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Previous: AVESTA TRUST, NSAR-A, 1997-08-27 |
Next: IMO INDUSTRIES INC, 8-K, 1997-08-27 |
<PAGE>
Texas Commerce Bank National Association
AVESTA Trust
SEMI-ANNUAL REPORT
(Unaudited)
June 30, 1997
Officers
-------------------------------------------------------------------------
Henry J. Lartigue, Chief Executive Officer
Amy Mian, Treasurer
Nancy Burge, Controller and Chief Accounting Officer
Thomas J. Press, Compliance Officer and Secretary
Guy Barba, Portfolio Officer
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
Supervisory Committee
-------------------------------------------------------------------------
Henry J. Lartigue, Chairman
Frank A. Liddell, Jr.
George E. McDavid
Kenneth L. Otto
H. Michael Tyson
Trustee
----------------------------------------------------------------------
Texas Commerce Bank National Association
712 Main
Houston, Texas 77002
Legal Counsel
--------------------------------------------------------------
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Independent Accountants
- -------------------------------------------------------------------------------
Price Waterhouse, LLP
1201 Louisiana, Suite 2900
Houston, Texas 77002
AVESTA Trust
----------------------------------------------------------------------
7-TCT-37
P.O. Box 1555
Houston, Texas 77251 - 1555
This report is not authorized for distribution to prospective
investors unless preceded or accompanied by a current prospectus.
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
INDEX TO FUND FINANCIAL STATEMENTS AND SCHEDULES
------------------------------------------------
Page ref.
---------
Equity Growth Fund (1) 1-7
Equity Income Fund (1) 8-15
Balanced Fund (1) 16-24
Income Fund (1) 25-30
Core Equity Fund (2) 31-38
Small Capitalization Fund (2) 39-47
Short-Intermediate Term U.S. Government Securities Fund (2) 48-53
U.S. Government Securities Fund (2) 54-58
Intermediate Term Bond Fund (3) 59-65
Risk Manager-Income Fund (3) 66-74
Risk Manager-Balanced Fund (3) 75-83
Risk Manager-Growth Fund (3) 84-92
Money Market Fund (1) 93-99
(1) Financial statements and schedules include the Portfolio of Investments and
Statement of Assets and Liabilities as of June 30, 1997, Statements of
Operations for the six months ended June 30, 1997, Statement of Changes in
Net Assets for the six months ended June 30, 1997, and the year ended
December 31, 1996, and selected per unit data and ratios for the six months
ended June 30, 1997, and each of the five years in the period ended
December 31, 1996.
(2) Financial statements and schedules include the Portfolio of Investments and
Statement of Assets and Liabilities as of June 30, 1997, Statements of
Operations for the six months ended June 30, 1997, Statement of Changes in
Net Assets for the six months ended June 30, 1997, and the year ended
December 31, 1996, and selected per unit data and ratios for the six months
ended June 30, 1997, the three years ended December 31, 1996, and for the
perid from April 1, 1993 (inception) through December 31, 1993.
(3) Financial statements and schedules include the Portfolio of Investments and
Statement of Assets and Liabilities as of June 30, 1997, Statements of
Operations for the six months ended June 30, 1997, Statement of Changes in
Net Assets for the six months ended June 30, 1997, and the year ended
December 31, 1996, and selected per unit data and ratios for the six months
ended June 30, 1997, the two years ended December 31, 1996, and for the
period from October 3, 1994 (inception) through December 31, 1994.
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
EQUITY GROWTH FUND
------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 98.0%
Consumer Discretionary - 14.1%
4,700 Avon Products, Inc. $ 331,644
26,000 Bed Bath & Beyond, Inc.* 789,750
17,700 Dayton Hudson Corporation 941,419
14,000 Disney (Walt) Company 1,123,500
9,400 Federated Department Stores, Inc.* 326,650
19,200 GAP, Inc. 746,400
10,100 Gannett Company, Inc. 997,375
21,400 Jones Apparel Group, Inc.* 1,021,850
48,000 Kroger Company* 1,392,000
13,500 McDonald's Corporation 652,219
47,900 Wal-Mart Stores, Inc. 1,619,618
---------------
Total Consumer Discretionary 9,942,425
---------------
Consumer Staples - 16.9%
47,200 Coca-Cola Company 3,186,000
55,000 Coca-Cola Enterprises 1,265,000
15,700 Gillette Company 1,487,575
27,700 PepsiCo, Inc. 1,040,481
44,800 Philip Morris Companies, Inc. 1,988,000
13,500 Procter & Gamble Company 1,906,875
12,200 Ralston Purina Group 1,002,688
---------------
Total Consumer Staples 11,876,619
---------------
Financial Services - 10.0%
21,000 American Express Company 1,564,500
9,900 American International Group, Inc. 1,478,813
5,600 Citicorp, Inc. 675,150
30,200 Federal National Mortgage Association 1,317,475
49,500 The Charles Schwab Corporation 2,014,031
---------------
Total Financial Services 7,049,969
---------------
</TABLE>
The accompanying notes are an integral part of this statement.
-1-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
EQUITY GROWTH FUND
------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
Healthcare - 17.5%
14,600 Abbott Laboratories, Inc. $ 974,550
11,500 American Home Products Corporation 879,750
19,900 Bristol-Myers Squibb Company 1,611,900
21,500 Johnson & Johnson 1,384,062
8,200 Lilly (Eli) & Company 896,363
9,700 Medtronic, Inc. 785,700
20,100 Merck & Company, Inc. 2,080,350
12,900 Pfizer, Inc. 1,541,550
33,300 Teva Pharmaceutical Industries, Ltd. ADR 2,156,175
---------------
Total Healthcare 12,310,400
---------------
Integrated Oil - 1.5%
16,900 Exxon Corporation 1,039,350
---------------
Materials & Processing - 6.5%
23,500 DuPont (E.I.) de Nemours & Company, Inc. 1,477,562
14,500 Illinois Tool Works, Inc. 724,094
6,900 Minnesota Mining & Manufacturing Company 703,800
13,000 Potash Corporation Saskatchewan, Inc. 975,813
10,100 Tyco International, Ltd. 702,581
---------------
Total Materials & Processing 4,583,850
---------------
Other Energy - 0.9%
5,300 Schlumberger, Ltd. 662,500
---------------
Producer Durables - 8.1%
7,850 Allied-Signal, Inc. 659,400
26,300 Boeing Company 1,395,544
55,600 General Electric Company 3,634,850
---------------
Total Producer Durables 5,689,794
---------------
Technology - 18.8%
15,650 Adobe Systems, Inc. 548,728
11,800 BMC Software, Inc.* 653,425
</TABLE>
The accompanying notes are an integral part of this statement.
-2-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
EQUITY GROWTH FUND
------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
Technology - 18.8% (continued)
12,800 Cisco Systems, Inc.* $ 859,200
17,400 Compaq Computer Corporation* 1,726,950
19,300 Hewlett-Packard Company 1,080,800
18,300 Intel Corporation 2,595,169
25,800 Microsoft Corporation* 3,260,475
33,300 Newbridge Networks Corporation* 1,448,550
14,700 Oracle Systems Corporation* 740,512
4,300 Texas Instruments, Inc. 361,469
--------------
Total Technology 13,275,278
--------------
Utilities - 3.7%
18,900 GTE Corporation 829,237
12,074 Lucent Technologies, Inc. 870,083
15,200 SBC Communications, Inc. 940,500
--------------
Total Utilities 2,639,820
--------------
Total Common Stocks (Cost $43,392,733) 69,070,005
--------------
<CAPTION>
Principal
amount
------
<S> <C> <C>
SHORT-TERM INVESTMENTS - 2.0%
Repurchase Agreement - 2.0%
Lehman Brothers, dated 06/30/97, 5.95%, due 07/01/97 in the
amount of $1,372,000 (collateralized by $1,416,770 U.S. Treasury Bond, 6.125%, due
12/31/01, with a market value of
$1,372,000 $1,403,503 at 06/30/97), repurchase proceeds $1,372,227 1,372,000
--------------
Total Short-Term Investments (Cost $1,372,000) 1,372,000
--------------
Total Investments (Cost $44,764,733) - 100.0% 70,442,005
Other assets in excess of liabilities - 0.0% 24,567
--------------
NET ASSETS - 100% $ 70,466,572
==============
</TABLE>
* Non-income producing security.
The accompanying notes are an integral part of this statement.
-3-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
EQUITY GROWTH FUND
------------------
STATEMENT OF ASSETS AND LIABILITIES
-----------------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Assets
-----------------
<S> <C>
Investments, at value (cost $44,764,733) $70,442,005
Cash 324
Investment income receivable 59,913
Receivable for units issued 45,189
-----------
Total assets 70,547,431
-----------
Liabilities
-----------
Management fee payable 57,608
Payable for units redeemed 23,251
-----------
Total liabilities 80,859
-----------
Net assets $70,466,572
===========
Net assets were comprised of:
Units of beneficial interest $31,795,155
Accumulated net investment income 1,892,107
Accumulated net realized gain 11,102,038
Net unrealized appreciation 25,677,272
-----------
Net assets at June 30, 1997 $70,466,572
===========
Unit value, offering price and redemption price per unit ($70,466,572/
2,030,502 units of beneficial interest issued and outstanding;
unlimited number of units authorized) $ 34.70
===========
</TABLE>
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
-----------------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Assets
-----------------
<S> <C>
Income:
Dividends $ 366,624
Interest 31,669
------------
Total income 398,293
------------
Expenses:
Management fee (Note 2) 318,504
Accounting fees 9,489
Audit fees 5,746
Directors' fees 1,174
Insurance 2,369
Legal fees 1,117
Registration fees 3,527
Miscellaneous 1,019
------------
Total expenses 342,945
Expense subsidy (Note 3) (24,441)
------------
Net expenses 318,504
------------
Net investment income 79,789
------------
Net realized and unrealized gain on investments
-----------------------------------------------
Net realized gain on investments 2,500,970
Unrealized appreciation in value of investments during the year 11,390,287
------------
Net gain on investments 13,891,257
------------
Net increase in net assets resulting from operations $ 13,971,046
============
</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 CHARGES IN NET ASSETS
----------------------------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Six months Year ended
ended June 30, December 31,
1997 1996
---- ----
<S> <C> <C>
Increase/(decrease) in net assets:
From operations:
Net investments income $ 79,789 $ 209,574
Net realized gain on investments 2,500,970 2,782,798
Unrealized appreciation in value of
investments during the year 11,390,287 6,636,433
----------- -----------
Net increase in net assets resulting
from operations 13,971,046 9,628,805
----------- -----------
From unit transaction:
Net proceeds from units issued 6,642,531 15,022,289
Cost of units redeemed (7,475,127) (12,900,781)
----------- -----------
Net increase/(decrease) in net assets
resulting from unit transactions (832,596) 2,121,508
----------- -----------
Total increase in net assets 13,138,450 11,750,313
Net assets, beginning of year 57,328,122 45,577,809
----------- -----------
Net assets, end of year $70,466,572 $57,328,122
=========== ===========
Net change in units outstanding:
Units issued 216,984 590,521
Units redeemed (237,298) (504,266)
----------- -----------
(20,314) 86,255
=========== ===========
</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)
(Unaudited)
-----------
<TABLE>
<CAPTION>
Six months Years ended December 31,
each June 30, -------------------------------------------------------------------------------
1997 1996 1995 1994 1993* 1992*
---- ---- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Selected per unit data:
Investment income $ 0.19 $ 0.35 $ 0.38 $ 0.38 $ 0.38 $ 0.36
Expenses (0.16) (0.27) (0.23) (0.21) (0.21)# (0.21)
Expense subsidy 0.01 0.02 0.02 0.03 0.03 0.04
---------- ---------- ---------- ---------- ---------- ----------
Net investment income 0.04 0.10 0.17 0.20 0.20 0.19
Net realized and unrealized
gain/(loss) on investments 6.71 4.65 4.59 (0.37) 0.25 0.91
---------- ---------- ---------- ---------- ---------- ----------
Net increase/(decrease) in
net asset value 6.75 4.75 4.76 (0.17) 0.45 1.10
Net asset value, beginning
of year 27.95 23.20 18.44 18.61 18.16 17.06
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 34.70 $ 27.95 $ 23.20 $ 18.44 $ 18.61 $ 18.16
========== ========== ========== ========== ========== ==========
Ratio to average net assets:
Expenses 1.00%** 1.00% 1.00% 1.00% 1.00%## 1.00%
Net investment income 0.25%** 0.41% 0.78% 1.07% 1.12% 1.16%
Other:
Average net assets
(000 omitted) $64,275 $51,222 $40,753 $30,806 $29,305 $20,343
Portfolio turnover 19% 62% 99% 116% 97% 99%
Number of units outstanding
at end of year (000 omitted) 2,031 2,051 1,965 1,989 1,646 1,405
Total return 24.11% 20.52% 25.78% (0.90%) 2.48% 6.43%
</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
1992-1993.
** Annualized.
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
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
COMMON STOCKS - 93.3%
Auto & Transportation - 4.2%
<S> <C> <C>
15,800 Ford Motor Company $ 596,450
10,200 General Motors Corporation 568,012
10,600 Norfolk Southern Corporation 1,067,950
9,900 Union Pacific Corporation 697,950
----------------
Total Auto & Transportation 2,930,362
----------------
Consumer Discretionary - 3.3%
12,000 Avon Products, Inc. 846,750
17,100 Penney (J.C.) Company, Inc. 892,406
10,700 Sears, Roebuck & Company 575,125
----------------
Total Consumer Discretionary 2,314,281
----------------
Consumer Staples - 11.0%
16,400 Anheuser-Busch Companies, Inc. 687,775
14,300 Coca-Cola Company 965,250
8,000 Gillette Company 758,000
19,000 PepsiCo, Inc. 713,688
32,590 Philip Morris Companies, Inc. 1,446,181
12,100 Procter & Gamble Company 1,709,125
8,800 Ralston Purina Group 723,250
18,700 Sysco Corporation 682,550
----------------
Total Consumer Staples 7,685,819
----------------
Financial Services - 16.0%
23,400 American Express Company 1,743,300
12,087 American International Group, Inc. 1,805,496
21,300 Bank of New York 926,550
5,300 Citicorp, Inc. 638,981
10,600 First Union Corporation 980,500
3,500 General Re Corporation 637,000
28,800 Suntrust Banks, Inc. 1,585,800
</TABLE>
The accompanying notes are an integral part of this statement.
-8-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
EQUITY INCOME FUND
------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
Financial Services - 16.0% (continued)
14,900 Transamerica Corporation $ 1,394,081
23,566 Travelers Group, Inc. 1,486,131
---------------
Total Financial Services 11,197,839
---------------
Healthcare - 11.4%
13,300 Abbott Laboratories, Inc. 887,775
12,100 American Home Products Corporation 925,650
21,700 Bristol-Myers Squibb Company 1,757,700
11,800 Johnson & Johnson 759,625
12,800 Lilly (Eli) & Company 1,399,200
9,900 Merck & Company, Inc. 1,024,650
10,100 Pfizer, Inc. 1,206,950
---------------
Total Healthcare 7,961,550
---------------
Integrated Oil - 8.4%
10,700 Amoco Corporation 930,231
16,400 Chevron Corporation 1,212,575
18,200 Mobil Corporation 1,271,725
26,372 Royal Dutch Petroleum Company ADR 1,433,977
9,150 Texaco, Inc. 995,063
---------------
Total Integrated Oil 5,843,571
---------------
Materials & Processing - 7.0%
16,400 Dover Corporation 1,008,600
8,800 Dow Chemical Company 766,700
19,000 DuPont (E.I.) de Nemours & Company, Inc. 1,194,625
12,700 International Paper Company 616,744
29,200 Monsanto Company 1,257,425
---------------
Total Materials & Processing 4,844,094
---------------
Other Energy - 2.0%
16,400 Enron Corporation 669,325
14,300 Sonat, Inc. 732,875
--------------
</TABLE>
The accompanying notes are an integral part of this statement.
-9-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
EQUITY INCOME FUND
------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
Total Other Energy $ 1,402,200
--------------
Producer Durables - 8.5%
7,400 Boeing Company 392,663
25,200 General Electric Company 1,647,450
12,100 Lockheed Martin Corporation 1,253,106
21,100 Raytheon Company 1,076,100
28,900 Sundstrand Corporation 1,560,600
--------------
Total Producer Durables 5,929,919
--------------
Technology - 11.9%
11,800 Hewlett-Packard Company 660,800
4,500 Intel Corporation 638,156
22,000 International Business Machines Corporation 1,984,125
7,100 Microsoft Corporation* 897,263
15,300 Motorola, Inc. 1,162,800
13,500 Texas Instruments, Inc. 1,134,844
22,900 Xerox Corporation 1,806,237
--------------
Total Technology 8,284,225
--------------
Utilities - 9.6%
17,600 AT&T Corporation 617,100
10,000 Ameritech Corporation 679,375
8,700 Bell Atlantic Corporation 660,113
12,500 BellSouth Corporation 579,688
37,500 DQE, Inc. 1,059,375
21,600 Duke Power Company 1,035,450
5,684 Lucent Technologies, Inc. 409,603
25,000 NIPSCO Industries, Inc. 1,032,812
10,400 SBC Communications, Inc. 643,500
--------------
Total Utilities 6,717,016
--------------
Total Common Stocks (Cost $40,043,968) 65,110,876
-------------
</TABLE>
The accompanying notes are an integral part of this statement.
-10-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
EQUITY INCOME FUND
------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Principal
amount Value
------ -----
<S> <C> <C>
SHORT-TERM INVESTMENTS - 5.9%
Repurchase Agreement - 4.5%
Lehman Brothers, dated 06/30/97, 5.95%,
due 07/01/97 in the amount of $3,150,000
(collateralized by $3,252,789 U.S. Treasury Bond,
6.125%, due 12/31/01, with a market value of
$3,222,327 at 06/30/97), repurchase
$3,150,000 proceeds $3,150,521 $ 3,150,000
--------------
<CAPTION>
Number of
shares
------
<S> <C> <C>
Short Term Investment Fund - 1.4%
Fidelity Institutional Cash Portfolios:
967,000 Government 967,000
--------------
Total Short-Term Investments (Cost $4,117,000) 4,117,000
--------------
Total Investments (Cost $44,160,968) - 99.2% 69,227,876
Other assets in excess of liabilities - 0.8% 571,072
--------------
NET ASSETS - 100% $ 69,798,948
==============
</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
-----------------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
Assets
--------------
<S> <C>
Investments, at value (cost $44,160,968) $ 69,227,876
Cash 565
Investment income receivable 70,017
Receivable for investments sold 1,546,655
Receivable for units issued 25,640
------------
Total assets 70,870,753
------------
Liabilities
--------------
Payable for investments purchased 994,085
Management fee payable 56,494
Payable for units redeemed 21,226
------------
Total liabilities 1,071,805
------------
Net assets $ 69,798,948
============
Net assets were comprised of:
Units of beneficial interest $ 29,023,253
Accumulated net investment income 5,105,280
Accumulated net realized gain 10,603,507
Net unrealized appreciation 25,066,908
------------
Net assets at June 30, 1997 $ 69,798,948
============
Unit value, offering price and redemption price
per unit ($69,798,948/2,057,917 units of beneficial
interest issued and outstanding; unlimited number
of units authorized) $ 33.92
============
</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 OPERATIONS
-----------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Net investment income
---------------------
<S> <C>
Income:
Dividends $ 650,776
Interest 73,013
-----------
Total income 723,789
-----------
Expenses:
Management fee (Note 2) 331,833
Accounting fees 9,489
Audit fees 5,746
Directors' fees 1,174
Insurance 2,443
Legal fees 1,117
Registration fees 4,037
Miscellaneous 1,019
-----------
Total expenses 356,858
Expense subsidy (Note 3) (25,025)
-----------
Net expenses 331,833
-----------
Net investment income 391,956
-----------
Net realized and unrealized gain on investments
-----------------------------------------------
Net realized gain on investments 3,305,314
Unrealized appreciation in value of investments during the year 8,188,125
-----------
Net gain on investments 11,493,439
-----------
Net increase in net assets resulting from operations $11,885,395
===========
</TABLE>
The accompanying notes are an integral part of this statement.
-13-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
EQUITY INCOME FUND
------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Six months Year ended
ended June 30, December 31,
1997 1996
---- ----
<S> <C> <C>
Increase/(decrease) in net assets:
From operations:
Net investment income 391,956 $ 991,807
Net realized gain on investments 3,305,314 4,768,241
Unrealized appreciation in value of investments
during the year $ 8,188,125 $ 4,099,749
------------------- -------------------
Net increase in net assets resulting from operations 11,885,395 9,859,797
------------------- -------------------
From unit transactions:
Net proceeds from units issued 7,953,657 14,693,984
Cost of units redeemed (13,430,568) (16,148,394)
------------------- -------------------
Net decrease in net assets resulting
from unit transaction (5,476,911) (1,454,410)
------------------- -------------------
Total increase in net assets 6,408,484 8,405,387
Net assets, beginning of year 63,390,464 54,985,077
------------------- -------------------
Net assets, end of year $ 69,798,948 $ 63,390,464
=================== ===================
Net change in units outstanding:
Units issued 260,655 578,822
Units redeemed (449,800) (629,084)
------------------- -------------------
(189,145) (50,262)
=================== ===================
</TABLE>
The accompanying notes are an integral part of this statement.
-14-
<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>
Six months ended Years ended December 31,
June 30, ------------------------------------------------------------------------------
1997 1996 1995 1994 1993* 1992*
---- ---- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Selected per unit data:
Investment income $ 0.33 $ 0.69 $ 0.65 $ 0.57 $ 0.52 $ 0.55
Expenses (0.16) (0.27) (0.23) (0.20) (0.20)# (0.19)
Expense subsidy 0.01 0.01 0.02 0.02 0.03 0.03
------------ ----------- ------------- ----------- ------------ ------------
Net investment income 0.18 0.43 0.44 0.39 0.35 0.39
Net realized and unrealized
gain/(loss) on investments 5.53 3.85 5.59 (1.01) 1.68 0.50
------------ ----------- ------------- ----------- ------------ ------------
Net increase/(decrease) in
net asset value 5.71 4.28 6.03 (0.62) 2.03 0.89
Net asset value, beginning
of year 28.21 23.93 17.90 18.52 16.49 15.60
------------ ----------- ------------- ----------- ------------ ------------
Net asset value, end of year $ 33.92 $ 28.21 $ 23.93 $ 17.90 $ 18.52 $ 16.49
============ =========== ============= =========== ============ ============
Ratio to average net assets:
Expenses 1.00%** 1.00% 1.00% 1.00% 1.00%## 1.00%
Net investment income 1.17%** 1.67% 2.10% 2.13% 1.98% 2.52%
Other:
Average net assets
(000 omitted) $67,531 $59,291 $44,651 $41,889 $31,308 $18,565
Portfolio turnover 2% 24% 11% 42% 40% 25%
Number of units outstanding
at end of year (000 omitted) 2,058 2,247 2,297 2,195 2,246 1,389
Total return 20.24% 17.87% 33.72% (3.37%) 12.34% 5.61%
</TABLE>
# Reflects voluntary fee waiver of $17,300 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
1992-1993.
** Annualized.
Per unit amounts are calculated using average units outstanding for
the period.
The accompanying notes are an integral part of this statement.
-15-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
BALANCED FUND
-------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
LONG-TERM INVESTMENTS - 95.2%
COMMON STOCKS - 56.5%
Consumer Discretionary - 8.1%
1,050 Avon Products, Inc. $ 74,091
5,300 Bed Bath & Beyond, Inc.* 160,987
3,550 Dayton Hudson Corporation 188,816
2,900 Disney (Walt) Company 232,725
1,900 Federated Department Stores, Inc.* 66,025
4,000 GAP, Inc. 155,500
2,100 Gannett Company, Inc. 207,375
4,300 Jones Apparel Group, Inc.* 205,325
10,400 Kroger Company* 301,600
2,700 McDonald's Corporation 130,444
9,700 Wal-Mart Stores, Inc. 327,981
------------
Total Consumer Discretionary 2,050,869
------------
Consumer Staples - 9.9%
10,200 Coca-Cola Company 688,500
12,000 Coca-Cola Enterprises 276,000
3,400 Gillette Company 322,150
5,700 PepsiCo, Inc. 214,106
9,600 Philip Morris Companies, Inc. 426,000
2,800 Procter & Gamble Company 395,500
2,500 Ralston Purina Group 205,469
------------
Total Consumer Staples 2,527,725
------------
Financial Services - 5.8%
4,300 American Express Company 320,350
2,200 American International Group, Inc. 328,625
1,200 Citicorp, Inc. 144,675
6,500 Federal National Mortgage Association 283,563
</TABLE>
The accompanying notes are an integral part of this statement.
-16-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
BALANCED FUND
-------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
Financial Services - 5.8% (continued)
10,000 The Charles Schwab Corporation $ 406,875
------------
Total Financial Services 1,484,088
------------
Healthcare - 10.1%
3,200 Abbott Laboratories, Inc. 213,600
2,500 American Home Products Corporation 191,250
4,200 Bristol-Myers Squibb Company 340,200
4,600 Johnson & Johnson 296,125
1,700 Lilly (Eli) & Company 185,831
2,000 Medtronic, Inc. 162,000
4,100 Merck & Company, Inc. 424,350
2,600 Pfizer, Inc. 310,700
6,650 Teva Pharmaceutical Industries, Ltd. ADR 430,588
------------
Total Healthcare 2,554,644
------------
Integrated Oil - 0.9%
3,600 Exxon Corporation 221,400
------------
Materials & Processing - 3.5%
5,000 DuPont (E.I.) de Nemours & Company, Inc. 314,375
3,000 Illinois Tool Works, Inc. 149,812
1,400 Minnesota Mining & Manufacturing Company 142,800
1,900 Potash Corporation Saskatchewan, Inc. 142,619
2,000 Tyco International, Ltd. 139,125
------------
Total Materials & Processing 888,731
------------
Other Energy - 0.5%
1,100 Schlumberger, Ltd. 137,500
------------
Producer Durables - 4.6%
1,700 Allied-Signal, Inc. 142,800
5,600 Boeing Company 297,150
11,200 General Electric Company 732,200
------------
Total Producer Durables 1,172,150
------------
</TABLE>
The accompanying notes are an integral part of this statement.
-17-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
BALANCED FUND
-------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
Technology - 10.8%
3,200 Adobe Systems, Inc. $ 112,200
2,500 BMC Software, Inc.* 138,437
2,800 Cisco Systems, Inc.* 187,950
3,500 Compaq Computer Corporation* 347,375
4,200 Hewlett-Packard Company 235,200
3,750 Intel Corporation 531,797
5,250 Microsoft Corporation* 663,469
6,800 Newbridge Networks Corporation* 295,800
3,000 Oracle Systems Corporation* 151,125
900 Texas Instruments, Inc. 75,656
------------
Total Technology 2,739,009
------------
Utilities - 2.3%
4,100 GTE Corporation 179,888
2,644 Lucent Technologies, Inc. 190,533
3,300 SBC Communications, Inc. 204,187
------------
Total Utilities 574,608
------------
Total Common Stocks (Cost $9,092,623) 14,350,724
------------
<CAPTION>
Principal
amount
------
<S> <C> <C>
CORPORATE BONDS - 18.4%
Auto & Transportation - 1.6%
$360,000 Ford Motor Company, 8.88%, due 01/15/22 416,336
------------
Financial & Other - 14.5%
500,000 Anheuser-Busch Companies, Inc., 6.75%,
due 08/01/03 500,039
500,000 Associates Corporation of North America,
7.52%, due 03/29/00 511,622
400,000 BankAmerica Corporation, 6.20%, due 02/15/06 376,750
100,000 Caterpillar Financial Services, 6.95%,
due 11/01/00 100,921
264,000 Ford Credit Grantor Trust, 5.90%, due
10/15/00 264,719
225,000 Ford Motor Credit Company, 6.25%, due
12/08/05 213,425
</TABLE>
The accompanying notes are an integral part of this statement.
-18-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
BALANCED FUND
-------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Principal
amount Value
------ -----
<S> <C> <C>
Financial & Other - 14.5% (continued)
$ 450,000 McDonald's Corporation, 7.05%, due 11/15/25 $ 427,711
400,000 PNC Student Loan Trust, 6.14%, due 01/25/00 398,000
325,000 Procter & Gamble Company, 6.45%, due 01/15/26 292,894
600,000 Wal-Mart Stores, Inc., 6.75%, due 05/15/02 603,292
------------
Total Financial & Other 3,689,373
------------
Healthcare - 2.3%
600,000 Abbott Laboratories, 5.60%, due 10/01/03 569,134
------------
Total Corporate Bonds (Cost $4,610,953) 4,674,843
------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 20.3%
U.S. Government Agency Obligations - 7.8%
500,000 Federal Home Loan Mortgage Corporation,
8.35%, due 10/06/04 502,623
1,485,000 Federal National Mortgage Association,
7.50%, due 03/15/27 1,490,575
------------
Total U.S. Government Agency Obligations 1,993,198
------------
U.S. Government Obligations - 12.5%
825,000 U.S. Treasury Bond, 6.25%, due 08/15/23 763,641
500,000 U.S. Treasury Bond, 6.50%, due 11/15/26 479,375
500,000 U.S. Treasury Note, 5.63%, due 11/30/98 497,813
280,000 U.S. Treasury Note, 5.88%, due 02/15/04 271,338
1,150,000 U.S. Treasury Note, 6.38%, due 03/31/01 1,152,516
------------
Total U.S. Treasury Obligations 3,164,683
------------
Total U.S. Government and Agency
Obligations (Cost $5,121,581) 5,157,881
------------
Total Long-Term Investments
(Cost $18,825,157) 24,183,448
------------
SHORT-TERM INVESTMENTS - 4.1%
Financial Services - 1.5%
360,000 Beneficial Corporation, 6.60%, due 10/29/97 361,080
------------
</TABLE>
The accompanying notes are an integral part of this statement.
-19-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
BALANCED FUND
-------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
Short Term Investment Fund - 0.2%
Fidelity Institutional Cash Portfolios:
70,000 Government $ 70,000
------------
Principal
amount
------
U.S. Government Obligation - 2.4%
$600,000 U.S. Treasury Note, 5.38%, due 11/30/97 599,626
------------
Total Short-Term Investments (Cost
$1,030,706) 1,030,706
------------
Total Investments(Cost $19,855,863)
- 99.3% 25,214,154
Other Assets in Excess of Liabilities - 0.7% 168,778
------------
NET ASSETS - 100% $ 25,382,932
============
</TABLE>
* Non-income producing security.
The accompanying notes are an integral part of this statement.
-20-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
BALANCED FUND
-------------
STATEMENT OF ASSETS AND LIABILITIES
-----------------------------------
JUNE 30, 1997
-------------
<TABLE>
<CAPTION>
Assets
------------------
<S> <C>
Investments, at value (cost $19,855,863) $ 25,214,154
Cash 252
Investment income receivable 161,248
Receivable for investments sold 67,049
Receivable for units issued 9,646
---------------
Total assets 25,452,349
---------------
Liabilities
------------------
Management fee payable 20,715
Payable for units redeemed 48,702
---------------
Total liabilities 69,417
---------------
Net assets $ 25,382,932
===============
Net assets were comprised of:
Units of beneficial interest $ 4,261,662
Accumulated net investment income 7,153,374
Accumulated net realized gain 8,609,605
Net unrealized appreciation 5,358,291
---------------
Net assets at June 30, 1997 $ 25,382,932
===============
Unit value, offering price and redemption price per unit ($25,382,932/
942,566 units of beneficial interest issued and outstanding;
unlimited number of units authorized) $ 26.93
===============
</TABLE>
The accompanying notes are an integral part of this statement.
-21-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
BALANCED FUND
-------------
STATEMENT OF ASSETS AND LIABILITIES
-----------------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Net investment income
---------------------
<S> <C> <C>
Income:
Dividends $ 75,309
Interest 372,691
-----------
Total income 448,000
-----------
Expenses:
Management fee (Note 2) 120,775
Accounting fees 9,489
Audit fees 5,746
Directors' fees 1,174
Insurance 2,056
Legal fees 1,117
Registration fees 2,517
Miscellaneous 1,019
-----------
Total expenses 143,893
Expense subsidy (Note 3) (23,118)
-----------
Net expenses 120,775
-----------
Net investment income 327,225
-----------
Net realized and unrealized gain on investments
-----------------------------------------------
Net realized gain on investments 317,136
Unrealized appreciation in value of investments during the year 2,429,166
-----------
Net gain on investments 2,746,302
-----------
Net increase in net assets resulting from operations $ 3,073,527
===========
</TABLE>
The accompanying notes are an integral part of this statement.
-22-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
BALANCED FUND
-------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Six months Year ended
ended June 30, December 31,
1997 1996
---- ----
<S> <C> <C>
Increase/(decrease) in net assets:
From operations:
Net investment income $ 327,225 $ 620,001
Net realized gain on investments 317,136 1,430,532
Unrealized appreciation in value of investments
during the year 2,429,166 322,380
------------ ------------
Net increase in net assets resulting from operations 3,073,527 2,372,913
------------ ------------
From unit transactions:
Net proceeds from units issued 3,445,117 6,612,764
Cost of units redeemed (3,766,934) (7,825,902)
------------ ------------
Net decrease in net assets resulting from unit transactions (321,817) (1,213,138)
------------ ------------
Total increase in net assets 2,751,710 1,159,775
Net assets, beginning of year 22,631,222 21,471,447
------------ ------------
Net assets, end of year $ 25,382,932 $ 22,631,222
============ ============
Net change in units outstanding:
Units issued 137,206 297,343
Units redeemed (151,194) (351,351)
------------ ------------
(13,988) (54,008)
============ ============
</TABLE>
The accompanying notes are an integral part of this statement.
-23-
<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>
Six months ended Years ended December 31,
June 30, --------------------------------------------------------------------------------
1997 1996 1995 1994 1993* 1992*
---- ---- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Selected per unit data:
Investment income $ 0.46 $ 0.85 $ 0.76 $ 0.63 $ 0.64 $ 0.68
Expenses (0.15) (0.26) (0.23) (0.20) (0.19) (0.18)
Expense subsidy 0.03 0.04 0.04 0.03 0.02 0.02
------------ ----------- ------------- ----------- ------------ ------------
Net investment income 0.34 0.63 0.57 0.46 0.47 0.52
Net realized and unrealized
gain/(loss) on investments 2.93 1.78 3.52 (0.86) 0.52 0.32
------------ ----------- ------------- --------------- ------------ ------------
Net increase/(decrease) in
net asset value 3.27 2.41 4.09 (0.40) 0.99 0.84
Net asset value, beginning
of year 23.66 21.25 17.16 17.56 16.57 15.73
------------ ----------- ------------- ----------- ------------ ------------
Net asset value, end of year $ 26.93 $ 23.66 $ 21.25 $ 17.16 $ 17.56 $ 16.57
============ =========== ============= =========== ============ ============
Ratio to average net assets:
Expenses 1.00%** 1.00% 1.00% 1.00% 1.00% 1.00%
Net investment income 2.71%** 2.82% 2.94% 2.69% 2.78% 3.33%
Other:
Average net assets
(000 omitted) $24,366 $21,953 $21,843 $27,825 $51,971 $43,061
Portfolio turnover 35% 70% 98% 157% 148% 187%
Number of units outstanding
at end of year (000 omitted) 943 957 1,011 1,328 2,123 3,084
Total return 13.82% 11.31% 23.83% (2.27%) 6.01% 5.32%
</TABLE>
* Amounts adjusted to reflect 10:1 reverse split for the years ended
1992-1993.
** Annualized.
Per unit amounts are calculated using average units outstanding for the
period.
The accompanying notes are an integral part of this statement.
-24-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
INCOME FUND
-----------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Principal
amount Value
------ -----
<C> <S> <C>
LONG-TERM INVESTMENTS - 95.4%
CORPORATE BONDS - 47.1%
Auto & Transportation - 2.7%
$1,140,000 Ford Motor Company, 8.88%, due 01/15/22 $ 1,318,396
-------------
Financial & Other - 41.7%
2,400,000 Abbott Laboratories, 5.60%, due 10/01/03 2,276,537
2,500,000 Anheuser-Busch Companies, Inc., 6.75%, due 08/01/03 2,500,195
2,400,000 Associates Corporation of North America, 7.52%, due 03/29/00 2,455,788
2,000,000 BankAmerica Corporation, 6.20%, due 02/15/06 1,883,748
2,400,000 Caterpillar Financial Services, 6.95%, due 11/01/00 2,422,099
1,000,000 Ford Motor Credit Company, 6.25%, due 12/08/05 948,554
2,000,000 McDonald's Corporation, 7.05%, due 11/15/25 1,900,940
2,410,000 PNC Student Loan Trust, 6.14%, due 01/25/00 2,397,950
1,725,000 Procter & Gamble Company, 6.45%, due 01/15/26 1,554,589
2,400,000 Wal-Mart Stores, Inc., 6.75%, due 05/15/02 2,413,169
-------------
Total Financial & Other 20,753,569
-------------
Financial Services - 2.7%
1,321,785 Ford Credit Grantor Trust, 5.90%, due 10/15/00 1,323,596
-------------
Total Corporate Bonds (Cost $23,187,814) 23,395,561
-------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 48.3%
U.S. Government Agency Obligations - 19.9%
2,550,000 Federal Home Loan Mortgage Corporation, 8.35%, due 10/06/04 2,563,375
2,486,557 Federal National Mortgage Association, 6.50%, due 09/01/26 2,381,662
4,950,001 Government National Mortgage Association 7.50%, due 10/15/26 4,968,578
-------------
Total U.S. Government Agency Obligations
(Cost $9,819,706) 9,913,615
-------------
</TABLE>
The accompanying notes are an integral part of this statement.
-25-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
INCOME FUND
-----------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Principal
amount Value
------ -----
<C> <S> <C>
U.S. Treasury Obligations - 28.4%
$2,450,000 U.S. Treasury Bond, 6.75%, due 08/15/26 $ 2,424,736
3,500,000 U.S. Treasury Bond, 8.13%, due 05/15/21 4,005,316
3,500,000 U.S. Treasury Note, 5.63%, due 11/30/98 3,484,691
4,200,000 U.S. Treasury Note, 6.38%, due 03/31/01 4,209,189
-------------
Total U.S. Treasury Obligations (Cost $14,282,553) 14,123,932
-------------
Total U.S. Government and Agency Obligations
(Cost $24,102,259) 24,037,547
-------------
Total Long-Term Investments (Cost $47,290,073) 47,433,108
-------------
SHORT-TERM INVESTMENTS - 3.3%
Financial Services - 2.3%
1,140,000 Beneficial Corporation, 6.60%, due 10/29/97 1,143,421
-------------
Repurchase Agreement - 0.1%
Lehman Brothers, dated 06/30/97, 5.95%,
due 07/01/97 in the amount of $38,000
(collateralized by $39,240 U.S. Treasury Bond,
6.125%, due 12/31/01, with a market value of
38,000 $38,873 at 06/30/97), repurchase proceeds $38,006 38,000
-------------
Number of
shares
------
Short Term Investment Fund - 0.9%
Fidelity Institutional Cash Portfolios:
445,200 Government 445,200
-------------
Total Short-Term Investments (Cost $1,626,621) 1,626,621
-------------
Total Investments (Cost $48,916,694) - 98.7% 49,059,729
Other assets in excess of liabilities - 1.3% 651,141
-------------
NET ASSETS - 100% $ 49,710,870
=============
</TABLE>
The accompanying notes are an integral part of this statement.
-26-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
INCOME FUND
-----------
STATEMENT OF ASSETS AND LIABILITIES
-----------------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Assets
------------------
<S> <C>
Investments, at value (cost $48,916,694) $ 49,059,729
Cash 91
Investment income receivable 653,402
Receivable for units issued 43,281
-----------
Total assets 49,756,503
-----------
Liabilities
------------------
Management fee payable 30,231
Payable for units redeemed 15,402
-----------
Total liabilities 45,633
-----------
Net assets $ 49,710,870
===========
Net assets were comprised of:
Units of beneficial interest $ 25,477,509
Accumulated net investment income 22,366,427
Accumulated net realized gain 1,723,899
Net unrealized appreciation 143,035
-----------
Net assets at June 30, 1997 $ 49,710,870
===========
Unit value, offering price and redemption price per unit ($49,710,870/
2,617,474 units of beneficial interest issued and outstanding;
unlimited number of units authorized) $ 18.99
===========
</TABLE>
The accompanying notes are an integral part of this statement.
-27-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
INCOME FUND
-----------
STATEMENT OF OPERATIONS
-----------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Net investment income
---------------------
<S> <C>
Income:
Interest $ 1,684,730
----------
Expenses:
Management fee (Note 2) 191,379
Accounting fees 9,489
Audit fees 5,746
Directors' fees 1,174
Insurance 2,443
Legal fees 1,117
Registration fees 3,027
Miscellaneous 1,019
----------
Total expenses 215,394
Expense subsidy (Note 3) (24,015)
----------
Net expenses 191,379
----------
Net investment income 1,493,351
----------
Net realized and unrealized gain on investments
-----------------------------------------------
Net realized loss on investments (210,948)
Unrealized depreciation in value of investments during the year (118,862)
----------
Net loss on investments (329,810)
----------
Net increase in net assets resulting from operations $ 1,163,541
==========
</TABLE>
The accompanying notes are an integral part of this statement.
-28-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
INCOME FUND
-----------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Six months Year ended
ended June 30, December 31,
1997 1996
---- ----
<S> <C> <C>
Increase/(decrease) in net assets:
From operations:
Net investment income $ 1,493,351 $ 3,016,803
Net realized gain/(loss) on investments (210,948) 233,730
Unrealized depreciation in value of investments
during the year (118,862) (2,268,924)
-------------- --------------
Net increase in net assets resulting from operations 1,163,541 981,609
-------------- --------------
From unit transactions:
Net proceeds from units issued 3,947,414 8,529,032
Cost of units redeemed (9,014,384) (13,347,969)
-------------- --------------
Net decrease in net assets resulting
from unit transaction (5,066,970) (4,818,937)
-------------- --------------
Total decrease in net assets (3,903,429) (3,837,328)
Net assets, beginning of years 53,614,299 57,451,627
-------------- --------------
Net assets, end of year $ 49,710,870 $ 53,614,299
============== ==============
Net change in units outstanding:
Units issued 212,082 473,031
Units redeemed (483,237) (738,759)
-------------- --------------
(271,155) (265,728)
============== ==============
</TABLE>
The accompanying notes are an integral part of this statement.
-29-
<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)
(Unaudited)
<TABLE>
<CAPTION>
Six months ended Years ended December 31,
June 30, --------------------------------------------------------------------------
1997 1996 1995 1994 1993* 1992*
---- ---- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Selected per unit data:
Investment income $ 0.61 $ 1.14 $ 1.09 $ 0.97 $ 0.97 $ 1.02
Expense (0.08)** (0.15)** (0.14)** (0.14)** (0.17) (0.16)
Expense subsidy 0.01 0.01 0.02 0.01 0.02 0.02
----------- ----------- ------------ ------------ ------------ ------------
Net investment income 0.54 1.00 0.97 0.84 0.82 0.88
Net realized and unrealized
gain/(loss) on investments (0.11) (0.65) 1.85 (1.56) 0.67 (0.16)
----------- ----------- ------------ ------------ ----------- -----------
Net increase/(decrease) in
net asset value 0.43 0.35 2.82 (0.72) 1.49 0.72
Net asset value, beginning
of year 18.56 18.21 15.39 16.11 14.62 13.90
----------- ----------- ------------ ------------ ------------ ------------
Net asset value, end of year $ 18.99 $ 18.56 $ 18.21 $ 15.39 $ 16.11 $ 14.62
=========== =========== ============ ============ ============ ============
Ratio to average net assets:
Expenses 0.75%+*** 0.75%*** 0.75%*** 0.75%*** 1.00% 1.00%
Net investment income 5.82%+ 5.58% 5.77% 5.43% 5.20% 6.21%
Other:
Average net assets
(000 omitted) $51,722 $54,048 $54,637 $63,817 $70,750 $53,886
Portfolio turnover 73% 72% 93% 239% 156% 285%
Number of units outstanding
at end of year (000 omitted) 2,617 2,889 3,154 3,395 4,724 4,413
Total return 2.31% 1.91% 18.38% (4.47%) 10.18% 5.13%
</TABLE>
* Amounts adjusted to reflect 10:1 reverse split for the years ended
1992-1993.
** Reflects management fee reduction of $65,096 or $0.03 per unit, $135,137
or $0.05 per unit, $136,617 or $0.04 per unit and $99,627 or $0.03 per
unit for the six months ended June 30, 1997 and years ended December 31,
1996, 1995 and 1994, respectively. Without management fee reduction,
expense per unit is $0.11, $0.18, $0.18 and $0.17 for the six months
ended June 30, 1997 and years ended December 31, 1996, 1995 and 1994,
respectively.
*** Reflects management fee reductions of 0.25% or $65,096, $135,137,
$136,617 and $99,627 for the six months ended June 30, 1997 and
years ended December 31, 1996, 1995 and 1994, respectively. For the year
ended December 31, 1994 the actual net expense ratio for the year was
0.8% of average net assets as the fee reduction went into effect on
5/2/94.
+ Annualized.
Per unit amounts are calculated using average units outstanding for the
period.
The accompanying nots are an integral part of this statement.
-30-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
CORE EQUITY FUND
----------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
COMMON STOCKS - 95.1%
Auto & Transportation - 2.8%
5,700 AMR Corporation $ 527,250
9,000 Ford Motor Company 339,750
3,400 General Motors Corporation 189,338
-----------------
Total Auto & Transportation 1,056,338
-----------------
Consumer Discretionary - 8.8%
10,600 Dayton Hudson Corporation 563,787
3,500 Disney (Walt) Company 280,875
10,700 Federated Department Stores, Inc.* 371,825
4,900 Home Depot, Inc. 337,794
3,900 McDonald's Corporation 188,419
7,900 New York Times Company 391,050
10,800 Sears, Roebuck & Company 580,500
17,600 Wal-Mart Stores, Inc. 595,100
-----------------
Total Consumer Discretionary 3,309,350
-----------------
Consumer Staples - 9.8%
13,200 Coca-Cola Company 891,000
19,500 Coca-Cola Enterprises 448,500
5,200 Gillette Company 492,700
9,200 PepsiCo, Inc. 345,575
13,700 Philip Morris Companies, Inc. 607,938
4,700 Procter & Gamble Company 663,875
1,000 Unilever, N.V. 218,000
-----------------
Total Consumer Staples 3,667,588
-----------------
Financial Services - 15.4%
8,500 American Express Company 633,250
6,400 American International Group, Inc. 956,000
3,100 Citicorp, Inc. 373,744
18,000 Federal National Mortgage Association 785,250
</TABLE>
The accompanying notes are an integral part of this statement.
-31-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
CORE EQUITY FUND
----------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
Financial Services - 15.4% (continued)
6,800 MBIA, Inc. $ 767,125
9,100 Student Loan Marketing Association 1,155,700
5,300 The Charles Schwab Corporation 215,644
14,100 Travelers Group, Inc. 889,149
-------------
Total Financial Services 5,775,862
-------------
Healthcare - 10.7%
4,600 Abbott Laboratories, Inc. 307,050
4,000 American Home Products Corporation 306,000
6,000 Bristol-Myers Squibb Company 486,000
6,800 Johnson & Johnson 437,750
3,200 Lilly (Eli) & Company 349,800
7,600 Merck & Company, Inc. 786,600
4,400 Pfizer, Inc. 525,800
8,400 Schering-Plough Corporation 402,150
6,100 Teva Pharmaceutical Industries, Ltd. ADR 394,975
-------------
Total Healthcare 3,996,125
-------------
Integrated Oil - 9.6%
3,400 Amoco Corporation 295,587
9,190 British Petroleum Company PLC 688,101
5,400 Chevron Corporation 399,263
13,600 Exxon Corporation 836,400
10,000 Mobil Corporation 698,750
12,400 Royal Dutch Petroleum Company ADR 674,250
-------------
Total Integrated Oil 3,592,351
-------------
Materials & Processing - 10.2%
3,500 Aluminum Company of America 263,813
10,800 Dover Corporation 664,200
3,900 Dow Chemical Company 339,787
11,400 DuPont (E.I.) de Nemours & Company, Inc. 716,775
</TABLE>
The accompanying notes are an integral part of this statement.
-32-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
CORE EQUITY FUND
----------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
Materials & Processing - 10.2% (continued)
7,800 Illinois Tool Works, Inc. $ 389,512
7,500 International Paper Company 364,219
3,400 Kimberly-Clark Corporation 169,150
6,150 Minnesota Mining & Manufacturing Company 627,300
3,300 Phelps Dodge Corporation 281,119
-------------
Total Materials & Processing 3,815,875
-------------
Other Energy - 1.3%
3,900 Schlumberger, Ltd. 487,500
-------------
Producer Durables - 8.2%
9,200 Allied-Signal, Inc. 772,800
7,000 Boeing Company 371,438
11,300 Emerson Electric Company 622,206
19,800 General Electric Company 1,294,425
-------------
Total Producer Durables 3,060,869
-------------
Technology - 12.7%
4,350 Adobe Systems, Inc. 152,522
3,700 BMC Software, Inc. * 204,887
3,800 Cisco Systems, Inc.* 255,075
5,800 Compaq Computer Corporation* 575,650
3,200 Computer Associates International, Inc. 178,200
5,500 Hewlett-Packard Company 308,000
6,300 Intel Corporation 893,419
6,100 International Business Machines Corporation 550,144
9,900 Microsoft Corporation* 1,251,112
2,700 Motorola, Inc. 205,200
2,300 Texas Instruments, Inc. 193,344
-------------
Total Technology 4,767,553
-------------
</TABLE>
The accompanying notes are an integral part of this statement.
-33-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
CORE EQUITY FUND
----------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
Utilities - 5.6%
5,050 AT&T Corporation $ 177,066
4,300 GTE Corporation 188,662
3,038 Lucent Technologies, Inc. 218,926
9,500 MCI Communications Corporation 363,672
13,800 NIPSCO Industries, Inc. 570,112
9,600 SBC Communications, Inc. 594,000
--------------
Total Utilities 2,112,438
--------------
Total Common Stocks (Cost $22,420,440) 35,641,849
--------------
<CAPTION>
Principal
amount
------
<S> <C> <C>
SHORT-TERM INVESTMENTS - 4.4%
Repurchase Agreement - 2.3%
Lehman Brothers, dated 06/30/97, 5.95%, due 07/01/97
in the amount of $865,000 (collateralized by $893,226
U.S. Treasury Bond, 6.125%, due 12/31/01, with a
market value of $884,861 at 06/30/97),
$865,000 repurchase proceeds $865,143 865,000
--------------
<CAPTION>
Number
of
shares
- ------
<S> <C> <C>
Short Term Investment Fund - 2.1%
Fidelity Institutional Cash Portfolios:
778,089 Government 778,089
--------------
Total Short-Term Investments (Cost $1,643,089) 1,643,089
--------------
Total Investments (Cost $24,063,529) - 99.5% 37,284,938
Other assets in excess of liabilities - 0.5% 176,478
--------------
NET ASSETS - 100% $ 37,461,416
==============
</TABLE>
* Non-income producing security.
The accompanying notes are an integral part of this statement.
-34-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
CORE EQUITY FUND
----------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
Assets
------------------
<S> <C>
Investments, at value (cost $24,063,529) $ 37,284,938
Cash 812
Investment income receivable 37,805
Receivable for investments sold 141,940
Receivable for units issued 42,523
-----------
Total assets 37,508,018
-----------
Liabilities
------------------
Management fee payable 30,802
Payable for units redeemed 15,800
-----------
Total liabilities 46,602
-----------
Net assets $ 37,461,416
===========
Net assets were comprised of:
Units of beneficial interest $ 21,063,768
Accumulated net investment income 1,101,751
Accumulated net realized gain 2,074,488
Net unrealized appreciation 13,221,409
-----------
Net assets at June 30, 1997 $ 37,461,416
===========
Unit value, offering price and redemption price per unit ($37,461,416/
1,958,358 units of beneficial interest issued and outstanding;
unlimited number of units authorized) $ 19.13
===========
</TABLE>
The accompanying notes are an integral part of this statement.
-35-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
CORE EQUITY FUND
----------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
Net investment income
---------------------
<S> <C>
Income:
Dividends $ 253,858
Interest 53,822
----------
Total income 307,680
----------
Expenses:
Management fee (Note 2) 165,417
Accounting fees 9,489
Audit fees 5,746
Directors' fees 1,174
Insurance 2,185
Legal fees 1,117
Registration fees 3,527
Miscellaneous 1,019
----------
Total expenses 189,674
Expense subsidy (Note 3) (24,257)
----------
Net expenses 165,417
----------
Net investment income 142,263
----------
Net realized and unrealized gain on investments
-----------------------------------------------
Net realized gain on investments 710,863
Unrealized appreciation in value of investments during the year 5,328,769
----------
Net gain on investments 6,039,632
----------
Net increase in net assets resulting from operations $ 6,181,895
==========
</TABLE>
The accompanying notes are an integral part of this statement.
-36-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
CORE EQUITY FUND
----------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Six months Year ended
ended June 30, December 31,
1997 1996
---- ----
<S> <C> <C>
Increase/(decrease) in net assets:
From operations:
Net investment income $ 142,263 $ 292,789
Net realized gain investments 710,863 374,940
Unrealized appreciation in value of
investments during the year 5,328,769 4,766,319
----------- -----------
Net increase in net assets resulting
from operations 6,181,895 5,434,048
----------- -----------
From unit transactions:
Net proceeds from units issued 6,905,739 6,279,420
Cost of units redeemed (4,209,795) (7,497,025)
----------- -----------
Net increase/(decrease) in net assets
resulting from unit transactions 2,695,944 (1,217,605)
----------- -----------
Total increase in net assets 8,877,839 4,216,443
Net assets, beginning of year 28,583,577 24,367,134
----------- -----------
Net assets, end of year $37,461,416 $28,583,577
=========== ===========
Net change in units outstanding:
Units issued 401,519 440,515
Units redeemed (236,648) (520,615)
----------- -----------
164,871 (80,100)
=========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
-37-
<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 years indicated)
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
June 30, Years ended December 31,
--------------------------------------------------------------------------
1997 1996 1995 1994 1993*
---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C>
Selected per unit data:
Investment income $ 0.16 $ 0.30 $ 0.29 $ 0.28 $ 0.21
Expenses (0.10) (0.16) (0.14)# (0.13) (0.20)#
Expense subsidy 0.01 0.02 0.02 0.03 0.13
---------- ---------- ---------- ---------- ----------
Net investment income 0.07 0.16 0.17 0.18 0.14
Net realized and unrealized
gain/(loss) on investments 3.12 2.77 2.48 (0.62) 0.66
---------- ---------- ---------- ---------- ----------
Net increase/(decrease) in
net asset value 3.19 2.93 2.65 (0.44) 0.80
Net asset value beginning
of year 15.94 13.01 10.36 10.80 10.00
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 19.13 $ 15.94 $ 13.01 $ 10.36 $ 10.80
========== ========== ========== ========== ==========
Ratio to average net assets:
Expenses 1.00%** 1.00% 1.00% 1.00% 1.00%##
Net investment income 0.86%** 1.10% 1.44% 1.68% 1.84%**
Other:
Average net assets
(000 omitted) $33,370 $26,542 $22,336 $16,948 $ 4,356
Portfolio turnover 14% 29% 133% 129% 83%
Number of units outstanding
at end of year (000 omitted) 1,958 1,793 1,874 2,030 1,086
Total return 20.03% 22.54% 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 in 1993 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.
*** Nonannualized.
Per unit amounts are calculated using average units outstanding for the period.
The accompanying notes are an integral part of this statement.
-38-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
SMALL CAPITALIZATION FUND
-------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<C> <S> <C>
COMMON STOCKS - 96.4%
Auto & Transportation - 4.6%
14,250 AAR Corporation $ 460,453
8,550 Air Express International Corporation 339,863
15,350 Offshore Logistics, Inc.* 289,731
7,350 Tower Automotive, Inc.* 316,050
-----------------
Total Auto & Transportation 1,406,097
-----------------
Consumer Discretionary - 16.4%
7,500 CDI Corporation 312,656
11,900 Carson Pirie Scott Company* 377,825
8,300 Cinar Films, Inc.* 269,750
11,450 Corrections Corporation of America* 455,138
10,900 Fair Isaac & Company 485,731
13,100 Mohawk Industries* 298,025
12,150 Personnel Group of America, Inc.* 350,072
10,200 Proffitt's, Inc.* 447,525
13,650 Stage Stores, Inc.* 355,753
15,600 Servico, Inc.* 232,050
12,450 St. John Knits, Inc. 672,300
7,345 Unavision* 287,373
15,700 Waban, Inc.* 505,344
-----------------
Total Consumer Discretionary 5,049,542
-----------------
Consumer Staples - 6.3%
14,050 JP Food Service* 403,059
28,800 Lojack Corporation* 414,000
15,200 Richfood Holdings, Inc. 395,200
9,000 Schweitzer-Mauduit International, Inc. 337,500
9,800 Suiza Foods Corporation* 401,800
-----------------
Total Consumer Staples 1,951,559
-----------------
</TABLE>
The accompanying notes are an integral part of this statement.
-39-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
SMALL CAPITALIZATION FUND
-------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<C> <S> <C>
Financial Services - 15.2%
8,900 Allied Group, Inc. $ 338,200
10,000 Bank United Corporation 380,000
12,025 Capstead Mortgage Corporation 296,867
24,850 City National Corporation 597,953
10,322 Delphi Financial Group, Inc.* 397,397
6,400 Evans Withycombe Residential, Inc. 132,800
3,150 Finova Group, Inc. 240,975
5,500 First Savings Bank of Washington Bancorp, Inc. 122,375
3,200 JSB Financial, Inc. 138,400
15,300 Klamath First Bancorp, Inc. 292,613
8,700 Magna Group, Inc. 302,325
19,900 TR Financial Corporation 501,231
10,750 Vesta Insurance Group, Inc. 464,938
15,600 Weeks Corporation 487,500
-----------------
Total Financial Services 4,693,574
-----------------
Healthcare - 13.3%
21,550 ADAC Laboratories 509,119
18,450 Ballard Medical Products 370,153
13,550 Centocor, Inc.* 420,897
11,400 IMPATH, Inc.* 310,650
17,400 Multicare Companies, Inc.* 476,325
16,750 OccuSystems, Inc.* 485,750
11,544 Pharmaceutical Product Development, Inc.* 253,968
15,550 Sofamor/Danek Group, Inc.* 711,413
13,900 Sybron International Corporation* 554,262
-----------------
Total Healthcare 4,092,537
-----------------
</TABLE>
The accompanying notes are an integral part of this statement.
-40-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
SMALL CAPITALIZATION FUND
-------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<C> <S> <C>
Integrated Oil - 3.2%
12,900 Abraxas Petroleum Corporation* $ 165,684
17,750 Coho Energy, Inc.* 188,594
13,700 Lomak Petroleum, Inc. 244,031
8,100 Louis Dreyfus Natural Gas Corporation* 131,625
18,000 Plains Resources, Inc.* 265,500
-----------------
Total Integrated Oil 995,434
-----------------
Materials & Processing - 8.1%
19,250 Chase Brass Industries, Inc.* 469,219
15,933 Delta & Pine Land Company 567,613
11,300 EVI, Inc.* 474,600
12,050 Jacobs Engineering Group, Inc.* 323,844
8,100 NCI Building Systems, Inc.* 262,238
15,600 Pegasus Gold, Inc.* 95,550
4,150 Potash Corporation Saskatchewan, Inc. 311,509
-----------------
Total Materials & Processing 2,504,573
-----------------
Other Energy - 4.6%
4,700 Atwood Oceanics* 314,900
22,150 Dawson Production Services, Inc.* 310,100
12,200 Falcon Drilling Company, Inc.* 703,025
4,000 Rutherford-Moran Oil Corporation* 94,000
-----------------
Total Other Energy 1,422,025
-----------------
Producer Durables - 3.9%
23,150 Figgie International, Inc.* 318,312
1,600 Halter Marine Group, Inc.* 38,400
6,700 Oregon Metallurgical Corporation* 188,438
14,150 Tracor, Inc.* 355,519
8,100 USA Waste Services, Inc.* 312,862
-----------------
Total Producer Durables 1,213,531
-----------------
</TABLE>
The accompanying notes are an integral part of this statement.
-41-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
SMALL CAPITALIZATION FUND
-------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<C> <S> <C>
Technology - 18.3%
15,600 Actel Corporation* $ 266,175
15,500 Analyst International Company 519,250
6,100 BISYS Group, Inc.* 254,675
11,700 BancTec, Inc.* 303,469
8,850 Black Box Corporation* 356,213
13,200 CHS Electronics, Inc.* 349,800
8,400 Computer Products, Inc.* 210,000
17,700 Comverse Technology, Inc.* 920,400
10,600 Fisher Scientific International 503,500
15,150 National Computer Systems, Inc. 403,369
12,500 National TechTeam, Inc.* 267,187
18,700 PRI Automation, Inc.* 709,431
8,100 Visio Corporation* 571,050
-----------------
Total Technology 5,634,519
-----------------
Utilities - 2.5%
8,750 California Energy Company, Inc.* 332,500
10,800 Tejas Gas Corporation* 423,900
-----------------
Total Utilities 756,400
-----------------
Principal Total Common Stocks (Cost $22,124,022) 29,719,790
amount -----------------
------
SHORT-TERM INVESTMENTS - 4.0%
Repurchase Agreement - 1.9%
Lehman Brothers, dated 06/30/97, 5.95%,
due 07/01/97 in the amount of $576,000
(collateralized by $594,796 U.S. Treasury Bond,
6.125%, due 12/31/01, with a market value of
$589,226 at 06/30/97), repurchase
$ 576,000 proceeds $576,095 576,000
-----------------
</TABLE>
The accompanying notes are an integral part of this statement.
-42-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
SMALL CAPITALIZATION FUND
-------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<C> <S> <C>
Short Term Investment Fund - 0.2%
Fidelity Institutional Cash Portfolios:
69,000 Government $ 69,000
-----------------
Principal
amount
------
U.S. Government Obligations - 1.9%
$ 315,000 U.S. Treasury Bill, 5.11%, due 07/10/97** 314,598
268,000 U.S. Treasury Bill, 5.07%, due 07/17/97** 267,396
-----------------
Total U.S. Government Obligations 581,994
-----------------
Total Short-Term Investments (Cost $1,226,994) 1,226,994
-----------------
Total Investments (Cost $23,351,016) - 100.4% 30,946,784
Liabilities in excess of other assets - (0.4%) (129,723)
-----------------
NET ASSETS - 100% $ 30,817,061
=================
</TABLE>
* Non-income producing security.
** Rate disclosed is as of June 30, 1997.
The accompanying notes are an integral part of this statement.
-43-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
SMALL CAPITALIZATION FUND
-------------------------
STATEMENT OF ASSETS AND LIABILITIES
-----------------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Assets
----------
<S> <C>
Investments, at value (cost $23,351,016) $ 30,946,784
Cash 162
Investment income receivable 5,592
Receivable for investments sold 190,491
Receivable for units issued 32,120
------------
Total assets 31,175,149
------------
<CAPTION>
Liabilities
---------------
<S> <C>
Payable for investments purchased 329,866
Management fee payable 25,262
Payable for units redeemed 2,960
------------
Total liabilities 358,088
------------
Net assets $ 30,817,061
============
Net assets were comprised of:
Units of beneficial interest $ 20,213,147
Accumulated net investment income 120,360
Accumulated net realized gain 2,887,786
Net unrealized appreciation 7,595,768
------------
Net assets at June 30, 1997 $ 30,817,061
============
Unit value, offering price and redemption price per unit ($30,817,061/
1,577,115 units of beneficial interest issued and outstanding; unlimited number
of units authorized) $ 19.54
============
</TABLE>
The accompanying notes are an integral part of this statement.
-44-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
SMALL CAPITALIZATION FUND
-------------------------
STATEMENT OF OPERATIONS
-----------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Net investment income
---------------------
<S> <C>
Income:
Dividends $ 72,000
Interest 51,014
--------------
Total income 123,014
--------------
Expenses:
Management fee (Note 2) 121,273
Accounting fees 9,489
Audit fees 5,746
Directors' fees 1,174
Insurance 2,019
Legal fees 1,117
Registration fees 5,537
Miscellaneous 779
--------------
Total expenses 147,134
Expense subsidy (Note 3) (25,861)
---------------
Net expenses 121,273
--------------
Net investment income 1,741
--------------
<CAPTION>
Net realized and unrealized gain on investments
-----------------------------------------------
<S> <C>
Net realized gain on investments 420,208
Unrealized appreciation in value of investments during the year 3,003,118
--------------
Net gain on investments 3,423,326
--------------
Net increase in net assets resulting from operations $ 3,425,067
==============
</TABLE>
The accompanying notes are an integral part of this statement.
-45-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
SMALL CAPITALIZATION FUND
-------------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Six months Year ended
ended June 30, December 31,
1997 1996
---- ----
<S> <C> <C>
Increase/(decrease) in net assets:
From operations:
Net investment income $ 1,741 $ 5,774
Net realized gain on investments 420,208 2,846,278
Unrealized appreciation in value of investments
during the year 3,003,118 1,536,847
----------------- ----------------
Net increase in net assets resulting from operations 3,425,067 4,388,899
----------------- ----------------
From unit transactions:
Net proceeds from units issued 9,444,011 7,179,789
Cost of units redeemed (2,802,226) (3,666,519)
----------------- ---------------
Net increase in net assets resulting
from unit transactions 6,641,785 3,513,270
----------------- ----------------
Total increase in net assets 10,066,852 7,902,169
Net assets, beginning of year 20,750,209 12,848,040
----------------- ----------------
Net assets, end of year $ 30,817,061 $ 20,750,209
================= ================
Net change in units outstanding:
Units issued 550,323 458,305
Units redeemed (155,305) (234,176)
----------------- ---------------
395,018 224,129
================= ================
</TABLE>
The accompanying notes are an integral part of this statement.
-46-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
SMALL CAPITALIZATION FUND
-------------------------
SELECTED PER UNIT DATA AND RATIOS
---------------------------------
(Unaudited)
-----------
(Selected data for a unit outstanding throughout each of the years indicated)
<TABLE>
<CAPTION>
Six months ended Years ended December 31,
June 30, -----------------------------------------------------------------------
1997 1996 1995 1994 1993***
---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C>
Selected per unit data:
Investments income $0.09 $ 0.16 $ 0.17 $ 0.16 $ 0.09
Expenses (0.10)** (0.18)** (0.16)** (0.15)** (0.17)#
Expense subsidy 0.01 0.03 0.04 0.05 0.10
------------ ------------- -------------- -------------- --------------
Net investment income 0.00 0.01 0.05 0.06 0.02
Net realized and unrealized
gain/(loss) on investments 1.99 4.13 3.13 (0.72) 0.87
------------ ------------- -------------- -------------- --------------
Net increase/(decrease) in
net asset value 1.99 4.14 3.18 (0.66) 0.89
Net asset value, beginning
of year 17.55 13.41 10.23 10.89 10.00
------------ ------------- -------------- -------------- --------------
Net asset value, end of year $ 19.54 $ 17.55 $ 13.41 $ 10.23 $ 10.89
============ ============= ============== ============== ==============
Ratio to average net assets:
Expenses 1.00%+* 1.00%* 1.00%* 1.00%* 1.15%##
Net investment income 0.01% 0.04% 0.46% 0.55% 0.28%+
Other:
Average net assets
(000 omitted) $24,368 $16,384 $10,378 $9,678 $ 5,768
Portfolio turnover 26% 68% 89% 120% 161%
Number of units outstanding
at end of year (000 omitted) 1,577 1,182 958 906 903
Total return 11.32% 30.88% 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 0.15% or $17,690, $24,219, $15,584
and $9,153 for the for the six months ended June 30, 1997 and years
ended December 31, 1996, 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 May 2, 1994.
** Reflects management fee reduction of $17,690 or $0.01 per unit, $24,219 or
$0.02 per unit, $15,584 or $0.02 per unit and $9,153 or $0.01 per unit for
the for the six months ended June 30, 1997 and years ended December 31,
1996, 1995 and 1994, respectively. Without management fee reduction,
expense per unit is $0.11, $0.19, $0.17 and $0.16 for the for the six
months ended June 30, 1997 and years ended December 31, 1996, 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.
-47-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
SHORT-INTERMEDIATE TERM U.S. GOVERNMENT SECURITIES FUND
-------------------------------------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Principal
amount Value
------ -----
<S> <C> <C>
INTERMEDIATE-TERM U.S. GOVERNMENT
OBLIGATIONS - 96.8%
U.S. Government Agency Obligations - 30.5%
$1,330,000 Federal Farm Credit Bank, 6.90%, due 05/01/02 $ 1,348,819
1,300,000 Federal Home Loan Bank, 6.79%, due 04/17/01 1,314,472
Federal Home Loan Mortgage Corporation,
2,586,328 5.60%, due 09/15/00 2,546,628
Federal National Mortgage Association,
2,392,091 6.00%, due 05/01/01 2,323,318
-----------------
Total U.S. Government Agency Obligations 7,533,237
-----------------
U.S. Government Obligations - 66.3%
1,000,000 U.S. Treasury Note, 5.13%, due 02/28/98 996,251
4,666,000 U.S. Treasury Note, 5.50%, due 11/15/98 4,638,298
1,265,000 U.S. Treasury Note, 5.75%, due 08/15/03 1,221,912
1,000,000 U.S. Treasury Note, 5.88%, due 04/30/98 1,001,251
1,500,000 U.S. Treasury Note, 5.88%, due 10/31/98 1,498,595
900,000 U.S. Treasury Note, 5.88%, due 11/30/01 883,126
2,000,000 U.S. Treasury Note, 6.38%, due 04/30/99 2,011,252
400,000 U.S. Treasury Note, 6.50%, due 05/31/01 402,375
1,100,000 U.S. Treasury Note, 6.88%, due 05/15/06 1,123,032
2,500,000 U.S. Treasury Note, 7.75%, due 11/30/99 2,587,502
-----------------
Total U.S. Government Obligations 16,363,594
-----------------
Total Intermediate-Term U.S. Government
Obligations (Cost $23,833,952) 23,896,831
-----------------
</TABLE>
The accompanying notes are an integral part of this statement.
-48-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
SHORT-INTERMEDIATE TERM U.S. GOVERNMENT SECURITIES FUND
-------------------------------------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Principal
amount Value
------ -----
<S> <C> <C>
SHORT-TERM INVESTMENTS - 2.0%
Repurchase Agreement - 0.4%
Lehman Brothers, dated 06/30/97, 5.95%,
due 07/01/97 in the amount of $99,000
(collateralized by $102,231 U.S. Treasury Bond,
6.125%, due 12/31/01, with a market value of
$101,273 at 06/30/97), repurchase
$ 99,000 proceeds $99,016 $ 99,000
--------------
<CAPTION>
Number of
shares
------
<S> <C> <C>
Short Term Investment Fund - 1.6%
Fidelity Institutional Cash Portfolios:
401,000 Government 401,000
--------------
Total Short-Term Investments (Cost $500,000) 500,000
--------------
Total Investments (Cost $24,333,952) - 98.8% 24,396,831
Other assets in excess of liabilities - 1.2% 306,033
--------------
NET ASSETS - 100% $24,702,864
==============
</TABLE>
The accompanying notes are an integral part of this statement.
-49-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
SHORT-INTERMEDIATE TERM U.S. GOVERNMENT SECURITIES FUND
-------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
-----------------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Assets
-----------
<S> <C>
Investments, at value (cost $24,333,952) $ 24,396,831
Cash 604
Investment income receivable 209,978
Receivable for investments sold 90,887
Receivable for units issued 130,741
----------------
Total assets 24,829,041
----------------
<CAPTION>
Liabilities
---------------
<S> <C>
Management fee payable 15,061
Payable for units redeemed 111,116
----------------
Total liabilities 126,177
----------------
Net assets $ 24,702,864
================
Net assets were comprised of:
Units of beneficial interest $ 20,758,261
Accumulated net investment income 4,713,566
Accumulated net realized loss (831,842)
Net unrealized appreciation 62,879
----------------
Net assets at June 30, 1997 $ 24,702,864
================
Unit value, offering price and redemption price per unit ($24,702,864/
2,070,359 units of beneficial interest issued and outstanding;
unlimited number of units authorized) $ 11.93
================
</TABLE>
The accompanying notes are an integral part of this statement.
-50-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
SHORT-INTERMEDIATE TERM U.S. GOVERNMENT SECURITIES FUND
-------------------------------------------------------
STATEMENT OF OPERATIONS
-----------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Net investment income
---------------------
<S> <C>
Income:
Interest $ 819,440
-----------
Expenses:
Management fee (Note 2) 99,304
Accounting fees 9,489
Audit fees 5,746
Directors fees 1,174
Insurance 2,185
Legal fees 1,117
Registration fees 2,517
Miscellaneous 1,019
-----------
Total expenses 122,551
Expense subsidy (Note 3) (23,247)
-----------
Net expenses 99,304
-----------
Net investment income 720,136
-----------
<CAPTION>
Net realized and unrealized loss on investments
-----------------------------------------------
<S> <C>
Net realized loss on investments (88,763)
Unrealized depreciation in value of investments during the year (53,561)
-----------
Net loss on investments (142,324)
-----------
Net increase in net assets resulting from operations $ 577,812
===========
</TABLE>
The accompanying notes are an integral part of this statement.
-51-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
SHORT-INTERMEDIATE TERM U.S. GOVERNMENT SECURITIES FUND
-------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Six months Year ended
ended June 30, December 31,
1997 1996
---- ----
<S> <C> <C>
Increase/(decrease) in net assets:
From operations:
Net investment income $ 720,136 $ 1,492,190
Net realized loss on investments (88,763) (261,104)
Unrealized depreciation in value of investments
during the year (53,561) (513,449)
----------- -----------
Net increase in net assets resulting from operations 577,812 717,637
----------- -----------
From unit transactions:
Net proceeds from units issued 4,393,131 8,522,957
Cost of units redeemed (8,818,860) (9,473,140)
----------- -----------
Net decrease in net assets resulting
from unit transactions (4,425,729) (950,183)
----------- -----------
Total decrease in net assets (3,847,917) (232,546)
Net assets, beginning of year 28,550,781 28,783,327
----------- -----------
Net assets, end of year $24,702,864 $28,550,781
=========== ===========
Net change in units outstanding:
Units issued 373,251 745,912
Units redeemed (752,344) (832,085)
----------- -----------
(379,093) (86,173)
=========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
-52-
<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 years indicated)
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
June 30, Years ended December 31,
------------------------ -----------------------------------------------------------------------
1997 1996 1995 1994 1993*
---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C>
Selected per unit data:
Investment income $ 0.36 $ 0.69 $ 0.66 $ 0.52 $ 0.33
Expenses (0.05) (0.10) (0.10) (0.09) (0.11)#
Expense subsidy 0.01 0.01 0.02 0.02 0.07
------------ ------------- -------------- -------------- --------------
Net investment income 0.32 0.60 0.58 0.45 0.29
Net realized and unrealized
gain/(loss) on investments (0.05) (0.29) 0.63 (0.55) (0.05)
------------ ------------- -------------- -------------- --------------
Net increase/(decrease) in
net asset value 0.27 0.31 1.21 (0.10) 0.24
Net asset value, beginning
of year 11.66 11.35 10.14 10.24 10.00
------------ ------------- -------------- -------------- --------------
Net asset value, end of year $ 11.93 $ 11.66 $ 11.35 $ 10.14 $ 10.24
============ ============= ============== ============== ==============
Ratio to average net assets:
Expenses 0.75%** 0.75% 0.75% 0.75% 0.75%##
Net investment income 5.44%** 5.26% 5.38% 4.41% 3.76%**
Other:
Average net assets
(000 omitted) $26,717 $28,354 $24,350 $21,504 $ 8,598
Portfolio turnover 46% 177% 187% 268% 247%
Number of units outstanding
at end of year (000 omitted) 2,070 2,449 2,536 2,269 1,698
Total return 2.35% 2.68% 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.
-53-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
U.S. GOVERNMENT SECURITIES FUND
-------------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Principal
amount Value
------ -----
<C> <S> <C>
LONG-TERM U.S. GOVERNMENT OBLIGATIONS 89.0%
U.S. Treasury Bonds - 79.7%
$ 1,850,000 U.S. Treasury Bond, 6.25%, due 08/15/23 $ 1,712,408
420,000 U.S. Treasury Bond, 6.75%, due 08/15/26 415,669
-----------
Total U.S. Treasury Bond 2,128,077
-----------
U.S. Treasury Note - 9.3%
250,000 U.S. Treasury Note, 5.63%, due 11/30/98 248,906
-----------
Total Long-Term U.S. Government
Obligations (Cost $2,312,324) 2,376,983
-----------
SHORT-TERM INVESTMENTS - 5.2%
Repurchase Agreement - 3.6%
Lehman Brothers, dated 06/30/97, 5.95%,
due 07/01/97 in the amount of $97,000
(collateralized by $100,165 U.S. Treasury Bond,
6.125%, due 12/31/01, with a market value of
$99,227 at 06/30/97), repurchase
97,000 proceeds $97,016 97,000
<CAPTION> -----------
Number of
shares
------
<C> <S> <C>
Short Term Investment Fund - 1.6%
Fidelity Institutional Cash Portfolios:
41,000 Government 41,000
-----------
Total Short-Term Investments (Cost $138,000) 138,000
-----------
Total Investments (Cost $2,450,324) - 94.2% 2,514,983
Other assets in excess of liabilities - 5.8% 154,486
-----------
NET ASSETS - 100% $ 2,669,469
===========
</TABLE>
The accompanying notes are an integral part of this statement.
-54-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
U.S. GOVERNMENT SECURITIES FUND
-------------------------------
STATEMENT OF ASSETS AND LIABILITIES
-----------------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Assets
----------
<S> <C>
Investments, at value (cost $2,450,324) $ 2,514,983
Cash 413
Investment income receivable 55,481
Receivable for units issued 100,247
----------------
Total assets 2,671,124
----------------
Liabilities
---------------
Management fee payable 1,655
----------------
Total liabilities 1,655
----------------
Net assets $ 2,669,469
================
Net assets were comprised of:
Units of beneficial interest $ 2,140,478
Accumulated net investment income 652,400
Accumulated net realized loss (188,068)
Net unrealized appreciation 64,659
----------------
Net assets at June 30, 1997 $ 2,669,469
================
Unit value, offering price and redemption price per unit ($2,669,469/
205,918 units of beneficial interest issued and outstanding; unlimited number of
units authorized) $ 12.96
================
</TABLE>
The accompanying notes are an integral part of this statement.
-55-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
U.S. GOVERNMENT SECURITIES FUND
-------------------------------
STATEMENT OF OPERATIONS
-----------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Net investment income
---------------------
<S> <C>
Income:
Interest $ 90,286
--------------
Expenses:
Management fee (Note 2) 9,881
Accounting fees 9,489
Audit fees 5,746
Directors' fees 1,174
Insurance 1,733
Legal fees 1,117
Registration fees 2,517
Miscellaneous 757
--------------
Total expenses 32,414
Expense subsidy (Note 3) (22,533)
--------------
Net expenses 9,881
--------------
Net investment income 80,405
--------------
<CAPTION>
Net realized and unrealized gain on investments
-----------------------------------------------
<S> <C>
Net realized gain on investments 3,165
Unrealized depreciation in value of investments during the year (42,149)
--------------
Net loss on investments (38,984)
--------------
Net increase in net assets resulting from operations $ 41,421
==============
</TABLE>
The accompanying notes are an integral part of this statement.
-56-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
U.S. GOVERNMENT SECURITIES FUND
-------------------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Six months Year ended
ended June 30, December 31,
1997 1996
---- ----
<S> <C> <C>
Increase/(decrease) in net assets:
From operations:
Net investment income $ 80,405 $ 164,927
Net realized gain on investments 3,165 54,565
Unrealized depreciation in value of investments
during the year (42,149) (271,709)
-------------------- -------------------
Net increase/(decrease) in net assets resulting
from operations 41,421 (52,217)
-------------------- -------------------
From unit transactions:
Net proceeds from units issued 398,275 794,123
Cost of units redeemed (516,904) (872,518)
-------------------- -------------------
Net increase decrease in net assets resulting
from unit transactions (118,629) (78,395)
-------------------- -------------------
Total decreases in net assets (77,208) (130,612)
Net assets, beginning of year 2,746,677 2,877,289
-------------------- -------------------
Net assets, end of year $ 2,669,469 $ 2,746,677
==================== ===================
Net change in units outstanding:
Units issued 31,307 64,599
Units redeemed (40,618) (70,569)
-------------------- -------------------
(9,311) (5,970)
==================== ===================
</TABLE>
The accompanying notes are an integral part of this statement.
-57-
<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 years indicated)
(Unaudited)
<TABLE>
<CAPTION>
Six months
ended June 30, Years ended December 31,
--------------------------------------------------------------------
1997 1996 1995 1994 1993*
---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C>
Selected per unit data:
Investment income $ 0.43 $ 0.83 $ 0.81 $ 0.70 $ 0.45
Expenses (0.15)** (0.25)** (0.24)** (0.23)** (0.36)#
Expense subsidy 0.10 0.16 0.16 0.15 0.31
------------ ------------- -------------- -------------- --------------
Net investment income 0.38 0.74 0.73 0.62 0.40
Net realized and unrealized
gain/(loss) on investments (0.18) (0.99) 2.28 (1.53) 0.51
------------ ------------- -------------- -------------- --------------
Net increase/(decrease) in
net asset value 0.20 (0.25) 3.01 (0.91) 0.91
Net asset value, beginning
of year 12.76 13.01 10.00 10.91 10.00
------------ ------------- -------------- -------------- --------------
Net asset value, end of year $ 12.96 $ 12.76 $ 13.01 $ 10.00 $ 10.91
============ ============= ============== ============== ==============
Ratio to average net assets:
Expense 0.75%+* 0.75%* 0.75%* 0.75%* 0.85%##
Net investment income 6.12%+ 6.01% 6.38% 6.23% 4.91%+
Other:
Average net assets
(000 omitted) $2,650 $2,746 $2,535 $2,810 $ 1,905
Portfolio turnover 12% 48% 17% 174% 232%
Number of units outstanding
at end of year (000 omitted) 206 215 221 263 267
Total return 1.55% (1.89%) 30.11% (8.39%) 9.12%****
</TABLE>
+ Annualized.
# Reflects voluntary fee waiver of $3,040 or $0.02 per unit. Without
voluntary fee 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 0.10% or $1,291, $2,757, $2,527 and
$1,886 for the six months ended June 30, 1997 and years ended December
31, 1996, 1995 and 1994, respectively. For the year ended December 31,
1994 the actual net expense ratio for the year was 0.80% of average net
assets as the fee reduction went into effect on 5/2/94.
** Reflects management fee reduction of $1,291 or $0.01 per unit, $2,757 or
$0.01 per unit, $2,527 or $0.01 per unit and $1,886 or $0.01 per unit
for the six months ended June 30, 1997 and years ended December 31,
1996, 1995 and 1994, respectively. Without management fee reduction,
expense per unit is $0.16, $0.26, $0.25 and $0.24 for the six months
ended June 30, 1997 and years ended December 31, 1996, 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.
-58-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
INTERMEDIATE TERM BOND FUND
---------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Principal
amount Value
------ -----
<S> <C> <C>
LONG-TERM INVESTMENTS - 93.2%
CORPORATE BONDS - 30.7%
Financial & Other - 16.9%
$150,000 Associates Corporation of North America, 7.70%, due 03/01/02 $ 155,025
450,000 Chrysler Financial Corporation, 6.95%, due 03/25/02 453,027
200,000 Chubb Capital, 6.88%, due 02/01/03 200,768
108,146 Ford Credit Grantor Trust, 5.90%, due 10/15/00 108,294
400,000 Ford Motor Credit Company, 6.25%, due 12/08/05 379,422
350,000 General Motors Acceptance Corporation, 6.63%, due 10/15/05 339,122
48,742 General Motors Acceptance Corporation, 7.15%, due 03/15/00 49,197
150,000 Household Finance Company, 6.18%, due 06/30/98 150,092
150,000 International Lease Finance, 5.50%, due 01/15/99 148,323
200,000 Premier Auto Trust, 6.25%, due 08/06/01 200,182
370,185 Toyota Auto Receivables, 6.45%, due 04/15/02 372,777
200,000 SBC Communications, Inc., 6.88%, due 08/15/06 198,896
150,000 U.S. Leasing International, 5.95%, due 10/15/03 142,418
----------------
Total Financial & Other 2,897,543
----------------
Financial Services - 13.8%
150,000 BankAmerica Corporation, 6.85%, due 03/01/03 149,957
200,000 Citicorp Corporation, 7.13%, due 09/01/05 200,994
300,000 Commercial Credit Corporation, 5.90%, due 09/01/03 285,517
150,000 Commercial Credit Corporation, 6.13%, due 12/01/05 141,376
350,000 First Chicago NBD Corporation, 7.13%, due 05/15/07 347,944
200,000 First Union Corporation, 7.00%, due 03/15/06 197,708
450,000 NationsBank Corporation, 7.00%, due 05/15/03 452,656
200,000 Norwest Corporation, 6.20%, due 12/01/05 189,840
400,000 Smith Barney Holdings, 7.00%, due 03/15/04 399,503
----------------
Total Financial Services 2,365,495
----------------
Total Corporate Bonds (Cost $5,227,120) 5,263,038
----------------
</TABLE>
The accompanying notes are an integral part of this statement.
-59-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
INTERMEDIATE TERM BOND FUND
---------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Principal
amount Value
------ -----
<S> <C> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 62.5%
U.S. Government Agency Obligations - 19.9%
$ 100,000 Federal Home Loan Bank, 6.05%, due 06/28/00 $ 99,222
500,000 Federal Home Loan Bank, 7.00%, due 04/02/07 508,256
220,968 Federal National Mortgage Association, 6.50%, due 03/01/00 218,344
700,000 Federal National Mortgage Association, 7.00%, due 12/01/03 702,844
1,881,001 Federal National Mortgage Association, 7.00%, due 12/01/03 1,888,643
---------------
Total U.S. Government Agency Obligations 3,417,309
---------------
U.S. Treasury Obligations - 42.6%
1,400,000 U.S. Treasury Note, 5.50%, due 04/15/00 1,375,502
1,050,000 U.S. Treasury Note, 5.88%, due 01/31/99 1,048,032
775,000 U.S. Treasury Note, 6.00%, due 09/30/98 775,970
190,000 U.S. Treasury Note, 6.38%, due 03/31/01 190,416
285,000 U.S. Treasury Note, 6.38%, due 08/15/02 284,911
2,090,000 U.S. Treasury Note, 6.50%, due 10/15/06 2,081,510
590,000 U.S. Treasury Note, 6.88%, due 09/30/01 590,369
690,000 U.S. Treasury Note, 7.25%, due 05/15/04 719,326
240,000 U.S. Treasury Note, 7.25%, due 08/15/04 250,275
---------------
Total U.S. Treasury Obligations 7,316,311
---------------
Total U.S. Government and Agency Obligations
(Cost $10,641,750) 10,733,620
---------------
Total Long-Term Investments (Cost $15,868,870) 15,996,658
---------------
SHORT-TERM INVESTMENTS - 9.7%
Repurchase Agreement - 4.5%
Lehman Brothers, dated 06/30/97, 5.95%, due 07/01/97 in
the amount of $773,000 (collateralized by $798,224
U.S. Treasury Bond, 6.125%, due 12/31/01, with a
market value of $790,749 at 06/30/97), repurchase
773,000 proceeds $773,128 773,000
---------------
</TABLE>
The accompanying notes are an integral part of this statement.
-60-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
INTERMEDIATE TERM BOND FUND
---------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
Short Term Investment Fund - 2.0%
345,300 Fidelity Institutional Cash Portfolios:
Government $ 345,300
---------------
<CAPTION>
Principal
amount
------
<S> <C> <C>
U.S. Government Obligation - 3.2%
$ 548,000 U.S. Treasury Bill, 5.05%, due 08/14/97* 544,617
---------------
Total Short-Term Investments (Cost $1,662,917) 1,662,917
---------------
Total Investments (Cost $17,531,787) - 102.9% 17,659,575
Liabilities in excess of other assets - (2.9%) (504,163)
---------------
NET ASSETS - 100% $ 17,155,412
===============
* Rate disclosed is as of June 30, 1997.
</TABLE>
The accompanying notes are an integral part of this statement.
-61-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
INTERMEDIATE TERM BOND FUND
---------------------------
STATEMENT OF ASSETS AND LIABILITIES
-----------------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Assets
--------------
<S> <C>
Investments, at value (cost $17,531,787) $ 17,659,575
Investment income receivable 209,014
Receivable for units issued 1,214
---------------
Total assets 17,869,803
---------------
<CAPTION>
Liabilities
--------------
<S> <C>
Cash overdraft 478
Payable for investments purchased 703,719
Management fee payable 10,194
---------------
Total liabilities 714,391
---------------
Net assets $ 17,155,412
===============
Net assets were comprised of:
Units of beneficial interest $ 15,798,817
Accumulated net investment income 1,082,194
Accumulated net realized gain 146,613
Net unrealized appreciation 127,788
---------------
Net assets at June 30, 1997 $ 17,155,412
===============
Unit value, offering price and redemption price per unit ($17,155,412/
1,414,672 units of beneficial interest issued and outstanding;
unlimited number of units authorized) $ 12.13
===============
</TABLE>
-62-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
INTERMEDIATE TERM BOND FUND
---------------------------
STATEMENT OF OPERATIONS
-----------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
Net investment income
---------------------
<TABLE>
<CAPTION>
<S> <C>
Income:
Interest $360,098
--------
Expenses:
Management fee (Note 2) 42,747
Accounting fees 9,489
Audit fees 5,746
Directors' fees 1,174
Insurance 1,825
Legal fees 4,392
Registration fees 2,517
Miscellaneous 757
--------
Total expenses 68,647
Expense subsidy (Note 3) (25,900)
--------
Net expenses 42,747
--------
Net investment income 317,351
--------
Net realized and unrealized gain on investments
-----------------------------------------------
Net realized loss on investments (63,997)
Unrealized appreciation in value of investments during the year 113,238
--------
Net gain on investments 49,241
--------
Net increase in net assets resulting from operations $366,592
========
</TABLE>
The accompanying notes are an integral part of this statement.
-63-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
INTERMEDIATE TERM BOND FUND
---------------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Six months Year ended
ended June 30, December 31,
1997 1996
---- ----
<S> <C> <C>
Increase/(decrease) in net assets:
From operations:
Net investment income $ 317,351 $ 337,012
Net realized loss on investments (63,997) (136,033)
Unrealized appreciation/(depreciation) in value of
investments during the year 113,238 (106,912)
------------ ------------
Net increase in net assets resulting from operations 366,592 94,067
------------ ------------
From unit transactions:
Net proceeds from units issued 10,597,948 5,518,425
Cost of units redeemed (757,886) (3,694,415)
------------ ------------
Net increase in net assets resulting
from unit transactions 9,840,062 1,824,010
------------ ------------
Total increase in net assets 10,206,654 1,918,077
Net assets, beginning of year 6,948,758 5,030,681
------------ ------------
Net assets, end of year $ 17,155,412 $ 6,948,758
============ ============
Net change in units outstanding:
Units issued 893,403 477,320
Units redeemed (63,299) (323,790)
------------ ------------
830,104 153,530
============ ============
</TABLE>
The accompanying notes are an integral part of this statement.
-64-
<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 each of the years indicated)
(Unaudited)
<TABLE>
<CAPTION>
Six months
ended June 30, Years ended December 31,
-------------------------------------------------------
1997 1996 1995 1994*
---- ---- ---- -----
<S> <C> <C> <C> <C>
Selected per unit data:
Investment income $ 0.36 $ 0.70 $ 0.72 $ 0.17
Expenses (0.07) (0.16) (0.16) (0.08)
Expense subsidy 0.03 0.07 0.08 0.06
------------- ------------- ------------- -------------
Net investment income 0.32 0.61 0.64 0.15
Net realized and unrealized
gain/(loss) on investments (0.08) (0.39) 1.04 (0.16)
------------- ------------- ------------- -------------
Net increase/(decrease) in
net asset value 0.24 0.22 1.68 (0.01)
Net asset value, beginning
of year 11.89 11.67 9.99 10.00
------------- ------------- ------------- -------------
Net asset value, end of year $ 12.13 $ 11.89 $ 11.67 $ 9.99
============= ============= ============= =============
Ratio to average net assets:
Expenses 0.75%** 0.75% 0.75% 0.75%**
Net investment income 5.52%** 5.32% 5.89% 6.12%**
Other:
Average net assets
(000 omitted) $11,591 $6,338 $5,973 $5,046
Portfolio turnover 101% 134% 198% 7%
Number of units outstanding
at end of year (000 omitted) 1,415 585 431 513
Total return 2.04% 1.86% 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.
-65-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
RISK MANAGER-INCOME FUND
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
LONG-TERM INVESTMENTS - 89.2%
COMMON STOCKS - 27.0%
Auto & Transportation - 0.7%
100 AMR Corporation $ 9,250
300 Ford Motor Company 11,325
150 General Motors Corporation 8,353
-------------
Total Auto & Transportation 28,928
-------------
Consumer Discretionary - 2.4%
350 Dayton Hudson Corporation 18,616
150 Disney (Walt) Company 12,038
350 Federated Department Stores, Inc.* 12,163
200 Home Depot, Inc. 13,787
100 McDonald's Corporation 4,831
200 New York Times Company 9,900
650 Wal-Mart Stores, Inc. 21,978
-------------
Total Consumer Discretionary 93,313
-------------
Consumer Staples - 3.3%
400 Coca-Cola Company 27,000
600 Coca-Cola Enterprises 13,800
200 Gillette Company 18,950
300 PepsiCo, Inc. 11,269
450 Philip Morris Companies, Inc. 19,969
200 Procter & Gamble Company 28,250
50 Unilever, N.V. 10,900
-------------
Total Consumer Staples 130,138
-------------
Financial Services - 3.6%
250 American Express Company 18,625
200 American International Group, Inc. 29,875
100 Citicorp, Inc. 12,056
600 Federal National Mortgage Association 26,175
</TABLE>
The accompanying notes are an integral part of this statement.
-66-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
RISK MANAGER-INCOME FUND
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
Financial Services - 3.6% (continued)
200 MBIA, Inc. $ 22,563
200 Student Loan Marketing Association 25,400
200 The Charles Schwab Corporation 8,137
-----------
Total Financial Services 142,831
-----------
Healthcare - 2.6%
100 Abbott Laboratories, Inc. 6,675
100 American Home Products Corporation 7,650
200 Bristol-Myers Squibb Company 16,200
100 Lilly (Eli) & Company 10,931
200 Merck & Company, Inc. 20,700
100 Pfizer, Inc. 11,950
300 Schering-Plough Corporation 14,363
200 Teva Pharmaceutical Industries, Ltd. ADR 12,950
-----------
Total Healthcare 101,419
-----------
Integrated Oil - 3.2%
100 Amoco Corporation 8,694
400 British Petroleum Company PLC 29,950
200 Chevron Corporation 14,787
400 Exxon Corporation 24,600
400 Mobil Corporation 27,950
400 Royal Dutch Petroleum Company ADR 21,750
-----------
Total Integrated Oil 127,731
-----------
Materials & Processing - 3.0%
150 Aluminum Company of America 11,306
300 Dover Corporation 18,450
100 Dow Chemical Company 8,712
400 DuPont (E.I.) de Nemours & Company, Inc. 25,150
200 Illinois Tool Works, Inc. 9,988
200 International Paper Company 9,712
</TABLE>
The accompanying notes are an integral part of this statement.
-67-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
RISK MANAGER-INCOME FUND
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
Materials & Processing - 3.0% (continued)
100 Kimberly-Clark Corporation $ 4,975
200 Minnesota Mining & Manufacturing Company 20,400
100 Phelps Dodge Corporation 8,519
--------------
Total Materials & Processing 117,212
--------------
Other Energy - 0.5%
150 Schlumberger, Ltd. 18,750
--------------
Producer Durables - 2.2%
300 Allied-Signal, Inc. 25,200
300 Boeing Company 15,919
400 Emerson Electric Company 22,025
400 General Electric Company 26,150
--------------
Total Producer Durables 89,294
--------------
Technology - 3.8%
150 Adobe Systems, Inc. 5,259
100 BMC Software, Inc.* 5,538
100 Cisco Systems, Inc.* 6,712
200 Compaq Computer Corporation* 19,850
50 Computer Associates International, Inc. 2,784
200 Hewlett-Packard Company 11,200
20 Imation Corporation* 528
200 Intel Corporation 28,362
200 International Business Machines Corporation 18,038
300 Microsoft Corporation* 37,912
100 Motorola, Inc. 7,600
75 Texas Instruments, Inc. 6,305
--------------
Total Technology 150,088
--------------
Utilities - 1.7%
150 AT&T Corporation 5,259
150 GTE Corporation 6,581
</TABLE>
The accompanying notes are an integral part of this statement.
-68-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
RISK MANAGER-INCOME FUND
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
Utilities - 1.7% (continued)
113 Lucent Technologies, Inc. $ 8,143
300 MCI Communications Corporation 11,484
450 NIPSCO Industries, Inc. 18,591
300 SBC Communications, Inc. 18,563
--------------
Total Utilities 68,621
--------------
Total Common Stocks (Cost $673,379) 1,068,325
--------------
Principal
amount
------
CORPORATE BONDS - 14.3%
$125,000 Anheuser-Busch Companies, Inc., 6.75%, due 08/01/03 125,010
100,000 Associates Corporation of North America, 7.52%, due 03/29/00 102,325
100,000 BankAmerica Corporation, 6.20%, due 02/15/06 94,187
125,000 Ford Motor Credit Company, 6.25%, due 12/08/05 118,569
125,000 Wal-Mart Stores, Inc., 6.75%, due 05/15/02 125,686
--------------
Total Corporate Bonds (Cost $563,964) 565,777
--------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 47.9%
U.S. Government Agency Obligation - 3.8%
150,000 Federal Home Loan Bank, 6.05%, due 06/28/00 148,833
--------------
U.S. Government Obligations - 44.1%
550,000 U.S. Treasury Note, 6.00%, due 08/15/99 548,797
375,000 U.S. Treasury Note, 6.38%, due 03/31/01 375,820
350,000 U.S. Treasury Note, 6.38%, due 08/15/02 349,891
455,000 U.S. Treasury Note, 7.25%, due 08/15/04 474,480
--------------
Total U.S. Government Obligations 1,748,988
--------------
Total U.S. Government and Agency Obligations
(Cost $1,904,436) 1,897,821
--------------
Total Long-Term Investments (Cost $3,141,779) 3,531,923
--------------
</TABLE>
The accompanying notes are an integral part of this statement.
-69-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
RISK MANAGER-INCOME FUND
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Principal
amount Value
------ -----
<S> <C> <C>
SHORT-TERM INVESTMENTS - 9.5%
Repurchase Agreement - 1.8%
Lehman Brothers, dated 06/30/97, 5.95%, due 07/01/97
in the amount of $71,000 (collateralized by
$73,317 U.S. Treasury Bond, 6.125%, due 12/31/01,
with a market value of $72,630 at 06/30/97),
repurchase
$ 71,000 proceeds $71,012 $ 71,000
------------
Number of
shares
------
Short Term Investment Fund - 2.6%
Fidelity Institutional Cash Portfolios:
104,000 Government 104,000
------------
Principal
amount
------
U.S. Government Obligation - 5.1%
$ 200,000 U.S. Treasury Note, 6.50%, due 08/15/97 200,313
------------
Total Short-Term Investments (Cost $375,313) 375,313
------------
Total Investments (Cost $3,517,092) - 98.7% 3,907,236
Other assets in excess of liabilities - 1.3% 50,363
------------
NET ASSETS - 100% $ 3,957,599
============
</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-INCOME FUND
------------------------
STATEMENT OF ASSETS AND LIABILITIES
-----------------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Assets
-------------------
<S> <C>
Investments, at value (cost $3,517,092) $ 3,907,236
Cash 42
Investment income receivable 54,021
----------
Total assets 3,961,299
----------
<CAPTION>
Liabilities
-------------------
Management fee payable 3,700
----------
Total liabilities 3,700
----------
Net assets $ 3,957,599
==========
Net assets were comprised of:
Units of beneficial interest $ 1,793,051
Accumulated net investment income 862,582
Accumulated net realized gain 911,822
Net unrealized appreciation 390,144
----------
Net assets at June 30, 1997 $ 3,957,599
==========
Unit value, offering price and redemption price per unit ($3,957,599/
302,603 units of beneficial interest issued and outstanding;
unlimited number of units authorized) $ 13.08
==========
</TABLE>
The accompanying notes are an integral part of this statement.
-71-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
RISK MANAGER-INCOME FUND
------------------------
STATEMENT OF OPERATIONS
-----------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Net investment income
---------------------
<S> <C>
Income:
Dividends $ 8,314
Interest 98,032
---------
Total income 106,346
---------
Expenses:
Management fee (Note 2) 23,486
Accounting fees 9,489
Audit fees 5,746
Directors' fees 1,174
Insurance 1,770
Legal fees 4,392
Registration fees 2,517
Miscellaneous 757
---------
Total expenses 49,331
Expense subsidy (Note 3) (25,845)
---------
Net expenses 23,486
---------
Net investment income 82,860
---------
<CAPTION>
Net realized and unrealized gain on investments
-----------------------------------------------
Net realized gain on investments 38,079
Unrealized appreciation in value of investments during the year 143,543
---------
Net gain on investments 181,622
---------
Net increase in net assets resulting from operations $ 264,482
=========
</TABLE>
The accompanying notes are an integral part of this statement.
-72-
<PAGE>
<TABLE>
<CAPTION>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
RISK MANAGER-INCOME FUND
------------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
(Unaudited)
-----------
Six months Year ended
ended June 30, December 31,
1997 1996
---- ----
<S> <C> <C>
Increase/(decrease) in net assets:
From operations:
Net investment income $ 82,860 $ 189,098
Net realized gain on investments 38,079 98,693
Unrealized appreciation in value of
investments during the year 143,543 23,398
-------------- --------------
Net increase in net assets resulting from operations 264,482 311,189
-------------- --------------
From unit transactions:
Net proceeds from units issued 312,041 952,199
Cost of units redeemed (1,359,185) (1,892,110)
Net decrease in net assets resulting from unit
transactions (1,047,144) (939,911)
-------------- --------------
Total decrease in net assets (782,662) (628,722)
Net assets, beginning of year 4,740,261 5,358,983
-------------- --------------
Net assets, end of year $ 3,957,599 $ 4,740,261
============== ==============
Net change in units outstanding:
Units issued 24,879 80,449
Units redeemed (107,652) (161,659)
-------------- --------------
(82,773) (81,210)
============== ==============
</TABLE>
The accompanying notes are an integral part of this statement.
-73-
<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)
(Unaudited)
<TABLE>
<CAPTION>
Six months
ended June 30, Years ended December 31,
----------------------------------------------------------
1997 1996 1995 1994*
---- ---- ---- -----
<S> <C> <C> <C> <C>
Selected per unit data:
Investment income $ 0.31 $ 0.58 $ 0.60 $ 0.15
Expenses (0.14) (0.23) (0.16) (0.06)
Expense subsidy 0.07 0.10 0.04 0.03
-------------- -------------- ------------- ------------
Net investment income 0.24 0.45 0.48 0.12
Net realized and unrealized
gain/(loss) on investments 0.54 0.34 1.06 (0.15)
-------------- -------------- ------------- ------------
Net increase/(decrease) in
net asset value 0.78 0.79 1.54 (0.03)
Net asset value, beginning
of year 12.30 11.51 9.97 10.00
-------------- -------------- ------------- ------------
Net asset value, end of year $ 13.08 $ 12.30 $ 11.51 $ 9.97
============== ============== ============= ============
Ratio to average net assets:
Expenses 1.10%** 1.10% 1.10% 1.10%**
Net investment income 3.88%** 3.88% 4.52% 4.77%**
Other:
Average net assets
(000 omitted) $4,305 $4,874 $10,590 $9,491
Portfolio turnover 18% 66% 278% 15%
Number of units outstanding
at end of year (000 omitted) 303 385 467 967
Total return 6.34% 6.90% 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 integral part of this statement.
-74-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
RISK MANAGER-BALANCED FUND
--------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
LONG-TERM INVESTMENTS - 91.0%
COMMON STOCKS - 48.5%
Auto & Transportation - 1.6%
500 AMR Corporation $ 46,250
800 Ford Motor Company 30,200
450 General Motors Corporation 25,059
-------------
Total Auto & Transportation 101,509
-------------
Consumer Discretionary - 3.8%
900 Dayton Hudson Corporation 47,869
300 Disney (Walt) Company 24,075
1,000 Federated Department Stores, Inc.* 34,750
450 Home Depot, Inc. 31,022
400 McDonald's Corporation 19,325
600 New York Times Company 29,700
1,500 Wal-Mart Stores, Inc. 50,719
-------------
Total Consumer Discretionary 237,460
-------------
Consumer Staples - 5.0%
1,100 Coca-Cola Company 74,250
1,800 Coca-Cola Enterprises 41,400
400 Gillette Company 37,900
800 PepsiCo, Inc. 30,050
1,150 Philip Morris Companies, Inc. 51,031
400 Procter & Gamble Company 56,500
100 Unilever, N.V. 21,800
-------------
Total Consumer Staples 312,931
-------------
Financial Services - 8.0%
800 American Express Company 59,600
500 American International Group, Inc. 74,688
300 Citicorp, Inc. 36,169
1,700 Federal National Mortgage Association 74,162
</TABLE>
The accompanying notes are an integral part of this statement.
-75-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
RISK MANAGER-BALANCED FUND
--------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
Financial Services - 8.0% (continued)
600 MBIA, Inc. $ 67,688
750 Student Loan Marketing Association 95,250
450 The Charles Schwab Corporation 18,309
1,300 Travelers Group, Inc. 81,981
---------------
Total Financial Services 507,847
---------------
Healthcare - 5.3%
400 Abbott Laboratories, Inc. 26,700
400 American Home Products Corporation 30,600
600 Bristol-Myers Squibb Company 48,600
300 Lilly (Eli) & Company 32,794
700 Merck & Company, Inc. 72,450
400 Pfizer, Inc. 47,800
700 Schering-Plough Corporation 33,512
600 Teva Pharmaceutical Industries, Ltd. ADR 38,850
---------------
Total Healthcare 331,306
---------------
Integrated Oil - 5.2%
300 Amoco Corporation 26,081
800 British Petroleum Company PLC 59,900
500 Chevron Corporation 36,969
1,100 Exxon Corporation 67,650
1,000 Mobil Corporation 69,875
1,200 Royal Dutch Petroleum Company ADR 65,250
---------------
Total Integrated Oil 325,725
---------------
Materials & Processing - 5.5%
350 Aluminum Company of America 26,381
900 Dover Corporation 55,350
350 Dow Chemical Company 30,494
1,000 DuPont (E.I.) de Nemours & Company, Inc. 62,875
700 Illinois Tool Works, Inc. 34,956
</TABLE>
The accompanying notes are an integral part of this statement.
-76-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
RISK MANAGER-BALANCED FUND
--------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
Materials & Processing - 5.5% (continued)
700 International Paper Company $ 33,994
300 Kimberly-Clark Corporation 14,925
600 Minnesota Mining & Manufacturing Company 61,200
300 Phelps Dodge Corporation 25,556
-------------
Total Materials & Processing 345,731
-------------
Other Energy - 0.7%
350 Schlumberger, Ltd. 43,750
-------------
Producer Durables - 4.3%
850 Allied-Signal, Inc. 71,400
600 Boeing Company 31,838
1,000 Emerson Electric Company 55,062
1,700 General Electric Company 111,138
-------------
Total Producer Durables 269,438
-------------
Technology - 6.2%
350 Adobe Systems, Inc. 12,272
300 BMC Software, Inc.* 16,613
300 Cisco Systems, Inc.* 20,137
500 Compaq Computer Corporation* 49,625
300 Computer Associates International, Inc. 16,706
450 Hewlett-Packard Company 25,200
60 Imation Corporation* 1,583
500 Intel Corporation 70,906
600 International Business Machines Corporation 54,112
700 Microsoft Corporation* 88,463
250 Motorola, Inc. 19,000
200 Texas Instruments, Inc. 16,813
-------------
Total Technology 391,430
-------------
</TABLE>
The accompanying notes are an integral part of this statement.
-77-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
RISK MANAGER-BALANCED FUND
--------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
Utilities - 2.9%
450 AT&T Corporation $ 15,778
350 GTE Corporation 15,356
275 Lucent Technologies, Inc. 19,817
800 MCI Communications Corporation 30,625
1,250 NIPSCO Industries, Inc. 51,641
800 SBC Communications, Inc. 49,500
--------------
Total Utilities 182,717
--------------
Total Common Stocks (Cost $1,874,687) 3,049,844
--------------
<CAPTION>
Principal
amount
------
CORPORATE BONDS - 7.4%
$125,000 Anheuser-Busch Companies, Inc., 6.75%, due 08/01/03 125,010
100,000 BankAmerica Corporation, 6.20%, due 02/15/06 94,187
125,000 Ford Motor Credit Company, 6.25%, due 12/08/05 118,569
125,000 Wal-Mart Stores, Inc., 6.75%, due 05/15/02 125,686
--------------
Total Corporate Bonds (Cost $461,986) 463,452
--------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 35.1%
U.S. Government Agency Obligation - 2.4%
150,000 Federal Home Loan Bank, 6.05%, due 06/28/00 148,833
--------------
U.S. Government Obligations - 32.7%
450,000 U.S. Treasury Note, 5.63%, due 11/30/98 448,032
480,000 U.S. Treasury Note, 6.25%, due 02/15/07 469,650
675,000 U.S. Treasury Note, 6.38%, due 03/31/01 676,477
300,000 U.S. Treasury Note, 6.38%, due 08/15/02 299,907
150,000 U.S. Treasury Note, 8.50%, due 11/15/00 159,984
--------------
Total U.S. Government Obligations 2,054,050
--------------
Total U.S. Government and Agency Obligations
(Cost $2,212,123) 2,202,883
--------------
Total Long-Term Investments (Cost $4,548,796) 5,716,179
--------------
</TABLE>
The accompanying notes are an integral part of this statement.
-78-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
RISK MANAGER-BALANCED FUND
--------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Principal
amount Value
------ -----
<C> <S> <C>
SHORT-TERM INVESTMENTS - 8.3%
Repurchase Agreement - 3.5%
Lehman Brothers, dated 06/30/97, 5.95%,
due 07/01/97 in the amount of $219,000
(collateralized by $226,146 U.S. Treasury Bond,
6.125%, due 12/31/01, with a market value of
$224,028 at 06/30/97), repurchase
$219,000 proceeds $219,036 $ 219,000
----------
U.S. Government Obligation - 4.8%
300,000 U.S. Treasury Note, 6.50%, due 08/15/97 300,469
----------
Total Short-Term Investments (Cost $519,469) 519,469
----------
Total Investments (Cost $5,068,265) - 99.3% 6,235,648
Other Assets in Excess of Liabilities - 0.7% 43,564
----------
NET ASSETS - 100% $6,279,212
==========
</TABLE>
* Non-income producing security.
The accompanying notes are an integral part of this statement.
-79-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
RISK MANAGER-BALANCED FUND
--------------------------
STATEMENT OF ASSETS AND LIABILITIES
-----------------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Assets
------------------
<S> <C>
Investments, at value (cost $5,068,265) $ 6,235,648
Cash 389
Investment income receivable 50,595
-----------
Total assets 6,286,632
-----------
<CAPTION>
Liabilities
-------------------
<S> <C>
Management fee payable 5,594
Payable for units redeemed 1,826
-----------
Total liabilities 7,420
-----------
Net assets $ 6,279,212
===========
Net assets were comprised of:
Units of beneficial interest $ 3,726,971
Accumulated net investment income 616,747
Accumulated net realized gain 768,111
Net unrealized appreciation 1,167,383
-----------
Net assets at June 30, 1997 $ 6,279,212
===========
Unit value, offering price and redemption price per unit ($6,279,212/
434,902 units of beneficial interest issued and outstanding;
unlimited number of units authorized) $ 14.44
===========
</TABLE>
The accompanying notes are an integral part of this statement.
-80-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
RISK MANAGER-BALANCED FUND
--------------------------
STATEMENT OF OPERATIONS
-----------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Net investment income
---------------------
<S> <C>
Income:
Dividends $ 23,239
Interest 97,816
----------
Total income 121,055
----------
Expenses:
Management fee (Note 2) 33,784
Accounting fees 9,489
Audit fees 5,746
Directors' fees 1,174
Insurance 1,798
Legal fees 4,392
Registration fees 2,517
Miscellaneous 757
----------
Total expenses 59,657
Expense subsidy (Note 3) (25,873)
----------
Net expenses 33,784
----------
Net investment income 87,271
----------
<CAPTION>
Net realized and unrealized gain on investments
-----------------------------------------------
<S> <C>
Net realized gain on investments 51,879
Unrealized appreciation in value of investments during the year 485,067
----------
Net gain on investments 536,946
----------
Net increase in net assets resulting from operations $ 624,217
==========
</TABLE>
The accompanying notes are an integral part of this statement.
-81-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
RISK MANAGER-BALANCED FUND
--------------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Six months Year ended
ended June 30, December 31,
1997 1996
---- ----
<S> <C> <C>
Increase/(decrease) in net assets:
From operations:
Net investment income $ 87,271 $ 180,676
Net realized gain on investments 51,879 82,515
Unrealized appreciation in value of
investments during the year 485,067 369,085
------------- -------------
Net increase in net assets resulting
from operations 624,217 632,276
------------- -------------
From unit transactions:
Net proceeds from units issued 1,898,223 1,739,716
Cost of units redeemed (2,158,501) (2,373,479)
------------- -------------
Net decrease in net assets resulting
from unit transactions (260,278) (633,763)
------------- -------------
Total increase/(decrease) in net assets 363,939 (1,487)
------------- -------------
Net assets, beginning of year 5,915,273 5,916,760
------------- -------------
Net assets, end of year $ 6,279,212 $ 5,915,273
============= =============
Net change in units outstanding:
Units issued 140,779 144,554
Units redeemed (161,099) (195,789)
------------- -------------
(20,320) (51,235)
============= =============
</TABLE>
The accompanying notes are an integral part of this statement.
-82-
<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 each of the years indicated)
(Unaudited)
<TABLE>
<CAPTION>
Six months
ended June 30, Years ended December 31,
-------------------------------------------------------
1997 1996 1995 1994*
---- ---- ---- -----
<S> <C> <C> <C> <C>
Selected per unit data:
Investment income $ 0.26 $ 0.50 $ 0.50 $ 0.13
Expenses (0.13) (0.21) (0.17) (0.09)
Expense subsidy 0.06 0.08 0.05 0.06
----------- ----------- ----------- -----------
Net investment income 0.19 0.37 0.38 0.10
Net realized and unrealized
gain/(loss) on investments 1.26 0.94 1.36 (0.16)
----------- ----------- ----------- -----------
Net increase/(decrease) in
net asset value 1.45 1.31 1.74 (0.06)
Net asset value, beginning
of year 12.99 11.68 9.94 10.00
----------- ----------- ----------- -----------
Net asset value, end of year $ 14.44 $ 12.99 $ 11.68 $ 9.94
=========== =========== =========== ===========
Ratio to average net assets:
Expenses 1.10%** 1.10% 1.10% 1.10%**
Net investment income 2.84%** 3.02% 3.54% 3.99%**
Other:
Average net assets
(000 omitted) $6,196 $5,990 $8,456 $5,051
Portfolio turnover 32% 51% 337% 17%
Number of units outstanding
at end of year(000 omitted) 435 455 506 513
Total return 11.13% 11.23% 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.
-83-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
RISK MANAGER-GROWTH FUND
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
LONG-TERM INVESTMENTS - 77.8%
COMMON STOCKS - 54.1%
Auto & Transportation - 1.5%
125 AMR Corporation $ 11,563
350 Ford Motor Company 13,212
250 General Motors Corporation 13,922
-----------------
Total Auto & Transportation 38,697
-----------------
Consumer Discretionary - 5.0%
400 Dayton Hudson Corporation 21,275
100 Disney (Walt) Company 8,025
475 Federated Department Stores, Inc.* 16,506
125 Home Depot, Inc. 8,617
200 McDonald's Corporation 9,663
400 New York Times Company 19,800
375 Sears, Roebuck & Company 20,156
700 Wal-Mart Stores, Inc. 23,669
-----------------
Total Consumer Discretionary 127,711
-----------------
Consumer Staples - 5.7%
550 Coca-Cola Company 37,125
975 Coca-Cola Enterprises 22,425
250 Gillette Company 23,687
400 PepsiCo, Inc. 15,025
575 Philip Morris Companies, Inc. 25,516
125 Procter & Gamble Company 17,656
25 Unilever, N.V. 5,450
-----------------
Total Consumer Staples 146,884
-----------------
Financial Services - 9.1%
350 American Express Company 26,075
250 American International Group, Inc. 37,344
100 Citicorp, Inc. 12,056
</TABLE>
The accompanying notes are an integral part of this statement.
-84-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
RISK MANAGER-GROWTH FUND
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
Financial Services - 9.1% (continued)
700 Federal National Mortgage Association $ 30,537
250 MBIA, Inc. 28,203
350 Student Loan Marketing Association 44,450
275 The Charles Schwab Corporation 11,189
700 Travelers Group, Inc. 44,144
-------------
Total Financial Services 233,998
-------------
Healthcare - 4.8%
125 Abbott Laboratories, Inc. 8,344
100 American Home Products Corporation 7,650
150 Bristol-Myers Squibb Company 12,150
100 Lilly (Eli) & Company 10,931
325 Merck & Company, Inc. 33,638
100 Pfizer, Inc. 11,950
400 Schering-Plough Corporation 19,150
300 Teva Pharmaceutical Industries, Ltd. ADR 19,425
-------------
Total Healthcare 123,238
-------------
Integrated Oil - 6.0%
100 Amoco Corporation 8,694
500 British Petroleum Company PLC 37,437
250 Chevron Corporation 18,484
550 Exxon Corporation 33,825
500 Mobil Corporation 34,938
400 Royal Dutch Petroleum Company ADR 21,750
-------------
Total Integrated Oil 155,128
-------------
Materials & Processing - 6.7%
100 Aluminum Company of America 7,537
400 Dover Corporation 24,600
250 Dow Chemical Company 21,781
250 DuPont (E.I.) de Nemours & Company, Inc. 15,719
</TABLE>
The accompanying notes are an integral part of this statement.
-85-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
RISK MANAGER-GROWTH FUND
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<S> <C> <C>
Materials & Processing - 6.7% (continued)
500 Illinois Tool Works, Inc. $ 24,969
300 International Paper Company 14,569
500 Kimberly-Clark Corporation 24,875
300 Minnesota Mining & Manufacturing Company 30,600
100 Phelps Dodge Corporation 8,519
--------------
Total Materials & Processing 173,169
--------------
Other Energy - 0.5%
100 Schlumberger, Ltd. 12,500
--------------
Producer Durables - 4.4%
400 Allied-Signal, Inc. 33,600
200 Boeing Company 10,613
600 Emerson Electric Company 33,037
550 General Electric Company 35,956
--------------
Total Producer Durables 113,206
--------------
Technology - 7.4%
200 Adobe Systems, Inc. 7,012
200 BMC Software, Inc.* 11,075
100 Cisco Systems, Inc.* 6,713
300 Compaq Computer Corporation* 29,775
75 Computer Associates International, Inc. 4,177
300 Hewlett-Packard Company 16,800
20 Imation Corporation* 528
250 Intel Corporation 35,453
150 International Business Machines Corporation 13,528
400 Microsoft Corporation* 50,550
75 Motorola, Inc. 5,700
100 Texas Instruments, Inc. 8,406
--------------
Total Technology 189,717
--------------
</TABLE>
The accompanying notes are an integral part of this statement.
-86-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
RISK MANAGER-GROWTH FUND
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
<TABLE>
<CAPTION>
Number of
shares Value
------ -----
<C> <S> <C>
Utilities - 3.0%
225 AT&T Corporation $ 7,889
175 GTE Corporation 7,678
88 Lucent Technologies, Inc. 6,342
350 MCI Communications Corporation 13,398
475 NIPSCO Industries, Inc. 19,624
350 SBC Communications, Inc. 21,656
-----------------
Total Utilities 76,587
-----------------
Total Common Stocks (Cost $967,758) 1,390,835
-----------------
Principal
amount
------
CORPORATE BONDS - 1.1%
$ 30,000 BankAmerica Corporation, 6.20%, due 02/15/06 28,256
-----------------
Total Corporate Bonds (Cost $28,859) 28,256
-----------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 22.6%
U.S. Government Agency Obligation - 1.9%
50,000 Federal Home Loan Bank, 6.05%, due 06/28/00 49,611
-----------------
U.S. Government Obligations - 20.7%
250,000 U.S. Treasury Note, 6.00%, due 08/15/99 249,453
20,000 U.S. Treasury Note, 6.25%, due 02/15/07 19,569
90,000 U.S. Treasury Note, 6.38%, due 03/31/01 90,197
90,000 U.S. Treasury Note, 6.50%, due 08/15/05 89,803
30,000 U.S. Treasury Note, 7.25%, due 08/15/04 31,284
50,000 U.S. Treasury Note, 7.50%, due 05/15/02 52,328
-----------------
Total U.S. Government Obligations 532,634
-----------------
Total U.S. Government and Agency Obligations
(Cost $580,943) 582,245
-----------------
Total Long-Term Investments (Cost $1,577,560) 2,001,336
-----------------
</TABLE>
The accompanying notes are an integral part of this statement.
-87-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
RISK MANAGER-GROWTH FUND
------------------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Principal
amount Value
------ -----
<S> <C> <C>
SHORT-TERM INVESTMENTS - 21.6%
Repurchase Agreement - 4.5%
Lehman Brothers, dated 06/30/97, 5.95%,
due 07/01/97 in the amount of $116,000
(collateralized by $119,785 U.S. Treasury Bond,
6.125%, due 12/31/01, with a market value of
$118,663 at 06/30/97), repurchase
$ 116,000 proceeds $116,019 $ 116,000
-----------------
Number of
shares
------
Short Term Investment Fund - 4.5%
116,000 Fidelity Institutional Cash Portfolios:
Government 116,000
-----------------
Principal
amount
------
U.S. Government Obligations - 12.6%
$ 120,000 U.S. Treasury Bill, 5.07%, due 07/17/97** 119,730
105,000 U.S. Treasury Bill, 5.05%, due 08/14/97** 104,352
100,000 U.S. Treasury Note, 6.50%, due 08/15/97 100,156
-----------------
Total Short-Term U.S. Government Obligations 324,238
-----------------
Total Short-Term Investments (Cost $556,238) 556,238
-----------------
Total Investments($2,133,798) - 99.4% 2,557,574
Other Assets in Excess of Liabilities - 0.6% 16,082
-----------------
NET ASSETS - 100% $ 2,573,656
=================
</TABLE>
* Non-income producing security.
** Rate disclosed is as of June 30, 1997.
The accompanying notes are an integral part of this statement.
-88-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
RISK MANAGER-GROWTH FUND
------------------------
STATEMENT OF ASSETS AND LIABILITIES
-----------------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Assets
-------------------
<S> <C>
Investments, at value (cost $2,133,798) $ 2,557,574
Cash 732
Investment income receivable 16,346
Receivable for units issued 1,308
--------------
Total assets 2,575,960
--------------
<CAPTION>
Liabilities
-------------------
<S> <C>
Management fee payable 2,304
--------------
Total liabilities 2,304
--------------
Net assets $ 2,573,656
==============
Net assets were comprised of:
Units of beneficial interest $ 961,933
Accumulated net investment income 314,300
Accumulated net realized gain 873,647
Net unrealized appreciation 423,776
--------------
Net assets at June 30, 1997 $ 2,573,656
==============
Unit value, offering price and redemption price per unit ($2,573,656/
168,678 units of beneficial interest issued and outstanding;
unlimited number of units authorized) $ 15.26
==============
</TABLE>
The accompanying notes are an integral part of this statement.
-89-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
RISK MANAGER-GROWTH FUND
------------------------
STATEMENT OF OPERATIONS
-----------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Net investment income
---------------------
<S> <C>
Income:
Dividends $ 10,359
Interest 29,946
------------
Total income 40,305
------------
Expenses:
Management fee (Note 2) 12,610
Accounting fees 9,489
Audit fees 5,746
Directors' fees 1,174
Insurance 1,706
Legal fees 4,392
Registration fees 2,517
Miscellaneous 757
------------
Total expenses 38,391
Expense subsidy (Note 3) (25,781)
------------
Net expenses 12,610
------------
Net investment income 27,695
------------
<CAPTION>
Net realized and unrealized gain on investments
-----------------------------------------------
<S> <C>
Net realized gain on investments 230,050
Unrealized appreciation in value of investments during the year 3,900
------------
Net gain on investments 233,950
------------
Net increase in net assets resulting from operations $ 261,645
============
</TABLE>
The accompanying notes are an integral part of this statement.
-90-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
RISK MANAGER-GROWTH FUND
------------------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Six months Year ended
ended June 30, December 31,
1997 1996
---- ----
<S> <C> <C>
Increase/(decrease) in net assets:
From operations:
Net investment income $ 27,695 $ 91,251
Net realized gain on investments 230,050 8,108
Unrealized appreciation in value of investments
during the year 3,900 288,719
---------------- ---------------
Net increase in net assets resulting from operations 261,645 388,078
---------------- ---------------
From unit transactions:
Net proceeds from units issued 472,183 1,582,402
Cost of units redeemed (1,526,813) (994,516)
---------------- ---------------
Net increase/(decrease) in net assets resulting
from unit transactions (1,054,630) 587,886
---------------- ---------------
Total increase/(decrease) in net assets (792,985) 975,964
Net assets, beginning of year 3,366,641 2,390,677
---------------- ---------------
Net assets, end of year $ 2,573,656 $ 3,366,641
================ ===============
Net change in units outstanding:
Unit issued 33,101 126,044
Unit redeemed (110,632) (77,561)
---------------- ---------------
(77,531) 48,483
================ ===============
</TABLE>
The accompanying notes are an integral part of this statement.
-91-
<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 each of the years indicated)
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
June 30, Years ended December 31,
--------------------------------------------------
1997 1996 1995 1994*
---- ---- ---- -----
<S> <C> <C> <C> <C>
Selected per unit data:
Investment income $ 0.23 $ 0.51 $ 0.43 $ 0.11
Expenses (0.22) (0.31) (0.20) (0.09)
Expense subsidy 0.15 0.17 0.08 0.06
---------- ----------- ------------ ------------
Net investment income 0.16 0.37 0.31 0.08
Net realized and unrealized
gain/(loss) on investments 1.43 1.21 1.88 (0.18)
---------- ----------- ------------ ------------
Net increase/(decrease) in
net asset value 1.59 1.58 2.19 (0.10)
Net asset value, beginning
of year 13.67 12.09 9.90 10.00
---------- ----------- ------------ ------------
Net asset value, end of year $ 15.26 $ 13.67 $ 12.09 $ 9.90
---------- =========== ============ ============
Ratio to average net assets:
Expenses 1.10%** 1.10% 1.10% 1.10%**
Net investment income 2.41%** 2.88% 2.84% 3.14%**
Other:
Average net assets $2,314
(000 omitted) 40% $3,166 $5,532 $4,949
Portfolio turnover 42% 191% 31%
Number of units outstanding
at end of year (000 omitted) 169 246 198 500
Total return 11.60% 13.09% 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.
-92-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
MONEY MARKET FUND
-----------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Annualized
Principal Maturity yield on date
amount date of purchase Value
------ ---- ----------- -----
<S> <C> <C> <C> <C>
CERTIFICATES OF DEPOSIT - 4.0%
$ 3,000,000 Bankers Trust New York Corporation, 6.16%, due 05/21/98 $ 3,000,964
2,000,000 Bankers Trust New York Corporation, 6.24%, due 04/02/98 1,999,569
--------------
Total Certificates of Deposit 5,000,533
--------------
COMMERCIAL PAPER - 64.8%
5,700,000 American Express Credit Corporation 10/01/97 5.63% 5,619,301
1,345,000 Anheuser-Busch Companies, Inc. 08/29/97 5.63% 1,332,766
2,337,000 Caisse D'Amortissement 07/01/97 5.58% 2,337,000
1,700,000 Cargill, Inc. 09/12/97 5.61% 1,680,937
4,000,000 Cargill, Inc. 09/19/97 5.69% 3,950,845
4,000,000 Ford Motor Credit Company 07/29/97 5.62% 3,982,671
1,300,000 Ford Motor Credit Company 08/11/97 5.45% 1,292,153
5,200,000 GTE Funding Inc. 07/22/97 6.10% 5,181,568
2,200,000 General Electric Capital Corporation 09/02/97 5.56% 2,179,171
1,500,000 Goldman Sachs Group, LP 07/21/97 5.58% 1,495,392
4,000,000 Goldman Sachs Group, LP 07/02/97 5.60% 3,999,381
3,500,000 International Business Machines Corporation 07/03/97 5.53% 3,498,931
4,500,000 International Lease Finance Corporation 08/06/97 5.69% 4,474,755
3,000,000 Lucent Technologies, Inc. 07/15/97 5.56% 2,993,572
2,000,000 Merrill Lynch & Company, Inc. 07/21/97 5.54% 1,994,011
3,700,000 Merrill Lynch & Company, Inc. 09/30/97 5.66% 3,647,905
5,500,000 Metropolitan Life Funding, Inc. 07/28/97 5.59% 5,477,189
5,600,000 National Rural Utilities Cooperative Finance 07/21/97 5.57% 5,582,827
4,000,000 PepsiCo, Inc. 07/25/97 5.55% 3,985,333
1,500,000 PepsiCo, Inc. 07/14/97 5.53% 1,497,021
1,000,000 Societe Generale 01/12/98 5.79% 999,898
4,000,000 Societe Generale 08/11/97 5.48% 4,000,044
5,000,000 Toyota Motor Credit Corporation 07/31/97 5.64% 4,976,958
4,000,000 U.S.A.A. Capital Corporation 07/11/97 5.56% 3,993,855
</TABLE>
The accompanying notes are an integral part of this statement.
-93-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
MONEY MARKET FUND
-----------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
<TABLE>
<CAPTION>
Annualized
Principal Maturity yield on date
amount date of purchase Value
------ ---- ----------- -----
<S> <C> <C> <C> <C>
COMMERCIAL PAPER - 64.8% (continued)
$1,185,000 U.S.A.A. Capital Corporation 07/21/97 5.59% $ 1,181,346
---------------
Total Commercial Paper 81,354,830
---------------
CORPORATE BONDS - 18.3%
1,000,000 Associates Corporation of North America, 6.63%, due 11/15/97 1,003,265
5,000,000 Bank One Indiana, NA, 5.69%, due 02/05/98* 4,998,258
5,000,000 Bear Stearns Companies, Inc., 5.89%, due 10/31/97* 5,003,823
4,000,000 Caterpillar Financial Services Company, 5.76%, due 11/03/97* 4,000,000
2,000,000 Dean Witter Discover & Company, 5.64%, due 08/08/97* 1,999,981
3,000,000 General Electric Capital Corporation, 7.88%, due 11/15/97 3,022,929
International Business Machines Credit Receivables,
2,000,000 6.38%, due 11/01/97 2,001,624
1,000,000 International Lease Finance Corporation, 6.04%, due 05/06/98 998,942
---------------
Total Corporate Bonds 23,028,822
---------------
MUNICIPAL BOND OBLIGATIONS - 1.7%
2,115,000 Florida Power & Light, 5.70%, due 03/05/98 2,113,236
---------------
REPURCHASE AGREEMENT - 1.7%
Lehman Brothers, dated 06/30/97, 5.95%,
due 07/01/97 in the amount of $2,216,000
(collateralized by $2,288,311 U.S. Treasury Bond,
6.125%, due 12/31/01, with a market value of
$2,266,882 at 06/30/97), repurchase
2,216,000 proceeds $2,216,366 2,216,000
---------------
<CAPTION>
Number of
shares
------
<S> <C> <C>
SHORT-TERM INVESTMENT FUND - 4.6%
Fidelity Institutional Cash Portfolios:
5,803,000 Government 5,803,000
---------------
</TABLE>
The accompanying notes are an integral part of this statement.
-94-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
MONEY MARKET FUND
-----------------
PORTFOLIO OF INVESTMENTS
------------------------
JUNE 30, 1997
-------------
<TABLE>
<CAPTION>
Principal
amount Value
------ -----
<S> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS - 2.4%
$3,000,000 Federal National Mortgage Association, 5.51%, due 02/24/98 $ 2,991,473
---------------
U.S. TREASURY OBLIGATIONS - 3.0%
439,000 U.S. Treasury Bill, 4.94%, due 08/21/97** 435,928
347,000 U.S. Treasury Bill, 4.92%, due 08/28/97** 344,249
3,000,000 U.S. Treasury Note, 5.13%, due 02/28/98 2,988,190
---------------
Total U.S. Treasury Obligations 3,768,367
---------------
Total Investments (Cost $126,276,261) - 100.5% 126,276,261
Liabilities in excess of other assets - (0.5%) (669,130)
---------------
NET ASSETS - 100% $125,607,131
===============
</TABLE>
* Variable/floating rate security - rate disclosed is as of June 30, 1997.
** Rate disclosed is as of June 30, 1997.
The accompanying notes are an integral part of this statement.
-95-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
MONEY MARKET FUND
-----------------
STATEMENT OF ASSETS AND LIABILITIES
-----------------------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Assets
------------------
<S> <C>
Investments, at amortized cost, which approximates value $ 126,276,261
Cash 197
Investment income receivable 518,592
Receivable for units issued 42,292
-------------
Total assets 126,837,342
-------------
Liabilities
------------------
Management fee payable 53,173
Payable for units redeemed 1,177,038
-------------
Total liabilities 1,230,211
-------------
Net assets $ 125,607,131
=============
Unit value, offering price and redemption price per unit ($125,607,131/
125,607,131 units of beneficial interest issued and outstanding;
unlimited number of units authorized) $ 1.00
=============
</TABLE>
The accompanying notes are an integral part of this statement.
-96-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
MONEY MARKET FUND
-----------------
STATEMENT OF OPERATIONS
-----------------------
JUNE 30, 1997
-------------
(Unaudited)
-----------
Net investment income
---------------------
<TABLE>
<S> <C>
Income:
Interest $ 3,295,027
-------------
Total income 3,295,027
-------------
Expenses:
Management fee (Note 2) 299,777
Accounting fees 9,031
Audit fees 5,746
Directors' fees 1,174
Insurance 2,654
Legal fees 1,117
Registration fees 7,789
Miscellaneous 1,019
-------------
Total expenses 328,307
Expense subsidy (Note 3) (28,530)
--------------
Net expenses 299,777
-------------
Net investment income $ 2,995,250
=============
</TABLE>
The accompanying notes are an integral part of this statement.
-97-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
MONEY MARKET FUND
-----------------
STATEMENT OF CHANGES IN NET ASSETS
----------------------------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Six months Year Ended
ended June 30, December 31,
1997 1996
---- ----
<S> <C> <C>
Increase in net assets:
From operations:
Net investment income $ 2,995,250 $ 4,432,124
--------------- ---------------
Dividends to unitholders (2,995,250) (4,432,124)
--------------- ---------------
From unit transactions:
Net proceeds from units issued 91,018,587 163,851,223
Net asset value of units issued for
dividends reinvested 2,995,250 4,432,124
Cost of units redeemed (87,512,696) (120,487,579)
--------------- ---------------
Net increase in net assets resulting
from unit transactions 6,501,141 47,795,768
--------------- ---------------
Total increase in net assets 6,501,141 47,795,768
Net assets, beginning of year 119,105,990 71,310,222
--------------- ---------------
Net assets, end of year $ 125,607,131 $ 119,105,990
=============== ===============
Net change in units outstanding:
Units issued 91,018,587 163,851,223
Units redeemed (87,512,696) (120,487,579)
Units issued for dividends reinvested 2,995,250 4,432,124
--------------- ---------------
6,501,141 47,795,768
=============== ===============
</TABLE>
The accompanying notes are an integral part of this statement.
-98-
<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>
Six months
ended June 30, Years ended December 31,
----------------------------------------------------------------------------
1997 1996 1995* 1994* 1993 1992
---- ---- ----- ----- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Selected per unit data:
Investment income $ 0.027 $ 0.054 $ 0.059 $ 0.045 $ 0.032 $ 0.041
Expenses (0.002)** (0.006)** (0.006)** (0.007)** (0.008) (0.008)
Expense subsidy 0.000 0.001 0.001 0.001 0.002 0.002
----------- ------------ ---------- ----------- ----------- ----------
Net investment income 0.025 0.049 0.054 0.039 0.026 0.035
Dividends to unitholders (0.025) (0.049) (0.054) (0.039) (0.026) (0.035)
Net asset value, beginning
of year 1.000 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 $ 1.000
=========== ============ ========== =========== =========== ==========
Ratio to average net assets:
Expenses 0.50%+* 0.50%* 0.50%* 0.50%* 0.65% 0.65%
Net investment income 5.02%+ 4.93% 5.43% 3.90% 2.57% 3.37%
Other:
Average net assets
(000 omitted) $120,294 $89,967 $67,067 $31,587 $30,917 $34,125
Number of units outstanding
at end of year (000 omitted) 125,607 119,106 71,310 55,505 28,024 32,861
Total return 2.51% 5.10% 5.57% 3.80% 2.60% 3.44%
</TABLE>
* Reflects management fee reduction of 0.15% or $87,988, $134,952, $100,525
and $27,802 for the six months ended June 30, 1997 and years ended
December 31, 1996, 1995 and 1994, respectively. For the year ended
December 31, 1994 the actual net expense ratio for the year was 0.56% of
average net assets as the fee reduction went into effect on 5/2/94.
** Reflects management fee reduction of $87,988 or $0.001 per unit, $134,952
or $0.002 per unit, $100,525 or $0.002 per unit and $27,802 or $0.001 per
unit for the six months ended June 30, 1997 and years ended December 31,
1996, 1995 and 1994, respectively. Without management fee reduction,
expense per unit is $0.003, $0.007, $0.007 and $0.008 for the six months
ended June 30, 1997 and years ended December 31, 1996, 1995 and 1994,
respectively.
+ Annualized.
Per unit amounts are calculated using average units outstanding for the
period.
The accompanying notes are an integral part of this statement.
-99-
<PAGE>
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
----------------------------------------
AVESTA TRUST
------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
JUNE 30, 1997
-------------
The AVESTA Trust (the "Trust"), formerly the Retirement Investment Trust, is
registered under the Investment Company Act of 1940 as an open-end, 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. Chase 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.
-100-
<PAGE>
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 June 30, 1997.
The INTERNATIONAL BOND FUND had not commenced operations at June 30, 1997.
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.
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.
-101-
<PAGE>
NOTE 1 - ACCOUNTING POLICIES
- ----------------------------
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
Fund'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.
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 1997, the Trust invested in options contracts solely for the
purpose of hedging their existing portfolio.
When a Fund writes (sells) a call option, an amount equal to the premium
received by the Fund 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 Fund 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 Fund has realized a gain or loss. The Fund, 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
-102-
<PAGE>
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 Fund may not write put options.
The premium paid by a Fund 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 Fund realizes a loss
in the amount of the premium paid for the option. If the Fund 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 Fund
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 Fund exercises a purchased call option, the
amount of the premium originally paid increases the cost of the security which
the Fund 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 Fund 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 Fund 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
Fund invests in financial futures contracts solely for the purpose of hedging
its existing portfolio securities or securities the Fund intends to purchase
against fluctuations in value caused by changes in prevailing market interest
rates. Should market values move unexpectedly, the Fund 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.
Federal Income Taxes
No provision for federal income taxes is required because the IRS has ruled that
the Fund 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.
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.
-103-
<PAGE>
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 Fund has management agreements with TCB. Pursuant to these agreements, TCB
has responsibility for all investment advisory services in connection with the
management of the Fund. TCB pays the compensation of officers and employees of
the Fund, occupancy and certain accounting and clerical costs of the Fund. The
Fund 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 0.90% 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 agreements, 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.
From time to time, TCB may voluntarily elect to waive a portion of the Fund's
management fee. The voluntary fee waiver may be discontinued at any time without
prior notice.
-104-
<PAGE>
For the six months ended June 30, 1997, TCB elected to reduce management fees by
a total of $172,065 resulting in the following amounts of fees reduced per Fund:
$65,096 in the Income Fund, $17,690 in the Small Capitalization Fund, $1,291 in
the U.S. Government Securities Fund, and $87,988 in the Money Market Fund.
NOTE 4 - PORTFOLIO SECURITIES
- -----------------------------
Purchases and sales of investment securities, excluding short-term securities,
futures and written options, for the period ended June 30, 1997 and gross
unrealized appreciation and depreciation at June 30, 1997 were as follows:
<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized
Purchases Sales Appreciation Depreciation
--------- ----- ------------ ------------
<S> <C> <C> <C> <C>
Equity Growth Fund $ 11,971,168 $ 13,252,163 $ 25,808,237 $ 130,965
Equity Income Fund 994,085 9,191,910 25,144,776 77,868
Balanced Fund 9,453,804 7,998,626 5,420,132 61,841
Income Fund 42,075,051 35,603,483 427,894 284,859
Core Equity Fund 6,040,828 4,463,101 13,271,213 49,804
Small Capitalization Fund 12,705,181 5,833,691 7,876,534 280,766
Short-Intermediate Term U.S.
Government Securities Fund 11,273,052 14,518,645 151,034 88,155
U.S. Government Securities Fund 388,664 294,344 68,990 4,331
Intermediate Term Bond Fund 19,622,463 10,156,306 151,989 24,201
Risk Manager - Income Fund 827,553 603,181 411,568 21,424
Risk Manager - Balanced 2,055,412 1,745,664 1,188,964 21,581
Risk Manager - Growth 793,300 1,514,137 429,095 5,319
</TABLE>
Purchases and sales of long-term U.S. Government Obligations included in the
purchase and sale amounts above for the year ended June 30, 1997 are as follows:
<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized
Purchases Sales Appreciation Depreciation
--------- ----- ------------ ------------
<S> <C> <C> <C> <C>
Balanced Fund $ 4,913,804 $ 4,681,191 $ 123,363 $ 11,856
Income Fund 30,146,276 35,263,811 114,138 178,850
Short-Intermediate Term U.S.
Government Securities Fund 9,654,711 14,518,645 146,797 88,155
U.S. Government Securities Fund 388,664 294,344 68,990 4,331
Intermediate Term Bond Fund 16,639,995 9,944,621 99,483 7,614
Risk Manager - Income Fund 398,563 413,238 19,412 13,788
Risk Manager - Balanced 1,597,705 1,192,432 37,506 12,386
Risk Manager - Growth 308,014 485,938 13,420 1,025
</TABLE>
The Money Market Fund held only short-term securities and, therefore, is not
included above.
-105-
<PAGE>
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.
-106-
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