Portfolio Manager's Letter
EXECUTIVE INVESTORS BLUE CHIP FUND
Dear Investor:
The U.S. economic recovery hit full stride in 1994 with gross domestic
product growth of approximately 4%. The unemployment rate fell from
6.4% to 5.4% over the course of the year as the economy created 3.5
million new jobs. Feeling secure about job prospects, consumers were
willing to borrow and spend. U.S. vehicle sales reached their highest
level since 1988. Despite strong growth, inflation remained below 3% as
low labor costs, improved productivity and international competition
kept prices from accelerating.
Nonetheless, concerned that strong economic growth would eventually
lead to inflation, the Federal Reserve in February engineered the first
of six short-term interest rate increases which in total raised rates
250 basis points (2.50%). As is typical at this point in the economic
cycle, long-term interest rates also rose with the benchmark 30 year
U.S. Treasury bond yield increasing approximately 155 basis points
(1.55%) during the year. With higher interest rates creating concern
that the economy might slow, broad stock market indices were unable to
advance and ended the year unchanged to slightly lower despite strong
earnings reported by many companies.
The stock market weakened as valuations became less attractive versus
high bond market yields. The equity market was driven more by fears of
inflation and rising interest rates than by good earnings reports which
generally showed growth in revenues and improved profit margins.
Investors became increasingly skittish as volatility increased.
During 1994, the Blue Chip Fund paid dividends of $.22 per share from
net investment income and made a capital gains distribution of $.93 per
share. The Series total return for the year declined 1.21%,
underperforming the S&P Index which rose 1.28%. This was due in part to
an overweighted position in cyclical securities, such as steel and
housing related issues. As the Fed tightened monetary policy, investors
began to fear that the economy would slow and cause corporate profits
to peak prematurely. Investors aggressively sold cyclical issues
causing many securities to trade at historically low price/earnings
multiples even as some of these companies reported record earnings. The
stock market also penalized any company which failed to meet analysts'
earnings expectations.
Technology and health care issues were the best performers for 1994.
Technology companies, such as Motorola and Automatic Data Processing,
are benefitting from the trend towards substitution of capital for
labor. Companies are upgrading technology in order to increase
productivity and boost corporate profits. The Blue Chip Fund also
benefitted from its exposure to companies with sizeable foreign and
export profits. Investors became increasingly convinced that the global
economy, especially Europe, was growing at a stronger pace than the
U.S. economy.
As always, we appreciate the opportunity to serve your investment
needs.
Sincerely,
/s/ Patricia D. Poitra
Patricia D. Poitra
Director of Equities
and Portfolio Manager
January 31, 1995
Cumulative Performance Information
EXECUTIVE INVESTORS BLUE CHIP FUND
Comparison of change in value of $10,000 investment in the Executive
Investors Blue Chip Fund and the Standard & Poor's 500 Index.
The following table is the source data for the line chart which
appears at this point in the printed document. This table is
not part of the original printed document and is shown for
reference only. The same is also true for this descriptive
paragraph.
<TABLE>
<CAPTION>
Executive Investors Standard & Poor's
Blue Chip Fund 500 Index
<S> <C> <C>
May-90 $ 9,525 $10,000
Dec-90 9,215 9,335
Dec-91 11,774 12,185
Dec-92 12,260 13,060
Dec-93 13,256 14,340
Dec-94 13,096 14,524
</TABLE>
<TABLE>
<CAPTION>
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
<S> <C> <C>
One Year (1.21%) (5.89%)
Since Inception 7.21% 6.00%
</TABLE>
The graph compares a $10,000 investment made in the Executive Investors
Blue Chip Fund on 5/17/90 (inception date) with a similar investment in
the S&P 500 Index. For purposes of the graph and the accompanying
table, unless otherwise indicated, it has been assumed that the maximum
sales charge was deducted from the initial $10,000 investment in the
Fund and all dividends and distributions were reinvested.
The S&P 500 Index is a capitalization-weighted index of 500 stocks
designed to measure performance of the broad domestic economy through
changes in the aggregate market value of 500 stocks representing all
major industries. The Index does not take into account fees and
expenses. It is not possible to invest in the Standard & Poor's 500
Index.
* Average Annual Total Return figures (for the period ended 12/31/94)
include the reinvestment of all dividends and distributions. "N.A.V.
Only" returns are calculated without sales charges. The "S.E.C.
Standardized" returns shown are based on the maximum sales charge of
4.75%. Some or all of the expenses of the Fund were waived or assumed.
If such expenses had been paid by the Fund, the S.E.C. Standardized
Average Annual Total Return for One Year and Since Inception would have
been (7.27%) and 4.05%, respectively. Results represent past
performance and do not indicate future results. Investment return and
principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than the original
cost. S&P 500 Index figures from Standard & Poor's and all other
figures from Executive Investors Management Company, Inc.
Portfolio Manager's Letter
EXECUTIVE INVESTORS HIGH YIELD FUND
Dear Investor:
The principal factors that affected the Fund's performance in 1994 were
strong economic growth and fears of inflation. The U.S. economic
recovery hit full stride with gross domestic product growth of
approximately 4%. The unemployment rate fell from 6.4% to 5.4% as the
economy created 3.5 million new jobs. Feeling secure about job
prospects, consumers were willing to borrow and spend. U.S. vehicle
sales reached their highest level since 1988. Despite strong growth,
inflation remained below 3% as low labor costs, improved productivity
and international competition kept prices from accelerating.
Nonetheless, concerned that strong economic growth would eventually
lead to inflation, the Federal Reserve in February engineered the first
of six short term interest rate increases which in total raised rates
250 basis points (2.50%). As is typical at this point in the economic
cycle, long-term interest rates also rose with the benchmark 30 year
U.S. Treasury bond yield increasing approximately 155 basis points
(1.55%) during the year. With higher interest rates creating concern
that the economy might slow, broad stock market indices were unable to
advance and ended the year unchanged to slightly lower despite strong
earnings reported by many companies.
Last year began positively for the high yield market as high yield
bonds were in great demand. However, as rising interest rates caused
bond investors to retrench, especially in the second half of 1994,
caution pervaded the market. High yield underwriting volume fell to $43
billion from over $70 billion in 1993. A market preference for better
quality credits benefitted that sector of the market and Executive High
Yield Fund in particular.
The high yield market was not immune to the difficult conditions in the
fixed income and equity markets with the First Boston High Yield Index
posting a total return of -.97%. The Executive Investors High Yield
Fund, however, posted a total return of -2.32% according to Lipper
Analytical Services, Inc. This compares favorably to a total return of
- - -3.83% for the average high yield fund (according to Lipper Analytical
Services). The average high yield fund exceeded the performance of the
benchmark U.S. Treasury ten year note by over four percent.
The Fund's performance benefitted from an interest rate posture that
proved to be relatively defensive. With most of the portfolio invested
in high coupon bonds that tend to be more stable in price, the Fund was
less adversely affected by the trend toward higher interest rates than
it might have been. Lower or zero coupon bonds trading at discounted
prices were negatives, but the Fund had moderate exposure to these
types of securities.
Correct industry choices and individual bond selections are the key
factors that differentiated Executive Investors High Yield Fund from
many of its competitors. Announcements by investment grade companies
that they were acquiring issuers whose securities were held by the Fund
bolstered the values of various Fund holdings, such as Allison Engine
10%, American Medical 13 1/2%, Summit Communications 10 1/2% and Transco
Energy 11 1/4%. We foresaw good economic growth and emphasized cyclical
investments benefitting from volume growth and pricing improvement in
the chemical, mining/metal, paper/forest product sectors. As
importantly, the Fund had little or no exposure to some of the worst
performing sectors: casinos, home builders and emerging markets.
Through careful management, the Fund avoided distressed situations in
all but two instances, Acme Holdings 11 3/4% and SHRP 11 3/4%. Still,
credit concerns caused other bonds to decline in value, such as Lomas
Mortgage 10 1/4%, and Waxman Industries 13 3/4%.
To sum up, high yield bonds were less buffeted by interest rate risk in
1994 than most fixed income alternatives. Investors who were able to
accept the inherent credit risk in the Fund were rewarded. As always,
we appreciate the opportunity to serve your investment needs.
Sincerely,
/s/ George V. Ganter
George V. Ganter
Portfolio Manager
January 31, 1995
Cumulative Performance Information
EXECUTIVE INVESTORS HIGH YIELD FUND
Comparison of change in value of $10,000 investment in the Executive
Investors High Yield Fund and the First Boston High Yield Index.
The following table is the source data for the line chart which
appears at this point in the printed document. This table is
not part of the original printed document and is shown for
reference only. The same is also true for this descriptive
paragraph.
<TABLE>
<CAPTION>
Executive Investors High Yield Fund First Boston High Yield Index
<S> <C> <C>
Mar-87 $ 9,525 $10,000
Dec-87 9,113 10,653
Dec-88 11,055 12,107
Dec-89 10,933 12,155
Dec-90 9,566 11,379
Dec-91 12,950 16,358
Dec-92 15,008 19,075
Dec-93 17,564 22,683
Dec-94 17,156 22,463
</TABLE>
<TABLE>
<CAPTION>
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
<S> <C> <C>
One Year (2.32%) (6.92%)
Five Years 9.43% 8.36%
Since Inception 7.86% 7.19%
S.E.C. 30-Day Yield 9.37%
</TABLE>
The graph compares a $10,000 investment made in the Executive Investors
High Yield Fund on 3/24/87 (inception date) with a similar investment
in the First Boston High Yield Index. For purposes of the graph and the
accompanying table, unless otherwise indicated, it has been assumed
that the maximum sales charge was deducted from the initial $10,000
investment in the Fund and all dividends and distributions were
reinvested.
The First Boston High Yield Index is designed to measure the
performance of the High Yield Bond Market. The index consists of 661
different issues, 576 of these are cash pay, 70 are zero-coupon, 6 are
step bonds, 4 are payment-in-kind bonds and the remaining 5 are in
default. The bonds included in the Index have an average life of 8.1
years, an average maturity of 8.2 years, an average duration of 4.7
years and an average coupon of 10.65%. The Index does not take into
account fees and expenses. It is not possible to invest in the First
Boston High Yield Index.
* Average Annual Total Return figures (for the period ended 12/31/94)
include the reinvestment of all dividends and distributions. "N.A.V.
Only" returns are calculated without sales charges. The "S.E.C.
Standardized" returns shown are based on the maximum sales charge of
4.75% (prior to 10/28/88, the maximum sales charge was 4.0%) and are
lower than they would have been had the sales charge not been
increased. Some or all of the expenses of the Fund were waived or
assumed. If such expenses had been paid by the Fund, the S.E.C.
Standardized Average Annual Total Return for One Year, Five Years and
Since Inception would have been (7.52%), 7.29% and 5.84%, respectively
and the S.E.C. Yield for December 1994 would have been 8.83%. Results
represent past performance and do not indicate future results.
Investment return and principal value of an investment will fluctuate
so that an investor's shares, when redeemed, may be worth more or less
than the original cost. The unusually high current yields offered
reflect the substantial risks associated with investments in high yield
bonds. The issuers of the bonds pay higher interest rates because they
have a greater likelihood of financial difficulty, which could result
in their inability to repay the bonds fully when due. Prices of high
yield bonds are also subject to greater fluctuations. First Boston
High Yield Index figures from CS First Boston and all other figures
from Executive Investors Management Company, Inc.
Portfolio Manager's Letter
EXECUTIVE INVESTORS INSURED TAX EXEMPT FUND
Dear Investor:
The U.S. economic recovery hit full stride in 1994 with gross domestic
product growth of approximately 4%. The unemployment rate fell from
6.4% to 5.4% over the course of the year as the economy created 3.5
million new jobs. Feeling secure about job prospects, consumers were
willing to borrow and spend. U.S. vehicle sales reached their highest
level since 1988. Despite strong growth, inflation remained below 3% as
low labor costs, improved productivity and international competition
kept prices from accelerating.
Nonetheless, concerned that strong economic growth would eventually
lead to inflation, the Federal Reserve in February engineered the first
of six short-term interest rate increases which in total raised rates
250 basis points (2.50%). As is typical at this point in the economic
cycle, long-term interest rates also rose with the benchmark 30 year
U.S. Treasury bond yield increasing approximately 155 basis points
(1.55%) during the year. With higher interest rates creating concern
that the economy might slow, broad stock market indices were unable to
advance and ended the year unchanged to slightly lower despite strong
earnings reported by many companies.
The municipal bond market fell in stages during 1994. The first decline
was precipitated by the Federal Reserve's decision to begin raising
interest rates in February, causing long-term municipal bond yields to
rise over 100 basis points (1.00%). The second decline--which took
rates up another 95 basis points (.95%)--ran from September through
November, as economic growth continued to be strong. The Fed continued
to raise short-term rates and municipal bond funds sustained high
levels of redemptions. Following a December rally, municipal bond
yields ended the year 145 basis points (1.45%) higher than they had
begun 1994.
New issue supply totalled $163 billion, a drop of 44% from 1993's
record pace. The positive impact of lower supply was offset by the sale
of bonds by mutual funds. The municipal yield curve flattened during
the year as short-term interest rates rose more than long-term rates.
In general, sector and credit decisions had little impact on relative
returns in the municipal bond market. Rather, the sustained decline in
the market made "duration"--which measures the interest rate
sensitivity of bonds--the key determinant of total return. While the
bankruptcy of Orange County, California disrupted the municipal bond
market in general, and the California market in particular, the
Executive Investors Insured Tax Exempt Fund was relatively unaffected
because all the bonds in the Fund are insured as to payment of
principal and interest.
The Executive Investors Insured Tax Exempt Fund declined 3.95% during
1994, compared to a 5.17% decline for the Lehman Brothers Municipal
Bond Index. The Fund's outperformance reflects active management of the
portfolio. The Fund was able to take advantage of market inefficiencies
created by reduced new issue supply combined with strong retail demand
for bonds in high-tax states. In addition, the Fund invested in high
coupon non-callable bonds which cushioned it from the adverse impact of
rising rates.
As always, we appreciate the opportunity to serve your investment
needs.
Sincerely,
/s/ Clark D. Wagner
Clark D. Wagner
Chief Investment Officer
and Portfolio Manager
January 31, 1995
Cumulative Performance Information
EXECUTIVE INVESTORS INSURED TAX EXEMPT FUND
Comparison of change in value of $10,000 investment in the Executive
Investors Insured Tax Exempt Fund and the Lehman Brothers Municipal
Bond Index.
The following table is the source data for the line chart which
appears at this point in the printed document. This table is
not part of the original printed document and is shown for
reference only. The same is also true for this descriptive
paragraph.
<TABLE>
<CAPTION>
Executive Investors Insured Lehman Brothers Municipal
Tax Exempt Fund Bond Index
<S> <C> <C>
Jul-90 $ 9,525 $10,000
Dec-90 9,901 10,286
Dec-91 11,188 11,536
Dec-92 12,412 12,552
Dec-93 14,366 14,093
Dec-94 13,797 13,365
</TABLE>
<TABLE>
<CAPTION>
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
<S> <C> <C>
One Year (3.95%) (8.52%)
Since Inception 8.66% 7.48%
S.E.C. 30-Day Yield 5.80%
</TABLE>
The graph compares a $10,000 investment made in the Executive Investors
Insured Tax Exempt Fund on 7/26/90 (inception date) with a similar
investment in the Lehman Brothers Municipal Bond Index. For purposes of
the graph and the accompanying table, unless otherwise indicated, it
has been assumed that the maximum sales charge was deducted from the
initial $10,000 investment in the Fund and all dividends and
distributions were reinvested.
The Lehman Brothers Municipal Bond Index is a total return performance
benchmark for the long-term investment grade tax exempt bond market.
Returns and attributes for the Index are calculated semi-monthly using
approximately 21,000 municipal bonds which are priced by Muller Data
Corp. The Index does not take into account fees and expenses or cost of
insurance of the bonds held by an insured tax-exempt bond fund. It is
not possible to invest in the Lehman Brothers Municipal Bond Index.
* Average Annual Total Return figures (for the period ended 12/31/94)
include the reinvestment of all dividends and distributions. "N.A.V.
Only" returns are calculated without sales charges. The "S.E.C.
Standardized" returns shown are based on the maximum sales charge of
4.75%. Some or all of the expenses of the Fund were waived or assumed.
If such expenses had been paid by the Fund, the S.E.C. Standardized
Average Annual Total Return for One Year and Since Inception would have
been (10.59%) and 5.88%, respectively and the S.E.C. Yield for December
1994 would have been 4.26%. Results represent past performance and do
not indicate future results. Investment return and principal value of
an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost. Lehman
Brothers Municipal Bond Index figures from Lehman Brothers Inc. and all
other figures from Executive Investors Management Company, Inc.
<TABLE>
<CAPTION>
Portfolio of Investments
EXECUTIVE INVESTORS BLUE CHIP FUND
December 31, 1994
- - ----------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- - ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS--89.5%
Basic Industry--2.7%
400 Monsanto Company $ 28,200 $ 271
- - ----------------------------------------------------------------------------------------------
Capital Goods--8.9%
200 Boeing Co. 9,350 90
100 Browning Ferris Industries, Inc. 2,837 27
100 Deere & Company 6,625 64
150 Dover Corporation 7,744 74
50 Eaton Corp. 2,475 24
100 Emerson Electric 6,250 60
550 General Electric Company 28,050 269
75 Ingersoll-Rand Co. 2,363 23
100 ITT Corporation 8,863 85
50 McDonnell Douglas Corp. 7,100 68
200 *Varity Corp. 7,250 70
150 WMX Technologies Inc. 3,937 38
- - ----------------------------------------------------------------------------------------------
92,844 892
- - ----------------------------------------------------------------------------------------------
Consumer Durables--2.4%
100 Chrysler Corporation 4,900 47
250 Ford Motor Co. 7,000 67
200 General Motors Corp. 8,450 81
50 Goodyear Tire & Rubber Company 1,680 16
150 Masco Corporation 3,394 33
- - ----------------------------------------------------------------------------------------------
25,424 244
- - ----------------------------------------------------------------------------------------------
Consumer Non-Durables--18.2%
250 Abbott Laboratories 8,155 78
100 American Home Products Corp. 6,275 60
50 Anheuser Busch Companies, Inc. 2,544 24
150 Bristol-Myers Squibb Co. 8,681 83
450 Coca Cola Company 23,175 223
200 CPC International Inc. 10,650 102
100 Eastman Kodak Co. 4,775 46
50 Gillette Co. 3,738 36
200 Johnson & Johnson 10,950 105
100 Kellogg Company 5,812 56
150 Kimberly Clark Corporation 7,575 73
100 Lilly (Eli) & Co. 6,563 63
400 Merck & Co., Inc. 15,250 147
250 Pepsico Inc. 9,063 87
200 Pet, Inc. 3,950 38
100 Pfizer Inc. 7,725 74
350 Philip Morris Cos., Inc. 20,125 194
200 Procter & Gamble Co. 12,400 119
100 *Ralcorp Holdings Inc. 2,225 21
250 Sara Lee Corp. 6,313 61
50 Schering-Plough Corp. 3,700 36
300 Stride Rite Corp. 3,338 32
50 Unilever PLC 5,825 56
- - ----------------------------------------------------------------------------------------------
188,807 1,814
- - ----------------------------------------------------------------------------------------------
Consumer Services--7.5%
100 Albertson's Inc. 2,900 28
100 Dayton-Hudson Corp. 7,075 69
150 Disney (Walt) Company 6,919 66
100 GAP, Inc. (The) 3,050 29
150 Home Depot, Inc. (The) 6,900 67
100 *Kroger Company 2,413 23
50 Mattel Inc. 1,256 12
100 May Department Stores Co. 3,375 32
200 McDonald's Corp. 5,850 56
150 Nordstrom Inc. 6,300 61
150 Officemax Inc. 3,975 38
100 Rite Aid Corp. 2,338 22
100 Sears, Roebuck & Co. 4,600 44
25 Time Warner Inc. 878 8
100 *Toys "R" Us, Inc. 3,050 29
100 *Viacom Inc.--Class "B" 4,063 39
600 Wal-Mart Stores, Inc. 12,750 124
- - ----------------------------------------------------------------------------------------------
77,692 747
- - ----------------------------------------------------------------------------------------------
Energy--18.5%
300 Alcan Aluminum Ltd. 7,612 73
300 Amoco Corp. 17,738 170
150 Atlantic Richfield Co. 15,263 147
50 Burlington Resources Inc. 1,750 17
200 Chevron Corp. 8,925 86
100 Dow Chemical Co. 6,725 65
200 Du Pont (E.I.) De Nemours & Co. 11,250 108
200 Enron Corporation 6,100 59
400 Exxon Corp. 24,300 233
100 Halliburton Co. 3,313 32
100 Inland Steel Industries, Inc. 3,513 34
50 Kerr-McGee Corp. 2,300 22
130 Minnesota Mining & Manufacturing Company 6,939 67
150 Mobil Corporation 12,637 121
200 NICOR, Inc. 4,550 44
150 Nucor Corp. 8,325 80
100 Pacific Enterprises 2,125 20
50 Phillips Petroleum Co. 1,638 16
225 Royal Dutch Petroleum Company 24,187 232
100 Schlumberger, Ltd. 5,038 48
100 Scott Paper Co. 6,913 66
100 Texaco Inc. 5,988 58
200 Unocal Corp. 5,450 52
- - ----------------------------------------------------------------------------------------------
192,579 1,850
- - ----------------------------------------------------------------------------------------------
Financial--7.9%
150 American Express Co. 4,425 43
100 American International Group Inc. 9,800 94
247 Banc One Corporation 6,268 60
250 BankAmerica Corporation 9,875 95
100 Chase Manhattan Corp. 3,438 33
100 Chemical Banking Corp. 3,588 34
150 Citicorp 6,206 60
150 Federal National Mortgage Association 10,930 105
150 First Fidelity Bancorporation 6,731 65
350 MGIC Investment Corporation 11,594 111
200 NationsBank Corporation 9,025 87
- - ----------------------------------------------------------------------------------------------
81,880 787
- - ----------------------------------------------------------------------------------------------
Health Care Miscellaneous--2.1%
150 Columbia/HCA Healthcare Corporation 5,475 53
300 U.S. Healthcare, Inc. 12,375 119
50 Warner-Lambert Company 3,850 37
- - ----------------------------------------------------------------------------------------------
21,700 209
- - ----------------------------------------------------------------------------------------------
Retail Trade--.1%
100 *Price/Costco, Inc. 1,288 12
- - ----------------------------------------------------------------------------------------------
Technology--9.3%
200 *Airtouch Communications Inc. 5,825 56
50 Autodesk Inc. 1,981 19
100 Automatic Data Processing, Inc. 5,850 56
100 Cisco Systems, Inc. 3,513 34
50 *Compaq Computer Corp. 1,975 19
100 Hewlett-Packard Co. 9,987 96
100 Intel Corporation 6,387 61
200 International Business Machines Corp. 14,700 142
300 MCI Communications Corp. 5,513 53
200 *Microsoft Corp. 12,225 118
200 Motorola, Inc. 11,575 111
200 National Semiconductor Corp. 3,900 37
300 *Oracle Systems Corp. 13,237 127
- - ----------------------------------------------------------------------------------------------
96,668 929
- - ----------------------------------------------------------------------------------------------
Transportation--1.0%
50 *AMR Corp. 2,662 26
300 *Southern Pacific Rail Corp 5,436 52
125 Southwest Airlines Co. 2,094 20
- - ----------------------------------------------------------------------------------------------
10,192 98
- - ----------------------------------------------------------------------------------------------
Utilities--10.9%
300 A T & T Corp. 15,075 145
200 Ameritech Corp. 8,075 78
150 Bell Atlantic Corp. 7,462 72
150 BellSouth Corp. 8,117 78
200 Carolina Power & Light Co. 5,325 51
400 Cinergy Corp. 9,350 90
200 Duke Power Co. 7,625 73
250 FPL Group, Inc. 8,780 84
300 GTE Corporation 9,113 87
150 Nynex Corp. 5,513 53
200 Pacific Telesis Group 5,700 55
200 Pacificorp 3,625 35
200 *SBC Communications Inc. 8,075 78
200 Texas Utilities Co. 6,400 61
150 U.S. West, Inc. 5,344 51
- - ----------------------------------------------------------------------------------------------
113,579 1,091
- - ----------------------------------------------------------------------------------------------
Total Value of Common Stocks (cost $913,199) 930,853 8,944
- - ----------------------------------------------------------------------------------------------
CONVERTIBLE BONDS--1.2%
Leisure Time
$20M Bell Sports Corporation, 4 1/4%, 2000 (cost $14,991) 12,875 124
- - ----------------------------------------------------------------------------------------------
Total Value of Investments (cost $928,190) 90.7% 943,728 9,068
Other Assets, Less Liabilities 9.3 97,010 932
- - ----------------------------------------------------------------------------------------------
Net Assets 100.0% $1,040,738 $10,000
==============================================================================================
*Non-income producing
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Portfolio of Investments
EXECUTIVE INVESTORS HIGH YIELD FUND
December 31, 1994
- - -------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- - -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CORPORATE BONDS--92.8%
Aerospace/Defense--5.4%
$ 300M Allison Engine Company, Inc., 10%, 2003 $ 309,000 $ 204
275M Dyncorp, PIK, 16%, 2003 259,506 171
250M Fairchild Industries, Inc., 12 1/4%, 1999 246,562 163
- - -------------------------------------------------------------------------------------------------------------------------
815,068 538
- - -------------------------------------------------------------------------------------------------------------------------
Apparel/Textiles--2.4%
400M Westpoint Stevens, Inc., 9 3/8%, 2005 361,000 238
- - -------------------------------------------------------------------------------------------------------------------------
Automotive--6.9%
400M JPS Automotive Products Corp., 11 1/8%, 2001 391,000 258
150M Lear Seating, Inc., 11 1/4%, 2000 152,813 101
500M SPX Corp., 11 3/4%, 2002 499,375 330
- - -------------------------------------------------------------------------------------------------------------------------
1,043,188 689
- - -------------------------------------------------------------------------------------------------------------------------
Building Materials-- .5%
185M Waxman Industries, Inc., 0%-12 3/4%, 2004 82,325 54
- - -------------------------------------------------------------------------------------------------------------------------
Chemicals--11.4%
425M Buckeye Cellulose, Inc., 10 1/4%, 2001 399,500 264
550M Harris Chemical North America, Inc., 0%-10 1/4%, 2001 456,500 301
500M OSI Specialties, Inc., 9 1/4%, 2003 457,500 303
400M Rexene Corp., 11 3/4%, 2004 411,000 271
- - -------------------------------------------------------------------------------------------------------------------------
1,724,500 1,139
- - -------------------------------------------------------------------------------------------------------------------------
Conglomerates--1.4%
500M International Semi-Tech Microelectronics, Inc., 0%-11 1/2%, 2003 212,500 140
- - -------------------------------------------------------------------------------------------------------------------------
Consumer Non-Durables--1.7%
250M Calmar, Inc., 12%, 1997 251,250 166
- - -------------------------------------------------------------------------------------------------------------------------
Durable Goods Manufacturing--1.2%
200M Fairfield Manufacturing, Inc., 11 3/8%, 2001 188,000 124
- - -------------------------------------------------------------------------------------------------------------------------
Electrical Equipment--3.4%
450M Essex Group, Inc., 10%, 2003 420,750 279
44M Thermadyne Industries, Inc., 10 1/4%, 2002 42,240 28
62M Thermadyne Industries, Inc., 10 3/4%, 2003 58,280 38
- - -------------------------------------------------------------------------------------------------------------------------
521,270 345
- - -------------------------------------------------------------------------------------------------------------------------
Energy Services--5.3%
400M Giant Industries, Inc., 9 3/4%, 2003 358,000 236
223M Synergy Group, Inc., 9 1/2%, 2000 178,400 118
250M Transco Energy Co., 11 1/4%, 1999 266,875 176
- - -------------------------------------------------------------------------------------------------------------------------
803,275 530
- - -------------------------------------------------------------------------------------------------------------------------
Entertainment/Leisure-- .4%
300M +SHRP Capital Corp., 11 3/4%, 1999 52,500 35
- - -------------------------------------------------------------------------------------------------------------------------
Financial Services--4.1%
300M Lomas Mortgage, USA, 10 1/4%, 2002 255,000 168
400M Olympic Financial, Ltd., 11 3/4%, 2000 368,000 244
- - -------------------------------------------------------------------------------------------------------------------------
623,000 412
- - -------------------------------------------------------------------------------------------------------------------------
Food/Beverage/Tobacco--2.7%
400M Fleming Co., Inc., 10 5/8%, 2001 402,000 265
- - -------------------------------------------------------------------------------------------------------------------------
Food Services-- .9%
150M Americold Corp., 11 1/2%, 2005 135,375 89
- - -------------------------------------------------------------------------------------------------------------------------
Gaming/Lodging--1.2%
220M Casino America, Inc., 11 1/2%, 2001 185,900 123
- - -------------------------------------------------------------------------------------------------------------------------
Healthcare--4.3%
350M American Medical International, Inc., 13 1/2%, 2001 383,469 254
300M Mediq/PRN Life Support Services, Inc., 11 1/8%, 1999 271,500 179
- - -------------------------------------------------------------------------------------------------------------------------
654,969 433
- - -------------------------------------------------------------------------------------------------------------------------
Media/Cable Television--7.3%
300M Garden State Newspapers, Inc., 12%, 2004 298,500 197
250M Lamar Advertising, Inc., 11%, 2003 239,375 158
400M Outdoor Systems, Inc., 10 3/4%, 2003 362,000 239
200M Summit Communications Group, 10 1/2%, 2005 204,500 135
- - -------------------------------------------------------------------------------------------------------------------------
1,104,375 729
- - -------------------------------------------------------------------------------------------------------------------------
Mining/Metals--9.7%
300M Carbide/Graphite Group, Inc., 11 1/2%, 2003 303,000 200
200M Geneva Steel Co., Inc., 11 1/8%, 2001 189,000 125
300M Geneva Steel Co., Inc., 9 1/2%, 2004 253,125 167
400M WCI Steel, Inc., 10 1/2%, 2002 385,000 254
400M Wheeling-Pittsburgh Steel Corp., 9 3/8%, 2003 342,000 226
- - -------------------------------------------------------------------------------------------------------------------------
1,472,125 972
- - -------------------------------------------------------------------------------------------------------------------------
Miscellaneous--1.0%
350M +Acme Holdings, Inc., 11 3/4%, 2000 147,000 97
- - -------------------------------------------------------------------------------------------------------------------------
Paper/Forest Products--9.5%
400M Gaylord Container Corp., 11 1/2%, 2001 408,000 269
200M Rainy River Forest Products Co., Inc., 10 3/4%, 2001 199,500 132
500M Stone Container Corp., 9 7/8%, 2001 475,000 314
350M S. D. Warren Co., Inc., 12%, 2004 (Note 6) 358,750 237
- - -------------------------------------------------------------------------------------------------------------------------
1,441,250 952
- - -------------------------------------------------------------------------------------------------------------------------
Retail-Food/Drug--2.6%
400M Penn Traffic Co., Inc., 10.65%, 2004 393,000 260
- - -------------------------------------------------------------------------------------------------------------------------
Retail-General Merchandise--.0%
2M Barry's Jewelers, Inc., 12 5/8%, 1996 1,061 1
- - -------------------------------------------------------------------------------------------------------------------------
Telecommunications--4.5%
700M PanAmSat Capital Corp., 0%-11 3/8%, 2003 437,500 289
250M Paging Network, Inc., 11 3/4%, 2002 249,375 165
- - -------------------------------------------------------------------------------------------------------------------------
686,875 454
- - -------------------------------------------------------------------------------------------------------------------------
Transportation--5.0%
300M Moran Transportation Co., 11 3/4%, 2004 283,500 187
500M Trism, Inc., 10 3/4%, 2000 472,500 312
- - -------------------------------------------------------------------------------------------------------------------------
756,000 499
- - -------------------------------------------------------------------------------------------------------------------------
Total Value of Corporate Bonds (cost $15,237,316) 14,057,806 9,284
- - -------------------------------------------------------------------------------------------------------------------------
UNITS--2.3%
Telecommunications
650 Echostar Communications Corp., 0%-12 7/8%, 2004(a) (cost $373,755) 339,625 224
- - -------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--.3%
Electrical Equipment--.1%
648 *Thermadyne Holdings Corp. 7,573 5
- - -------------------------------------------------------------------------------------------------------------------------
Gaming/Lodging--.0%
5,063 *Divi Hotels, Inc. 380 --
2,000 *Goldriver Hotel & Casino Corp., Series "B" 3,000 2
- - -------------------------------------------------------------------------------------------------------------------------
3,380 2
- - -------------------------------------------------------------------------------------------------------------------------
Retail-General Merchandise--.2%
4,497 *Barry's Jewelers, Inc. 31,478 21
- - -------------------------------------------------------------------------------------------------------------------------
Total Value of Common Stocks (cost $233,978) 42,431 28
- - -------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--2.0%
Financial Services
3,000 California Federal Bank, 10 5/8%, Series "B" (cost $300,000) 300,000 198
- - -------------------------------------------------------------------------------------------------------------------------
WARRANTS--.1%
Building Materials--.0%
5,900 *Waxman Industries, Inc. (expiring 6/1/04) (Note 6) 2,950 2
- - -------------------------------------------------------------------------------------------------------------------------
Entertainment/Leisure--.0%
800 *SHRP Capital Corp. (expiring 7/15/99) (Note 6) -- --
- - -------------------------------------------------------------------------------------------------------------------------
Financial Services--.0%
2,400 *Olympic Financial, Ltd. (expiring 9/1/99) 4,200 3
- - -------------------------------------------------------------------------------------------------------------------------
Gaming/Lodging-- .1%
717 *Casino America, Inc. (expiring 11/15/96) 179 --
200 *Goldriver Finance Corp., Liquidating Trust 3,000 2
1,800 *Presidential Riverboat Casinos, Inc. (expiring 9/15/96) (Note 6) 7,200 5
- - -------------------------------------------------------------------------------------------------------------------------
10,379 7
- - -------------------------------------------------------------------------------------------------------------------------
Retail-General Merchandise--.0%
100 *Payless Cashways, Inc. (expiring 11/1/96) 150 --
- - -------------------------------------------------------------------------------------------------------------------------
Total Value of Warrants (cost $14,363) 17,679 12
- - -------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $16,159,412) 97.5% 14,757,541 9,746
Other Assets, Less Liabilities 2.5 384,387 254
- - -------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $15,141,928 $10,000
=========================================================================================================================
* Non-income producing
+ In default as to principal and/or interest (Note 7).
(a) Each unit consists of a $1,000 principal amount of 12 7/8% senior
secured discount note due 6/1/04 and warrants to purchase six shares of
Class "A" common stock.
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Portfolio of Investments
EXECUTIVE INVESTORS INSURED TAX EXEMPT FUND
December 31, 1994
- - -------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- - -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS--97.5 %
Arizona--4.4%
$250M Maricopa County, Arizona Dev. Auth. Hosp. Facs. Rev.
Samaritan Health Services Series "A" 7%, 12/1/2016 $ 261,563 $ 253
200M Maricopa County, Arizona Sch. Dist. (No. 80 Chandler) 6 1/4%, 7/1/2011 195,250 188
- - -------------------------------------------------------------------------------------------------------------------------
456,813 441
- - -------------------------------------------------------------------------------------------------------------------------
California--15.6%
Los Angeles County, Calif. Transportation Comm. Sales Tax Revenue:
100M 6 3/4%, 7/1/2020 107,000 103
100M 6.9%, 7/1/2021 107,750 104
200M San Diego Cnty. Water Authority Ctf. of Partn. RITES Var. Rate 4/22/2009 187,000 180
250M San Francisco, Calif. City & County Parking Auth. 7%, 6/1/2017 252,188 243
500M San Francisco, Calif. City & County Redev. Agcy. 6 3/4%, 7/1/2015 497,500 480
250M San Jose, Calif. Redev. Agcy. 6%, 8/1/2015 230,625 223
250M Santa Ana, Calif. Finance Authority 6 1/4%, 7/1/2015 237,500 229
- - -------------------------------------------------------------------------------------------------------------------------
1,619,563 1,562
- - -------------------------------------------------------------------------------------------------------------------------
Colorado--3.3%
350M Roaring Fork, Colorado General Obligation 6.6%, 12/15/2014 346,500 334
- - -------------------------------------------------------------------------------------------------------------------------
Connecticut--3.7%
400M Connecticut State Special Tax Oblig. Rev. 6.1%, 10/1/2011 383,000 370
- - -------------------------------------------------------------------------------------------------------------------------
District of Columbia--.9%
90M District of Columbia General Obligation Series "A" 6 7/8%, 6/1/2011 95,963 93
- - -------------------------------------------------------------------------------------------------------------------------
Georgia--2.3%
100M Cherokee County, Ga. Water & Sewer Auth. Rev. 7.1%, 8/1/2019 108,500 105
125M Hall County, Georgia School District 6.7%, 12/1/2014 125,625 121
- - -------------------------------------------------------------------------------------------------------------------------
234,125 226
- - -------------------------------------------------------------------------------------------------------------------------
Illinois--6.8%
100M Du Paige Water Commission, Illinois Water Rev. 6 7/8%, 5/1/2014 105,250 102
500M Illinois Dev. Fin. Auth. Rev. (Rockford School 205) 6.55%, 2/1/2009 498,750 481
100M Will County School District General Obligation 7.1%, 12/1/2009 103,875 100
- - -------------------------------------------------------------------------------------------------------------------------
707,875 683
- - -------------------------------------------------------------------------------------------------------------------------
Indiana--1.3%
130M Delaware Cnty. Hosp. Auth. (Ball Memorial Hosp.) 6 5/8%, 8/1/2006 133,738 129
- - -------------------------------------------------------------------------------------------------------------------------
Maine--2.4%
250M Maine Muni Bond Bank Variable Rate 6 1/2%, 11/1/2014 247,187 239
- - -------------------------------------------------------------------------------------------------------------------------
Massachusetts--2.3%
250M Mass. Health & Edl. Facs. Auth. (South Shore Hosp.) 6 1/2%, 7/1/2022 239,687 231
- - -------------------------------------------------------------------------------------------------------------------------
Michigan--2.2%
1,000M Howell Michigan Public Schools Cap. Appreciation Zero Cpn. 5/1/2006 225,000 217
- - -------------------------------------------------------------------------------------------------------------------------
Missouri--4.9%
500M Missouri State Health & Educational Facilities Authority:
BJC Health Systems Series "A" 6 3/4%, 5/15/2010 506,250 489
- - -------------------------------------------------------------------------------------------------------------------------
Nevada--.9%
80M Reno Hosp. Rev. (St. Mary's Hospital) 7 3/4%, 7/1/2015 88,400 85
- - -------------------------------------------------------------------------------------------------------------------------
New Jersey--12.4%
500M New Jersey Economic Development Authority Market Trans. Fac. Rev.
5 7/8%, 7/1/2011 471,250 455
350M New Jersey Health Care Fac. Fin. Auth. (Dover Gen. Hosp. & Med Ctr)
5 7/8%, 7/1/2012 323,312 312
485M New Jersey Housing & Mortgage Fin. Rev. 6.55%, 10/1/2010 487,425 470
- - -------------------------------------------------------------------------------------------------------------------------
1,281,987 1,237
- - -------------------------------------------------------------------------------------------------------------------------
New York--11.2%
440M Buffalo, New York General Obligation Series "E" 6 1/2%, 12/1/2020 423,500 409
500M Metropolitan Transit Authority, New York Commuter Facs. Rev.
Series "A" 6 1/8%, 7/1/2014 470,625 454
290M New York City Municipal Water Fin. Auth. 5 7/8%, 6/15/2012 268,250 259
- - -------------------------------------------------------------------------------------------------------------------------
1,162,375 1,122
- - -------------------------------------------------------------------------------------------------------------------------
Ohio--1.8%
200M Portage County, Ohio 6.2%, 12/1/2014 190,250 184
- - -------------------------------------------------------------------------------------------------------------------------
Pennsylvania--9.6%
200M Jeannette, Pa. School District 6.65%, 6/15/2021 210,000 203
500M Pennsylvania State Ind. Dev. Auth. 5 1/2%, 1/1/2014 428,750 414
400M Pennsylvania State Turnpike Revenue 5 1/2%, 12/1/2012 357,500 344
- - -------------------------------------------------------------------------------------------------------------------------
996,250 961
- - -------------------------------------------------------------------------------------------------------------------------
Rhode Island--4.4%
250M Kent County, Rhode Island Water Auth. Rev. 6.35%, 7/15/2014 238,437 230
200M Rhode Island Convention Center Auhority Series "A" 6.7%, 5/15/2020 212,750 205
- - -------------------------------------------------------------------------------------------------------------------------
451,187 435
- - -------------------------------------------------------------------------------------------------------------------------
Texas--7.1%
500M Harris County General Obligation 6 1/2%, 8/15/2013 494,375 477
250M Houston, Texas Water Cert. of Part. 6 1/4%, 12/15/2012 240,000 232
- - -------------------------------------------------------------------------------------------------------------------------
734,375 709
- - -------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $10,201,145) 97.5% 10,100,525 9,747
Other Assets, Less Liabilities 2.5 262,101 253
- - -------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $10,362,626 $10,000
=========================================================================================================================
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
EXECUTIVE INVESTORS TRUST
December 31, 1994
- - ------------------------------------------------------------------------------------------------------------------------
EXECUTIVE INVESTORS
----------------------------------------------
Blue Chip High Yield Insured Tax
Fund Fund Exempt Fund
- - ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Investments in securities:
At identified cost $ 928,190 $16,159,412 $10,201,145
========== =========== ===========
At value (Note 1A) $ 943,728 $14,757,541 $10,100,525
Cash 129,452 139,339 29,976
Receivables:
Investment securities sold 48,008 -- 580,824
Interest and dividends 2,680 320,283 179,717
Trust shares sold 11,880 77,270 524
Other assets 4 4,966 17
---------- ----------- -----------
Total Assets 1,135,752 15,299,399 10,891,583
---------- ----------- -----------
Liabilities
Payables:
Investment securities purchased 77,130 -- 473,681
Trust shares redeemed 14,213 41,082 14,398
Dividends payable January 15, 1995 2,446 75,423 28,842
Accrued expenses 1,225 35,319 12,036
Accrued advisory fees -- 5,647 --
---------- ----------- -----------
Total Liabilities 95,014 157,471 528,957
---------- ----------- -----------
Net Assets $1,040,738 $15,141,928 $10,362,626
---------- ----------- -----------
Net Assets Consist of:
Capital paid in $1,023,160 $21,198,107 $10,486,919
Undistributed net investment income 2,040 36,461 3,810
Accumulated net realized loss on investments -- (4,690,769) (27,483)
Net unrealized appreciation (depreciation) in value
of investments 15,538 (1,401,871) (100,620)
---------- ----------- -----------
Net Assets $1,040,738 $15,141,928 $10,362,626
========== =========== ===========
Shares of Beneficial Interest Outstanding (Note 2) 81,640 2,170,241 827,176
========== =========== ===========
Net Asset Value and Redemption Price Per Share
(Net assets divided by shares of beneficial
interest outstanding) $12.75 $6.98 $12.53
====== ===== ======
Maximum Offering Price Per Share
(Net Asset Value/.9525)* $13.39 $7.33 $13.15
====== ===== ======
* On purchases of $100,000 or more, the sales charge is reduced.
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
EXECUTIVE INVESTORS TRUST
Year Ended December 31, 1994
- - -------------------------------------------------------------------------------------------------------------------
EXECUTIVE INVESTORS
----------------------------------------------
Blue Chip High Yield Insured Tax
Fund Fund Exempt Fund
- - -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income
Income:
Interest $ 955 $ 1,577,388 $580,740
Dividends (Note 1D) 21,464 30,151 --
Consent fees -- 14,000 --
--------- ----------- ---------
Total income 22,419 1,621,539 580,740
--------- ----------- ---------
Expenses:
Advisory fee (Note 4) 9,661 150,442 98,612
Distribution plan expenses (Note 5) 4,830 75,221 49,700
Professional fees 4,265 19,211 13,454
Shareholder servicing costs (Note 4) 2,768 21,335 7,133
Reports and notices to shareholders 830 12,467 3,569
Custodian fees 1,112 102 434
Other expenses 1,072 4,517 4,722
--------- ----------- ---------
Total expenses 24,538 283,295 177,624
Less: Expenses waived or assumed (Note 4) 19,708 82,743 127,917
--------- ----------- ---------
Net expenses 4,830 200,552 49,707
--------- ----------- ---------
Net investment income 17,589 1,420,987 531,033
--------- ----------- ---------
Realized and Unrealized Gain (Loss) on Investments (Note 3):
Net realized gain (loss) on investments 70,824 80,680 (27,483)
Net unrealized depreciation of investments (102,509) (1,873,704) (894,199)
--------- ----------- ---------
Net loss on investments (31,685) (1,793,024) (921,682)
--------- ----------- ---------
Net Decrease in Net Assets Resulting from Operations $ (14,096) $ (372,037) $(390,649)
========= =========== =========
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
EXECUTIVE INVESTORS TRUST
- - -------------------------------------------------------------------------------------------------------------------------
Executive Investors
---------------------------------------------------------------------------------
INSURED
BLUE CHIP FUND HIGH YIELD FUND TAX EXEMPT FUND
------------------------- ------------------------ -----------------------
Year Ended December 31 1994 1993 1994 1993 1994 1993
- - ---------------------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in Net
Assets from Operations
Net investment income $ 17,589 $ 13,362 $ 1,420,987 $ 1,124,173 $ 531,033 $ 413,982
Net realized gain (loss) on
investments 70,824 39,615 80,680 453,896 (27,483) 215,101
Net unrealized appreciation
(depreciation) of investments (102,509) 9,987 (1,873,704) 267,519 (894,199) 463,392
---------- --------- ----------- ----------- ----------- ----------
Net increase (decrease) in net as-
sets resulting from operations (14,096) 62,964 (372,037) 1,845,588 (390,649) 1,092,475
---------- --------- ----------- ----------- ----------- ----------
Distributions to Shareholders
from:
Net investment income (15,549) (13,550) (1,486,797) (1,157,690) (538,977) (413,864)
Net realized gain from security
transactions (70,824) (38,434) -- -- -- (213,953)
---------- --------- ----------- ----------- ----------- ----------
Total Distributions (86,373) (51,984) (1,486,797) (1,157,690) (538,977) (627,817)
---------- --------- ----------- ----------- ----------- ----------
Trust Share Transactions(a)
Issued 307,337 282,580 4,684,633 4,670,832 2,357,147 3,664,979
Issued on reinvestments 83,856 51,591 659,544 569,983 271,847 365,569
Redeemed (206,473) (174,173) (2,574,747) (2,188,744) (783,306) (923,763)
---------- --------- ----------- ----------- ----------- ----------
Net increase from trust share
transactions 184,720 159,998 2,769,430 3,052,071 1,845,688 3,106,785
---------- --------- ----------- ----------- ----------- ----------
Total increase in net assets 84,251 170,978 910,596 3,739,969 916,062 3,571,443
Net Assets
Beginning of year 956,487 785,509 14,231,332 10,491,363 9,446,564 5,875,121
---------- --------- ----------- ----------- ----------- ----------
End of year+ $1,040,738 $956,487 $15,141,928 $14,231,332 $10,362,626 $9,446,564
========== ========= =========== =========== =========== ==========
+ Includes undistributed net
investment income of $ 2,040 -- $ 36,461 $ 102,271 $ 3,810 $ 11,754
========== ========= =========== =========== =========== ==========
(a)Trust Shares Issued and
Redeemed
Issued 21,798 19,652 620,568 601,429 180,398 268,309
Issued on reinvestments 6,516 3,661 89,317 73,550 21,136 26,640
Redeemed (14,678) (12,327) (343,344) (282,878) (60,322) (67,014)
---------- --------- ----------- ----------- ----------- ----------
Net increase in Trust shares 13,636 10,986 366,541 392,101 141,212 227,935
========== ========= =========== =========== =========== ==========
See notes to financial statements
</TABLE>
Notes to Financial Statements
Executive Investors Trust
1. Significant Accounting Policies--The Trust, a Massachusetts business
trust, is registered under the Investment Company Act of 1940 (the
"1940 Act") as a diversified, open-end management investment company.
The Trust consists of unlimited shares of beneficial interest of the
Blue Chip Fund, the High Yield Fund and the Insured Tax Exempt Fund,
and accounts separately for the assets, liabilities and operations of
each Fund.
A. Security Valuation--Except as provided below, a security listed or
traded on an exchange or the NASDAQ National Market System is valued at
its last sale price on the exchange or system where the security is
principally traded, and lacking any sales, the security is valued at
the mean between the closing bid and asked prices. Each security traded
in the over-the-counter market (including securities listed on
exchanges whose primary market is believed to be over-the-counter) is
valued at the mean between the last bid and asked prices based upon
quotes furnished by a market maker for such securities. Securities for
which market quotations are not readily available are valued on a
consistent basis at fair value as determined in good faith by or under
the direction of the Trust's officers in a manner specifically
authorized by the trustees.
Securities in the High Yield Fund may also be priced by a pricing
service which uses quotations obtained from investment dealers or
brokers, information with respect to market transactions in comparable
securities and other available information in determining value.
The municipal bonds in which the Insured Tax Exempt Fund invests are
traded primarily in the over-the-counter markets. Such securities are
valued daily on the basis of valuations provided by a pricing service
approved by the Board of Trustees. The pricing service considers
security type, rating, market condition and yield data, as well as
market quotations and prices provided by market makers in determining
value. "When Issued Securities" are reflected in the assets of the Fund
as of the date the securities are purchased.
The municipal bonds held by the Insured Tax Exempt Fund are insured as
to payment of principal and interest by the issuer or under insurance
policies written by independent insurance companies. It is the
intention of the Fund to retain any insured securities which are in
default or in significant risk of default and to place a value on the
defaulted securities equal to the value of similar securities which are
not in default.
B. Federal Income Taxes--No provision has been made for federal income
taxes on net income or capital gains since it is the policy of the
Trust to continue to comply with the special provisions of the Internal
Revenue Code applicable to investment companies and to make sufficient
distributions of income and capital gains (in excess of any available
capital loss carryovers) to relieve it from all, or substantially all,
federal income taxes. At December 31, 1994, the High Yield Fund had
capital loss carryovers of $4,651,284 of which $3,364,392 expires in
1998, and $1,286,892 in 1999 and the Insured Tax Exempt Fund had a
capital loss carryover of $19,495 which expires in 2002.
C. Expense Allocation--Expenses directly charged or attributable to a
Fund are paid from the assets of that Fund. General expenses of the
Trust are allocated among and charged to the assets of each Fund on a
fair and equitable basis, which may be based on the relative assets of
each Fund or the nature of the services performed and relative
applicability to each Fund.
D. Other--Security transactions are accounted for on the date the
securities are purchased or sold. Cost is determined, and gains and
losses are based, on the identified cost basis for both financial
statement and federal income tax purposes. Interest income and
estimated expenses are accrued daily. Dividend income is recorded on
the ex-dividend date. Shares of stock received in lieu of cash
dividends on certain preferred stock holdings are recognized as
dividend income and recorded at the market value of the shares
received. During the year ended December 31, 1994, the High Yield Fund
recognized $12,738 of dividend income from these taxable "pay in kind"
distributions.
E. Distributions to Shareholders--Dividends from net investment income
to shareholders of the High Yield Fund and the Insured Tax Exempt Fund
are declared daily and paid monthly. Dividends from net investment
income of the Blue Chip Fund are declared and paid quarterly.
Distributions from net realized capital gains are declared and paid
annually.
Income dividends and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are primarily due to
differing treatments for capital loss carryforwards and post October
losses.
2. Trust Shares--The Declaration of Trust permits the issuance of an
unlimited number of shares of beneficial interest, of one or more
series.
3. Security Transactions--For the year ended December 31, 1994,
purchases and sales of securities other than United States Treasury
bills and short-term notes, were as follows:
<TABLE>
<CAPTION>
BLUE CHIP HIGH YIELD INSURED TAX
FUND FUND EXEMPT FUND
------------ ------------- --------------
<S> <C> <C> <C>
Securities
- - ----------
Cost of purchases $879,981 $10,671,321 $21,197,324
======== =========== ===========
Proceeds of sales $832,932 $ 7,656,688 $19,686,703
======== =========== ===========
</TABLE>
At December 31, 1994, aggregate cost and net unrealized appreciation
(depreciation) of securities for federal income tax purposes were as
follows:
<TABLE>
<CAPTION>
BLUE CHIP HIGH YIELD INSURED TAX
FUND FUND EXEMPT FUND
------------ ------------- --------------
<S> <C> <C> <C>
Aggregate cost $928,190 $ 16,159,412 $ 10,201,145
======== ============ ============
Unrealized appreciation $ 44,848 $ 101,938 $ 128,904
Unrealized depreciation 29,310 1,503,809 229,524
-------- ------------ ------------
Net unrealized appreciation (depreciation) $ 15,538 $ (1,401,871) $ (100,620)
======== ============ ============
</TABLE>
4. Advisory Fee and Other Transactions With Affiliates (Also see Note
5)--Certain officers and trustees of the Trust are officers and
directors of its investment adviser, Executive Investors Management
Company, Inc. ("EIMCO"), its underwriter, Executive Investors
Corporation ("EIC"), its transfer agent, Administrative Data Management
Corp. ("ADM") and/or First Financial Savings Bank, S.L.A. ("FFS"),
custodian of the Trust's Individual Retirement Accounts. Officers and
trustees received no remuneration from the Trust for serving in such
capacities. Their remuneration (together with certain other expenses of
the Trust) is paid by EIMCO or First Investors Corporation ("FIC").
The Investment Advisory Agreement provides as compensation to EIMCO an
annual fee, payable monthly, at the rate of 1% on the first $200
million of each Fund's average daily net assets, .75% on the next $300
million, declining by .03% on each $250 million thereafter, down to
.66% on average daily net assets over $1 billion. The total advisory
fees earned by EIMCO from all Funds was $258,715, of which $191,016 was
waived. In addition, expenses of $30,027 were assumed by EIMCO.
Pursuant to certain state regulations, EIMCO has agreed to reimburse
each Fund if and to the extent that each Fund's aggregate operating
expenses, including the advisory fee but generally excluding interest,
taxes, brokerage commissions and extraordinary expenses, exceed any
limitation on expenses applicable to the Fund in those states (unless
waivers of such limitation have been obtained). The amount of any such
reimbursement is limited to the yearly advisory fee. For the year ended
December 31, 1994, no reimbursement was required pursuant to these
provisions.
For the year ended December 31, 1994, EIC, as underwriter of the Trust,
received $31,332 in commissions after allowing $65,694 to FIC (an
affiliated dealer) and $158,670 to other dealers. Shareholder servicing
costs consist of $28,372 in transfer agent fees and out of pocket
expenses accrued to ADM, (of which $9,325 was waived by the transfer
agent) and $2,864 in custodian fees, paid to FFS.
5. Distribution Plan--Pursuant to a Distribution Plan adopted under
Rule 12b-1 of the 1940 Act, each Fund pays a fee equal to .50% of its
average net assets on an annualized basis each fiscal year, payable
quarterly. The fee consists of a distribution fee and a service fee.
The service fee is payable to the underwriter or other securities
dealers for the ongoing servicing of their clients who are shareholders
of any of the Funds.
6. Rule 144A Securities--Under rule 144A, certain restricted securities
are exempt from the registration requirements of the Securities Act of
1933 and may be resold to qualified institutional investors. At
December 31, 1994 the High Yield Fund held four 144A securities with an
aggregate value of $368,900 representing 2.4% of the High Yield Fund's
net assets. These securities are valued as set forth in Note 1A.
7. Concentration of Credit Risk--The High Yield Fund's investment in
high yield securities, whether rated or unrated, may be considered
speculative and subject to greater market fluctuations and risks of
loss of income and principal than lower yielding, higher rated, fixed
income securities. The risk of loss due to default by the issuer may be
significantly greater for the holders of high yielding securities,
because such securities are generally unsecured and are often
subordinated to other creditors of the issuer. At December 31, 1994,
the High Yield Fund held two defaulted securities with a value of
$199,500 representing 1.3% of the Fund's net assets.
Financial Highlights
Executive Investors Trust
The following table sets forth the per share operating performance data
for a share of benefical interest outstanding, total return, ratios to
average net assets and other supplemental data for each period
indicated.
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------------------------
Per Share Data
-------------------------------------------------------------------------------------------------------
Income from Investment Operations Less Distributions from
--------------------------------- -----------------------
Net Asset Net Net
Value Realized and Dividends Realized
---------- Net Unrealized Total from from Net Gain
Beginning Investment Gain (Loss) on Investment Investment from Security Total
of Period Income Investments Operations Income Transactions Distributions
- - -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BLUE CHIP FUND
5/17/90* to 12/31/90 $11.43 $.16 $(.52) $(.36) $.16 $ -- $.16
1991 10.91 .31 2.68 2.99 .30 .11 .41
1992 13.49 .25 .30 .55 .26 -- .26
1993 13.78 .23 .88 1.11 .23 .59 .82
1994 14.07 .24 (.41) (.17) .22 .93 1.15
HIGH YIELD FUND
3/24/87* to 12/31/87 9.60 .73 (1.12) (.39) .74 -- .74
1988 8.47 1.22 .52 1.74 1.20 -- 1.20
1989 9.01 1.18 (1.25) (.07) 1.20 -- 1.20
1990 7.74 .95 (1.84) (.89) .96 -- .96
1991 5.89 .82 1.17 1.99 .78 -- .78
1992 7.10 .80 .29 1.09 .76 -- .76
1993 7.43 .72 .50 1.22 .76 -- .76
1994 7.89 .70 (.87) (.17) .74 -- .74
INSURED TAX EXEMPT FUND
7/26/90* to 12/31/90 11.43 .22 .20 .42 .14 -- .14
1991 11.71 .78 .72 1.50 .78 .04 .82
1992 12.39 .74 .59 1.33 .72 .17 .89
1993 12.83 .71 1.27 1.98 .72 .32 1.04
1994 13.77 .68 (1.23) (.55) .69 -- .69
TABLE CONTINUED BELOW
<CAPTION>
Financial Highlight Continued
- - -----------------------------------------------------------------------------------------------------------------------------
Ratios / Supplemental Data
- - -----------------------------------------------------------------------------------------------------------------------------
Ratio to Average Net Assets Before
Ratio to Average Net Assets+ Expenses Waived or Assumed
---------------------------- ----------------------------------
Net Asset
Value
---------- Total Net Assets Net Net Portfolio
End of Return** End of Period Investment Investment Turnover
Period (%) (in thousands) Expenses(%) Income(%) Expenses(%) Income(%) Rate(%)
- - -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BLUE CHIP FUND
5/17/90* to 12/31/90 10.91 (6.02)(a) $ 313 -- 2.74(a) 4.67(a) (1.93)(a) 21
1991 13.49 27.65 677 .03 2.58 3.72 (1.11) 31
1992 13.78 4.13 786 .41 1.95 2.55 (.19) 50
1993 14.07 8.13 956 .50 1.63 2.30 (.17) 47
1994 12.75 (1.21) 1,041 .50 1.82 2.54 (.22) 89
HIGH YIELD FUND
3/24/87* to 12/31/87 8.47 (5.55)(a) 1,156 -- 7.06(a) 1.78(a) 5.27(a) 27
1988 9.01 21.31 9,205 -- 13.63 2.14 11.49 56
1989 7.74 (1.11) 20,335 -- 13.61 1.82 11.79 36
1990 5.89 (12.51) 11,683 .31 13.71 1.94 12.08 44
1991 7.10 35.38 11,071 .95 12.22 2.17 11.00 40
1992 7.43 16.89 10,491 1.29 10.72 2.10 9.90 83
1993 7.89 17.04 14,231 1.34 9.49 1.95 8.88 89
1994 6.98 (2.32) 15,142 1.33 9.45 1.88 8.90 53
INSURED TAX EXEMPT FUND
7/26/90* to 12/31/90 11.71 8.00(a) 653 .09(a) 4.41(a) 1.70(a) 2.79(a) 0
1991 12.39 13.20 4,369 .12 6.23 2.41 3.94 112
1992 12.83 11.03 5,875 .47 5.88 1.89 4.47 131
1993 13.77 15.74 9,447 .50 5.29 1.68 4.11 97
1994 12.53 (3.95) 10,363 .50 5.39 1.80 4.09 215
(a) Annualized
* Commencement of operations
** Calculated without sales charge
+ Net of expenses waived or assumed by the investment adviser, the
underwriter and the transfer agent from commencement of operations
through December 31, 1994.
See notes to financial statements
</TABLE>
Independent Auditor's Report
To the Shareholders and Trustees of
Executive Investors Trust
We have audited the accompanying statement of assets and liabilities,
including the portfolios of investments, of Executive Investors Blue
Chip Fund, Executive Investors High Yield Fund and Executive Investors
Insured Tax Exempt Fund (comprising Executive Investors Trust), as of
December 31, 1994, the related statement of operations for year then
ended, the statement of changes in net assets for each of the two years
in the period then ended, and financial highlights for each of the
periods presented. These financial statements and financial highlights
are the responsibility of the Trust's management. Our responsibility is
to express an opinion on these financial statements and financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned as of December
31, 1994, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Executive Investors Blue Chip Fund, Executive
Investors High Yield Fund and Executive Investors Insured Tax Exempt
Fund as of December 31, 1994, and the results of their operations,
changes in their net assets and the financial highlights for each of
the respective periods presented, in conformity with generally accepted
accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
January 31, 1995
(This page has been left blank intentionally.)
EXECUTIVE INVESTORS TRUST
Trustees
- - --------
James J. Coy
Roger L. Grayson
Glenn O. Head
Kathryn S. Head
F. William Ortman, Jr.
Rex R. Reed
Herbert Rubinstein
John T. Sullivan
Robert F. Wentworth
Officers
- - --------
Glenn O. Head
President
George V. Ganter
Vice President
Patricia D. Poitra
Vice President
Clark D. Wagner
Vice President
Concetta Durso
Vice President and Secretary
Joseph I. Benedek
Treasurer
Carol Lerner Brown
Assistant Secretary
EXECUTIVE INVESTORS TRUST
Shareholder Information
- - -----------------------
Investment Adviser
Executive Investors
Management Company, Inc.
95 Wall Street
New York, NY 10005
Underwriter
Executive Investors Corporation
95 Wall Street
New York, NY 10005
Custodian
The Bank of New York
48 Wall Street
New York, NY 10286
Transfer Agent
Administrative Data
Management Corp.
10 Woodbridge Center Drive
Woodbridge, NJ 07095-1198
Legal Counsel
Kirkpatrick & Lockhart
1800 M Street, N.W.
Washington, DC 20036
Auditors
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, PA 19102
For more complete information about Executive Investors Trust,
including charges and expenses, you may obtain a prospectus from your
registered representative or by calling 1-800-423-4026. Read it
carefully before you invest or send money.
EXECUTIVE INVESTORS TRUST
95 WALL STREET
NEW YORK, NY 10005
EIHY-107
The words "BULK RATE U.S. POSTAGE PAID PERMIT NO. 7379" in a box
to the right of a circle containing the words "MAILED FROM
ZIP CODE 11201" appears to the right of the above language in the
printed piece.
Vertically reading from bottom to top in center of the page the words
"EXECUTIVE INVESTORS" appear in the printed piece.
EXECUTIVE
INVESTORS
TRUST
Blue Chip Fund
High Yield Fund
Insured Tax Exempt Fund
ANNUAL
REPORT
DECEMBER 31, 1994
