<PAGE>
PORTFOLIO MANAGER'S LETTER
EXECUTIVE INVESTORS BLUE CHIP FUND
Dear Investor:
The current economic expansion extended into its fifth year in 1996. The economy
grew by 3.4% during the year while the core rate of consumer price inflation
increased 2.6%, its slowest growth since the mid 1960's. The combination of
moderate growth and low inflation provided a positive background for the
financial markets and generated strong demand for U.S. equity securities in
particular.
The U.S. stock market posted its second consecutive year of strong gains in 1996
with the S&P 500 Index rising 22.9%. Recognizing that deregulation and
internationalization had generated fundamental changes in the U.S. economy,
investors remained comfortable with the earnings outlook for U.S. based
companies. Supported by a continuing revolution in technology, profit margins
were bolstered by management tools such as just in time inventory, the ability
to bring labor and capital on line quickly, controlled unit labor costs and
productivity gains. Investors became comfortable with the notion of the
internationalization of the U.S. economy shielding it from recessions by
diversifying its supply lines and its revenue base. Outsourcing and the use of
temporary workers also contributed to the bottom line, containing costs and
contributing to a low inflationary environment.
For the year ended December 31, 1996, Executive Investors Blue Chip Fund
returned on a net asset value basis 20.6%, compared to a 20.8% return for the
Lipper Growth and Income Average. The Executive Investors Blue Chip Fund
benefited from solid gains in the energy group, specifically the oil and gas
drilling and exploration group (Dresser Industries, Schlumberger and
Halliburton). The technology group (Microsoft, IBM and Intel) and money center
bank group (Citicorp and Chase Manhattan) were also major contributors to your
Fund's performance for the year. The Fund also benefited from a year end rally
in the pharmaceutical group (Eli Lilly and Merck). Telecommunications,
specifically the long distance (AT&T, MCI Communications and Sprint) and
regional carriers (BellSouth, NYNEX and Bell Atlantic), construction (Fluor) and
consumer staples (Heinz, General Mills and Kellogg) groups hindered the Fund's
performance for 1996.
While we continue to believe the fundamentals that pushed U.S. stock markets to
new highs remain in place, investors should remain aware of the risks associated
with investing in the stock market. A significant risk to the stock market is
that a too rapidly expanding economy creates inflationary pressures, leading the
Federal Reserve to raise interest rates. Investors should also recognize that
certain sectors of the market, such as technology, can be more volatile than the
overall market. Investments in such sectors can create greater opportunities but
also entail greater risk. Finally, on a technical basis the current bull market
is now the longest in history and, according to many market historians, may be
ready for a correction.
We believe the fundamentals supporting continued moderate economic expansion,
mild inflation, and continued growth in the U.S. stock market are still in
place. U.S. companies, through the continued implementation of new technologies
to improve productivity, should remain highly competitive domestically and
internationally. Through a sector neutral, bottom up investment strategy we will
continue to identify those companies we believe are positioning themselves to
remain competitive and generate above average growth. While our main focus will
remain on the long term, we will take advantage of short-term trading
opportunities as they arise.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
[SIGNATURE]
Patricia D. Poitra
Director of Equities
and Portfolio Manager
January 31, 1997
1
<PAGE>
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.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
BLUE CHIP FUND S 500
<S> <C> <C>
May-90 9,525 10,000
Dec-90 9,215 9,335
Dec-91 11,774 12,185
Dec-92 12,259 13,060
Dec-93 13,256 14,340
Dec-94 13,096 14,524
Dec-95 17,849 20,463
Dec-96 21,530 25,161
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
One Year 20.62% 14.92%
Five Years 20.83% 11.74%
Since Inception
(5/17/90) 13.08% 12.26%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE EXECUTIVE INVESTORS BLUE CHIP
FUND BEGINNING 5/17/90 (INCEPTION DATE) WITH A THEORETICAL INVESTMENT IN THE S&P
500 INDEX. THE S&P 500 INDEX IS AN UNMANAGED CAPITALIZATION-WEIGHTED INDEX OF
500 STOCKS DESIGNED TO MEASURE PERFORMANCE OF THE BROAD DOMESTIC ECONOMY THROUGH
CHANGES IN THE AGGREGATE MARKET VALUE OF SUCH STOCKS, WHICH REPRESENT ALL MAJOR
INDUSTRIES. IT IS NOT POSSIBLE TO INVEST DIRECTLY IN THIS INDEX. IN ADDITION,
THE INDEX DOES NOT TAKE INTO ACCOUNT FEES AND EXPENSES. 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.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 12/31/96) 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, FIVE YEARS AND
SINCE INCEPTION WOULD HAVE BEEN 13.54%, 10.16% AND 10.38%, 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.
2
<PAGE>
PORTFOLIO MANAGER'S LETTER
EXECUTIVE INVESTORS HIGH YIELD FUND
Dear Investor:
The current economic expansion extended to its fifth year in 1996. The economy
grew by 3.4% during the year with the core rate of consumer price inflation
increasing 2.6%, its slowest pace since the mid-1960's. The combination of
moderate growth and low inflation provided a positive background for the
financial markets. The broad stock market averages made new highs during 1996
while long-term interest rates moved somewhat higher during the year. Besides
the economy, the markets benefited from strong demand for U.S. securities.
Individual investors bought a record amount of stock mutual funds, while foreign
investors bought a record amount of U.S. Treasury bonds.
1996 was a year of incredible activity in fixed income markets and for high
yield bonds in particular. The net result was positive for the high yield market
and the Executive Investors High Yield Fund. Junk bond market returns of 13.7%
and 12.4% as measured by the Lipper Analytical Services average of fund returns
and Credit Suisse First Boston, respectively, were sharply higher than the 0.1%
total return for ten year Treasury notes. Buoyant capital markets, led by rising
equity valuations, created an environment in which credit sensitive bonds as a
group, especially junk bonds, outperformed Treasury securities of equivalent
maturities. Investors who observed this profit potential and who were willing to
assume the credit risk inherent in high yield issuers responded by directing
tens of billions of dollars into the high yield bond market. In spite of record
new issuance, there has still been market wide competition for new investments.
High yield issuers thus had more flexibility with which to bolster liquidity,
implement growth plans, reduce their costs of capital and improve their credit
strength. The greatest benefit of this flexibility generally accrued to the
lowest rated companies in the junk bond pecking order -- weak single B or split
rated single B/ CCC+ -- companies with the least room for error. Consequently,
many of those bonds outperformed higher quality issuers, which tended to be more
affected by rising interest rates.
During 1996, Executive Investors High Yield Fund returned on a net asset value
basis 13.7% equalling the average of all high yield funds as measured by Lipper
Analytical Services, Inc. Our strategy has been to emphasize companies with
managements intent on -- and capable of -- paying their obligations and
improving their credit ratings. As noted above, the best relative performance in
1996 often came from companies employing much more aggressive and risky
financial and operating strategies. Nevertheless, the Fund had several
investments which exceeded market expectations and delivered exceptional
performance such as: WCI Steel, Garden State News, Monarch Marking, Lamar
Advertising, Gulf Canada, Outdoor Systems, Synthetic Industries and Moran
Transportation. A few of these are no longer held because the companies bought
back their bonds at above market prices that we simply could not refuse. The
Fund has a material investment in Bell Cablemedia and Videotron Holdings because
of their strong location and strategy. They have become a major force in Cable
TV and deregulated telephone service in Great Britain. Their bonds have
appreciated because these companies are being acquired by a much larger
investment grade U.K. company. A low concentration in gaming slowed performance
in the first half of 1996 and enhanced it later in the year as investors
realized that the industry's expansion phase was ending and more intense
competition was beginning. The market wide default rate declined from 3.1% in
1995 to 1.4% in 1996; however, the Fund experienced no defaults. We elected to
sell at moderate discounts a few holdings where credit deterioration appeared
likely.
Investors who buy bond funds -- whether for income or total return -- should be
aware that the value of their investment fluctuates as interest rates change.
For
3
<PAGE>
PORTFOLIO MANAGER'S LETTER (continued)
EXECUTIVE INVESTORS HIGH YIELD FUND
example, a 1% increase in yield on a ten year bond results in roughly a 7%
decrease in that bond's price. In each of the last five years, ten year Treasury
bond yields have moved more than 1%. In addition, the value of a fund can
fluctuate based on changes in the credit quality of the bonds which it holds. In
particular, high yield funds invest in lower-rated debt obligations which are
more sensitive than higher-rated investments to adverse economic changes or
individual corporate developments, and thus can be subject to a higher incidence
of default. Investors should be aware of these risks and recognize that
successful investing generally requires a long-term commitment to the market.
As 1997 begins, it is important to recognize that high yield bonds are very much
intertwined with valuations that prevail throughout the capital markets. This
means that the health of the equity market is every bit as important as the
direction of interest rates in understanding the overall direction of our
market. We do not rely on yield declines to continue to drive portfolio
appreciation as in the last couple of years. Instead, we emphasize basic
"blocking and tackling" -- investment research that perceives big picture
industry trends, identifies management capability, and locks in on strategies
and business plans that will work for bondholders. This will be key in
delivering value -- superior yield that compensates the Fund for the higher
risks assumed by investing in the junk bond market.
Looking forward, the factors that benefited the markets in 1996 appear likely to
continue in 1997: moderate growth, low inflation, and strong demand for
financial assets. A significant risk to the market is that inflation may
increase due to the length of the economic expansion. This could lead the
Federal Reserve to raise interest rates, hurting both the bond and stock
markets. On the other hand, the markets may be positively surprised by
legislation from the President and Congress to eliminate the federal budget
deficit. We will continue to be alert to events that may affect the value of
your investments.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
[SIGNATURE]
George V. Ganter
Vice President
and Portfolio Manager
January 31, 1997
4
<PAGE>
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.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
HIGH YIELD FUND FIRST BOSTON HIGH YIELD INDEX
<S> <C> <C>
Mar-87 9,525 10,000
Dec-87 9113 10563
Dec-88 11055 12107
Dec-89 10933 12155
Dec-90 9,566 11,379
Dec-91 12,968 16,358
Dec-92 15,008 19,075
Dec-93 17,564 22,683
Dec-94 17,156 22,463
Dec-95 20,430 26,367
Dec-96 23,227 29,642
Average Annual Total Return*
N.A.V. only S.E.C. Standardized
One Year 13.69% 8.28%
Five Years 12.39% 11.32%
Since Inception
(3/24/87) 9.55% 9.00%
S.E.C. 30-Day Yield 7.60%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE EXECUTIVE INVESTORS HIGH YIELD
FUND BEGINNING 3/24/87 (INCEPTION DATE) WITH A THEORETICAL INVESTMENT IN THE
FIRST BOSTON HIGH YIELD INDEX. THE FIRST BOSTON HIGH YIELD INDEX IS DESIGNED TO
MEASURE THE PERFORMANCE OF THE HIGH YIELD BOND MARKET. THE INDEX CONSISTS OF 852
DIFFERENT ISSUES, 706 OF WHICH ARE CASH PAY, 127 OF WHICH ARE ZERO-COUPON, 9 OF
WHICH ARE STEP BONDS, 1 OF WHICH IS A PAYMENT-IN-KIND BONDS AND THE REMAINING 9
OF WHICH ARE IN DEFAULT. THE BONDS INCLUDED IN THE INDEX HAVE AN AVERAGE LIFE OF
7.8 YEARS, AN AVERAGE MATURITY OF 7.8 YEARS, AN AVERAGE DURATION OF 4.2 YEARS
AND AN AVERAGE COUPON OF 10.6%. IT IS NOT POSSIBLE TO INVEST DIRECTLY IN THIS
INDEX. IN ADDITION, THE INDEX DOES NOT TAKE INTO ACCOUNT FEES AND EXPENSES. 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.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 12/31/96) 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 7.61%, 10.61% AND 7.80%, RESPECTIVELY, AND THE
S.E.C. 30-DAY YIELD FOR DECEMBER 1996 WOULD HAVE BEEN 7.01%. 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.
5
<PAGE>
PORTFOLIO MANAGER'S LETTER
EXECUTIVE INVESTORS INSURED TAX EXEMPT FUND
Dear Investor:
The current economic expansion extended to its fifth year in 1996. The economy
grew by 3.4% during the year with the core rate of consumer price inflation
increasing 2.6%, its slowest pace since the mid-1960's. The combination of
moderate growth and low inflation provided a positive background for the
financial markets. The broad stock market averages made new highs in 1996 while
long-term interest rates moved somewhat higher during the year. Besides the
economy, the markets benefited from strong demand for U.S. securities.
Individual investors bought a record amount of stock mutual funds, while foreign
investors bought a record amount of U.S. Treasury bonds.
Long-term municipal bond yields rose approximately 30 basis points (.30%) during
1996. The municipal bond market's performance compares very favorably to the
Treasury bond market where long-term yields rose approximately 70 basis points
(.70%). The municipal bond market's relatively strong performance during 1996
was attributable to the comparatively cheap levels at which the market began the
year, due to concerns over potential tax reform. As those concerns disappeared,
demand for tax-exempt bonds increased and municipal bonds appreciated versus
Treasury bonds. In fact, broad based demand throughout the year from individuals
and insurance companies was sufficient to absorb $183 billion of the new issue
supply.
During 1996, Executive Investors Insured Tax Exempt Fund had a total return on a
net asset value basis of 4.1%. The return compares favorably to the average
return of 2.8% for insured municipal bond funds reported by Lipper Analytical
Services, Inc. In 1996, the Fund declared dividends from investment income of
66.5 cents per share and made a capital gain distribution in the amount of 10.8
cents per share.
The Fund's strong performance is attributable to several factors. First, the
Fund successfully managed interest rate risk during the year as yields rose
substantially during the first part of the year and then declined during the
Fall. Second, the Fund took advantage of short-term trading opportunities,
particularly by purchasing relatively cheap new issues. Third, the Fund has
continually focused on improving call protection, particularly by buying
noncallable bonds.
Investors who buy bond funds -- whether for income or total return -- should be
aware that the value of their investment fluctuates as interest rates change.
For example, a 1% increase in yield on a ten year bond results in roughly a 7%
decrease in that bond's price. In each of the last five years, ten year Treasury
bond yields have moved more than 1%. In addition, while the Fund's municipal
bonds are insured as to timely payment of principal and interest, this insurance
does not protect the bonds against changes in market value. Investors should be
aware of these risks and recognize that successful investing generally requires
a long-term commitment to the market.
Looking forward, the factors that benefited the markets in 1996 appear likely to
continue in 1997: moderate growth, low inflation, and strong demand for
financial assets. The primary risk to the market is that inflation may increase
due to the length of the economic expansion. This could lead the Federal Reserve
to raise interest rates, hurting both the bond and stock markets. On the other
hand, the markets may be positively surprised by legislation from the President
and Congress to eliminate the federal budget
6
<PAGE>
deficit. As always, we will be alert to events that may affect the value of your
investments.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
[SIGNATURE]
Clark D. Wagner
Chief Investment Officer
and Portfolio Manager
January 31, 1997
7
<PAGE>
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.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INSURED TAX EXEMPT FUND LEHMAN BROTHERS MUNICIPAL BOND INDEX
<S> <C> <C>
Jul-90 9,375 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 13,798 13,365
Dec-95 16,631 15,697
Dec-96 17,313 16,364
Average Annual Total Returns*
N.A.V. Only S.E.C. Standard
One Year 4.11% (-0.84)
Five Years 9.07% 8.02%
Since Inception
(7/26/90) 9.73% 8.90%
S.E.C. 30-Day Yield 4.55%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE EXECUTIVE INVESTORS INSURED TAX
EXEMPT FUND BEGINNING 7/26/90 (INCEPTION DATE) WITH A THEORETICAL INVESTMENT IN
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX. 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 DIRECTLY 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.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 12/31/96) 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, FIVE YEARS AND
SINCE INCEPTION WOULD HAVE BEEN (3.81)%, 6.27% AND 7.44%, RESPECTIVELY, AND
THE S.E.C. 30-DAY YIELD FOR DECEMBER 1996 WOULD HAVE BEEN 3.61%. 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.
8
<PAGE>
PORTFOLIO OF INVESTMENTS
EXECUTIVE INVESTORS BLUE CHIP FUND
December 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--94.1%
BASIC MATERIALS--5.1%
100 *Alumax, Inc. $ 3,337 $ 15
100 Aluminum Company of America 6,375 30
200 Barrick Gold Corporation 5,750 27
200 Cabot Corporation 5,025 23
100 Dow Chemical Company 7,837 36
100 Du Pont (E.I.) de Nemours & Company 9,437 44
100 Freeport-McMoRan Copper & Gold, Inc. - Class "B" 2,987 14
300 IMC Global, Inc. 11,737 54
300 International Paper Company 12,112 56
100 Mead Corporation 5,812 27
400 Monsanto Company 15,550 72
150 Morton International, Inc. 6,112 28
100 Nucor Corporation 5,100 24
100 Pioneer Hi-Bred International, Inc. 7,000 32
100 Sigma-Aldrich Corporation 6,244 29
- -------------------------------------------------------------------------------------
110,415 511
- -------------------------------------------------------------------------------------
CAPITAL GOODS--12.6%
100 AlliedSignal, Inc. 6,700 31
300 Avery Dennison Corporation 10,612 49
100 Boeing Company 10,637 49
300 Caterpillar, Inc. 22,575 105
200 Corning, Inc. 9,250 43
100 Cummins Engine Company, Inc. 4,600 21
100 Emerson Electric Company 9,675 45
400 General Electric Company 39,550 183
300 General Signal Corporation 12,825 59
200 Harnischfeger Industries, Inc. 9,625 45
75 Ingersoll-Rand Company 3,337 15
100 Johnson Controls, Inc. 8,287 38
200 Kennametal, Inc. 7,775 36
200 *Laidlaw, Inc. - Class "B" 2,300 11
100 Lockheed Martin Corporation 9,150 42
- -------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
PORTFOLIO OF INVESTMENTS
EXECUTIVE INVESTORS BLUE CHIP FUND
December 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
CAPITAL GOODS (continued)
130 Minnesota Mining & Manufacturing Company $ 10,774 $ 50
300 *Philip Environmental, Inc. 4,350 20
100 Raychem Corporation 8,012 37
200 Textron, Inc. 18,850 87
400 Thomas & Betts Corporation 17,750 82
200 *Tyco International, Ltd. 10,575 49
200 United Technologies Corporation 13,200 61
400 *USA Waste Services, Inc. 12,750 59
300 WMX Technologies, Inc. 9,787 45
- -------------------------------------------------------------------------------------
272,946 1,262
- -------------------------------------------------------------------------------------
COMMUNICATION SERVICES--1.8%
200 *Airtouch Communications, Inc. 5,050 23
200 BellSouth Corporation 8,075 37
300 GTE Corporation 13,650 63
200 MCI Communications Corporation 6,537 30
100 SBC Communications, Inc. 5,175 24
- -------------------------------------------------------------------------------------
38,487 177
- -------------------------------------------------------------------------------------
CONSUMER CYCLICALS--10.0%
200 Adidas AG (GDR) 8,630 40
800 Chrysler Corporation 26,400 122
100 Danaher Corporation 4,662 22
100 Eastman Kodak Company 8,025 37
500 *Federated Department Stores, Inc. 17,062 79
200 General Motors Corporation 11,150 52
200 Hasbro, Inc. 7,775 36
300 Hilton Hotels Corporation 7,837 36
400 Home Depot, Inc. 20,050 93
700 *Host Marriott Corporation 11,200 52
400 *Lear Corporation 13,650 63
150 Masco Corporation 5,400 25
200 McGraw-Hill Companies, Inc. 9,225 43
200 Nike, Inc. 11,950 55
- -------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONSUMER CYCLICALS (continued)
400 Ogden Corporation $ 7,500 $ 35
300 *Price/Costco, Inc. 7,537 35
100 Sears, Roebuck and Company 4,612 21
400 *Staples, Inc. 7,225 33
200 Tribune Company 15,775 73
500 Wal-Mart Stores, Inc. 11,437 53
- -------------------------------------------------------------------------------------
217,102 1,005
- -------------------------------------------------------------------------------------
CONSUMER STAPLES--13.5%
300 Anheuser-Busch Companies, Inc. 12,000 56
500 Coca-Cola Company 26,312 122
200 CPC International, Inc. 15,500 72
400 Dole Food Company 13,550 63
100 General Mills, Inc. 6,337 29
400 Gillette Company 31,100 144
150 Heinz (H.J.) Company 5,362 25
300 *Infinity Broadcasting Corporation - Class "A" 10,088 47
100 Kimberly-Clark Corporation 9,525 44
100 *Kroger Company 4,650 22
900 PepsiCo, Inc. 26,325 122
300 Procter & Gamble Company 32,250 149
1,000 *Steiner Leisure, Ltd. 20,125 93
200 Sysco Corporation 6,525 30
200 *Tele-Communications, Inc. Liberty Media Group -
Class "A" 5,713 26
100 Unilever N.V. 17,525 81
100 *Viacom, Inc. - Class "B" 3,488 16
150 *Vons Companies, Inc. 8,981 42
100 Walgreen Company 4,000 19
400 Walt Disney Company 27,850 129
100 Wendy's International, Inc. 2,050 10
100 Whitman Corporation 2,288 11
- -------------------------------------------------------------------------------------
291,544 1,352
- -------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
PORTFOLIO OF INVESTMENTS
EXECUTIVE INVESTORS BLUE CHIP FUND
December 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
ENERGY--7.2%
150 Amoco Corporation $ 12,075 $ 56
200 Baker Hughes, Inc. 6,900 32
200 Dresser Industries, Inc. 6,200 29
200 Exxon Corporation 19,600 91
100 Halliburton Company 6,025 28
50 Kerr-McGee Corporation 3,600 17
200 Mobil Corporation 24,450 113
225 Royal Dutch Petroleum Company 38,419 178
200 Schlumberger, Ltd. 19,975 93
100 Texaco, Inc. 9,813 45
200 Unocal Corporation 8,125 38
- -------------------------------------------------------------------------------------
155,182 720
- -------------------------------------------------------------------------------------
FINANCIAL--13.7%
200 Allstate Corporation 11,575 54
200 American Express Company 11,300 52
150 American International Group, Inc. 16,238 75
200 Bank of Boston Corporation 12,850 60
150 BankAmerica Corporation 14,963 69
300 Charles Schwab Corporation 9,600 44
200 Chase Manhattan Corporation 17,850 83
200 Citicorp 20,600 95
200 Dean Witter Discover and Company 13,250 61
500 Federal National Mortgage Association 18,625 86
100 Fifth Third Bancorp 6,281 29
200 First Union Corporation 14,800 69
100 General Re Corporation 15,775 73
100 ITT Hartford Group, Inc. 6,750 31
200 Marshall & Ilsley Corporation 6,925 32
100 Merrill Lynch & Company, Inc. 8,150 38
200 National City Corporation 8,975 42
100 NationsBank Corporation 9,775 45
300 Norwest Corporation 13,050 60
200 Salomon, Inc. 9,425 44
- -------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
FINANCIAL (continued)
200 Student Loan Marketing Association $ 18,625 $ 86
500 The Money Store, Inc. 13,813 64
100 Torchmark Corporation 5,050 23
600 USF&G Corporation 12,525 58
- -------------------------------------------------------------------------------------
296,770 1,373
- -------------------------------------------------------------------------------------
HEALTHCARE/MISCELLANEOUS--11.3%
250 Abbott Laboratories 12,688 59
300 American Home Products Corporation 17,588 81
100 *Amgen, Inc. 5,438 25
200 Baxter International, Inc. 8,200 38
300 Becton Dickinson & Company 13,013 60
200 *Biogen, Inc. 7,750 36
250 Bristol-Myers Squibb Company 27,188 126
600 *Cardiovascular Dynamics, Inc. 7,800 36
225 Columbia/HCA Healthcare Corporation 9,169 42
300 Eli Lilly & Company 21,900 101
200 Guidant Corporation 11,400 53
400 Johnson & Johnson 19,900 92
300 Merck & Company, Inc. 23,775 110
400 Pharmacia & Upjohn, Inc. 15,850 73
200 SmithKline Beecham PLC 13,600 63
200 *St. Jude Medical, Inc. 8,525 40
200 *Tenet Healthcare Corporation 4,375 20
200 Warner-Lambert Company 15,000 69
- -------------------------------------------------------------------------------------
243,159 1,124
- -------------------------------------------------------------------------------------
TECHNOLOGY--14.8%
400 *Adaptec, Inc. 16,000 74
200 *Andrew Corporation 10,613 49
200 *Cascade Communications Corporation 11,025 51
300 *Cisco Systems, Inc. 19,088 88
150 Computer Associates International, Inc. 7,463 35
200 *Dell Computer Corporation 10,625 49
- -------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
PORTFOLIO OF INVESTMENTS
EXECUTIVE INVESTORS BLUE CHIP FUND
December 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
TECHNOLOGY (continued)
400 Ericsson (L.M.) Telephone Co. (ADR) - Class "B" $ 12,075 $ 56
500 *ESS Technology, Inc. 14,063 65
400 First Data Corporation 14,600 68
400 Hewlett-Packard Company 20,100 93
100 *Informix Corporation 2,038 9
200 Intel Corporation 26,188 121
100 International Business Machines Corporation 15,100 70
400 *Loral Space & Communications 7,350 34
100 Lucent Technologies, Inc. 4,625 21
400 *Microsoft Corporation 33,050 153
300 Motorola, Inc. 18,413 85
300 Nokia Corporation (ADR) - Class "A" 17,288 80
175 *Oracle Corporation 7,306 34
200 Raytheon Company 9,625 45
300 *Sterling Commerce, Inc. 10,575 49
400 *Sun Microsystems, Inc. 10,275 48
700 *SystemSoft Corporation 10,413 48
200 Texas Instruments, Inc. 12,750 59
- -------------------------------------------------------------------------------------
320,648 1,484
- -------------------------------------------------------------------------------------
TRANSPORTATION--.7%
100 *AMR Corporation 8,813 41
200 Ryder System, Inc. 5,625 26
- -------------------------------------------------------------------------------------
14,438 67
- -------------------------------------------------------------------------------------
UTILITIES--3.4%
200 Carolina Power & Light Company 7,300 34
400 CINergy Corporation 13,350 62
200 Duke Power Company 9,250 43
200 Enron Corporation 8,625 40
250 FPL Group, Inc. 11,500 53
200 PacifiCorp 4,100 19
- -------------------------------------------------------------------------------------
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
UTILITIES (continued)
200 Sonat, Inc. $ 10,300 $ 48
200 Texas Utilities Company 8,150 38
- -------------------------------------------------------------------------------------
72,575 337
- -------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $1,535,546) 94.1% 2,033,266 9,412
OTHER ASSETS, LESS LIABILITIES 5.9 126,969 588
- -------------------------------------------------------------------------------------
NET ASSETS 100.0% $2,160,235 $10,000
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
</TABLE>
* Non-income producing.
See notes to financial statements
15
<PAGE>
PORTFOLIO OF INVESTMENTS
EXECUTIVE INVESTORS HIGH YIELD FUND
December 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
CORPORATE BONDS--89.8%
AEROSPACE/DEFENSE--2.9%
$ 200M Howmet Corp., 10%, 2003 $ 219,000 $ 131
150M K & F Industries, Inc., 10.375%, 2004 159,000 95
100M Moog, Inc., 10%, 2006 105,750 63
- -------------------------------------------------------------------------------------
483,750 289
- -------------------------------------------------------------------------------------
APPAREL/TEXTILES--4.3%
300M Pillowtex Corp., 10%, 2006 (Note 4) 310,500 185
400M Westpoint Stevens, Inc., 9.375%, 2005 411,000 245
- -------------------------------------------------------------------------------------
721,500 430
- -------------------------------------------------------------------------------------
AUTOMOTIVE--3.3%
150M Lear Seating, Inc., 11.25%, 2000 154,688 92
350M SPX Corp., 11.75%, 2002 392,875 234
- -------------------------------------------------------------------------------------
547,563 326
- -------------------------------------------------------------------------------------
BUILDING MATERIALS--1.9%
299M ISP Holdings, Inc., 9.75%, 2002 (Note 4) 313,950 187
- -------------------------------------------------------------------------------------
CHEMICALS--5.9%
300M Harris Chemical North America, Inc., 10.25%, 2001 313,500 187
400M Rexene Corp., 11.75%, 2004 452,000 269
200M Synthetic Industries, Inc., 12.75%, 2002 221,500 132
- -------------------------------------------------------------------------------------
987,000 588
- -------------------------------------------------------------------------------------
CONSUMER PRODUCTS--5.7%
300M Herff Jones, Inc., 11%, 2005 322,500 192
300M Scholastic Brands, Inc., 11%, 2007 (Note 4) 306,750 183
500M Semi-Tech Corp., 0%-11.50%, 2003 325,000 194
- -------------------------------------------------------------------------------------
954,250 569
- -------------------------------------------------------------------------------------
CONTAINERS/PACKAGING--2.4%
400M Radnor Holdings, 10%, 2003 (Note 4) 408,000 243
- -------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
DURABLE GOODS MANUFACTURING--1.3%
$ 200M Fairfield Manufacturing, Inc., 11.375%, 2001 $ 211,000 $ 126
- -------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--2.8%
350M Essex Group, Inc., 10%, 2003 362,250 216
100M Thermadyne Industries, Inc., 10.75%, 2003 102,250 61
- -------------------------------------------------------------------------------------
464,500 277
- -------------------------------------------------------------------------------------
ENERGY--8.0%
300M Falcon Drilling Co., Inc., 12.50%, 2005 336,000 200
400M Giant Industries, Inc., 9.75%, 2003 418,000 249
250M Maxus Energy Corp., 11.50%, 2015 263,438 157
300M United Meridian Corp., 10.375%, 2005 328,500 196
- -------------------------------------------------------------------------------------
1,345,938 802
- -------------------------------------------------------------------------------------
FINANCIAL--.7%
100M Terra Nova Holdings, PLC, 10.75%, 2005 113,500 68
- -------------------------------------------------------------------------------------
FOOD/BEVERAGE/TOBACCO--2.0%
300M Van de Kamps, 12%, 2005 331,500 198
- -------------------------------------------------------------------------------------
GAMING/LODGING--3.3%
250M Casino America, Inc., 12.50%, 2003 236,250 141
250M Grand Casinos, Inc., 10.125%, 2003 253,750 151
168M SHRP Capital Corp., 11%, 2001 68,157 41
- -------------------------------------------------------------------------------------
558,157 333
- -------------------------------------------------------------------------------------
HEALTHCARE--5.2%
200M Dade International, Inc., 11.125%, 2006 218,000 130
300M Ornda Healthcorp., 12.25%, 2002 322,500 192
300M Tenet Healthcare Corporation, 10.125%, 2005 332,625 198
- -------------------------------------------------------------------------------------
873,125 520
- -------------------------------------------------------------------------------------
MEDIA/CABLE TELEVISION--11.6%
500M Bell Cablemedia, PLC, 0%-11.95%, 2004 440,000 262
650M Echostar Communications Corp., 0%-12.875%, 2004 537,875 321
- -------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
PORTFOLIO OF INVESTMENTS
EXECUTIVE INVESTORS HIGH YIELD FUND
December 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
MEDIA/CABLE TELEVISION (continued)
$ 300M Garden State Newspapers, Inc., 12%, 2004 $ 328,500 $ 196
300M Grupo Televisa, S.A., 11.875%, 2006 328,500 196
300M Rogers Cablesystems, Inc., 10%, 2005 316,500 189
- -------------------------------------------------------------------------------------
1,951,375 1,164
- -------------------------------------------------------------------------------------
MINING/METALS--9.4%
274M Carbide/Graphite Group, Inc., 11.50%, 2003 298,660 178
400M Euramax International PLC, 11.25%, 2006 (Note 4) 414,000 247
200M Gulf States Steel Inc., 13.50%, 2003 190,000 113
240M UCAR Global Enterprises, Inc., 12%, 2005 276,900 165
400M Wheeling-Pittsburgh Steel Corp., 9.375%, 2003 390,000 232
- -------------------------------------------------------------------------------------
1,569,560 935
- -------------------------------------------------------------------------------------
MISCELLANEOUS--2.7%
100M Allied Waste, North America, 10.25%, 2006 (Note
4) 105,250 63
300M Monarch Marking Systems, Inc., 12.50%, 2003 346,500 207
- -------------------------------------------------------------------------------------
451,750 270
- -------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--9.3%
300M Gaylord Container Corp., 11.50%, 2001 319,500 190
200M Rainy River Forest Products Co., Inc., 10.75%,
2001 218,000 130
350M Riverwood International, 10.25%, 2006 346,500 207
350M S.D. Warren Co., Inc., 12%, 2004 379,750 226
300M Stone Container Corp., 9.875%, 2001 304,500 182
- -------------------------------------------------------------------------------------
1,568,250 935
- -------------------------------------------------------------------------------------
REAL ESTATE/CONSTRUCTION--.9%
150M Continental Homes Holding Corp., 10%, 2006 156,375 93
- -------------------------------------------------------------------------------------
TELECOMMUNICATIONS--2.3%
450M American Communication Services, Inc., 0%-13%,
2005 270,000 161
200M InterCel, Inc., 0%-12%, 2006 121,450 72
- -------------------------------------------------------------------------------------
391,450 233
- -------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
PRINCIPAL INVESTED
AMOUNT FOR EACH
OR $10,000 OF
SHARES SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
TRANSPORTATION--3.9%
$ 300M Moran Transportation Co., 11.75%, 2004 $ 325,500 $ 194
350M Trism, Inc., 10.75%, 2000 336,875 201
- -------------------------------------------------------------------------------------
662,375 395
- -------------------------------------------------------------------------------------
TOTAL VALUE OF CORPORATE BONDS (cost $14,554,103) 15,064,868 8,981
- -------------------------------------------------------------------------------------
COMMON STOCKS--.3%
GAMING/LODGING--.0%
45 *SHRP Equity, Inc. 203 --
- -------------------------------------------------------------------------------------
MEDIA/CABLE TELEVISION--.3%
2,203 *Echostar Communications - Class "A" 48,466 29
- -------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $0) 48,669 29
- -------------------------------------------------------------------------------------
PREFERRED STOCKS--5.7%
FINANCIAL SERVICES--2.0%
3,000 California Federal Bank, 10.625%, Series "B" 333,750 199
- -------------------------------------------------------------------------------------
MEDIA/CABLE TELEVISION--1.7%
239 PanAmSat Capital Corp., 12.75% 290,482 173
- -------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--2.0%
9,000 S.D. Warren Co., Inc., 14% 333,000 199
- -------------------------------------------------------------------------------------
TOTAL VALUE OF PREFERRED STOCKS (cost $794,195) 957,232 571
- -------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
PORTFOLIO OF INVESTMENTS
EXECUTIVE INVESTORS HIGH YIELD FUND
December 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
WARRANTS INVESTED
OR FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
WARRANTS--.6%
GAMING/LODGING--.0%
200 *Goldriver Finance Corp., Liquidating Trust $ 1,400 $ 1
- -------------------------------------------------------------------------------------
MINING/METALS--.0%
200 *Gulf State Steel Acquistion Corp. (expiring
4/1/03) (Note 4) 100 --
- -------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--.3%
9,000 *S.D. Warren Co., Inc. (expiring 12/15/06) (Note
4) 49,500 30
- -------------------------------------------------------------------------------------
TELECOMMUNICATIONS--.3%
450 *American Communication Services, Inc. (expiring
11/1/05) (Note 4) 42,750 25
- -------------------------------------------------------------------------------------
TOTAL VALUE OF WARRANTS (cost $0) 93,750 56
- -------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--1.5%
$ 250M S.C. Johnson & Son, Inc., 7.00%, 1/2/97 (cost
$249,951) 249,951 149
- -------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $15,598,249) 97.9% 16,414,470 9,786
OTHER ASSETS, LESS LIABILITIES 2.1 358,850 214
- -------------------------------------------------------------------------------------
NET ASSETS 100.0% $16,773,320 $10,000
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
</TABLE>
* Non-income producing.
See notes to financial statements
20
<PAGE>
PORTFOLIO OF INVESTMENTS
EXECUTIVE INVESTORS INSURED TAX EXEMPT FUND
December 31, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
MUNICIPAL BONDS--97.8%
ALABAMA--1.7%
$ 250M Coffee Cnty. Public Bldg. Authority, 6.10%,
9/1/2016 $ 258,125 $ 167
- --------------------------------------------------------------------------------------
ARIZONA--3.4%
250M Maricopa County, Arizona Dev. Auth. Hosp. Facs.
Rev. (Samaritan Health Services Series "A"),
7%, 12/1/2016 297,187 193
200M Maricopa County, Arizona Sch. Dist. #80
(Chandler), 6.25%, 7/1/2011 219,250 142
- --------------------------------------------------------------------------------------
516,437 335
- --------------------------------------------------------------------------------------
CALIFORNIA--10.4%
Los Angeles County, Calif. Transportation Comm.
Sales Tax Revenue:
100M 6.75%, 7/1/2001 111,375 72
100M 6.90%, 7/1/2001 112,000 73
500M San Francisco, Calif. City & Cnty. Redev. Agy.
(Moscone Ctr.), 6.75%, 7/1/2015 553,750 359
250M San Francisco, Calif. City & County Parking
Auth., 7%, 6/1/2012 285,312 185
250M San Jose, Redev. Agcy. Tax Allocation, 6%,
8/1/2015 267,812 174
250M Santa Ana, Calif. Finance Authority, 6.25%,
7/1/2015 275,937 179
- --------------------------------------------------------------------------------------
1,606,186 1,042
- --------------------------------------------------------------------------------------
COLORADO--2.6%
350M Roaring Fork, Colorado General Obligation, 6.60%,
6/15/2004* 392,437 255
- --------------------------------------------------------------------------------------
CONNECTICUT--2.8%
400M Connecticut State Special Tax Oblig. Rev., 6.10%,
10/1/2011 423,500 275
- --------------------------------------------------------------------------------------
DELAWARE--.9%
130M Delaware Cnty. Hosp. Auth. (Ball Memorial Hosp.),
6.625%, 8/1/2006 141,050 91
- --------------------------------------------------------------------------------------
GEORGIA--6.2%
100M Cherokee County, Ga. Water & Sewer Auth. Rev.,
7.10%, 8/1/2000* 110,875 72
350M Milledgeville, Ga. Water & Sewer Revenue, 6%,
12/1/2021 373,188 242
500M Richmond, Ga. Water & Sewer Revenue, 5.125%,
10/1/2017 476,250 309
- --------------------------------------------------------------------------------------
960,313 623
- --------------------------------------------------------------------------------------
</TABLE>
21
<PAGE>
PORTFOLIO OF INVESTMENTS
EXECUTIVE INVESTORS INSURED TAX EXEMPT FUND
December 31, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
ILLINOIS--12.0%
$ 500M Chicago, Illinois Board of Education, 6.25%,
12/1/2012 $ 543,750 $ 353
500M Chicago, Illinois General Obligation, 6%,
1/1/2010 528,125 343
100M Du Paige Water Commission, Ill. Water Rev.,
6.875%, 5/1/1997* 103,063 67
500M Illinois Dev. Fin. Auth. (Rockford School 205),
6.55%, 2/1/2009 558,750 363
100M Will County School District General Obligation,
7.10%, 12/1/2009 117,625 76
- --------------------------------------------------------------------------------------
1,851,313 1,202
- --------------------------------------------------------------------------------------
IOWA--3.3%
500M Iowa Finance Auth. Rev. Correctional Facility
Program, 5.75%, 6/15/2016 513,125 333
- --------------------------------------------------------------------------------------
MAINE--1.8%
250M Maine Municipal Bond Bank, 6.50%, 11/1/2014 272,500 177
- --------------------------------------------------------------------------------------
MASSACHUSETTS--3.4%
500M Mass. Bay Transn. Auth. Gen. Transn. Sys. Series
"A", 5.80%, 3/1/2013 523,125 339
- --------------------------------------------------------------------------------------
MICHIGAN--1.9%
1,000M Howell, Michigan Public Schools General
Obligation, Zero Coupon, 5/1/2006* 285,000 185
- --------------------------------------------------------------------------------------
MISSOURI--5.1%
200M Liberty, Missouri Sewer System Rev., 6.15%,
2/1/2015 212,000 138
500M Missouri State Health & Educational Facilities
Auth. (BJC Health Systems Series "A"), 6.75%,
5/15/2010 572,500 371
- --------------------------------------------------------------------------------------
784,500 509
- --------------------------------------------------------------------------------------
NEVADA--.6%
80M Reno Hosp. Rev. (St. Mary's Hospital), 7.75%,
1/1/2000* 88,900 58
- --------------------------------------------------------------------------------------
NEW JERSEY--3.3%
485M New Jersey Housing & Mortgage Fin. Rev., 6.55%,
10/1/2010 514,100 334
- --------------------------------------------------------------------------------------
NEW YORK--6.4%
290M New York City Municipal Water Fin. Auth., 5.875%,
6/15/2012 305,225 198
700M New York State Dorm. Auth. Revs. (Cooper Union),
5.375%, 7/1/2016 682,500 443
- --------------------------------------------------------------------------------------
987,725 641
- --------------------------------------------------------------------------------------
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
NORTH CAROLINA--2.8%
$ 430M North Carolina Central Univ. Rev. Hsg. Sys.,
5.75%, 11/1/2015 $ 436,988 $ 284
- --------------------------------------------------------------------------------------
OHIO--3.0%
500M North Olmstead, Ohio General Obligation, 5%,
12/1/2016 468,125 304
- --------------------------------------------------------------------------------------
OKLAHOMA--3.6%
500M Grand River Dam Authority Revenue, 6.25%,
6/1/2011 552,500 359
- --------------------------------------------------------------------------------------
OREGON--1.6%
250M Tillamook County, Oregon General Obligation,
5.60%, 1/15/2012 253,125 164
- --------------------------------------------------------------------------------------
PENNSYLVANIA--3.9%
200M Jeannette, Pa. School District General
Obligation, 6.65%, 6/1/2001* 217,250 141
350M Philaldelphia, Pa. Water & Wastewater Rev.,
6.25%, 8/1/2012 381,938 248
- --------------------------------------------------------------------------------------
599,188 389
- --------------------------------------------------------------------------------------
PUERTO RICO--6.8%
425M Puerto Rico Commonwealth Hwy. & Transn. Auth.
Hwy. Rev., 6.25%, 7/1/2014 470,688 305
545M Puerto Rico Indl. Tourist Edl. Med. & Env. Ctl.
Facs., 6.25%, 7/1/2016 580,425 377
- --------------------------------------------------------------------------------------
1,051,113 682
- --------------------------------------------------------------------------------------
RHODE ISLAND--1.4%
200M Rhode Island Convention Center Authority Series
"A", 6.70%, 5/15/2001 220,500 143
- --------------------------------------------------------------------------------------
TEXAS--8.9%
505M Austin, Texas Utility System Rev., 6%, 11/15/2013 539,088 350
500M Harris County General Obligation, 6.50%,
8/15/2013 560,355 364
250M Houston, Water Conveyance System Cert. of Part.,
6.25%, 12/15/2012 274,375 178
- --------------------------------------------------------------------------------------
1,373,818 892
- --------------------------------------------------------------------------------------
TOTAL VALUE OF MUNICIPAL BONDS (cost $14,118,903) 15,073,693 9,783
- --------------------------------------------------------------------------------------
</TABLE>
23
<PAGE>
PORTFOLIO OF INVESTMENTS
EXECUTIVE INVESTORS INSURED TAX EXEMPT FUND
December 31, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
SHORT-TERM TAX EXEMPT INVESTMENTS--1.3%
NEW YORK--.7%
$ 100M New York City General Obligation Adjustable Rate
Note, 4.50%** $ 100,000 $ 65
- --------------------------------------------------------------------------------------
OHIO--.6%
100M Ohio State Air Quality Dev. Auth. Rev. Adjustable
Rate Note, 4.70%** 100,000 65
- --------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM TAX EXEMPT INVESTMENTS
(cost $200,000) 200,000 130
- --------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $14,318,903) 99.1% 15,273,693 9,913
OTHER ASSETS, LESS LIABILITIES 0.9 134,736 87
- --------------------------------------------------------------------------------------
NET ASSETS 100.0% $15,408,429 $10,000
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
</TABLE>
* Municipal Bonds which have been prerefunded are shown maturing at the
prerefunded call date.
** Interest rates on Adjustable Rate Notes are determined and reset daily by the
issuer. Interest rate shown is the rate in effect at December 31, 1996.
See notes to financial statements
24
<PAGE>
[This page intentionally left blank.]
25
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
EXECUTIVE INVESTORS TRUST
December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
BLUE CHIP HIGH YIELD INSURED TAX
FUND FUND EXEMPT FUND
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investment in securities:
At identified cost................... $1,535,546 $15,598,249 $14,318,903
--------- ---------- -----------
--------- ---------- -----------
At value (Note 1A)................... $2,033,266 $16,414,470 $15,273,693
Cash................................... 133,688 56,778 58,111
Receivables:
Interest and dividends............... 2,733 309,007 214,984
Trust shares sold.................... 186 119,844 53,427
Other assets........................... 4 4,966 17
--------- ---------- -----------
Total Assets........................... 2,169,877 16,905,065 15,600,232
--------- ---------- -----------
LIABILITIES
Payables:
Cash portion of dividend payable
January 15, 1997................... 4,560 84,735 54,829
Trust shares redeemed................ 209 6,536 118,318
Accrued expenses....................... 4,425 33,535 15,426
Accrued advisory fee................... 448 6,939 3,230
--------- ---------- -----------
Total Liabilities...................... 9,642 131,745 191,803
--------- ---------- -----------
NET ASSETS............................. $2,160,235 $16,773,320 $15,408,429
--------- ---------- -----------
--------- ---------- -----------
NET ASSETS CONSIST OF:
Capital paid in........................ $1,661,153 $20,898,563 $14,451,641
Undistributed net investment income.... 1,362 153,929 1,998
Accumulated net realized loss on
investment transactions.............. -- (5,095,393) --
Net unrealized appreciation in value of
investments.......................... 497,720 816,221 954,790
--------- ---------- -----------
Total.................................. $2,160,235 $16,773,320 $15,408,429
--------- ---------- -----------
--------- ---------- -----------
SHARES OF BENEFICIAL INTEREST
OUTSTANDING.......................... 117,690 2,125,233 1,114,951
--------- ---------- -----------
--------- ---------- -----------
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE
(Net assets divided by trust shares
outstanding)......................... $ 18.36 $ 7.89 $ 13.82
--------- ----- -----------
--------- ----- -----------
MAXIMUM OFFERING PRICE PER SHARE (Net
asset value/.9525)*.................. $ 19.28 $ 8.28 $ 14.51
--------- ----- -----------
--------- ----- -----------
</TABLE>
* On purchases of $100,000 or more, the sales charge is reduced.
See notes to financial statements
26
<PAGE>
STATEMENT OF OPERATIONS
EXECUTIVE INVESTORS TRUST
Year Ended December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
BLUE CHIP HIGH YIELD INSURED TAX
FUND FUND EXEMPT FUND
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Income:
Interest............................. $ 5,734 $1,610,754 $ 833,742
Dividends (Note 1F).................. 30,378 64,471 --
Consent fees......................... -- 30,980 --
--------- ---------- -----------
Total income........................... 36,112 1,706,205 833,742
--------- ---------- -----------
Expenses (Notes 1F and 3):
Advisory fee......................... 17,351 161,441 148,917
Distribution plan expenses........... 8,675 80,721 74,459
Shareholder servicing costs.......... 2,992 19,886 8,257
Professional fees.................... 4,293 15,624 10,075
Custodian fees....................... 3,478 6,326 4,951
Reports and notices to
shareholders....................... 1,595 7,973 3,805
Other expenses....................... 1,121 2,156 4,517
--------- ---------- -----------
Total expenses......................... 39,505 294,127 254,981
Less: Expenses waived or assumed....... (24,210) (96,865) (139,456)
Custodian fees paid indirectly.... (2,180) (4,888) (3,833)
--------- ---------- -----------
Net expenses........................... 13,115 192,374 111,692
--------- ---------- -----------
Net investment income.................. 22,997 1,513,831 722,050
--------- ---------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (Note 2):
Net realized gain (loss) on
investments.......................... 118,654 (139,925) 120,145
Net unrealized appreciation
(depreciation) of investments........ 199,645 707,493 (215,936)
--------- ---------- -----------
Net gain (loss) on investments......... 318,299 567,568 (95,791)
--------- ---------- -----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS...................... $ 341,296 $2,081,399 $ 626,259
--------- ---------- -----------
--------- ---------- -----------
</TABLE>
See notes to financial statements
27
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
EXECUTIVE INVESTORS TRUST
<TABLE>
<CAPTION>
- ----------------------------------------------------------------
BLUE CHIP FUND
----------------------
YEAR ENDED DECEMBER 31 1996 1995
- ---------------------------------------- ---------- ----------
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS
Net investment income................. $ 22,997 $ 24,113
Net realized gain (loss) on
investments......................... 118,654 61,724
Net unrealized appreciation
(depreciation) of investments....... 199,645 282,537
---------- ----------
Net increase in net assets resulting
from operations................... 341,296 368,374
---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income................. (24,266) (23,522)
Net realized gains.................... (118,654) (61,724)
---------- ----------
Total distributions................. (142,920) (85,246)
---------- ----------
TRUST SHARE TRANSACTIONS (a)
Proceeds from shares sold............. 602,423 209,332
Value of distributions reinvested..... 137,288 79,327
Cost of shares redeemed............... (204,360) (186,017)
---------- ----------
Net increase (decrease) from trust
share transactions.................. 535,351 102,642
---------- ----------
Net increase in net assets.......... 733,727 385,770
NET ASSETS
Beginning of year..................... 1,426,508 1,040,738
---------- ----------
End of year+.......................... $2,160,235 $1,426,508
---------- ----------
---------- ----------
+Includes undistributed net investment
income of.............................. $ 1,362 $ 2,631
---------- ----------
---------- ----------
(a)TRUST SHARES ISSUED AND REDEEMED
Sold.................................. 34,030 13,332
Issued for distributions reinvested... 7,503 4,767
Redeemed.............................. (11,252) (12,330)
---------- ----------
Net increase (decrease) in trust
shares.............................. 30,281 5,769
---------- ----------
---------- ----------
</TABLE>
See notes to financial statements
28
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
INSURED
HIGH YIELD FUND TAX EXEMPT FUND
------------------------ ------------------------
1996 1995 1996 1995
- ---------------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS
Net investment income................. $ 1,513,831 $ 1,473,593 $ 722,050 $ 636,876
Net realized gain (loss) on
investments......................... (139,925) (264,699) 120,145 288,360
Net unrealized appreciation
(depreciation) of investments....... 707,493 1,510,599 (215,936) 1,271,346
----------- ----------- ----------- -----------
Net increase in net assets resulting
from operations................... 2,081,399 2,719,493 626,259 2,196,582
----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income................. (1,455,005) (1,414,951) (722,005) (638,733)
Net realized gains.................... -- -- (120,145) (260,877)
----------- ----------- ----------- -----------
Total distributions................. (1,455,005) (1,414,951) (842,150) (899,610)
----------- ----------- ----------- -----------
TRUST SHARE TRANSACTIONS (a)
Proceeds from shares sold............. 2,505,007 1,793,924 3,948,019 2,766,768
Value of distributions reinvested..... 618,840 578,661 520,606 538,422
Cost of shares redeemed............... (2,649,367) (3,146,609) (2,186,795) (1,622,298)
----------- ----------- ----------- -----------
Net increase (decrease) from trust
share transactions.................. 474,480 (774,024) 2,281,830 1,682,892
----------- ----------- ----------- -----------
Net increase in net assets.......... 1,100,874 530,518 2,065,939 2,979,864
NET ASSETS
Beginning of year..................... 15,672,446 15,141,928 13,342,490 10,362,626
----------- ----------- ----------- -----------
End of year+.......................... $16,773,320 $15,672,446 $15,408,429 $13,342,490
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
+Includes undistributed net investment
income of............................. $ 153,929 $ 95,103 $ 1,998 $ 1,953
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
(a)TRUST SHARES ISSUED AND REDEEMED
Sold.................................. 322,959 244,106 286,274 201,812
Issued for distributions reinvested... 79,911 78,556 37,872 39,073
Redeemed.............................. (341,193) (429,347) (159,446) (117,810)
----------- ----------- ----------- -----------
Net increase (decrease) in trust
shares.............................. 61,677 (106,685) 164,700 123,075
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
See notes to financial statements
29
<PAGE>
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. The objective of each Fund is as
follows:
BLUE CHIP FUND seeks high total investment return consistent with the
preservation of capital.
HIGH YIELD FUND primarily seeks high current income and secondarily seeks
capital appreciation.
INSURED TAX EXEMPT FUND seeks to provide a high level of interest income which
is exempt from federal income tax and is not an item of tax preference for
purposes of the federal alternative minimum tax.
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 and other assets 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, 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 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. The Fund may invest up to 20% of
its assets in portfolio securities not covered by the insurance feature.
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, 1996, the High
Yield Fund had capital loss carryovers of $4,971,915 of which $3,364,392 expires
30
<PAGE>
in 1998, $1,286,892 expires in 1999, $211,168 expires in 2003 and $109,463
expires in 2004.
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. Distributions to Shareholders--Dividends from net investment income to the
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.
E. Use of Estimates--The preparation of the 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 at the date of the financial statements and the reported amounts of
revenue and expense during the reporting period. Actual results could differ
from those estimates.
F. 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, 1996, the High Yield Fund recognized $32,192 of dividend
income from these taxable "pay in kind" distributions. The Fund's custodian has
provided credits in the amount of $10,901 against custodian charges based on the
uninvested cash balances of the Funds.
2. SECURITY TRANSACTIONS--For the year ended December 31, 1996, 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>
Cost of purchases...................... $1,163,034 $4,425,431 $18,774,403
--------- ---------- -----------
--------- ---------- -----------
Proceeds of sales...................... $ 800,445 $4,272,116 $16,701,113
--------- ---------- -----------
--------- ---------- -----------
</TABLE>
31
<PAGE>
NOTES TO FINANCIAL STATEMENTS
EXECUTIVE INVESTORS TRUST
At December 31, 1996, aggregate cost and net unrealized appreciation 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......................... $1,535,546 $15,598,249 $14,318,903
--------- ---------- -----------
--------- ---------- -----------
Gross unrealized appreciation.......... $ 513,615 $1,145,185 $ 960,465
Gross unrealized depreciation.......... 15,895 328,964 5,675
--------- ---------- -----------
Net unrealized appreciation............ $ 497,720 $ 816,221 $ 954,790
--------- ---------- -----------
--------- ---------- -----------
</TABLE>
3. ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES--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"), an affiliated dealer.
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'
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 $327,709 of
which $205,422 was waived. In addition, expenses of $22,338 were assumed by
EIMCO.
For the year ended December 31, 1996, EIC, as underwriter of the Trust, received
$22,001 in commissions from the sale of Trust shares, after allowing $8,663 to
FIC and $107,069 to other dealers. Shareholder servicing costs included $28,512
paid in transfer agent fees and out of pocket expenses to ADM and $2,623 in
custodian fees paid to FFS.
Pursuant to a Distribution Plan adopted under Rule 12b-1 of the 1940 Act, each
Fund is authorized to pay 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 paid for the ongoing
servicing of clients who are shareholders of that Fund. Total 12b-1 fees accrued
to EIC amounted to $163,855 (of which $32,771 was waived).
4. RULE 144A SECURITIES--Under Rule 144A, certain restricted securities are
exempt from the registration requirements of the Securities Act of 1933 and may
only be resold to qualified institutional investors. At December 31, 1996, the
High Yield Fund held nine 144A securities with an aggregate value of $1,950,800
representing 11.6% of the High Yield Fund's net assets. These securities are
valued as set forth in Note 1A.
32
<PAGE>
(This page has been intentionally left blank.)
33
<PAGE>
FINANCIAL HIGHLIGHTS
EXECUTIVE INVESTORS TRUST
The following table sets forth the per share operating performance data for a
share of beneficial interest outstanding, total return, ratios to average net
assets and other supplemental data for each period indicated.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
P E R S H A R E D A T A
---------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
NET ASSET --------------------------------------- FROM
VALUE NET REALIZED --------------------
--------- NET AND UNREALIZED TOTAL FROM NET NET
BEGINNING INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAINS 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
1995.................................... 12.75 .30 4.30 4.60 .29 .74 1.03
1996.................................... 16.32 .22 3.13 3.35 .24 1.07 1.31
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
1995.................................... 6.98 .70 .58 1.28 .67 -- .67
1996.................................... 7.59 .72 .28 1.00 .70 -- .70
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
1995.................................... 12.53 .72 1.80 2.52 .73 .28 1.01
1996.................................... 14.04 .66 (.10) .56 .67 .11 .78
</TABLE>
(a) Annualized
* Commencement of operations
** Calculated without sales charges
+ Some or all expenses have been waived or assumed from commencement of
operations through December 31, 1996 (Note 3).
++ Average commission rate (per share of security) as required by amended
disclosure requirements effective for fiscal years beginning on or after
September 1, 1995.
See notes to financial statements
34
<PAGE>
The following table sets forth the per share operating performance data for a
share of beneficial interest outstanding, total return, ratios to average net
assets and other supplemental data for each period indicated.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
R A T I O S / S U P P L E M E N T A L D A T A
------------------------------------------------------------------------------
---------
RATIO TO AVERAGE
RATIO TO AVERAGE NET ASSETS BEFORE
EXPENSES WAIVED OR
NET ASSETS+ ASSUMED
NET ASSET NET ASSETS ------------------ ------------------
VALUE TOTAL END OF NET NET PORTFOLIO
--------- RETURN PERIOD INVESTMENT INVESTMENT TURNOVER
END ** (IN EXPENSES INCOME EXPENSES INCOME RATE
OF PERIOD (%) THOUSANDS) (%) (%) (%) (%) (%)
- ----------------------------------------------------------------------------------------------------------------------------------
<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
1995.................................... 16.32 36.30 1,427 .50 1.99 2.20 .29 33
1996.................................... 18.36 20.62 2,160 .75 1.33 2.28 (.20) 50
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
1995.................................... 7.59 19.08 15,672 1.35 9.52 1.90 8.97 69
1996.................................... 7.89 13.69 16,773 1.22 9.38 1.82 8.78 27
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
1995.................................... 14.04 20.53 13,342 .50 5.35 1.74 4.11 147
1996.................................... 13.82 4.11 15,408 .75 4.85 1.71 3.89 116
<CAPTION>
AVERAGE
COMMISSION
RATE
++
- ---------------------------------------------------------------
<S> <C><C>
BLUE CHIP FUND
5/17/90* to 12/31/90.................... $N/A
1991.................................... N/A
1992.................................... N/A
1993.................................... N/A
1994.................................... N/A
1995.................................... N/A
1996.................................... .0689
HIGH YIELD FUND
3/24/87* to 12/31/87.................... N/A
1988.................................... N/A
1989.................................... N/A
1990.................................... N/A
1991.................................... N/A
1992.................................... N/A
1993.................................... N/A
1994.................................... N/A
1995.................................... N/A
1996.................................... N/A
INSURED TAX EXEMPT FUND
7/26/90* to 12/31/90.................... N/A
1991.................................... N/A
1992.................................... N/A
1993.................................... N/A
1994.................................... N/A
1995.................................... N/A
1996.................................... N/A
</TABLE>
(a) Annualized
* Commencement of operations
** Calculated without sales charges
+ Some or all expenses have been waived or assumed from commencement of
operations through December 31, 1996 (Note 3).
++ Average commission rate (per share of security) as required by amended
disclosure requirements effective for fiscal years beginning on or after
September 1, 1995.
See notes to financial statements
35
<PAGE>
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, 1996, the related
statement of operations for the 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,
1996, by correspondence with the custodian. 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, 1996, and the
results of their operations, changes in their net assets and financial
highlights for the respective periods presented, in conformity with generally
accepted accounting principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
January 31, 1997
36
<PAGE>
[This page intentionally left blank.]
37
<PAGE>
EXECUTIVE INVESTORS TRUST
TRUSTEES
- -------------------------------------------
JAMES J. COY
ROGER L. GRAYSON
GLENN O. HEAD
KATHRYN S. HEAD
REX R. REED
HERBERT RUBINSTEIN
JAMES M. SRYGLEY
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
GREGORY R. KINGSTON
Assistant Treasurer
MARK S. SPENCER
Assistant Treasurer
38
<PAGE>
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.
581 Main Street
Woodbridge, NJ 07095-1198
LEGAL COUNSEL
KIRKPATRICK & LOCKHART LLP
1800 Massachusetts Avenue, N.W.
Washington, DC 20036
AUDITORS
TAIT, WELLER & BAKER
Two Penn Center Plaza
Philadelphia, PA 19102
It is the Trust's practice to mail only one copy of its annual and semi-annual
reports to any address at which more than one shareholder with the same last
name has indicated that mail is to be delivered. Additional copies of the
reports will be mailed if requested by any shareholder in writing or by calling
800-423-4026. The Trust will ensure that separate reports are sent to any
shareholder who subsequently changes his or her mailing address.
This report is authorized for distribution only to existing shareholders, and,
if given to prospective shareholders, must be accompanied or preceded by the
Trust's prospectus.
39
<PAGE>
EXECUTIVE
INVESTORS
TRUST
Blue Chip Fund
High Yield Fund
Insured Tax Exempt Fund
ANNUAL
REPORT
DECEMBER 31, 1996
Vertically reading from bottom to top in the center of the page
the words "EXECUTIVE INVESTORS" appear.
The following appears in a box to the left of the above language:
EXECUTIVE INVESTORS
NEED SERVICE?
If you have questions about your account...or would like
information regarding other products or services...please contact
your representative or call our Shareholder Services Department
at...
(800) 423-4026
The following appears in a box within the above box:
Our business is...putting investors first
The following appears on the bottom lefthand side:
EIHY-107
