<PAGE> 1
SEMIANUAL
REPORT
--------------------
APRIL 30, 1995
(Unaudited)
[PHOTO]
[PHOTO] [PHOTO]
COMMON SENSE(R) II COMMON
SENSE(R) TRUST
FAMILY OF FUNDS
<PAGE> 2
SHAREHOLDERS' MESSAGE
- --------------------------------------------------------------------------------
[PHOTO]
June 1, 1995
Dear Shareholder,
During the six-month period covered by this report, November 1, 1994 through
April 30, 1995, we saw the close of a challenging and difficult year in the
financial markets - and the beginning of a new year, with renewed optimism and
strength on many fronts.
Market Overview
In an effort to moderate economic growth and keep inflation under control, the
Federal Reserve Board raised the federal funds rate (the rate banks charge each
other for overnight loans) seven times from February 1994 through February
1995. As a result, the fed funds rate doubled from 3 percent to 6 percent,
its highest level in three years. Intermediate- and long-term interest rates
quickly followed the Fed's lead and moved significantly higher as well. The
yield on 30-year Treasury securities, for example, began 1994 at 6.35 percent
and increased to a high of 8.16 percent, before retreating to 7.89 percent at
the end of the year. However, since yields and prices move in opposite
directions, this had a negative impact on prices of fixed-income securities.
Stock market investors did not fare much better during this rising
interest rate environment, which continued into early 1995. Despite the robust
economy and stronger corporate earnings, the market was concerned that higher
interest rates and the prospect for continued rate hikes might altogether
extinguish the economic expansion.
In contrast, 1995 began more positively as the bond market got a boost
from growing sentiment that the Fed had stabilized economic growth while
keeping inflation under control, and that it may be near the end of its
tightening cycle. Subsequently, the yield on 30-year Treasury securities fell
to 7.34 percent at the end of April - down more than three quarters of a
percentage point from its November 1994 high of 8.16 percent.
The stock market responded in late February with the Dow Jones
Industrial Average breaking through the 4000 mark, setting a new record high
and raising expectations for a stronger market in 1995. At the same time,
almost all other major stock indexes rose, including the S&P 500 Index, the New
York Stock Exchange Composite Index, and the Nasdaq Composite Index.
Additionally, at the end of April, the Van Kampen American Capital
Index of Investor Intentions reached 138, an increase of 11 percent over its
March-end level of 124. The index, computed from an independently conducted
survey and published by Van Kampen American Capital, measures the investment
climate (investors' confidence) by asking 1,000 investors about what they
intend to do with their money over the next 60-90 days. A total of 46.3 percent
of investors said the next 60-90 days would be a "good" time to invest.
1
<PAGE> 3
Outlook
Economic data continues to point to a slowdown in the economy. First-quarter
gross domestic product, for example, grew at an annualized rate of 2.8 percent,
substantially lower than its fourth-quarter rate of 5.1 percent last year. Many
analysts now expect GDP to grow between 1 and 2 percent for the second half of
the year. If this happens, we do not believe the Fed will be compelled to raise
short-term interest rates. On the other hand, if GDP grows between 2.5 percent
and 4 percent, we may see the Fed increase interest rates once again. But, we
do not anticipate the same level of volatility from a rate hike that we saw in
the markets last year.
We believe stocks and bonds will continue to perform well, as the
economy grows at a moderate pace and inflation remains low. Corporate earnings
continue to be stronger than expected despite a slower economy, which has
helped to drive stock prices higher. The Dow Jones Industrial Average, for
example, closed above the 4300 mark at the end of April, its 17th record high
since late February. Likewise, bond prices continue to appreciate as yields on
long-term rates continue to fall.
On the following pages, you can read about your Fund's performance
during the past six months, as well as portfolio management's outlook for the
Fund in the coming months. We hope that you will find this information helpful
in reviewing your investment with Common Sense Trust.
We look forward to communicating with you on a regular basis,
providing information about your Fund's performance and new investment
opportunities. We appreciate your continued confidence in Common Sense Trust.
Sincerely,
/s/ DON G. POWELL
Don G. Powell
President
2
<PAGE> 4
PORTFOLIO PERSPECTIVE
- --------------------------------------------------------------------------------
***************************************************************************
* *
* The following is an interview with the portfolio management team of *
* the Common Sense Trust II stock funds. The team includes: Stephen L. *
* Boyd, Common Sense II Growth Fund; James A. Gilligan, Common Sense II *
* Growth and Income Fund; Gary M. Lewis, Common Sense II Emerging *
* Growth; James B. Conheady and Jeffrey Russell, Common Sense II *
* International Equity; and, Alan T. Sachtleben, executive vice *
* president, equity investments. *
* *
***************************************************************************
Q. WHAT FACTORS HAD THE GREATEST IMPACT ON THE PERFORMANCE OF THE STOCK FUNDS
DURING THE SIX MONTHS ENDED APRIL 30, 1995?
COMMON SENSE II GROWTH FUND
HOLDING BY INDUSTRY
[PIE CHART]
A. The biggest boost to stock prices came from interest rates, which declined
during the reporting period. After watching rates rise during the previous
six months, investors were optimistic about the impact that falling rates
would have on corporate profits. In response, the stock market continued to
attract new money and set several record highs, as measured by the Dow
Jones Industrial Average, an unmanaged index that reflects the performance
of stocks of large, industrial companies.
Lower interest rates help companies for two reasons. First, they are
an indication that the stock market is not concerned about inflation, which
generally boosts stock prices. Second, they reduce a company's cost of
borrowing, which provides a direct boost to profits.
The stock funds also benefited from the continued slowing of economic
growth rates and a declining U.S. dollar. Slower growth means inflation is
less likely to be a problem, which means the Federal Reserve Board is less
likely to raise interest rates. The devaluing of the dollar compared to the
Japanese yen and European currencies meant U.S. exports were more
affordable and imports less affordable, both of which helped increased
sales for domestic companies.
Q. WHAT CHANGES DID YOU MAKE TO THE PORTFOLIOS TO DEAL WITH THE CHANGING
ECONOMIC CONDITIONS?
COMMON SENSE II
GROWTH & INCOME FUND
HOLDING BY INDUSTRY
[PIE CHART]
A. Common Sense II Growth Fund reduced its holdings of cyclical stocks, which
are companies most likely to be affected by changes in the economy. As a
result, we reduced the Fund's exposure to companies in the consumer
durables (autos), raw materials (chemicals and paper) and retail
industries, while significantly increasing our investment in financial
services. Firms in this industry usually benefit from lower interest rates.
The Fund also increased slightly its holdings of technology stocks because
of the continued strong growth of that industry.
Common Sense II Growth and Income Fund increased the percentage of the
portfolio invested in financial services. Additionally, as a result of
buying fundamentally attractive companies, both funds increased their
holdings of companies that appeared to be possible candidates for takeovers
or restructurings, and they benefited from these positions. Common Sense II
Growth & Income Fund owned stock in four companies - Dr Pepper, PET, U.S.
Shoe and E Systems - that either were taken over or became takeover targets
during the past six months.
The diversification of both funds is shown by the charts at right.
3
<PAGE> 5
COMMON SENSE II
EMERGING GROWTH FUND
HOLDING BY INDUSTRY
[PIE CHART]
Two new funds were added to the Trust on February 21, 1995: Common
Sense II Emerging Growth Fund and Common Sense II International Equity
Fund. In both cases, during the past two months the management team focused
on building a diversified portfolio for each fund.
Common Sense II Emerging Growth Fund uses a "bottom up" investment
approach, which focuses on stock selection rather than market timing or
other investment techniques. By maintaining a broadly diversified
portfolio, the Fund attempts to control risk. Some of the stocks in the
portfolio that performed best during the Fund's initial period of operation
were Altera (semiconductors), Glenayre Technologies (telecommunications),
Petroleum Geo Services (oil service) and Potash Corp. (fertilizer). In
general, the companies in the portfolio will have annual revenues of less
than $1 billion.
Common Sense II International Equity Fund is diversified both in terms
of industries and countries. About 45% of the portfolio is invested in
European stocks, with large exposure in Sweden, Italy and Austria. About
one-quarter of the portfolio is invested in the Far East, and 6 percent is
invested in Canada and Latin America. The remainder of the portfolio is in
the United States and cash equivalents. In the Far East, we have invested
more heavily in Malaysia, Hong Kong and Singapore, which we feel offer more
value. Overall, the portfolio is broadly diversified, with investments
currently in 20 countries and several industries. In general, the companies
whose stock is in the portfolio are enjoying earnings growth of at least
25 percent more than other companies in their local markets. The
diversification of both funds is shown by the charts at left.
COMMON SENSE II
INTERNATIONAL EQUITY FUND
HOLDING BY COUNTRY
[PIE CHART]
Q. HOW DID THE FUNDS PERFORM DURING THE SIX MONTHS ENDED APRIL 30, 1995?
A. Common Sense II Growth Fund Class A Shares achieved a total return at net
asset value (without a sales charge) of 6.64 percent, while Class B Shares
achieved a total return at net asset value of 6.24 percent.
Common Sense II Growth and Income Fund Class A Shares achieved a total
return at net asset value of 7.88 percent, including reinvestment of
dividends totalling $.095 per share, while Class B Shares achieved a total
return at net asset value of 7.43 percent, including reinvestment of
dividends totalling $.054 per share. By comparison, the Standard & Poor's
500-Stock Index, an unmanaged index that reflects general stock market
performance, achieved a total return of 10.45 percent. The index does not
reflect any commissions or fees that would be paid by an investor
purchasing the securities it represents.
From inception on February 21, 1995 through April 30, 1995, Common
Sense II Emerging Growth Fund Class A Shares achieved a total return at net
asset value of 5 percent, and Class B Shares achieved a total return at net
asset value of 4.91 percent. By comparison, the S&P 500 Index achieved a
total return of 6.27 percent and the Russell 2000 Index, an unmanaged index
that reflects the performance of smaller company stocks, achieved a total
return of 4.8 percent during the same period.
4
<PAGE> 6
From inception on February 21, 1995 through April 30, 1995, Common
Sense II International Equity Fund Class A Shares achieved a total return
at net asset value of 7.45 percent, and Class B Shares achieved a total
return at net asset value of 7.37 percent.
By comparison, the Morgan Stanley Capital International EAFE Index,
which reflects the general performance of the major international stock
markets, achieved a total return of 10.29 percent. Neither index reflects
any commissions or fees that would be paid by an investor purchasing the
securities it represents.
Q. WHAT IS THE OUTLOOK FOR STOCKS?
A. We believe that stocks are fairly valued. However, certain segments of the
stock market remain attractive, including companies in the energy and
communications industries, and the stocks of smaller companies.
Small-company stocks are selling at historically low prices when compared
to the stocks of larger companies, and would greatly benefit from any
reduction in capital gains tax rates. We will continue to look for stocks
that have solid fundamentals and that we believe offer good prospects for
growth, regardless of economic conditions. This strategy may continue to
provide the added benefit of enhanced growth from takeovers, since we
anticipate merger activity to remain steady or increase.
<TABLE>
<S> <C> <C>
/s/ ALAN T. SACHTLEBEN /s/ STEPHEN L. BOYD /s/ JAMES A. GILLIGAN
Alan T. Sachtleben Stephen L. Boyd James A. Gilligan
Executive Vice President Portfolio Manager Portfolio Manager
Equity Investments Common Sense II Common Sense II
Growth Fund Growth and Income Fund
/s/ GARY L. LEWIS /s/ JAMES B. CONHEADY /s/ JEFFREY RUSSELL
Gary L. Lewis James B. Conheady Jeffrey Russell
Portfolio Manager Portfolio Co-Manager Portfolio Co-Manager
Common Sense II Common Sense II Common Sense II
Emerging Growth Fund International Equity Fund International Equity Fund
</TABLE>
5
<PAGE> 7
***************************************************************************
* *
* The following is an interview with the portfolio management team of *
* the Common Sense Trust II Government Fund. The team includes John R. *
* Reynoldson, portfolio manager, and Robert C. Peck, Jr., executive *
* vice president, fixed-income investments. *
* *
***************************************************************************
Q. WHAT FACTORS HAD THE GREATEST IMPACT ON THE PERFORMANCE OF THE COMMON
SENSE II GOVERNMENT FUND DURING THE SIX MONTHS ENDED APRIL 30, 1995?
YIELDS ON 10-YEAR TREASURY NOTES
[GRAPH]
A. Changes in interest rates had a significant impact on the Fund, as they
did on the stock funds. After rising during the previous six months,
interest rates began to fall during the reporting period. The impact on
yields can be seen in the chart at left, which shows yields on 10-Year
Treasury notes dropping from a high of 8.03 percent on November 7 to a low
of 6.99 percent on April 24. Generally, when interest rates fall, prices of
bonds and the net asset value of bond funds increase. This was the case
during the statement period with the net asset value of the Fund measured
by Class A Shares rising from $11.54 on October 31, 1994, to $11.87 on
April 30, 1995, or 2.9 percent.
Q. WHAT CHANGES DID YOU MAKE TO THE PORTFOLIO TO DEAL WITH THE CHANGING
INTEREST-RATE ENVIRONMENT?
A. We increased the Fund's sensitivity to changes in interest rates by
extending the average maturity and duration of the portfolio to capture the
capital gains opportunities offered by falling yields. Also, we increased
the portfolio's commitment to mortgage-backed securities, which, according
to our research, offered attractive values.
Q. HOW DID THE FUND PERFORM DURING THE SIX MONTHS ENDED APRIL 30,1995?
A. Common Sense II Government Fund Class A Shares achieved a total return at
net asset value of 5.96 percent, including reinvestment of distributions
totalling $.3396 per share. Class B Shares achieved a total return at net
asset value of 5.61 percent, including reinvestment of distributions
totalling $.3006 per share. By comparison, the Lehman Brothers General U.S.
Government Index achieved a total return of 6.52 percent. The unmanaged
index is used as a benchmark for many government funds, but it does not
reflect any commissions or fees that would be paid by an investor
purchasing the securities it represents.
Q. WHAT'S THE OUTLOOK FOR FIXED-INCOME SECURITIES?
A. Through the reporting period, rates of economic growth slowed and
inflation remained in check, reflecting the Fed's tightening of the money
supply during 1994. This slowdown in growth seems to have put further Fed
tightening on hold, and has allowed the bond market to rally. Looking
ahead, we expect a moderate rebound in economic activity, and some increase
in the inflation rate. We believe this environment will cause interest
rates to rise moderately during the rest of the year.
/s/ ROBERT C. PECK, JR. /s/ JOHN R. REYNOLDSON
Robert C. Peck, Jr. John R. Reynoldson
Executive Vice President Portfolio Manager
Fixed Income Investments Common Sense II Government Fund
6
<PAGE> 8
Growth II Fund Statement of Net Assets
- --------------------------------------------------------------------------------
April 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number Market
of Shares Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock 88.7%
CONSUMER DISTRIBUTION 3.4%
1,500 Albertsons, Inc. . . . . . . . . . . . . . . . . . . . . . $ 47,437
1,700 Federated Department Stores, Inc. . . . . . . . . . . . . . 35,912
*7,500 Kroger Co. . . . . . . . . . . . . . . . . . . . . . . . . 191,250
2,500 May Department Stores Co. . . . . . . . . . . . . . . . . . 90,625
2,200 Sears, Roebuck & Co. . . . . . . . . . . . . . . . . . . . 119,350
4,500 Sysco Corp. . . . . . . . . . . . . . . . . . . . . . . . . 126,000
3,300 Walgreen Co. . . . . . . . . . . . . . . . . . . . . . . . 155,100
8,500 Wal-Mart Stores, Inc. . . . . . . . . . . . . . . . . . . . 201,875
------------
TOTAL CONSUMER DISTRIBUTION . . . . . . . . . . . . . 967,549
------------
CONSUMER DURABLES 0.8%
2,600 Black & Decker Corp. . . . . . . . . . . . . . . . . . . . 78,000
4,300 Echlin, Inc. . . . . . . . . . . . . . . . . . . . . . . . 156,950
------------
TOTAL CONSUMER DURABLES . . . . . . . . . . . . . . . 234,950
------------
CONSUMER NON-DURABLES 7.7%
2,800 Campbell Soup Co. . . . . . . . . . . . . . . . . . . . . . 143,500
2,000 Coca-Cola Co. . . . . . . . . . . . . . . . . . . . . . . . 116,250
3,500 Colgate-Palmolive Co. . . . . . . . . . . . . . . . . . . . 245,875
5,500 ConAgra, Inc. . . . . . . . . . . . . . . . . . . . . . . . 182,875
3,000 CPC International, Inc. . . . . . . . . . . . . . . . . . . 175,875
2,500 General Mills, Inc. . . . . . . . . . . . . . . . . . . . . 152,500
3,500 Heinz (H.J.) Co. . . . . . . . . . . . . . . . . . . . . . 147,000
5,200 PepsiCo, Inc. . . . . . . . . . . . . . . . . . . . . . . . 216,450
4,100 Procter & Gamble Co. . . . . . . . . . . . . . . . . . . . . 286,488
2,800 Ralston-Ralston Purina Group . . . . . . . . . . . . . . . . 133,000
*6,500 RJR Nabisco Holdings Corp., Class A . . . . . . . . . . . . 181,188
5,500 Sara Lee Corp. . . . . . . . . . . . . . . . . . . . . . . . 153,313
2,500 Whitman Corp. . . . . . . . . . . . . . . . . . . . . . . . 45,625
------------
TOTAL CONSUMER NON-DURABLES . . . . . . . . . . . . . 2,179,939
------------
CONSUMER SERVICES 7.0%
1,400 Capital Cities ABC, Inc. . . . . . . . . . . . . . . . . . 118,300
2,500 CBS, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 160,312
*4,000 Circus Circus Enterprises, Inc. . . . . . . . . . . . . . . 132,500
*5,000 Cox Communications Inc. . . . . . . . . . . . . . . . . . . 76,250
3,500 Disney (Walt) Co. . . . . . . . . . . . . . . . . . . . . . 193,812
5,500 Marriott International, Inc. . . . . . . . . . . . . . . . 198,000
6,000 McDonald's Corp. . . . . . . . . . . . . . . . . . . . . . 210,000
6,500 News Corp. Limited, ADR . . . . . . . . . . . . . . . . . . 126,750
500 Omnicom Group, Inc. . . . . . . . . . . . . . . . . . . . . 27,813
5,500 Service Corp. International . . . . . . . . . . . . . . . . 155,375
*8,000 Tele-Communications, Inc., Class A . . . . . . . . . . . . . 153,000
5,000 Time Warner, Inc. . . . . . . . . . . . . . . . . . . . . . 183,125
2,200 Tribune Co. . . . . . . . . . . . . . . . . . . . . . . . . 130,075
*2,500 Viacom, Inc., Class B . . . . . . . . . . . . . . . . . . . 114,688
------------
TOTAL CONSUMER SERVICES . . . . . . . . . . . . . . . 1,980,000
------------
</TABLE>
7
<PAGE> 9
Growth II Fund Statement of Net Assets, continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Market
of Shares Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
ENERGY 8.5%
5,000 Amoco Corp. . . . . . . . . . . . . . . . . . . . . . . . . $ 328,125
2,300 Ashland, Inc. . . . . . . . . . . . . . . . . . . . . . . . 85,100
2,500 British Petroleum Co., PLC, ADR . . . . . . . . . . . . . . 215,312
9,000 Coastal Corp. . . . . . . . . . . . . . . . . . . . . . . . 267,750
4,000 Exxon Corp. . . . . . . . . . . . . . . . . . . . . . . . . 278,500
1,500 Mobil Corp. . . . . . . . . . . . . . . . . . . . . . . . . 142,313
10,200 Panhandle Eastern Corp. . . . . . . . . . . . . . . . . . . 244,800
2,500 Repsol SA, ADR . . . . . . . . . . . . . . . . . . . . . . . 80,000
1,200 Royal Dutch Petroleum Co., ADR . . . . . . . . . . . . . . . 148,800
4,500 Texaco, Inc. . . . . . . . . . . . . . . . . . . . . . . . 307,688
9,000 Williams Companies . . . . . . . . . . . . . . . . . . . . . 295,875
------------
TOTAL ENERGY . . . . . . . . . . . . . . . . . . . . . 2,394,263
------------
FINANCE 15.3%
5,000 Ahmanson (H.F.) & Co. . . . . . . . . . . . . . . . . . . . 105,000
60,661 American Capital Small Capitalization Fund, Inc.
(See Note 2) . . . . . . . . . . . . . . . . . . . . . . 622,988
5,500 American Express Co. . . . . . . . . . . . . . . . . . . . . 191,125
2,200 American International Group, Inc. . . . . . . . . . . . . . 234,850
6,000 Bank of Boston Corp. . . . . . . . . . . . . . . . . . . . . 201,000
2,000 BankAmerica Corp. . . . . . . . . . . . . . . . . . . . . . 99,000
3,000 BayBanks, Inc. . . . . . . . . . . . . . . . . . . . . . . . 187,500
7,000 Chase Manhattan Corp. . . . . . . . . . . . . . . . . . . . 306,250
6,500 Chemical Banking Corp. . . . . . . . . . . . . . . . . . . . 271,375
3,000 CoreStates Financial Corp. . . . . . . . . . . . . . . . . . 97,875
7,000 Federal National Mortgage Association . . . . . . . . . . . 617,750
2,700 First Bank System, Inc. . . . . . . . . . . . . . . . . . . 109,350
3,500 First Chicago Corp. . . . . . . . . . . . . . . . . . . . . 193,375
7,500 Great Western Financial Corp. . . . . . . . . . . . . . . . 158,437
6,500 Green Point Financial Corp. . . . . . . . . . . . . . . . . 155,594
3,300 Green Tree Financial Corp. . . . . . . . . . . . . . . . . . 134,887
3,000 MBNA Corp. . . . . . . . . . . . . . . . . . . . . . . . . 90,750
5,700 Midlantic Corp. . . . . . . . . . . . . . . . . . . . . . . 208,050
1,800 St. Paul Companies, Inc. . . . . . . . . . . . . . . . . . 86,625
8,500 West One Bancorp. . . . . . . . . . . . . . . . . . . . . . 234,813
------------
TOTAL FINANCE . . . . . . . . . . . . . . . . . . . . 4,306,594
------------
HEALTH CARE 10.6%
5,500 Abbott Laboratories, Inc. . . . . . . . . . . . . . . . . . 216,562
3,000 American Home Products Corp. . . . . . . . . . . . . . . . 231,375
*1,500 Amgen, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 109,031
*3,000 Astra AB, Series A, ADR . . . . . . . . . . . . . . . . . . 86,250
5,500 Baxter International, Inc. . . . . . . . . . . . . . . . . 191,125
2,000 Becton Dickinson & Co. . . . . . . . . . . . . . . . . . . 111,500
6,000 Caremark International, Inc. . . . . . . . . . . . . . . . 105,000
3,500 Columbia/HCA Healthcare Corp. . . . . . . . . . . . . . . . 147,000
*1,000 Forest Laboratories, Inc. . . . . . . . . . . . . . . . . . 45,000
*1,600 Genentech, Inc. . . . . . . . . . . . . . . . . . . . . . . 80,600
*4,500 Healthcare & Retirement Corp. . . . . . . . . . . . . . . . 127,125
2,000 Healthsouth Rehabilitation . . . . . . . . . . . . . . . . . 39,500
1,200 Integrated Health Services, Inc. . . . . . . . . . . . . . 41,550
2,000 Johnson & Johnson . . . . . . . . . . . . . . . . . . . . . 130,000
</TABLE>
8
<PAGE> 10
Growth II Fund Statement of Net Assets, continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Market
of Shares Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
HEALTHCARE-continued
2,400 Lilly (Eli) & Co. . . . . . . . . . . . . . . . . . . . . . $ 179,400
2,500 Mallinckrodt Group, Inc. . . . . . . . . . . . . . . . . . . 90,000
2,500 Merck & Co., Inc. . . . . . . . . . . . . . . . . . . . . . 107,188
3,000 Mylan Laboratories, Inc. . . . . . . . . . . . . . . . . . 92,250
1,500 Pfizer, Inc. . . . . . . . . . . . . . . . . . . . . . . . 129,938
*2,700 Scherer (R.P.) Corp. . . . . . . . . . . . . . . . . . . . 128,925
3,000 Schering-Plough Corp. . . . . . . . . . . . . . . . . . . . 226,125
4,500 Upjohn Co. . . . . . . . . . . . . . . . . . . . . . . . . 163,125
2,400 Warner Lambert Co. . . . . . . . . . . . . . . . . . . . . 191,400
------------
TOTAL HEALTH CARE . . . . . . . . . . . . . . . . . . 2,969,969
------------
PRODUCER MANUFACTURING 7.3%
4,500 Browning-Ferris Industries, Inc. . . . . . . . . . . . . . 148,500
5,500 Corning, Inc. . . . . . . . . . . . . . . . . . . . . . . . 183,562
2,800 Deere & Co. . . . . . . . . . . . . . . . . . . . . . . . . 229,600
4,000 General Electric Co. . . . . . . . . . . . . . . . . . . . 224,000
7,500 Honeywell, Inc. . . . . . . . . . . . . . . . . . . . . . . 289,687
2,000 Illinois Tool Works, Inc. . . . . . . . . . . . . . . . . . 100,250
2,500 ITT Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 261,250
2,500 Philip NV, ADR . . . . . . . . . . . . . . . . . . . . . . 96,250
4,800 Rockwell International Corp. . . . . . . . . . . . . . . . 209,400
*5,000 Thermo Fibertek, Inc. . . . . . . . . . . . . . . . . . . . 91,875
3,000 Wheelabrator Technologies, Inc. . . . . . . . . . . . . . . 43,500
6,100 WMX Technologies, Inc. . . . . . . . . . . . . . . . . . . 166,225
------------
TOTAL PRODUCER MANUFACTURING . . . . . . . . . . . . . 2,044,099
------------
RAW MATERIALS/PROCESSING INDUSTRIES 4.7%
2,200 Air Products & Chemicals, Inc. . . . . . . . . . . . . . . 110,825
4,000 Du Pont (E.I.) de Nemours & Co., Inc. . . . . . . . . . . . 263,500
2,300 Eastman Chemical Co. . . . . . . . . . . . . . . . . . . . 130,525
2,000 Engelhard Corp. . . . . . . . . . . . . . . . . . . . . . . 76,750
3,500 Grace (W.R.) & Co. . . . . . . . . . . . . . . . . . . . . . 187,687
3,000 James River Corp. . . . . . . . . . . . . . . . . . . . . . 81,375
3,500 Lubrizol Corp. . . . . . . . . . . . . . . . . . . . . . . 122,062
4,500 Pall Corp. . . . . . . . . . . . . . . . . . . . . . . . . 105,188
800 Scott Paper Co. . . . . . . . . . . . . . . . . . . . . . . 71,300
5,000 Sherwin Williams Co. . . . . . . . . . . . . . . . . . . . 178,125
------------
TOTAL MATERIALS/PROCESSING INDUSTRIES . . . . . . . . 1,327,337
------------
TECHNOLOGY 19.4%
2,200 Adobe Systems, Inc. . . . . . . . . . . . . . . . . . . . . 128,150
*3,300 Applied Materials, Inc. . . . . . . . . . . . . . . . . . . 203,362
1,400 BMC Software, Inc. . . . . . . . . . . . . . . . . . . . . 87,150
2,500 Boeing Co. . . . . . . . . . . . . . . . . . . . . . . . . 137,500
*2,700 Cisco Systems, Inc. . . . . . . . . . . . . . . . . . . . . 107,662
*12,500 Compaq Computer Corp. . . . . . . . . . . . . . . . . . . . 475,000
2,300 Computer Associates International, Inc. . . . . . . . . . . 148,062
*3,500 DSC Communications Corp. . . . . . . . . . . . . . . . . . 129,500
1,600 Hewlett-Packard Co. . . . . . . . . . . . . . . . . . . . . 105,800
</TABLE>
9
<PAGE> 11
Growth II Fund Statement of Net Assets, continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Market
of Shares Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY-continued
*2,500 Integrated Device Technology, Inc. . . . . . . . . . . . . . $ 95,312
4,800 Intel Corp. . . . . . . . . . . . . . . . . . . . . . . . . 491,400
5,100 International Business Machines Corp. . . . . . . . . . . . 483,225
1,300 Linear Technology Corp. . . . . . . . . . . . . . . . . . . 77,675
3,500 Lockheed Martin Corp. . . . . . . . . . . . . . . . . . . . 202,125
2,900 Loral Corp. . . . . . . . . . . . . . . . . . . . . . . . . 136,300
*2,800 Lotus Development Corp. . . . . . . . . . . . . . . . . . . 88,200
*1,600 LSI Logic Corp. . . . . . . . . . . . . . . . . . . . . . . 106,600
4,500 McDonnell Douglas Corp. . . . . . . . . . . . . . . . . . . 279,000
*4,800 Microsoft Corp. . . . . . . . . . . . . . . . . . . . . . . 392,400
*9,100 National Semiconductor Corp. . . . . . . . . . . . . . . . 208,164
1,500 Northrop Grumman Corp. . . . . . . . . . . . . . . . . . . 74,438
*2,650 Oracle System Corp. . . . . . . . . . . . . . . . . . . . . 80,825
*2,000 Silicon Graphics, Inc. . . . . . . . . . . . . . . . . . . 75,000
*4,000 Symantec Corp. . . . . . . . . . . . . . . . . . . . . . . 93,000
4,800 Texas Instruments, Inc. . . . . . . . . . . . . . . . . . . 508,800
*1,900 3Com Corp. . . . . . . . . . . . . . . . . . . . . . . . . 106,400
5,000 Varian Associates, Inc. . . . . . . . . . . . . . . . . . . 230,000
1,700 Xerox Corp. . . . . . . . . . . . . . . . . . . . . . . . . 209,312
------------
TOTAL TECHNOLOGY . . . . . . . . . . . . . . . . . . . 5,460,362
------------
TRANSPORTATION 1.5%
2,200 AMR Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 148,225
4,500 Burlington Northern, Inc. . . . . . . . . . . . . . . . . . 267,750
------------
TOTAL TRANSPORTATION . . . . . . . . . . . . . . . . . 415,975
------------
UTILITIES 2.5%
*3,000 ALC Communications Corp. . . . . . . . . . . . . . . . . . 114,375
2,000 AT&T Corp. . . . . . . . . . . . . . . . . . . . . . . . . 101,500
3,000 Baltimore Gas & Electric Co. . . . . . . . . . . . . . . . 70,875
1,000 BellSouth Corp. . . . . . . . . . . . . . . . . . . . . . . 61,250
*3,100 Celluar Communications, Inc., Class A . . . . . . . . . . . 144,538
2,000 FPL Group, Inc. . . . . . . . . . . . . . . . . . . . . . . 73,500
3,000 WorldCom, Inc. . . . . . . . . . . . . . . . . . . . . . . 72,000
2,600 Peco Energy Co. . . . . . . . . . . . . . . . . . . . . . . 66,950
------------
TOTAL UTILITIES . . . . . . . . . . . . . . . . . . . 704,988
------------
TOTAL COMMON STOCK (Cost $23,107,670) . . . . . . . . 24,986,025
------------
</TABLE>
10
<PAGE> 12
Growth II Fund Statement of Net Assets, continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
United States Government Obligations 1.8%
$ 500,000 United States Treasury Notes, 7.75%, 2/15/01 (Cost $512,375) $ 519,610
------------
Short-Term Investments 15.3%
**1,100,000 Federal Home Loan Mortgage Corp., 5.97% to 6.03%,
5/2/95 to 7/20/95 . . . . . . . . . . . . . . . . . . . . . 1,094,097
**800,000 Federal National Mortgage Association, 5.99% to 6.16%, 5/31/95
to 10/10/95 . . . . . . . . . . . . . . . . . . . . . . . . 787,085
2,020,000 Repurchase agreement with SBC Capital Markets, Inc., dated
4/28/95, 5.92%, due 5/1/95 (collateralized by U.S.
Government obligations in a pooled cash account)
repurchase proceeds $2,020,997 . . . . . . . . . . . . . . 2,020,000
**400,000 United States Treasury Bills, 5.66%, 7/20/95 . . . . . . . . 394,780
------------
TOTAL SHORT-TERM INVESTMENTS (Cost $4,296,354) . . . . 4,295,962
------------
TOTAL INVESTMENTS (Cost $27,916,399) 105.8% . . . . . . . . 29,801,597
Other assets and liabilities, net (5.8%) . . . . . . . . . . (1,639,363)
------------
NET ASSETS Equivalent to $12.69 per share for Class A shares
and $12.60 per share for Class B shares 100% . . . . . . . $ 28,162,234
============
NET ASSETS WERE COMPRISED OF:
Shares of beneficial interest, at par; 883,874 Class A and 1,344,411
Class B shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . $ 22,283
Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,379,545
Accumulated net realized loss on securities . . . . . . . . . . . . . . . . . (159,907)
Net unrealized appreciation of securities
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,885,198
Futures . . . . . . . . . . . . . . . . . . . . . . . . . . . 108,643
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . (73,528)
------------
NET ASSETS at April 30, 1995 . . . . . . . . . . . . . . . . . . . . . . . . $ 28,162,234
============
</TABLE>
* Non-income producing security.
** Securities with a market value of approximately $2.1 million were placed as
collateral for futures contracts (Note 1D).
See Notes to Financial Statements.
11
<PAGE> 13
GROWTH II Fund Financial Statements
- --------------------------------------------------------------------------------
(Unaudited)
Statement of Operations
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 1995
----------------
<S> <C>
INVESTMENT INCOME
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 126,789
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,943
------------
Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220,732
------------
EXPENSES
Advisory fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,062
Shareholder service agent's fees and expenses . . . . . . . . . . . . . . . . 144,930
Accounting services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,353
Service fees-Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,074
Distribution and service fees-Class B . . . . . . . . . . . . . . . . . . . . 53,031
Trustees' fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . 12,230
Audit fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,396
Reports to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,250
Registration and filing fees . . . . . . . . . . . . . . . . . . . . . . . . 57,533
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
Expense reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . (73,625)
------------
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285,420
------------
Net investment loss . . . . . . . . . . . . . . . . . . . . . . . . . . . (64,688)
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON SECURITIES
Net realized gain (loss) on securities
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19,183)
Futures contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,154
Net unrealized appreciation of securities
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,613,745
Futures contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92,155
------------
Net realized and unrealized gain on securities . . . . . . . . . . . . . . 1,741,871
------------
Increase in net assets resulting from operations . . . . . . . . . . . . . $ 1,677,183
============
</TABLE>
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
SIX MONTHS MAY 3, 1994*
ENDED THROUGH
APRIL 30, 1995 OCTOBER 31, 1994
-------------- ----------------
<S> <C> <C>
NET ASSETS, beginning of period . . . . . . . . . . . . . . . . $ 10,163,636 $ 200
------------- ------------
OPERATIONS
Net investment loss . . . . . . . . . . . . . . . . . . . . (64,688) (8,840)
Net realized gain (loss) on securities . . . . . . . . . . . 35,971 (195,878)
Net unrealized appreciation of securities during the period 1,705,900 287,941
------------- ------------
Increase in net assets resulting from operations . . . . . . 1,677,183 83,223
------------- ------------
CAPITAL TRANSACTIONS
Proceeds from shares sold
Class A . . . . . . . . . . . . . . . . . . . . . . . . 6,786,103 4,406,808
Class B . . . . . . . . . . . . . . . . . . . . . . . . 10,743,754 5,848,735
------------- ------------
17,529,857 10,255,543
------------- ------------
Cost of shares redeemed
Class A . . . . . . . . . . . . . . . . . . . . . . . . (629,144) (63,815)
Class B . . . . . . . . . . . . . . . . . . . . . . . . (579,298) (111,515)
------------- ------------
(1,208,442) (175,330)
------------- ------------
Increase in net assets resulting from capital transactions . 16,321,415 10,080,213
------------- ------------
INCREASE IN NET ASSETS . . . . . . . . . . . . . . . . . . . . 17,998,598 10,163,436
------------- ------------
NET ASSETS, end of period . . . . . . . . . . . . . . . . . . . $ 28,162,234 $ 10,163,636
============= ============
</TABLE>
*Commencement of operations
See Notes to Financial Statements.
12
<PAGE> 14
Growth and Income II Fund Statement of Net Assets
- --------------------------------------------------------------------------------
April 30, 1995 (Unaudited)
<TABLE>
<Catpion>
Number Market
of Shares Value
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock 76.1%
CONSUMER DISTRIBUTION 2.5%
*500 AmeriSource Health Corp. . . . . . . . . . . . . . . . . . . . $ 11,062
1,400 Gap, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,625
1,700 May Department Stores Co. . . . . . . . . . . . . . . . . . . . 61,625
1,800 McKesson Corp. . . . . . . . . . . . . . . . . . . . . . . . . 71,325
*2,100 Michael's Stores, Inc. . . . . . . . . . . . . . . . . . . . . 59,850
*3,100 Nine West Group, Inc. . . . . . . . . . . . . . . . . . . . . . 100,750
1,600 Nordstrom, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 61,600
------------
TOTAL CONSUMER DISTRIBUTION . . . . . . . . . . . . . . . . 410,837
------------
CONSUMER DURABLES 2.2%
3,500 Black & Decker Corp. . . . . . . . . . . . . . . . . . . . . . 105,000
2,100 Eastman Kodak Co. . . . . . . . . . . . . . . . . . . . . . . . 120,750
1,800 Echlin, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 65,700
1,400 Stanley Works . . . . . . . . . . . . . . . . . . . . . . . . . 55,475
------------
TOTAL CONSUMER DURABLES . . . . . . . . . . . . . . . . . . 346,925
------------
CONSUMER NON-DURABLES 6.7%
2,200 Coca-Cola Co. . . . . . . . . . . . . . . . . . . . . . . . . . 127,875
1,700 CPC International, Inc. . . . . . . . . . . . . . . . . . . . . 99,662
1,200 Gillette Co. . . . . . . . . . . . . . . . . . . . . . . . . . 98,400
1,800 Heinz (H.J.) Co. . . . . . . . . . . . . . . . . . . . . . . . 75,600
1,600 Kellogg Co. . . . . . . . . . . . . . . . . . . . . . . . . . . 101,600
1,000 Nike, Inc., Class B . . . . . . . . . . . . . . . . . . . . . . 76,625
2,300 Procter & Gamble Co. . . . . . . . . . . . . . . . . . . . . . 160,713
2,800 Ralston-Ralston Purina Group . . . . . . . . . . . . . . . . . 133,000
2,800 RJR Nabisco Holdings Corp., Class A . . . . . . . . . . . . . . 78,050
4,100 Sara Lee Corp. . . . . . . . . . . . . . . . . . . . . . . . . 114,288
------------
TOTAL CONSUMER NON-DURABLES . . . . . . . . . . . . . . . . 1,065,813
------------
CONSUMER SERVICES 3.9%
1,500 Capital Cities ABC, Inc. . . . . . . . . . . . . . . . . . . . 126,750
2,000 Disney (Walt) Co. . . . . . . . . . . . . . . . . . . . . . . . 110,750
2,400 Gaylord Entertainment Co., Class A . . . . . . . . . . . . . . 56,700
3,800 McDonald's Corp. . . . . . . . . . . . . . . . . . . . . . . . 133,000
1,300 Omnicom Group, Inc. . . . . . . . . . . . . . . . . . . . . . . 72,312
900 Tribune Co. . . . . . . . . . . . . . . . . . . . . . . . . . . 53,213
4,500 Wendy's International, Inc. . . . . . . . . . . . . . . . . . . 76,500
------------
TOTAL CONSUMER SERVICES . . . . . . . . . . . . . . . . . . 629,225
------------
</TABLE>
13
<PAGE> 15
Growth and Income II Fund Statement of Net Assets, continued
- --------------------------------------------------------------------------------
<TABLE>
<Catpion>
Number Market
of Shares Value
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
ENERGY 8.8%
2,700 British Petroleum Co., PLC, ADR . . . . . . . . . . . . . . . . $ 232,537
3,900 Exxon Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 271,537
1,500 Mobil Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 142,312
8,000 Pacific Enterprises . . . . . . . . . . . . . . . . . . . . . . 197,000
6,500 Panhandle Eastern Corp. . . . . . . . . . . . . . . . . . . . . 156,000
2,500 Repsol SA, ADR . . . . . . . . . . . . . . . . . . . . . . . . . 80,000
2,000 Royal Dutch Petroleum Co., ADR . . . . . . . . . . . . . . . . 248,000
4,000 USX-Marathon Group . . . . . . . . . . . . . . . . . . . . . . 75,000
------------
TOTAL ENERGY . . . . . . . . . . . . . . . . . . . . . . . . 1,402,386
------------
FINANCE 12.0%
4,400 Ahmanson (H.F.) & Co. . . . . . . . . . . . . . . . . . . . . . 92,400
1,200 American International Group, Inc. . . . . . . . . . . . . . . 128,100
1,300 Avalon Properties, Inc. . . . . . . . . . . . . . . . . . . . . 25,512
4,500 Bank of Boston Corp. . . . . . . . . . . . . . . . . . . . . . 150,750
1,200 BankAmerica Corp. . . . . . . . . . . . . . . . . . . . . . . . 59,400
1,400 BayBanks, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 87,500
1,600 Beacon Properties Corp. . . . . . . . . . . . . . . . . . . . . 31,400
*2,600 Capital One Financial Corp. . . . . . . . . . . . . . . . . . . 52,325
1,800 Carr Realty Corp. . . . . . . . . . . . . . . . . . . . . . . . 31,950
4,700 Chemical Banking Corp. . . . . . . . . . . . . . . . . . . . . 196,225
4,700 CoreStates Financial Corp. . . . . . . . . . . . . . . . . . . 153,337
1,300 Crestar Financial Corp. . . . . . . . . . . . . . . . . . . . . 58,500
1,600 Debartolo Realty Corp. . . . . . . . . . . . . . . . . . . . . 22,200
1,100 Duke Realty Investments, Inc. . . . . . . . . . . . . . . . . . 29,975
1,000 Equity Residential Properties Trust . . . . . . . . . . . . . . 26,750
2,700 Federal National Mortgage Association . . . . . . . . . . . . . 238,275
1,900 First Bank System, Inc. . . . . . . . . . . . . . . . . . . . . 76,950
700 General RECorp. . . . . . . . . . . . . . . . . . . . . . . . . 89,162
1,000 Health Care Property Investors, Inc. . . . . . . . . . . . . . 30,250
1,400 Liberty Property Trust . . . . . . . . . . . . . . . . . . . . . 26,075
1,000 Manufactured Home Communities, Inc. . . . . . . . . . . . . . . 15,750
1,900 Morgan (J.P.) & Co., Inc. . . . . . . . . . . . . . . . . . . . 124,687
1,700 St. Paul Companies, Inc. . . . . . . . . . . . . . . . . . . . 81,813
3,100 TIG Holdings, Inc. . . . . . . . . . . . . . . . . . . . . . . 69,750
900 Weingarten Realty Investors . . . . . . . . . . . . . . . . . . 31,500
------------
TOTAL FINANCE . . . . . . . . . . . . . . . . . . . . . . . 1,930,536
------------
HEALTH CARE 9.2%
2,700 Abbott Laboratories, Inc. . . . . . . . . . . . . . . . . . . . 106,312
1,700 American Home Products Corp. . . . . . . . . . . . . . . . . . . 131,112
*2,000 Amgen, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 145,375
2,700 Baxter International, Inc. . . . . . . . . . . . . . . . . . . 93,825
*2,200 Charter Medical Corp. . . . . . . . . . . . . . . . . . . . . . 39,050
*2,000 Foundation Health Corp. . . . . . . . . . . . . . . . . . . . . 55,500
1,100 Lilly (Eli) & Co. . . . . . . . . . . . . . . . . . . . . . . . 82,225
*1,800 Lincare Holdings, Inc. . . . . . . . . . . . . . . . . . . . . 55,575
2,400 Merck & Co., Inc. . . . . . . . . . . . . . . . . . . . . . . . 102,900
2,400 Mylan Laboratories, Inc. . . . . . . . . . . . . . . . . . . . . 73,800
*5,700 National Medical Enterprises, Inc. . . . . . . . . . . . . . . . 96,900
*2,500 Nellcor, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 103,750
</TABLE>
14
<PAGE> 16
Growth and Income II Fund Statement of Net Assets, continued
- --------------------------------------------------------------------------------
<TABLE>
<Catpion>
Number Market
of Shares Value
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
HEALTH CARE-continued
1,300 Pfizer, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . $ 112,612
*2,400 Physicians Corp. of America . . . . . . . . . . . . . . . . . . 42,900
1,700 Schering-Plough Corp. . . . . . . . . . . . . . . . . . . . . . 128,138
2,900 Upjohn Co. . . . . . . . . . . . . . . . . . . . . . . . . . . 105,125
------------
TOTAL HEALTH CARE . . . . . . . . . . . . . . . . . . . . . 1,475,099
------------
PRODUCER MANUFACTURING 6.6%
1,400 Allied-Signal, Inc. . . . . . . . . . . . . . . . . . . . . . . 55,475
3,700 Browning-Ferris Industries, Inc. . . . . . . . . . . . . . . . 122,100
1,200 Fluor Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 61,800
2,800 General Electric Co. . . . . . . . . . . . . . . . . . . . . . 156,800
3,800 Honeywell, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 146,775
2,300 Illinois Tool Works, Inc. . . . . . . . . . . . . . . . . . . . 115,288
3,700 Philip NV, ADR . . . . . . . . . . . . . . . . . . . . . . . . . 142,450
2,700 Rockwell International Corp. . . . . . . . . . . . . . . . . . . 117,788
3,000 Wheelabrator Technologies, Inc. . . . . . . . . . . . . . . . . 43,500
3,500 WMX Technologies, Inc. . . . . . . . . . . . . . . . . . . . . 95,375
------------
TOTAL PRODUCER MANUFACTURING . . . . . . . . . . . . . . . . 1,057,351
------------
RAW MATERIALS/PROCESSING INDUSTRIES 6.6%
1,400 Air Products & Chemicals, Inc. . . . . . . . . . . . . . . . . . 70,525
4,100 Bemis, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 113,775
1,600 Cabot Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 62,800
1,800 Du Pont (E.I.) de Nemours & Co., Inc. . . . . . . . . . . . . . 118,575
1,800 Eastman Chemical Co. . . . . . . . . . . . . . . . . . . . . . 102,150
5,700 Ethyl Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 61,275
2,300 Ferro Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 65,263
*4,000 Fort Howard Corp. . . . . . . . . . . . . . . . . . . . . . . . 51,000
3,600 Grace (W.R.) & Co. . . . . . . . . . . . . . . . . . . . . . . 193,050
900 International Paper Co. . . . . . . . . . . . . . . . . . . . . 69,300
1,800 Nalco Chemical Co. . . . . . . . . . . . . . . . . . . . . . . 63,000
2,000 Sigma-Aldrich Corp. . . . . . . . . . . . . . . . . . . . . . . 88,500
------------
TOTAL RAW MATERIALS/PROCESSING INDUSTRIES . . . . . . . . . 1,059,213
------------
TECHNOLOGY 9.6%
2,000 Adobe Systems, Inc. . . . . . . . . . . . . . . . . . . . . . . 116,500
2,600 Computer Associates International, Inc. . . . . . . . . . . . . 167,375
*2,900 DSC Communications Corp. . . . . . . . . . . . . . . . . . . . 107,300
*2,200 General Instruments Corp. . . . . . . . . . . . . . . . . . . . 75,075
1,200 Hewlett-Packard Co. . . . . . . . . . . . . . . . . . . . . . . 79,350
3,500 International Business Machines Corp. . . . . . . . . . . . . . 331,625
1,500 Loral Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 70,500
*1,700 Lotus Development Corp. . . . . . . . . . . . . . . . . . . . . 53,550
*1,100 Microsoft Corp. . . . . . . . . . . . . . . . . . . . . . . . . 89,925
3,400 Northern Telecom, Ltd. . . . . . . . . . . . . . . . . . . . . 123,675
</TABLE>
15
<PAGE> 17
Growth and Income II Fund Statement of Net Assets, continued
- --------------------------------------------------------------------------------
<TABLE>
<Catpion>
Number Market
of Shares Value
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY-continued
1,700 Northrop Grumman Corp. . . . . . . . . . . . . . . . . . . . . . $ 84,363
*1,900 Sterling Software, Inc. . . . . . . . . . . . . . . . . . . . . 64,600
1,400 Xerox Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 172,375
------------
TOTAL TECHNOLOGY . . . . . . . . . . . . . . . . . . . . . . 1,536,213
------------
UTILITIES 8.0%
2,900 Ameritech Corp. . . . . . . . . . . . . . . . . . . . . . . . . 130,500
1,900 AT&T Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 96,425
1,100 BellSouth Corp. . . . . . . . . . . . . . . . . . . . . . . . . 67,375
4,500 Duke Power Co. . . . . . . . . . . . . . . . . . . . . . . . . 177,750
3,300 General Public Utilities Corp. . . . . . . . . . . . . . . . . . 94,050
3,500 GTE Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . 119,438
6,000 National Power, PLC, ADR . . . . . . . . . . . . . . . . . . . . 68,250
4,800 Pacific Telesis Group . . . . . . . . . . . . . . . . . . . . . 148,200
7,600 PacifiCorp . . . . . . . . . . . . . . . . . . . . . . . . . . . 144,400
3,000 Peco Energy Co. . . . . . . . . . . . . . . . . . . . . . . . . 77,250
1,500 PowerGen, PLC, ADR . . . . . . . . . . . . . . . . . . . . . . 19,125
3,300 U.S. West, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 136,538
------------
TOTAL UTILITIES . . . . . . . . . . . . . . . . . . . . . . 1,279,301
------------
TOTAL COMMON STOCK (Cost $11,131,058) . . . . . . . . . . . 12,192,899
------------
Convertible Preferred Stock 2.1%
2,000 Corning Glass Works, MIPS, 6.00% . . . . . . . . . . . . . . . . 103,000
3,500 James River Corp., DECS, $1.55 . . . . . . . . . . . . . . . . . 85,750
1,000 SCI Finance, NV, LLC, 6.25% . . . . . . . . . . . . . . . . . . 55,500
1,000 Transco Energy Co., $3.50 . . . . . . . . . . . . . . . . . . . 57,250
1,700 Westinghouse Electric Corp., PEPS, $1.30 . . . . . . . . . . . . 25,288
------------
TOTAL CONVERTIBLE PREFERRED STOCK (Cost $292,852) . . . . . . . 326,788
------------
Principal
Amount Convertible Corporate Obligations 7.7%
---------
CONSUMER DISTRIBUTION 1.4%
$ 150,000 Price Co., 6.75%, 3/1/01 . . . . . . . . . . . . . . . . . . . . 146,625
160,000 Rite Aid Corp., LYON, Zero Coupon, 7/24/06 . . . . . . . . . . . 75,200
------------
TOTAL CONSUMER DISTRIBUTION . . . . . . . . . . . . . . . . 221,825
------------
CONSUMER SERVICES 2.9%
280,000 Comcast Corp., 1.125%, 4/15/07 . . . . . . . . . . . . . . . . . 119,000
300,000 News America Holdings, Inc., LYON, Zero Coupon, 3/11/13 . . . . 129,750
Time Warner, Inc.
100,000 8.75%, 1/10/15 . . . . . . . . . . . . . . . . . . . . . . . 100,250
200,000 LYON, Zero Coupon, 12/17/12 . . . . . . . . . . . . . . . . 64,750
150,000 LYON, Zero Coupon, 6/22/13 . . . . . . . . . . . . . . . . . 57,188
------------
TOTAL CONSUMER SERVICES . . . . . . . . . . . . . . . . . . 470,938
------------
FINANCE 0.5%
1,941 Allstate Corp., 6.76%, 4/15/98 . . . . . . . . . . . . . . . . . 75,704
------------
</TABLE>
16
<PAGE> 18
Growth and Income II Fund Statement of Net Assets, continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value
- -----------------------------------------------------------------------------------------------
<S> <C>
HEALTH CARE 2.1%
$ 500,000 Roche Holdings, Inc., LYON, Zero Coupon, 4/20/10 . . . . . . . . $ 186,875
150,000 United Technologies Corp., Zero Coupon, 9/8/97 . . . . . . . . . 146,250
------------
TOTAL HEALTH CARE . . . . . . . . . . . . . . . . . . . . . 333,125
------------
UTILITIES 0.8%
3,026 Sprint Corp., DECS, 8.25%, 3/30/00 . . . . . . . . . . . . . . . 133,026
------------
TOTAL CONVERTIBLE CORPORATE OBLIGATIONS (Cost $1,195,286) . 1,234,618
------------
United States Government Obligations 1.3%
200,000 United States Treasury Notes, 7.75%, 2/15/01 (Cost $204,781) . . 207,844
------------
Short-Term Investments 16.3%
**500,000 Federal National Mortgage Association, 6.04% to 6.16%,
5/24/95 to 10/10/95 . . . . . . . . . . . . . . . . . . . . . . 493,374
1,225,000 Repurchase Agreement with SBC Capital Markets, Inc., dated
4/28/95, 5.92%, due 5/1/95 (collateralized by U.S. Government
obligations in a pooled cash account) repurchase
proceeds $1,225,604 . . . . . . . . . . . . . . . . . . . . 1,225,000
**900,000 United States Treasury Bills, 5.66% to 5.77%, 5/18/95 to 7/20/95 891,315
------------
TOTAL SHORT-TERM INVESTMENTS (Cost $2,610,009) . . . . . . . 2,609,689
------------
TOTAL INVESTMENTS (Cost $15,433,986) 103.5% . . . . . . . . . . 16,571,838
Other assets and liabilities, net (3.5%) . . . . . . . . . . . . (554,175)
------------
NET ASSETS, equivalent to $12.53 per share for
Class A shares and $12.51 per share for Class B shares 100% $ 16,017,663
============
NET ASSETS WERE COMPRISED OF:
Shares of beneficial interest, at par; 556,335 Class A and 723,354
Class B shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,797
Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,973,792
Accumulated net realized loss on securities . . . . . . . . . . . . . . . . . (145,085)
Net unrealized appreciation of securities
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,137,852
Futures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,782
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,475)
------------
NET ASSETS at April 30, 1995 . . . . . . . . . . . . . . . . . . . . . . . . $ 16,017,663
============
</TABLE>
* Non-income producing security.
** Securities with a market value of approximately $1.1 million were placed
as collateral for futures contracts (Note 1D).
DECS - Dividend enhanced convertible stock
LYON - Liquid yield option note
MIPS - Monthly income participating security
PEPS - Preferred equity participating security
See Notes to Financial Statements.
17
<PAGE> 19
Growth and Income II Fund Financial Statements
- --------------------------------------------------------------------------------
(Unaudited)
Statement of Operations
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INVESTMENT INCOME APRIL 30, 1995
--------------
<S> <C>
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 137,720
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63,113
------------
Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,833
------------
EXPENSES
Advisory fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,001
Shareholder service agent's fees and expenses . . . . . . . . . . . . . . . . 32,684
Accounting services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,074
Service fees - Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,472
Distribution and service fees - Class B . . . . . . . . . . . . . . . . . . . 29,495
Trustees' fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . 11,997
Audit fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,233
Reports to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,500
Registration and filing fees . . . . . . . . . . . . . . . . . . . . . . . . 58,257
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Expense reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23,352)
------------
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174,432
------------
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . 26,401
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON SECURITIES
Net realized gain (loss) on securities
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (32,624)
Futures contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,932
Net unrealized appreciation of securities during the period
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,056,715
Futures contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,907
------------
Net realized and unrealized gain on securities . . . . . . . . . . . . . . . 1,081,930
------------
Increase in net assets resulting from operations . . . . . . . . . . . . . . $ 1,108,331
============
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED MAY 3, 1994* THROUGH
Statement of Changes in Net Assets APRIL 30, 1995 OCTOBER 31, 1994
-------------- ----------------
<S> <C> <C>
NET ASSETS, beginning of period . . . . . . . . . . . . . . . . . . . . . $ 7,111,500 $ 200
------------ -------------
OPERATIONS
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . 26,401 54,709
Net realized loss on securities . . . . . . . . . . . . . . . . . . . (23,692) (121,393)
Net unrealized appreciation of securities during the period . . . . . 1,105,622 77,012
------------ -------------
Increase in net assets resulting from operations . . . . . . . . . . 1,108,331 10,328
------------ -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME (SEE NOTE 1H)
Class A (Includes $19,597 in excess of net investment as of 4/30/95) (42,548) (11,970)
Class B (Includes $22,777 in excess of net investment as of 4/30/95) (26,227) (6,840)
------------ -------------
(68,775) (18,810)
------------ -------------
CAPITAL TRANSACTIONS
Proceeds from shares sold
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,563,085 3,526,516
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,200,215 3,654,518
------------ -------------
8,763,300 7,181,034
------------ -------------
Proceeds from shares issued for distributions reinvested
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,342 11,544
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,081 6,749
------------ -------------
67,423 18,293
------------ -------------
Cost of shares redeemed
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (584,222) (56,689)
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (379,894) (22,856)
------------ -------------
(964,116) (79,545)
------------ -------------
Increase in net assets resulting from capital transactions . . . . . 7,866,607 7,119,782
------------ -------------
INCREASE IN NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . 8,906,163 7,111,300
------------ -------------
NET ASSETS, end of period . . . . . . . . . . . . . . . . . . . . . . . . $ 16,017,663 $ 7,111,500
============ =============
</TABLE>
*Commencement of operations
See Notes to Financial Statements.
18
<PAGE> 20
Government II Fund Statement of Net Assets
- --------------------------------------------------------------------------------
April 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Principal Market
Amount Value
- -----------------------------------------------------------------------------------------------
<S> <C>
United States Agency Obligations 68.2%
Federal Home Loan Mortgage Corp.
$ 185,781 7.00%, 10/1/24 . . . . . . . . . . . . . . . . . . . . . . . $ 176,841
628,958 7.50%, 7/1/24 to 11/1/24 . . . . . . . . . . . . . . . . . . 614,215
243,785 8.00%, 4/1/23 to 11/1/24 . . . . . . . . . . . . . . . . . . 243,251
241,517 8.50%, 12/1/24 . . . . . . . . . . . . . . . . . . . . . . . 245,442
Federal National Mortgage Association
395,258 7.00%, 5/1/24 . . . . . . . . . . . . . . . . . . . . . . . 375,867
396,791 7.50%, 8/1/24 . . . . . . . . . . . . . . . . . . . . . . . 387,367
722,826 8.00%, 8/1/24 to 1/1/25 . . . . . . . . . . . . . . . . . . 721,019
200,828 8.50%, 7/1/24 . . . . . . . . . . . . . . . . . . . . . . . 203,902
Government National Mortgage Association
182,923 7.00%, 6/15/22 . . . . . . . . . . . . . . . . . . . . . . . 173,091
1,978,320 7.50%, 4/15/22 to 6/15/24 . . . . . . . . . . . . . . . . . 1,928,862
1,380,660 8.00%, 2/15/23 to 9/15/24 . . . . . . . . . . . . . . . . . 1,379,804
803,487 8.50%, 8/15/24 to 12/15/24 . . . . . . . . . . . . . . . . . 819,058
706,417 9.00%, 9/15/24 to 11/15/24 . . . . . . . . . . . . . . . . . 732,908
------------
TOTAL UNITED STATES AGENCY OBLIGATIONS (Cost $7,804,672) . . 8,001,627
------------
United States Government Obligations 25.2%
50,000 United States Treasury Bond, 8.125%, 8/15/19 . . . . . . . . . . 53,508
United States Treasury Notes
2,250,000 8.875%, 2/15/96 . . . . . . . . . . . . . . . . . . . . . . 2,293,942
600,000 11.25%, 5/15/95 . . . . . . . . . . . . . . . . . . . . . . 601,032
------------
TOTAL UNITED STATES GOVERNMENT OBLIGATIONS (Cost $2,977,899) 2,948,482
------------
Repurchase Agreement 3.6%
425,000 SBC Capital Markets, Inc., dated 4/28/95, 5.92%, due 5/1/95
(collateralized by U.S. Government obligations in a pooled
cash account) repurchase proceeds $425,210 (Cost $425,000) 425,000
------------
TOTAL INVESTMENTS (Cost $11,207,571)97.0% . . . . . . . . . . . 11,375,109
Other assets and liabilities, net 3.0% . . . . . . . . . . . . 354,975
------------
NET ASSETS, equivalent to $11.87 per share for Class A
and Class B shares 100% . . . . . . . . . . . . . . . . . . $ 11,730,084
============
NET ASSETS WERE COMPRISED OF:
Shares of beneficial interest, at par; 538,892 Class A and 449,594 Class B
shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,885
Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,608,656
Accumulated net realized loss on securities . . . . . . . . . . . . . . . . . (52,979)
Net unrealized appreciation of securities . . . . . . . . . . . . . . . . . . 167,538
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,016)
------------
NET ASSETS at April 30, 1995 . . . . . . . . . . . . . . . . . . . . . . . . $ 11,730,084
============
</TABLE>
See Notes to Financial Statements.
19
<PAGE> 21
Government II Fund Financial Statements
- --------------------------------------------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Statement of Operations SIX MONTHS
ENDED
APRIL 30, 1995
--------------
<S> <C>
INVESTMENT INCOME
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 378,290
------------
EXPENSES
Advisory fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,369
Shareholder service agent's fees and expenses . . . . . . . . . . . . . . . . 16,460
Accounting services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,546
Service fees - Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,495
Distribution and service fees - Class B . . . . . . . . . . . . . . . . . . . 19,636
Trustees' fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . 11,995
Audit fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,233
Custodian fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Legal fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
Report to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,961
Registration and filing fees . . . . . . . . . . . . . . . . . . . . . . . . 54,054
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Expense reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16,823)
------------
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140,168
------------
NET INVESTMENT INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . 238,122
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON SECURITIES
Net realized loss on securities . . . . . . . . . . . . . . . . . . . . . . . (17,418)
Net unrealized appreciation of securities during the period . . . . . . . . . 314,316
------------
NET REALIZED AND UNREALIZED GAIN ON SECURITIES . . . . . . . . . . . . . 296,898
------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . $ 535,020
============
</TABLE>
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
SIX MONTHS MAY 3, 1994*
ENDED THROUGH
APRIL 30, 1995 OCTOBER 31, 1994
-------------- ----------------
<S> <C> <C>
NET ASSETS, beginning of period . . . . . . . . . . . . . . . . . . . . . $ 7,342,156 $ 200
------------ -------------
OPERATIONS
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . 238,122 89,214
Net realized loss on securities . . . . . . . . . . . . . . . . . . . (17,418) (35,179)
Net unrealized appreciation (depreciation) of securities during
the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314,316 (146,778)
------------ -------------
Increase (decrease) in net assets resulting from operations . . . . . 535,020 (92,743)
------------ -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME (SEE NOTE 1H)
Class A (Includes $4,984 in excess of net investment income
as of 4/30/95) . . . . . . . . . . . . . . . . . . . . . . . . . . (148,926) (66,280)
Class B (Includes $3,399 in excess of net investment income
as of 4/30/95) . . . . . . . . . . . . . . . . . . . . . . . . . . (97,579) (17,949)
------------ -------------
(246,505) (84,229)
------------ -------------
CAPITAL TRANSACTIONS
Proceeds from shares sold
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,531,654 5,138,916
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,662,069 2,976,454
------------ -------------
5,193,723 8,115,370
------------ -------------
Proceeds from shares issued for distributions reinvested
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144,023 60,050
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92,887 17,072
------------ -------------
236,910 77,122
------------ -------------
Cost of shares redeemed
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (993,818) (516,794)
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (337,402) (156,770)
------------ -------------
(1,331,220) (673,564)
------------ -------------
Increase in net assets resulting from capital transactions . . . . . 4,099,413 7,518,928
------------ -------------
INCREASE IN NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . 4,387,928 7,341,956
------------ -------------
NET ASSETS, end of period . . . . . . . . . . . . . . . . . . . . . . . . $ 11,730,084 $ 7,342,156
============ =============
</TABLE>
* Commencement of operations
See Notes to Financial Statements.
20
<PAGE> 22
Emerging Growth II Fund Statement of Net Assets
- --------------------------------------------------------------------------------
April 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number Market
of Shares Value
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock 83.6%
CONSUMER DISTRIBUTION 5.4%
500 Alco Standard Corp. . . . . . . . . . . . . . . . . . . . . . . $ 35,437
*100 Baby Superstore, Inc. . . . . . . . . . . . . . . . . . . . . . 3,650
*200 Barnes & Noble, Inc. . . . . . . . . . . . . . . . . . . . . . 5,725
600 Bergen Brunswig Corp. . . . . . . . . . . . . . . . . . . . . . 14,250
900 Casey's General Stores, Inc. . . . . . . . . . . . . . . . . . 15,525
*800 CompUSA, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 19,900
*1,000 Corporate Express, Inc. . . . . . . . . . . . . . . . . . . . . 28,250
225 Dollar General Corp. . . . . . . . . . . . . . . . . . . . . . 5,231
500 Emulex Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 9,750
700 Fastenal Co. . . . . . . . . . . . . . . . . . . . . . . . . . 18,550
210 Pier 1 Imports, Inc. . . . . . . . . . . . . . . . . . . . . . 1,890
900 Richfood Holdings, Inc. . . . . . . . . . . . . . . . . . . . . 18,000
*300 Safeway, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 11,250
*400 Waban, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 6,650
------------
TOTAL CONSUMER DISTRIBUTION . . . . . . . . . . . . . . . . 194,058
------------
CONSUMER DURABLES 2.2%
200 Clayton Homes, Inc. . . . . . . . . . . . . . . . . . . . . . . 3,375
900 Echlin, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 32,850
100 Harman International Industries, Inc. . . . . . . . . . . . . . 3,650
1,000 Modine Manufacturing Co. . . . . . . . . . . . . . . . . . . . 33,875
*300 Ultralife Batteries, Inc. . . . . . . . . . . . . . . . . . . . 5,025
------------
TOTAL CONSUMER DURABLES . . . . . . . . . . . . . . . . . . 78,775
------------
CONSUMER NON-DURABLES 3.8%
*500 Bush Boake Allen, Inc. . . . . . . . . . . . . . . . . . . . . 14,875
700 Coca-Cola Enterprises, Inc. . . . . . . . . . . . . . . . . . . 15,662
700 First Brands Corp. . . . . . . . . . . . . . . . . . . . . . . 26,950
*400 Nautica Enterprises, Inc. . . . . . . . . . . . . . . . . . . . 11,000
600 St. John Knits, Inc. . . . . . . . . . . . . . . . . . . . . . 20,775
*700 Tommy Hilfiger Corp. . . . . . . . . . . . . . . . . . . . . . 16,100
100 Unifi, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 2,513
*900 Wolverine World Wide, Inc. . . . . . . . . . . . . . . . . . . 30,150
------------
TOTAL CONSUMER NON-DURABLES . . . . . . . . . . . . . . . . 138,025
------------
CONSUMER SERVICES 8.4%
*400 Alternative Resources Corp. . . . . . . . . . . . . . . . . . . 16,900
100 Belo (A.H.) Corp. . . . . . . . . . . . . . . . . . . . . . . . 6,012
*400 Clear Channel Communications, Inc. . . . . . . . . . . . . . . 22,500
*900 Corrections Corp. of America . . . . . . . . . . . . . . . . . . 29,362
900 Equifax, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 29,137
*300 Gartner Group, Inc. . . . . . . . . . . . . . . . . . . . . . . 12,412
*900 Hospitality Franchise Systems, Inc. . . . . . . . . . . . . . . 27,337
*500 Infinity Broadcasting Corp. . . . . . . . . . . . . . . . . . . 21,312
800 La Quinta Inns, Inc. . . . . . . . . . . . . . . . . . . . . . 23,900
*400 Landry's Seafood Restaurants . . . . . . . . . . . . . . . . . . 13,850
700 Manpower, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 23,363
600 Meredith Corp. . . . . . . . . . . . . . . . . . . . . . . . . 15,000
</TABLE>
21
<PAGE> 23
Emerging Growth II Fund Statement of Net Assets, continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Market
of Shares Value
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER SERVICES-continued
*900 Mirage Resorts, Inc. . . . . . . . . . . . . . . . . . . . . . $ 27,000
500 Reynolds & Reynolds Co. . . . . . . . . . . . . . . . . . . . . 13,250
*600 Robert Half International, Inc. . . . . . . . . . . . . . . . . 15,825
500 Wendy's International, Inc. . . . . . . . . . . . . . . . . . . 8,500
------------
TOTAL CONSUMER SERVICES . . . . . . . . . . . . . . . . . . . 305,660
------------
ENERGY 5.4%
500 Apache Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 13,500
*700 Barrett Resources Corp. . . . . . . . . . . . . . . . . . . . . 16,450
*1,200 Benton Oil & Gas Co. . . . . . . . . . . . . . . . . . . . . . 14,775
*850 BJ Services Co. . . . . . . . . . . . . . . . . . . . . . . . . 19,462
*300 Chesapeake Energy Corp. . . . . . . . . . . . . . . . . . . . . 7,050
500 Enron Oil & Gas Co. . . . . . . . . . . . . . . . . . . . . . . 11,437
*500 McDermott (J. Ray) & Co., Inc., SA . . . . . . . . . . . . . . 13,750
500 Kerr McGee Corp. . . . . . . . . . . . . . . . . . . . . . . . 25,938
*800 Petroleum Geo-Services, ADR . . . . . . . . . . . . . . . . . . 21,850
400 Phoenix Resource Co. . . . . . . . . . . . . . . . . . . . . . 11,400
600 Pogo Producing Co. . . . . . . . . . . . . . . . . . . . . . . 13,500
*300 Smith International, Inc. . . . . . . . . . . . . . . . . . . . 5,175
400 Sonat Offshore Drilling, Inc. . . . . . . . . . . . . . . . . . 10,800
500 Union Texas Petroleum Holdings, Inc. . . . . . . . . . . . . . 10,688
------------
TOTAL ENERGY . . . . . . . . . . . . . . . . . . . . . . . . . 195,775
------------
FINANCE 11.0%
400 AFLAC, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 16,500
400 Bank of Boston Corp. . . . . . . . . . . . . . . . . . . . . . 13,400
200 BayBanks, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 12,500
700 CMAC Investment Corp. . . . . . . . . . . . . . . . . . . . . . 25,900
500 Comdisco, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 14,062
700 Cullen Frost Bankers, Inc. . . . . . . . . . . . . . . . . . . 25,725
700 First American Corp. . . . . . . . . . . . . . . . . . . . . . . 24,150
400 First Bank Systems, Inc. . . . . . . . . . . . . . . . . . . . 16,200
300 Foothill Group, Inc., Class A . . . . . . . . . . . . . . . . . 6,525
200 GATX Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000
500 Green Tree Financial Corp. . . . . . . . . . . . . . . . . . . 20,437
300 Household International, Inc. . . . . . . . . . . . . . . . . . 14,062
700 MBNA Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 21,175
200 Mercantile Bancorporation, Inc. . . . . . . . . . . . . . . . . 7,300
500 MGIC Investment Corp. . . . . . . . . . . . . . . . . . . . . . 21,188
900 Midlantic Corp. . . . . . . . . . . . . . . . . . . . . . . . . 32,850
400 Money Store, Inc. . . . . . . . . . . . . . . . . . . . . . . . 9,350
*700 Olympic Financial . . . . . . . . . . . . . . . . . . . . . . . 8,488
100 Progressive Corp. . . . . . . . . . . . . . . . . . . . . . . . 3,775
100 Republic Corp. . . . . . . . . . . . . . . . . . . . . . . . . 4,788
200 St. Paul Companies, Inc. . . . . . . . . . . . . . . . . . . . 9,625
500 Star Banc Corp. . . . . . . . . . . . . . . . . . . . . . . . . 20,875
600 TCF Financial Corp. . . . . . . . . . . . . . . . . . . . . . . 25,725
600 United Companies Financial Corp. . . . . . . . . . . . . . . . 22,875
200 Vesta Insurance Group, Inc. . . . . . . . . . . . . . . . . . . 6,675
</TABLE>
22
<PAGE> 24
Emerging Growth II Fund Statement of Net Assets, continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Market
of Shares Value
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCE-continued
300 Webb (Del) Corp. . . . . . . . . . . . . . . . . . . . . . . . $ 5,738
------------
TOTAL FINANCE . . . . . . . . . . . . . . . . . . . . . . . . 398,888
------------
HEALTH CARE 13.2%
*600 AMSCO International, Inc. . . . . . . . . . . . . . . . . . . . 7,575
200 Becton Dickinson & Co. . . . . . . . . . . . . . . . . . . . . 11,150
*300 Boston Scientific Corp. . . . . . . . . . . . . . . . . . . . . 8,100
*500 Community Health Services, Inc. . . . . . . . . . . . . . . . . 17,375
*200 Cordis Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 14,350
*500 Coventry Corp. . . . . . . . . . . . . . . . . . . . . . . . . 11,750
*1,000 Cycare Systems, Inc. . . . . . . . . . . . . . . . . . . . . . 25,000
*200 Gulf South Medical Supply, Inc. . . . . . . . . . . . . . . . . 8,400
700 HBO & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,025
*800 Health Management Associates, Inc., Class A . . . . . . . . . . 23,200
*100 Healthcare Compare Corp. . . . . . . . . . . . . . . . . . . . 3,006
*100 Healthcare & Retirement Corp. . . . . . . . . . . . . . . . . . 2,825
*200 Healthsouth Rehabilitation . . . . . . . . . . . . . . . . . . . 3,950
*200 Hillhaven Corp. . . . . . . . . . . . . . . . . . . . . . . . . 5,500
*500 Homedco Group, Inc. . . . . . . . . . . . . . . . . . . . . . . 28,625
500 Invacare Corp. . . . . . . . . . . . . . . . . . . . . . . . . 19,750
*500 Lincare Holdings, Inc. . . . . . . . . . . . . . . . . . . . . 15,438
*300 Medaphis Corp. . . . . . . . . . . . . . . . . . . . . . . . . 17,100
400 Medic Computer Systems, Inc. . . . . . . . . . . . . . . . . . 17,600
500 Medtronic, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 37,188
200 Mentor Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 4,725
400 Mylan Laboratories, Inc. . . . . . . . . . . . . . . . . . . . 12,300
300 Omnicare, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 14,588
*200 Oxford Health Plans, Inc. . . . . . . . . . . . . . . . . . . . 8,325
*500 Phycor, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 15,875
300 Physician Sales & Services, Inc. . . . . . . . . . . . . . . . 10,613
*300 REN Corp. - USA . . . . . . . . . . . . . . . . . . . . . . . . 4,800
*400 Steris Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 15,800
400 Stryker Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 18,050
*200 Sun Healthcare Group . . . . . . . . . . . . . . . . . . . . . . 4,825
*100 Target Therapeutics, Inc. . . . . . . . . . . . . . . . . . . . 3,650
*500 Tenet Healthcare Corp. . . . . . . . . . . . . . . . . . . . . 8,500
*500 Thermedics, Inc. . . . . . . . . . . . . . . . . . . . . . . . 9,438
*600 Vencor, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 18,600
*200 Vivra, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 6,425
*400 Watsons Pharmaceuticals, Inc. . . . . . . . . . . . . . . . . . 12,450
------------
TOTAL HEALTH CARE . . . . . . . . . . . . . . . . . . . . . . 478,871
------------
PRODUCER MANUFACTURING 4.3%
400 Danaher Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 11,900
*200 FMC Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,275
*600 Glenayre Technologies . . . . . . . . . . . . . . . . . . . . . 36,900
900 Greenfield Industries, Inc. . . . . . . . . . . . . . . . . . . 26,550
200 Harnischfeger Industries, Inc. . . . . . . . . . . . . . . . . 5,900
500 Illinois Tool Works, Inc. . . . . . . . . . . . . . . . . . . . 25,062
100 Image Industries, Inc. . . . . . . . . . . . . . . . . . . . . 1,375
</TABLE>
23
<PAGE> 25
Emerging Growth II Fund Statement of Net Assets, continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Market
of Shares Value
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
PRODUCER MANUFACTURING-continued
100 Kennametal, Inc. . . . . . . . . . . . . . . . . . . . . . . . $ 3,350
200 Parker Hannifin Corp. . . . . . . . . . . . . . . . . . . . . . 10,400
850 Thermo Remediation, Inc. . . . . . . . . . . . . . . . . . . . 13,706
300 United Waste Systems, Inc. . . . . . . . . . . . . . . . . . . 8,475
------------
TOTAL PRODUCER MANUFACTURING . . . . . . . . . . . . . . . . . 155,893
------------
RAW MATERIALS/PROCESSING INDUSTRIES 5.4%
200 Avery Dennison Corp. . . . . . . . . . . . . . . . . . . . . . 8,125
300 Bemis, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 8,325
400 Boise Cascade Corp. . . . . . . . . . . . . . . . . . . . . . . 13,100
800 Cabot Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 31,400
350 Eastman Chemical Co. . . . . . . . . . . . . . . . . . . . . . 19,862
300 First Mississippi Corp. . . . . . . . . . . . . . . . . . . . . 7,500
500 Hercules, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 24,937
200 IMC Global, Inc. . . . . . . . . . . . . . . . . . . . . . . . 9,825
900 Mineral Technologies, Inc. . . . . . . . . . . . . . . . . . . 29,925
500 Potash Corp. Sask, Inc. . . . . . . . . . . . . . . . . . . . . 26,563
*100 Sealed Air Corp. . . . . . . . . . . . . . . . . . . . . . . . 4,275
*500 USG Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,813
------------
TOTAL RAW MATERIALS/PROCESSING INDUSTRIES . . . . . . . . . . 195,650
------------
TECHNOLOGY 21.9%
*300 Adaptec, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 9,600
*900 ADC Telecommunications, Inc. . . . . . . . . . . . . . . . . . 29,700
300 Adobe Systems, Inc. . . . . . . . . . . . . . . . . . . . . . . 17,475
*300 Altera Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 24,262
*600 Amphenol Corp., Class A . . . . . . . . . . . . . . . . . . . . 16,800
*900 Analog Devices, Inc. . . . . . . . . . . . . . . . . . . . . . 24,187
*500 Andrew Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 24,750
*100 Ascend Communications, Inc. . . . . . . . . . . . . . . . . . . 7,700
*800 Atmel Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 35,200
200 Autodesk, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 6,813
*100 BMC Software, Inc. . . . . . . . . . . . . . . . . . . . . . . 6,225
*300 Cadence Design Systems, Inc. . . . . . . . . . . . . . . . . . 9,675
*800 Ceridian Corp. . . . . . . . . . . . . . . . . . . . . . . . . 27,600
*200 Credence Systems Corp. . . . . . . . . . . . . . . . . . . . . 7,250
*300 Cypress Semiconductor Corp. . . . . . . . . . . . . . . . . . . 9,075
*200 Frame Technology Corp. . . . . . . . . . . . . . . . . . . . . 4,200
*300 FSI International, Inc. . . . . . . . . . . . . . . . . . . . . 13,950
*100 Hyperion Software Corp. . . . . . . . . . . . . . . . . . . . . 4,300
*300 Informix Corp. . . . . . . . . . . . . . . . . . . . . . . . . 11,812
*800 Input/Output, Inc. . . . . . . . . . . . . . . . . . . . . . . 27,100
*300 Integrated Device Technology, Inc. . . . . . . . . . . . . . . 11,438
*400 Kemet Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 15,800
*400 KLA Instruments Corp. . . . . . . . . . . . . . . . . . . . . . 24,800
*100 Kronos Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 3,050
200 Linear Technology Corp. . . . . . . . . . . . . . . . . . . . . 11,950
*800 LSI Logic Corp. . . . . . . . . . . . . . . . . . . . . . . . . 53,300
*100 Macromedia, Inc. . . . . . . . . . . . . . . . . . . . . . . . 3,350
500 Micron Technology, Inc. . . . . . . . . . . . . . . . . . . . . 41,125
</TABLE>
24
<PAGE> 26
Emerging Growth II Fund Statement of Net Assets, continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Market
of Shares Value
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY-continued
800 National Data Corp. . . . . . . . . . . . . . . . . . . . . . . $ 14,900
*300 Network General Corp. . . . . . . . . . . . . . . . . . . . . . 7,838
*200 Optical Data Systems, Inc. . . . . . . . . . . . . . . . . . . 8,100
*100 PRI Automation . . . . . . . . . . . . . . . . . . . . . . . . . 2,625
*400 Sierra On-Line, Inc. . . . . . . . . . . . . . . . . . . . . . 7,550
600 Sierra Semiconductor Corp. . . . . . . . . . . . . . . . . . . 15,300
*300 Silicon Graphics, Inc. . . . . . . . . . . . . . . . . . . . . 11,250
100 Softkey International, Inc. . . . . . . . . . . . . . . . . . . 2,450
*500 Sunguard Data Systems, Inc. . . . . . . . . . . . . . . . . . . 23,188
*600 Tellabs, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 41,400
500 Tencor Instruments . . . . . . . . . . . . . . . . . . . . . . . 33,875
*600 Teradyne, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 30,375
*300 3Com Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 16,800
*100 U.S. Robotics Corp. . . . . . . . . . . . . . . . . . . . . . . 7,925
*400 Ultratech Stepper, Inc. . . . . . . . . . . . . . . . . . . . . 22,400
*300 Vicor Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 11,550
705 Vishay Intertechnology, Inc. . . . . . . . . . . . . . . . . . 41,683
300 Watkins-Johnson Co. . . . . . . . . . . . . . . . . . . . . . . 11,888
------------
TOTAL TECHNOLOGY . . . . . . . . . . . . . . . . . . . . . . 793,584
------------
TRANSPORTATION 1.8%
700 Air Express International Corp. . . . . . . . . . . . . . . . . 16,450
*100 Landstar Systems, Inc. . . . . . . . . . . . . . . . . . . . . 2,900
*700 Northwest Airlines, Inc., Class A . . . . . . . . . . . . . . . 20,825
*100 TNT Freightways Corp. . . . . . . . . . . . . . . . . . . . . . 2,350
*400 Wisconsin Central Transportation Corp. . . . . . . . . . . . . 22,825
------------
TOTAL TRANSPORTATION . . . . . . . . . . . . . . . . . . . . 65,350
------------
UTILITIES 0.8%
*400 ALC Communications Corp. . . . . . . . . . . . . . . . . . . . 15,250
100 Century Telephone Enterprises, Inc. . . . . . . . . . . . . . . 2,975
200 Cincinnati Bell, Inc. . . . . . . . . . . . . . . . . . . . . . 4,800
100 Telecom New Zealand, ADR . . . . . . . . . . . . . . . . . . . . 6,675
------------
TOTAL UTILITIES . . . . . . . . . . . . . . . . . . . . . . 29,700
------------
TOTAL COMMON STOCK (Cost $2,940,469) . . . . . . . . . . . . 3,030,229
------------
WARRANT 0.0%
*60 BJ Services Co., expiring 4/13/00 (Cost $300) . . . . . . . . . 285
------------
</TABLE>
25
<PAGE> 27
Emerging Growth II Fund Statement of Net Assets, continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value
- -----------------------------------------------------------------------------------------------
<S> <C>
SHORT-TERM INVESTMENTS 39.9%
*$1,000,000 Federal Home Loan Mortgage Association, 5.97%, 7/20/95 . . . . . $ 986,400
460,000 Repurchase Agreement with SBC Capital Markets, Inc., dated
4/28/95, 5.92%, due 5/1/95 (collateralized by U.S. Government
obligations in a pooled cash account) repurchase proceeds
$460,227 . . . . . . . . . . . . . . . . . . . . . . . . . . 460,000
------------
TOTAL SHORT-TERM INVESTMENTS (Cost $1,446,747) . . . . . . . 1,446,400
------------
TOTAL INVESTMENTS (Cost $4,387,516) 123.5% . . . . . . . . . . . 4,476,914
Other assets and liabilities, net (23.5%). . . . . . . . . . . . (851,939)
------------
NET ASSETS Equivalent to $12.40 per share for Class A and
$12.39 per share for Class B shares 100% . . . . . . . . . . $ 3,624,975
============
NET ASSETS WERE COMPRISED OF:
Shares of beneficial interest, at par; 201,914 Class A and 90,434 Class B
shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,923
Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,548,821
Accumulated net realized loss on securities . . . . . . . . . . . . . . . . . (15,420)
Net unrealized appreciation of securities . . . . . . . . . . . . . . . . . . 89,398
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (747)
------------
NET ASSETS at April 30, 1995 . . . . . . . . . . . . . . . . . . . . . . . . $ 3,624,975
============
</TABLE>
*Non-income producing security.
See Notes to Financial Statements.
26
<PAGE> 28
Emerging Growth II Fund Financial Statements
- --------------------------------------------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS FEBRUARY 21, 1995
THROUGH
APRIL 30, 1995
--------------
<S> <C>
INVESTMENT INCOME
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,365
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 898
Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,263
EXPENSES
Advisory fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,789
Shareholder service agent's fees and expenses . . . . . . . . . . . . . . . . 2,400
Service fees - Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . 541
Distribution and service fees - Class B . . . . . . . . . . . . . . . . . . . 589
Audit fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,800
Custodian fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Legal fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 334
Reports to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 500
Registration and filing fees . . . . . . . . . . . . . . . . . . . . . . . . 9,757
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Expense reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,804)
------------
Total expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,010
------------
NET INVESTMENT LOSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . (747)
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON SECURITIES
Net realized loss on securities . . . . . . . . . . . . . . . . . . . . . . . (15,420)
Net unrealized appreciation of securities during the period . . . . . . . . . 89,398
------------
NET REALIZED AND UNREALIZED GAIN ON SECURITIES . . . . . . . . . . . . . . 73,978
------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . $ 73,231
============
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Changes in Net Assets FEBRUARY 21, 1995*
THROUGH
APRIL 30, 1995
--------------
<S> <C>
NET ASSETS, beginning of period . . . . . . . . . . . . . . . . . . . . . . $ 200
------------
OPERATIONS
Net investment loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . (747)
Net realized loss on securities . . . . . . . . . . . . . . . . . . . . . (15,420)
Net unrealized appreciation of securities during the period . . . . . . . . 89,398
------------
Increase in net assets resulting from operations . . . . . . . . . . . . 73,231
------------
CAPITAL TRANSACTIONS
Proceeds from shares sold
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,449,285
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,112,794
------------
3,562,079
------------
Cost of shares redeemed
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,000)
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,535)
------------
(10,535)
------------
Increase in net assets resulting from capital transactions . . . . . . . . 3,551,544
------------
INCREASE IN NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,624,775
------------
NET ASSETS, end of period . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,624,975
============
</TABLE>
*Commencement of operations
See Notes to Financial Statements.
27
<PAGE> 29
International Equity II Fund Statement of Net Assets
- --------------------------------------------------------------------------------
April 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number Market
of Shares Value
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK 86.2%
AUSTRALIA 1.8%
10,000 Coca-Cola Amatil . . . . . . . . . . . . . . . . . . . . . . . $ 61,095
------------
AUSTRIA 4.8%
500 AMS Austria Mikros . . . . . . . . . . . . . . . . . . . . . . 49,672
1,200 Baumax, AG . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,049
1,500 Burgenland Holding . . . . . . . . . . . . . . . . . . . . . . . 55,880
------------
160,601
------------
CANADA 2.1%
2,500 Loewen Group, Inc. . . . . . . . . . . . . . . . . . . . . . . 70,333
------------
DENMARK 1.9%
1,000 Kobenhaven Lufthave . . . . . . . . . . . . . . . . . . . . . . 64,305
------------
FINLAND 2.0%
1,600 Nokia Oy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,337
------------
FRANCE 3.3%
300 Castorama Dubois . . . . . . . . . . . . . . . . . . . . . . . . 49,695
200 Sidel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,486
------------
108,181
------------
GERMANY 3.5%
100 Bayer Motoren Werk . . . . . . . . . . . . . . . . . . . . . . . 51,215
200 Grohe (Friedrich) AG . . . . . . . . . . . . . . . . . . . . . . 65,931
------------
117,146
------------
HONG KONG 5.5%
10,000 Hong Kong Electric . . . . . . . . . . . . . . . . . . . . . . . 30,681
20,000 Hutchison Whampoa . . . . . . . . . . . . . . . . . . . . . . . 86,810
10,000 Swire Pacific . . . . . . . . . . . . . . . . . . . . . . . . . 66,852
------------
184,343
------------
IRELAND 4.9%
12,000 CRH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74,290
20,000 Independent News . . . . . . . . . . . . . . . . . . . . . . . . 90,119
------------
164,409
------------
ITALY 5.5%
5,000 Alleanza Assicuraz . . . . . . . . . . . . . . . . . . . . . . . 45,145
25,000 Stet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,266
25,000 Telecom Italia . . . . . . . . . . . . . . . . . . . . . . . . . 66,718
------------
183,129
------------
JAPAN 6.8%
1,000 Bunkyodd Co. . . . . . . . . . . . . . . . . . . . . . . . . . 34,509
1,000 Mabuchi Motor Co. . . . . . . . . . . . . . . . . . . . . . . . 66,044
2,220 Sato Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 45,967
400 Shohkoh Fund & Co. . . . . . . . . . . . . . . . . . . . . . . 81,395
------------
227,915
------------
</TABLE>
28
<PAGE> 30
International Equity II Fund Statement of Net Assets, continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Market
of Shares Value
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
MALAYSIA 5.9%
20,000 Leader Univ Holdings . . . . . . . . . . . . . . . . . . . . . . $ 65,130
10,000 Resorts World, BHD . . . . . . . . . . . . . . . . . . . . . . . 52,589
20,000 Sungei Way Holdings . . . . . . . . . . . . . . . . . . . . . . 79,288
------------
197,007
------------
MEXICO 3.6%
20,400 Gruma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68,395
*10,000 Grupo Carso . . . . . . . . . . . . . . . . . . . . . . . . . . 53,112
------------
121,507
------------
NETHERLANDS 3.2%
375 Heineken, NV . . . . . . . . . . . . . . . . . . . . . . . . . . 53,516
2,000 IHC Caland, NV . . . . . . . . . . . . . . . . . . . . . . . . . 54,636
------------
108,152
------------
NORWAY 1.6%
2,000 Petroleum Geo Service . . . . . . . . . . . . . . . . . . . . . 54,575
------------
SINGAPORE 5.7%
10,000 Cerebos Pacific . . . . . . . . . . . . . . . . . . . . . . . . 61,715
6,000 Fraser & Neave . . . . . . . . . . . . . . . . . . . . . . . . . 65,877
15,000 Sembawang Maritime . . . . . . . . . . . . . . . . . . . . . . . 62,971
------------
190,563
------------
SWEDEN 9.8%
2,500 Astra, AB . . . . . . . . . . . . . . . . . . . . . . . . . . . 72,949
1,500 Autoliv, AB . . . . . . . . . . . . . . . . . . . . . . . . . . 67,926
1,000 Ericsson (LM) Tel . . . . . . . . . . . . . . . . . . . . . . . 66,205
1,000 Hennes & Mauritz . . . . . . . . . . . . . . . . . . . . . . . . 67,582
1,500 Kinmevik Investment . . . . . . . . . . . . . . . . . . . . . . 52,028
------------
326,690
------------
SWITZERLAND 2.1%
100 Schw Ruckversicher . . . . . . . . . . . . . . . . . . . . . . . 69,696
------------
UNITED KINGDOM 3.1%
4,000 Carlton Communications . . . . . . . . . . . . . . . . . . . . . 60,766
10,000 Rentokil Group . . . . . . . . . . . . . . . . . . . . . . . . . 42,085
------------
102,851
------------
UNITED STATES 9.1%
1,500 Embotelladora Andina, ADR . . . . . . . . . . . . . . . . . . . 43,125
3,000 Madeco, SA, ADR . . . . . . . . . . . . . . . . . . . . . . . . 87,375
1,000 Roche Holdings, Ltd., ADR . . . . . . . . . . . . . . . . . . . 60,000
1,000 Telecom Corp. of New Zealand, ADR . . . . . . . . . . . . . . . 66,750
1,500 Telefonos de Mexico, SA, ADR . . . . . . . . . . . . . . . . . . 45,375
------------
302,625
------------
TOTAL COMMON STOCK (Cost $2,690,697) . . . . . . . . . . . . 2,880,460
------------
</TABLE>
29
<PAGE> 31
International Equity II Fund Statement of Net Assets, continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value
- -----------------------------------------------------------------------------------------------
<S> <C>
Repurchase Agreement 17.8%
$ 593,000 State Street Bank & Trust Co., dated 4/28/95, 4.00%, due 5/1/95
(collateralized by U.S. Government obligations) repurchase
proceeds $593,198 (Cost $593,000) . . . . . . . . . . . . . . $ 593,000
------------
TOTAL INVESTMENTS (Cost $3,283,697) 104.0% . . . . . . . . . . . 3,473,460
Other assets and liabilities, net (4.0%) . . . . . . . . . . . . (132,700)
------------
NET ASSETS Equivalent to $12.69 per share for Class A and $12.68
per share for Class B shares 100% . . . . . . . . . . . . . . $ 3,340,760
============
NET ASSETS WERE COMPRISED OF:
Shares of beneficial interest, at par; 228,871 Class A and 34,353 Class B
shares outstanding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,632
Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,142,890
Undistributed net realized gain on securities . . . . . . . . . . . . . . . . 1,142
Net unrealized appreciation (depreciation) of securities
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189,763
Other foreign denominated assets and liabilities . . . . . . . . . . . . . 1,789
Forward currency exchange contracts . . . . . . . . . . . . . . . . . . . . (940)
Foreign currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (353)
Undistributed net investment income . . . . . . . . . . . . . . . . . . . . . 3,837
------------
NET ASSETS at April 30, 1995 . . . . . . . . . . . . . . . . . . . . . . . . $ 3,340,760
============
</TABLE>
*Non-income producing security.
See Notes to Financial Statements.
30
<PAGE> 32
International Equity II Fund Financial Statements
- --------------------------------------------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Statement of Operations FEBRUARY 21, 1995*
THROUGH
APRIL 30, 1995
--------------
<S> <C>
INVESTMENT INCOME
Dividends (Net of $1,785 foreign taxes withheld at source) . . . . . . . . . $ 6,615
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,547
------------
Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,162
------------
EXPENSES
Advisory fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,425
Shareholder service agent's fees and expenses . . . . . . . . . . . . . . . 5,644
Service fees - Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,055
Distribution and service fees - Class B . . . . . . . . . . . . . . . . . . . 207
Audit fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,896
Custodian fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,404
Legal fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340
Reports to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 476
Registration and filing fees . . . . . . . . . . . . . . . . . . . . . . . . 4,607
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Expense reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19,733)
------------
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,325
------------
NET INVESTMENT INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . 3,837
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON SECURITIES
Net realized gain on foreign currency . . . . . . . . . . . . . . . . . . . . 1,142
Net unrealized appreciation (depreciation) of securities during the period
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189,763
Other foreign denominated assets and liabilities . . . . . . . . . . . . . 1,789
Forward currency exchange contracts . . . . . . . . . . . . . . . . . . . . (940)
Foreign currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (353)
------------
NET REALIZED AND UNREALIZED GAIN ON SECURITIES . . . . . . . . . . . . . . . 191,401
------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . $ 195,238
============
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Statement of Changes in Net Assets FEBRUARY 21, 1995*
THROUGH
APRIL 30, 1995
--------------
<S> <C>
NET ASSETS, beginning of period . . . . . . . . . . . . . . . . . . . . . . $ 200
------------
OPERATIONS
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,837
Net realized gain on securities . . . . . . . . . . . . . . . . . . . . . 1,142
Net unrealized appreciation of securities during the period . . . . . . . . 190,259
------------
Increase in net assets resulting from operations . . . . . . . . . . . . 195,238
------------
CAPITAL TRANSACTIONS
Proceeds from shares sold
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,726,104
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 422,430*
------------
3,148,534
------------
Cost of shares redeemed
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,000)
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,212)
-------------
(3,212)
-------------
Increase in net assets resulting from capital transactions . . . . . . . . 3,145,322
------------
INCREASE IN NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,340,560
------------
NET ASSETS, end of period . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,340,760
============
</TABLE>
*Commencement of operations.
See Notes to Financial Statements.
31
<PAGE> 33
Notes to Financial Statements
- --------------------------------------------------------------------------------
(Unaudited)
Note 1-Significant Accounting Policies
Common Sense Trust (the "Trust") is registered under the Investment Company Act
of 1940, as amended, as a diversified open-end management investment company
which offers shares in eleven separate portfolios, five of which are described
in this report: Common Sense II Growth Fund ("Growth II"), Common Sense II
Growth and Income Fund ("Growth and Income II"), Common Sense II Government
Fund ("Government II"), Common Sense II Emerging Growth Fund ("Emerging Growth
II") and Common Sense II International Equity Fund ("International Equity II").
Each Fund is accounted for as a separate entity. Investments in foreign
securities involve certain risks not ordinarily associated with investments in
securities of domestic issuers, including fluctuations in foreign exchange
rates, future political and economical developments, and the possible
imposition of exchange controls or other foreign governmental laws or
restrictions. The following is a summary of significant accounting policies
consistently followed by the Trust in the preparation of its financial
statements.
A. Investment Valuations
Securities listed or traded on a national securities exchange are valued at
the last sale price. Unlisted securities and listed securities for which
the last sale price is not available are valued at the most recent bid
price. U.S. Government securities are valued at the last reported bid
price. Securities for which market quotations are not readily available are
valued at fair value under a method approved by the Board of Trustees.
Short-term investments with a maturity of more than 60 days when purchased
are valued based on market quotations until the remaining days to maturity
become less than 61 days. From such time, until maturity, the investments
are valued at amortized cost.
B. Foreign Currency Translation
The market values of foreign securities, forward currency exchange
contracts and other assets and liabilities stated in foreign currency are
translated into U.S. dollars based on quoted exchange rates as of Noon
Eastern Time. The cost of securities is determined using historical
exchange rates. Income and expenses are translated at prevailing exchange
rates when accrued or incurred. Gains and losses on the sale of securities
are not segregated for financial reporting purposes between amounts arising
from changes in exchange rates and amounts arising from changes in the
market prices of securities. Realized gain and loss on foreign currency
includes the net realized amount from the sale of currency and the amount
realized between trade date and settlement date on security transactions.
C. Forward Currency Exchange Contracts
International Equity II enters into forward currency exchange contracts in
order to hedge its exposure to changes in foreign currency exchange rates
on its foreign portfolio holdings or settle transactions. A forward
currency exchange contract is a commitment to buy or sell a foreign
security at a set price on a future date. Changes in the value of the
contract are recognized by marking the contract to market on a daily basis
to reflect current currency translation rates. The Fund realizes gains or
losses at the time the forward currency exchange contract is closed. Risks
may arise as a result of the potential inability of the counterparties to
meet the terms of their contracts, and from unanticipated movements in the
value of a foreign currency relative to the U.S. dollar.
D. Futures Contracts and Forward Commitments
General-Transactions in futures contracts and forward commitments are
utilized in strategies to manage the market risk of the Trust's
investments. The purchase of a futures contract or forward commitment
increases the impact of changes in the market price of investments on net
asset value. Forward commitments have a risk of loss due to nonperformance
of counterparties. There is also a risk that the market movement of such
instruments may not be in the direction forecasted. Note 3-Investment
activity contains additional information.
Futures Contracts-Upon entering into futures contracts, the Trust maintains
securities with a value equal to its obligation under the futures contracts
in a segregated account with its custodian. A portion of these funds is
held as collateral in an account in the name of the broker, the Trust's
agent in acquiring the futures position. During the period the futures
contract is open, changes in the value of the contract ("variation margin")
are recognized by marking the contract to market on a daily basis. As
unrealized gains or losses are incurred, variation margin payments are
received from or made to the broker. Upon the closing or cash settlement of
a contract, gains and losses are realized. The cost of securities acquired
through delivery under a contract is adjusted by the unrealized gain or
loss on the contract.
Forward Commitments-The Trust trades certain securities under the terms of
forward commitments, whereby the settlement for payment and delivery occurs
at a specified future date. Forward commitments are privately negotiated
32
<PAGE> 34
Notes to Financial Statements, continued
transactions between the Trust and dealers. Upon executing a forward
commitment and during the period of obligation, the Trust maintains
collateral of cash or securities in a segregated account with its custodian
in an amount sufficient to relieve the obligation. If the intent of the
Trust is to accept delivery of a security traded under a forward purchase
commitment, the commitment is recorded as a long-term purchase. For forward
purchase and sale commitments which security settlement is not intended by
the Trust, changes in the value of the commitment are recognized by marking
the commitment to market on a daily basis. During the commitment, the Trust
may either resell or repurchase the forward commitment and enter into a new
forward commitment, the effect of which is to extend the settlement date.
In addition, the Trust may occasionally close such forward commitments
prior to delivery. Gains and losses are realized upon the ultimate closing
or cash settlement of forward commitments.
E. Repurchase Agreements
A repurchase agreement is a short-term investment in which the Trust
acquires ownership of a debt security and the seller agrees to repurchase
the security at a future time and specified price. The Trust may invest
independently in repurchase agreements, or transfer uninvested cash
balances into a pooled cash account along with other investment companies
advised by Van Kampen American Capital Asset Management, Inc. (the
"Adviser"), the daily aggregate of which is invested in repurchase
agreements. Repurchase agreements are collateralized by the underlying debt
security. The Trust will make payment for such securities only upon
physical delivery or evidence of book entry transfer to the account of the
custodian bank. The seller is required to maintain the value of the
underlying security at not less than the repurchase proceeds due the Trust.
F. Federal Income Taxes
No provision for federal income taxes is required because each Fund intends
to elect to be taxed as a "regulated investment company" under the Internal
Revenue Code and intends to maintain this qualification by annually
distributing all taxable net investment income and taxable net realized
capital gains to shareholders. It is anticipated that no distributions of
capital gains will be made until tax basis capital loss carryforwards, if
any, expire or are offset by net realized capital gains.
G. Investment Transactions and Related Investment Income
Investment transactions are accounted for on the trade date. Realized gains
and losses on investments are determined on the basis of identified cost.
Dividend income is recorded on the ex-dividend date. Interest income is
accrued daily.
Under the applicable foreign tax laws, a tax may be imposed on interest,
dividends and realized gains generated from foreign investments. Such taxes
are generally reflected on the Statement of Operations as a reduction of
the related income or gains.
H. Dividends and Distributions
The Trust declares annual distributions from net capital gains. Dividends
from net investment income are declared daily for Government II, quarterly
for Growth and Income II and annually for Growth II, Emerging Growth II and
International Equity II. Government II may distribute short-term capital
gains quarterly. Dividends and distributions to shareholders are recorded
on the record date.
The Trust distributes tax basis earnings in accordance with the minimum
distribution requirements of the Internal Revenue Code, which may differ
from generally accepted accounting principles. Such dividends or
distributions may exceed financial statement earnings.
I. Debt Discount or Premium
The Trust accounts for debt discounts or premiums on the same basis as is
followed for federal income tax reporting. Accordingly, original issue
discounts on long-term debt securities purchased are amortized over the
life of the security. Premiums on debt securities are not amortized. Market
discounts are recognized at the time of sale as realized gains for book
purposes, and ordinary income for tax purposes.
Note 2-Advisory Fees and Other Transactions with Affiliates
The Adviser serves as investment manager of the Trust. Advisory fees to Adviser
are paid monthly, based on the average daily
33
<PAGE> 35
Notes to Financial Statements, continued
net assets of each Fund at an annual rate as indicated by the following
graduated fee schedules:
<TABLE>
<CAPTION>
Emerging Growth II, Growth II
& Growth and Income II Government II
------------------------------------- ------------------------------------
Average Daily Annual Average Daily Annual
Net Assets Rate Net Assets Rate
----------------- ---------- ----------------- ----------
<S> <C> <C> <C>
First $1 billion .65% First $1 billion .60%
Next $1 billion .60% Next $1 billion .55%
Next $1 billion .55% Next $1 billion .50%
Next $1 billion .50% Next $1 billion .45%
Over $4 billion .45% Next $1 billion .40%
Over $5 billion .35%
</TABLE>
The Adviser has entered into a subadvisory agreement with Smith Barney Mutual
Funds Management, Inc. (the "Subadviser"), who provides advisory services to
the International Equity II Fund and the Adviser with respect to it's
investments in foreign securities. Advisory fees for the International Equity
II Fund are calculated monthly, based on the average daily net assets of the
Fund at the annual rate of 1.00%. The Adviser pays 50% of its advisory fee to
the Subadviser.
The Adviser has agreed that it will reimburse the Trust for any expenses
(including the advisory fee, but excluding interest, brokerage commissions,
distribution and service fees, and other extraordinary expenses) in excess of
the most restrictive limitation imposed by state securities commissions. The
most restrictive expense limitation is presently believed to be 2.5% of the
Fund's average daily net assets up to $30 million, 2.0% of the next $70 million
of such net assets and 1.5% of the Fund's net assets in excess of $100 million.
For the period ended April 30, 1995, the Adviser had no reimbursement to the
Trust due to such expense limitation. The Adviser and, in the case of the
International Equity II Fund, the Subadviser may, from time to time, agree to
waive their respective investment advisory fees or any portion thereof or elect
to reimburse a Fund for ordinary business expenses in excess of an agreed upon
amount. The Adviser prepaid the Trust's initial registration and filing
expenses. The Trust is amortizing such expenses over a ten month period ending
April 1995.
At the end of the period, the Adviser owned approximately 10% of Emerging
Growth II's and 37% of International Equity II's Class A outstanding shares,
respectively.
Accounting services include the salaries and overhead expenses of the Trust's
Treasurer and the personnel operating under his direction. Charges are
allocated among investment companies advised by the Adviser. These charges
include the employee costs attributable to the Trust's accounting officers. A
portion of the accounting services expense was paid to the Adviser in
reimbursement of personnel, facilities and equipment costs attributable to the
provision of accounting services. The services provided by the Adviser are at
cost.
Common Sense Shareholder Services ("CSSS") serves as the Trust's shareholder
service agent. CSSS is a subsidiary of PFS Services, Inc. Common Sense
Distributors (the "Distributor"), a subsidiary of PFS Distributors, Inc.,
serves as Distributor of the Trust's shares through an exclusive selling
agreement with PFS Investments Inc. (the "Retail Dealer"). The Retail Dealer is
an indirect wholly-owned subsidiary of Primerica Financial Services. Certain
officers and trustees of the Trust are officers and directors of the Adviser or
its affiliates.
Under the Distribution Plans, each class of shares pays .25% per annum of its
average daily net assets to the Distributor as a service fee. The service fee
is intended to cover personal services provided to the shareholders by
representatives of the Retail Dealer. Class B shares pay an additional fee of
.75% per annum of their average daily net assets to reimburse the Distributor
for its distribution costs. Actual distribution expenses incurred by the
Distributor for Class B shares may exceed the amounts reimbursed to the
Distributor by the Fund. At the end of the period, the Trust was advised that
the unreimbursed expenses incurred by the Distributor under the Class B plan
were as shown in the table below and may be carried forward and reimbursed
through either the collection of the contingent deferred sales charges from
share repurchases or, subject to the annual renewal of the plans, future Trust
reimbursements of distribution fees.
Amounts paid by the affiliates during the period were as follows:
<TABLE>
<CAPTION>
Growth and Emerging International
Growth II Income II Government II Growth II Equity II
--------- --------- ------------- --------- ---------
<S> <C> <C> <C> <C> <C>
Accounting services . . . . . . . . . . . . . $ 2,228 $ 2,186 $ 2,173 $ - $ -
Shareholder service agent fees . . . . . . . . 117,607 26,318 5,589 2,000 5,440
Sales of Fund shares:
Distributor commissions . . . . . . . . . . 47,931 19,281 13,620 7,984 3,587
Retail Dealer commissions . . . . . . . . . 300,937 126,641 77,844 50,255 3,416
Distributor Class B unreimbursed expenses . 638,187 350,124 223,633 10,232 3,416
</TABLE>
34
<PAGE> 36
Notes to Financial Statements, continued
- --------------------------------------------------------------------------------
At the end of the period, Growth II owned approximately .46% of the American
Capital Small Capitalization Fund, Inc. ("Small Cap"), an investment company
managed by the Adviser. Small Cap comprised approximately 2% of Growth II's
total net assets. Small Cap's portfolio consisted of the following securities:
<TABLE>
<CAPTION>
Number Market
of Shares Value
- ----------------------------------------------------------------------------------------------
<S> <C>
Common Stock
CONSUMER DISTRIBUTION
6,000 Arbor Drugs, Inc. . . . . . . . . . . . . . . . . . . . . . . . $ 154,500
29,000 Barnes & Noble, Inc. . . . . . . . . . . . . . . . . . . . . . . 833,750
13,000 Big B, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 189,313
5,000 Books-A-Million, Inc. . . . . . . . . . . . . . . . . . . . . . 68,125
3,000 Carson Pirie Scott & Co. . . . . . . . . . . . . . . . . . . . . 48,000
4,000 CDW Computer Centers, Inc. . . . . . . . . . . . . . . . . . . . 142,000
39,000 Circuit City Stores, Inc. . . . . . . . . . . . . . . . . . . . 984,750
60,000 Claire's Stores, Inc. . . . . . . . . . . . . . . . . . . . . . 832,500
12,000 CompUSA, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 295,500
26,000 Fingerhut Companies, Inc. . . . . . . . . . . . . . . . . . . . 295,750
7,000 Food Lion, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 38,938
33,000 General Nutrition Companies, Inc. . . . . . . . . . . . . . . . 810,563
16,000 Gymboree Corp. . . . . . . . . . . . . . . . . . . . . . . . . 378,000
4,000 Haggar Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 82,000
11,000 Health Management, Inc. . . . . . . . . . . . . . . . . . . . . 198,000
2,000 Hills Stores Co. . . . . . . . . . . . . . . . . . . . . . . . . 40,250
14,000 MacFrugals Bargains Closeouts . . . . . . . . . . . . . . . . . 197,750
4,000 Medicine Shoppe International, Inc. . . . . . . . . . . . . . . 129,000
6,000 Men's Wearhouse, Inc. . . . . . . . . . . . . . . . . . . . . . 151,500
7,900 Meyer (Fred), Inc. . . . . . . . . . . . . . . . . . . . . . . 245,888
1,000 Michael's Stores, Inc. . . . . . . . . . . . . . . . . . . . . 28,750
20,000 Micro Wholesale, Inc. . . . . . . . . . . . . . . . . . . . . . 705,000
7,000 New England Business Service, Inc. . . . . . . . . . . . . . . . 127,750
4,000 Nine West Group, Inc. . . . . . . . . . . . . . . . . . . . . . 129,500
39,900 Pier 1 Imports, Inc. . . . . . . . . . . . . . . . . . . . . . . 359,100
5,000 Proffitts, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 123,438
5,000 Rex Stores Corp. . . . . . . . . . . . . . . . . . . . . . . . . 67,500
3,000 Richfood Holdings, Inc. . . . . . . . . . . . . . . . . . . . . 60,000
7,000 Ross Stores, Inc. . . . . . . . . . . . . . . . . . . . . . . . 67,813
12,500 Rykoff-Sexton, Inc. . . . . . . . . . . . . . . . . . . . . . . 217,188
5,000 Shoe Carnival, Inc. . . . . . . . . . . . . . . . . . . . . . . 30,000
31,800 Stop & Shop Companies, Inc. . . . . . . . . . . . . . . . . . . 846,675
31,000 Sunglass Hut International, Inc. . . . . . . . . . . . . . . . . 875,749
3,000 Urban Outfitters, Inc. . . . . . . . . . . . . . . . . . . . . . 63,000
13,000 Viking Office Products, Inc. . . . . . . . . . . . . . . . . . 354,250
39,000 Waban, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 648,375
3,000 Younkers, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 55,875
12,000 Zale Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . 140,250
------------
TOTAL CONSUMER DISTRIBUTION . . . . . . . . . . . . . . . . . 11,016,290
------------
CONSUMER DURABLES
11,000 Aldila, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 68,750
2,000 Armstrong World Industries, Inc. . . . . . . . . . . . . . . . . 90,750
11,000 Automotive Industries Holdings, Inc., Class A . . . . . . . . . 290,125
3,000 Borg Warner Automotive, Inc. . . . . . . . . . . . . . . . . . . 75,750
10,000 Breed Technologies, Inc. . . . . . . . . . . . . . . . . . . . . 202,500
4,000 Champion Enterprises, Inc. . . . . . . . . . . . . . . . . . . . 118,500
35,000 Clayton Homes, Inc. . . . . . . . . . . . . . . . . . . . . . . 581,875
28,000 Echlin, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,022,000
5,000 Fleetwood Enterprises, Inc. . . . . . . . . . . . . . . . . . . 111,875
8,000 Harman International Industries, Inc. . . . . . . . . . . . . . 290,000
11,000 Leggett & Platt, Inc. . . . . . . . . . . . . . . . . . . . . . 424,875
32,000 Lennar Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 524,000
7,000 Libbey, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 136,500
32,000 Masland Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 428,000
46,000 Maytag Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . 793,500
30,000 Oakwood Homes Corp. . . . . . . . . . . . . . . . . . . . . . . 742,500
12,000 Outboard Marine Corp. . . . . . . . . . . . . . . . . . . . . . 256,500
10,000 Pulte Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 215,000
7,000 Smith (A.O.) Corp. . . . . . . . . . . . . . . . . . . . . . . . 166,250
3,000 Strattec Security Corp. . . . . . . . . . . . . . . . . . . . . 34,500
12,000 Toro Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 346,500
15,000 Winnebago Industries, Inc. . . . . . . . . . . . . . . . . . . . 151,875
14,000 Zenith Electronics Corp. . . . . . . . . . . . . . . . . . . . . 105,000
------------
TOTAL CONSUMER DURABLES . . . . . . . . . . . . . . . . . . . 7,177,125
------------
CONSUMER NON-DURABLES
22,000 American Greetings Corp., Class A . . . . . . . . . . . . . . . 603,625
7,000 Armour All Products Corp. . . . . . . . . . . . . . . . . . . . 140,000
6,000 Barefoot, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 66,000
5,000 Cyrk, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,250
4,000 Dean Foods Co. . . . . . . . . . . . . . . . . . . . . . . . . . 113,000
4,000 Dial Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . 96,000
7,000 Fieldcrest Cannon, Inc. . . . . . . . . . . . . . . . . . . . . 155,750
15,000 Griffon Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 118,125
5,000 Hormel (Geo. A.) & Co. . . . . . . . . . . . . . . . . . . . . . 136,250
13,000 IBP, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 477,750
1,800 Jones Apparel Group, Inc. . . . . . . . . . . . . . . . . . . . 47,025
2,000 Kellwood Co. . . . . . . . . . . . . . . . . . . . . . . . . . . 35,250
19,000 Lancaster Colony Corp. . . . . . . . . . . . . . . . . . . . . . 665,000
5,000 Nautica Enterprises, Inc. . . . . . . . . . . . . . . . . . . . 140,000
5,000 Nu-kote Holdings, Inc., Class A . . . . . . . . . . . . . . . . 139,063
22,000 Paragon Trade Brands, Inc. . . . . . . . . . . . . . . . . . . . 338,250
11,000 Phillips-Van Heusen Corp. . . . . . . . . . . . . . . . . . . . 167,750
3,000 Scotts Co., Class A . . . . . . . . . . . . . . . . . . . . . . 59,250
9,000 Smithfield Foods, Inc. . . . . . . . . . . . . . . . . . . . . . 204,750
18,000 Springs Industries, Inc. . . . . . . . . . . . . . . . . . . . . 693,000
4,000 Starbucks Corp. . . . . . . . . . . . . . . . . . . . . . . . . 93,750
3,000 St. John Knits, Inc. . . . . . . . . . . . . . . . . . . . . . . 102,750
31,000 Topps, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 186,000
17,000 Unifi, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 431,375
9,000 Universal Foods Corp. . . . . . . . . . . . . . . . . . . . . . 292,500
10,000 Westpoint Stevens, Inc. . . . . . . . . . . . . . . . . . . . . 183,750
53,000 Whitman Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 960,625
6,000 WLR Foods, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 138,000
12,000 Wolverine World Wide, Inc. . . . . . . . . . . . . . . . . . . . 393,000
------------
TOTAL CONSUMER NON-DURABLES . . . . . . . . . . . . . . . . . 7,248,838
------------
CONSUMER SERVICES
4,000 ADVO, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000
4,000 American Media, Inc., Class A . . . . . . . . . . . . . . . . . 24,500
10,200 American Medical Response . . . . . . . . . . . . . . . . . . . 261,375
5,000 Banta Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 166,250
6,000 Belo (A.H.) Corp. . . . . . . . . . . . . . . . . . . . . . . . 361,500
25,000 Bowne & Co., Inc. . . . . . . . . . . . . . . . . . . . . . . . 403,125
6,000 Brinker International, Inc. . . . . . . . . . . . . . . . . . . 102,750
1,000 Central Newspapers, Inc., Class A . . . . . . . . . . . . . . . 26,000
3,500 Club Med, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 99,313
33,000 Equifas, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 1,056,000
1,000 Heritage Media Corp., Class A . . . . . . . . . . . . . . . . . 25,500
16,000 Hospitality Franchise System, Inc. . . . . . . . . . . . . . . . 488,000
3,000 Jones Intercable, Inc., Class A . . . . . . . . . . . . . . . . 43,125
11,000 Kelly Services, Inc. . . . . . . . . . . . . . . . . . . . . . . 375,375
1,000 Lee Enterprises, Inc. . . . . . . . . . . . . . . . . . . . . . 35,750
28,000 Lone Star Steakhouse & Saloon, Inc. . . . . . . . . . . . . . . 861,000
27,000 Mirage Resorts, Inc. . . . . . . . . . . . . . . . . . . . . . . 803,250
</TABLE>
35
<PAGE> 37
Notes to Financial Statements, continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Market
of Shares Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
35,760 Ogden Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 733,080
11,000 Olsten Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 374,000
5,200 PHH Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . 207,350
17,000 Players International, Inc. . . . . . . . . . . . . . . . . . . 503,625
3,000 Regal Cinemas, Inc. . . . . . . . . . . . . . . . . . . . . . . 82,500
33,000 Robert Half International, Inc. . . . . . . . . . . . . . . . . 870,375
26,000 Sbarro, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 672,750
3,000 Scripps (E.W.) Co., Class A . . . . . . . . . . . . . . . . . . 86,625
10,000 Service Corp. International . . . . . . . . . . . . . . . . . . 278,750
13,500 Spelling Entertainment, Group I . . . . . . . . . . . . . . . . 138,374
18,000 SPS Transaction Services . . . . . . . . . . . . . . . . . . . . 558,000
58,000 Wendy's International, Inc. . . . . . . . . . . . . . . . . . . 993,250
32,000 Westcott Communications, Inc. . . . . . . . . . . . . . . . . . 452,000
------------
TOTAL CONSUMER SERVICES . . . . . . . . . . . . . . . . . . . 11,163,492
------------
ENERGY
5,000 Addington Resources, Inc. . . . . . . . . . . . . . . . . . . . 58,125
21,000 Ashland, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 769,125
17,000 BJ Services Co. . . . . . . . . . . . . . . . . . . . . . . . . 391,000
5,000 Chesapeake Energy Corp. . . . . . . . . . . . . . . . . . . . . 117,500
4,000 Columbia Gas System, Inc. . . . . . . . . . . . . . . . . . . . 118,000
14,000 Diamond Shamrock R & M, Inc. . . . . . . . . . . . . . . . . . . 383,250
27,000 Eastern Enterprises . . . . . . . . . . . . . . . . . . . . . . 806,625
19,000 El Paso Natural Gas Co. . . . . . . . . . . . . . . . . . . . . 553,375
19,000 KCS Energy, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 339,625
2,000 MAPCO, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 113,250
7,000 McDermott (J. Ray) & Co., Inc. . . . . . . . . . . . . . . . . . 193,375
102,000 Nabors Industries, Inc. . . . . . . . . . . . . . . . . . . . . 956,250
9,000 NACCO Industries, Inc., Class A. . . . . . . . . . . . . . . . . 499,500
15,500 National Fuel Gas . . . . . . . . . . . . . . . . . . . . . . . 443,688
8,000 New Jersey Resources . . . . . . . . . . . . . . . . . . . . . . 183,000
35,000 NICOR, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 866,250
20,000 Offshore Logistics, Inc. . . . . . . . . . . . . . . . . . . . . 271,250
14,400 ONEOK, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 273,600
3,000 Oryx Energy Co. . . . . . . . . . . . . . . . . . . . . . . . . 41,625
39,000 Pacific Enterprises . . . . . . . . . . . . . . . . . . . . . . 960,375
3,000 Phoenix Resource Co. . . . . . . . . . . . . . . . . . . . . . . 85,500
7,000 Quaker State Corp. . . . . . . . . . . . . . . . . . . . . . . . 99,750
6,000 Smith International, Inc. . . . . . . . . . . . . . . . . . . . 103,500
7,000 Southwestern Energy Co. . . . . . . . . . . . . . . . . . . . . 106,750
4,000 Tosco Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 136,500
301 Transco Energy Co. . . . . . . . . . . . . . . . . . . . . . . . 6,094
30,000 Varco International, Inc. . . . . . . . . . . . . . . . . . . . 247,500
5,400 WICOR, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 147,150
------------
TOTAL ENERGY . . . . . . . . . . . . . . . . . . . . . . . . . 9,271,532
------------
FINANCE
8,000 Advanta Corp., Class A . . . . . . . . . . . . . . . . . . . . . 274,000
15,000 Alex Brown, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 605,625
2,080 Alleghany Corp. . . . . . . . . . . . . . . . . . . . . . . . . 323,960
17,000 AMBAC, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 688,500
29,000 Bankers Life Holding Corp. . . . . . . . . . . . . . . . . . . . 605,375
8,000 BanPonce Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 257,000
4,500 Capitol American Financial Corp. . . . . . . . . . . . . . . . . 97,875
6,000 Capital Re Corp. . . . . . . . . . . . . . . . . . . . . . . . . 138,750
6,000 Charter One Financial, Inc. . . . . . . . . . . . . . . . . . . 137,250
10,000 CMAC Investment Corp. . . . . . . . . . . . . . . . . . . . . . 365,000
5,000 Comdisco, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 140,625
11,000 Commercial Federal Corp. . . . . . . . . . . . . . . . . . . . . 288,750
16,500 Compass Bancshares, Inc. . . . . . . . . . . . . . . . . . . . . 432,094
81,960 Dime Bancorp, Inc. . . . . . . . . . . . . . . . . . . . . . . . 778,620
2,000 Eaton Vance Corp. . . . . . . . . . . . . . . . . . . . . . . . 63,250
13,000 Finova Group, Inc. . . . . . . . . . . . . . . . . . . . . . . . 438,750
7,000 First American Corp. . . . . . . . . . . . . . . . . . . . . . . 241,500
1,000 First Commercial Corp. . . . . . . . . . . . . . . . . . . . . . 27,500
2,000 First Financial Corp. . . . . . . . . . . . . . . . . . . . . . 31,625
26,000 First USA, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 1,111,500
15,000 Firstar Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 433,125
24,000 FirstFed Michigan Corp. . . . . . . . . . . . . . . . . . . . . 579,000
14,000 Foothill Group, Inc., Class A . . . . . . . . . . . . . . . . . 306,250
13,000 Fremont General Corp. . . . . . . . . . . . . . . . . . . . . . 287,625
4,000 GATX Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . 180,000
79,000 Hibernia Corp., Class A . . . . . . . . . . . . . . . . . . . . 651,750
15,000 Integra Financial Corp. . . . . . . . . . . . . . . . . . . . . 654,375
5,000 Inter-Regional Financial Group, Inc. . . . . . . . . . . . . . . 126,875
7,000 Marshall & Ilsley Corp. . . . . . . . . . . . . . . . . . . . . 140,875
2,000 Mercantile Bancorporation, Inc. . . . . . . . . . . . . . . . . 72,750
20,000 Mercury General Corp. . . . . . . . . . . . . . . . . . . . . . 302,500
29,300 MGIC Investment Corp. . . . . . . . . . . . . . . . . . . . . . 1,230,600
3,000 Ohio Casualty Corp. . . . . . . . . . . . . . . . . . . . . . . 87,375
4,000 Old Kent Financial Corp. . . . . . . . . . . . . . . . . . . . 124,000
17,250 Orion Capital Corp. . . . . . . . . . . . . . . . . . . . . . . 605,906
15,000 Protective Life Corp. . . . . . . . . . . . . . . . . . . . . . 680,625
29,000 Regions Financial Corp. . . . . . . . . . . . . . . . . . . . . 1,000,500
20,000 Reliastar Financial Corp. . . . . . . . . . . . . . . . . . . . 715,000
3,000 Roosevelt Financial Group, Inc. . . . . . . . . . . . . . . . . 48,094
7,000 Southern National Corp. . . . . . . . . . . . . . . . . . . . . 142,625
54,000 SouthTrust Corp. . . . . . . . . . . . . . . . . . . . . . . . 1,161,000
2,000 Standard Federal Bank . . . . . . . . . . . . . . . . . . . . . 56,000
20,300 Star Banc Corp. . . . . . . . . . . . . . . . . . . . . . . . . 847,525
10,000 TCF Financial Corp. . . . . . . . . . . . . . . . . . . . . . . 427,500
5,500 White River Corp. . . . . . . . . . . . . . . . . . . . . . . . 180,125
------------
TOTAL FINANCE . . . . . . . . . . . . . . . . . . . . . . . . 18,089,549
------------
HEALTH CARE
8,000 Abbey Healthcare Group, Inc. . . . . . . . . . . . . . . . . . . 311,000
24,000 AMSCO International, Inc. . . . . . . . . . . . . . . . . . . . 303,000
23,000 Calgene, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 158,125
14,000 Circa Pharmaceuticals, Inc. . . . . . . . . . . . . . . . . . . 341,250
6,000 Cognex Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 178,500
3,000 Cordis Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 219,750
4,000 Dentsply International, Inc. . . . . . . . . . . . . . . . . . . 141,000
38,000 FoxMeyer Health Corp. . . . . . . . . . . . . . . . . . . . . . 726,750
14,000 Genetic Therapy, Inc. . . . . . . . . . . . . . . . . . . . . . 133,000
51,000 Gilead Sciences, Inc. . . . . . . . . . . . . . . . . . . . . . 752,250
8,000 Healthsouth Rehabilitation . . . . . . . . . . . . . . . . . . . 157,000
26,000 ICOS Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . 117,000
9,000 Integrated Health Services, Inc. . . . . . . . . . . . . . . . . 312,750
21,000 Lincare Holdings, Inc. . . . . . . . . . . . . . . . . . . . . . 630,000
1,000 Manor Care, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 29,750
6,000 Mariner Health Group, Inc. . . . . . . . . . . . . . . . . . . . 87,750
11,000 Mentor Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 248,875
27,000 Mylan Laboratories, Inc. . . . . . . . . . . . . . . . . . . . . 833,625
23,000 Nellcor, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 943,000
16,000 Oxford Health Plans, Inc. . . . . . . . . . . . . . . . . . . . 672,000
6,000 Pacific Physician Services, Inc. . . . . . . . . . . . . . . . . 110,250
12,000 Pacificare Health Systems, Inc. . . . . . . . . . . . . . . . . 750,000
3,000 Quintiles Transnational . . . . . . . . . . . . . . . . . . . . 114,000
7,000 Scios Nova, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 46,375
1,000 Sierra Health Services, Inc. . . . . . . . . . . . . . . . . . . 26,500
18,000 Steris Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 711,000
3,000 Target Therapeutics, Inc. . . . . . . . . . . . . . . . . . . . 108,750
26,000 Thermo Cardiosystems, Inc. . . . . . . . . . . . . . . . . . . . 867,750
2,000 United American Healthcare Corp. . . . . . . . . . . . . . . . . 34,000
4,000 United Wisconsin Services, Inc. . . . . . . . . . . . . . . . . 81,000
3,000 Universal Health Services, Inc. . . . . . . . . . . . . . . . . 78,750
</TABLE>
36
<PAGE> 38
Notes to Financial Statements, continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Market
of Shares Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
24,000 Vivra, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 777,000
15,000 Watsons Pharmaceuticals, Inc. . . . . . . . . . . . . . . . . . 465,000
------------
TOTAL HEALTH CARE . . . . . . . . . . . . . . . . . . . . . . 11,466,750
------------
PRODUCER MANUFACTURING
18,000 AGCO Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . 639,000
36,000 Allwaste, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 220,500
5,000 Ametek, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 81,250
9,600 AptarGroup, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 283,200
3,000 Beldon, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 67,500
2,000 Blount, Inc., Class A . . . . . . . . . . . . . . . . . . . . . 90,000
20,000 Briggs & Stratton Corp. . . . . . . . . . . . . . . . . . . . . 702,500
21,000 Cummins Engine Co., Inc. . . . . . . . . . . . . . . . . . . . . 929,250
30,000 Danaher Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 862,500
10,000 Detroit Diesel Corp. . . . . . . . . . . . . . . . . . . . . . . 232,500
2,000 Duracraft Corp. . . . . . . . . . . . . . . . . . . . . . . . . 64,500
4,000 Granite Construction, Inc. . . . . . . . . . . . . . . . . . . . 80,250
24,500 IDEX Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . 808,500
7,000 Indresco, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 95,375
20,000 Juno Lighting, Inc. . . . . . . . . . . . . . . . . . . . . . . 405,000
5,000 Kaydon Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 138,125
2,000 Kent Electrics Corp. . . . . . . . . . . . . . . . . . . . . . . 58,750
8,000 Kulicke & Soffa Industries, Inc. . . . . . . . . . . . . . . . . 343,000
40,000 Manville Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 465,000
12,000 Mueller Industries, Inc. . . . . . . . . . . . . . . . . . . . . 498,000
4,000 National Service Industries, Inc. . . . . . . . . . . . . . . . 112,000
1,000 Newpark Resources, Inc. . . . . . . . . . . . . . . . . . . . . 21,625
5,500 PEC Israel Economic Corp. . . . . . . . . . . . . . . . . . . . 151,938
8,000 Ruddick Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 166,000
9,000 Southdown, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 171,000
11,000 SPS Technologies, Inc. . . . . . . . . . . . . . . . . . . . . . 343,750
16,000 Sterling Chemicals, Inc. . . . . . . . . . . . . . . . . . . . . 198,000
42,000 Thermo Instrument Systems, Inc. . . . . . . . . . . . . . . . . 976,500
5,000 United Waste Systems, Inc. . . . . . . . . . . . . . . . . . . . 145,000
14,000 Varity Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 586,250
6,000 Watts Industries, Inc., Class A . . . . . . . . . . . . . . . . 138,000
9,000 Wellman, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 247,500
7,000 York International Corp. . . . . . . . . . . . . . . . . . . . . 288,750
------------
TOTAL PRODUCER MANUFACTURING . . . . . . . . . . . . . . . . . 10,611,013
------------
RAW MATERIALS/PROCESSING INDUSTRIES
9,900 Amcast Industrial Corp. . . . . . . . . . . . . . . . . . . . . 195,525
35,000 Ecolab, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 796,250
6,000 First Mississippi Corp. . . . . . . . . . . . . . . . . . . . . 150,000
22,000 Georgia Gulf Corp. . . . . . . . . . . . . . . . . . . . . . . . 723,250
24,000 Handy & Harmon . . . . . . . . . . . . . . . . . . . . . . . . . 357,000
8,000 Inland Steel Industries, Inc. . . . . . . . . . . . . . . . . . 208,000
6,000 International Specialty Products, Inc. . . . . . . . . . . . . . 47,250
14,000 Jefferson Smurfit Corp. . . . . . . . . . . . . . . . . . . . . 190,750
2,000 Justin Industries, Inc. . . . . . . . . . . . . . . . . . . . . 22,000
6,000 Kaiser Aluminum Corp. . . . . . . . . . . . . . . . . . . . . . 67,500
22,000 Longview Fibre Co. . . . . . . . . . . . . . . . . . . . . . . . 360,250
18,000 Lubrizol Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 627,750
29,000 Lyondell Petrochemical Co. . . . . . . . . . . . . . . . . . . . 725,000
20,000 Magma Copper Co., Class B . . . . . . . . . . . . . . . . . . . 330,000
3,000 Medusa Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 67,875
22,000 Minerals Technologies, Inc. . . . . . . . . . . . . . . . . . . 731,500
2,000 NCH Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . 127,000
12,000 Olin Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . 670,500
73,000 Owens-Illinois, Inc. . . . . . . . . . . . . . . . . . . . . . . 866,875
2,000 Pentair, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 91,000
10,000 Potlatchm, Corp. . . . . . . . . . . . . . . . . . . . . . . . . 422,500
16,000 Rayonier, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 530,000
9,000 Riverwood International Corp. . . . . . . . . . . . . . . . . . 196,875
25,000 RPM,Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 490,625
10,000 Sealed Air Corp. . . . . . . . . . . . . . . . . . . . . . . . . 427,500
15,000 Terra Industries, Inc. . . . . . . . . . . . . . . . . . . . . 165,000
7,000 USG Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . 163,625
21,000 Vigoro Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 840,000
4,000 Vulcan Materials Co. . . . . . . . . . . . . . . . . . . . . . . 232,500
37,500 Worthington Industries, Inc. . . . . . . . . . . . . . . . . . . 703,124
------------
TOTAL RAW MATERIALS/PROCESSING INDUSTRIES . . . . . . . . . . 11,527,024
------------
TECHNOLOGY
7,500 Altera Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 600,469
13,950 Analog Devices, Inc. . . . . . . . . . . . . . . . . . . . . . . 371,419
10,000 Aspect Telecommunications Corp. . . . . . . . . . . . . . . . . 416,250
4,000 Atmel Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 171,000
3,000 Augat, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 61,125
22,400 Avnet, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 994,000
16,000 BMC Software, Inc. . . . . . . . . . . . . . . . . . . . . . . . 988,000
13,000 Chipcom Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 419,250
3,000 Cirrus Logic, Inc. . . . . . . . . . . . . . . . . . . . . . . . 146,625
5,000 Conner Peripherals, Inc. . . . . . . . . . . . . . . . . . . . . 53,750
21,000 Credence Systems Corp. . . . . . . . . . . . . . . . . . . . . . 771,750
2,000 Cyrix Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 48,375
21,000 Electroglas, Inc. . . . . . . . . . . . . . . . . . . . . . . . 913,500
20,000 Electronics For Imaging . . . . . . . . . . . . . . . . . . . . 920,000
16,000 Exabyte Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 200,000
21,000 Filenet Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 708,750
22,000 Frame Technology Corp. . . . . . . . . . . . . . . . . . . . . . 462,000
4,000 FTP Software, Inc. . . . . . . . . . . . . . . . . . . . . . . . 104,500
48,000 Gateway 2000, Inc. . . . . . . . . . . . . . . . . . . . . . . . 912,000
17,000 Harris Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 799,000
4,200 Input/Output, Inc. . . . . . . . . . . . . . . . . . . . . . . . 143,325
10,000 Integrated Device Technology, Inc. . . . . . . . . . . . . . . . 390,000
14,000 International Rectifier Corp. . . . . . . . . . . . . . . . . . 353,500
51,000 Intervoice, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 777,750
3,000 Komag, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 116,625
21,000 Lam Research Corp. . . . . . . . . . . . . . . . . . . . . . . . 1,050,000
25,000 LEGENT Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 675,000
1,000 Littelfuse, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 33,750
12,000 National Semiconductor Corp. . . . . . . . . . . . . . . . . . . 271,500
15,500 Novellus Systems, Inc. . . . . . . . . . . . . . . . . . . . . . 926,125
3,000 Pioneer Standard Electronics, Inc. . . . . . . . . . . . . . . . 58,500
5,000 Quantum Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 91,250
4,000 Recoton Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 63,000
19,000 S3, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 444,125
14,000 Seagate Technology . . . . . . . . . . . . . . . . . . . . . . . 441,000
33,000 Sequent Computer Systems, Inc. . . . . . . . . . . . . . . . . . 548,624
34,000 Solectron Corp. . . . . . . . . . . . . . . . . . . . . . . . . 994,500
16,000 Sterling Software, Inc. . . . . . . . . . . . . . . . . . . . . 536,000
1,000 Symbol Technologies, Inc. . . . . . . . . . . . . . . . . . . . 32,875
9,000 Synopsys, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 488,250
15,000 Tandem Computers, Inc. . . . . . . . . . . . . . . . . . . . . . 193,125
18,000 Teradyne, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 893,250
6,000 3Com Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . 336,750
5,737 U.S. Robotics Corp. . . . . . . . . . . . . . . . . . . . . . . 446,769
5,000 VLSI Technology, Inc. . . . . . . . . . . . . . . . . . . . . . 102,549
6,000 Wall Data, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 111,000
49,000 Western Digital Corp. . . . . . . . . . . . . . . . . . . . . . 784,000
11,000 Xilinx, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 838,750
------------
TOTAL TECHNOLOGY . . . . . . . . . . . . . . . . . . . . . . . 22,203,595
------------
TRANSPORTATION
45,000 Arkansas Best Corp. . . . . . . . . . . . . . . . . . . . . . . 450,000
8,000 Arnold Industries, Inc. . . . . . . . . . . . . . . . . . . . . 142,000
</TABLE>
37
<PAGE> 39
Notes to Financial Statements, continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number Market
of Shares Value
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
6,800 Consolidated Freightways, Inc. . . . . . . . . . . . . . . . . . 173,400
28,000 Illinois Central Corp. . . . . . . . . . . . . . . . . . . . . . 983,500
2,000 M.S. Carriers, Inc. . . . . . . . . . . . . . . . . . . . . . . 47,750
29,000 Northwest Airlines, Inc., Class A . . . . . . . . . . . . . . . 866,375
19,000 Pittston Company Services Group . . . . . . . . . . . . . . . . 451,250
9,000 Skywest, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 142,875
------------
TOTAL TRANSPORTATION . . . . . . . . . . . . . . . . . . . . . 3,257,150
------------
UTILITIES
8,000 Atlantic Energy . . . . . . . . . . . . . . . . . . . . . . . . 145,000
37,100 Boston Edison Co. . . . . . . . . . . . . . . . . . . . . . . . 890,400
3,000 C-TEC Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . 63,750
4,300 Central Hudson Gas & Electric . . . . . . . . . . . . . . . . . 111,263
2,000 Cilcorp, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 72,750
44,000 Delmarva Power & Lighting Co. . . . . . . . . . . . . . . . . . 863,500
28,000 DQE, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 941,500
8,000 Eastern Utilities Association . . . . . . . . . . . . . . . . . 191,000
42,000 Illinova Corp. . . . . . . . . . . . . . . . . . . . . . . . . . 976,500
35,000 Lincoln Telecommunications . . . . . . . . . . . . . . . . . . . 542,500
33,500 Oklahoma Gas & Electric Co. . . . . . . . . . . . . . . . . . . 1,151,562
3,000 Orange & Rockland Utilities . . . . . . . . . . . . . . . . . . 95,250
40,000 Pinnacle West Capital Corp. . . . . . . . . . . . . . . . . . . 855,000
47,000 Portland General Corp. . . . . . . . . . . . . . . . . . . . . . 963,500
16,000 Public Services Co. of New Mexico . . . . . . . . . . . . . . . 202,000
14,200 Southern New England Telecommunications . . . . . . . . . . . . 466,825
------------
TOTAL UTILITIES . . . . . . . . . . . . . . . . . . . . . . . 8,532,300
------------
TOTAL COMMON STOCK . . . . . . . . . . . . . . . . . . . . . . 131,564,668
------------
Convertible Preferred Stock
1,600 FHP International, $1.25, Series A . . . . . . . . . . . . . . . 37,800
------------
Principal
Amount
(000) Repurchase Agreement
- -----------
$ 2,045 SBC Capital Markets, Inc., 5.92%, 5/1/95 . . . . . . . . . . . . 2,045,000
------------
TOTAL INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . 133,647,468
Other assets and liabilities, net . . . . . . . . . . . . . . . 3,104,847
------------
NET ASSETS at April 30, 1995 . . . . . . . . . . . . . . . . . . $136,752,315
============
</TABLE>
Note 3-Investment Activity
During the period, the cost of purchases and proceeds from sales and maturities
of investments, excluding short-term investments and forward commitments were:
<TABLE>
<CAPTION>
Growth Emerging International
Growth II and Income II Government II Growth II Equity II
--------- ------------- ------------- --------- ---------
<S> <C> <C> <C> <C> <C>
Purchases . . . . . . . . . . . . $30,793,450 $ 13,201,730 $ 4,995,488 $3,091,395 $2,690,697
Sales . . . . . . . . . . . . . . $15,296,700 $ 5,868,037 $ 1,308,908 $ 135,205 $ -
</TABLE>
At the end of the period, the Trust held the following long futures contracts:
<TABLE>
<CAPTION>
Number Market Unrealized
Fund Description of Contracts Value Appreciation
---- ----------- ------------ ------ ------------
<S> <C> <C> <C> <C>
Growth II Standard & Poor's 500 Index
expiring June 1995 8 $ 2,067,000 $108,643
=========== ========
Growth and Income II Standard & Poor's 500 Index
expiring June 1995 4 $ 1,033,500 $ 44,782
=========== ========
</TABLE>
At the end of the period, International Equity II held the following forward
currency exchange contracts:
<TABLE>
<CAPTION>
Unrealized
Settlement U.S. Dollar Appreciation
Currency Date Value (Depreciation)
-------- ---------- ----------- --------------
<S> <C> <C> <C>
Australian Schilling
494,769 (payable) . . . . . 05/08/95 $ 50,777 $ 47
British Pound Sterling
12,763 (payable) . . . . . 05/12/95 20,539 (97)
13,307 (payable) . . . . . 05/15/95 21,415 (31)
French Franc
279,173 (payable) . . . . . 05/31/95 56,812 (804)
Singapore Dollar
33,043 (payable) . . . . . 05/02/95 23,712 (55)
-------- ------
$173,255 $ (940)
======== ======
</TABLE>
38
<PAGE> 40
Notes to Financial Statements, continued
- --------------------------------------------------------------------------------
The following table presents the identified cost of investments (and foreign
currency for International Equity II) at the end of the period for federal
income tax purposes, the associated net unrealized appreciation and capital
loss carryforward which will expire in 2002.
<TABLE>
<CAPTION>
Growth Emerging International
Growth II and Income II Government II Growth II Equity II
--------- ------------- ------------- --------- -------------
<S> <C> <C> <C> <C> <C>
Identified cost . . . . . . . . . $27,916,399 $ 15,436,800 $ 11,207,571 $4,387,516 $3,333,210
=========== ============ ============ ========== ==========
Gross unrealized appreciation . . $ 2,032,781 $ 1,258,802 $ 196,956 $ 140,971 $ 205,215
Gross unrealized depreciation . . (147,583) (123,764) (29,418) (51,573) (15,805)
----------- ------------ ------------ ---------- ----------
Net unrealized appreciation . . . $ 1,885,198 $ 1,135,038 $ 167,538 $ 89,398 $ 189,410
=========== ============ ============ ========== ==========
Capital loss carryforward . . . . $ 177,804 $ 120,455 $ 35,561 $ - $ -
=========== ============ ============ ========== ==========
</TABLE>
Note 4-Capital
Each Fund offers two classes of shares at their respective net asset values per
share, plus a sales charge which is imposed either at the time of purchase (the
Class A shares) or at the time of redemption on a contingent deferred basis
(the Class B shares). All classes of shares have the same rights, except that
Class B shares bear the cost of distribution fees and certain other class
specific expenses. Class B shares automatically convert to Class A shares six
years after purchase, subject to certain conditions. Realized and unrealized
gains or losses, investment income and expenses (other than class specific
expenses) are allocated daily to each class of shares based upon the relative
proportion of net assets of each class.
The Trust has an unlimited number of each class of shares of $.01 par value
beneficial interest authorized. Transactions in shares of beneficial interest
for the period were as follows:
<TABLE>
<CAPTION>
Growth Emerging International
Growth II and Income II Government II Growth II Equity II
--------- ------------- ------------- --------- -------------
<S> <C> <C> <C> <C> <C>
Shares sold
Class A . . . . . . . . . . . . 567,705 305,669 218,047 202,079 229,035
Class B . . . . . . . . . . . . 905,177 442,205 228,718 91,130 34,454
----------- ------------ ------------ ---------- ----------
1,472,882 747,874 446,765 293,209 263,489
----------- ------------ ------------ ---------- ----------
Shares issued for distributions
reinvested
Class A . . . . . . . . . . . . - 3,554 12,338 - -
Class B . . . . . . . . . . . . - 2,257 7,952 - -
----------- ------------ ------------ ---------- ----------
- 5,811 20,290 - -
----------- ------------ ------------ ---------- ----------
Shares redeemed
Class A . . . . . . . . . . . . (52,415) (49,354) (86,038) (165) (164)
Class B . . . . . . . . . . . . (48,683) (32,159) (28,960) (696) (101)
----------- ------------ ------------ ---------- ----------
(101,098) (81,513) (114,998) (861) (265)
----------- ------------ ------------ ---------- ----------
Shares outstanding . . . . . . . . 1,371,784 672,172 352,057 292,348 263,224
=========== ============ ============ ========== ==========
</TABLE>
Note 5-Trustee Compensation
Trustees who are not affiliated with the Adviser are compensated by the Trust
at the annual rate of $3,880 plus a fee of $260 per day for the Board meeting
attended.
<TABLE>
<CAPTION>
Growth Emerging International
Growth II and Income II Government II Growth II Equity II
--------- ------------- ------------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Trustees' fees for the period . . $11,503 $11,269 $11,268 - -
======= ======= ======= = =
</TABLE>
39
<PAGE> 41
Growth II Fund Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout the
periods indicated (Unaudited).
<TABLE>
<CAPTION>
CLASS A CLASS B
----------------------------------- -----------------------------------
SIX MONTHS MAY 3, 1994(1) SIX MONTHS MAY 3, 1994(1)
ENDED THROUGH ENDED THROUGH
APRIL 30, 1995 OCTOBER 31, 1994(2) APRIL 30, 1995 OCTOBER 31, 1994(2)
-------------- ------------------- -------------- -------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period . . . . $11.89 $11.81 $11.85 $11.81
------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Investment income . . . . . . . . . . . . . . .10 .29 .07 .28
Expenses(4) . . . . . . . . . . . . . . . . . (.11) (.29) (.10) (.32)
------ ------ ------ ------
Net investment income (loss) . . . . . . . . (.01) .00 (.03) (.04)
Net realized and unrealized gain
on securities . . . . . . . . . . . . . . . .81 .08 .78 .08
------ ------ ------ ------
Total from investment operations . . . . . . .80 .08 .75 .04
------ ------ ------ ------
Net asset value, end of period . . . . . . . $12.69 $11.89 $12.60 $11.85
====== ====== ====== ======
TOTAL RETURN(3) . . . . . . . . . . . . . . . 6.64% .76% 6.24% .42%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions) . . . . $11.2 $4.4 $17.0 $5.8
Average net assets (millions) . . . . . . . . $ 7.3 $2.1 $10.6 $2.1
Ratios to average net assets (annualized)(4)
Expenses . . . . . . . . . . . . . . . . . 2.78% 4.89% 3.52% 5.79%
Expenses, without expense reimbursement . . 3.61% - 4.36% -
Net investment loss . . . . . . . . . . . . (.28%) (.05%) (1.04%) (.78%)
Net investment loss, without expense
reimbursement . . . . . . . . . . . . . . (1.11%) - (1.87%) -
Portfolio turnover rate . . . . . . . . . . . 97% 151% 97% 151%
</TABLE>
(1) Commencement of operations
(2) Based on average month-end shares outstanding
(3) Total return has not been annualized and does not consider the effect of
sales charges.
(4) See Note 2
See Notes to Financial Statements.
40
<PAGE> 42
Growth and Income II Fund Financial Highlights, continued
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout the
periods indicated (Unaudited).
<TABLE>
<CAPTION>
CLASS A CLASS B
----------------------------------- -----------------------------------
SIX MONTHS MAY 3, 1994(1) SIX MONTHS MAY 3, 1994(1)
ENDED THROUGH ENDED THROUGH
APRIL 30, 1995 OCTOBER 31, 1994(2) APRIL 30, 1995 OCTOBER 31, 1994(2)
-------------- ------------------- -------------- -------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period . . . . $11.71 $11.81 $11.70 $11.81
------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Investment income . . . . . . . . . . . . . . .11 .42 .18 .42
Expenses . . . . . . . . . . . . . . . . . . (.08) (.21) (.18) (.25)
------ ------ ------ ------
Net investment income . . . . . . . . . . . . .03 .21 .00 .17
Net realized and unrealized gains or losses
on securities . . . . . . . . . . . . . . . .885 (.26) .864 (.251)
------ ------ ------ ------
Total from investment operations . . . . . . .915 (.05) .864 (.081)
------ ------ ------ ------
LESS DISTRIBUTIONS FROM NET INVESTMENT
INCOME . . . . . . . . . . . . . . . . . . (.095)(5) (.05) (.054)(5) (.029)
------ ------ ------ ------
Net asset value, end of period . . . . . . . $12.53 $11.71 $12.51 $11.70
====== ====== ====== ======
TOTAL RETURN(3) . . . . . . . . . . . . . . . 7.88% (.42%) 7.43% (.68%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions) . . . . $7.0 $3.5 $9.0 $3.6
Average net assets (millions) . . . . . . . . $5.2 $1.9 $5.9 $1.5
Ratios to average net assets (annualized)(4)
Expenses . . . . . . . . . . . . . . . . . 2.77% 3.37% 3.53% 4.42%
Expenses, without expense reimbursement . . 3.20% 3.40% 3.95% 4.45%
Net investment income . . . . . . . . . . . .89% 3.38% .12% 3.00%
Net investment income (loss), without
expense reimbursement . . . . . . . . . . .47% 3.35% (.31%) 2.97%
Portfolio turnover rate . . . . . . . . . . . 61% 215% 61% 215%
</TABLE>
(1) Commencement of operations
(2) Based on average month-end shares outstanding
(3) Total return has not been annualized and does not consider the effect of
sales charges.
(4) See Note 2
(5) Includes $.044 and $.047 per share for Class A and Class B, respectively,
in excess of net investment income - see Note 1H.
See Notes to Financial Statements.
41
<PAGE> 43
Government II Fund Financial Highlights, continued
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each of
the periods indicated (Unaudited).
<TABLE>
<CAPTION>
CLASS A CLASS B
----------------------------------- -----------------------------------
SIX MONTHS MAY 3, 1994(1) SIX MONTHS MAY 3, 1994(1)
ENDED THROUGH ENDED THROUGH
APRIL 30, 1995 OCTOBER 31, 1994(2) APRIL 30, 1995 OCTOBER 31, 1994(2)
-------------- ------------------- -------------- -------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period . . . . $11.54 $11.91 $11.54 $11.91
------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Investment income . . . . . . . . . . . . . . .49 .38 .50 .38
Expenses(4) . . . . . . . . . . . . . . . . . (.16) (.15) (.21) (.18)
------ ------ ------ ------
Net investment income . . . . . . . . . . . . .33 .23 .29 .20
Net realized and unrealized gains or losses
on securities . . . . . . . . . . . . . . . .3396 (.40) .3406 (.41)
------ ------ ------ ------
Total from investment operations . . . . . . .6696 (.17) .6306 (.21)
------ ------ ------ ------
LESS DISTRIBUTIONS FROM NET INVESTMENT INCOME (.3396)(5) (.20) (.3006)(5) (.16)
------ ------ ------ ------
Net asset value, end of period . . . . . . . $11.87 $11.54 $11.87 $11.54
====== ====== ====== ======
TOTAL RETURN(3) . . . . . . . . . . . . . . . 5.96% (1.53%) 5.61% (1.83%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions) . . . . $6.4 $4.6 $5.3 $2.8
Average net assets (millions) . . . . . . . . $5.2 $3.9 $3.9 $1.1
Ratios to average net assets (annualized)(4)
Expenses . . . . . . . . . . . . . . . . . 2.78% 2.32% 3.52% 3.25%
Expenses, without expense reimbursement . . 3.15% - 3.89% -
Net investment income . . . . . . . . . . . 5.59% 3.54% 4.84% 3.49%
Net investment income, without expense
reimbursement . . . . . . . . . . . . . . 5.22% - 4.47% -
Portfolio turnover rate . . . . . . . . . . . 14% 155% 14% 155%
</TABLE>
(1) Commencement of operations
(2) Based on average month-end shares outstanding
(3) Total return has not been annualized and does not consider the effect of
sales charges.
(4) See Note 2
(5) Includes $.0114 and $.0105 per share for Class A and Class B, respectively,
in excess of net investment income - see Note 1H.
See Notes to Financial Statements.
42
<PAGE> 44
Emerging Growth II Fund Financial Highlights, continued
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout the
period indicated (Unaudited). February 21, 1995(1) through April 30, 1995
<TABLE>
<CAPTION>
CLASS A CLASS B
------- -------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE(2)
Net asset value, beginning of period . . . . . . . . . . . $11.81 $11.81
------ ------
INCOME FROM INVESTMENT OPERATIONS
Investment income . . . . . . . . . . . . . . . . . . . . . .07 .05
Expenses(4) . . . . . . . . . . . . . . . . . . . . . . . . (.08) (.06)
------ ------
Net investment loss . . . . . . . . . . . . . . . . . . . . (.01) (.01)
Net realized and unrealized gain on securities . . . . . . .60 .59
------ ------
Total from investment operations . . . . . . . . . . . . . .59 .58
------ ------
Net asset value, end of period . . . . . . . . . . . . . . $12.40 $12.39
====== ======
TOTAL RETURN(3) . . . . . . . . . . . . . . . . . . . . . . 5.00% 4.91%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions) . . . . . . . . . . . $2.5 $1.1
Average net assets (millions) . . . . . . . . . . . . . . . $0.9 $0.2
Ratios to average net assets (annualized)(4)
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 2.92% 2.89%
Expenses, without expense reimbursement . . . . . . . . . 6.84% 6.82%
Net investment loss . . . . . . . . . . . . . . . . . . . (.22%) (.50%)
Net investment loss, without expense reimbursement . . . . (4.15%) (4.43%)
Portfolio turnover rate . . . . . . . . . . . . . . . . . . 12% 12%
</TABLE>
(1) Commencement of operations
(2) Based on average month-end shares outstanding
(3) Total return has not been annualized and does not consider the effect of
sales charges.
(4) See Note 2
See Notes to Financial Statements.
43
<PAGE> 45
International Equity II Fund Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout the
period indicated (Unaudited). February 21, 1995* through April 30, 1995
<TABLE>
<CAPTION>
Class A Class B
------- -------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE(2)
Net asset value, beginning of period . . . . . . . . . . . $11.81 $11.81
------ ------
INCOME FROM INVESTMENT OPERATIONS
Investment income . . . . . . . . . . . . . . . . . . . . . .10 .06
Expenses(4) . . . . . . . . . . . . . . . . . . . . . . . . (.08) (.02)
------ ------
Net investment income . . . . . . . . . . . . . . . . . . . .02 .04
Net realized and unrealized gain on securities . . . . . . .86 .83
------ ------
Total from investment operations . . . . . . . . . . . . . .88 .87
------ ------
Net asset value, end of period . . . . . . . . . . . . . . $12.69 $12.68
====== ======
TOTAL RETURN(3) . . . . . . . . . . . . . . . . . . . . . . 7.45% 7.37%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions) . . . . . . . . . . . $2.9 $0.4
Average net assets (millions) . . . . . . . . . . . . . . . $1.7 $0.0
Ratios to average net assets (annualized)(4)
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 2.87% 1.03%
Expenses, without expense reimbursement . . . . . . . . . 7.33% 5.49%
Net investment income . . . . . . . . . . . . . . . . . . .82% 1.89%
Net investment loss, without expense reimbursement . . . . (3.64%) (2.57%)
Portfolio turnover rate . . . . . . . . . . . . . . . . . . 0% 0%
</TABLE>
(1) Commencement of operations
(2) Based on average month-end shares outstanding
(3) Total return has not been annualized and does not consider the effect of
sales charges.
(4) See Note 2
See Notes to Financial Statements.
44
<PAGE> 46
Common Sense Trust II
- --------------------------------------------------------------------------------
Board of Trustees
Donald M. Carlton F. Robert Paulsen
A. Benton Cocanougher R. Richardson Pettit
Stephen R. Gross Don G. Powell
Norman Hackerman Alan B. Shepard, Jr.
Robert D. H. Harvey Miller Upton
Alan G. Merten Benjamin N. Woodson
Steven Muller
- --------------------------------------------------------------------------------
Officers
Don G. Powell Curtis W. Morell
President Vice President and
Treasurer
Gerald Baxter
Stephen L. Boyd Tanya M. Loden
Jim Conheady Vice President and
Kenneth S. Durham Controller
Harvey Eisen
James A. Gilligan Nori L. Gabert
John A. Helms Vice President and
David C. Johnson Secretary
Gary M. Lewis
Dennis J. McDonnell Huey P. Falgout, Jr.
Jeff New J. David Wise
Ronald A. Nyberg Assistant Secretaries
Robert C. Peck, Jr.
Greg Pitts Perry F. Farrell
John R. Reynoldson M. Robert Sullivan
Jeffrey Russell Assistant Treasurers
Alan T. Sachtleben
David R. Troth
D. Richard Williams
Paul R. Wolkenberg
Vice Presidents
- --------------------------------------------------------------------------------
Investment Adviser
Van Kampen American Capital Asset Management, Inc.
2800 Post Oak Blvd., Houston, Texas 77056
- --------------------------------------------------------------------------------
Investment Subadviser
Smith Barney Mutual Funds Management, Inc.
388 Greenwich Street, New York, New York 10013
- --------------------------------------------------------------------------------
Distributor
Common Sense Distributors
3100 Breckinridge Blvd., Duluth, Georgia 30199-0001
- --------------------------------------------------------------------------------
Shareholder Service Agent
Common Sense Shareholder Services
3100 Breckinridge Blvd., Duluth, Georgia 30199-0062
- --------------------------------------------------------------------------------
Custodian
State Street Bank and Trust Company
225 Franklin Street, Boston, Massachusetts 02110
- --------------------------------------------------------------------------------
Counsel
Sullivan & Worcester
1025 Connecticut Avenue N.W., Washington, D.C. 20036
- --------------------------------------------------------------------------------
This report is submitted for the general information of the shareholders of the
Trust. It is not authorized for distribution to prospective investors unless it
has been preceded or is accompanied by an effective prospectus of the Trust
which contains additional information on how to purchase shares, the sales
charge, and other pertinent data.
- --------------------------------------------------------------------------------
***************************************************************************
* *
* Shareholder inquiries should be directed in writing to the *
* Shareholder Service Agent. Common Sense Shareholder Services, 3120 *
* Breckinridge Blvd., Duluth, Georgia 30199-001, or by calling (800) *
* 544-5445. *
* *
***************************************************************************
<PAGE> 47
*********************
* BULK RATE *
* U.S. POSTAGE *
* PAID *
* Permit No. 747 *
* Atlanta, GA. *
*********************
COMMON SENSE(R) TRUST
FAMILY OF FUNDS
Common Sense Shareholder Services
3120 Breckinridge Blvd.
Duluth, Georgia 30199-0001
If you have any questions, please contact
one of our Customer Service Representatives
1-800-544-5445
PRINTED MATTER
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