PROFESSIONALLY MANAGED PORTFOLIOS, N-30D, 1997-03-07

PROFESSIONALLY MANAGED PORTFOLIOS
N-30D, 1997-03-07

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UNITED STATES TRUST COMPANY
BOSTON Investment Management

January, 1997

Dear Boston Managed Growth Fund Shareholder,

Fund Net Asset Value: $83.31

COMPARATIVE PERFORMANCE*
<TABLE>
<CAPTION>
Annualized
Since
Quarter Six Months Year Inception
Ending Ended Ended 12/1/95 to
12/31/96 12/31/96 12/31/96 12/31/96
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Boston Managed Growth Fund 6.5% 10.2% 14.4% 14.5%

Standard & Poor's 500 8.3% 11.7% 22.9% 22.8%

Lehman Bond Index 3.1% 4.9% 2.9% 4.3%

90 Day U.S. Treasury Bill 1.3% 2.5% 5.0% 5.2%
</TABLE>
*After all expenses at an annual rate of 1%, the Advisor's expense
limitation. Results shown are past performance which is not an indication of
future returns. Shares of the Fund are not deposits or obligations of United
States Trust Company of Boston or any Bank and are not insured by the FDIC,
Federal Reserve Board or any agency. The value of the Fund shares and returns
will fluctuate and investors may have a gain or loss when they redeem shares.
Distributed by First Fund Distributors, Inc.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

MARKET & PERFORMANCE SUMMARY - Fourth Quarter 1996

How much higher can stock prices go? Can the economic and political
environment stay this good? Is a major correction or another crash in store for
us in 1997? Portfolio managers and private investors alike were pondering these
and similar questions during the fourth quarter as stock prices posted their
best gains of 1996. The S&P 500 ended the year with a quarterly increase of 8.3%
and a full year total return of 22.9%. These gains followed an increase of 37.6%
in 1995, and brought the two-year compound return for stocks to almost 70%,
which is among the best in this century! No wonder that even Alan Greenspan, the
justifiably well-respected Chairman of the Federal Reserve, commented in
December that stock prices are perhaps entering a state of "irrational
exuberance", and expressed his concern that a sudden price decline may impact
the real economy. After a swift, but brief, correction of about 5%, investors
concluded that Mr. Greenspan's intention was only to temper enthusiasm rather
than to signal new policy measures that would end the bull market. Our thoughts
on
<PAGE>
these issues are discussed in the economic and strategy sections of this report,
but first an assessment of the 1996 results.

Boston Managed Growth Fund participated fully in the favorable market
trend. The fourth quarter gain of 6.5% lifted the six month total return to
10.1% and the full year return to 14.4%. Although well below the return of most
(including those we manage) all-equity funds, a gain of 14.4% compares very well
with other diversified stock and bond funds. Bonds, which provided a total
return of only 3%, adversely impacted all similar diversified funds in 1996.
Boston Managed Growth's above average gain was aided by the comparatively high
allocation to stocks we maintained throughout 1996, and the strong performance
of the equity component during the second half of the year. As 1997 begins we
have retained an above average allocation to common stocks of roughly 70% of the
total value of the Fund. The remaining 30% is primarily invested in high quality
bonds maturing within 5 - 10 years. Provided the economic trend does not
deteriorate, our view remains that stock prices generally have not reached
overvalued levels, and we expect further, though more moderate, gains in 1997.

ECONOMIC SUMMARY & OUTLOOK

The so-called Goldilocks economy - `not too strong, not too weak' - has
now lasted two full years and arguably five years. Moreover, we have only had
one recession since 1982! During these past fourteen years, inflation has
averaged a rather tame 3% or so. Yet, many forecasters quoted in the financial
press continue to warn that another recession is around the corner, while others
insist that rising inflation next year will lead to much higher interest rates.
Almost anything is possible, but our view, as expressed in my recent reports, is
that in 1997 the economy will again disappoint forecasters at both extremes of
the growth/recession spectrum. Specifically, real GDP growth should be in the 2%
- - 3% range, inflation remain less than 3%, and corporate profits increase by 8%
- - 10%.

Much of the credit for the moderate, long-lived expansion has gone to
the Federal Reserve. We are not sure that all the credit is justified, but it is
hard to argue that a different monetary policy would have produced even better
economic results, or that the political pressure the Fed placed on Congress and
the President to gradually reduce the budget deficit was unnecessary. Now that
our political leaders appear to be leading the charge toward budget balance, Fed
Chairman Greenspan has turned his admonishments toward investors by raising the
issue of the impact of stock price levels on the economy with his "irrational
exuberance" reference.

What is his concern? Why would it be so bad for the economy if stock
prices dropped by 15% or even 30%? A 15% drop would lower the value of aggregate
investor portfolios only back to about February, 1996 levels, while a 30%
decline would still leave perceived stock market wealth higher than March, 1995.
It is worth noting that, collectively, investors cannot sidestep a drop in
prices. For every investor that sells near a peak, there is an unfortunate buyer
at that same price.

Chairman Greenspan's concern emanates from potential consumer and
business reaction to a loss in perceived wealth. Most individuals feel worse if
their portfolio increases from $1 million to $3 million and then drops back to
$2 million, than they do about a gradual gain from $1 million to $2 million. In
the first instance $1 million was lost, while in the latter $1 million was made.
Now that a larger proportion of individuals are more
<PAGE>
directly invested in stocks through either mutual funds or 401(k) retirement
programs, a drop in stock values may lead to lower spending on goods and
services. Projecting the extent of the economic impact if the perceived wealth
in our stock holdings simply returns to what it was a year or two ago is too
difficult for even the Fed to analyze. The impact may be trivial or it may prove
to be a sufficient catalyst to induce our second recession in fifteen years. We
conclude that Chairman Greenspan prefers a gradual, consistent rise in stock
values that coincides with economic and business growth, and seeks to avoid
"irrational exuberance". He may not get his wish, but it is comforting to
believe he is on the side of most investors.

INVESTMENT STRATEGY

In the opening section of this report I implied that the political,
economic and business environment has rarely been better from the standpoint of
supporting high stock prices. The following table outlines just how strong the
support has been from the two key determinants of long term stock values -
corporate profits and interest rates.
<TABLE>
<CAPTION>
S&P 500 PRICE TEN YEAR
S&P 500 OPERATING EARNINGS U.S. TREASURY
Index Value EARNINGS* RATIO YIELD
----------- --------- ----- -----
<S> <C> <C> <C> <C>
December 31, 1990 330 $23.55 14.0X 8.1%

December 31, 1991 417 $20.34 20.5X 6.7%

December 31, 1992 436 $22.49 19.4X 6.7%

December 31, 1993 466 $26.64 17.5X 5.8%

December 31, 1994 459 $33.01 13.9X 7.8%

December 31, 1995 616 $38.81 15.8X 5.6%

December 31, 1996 741 $41.00(E) 18.0X 6.4%
</TABLE>
*Source: Paine Webber

The first column provides the year-end closing values for the Standard
& Poors 500 stock index each year end since 1990. The value has risen from 330
to 741, or more than 100% in just six years. Supporting record price levels is
the almost doubling in corporate operating profits for companies in the S&P 500.
The profit rise has kept the valuation of earnings within historical ranges.
Moreover, the profit expansion occurred while interest rates declined from over
8% to well below 7%, further supporting higher earnings valuations. In addition
to profits and interest rates, stock prices have been aided by the stability of
our economy relative to those of other industrialized countries, as well as the
perceived political and military power enjoyed by the United States subsequent
to the downfall of the Soviet regime.
<PAGE>
A change in the direction of either corporate profits or interest
rates, or greater global instability, would no doubt lead to a deeper and longer
lasting market drop than we had in July, 1996 (10%) or December, 1996 (5%). As
always, in 1997 we will focus on discerning between the short, emotional and
unavoidable price corrections we experienced twice in 1996, and a fundamental,
longer-term change in the direction of corporate profits and interest rates that
would lead to a much deeper, longer-lasting decline in security values. Given
our constructive 1997 economic outlook, we expect the trend in corporate profits
and interest rates to remain favorable, which in turn has led us to keep the
Fund's equity exposure at the current high level.

The accompanying summary statement outlines the Fund's individual
holdings and investment position. Emphasis continues to be in higher quality
securities. Relative to the stock market generally, we maintain above average
equity exposure in the finance, healthcare and producer sectors.

On behalf of all of us at United States Trust, I thank you for your
continued confidence in our services and extend our best wishes for a healthy,
prosperous and peaceful 1997. Please feel free to contact either me or my
colleagues at (617) 726-7252 should you have any questions about our investment
views or your account.

Sincerely,

/s/ Domenic Colasacco
Domenic Colasacco
President,
United States Trust Company of Boston
<PAGE>
Boston Managed Growth Fund

SCHEDULE OF INVESTMENTS at December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Shares COMMON STOCKS: 69.0% Market Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Communication Services: 3.0%
13,800 Ameritech Corp.......................................................... $ 836,625
8,000 AT&T Corp............................................................... 348,000
20,000 Bellsouth Corp.......................................................... 807,500
----------
1,992,125
----------
Consumer Cyclicals: 6.0%
19,000 A.O. Smith Corp......................................................... 567,625
10,000 Ford Motor Co........................................................... 318,750
19,100 Gannett Co., Inc........................................................ 1,430,112
7,500 General Motors Corp..................................................... 418,125
21,100 Leggett & Platt, Inc.................................................... 730,588
20,200 Price/Costco, Inc.*..................................................... 507,525
----------
3,972,725
----------
Consumer Products: 8.6%
20,000 Albertson's, Inc........................................................ 712,500
10,000 American Greetings, Class A............................................. 283,750
30,000 Anheuser Busch Companies, Inc........................................... 1,200,000
2,600 Earthgrains Co.......................................................... 135,850
1,000 Gillette Co............................................................. 77,750
2,000 Kimberly Clark Corp..................................................... 190,500
7,500 McDonald's Corp......................................................... 339,375
16,000 Procter & Gamble Co..................................................... 1,720,000
7,000 Sysco Corp.............................................................. 228,375
6,000 UST, Inc................................................................ 194,250
6,000 The Walt Disney Co...................................................... 417,750
4,800 Wm. Wrigley, Jr., Co.................................................... 270,000
----------
5,770,100
----------
Energy & Resources: 4.6%
10,500 Amoco Corp.............................................................. 845,250
5,400 Atlantic Richfield Co................................................... 715,500
15,500 Exxon Corp.............................................................. 1,519,000
----------
3,079,750
----------
</TABLE>
5
<PAGE>
Boston Managed Growth Fund

SCHEDULE OF INVESTMENTS at December 31, 1996 (Unaudited), Continued
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Shares Market Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Finance: 13.8%
48,000 Bank of Boston Corp..................................................... $ 3,084,000
10,000 Boatmen's Bancshares, Inc............................................... 645,000
15,000 Cincinnati Financial Corp............................................... 973,125
22,900 Federal National Mortgage Association................................... 853,025
9,500 First Virginia Banks, Inc............................................... 454,813
35,000 T. Rowe Price Associates, Inc........................................... 1,522,500
45,000 United Asset Management Corp............................................ 1,198,125
8,900 Wachovia Corp........................................................... 502,850
-----------
9,233,438
-----------
Healthcare: 11.0%
35,000 Becton Dickinson & Co................................................... 1,518,125
35,000 Johnson & Johnson....................................................... 1,741,250
15,700 Medtronic, Inc.......................................................... 1,067,600
9,000 Merck & Co., Inc........................................................ 713,250
12,000 Pfizer, Inc............................................................. 994,500
20,000 Schering-Plough Corp.................................................... 1,295,000
-----------
7,329,725
-----------
Industrial Materials: 3.3%
5,100 PPG Industries, Inc..................................................... 286,237
25,900 Sealed Air Corp.*....................................................... 1,078,088
13,200 Sigma-Aldrich Corp...................................................... 824,175
-----------
2,188,500
-----------
Producer Products: 10.9%
16,000 Donaldson Co., Inc...................................................... 536,000
19,100 Emerson Electric Co..................................................... 1,847,925
9,200 Honeywell, Inc.......................................................... 604,900
5,000 Hubbell, Inc., Class B.................................................. 216,250
20,000 Illinois Tool Works..................................................... 1,597,500
3,000 Johnson Controls, Inc................................................... 248,625
17,000 Millepore Corp.......................................................... 703,375
5,500 Minnesota Mining & Manufacturing Co..................................... 455,813
5,200 Tecumseh Products Co., Class A.......................................... 298,350
3,500 Tecumseh Products Co., Class B.......................................... 199,062
10,500 York International Corp................................................. 586,687
-----------
7,294,487
-----------
</TABLE>
6
<PAGE>
Boston Managed Growth Fund

Total Common Stocks (cost $37,901,159).................................. 46,083,775
-----------

Principal Amount CORPORATE BONDS: 10.2%
- -------------------------------------------------------------------------------------------------------------------
$ 925,000 American Home Products 7.90% 2/15/05.................................... 985,125
300,000 Atlantic Richfield Co. 8.50% 4/1/12..................................... 335,625
300,000 Chubb Capital Corp. 6.00% 2/1/98........................................ 300,375
300,000 Deere & Co. 8.79% 8/6/98................................................ 311,901
500,000 Eaton Corp. 8.90% 8/15/06............................................... 568,750
400,000 Equitable Resources 8.55% 9/1/03........................................ 437,292
200,000 Ford Motor Credit Corp. 9.25% 6/15/98................................... 208,750
425,000 Ford Motor Credit Corp. 7.75% 11/15/02.................................. 447,844
300,000 Ford Motor Credit Corp. 6.625% 6/30/03.................................. 299,625
825,000 GMAC 9.625% 12/15/01.................................................... 926,062
300,000 GMAC 8.50% 1/1/03....................................................... 324,375
300,000 Sears Roebuck Co. 9.46% 6/20/00......................................... 326,250
300,000 Southwestern Bell Capital 7.75% 10/30/97................................ 304,779
375,000 Sysco Corp. 6.50% 6/15/05............................................... 367,500
400,000 Unum Corp. 5.88% 10/15/03............................................... 380,428
300,000 Weyerhaeuser Co. 7.25% 7/1/13 ......................................... 300,000
-----------

Total Corporate Bonds (cost $6,946,583)................................. 6,824,681
-----------
</TABLE>
7
<PAGE>
Boston Managed Growth Fund

SCHEDULE OF INVESTMENTS at December 31, 1996 (Unaudited), Continued
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AND GOVERNMENT AGENCY
Principal Amount OBLIGATIONS: 17.3% Market Value
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
$ 300,000 FHLBB 9.20% 8/25/97..................................................... $ 306,615
285,000 FNMA 9.20% 6/10/97...................................................... 289,141
875,000 FNMA Medium Term Note 5.49% 10/2/03..................................... 849,459
2,750,000 U.S. Treasury Bond 7.50% 11/15/16....................................... 2,978,085
2,950,000 U.S. Treasury Note 9.125% 5/15/99....................................... 3,152,400
1,725,000 U.S. Treasury Note 8.75% 8/15/00........................................ 1,869,503
2,000,000 U.S. Treasury Note 8.00% 5/15/01........................................ 2,136,800
-----------

Total U.S. Government and Government Agency Obligations
(cost $11,744,127)...................................................... 11,582,003
-----------

SHORT TERM INVESTMENT: 2.4%
- -------------------------------------------------------------------------------------------------------------------
1,566,577 SEI Daily Income Government Fund II (cost $1,566,577)................... 1,566,577
-----------

Total Investment in Securities (cost $58,158,447+): 98.9%............... 66,057,036
Other Assets less Liabilities: 1.1%..................................... 752,767
-----------
Total Net Assets: 100.0%................................................ $66,809,803
===========

+ At December 31, 1996, the cost of securities for Federal tax purposes was the
same as the basis for financial reporting. Unrealized appreciation and
depreciation of securities were as follows:

Gross unrealized appreciation........................................... $ 8,248,823
Gross unrealized depreciation........................................... (350,234)
-----------
Net unrealized appreciation.................................... $ 7,898,589
===========
</TABLE>
*Non-income producing security.

See Accompanying Notes to Financial Statements.
8
<PAGE>
Boston Managed Growth Fund

STATEMENT OF ASSETS AND LIABILITIES at December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------

ASSETS
<S> <C>
Investments in securities, at value (identified cost $58,158,447) (Note 2-A) .......... $66,057,036
Receivables:
Investment securities sold....................................................... 419,756
Dividends and interest........................................................... 369,942
Other assets........................................................................... 11,893
-----------
Total assets .............................................................. 66,858,627
-----------

LIABILITIES
Payables:
Advisory fee..................................................................... 42,732
Administration fee............................................................... 5,698
Other accrued expenses ................................................................ 394
-----------
Total liabilities.......................................................... 48,824
-----------

NET ASSETS................................................................................... $66,809,803
===========

Net asset value, offering and redemption price per share
($66,809,803/801,982 shares outstanding; unlimited number of shares
authorized without par value) ......................................................... $83.31
======

COMPONENTS OF NET ASSETS
Paid-in capital ....................................................................... $59,183,548
Undistributed net investment income.................................................... 31,826
Accumulated net realized loss on investments........................................... (304,160)
Net unrealized appreciation on investments............................................. 7,898,589
-----------
Net assets ...................................................................... $66,809,803
===========
</TABLE>
See Accompanying Notes to Financial Statements. 9
<PAGE>
Boston Managed Growth Fund

STATEMENT OF OPERATIONS - For the Six Months ended December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Income
Interest ........................................................................ $ 626,276
Dividends........................................................................ 438,946
-----------
Total investment income ................................................... 1,065,222
-----------
Expenses
Advisory fees (Note 3) .......................................................... 242,958
Administration fee (Note 3)...................................................... 32,394
Custodian and accounting fees.................................................... 26,683
Auditing fees.................................................................... 8,288
Registration fees................................................................ 8,456
Transfer agent fees.............................................................. 1,844
Trustees' fees................................................................... 2,203
Reports to shareholders.......................................................... 2,912
Miscellaneous.................................................................... 1,181
Legal fees....................................................................... 929
-----------
Total expenses............................................................. 327,848
-----------
Net investment income ................................................... 737,374
-----------

REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from security transactions .......................................... 50,798
Net change in unrealized appreciation on investments .................................. 5,578,126
-----------
Net realized and unrealized gain on investments ................................. 5,628,924
-----------
Net Increase in Net Assets Resulting from Operations ...................... $ 6,366,298
===========
</TABLE>
See Accompanying Notes to Financial Statements.
10
<PAGE>

Boston Managed Growth Fund

STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Six Months December 1, 1995*
ended through
December 31, 1996# June 30, 1996
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM:
OPERATIONS
Net investment income.................................................. $ 737,374 $ 786,736
Net realized gain (loss) from security transactions ................... 50,798 (354,958)
Net change in unrealized appreciation on investments................... 5,578,126 2,320,463
---------- ----------
Net increase in net assets resulting from operations ............ 6,366,298 2,752,241
---------- ----------

DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net investment income.................................................. (1,387,106) (105,178)
---------- ----------

CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from net change in outstanding
shares (a)....................................................... 59,608 59,123,940
---------- ----------
Total increase in net assets .................................... 5,038,800 61,771,003

NET ASSETS
Beginning of period ................................................... 61,771,003 -0-
---------- ----------
End of period (including undistributed net investment income of
$31,826 and $681,558)........................................... $66,809,803 $61,771,003
=========== ===========
</TABLE>

(a) A summary of capital shares transactions is as follows:
<TABLE>
<CAPTION>
Six Months ended December 1, 1995*
December 31, 1996# through June 30, 1996
------------------ ---------------------
Shares Value Shares Value
------ ----- ------ -----
<S> <C> <C> <C> <C>
Shares sold ......................................... 50,685 $4,075,506 827,127 $61,190,223
Shares issued in reinvestment of distribution........ 17,057 1,387,106 1,414 105,178
Shares redeemed...................................... (65,372) (5,403,004) (28,929) (2,171,461)
------- ---------- ------- -----------
Net increase ........................................ 2,370 $ 59,608 799,612 $59,123,940
======= ========== ======= ===========
</TABLE>

#Unaudited.

*Commencement of operations.

See Accompanying Notes to Financial Statements. 11
<PAGE>
Boston Managed Growth Fund

FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout each period
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Six Months December 1, 1995*
ended through
December 31, 1996# June 30, 1996
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period ................................. $77.25 $73.62
------ ------
Income from investment operations:
Net investment income .......................................... .96 1.00
Net realized and unrealized gain on investments ................ 6.87 2.78
------ ------
Total from investment operations...................................... 7.83 3.78
------ ------
Less distributions:
From net investment income...................................... (1.77) (.15)
------ ------
Net asset value, end of period ....................................... $83.31 $77.25
====== ======
Total return ......................................................... 10.19%++ 5.14%++
Ratios/supplemental data:
Net assets, end of period (millions).................................. $ 66.8 $ 61.8
Ratio of expenses to average net assets............................... 1.00%+ 1.00%+
Ratio of net investment income to average net assets.................. 2.27%+ 2.43%+
Portfolio turnover rate .............................................. 13.68% 17.69%
Average commission rate paid per share++.............................. $.0573 $.0500
</TABLE>

#Unaudited.

*Commencement of operations.

+Annualized.

++Not Annualized.

++For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share for security trades on which
commissions are charged. This amount may vary from period to period and fund to
fund depending on the mix of trades executed in various markets where trading
practices and commission rate structures may differ.

See Accompanying Notes to Financial Statements.
12
<PAGE>
Boston Managed Growth Fund

NOTES TO FINANCIAL STATEMENTS (Unaudited)
- --------------------------------------------------------------------------------

NOTE 1 - ORGANIZATION

The Boston Managed Growth Fund (the "Fund") is a diversified series of
shares of beneficial interest of Professionally Managed Portfolios (the
"Trust"), which is registered under the Investment Company Act of 1940 (the
"1940 Act") as an open-end management investment company. The Fund began
operations on December 1, 1995. The investment objective of the Fund is to seek
income and long-term capital growth through an actively managed portfolio of
stocks, bonds, and money market instruments.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently
followed by the Fund. These policies are in conformity with generally accepted
accounting principles.
A. Security Valuation. Investments in securities traded on a national
securities exchange or included in the NASDAQ National Market System
are valued at the last reported sale price at the close of regular
trading on the last business day of the period; securities traded on
an exchange or NASDAQ for which there have been no sales and other
over-the-counter securities are valued at the last reported bid
price. Securities for which quotations are not readily available are
valued at their respective fair values as determined in good faith by
the Board of Trustees. Short-term investments are stated at cost,
which when combined with accrued interest, approximates market value.
U.S. Government securities with less than 60 days remaining to
maturity when acquired by the Fund are valued on an amortized cost
basis. U.S. Government securities with more than 60 days remaining to
maturity are valued at the current market value (using the mean
between the bid and asked price) until the 60th day prior to
maturity, and are then valued at amortized cost based upon the value
on such date unless the Board determines during such 60 day period
that this amortized cost basis does not represent fair value.
B. Federal Income Taxes. The Fund intends to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to
its shareholders. Therefore, no federal income tax provision is
required.
C. Security Transactions, Investment Income and Distributions. As is
common in the industry, security transactions are accounted for on
the trade date. Dividend income and distributions to shareholders are
recorded on the ex-dividend date.
D. Use of Estimates. The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amount of assets and liabilities at the date of the financial
statements. Actual results could differ from those estimates.

NOTE 3 - INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES

For the six months ended December 31, 1996, United States Trust Company of
Boston (the "Advisor") provided the Fund with investment management services
under an Investment Advisory Agreement. The Advisor
13
<PAGE>
Boston Managed Growth Fund

NOTES TO FINANCIAL STATEMENTS (Unaudited), Continued
- --------------------------------------------------------------------------------
furnished all investment advice, office space, facilities, and most personnel
needed by the Fund. As compensation for its services, the Advisor was entitled
to a monthly fee at the annual rate of 0.75% based upon the average daily net
assets of the Fund. For the six months ended December 31, 1996, the Fund
incurred $242,958 in advisory fees.

The Fund is responsible for its own operating expenses. The Advisor has
agreed to reduce fees payable to it by the Fund to the extent necessary to limit
the Fund's aggregate annual operating expenses to 1.00% of average net assets.
Any such reductions made by the Advisor in its fees or payments or reimbursement
of expenses which are the Fund's obligation are subject to reimbursement by the
Fund provided the Fund is able to effect such reimbursement and remain in
compliance with any applicable laws or expense limitations.

Investment Company Administration Corporation (the "Administrator") acts
as the Fund's Administrator under an Administration Agreement. The Administrator
prepares various federal and state regulatory filings, reports and returns for
the Funds; prepares reports and materials to be supplied to the trustees;
monitors the activities of the Fund's custodian, transfer agent and accountants;
coordinates the preparation and payment of Fund expenses and reviews the Fund's
expense accruals. For its services, the Administrator receives an annual fee
equal to the greater of 0.10% of average net assets or $30,000.

First Fund Distributors, Inc. (the "Distributor") acts as the Fund's
principal underwriter in a continuous public offering of the Fund's shares. The
Distributor is an affiliate of the Administrator.

Certain officers and Trustees of the Trust are also officers and/or
directors of the Administrator and Distributor.

NOTE 4 - PURCHASES AND SALES OF SECURITIES

Purchases and sales of securities, other than short-term investments, for
the six months ended December 31, 1996 were $8,892,328 and $8,509,413,
respectively.
14
<PAGE>
<TABLE>
<C> <C>
UNITED STATES TRUST COMPANY
Advisor and Shareholder Service Agent BOSTON Investment Management

United States Trust Company of Boston
40 Court Street
Boston, MA 02108
(617) 726-7250

Distributor

First Fund Distributors, Inc.
4455 East Camelback Road, Suite 261E
Phoenix, AZ 85018

Custodian and Transfer Agent BOSTON MANAGED
GROWTH FUND
The Provident Bank
One East Fourth Street
Cincinnati, OH 45202

Auditors

Ernst & Young LLP
515 South Flower Street
Los Angeles, CA 90071

Legal Counsel
Semi-Annual Report
Heller, Ehrman, White & McAuliffe
333 Bush Street December 31, 1996
San Francisco, CA 94104

This report is intended for the shareholders of
the Boston Managed Growth Fund and should
not be used as sales literature unless accompanied
or preceded by the Fund's current prospectus.
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