[OBJECT OMITTED]
- --------------------------------------------------------------------------------
CLEARWATER INVESTMENT TRUST
- --------------------------------------------------------------------------------
August 18, 1999
TO: Our Unit Holders
On June 30, 1999, the net asset value of the Clearwater Growth Fund was $28.20
per unit. The net asset value of the Clearwater Small Cap Fund was $14.54 per
unit. On a total return basis for 1999, the Clearwater Growth Fund increased by
8.8% and the Clearwater Small Cap Fund increased by 11.2%. For comparative
purposes, the Russell 1000 increased by 11.5% and the Russell 2000 increased by
9.3%. For the second quarter, the Clearwater Growth Fund increased 4.9% and the
Clearwater Small Cap Fund increased 21.6%. The Russell 1000 increased 7.1% and
the Russell 2000 increased 15.6%.
Parametric Portfolio Associates, the sub-advisor for the Clearwater Growth Fund,
made the following comments on the first half and the outlook for balance of
1999:
"The first half of 1999 has been marked by trend reversals in both size and
style preference among U.S. investors. While the first quarter saw the
continuation of solid gains in large capitalization growth companies, value
stocks and smaller stocks took the lead in the second quarter. The trend
reversals in style, value vs. growth was more pronounced in the large
capitalization sector.
The portfolio trailed the Russell 1000 index benchmark during the first half
of 1999 by 2.6% due to the strong residual sector and stock specific biases
that were present in the original portfolio. The relative under-performance
can be attributed nearly entirely to the month of April when the healthcare
sector, especially drug stocks, performed extremely poorly. The portfolio has
an overweight of more than 5% in this sector and has large positions in a few
healthcare stocks. Listed below are some laggards in the healthcare sector
that help illustrate the relative difference in performance of the portfolio
vs. the Russell1000 index.
- --------------- --------------- --------------- ------------------------------
Portfolio Benchmark Performance
(April 99)
- --------------- --------------- --------------- ------------------------------
Mckesson 1.0% 0.1% -47.0%
- --------------- --------------- --------------- ------------------------------
Elan Plc 0.7% 0.0% -26.0%
- --------------- --------------- --------------- ------------------------------
Amgen 1.2% 0.3% -17.9%
- --------------- --------------- --------------- ------------------------------
Pfizer 2.6% 1.2% -17.0%
- --------------- --------------- --------------- ------------------------------
Biogen 1.3% 0.1% -16.8%
- --------------- --------------- --------------- ------------------------------
<PAGE>
August 18, 1999
Page 2
Parametric Portfolio Associates (cont.)
Please note that many of these securities have been systematically trimmed
from their original late 1997 positions (e.g. Mckesson HBOC constituted more
than 3% of the initial portfolio in late 1997) and Parametric continues to
look for opportunities to further reduce these positions. Though many of these
securities have fallen considerably, all are well above their original cost.
While the initial "tracking error" experience of the Clearwater portfolio
relative to the Russell 1000 has been sharply negative, Parametric believes
the current course of action is being affirmed in several areas:
1. The portfolio has participated strongly in the overall upward movement in
the U.S. market and subject to low fees and tax costs.
2. Parametric has reduced predicted tracking error by 50% over this period.
3. The eighteen months since the inception of this strategy is a very short
time relative to the investment horizon of these assets.
Looking forward, Parametric expects to continue to make solid progress in
diversifying the current portfolio. We will focus primarily on reducing large
active exposures to economic sectors and capitalization ranges while remaining
cognizant of concentrated positions in single stocks. We currently plan not to
realize net capital gains as long as the portfolio is on schedule to meet its
tracking error targets."
Kennedy Capital Management, the sub-advisor for the Clearwater Small Cap Fund,
made the following comments:
"The market broadened considerably in the second quarter of 1999 and finally
embraced small capitalization stocks. The Russell 2000 gained about 15.5%
while large capitalization stocks added 7%. The quarter consistently favored
small stocks, but momentum once again shifted to large stocks in the last few
days of June. On June 30th the Federal Open Market Committee ("FOMC")
announced a quarter of one- percent rise in interest rates combined with a
neutral policy stance. Investors responded by going on a buying spree,
particularly targeting their favorite growth stocks. Since the July 4th
holiday, small stocks have once again assumed leadership.
In spite of this strong second quarter, there are many uncertainties as we
enter the final six months of the millennium, and equity returns are likely
to be choppy. First, we believe that investor confidence in the persistence
of a benign interest rate environment is misplaced.
<PAGE>
August 18, 1999
Page 3
Kennedy Capital Management (cont.)
The FOMC's announced neutral policy stance notwithstanding, there is a
significant chance of another interest rate increase in 1999 for both
economic and political reasons. Wage rates, labor demand, and consumer
spending suggests inflation pressure is building.
While prices, consumer and wholesale prices as opposed to housing and asset
prices, are currently well behaved, the Fed is likely to try to avoid
interfering in the electoral process. This means that any preemptive
increases will come sooner than later, i.e. in 1999 and not in the 2000
election year. A second force for an unsettled market is the Y2K jitters.
Expectations of year 2000 problems may be overblown, but the prospects of
these problems will undermine investor confidence. Finally, the market as a
whole - specifically the large capitalization segment - is priced at
unprecedented level and is going to have difficulty establishing much of an
upward move and could retreat substantially.
What does this mean for small-cap investors? It suggests that the "break-out"
they (WE!) have been waiting for will probably not happen in 1999. However,
it should be a reasonably good period for small stocks, at least on a
relative basis. With large-cap investors growing more nervous, we are seeing
1) an increasing number of takeovers of small companies by large firms, 2)
growing buyout activity including the formation of LBO firms, a direct
indication that the purchase of these smaller companies can be easily
supported with debt at these valuation levels, and 3) more insider buying;
First Call Corp., for example, reports that small company "insiders" are
buying rather than selling their company stock at a two to one ratio. A year
ago that ratio was reversed.
We at Kennedy Capital have been waiting for he development of these
conditions. We continue to scour the markets for under-followed and
under-priced companies. There are many such firms. We recently ran a screen
for stocks of companies below $2 billion in market capitalization, selling at
less than book value and earning money. That exercise produced a list of 627
companies. Some of these are very attractive, and we are looking at each of
them to assess their potential."
Clearwater Investment Trust Clearwater Management Company
P. W. Pascoe, Chairman and Treasurer P. W. Pascoe, Chairman and Treasurer
Samuel B. Carr, Jr. W. T. Weyerhaeuser, V. P. and Secretary
Stanley R. Day, Jr. E. C. Driscoll
Robert J. Phares W. John Driscoll
F. T. Weyerhaeuser C. W. Morley
F. W. Piasecki
D.C. Titcomb, V. P. and Secretary D. C. Titcomb
G. H. Weyerhaeuser, Jr.
<PAGE>
CLEARWATER INVESTMENT TRUST
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES
<S> <C> <C>
June 30, 1999 GROWTH SMALL CAP
FUND FUND
ASSETS
Investments in securities, at market value (note 2)
(identified cost: $60,950,230 Growth Fund; $40,827,790 Small Cap Fund) $148,512,270 $48,783,657
Cash 2,116 10,525
Receivable for investment securities sold 0 1,075,626
Accrued dividend and interest receivable 83,899 10,269
Other receivables 0 0
-------------- -------------
TOTAL ASSETS 148,598,285 49,880,077
LIABILITIES
Payables for investment securities purchased 0 1,161,475
Accrued management fee 160,085 145,577
-------------- -------------
TOTAL LIABILITIES 160,085 1,307,052
NET ASSETS $148,438,200 $48,573,025
============== =============
CAPITAL
Capital stock and additional paid-in capital
(authorized unlimited number of shares at no par value for each Fund:
outstanding 5,263,138 and 3,340,535 shares, respectively (note 2)) $59,558,936 $38,289,504
Accumulated net income(loss) 436,611 (69,714)
Accumulated net realized gain 880,612 2,397,368
Unrealized appreciation of investments 87,562,041 7,955,867
-------------- -------------
NET ASSETS $148,438,200 $48,573,025
============== =============
Net asset value per share of outstanding capital stock $ 28.20 $ 14.54
</TABLE>
See accompanying notes to financial statements 1
<PAGE>
CLEARWATER INVESTMENT TRUST
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
<S> <C> <C>
For Period Ended June 30, 1999 GROWTH SMALL CAP
FUND FUND
INVESTMENT INCOME
Income:
Dividends (net of foreign taxes withheld of $1,001 and $0, respectively) $551,214 $171,906
Interest 7,669 38,680
-------------- -------------
TOTAL INCOME 558,883 210,586
Expenses: (note 5)
Income tax expense 5,240 25
Investment advisory fee 312,961 280,275
-------------- -------------
TOTAL EXPENSES 318,201 280,300
NET INVESTMENT INCOME (LOSS) 240,682 (69,714)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on security transactions 880,612 2,397,368
Unrealized appreciation during the period 10,831,367 2,539,548
-------------- -------------
NET GAIN ON INVESTMENTS 11,711,979 4,936,916
-------------- -------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $11,952,661 $4,867,202
============== =============
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
For Period Ended June 30, 1999 GROWTH FUND SMALL CAP FUND
<S> <C> <C> <C> <C>
6/30/99 12/31/98 6/30/99 12/31/98
OPERATIONS
Net investment income(loss) $240,682 $474,100 ($69,714) ($115,508)
Net realized gain(loss) on investments 880,612 (205,323) 2,397,368 3,235,880
Unrealized appreciation(depreciation) during the period 10,831,367 24,810,426 2,539,548 (6,246,007)
-------------- -------------- -------------- -------------
NET INCREASE (DECREASE) IN ASSETS FROM OPERATIONS 11,952,661 25,079,203 4,867,202 (3,125,635)
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income 0 (278,171) 0 0
Net realized gain on investments 0 0 0 (3,235,811)
-------------- -------------- -------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS 0 (278,171) 0 (3,235,811)
CAPITAL SHARE TRANSACTIONS (note 4)
Proceeds from shares sold 1,811,900 619,900 1,995,000 2,994,150
Reinvestment of distributions from net investment income and gains 143,075 4,830,772 2,494,189 5,186,008
Payments for shares redeemed (242,000) (2,338,395) 0 (3,440,487)
-------------- -------------- -------------- -------------
INCREASE IN NET ASSETS FROM CAPITAL SHARES TRANSACTIONS 1,712,975 3,112,277 4,489,189 4,739,671
-------------- -------------- -------------- -------------
TOTAL INCREASE(DECREASE) IN NET ASSETS 13,665,636 27,913,309 9,356,391 (1,621,775)
NET ASSETS
At the beginning of the period 134,772,564 106,859,255 39,216,634 40,838,409
-------------- -------------- -------------- -------------
At the end of the period $148,438,200 $134,772,564 $48,573,025 $39,216,634
============== ============== ============== =============
Undistributed Net Income $436,611 $195,929 $0 $0
============== ============== ============== =============
</TABLE>
See accompanying notes to financial statements 2
<PAGE>
CLEARWATER INVESTMENT TRUST
Notes to Financial Statements
(1) Organization
Clearwater Investment Trust (the Trust) was established on January
12, 1987 as a Massachusetts business trust and is registered under
the Investment Company Act of 1940 (as amended) as a diversified
open-end management investment company and presently includes two
series of funds: Clearwater Growth Fund and Clearwater Small Cap Fund
(the funds). The Trust's declaration of trust permits the board of
directors to create additional funds in the future. The investment
objective of the funds is long-term capital growth. The Clearwater
Growth Fund invests in a broad list of equity securities that offer
the potential for growth. The Clearwater Small Cap Fund primarily
invests in equity and fixed income securities of companies that have
total equity market capitalizations of $1 billion or lower.
(2) Summary of Significant Accounting Policies
The significant accounting policies followed by the funds are as follows:
Investments in Securities
Investments in securities are valued at the last sales price on the
principal exchange or market where they are traded. Securities which
have not traded on the date of valuation or securities for which
sales prices are not generally reported are valued at the mean
between the last bid and asked prices. Securities for which no market
quotations are readily available (including those the trading of
which has been suspended) will be valued at fair value as determined
in good faith by the board of trustees, although the actual
computations may be made by persons acting pursuant to the direction
of the board.
Security transactions are accounted for on the date the securities
are purchased or sold. Realized gains and losses are calculated on an
identified cost basis. Dividend income is recognized on the
ex-dividend date and interest income, including amortization of
original issue discount and premium, is accrued daily.
1
<PAGE>
CLEARWATER INVESTMENT TRUST
Federal Taxes
The Trust's policy is to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to shareholders.
Therefore, no income tax provision is required. Each fund is treated
as a separate entity for federal income tax purposes.
For federal income tax purposes, the Growth Fund had a capital loss
carryover of $205,323 at December 31, 1998, that will expire in 2006
if not offset by capital gains. It is unlikely the board will
authorize a distribution of any net realized capital gains until the
available capital loss carryover has been offset or expires.
Net investment income and net realized gains (losses) for the funds
my differ for financial statement and tax purposes. The character of
distributions made during the year from net investment income or net
realized gains may differ from their ultimate characterization for
federal income tax purposes. Also, due to the timing of dividend
distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gains (losses) were
recorded by the funds.
On the statements of assets and liabilities, due to permanent
book-to-tax differences, the following adjustments have been made:
Clearwater Clearwater
Growth Fund Small Cap Fund
--------------------------------------------------------------------
--------------------------------------------------------------------
Undistributed net investment income $ 0 $ 115,508
Accumulated net realized gains 975 (9,958)
Additional paid-in capital (975) (105,550)
Distributions to Shareholders
Distributions to shareholders from net investment income and net
realized gains, if any, are declared annually and paid in cash or
reinvested in additional shares. The Board of Trustees has declared a
dividend in the total amount of $195,929 payable December 28, 1999 to
shareholders of record of the Growth Fund on December 21, 1999. Such
dividend comprises the remaining undistributed net income of the
Growth Fund for 1998.
2
<PAGE>
CLEARWATER INVESTMENT TRUST
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 amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
increase and decrease in net assets from operations during the
period. Actual results could differ from those estimates.
(3) Investment Security Transactions
Cost of purchases and proceeds from sales of securities, other that
temporary investments in short-term securities, for the period ended
June 30, 1999, were as follows:
Purchases Sales proceeds
-----------------------------------------------------------
-----------------------------------------------------------
Clearwater Growth Fund $9,424,085 $8,134,971
Clearwater Small Cap Fund 22,654,375 21,435,902
(4) Capital Share Transactions
Transactions in shares of each fund for the period ended June 30,
1999 and the year ended December 31, 1998, were as follows:
<TABLE>
<CAPTION>
Clearwater Clearwater
Growth Fund Small Cap Fund
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
6/30/99 12/31/98 6/30/99 12/31/98
-------------------------------------------------------------------------------------------------
Sold 67,275 25,983 152,633 198,063
Issued for reinvested
distributions 5,520 228,190 190,687 340,289
Redeemed (9,110) (102,479) -0- (220,241)
-------------------------------------------------------------------------------------------------
Increase 63,685 151,694 343,320 318,111
-------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
CLEARWATER INVESTMENT TRUST
(5) Expenses and Related Party Transactions
The Trust has a contract for investment advisory services with
Clearwater Management Company, a management firm of which the Trust's
chairman is a shareholder. Under terms of an agreement, Clearwater
Growth Fund and Clearwater Small Cap Fund pay a monthly fee equal to
an annual rate of 0.45% and 1.35% of average net assets,
respectively. Clearwater Management Company is responsible for the
payment or reimbursement of all of the Funds' expenses, except
brokerage, taxes, interest and extraordinary expenses.
The management firm has entered into a sub-advisory contract with an
independent investment advisory firm for each fund to provide daily
investment management services. The sub-advisory fee for the
Clearwater Growth Fund, payable to Parametric Portfolio Associates,
Inc., is equal to an annual rate of 0.15% of net assets. The
sub-advisory fee for the Clearwater Small Cap Fund, payable to
Kennedy Capital Management, is equal to an annual rate of 0.85% of
the first $50 million in net assets and then decreasing to 0.80% of
net assets in excess of $50 million.
(6) Restricted Securities
At June 30, 1999, investments in securities for the Clearwater Growth
Fund includes a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. The Fund
currently limits investments in restricted securities to 15% of net
assets at the time of purchase. The aggregate value of such security
at June 30, 1999 was $1,523,500 representing 1.03% of net assets for
the Clearwater Growth Fund.
4
<PAGE>
CLEARWATER INVESTMENT TRUST
(7) Financial Highlights
Per share data (rounded to the nearest cent) for a share of capital stock
outstanding throughout the period and selected information for each
period is as follows:
<TABLE>
<CAPTION>
Clearwater Growth Fund
Year ended December 31,
June 30, ---------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 1998 1997(c) 1996 1995 1994
---------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $25.92 21.17 17.88 17.01 13.62 14.49
---------------------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income(loss) 0.05 0.09 (0.01) (0.01) 0.01 0.06
Net realized and unrealized gains 2.23 4.71 5.08 3.68 4.43 0.11
---------------------------------------------------------------------------------------------------------
Total from investment
operations 2.28 4.80 5.07 3.67 4.44 0.17
---------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income 0.00 (0.05) 0.00 0.00 (0.01) (0.06)
Distributions from net realized gains 0.00 0.00 (1.78) (2.80) (1.04) (0.98)
---------------------------------------------------------------------------------------------------------
Total distributions 0.00 (0.05) (1.78) (2.80) (1.05) (1.04)
---------------------------------------------------------------------------------------------------------
Net asset value, end of year $28.20 25.92 21.17 17.88 17.01 13.62
---------------------------------------------------------------------------------------------------------
Total return(a) 8.8% 22.7% 28.4% 21.6% 32.6% 1.2%
Net assets, end of year (000s omitted) $148,438 134,773 106,859 93,922 84,775 65,999
Ratio of expenses to average net assets 0.23% 0.45% 0.98% 1.08%(b) 1.08% 1.07%
Ratio of net investment income (loss) to
average net assets 0.17% 0.39% (0.06%) (0.07%) 0.06% 0.39%
Portfolio turnover rate (excluding short-
term securities) 5.81% 3.65% 38.16% 75.90% 58.64% 70.69%
<FN>
(a) Total return figures are based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at
net asset value.
(b) Includes federal and state taxes of .01%.
(c) Effective November 1, 1997, Parametric Portfolio Associates, Inc.
became the subadvisor for the fund.
</FN>
</TABLE>
5
<PAGE>
CLEARWATER INVESTMENT TRUST
<TABLE>
<CAPTION>
Clearwater Small Cap Fund
Year ended December 31,
June 30, ---------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 1998 1997 1996 1995 1994(b)
---------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $13.08 15.24 12.74 11.47 9.89 12.26
---------------------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income(loss) (0.02) (0.04) (0.02) 0.00 0.04 0.17
Net realized and unrealized gains(losses) 1.48 (1.04) 5.14 1.71 2.56 (0.99)
---------------------------------------------------------------------------------------------------------
Total from investment
operations 1.46 (1.08) 5.12 1.71 2.60 (0.82)
---------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income 0.00 0.00 0.00 0.00 (0.04) (0.17)
Excess distributions from net invest income 0.00 0.00 0.00 (0.01) 0.00 0.00
Distributions from net realized gains 0.00 (1.08) (2.62) (0.42) (0.98) (1.38)
Tax return of capital 0.00 0.00 0.00 (0.01) 0.00 0.00
---------------------------------------------------------------------------------------------------------
Total distributions 0.00 (1.08) (2.62) (0.44) (1.02) (1.55)
---------------------------------------------------------------------------------------------------------
Net asset value, end of year $14.54 13.08 15.24 12.74 11.47 9.89
---------------------------------------------------------------------------------------------------------
Total return(a) 11.2% (7.1%) 40.2% 15.0% 26.3% (6.7%)
Net assets, end of year (000s omitted) $48,573 39,217 40,838 32,774 26,826 17,998
Ratio of expenses to average net assets 0.67% 1.36%(c) 1.35% 1.37%(c) 1.35% 1.40%
Ratio of net investment income (loss) to
average net assets (.17%) (0.26%) (0.17%) 0.00% 0.36% 1.61%
Portfolio turnover rate (excluding short-
term securities) 52.69% 88.27% 92.22% 89.25% 77.46% 122.88%
<FN>
(a) Total return figures are based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at
net asset value.
(b) Effective May 1, 1994, a change was implemented in the fund's
investment policies whereby the fund must invest at least 65% of its
total assets in securities of companies that have total equity
market capitalizations of $1 billion or lower. Also effective
January 1, 1994, Kennedy Capital Management became the sub-adviser
for the fund.
(c) Includes federal and state taxes of .01% in 1998 and .04% in 1996.
</FN>
</TABLE>
6
<PAGE>
CLEARWATER GROWTH FUND
SCHEDULE OF INVESTMENTS AT JUNE 30, 1999
<TABLE>
<CAPTION>
FACE PERCENT
AMOUNT MARKET OF
OR SHARES SECURITY COST VALUE (a) NET ASSETS
COMMON STOCKS
<S> <C> <C> <C> <C> <C>
BANKS
9,786 BANK AMER CORP 656,291.74 717,436.12
2,600 BANK NEW YORK INC 62,790.52 95,387.50
4,434 BANK ONE CORP 211,922.51 264,100.12
1,000 BANKBOSTON CORP 41,430.00 51,125.00
400 BB&T CORP 14,162.00 14,675.00
13,000 CHASE MANHATTAN CORP NEW 654,888.75 1,126,125.00
37,617 CITIGROUP INC 542,003.72 1,786,807.50
450 COMERICA INC 23,943.00 26,746.87
800 FIFTH THIRD BANCORP 38,237.50 53,250.00
4,000 FIRST AMERN CORP TENN 107,205.00 166,250.00
2,834 FIRST UN CORP 135,000.24 133,198.00
600 FIRSTAR CORP WIS 14,174.50 16,800.00
1,800 FLEET FINL GROUP INC 58,272.75 79,875.00
1,400 KEYCORP NEW 44,267.02 44,975.00
2,100 MBNA CORP 37,621.50 64,312.50
2,200 MELLON BK CORP 60,578.54 80,025.00
600 MORGAN J P & CO INC 69,092.28 84,300.00
1,000 NATIONAL CITY CORP 62,560.02 65,500.00
200 NORTHERN TRUST CORP 14,850.00 19,400.00
1,300 PNC BK CORP 63,852.97 74,912.50
7,000 REPUBLIC NY CORP 334,237.70 477,312.50
700 STATE STREET CORPORATION 42,060.76 59,762.50
700 SUNTRUST BKS INC 46,060.77 48,606.25
55,000 TCF FINANCIAL CORP 965,087.50 1,533,125.00
2,400 US BANCORP DEL 83,398.00 81,600.00
700 WACHOVIA CORP NEW 54,867.00 59,893.75
336 WASHINGTON MUT INC 13,262.00 11,886.00
55,000 WELLS FARGO & CO NEW 1,250,765.50 2,351,250.00
---------------- ----------------
5,702,883.79 9,588,637.11 6.46%
BUSINESS SERVICES
13,000 AMERICA ONLINE INC DEL (b) 1,672,593.00 1,436,500.00
2,000 AUTOMATIC DATA PROCESSING INC 52,653.80 88,000.00
700 BROWNING FERRIS INDS INC 23,948.26 30,100.00
44,000 CERIDIAN CORP 548,909.80 1,438,250.00
10,000 COMPUTER SCIENCES CORP (b) 341,043.55 691,875.00
52,000 DENDRITE INTL INC (b) 317,216.10 1,878,500.00
100 ELECTRONIC DATA SYS CORP NEW 3,917.93 5,656.25
22,000 FIRST DATA CORP 226,047.22 1,076,625.00
40,500 FISERV INC (b) 549,868.20 1,268,156.25
200 INTERPUBLIC GROUP COS INC 12,024.50 17,325.00
1,040 MOMENTUM BUSINESS APPLICATIONS (b) - 7,345.00
200 OMNICOM GROUP 10,562.00 16,000.00
52,312 PAYCHEX INC 278,096.38 1,667,445.00
1,000 PITNEY BOWES INC 41,455.00 64,250.00
44,000 SAP AKTIENGESELLSCHAFT (c) 401,720.00 1,523,500.00
450 STAPLES INC (b) 9,993.75 13,921.87
43,500 STEWART ENTERPRISES INC 629,245.99 633,468.75
17,500 VODAFONE AIRTOUCH PLC 1,048,159.20 3,447,500.00
1,087 WASTE MGMT INC DEL 37,385.30 58,426.25
---------------- ----------------
6,204,839.98 15,362,844.37 10.35%
<FN>
See accompanying notes to investment securities 1 (continued)
</FN>
</TABLE>
<PAGE>
CLEARWATER GROWTH FUND
SCHEDULE OF INVESTMENTS AT JUNE 30, 1999
<TABLE>
<CAPTION>
FACE PERCENT
AMOUNT MARKET OF
OR SHARES SECURITY COST VALUE (a) NET ASSETS
<S> <C> <C> <C> <C> <C>
CAPITAL GOODS
1,500 CATERPILLAR INC 77,171.25 90,000.00
28,500 CRANE CO 515,675.00 895,968.75
800 DOVER CORP 27,686.52 28,000.00
1,800 EMERSON ELEC CO 101,620.50 113,175.00
38,600 GENERAL ELEC CO 1,661,591.47 4,361,800.00
400 HONEYWELL INC 28,161.52 46,350.00
900 ILLINOIS TOOL WKS INC 47,147.76 73,800.00
200 INGERSOLL RAND CO 8,874.50 12,925.00
8,000 OWENS CORNING 248,120.85 275,000.00
600 PPG INDS INC 34,142.28 35,437.50
17,000 TYCO INTL LTD NEW 329,885.00 1,610,750.00
---------------- ----------------
3,080,076.65 7,543,206.25 5.08%
CONSUMER DURABLES
1,247 DAIMLER CHRYSLER AG STUTTGART 72,120.00 110,827.12
1,957 DELPHI AUTOMOTIVE SYS CORP 31,459.52 36,326.81
1,100 EASTMAN KODAK CO 69,022.25 74,525.00
4,500 FORD MTR CO DEL 154,848.03 253,968.75
2,800 GENERAL MTRS CORP 150,403.12 184,800.00
52,500 HARLEY DAVIDSON INC 661,620.72 2,854,687.50
1,300 MASCO CORP 31,635.50 37,537.50
---------------- ----------------
1,171,109.14 3,552,672.68 2.39%
CONSUMER NON DURABLES
40 AGRIBRANDS INTL INC (b) 1,196.85 1,582.50
1,800 ANHEUSER BUSCH COS INC 76,807.95 127,687.50
1,200 AVON PRODS INC 43,598.52 66,600.00
1,000 BESTFOODS 47,226.67 49,500.00
100 CLOROX CO 10,256.00 10,681.25
36,000 COCA COLA CO 1,081,705.00 2,250,000.00
200 COCA COLA ENTERPRISES INC 6,637.00 5,950.00
1,000 COLGATE PALMOLIVE CO 63,903.80 98,750.00
700 GENERAL MLS INC 46,317.00 56,262.50
33,000 GILLETTE CO 550,137.35 1,353,000.00
1,200 HEINZ H J CO 57,072.00 60,150.00
5,000 PEPSICO INC 186,237.50 193,437.50
31,500 PHILIP MORRIS COS INC 520,988.30 1,265,906.25
18,000 PROCTER & GAMBLE CO 728,181.20 1,606,500.00
200 QUAKER OATS CO 10,637.00 13,275.00
1,200 RALSTON PURINA CO 35,239.67 36,525.00
3,200 SARA LEE CORP 82,505.44 72,600.00
3,950 SYSCO CORP 121,024.50 117,759.37
300 WRIGLEY WM JR CO 21,918.00 27,000.00
---------------- ----------------
3,691,589.75 7,413,166.87 4.99%
CONSUMER SERVICES
2,812 AT&T CORP 36,887.50 103,341.00
4,400 CBS CORP (b) 122,493.25 191,125.00
37,000 CENDANT CORP (b) 284,605.76 758,500.00
200 CLEAR CHANNEL COMMUNICATIONS (b) 11,524.50 13,787.50
2,800 COMCAST CORP 44,837.50 107,625.00
7,050 DISNEY WALT CO 205,149.73 217,228.12
1,100 GANNETT INC 61,559.72 78,512.50
41,000 MARRIOTT INTL INC NEW 352,253.59 1,532,375.00
5,400 MCDONALDS CORP 132,805.67 223,087.50
400 MCGRAW HILL COS INC 16,537.00 21,575.00
2,400 MEDIAONE GROUP INC (b) 70,585.41 178,500.00
1,850 PROMUS HOTEL CORP NEW (b) 53,154.10 57,350.00
3,375 SODEXHO MARRIOTT SVCS INC (b) 243,619.45 64,757.81
3,400 TIME WARNER INC 110,170.75 249,900.00
200 TRIBUNE CO NEW 13,712.00 17,425.00
2,600 VIACOM INC (b) 51,115.55 114,400.00
---------------- ----------------
1,811,011.48 3,929,489.43 2.65%
<FN>
See accompanying notes to investment securities 2 (continued)
</FN>
</TABLE>
<PAGE>
CLEARWATER GROWTH FUND
SCHEDULE OF INVESTMENTS AT JUNE 30, 1999
<TABLE>
<CAPTION>
FACE PERCENT
AMOUNT MARKET OF
OR SHARES SECURITY COST VALUE (a) NET ASSETS
<S> <C> <C> <C> <C> <C>
ENERGY
16,113 BP AMOCO PLC 854,870.23 1,748,261.80
2,500 CHEVRON CORP 214,043.68 237,968.75
17,300 EXXON CORP 1,241,282.16 1,334,262.50
3,000 MOBIL CORP 221,392.50 297,000.00
34,570 SCHLUMBERGER LTD 979,887.95 2,201,676.87
3,000 TRANSOCEAN OFFSHORE INC 75,090.00 78,750.00
---------------- ----------------
3,586,566.52 5,897,919.92 3.97%
FINANCIAL SERVICES
33,000 ACE LTD 625,555.00 932,250.00
300 AFLAC INC 10,336.74 14,362.50
18,000 ALLSTATE CORP 559,336.40 645,750.00
1,900 AMERICAN EXPRESS CO 161,114.01 247,237.50
1,000 AMERICAN GEN CORP 55,185.00 75,375.00
20,848 AMERICAN INTL GROUP INC 494,492.61 2,440,519.00
750 AON CORP 27,655.00 30,937.50
2,044 ASSOCIATES FIRST CAP CORP 61,288.86 90,574.75
1 BERKSHIRE HATHAWAY INC DEL CL A (b) 59,481.43 68,900.00
12 BERKSHIRE HATHAWAY INC DEL CL B (b) 23,792.57 26,880.00
300 CAPITAL ONE FINL CORP 11,424.75 16,706.25
600 CHUBB CORP 40,817.28 41,700.00
800 CIGNA CORP 45,024.00 71,200.00
12,000 EQUITABLE COMPANIES INC 461,539.95 804,000.00
21,500 FEDERAL HOME LN MTG CORP 65,945.84 1,247,000.00
4,000 FEDERAL NATL MTG ASSN 210,333.75 273,500.00
18,000 FRANKLIN RES INC 332,901.55 731,250.00
1,000 HARTFORD FINANCIAL SVCS GRP 42,998.50 58,312.50
1,200 HOUSEHOLD INTL INC 45,811.52 56,850.00
400 LINCOLN NATL CORP IN 19,162.00 20,925.00
950 MARSH & MCLENNAN COS INC 48,954.50 71,725.00
44,000 MERCURY GEN CORP NEW 622,320.30 1,496,000.00
1,100 MERRILL LYNCH & CO INC 78,459.70 87,931.25
24,000 MGIC INVT CORP WIS 576,720.00 1,167,000.00
1,900 MORGAN STANLEY DEAN WITTER 117,313.95 194,750.00
19,000 MUTUAL RISK MGMT LTD 352,996.55 634,125.00
39,000 PRICE T ROWE & ASSOC INC 544,918.25 1,496,625.00
300 PROVIDIAN FINL CORP 15,774.50 28,050.00
8,500 RADIAN GROUP INC 245,161.25 414,906.25
300 SCHWAB CHARLES CORP 7,612.00 32,962.50
700 SLM HLDG CORP 28,837.00 32,068.75
200 TRANSAMERICA CORP 11,937.25 15,000.00
19,000 XL CAPITAL LTD 523,635.00 1,073,500.00
---------------- ----------------
6,528,837.01 14,638,873.75 9.86%
HEALTH CARE
5,800 ABBOTT LABS 191,129.25 263,900.00
700 AETNA INC 50,510.75 62,606.25
4,900 AMERICAN HOME PRODUCTS CORP 196,436.73 281,750.00
28,000 AMGEN INC (b) 259,439.50 1,704,500.00
1,100 BAXTER INTL INC 54,547.25 66,687.50
31,000 BIOGEN INC (b) 450,884.15 1,993,687.50
7,600 BRISTOL MYERS SQUIBB CO 359,778.10 535,325.00
600 CARDINAL HEALTH INC 29,424.00 38,475.00
41,000 ELAN PLC (b) 625,284.55 1,137,750.00
1,400 GUIDANT CORP 44,560.75 72,012.50
54,000 HEALTHSOUTH CORP (b) 425,790.00 806,625.00
16,500 JOHNSON & JOHNSON 364,435.12 1,617,000.00
19,000 LILLY ELI & CO 794,112.40 1,360,875.00
32,560 MCKESSON HBOC INC 580,874.25 1,045,990.00
23,000 MEDTRONIC INC 171,646.13 1,791,125.00
<FN>
See accompanying notes to investment securities 3 (continued)
</FN>
</TABLE>
<PAGE>
CLEARWATER GROWTH FUND
SCHEDULE OF INVESTMENTS AT JUNE 30, 1999
<TABLE>
<CAPTION>
FACE PERCENT
AMOUNT MARKET OF
OR SHARES SECURITY COST VALUE (a) NET ASSETS
<S> <C> <C> <C> <C> <C>
HEALTH CARE (Cont'd)
9,200 MERCK & CO INC 431,401.00 680,800.00
35,500 PFIZER INC 354,583.00 3,896,125.00
2,000 PHARMACIA & UPJOHN INC 69,876.21 113,625.00
5,600 SCHERING PLOUGH CORP 179,068.00 296,800.00
12,000 SMITHKLINE BEECHAM P L C 345,855.00 792,750.00
17,500 STRYKER CORP 270,380.65 1,052,187.50
600 UNITED HEALTHCARE CORP 29,267.28 37,575.00
43,750 WARNER LAMBERT CO 1,256,506.53 3,035,156.25
---------------- ----------------
7,535,790.60 22,683,327.50 15.28%
MULTI-INDUSTRY
600 TEXTRON INC 38,736.00 49,387.50
---------------- ----------------
38,736.00 49,387.50 0.03%
RAW MATERIALS
1,400 ALCOA INC 50,629.50 86,625.00
1,000 DOW CHEM CO 92,122.54 126,875.00
4,300 DU PONT E I DE NEMOURS & CO 250,364.38 293,743.75
300 GEORGIA PAC CORP 5,990.16 7,575.00
1,200 INTERNATIONAL PAPER CO 56,047.00 60,600.00
2,100 KIMBERLY CLARK CORP 108,976.05 119,700.00
22,500 MONSANTO CO 329,839.69 887,343.75
---------------- ----------------
893,969.32 1,582,462.50 1.07%
RETAIL
900 ALBERTSONS INC 35,960.25 46,406.25
900 COSTCO COS INC (b) 39,156.25 72,056.25
1,200 CVS CORP 37,761.00 60,900.00
1,700 DAYTON HUDSON CORP 60,597.48 110,500.00
19,500 FEDERATED DEPT STORES INC DEL (b) 513,045.00 1,032,281.25
2,363 GAP INC 39,067.00 119,010.93
51,500 HOME DEPOT INC 50,381.91 3,318,531.25
46,000 KOHLS CORP (b) 758,178.75 3,550,625.00
1,800 KROGER CO 32,335.26 50,287.50
300 LOWES COS INC 11,643.00 17,006.25
1,500 MAY DEPT STORES CO 57,297.50 61,312.50
1,600 SAFEWAY INC (b) 47,173.04 79,200.00
1,200 SEARS ROEBUCK & CO 55,159.56 53,475.00
300 TJX COS INC NEW 7,105.50 9,993.75
16,600 WAL MART STORES INC 481,603.12 800,950.00
50,000 WALGREEN CO 632,788.70 1,468,750.00
---------------- ----------------
2,859,253.32 10,851,285.93 7.31%
TECHNOLOGY
23,500 ADC TELECOMMUNICATIONS INC (b) 538,040.05 1,070,718.75
1,700 ALLIED SIGNAL INC 63,195.80 107,100.00
38,000 ANALOG DEVICES INC (b) 681,654.00 1,907,125.00
1,500 APPLIED MATERIALS INC (b) 54,672.06 110,812.50
22,000 ASM LITHOGRAPHY HLDG N V (b) 422,301.25 1,306,250.00
19,000 BOEING CO 449,445.00 839,562.50
85,500 CISCO SYS INC (b) 278,270.35 5,514,750.00
15,000 COMPUTER ASSOC INTL INC 514,842.00 825,000.00
8,400 DELL COMPUTER CORP (b) 110,222.76 310,800.00
3,200 E M C CORP MASS (b) 47,098.00 176,000.00
3,300 HEWLETT PACKARD CO 209,029.39 331,650.00
52,000 INTEL CORP 208,329.75 3,094,000.00
9,600 INTERNATIONAL BUSINESS MACHS 623,325.50 1,240,800.00
19,000 LEGATO SYSTEMS INC (b) 157,970.10 1,097,250.00
13,130 LUCENT TECHNOLOGIES INC 423,004.20 885,454.37
52,000 MICROSOFT CORP (b) 83,073.61 4,689,750.00
120 NORTEL NETWORKS CORP 6,924.50 10,417.50
39,750 ORACLE CORP (b) 83,951.14 1,475,718.75
64,000 PARAMETRIC TECHNOLOGY CORP (b) 417,553.25 888,000.00
<FN>
See accompanying notes to investment securities 4 (continued)
</FN>
</TABLE>
<PAGE>
CLEARWATER GROWTH FUND
SCHEDULE OF INVESTMENTS AT JUNE 30, 1999
<TABLE>
<CAPTION>
FACE PERCENT
AMOUNT MARKET OF
OR SHARES SECURITY COST VALUE (a) NET ASSETS
<S> <C> <C> <C> <C> <C>
TECHNOLOGY (Cont'd)
34,000 PEOPLESOFT INC (b) 445,907.50 586,500.00
1,100 RAYTHEON CO 58,778.50 77,412.50
600 SUN MICROSYSTEMS INC (b) 14,325.00 41,325.00
29,000 TELLABS INC (b) 298,665.30 1,959,312.50
400 TEXAS INSTRS INC 24,274.00 58,000.00
300 UNISYS CORP (b) 8,118.00 11,681.25
8,696 UNITED TECHNOLOGIES CORP 458,792.54 623,394.50
11,000 XEROX CORP 426,875.15 649,687.50
38,000 XILINX INC (b) 579,697.78 2,175,500.00
---------------- ----------------
7,688,336.48 32,063,972.62 21.60%
TRANSPORTAION
600 AMR CORP DEL (b) 35,793.00 40,950.00
1,500 BURLINGTON NORTHN SANTA FE 48,067.50 46,500.00
400 DELTA AIR LINES INC DE 20,824.50 23,050.00
23,200 FDX CORP (b) 523,042.27 1,258,600.00
300 NORFOLK SOUTHN CORP 8,980.50 9,037.50
300 SOUTHWEST AIRLS CO 6,712.00 9,337.50
---------------- ----------------
643,419.77 1,387,475.00 0.93%
UTILITIES
2,500 ALLTEL CORP 141,256.25 178,750.00
4,950 AMERICAN ELEC PWR INC 208,062.63 185,934.37
7,200 AMERITECH CORP 341,311.50 529,200.00
41,626 AT & T CORP (b) 1,809,138.69 2,323,251.12
11,500 BELL ATLANTIC CORP 561,109.13 751,812.50
18,350 BELLSOUTH CORP 687,385.49 860,156.25
9,200 CENTRAL & SOUTH WEST CORP 230,652.00 215,050.00
2,100 COASTAL CORP 67,063.50 84,000.00
4,400 CONSOLIDATED EDISON INC 197,939.04 199,100.00
1,700 DOMINION RES INC VA 66,133.25 73,631.25
4,500 DUKE ENERGY CO 245,801.31 244,687.50
2,500 EDISON INTL 64,087.50 66,875.00
4,200 ENRON CORP 238,202.00 343,350.00
2,300 ENTERGY CORP 64,644.25 71,875.00
3,450 FPL GROUP INC 193,741.38 188,456.25
3,600 GTE CORP 161,666.00 272,700.00
400 LEVEL 3 COMMUNICATIONS INC (b) 16,475.00 24,025.00
19,536 MCI WORLDCOM INC (b) 1,337,693.92 1,681,317.00
7,100 PG&E CORP 222,544.75 230,750.00
1,700 PUBLIC SVC ENTERPRISE GROUP 62,964.50 69,487.50
2,500 RELIANT ENERGY INC 66,281.25 69,062.50
21,900 SBC COMMUNICATIONS INC 800,184.00 1,270,200.00
2,600 SONAT INC 64,018.50 86,125.00
8,100 SOUTHERN CO 196,036.01 214,650.00
9,200 SPRINT CORP COM 337,910.53 485,875.00
800 SPRINT CORP PCS COM SER 1 (b) 10,146.79 45,700.00
4,600 TEXAS UTILS CO 194,088.54 189,750.00
1,954 U S WEST INC NEW 82,733.27 114,797.50
1,800 UNICOM CORP 63,145.50 69,412.50
5,300 WILLIAMS COS INC 179,406.65 225,581.25
---------------- ----------------
8,911,823.13 11,365,562.49 7.66%
<FN>
See accompanying notes to investment securities 5 (continued)
</FN>
</TABLE>
<PAGE>
CLEARWATER GROWTH FUND
SCHEDULE OF INVESTMENTS AT JUNE 30, 1999
<TABLE>
<CAPTION>
FACE PERCENT
AMOUNT MARKET OF
OR SHARES SECURITY COST VALUE (a) NET ASSETS
<S> <C> <C> <C> <C> <C>
CASH EQUIVALENTS
CASH OR CASH EQUIVALENT
601,986.80 SSGA MONEY MARKET 601,986.80 601,986.80 0.41%
---------------- ---------------- --------------
Grand Total (d) 60,950,229.74 148,512,270.72 100.04%
================ ================ ==============
<FN>
Notes to Investments in Securities
(a)Securities are valued in accordance with procedures
described in note 2 to the financial statements.
(b)Currently non-income producing assets.
(c)Security purchased on May 23, 1995 at a cost of
$401,720 as part of a private placement that has not
been registered with the Securities and Exchange
Commission under the Securities Act of 1933. May be
sold only to dealers in that program or other
accredited investors.
(d)At June 30, 1999, the cost for Federal income tax
purposes was $60,950,230. The aggregate gross
unrealized appreciation and depreciation of
investments in securities based of this cost were as
follows:
Gross unrealized appreciation 88,047,549.23
Gross unrealized depreciation (485,508.25)
----------------
Net unrealized appreciation 87,562,040.98
================
See accompanying notes to investment securities 6 (continued)
</FN>
</TABLE>
<PAGE>
CLEARWATER SMALL CAP FUND
SCHEDULE OF INVESTMENTS AT JUNE 30, 1999
<TABLE>
<CAPTION>
FACE PERCENT
AMOUNT MARKET OF
OR SHARES SECURITY COST VALUE (a) NET ASSETS
COMMON STOCKS
<S> <C> <C> <C> <C> <C>
BANKS
45,400 REPUBLIC SEC FINL CORP 468,059.65 380,225.00
12,372 SUN BANCORP INC N J (b) 160,845.35 216,510.00
---------------- ----------------
628,905.00 596,735.00 1.23%
BUSINESS SERVICES
76,700 ALIGN RITE INTL INC (b) 974,735.71 1,064,212.50
30,300 AMBASSADORS INTL INC (b) 434,888.00 450,712.50
39,000 ARMOR HLDGS INC (b) 429,000.00 407,062.50
48,435 BALLANTYNE OMAHA INC (b) 358,419.20 369,316.87
27,300 DSP GROUP INC (b) 625,432.23 982,800.00
28,000 EDWARDS J D & CO (b) 429,956.37 518,000.00
65,600 ROCKY MTN INTERNET INC (b) 163,837.50 787,200.00
---------------- ----------------
3,416,269.01 4,579,304.37 9.43%
CAPITAL GOODS
21,300 ALPINE GROUP INC (b) 367,742.38 342,131.25
64,800 BLUEGREEN CORP (b) 457,397.43 348,300.00
71,100 BOLT TECHNOLOGY CORP (b) 126,247.38 408,825.00
26,500 CAMERON ASHLEY BUILDING PROD (b) 312,314.85 276,593.75
26,850 D.R.HORTON INC 496,996.99 446,381.25
19,500 GASONICS INTL CORP (b) 82,988.72 273,000.00
22,400 GIANT CEM HLDG INC (b) 485,547.00 512,400.00
30,300 HELIX TECHNOLOGY CORP 409,581.79 725,306.25
39,600 HERLEY INDUSTRIES INC (b) 234,888.17 517,275.00
23,400 HUSSMANN INTL INC 391,503.96 387,562.50
105,000 INTERNATIONAL FIBERCOM INC (b) 754,222.02 954,843.75
90,800 JPM CO (b) 1,078,399.52 1,180,400.00
25,500 PARLEX CORP (b) 333,562.50 401,625.00
20,600 PENN ENGR & MFG CORP 459,361.25 463,500.00
50,000 SAXTON INC (b) 371,387.50 275,000.00
12,300 TEXAS INDS INC 330,781.46 476,625.00
---------------- ----------------
6,692,922.92 7,989,768.75 16.45%
CONSUMER DURABLES
55,000 NOBLE INTL LTD (b) 623,310.76 880,000.00
28,200 PULASKI FURNITURE CORP 643,768.50 574,575.00
40,000 ROWE COS 438,200.01 417,500.00
---------------- ----------------
1,705,279.27 1,872,075.00 3.85%
CONSUMER SERVICES
31,800 CALLAWAY GOLF CO 508,093.32 465,075.00
46,700 REMEC INC (b) 516,719.50 753,037.50
---------------- ----------------
1,024,812.82 1,218,112.50 2.51%
ENERGY
10,400 DRIL QUIP INC (b) 200,709.04 238,550.00
71,000 FOREST OIL CORP (b) 766,800.00 891,937.50
43,000 GULF IS FABRICATION INC (b) 484,165.31 513,312.50
53,362 MIDCOAST ENERGY RES INC 794,117.65 860,462.25
21,500 OCEANEERING INTL INC (b) 321,494.41 346,687.50
19,600 PETROLEUM GEO SVCS AS (b) 301,030.14 291,550.00
22,500 ST MARY LD & EXPL CO 376,873.70 462,656.25
55,600 TRICO MARINE SVCS INC (b) 403,360.97 364,875.00
19,000 WILLBROS GROUP INC (b) 151,895.75 161,500.00
---------------- ----------------
3,800,446.97 4,131,531.00 8.51%
<FN>
See accompanying notes to investment securities 1 (continued)
</FN>
</TABLE>
<PAGE>
CLEARWATER SMALL CAP FUND
SCHEDULE OF INVESTMENTS AT JUNE 30, 1999
<TABLE>
<CAPTION>
FACE PERCENT
AMOUNT MARKET OF
OR SHARES SECURITY COST VALUE (a) NET ASSETS
<S> <C> <C> <C> <C> <C>
FINANCIAL SERVICES
15,700 AMERICAN SAFETY INSURANCE GRP (b) 172,700.00 132,468.75
13,539 AMERUS LIFE HLDGS INC 402,635.52 365,553.00
49,950 FACTUAL DATA CORP (b) 416,635.25 527,596.87
26,000 FREEDOM SECS CORP 413,179.87 445,250.00
44,300 GILMAN CIOCIA INC (b) 394,248.83 407,006.25
32,300 INTERCONTINENTAL LIFE CORP (b) 414,150.00 302,812.50
31,800 KINNARD INVTS INC (b) 155,796.75 130,181.25
58,000 LONDON PAC GROUP LTD 807,115.95 1,334,000.00
20,500 OAK HILL FINL INC 404,125.00 374,125.00
36,610 PACIFIC CREST CAP INC 302,386.37 558,302.50
58,450 PENN AMERICA GROUP INC 588,131.19 606,418.75
21,800 PENN TREATY AMERN CORP (b) 397,122.35 524,562.50
14,700 QUEENS CNTY BANCORP 216,500.44 475,912.50
---------------- ----------------
5,084,727.52 6,184,189.87 12.73%
HEALTH CARE
37,200 COLORADO MED TECH INC (b) 247,646.00 816,075.00
48,400 ENDOSONICS CORP (b) 352,346.05 338,800.00
18,000 HANGER ORTHOPEDIC GROUP (b) 235,796.47 255,375.00
39,600 ICN PHARMACEUTICALS INC 577,895.76 1,274,625.00
75,000 ORTHOLOGIC CORP (b) 248,430.16 185,156.25
51,000 PLASMA THERM INC (b) 220,999.50 140,250.00
30,800 RIGHTCHOICE MANAGED CARE INC (b) 341,271.00 352,275.00
13,000 ROBERTS PHARMACEUTICAL CORP (b) 237,650.20 315,250.00
149,200 UROCOR INC (b) 835,345.54 732,012.50
---------------- ----------------
3,297,380.68 4,409,818.75 9.08%
MULTI-INDUSTRY
37,000 MULTI LINK TELECOMMUNICATIONS (b) 221,224.00 242,812.50
30,200 MULTI LINK TELECOMMUNICATIONS RTS (b) 3,020.00 18,875.00
---------------- ----------------
224,244.00 261,687.50 0.54%
RAW MATERIALS
30,400 CHIEFTAIN INTL INC (b) 514,520.00 532,000.00
8,900 COMMERCIAL METALS CO 222,941.60 253,650.00
46,000 EASCO INC 354,067.90 485,875.00
31,000 MERCER INTL INC 302,587.60 186,000.00
57,000 NORTHWEST PIPE CO (b) 907,315.04 947,625.00
18,100 SPARTECH CORP 261,004.63 572,412.50
---------------- ----------------
2,562,436.77 2,977,562.50 6.13%
RETAIL
14,600 BUCKLE INC (b) 306,097.50 419,750.00
47,700 DEB SHOPS INC 562,056.07 948,037.50
86,500 ELDER BEERMAN STORES CORP NEW (b) 1,046,886.83 632,531.25
18,700 SCHULTZ SAV O STORES INC 201,045.83 299,200.00
---------------- ----------------
2,116,086.23 2,299,518.75 4.73%
TECHNOLOGY
41,350 AEROFLEX INC (b) 432,845.85 816,662.50
2,650 ALPHA INDS INC (b) 92,418.75 126,206.25
69,000 AMKOR TECHNOLOGY INC (b) 517,458.25 707,250.00
28,000 ANALYTICAL SURVEYS INC (b) 683,640.74 696,500.00
14,200 APPLIED SCIENCE & TECH INC (b) 156,200.00 319,500.00
24,400 ENGINEERED SUPPORT SYS INC 331,250.00 288,225.00
118,100 ENLIGHTEN SOFTWARE SOLUTIONS (b) 426,261.18 405,968.75
20,300 GALILEO TECHNOLOGY LTD (b) 485,606.92 919,843.75
11,800 INTERVOICE INC (b) 126,295.91 170,362.50
31,000 MTS SYS CORP 396,306.25 377,812.50
27,900 NANOMETRICS INC (b) 189,760.12 219,712.50
52,000 OPTI INC (b) 301,461.16 316,062.50
38,200 ORCAD INC (b) 273,471.28 484,662.50
32,350 WATKINS JOHNSON CO. 766,548.72 954,325.00
---------------- ----------------
5,179,525.13 6,803,093.75 14.01%
<FN>
See accompanying notes to investment securities 2 (continued)
</FN>
</TABLE>
<PAGE>
CLEARWATER SMALL CAP FUND
SCHEDULE OF INVESTMENTS AT JUNE 30, 1999
<TABLE>
<CAPTION>
FACE PERCENT
AMOUNT MARKET OF
OR SHARES SECURITY COST VALUE (a) NET ASSETS
<S> <C> <C> <C> <C> <C>
TRANSPORTATION
72,000 ANANGEL AMERN SHIPHOLDINGS LTD (b) 276,832.50 389,250.00
---------------- ----------------
276,832.50 389,250.00 0.80%
UTILITIES
16,700 CONNECTICUT WTR SVC INC 400,501.15 459,250.00
23,700 PROVIDENCE ENERGY CORP 438,154.75 632,493.75
---------------- ----------------
838,655.90 1,091,743.75 2.25%
CASH EQUIVALENTS
CASH OR CASH EQUIVALENT
3,979,265.76 SSGA MONEY MARKET 3,979,265.76 3,979,265.76 8.19%
---------------- ---------------- ---------------
Grand Total (c) 40,827,790.48 48,783,657.25 100.44%
================ ================ ===============
<FN>
Notes to Investments in Securities
(a)Securities are valued in accordance with procedures
described in note 2 to the financial statements.
(b)Currently non-income producing assets.
(c)At June 30, 1999, the cost for Federal income tax
purposes was $40,827,790. The aggregate gross
unrealized appreciation and depreciation of
investments in securities based of this cost were
as follows:
Gross unrealized appreciation 9,685,814.85
Gross unrealized depreciation (1,729,948.08)
----------------
Net unrealized appreciation 7,955,866.77
================
See accompanying notes to investment securities 3 (continued)
</FN>
</TABLE>
