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HIGHMARK
MUTUAL FUND GROUP
ANNUAL
REPORT
JANUARY 31, 1996
Not FDIC Insured
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TABLE OF CONTENTS
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Message From the Chairman and the Investment Adviser
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Statements of Assets and Liabilities
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Statements of Operations
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Statements of Changes in Net Assets
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Schedules of Portfolio Investments
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Notes to Financial Statements
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Financial Highlights
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MESSAGE FROM THE CHAIRMAN AND THE INVESTMENT ADVISER
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Dear Shareholder:
We are pleased to report another strong period for The Group for the six months
ended January 31, 1996--a period in which the stock and bond markets produced
very strong results.
Although we are gratified with our performance, we are mindful that the markets
may be getting overextended. As a result, we continue to follow our disciplined,
long-term investment approach that constantly strives to balance risk and
return.
THE FED LOWERS INTEREST RATES
Since July, the Federal Reserve Board has lowered short-term interest rates
one-half of a percentage point in an effort to stimulate the economy. The
Christmas retailing season was very disappointing, and economic growth increased
at a rate of about 1%. We expect 1.5% to 2% growth in the first half of 1996 and
perhaps 2.5% growth in the second half of the year. With growth slow and
inflation almost nonexistent, the fundamentals in the economy remain favorable
for lower interest rates. We expect the Federal Reserve to lower the federal
funds rate another notch or two this year. This is the rate banks charge each
other for overnight loans and is the bellwether for short-term interest rates in
general.
STOCKS CONTINUE TO SET RECORDS
In 1995, the Dow Jones Industrial Average recorded 69 new highs, the highest
number ever for a single year. The maximum correction during 1995 was only 3.3%,
which is the lowest ever for a single year. Indeed, the upward trend in the
market continued in January 1996 as well. The primary factors driving the market
were falling interest rates, subdued inflation and continuing corporate
profitability.
Nevertheless, we are cautious in our outlook for 1996. Beneath the surface of
the Dow, the results have been less spectacular. For example, by mid-December,
about one-third of all issues on the New York Stock Exchange had declined 20% or
more from their 1995 peaks. For the NASDAQ composite index, 58% of all stocks
had declined 20% or more from their 1995 peaks.
Given slow economic growth, we expect that 1996 earnings growth rates for many
companies will be much lower than they were in 1995. We continue to evaluate the
tradeoff between low inflation and low interest rates--which are good for
stocks--against the deceleration in the growth rate for corporate profits, which
imply weak stock prices.
BONDS: A FOCUS ON YIELD
Over the past six months, the bond market has continued to provide steady yields
as well as capital appreciation resulting from lower interest rates. Many
investors were concerned that the bond market would
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retreat if the budget negotiations in Washington failed to lead to a balanced
budget plan as promised. When talks collapsed in mid-January, the bond market
reacted negatively, but rebounded temporarily, reflecting the sluggish economy.
With interest rates at relatively low levels, investors will likely focus on the
current yields offered by bonds in relation to inflation. We expect this
environment to favor bonds that pay high income, such as corporate issues and
mortgage-backed securities.
IN CLOSING...
This semi-annual report includes a Schedule of Portfolio Investments, which
provides a list of each fund's holdings, and Financial Highlights, which
includes performance information and a description of fund transactions. We urge
you to read the entire report closely to help you monitor the progress of your
investment in the HighMark funds.
As always, if you have any questions about your investment in The HighMark
Group, or would like a prospectus or other information about any of our funds,
please call us at 1-800-433-6884. Thank you for your continued confidence in us.
Sincerely,
/s/ Stephen G. Mintos /s/ Luke Mazur
Stephen G. Mintos Luke Mazur
Chairman President and Chief Investment Officer
The HighMark Group MERUS(R) Capital Management
March 8, 1996
For more complete information on any HighMark fund, including fees, expenses and
sales charges, please call 1-800-433-6884 for a prospectus. Please read the
prospectus carefully before you invest or send money.
MUTUAL FUNDS:
- - ARE NOT FDIC INSURED
- - HAVE NO BANK GUARANTEE
- - MAY LOSE VALUE
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HIGHMARK INCOME EQUITY FUND
For the six-month period ended January 31, 1996, the HighMark Income Equity Fund
returned 18.26% (Investor Shares),+ outperforming its benchmark, the S&P 500
Stock Index, which was up 14.54%. This is particularly noteworthy since an
income-equity strategy typically lags in a strong market. In a slowly rising
market, our strategy generally leads the overall market. And in a falling
market, our strategy--which emphasizes high dividend yields--almost always
outperforms the market.
Nevertheless, the Income Equity strategy produced solid returns as investors
shifted out of the volatile technology sector into stocks of high-quality
companies that pay above-average dividends and offer excellent value. In this
regard, the fund's drug, tobacco, and telephone utility stocks performed well,
while its retail shares lagged.
A UNIQUE SELECTION PROCESS
We have found that our investment style has proven to be an effective way to
find good-quality, low-priced companies. Our strategy has been successful for
two primary reasons. First, we have a strong research department, and we
diligently analyze all the companies in the portfolio. Second, we adhere to our
relative dividend yield discipline, which helps us identify stocks that are
attractively priced and forces us to sell stocks when they become expensive.
Most of the stocks that we buy are temporarily out of favor in the financial
community. However, our fundamental research gives us the confidence to take a
different view than the rest of Wall Street. Our selection criteria include
strong fundamentals, good cash flow, dividend dependability and other favorable
long-term characteristics. By buying these types of securities, we aim to limit
our downside risk and to receive an above-average dividend yield as we wait for
a company to make positive changes, which should drive its share price up. The
following holdings illustrate our approach:
- - B.F. GOODRICH. When the company's chairman made a presentation in October
1994, just seven securities analysts attended--three from MERUS(R) Capital
Management, the fund's adviser. This gave us a unique opportunity to hear the
story first hand. After further analysis, we bought the stock on the expectation
that the company would turn around. The stock price rose 62% in 1995.
- - FEDERAL NATIONAL MORTGAGE ASSOCIATION. As one of the largest providers of
home mortgages in the United States, Fannie Mae was already in other HighMark
portfolios, so we knew it very well. When the company's relative dividend yield
became attractive, we bought it--and the stock's price climbed 82% in 1995.
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+The fund's total return (Investor Shares) with the maximum sales charge of
4.50% was 12.98% for the period.
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- - BRISTOL-MYERS SQUIBB. Battered by health-care proposals in 1993,
pharmaceutical stocks were depressed for nearly two years. We bought this stock
in 1992, when its dividend yield was high and the company's long-term
fundamentals appeared sound. We expect earnings growth to come from new drugs
for diabetes, cancer and depression. The stock price climbed 52% in 1995.
As of January 31, 1996, the fund's top five holdings were Bristol-Myers Squibb
(3.30%), Atlantic Richfield (3.26%), Philip Morris (3.13%), J.C. Penney (3.06%)
and GTE Corp. (3.01%).++
HIGHMARK INCOME EQUITY FUND
Return on a $10,000 Investment
<TABLE>
<CAPTION>
Morningstar Equity
Date Investor Fiduciary S&P 500 Income Index
<S> <C> <C> <C> <C>
2/09/84 9,543 10,000 10,000 10,000
7/31/84 9,026 9,458 9,774 9,774
7/31/85 12,350 12,941 12,953 12,761
7/31/86 15,764 16,518 16,637 15,787
7/31/87 20,003 20,960 23,181 18,946
7/31/88 19,714 20,657 20,497 18,193
7/31/89 25,265 26,474 27,035 22,478
7/31/90 25,053 26,252 28,792 22,601
7/31/91 28,210 29,561 32,463 25,153
7/31/92 32,734 34,301 36,615 28,911
7/31/93 35,926 37,646 39,812 32,469
7/31/94 37,445 39,238 41,866 33,766
7/31/95 44,004 46,011 52,786 39,274
1/31/96 52,040 54,433 60,460 44,297
</TABLE>
HighMark Income Equity Fund Performance
Average Annual Total Return
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Since
Inception
6 Months* 1 Year 5 Years 10 Years (2/9/84)
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1/31/96
Investor** 12.98% 28.43% 15.18% 13.61% 14.75%
Fiduciary 18.30% 34.46% 16.21% 14.11% 15.18%
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The performance of the HighMark Income Equity Fund is measured against
the S&P 500 Stock Index, an unmanaged index generally considered to be
representative of the U.S. stock market, and the Morningstar Equity Income
Average, a composite of managed equity income funds. The S&P 500 Stock Index
does not reflect the deduction of expenses associated with a mutual fund, such
as investment management and fund accounting fees. However, the fund's
performance and the Morningstar Equity Income Average reflect these value-added
services. Past performance is not predictive of future results. The investment
return and NAV will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than the original cost.
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++The fund's composition is subject to change.
*Aggregate total return.
**Reflects 4.50% sales charge.
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HIGHMARK GROWTH FUND
For the six months ended January 31, 1996, the Growth Fund produced a total
return of 11.84% (Investor Shares)+ compared to a return of 8.27% for the
MorningStar Growth Fund average of 882 funds for the period and a total return
of 14.54% for the S&P 500. We continued to emphasize classic blue-chip growth
companies such as Coca-Cola and Disney, which have a proven track record of good
management and steady earnings growth.
TECHNOLOGY COOLS
Early in the period, we reduced the fund's weighting in technology due to our
concern regarding the degree of speculation in this area. For much of 1995,
semi-conductor stocks had great momentum. By October, Internet services
companies became the market's favorites. For example, Netscape went public in
1995 and reached a market capitalization of $5 billion, larger than half of the
more established companies in the S&P 500. Such a surge is typically a sign that
emotion rather than common sense is propelling a stock.
FINANCIAL STOCKS LEAD THE WAY
Currently, the largest weighting in the portfolio is in financial services.
These stocks have done very well due to falling interest rates, growing
corporate profits and merger activity. For example, American Express has been on
an upward track since it divested Lehman Brothers in 1994. The company projects
earnings growth of 15% per year through the year 2000, partly on the strength of
the network of personal financial planners that it recently acquired from IDS
Financial Services. Personal financial planning services are in increasing
demand as baby boomers head toward retirement.
EXPORTING AMERICANA
In January, McDonald's announced plans to repurchase $2.2 billion in common
stock over the next three years and to add 2,500 to 3,200 new restaurants in
each of the next two years. That compares to 1,800 in 1994 and 2,400 in 1995. We
are impressed that the company is generating so much cash that it can expand and
repurchase stock at the same time. Since most of the expansion is overseas, the
company expects its foreign earnings to grow 20% per year. Recently, when a new
McDonald's opened in Kuwait, the line was seven miles long.
GROWTH AND VALUE
The projected composite growth rate of the stocks in the fund is 18% for 1996,
more than double the 7% forecast for the S&P 500. Yet the Growth Fund is priced
at just a 3% premium over the S&P 500, suggesting
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+The fund's total return (Investor Shares) with the maximum sales charge of
4.50% was 6.81% for the period.
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that the portfolio contains excellent value. Although the fund is not as
aggressive as many of its peers, we believe that our risk-based return
performance will continue to serve investors well.
As of January 31, 1996, the fund's top five holdings were Coca-Cola (3.45%),
Federal National Mortgage Association (3.17%), B.F. Goodrich (3.03%), McDonald's
(2.97%) and Anheuser-Busch (2.90%).++
HIGHMARK GROWTH FUND
Return on a $10,000 Investment
<TABLE>
<CAPTION>
Morningstar
Date Investor Fiduciary S&P 500 Growth Index
<S> <C> <C> <C> <C>
11/18/93 9,551 10,000 10,000 10,000
7/31/94 9,382 9,813 10,003 9,952
7/31/95 11,737 12,289 12,613 12,453
1/31/96 13,128 13,713 14,447 13,474
</TABLE>
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HighMark Growth Fund Performance
Average Annual Total Return
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Since
Inception
6 Months* 1 Year (11/18/93)
1/31/96
Investor** 6.81% 29.44% 13.13%
Fiduciary 11.59% 35.17% 15.39%
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The performance of the HighMark Growth Fund is measured against the
S&P 500 Stock Index, an unmanaged index generally considered to be
representative of the U.S. stock market, and the Morningstar Growth Average, a
composite of managed growth funds. The S&P 500 Stock Index does not reflect the
deduction of expenses associated with a mutual fund, such as investment
management and fund accounting fees. However, the fund's performance and the
Morningstar Growth Average reflect these value-added services. Past performance
is not predictive of future results. The investment return and NAV will
fluctuate, so that an investor's shares, when redeemed, may be worth more or
less than the original cost.
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++The fund's composition is subject to change.
*Aggregate total return.
**Reflects 4.50% sales charge.
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HIGHMARK INCOME & GROWTH FUND
The Income & Growth Fund is a portfolio of more than 100 high-quality stocks of
companies with strong balance sheets, sound management and demonstrated growth
in earnings and dividends. The portfolio is extremely well-diversified across
many industries--including banking, electrical equipment and oil. The largest
company in the portfolio comprises just 2.8% of the total. For the six months
ended January 31, 1996, the Income & Growth Fund produced a total return of
11.98% (Investor Shares).+ In comparison, its benchmark, the S&P 500, was up
14.54%.
CONSERVATIVE STANCE PAYS OFF
Given our outlook for a slowing economy, we maintained lower weightings in
technology holdings in recent months. Our strategy emphasizes companies with
stable earnings and dividends, and many technology companies do not meet these
criteria. However, the group is more attractive now that share prices have
declined. In general, the fund's price-to-earnings ratio is lower--and its
dividend yield higher--than that of the overall market. We also tend to invest
in large companies, and that was a good place to be in late 1995.
RX FOR THE PORTFOLIO
The Income & Growth Fund held a sizable number of pharmaceutical stocks such as
Pfizer, Merck, Bristol-Myers Squibb and Warner Lambert, which had been depressed
by the Clinton Administration's earlier attempts to revamp the health-care
industry. As it turned out, there was too much pessimism about the industry's
prospects. The Clinton plan was scrapped; the stocks offered strong yields--and
the country's demographics favor them as the population ages. As companies
started to show better-than-expected growth, investors bid the stocks up
strongly. In addition, as cyclical stocks including technology started to sell
off, investors shifted to companies--such as pharmaceuticals--that could show
steady growth, even in a slow-growth economy.
RETAILING: STILL TOO MANY STORES
With consumer demand sluggish, this sector of the economy is weak. As the
industry consolidates, it will probably take another year before surviving
retailers become strong again. Due to the sell-off across the board, some of
these stocks represent very good value. The portfolio includes shares of some of
the stronger retailers, including J.C. Penney, Wal-Mart and Sears.
As of January 31, 1996, the fund's top five holdings were General Electric
(2.82%), Pfizer (2.09%), BankAmerica (1.62%), Marsh & McClennan (1.60%) and
Corning Glass (1.60%).++
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+The fund's total return (Investor Shares) with the maximum sales charge of
4.50% was 6.97% for the period.
++The composition of the fund's holdings is subject to change.
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HIGHMARK INCOME & GROWTH FUND
Return on a $10,000 Investment
Date Investor Fiduciary S&P 500
11/14/93 9,551 10,000 10,000
7/31/94 9,716 10,163 10,003
7/31/95 11,724 12,265 12,613
1/31/96 13,128 13,747 14,447
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HighMark Income & Growth Fund Performance
Average Annual Total Return
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Since
Inception
6 Months* 1 Year (11/14/93)
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1/31/96
Investor** 6.97% 25.52% 13.07%
Fiduciary 12.08% 31.61% 15.44%
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The performance of the HighMark Income & Growth Fund is measured against the
S&P 500 Stock Index, an unmanaged index generally considered to be
representative of the U.S. stock market. The index does not reflect the
deduction of expenses associated with a mutual fund, such as investment
management and fund accounting fees. However, the fund's performance reflects
these value-added services. Past performance is not predictive of future
results. The investment return and NAV will fluctuate, so that an investor's
shares, when redeemed, may be worth more or less than the original cost.
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*Aggregate total return.
**Reflects 4.50% sales charge.
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HIGHMARK BALANCED FUND
For the six months ended January 31, 1996, the HighMark Balanced Fund's total
return was 10.01% (Investor Shares).+ In comparison, the fund's benchmarks, the
S&P 500 and the Lehman Brothers Aggregate Bond Index, were up 14.54% and 7.24%,
respectively.
STOCK PORTION RELATIVELY HIGH
The fund searches for the best combination of stocks, bonds and cash equivalents
by assessing the relative risk and reward of each type of investment in the
current market environment. As of January 31, 1996, the fund favored stocks,
which comprised 57% of the portfolio; bonds accounted for 34% and cash
equivalents, 9%. The reason: Although corporate profit growth is slowing, it is
still advancing at a rate of 8% to 10% per year.
We would shift the fund toward bonds if the slowing economy led to corporate
earnings growth below the high single-digit level. Typically, a slower economy
would favor bonds, because the Federal Reserve would lower interest rates to
stimulate growth. At this stage, the fund's high cash position has been
advantageous because money-market instruments continue to pay high yields in
relation to inflation. This advantage will diminish if the Federal Reserve
continues to lower interest rates.
RISK POSTURE FAVORS BONDS
As the Dow Jones Industrial Average climbs above 5,400, the downside risk for
stocks increases. Yet even in the bond market's worst year--1994--total returns
were down just 4%. In contrast, during the worst stock market in history--during
the 1930s--stocks fell 43%. Although bonds do not offer the upside potential of
stocks, they are generally less volatile. That's why we will pay particular
attention to the relative risks and rewards of these two asset classes as the
economy continues to slow this year.
As of January 31, 1996, the fund's top five equity holdings were General
Electric (1.70%), Pfizer (1.09%), Corning Glass (.97%), Anheuser-Busch (.96%)
and BankAmerica (.93%).++
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+The fund's total return (Investor Shares) with the maximum sales charge of
4.50% was 5.05% for the period.
++The composition of the fund's holdings is subject to change.
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HIGHMARK BALANCED FUND
Return on a $10,000 Investment
Lehman
Brothers Morningstar
Aggregate Balanced
Date Investor Fiduciary S&P 500 Bond Index Index
11/14/93 9,551 10,000 10,000 10,000 10,000
7/31/94 9,527 10,026 10,003 9,773 9,929
7/31/95 11,013 11,592 12,613 10,767 11,468
1/31/96 12,116 12,778 14,447 11,547 12,510
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HighMark Balanced Fund Performance
Average Annual Total Return
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Since
Inception
6 Months* 1 Year (11/14/93)
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1/31/96
Investor** 5.05% 19.88% 9.04%
Fiduciary 10.24% 25.63% 11.69%
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The performance of the HighMark Balanced Fund is measured against the
S&P 500 Stock Index, an unmanaged index generally considered to be
representative of the U.S. stock market, the Lehman Brothers Aggregate Bond
Index, an unmanaged broad-based index generally considered to be representative
of the bond market as a whole, and the Morningstar Balanced Average, a
composite of managed balanced funds. These indices do not reflect the deduction
of expenses associated with a mutual fund, such as investment management and
fund accounting fees. However, the fund's performance and the Morningstar
Balanced Average reflect these value-added services. Past performance is not
predictive of future results. The investment return and NAV will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than the
original cost.
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*Aggregate total return.
**Reflects 4.50% sales charge.
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HIGHMARK BOND FUND
The bond market has continued to perform well as long-term interest rates
continued to fall. For the six months ended January 31, 1996, the HighMark Bond
Fund produced a total return of 7.66% (Investor Shares).+ In comparison, the
fund's benchmark, the Lehman Brothers Aggregate Bond Index returned 7.24%.
The fund's strong performance was due in part to its longer average maturity,
9.6 years, and longer duration than many bond funds. (Duration is a measure of a
fund's sensitivity to changes in interest rates.) During a period of falling
interest rates, a relatively long average maturity and duration typically have
greater potential for capital appreciation.
The HighMark Bond Fund invests in a portfolio of U.S. Treasury and agency
securities, mortgage-backed securities and high-grade corporate bonds. During
the past six months, the fund's performance benefited from several factors. For
example, it held fewer mortgage-backed securities than usual. In a period of
falling interest rates, as homeowners refinance their mortgages, these
securities tend to be repaid at par, which lowers total return.
PROTECTION AGAINST CALLS
In addition, the portfolio had very few callable corporate bonds. Corporations
can sometimes "call" their bonds--that is, redeem them prior to maturity--to
take advantage of falling interest rates. In contrast, the portfolio includes
some "putable" corporate bonds that we can retire if interest rates rise.
Putable bonds protect the portfolio in a rising interest-rate environment
because they don't depreciate nearly as much as a bond without such a feature.
We continue to emphasize the highest credit quality in corporate bonds because
the yields offered by bonds of lower quality are not sufficient to justify the
increased risk. Since July 1995, the fund has added some bank names such as
Citicorp and U.S. Bancorp, a regional banking company based in Portland, Oregon.
As interest rates level off--and it appears that we are getting closer to the
bottom of the current cycle--we plan to add mortgage-backed securities to the
portfolio to take advantage of their higher yield. Corporate bonds also provide
a yield advantage over U.S. Treasuries that would become increasingly important
in a stable interest rate environment.
Low inflation continues to be the real story for the bond market. During 1995,
the consumer price index advanced just 2.5%, down from 2.7% in 1994. This
continues to be an excellent environment for investors who want the relatively
high current income from bonds.
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+The fund's total return (Investor Shares) with the maximum sales charge of
3.00% was 4.42% for the period.
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HIGHMARK BOND FUND
Return on a $10,000 Investment
Morningstar
Corporate Lehman
Bond High Brothers
Quality Aggregate
Date Investor Fiduciary Index Bond Index
2/15/84 9,695 10,000 10,000 10,000
7/31/84 9,479 9,778 10,077 10,275
7/31/85 11,804 12,175 12,225 12,733
7/31/86 14,947 15,417 14,436 15,470
7/31/87 15,186 15,664 15,140 16,168
7/31/88 16,073 16,579 16,119 17,394
7/31/89 18,450 19,030 18,127 20,039
7/31/90 19,468 20,081 19,231 21,452
7/31/91 21,218 21,886 20,994 23,749
7/31/92 24,280 25,044 23,768 27,262
7/31/93 26,725 27,566 25,693 30,037
7/31/94 25,707 26,699 25,832 30,061
7/31/95 28,096 29,217 27,820 33,098
1/31/96 30,249 31,436 29,380 35,496
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HighMark Bond Fund Performance
Average Annual Total Return
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Since
Inception
6 Months* 1 Year 5 Years 10 Years (2/15/84)
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1/31/96
Investor** 4.42% 13.90% 7.50% 8.22% 9.69%
Fiduciary 7.60% 17.36% 8.32% 8.63% 10.04%
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The performance of the HighMark Bond Fund is measured against the Lehman
Brothers Aggregate Bond Index, an unmanaged broad-based index generally
considered to be representative of the bond market as a whole, and the
Morningstar Corporate Bond High Quality Average, a composite of managed
corporate bond funds. The Lehman Brothers Aggregate Bond Index does not reflect
the deduction of expenses associated with a mutual fund, such as investment
management and fund accounting fees. However, the fund's performance and the
Morningstar Corporate Bond High Quality Average reflect these value-added
services. Past performance is not predictive of future results. The investment
return and NAV will fluctuate, so that an investor's shares, when redeemed, may
be worth more or less than the original cost.
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*Aggregate total return.
**Reflects 3.00% sales charge.
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HIGHMARK GOVERNMENT BOND FUND
The Government Bond Fund invests primarily in U.S. Government securities
maturing in one to five years. For the six months ended January 31, 1996, the
fund's total return was 5.79% (Investor Shares),+ outperforming its benchmark,
the Lehman Brothers Mutual Fund Short Government Index, which returned 5.12%.
The reason that we were able to outperform is that the average maturity of the
fund is substantially longer than that of the index. This strategy is being
reviewed in light of the market sell-off in early March. The economy continues
its sluggish growth, and this bodes well for our strategy. However, we are not
as bullish as we were six months ago.
HIGHMARK GOVERNMENT BOND FUND
Return on a $10,000 Investment
<TABLE>
<CAPTION>
Lehman Brothers
Date Investor Fiduciary Mutual Fund Index
<S> <C> <C> <C>
11/14/93 9,699 10,000 10,000
7/31/94 9,465 9,841 9,868
7/31/95 10,172 10,560 10,633
1/31/96 10,761 11,166 11,177
</TABLE>
HighMark Government Bond Fund Performance
Average Annual Total Return
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Since
Inception
6 Months* 1 Year (11/14/93)
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1/31/96
Investor** 2.63% 9.46% 3.36%
Fiduciary 5.75% 12.84% 5.10%
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The performance of the HighMark Government Bond Fund is measured
against the Lehman Brothers Mutual Fund Short Government Index, an unmanaged
broad-based index generally considered to be representative of U.S. Government
securities with maturities of one to five years. The index does not reflect the
deduction of expenses associated with a mutual fund, such as investment
management and fund accounting fees. However, the fund's performance reflects
these value-added services. Past performance is not predictive of future
results. The investment return and NAV will fluctuate, so that an investor's
shares, when redeemed, may be worth more or less than the original cost.
- ---------------
+The fund's total return (Investor Shares) with the maximum sales charge of
3.00% was 2.63% for the period.
*Aggregate total return.
**Reflects 3.00% sales charge.
------
13
------
<PAGE> 17
LOGO
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HIGHMARK MONEY MARKET FUNDS
THE TAXABLE MONEY MARKET FUNDS
Since early July 1995, the Federal Reserve has lowered the federal funds rate
three times for a total of .75 of a percentage point. Money market fund yields
tend to track this rate, which is the interest rate charged by member banks for
overnight loans.
The likelihood of significant additional Fed easing has been called into
question recently as reports of recent strength in retail, housing and auto
sales have appeared. This situation could reverse itself, but it has created
substantial concern in the fixed-income markets. Inflation and productivity
remain friendly to the bond market, but the outlook is not as bullish as earlier
in the year.
THE TAX-FREE MONEY MARKET FUNDS+
The California Tax-Free Money Market Fund and the Tax-Free Money Market Fund are
managed in a conservative manner. Most of the securities held in these funds are
credit-enhanced securities, which are insured or backed by direct-pay
irrevocable bank letters of credit. In addition, the average maturity of these
funds is currently less than 25 days. Maintaining a very short average maturity
greatly enhances liquidity.
The challenge in these tax-free funds is to invest in high-grade securities,
maintain a high level of liquidity and provide our shareholders with high
performance. Currently, the new issuance of tax-free securities remains light.
Still, tax-free money market funds can be advantageous for investors in high
federal and state income tax brackets.
- ---------------
+Some or all of the income may be subject to certain state and local taxes, and,
depending on a shareholder's tax bracket, to the federal alternative minimum
tax.
------------------------
The HighMark Group is a family of mutual funds distributed by BISYS Fund
Services, independent of The Bank of California, N.A., and its affiliates.
Certain fees of some funds are currently being waived, which may result in
higher fund total returns than would occur if full fees were charged. Past
performance is not predictive of future results. The composition of the funds'
holdings is subject to change.
An investment in the HighMark money market funds is neither insured nor
guaranteed by the U.S. Government. Although these funds seek to maintain a
stable net asset value of $1.00 per share, there can be no assurance that they
will be able to do so.
The HighMark Funds are not deposits of, or guaranteed or endorsed by, The Bank
of California or its affiliates, nor are they federally insured by the FDIC or
any other government agency. An investment in mutual fund shares involves
investment risks, including possible loss of principal.
- ------
14
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
JANUARY 31, 1996
Amounts in Thousands, Except Per Share Amounts
(UNAUDITED)
<TABLE>
<CAPTION>
100% U.S.
DIVERSIFIED U.S. GOVERNMENT TREASURY CALIFORNIA
OBLIGATIONS OBLIGATIONS OBLIGATIONS TAX-FREE TAX-FREE
FUND FUND FUND FUND FUND
----------- --------------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities, at value........................ $ 361,482 $ 190,723 $ 329,175 $ 153,685 $43,976
Repurchase agreements...................................... 46,043 28,838 -- -- --
-------- -------- -------- -------- -------
Total Investments (amortized cost $407,525; $219,561;
$329,175; $153,685 and $43,976, respectively).......... 407,525 219,561 329,175 153,685 43,976
Interest receivable........................................ 2,061 332 575 487 177
Receivable from brokers for investments sold............... -- -- -- 1,000 --
Prepaid expenses and other assets.......................... 23 34 15 7 1
-------- -------- -------- -------- -------
Total Assets 409,609 219,927 329,765 155,179 44,154
-------- -------- -------- -------- -------
LIABILITIES:
Cash overdraft............................................. -- -- 6 4,118 1,080
Dividends payable 1,670 1,069 1,210 365 106
Payable to brokers for investments purchased............... 4,961 5,000 9,873 -- --
Accrued expenses and other payables:
Investment advisory fees................................. 134 88 104 34 14
Administration fees...................................... 22 15 17 6 1
Shareholder services fees................................ 2 1 1 1 --
Custodian, accounting and transfer agent fees............ 28 23 16 17 11
Other.................................................... 77 26 58 32 11
-------- -------- -------- -------- -------
Total Liabilities...................................... 6,894 6,222 11,285 4,573 1,223
-------- -------- -------- -------- -------
NET ASSETS:
Capital.................................................... 403,095 213,890 318,418 150,655 42,947
Accumulated undistributed net realized gains (losses) on
investment transactions.................................. (380) (185) 62 (49) (16)
-------- -------- -------- -------- -------
Net Assets............................................. $ 402,715 $ 213,705 $ 318,480 $ 150,606 $42,931
======== ======== ======== ======== =======
Net Assets
Investor................................................. $ 152,343 $ 61,617 $ 106,541 $ 48,875 $14,598
Fiduciary................................................ 250,372 152,088 211,939 101,731 28,333
-------- -------- -------- -------- -------
Total.................................................. $ 402,715 $ 213,705 $ 318,480 $ 150,606 $42,931
======== ======== ======== ======== =======
Outstanding units of beneficial interest (shares)
Investor................................................. 152,426 61,633 106,524 48,887 14,603
Fiduciary 250,669 152,257 211,894 101,768 28,344
-------- -------- -------- -------- -------
Total.................................................. 403,095 213,890 318,418 150,655 42,947
======== ======== ======== ======== =======
Net asset value--offering and redemption price per share
Investor................................................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Fiduciary................................................ 1.00 1.00 1.00 1.00 1.00
======== ======== ======== ======== =======
</TABLE>
See notes to financial statements.
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LOGO
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
JANUARY 31, 1996
Amounts in Thousands, Except Per Share Amounts
(UNAUDITED)
<TABLE>
<CAPTION>
INCOME
BOND GOVERNMENT EQUITY
FUND BOND FUND FUND
------- ---------- ----------
<S> <C> <C> <C>
ASSETS:
Investments in securities, at value..................................................... $62,028 $4,619 $ 264,094
Repurchase agreements................................................................... 548 48 7,040
------- ------ --------
Total Investments (cost $59,804; $4,512 and $224,730, respectively).................. 62,576 4,667 271,134
Interest and dividends receivable....................................................... 924 92 736
Receivable from brokers for investments sold............................................ 2,427 -- --
Prepaid expenses and other assets....................................................... 1 10 --
------- ------ --------
Total Assets......................................................................... 65,928 4,769 271,870
------- ------ --------
LIABILITIES:
Dividends payable....................................................................... 316 23 557
Payable to brokers for investments purchased............................................ 2,088 -- 925
Accrued expenses and other payables:
Investment advisory fees............................................................... 24 -- 147
Administration fees.................................................................... 2 -- 15
Shareholder services fees.............................................................. -- -- 1
Custodian, accounting and transfer agent fees.......................................... 15 5 33
Other.................................................................................. 39 2 65
------- ------ --------
Total Liabilities.................................................................... 2,484 30 1,743
------- ------ --------
NET ASSETS:
Capital................................................................................. 63,654 4,903 216,784
Net unrealized appreciation on investments.............................................. 2,772 155 46,404
Accumulated undistributed net realized gains (losses) on investment transactions........ (2,982) (319) 6,939
------- ------ --------
Net Assets........................................................................... $63,444 $4,739 $ 270,127
======= ====== ========
Net Assets
Investor............................................................................... $ 1,181 $1,107 $ 6,944
Fiduciary.............................................................................. 62,263 3,632 263,183
------- ------ --------
Total................................................................................ $63,444 $4,739 $ 270,127
======= ====== ========
Outstanding units of beneficial interest (shares)
Investor............................................................................... 110 114 479
Fiduciary.............................................................................. 5,749 373 18,185
------- ------ --------
Total................................................................................ 5,859 487 18,664
======= ====== ========
Net asset value
Investor--redemption price per share................................................... $ 10.74 $ 9.67 $ 14.50
Fiduciary--offering and redemption price per share..................................... 10.83 9.74 14.47
======= ====== ========
Maximum Sales Charge (Investor Shares).................................................. 3.00% 3.00% 4.50%
======= ====== ========
Maximum Offering Price (100%/100%-Maximum Sales Charge) of net asset value adjusted to
nearest cent) per share (Investor Shares).............................................. $ 11.07 $ 9.97 $ 15.18
======= ====== ========
</TABLE>
See notes to financial statements.
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16
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<PAGE> 20
LOGO
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
JANUARY 31, 1996
Amounts in Thousands, Except Per Share Amounts
(UNAUDITED)
<TABLE>
<CAPTION>
INCOME &
BALANCED GROWTH GROWTH
FUND FUND FUND
-------- ------- --------
<S> <C> <C> <C>
ASSETS:
Investments in securities, at value................................................. $31,478 $35,888 $5,976
Repurchase agreements............................................................... 3,071 2,559 270
-------- -------- -------
Total Investments (cost $29,677; $32,492 and $5,020, respectively).............. 34,549 38,447 6,246
Interest and dividends receivable................................................... 223 42 11
Receivable from brokers for investments sold........................................ 4 70 1
Prepaid expenses and other assets................................................... 3 2 6
-------- -------- -------
Total Assets.................................................................... 34,779 38,561 6,264
-------- -------- -------
LIABILITIES:
Dividends payable................................................................... 86 25 7
Payable to brokers for investments purchased........................................ -- 1,006 --
Accrued expenses and other payables:
Investment advisory fees.......................................................... 17 17 --
Administration fees............................................................... 2 2 --
Custodian, accounting and transfer agent fees..................................... 3 4 4
Other............................................................................. 9 10 3
-------- -------- -------
Total Liabilities............................................................... 117 1,064 14
-------- -------- -------
NET ASSETS:
Capital............................................................................. 29,880 31,225 5,055
Net unrealized appreciation on investments.......................................... 4,872 5,955 1,226
Accumulated undistributed net realized gains (losses) on investment transactions.... (90) 317 (31)
-------- -------- -------
Net Assets...................................................................... $34,662 $37,497 $6,250
======== ======== =======
Net Assets
Investor.......................................................................... $ 607 $ 2,081 $ 268
Fiduciary......................................................................... 34,055 35,416 5,982
-------- -------- -------
Total........................................................................... $34,662 $37,497 $6,250
======== ======== =======
Outstanding units of beneficial interest (shares)
Investor.......................................................................... 52 166 22
Fiduciary......................................................................... 2,899 2,830 486
-------- -------- -------
Total........................................................................... 2,951 2,996 508
======== ======== =======
Net asset value
Investor--redemption price per share.............................................. $ 11.66 $ 12.54 $12.30
Fiduciary--offering and redemption price per share................................ 11.75 12.51 12.30
======== ======== =======
Maximum Sales Charge (Investor Shares).............................................. 4.50% 4.50% 4.50%
======== ======== =======
Maximum Offering Price (100%/100%-Maximum Sales Charge) of net asset value adjusted
to nearest cent) per share (Investor Shares)...................................... $ 12.21 $ 13.13 $12.88
======== ======== =======
</TABLE>
See notes to financial statements.
------
17
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<PAGE> 21
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JANUARY 31, 1996
Amounts in Thousands
(UNAUDITED)
<TABLE>
<CAPTION>
U.S. 100% U.S.
DIVERSIFIED GOVERNMENT TREASURY CALIFORNIA
OBLIGATIONS OBLIGATIONS OBLIGATIONS TAX-FREE TAX-FREE
FUND FUND FUND FUND FUND
----------- ---------- ----------- ---------- --------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income....................................... $11,238 $6,653 $ 8,192 $2,926 $828
------- ------- ------- ------ ------
Total Income...................................... 11,238 6,653 8,192 2,926 828
------- ------- ------- ------ ------
EXPENSES:
Investment advisory fees.............................. 771 465 591 325 87
Administration fees................................... 385 232 296 162 44
Distribution fees (Investor shares)................... -- 9 -- -- --
Shareholder services fees............................. 482 291 370 203 55
Custodian and accounting fees......................... 130 88 86 63 38
Legal and audit fees.................................. 34 19 27 15 3
Trustees' fees and expenses........................... 6 4 5 2 1
Transfer agent fees................................... 36 20 22 22 16
Registration and filing fees.......................... 21 8 16 3 2
Printing costs........................................ 24 33 19 10 3
Other................................................. 6 4 5 2 1
Expenses voluntarily reduced.......................... (454) (277) (351) (386) (87)
------- ------- ------- ------ ------
Total Expenses.................................... 1,441 896 1,086 421 163
------- ------- ------- ------ ------
Net Investment Income................................. 9,797 5,757 7,106 2,505 665
------- ------- ------- ------ ------
REALIZED GAINS ON INVESTMENTS:
Net realized gains on investment transactions......... 6 6 6 -- --
------- ------- ------- ------ ------
Change in net assets resulting from operations........ $ 9,803 $5,763 $ 7,112 $2,505 $665
======= ======= ======= ====== ======
</TABLE>
See notes to financial statements.
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- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JANUARY 31, 1996
Amounts in Thousands
(UNAUDITED)
<TABLE>
<CAPTION>
GOVERNMENT INCOME
BOND BOND EQUITY
FUND FUND FUND
------ ---------- ----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income......................................................... $2,169 $144 $ 279
Dividend income......................................................... -- -- 4,762
------ ---- -------
Total Income........................................................ 2,169 144 5,041
------ ---- -------
EXPENSES:
Investment advisory fees................................................ 269 21 818
Administration fees..................................................... 63 4 246
Shareholder services fees............................................... 79 5 307
Custodian and accounting fees........................................... 43 33 87
Legal and audit fees.................................................... 5 2 23
Trustees' fees and expenses............................................. 1 -- 4
Transfer agent fees..................................................... 27 16 52
Registration and filing fees............................................ 3 -- 12
Printing costs.......................................................... 10 1 19
Other................................................................... 1 -- 4
Expenses voluntarily reduced............................................ (223) (42) (292)
------ ---- -------
Total expenses before expense reimbursements........................ 278 40 1,280
Expense reimbursements.............................................. -- (22) --
------ ---- -------
Total Expenses...................................................... 278 18 1,280
------ ---- -------
Net Investment Income................................................... 1,891 126 3,761
------ ---- -------
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized gains (losses) on investment transactions.................. (183) (20) 11,349
Net change in unrealized appreciation on investments.................... 2,862 127 25,966
------ ---- -------
Net realized/unrealized gains on investments............................ 2,679 107 37,315
------ ---- -------
Change in net assets resulting from operations.......................... $4,570 $233 $ 41,076
====== ==== =======
</TABLE>
See notes to financial statements.
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<PAGE> 23
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JANUARY 31, 1996
Amounts in Thousands
(UNAUDITED)
<TABLE>
<CAPTION>
INCOME &
BALANCED GROWTH GROWTH
FUND FUND FUND
-------- ------ --------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income........................................................... $ 462 $ 46 $ 10
Dividend income........................................................... 268 256 82
------ ------ ------
Total Income.......................................................... 730 302 92
------ ------ ------
EXPENSES:
Investment advisory fees.................................................. 163 155 29
Administration fees....................................................... 33 31 6
Shareholder services fees................................................. 41 39 7
Custodian and accounting fees............................................. 28 35 38
Legal and audit fees...................................................... 3 3 2
Trustees' fees and expenses............................................... 1 -- --
Transfer agent fees....................................................... 16 20 16
Registration and filing fees.............................................. 1 3 1
Printing costs............................................................ 3 3 1
Expenses voluntarily reduced.............................................. (140) (150 ) (58)
------ ------ ------
Total expenses before expense reimbursements.......................... 149 139 42
Expense reimbursements................................................ -- -- (13)
------ ------ ------
Total Expenses........................................................ 149 139 29
------ ------ ------
Net Investment Income..................................................... 581 163 63
------ ------ ------
REALIZED/UNREALIZED GAINS ON INVESTMENTS:
Net realized gains on investment transactions............................. 104 1,215 344
Net change in unrealized appreciation on investments...................... 2,474 2,193 229
------ ------ ------
Net realized/unrealized gains on investments.............................. 2,578 3,408 573
------ ------ ------
Change in net assets resulting from operations............................ $3,159 $3,571 $636
====== ====== ======
</TABLE>
See notes to financial statements.
- ------
20
- ------
<PAGE> 24
LOGO
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Amounts in Thousands
<TABLE>
<CAPTION>
DIVERSIFIED U.S. GOVERNMENT
OBLIGATIONS FUND OBLIGATIONS FUND
------------------------- --------------------------
SIX MONTHS
ENDED SIX MONTHS
JANUARY YEAR ENDED ENDED YEAR ENDED
31, JULY 31, JANUARY 31, JULY 31,
1996 1995 1996 1995
---------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income.............................. $ 9,797 $ 17,476 $ 5,757 $ 8,697
Net realized gains (losses) on investment
transactions..................................... 6 (29) 6 34
--------- ----------- ----------- -----------
Change in net assets resulting from operations....... 9,803 17,447 5,763 8,731
--------- ----------- ----------- -----------
DISTRIBUTIONS TO INVESTOR SHAREHOLDERS:
From net investment income......................... (3,663) (5,516) (2,006) (2,084)
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS:
From net investment income......................... (6,134) (11,960) (3,751) (6,613)
--------- ----------- ----------- -----------
Change in net assets from shareholder
distributions...................................... (9,797) (17,476) (5,757) (8,697)
--------- ----------- ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued........................ 922,965 1,562,243 1,034,295 1,760,626
Dividends reinvested............................... 3,432 4,915 1,833 1,950
Cost of shares redeemed............................ (922,355) (1,473,121) (1,030,650) (1,740,538)
--------- ----------- ----------- -----------
Change in net assets from share transactions......... 4,042 94,037 5,478 22,038
--------- ----------- ----------- -----------
Change in net assets................................. 4,048 94,008 5,484 22,072
NET ASSETS:
Beginning of period................................ 398,667 304,659 208,221 186,149
--------- ----------- ----------- -----------
End of period...................................... $ 402,715 $ 398,667 $ 213,705 $ 208,221
========= =========== =========== ===========
SHARE TRANSACTIONS:
Issued............................................. 922,965 1,562,243 1,034,295 1,760,626
Reinvested......................................... 3,432 4,915 1,833 1,950
Redeemed........................................... (922,355) (1,473,121) (1,030,650) (1,740,538)
--------- ----------- ----------- -----------
Change in shares..................................... 4,042 94,037 5,478 22,038
========= =========== =========== ===========
</TABLE>
See notes to financial statements.
------
21
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<PAGE> 25
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Amounts in Thousands
<TABLE>
<CAPTION>
100% U.S. TREASURY CALIFORNIA
OBLIGATIONS FUND TAX-FREE FUND TAX-FREE FUND
---------------------- ---------------------- ----------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED
JANUARY YEAR ENDED JANUARY YEAR ENDED JANUARY YEAR ENDED
31, JULY 31, 31, JULY 31, 31, JULY 31,
1996 1995 1996 1995 1996 1995
---------- ---------- ---------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income.................. $ 7,106 $ 10,640 $ 2,505 $ 4,619 $ 665 $ 1,405
Net realized gains (losses) on
investment transactions.............. 6 57 -- (23) -- (13)
--------- --------- --------- --------- --------- ---------
Change in net assets resulting from
operations............................. 7,112 10,697 2,505 4,596 665 1,392
--------- --------- --------- --------- --------- ---------
DISTRIBUTIONS TO INVESTOR SHAREHOLDERS:
From net investment income............. (2,420) (2,706) (802) (1,089) (203) (422)
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS:
From net investment income............. (4,686) (7,934) (1,703) (3,530) (462) (983)
--------- --------- --------- --------- --------- ---------
Change in net assets from shareholder
distributions.......................... (7,106) (10,640) (2,505) (4,619) (665) (1,405)
--------- --------- --------- --------- --------- ---------
CAPITAL TRANSACTIONS:
Proceeds from shares issued............ 489,635 736,668 180,079 354,814 72,809 156,974
Dividends reinvested................... 2,233 2,106 783 1,035 212 429
Cost of shares redeemed................ (452,658) (659,445) (176,542) (356,054) (73,605) (164,192)
--------- --------- --------- --------- --------- ---------
Change in net assets from share
transactions........................... 39,210 79,329 4,320 (205) (584) (6,789)
--------- --------- --------- --------- --------- ---------
Change in net assets..................... 39,216 79,386 4,320 (228) (584) (6,802)
NET ASSETS:
Beginning of period.................... 279,264 199,878 146,286 146,514 43,515 50,317
--------- --------- --------- --------- --------- ---------
End of period.......................... $ 318,480 $ 279,264 $ 150,606 $ 146,286 $ 42,931 $ 43,515
========= ========= ========= ========= ========= =========
SHARE TRANSACTIONS:
Issued................................. 489,635 736,668 180,079 354,814 72,809 156,974
Reinvested............................. 2,233 2,106 783 1,035 212 429
Redeemed............................... (452,658) (659,445) (176,542) (356,054) (73,605) (164,192)
--------- --------- --------- --------- --------- ---------
Change in shares......................... 39,210 79,329 4,320 (205) (584) (6,789)
========= ========= ========= ========= ========= =========
</TABLE>
See notes to financial statements.
- ------
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- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Amounts in Thousands
<TABLE>
<CAPTION>
BOND FUND GOVERNMENT BOND FUND INCOME EQUITY FUND
---------------------- ---------------------- ----------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED
JANUARY YEAR ENDED JANUARY YEAR ENDED JANUARY YEAR ENDED
31, JULY 31, 31, JULY 31, 31, JULY 31,
1996 1995 1996 1995 1996 1995
---------- ---------- ---------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income.................. $ 1,891 $ 3,824 $ 126 $ 294 $ 3,761 $ 7,595
Net realized gains (losses) on
investment transactions.............. (183) (1,512) (20) (55) 11,349 8,944
Net change in unrealized appreciation
on investments....................... 2,862 3,052 127 79 25,966 17,456
-------- -------- ------- -------- -------- --------
Change in net assets resulting from
operations............................. 4,570 5,364 233 318 41,076 33,995
-------- -------- ------- -------- -------- --------
DISTRIBUTIONS TO INVESTOR SHAREHOLDERS:
From net investment income............. (26) (18) (18) (3) (85) (43)
From net realized gains on
investments.......................... (1) -- -- -- (277) (16)
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS:
From net investment income............. (1,865) (3,806) (108) (291) (3,676) (7,552)
From net realized gains on
investments.......................... (32) -- (1) -- (11,279) (7,309)
-------- -------- ------- -------- -------- --------
Change in net assets from shareholder
distributions.......................... (1,924) (3,824) (127) (294) (15,317) (14,920)
-------- -------- ------- -------- -------- --------
CAPITAL TRANSACTIONS:
Proceeds from shares issued............ 6,325 11,393 1,180 1,376 28,472 36,043
Dividends reinvested................... 1,538 3,125 122 297 13,942 13,535
Cost of shares redeemed................ (7,381) (19,934) (653) (2,884) (23,252) (56,799)
-------- -------- ------- -------- -------- --------
Change in net assets from share
transactions........................... 482 (5,416) 649 (1,211) 19,162 (7,221)
-------- -------- ------- -------- -------- --------
Change in net assets..................... 3,128 (3,876) 755 (1,187) 44,921 11,854
NET ASSETS:
Beginning of period.................... 60,316 64,192 3,984 5,171 225,206 213,352
-------- -------- ------- -------- -------- --------
End of period.......................... $ 63,444 $ 60,316 $4,739 $ 3,984 $270,127 $225,206
======== ======== ======= ======== ======== ========
SHARE TRANSACTIONS:
Issued................................. 596 1,137 123 148 2,047 2,956
Reinvested............................. 145 312 13 32 991 1,159
Redeemed............................... (694) (1,985) (68) (309) (1,695) (4,698)
-------- -------- ------- -------- -------- --------
Change in shares......................... 47 (536) 68 (129) 1,343 (583)
======== ======== ======= ======== ======== ========
</TABLE>
See notes to financial statements.
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Amounts in Thousands
<TABLE>
<CAPTION>
BALANCED FUND GROWTH FUND INCOME & GROWTH FUND
---------------------- ---------------------- ----------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED
JANUARY YEAR ENDED JANUARY YEAR ENDED JANUARY YEAR ENDED
31, JULY 31, 31, JULY 31, 31, JULY 31,
1996 1995 1996 1995 1996 1995
---------- ---------- ---------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income.................. $ 581 $ 992 $ 163 $ 272 $ 63 $ 133
Net realized gains on investment
transactions......................... 104 21 1,215 915 344 42
Net change in unrealized appreciation
on investments....................... 2,474 2,804 2,193 3,752 229 961
------- ------- ------- ------- ------ -------
Change in net assets resulting from
operations............................. 3,159 3,817 3,571 4,939 636 1,136
------- ------- ------- ------- ------ -------
DISTRIBUTIONS TO INVESTOR SHAREHOLDERS:
From net investment income............. (10) (3) (8) (5) (3) (1)
From net realized gains on
investments.......................... -- -- (94) (3) (14) --
DISTRIBUTIONS TO FIDUCIARY SHAREHOLDERS:
From net investment income............. (571) (989) (155) (267) (60) (132)
From net realized gains on
investments.......................... (2) -- (1,566) (240) (315) --
------- ------- ------- ------- ------ -------
Change in net assets from shareholder
distributions.......................... (583) (992) (1,823) (515) (392) (133)
------- ------- ------- ------- ------ -------
CAPITAL TRANSACTIONS:
Proceeds from shares issued............ 6,482 10,356 9,826 9,727 1,741 1,771
Dividends reinvested................... 568 986 1,783 503 380 127
Cost of shares redeemed................ (5,392) (9,590) (2,174) (3,594) (2,999) (788)
------- ------- ------- ------- ------ -------
Change in net assets from share
transactions........................... 1,658 1,752 9,435 6,636 (878) 1,110
------- ------- ------- ------- ------ -------
Change in net assets..................... 4,234 4,577 11,183 11,060 (634) 2,113
NET ASSETS:
Beginning of period.................... 30,428 25,851 26,314 15,254 6,884 4,771
------- ------- ------- ------- ------ -------
End of period.......................... $ 34,662 $ 30,428 $ 37,497 $ 26,314 $6,250 $6,884
======= ======= ======= ======= ====== =======
SHARE TRANSACTIONS:
Issued................................. 576 1,021 809 951 145 168
Reinvested............................. 51 99 148 51 32 12
Redeemed............................... (479) (966) (178) (347) (255) (73)
------- ------- ------- ------- ------ -------
Change in shares......................... 148 154 779 655 (78) 107
======= ======= ======= ======= ====== =======
</TABLE>
See notes to financial statements.
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- --------------------------------------------------------------------------------
DIVERSIFIED OBLIGATIONS FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
JANUARY 31, 1996
Amounts in Thousands
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
--------- ------------------------------- ---------
<S> <C> <C> <C>
CERTIFICATES OF DEPOSIT (13.7%):
5,000 ABN-Amro,
5.56%, 6/5/96................ $ 4,997
10,000 Abbey National Treasury
Services,
5.71%, 3/11/96............... 10,000
5,000 Abbey National Treasury
Services,
5.72%, 9/11/96............... 5,000
5,000 Dai-Ichi Kangyo, 6.25%,
2/2/96....................... 5,000
5,000 Rabobank Nv, 5.82%, 8/14/96.... 5,000
5,000 Society Generale, 6.03%,
2/26/96...................... 5,001
10,000 Sumitomo Bank, 5.87%,
2/14/96...................... 10,000
5,000 Sumitomo Bank, 6.01%,
10/30/96..................... 5,000
5,000 Westdeutsche Landesbank
Girozentrale, 6.22%,
5/16/96...................... 5,008
--------
55,006
--------
COMMERCIAL PAPER (66.9%):
Automotive (5.0%):
5,000 Daimler-Benz North America
Corp., 5.65%, 2/13/96........ 4,991
10,000 Ford Motor Credit Corp.,
5.65%, 2/22/96............... 9,967
5,000 Ford Motor Credit Corp.,
5.47%, 3/25/96............... 4,960
--------
19,918
--------
Banking (8.7%):
5,000 ABN-Amro North America, Inc.,
5.80%, 2/16/96............... 4,988
5,000 Chiao Tung Bank, 5.70%,
2/6/96....................... 4,996
5,000 Chiao Tung Bank, 5.72%,
2/6/96....................... 4,996
5,000 Chiao Tung Bank, 5.43%,
2/23/96...................... 4,983
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
--------
<S> <C> <C> <C>
Continued
COMMERCIAL PAPER, CONTINUED:
Banking, continued:
10,000 National Australia Funding
Corp.,
5.31%, 4/18/96............... $ 9,886
5,300 Sanwa Bank, 6.08%, 4/22/96..... 5,227
--------
35,076
--------
Beverages (1.2%):
5,000 PepsiCo Inc., 5.61%, 5/17/96... 4,917
--------
4,917
--------
Business Credit Institutions (14.9%):
5,000 Apreco Inc., 5.42%, 2/29/96.... 4,979
10,000 CXC, Inc., 5.72%, 2/1/96....... 10,000
5,600 CXC, Inc., 5.69%, 2/2/96....... 5,599
5,000 Ciesco, Inc. L.P., 5.33%,
3/25/96...................... 4,961
5,000 Ciesco, Inc. L.P.,
5.31%, 4/12/96............... 4,948
10,000 Corporate Receivables Corp.,
5.70%, 2/6/96................ 9,992
5,000 Corporate Receivables Corp.,
5.67%, 2/9/96................ 4,994
9,600 Falcon Asset Securitization
Corp., 5.48%, 2/12/96........ 9,584
5,000 Falcon Asset Securitization
Corp., 5.45%, 2/26/96........ 4,981
--------
60,038
--------
Financial Services (6.6%):
5,000 American Express Credit Corp.,
5.57%, 2/6/96................ 4,996
5,000 Beta Finance Inc., 5.30%,
3/25/96...................... 4,961
Continued
</TABLE>
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25
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<PAGE> 29
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- --------------------------------------------------------------------------------
DIVERSIFIED OBLIGATIONS FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
Amounts in Thousands
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
--------
<S> <C> <C> <C>
COMMERCIAL PAPER, CONTINUED:
Financial Services, continued:
11,700 Beta Finance Inc., 5.57%,
3/4/96....................... $ 11,642
5,000 Dem Danske Corp., 5.57%,
3/5/96....................... 4,975
--------
26,574
--------
Governments (Foreign) (12.3%):
5,000 Kingdom of Sweden, 5.56%,
3/8/96....................... 4,972
5,000 Kingdom of Sweden, 5.60%,
4/4/96....................... 4,951
5,000 Kingdom of Sweden, 5.18%,
7/11/96...................... 4,884
10,000 Korea Development Bank, 5.63%,
2/26/96...................... 9,961
5,000 Korea Development Bank, 5.29%,
4/25/96...................... 4,938
5,000 Province of British Columbia,
5.58%, 2/1/96................ 5,000
5,000 Tasmanian Public Finance Corp.,
5.55%, 3/18/96............... 4,965
5,000 Tasmanian Public Finance Corp.,
5.37%, 4/12/96............... 4,947
5,000 Tasmanian Public Finance Corp.,
5.22%, 7/15/96............... 4,880
--------
49,498
--------
Industrial Goods & Services (2.5%):
5,000 Akzo Nobel Inc., 5.50%,
2/22/96...................... 4,984
5,000 Akzo Nobel, Inc., 5.36%,
3/25/96...................... 4,961
--------
9,945
--------
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
--------
<S> <C> <C> <C>
Continued
COMMERCIAL PAPER, CONTINUED:
Multiple Industry (2.6%):
5,000 Btr Dunlop Finance Inc., 5.68%,
2/8/96....................... $ 4,995
5,279 Btr Dunlop Finance, Inc.,
5.66%, 2/12/96............... 5,270
--------
10,265
--------
Technology (3.3%):
13,750 Hewlett Packard Co., 5.10%,
7/11/96...................... 13,436
--------
13,436
--------
Telecommunications (1.2%):
5,000 AT&T Capital Corp., 5.37%,
4/4/96....................... 4,953
--------
4,953
--------
Tobacco & Tobacco Products (1.2%):
5,000 B.A.T. Capital Corp., 5.60%,
2/23/96...................... 4,983
--------
4,983
--------
Trading Company (6.2%):
5,000 Cargill Inc., 5.57%, 3/12/96... 4,969
5,000 Sumitomo Corp. America Dcp.,
5.72%, 2/1/96................ 5,000
5,000 Sumitomo Corp. America Dcp.,
5.43%, 3/19/96............... 4,965
Continued
</TABLE>
- ------
26
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<PAGE> 30
- --------------------------------------------------------------------------------
DIVERSIFIED OBLIGATIONS FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
Amounts in Thousands
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
--------
<S> <C> <C> <C>
COMMERCIAL PAPER, CONTINUED:
Trading Company, continued:
5,000 Sumitomo Corp. America Dcp.,
5.75%, 4/15/96............... $ 4,941
5,000 Wool International, 5.62%,
2/15/96...................... 4,989
--------
24,864
--------
Utility (1.2%):
5,000 National Rural Utilities Co-Op
Fin Corp., 5.53%, 03/22/96... 4,962
--------
4,962
--------
Total Commercial Paper 269,429
--------
CORPORATE BONDS (4.3%):
Banking (3.7%):
5,000 J.P. Morgan, 6.50%, 5/6/96..... 5,011
10,000 Sanwa Floating Rate Bond,
5.95%, 12/4/96............... 10,000
--------
15,011
--------
Manufacturing--Consumer Goods (0.6%):
2,500 Gillette Co., 4.75%, 8/15/96... 2,486
--------
Total Corporate Bonds 17,497
--------
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
--------- ------------------------------- ---------
<S> <C> <C> <C>
MEDIUM TERM NOTE (2.5%):
10,000 PepsiCo, Inc., 6.90%,
2/16/96...................... $ 10,004
--------
Total Medium Term Note 10,004
--------
U.S. TREASURY BILLS (2.4%):
10,000 4.77%, 1/9/97.................. 9,546
--------
Total U.S. Treasury Bills 9,546
--------
Total Investments, at Amortized Cost 361,482
--------
REPURCHASE AGREEMENTS (11.4%):
26,043 First Boston, 5.90%, 2/1/96
(Collateralized by 20,010
U.S. Treasury Bonds, 8.75%,
5/15/17, market value--
$26,621)..................... 26,043
20,000 Salomon Brothers, 5.90%, 2/1/96
(Collateralized by 100,385
U.S. Treasury Strips, 8.75%,
5/15/17, market value--
$20,517)..................... 20,000
--------
Total Repurchase Agreements 46,043
--------
Total (Cost--$407,525)(a) $407,525
========
</TABLE>
- ------------
Percentages indicated are based on net assets of $402,715.
(a) Cost for federal income tax and financial reporting purposes are the same.
See notes to financial statements.
------
27
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<PAGE> 31
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- --------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
JULY 31, 1996
Amounts in Thousands
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ------------- ------------------------------- ---------
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCIES (84.8%):
Federal Farm Credit Bank
5,000 5.32%, 4/1/96.................. $ 5,000
5,000 5.25%, 5/1/96.................. 5,000
Federal Home Loan Banks:
5,000 5.56%, 2/2/96.................. 4,999
5,000 5.53%, 2/5/96.................. 4,997
5,000 5.55%, 2/5/96.................. 4,997
3,000 7.13%, 2/9/96.................. 3,001
5,000 5.53%, 2/12/96................. 4,992
3,000 6.79%, 2/15/96................. 3,001
5,000 5.50%, 2/15/96................. 4,989
5,000 5.32%, 3/6/96.................. 4,975
5,000 5.25%, 4/3/96.................. 4,955
4,000 4.34%, 7/29/96................. 3,983
Federal Home Loan Mortgage Corp.:
5,000 5.56%, 2/1/96.................. 5,000
5,000 5.55%, 2/2/96.................. 4,999
5,000 5.52%, 2/8/96.................. 4,995
10,000 5.36%, 2/20/96................. 9,972
5,000 5.47%, 3/1/96.................. 4,978
5,000 5.28%, 4/11/96................. 4,949
Federal National Mortgage Assoc.:
3,000 5.50%, 2/8/96.................. 2,997
10,000 5.42%, 2/13/96................. 9,982
10,000 5.50%, 2/20/96................. 9,971
3,000 5.58%, 2/21/96................. 2,991
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ------------- ------------------------------- ---------
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCIES, CONTINUED:
Federal National Mortgage Assoc., continued:
5,000 5.47%, 3/7/96.................. $ 4,973
3,000 5.49%, 3/11/96................. 2,982
5,000 5.43%, 3/12/96................. 4,970
3,000 5.48%, 3/13/96................. 2,981
5,000 5.54%, 3/13/96................. 4,969
5,000 5.66%, 3/15/96................. 5,000
5,000 5.46%, 3/19/96................. 4,964
5,000 5.46%, 4/5/96.................. 4,951
5,000 5.29%, 4/12/96................. 4,948
10,000 5.27%, 4/12/96................. 9,896
10,000 5.24%, 4/18/96................. 9,888
5,000 5.40%, 5/2/96.................. 4,932
--------
Total U.S. Government Agencies 181,177
--------
U.S. TREASURY BILLS (4.5%):
10,000 4.77%, 1/9/97.................. 9,546
--------
Total U.S. Treasury Bills 9,546
--------
Total Investments, at Value 190,723
--------
REPURCHASE AGREEMENTS (13.5%):
28,838 First Boston 5.90%, 2/1/96
(Collateralized by 22,158
U.S. Treasury Bonds, 8.75%,
5/15/17, market value--
$29,479)..................... 28,838
--------
Total Repurchase Agreements 28,838
--------
Total (Cost--$219,561)(a) $219,561
========
</TABLE>
- ------------
Percentages indicated are based on net assets of $213,705.
(a) Cost for federal income tax and financial reporting purposes are the same.
See notes to financial statements.
- ------
28
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<PAGE> 32
LOGO
- --------------------------------------------------------------------------------
100% U.S. TREASURY OBLIGATIONS FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
JULY 31, 1996
Amounts in Thousands
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ------------- ------------------------------- ---------
<S> <C> <C> <C>
U.S. TREASURY BILLS (87.0%):
5,000 *5.45%, 2/1/96................. $ 5,000
4,353 *5.34%, 2/1/96................. 4,352
5,000 *5.37%, 2/1/96................. 5,000
8,000 *5.37%, 2/8/96................. 7,992
3,000 *5.39%, 2/8/96................. 2,997
4,072 *5.35%, 2/8/96................. 4,068
5,000 *5.38%, 2/8/96................. 4,995
3,000 *5.47%, 2/15/96................ 2,994
2,075 *5.43%, 2/15/96................ 2,071
1,745 *5.44%, 2/15/96................ 1,741
3,000 *5.42%, 2/15/96................ 2,994
2,962 *5.33%, 2/15/96................ 2,956
88 *5.31%, 2/15/96................ 87
5,000 *5.36%, 2/15/96................ 4,990
1,800 *5.34%, 2/15/96................ 1,795
4,500 *5.43%, 2/22/96................ 4,486
7,000 *5.35%, 2/22/96................ 6,978
1,482 *5.33%, 2/22/96................ 1,477
1,180 *5.32%, 2/22/96................ 1,176
1,383 *5.30%, 2/22/96................ 1,379
7,019 *5.31%, 2/29/96................ 6,989
6,222 *5.30%, 2/29/96................ 6,196
5,000 *5.32%, 2/29/96................ 4,979
8,854 *5.34%, 3/7/96................. 8,807
3,010 *5.30%, 3/7/96................. 2,994
1,056 *5.28%, 3/7/96................. 1,051
10,000 *5.29%, 3/7/96................. 9,949
5,000 *5.31%, 3/14/96................ 4,969
3,256 *5.24%, 3/14/96................ 3,236
2,542 *5.19%, 3/14/96................ 2,527
5,196 *5.20%, 3/14/96................ 5,165
4,000 *5.32%, 3/21/96................ 3,971
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
--------
<S> <C> <C> <C>
U.S. TREASURY BILLS, CONTINUED:
2,500 *5.39%, 3/21/96................ $ 2,482
2,720 *4.87%, 3/21/96................ 2,702
5,000 *5.32%, 3/21/96................ 4,953
4,000 *5.36%, 4/4/96................. 3,962
5,000 *5.31%, 4/4/96................. 4,954
8,176 *5.04%, 4/4/96................. 8,104
8,000 *5.04%, 4/11/96................ 7,922
1,098 *5.03%, 4/11/96................ 1,087
10,714 *4.99%, 4/11/96................ 10,610
5,000 *5.33%, 4/18/96................ 4,943
6,000 *5.00%, 4/18/96................ 5,936
2,384 *4.95%, 4/18/96................ 2,359
5,000 *4.94%, 4/18/96................ 4,947
6,767 *4.89%, 4/18/96................ 6,695
111 *4.94%, 4/25/96................ 110
5,000 *4.98%, 4/25/96................ 4,942
10,635 *4.96%, 4/25/96................ 10,512
2,602 *4.99%, 4/25/96................ 2,572
730 *4.97%, 5/2/96................. 721
5,000 *4.99%, 5/2/96................. 4,940
5,000 *5.03%, 5/2/96................. 4,938
3,870 *5.50%, 5/30/96................ 3,800
5,000 *5.21%, 5/30/96................ 4,913
5,000 *5.15%, 6/6/96................. 4,910
5,000 *5.05%, 6/20/96................ 4,902
5,000 *4.99%, 7/5/96................. 4,893
2,000 *5.54%, 7/25/96................ 1,945
2,000 *5.48%, 7/25/96................ 1,947
5,000 *4.83%, 7/25/96................ 4,882
5,000 *4.91%, 7/25/96................ 4,881
5,000 *4.84%, 7/25/96................ 4,882
</TABLE>
Continued
------
29
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<PAGE> 33
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- --------------------------------------------------------------------------------
100% U.S. TREASURY OBLIGATIONS FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JULY 31, 1996
Amounts in Thousands
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- ------------- ------------------------------- ---------
<S> <C> <C> <C>
U.S. TREASURY BILLS, CONTINUED:
2,000 *5.48%, 8/22/96................ $ 1,938
2,500 *5.50%, 8/22/96................ 2,423
Total U.S. Treasury Bills 277,068
U.S. TREASURY NOTES (16.4%):
20,000 *5.55%, 1/15/09................ 20,000
5,000 *4.63%, 2/15/96................ 4,998
5,000 *7.75%, 3/31/96................ 5,019
12,000 *7.63%, 4/30/96................ 12,063
5,000 *5.87%, 5/31/96................ 5,004
5,000 *6.13%, 7/31/96................ 5,023
Total U.S. Treasury Notes 52,107
Total (Cost--$329,175)(a) $329,175
</TABLE>
- ------------
Percentages indicated are based on net assets of $318,480.
(a) Cost for federal income tax and financial reporting purposes are the same.
* Effective yield at date of issuance.
See notes to financial statements.
- ------
30
- ------
<PAGE> 34
LOGO
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
JANUARY 31, 1996
Amounts in Thousands
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ------------------------------------------------------------------------------------ ---------
<C> <S> <C>
MUNICIPAL SECURITIES (100.1%):
California (100.1%)
7,600 California Health Facilities Finance Authority, Catholic HealthCare West, 3.65%*, $ 7,600
7/1/05**..........................................................................
700 California Health Facilities Finance Authority, Creekside Drive Apts., 3.00%*, 700
4/1/07**..........................................................................
1,900 California Health Facilities Finance Authority, Enloe Memorial Hospital, Series A, 1,900
3.90%*, 1/1/16**..................................................................
8,400 California Health Facilities Finance Authority, Kaiser Permanent, Series B, 3.65%*, 8,400
5/1/28**..........................................................................
7,900 California Health Facilities Finance Authority, Memorial Health Services, 3.70%*, 7,900
10/1/24**.........................................................................
1,700 California Health Facilities Finance Authority, Pool Program, Series 1990 A, 3.70%*, 1,700
9/1/20**..........................................................................
2,400 California Health Facilities Finance Authority, Pooled Loan Program, Series B, 2,400
3.65%*, 10/1/10**.................................................................
1,000 California Health Facilities Finance Authority, Santa Barbara Cottage Hospital, 1,000
Series B, 3.75%*, 9/1/05**........................................................
2,200 California Health Facilities Finance Authority, Santa Barbara Cottage Hospital, 2,200
Series C, 3.75%*, 9/1/15**........................................................
800 California Health Facilities Finance Authority, Vacaville, The Sycamores Apts., 800
3.00%*, 4/1/05**..................................................................
3,600 California Health Facilities Finance Authority, Westwood Park Apts., 3.00%*, 3,600
12/1/07**.........................................................................
7,205 California Multi-Family Housing Revenue, Southpark Apartment Project, 3.35%, 7,205
12/1/05...........................................................................
6,500 California Pollution Control Finance Authority, Resource Recovery Program, Burney 6,500
Forest Products Project Series A, 3.90%*, 9/1/20**................................
2,000 California Pollution Control Finance Authority, Resource Recovery Program, Delano 2,000
Project, 4.70%*, 8/1/19**.........................................................
1,500 California Pollution Control Finance Authority, Resource Recovery Program, Delano 1,500
Project 1990, 3.70%*, 8/1/19**....................................................
1,900 California Pollution Control Finance Authority, Resource Recovery Program, Delano 1,900
Project 1991, 3.25%*, 8/1/19**....................................................
</TABLE>
Continued
------
31
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<PAGE> 35
LOGO
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
Amounts in Thousands
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ------------------------------------------------------------------------------------- ----------
<C> <S> <C>
MUNICIPAL SECURITIES, CONTINUED:
California, continued:
800 California Pollution Control Finance Authority, Resource Recovery Program, Honey $ 800
Lake Power Project , 4.00%*, 9/1/18**.............................................
400 California Pollution Control Finance Authority, Honey Lake Power Project 1988, 400
3.70%*, 9/1/18**..................................................................
1,700 California Pollution Control Finance Authority, North County Recycling Center, 1,700
Series B, 2.90%*, 7/1/17**........................................................
1,750 California Pollution Control Finance Authority, Pacific Gas & Electric, Series C, 1,750
3.65%*, 10/1/20**.................................................................
2,500 California Pollution Control Finance Authority, Pacific Gas & Electric, Series C, 2,500
3.35%*, 10/1/20*..................................................................
500 California Pollution Control Finance Authority, Pacific Gas & Electric, Series A, 500
3.45%*, 10/1/20**.................................................................
1,500 California Pollution Control Finance Authority, Southern California Edison, Series 1,500
A, 4.15%*, 2/28/08**..............................................................
1,400 California Pollution Control Finance Authority, Southern California Edison, Series 1,400
B, 4.15%*, 2/28/08**..............................................................
700 California Pollution Control Finance Authority, Southern California Edison, Series 700
C, 4.15%*, 2/28/08**..............................................................
200 California Pollution Control Finance Authority, Southern California Edison, Series 200
D, 4.15%*, 2/28/08**..............................................................
1,600 California Pollution Control Finance Authority, Southern California Edison, Series 1,600
C, 3.65%*, 3/1/08**...............................................................
500 California Pollution Control Finance Authority, Southern California Edison, Series 500
C, 3.60%*, 3/1/08**...............................................................
1,200 California Pollution Control Finance Authority, Southern California Edison, Series 1,200
C, 3.65%*, 3/1/08**...............................................................
1,000 California Pollution Control Finance Authority, Southern California Edison, Series 1,000
C, 3.45%*, 3/1/08**...............................................................
</TABLE>
Continued
- ------
32
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- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
Amounts in Thousands
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- -------- ------------------------------------------------------------------------------------- -----------
<S> <C> <C>
MUNICIPAL SECURITIES, CONTINUED:
California, continued:
1,000 California Pollution Control Finance Authority, Southern California Edison, Series $ 1,000
C, 3.70%*, 3/1/08**...............................................................
3,400 California Pollution Control Finance Authority, Southern California Edison, Series 3,400
C, 3.30%*, 5/23/96**..............................................................
1,000 California Pollution Control Finance Authority, Southern California Edison, Series 1,000
C, 3.20%*, 3/1/08**...............................................................
4,000 California Pollution Control Finance Authority, Southern California Edison, Series 4,000
C, 3.00%*, 3/1/08**...............................................................
1,500 California Pollution Control Finance Authority, Southern California Edison, Series 1,500
C, 3.35%*, 3/1/08**...............................................................
1,000 California Pollution Control Finance Authority, Southern California Edison, Series 1,000
D, 3.30%*, 3/1/08**...............................................................
500 California Pollution Control Finance Authority, Southern California Edison, Series 500
D, 3.20%*, 3/1/08**...............................................................
3,080 California Pollution Control Finance Authority, Wadham Energy B, 3.20%*, 3,080
11/1/17**.........................................................................
2,800 California Pollution Control Finance Authority, Wadham Energy B, 3.20%*, 2,800
11/1/17**.........................................................................
8,365 California Statewide Community Development Authority, Series A, 3.65%*, 5/15/25**... 8,365
4,400 California SCPPA, Revenue Bonds, 91 Refunding Series, 2.75%*, 7/1/19**.............. 4,400
1,200 California Pollution Control Revenue, Wadham Energy, Series C, 3.20%*, 11/1/17**.... 1,200
7,800 California State Department, Water Resources, 3.65%*, 12/1/25**..................... 7,800
6,000 Contra Costa Transportation, Sales Tax Receivable, 2.90%*, 3/1/09**................. 6,000
5,000 Contra Costa County, California Multi-Family Housing Revenue, Park Regency, Series 5,000
A, 3.90%*, 8/1/32**...............................................................
1,200 Kern County Public Facilities Authority, Series B, 3.65%*, 8/1/06**................. 1,200
8,400 Los Angeles County, California Metro Transportation Authority, Union Station 8,400
Gateway, Series A, 3.75%*, 7/1/25**...............................................
7,300 Los Angeles County, Multi-Family Housing, Series K, 3.70%*, 7/1/10**................ 7,300
</TABLE>
Continued
------
33
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<PAGE> 37
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- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
Amounts in Thousands
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
- --------- ------------------------------------------------------------------------------------ ---------
<C> <S> <C>
MUNICIPAL SECURITIES, CONTINUED:
California, continued:
4,685 Oakland, California Health Facilities, Revenue Bonds-Childrens Hospital, Series A, $ 4,685
3.70%*, 7/1/08**..................................................................
2,800 Oxnard, California Housing Authority ,Multi-Family Housing Revenue, Seawind 2,800
Apartments Project, 3.30%*, 12/1/20**.............................................
2,100 Sacramento County, Multi-Family Housing Authority, River Oaks Apartments, 3.40%*, 2,100
9/15/07**.........................................................................
200 San Jose, California Mortgage Revenue, Somerset Park, 3.90%*, 11/1/17**............. 200
--------
Total Municipal Securities 150,785
--------
<CAPTION>
MARKET
SHARES VALUE
--------
<C> <S> <C>
INVESTMENT COMPANIES (1.9%):
Goldman Sachs California Tax-Exempt Money Market Fund...............................
1,537 1,537
Provident California Money Market Fund..............................................
1,363 1,363
--------
Total Investment Companies 2,900
--------
Total (Cost--$153,685) $153,685
========
</TABLE>
- ------------
Percentages indicated are based on net assets of $150,606.
<TABLE>
<C> <S>
(a) Cost for federal income tax and financial reporting purposes are the same.
* Variable rate securities collateralized by bank letters of credit or other bank credit agreements. The interest
rate, which will change periodically, is based upon bank prime rates or and index of market interest rates. The
rate reflected on the Schedule of Portfolio Investments is the rate in effect on January 31, 1996.
** Put and demand features exist allowing the Fund to require the repurchase of the investment within variable
time periods of less than one year.
</TABLE>
See notes to financial statements.
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34
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TAX-FREE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
JANUARY 31, 1996
Amounts in Thousands
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
--------- ----------------------------------------------------------------------------------- ---------
<S> <C> <C> <C>
MUNICIPAL SECURITIES (94.7%):
Arizona (6.5%):
1,200 Maricopa County, Arizona Pollution Control Corp., Revenue Bonds--Southern
California Edison, Series D, 3.35%, 12/1/09**.................................... $ 1,200
1,100 Maricopa County, Arizona Pollution Control Corp., Southern California Edison,
Series 1985F, 3.70%, 2/1/09**.................................................... 1,100
500 Maricopa County, Arizona Pollution Control Revenue, Southern California Edison,
Series D, 3.60%, 12/1/09**....................................................... 500
-------
2,800
-------
California (23.4%):
200 California Health Facilities Finance Authority Revenue, Enloe Memorial Hospital,
3.10%*, 1/1/16................................................................... 200
200 California Health Facilities Finance Authority Revenue, Kaiser Permanent, Series B,
2.80%*, 5/1/28................................................................... 200
500 California Pollution Control Finance Authority Revenue, Southern California Edison,
Series 85C, 3.60%, 3/1/08**...................................................... 500
1,000 California Pollution Control Finance Authority Revenue, Southern California Edison,
Series 85C, 3.70%, 3/1/08**...................................................... 1,000
500 California Pollution Control Finance Authority Revenue, Southern California Edison,
Series 85C, 3.30%, 3/1/08**...................................................... 500
750 California Pollution Control Finance Authority Revenue, Southern California Edison,
Series 85D, 3.20%, 3/1/08**...................................................... 750
1,200 California Pollution Control Finance Authority Revenue, Southern California Edison,
Series 1985D, 3.50%, 3/1/08**.................................................... 1,200
1,000 California Pollution Control Finance Authority Revenue, Southern California Edison,
Series 85D, 3.70%, 3/1/08**...................................................... 1,000
1,000 California Pollution Control Finance Authority Revenue, Burney Forest 1988,
3.75%*, 9/1/20................................................................... 1,000
100 California Pollution Control Finance Authority Revenue, Burney Forest 1988,
3.75%*, 9/1/20................................................................... 100
200 California Pollution Control Finance Authority Revenue, Delano Project 1990,
3.75%*, 8/1/19................................................................... 200
</TABLE>
Continued
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35
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- --------------------------------------------------------------------------------
TAX-FREE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
Amounts in Thousands
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
--------- ------------------------------------------------------------------------------------- -----------
<S> <C> <C>
MUNICIPAL SECURITIES, CONTINUED:
California, continued:
250 California Pollution Control Finance Authority Revenue, Pacific Gas & Electric,
Series 1988C, 3.35%, 10/1/20**................................................... $ 250
300 California Statewide Community Development Authority, Series 95A, 2.80%*,
5/15/25.......................................................................... 300
2,100 Los Angeles Multi-Family Housing, Series K, 3.10%*, 7/1/10......................... 2,100
100 Los Angeles County, California Metro Transportation Authority Revenue, Union
Station Gateway Project, 2.75%*, 7/1/25.......................................... 100
400 Los Angeles County, California Metro Transportation Authority Revenue, 2.95%*,
7/1/12........................................................................... 400
200 Los Angeles Crescent Gardens, 3.20%*, 7/1/14....................................... 200
-------
10,000
-------
Florida (7.2%):
800 Broward County, Florida Housing Finance Authority, Multi-Family Housing Revenue,
Welleby Apartments Project, 3.25%*, 2/1/06....................................... 800
2,300 Indian Trace Community Development, Basin 1 Water Management Special Benefit,
3.05%*, 11/1/99.................................................................. 2,300
-------
3,100
-------
Hawaii (1.9%):
800 Hawaii State Housing Finance, Affordable Rental Housing, Series A, 3.25%*,
7/1/27........................................................................... 800
-------
Illinois (3.9%):
200 Illinois Health Facilities Finance Authority Revenue, Methodist Medical Center,
Series 1985B, 3.55%*, 10/1/14.................................................... 200
1,490 Illinois Housing Development Authority, Multi-Family Housing, Revenue for Rimrod,
3.65%*, 2/1/24................................................................... 1,490
-------
1,690
-------
Indiana (4.9%):
1,000 Jasper County, Indiana Pollution Control Revenue, Northern Indiana Public Services,
3.75%, 11/1/16**................................................................. 1,000
500 Jasper County, Indiana Pollution Control Revenue, Northern Indiana Public Services,
Series 1988C, 3.15%*, 11/1/16**.................................................. 500
</TABLE>
Continued
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36
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- --------------------------------------------------------------------------------
TAX-FREE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
Amounts in Thousands
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
---------- ------------------------------------------------------------------------------------- ----------
<S> <C> <C>
MUNICIPAL SECURITIES, CONTINUED:
Indiana, continued:
600 City Of Sullivan, Indiana Pollution Control Revenue, National Rural Utilities,
Hoosier Electric Co., 3.75%, 12/1/14**........................................... $ 600
-------
2,100
-------
Kentucky (3.5%):
1,400 Clark County, Kentucky Pollution Control Revenue, East Kentucky Power Co-Op,
National Rural Utilities, 3.7%, 4/15/96.......................................... 1,400
100 Daviess County, Kentucky Solid Waste Disposal Facility Revenue, Scott Paper Co.
Project, 3.90%*, 5/1/24.......................................................... 100
-------
1,500
-------
Louisiana (5.1%):
2,200 Louisiana Pollution Control Finance Authority Revenue, 3.60%*, 12/1/15............. 2,200
-------
Michigan (5.1%):
2,200 Michigan State Underground Storage, Storage Tank Assurance Authority, 3.00%*,
12/1/04.......................................................................... 2,200
-------
Minnesota (0.2%):
100 Hubbard County, Minnesota Solid Waste Disposal Revenue, Potlatch Corp. Project,
Series 1, 3.30%*, 8/1/14......................................................... 100
-------
Missouri (2.8%):
1,200 St. Charles Missouri, Sun River Village Apts., 3.35%*, 12/1/07..................... 1,200
-------
Nevada (5.1%):
2,200 Clark County, Nevada Airport, Improvement Revenue Bonds, Series 1995A-1,
3.05%*, 7/1/25................................................................... 2,200
-------
New Mexico (4.2%):
1,800 Albuquerque, New Mexico Airport Revenue, Sub Lien Revenue Bonds, Series 1995,
3.05%*, 7/1/14................................................................... 1,800
-------
New York (4.4%):
200 New York General Obligation Bonds, Series B, 3.80%*, 10/1/20....................... 200
200 New York General Obligation Bonds, Series B, 3.80%*, 10/1/22....................... 200
</TABLE>
Continued
------
37
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<PAGE> 41
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- --------------------------------------------------------------------------------
TAX-FREE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
Amounts in Thousands
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
---------- ------------------------------------------------------------------------------------- ---------
<S> <C> <C>
MUNICIPAL SECURITIES, CONTINUED:
New York, continued:
1,500 Triborough Bridge & Tunnel Authority, New York Special Obligation, 2.95%*,
1/1/24........................................................................... $ 1,500
-------
1,900
-------
Oregon (0.9%):
360 Port Morrow, Oregon Revenue Bond, Portland General Electric Co., Series A,
3.80%*, 10/1/13.................................................................. 360
-------
Pennsylvania (0.5%):
200 Lehigh County, Pennsylvania, Industrial Development Authority, Pollution Control
Revenue, Allegheny Electric Co-Op, Inc., Series A, 3.25%*, 12/1/15............... 200
-------
Rhode Island (0.9%):
400 Rhode Island State Student Loan Authority, Student Loan Revenue Bonds, Series 1,
3.30%*, 7/1/19................................................................... 400
-------
Utah (2.3%):
1,000 Emery County, Utah, Pollution Control Revenue, Pacific Corp. Project, 3.80%*,
7/1/15**......................................................................... 1,000
-------
Virginia (10.7%):
2,300 Alexandria, Virginia Redevelopment & Housing Authority, Multi-Famaily Housing
Revenue, Crystal City Apartments Project, 3.45%*, 12/15/18....................... 2,300
100 Amelia County, Virginia Industrial Development Authority, Chambers Waste Power
Project, Series 1991, 3.60%*, 7/1/07............................................. 100
1,500 Charles County, Virginia Industrial Development Authority, Chamber Development of
Virginia, Inc. Project, 3.60%*, 10/1/04.......................................... 1,500
700 Charles County, Virginia Industrial Development Authority, Chambers Development of
Virginia, Inc. Project, 3.60%*, 10/1/04.......................................... 700
-------
4,600
-------
Wyoming (1.2%):
500 Sweetwater County, Wyoming Pollution Control Revenue, PacifiCorp Project, Series
1990A, 3.15%*, 7/1/15............................................................ 500
-------
Total Municipal Securities 40,650
-------
</TABLE>
Continued
- ------
38
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<PAGE> 42
LOGO
- --------------------------------------------------------------------------------
TAX-FREE FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
Amounts in Thousands
(UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
--------- ----------------------------------------------------------------------------------- ---------
<S> <C> <C> <C>
INVESTMENT COMPANIES (7.7%):
1,748 Goldman Sachs Tax Exempt National Fund............................................. $ 1,748
1,578 SEI Institutional Tax Exempt Money Market Fund..................................... 1,578
-------
Total Investment Companies....................................................................... 3,326
-------
Total (Cost--$43,976)(a)......................................................................... $43,976
=======
</TABLE>
- ------------
Percentages indicated are based on total net assets of $42,931.
(a) Cost for federal income tax and financial reporting purposes are the same.
* Variable rate securities collateralized by bank letters of credit or other
bank credit arrangements. The interest rate, which will change periodically,
is based upon bank prime rates or an index of market interest rates. The rate
reflected on the Schedule of Portfolio Investments is the rate in effect on
January 31, 1996.
** Put and demand features exist allowing the Fund to require the repurchase of
the instrument within variable time periods of less than one year.
See notes to financial statements.
------
39
------
<PAGE> 43
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- --------------------------------------------------------------------------------
BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
JANUARY 31, 1996
Amounts in Thousands
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- -------------------------------- -------
<S> <C> <C> <C>
ASSET BACKED SECURITIES (18.2%):
400 Advanta Mortgage Loan Trust,
7.90%, 3/25/07................ $ 412
860 Carco Auto Loan, 7.88%,
3/15/98....................... 868
1,000 Carco 94-2, 7.88%, 8/15/97...... 1,039
1,125 Contimortgage Home Equity Loan
Trust, 8.09%, 9/15/09......... 1,165
1,000 Contimortgage Home Equity Loan
Trust, 8.05%, 7/15/12......... 1,069
1,200 EQCC Home Equity Loan Trust,
7.80%, 12/15/10............... 1,284
1,250 Green Tree Financial Corporation
6.80%, 1/15/26................ 1,273
500 MBNA Credit Card, 7.25%,
6/15/99....................... 513
764 Mid State Trust 4, 8.33%,
4/1/30........................ 840
809 Premier Auto Receivable Trust,
4.90%, 10/15/98............... 806
1,000 Standard Credit Card Master
Trust 4.65%, 3/7/99........... 994
600 UCFC Home Equity Loan 7.78%,
12/10/06...................... 613
690 UFSB Grantor Trust 5.08%,
5/15/00....................... 691
-------
Total Asset Backed Securities 11,567
-------
COLLATERALIZED MORTGAGE OBLIGATIONS (15.0%):
Bear Stearns Secured Investors:
500 7.50%, 1/20/99.................. 508
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- -------------------------------- -------
<S> <C> <C> <C>
Continued
COLLATERIALIZED MORTGAGE OBLIGATIONS, CONTINUED:
Country Wide Mortgage:
1,180 6.75%, 3/25/08.................. $ 1,175
Federal Home Loan Mortgage Corp.:
1,500 6.25%, 1/15/24.................. 1,475
Federal National Mortgage Assoc.:
1,500 6.50%, 3/25/13.................. 1,503
Federal National Mortgage Assoc.:
2,000 6.20%, 9/25/02.................. 2,020
Federal National Mortgage Assoc.:
103 7.00%, 7/25/00.................. 102
GE Capital Mortgage Service, Inc.:
1,850 6.50%., 1/25/24................. 1,803
Residential Funding Mortgage:
950 6.75%, 11/25/07................. 950
-------
Total Collateralized Mortgage Obligations 9,536
-------
CORPORATE BONDS (25.6%):
Automotive (3.9%):
2,290 General Motors Acceptance Corp.,
8.00%, 10/1/99................ 2,462
-------
Banking (5.3%):
1,785 Bank of America, 6.00%,
7/15/97....................... 1,803
600 Citicorp, 6.75%, 8/15/05........ 620
900 U.S. Bancorp, 6.75%, 10/15/05... 924
-------
3,347
-------
Computer Hardware (1.5%):
800 IBM Corp., 8.38%, 11/1/19....... 952
-------
</TABLE>
Continued
- ------
40
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<PAGE> 44
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- --------------------------------------------------------------------------------
BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
Amounts in Thousands
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ----------------------------------- -------
<S> <C> <C> <C>
CORPORATE BONDS, CONTINUED:
Financial Services (1.0%):
650 Golden West Financial,
6.70%, 7/1/02................. $ 671
-------
Governments (Foreign) (2.9%):
825 Hydro-Quebec, 8.05%, 7/7/24..... 946
785 Norske Hydro, 7.75%, 6/15/23.... 876
-------
1,822
-------
Industrial Goods & Services (1.3%):
860 Caterpillar Tractor Co., 6.00%,
5/1/07........................ 842
-------
Retail Stores (6.0%):
980 J.C. Penney, Inc., 6.00%,
5/1/06........................ 965
900 Sears Roebuck Co., 9.25%,
8/1/97........................ 950
1,850 Wal Mart Stores, Inc., 6.38%,
3/1/03........................ 1,894
-------
3,809
-------
Telecommunications (3.7%):
1,500 Bell Atlantic-Maryland, 8.00%,
10/15/29...................... 1,757
500 New England Telephone &
Telegraph 7.88%, 11/15/29..... 579
-------
2,336
-------
Total Corporate Bonds 16,241
-------
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ----------------------------------- -------
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCIES (16.7%):
Federal Home Loan Bank:
300 8.38%, 10/25/99................. $ 330
Federal National Mortgage Assoc.:
2,000 8.50%, 2/15/26.................. 2,091
1,000 9.05%, 4/10/00.................. 1,129
1,700 6.50%, 3/1/24................... 1,684
Government National Mortgage Assoc.:
1,906 6.50%, 6/15/23.................. 1,893
635 6.50%, 12/15/23................. 630
866 7.50%, 1/15/24.................. 891
182 7.50%, 1/15/24.................. 187
36 7.50%, 1/15/24.................. 36
301 7.50%, 1/15/24.................. 310
394 7.50%, 2/15/24.................. 405
71 7.50%, 2/15/24.................. 73
936 7.00%, 4/15/24.................. 948
-------
Total U.S. Government Agencies 10,607
-------
U.S. TREASURY BONDS (15.5%):
1,500 10.38%, 11/15/12................ 2,073
1,250 7.25%, 5/15/16.................. 1,417
2,360 8.75%, 8/15/20.................. 3,142
2,800 7.13%, 2/15/23.................. 3,172
-------
Total U.S. Treasury Bonds 9,804
-------
</TABLE>
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41
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- --------------------------------------------------------------------------------
BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
Amounts in Thousands
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- -------------------------------- -------
<S> <C> <C> <C>
U.S. TREASURY NOTES (6.7%):
1,000 8.13%, 2/15/98.................. $ 1,060
430 9.00%, 5/15/98.................. 466
2,420 8.50%, 11/15/00................. 2,747
-------
Total U.S. Treasury Notes 4,273
-------
Total Investments, at value 62,028
-------
REPURCHASE AGREEMENTS (0.9%):
548 First Boston 5.90%, 2/1/96
(Collateralized by 423
U.S. Treasury Bonds, 8.75%,
5/15/17, market
value--$563).................. 548
-------
Total Repurchase Agreements 548
-------
Total (Cost--$59,804)(a) $62,576
=======
</TABLE>
- ------------
Percentages indicated are based on net assets of $63,444.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows (amounts in thousands):
<TABLE>
<S> <C>
Unrealized appreciation............................................ $3,189
Unrealized depreciation............................................ (417)
------
Net unrealized appreciation........................................ $2,772
======
</TABLE>
See notes to financial statements.
- ------
42
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<PAGE> 46
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- --------------------------------------------------------------------------------
GOVERNMENT BOND FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
JANUARY 31, 1996
Amounts in Thousands
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- --------------------------------- ------
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCIES (92.7%):
Federal Home Loan Bank:
185 6.33%, 5/27/97................... $ 188
240 9.25%, 11/25/98.................. 265
200 9.30%, 1/25/99................... 220
50 5.43%, 2/25/99................... 50
660 6.31%, 4/6/99.................... 679
330 7.91%, 11/7/01................... 367
Federal Home Loan Mortgage Corp.
315 5.88%, 3/22/00................... 319
240 6.22%, 3/24/03................... 247
Federal National Mortgage Assoc.:
370 8.20%, 3/10/98................... 392
255 4.88%, 10/15/98.................. 253
150 9.55%, 3/10/99................... 168
500 8.55%, 8/30/99................... 551
320 9.05%, 4/10/00................... 361
300 8.25%, 12/18/00.................. 335
------
Total U.S. Government Agencies 4,395
------
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------- --------------------------------- ------
<S> <C> <C> <C>
U.S. TREASURY NOTES (4.7%):
208 7.50%, 1/31/98................... $ 224
------
Total Investments, at value 4,619
------
REPURCHASE AGREEMENTS (1.0%):
48 First Boston, 5.90%, 2/1/96
(Collateralized by 39 U.S.
Treasury Bonds, 8.75%, 5/15/17,
market value--$52)............. 48
------
Total Repurchase Agreements 48
------
Total (Cost--$4,512)(a) $4,667
------
</TABLE>
- ------------
Percentages indicated are based on net assets of $4,739.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows (amounts in thousands):
<TABLE>
<S> <C>
Unrealized appreciation............................................. $167
Unrealized depreciation............................................. (12)
----
Net unrealized appreciation......................................... $155
====
</TABLE>
See notes to financial statements.
------
43
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<PAGE> 47
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- --------------------------------------------------------------------------------
INCOME EQUITY FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
JANUARY 31, 1996
(Amounts in Thousands, Except for Shares or Principal Amount)
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------------------------- --------
<S> <C> <C> <C>
COMMON STOCKS (97.8%):
Banks (9.9%):
163,500 Banc One Corp. .............. $ 6,193
39,600 BankAmerica Corp. ........... 2,668
102,300 Fleet Financial Group,
Inc. ...................... 4,092
75,700 J. P. Morgan & Co. .......... 6,151
80,400 National City Corp. ......... 2,623
92,350 U.S. Bancorp................. 3,035
45,700 Wachovia Corp. .............. 2,045
--------
26,807
--------
Beverages (1.8%):
69,900 Anheuser-Busch Co. .......... 4,858
--------
Business Equipment & Services (3.0%):
124,900 Dun & Bradstreet Corp. ...... 8,119
--------
Chemicals--Petroleum & Inorganic (1.8%):
51,900 Dow Chemical Co. ............ 3,867
14,100 E. I. Dupont De Nemours
Co. ....................... 1,084
--------
4,951
--------
Chemicals--Specialty (3.4%):
88,600 B.F. Goodrich................ 6,523
81,200 Witco Corp. ................. 2,578
--------
9,101
--------
Commercial Goods & Services (1.1%):
84,700 National Services Industries,
Inc. ...................... 2,954
--------
Consumer Goods & Services (1.1%):
35,700 Clorox Co. .................. 2,950
--------
Cosmetics & Toiletries (0.8%):
43,600 International Flavors &
Fragrances (b)............. 2,185
--------
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------------------------- --------
<S> <C> <C> <C>
Continued
COMMON STOCKS, CONTINUED:
Electrical Equipment (2.2%):
42,300 General Electric Co. ........ $ 3,247
34,500 Thomas & Betts Corp. ........ 2,713
--------
5,960
--------
Financial Services (3.3%):
102,300 American General Corp. ...... 3,862
32,900 Beneficial Corp. ............ 1,608
103,600 Federal National Mortgage
Assoc. .................... 3,574
--------
9,044
--------
Food & Related (1.9%):
50,400 General Mills, Inc. ......... 2,898
61,450 H. J. Heinz Co. ............. 2,112
--------
5,010
--------
Forest & Paper Products (2.3%):
67,800 International Paper.......... 2,771
75,300 Weyerhaeuser Co. ............ 3,473
--------
6,244
--------
Health Care (6.8%):
52,700 American Home Products
Corp. ..................... 5,375
100,600 Bristol Myers Squibb Co. .... 8,903
99,200 Pharmacia & Upjohn Co. ...... 4,154
--------
18,432
--------
Insurance--Life (0.8%):
43,825 Jefferson Pilot Corp. ....... 2,186
--------
</TABLE>
Continued
- ------
44
- ------
<PAGE> 48
LOGO
- --------------------------------------------------------------------------------
INCOME EQUITY FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
(Amounts in Thousands, Except for Shares or Principal Amount)
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ------------------------------- -------
<S> <C> <C> <C>
COMMON STOCKS, CONTINUED:
Insurance--Multiline (1.4%):
42,300 Marsh & Mclennan Co.,
Inc. ...................... $ 3,849
--------
Insurance--Property & Casualty (3.6%):
52,500 Lincoln National Corp. ...... 2,776
76,100 SAFECO Corp. ................ 2,730
69,000 Saint Paul Cos., Inc. ....... 3,933
--------
9,439
--------
Machinery & Equipment (0.4%):
29,000 Cooper Industries, Inc. ..... 1,091
--------
Manufacturing (1.8%):
74,100 Minnesota Mining &
Manufacturing.............. 4,779
--------
Medical Equipment & Supplies (0.6%):
38,000 Baxter International,
Inc. ...................... 1,729
--------
Petroleum--Domestic (4.8%):
77,400 Atlantic Richfield Co. ...... 8,795
81,200 Dresser Industries Inc. ..... 2,111
59,700 Phillips Petroleum........... 1,948
--------
12,854
--------
Petroleum--Internationals (9.1%):
102,000 Amoco Corp. ................. 7,178
106,800 Chevron Corp. ............... 5,540
61,400 Exxon Corp. ................. 4,927
85,600 Texaco, Inc. ................ 6,922
--------
24,567
--------
Pharmaceuticals (0.4%):
11,200 Warner-Lambert Co. .......... 1,050
--------
Publishing (1.0%):
29,800 McGraw Hill, Inc. ........... 2,652
--------
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ------------------------------- -------
<S> <C> <C> <C>
Continued
COMMON STOCKS, CONTINUED:
Railroad (0.5%):
20,000 Union Pacific Corp. ......... $ 1,333
--------
Retail--General Merchandise (4.0%):
57,300 May Department Stores Co. ... 2,550
168,500 J.C. Penney, Inc. ........... 8,257
--------
10,807
--------
Telephone (8.5%):
75,800 Bell Atlantic Corp. ......... 5,221
177,000 GTE Corp. ................... 8,142
98,000 Nynex Corp. ................. 5,255
122,770 U.S. West, Inc. ............. 4,312
--------
22,930
--------
Tobacco (6.4%):
92,100 American Brands, Inc. ....... 4,202
91,000 Philip Morris Cos., Inc. .... 8,463
135,600 UST, Inc. ................... 4,560
--------
17,225
--------
Utilities--Electric (11.7)%:
120,200 Baltimore Gas & Electric
Co. ....................... 3,456
114,800 Central & South West
Corp.(b)................... 3,143
64,300 Dominion Resources........... 2,757
70,600 Florida Progress Corp. ...... 2,506
147,000 PacifiCorp................... 3,124
86,872 Public Service Enterprise
Group, Inc. ............... 2,715
115,700 Teco Energy Inc. ............ 3,022
</TABLE>
Continued
------
45
------
<PAGE> 49
LOGO
- --------------------------------------------------------------------------------
INCOME EQUITY FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
(Amounts in Thousands, Except for Shares or Principal Amount)
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------------------------- --------
<S> <C> <C> <C>
COMMON STOCKS, CONTINUED:
Utilities--Electric, continued:
157,600 Texas Utilities Co. ......... $ 6,442
143,100 Wisconsin Energy Corp. ...... 4,508
--------
31,673
--------
Utilities--Gas and Pipeline (3.4%):
138,800 Consolidated Natural Gas
Co. ....................... 6,246
42,700 Nicor, Inc. ................. 1,164
36,900 Tenneco, Inc. ............... 1,905
--------
9,315
--------
Total Common Stocks 264,094
--------
Total Investments, at value 264,094
--------
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ----------------------------- --------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS (2.7%):
7,039,927 First Boston 5.90%, 2/1/96
(Collateralized by
5,409,000 U.S. Treasury
Bonds, 8.75%, 5/15/17,
market value-- $7,196)..... $ 7,040
--------
Total Repurchase Agreements 7,040
--------
Total (Cost--$224,730)(a) $271,134
========
</TABLE>
- ------------
Percentages indicated are based on net assets of $270,127.
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting in excess of federal income tax reporting of
approximately $58 cost for federal income tax purposes differs from value by
net unrealized appreciation of securities as follows (amounts in thousands):
<TABLE>
<S> <C>
Unrealized appreciation........................................... $47,038
Unrealized depreciation........................................... (692)
-------
Net unrealized appreciation....................................... $46,346
=======
</TABLE>
(b) Represents non-income producing security.
See notes to financial statements.
- ------
46
- ------
<PAGE> 50
- ------------------------------------------------------------------------------
BALANCED FUND
- ------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
JANUARY 31, 1996
Amounts in Thousands, Except for Shares or Principal Amount
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------ -------
<S> <C> <C> <C>
ASSET BACKED SECURITIES (4.3%):
205,000 Carco Auto Loan,
7.88%, 3/15/98.............. $ 207
190,000 Carco 94-2, 7.88%, 8/15/97.... 197
200,000 Contimortgage Home Equity Loan
Trust, 8.09%, 9/15/09....... 207
250,000 Green Tree Financial Corp.
6.80%, 1/15/26.............. 255
400,000 Standard Credit Card Master
Trust, 4.65%, 3/7/99........ 398
221,908 UFSB Grantor Trust 5.08%,
5/15/00..................... 222
-------
1,486
-------
COLLATERALIZED MORTGAGE OBLIGATIONS (3.0%):
100,000 Country Wide Mortgage:
6.75%, 3/25/08.............. 100
500,000 Federal Home Loan Mortgage
Corp.: 6.25%, 1/15/24....... 492
23,574 Federal National Mortage
Assoc.: 7.00%, 7/25/00...... 23
250,000 GE Capital Mortage Service,
Inc.: 1994-1 6.50%.,
1/25/24..................... 244
175,000 Residential Funding Mortgage:
6.75%, 11/25/07............. 174
-------
1,033
-------
COMMON STOCKS (56.8%):
Aeorspace (0.6%):
2,900 B.F. Goodrich................. 214
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------ -------
<S> <C> <C> <C>
Continued
COMMON STOCKS, CONTINUED: -------
Air Transportation (0.5%):
1,300 Federal Express Corp. (b)..... $ 99
2,200 Southwest Airlines Co. ....... 57
-------
156
-------
Banks (4.0%):
2,700 Banc One Corp. ............... 102
4,800 BankAmerica Corp. ............ 323
1,600 Chemical Bank Corp. .......... 107
7,400 Fleet Financial Group,
Inc. ....................... 296
2,200 J. P. Morgan And Co. ......... 179
2,300 National City Corp. .......... 75
6,000 Norwest Corp. ................ 206
2,000 Wachovia...................... 90
-------
1,378
-------
Beverages (2.3%):
4,800 Anheuser-Busch Co. ........... 334
2,800 Coca Cola Co. ................ 211
4,100 PepsiCo, Inc. ................ 244
-------
789
-------
Building Materials (0.5%):
5,600 Masco Corp. .................. 164
-------
Business Equipment & Services (0.7%):
1,900 Dun & Bradstreet Corp. ....... 124
2,800 Pitney Bowes, Inc. ........... 126
-------
250
-------
</TABLE>
Continued
------
47
------
<PAGE> 51
LOGO
- --------------------------------------------------------------------------------
BALANCED FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
Amounts in Thousands, Except for Shares or Principal Amount
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ------------------------------- --------
<S> <C> <C> <C>
COMMON STOCKS, CONTINUED:
Chemicals--Petroleum & Inorganics (1.2%):
900 Dow Chemical Co. ............. $ 67
2,800 E. I. Dupont De Nemours
Co. ........................ 215
1,000 Monsanto Corp. ............... 130
-------
412
-------
Chemicals--Specialty (0.4%):
3,000 Betz Labs, Inc. .............. 124
-------
Commercial Goods & Services (0.6%):
6,300 National Services Industries,
Inc. ....................... 220
-------
Computers--Main & Mini (0.6%):
2,000 International Business
Machines ................... 218
-------
Computer Software (0.8%):
1,300 Microsoft Corp. (b)........... 120
2,400 Shared Medical Systems
Corp. ...................... 137
-------
257
-------
Construction Materials (0.3%):
4,200 Fleetwood Enterprises......... 107
-------
Cosmetics & Toiletries (1.2%):
2,900 Colgate-Palmolive............. 215
2,700 Ingersoll-Rand................ 108
1,600 International Flavors &
Fragrances.................. 80
-------
403
-------
Defense (0.8%):
5,400 Raytheon Co. ................. 265
-------
Electrical Equipment (4.3%):
7,600 AMP, Inc. .................... 297
2,500 Emerson Electric.............. 209
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ------------------------------- --------
<S> <C> <C> <C>
Continued
COMMON STOCKS, CONTINUED:
Electrical Equipment, continued:
7,700 General Electric Co. ......... $ 591
4,400 Intel Corp. .................. 243
1,650 Thomas & Betts Corp. ......... 130
-------
1,470
-------
Electronics (0.6%):
3,800 Motorola, Inc. ............... 204
Environmental Services (0.5%):
5,400 Browning Ferris Industries,
Inc. ....................... 159
Financial Services (1.5%):
6,600 American General Corp. ....... 249
7,600 Federal National Mortgage
Assoc. ..................... 262
-------
511
-------
Food & Related (1.9%):
1,600 Campbell Soup Co. ............ 101
1,800 General Mills, Inc. .......... 104
6,450 H. J. Heinz Co. .............. 222
1,500 Hershey Foods ................ 106
1,700 Ralston Purina Co. ........... 109
-------
642
-------
Forest & Paper Products (1.5%):
1,800 Georgia Pacific Corp. ........ 132
2,200 International Paper Co. ...... 90
1,500 Kimberly Clark Corp. ......... 121
4,000 Weyerhaeuser Co. ............. 184
-------
527
-------
</TABLE>
Continued
- ------
48
- ------
<PAGE> 52
LOGO
- --------------------------------------------------------------------------------
BALANCED FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
Amounts in Thousands, Except for Shares or Principal Amount
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ------------------------------- --------
<S> <C> <C> <C>
COMMON STOCKS, CONTINUED:
Health Care--General (1.9%):
2,500 Bristol Myers Squibb Co. ..... $ 221
2,500 Johnson & Johnson............. 240
3,500 Schering Plough Corp. ........ 190
-------
651
-------
Hospital Supply & Management (0.7%):
4,100 Columbia HCA Healthcare
Corp. ...................... 228
-------
Household--General Products (0.8%):
6,100 Rubbermaid, Inc. ............. 173
5,600 Sunbeam Corp. ................ 90
-------
263
-------
Insurance--Life (0.3%):
1,650 Jefferson Pilot Corp. ........ 82
-------
Insurance--Multiline (1.1%):
1,761 Allstate Corp. ............... 77
3,300 Marsh & Mclennan Cos.,
Inc. ....................... 300
-------
377
-------
Insurance--Property & Casualty (1.2%):
1,500 General Re.................... 230
1,700 Hartford Steam Boiler......... 89
1,600 Saint Paul Cos., Inc.......... 91
-------
410
-------
Machinery & Equipment (0.5%):
4,300 Snap-On, Inc. ................ 189
-------
Manufacturing (0.3%):
2,500 Service Corp International.... 108
-------
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ------------------------------- --------
<S> <C> <C> <C>
Continued
COMMON STOCKS, CONTINUED:
Medical Equipment & Supplies (0.7%):
5,000 Baxter International, Inc. ... $ 228
-------
Motor Vehicle Parts (0.3%):
2,200 Genuine Parts Co. ............ 98
-------
Motor Vehicles (0.5%):
5,900 Ford Motor Co. ............... 175
-------
Multiple Industry (1.0%):
10,800 Corning Glass................. 338
5,000 Minnesota Mining &
Manufacturing............... 322
-------
660
-------
Petroleum--Domestic (1.2%):
1,700 Atlantic Richfield Co. ....... 193
6,700 Phillips Petroleum Co. ....... 219
-------
412
-------
Petroleum--Internationals (3.4%):
4,300 Amoco Corp. .................. 303
5,600 Chevron Corp. ................ 290
2,200 Exxon Corp. .................. 177
2,000 Mobil Corp. .................. 221
2,400 Texaco, Inc. ................. 194
-------
1,185
-------
Petroleum--Services (1.3%):
9,300 Baker Hughes, Inc. ........... 241
3,300 El Paso Natural Gas Co. ...... 107
2,000 Halliburton Co. .............. 103
-------
451
-------
</TABLE>
Continued
------
49
------
<PAGE> 53
LOGO
- --------------------------------------------------------------------------------
BALANCED FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
Amounts in Thousands, Except for Shares or Principal Amount
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ------------------------------- ---------
<S> <C> <C> <C>
COMMON STOCKS, CONTINUED:
Pharmaceuticals (2.6%):
2,200 Abbott Laboratories........... $ 93
3,800 Merck & Co., Inc. ............ 267
5,500 Pfizer, Inc. ................. 378
1,700 Warner Lambert Co. ........... 159
-------
897
-------
Photographic Equipment (0.4%):
1,600 Eastman Kodak Co. ............ 117
-------
Publishing (0.6%):
3,100 Gannett Co., Inc. ............ 197
-------
Railroad (1.2%):
3,100 Burlington Northern, Inc. .... 254
2,100 Union Pacific Corp. .......... 140
-------
394
-------
Restaurants (0.2%):
3,000 Brinker International, Inc.
(b)......................... 38
1,200 Darden Restaurants, Inc. ..... 14
-------
52
-------
Retail--General Merchandise (1.3%):
4,000 J.C. Penney, Inc. ............ 196
2,800 Sears Roebuck & Co. .......... 116
6,900 Wal Mart Stores, Inc. ........ 141
-------
453
-------
Retail--Specialty Stores (0.2%):
2,700 Melville Corp. ............... 77
-------
Telecommunications (4.5%):
6,600 Airtouch (b).................. 186
3,800 Ameritech Corp. .............. 228
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ------------------------------- ---------
<S> <C> <C> <C>
Continued
COMMON STOCKS, CONTINUED:
Telecommunications, continued:
4,500 A T & T Corp. ................ $ 301
4,600 Bellsouth Corp. .............. 197
1,600 DSC Communications
Corp. (b)................... 47
5,700 GTE Corp. .................... 262
3,500 MCI Telecommunications
Corp. ...................... 100
4,200 U.S. West, Inc. .............. 148
4,200 U.S. West Media Group (b)..... 89
-------
1,558
-------
Tobacco (1.3%):
2,500 Phillip Morris Cos., Inc. .... 233
6,200 UST, Inc. .................... 208
-------
441
-------
Tools (0.6%):
4,100 Stanley Works................. 211
-------
Toys (0.3%):
3,400 Mattel, Inc. ................. 110
-------
Utilities--Electric (2.9%):
4,300 FPL Group, Inc. .............. 200
6,800 Pacific Gas & Electric Co. ... 190
9,000 PacifiCorp.................... 191
6,500 Public Service Enterprise
Group, Inc. ................ 203
5,100 Texas Utilities Co. .......... 208
-------
992
-------
</TABLE>
Continued
- ------
50
- ------
<PAGE> 54
LOGO
- --------------------------------------------------------------------------------
BALANCED FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
Amounts in Thousands, Except for Shares or Principal Amount
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ------------------------------- --------
<S> <C> <C> <C>
COMMON STOCKS, CONTINUED:
Utilities--Gas & Pipeline (0.7%):
2,600 Consolidated Natural Gas
Co. ........................ $ 117
1,900 Tenneco, Inc. ................ 98
-------
215
-------
Total Common Stocks 19,701
-------
CORPORATE BONDS (8.5%):
Automotive (1.9%):
300,000 Ford Capital, 9.38%, 1/1/98... 321
305,000 General Motors Acceptance
Corp., 8.00%, 10/1/99....... 328
-------
649
-------
Banking (1.4%):
215,000 Bank of America,
6.00%, 7/15/97.............. 217
100,000 Citicorp, 6.75%, 8/15/05...... 103
150,000 U. S. Bancorp,
6.75%, 10/15/05............. 154
-------
474
-------
Beverages (0.3%):
95,000 Bass America, Inc., 6.75%,
8/1/99...................... 99
-------
Computer Hardware (0.7%):
200,000 IBM Corp., 8.38%, 11/1/19..... 238
-------
Financial Services (0.3%):
100,000 Golden West Financial, 6.70%,
7/1/02...................... 103
-------
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ------------------------------- --------
<S> <C> <C> <C>
Continued
CORPORATE BONDS, CONTINUED:
Governments (Foreign) (1.0%):
100,000 Hydro-Quebec, 8.05%, 7/7/24... $ 115
215,000 Norske Hydro, 7.75%,
6/15/23..................... 240
-------
355
-------
Industrial Goods & Services (0.6%):
205,000 Caterpillar Tractor Co.,
6.00%, 5/1/07............... 201
-------
Retail Stores (1.3%):
100,000 J.C. Penney, Inc.,
6.00%, 5/1/06............... 98
150,000 Sears Roebuck Co., 9.25%,
8/1/97...................... 158
200,000 Wal Mart Stores, Inc., 6.38%,
3/1/03...................... 205
-------
461
-------
Telecommunications (1.0%):
175,000 Bell Atlantic Maryland, 8.00%,
10/15/29.................... 205
125,000 New England Telephone &
Telegraph, 7.88%,
11/15/29.................... 145
-------
350
-------
Total Corporate Bonds 2,930
-------
U.S. GOVERNMENT AGENCIES (2.7%):
Federal National Mortgage Assoc.:
330,972 6.50%, 3/1/24, Pool #276510... 328
</TABLE>
Continued
------
51
------
<PAGE> 55
LOGO
- --------------------------------------------------------------------------------
BALANCED FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
Amounts in Thousands, Except for Shares or Principal Amount
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------ -------
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCIES, CONTINUED:
Government National Mortgage Assoc.:
100,268 6.50%, 2/15/24, Pool
#388599..................... $ 100
486,477 7.50%, 5/15/24, Pool
#386494..................... 500
-------
Total U.S. Government Agencies 928
-------
U.S. TREASURY BONDS (5.0%):
150,000 7.25%, 5/15/16................ 170
205,000 8.75%, 8/15/20................ 273
1,125,000 7.13%, 2/15/23................ 1,274
-------
Total U.S. Treasury Bonds 1,717
-------
U.S. TREASURY NOTES (10.6%):
300,000 7.88%, 7/15/96................ 304
200,000 8.13%, 2/15/98................ 212
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------ -------
<S> <C> <C> <C>
U.S. TREASURY NOTES, CONTINUED:
1,000,000 8.25%, 7/15/98................ $ 1,074
1,000,000 5.50%, 4/15/00................ 1,014
500,000 8.50%, 11/15/00............... 568
500,000 5.88%, 2/15/04................ 511
-------
Total U.S. Treasury Notes.................... 3,683
-------
Total Investments, at value 31,478
-------
REPURCHASE AGREEMENTS (8.9%):
3,071,283 First Boston Repurchase
Agreement 5.90%, 2/1/96
(Collateralized by 2,361,000
U.S. Treasury Bonds, 8.75%,
5/15/17, market
value--$3,141).............. 3,071
-------
Total Repurchase Agreements 3,071
-------
Total Cost--($29,677) (a) $34,549
=======
</TABLE>
- ------------
Percentages indicated are based on net assets of $34,662.
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting in excess of federal income tax reporting of
approximately $15, cost for federal income tax purposes differs from value
by net unrealized appreciation of securities as follows (amounts in
thousands):
<TABLE>
<S> <C>
Unrealized appreciation............................................ $5,097
Unrealized depreciation............................................ (240)
------
Net unrealized appreciation........................................ $4,857
======
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements.
- ------
52
- ------
<PAGE> 56
LOGO
- --------------------------------------------------------------------------------
GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
JANUARY 31, 1996
Amounts in Thousands, Except for Shares or Principal Amount
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------ -------
<S> <C> <C> <C>
COMMON STOCKS (95.7%):
Aerospace (3.0%)
15,450 B.F. Goodrich................. $ 1,138
-------
Banks (5.2%):
2,330 Banc One Corp. ............... 88
7,145 BankAmerica Corp. ............ 481
2,970 Barnett Banks, Inc. .......... 174
9,370 Chemical Banking Corp. ....... 628
13,880 Fleet Financial Group, 555
Inc. .......................
-------
1,926
-------
Beverages (7.3%):
15,650 Anheuser-Busch Co. ........... 1,088
17,150 Coca Cola Co. ................ 1,293
6,270 PepsiCo, Inc. ................ 374
-------
2,755
-------
Broadcasting (1.8%):
3,550 Capital Cities/ABC, Inc. ..... 457
9,795 Comcast Corp. ................ 197
-------
654
-------
Business Equipment & Services (0.3%):
4,720 Officemax, Inc. (b)........... 109
-------
Business Services (1.0%):
10,262 CUC International, Inc. (b)... 378
-------
Computers--Main & Mini (3.0%):
6,610 Ceridian Corp. (b)............ 297
3,370 Hewlett Packard Co. .......... 286
3,430 International Business 373
Machines....................
4,415 Silicon Graphics, Inc. (b).... 124
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------ -------
<S> <C> <C> <C>
Continued
COMMON STOCKS, CONTINUED:
Computers--Main & Mini, continued:
500 Sun Microsystems (b).......... $ 23
-------
1,103
-------
Computer Software (6.5%):
2,345 Adobe Systems................. 80
2,240 Automatic Data Processing, 89
Inc. .......................
3,845 Cisco Systems (b)............. 320
4,617 Computer Associates 316
International, Inc. ........
2,485 Computer Sciences (b)......... 189
5,245 First Data Corp. ............. 371
10,105 General Motors, Class E ...... 561
2,050 Microsoft Corp. (b)........... 190
6,595 Oracle Systems Corp. (b)...... 315
-------
2,431
-------
Cosmetics & Toiletries (3.4%):
2,360 Avon Products (b)............. 186
4,985 Colgate-Palmolive Co. ........ 369
13,760 Gillette Co. ................. 738
-------
1,293
-------
Durable Goods (1.0%):
10,990 Coleman Inc. (b).............. 367
-------
Electrical Equipment (5.3%):
9,780 AMP, Inc. .................... 381
3,850 Duracell International, 192
Inc. .......................
12,170 General Electric Co. ......... 934
6,805 Intel Corp. .................. 376
</TABLE>
Continued
------
53
------
<PAGE> 57
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- --------------------------------------------------------------------------------
GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
Amounts in Thousands, Except for Shares or Principal Amount
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- -------------------------------- -------
<S> <C> <C> <C>
COMMON STOCKS, CONTINUED:
Electrical Equipment, continued:
5,130 National Semiconductor Corp. $ 88
(b).........................
-------
1,971
-------
Electronics (0.2%):
1,420 Motorola, Inc. ............... 76
-------
Electronic Components (0.3%):
2,575 Applied Materials (b)......... 95
-------
Electronic Instruments (0.2%):
1,920 Texas Instruments, Inc. ...... 89
-------
Entertainment (0.9%):
6,130 Circus Circus Enterprises, 195
Inc. (b)....................
4,715 Harrah's Entertainment, Inc. 130
(b).........................
-------
325
-------
Environmental Services (0.2%):
2,795 Browning Ferris Industries, 82
Inc. .......................
-------
Financial Services (7.5%):
15,565 American Express Co........... 716
6,525 Federal Home Loan Mortgage 559
Corp. ......................
34,450 Federal National Mortgage 1,189
Association.................
6,425 Green Tree Financial Corp. ... 190
1,405 Household International, 91
Inc. .......................
1,780 Mutual Risk Management 77
Limited ....................
-------
2,822
-------
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- -------------------------------- -------
<S> <C> <C> <C>
Continued
COMMON STOCKS, CONTINUED:
Food & Related (2.7%):
1,410 Campbell Soup Co. ............ $ 89
5,065 General Mills, Inc. .......... 291
4,710 H. J. Heinz Co. .............. 162
2,635 Hershey Foods ................ 186
4,432 Ralston Purina Co. ........... 285
-------
1,013
-------
Forest & Paper Products (1.0%):
1,220 Georgia Pacific Corp. ........ 90
2,340 International Paper Co. ...... 96
3,955 Weyerhaeuser Co. ............. 182
-------
368
-------
Healthcare--Drugs (5.8%):
3,291 Amgen, Inc. (b)............... 198
6,175 Bristol-Myers Squibb Co. ..... 546
7,865 Merck & Co. .................. 553
9,165 Pharmacia & Upjohn Co. ....... 384
5,070 Pfizer, Inc. ................. 349
2,985 Schering Plough Corp. ........ 162
-------
2,192
-------
</TABLE>
Continued
- ------
54
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<PAGE> 58
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- --------------------------------------------------------------------------------
GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
Amounts in Thousands, Except for Shares or Principal Amount
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- -------------------------------- -------
<S> <C> <C> <C>
COMMON STOCKS, CONTINUED:
Healthcare--General (4.9%):
8,857 Abbott Laboratories........... $ 374
25,540 Horizon/CMS Healthcare Corp. 699
(b).........................
7,870 Johnson & Johnson............. 756
-------
1,829
-------
Hospital Supply & Management (0.5%):
3,456 Columia HCA Healthcare 192
Corp. ......................
-------
Hotels & Gaming (1.0%):
15,527 Promus Hotel Corp. (b)........ 388
-------
Household--General Products (0.9%):
1,905 Procter & Gamble Co. ......... 160
2,850 Rubbermaid, Inc. ............. 81
6,045 Sunbeam Corp. (b)............. 97
-------
338
-------
Insurance--Life (0.2%):
1,680 Jefferson-Pilot Corp. ........ 84
-------
Insurance--Multiline (1.7%):
8,732 Allstate Corp. ............... 381
2,755 Marsh & Mclennan Cos., 251
Inc. .......................
-------
632
-------
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- -------------------------------- -------
<S> <C> <C> <C>
Continued
COMMON STOCKS, CONTINUED:
Insurance--Property & Casualty (2.7%):
4,030 American International Group, $ 390
Inc. .......................
1,130 General Re Corp. ............. 173
5,015 MBIA, Inc. ................... 370
2,240 SAFECO Corp. ................. 80
-------
1,013
-------
Leisure Time Industry (2.6%):
15,040 The Walt Disney Co. .......... 966
-------
Manufacturing (1.4%):
2,480 Minnesota Mining And 160
Manufacturing...............
8,080 Service Corp. International... 350
-------
510
-------
Medical Equipment & Supplies (1.1%):
3,599 Chiron Corp. (b).............. 414
-------
Petroleum--Internationals (2.9%):
5,220 Amoco Corp. .................. 367
5,730 Exxon Corp. .................. 460
3,380 Texaco, Inc. ................. 273
-------
1,100
-------
</TABLE>
Continued
------
55
------
<PAGE> 59
LOGO
- --------------------------------------------------------------------------------
GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
Amounts in Thousands, Except for Shares or Principal Amount
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
----------- -------------------------------- -------
<S> <C> <C> <C>
COMMON STOCKS, CONTINUED:
Petroleum--Services (4.0%):
16,160 Baker Hughes, Inc. ........... $ 418
7,480 Dresser Industries Inc. ...... 194
8,240 Halliburton Co. .............. 425
6,805 Schlumberger Limited.......... 477
-------
1,514
-------
Pharmaceuticals (0.7%):
2,835 Warner Lambert Co. ........... 266
-------
Publishing (2.1%):
12,655 Gannett Company, Inc. ........ 804
-------
Restaurants (3.0%):
22,145 McDonald's Corp. ............. 1,113
-------
Retail--General Merchandise (0.9%):
1,810 J.C. Penney, Inc. ............ 89
11,480 Price/Costco, Inc. (b)........ 179
1,755 Sears Roebuck & Co. .......... 73
-------
341
-------
Retail--Specialty Stores (0.7%):
1,860 Home Depot, Inc. ............. 86
8,730 Toys R Us (b)................. 193
-------
279
-------
Telecommunications (3.2%):
9,335 Airtouch (b).................. 264
8,465 A T & T Corp. ................ 566
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
----------- -------------------------------- -------
<S> <C> <C> <C>
Continued
COMMON STOCKS, CONTINUED:
Telecommunications, continued:
3,910 GTE Corp. .................... $ 180
3,165 SBC Communications, Inc. ..... 179
-------
1,189
-------
Telecommunications--Equipment (0.9%):
1,240 DSC Communications Corp. (b).. 36
10,515 Network Equipment & 290
Technologies (b)............
-------
326
-------
Tobacco (1.7%):
5,820 Philip Morris Cos., Inc. ..... 541
2,370 UST........................... 80
-------
621
-------
Toys (1.3%):
15,640 Mattel, Inc. ................. 504
-------
Utilities--Gas & Pipeline (0.7%):
5,385 Tenneco, Inc. ................ 278
-------
Total Common Stocks 35,888
-------
Total Investments, at value 35,888
-------
</TABLE>
Continued
- ------
56
- ------
<PAGE> 60
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- --------------------------------------------------------------------------------
GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
Amounts in Thousands, Except for Shares or Principal Amount
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------ -------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS (6.8%):
2,559,069 First Boston, 5.90%, 2/1/96 $ 2,559
(Collateralized by
22,158,000 U.S. Treasury
Bonds, 8.75%, 5/15/17,
market value--$29,479)......
-------
Total Repurchase Agreements 2,559
-------
Total (Cost--$32,492) (a) $38,447
=======
</TABLE>
- ------------
Percentages indicated are based on net assets of $37,497.
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting in excess of federal income tax reporting of
approximately $210 cost for federal income tax purposes differs from value
by net unrealized appreciation of securities as follows (amounts in
thousands):
<TABLE>
<S> <C>
Unrealized appreciation............................................ $6,210
Unrealized depreciation............................................ (465)
------
Net unrealized appreciation........................................ $5,745
======
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements.
------
57
------
<PAGE> 61
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- --------------------------------------------------------------------------------
INCOME & GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS
JANUARY 31, 1996
Amounts in Thousands, Except for Shares or Principal Amount
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- --------------------------------- ------
<S> <C> <C> <C>
COMMON STOCKS (95.6%):
Aerospace (0.7%):
900 B.F. Goodrich.................... $ 66
------
Air Transportation (0.8%):
400 Federal Express Corp. (b)........ 30
800 Southwest Airlines Co. .......... 21
------
51
------
Banks (6.8%):
700 Banc One Corp. .................. 27
1,500 BankAmerica Corp. ............... 100
500 Chemical Banking Corp. .......... 34
2,200 Fleet Financial Group, Inc. ..... 88
700 J. P. Morgan & Co. .............. 57
900 National City Corp. ............. 29
1,900 Norwest Corp. ................... 65
600 Wachovia Corp. .................. 26
------
426
------
Beverages (3.5%):
1,300 Anheuser-Busch Co. .............. 90
800 Coca Cola Co. ................... 60
1,100 PepsiCo, Inc. ................... 66
------
216
------
Building Materials (1.0%):
2,000 Masco Corp. ..................... 59
------
Business Equipment & Services (1.0%):
500 Dun & Bradstreet Corp. .......... 33
600 Pitney Bowes, Inc. .............. 27
------
60
------
Chemicals--Petroleum & Inorganic (2.2%):
400 Dow Chemical Co. ................ 30
900 E. I. Dupont De Nemours Co. ..... 69
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
------
<S> <C> <C> <C>
Continued
COMMON STOCKS, CONTINUED:
Chemicals--Petroleum & Inorganic, continued:
300 Monsanto Corp. .................. $ 39
------
138
------
Chemicals--Specialty (0.8%):
700 Betz Labs, Inc. ................. 29
------
Commercial Goods & Services (1.1%):
1,900 National Services Industries,
Inc. .......................... 66
------
Computers--Main & Mini (1.0%):
600 International Business
Machines....................... 65
------
Computer Software (1.4%):
600 Microsoft Corp. (b).............. 56
600 Shared Medical Systems Corp. .... 34
------
90
------
Construction Materials (0.5%):
1,300 Fleetwood Enterprises............ 33
------
Cosmetics & Toiletries (1.3%):
800 Colgate-Palmolive Co. ........... 59
500 International Flavors &
Fragrances..................... 25
------
84
------
Defense (1.0%):
1,300 Raytheon Co. .................... 64
------
Electrical Equipment (6.5%):
1,500 AMP, Inc. ....................... 59
800 Emerson Electric................. 66
2,300 General Electric Co. ............ 177
1,300 Intel Corp. ..................... 72
450 Thomas & Betts Corp. ............ 35
------
409
------
</TABLE>
- ------
58
- ------
<PAGE> 62
- --------------------------------------------------------------------------------
INCOME & GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
Amounts in Thousands, Except for Shares or Principal Amount
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
------
<S> <C> <C> <C>
COMMON STOCKS, CONTINUED:
Electronics (1.1%):
1,300 Motorola, Inc. .................. $ 70
------
Environmental Services (0.9%):
2,000 Browning Ferris Industries,
Inc. .......................... 59
------
Financial Services (2.1%):
1,700 American General Corp. .......... 64
2,000 Federal National Mortgage
Assoc. ........................ 69
------
133
------
Food & Related (3.1%):
500 Campbell Soup Co. ............... 32
500 General Mills, Inc. ............. 29
1,900 H. J. Heinz Co. ................. 65
500 Hershey Foods.................... 35
500 Ralston Purina Co. .............. 32
------
193
------
Forest & Paper Products (2.7%):
700 Georgia Pacific Corp. ........... 51
600 International Paper Co. ......... 25
400 Kimberly Clark Corp. ............ 32
1,300 Weyerhaeuser Co. ................ 60
------
168
------
Health Care--General (6.8%):
600 Abbott Laboratories.............. 25
800 Bristol Myers Squibb Co. ........ 71
700 Johnson & Johnson................ 67
1,000 Merck & Co., Inc. ............... 70
1,900 Pfizer, Inc. .................... 131
1,100 Schering Plough Corp. ........... 60
------
424
------
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
------
<S> <C> <C> <C>
Continued
COMMON STOCKS, CONTINUED:
Hospital Supply & Management (1.1%):
1,200 Columbia HCA Healthcare
Corp. ......................... $ 67
------
Household--General Products (1.5%):
2,200 Rubbermaid, Inc. ................ 63
1,900 Sunbeam Corp. ................... 30
------
93
------
Insurance--Life (0.5%):
675 Jefferson Pilot Corp. ........... 34
------
Insurance--Multiline (2.1%):
756 Allstate Corp. .................. 33
1,100 Marsh & Mclennan Cos., Inc. ..... 100
------
133
Insurance--Property & Casual (2.0%):
400 General Re....................... 62
600 Hartford Steam Boiler............ 31
600 Saint Paul Cos., Inc. ........... 34
------
127
------
Machinery & Equipment (1.5%):
800 Ingersoll-Rand Co. .............. 33
1,400 Snap-On, Inc. ................... 61
------
94
------
Manufacturing (0.5%):
700 Service Corp. International...... 30
------
Medical Equipment & Supplies (0.9%):
1,300 Baxter International, Inc. ...... 59
------
</TABLE>
------
59
------
<PAGE> 63
LOGO
- --------------------------------------------------------------------------------
INCOME & GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
Amounts in Thousands, Except for Shares or Principal Amount
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
------
<S> <C> <C> <C>
COMMON STOCKS, CONTINUED:
Motor Vehicles (1.3%):
750 Genuine Parts Co. ............... $ 34
1,700 Ford Motor Co. .................. 50
------
84
------
Multiple Industry (3.2%):
1,550 Minnesota Mining &
Manufacturing.................. 100
3,200 Corning Glass.................... 100
------
200
------
Petroleum--Domestic (1.9%):
500 Atlantic Richfield Co. .......... 57
1,800 Phillips Petroleum Co. .......... 59
------
116
------
Petroleum--Internationals (6.2%):
1,400 Amoco Corp. ..................... 99
1,800 Chevron Corp. ................... 93
800 Exxon Corp. ..................... 64
600 Mobil Corp. ..................... 66
800 Texaco, Inc. .................... 65
------
387
------
Petroleum--Services (2.4%):
2,900 Baker Hughes, Inc. .............. 75
1,100 El Paso Natural Gas.............. 36
700 Halliburton Co. ................. 36
------
147
------
Pharmaceuticals (1.1%):
700 Warner Lambert Co. .............. 66
------
Photographic Equipment (0.6%):
500 Eastman Kodak Co. ............... 37
------
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
------
<S> <C> <C> <C>
Continued
COMMON STOCKS, CONTINUED:
Publishing (1.1%):
1,100 Gannett Co., Inc. ............... $ 70
------
Railroad (1.9%):
700 Burlington Northern, Inc. ....... 57
900 Union Pacific Corp. ............. 60
------
117
------
Restaurants (0.3%):
1,300 Brinker International, Inc.
(b)............................ 16
400 Darden Restaurants, Inc. ........ 5
------
21
------
Retail--General Merchandise (2.0%):
1,100 J.C. Penney, Inc. ............... 54
600 Sears Roebuck & Co. ............. 25
2,200 Wal Mart Stores, Inc. ........... 45
------
124
------
Retail--Specialty Stores (0.4%):
800 Melville Corp. .................. 23
------
Telecommunications (6.9%):
1,300 A T & T Corp. ................... 87
2,000 Airtouch (b)..................... 57
1,100 Ameritech Corp. ................. 66
1,500 Bellsouth Corp. ................. 64
1,400 General Telephone Electric 64
Corp. .........................
1,000 MCI Telecommunications Corp. .... 29
1,200 U.S. West, Inc. ................. 42
1,100 U.S. West Media Group (b)........ 23
------
432
------
</TABLE>
- ------
60
- ------
<PAGE> 64
- --------------------------------------------------------------------------------
INCOME & GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JANUARY 31, 1996
Amounts in Thousands, Except for Shares or Principal Amount
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
------
<S> <C> <C> <C>
COMMON STOCKS, CONTINUED:
Telecommunications--Equipment (0.3%):
700 DSC Communications Corp. (b) .... $ 20
------
Toys (0.5%):
900 Mattel, Inc. .................... 29
------
Tobacco (2.0%):
700 Phillip Morris Co., Inc. ........ 65
1,700 UST, Inc. ....................... 57
------
122
------
Tools (1.0%):
1,200 Stanley Works.................... 62
------
Utilities--Electric (4.9%):
1,400 FPL Group, Inc. ................. 65
3,000 PacifiCorp....................... 64
1,800 Pacific Gas & Electric Co. ...... 50
2,000 Public Service Enterprise Group,
Inc. .......................... 63
1,600 Texas Utilities Co. ............. 65
------
307
------
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- --------------------------------- ------
<S> <C> <C> <C>
COMMON STOCKS, CONTINUED:
Utilities--Gas & Pipeline (1.2%):
800 Consolidated Natural Gas Co. .... $ 36
700 Tenneco, Inc. ................... 36
------
72
------
Total Common Stocks 5,976
------
Total Investments, at value 5,976
------
REPURCHASE AGREEMENTS (4.3%):
269,877 First Boston, 5.90%, 2/1/96
(Collateralized by 106,000 U.S.
Treasury Bonds, 6.88%-7.63%,
2/15/25-8/15/25 and 17,598,000
U.S. Treasury Notes, market
value--$20,401)................ 270
------
Total Repurchase Agreements.................... 270
------
Total Cost--($5,020)(a)........................ $6,246
======
</TABLE>
- ------------
Percentages indicated are based on net assets of $6,250.
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting in excess of federal income tax reporting of
approximately $7, cost for federal income tax purposes differs from value by
net unrealized appreciation of securities as follows (amounts in thousands):
<TABLE>
<S> <C>
Unrealized appreciation............................................ $1,274
Unrealized depreciation............................................ (55)
------
Net unrealized appreciation........................................ $1,219
======
</TABLE>
(b) Represents non-income producing security.
See notes to financial statements.
------
61
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<PAGE> 65
LOGO
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1996
(UNAUDITED)
1. ORGANIZATION:
The HighMark Group (the "Group") was organized on March 10, 1987 and is
registered under the Investment Company Act of 1940 as amended (the "1940
Act"), as a diversified, open-end investment company established as a
Massachusetts business trust.
The Group is authorized to issue an unlimited number of shares which are
units of beneficial interest without par value. The Group presently offers
shares in the Diversified Obligations Fund, the U.S. Government Obligations
Fund, the 100% U.S. Treasury Obligations Fund, the California Tax-Free Fund,
the Tax-Free Fund, the Bond Fund, the Government Bond Fund, the Income
Equity Fund, the Balanced Fund, the Growth Fund and the Income & Growth Fund
(collectively, "the Funds" and individually, "a Fund"). Sales of shares may
be made to customers of The Bank of California, N.A. ("The Bank of
California") and to its affiliates, to all accounts of its correspondent
banks, to institutional investors, and to the general public. Merus Capital
Management, ("Merus"), a division of The Bank of California, serves as
investment adviser to the Group.
On December 1, 1990, the Diversified Obligations Fund, the U.S. Government
Obligations Fund, the 100% U.S. Treasury Obligations Fund, the California
Tax-Free Fund, and the Tax-Free Fund (collectively, "the money market
funds") divided and commenced offering of two classes of shares (Investor
Shares and Fiduciary Shares). On June 20, 1994, the Bond Fund, the
Government Bond Fund, the Income Equity Fund, the Balanced Fund, the Growth
Fund and the Income & Growth Fund (collectively, "the variable net asset
value funds") also commenced offering of Investor and Fiduciary Shares.
Investor and Fiduciary Shares represent interests in the same portfolio
investments of a Fund and are identical in all respects except that Investor
Shares bear the expense, if any, of the distribution fee under the Group's
Distribution and Shareholder Services Plan (the "Distribution Plan"), which
will cause the Investor Shares to have a higher expense ratio and to pay
lower dividends than those related to Fiduciary Shares, and Investor Shares
have certain exclusive voting rights with respect to the Group's
Distribution Plan. In addition, Investor Shares of the variable net asset
value funds are subject to initial sales charges imposed at the time of
purchase, in accordance with the Funds' prospectuses.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies followed by
the Group in the preparation of its financial statements. The policies are
in conformity with generally accepted accounting principles. The
Continued
- ------
62
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<PAGE> 66
LOGO
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JANUARY 31, 1996
(UNAUDITED)
preparation of financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements and the reported amounts of income
and expenses for the period. Actual results could differ from those
estimates.
SECURITIES VALUATION:
Investments in the money market funds are valued at either amortized cost,
which approximates market value, or at original cost, which when combined
with accrued interest, approximates market value. Under the amortized cost
valuation method, discount or premium is amortized on a constant basis to
the maturity of the security. In addition, the money market funds may not a)
purchase any instrument with a remaining maturity greater than thirteen
months unless such investment is subject to a demand feature, or b) maintain
a dollar weighted average portfolio maturity which exceeds 90 days.
Investments in common stocks and preferred stocks, corporate notes,
commercial paper, and U.S. Government securities of the variable net asset
value funds are valued at their market values determined on the basis of the
mean of the latest available bid prices in the principal market (closing
sales prices if the principal market is an exchange) in which such
securities are normally traded. Investments in investment companies are
valued at their net asset values as reported by such companies. The
differences between cost and market values of investments held by the
variable net asset value funds are reflected as either unrealized
appreciation or depreciation. Securities, including restricted securities,
for which market quotations are not readily available, are valued at fair
market value under the supervision of the Fund's Board of Directors.
Although the California Tax-Free Fund has a diversified investment
portfolio, all of its investments are in the securities of issuers in
California. Such concentration may subject the Fund to the effects of
economic changes occurring within that state.
SECURITY TRANSACTIONS AND RELATED INCOME:
Securities transactions are accounted for on the date the security is
purchased or sold (trade date). Interest income is recognized on the accrual
basis and includes, where applicable, the pro rata amortization of premium
or accretion of discount. Dividend income is recorded on the ex-dividend
date. Gains or losses realized on sales of securities are determined by
comparing the identified cost of the security lot sold with the net sales
proceeds.
Continued
------
63
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<PAGE> 67
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JANUARY 31, 1996
(UNAUDITED)
REPURCHASE AGREEMENTS:
The Funds may acquire repurchase agreements from financial institutions such
as banks and broker-dealers which Merus deems creditworthy under guidelines
approved by the Group's Board of Trustees, subject to the seller's agreement
to repurchase such securities at a mutually agreed-upon date and price. The
repurchase price generally equals the price paid by a Fund plus interest
negotiated on the basis of current short-term rates, which may be more or
less than the rate on the underlying portfolio securities. The seller, under
a repurchase agreement, is required to maintain the value of collateral held
pursuant to the agreement at not less than 102% of the repurchase price
(including accrued interest). Securities subject to repurchase agreements
are held by the Funds' custodian in the Federal Reserve/Treasury book-entry
system. Repurchase agreements are considered to be loans by a Fund under the
1940 Act.
DIVIDENDS TO SHAREHOLDERS:
Dividends from net investment income are declared daily and paid monthly for
the money market funds. Dividends from net investment income are declared
and paid monthly for the variable net asset value funds. Distributable net
realized capital gains, if any, are declared and distributed at least
annually for each of the Funds.
Dividends from net investment income and from net realized capital gains are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are primarily
due to differing treatments for expiring capital loss carryforwards and
deferrals of certain losses.
FEDERAL INCOME TAXES:
It is the policy of each of the Funds to continue to qualify as a regulated
investment company by complying with the provisions available to certain
investment companies, as defined in applicable sections of the Internal
Revenue Code, and to make distributions of net investment income and net
realized capital gains sufficient to relieve it from all, or substantially
all, federal income taxes.
OTHER:
Expenses that are directly related to one of the Funds are charged directly
to that Fund and are allocated to each class of shares based on the relative
net assets of each class. Other operating expenses of the Group are prorated
to the Funds on the basis of relative net assets.
Continued
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64
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- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JANUARY 31, 1996
(UNAUDITED)
3. PURCHASES AND SALES OF SECURITIES:
Purchases and sales of securities (excluding short-term securities) for the
six months ended January 31, 1996 are as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
----------- -----------
<S> <C> <C>
Bond Fund....................................................... $ 6,043,178 $ 5,380,123
Government Bond Fund............................................ $ 2,066,152 $ 1,447,109
Income Equity Fund.............................................. $61,185,512 $51,601,646
Balanced Fund................................................... $ 3,490,040 $ 1,029,043
Growth Fund..................................................... $20,350,488 $13,177,536
Income & Growth Fund............................................ $ 1,091,952 $ 2,223,537
</TABLE>
Continued
------
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JANUARY 31, 1996
(UNAUDITED)
4. CAPITAL SHARE TRANSACTIONS:
Transactions in capital shares for the Group for the six months ended
January 31, 1996 and the year ended July 31, 1995 were as follows:
<TABLE>
<CAPTION>
DIVERSIFIED U.S. GOVERNMENT
OBLIGATIONS FUND OBLIGATIONS FUND
------------------------ -------------------------
SIX MONTHS SIX MONTHS
ENDED ENDED
JANUARY YEAR ENDED JANUARY YEAR ENDED
31, JULY 31, 31, JULY 31,
1996 1995 1996 1995
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
INVESTOR SHARES:
Proceeds from shares issued..................... $ 476,938 $ 646,263 $ 332,018 $ 394,176
Dividends reinvested............................ 3,413 4,895 1,831 1,948
Shares redeemed................................. (456,201) (598,685) (320,708) (371,715)
--------- --------- --------- -----------
Change in net assets from Investor Share
transactions.................................. $ 24,150 $ 52,473 $ 13,141 $ 24,409
========= ========= ========= ===========
FIDUCIARY SHARES:
Proceeds from shares issued..................... $ 446,027 $ 915,980 $ 702,277 $ 1,366,450
Dividends reinvested............................ 19 20 2 2
Shares redeemed................................. (466,154) (874,436) (709,942) (1,368,823)
--------- --------- --------- -----------
Change in net assets from Fiduciary Share
transactions.................................. $ (20,108) $ 41,564 $ (7,663) $ (2,371)
========= ========= ========= ===========
SHARE TRANSACTIONS:
INVESTOR SHARES:
Issued.......................................... 476,938 646,263 332,018 394,176
Reinvested...................................... 3,413 4,895 1,831 1,948
Redeemed........................................ (456,201) (598,685) (320,708) (371,715)
--------- --------- --------- -----------
Change in Investor Shares....................... 24,150 52,473 13,141 24,409
========= ========= ========= ===========
FIDUCIARY SHARES:
Issued.......................................... 446,027 915,980 702,277 1,366,450
Reinvested...................................... 19 20 2 2
Redeemed........................................ (466,154) (874,436) (709,942) (1,368,823)
--------- --------- --------- -----------
Change in Fiduciary Shares...................... (20,108) 41,564 (7,663) (2,371)
========= ========= ========= ===========
</TABLE>
Continued
- ------
66
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<PAGE> 70
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- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JANUARY 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
100% U.S. TREASURY CALIFORNIA TAX-FREE
OBLIGATIONS FUND FUND TAX-FREE FUND
----------------------- ----------------------- -----------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED
JANUARY YEAR ENDED JANUARY YEAR ENDED JANUARY YEAR ENDED
31, JULY 31, 31, JULY 31, 31, JULY 31,
1996 1995 1996 1995 1996 1995
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
INVESTOR SHARES:
Proceeds from shares
issued..................... $ 219,410 $ 310,873 $ 67,813 $ 99,160 $ 14,470 $ 44,420
Dividends reinvested......... 2,218 2,090 780 1,027 202 412
Shares redeemed.............. (203,748) (263,475) (60,261) (91,159) (12,776) (52,158)
--------- --------- --------- --------- -------- ---------
Change in net assets from
Investor Share
transactions............... $ 17,880 $ 49,488 $ 8,332 $ 9,028 $ 1,896 $ (7,326)
========= ========= ========= ========= ======== =========
FIDUCIARY SHARES:
Proceeds from shares
issued..................... $ 270,225 $ 425,795 $ 112,266 $ 255,654 $ 58,339 $ 112,554
Dividends reinvested......... 15 16 3 8 10 17
Shares redeemed.............. (248,910) (395,970) (116,281) (264,895) (60,829) (112,034)
--------- --------- --------- --------- -------- ---------
Change in net assets from
Fiduciary Share
transactions............... $ 21,330 $ 29,841 $ (4,012) $ (9,233) $ (2,480) $ 537
========= ========= ========= ========= ======== =========
SHARE TRANSACTIONS:
INVESTOR SHARES:
Issued....................... 219,410 310,873 67,813 99,160 14,470 44,420
Reinvested................... 2,218 2,090 780 1,027 202 412
Redeemed..................... (203,748) (263,475) (60,261) (91,159) (12,776) (52,158)
--------- --------- --------- --------- -------- ---------
Change in Investor Shares.... 17,880 49,488 8,332 9,028 1,896 (7,326)
========= ========= ========= ========= ======== =========
FIDUCIARY SHARES:
Issued....................... 270,225 425,795 112,266 255,654 58,339 112,554
Reinvested................... 15 16 3 8 10 17
Redeemed..................... (248,910) (395,970) (116,281) (264,895) (60,829) (112,034)
--------- --------- --------- --------- -------- ---------
Change in Fiduciary Shares... 21,330 29,841 (4,012) (9,233) (2,480) 537
========= ========= ========= ========= ======== =========
</TABLE>
Continued
------
67
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<PAGE> 71
LOGO
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JANUARY 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
BOND FUND GOVERNMENT BOND FUND INCOME EQUITY FUND
----------------------- ----------------------- -----------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED
JANUARY YEAR ENDED JANUARY YEAR ENDED JANUARY YEAR ENDED
31, JULY 31, 31, JULY 31, 31, JULY 31,
1996 1995 1996 1995 1996 1995
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
INVESTOR SHARES:
Proceeds from shares issued... $ 629 $ 626 $1,045 $ 97 $ 2,719 $ 4,131
Dividends reinvested.......... 23 14 13 2 355 52
Shares redeemed............... (58) (113) (32) (32) (575) (506)
------ ------- ----- ------ ------- -------
Change in net assets from
Investor Share
transactions................ $ 594 $ 527 $1,026 $ 67 $ 2,499 $ 3,677
====== ======= ===== ====== ======= =======
FIDUCIARY SHARES:
Proceeds from shares issued... $ 5,696 $ 10,767 $ 135 $ 1,279 $ 25,753 $ 31,913
Dividends reinvested.......... 1,515 3,111 109 295 13,587 13,482
Shares redeemed............... (7,323) (19,821) (621) (2,852) (22,677) (56,293)
------ ------- ----- ------ ------- -------
Change in net assets from
Fiduciary Share
transactions................ $ (112) $ (5,943) $ (377) $ (1,278) $ 16,663 $(10,898)
====== ======= ===== ====== ======= =======
SHARE TRANSACTIONS:
INVESTOR SHARES:
Issued........................ 59 63 109 11 196 331
Reinvested.................... 2 1 1 -- 25 5
Redeemed...................... (5) (11) (3) (4) (40) (40)
------ ------- ----- ------ ------- -------
Change in Investor Shares..... 56 53 107 7 181 296
====== ======= ===== ====== ======= =======
FIDUCIARY SHARES:
Issued........................ 537 1,074 14 137 1,851 2,625
Reinvested.................... 143 311 12 32 966 1,154
Redeemed...................... (689) (1,974) (65) (305) (1,655) (4,658)
------ ------- ----- ------ ------- -------
Change in Fiduciary Shares.... (9) (589) (39) (136) 1,162 (879)
====== ======= ===== ====== ======= =======
</TABLE>
Continued
- ------
68
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<PAGE> 72
LOGO
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JANUARY 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
BALANCED FUND INCOME & GROWTH FUND
----------------------- GROWTH FUND -----------------------
SIX MONTHS ------------------------ SIX MONTHS
ENDED SIX MONTHS ENDED
JANUARY YEAR ENDED ENDED YEAR ENDED JANUARY YEAR ENDED
31, JULY 31, JANUARY 31, JULY 31, 31, JULY 31,
1996 1995 1996 1995 1996 1995
---------- ---------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
INVESTOR SHARES:
Proceeds from shares issued... $ 199 $ 480 $ 843 $ 1,230 $ 74 $ 205
Dividends reinvested.......... 10 2 96 5 14 1
Shares redeemed............... (113) (20) (166) (144) (47) --
------- ------- ------- ------- ------ -------
Change in net assets from
Investor Share
transactions................ $ 96 $ 462 $ 773 $ 1,091 $ 41 $ 206
======= ======= ======= ======= ====== =======
FIDUCIARY SHARES:
Proceeds from shares issued... $ 6,283 $ 9,876 $ 8,983 $ 8,497 $ 1,667 $1,566
Dividends reinvested.......... 558 984 1,687 498 366 126
Shares redeemed............... (5,279) (9,570) (2,008) (3,450) (2,952) (788)
------- ------- ------- ------- ------ -------
Change in net assets from
Fiduciary Share
transactions................ $ 1,562 $ 1,290 $ 8,662 $ 5,545 $ (919) $ 904
======= ======= ======= ======= ====== =======
SHARE TRANSACTIONS:
INVESTOR SHARES:
Issued........................ 18 45 68 115 6 18
Reinvested.................... 1 -- 8 1 1 --
Redeemed...................... (10) (2) (13) (13) (3) --
------- ------- ------- ------- ------ -------
Change in Investor Shares..... 9 43 63 103 4 18
======= ======= ======= ======= ====== =======
FIDUCIARY SHARES:
Issued........................ 558 976 741 836 139 150
Reinvested.................... 50 99 140 50 31 12
Redeemed...................... (469) (964) (165) (334) (252) (73)
------- ------- ------- ------- ------ -------
Change in Fiduciary Shares.... 139 111 716 552 (82) 89
======= ======= ======= ======= ====== =======
</TABLE>
Continued
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- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JANUARY 31, 1996
(UNAUDITED)
5. RELATED PARTY TRANSACTIONS:
Investment advisory services are provided to the Group by Merus. Under the
terms of the investment advisory agreement, The Bank of California, of which
Merus is a division, is entitled to receive fees based on a percentage of
the average net assets of each of the Funds. The Bank of California also
serves as custodian, sub-transfer agent and sub-administrator for the Group.
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services ("BISYS"),
an Ohio Limited Partnership, and BISYS Fund Services Ohio, Inc. ("BISYS
Ohio") are subsidiaries of the BISYS Group, Inc.
BISYS, with whom certain officers and trustees of the Group are affiliated,
serves the Group as administrator. Such officers and trustees are paid no
fees directly by the Funds for serving as officers and trustees of the
Group. Under the terms of the administration agreement, BISYS' fees are
computed daily as a percentage of the average net assets of the Funds. BISYS
also serves as the Group's distributor. As distributor, BISYS is entitled to
receive fees from the Funds for providing distribution services. For the six
months ended January 31, 1996, BISYS received $125,535 for commissions
earned on sales of shares of the Group's variable net asset value funds, of
which $43,778 was reallowed to affiliated broker/dealers. BISYS Ohio serves
the Group as transfer agent and mutual fund accountant.
The Group has adopted a Distribution Plan pursuant to Rule 12b-1 under the
1940 Act pursuant to which each Fund may pay the Distributor as compensation
for its services in connection with the Distribution Plan a distribution
fee, computed daily and paid monthly, at a maximum rate of twenty-five one-
hundredths of one percent (0.25%) of the average daily net assets
attributable to the Funds' Investor Shares. A Fund's Fiduciary Shares are
not subject to the Distribution Plan or a distribution fee. The Distributor
has agreed to voluntarily reduce payments to be received pursuant to the
Distribution Plan with respect to a money market fund to the extent
necessary to ensure that such payments do not exceed the income attributable
to such Fund's shares on any day.
The Group has also adopted a Shareholder Services Plan permitting payment of
compensation to financial institutions that agree to provide certain
administrative support services for their customers who are Fund
shareholders. Each Fund has entered into a specific arrangement with BISYS
for the provision of such services and reimburses BISYS for its cost of
providing these services, subject to a maximum annual rate of twenty-five
one-hundredths of one percent (0.25%) of each Fund's average daily net
assets.
Continued
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70
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<PAGE> 74
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- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JANUARY 31, 1996
(UNAUDITED)
Fees may be voluntarily reduced or reimbursed to assist the Funds in
maintaining competitive expense ratios.
Information regarding these transactions is as follows for the six months
ended January 31, 1996:
<TABLE>
<CAPTION>
DIVERSIFIED U.S. GOVERNMENT 100% U.S. TREASURY
OBLIGATIONS OBLIGATIONS OBLIGATIONS
FUND FUND FUND
----------------------- ----------------------- -----------------------
<S> <C> <C> <C>
INVESTMENT ADVISORY FEES:
Annual fee before voluntary fee
reductions
(percentage of average net
assets)............................. 0.40% 1st $500 million 0.40% 1st $500 million 0.40% 1st $500 million
0.35% next $500 million 0.35% next $500 million 0.35% next $500 million
0.30% remaining 0.30% remaining 0.30% remaining
Voluntary fee reductions.............. $2,138 $1,167 $1,694
ADMINISTRATION FEES:
Annual fee before voluntary fee
reductions (percentage of average
net assets)......................... 0.20% 0.20% 0.20%
Voluntary fee reductions.............. $1,068 $583 $817
DISTRIBUTION FEES (INVESTOR SHARES):
Annual fee (percentage of average net
assets)............................. 0.25% 0.25% 0.25%
SHAREHOLDER SERVICES FEES:
Annual fee before voluntary fee
reductions (percentage of average
net assets)......................... 0.25% 0.25% 0.25%
Voluntary fee reductions.............. $450,415 $275,250 $349,079
CUSTODIAN FEES: $65,552 $48,704 $36,831
TRANSFER AGENT AND ACCOUNTING FEES: $99,431 $60,468 $71,452
</TABLE>
Continued
------
71
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JANUARY 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
CALIFORNIA
TAX-FREE TAX-FREE
FUND FUND
----------------------- -----------------------
<S> <C> <C>
INVESTMENT ADVISORY FEES:
Annual fee before voluntary fee reductions
(percentage of average net assets).......................... 0.40% 1st $500 million 0.40% 1st $500 million
0.35% next $500 million 0.35% next $500 million
0.30% remaining 0.30% remaining
Voluntary fee reductions...................................... $156,150 $13,664
ADMINISTRATION FEES:
Annual fee before voluntary fee reductions
(percentage of average net assets).......................... 0.20% 0.20%
Voluntary fee reductions...................................... $40,902 $21,870
DISTRIBUTION FEES (INVESTOR SHARES):
Annual fee (percentage of average net assets)................. 0.25% 0.25%
SHAREHOLDER SERVICES FEES:
Annual fee before voluntary fee reductions
(percentage of average net assets).......................... 0.25% 0.25%
Voluntary fee reductions...................................... $189,213 $51,216
CUSTODIAN FEES: $32,846 $18,293
TRANSFER AGENT AND ACCOUNTING FEES: $51,611 $36,443
</TABLE>
Continued
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72
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- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JANUARY 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
GOVERNMENT INCOME
BOND BOND EQUITY
FUND FUND FUND
--------------------- --------------------- ---------------------
<S> <C> <C> <C>
INVESTMENT ADVISORY FEES:
Annual fee before voluntary fee reductions
(percentage of average net assets)........ 1.00% 1st $40 million 1.00% 1st $40 million 1.00% 1st $40 million
0.60% remaining 0.60% remaining 0.60% remaining
Voluntary fee reductions.................... $128,223 $21,062 $2,972
ADMINISTRATION FEES:
Annual fee before voluntary fee reductions
(percentage of average net assets)........ 0.20% 0.20% 0.20%
Voluntary fee reductions.................... $22,123 $4,212 $918
DISTRIBUTION FEES (INVESTOR SHARES):
Annual fee (percentage of average net
assets)................................... 0.25% 0.25% 0.25%
SHAREHOLDER SERVICES FEES:
Annual fee before voluntary fee reductions
(percentage of average net assets)........ 0.25% 0.25% 0.25%
Voluntary fee reductions.................... $72,864 $4,897 $288,131
CUSTODIAN FEES: $19,524 $11,689 $44,220
Voluntary fee reductions.................... -- $11,689 --
TRANSFER AGENT AND ACCOUNTING FEES: $50,059 $36,791 $94,921
</TABLE>
Continued
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JANUARY 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
BALANCED GROWTH INCOME &
FUND FUND GROWTH FUND
--------------------- --------------------- ---------------------
<S> <C> <C> <C>
INVESTMENT ADVISORY FEES:
Annual fee before voluntary fee reductions
(percentage of average net assets)........ 1.00% 1st $40 million 1.00% 1st $40 million 1.00% 1st $40 million
0.60% remaining 0.60% remaining 0.60% remaining
Voluntary fee reductions.................... $86,742 $93,305 $28,996
ADMINISTRATION FEES:
Annual fee before voluntary fee reductions
(percentage of average net assets)........ 0.20% 0.20% 0.20%
Voluntary fee reductions.................... $113 $146 $5,800
DISTRIBUTION FEES (INVESTOR SHARES):
Annual fee (percentage of average net
assets)................................... 0.25% 0.25% 0.25%
SHAREHOLDER SERVICES FEES:
Annual fee before voluntary fee reductions
(percentage of average net assets)........ 0.25% 0.25% 0.25%
Voluntary fee reductions.................... $38,348 $36,799 $6,698
CUSTODIAN FEES:............................. $14,358 $19,617 $16,155
Voluntary fee reductions.................... $14,358 $19,617 $16,155
ACCOUNTING AND TRANSFER AGENT FEES: $30,152 $34,630 $37,885
</TABLE>
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74
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<PAGE> 78
- --------------------------------------------------------------------------------
DIVERSIFIED OBLIGATIONS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
FOR THE SIX MONTHS -----------------------------------------------------------------------------------------
ENDED JANUARY 31,
1996 (UNAUDITED) 1995 1994 1993 1992
---------------------- -------------------- ------------------- ------------------- -------------------
INVESTOR FIDUCIARY INVESTOR FIDUCIARY INVESTOR FIDUCIARY INVESTOR FIDUCIARY INVESTOR FIDUCIARY
-------- -------- -------- -------- ------- -------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET
VALUE,
BEGINNING
OF
PERIOD.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- ------- -------- ------- -------- ------- --------
INVESTMENT
ACTIVITIES
Net
investment
income.. 0.026 0.026 0.049 0.049 0.028 0.028 0.027 0.027 0.043 0.043
-------- -------- -------- -------- ------- -------- ------- -------- ------- --------
DISTRIBUTIONS
From net
investment
income... (0.026) (0.026) (0.049) (0.049) (0.028) (0.028) (0.027) (0.027) (0.043) (0.043)
-------- -------- -------- -------- ------- -------- ------- -------- ------- --------
NET ASSET
VALUE, END
OF
PERIOD.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======= ======== ======= ======== ======= ========
Total
Return.... 2.59%(b) 2.59%(b) 4.99% 4.99% 2.88% 2.88% 2.75% 2.75% 4.41% 4.41%
RATIOS/SUPPLEMENTARY
DATA:
Net Assets
at end
of
period
(000)... $152,343 $250,372 $128,191 $270,476 $75,725 $228,934 $77,589 $254,034 $17,600 $337,485
Ratio of
expenses
to
average
net
assets... 0.75%(a) 0.75%(a) 0.74% 0.74% 0.74% 0.74% 0.72% 0.72% 0.72% 0.72%
Ratio of
net
investment
income
to
average
net
assets... 5.08%(a) 5.09%(a) 4.92% 4.88% 2.83% 2.83% 2.72% 2.72% 4.34% 4.34%
Ratio of
expenses
to
average
net
assets*... 0.98%(a) 0.98%(a) 1.23% 0.98% 1.14% 0.89% 0.79% 0.73% 0.97% 0.72%
Ratio of
net
investment
income
to
average
net
assets*... 4.85%(a) 4.86%(a) 4.43% 4.64% 2.42% 2.67% 2.65% 2.71% 4.09% 4.34%
</TABLE>
- ------------
On December 1, 1990, the Diversified Obligations Fund commenced offering Class A
Shares and designated existing shares as Class B Shares. As of June 20, 1994,
Class A and Class B Shares were designated as "Investor" and "Fiduciary" Shares,
respectively.
(a) Annualized.
(b) Not annualized.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
See notes to financial statements.
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U.S. GOVERNMENT OBLIGATIONS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
FOR THE SIX MONTHS -----------------------------------------------------------------------------------------
ENDED JANUARY 31,
1996 (UNAUDITED) 1995 1994 1993 1992
--------------------- ------------------- ------------------- ------------------- --------------------
INVESTOR FIDUCIARY INVESTOR FIDUCIARY INVESTOR FIDUCIARY INVESTOR FIDUCIARY INVESTOR FIDUCIARY
------- -------- ------- -------- ------- -------- ------- -------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET
VALUE,
BEGINNING
OF
PERIOD.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- ------- -------- ------- -------- ------- --------
INVESTMENT
ACTIVITIES
Net
investment
income... 0.025 0.025 0.048 0.048 0.027 0.027 0.027 0.027 0.042 0.042
-------- -------- -------- -------- ------- -------- ------- -------- ------- --------
DISTRIBUTIONS
From net
investment
income... (0.025) (0.025) (0.048) (0.048) (0.027) (0.027) (0.027) (0.027) (0.042) (0.042)
-------- -------- -------- -------- ------- -------- ------- -------- ------- --------
NET ASSET
VALUE, END
OF
PERIOD.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======= ======== ======= ======== ======= ========
Total
Return.... 2.51%(b) 2.52%(b) 4.86% 4.87% 2.74% 2.74% 2.72% 2.72% 4.25% 4.25%
RATIOS/SUPPLEMENTARY
DATA:
Net Assets
at end
of
period
(000)... $61,617 $152,088 $48,474 $159,747 $24,055 $162,094 $37,332 $166,182 $12,527 $94,252
Ratio of
expenses
to
average
net
assets... 0.79%(a) 0.76%(a) 0.78% 0.78% 0.77% 0.78% 0.71% 0.71% 0.73% 0.73%
Ratio of
net
investment
income
to
average
net
assets... 4.95%(a) 4.96%(a) 4.82% 4.76% 2.63% 2.70% 2.67% 2.67% 4.15% 4.15%
Ratio of
expenses
to
average
net
assets*... 1.02%(a) 1.00%(a) 1.27% 1.02% 1.17% 0.94% 0.79% 0.74% 0.99% 0.74%
Ratio of
net
investment
income
to
average
net
assets*... 4.72%(a) 4.72%(a) 4.33% 4.52% 2.23% 2.54% 2.59% 2.65% 3.89% 4.14%
</TABLE>
- ------------
On December 1, 1990, the U.S. Government Obligations Fund commenced offering
Class A Shares and designated existing shares as Class B Shares. As of June 20,
1994, Class A and Class B Shares were designated as "Investor" and "Fiduciary"
Shares, respectively.
(a) Annualized.
(b) Not annualized.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
See notes to financial statements.
- ------
76
- ------
<PAGE> 80
- --------------------------------------------------------------------------------
100% U.S. TREASURY OBLIGATIONS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
FOR THE SIX MONTHS ----------------------------------------------------------------------------------------
ENDED JANUARY 31,
1996 (UNAUDITED) 1995 1994 1993 1992
---------------------- ------------------- ------------------- ------------------- -------------------
INVESTOR FIDUCIARY INVESTOR FIDUCIARY INVESTOR FIDUCIARY INVESTOR FIDUCIARY INVESTOR FIDUCIARY
-------- -------- ------- -------- ------- -------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET
VALUE,
BEGINNING
OF
PERIOD.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- ------- -------- ------- -------- ------- --------
INVESTMENT
ACTIVITIES
Net
investment
income... 0.024 0.024 0.046 0.046 0.026 0.026 0.026 0.026 0.040 0.040
Net
realized
and
unrealized
gains on
investments... -- -- -- -- -- -- -- -- 0.001 0.001
-------- -------- -------- -------- ------- -------- ------- -------- ------- --------
Total
from
Investment
Activities... 0.024 0.024 0.046 0.046 0.026 0.026 0.026 0.026 0.041 0.041
-------- -------- -------- -------- ------- -------- ------- -------- ------- --------
DISTRIBUTIONS
From net
investment
income... (0.024) (0.024) (0.046) (0.046) (0.026) (0.026) (0.026) (0.026) (0.040) (0.040)
From net
realized
gains... -- -- -- -- -- -- -- -- (0.001) (0.001)
-------- -------- -------- -------- ------- -------- ------- -------- ------- --------
Total
Distributions... (0.024) (0.024) (0.046) (0.046) (0.026) (0.026) (0.026) (0.026) (0.041) (0.041)
-------- -------- -------- -------- ------- -------- ------- -------- ------- --------
NET ASSET
VALUE, END
OF
PERIOD.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======= ======== ======= ======== ======= ========
Total
Return.... 2.44%(b) 2.44%(b) 4.69% 4.69% 2.68% 2.68% 2.64% 2.64% 4.18% 4.18%
RATIOS/SUPPLEMENTARY
DATA:
Net Assets
at end
of
period
(000)... $106,541 $211,939 $88,660 $190,604 $39,157 $160,721 $32,629 $191,946 $11,551 $219,451
Ratio of
expenses
to
average
net
assets... 0.73%(a) 0.73%(a) 0.73% 0.73% 0.74% 0.74% 0.67% 0.67% 0.65% 0.65%
Ratio of
net
investment
income
to
average
net
assets... 4.80%(a) 4.81%(a) 4.68% 4.60% 2.68% 2.63% 2.60% 2.60% 3.99% 3.99%
Ratio of
expenses
to
average
net
assets*... 0.97%(a) 0.97%(a) 1.22% 0.97% 1.15% 0.90% 0.75% 0.72% 0.97% 0.72%
Ratio of
net
investment
income
to
average
net
assets*... 4.56%(a) 4.57%(a) 4.19% 4.36% 2.27% 2.48% 2.52% 2.55% 3.67% 3.92%
</TABLE>
- ------------
On December 1, 1990, the 100% U.S. Treasury Obligations Fund commenced offering
Class A Shares and designated existing shares as Class B Shares. As of June 20,
1994, Class A and Class B Shares were designated as "Investor" and "Fiduciary"
Shares, respectively.
(a) Annualized.
(b) Not annualized.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
See notes to financial statements.
------
77
------
<PAGE> 81
LOGO
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
FOR THE SIX MONTHS ---------------------------------------------------------------------------------------
ENDED JANUARY 31,
1996 (UNAUDITED) 1995 1994 1993 1992
--------------------- ------------------- ------------------- ------------------- ------------------
INVESTOR FIDUCIARY INVESTOR FIDUCIARY INVESTOR FIDUCIARY INVESTOR FIDUCIARY INVESTOR FIDUCIARY
------- -------- ------- -------- ------- -------- ------- -------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET
VALUE,
BEGINNING OF
PERIOD...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- ------- -------- ------- -------- ------- --------
INVESTMENT
ACTIVITIES
Net
investment
income.... 0.016 0.016 0.031 0.031 0.020 0.020 0.021 0.021 0.032 0.032
-------- -------- -------- -------- ------- -------- ------- -------- ------- --------
DISTRIBUTIONS
From net
investment
income.... (0.016) (0.016) (0.031) (0.031) (0.020) (0.020) (0.021) (0.021) (0.032) (0.032)
-------- -------- -------- -------- ------- -------- ------- -------- ------- --------
NET ASSET
VALUE, END
OF PERIOD... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======= ======== ======= ======== ======= ========
Total
Return...... 1.56%(b) 1.55%(b) 3.16% 3.16% 1.99% 1.99% 2.13% 2.13% 3.20% 3.20%
RATIOS/SUPPLEMENTARY
DATA:
Net Assets
at end of
period
(000)..... $48,875 $101,731 $40,544 $105,742 $31,521 $114,993 $44,410 $142,939 $4,609 $116,062
Ratio of
expenses
to average
net
assets.... 0.52%(a) 0.52%(a) 0.50% 0.50% 0.50% 0.50% 0.44% 0.44% 0.54% 0.54%
Ratio of net
investment
income to
average
net
assets.... 3.09%(a) 3.09%(a) 3.14% 3.11% 1.96% 1.96% 2.08% 2.08% 3.15% 3.15%
Ratio of
expenses
to average
net
assets*... 1.00%(a) 1.00%(a) 1.26% 1.01% 1.18% 0.93% 0.79% 0.73% 0.99% 0.74%
Ratio of net
investment
income to
average
net
assets*... 2.61%(a) 2.61%(a) 2.38% 2.60% 1.28% 1.53% 1.73% 1.78% 2.70% 2.95%
</TABLE>
- ------------
On December 1, 1990, the California Tax-Free Fund commenced offering Class A
Shares and designated existing shares as Class B Shares. As of June 20, 1994,
Class A and Class B Shares were designated as "Investor" and "Fiduciary" Shares,
respectively.
(a) Annualized.
(b) Not annualized.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
See notes to financial statements.
- ------
78
- ------
<PAGE> 82
- --------------------------------------------------------------------------------
TAX-FREE FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
FOR THE SIX MONTHS --------------------------------------------------------------------------
ENDED JANUARY 31,
1996 (UNAUDITED) 1995 1994 1993
---------------------- ---------------------- ---------------------- ----------------------
INVESTOR FIDUCIARY INVESTOR FIDUCIARY INVESTOR FIDUCIARY INVESTOR FIDUCIARY
------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income.... 0.015 0.015 0.030 0.030 0.019 0.019 0.021 0.021
------- ------- ------- ------- ------- ------- ------- -------
DISTRIBUTIONS
From net investment
income................. (0.015) (0.015) (0.030) (0.030) (0.019) (0.019) (0.021) (0.021)
------- ------- ------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= ======= ======= =======
Total Return.............. 1.55%(b) 1.55%(b) 3.00% 3.00% 1.96% 1.96% 2.16% 2.16%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of
period (000)........... $14,598 $28,333 $ 12,702 $30,813 $ 20,032 $30,285 $ 40,010 $29,799
Ratio of expenses to
average net assets..... 0.75%(a) 0.74%(a) 0.73% 0.73% 0.69% 0.69% 0.53% 0.53%
Ratio of net investment
income to average net
assets................. 3.05%(a) 3.05%(a) 2.90% 2.95% 1.93% 1.95% 2.12% 2.12%
Ratio of expenses to
average net assets*.... 1.14%(a) 1.14%(a) 1.39% 1.14% 1.27% 1.02% 0.96% 0.84%
Ratio of net investment
income to average net
assets*................ 2.66%(a) 2.65%(a) 2.24% 2.54% 1.36% 1.62% 1.69% 1.82%
<CAPTION>
1992
----------------------
INVESTOR FIDUCIARY
--------- ---------
<S> <<C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD................ $ 1.00 $ 1.00
------- -------
INVESTMENT ACTIVITIES
Net investment income.... 0.033 0.033
------- -------
DISTRIBUTIONS
From net investment
income................. (0.033) (0.033)
------- -------
NET ASSET VALUE, END OF
PERIOD................... $ 1.00 $ 1.00
======= =======
Total Return.............. 3.35% 3.35%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of
period (000)........... $ 23,780 $27,136
Ratio of expenses to
average net assets..... 0.57% 0.57%
Ratio of net investment
income to average net
assets................. 3.31% 3.31%
Ratio of expenses to
average net assets*.... 1.09% 0.84%
Ratio of net investment
income to average net
assets*................ 2.79% 3.05%
</TABLE>
- ------------
On December 1, 1990, the Tax-Free Fund commenced offering Class A Shares and
designated existing shares as Class B Shares. As of June 20, 1994, Class A and
Class B Shares were designated as "Investor" and "Fiduciary" Shares,
respectively.
(a) Annualized.
(b) Not annualized.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
See notes to financial statements.
------
79
------
<PAGE> 83
LOGO
- --------------------------------------------------------------------------------
BOND FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
JUNE 20, YEAR
FOR THE SIX MONTHS YEAR ENDED 1994 TO ENDED
ENDED JANUARY 31, JULY 31, JULY 31, JULY 31, YEAR ENDED JULY
1996 (UNAUDITED) 1995 1994 (A) 1994 (A) 31,
----------------------- ----------------------- -------- --------- -----------------
INVESTOR FIDUCIARY INVESTOR FIDUCIARY INVESTOR FIDUCIARY 1993 1992
-------- --------- -------- --------- -------- --------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD... $10.29 $ 10.38 $10.04 $ 10.11 $10.12 $ 11.13 $ 11.02 $ 10.29
------ ------ ------ ------ ------ ------ ------ ------
INVESTMENT ACTIVITIES
Net investment
income.............. 0.31 0.32 0.66 0.64 0.07 0.63 0.70 0.67
Net realized and
unrealized gains
(losses) on
investments......... 0.47 0.46 0.23 0.27 (0.05) (0.97) 0.35 0.77
------ ------ ------ ------ ------ ------ ------ ------
Total from
Investment
Activities...... 0.78 0.78 0.89 0.91 0.02 (0.34) 1.05 1.44
------ ------ ------ ------ ------ ------ ------ ------
DISTRIBUTIONS
From net investment
income.............. (0.32) (0.32) (0.64) (0.64) (0.10) (0.63) (0.70) (0.67)
From net realized
gains............... (0.01) (0.01) -- -- -- (0.01) (0.24) (0.04)
In excess of net
realized gains...... -- -- -- -- -- (0.04) -- --
------ ------ ------ ------ ------ ------ ------ ------
Total
Distributions... (0.33) (0.33) (0.64) (0.64) (0.10) (0.68) (0.94) (0.71)
------ ------ ------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF
PERIOD................ $10.74 $ 10.83 $10.29 $ 10.38 $10.04 $ 10.11 $ 11.13 $ 11.02
====== ====== ====== ====== ====== ====== ====== ======
Total Return (excludes
sales charges)........ 7.66%(e) 7.60%(e) 9.29% 9.43% (3.81)%(b) (3.14)% 10.07% 14.43%
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of
period (000)........ $1,181 $62,263 $ 558 $59,758 $ 7 $64,185 $33,279 $21,651
Ratio of expenses to
average net assets.. 0.88%(c) 0.88%(c) 0.92% 0.92% 0.99%(c) 0.86% 0.93% 0.91%
Ratio of net
investment income to
average net
assets.............. 5.98%(c) 6.02%(c) 6.29% 6.35% 5.77%(c) 6.11% 6.41% 6.23%
Ratio of expenses to
average net
assets*............. 1.59%(c) 1.59%(c) 1.89% 1.64% 2.96%(c) 1.37% 1.55% 1.55%
Ratio of net
investment income to
average net
assets*............. 5.27%(c) 5.31%(c) 5.32% 5.62% 3.80%(c) 5.60% 5.79% 5.59%
Portfolio turnover.... 8.89%(d) 8.89%(d) 36.20%(d) 36.20%(d) 44.33%(d) 44.33%(d) 58.81% 79.56%
</TABLE>
- ------------
(a) Period from commencement of operations. On June 20, 1994, the Bond Fund
commenced offering Investor Shares and designated existing shares as
Fiduciary Shares.
(b) Represents total return for the Fiduciary shares for the period from August
1, 1993 to June 19, 1994 plus the total return for the Investor Shares for
the period from June 20, 1994 to July 31, 1994.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
(e) Not annualized.
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
See notes to financial statements.
- ------
80
- ------
<PAGE> 84
- --------------------------------------------------------------------------------
GOVERNMENT BOND FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
JUNE 20, NOVEMBER 14,
FOR THE SIX MONTHS YEAR ENDED 1994 TO 1993 TO
ENDED JANUARY 31, JULY 31, JULY 31, JULY 31,
1996 (UNAUDITED) 1995 1994 (A) 1994 (A)
----------------------- -------------------- -------- ------------
INVESTOR FIDUCIARY INVESTOR FIDUCIARY INVESTOR FIDUCIARY
-------- --------- -------- --------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $ 9.43 $ 9.50 $ 9.36 $ 9.44 $ 9.47 $ 10.00
------ ------ ------ ------ ------- -------
INVESTMENT ACTIVITIES
Net investment income...................... 0.32 0.30 0.66 0.60 0.01 0.40
Net realized and unrealized gains (losses)
on investments........................... 0.22 0.24 0.01 0.06 (0.02 ) (0.56)
------ ------ ------ ------ ------- -------
Total from Investment Activities....... 0.54 0.54 0.67 0.66 (0.01 ) (0.16)
------ ------ ------ ------ ------- -------
DISTRIBUTIONS
From net investment income................. (0.30) (0.30) (0.60) (0.60) (0.10 ) (0.40)
------ ------ ------ ------ ------- -------
Total Distributions.................... (0.30) (0.30) (0.60) (0.60) (0.10 ) (0.40)
------ ------ ------ ------ ------- -------
NET ASSET VALUE, END OF PERIOD............... $ 9.67 $ 9.74 $ 9.43 $ 9.50 $ 9.36 $ 9.44
====== ====== ====== ====== ======= =======
Total Return (excludes sales charges)........ 5.79%(e) 5.75%(e) 7.47% 7.30% (2.42 )%(b)(e) (1.59)%(e)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).......... $1,107 $ 3,632 $ 68 $ 3,916 $ 5,171
Ratio of expenses to average net assets.... 0.85%(c) 0.85%(c) 0.85% 0.85% 0.87 %(c) 0.85%(c)
Ratio of net investment income to average
net assets............................... 6.04%(c) 6.00%(c) 6.25% 6.32% 4.37 %(c) 5.84%(c)
Ratio of expenses to average net assets*... 3.71%(c) 3.91%(c) 2.54% 2.29% 0.87 %(c) 3.09%(c)
Ratio of net investment income to average
net assets*.............................. 3.18%(c) 2.94%(c) 4.56% 4.88% 4.37 %(c) 3.60%(c)
Portfolio turnover (d)..................... 36.00% 36.00% 67.49% 67.49% 176.26 % 176.26%
</TABLE>
- ------------
(a) Period from commencement of operations. On June 20, 1994, the Government
Bond Fund commenced offering Investor Shares and designated existing shares
as Fiduciary Shares.
(b) Represents total return for the Fiduciary Shares from commencement of
operations to June 19, 1994, plus the total return for the Investor Shares
for the period from June 20, 1994 to July 31, 1994.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
(e) Not annualized.
* During the period, certain fees were voluntarily reduced. In addition,
certain expenses were reimbursed. If such voluntary fee reductions and
expense reimbursements had not occurred, the ratios would have been as
indicated.
See notes to financial statements.
------
81
------
<PAGE> 85
LOGO
- --------------------------------------------------------------------------------
INCOME EQUITY FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
JUNE 20, YEAR
FOR THE SIX MONTHS YEAR ENDED 1994 TO ENDED
ENDED JANUARY 31, JULY 31, JULY 31, JULY 31,
1996 (UNAUDITED) 1995 1994 (A) 1994 (A) YEAR ENDED JULY 31,
----------------------- ----------------------- ------------ --------- -----------------------
INVESTOR FIDUCIARY INVESTOR FIDUCIARY INVESTOR FIDUCIARY 1993 1994
-------- --------- -------- --------- ------------ --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET
VALUE,
BEGINNING OF
PERIOD...... $13.03 $ 13.00 $11.92 $ 11.92 $11.85 $ 12.13 $ 11.42 $ 10.22
------ -------- ------ -------- ----- -------- -------- -------
INVESTMENT
ACTIVITIES
Net
investment
income.... 0.22 0.21 0.42 0.44 0.04 0.39 0.38 0.40
Net realized
and
unrealized
gains on
investments... 2.13 2.13 1.55 1.50 0.08 0.12 0.71 1.20
------ -------- ------ -------- ----- -------- -------- -------
Total
from
Investment
Activities... 2.35 2.34 1.97 1.94 0.12 0.51 1.09 1.60
------ -------- ------ -------- ----- -------- -------- -------
DISTRIBUTIONS
From net
investment
income.... (0.22) (0.21) (0.44) (0.44) (0.05) (0.39) (0.38) (0.40)
From net
realized
gains..... (0.66) (0.66) (0.42) (0.42) -- (0.33) -- --
------ -------- ------ -------- ----- -------- -------- -------
Total
Distributions... (0.88) (0.87) (0.86) (0.86) (0.05) (0.72) (0.38) (0.40)
------ -------- ------ -------- ----- -------- -------- -------
NET ASSET
VALUE, END
OF PERIOD... $14.50 $ 14.47 $13.03 $ 13.00 $11.92 $ 11.92 $ 12.13 $ 11.42
====== ======== ====== ======== ===== ======== ======== =======
Total Return
(excludes
sales
charges).... 18.26%(e) 18.30%(e) 17.52% 17.26% 4.23%(b) 4.23% 9.75% 16.04%
RATIOS/SUPPLEMENTARY
DATA:
Net Assets
at end of
period
(000)..... $6,944 $ 263,183 $3,881 $ 221,325 $ 24 $ 213,328 $ 104,840 $ 74,478
Ratio of
expenses
to average
net
assets.... 1.04%(c) 1.04%(c) 1.06% 1.06% 1.10%(c) 1.06% 1.15% 1.16%
Ratio of net
investment
income to
average
net
assets.... 3.00%(c) 3.06%(c) 3.06% 3.59% 0.93%(c) 3.29% 3.27% 3.76%
Ratio of
expenses
to average
net
assets*... 1.28%(c) 1.28%(c) 1.55% 1.30% 1.33%(c) 1.10% 1.21% 1.29%
Ratio of net
investment
income to
average
net
assets*... 2.76%(c) 2.82%(c) 2.57% 3.34% 0.71%(c) 3.24% 3.22% 3.64%
Portfolio
turnover... 25.17%(d) 25.17%(d) 36.64%(d) 36.64%(d) 33.82%(d) 33.82%(d) 29.58% 23.05%
</TABLE>
- ------------
<TABLE>
<S> <C>
(a) Period from commencement of operations. On June 20, 1994, the Income Equity Fund commenced offering Investor
Shares and designated existing shares as Fiduciary Shares.
(b) Represents total return for the Fiduciary Shares for the period from August 1, 1993 to June 19, 1994 plus the
total return for the Investor Shares for the period from June 20, 1994 to July 31, 1994.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the
classes of shares issued.
(e) Not annualized.
* During the period, certain fees were voluntarily reduced. If such voluntary fee reductions had not occurred,
the ratios would have been as indicated.
</TABLE>
See notes to financial statements.
- ------
82
- ------
<PAGE> 86
- --------------------------------------------------------------------------------
BALANCED FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
JUNE 20, NOVEMBER 14,
FOR THE SIX MONTHS YEAR ENDED 1994 TO 1993 TO
ENDED JANUARY 31, JULY 31, JULY 31, JULY 31,
1996 (UNAUDITED) 1995 1994 (A) 1994 (A)
----------------------- -------------------- -------- ------------
INVESTOR FIDUCIARY INVESTOR FIDUCIARY INVESTOR FIDUCIARY
-------- --------- -------- --------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............. $10.79 $ 10.85 $ 9.71 $ 9.76 $ 9.71 $ 10.00
----- ------- ------ ------- ----- -------
INVESTMENT ACTIVITIES
Net investment income.......................... 0.20 0.20 0.43 0.39 -- 0.26
Net realized and unrealized gains (losses) on
investments.................................. 0.87 0.90 1.04 1.09 0.06 (0.24)
----- ------- ------ ------- ----- -------
Total from Investment Activities........... 1.07 1.10 1.47 1.48 0.06 0.02
----- ------- ------ ------- ----- -------
DISTRIBUTIONS
From net investment income..................... (0.20) (0.20) (0.39) (0.39) (0.06 ) (0.26)
----- ------- ------ ------- ----- -------
NET ASSET VALUE, END OF PERIOD................... $11.66 $ 11.75 $10.79 $ 10.85 $ 9.71 $ 9.76
===== ======= ====== ======= ===== =======
Total Return (excludes sales charges)............ 10.01%(d) 10.24%(d) 15.60% 15.62% (0.25 )%(d) 0.26%(d)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).............. $ 607 $34,055 $ 467 $29,961 $ 25,851
Ratio of expenses to average net assets........ 0.92%(b) 0.92%(b) 0.90% 0.89% 0.87%(b)
Ratio of net investment income to average net
assets....................................... 3.55%(b) 3.56%(b) 3.78% 3.93% 3.77%(b)
Ratio of expenses to average net assets*....... 1.77%(b) 1.77%(b) 2.05% 1.80% 1.79%(b)
Ratio of net investment income to average net
assets*...................................... 2.70%(b) 2.71%(b) 2.63% 3.02% 2.85%(b)
Portfolio turnover (c)......................... 3.53% 3.53% 20.70% 20.70% 44.14 % 44.14%
</TABLE>
- ------------
(a) Period from commencement of operations. On June 20, 1994, the Balanced Fund
commenced offering Investor Shares and designated existing shares as
Fiduciary Shares.
(b) Annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
(d) Not annualized.
* During the period, certain fees were voluntarily reduced. In addition,
certain expenses were reimbursed. If such voluntary fee reductions and
expense reimbursements had not occurred, the ratios would have been as
indicated.
See notes to financial statements.
------
83
------
<PAGE> 87
LOGO
- --------------------------------------------------------------------------------
GROWTH FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
JUNE 20, NOVEMBER 18,
FOR THE SIX MONTHS YEAR ENDED 1994 TO 1993 TO
ENDED JANUARY 31, JULY 31, JULY 31, JULY 31,
1996 (UNAUDITED) 1995 1994 (A) 1994 (A)
----------------------- -------------------- -------- ------------
INVESTOR FIDUCIARY INVESTOR FIDUCIARY INVESTOR FIDUCIARY
-------- --------- -------- --------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............ $11.87 $ 11.87 $ 9.77 $ 9.76 $ 9.74 $ 10.00
----- ------- ------ ------- ----- -------
INVESTMENT ACTIVITIES
Net investment income......................... 0.07 0.06 0.15 0.15 -- 0.05
Net realized and unrealized gains (losses) on
investments................................. 1.30 1.28 2.25 2.26 0.04 (0.24)
----- ------- ------ ------- ----- -------
Total from Investment Activities.......... 1.37 1.34 2.40 2.41 0.04 (0.19)
----- ------- ------ ------- ----- -------
DISTRIBUTIONS
From net investment income.................... (0.06) (0.06) (0.15) (0.15) (0.01 ) (0.05)
From net realized gains....................... (0.64) (0.64) (0.15) (0.15) -- --
----- ------- ------ ------- ----- -------
Total Distributions....................... (0.70) (0.70) (0.30) (0.30) (0.01 ) (0.05)
----- ------- ------ ------- ----- -------
NET ASSET VALUE, END OF PERIOD.................. $12.54 $ 12.51 $11.87 $ 11.87 $ 9.77 $ 9.76
===== ======= ====== ======= ===== =======
Total Return (excludes sales charges)........... 11.84%(e) 11.59%(e) 25.10% 25.23% (1.77 )%(b) (1.87)%(e)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)............. $2,081 $35,416 $1,218 $25,096 $ 15,254
Ratio of expenses to average net assets....... 0.89%(c) 0.89%(c) 0.84% 0.79% 0.77%(c)
Ratio of net investment income to average net
assets...................................... 1.05%(c) 1.05%(c) 1.17% 1.40% 0.86%(c)
Ratio of expenses to average net assets*...... 1.85%(c) 1.86%(c) 2.11% 1.92% 2.61%(c)
Ratio of net investment income to average net
assets*..................................... 0.09%(c) 0.08%(c) (0.10)% 0.26% (0.98)%(c)
Portfolio turnover (d)........................ 44.27% 44.27% 67.91% 67.91% 123.26 % 123.26%
</TABLE>
- ------------
(a) Period from commencement of operations. On June 20, 1994, the Growth Fund
commenced offering Investor Shares and designated existing shares as
Fiduciary Shares.
(b) Represents total return for the Fiduciary Shares from commencement of
operations to June 19, 1994 plus the total return for the Investor Shares
for the period from June 20, 1994 to July 31, 1994.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
(e) Not annualized.
* During the period, certain fees were voluntarily reduced. In addition,
certain expenses were reimbursed. If such voluntary fee reductions and
expense reimbursements had not occurred, the ratios would have been as
indicated.
See notes to financial statements.
- ------
84
- ------
<PAGE> 88
- --------------------------------------------------------------------------------
INCOME & GROWTH FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
JUNE 20, NOVEMBER 14,
FOR THE SIX MONTHS YEAR ENDED 1994 TO 1993 TO
ENDED JANUARY 31, JULY 31, JULY 31, JULY 31,
1996 (UNAUDITED) 1995 1994 (A) 1994 (A)
----------------------- -------------------- -------- ------------
INVESTOR FIDUCIARY INVESTOR FIDUCIARY INVESTOR FIDUCIARY
-------- --------- -------- --------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $11.75 $ 11.74 $ 9.97 $ 9.96 $ 9.86 $10.00
----- ------- ------ ------- ----- -------
INVESTMENT ACTIVITIES
Net investment income...................... 0.13 0.14 0.27 0.25 -- 0.20
Net realized and unrealized gains (losses)
on investments........................... 1.26 1.25 1.76 1.78 0.14 (0.04)
----- ------- ------ ------- ----- -------
Total from Investment Activities....... 1.39 1.39 2.03 2.03 0.14 0.16
----- ------- ------ ------- ----- -------
DISTRIBUTIONS
From net investment income................. (0.14) (0.14) (0.25) (0.25) (0.03) (0.20)
From net realized gains.................... (0.69) (0.69) -- -- -- --
----- ------- ------ ------- ----- -------
Total Distributions.................... (0.83) (0.83) (0.25) (0.25) (0.03) (0.20)
----- ------- ------ ------- ----- -------
NET ASSET VALUE, END OF PERIOD............... $12.31 $ 12.30 $11.75 $ 11.74 $ 9.97 $ 9.96
===== ======= ====== ======= ===== =======
Total Return (excludes sales charges)........ 11.98%(e) 12.08%(e) 20.67% 20.68% 1.73%(b) 1.63%(e)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).......... $ 268 $ 5,982 $ 215 $ 6,669 $4,771
Ratio of expenses to average net assets.... 0.98%(c) 0.98%(c) 0.97% 0.97% 0.88%(c) 0.95%(c)
Ratio of net investment income to average
net assets............................... 2.18%(c) 2.19%(c) 2.23% 2.37% 0.88%(c) 2.86%(c)
Ratio of expenses to average net assets*... 3.42%(c) 3.42%(c) 2.66% 2.41% 0.88%(c) 3.27%(c)
Ratio of net investment income (loss) to
average net assets*...................... (0.26)%(c) (0.25)%(c) 0.54% 0.93% 0.88%(c) 0.54%(c)
Portfolio turnover (d)..................... 20.02% 20.02% 15.01% 15.01% 97.24% 97.24%
</TABLE>
- ------------
(a) Period from commencement of operations. On June 20, 1994, the Income &
Growth Fund commenced offering Investor Shares and designated existing
shares as Fiduciary Shares.
(b) Represents total return for the Fiduciary Shares from commencement of
operations to June 19, 1994 plus the total return for the Investor Shares
for the period from June 20, 1994 to July 31, 1994.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
(e) Not annualized.
* During the period, certain fees were voluntarily reduced. In addition,
certain expenses were reimbursed. If such voluntary fee reductions and
expense reimbursements had not occurred, the ratios would have been as
indicated.
See notes to financial statements.
------
85
------
<PAGE> 89
(THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE> 90
(THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE> 91
[LOGO]
HIGHMARK
MUTUAL FUND GROUP
ANNUAL
REPORT
JANUARY 31, 1995
INVESTMENT ADVISER
MERUS CAPITAL MANAGEMENT
A DIVISION OF THE BANK OF CALIFORNIA, N.A.
400 CALIFORNIA STREET
P.O. BOX 45000
SAN FRANCISCO, CA 94104
CUSTODIAN
THE BANK OF CALIFORNIA, N.A.
400 CALIFORNIA STREET
P.O. BOX 45000
SAN FRANCISCO, CA 94104
ADMINISTRATOR & DISTRIBITOR
BISYS FUND SERVICES
3435 STELZER ROAD
COLUMBUS, OH 43219
NOT FDIC INSURED
