-------------------
INSTITUTIONAL CLASS
-------------------
SHORT-TERM BOND MARKET FUND
INTERMEDIATE BOND MARKET FUND
TAX-EXEMPT INTERMEDIATE BOND FUND
BOND IMMDEX(TM) FUND
SEMI-ANNUAL REPORT
APRIL 30, 1998
TO GET THERE, START HERE.(SM)
FIRSTAR
FUND
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NOTICE TO INVESTORS
- - Shares of Firstar Funds:
- ARE NOT INSURED BY THE FDIC, the US Government or any other governmental
agency;
- are not bank deposits or obligations of or guaranteed by Firstar Bank, its
parent company or its affiliates;
- are subject to investment risks, including possible loss of principal; and
- are offered by B.C. Ziegler and Company, member NASD, SIPC, and an
independent third-party distributor.
- -Firstar Bank affiliates serve as investment adviser, custodian, transfer
agent, administrator, and accounting services agent and receive compensation
for such services as disclosed in the current prospectus.
TABLE OF CONTENTS
Page(s)
SHAREOWNER LETTER........................................................1-2
STEADY GROWTH, LOW INFLATION AND A FLAT YIELD CURVE......................3-5
LOOKING AHEAD.............................................................5
SHORT-TERM BOND MARKET FUND REVIEW.......................................6-7
INTERMEDIATE BOND MARKET FUND REVIEW.....................................8-9
TAX-EXEMPT INTERMEDIATE BOND FUND REVIEW................................10-11
BOND IMMDEX(TM) FUND REVIEW.............................................12-13
STATEMENT OF ASSETS AND LIABILITIES.......................................14
STATEMENT OF OPERATIONS...................................................15
STATEMENT OF CHANGES IN NET ASSETS........................................16
FINANCIAL HIGHLIGHTS....................................................17-20
SCHEDULE OF INVESTMENTS.................................................21-30
NOTES TO THE FINANCIAL STATEMENTS.......................................31-34
FIRSTAR
FUNDS
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JUNE 1998
DEAR SHAREHOLDER:
INVESTMENT REVIEW
During the first half of our fiscal year, financial markets were strong,
rewarding investors that stayed the course. Robust U.S. employment gains, rising
incomes and declining levels of inflation drove consumer confidence to record
highs. Gains in consumer spending (responsible for two-thirds of U.S. economic
activity) on everything from housing to apparel to financial services kept U.S.
economic growth at impressive levels.
Despite solid economic underpinnings, the Asian financial crisis and the fear
that inflation is "just around the corner" will sustain above-average volatility
in the financial markets. However, even with all the ups and downs, we continue
to believe the long-term return potential of stocks and high quality bonds calls
for a consistent approach to asset allocation. Remember, it's time, not timing,
and a disciplined approach to asset allocation that wins the investment
marathon.
The Taxpayer Relief Act of 1997 created additional opportunities for IRA
investors to more aggressively prepare for their retirement. Many of you may
have already taken advantage of the new tax legislation by starting a Roth IRA.
Now, more than ever, it's important to consult your tax adviser to understand
how you can best benefit from favorable new tax laws.
The renaming of our fund family - from Portico to Firstar Funds - on February 1,
1998 aligned us more closely with our parent company and eliminated any
confusion over the relationship between the two organizations. Many enhancements
have been made to Firstar Funds literature as well as to the Firstar Funds' web
site at www.firstarfunds.com. Newly introduced, Firstar Funds Direct allows you
to access information regarding your account(s) on-line. Look for transactional
capabilities to become available on-line this summer. These are just a few of
the ways we are adding value to our servicing efforts. Our goal is to make it
easy and convenient for you to access your account(s) - 24 hours a day, seven
days a week.
MARKET OUTLOOK
Looking ahead, our market forecast is predicated on the following trends:
- - The Asian "flu" has devolved to "pneumonia."
- - The absence of a Japanese economic "tugboat" to pull the Pacific Rim out of
its decline (a la the U.S. in the 1995 Mexican crisis) will deepen and
lengthen the region's financial woes.
- - Reduced demand for U.S. exports due to the dollar's strength and a surge in
Asian imports will balloon the U.S. trade deficit to $200-$250 billion in
1998, creating a drag on the U.S. economy equivalent to 2%-3% of GDP.
- - Rising U.S. wages along with today's competitive, no-pricing-power
environment are squeezing corporate profits and increasing the "urge to
merge" as companies have no alternative but to acquire their competitors and
then cut costs to grow earnings.
- - Competition from imports and global overcapacity in manufacturing (e.g.
autos) and commodities (e.g. oil) will keep U.S. inflation subdued with the
Consumer Price Index (CPI) rising just 1%-1.5% in 1998.
- - Low unemployment and rising "real" (inflation-adjusted) wages in the U.S. are
fueling a boom in consumer spending, sustaining the current U.S. economic
expansion (now in its eighth year) despite the weakness in U.S. foreign trade
and the drag from a federal budget surplus.
- - After the first quarter's strong 4.8% advance in real GDP, U.S. economic
growth will slow to a 2%-3% rate, bringing the full-year 1998 gain in
economic output to approximately 3%.
- - Prospects for continued low levels of inflation and a slowdown in U.S.
economic growth make today's historically high inflation-adjusted bond yields
very attractive.
FIRSTAR
FUNDS
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- - U.S. bond market supply/demand trends favor lower interest rates as a likely
$75 billion swing in the federal budget from deficit to surplus reduces
supply while a strong dollar attracts foreign capital and increases demand.
- - A profits squeeze for the big, multi-national U.S. companies due to rising
wages, Asia's woes and a strong dollar could signal a cyclical peak in the
relative outperformance of large company stocks as their earnings growth
slows and the price-to-earnings multiples awarded their stocks are
compressed.
- - With stock performance driven by just two variables - earnings and the
multiple investors are willing to put on those earnings - prospects for small
and medium-sized company stocks are getting brighter given their
underexposure to Asia, improved relative earnings growth and attractive
valuations (i.e. price-to-earnings multiples).
- - During the next several months, we expect one, perhaps two, stock market
declines of 10%-15%. Yet despite the likelihood of increased market
volatility in the near-term, we are sticking with our beginning-of-the-year
outlook for above-average stock market returns in calendar 1998.
IN SUMMARY
Looking ahead, we see continued moderate economic growth and low levels of
inflation. Although market volatility may heighten anxiety levels, we believe
1998 will be another good year for investors. Finally, given the market's
tremendous gains over the past few years, it may be an opportune time to review
your portfolio. Uneven gains can sidetrack a well-planned investment strategy.
Make sure you are properly diversified.
As always, we appreciate your confidence in the Firstar Funds and encourage you
to read the portfolio reviews that follow.
(photo) (photo)
J. SCOTT HARKNESS, CFA MARY ELLEN STANEK, CFA
Chairman & Chief President
Investment Officer
Firstar Investment Research & Management Company, LLC (FIRMCO)
FIRSTAR
FUNDS
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STEADY GROWTH, LOW INFLATION AND A FLAT YIELD CURVE
The economy has continued on its steady growth/low inflation trek producing
ideal conditions for the financial markets. First quarter GDP (Gross Domestic
Product) grew by 4.8% after adjusting for inflation. Inflation, as measured by
the CPI (Consumer Price Index), was unchanged in the first quarter and for the
12 months ended March 31, 1998 was up just 1.4%. With inflation (the number one
enemy of the bond market) on the retreat, the bond market, along with the stock
market, has advanced. Long-term yields have fallen 20 basis points over the last
6 months while short-term yields, supported by a determined Federal Reserve, are
essentially unchanged. The result has been further flattening of an already flat
U.S. Treasury yield curve (see graph, below).
Maturity 10/31/97 4/30/98
(years) Yield (%) Yield (%)
-------- --------- ---------
1 5.35 5.38
2 5.61 5.57
3 5.68 5.60
5 5.72 5.64
7 5.84 5.73
10 5.83 5.67
30 6.15 5.95
We believe that inflation will remain subdued and see the flat yield curve as an
indication of the market's confidence in the Fed's resolve to contain inflation.
FIRSTAR
FUNDS
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HIGH REAL YIELDS
While nominal yields may appear low by historical standards, real yields, or
nominal yields less inflation, are high as the following chart shows. We believe
the bond market currently offers good value to investors seeking attractive
inflation-adjusted returns.
REAL YIELDS
HISTORICAL VS. CURRENT
(3, 5 & 10 YR. U.S. TREASURY NOTES)
--------------------------------------
TREASURY HISTORICAL AVERAGE CURRENT
NOTE (1960-PRESENT) (4/30/98)
------- ----------------- --------
3 YR. 2.42% 4.18%
5 YR. 2.57% 4.21%
10 YR. 2.77% 4.24%
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FIRSTAR FAMILY OF FIXED-INCOME FUNDS
- --------------------------------------------------------------------------------
SHORT-TERM INTERMEDIATE-TERM BOND FUNDS LONG-TERM
BOND FUND BOND FUND
- --------------------------------------------------------------------------------
FIRSTAR FIRSTAR FIRSTAR FIRSTAR
SHORT-TERM INTERMEDIATE TAX-EXEMPT BOND
BOND MARKET BOND MARKET INTERMEDIATE IMMDEX (TM)
FUND FUND BOND FUND FUND
- --------------------------------------------------------------------------------
LEHMAN LEHMAN LEHMAN LEHMAN
BROTHERS BROTHERS BROTHERS BROTHERS
BENCHMARK 1-3 YEAR INTERMEDIATE 5-YEAR GENERAL GOV'T./CORP.
GOV'T./CORP. GOV'T./CORP. OBLIGATION BOND
BOND INDEX BOND INDEX BOND INDEX INDEX
AVERAGE QUALITY
OF HOLDINGS<F1> AA AA AAA AA
AVERAGE MATURITY 2.8 YEARS 5.3 YEARS 5.1 YEARS 10.6 YEARS
- --------------------------------------------------------------------------------
DURATION 1.7 YEARS 3.3 YEARS 4.2 YEARS 5.4 YEARS
- --------------------------------------------------------------------------------
PRINCIPAL VOLATILITY LOW MODERATE MODERATE MODERATE-HIGH
- --------------------------------------------------------------------------------
Lehman Brothers is neither a sponsor of nor affiliated with Firstar Funds. An
investment cannot be made in an index. Average quality, maturity and duration
reflect the portfolio as of April 30, 1998, and will change from time to time in
connection with the management of the portfolios pursuant to the policies
described in the current prospectus.
<F1> Dollar weighted average quality of portfolio securities held by the Funds.
FIRSTAR
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GUESSING ON RATES - A DANGEROUS GAME
Despite declining inflation and high real yields, many bond managers anticipated
higher inflation and rising interest rates for this year. They shortened the
duration and decreased the interest rate sensitivity of their portfolios
relative to their benchmarks late last year. By keeping their portfolios shorter
than their benchmarks, they hoped to outperform by minimizing the effects of the
rise in rates they saw coming. With a slight decrease in rates so far this year,
many of these managers now find themselves behind the performance of their
benchmarks. WE MAINTAIN THAT ATTEMPTING TO TIME CHANGES IN INTEREST RATES IS
EXTREMELY DIFFICULT AND, IN THE LONG RUN, A SELF-DEFEATING GAME.
Our unwavering approach for the Firstar bond funds is to adhere to our
structured, or duration-matched, fixed-income management style. Our management
approach does not change with the market; we match the interest rate sensitivity
(duration) of each fund to that of its benchmark. Because we can effectively
measure and control the price risk of a portfolio so that the return mirrors the
selected index, it is possible to enhance the return without measurably
increasing the risk of the portfolio (relative to the benchmark). Thus, keeping
risks in line with objectives, our goal for each fund is to outperform its
benchmark on a consistent basis before fund expenses. We believe that
incremental outperformance on a consistent basis leads to superior performance
in the long run.
LOOKING AHEAD
For the balance of 1998, we expect many of the same key trends to continue.
Moderate economic growth coupled with continued low levels of inflation provide
attractive real or inflation-adjusted yields across all bond portfolios. We
expect the yield curve to remain flat and volatility to remain high. In this
environment, our long-standing approach to stay duration-neutral to our
benchmark and add value through our issue selection, sector allocation and yield
curve positioning decisions will provide our shareowners with attractive
inflation-adjusted returns.
MARY ELLEN STANEK, CFA
TERESA R. WESTMAN, CFA
DANIEL A. TRANCHITA, CFA
WARREN D. PIERSON, CFA
Portfolio Managers
Firstar Investment Research & Management Company, LLC (FIRMCO)
FIRSTAR
FUNDS
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SHORT-TERM BOND MARKET FUND
FIRSTAR SHORT-TERM BOND MARKET FUND seeks to provide an annual rate of total
return comparable to that of the Lehman Brothers 1-3 Year Government/Corporate
Bond Index, before Fund expenses. In order to achieve its objective, the Fund
may invest in securities with maturities longer than three years, in addition to
shorter bonds and notes.
INTEREST RATE SENSITIVITY AND RETURN
This Fund's maturity mix gives it an overall AVERAGE PORTFOLIO MATURITY OF 2.8
YEARS, and a DURATION OF 1.7 YEARS. Because the Short-Term Bond Market Fund's
duration of 1.7 years is less than the durations of the other Firstar taxable
bond funds, when interest rates increase it will display less downward price
movement than the Intermediate Bond Market Fund and the Bond IMMDEX (TM) Fund.
But, when interest rates decrease, this Fund will also exhibit less price
appreciation than the Intermediate Bond Market Fund and the Bond IMMDEX (TM)
Fund.
The shorter average maturity and duration of this Fund did not have a
significant impact on its performance for the six months ended April 30, 1998. A
slight decrease in interest rates (2-year U.S. Treasury rates decreased by 5
basis points to 5.57%) resulted in a six-month total return for the Fund of
+2.82%. This compares to the Fund's benchmark, the Lehman Brothers 1-3 Year
Government Corporate Bond Index, which had a total return of +2.89% for the same
period. Additionally, THIS REPRESENTS A HIGH REAL RATE OF RETURN WHEN COMPARED
TO THE CPI, WHICH OVER THE SAME PERIOD INCREASED ONLY A HALF OF ONE PERCENT.
SECTOR ALLOCATION
While the Fund's duration is the single most significant determinant of its
return, other factors are important too. The Fund's exposure to credit-sensitive
issues including corporate bonds and notes and asset-backed securities is one
determinant of its relative performance. CORPORATE BONDS AND NOTES ARE SELECTED
FOR THE FUND IN A RESEARCH-INTENSIVE PROCESS FROM THE FIXED-INCOME INVESTMENT
GRADE UNIVERSE. Sectors that we currently favor include: finance, banking and
brokerage, dollar-denominated international, asset-backed securities, and
mortgage-backed securities. Asset-backed securities in the Fund are all rated
highly by Moody's or Standard & Poor's. They represent the highest credit
quality of non-U.S. Government investments in the portfolio. ALMOST TWO-THIRDS
OF THE FUND (66%) IS INVESTED IN OBLIGATIONS RATED Aaa/AAA OR HIGHER.
FOREIGN EXPOSURE
THE FUND DOES NOT INVEST IN SECURITIES DENOMINATED IN FOREIGN CURRENCIES. AS
SUCH, IT HAS NO DIRECT EXPOSURE TO FOREIGN CURRENCY FLUCTUATIONS. The Fund does,
however, invest in Yankee securities. Yankees are obligations of foreign
entities denominated in U.S. dollars. Yankee investments total 7% of the Fund
and include credits of Canadian, European and Asian entities. Currently, Yankee
bond obligations are the fastest growing sector of the U.S. domestic corporate
bond market. Investing in Yankee issues has enabled us to capitalize on
opportunities in foreign bonds without exposing our investors to currency risk.
With recent market turmoil originating in the Pacific Rim countries, spreads on
some of the Fund's Yankee issues have widened significantly. This has resulted
in negative relative performance on these securities. AT CURRENT YIELD LEVELS,
WE FEEL THE FUND'S YANKEE BONDS REPRESENT EXCEPTIONAL VALUE. We anticipate that
they will outperform similarly rated investments in the coming year. See page 21
for a complete listing of portfolio holdings.
CONSISTENCY IS THE HALLMARK OF OUR APPROACH
Since Firstar Short-Term Bond Market Fund's inception on 12/29/89, we have
adhered to the same disciplined management approach. The past five years have
brought us more volatility in the fixed-income markets than many would have
expected. THE HALLMARK OF OUR APPROACH HAS BEEN THE FUND'S CONSISTENT
PERFORMANCE IN ALL MARKET CLIMATES. Firstar Short-Term Bond Market Fund's
returns have been comparable to the benchmark in periods of rising interest
rates and falling interest rates. Our goal is to continue to deliver this same
consistent performance in the future. We look forward to continuing to serve you
as Firstar Fund shareowners.
(PHOTO) (PHOTO)
MARY ELLEN STANEK, CFA DANIEL A. TRANCHITA, CFA
PORTFOLIO MANAGER PROFILE
- --------------------------------------------------------------------------------
MARY ELLEN STANEK, CFA, President of Firstar Investment Research & Management
Company, LLC (FIRMCO) and DANIEL A. TRANCHITA, CFA, Vice President and Senior
Portfolio Manager, co-manage the Fund - Mary Ellen since its inception on
December 29, 1989 and Dan since January 1, 1993. Mary Ellen has 19 years of
investment management experience and was named a Director of FIRMCO in 1992.
Prior to joining FIRMCO, she headed the Fixed Income and Quantitative Investment
Management Department at Firstar Trust Company. Mary Ellen received her BA from
Marquette University in 1978 and her MBA from the University of Wisconsin-
Milwaukee in 1984. Dan has been with Firstar since 1989 and has nine years of
investment management experience. He received his BA in 1987 and his MBA in 1989
from Marquette University. Mary Ellen and Dan are both Chartered Financial
Analysts.
FIRSTAR
FUNDS
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FIRSTAR SHORT-TERM BOND MARKET FUND
- -----------------------------------
12/29/89 10,000
10/90 10,464
10/91 11,865
10/92 12,966
10/93 13,833
10/94 14,035
10/95 15,290
10/96 16,177
10/97 17,223
4/98 17,709
This chart assumes an initial investment of $10,000 made on 12/29/89
(inception). Performance reflects fee waivers in effect. In the absence of fee
waivers, total return would be reduced. Returns shown include the reinvestment
of all dividends and other distributions. Past performance is not predictive of
future performance. Investment return and principal value will fluctuate, so
that your shares, when redeemed, may be worth more or less than their original
cost.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RATE OF RETURN (%)
FOR PERIODS ENDED APRIL 30, 1998
- --------------------------------------------------------------------------------
FISCAL SINCE
YEAR-TO- 1 3 5 INCEPTION
DATE YEAR YEARS YEARS 12/29/89
- --------------------------------------------------------------------------------
FIRSTAR SHORT-TERM BOND MARKET FUND 2.8 7.0 6.7 5.6 7.1
Lehman Brothers 1-3 Year Gov't./Corp.
Bond Index<F1> 2.9 7.2 6.8 5.5 7.0
- --------------------------------------------------------------------------------
<F1> The Lehman Brothers 1-3 Year Gov't./Corp. Bond Index is an unmanaged market
value weighted index measuring both principal price changes of, and income
provided by, the underlying universe of securities that comprise the
index. Securities included in the index must meet the following criteria:
fixed as opposed to variable rate; not less than one year to maturity; not
more than three years remaining to maturity; and minimum outstanding par
value of $100 million. An investment cannot be made directly in an index.
Effective at the close of business on January 9, 1995, Firstar Funds began to
offer Series A (retail) shares and Series Institutional shares. Series A shares,
unlike the Series Institutional shares, have a 2% maximum sales load and are
subject to an annual 0.25% service organization fee. In addition, the purchase
price adjustment on the Fund no longer applies to either the Series A or Series
Institutional shares. The performance for the Series Institutional shares has
been restated to reflect the elimination of the purchase price adjustment.
Performance reflects fee waivers in effect. In the absence of fee waivers, total
return would be reduced.
SECTOR DISTRIBUTION
4/30/98
- -----------------------------------
U.S. Treasury 15%
- -----------------------------------
U.S. Government Agency 14%
- -----------------------------------
Mortgage-Backed 14%
- -----------------------------------
Finance, Banking, Brokerage 17%
- -----------------------------------
Industrial 5%
- -----------------------------------
Utility 1%
- -----------------------------------
International/Yankee 7%
- -----------------------------------
Asset-Backed 24%
- -----------------------------------
Cash 2%
- -----------------------------------
Taxable Municipal 1%
- -----------------------------------
Total 100%
- -----------------------------------
PORTFOLIO COMPOSITION
4/30/98
- -----------------------------------
Average Maturity 2.8 Years
- -----------------------------------
Average Duration 1.7 Years
- -----------------------------------
QUALITY DISTRIBUTION
4/30/98
- -----------------------------------
U.S. Treasury 15%
- -----------------------------------
U.S. Government Agency 14%
- -----------------------------------
Aaa 37%
- -----------------------------------
Aa 5%
- -----------------------------------
A 24%
- -----------------------------------
Baa 4%
- -----------------------------------
Ba 1%
- -----------------------------------
Total 100%
- -----------------------------------
SEC 30-DAY YIELD
- -----------------------------------
5.80%
- -----------------------------------
TOTAL FUND NET ASSETS
4/30/98
- -----------------------------------
$175,244,901
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FIRSTAR
FUNDS
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INTERMEDIATE BOND MARKET FUND
FIRSTAR INTERMEDIATE BOND MARKET FUND seeks to provide an annual rate of total
return comparable to that of the Lehman Brothers Intermediate
Government/Corporate Bond Index, before Fund expenses. In order to achieve its
objective, the Fund may invest in securities with long remaining maturities (10
years or longer), in addition to shorter bonds and notes.
INTEREST RATE SENSITIVITY AND RETURN
This Fund's maturity mix gives it an overall AVERAGE PORTFOLIO MATURITY OF 5.3
YEARS, and a DURATION OF 3.3 YEARS. Because the Intermediate Bond Market Fund's
duration of just over three years is between the durations of the other Firstar
taxable bond funds, when interest rates increase it will display more downward
price movement than the Short-Term Bond Market Fund and less than the Bond
IMMDEX(TM) Fund. But, when interest rates decrease, this Fund will exhibit
greater price appreciation than the Short-Term Bond Market Fund and less than
the Bond IMMDEX(TM) Fund.
The intermediate average maturity and duration of the fund did not have a
significant impact on its performance for the six months ended April 30, 1998. A
slight decrease in interest rates (5-year U.S. Treasury rates decreased by 0.1%
to 5.6%) resulted in a six-month total return for the Fund of +2.81%. This
compares to the Fund's benchmark, the Lehman Brothers Intermediate Government
Corporate Bond Index, which had a total return of +3.11% for the same period.
Additionally, THIS REPRESENTS A HIGH REAL RATE OF RETURN WHEN COMPARED TO THE
CPI, WHICH OVER THE SAME PERIOD INCREASED ONLY A HALF OF ONE PERCENT.
SECTOR ALLOCATION
While the Fund's duration is the single most significant determinant of its
return, other factors are important too. The Fund's exposure to credit-sensitive
issues including corporate bonds and notes and asset-backed securities is one
determinant of its relative performance. CORPORATE BONDS AND NOTES ARE SELECTED
FOR THE FUND IN A RESEARCH-INTENSIVE PROCESS FROM THE FIXED-INCOME INVESTMENT
GRADE UNIVERSE. Sectors that we currently favor include: finance, banking and
brokerage, dollar-denominated international, and asset-backed securities. Asset-
backed securities in the Fund are all rated Aaa/AAA by Moody's or Standard &
Poor's. They represent the highest credit quality of non-U.S. Government
investments available. OVER HALF OF THE FUND, (59%), IS INVESTED IN OBLIGATIONS
RATED Aaa/AAA OR HIGHER.
FOREIGN EXPOSURE
THE FUND DOES NOT INVEST IN SECURITIES DENOMINATED IN FOREIGN CURRENCIES. AS
SUCH, IT HAS NO DIRECT EXPOSURE TO FOREIGN CURRENCY FLUCTUATIONS. The Fund does,
however, invest in Yankee securities. Yankees are obligations of foreign
entities denominated in U.S. dollars. Yankee investments total 8% of the Fund
and include credits of Canadian, European and Asian entities. Currently, Yankee
bond obligations are the fastest growing sector of the U.S. domestic corporate
bond market. Investing in Yankee issues has enabled us to capitalize on
opportunities in foreign bonds without exposing our investors to currency risk.
With recent market turmoil originating in the Pacific Rim countries, spreads on
some of the Fund's Yankee issues have widened significantly. This has resulted
in negative relative performance on these securities. AT CURRENT YIELD LEVELS,
WE FEEL THE FUND'S YANKEE BONDS REPRESENT EXCEPTIONAL VALUE. We anticipate that
they will outperform similarly rated investments in the coming year. See page 23
for a complete listing of portfolio holdings.
CONSISTENCY IS THE HALLMARK OF OUR APPROACH
Since Firstar Intermediate Bond Market Fund's inception on 1/5/93, we have
adhered to the same disciplined management approach. The past five years have
brought us more volatility in the fixed-income markets than many would have
expected. THE HALLMARK OF OUR APPROACH HAS BEEN THE FUND'S CONSISTENT
PERFORMANCE IN ALL MARKET CLIMATES. Firstar Intermediate Bond Market Fund's
returns have been comparable to the benchmark in periods of rising interest
rates and falling interest rates. Our goal is to continue to deliver this same
consistent performance in the future. We look forward to continuing to serve you
as Firstar Fund shareowners.
(PHOTO) (PHOTO)
MARY ELLEN STANEK, CFA TERESA R. WESTMAN, CFA
PORTFOLIO MANAGER PROFILE
- --------------------------------------------------------------------------------
MARY ELLEN STANEK, CFA, President of Firstar Investment Research & Management
Company, LLC (FIRMCO) and TERESA R. WESTMAN, CFA, Senior Vice President and
Senior Portfolio Manager have co-managed the Fund since its inception on January
5, 1993. Mary Ellen has 19 years of investment management experience and was
named a Director of FIRMCO in 1992. Prior to joining FIRMCO, she headed the
Fixed Income and Quantitative Investment Management Department at Firstar Trust
Company. Mary Ellen received her BA from Marquette University in 1978 and her
MBA from the University of Wisconsin-Milwaukee in 1984. Teresa has been with
Firstar since 1987 and has 11 years of investment management experience. Teresa
received her BA from Augustana College in 1985 and her MBA from the University
of Chicago in 1991. Mary Ellen and Teresa are both Chartered Financial
Analysts.
FIRSTAR
FUNDS
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FIRSTAR INTERMEDIATE BOND MARKET FUND
- -------------------------------------
1/5/93 10,000
10/93 10,858
10/94 10,670
10/95 11,978
10/96 12,669
10/97 13,602
4/98 13,983
This chart assumes an initial investment of $10,000 made on 1/5/93 (inception).
Performance reflects fee waivers in effect. In the absence of fee waivers, total
return would be reduced. Returns shown include the reinvestment of all dividends
and other distributions. Past performance is not predictive of future
performance. Investment return and principal value will fluctuate, so that your
shares, when redeemed, may be worth more or less than their original cost.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RATE OF RETURN (%)
FOR PERIODS ENDED APRIL 30, 1998
- --------------------------------------------------------------------------------
FISCAL SINCE
YEAR-TO- 1 3 5 INCEPTION
DATE YEAR YEARS YEARS 1/5/93
- --------------------------------------------------------------------------------
FIRSTAR INTERMEDIATE BOND MARKET FUND 2.8 8.5 7.6 6.0 6.5
LEHMAN BROTHERS INTERMEDIATE
GOV'T./CORP. BOND INDEX<F1> 3.1 8.9 7.7 6.1 6.6
- --------------------------------------------------------------------------------
<F1> The Lehman Brothers Intermediate Gov't./Corp. Bond Index is an unmanaged
market value weighted index measuring both principal price changes of, and
income provided by, the underlying universe of securities that comprise
the index. Securities included in the index must meet the following
critieria: fixed as opposed to variable rate; remaining maturity of one to
ten years; minimum outstanding par value of $100 million; and rated
investment grade or higher by Moody's, Standard & Poor's, or Fitch, in that
order. An investment cannot be made directly in an index.
Effective at the close of business on January 9, 1995, Firstar Funds began to
offer Series A (retail) shares and Series Institutional shares. Series A shares,
unlike the Series Institutional shares, have a 2% maximum sales load and are
subject to an annual 0.25% service organization fee. In addition, the purchase
price adjustment on the Fund no longer applies to either the Series A or Series
Institutional shares. The performance for the Series Institutional shares has
been restated to reflect the elimination of the purchase price adjustment.
Performance reflects fee waivers in effect. In the absence of fee waivers, total
return would be reduced.
SECTOR DISTRIBUTION
4/30/98
- -----------------------------------
U.S. Treasury 28%
- -----------------------------------
U.S. Government Agency 6%
- -----------------------------------
Mortgage-Backed 4%
- -----------------------------------
Finance, Banking, Brokerage 22%
- -----------------------------------
Industrial 9%
- -----------------------------------
International/Yankee 8%
- -----------------------------------
Asset-Backed 21%
- -----------------------------------
Cash 2%
- -----------------------------------
Total 100%
- -----------------------------------
PORTFOLIO COMPOSITION
4/30/98
- -----------------------------------
Average Maturity 5.3 Years
- -----------------------------------
Average Duration 3.3 Years
- -----------------------------------
QUALITY DISTRIBUTION
4/30/98
- -----------------------------------
U.S. Treasury 28%
- -----------------------------------
U.S. Government Agency 6%
- -----------------------------------
Aaa 25%
- -----------------------------------
Aa 3%
- -----------------------------------
A 29%
- -----------------------------------
Baa 8%
- -----------------------------------
Ba 1%
- -----------------------------------
Total 100%
- -----------------------------------
SEC 30-DAY YIELD
- -----------------------------------
5.81%
- -----------------------------------
TOTAL FUND NET ASSETS
4/30/98
- -----------------------------------
$299,670,746
- -----------------------------------
FIRSTAR
FUNDS
(logo)
TAX-EXEMPT INTERMEDIATE BOND FUND
FIRSTAR TAX-EXEMPT INTERMEDIATE BOND FUND seeks to provide current income exempt
from federal income taxes and emphasizes total return with relatively low
volatility of principal. Currently, the Fund does not purchase any issues which
are subject to the alternative minimum tax.
INTEREST RATE SENSITIVITY AND RETURN
In order to achieve its objectives, the Fund invests in bonds of short and
intermediate maturity. These bonds have a lower price sensitivity to changes in
interest rates than longer maturity bonds and, therefore, tend to be more stable
in value. As of April 30, 1998, the Fund's maturity mix gives it an overall
AVERAGE PORTFOLIO MATURITY OF 5.1 YEARS, and a DURATION OF 4.2 YEARS.
For the six months ended April 30, 1998, THE TOTAL RETURN OF THE FUND WAS
+1.93%. With the CPI increasing just 0.5% over the same time period, THIS
REPRESENTS A HIGH REAL RATE OF RETURN for short- to intermediate-term tax-exempt
bonds.
SECTOR ALLOCATION
With credit spreads in the municipal bond market remaining tight, the Fund
continues to focus on high quality holdings. As of April 30, 1998, the Fund has
an average quality rating of AAA with 70% OF THE FUND'S HOLDINGS SECURED WITH
U.S. TREASURY ISSUES (prerefunded municipal bonds).
CONSISTENCY IS THE HALLMARK OF OUR APPROACH
Since Firstar Tax-Exempt Intermediate Bond Fund's inception on 2/8/93, we have
adhered to the same disciplined management approach. Over the past five years,
the municipal bond market has seen considerable volatility. THE HALLMARK OF OUR
APPROACH HAS BEEN THE FUND'S CONSISTENT PERFORMANCE IN ALL MARKET CLIMATES. Our
goal is to continue to deliver this same consistent performance in the future.
We look forward to continuing to serve you as Firstar Fund shareowners.
(PHOTO)
WARREN D. PIERSON, CFA
PORTFOLIO MANAGER PROFILE
- --------------------------------------------------------------------------------
WARREN D. PIERSON, CFA, Vice President and Senior Portfolio Manager of Firstar
Investment Research & Management Company, LLC (FIRMCO) has managed the Fund
since June 22, 1993. Since joining Firstar in 1985, his responsibilities have
included trading government and government agency issues, as well as money
market instruments. His current portfolio management responsibilities focus on
the tax-exempt bond market. Warren received his BA from Lawrence University in
1984, and has 13 years of investment management experience. He is a Chartered
Financial Analyst, as well as a member of the Association for Investment
Management and Research and the Milwaukee Investment Analysts Society.
FIRSTAR
FUNDS
(logo)
FIRSTAR TAX-EXEMPT INTERMEDIATE BOND FUND
- -----------------------------------------
2/8/93 10,000
10/93 10,536
10/94 10,459
10/95 11,440
10/96 11,900
10/97 12,609
4/98 12,852
This chart assumes an initial investment of $10,000 made on 2/8/93 (inception).
Performance reflects fee waivers in effect. In the absence of fee waivers, total
return would be reduced. Returns shown include the reinvestment of all dividends
and other distributions. Past performance is not predictive of future
performance. Investment return and principal value will fluctuate, so that your
shares, when redeemed, may be worth more or less than their original cost.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RATE OF RETURN (%)
FOR PERIODS ENDED APRIL 30, 1998
- --------------------------------------------------------------------------------
FISCAL SINCE
YEAR-TO- 1 3 5 INCEPTION
DAVE YEAR YEARS YEARS 2/8//93
- --------------------------------------------------------------------------------
FIRSTAR TAX-EXEMPT INTERMEDIATE BOND FUND 1.9 6.5 5.6 5.0 4.9
Lehman Brothers 5 Year General
Obligation Bond Index<F1> 1.9 6.9 6.3 5.4 5.4
- --------------------------------------------------------------------------------
<F1> The Lehman Brothers 5 Year General Obligation Bond Index, an unmanaged
index, is a total return performance benchmark for the investment-grade
tax-exempt bond market. To be included in this index, a municipal bond must
be a state or local General Obligation bond; have a minimum credit rating
of at least Baa; have been issued as part of an offering of at least $50
million; have a maturity amount outstanding of at least $3 million; have
been issued within the last five years; and have a maturity of 4 to 6
years. An investment cannot be made directly in an index.
Effective at the close of business on January 9, 1995, Firstar Funds began to
offer Series A (retail) shares and Series Institutional shares. Series A shares,
unlike the Series Institutional shares, have a 2% maximum sales load and are
subject to an annual 0.25% service organization fee. Performance reflects fee
waivers in effect. In the absence of fee waivers, total return would be reduced.
SECTOR DISTRIBUTION
4/30/98
- -----------------------------------
General Obligations 7%
- -----------------------------------
Escrowed/Prerefunded 70%
- -----------------------------------
Insured 21%
- -----------------------------------
Revenue 2%
- -----------------------------------
Total 100%
- -----------------------------------
QUALITY DISTRIBUTION
4/30/98
- -----------------------------------
Aaa 91%
- -----------------------------------
Aa 9%
- -----------------------------------
A 0%
- -----------------------------------
Total 100%
- -----------------------------------
PORTFOLIO COMPOSITION
4/30/98
- -----------------------------------
Average Maturity 5.1 Years
- -----------------------------------
Average Duration 4.2 Years
- -----------------------------------
SEC30-DAY YIELD
- -----------------------------------
4.02%
- -----------------------------------
TOTAL FUND NET ASSETS
4/30/98
- -----------------------------------
$82,857,805
- -----------------------------------
FIRSTAR
FUNDS
(logo)
BOND IMMDEX(TM) FUND
FIRSTAR BOND IMMDEX(TM) FUND seeks to provide an annual rate of total return
comparable to that of the Lehman Brothers Government/Corporate Bond Index,
before Fund expenses. In order to achieve its objective, the Fund may invest in
securities with very long remaining maturities (30 years or longer), in addition
to shorter bonds and notes.
INTEREST RATE SENSITIVITY AND RETURN
This Fund's maturity mix gives it an overall AVERAGE PORTFOLIO MATURITY OF 10.6
YEARS, and a DURATION OF 5.4 YEARS. Because the Bond IMMDEX(TM) Fund's duration
of just over five years is the longest of all the Firstar taxable bond funds, it
will display the greatest downward price movement when interest rates increase,
but will exhibit the greatest price appreciation when interest rates decrease.
The longer average maturity and duration of the Fund did not have a significant
impact on its performance for the six months ended April 30, 1998. A slight
decrease in interest rates (10-year U.S. Treasury rates decreased by 0.1% to
5.7%) resulted in a six-month total return for the Fund of +3.40%. This is in
line with the Fund's benchmark, the Lehman Brothers Government Corporate Bond
Index, which had a total return of +3.64% for the same period. Additionally,
THIS REPRESENTS A HIGH REAL RATE OF RETURN WHEN COMPARED TO THE CPI, WHICH OVER
THE SAME PERIOD INCREASED ONLY A HALF OF ONE PERCENT.
SECTOR ALLOCATION
While the Fund's duration is the single most significant determinant of its
return, other factors are important too. The Fund's exposure to credit-sensitive
issues including corporate bonds and notes and asset-backed securities is one
determinant of its relative performance. CORPORATE BONDS AND NOTES ARE SELECTED
FOR THE FUND IN A RESEARCH-INTENSIVE PROCESS FROM THE FIXED-INCOME INVESTMENT
GRADE UNIVERSE. Sectors that we currently favor include: finance, banking and
brokerage, dollar-denominated international, and asset-backed securities. Asset-
backed securities in the Fund are all rated Aaa/AAA by Moody's or Standard &
Poor's. They represent the highest credit quality of non-U.S. Government
investments available. OVER HALF OF THE FUND (59%) IS INVESTED IN OBLIGATIONS
RATED Aaa/AAA OR HIGHER.
FOREIGN EXPOSURE
THE FUND DOES NOT INVEST IN SECURITIES DENOMINATED IN FOREIGN CURRENCIES. AS
SUCH, IT HAS NO DIRECT EXPOSURE TO FOREIGN CURRENCY FLUCTUATIONS. The Fund does,
however, invest in Yankee securities. Yankees are obligations of foreign
entities denominated in U.S. dollars. Yankee investments total 10% of the Fund
and include credits of Canadian, European and Asian entities. Currently, Yankee
bond obligations are the fastest growing sector of the U.S. domestic corporate
bond market. Investing in Yankee issues has enabled us to capitalize on
opportunities in foreign bonds without exposing our investors to currency risk.
With recent market turmoil originating in the Pacific Rim countries, spreads on
some of the Fund's Yankee issues have widened significantly. This has resulted
in negative relative performance on these securities. AT CURRENT YIELD LEVELS,
WE FEEL THE FUND'S YANKEE BONDS REPRESENT EXCEPTIONAL VALUE. We anticipate that
they will outperform similarly rated investments in the coming year. See page 28
for a complete listing of portfolio holdings.
CONSISTENCY IS THE HALLMARK OF OUR APPROACH
Since Firstar Bond IMMDEX(TM) Fund's inception on 12/29/89, we have adhered to
the same disciplined management approach. The past eight years have brought us
more volatility in the fixed-income markets than many would have expected. THE
HALLMARK OF OUR APPROACH HAS BEEN THE FUND'S CONSISTENT PERFORMANCE IN ALL
MARKET CLIMATES. Firstar Bond IMMDEX(TM)'s returns have been comparable to the
benchmark in periods of rising interest rates and falling interest rates. Our
goal is to continue to deliver this same consistent performance in the future.
We look forward to continuing to serve you as Firstar Fund shareowners.
(PHOTO) (PHOTO)
MARY ELLEN STANEK, CFA TERESA R. WESTMAN, CFA
PORTFOLIO MANAGER PROFILE
- --------------------------------------------------------------------------------
MARY ELLEN STANEK, CFA, President of Firstar Investment Research & Management
Company, LLC (FIRMCO) and TERESA R. WESTMAN, CFA, Senior Vice President and
Senior Portfolio Manager co-manage the Fund - Mary Ellen since its inception on
December 29, 1989 and Teresa since January 1, 1992. Mary Ellen has 19 years of
investment management experience and was named a Director of FIRMCO in 1992.
Prior to joining FIRMCO, she headed the Fixed Income and Quantitative Investment
Management Department at Firstar Trust Company. Mary Ellen received her BA from
Marquette University in 1978 and her MBA from the University of Wisconsin-
Milwaukee in 1984. Teresa has been with Firstar since 1987 and has 11 years of
investment management experience. Teresa received her BA from Augustana College
in 1985 and her MBA from the University of Chicago in 1991. Mary Ellen and
Teresa are both Chartered Financial Analysts.
FIRSTAR
FUNDS
(logo)
FIRSTAR BOND IMMDEX(TM) FUND
- -------------------------
12/29/89 10,000
10/90 10,421
10/91 12,105
10/92 13,376
10/93 15,154
10/94 14,565
10/95 15,934
10/96 17,840
10/97 19,428
4/98 20,088
This chart assumes an initial investment of $10,000 made on 12/29/89
(inception). Performance reflects fee waivers in effect. In the absence of fee
waivers, total return would be reduced. Returns shown include the reinvestment
of all dividends and other distributions. Past performance is not predictive of
future performance. Investment return and principal value will fluctuate, so
that your shares, when redeemed, may be worth more or less than their original
cost.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RATE OF RETURN (%)
FOR PERIODS ENDED APRIL 30, 1998
- --------------------------------------------------------------------------------
FISCAL SINCE
YEAR-TO- 1 3 5 INCEPTION
DATE YEAR YEARS YEARS 12/29/89
- --------------------------------------------------------------------------------
FIRSTAR BOND IMMDEX(TM) FUND 3.4 11.0 8.9 7.0 8.7
Lehman Brothers Gov't./Corp.
Bond Index<F1> 3.6 11.3 8.9 6.9 8.6
- --------------------------------------------------------------------------------
<F1> The Lehman Brothers Gov't./Corp. Bond Index is an unmanaged market value
weighted index measuring both principal price changes of, and income
provided by, the underlying universe of securities that comprise the index.
Securities included in the index must meet the following critieria: fixed
as opposed to variable rate; not less than one year to maturity; minimum
out standing par value of $100 million; and rated investment grade or
higher by Moody's, Standard & Poor's, or Fitch, in that order. An
investment cannot be made directly in an index.
Effective at the close of business on January 9, 1995, Firstar Funds began to
offer Series A (retail) shares and Series Institutional shares. Series A shares,
unlike the Series Institutional shares, have a 2% maximum sales load and are
subject to an annual 0.25% service organization fee. In addition, the purchase
price adjustment on the Fund no longer applies to either the Series A or Series
Institutional shares. The performance for the Series Institutional shares has
been restated to reflect the elimination of the purchase price adjustment.
Performance reflects fee waivers in effect. In the absence of fee waivers, total
return would be reduced.
SECTOR DISTRIBUTION
4/30/98
- -----------------------------------
U.S. Treasury 36%
- -----------------------------------
U.S. Government Agency 7%
- -----------------------------------
Mortgage-Backed 0%
- -----------------------------------
Finance, Banking, Brokerage 20%
- -----------------------------------
Industrial 10%
- -----------------------------------
Utility 3%
- -----------------------------------
International/Yankee 10%
- -----------------------------------
Asset-Backed 11%
- -----------------------------------
Cash 3%
- -----------------------------------
Total 100%
- -----------------------------------
PORTFOLIO COMPOSITION
4/30/98
- -----------------------------------
Average Maturity 10.6 Years
- -----------------------------------
Average Duration 5.4 Years
- -----------------------------------
QUALITY DISTRIBUTION
4/30/98
- -----------------------------------
U.S. Treasury 36%
- -----------------------------------
U.S. Government Agency 7%
- -----------------------------------
Aaa 16%
- -----------------------------------
Aa 3%
- -----------------------------------
A 25%
- -----------------------------------
Baa 12%
- -----------------------------------
Ba 1%
- -----------------------------------
Total 100%
- -----------------------------------
SEC 30-DAY YIELD
- -----------------------------------
5.87%
- -----------------------------------
TOTAL FUND NET ASSETS
4/30/98
- -----------------------------------
$516,083,949
- -----------------------------------
FIRSTAR
FUNDS
(logo)
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
APRIL 30, 1998 SHORT-TERM INTERMEDIATE TAX-EXEMPT BOND
(UNAUDITED) BOND MARKET BOND MARKET INTERMEDIATE IMMDEX(TM)
FUND FUND BOND FUND FUND
------------ ------------ ------------ ------------
<C> <C> <C> <C>
ASSETS:
Investments, at value (cost $173,411, $290,413,
$83,493 and $491,193, respectively) $173,873 $294,540 $ 84,594 $513,062
Interest receivable 2,243 4,426 1,510 8,385
Capital shares sold 915 919 2,085 1,469
Cash - 69 - -
Other assets 25 23 25 26
---------- --------- --------- ---------
Total Assets 177,056 299,977 88,214 522,942
--------- --------- --------- ---------
LIABILITIES:
Payable for securities purchased 1,039 - - 5,756
Capital shares redeemed 608 126 5,277 844
Payable to affiliates 131 156 53 237
Accrued expenses and other liabilities 33 24 26 21
--------- --------- --------- ---------
Total Liabilities 1,811 306 5,356 6,858
--------- --------- --------- ---------
NET ASSETS $175,245 $299,671 $ 82,858 $516,084
========= ========= ========= =========
NET ASSETS CONSIST OF:
Capital stock $177,238 $295,803 $ 81,761 $494,573
Undistributed net investment income 74 140 28 250
Undistributed accumulated net realized losses (2,529) (399) (32) (608)
Unrealized net appreciation on investments 462 4,127 1,101 21,869
--------- --------- --------- ---------
Total Net Assets $175,245 $299,671 $ 82,858 $516,084
========= ========= ========= =========
SERIES A:
Net assets $ 66,923 $ 25,172 $ 25,101 $ 77,064
Shares authorized ($.0001 par value) 500,000 500,000 500,000 500,000
Shares issued and outstanding 6,536 2,443 2,427 2,729
Net asset value and redemption price per share <F1> $10.24 $10.30 $10.34 $28.24
========= ========= ========= =========
Maximum offering price per share <F1> $10.45 $10.51 $10.55 $28.82
========= ========= ========= =========
SERIES INSTITUTIONAL:
Net assets $108,322 $274,499 $ 57,757 $439,020
Shares authorized ($.0001 par value) 500,000 500,000 500,000 500,000
Shares issued and outstanding 10,577 26,644 5,584 15,539
Net asset value, redemption price and offering
price per share <F1> $10.24 $10.30 $10.34 $28.25
========= ========= ========= =========
<F1> Amounts may not recalculate due to rounding.
</TABLE>
See notes to the financial statements.
FIRSTAR
FUNDS
(logo)
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS)
SIX MONTHS ENDED APRIL 30, 1998 SHORT-TERM INTERMEDIATE TAX-EXEMPT BOND
(UNAUDITED) BOND MARKET BOND MARKET INTERMEDIATE IMMDEX(TM)
FUND FUND BOND FUND FUND
------------ ------------ ------------ ----------
<C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $5,820 $9,045 $1,919 $16,311
------------ ------------ ------------ ------------
EXPENSES:
Investment advisory fees 529 712 198 741
Administration fees 97 157 44 273
Shareowner servicing and accounting costs 71 76 46 95
Service organization fees - Series A 83 28 27 87
Custody fees 21 25 10 48
Federal and state registration fees 14 22 10 24
Professional fees 13 13 10 14
Reports to shareowners 19 5 3 18
Directors' fees and expenses 4 4 4 4
Other 3 3 1 7
------------ ------------ ------------ ------------
Total expenses before waiver 854 1,045 353 1,311
Less: Waiver of expenses (331) (305) (128) (183)
------------ ------------ ------------ ------------
Net expenses 523 740 225 1,128
------------ ------------ ------------ ------------
NET INVESTMENT INCOME 5,297 8,305 1,694 15,183
------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on investment transactions 104 421 21 89
Change in unrealized appreciation (depreciation)
on investments (673) (707) (215) 1,251
------------ ------------ ------------ ------------
Net gain (loss) on investments (569) (286) (194) 1,340
------------ ------------ ------------ ------------
NET INCREASEIN NET ASSETS
RESULTING FROM OPERATIONS $4,728 $8,019 $1,500 $16,523
============ ============ ============ ============
</TABLE>
See notes to the financial statements.
FIRSTAR
FUNDS
(logo)
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
(AMOUNTS IN THOUSANDS)
SHORT-TERM INTERMEDIATE TAX-EXEMPT BOND
BOND MARKET BOND MARKET INTERMEDIATE BOND IMMDEX(TM)
FUND FUND FUND FUND
------------------- ------------------- ------------------- ------------------
Six months Year Six months Year Six months Year Six months Year
ended ended ended ended ended ended ended ended
Apr. 30, Oct. 31, Apr. 30, Oct. 31, Apr. 30, Oct. 31, Apr. 30, Oct. 31,
1998 1997 1998 1997 1998 1997 1998 1997
-------- -------- -------- -------- -------- -------- -------- -------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 5,297 $ 12,672 $ 8,305 $ 13,379 $ 1,694 $ 2,460 $15,183 $ 27,218
Net realized gain (loss) on investments 104 (1,101) 421 242 21 48 89 447
Change in unrealized appreciation
(depreciation) on investments (673) 1,426 (707) 3,016 (215) 805 1,251 9,973
-------- -------- -------- -------- -------- -------- -------- --------
Net increase in net assets
resulting from operations 4,728 12,997 8,019 16,637 1,500 3,313 16,523 37,638
-------- -------- -------- -------- -------- -------- -------- --------
CAPITAL SHARE TRANSACTIONS:
Shares sold 43,652 71,621 53,810 116,096 30,878 35,199 99,511 130,202
Shares issued to owners in
reinvestment of dividends 4,219 10,918 4,730 8,255 727 993 12,554 23,217
Shares redeemed (73,721) (87,494) (33,840) (43,261) (19,975) (12,976) (69,575) (104,870)
-------- -------- -------- -------- -------- -------- -------- --------
Net increase (decrease) in net assets
resulting from capital share
transactions (25,850) (4,955) 24,700 81,090 11,630 23,216 42,490 48,549
-------- -------- -------- -------- -------- -------- -------- --------
DISTRIBUTIONS TO SERIES A
SHAREOWNERS:
From net investment income <F1> (1,969) (3,625) (633) (1,090) (433) (589) (2,067) (3,214)
-------- -------- -------- -------- -------- -------- -------- --------
DISTRIBUTIONS TO SERIES
INSTITUTIONAL SHAREOWNERS:
From net investment income <F1> (3,315) (9,075) (7,627) (12,285) (1,246) (1,875) (13,024) (24,038)
-------- -------- -------- -------- -------- -------- -------- --------
TOTAL INCREASE (DECREASE)IN NET ASSETS (26,406) (4,658) 24,459 84,352 11,451 24,065 43,922 58,935
NET ASSETS:
Beginning of period 201,651 206,309 275,212 190,860 71,407 47,342 472,162 413,227
-------- -------- -------- -------- -------- -------- -------- --------
End of period (including undistributed
net investment income of $74, $62,
$140, $96, $28, $13, $250 and $158,
respectively) $175,245 $201,651 $299,671 $275,212 $82,858 $71,407 $516,084 $472,162
======== ======== ======== ======== ======== ======== ======== ========
<F1> For the Tax-Exempt Intermediate Bond Fund, substantially all distributions from net investment income are exempt from federal
income tax.
</TABLE>
See notes to the financial statements.
FIRSTAR
FUNDS
(logo)
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
SHORT-TERM BOND MARKET FUND
-----------------------------------------------------------------------------------------
Six months ended Year ended Year ended Year ended
April 30, October 31, October 31, October 31, Year ended
1998 1997 1996 1995<F2> October 31,
--------------- --------------- --------------- --------------- ---------------
Series Series Series Series Series Series Series Series
Per Share Data: A Inst"l. A Inst'l. A Inst'l. A Inst'l. 1994 1993
------ ------ ------ ------ ------ ------- ------- ------ ------- -------
Net asset value, (Unaudited)
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
beginning of period $10.27 $10.27 $10.25 $10.25 $10.28 $10.28 $10.03 $10.03 $10.56 $10.60
Income from investment operations:
Net investment income <F3> 0.30 0.32 0.60 0.62 0.58<F8> 0.61<F8> 0.61 0.63 0.56 0.58
Net realized and unrealized
gains (losses) on securities (0.03) (0.03) 0.02 0.02 (0.03) (0.03) 0.24 0.24 (0.41) 0.10
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations 0.27 0.29 0.62 0.64 0.55 0.58 0.85 0.87 0.15 0.68
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income (0.30) (0.32) (0.60) (0.62) (0.58) (0.61) (0.60) (0.62) (0.56) (0.58)
Distributions from capital gains - - - - - - - - (0.12) (0.14)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total distributions (0.30) (0.32) (0.60) (0.62) (0.58) (0.61) (0.60) (0.62) (0.68) (0.72)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of period $10.24 $10.24 $10.27 $10.27 $10.25 $10.25 $10.28 $10.28 $10.03 $10.56
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Total return <F4> <F5> 2.69% 2.82% 6.21% 6.47% 5.54% 5.80% 8.74% 8.95% 1.46% 6.70%
Supplemental data and ratios:
Net assets, in thousands,
end of period $66,923 $108,322 $65,567 $136,084 $58,843 $147,466 $47,730 $94,959 $122,368 $142,518
Ratio of net expenses
to average net assets <F6> 0.75% 0.50% 0.75% 0.50% 0.75% 0.50% 0.69% 0.50% 0.50% 0.52%
Ratio of net investment income
to average net assets <F6> 5.86% 6.11% 5.79% 6.04% 5.67% 5.92% 6.04% 6.23% 5.43% 5.53%
Portfolio turnover rate <F4> <F7> 34.11% 34.11% 77.12% 77.12% 59.62% 59.62% 100.58% 100.58% 76.13% 87.62%
<F1> Commencement of operations.
<F2> On January 9, 1995, all previously existing series of shares of each Fund were reclassified as Series A shares. Effective
on January 9, 1995, Institutional shareowners exchanged their Series A shares for the Funds' Institutional Series shares.
For the year ended October 31, 1995, the Financial Highlights ratios of net expenses to average net assets, ratios of net
investment income to average net assets, total return and the per share income from investment operations and
distributions are presented on a basis whereby the Fund's net investment income, net expenses, net realized and
unrealized gains (losses) and distributions for the period November 1, 1994 through January 9, 1995, were allocated to
each class of shares based upon the relative net assets of each class of shares as of the close of business on January 9,
1995, and the results thereof combined with the results of operations and distributions for each applicable class for the
period January 10, 1995 through October 31, 1995.
<F3> For the Tax-Exempt Intermediate Bond Fund, substantially all investment income is exempt from Federal income tax.
<F4> Not annualized for the period ended October 31, 1993, for the Intermediate Bond Market and Tax-Exempt Intermediate Bond
Funds, and for the periods ended April 30, 1998 for all funds.
<F5> The total return calculation does not reflect the 2% front end sales charge for Series A.
<F6> Annualized for the period ended October 31, 1993, for the Intermediate Bond Market and Tax-Exempt Intermediate Bond
Funds, and for the periods ended April 30, 1998 for all funds.
<F7> Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares
issued.
<F8> Net investment income per share is calculated using ending balances prior to consideration of adjustments for permanent
book and tax differences.)
</TABLE>
See notes to the financial statements.
FIRSTAR
FUNDS
(logo)
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
INTERMEDIATE BOND MARKET FUND
------------------------------------------------------------------------------------------
Six months Year Year Year
ended ended ended ended
April 30, October 31, October 31, October 31, Jan. 5,
1998 1997 1996 1995<F2> Year 1993 <F1>
---------------- ---------------- ---------------- ---------------- ended through
Series Series Series Series Series Series Series Series Oct. 31, Oct. 31,
Per Share Data: A Int'l. A Inst'l. A Inst'l. A Inst'l. 1994 1993
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, (Unaudited)
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
beginning of period $10.31 $10.31 $10.19 $10.19 $10.21 $10.21 $9.67 $9.67 $10.45 $10.00
Income from investment operations:
Net investment income <F3> 0.28 0.30 0.58 0.60 0.56<F8> 0.59<F8> 0.60 0.62 0.51 0.40
Net realized and unrealized
gains (losses) on securities (0.01) (0.01) 0.12 0.12 (0.02) (0.02) 0.53 0.53 (0.69) 0.45
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations 0.27 0.29 0.70 0.72 0.54 0.57 1.13 1.15 (0.18) 0.85
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income (0.28) (0.30) (0.58) (0.60) (0.56) (0.59) (0.59) (0.61) (0.51) (0.40)
Distributions from capital gains - - - - - - - - (0.09) -
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total distributions (0.28) (0.30) (0.58) (0.60) (0.56) (0.59) (0.59) (0.61) (0.60) (0.40)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of period $10.30 $10.30 $10.31 $10.31 $10.19 $10.19 $10.21 $10.21 $9.67 $10.45
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Total return <F4> <F5> 2.69% 2.81% 7.09% 7.36% 5.51% 5.77% 12.04% 12.25% (1.73)% 8.58%
Supplemental data and ratios:
Net assets, in thousands,
end of period $25,172 $274,499 $20,691 $254,521 $17,392 $173,468 $11,576 $128,941 $88,306 $56,794
Ratio of net expenses
to average net assets <F6> 0.75% 0.50% 0.75% 0.50% 0.75% 0.50% 0.69% 0.50% 0.50% 0.50%
Ratio of net investment income
to average net assets <F6> 5.60% 5.85% 5.71% 5.96% 5.59% 5.84% 6.07% 6.26% 5.19% 4.65%
Portfolio turnover rate <F4> <F7> 11.92% 11.92% 40.61% 40.61% 59.29% 59.29% 66.69% 66.69% 56.25% 82.37%
<F1> Commencement of operations.
<F2> On January 9, 1995, all previously existing series of shares of each Fund were reclassified as Series A shares. Effective on
January 9, 1995, Institutional shareowners exchanged their Series A shares for the Funds' Institutional Series shares. For
the year ended October 31, 1995, the Financial Highlights ratios of net expenses to average net assets, ratios of net
investment income to average net assets, total return and the per share income from investment operations and distributions
are presented on a basis whereby the Fund's net investment income, net expenses, net realized and unrealized gains (losses)
and distributions for the period November 1, 1994 through January 9, 1995, were allocated to each class of shares based upon
the relative net assets of each class of shares as of the close of business on January 9, 1995, and the results thereof
combined with the results of operations and distributions for each applicable class for the period January 10, 1995 through
October 31, 1995.
<F3> For the Tax-Exempt Intermediate Bond Fund, substantially all investment income is exempt from Federal income tax.
<F4> Not annualized for the period ended October 31, 1993, for the Intermediate Bond Market and Tax-Exempt Intermediate Bond
Funds, and for the periods ended April 30, 1998 for all funds.
<F5> The total return calculation does not reflect the 2% front end sales charge for Series A.
<F6> Annualized for the period ended October 31, 1993, for the Intermediate Bond Market and Tax-Exempt Intermediate Bond Funds,
and for the periods ended April 30, 1998 for all funds.
<F7> Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares
issued.
<F8> Net investment income per share is calculated using ending balances prior to consideration of adjustments for permanent
book and tax differences.
</TABLE>
See notes to the financial statements.
FIRSTAR
FUNDS
(logo)
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
TAX-EXEMPT INTERMEDIATE BOND FUND
------------------------------------------------------------------------------------------
Six months Year Year Year
ended ended ended ended
April 30, October 31, October 31, October 31, Jan. 5,
1998 1997 1996 1995<F2> Year 1993 <F1>
---------------- ---------------- ---------------- ---------------- ended through
Series Series Series Series Series Series Series Series Oct. 31, Oct. 31,
Per Share Data: A Int'l. A Inst'l. A Inst'l. A Inst'l. 1994 1993
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, (Unaudited)
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
beginning of period $10.35 $10.36 $10.21 $10.21 $10.23 $10.24 $9.78 $9.78 $10.26 $10.00
Income from investment operations:
Net investment income <F3> 0.21 0.22 0.42 0.44 0.40<F8> 0.43<F8> 0.42 0.44 0.41 0.27
Net realized and unrealized
gains (losses) on securities (0.01) (0.02) 0.14 0.15 (0.01) (0.03) 0.45 0.46 (0.48) 0.26
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations 0.20 0.20 0.56 0.59 0.39 0.40 0.87 0.90 (0.07) 0.53
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income (0.21) (0.22) (0.42) (0.44) (0.41) (0.43) (0.42) (0.44) (0.41) (0.27)
Distributions from capital gains - - - - - - - - - -
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total distributions (0.21) (0.22) (0.42) (0.44) (0.41) (0.43) (0.42) (0.44) (0.41) (0.27)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of period $10.34 $10.34 $10.35 $10.36 $10.21 $10.21 $10.23 $10.24 $9.78 $10.26
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Total return <F4> <F5> 1.90% 1.93% 5.60% 5.96% 3.87% 4.02% 9.07% 9.38% (0.73)% 5.36%
Supplemental data and ratios:
Net assets, in thousands,
end of period $25,101 $57,757 $19,199 $52,208 $10,690 $36,652 $7,711 $27,595 $26,167 $23,866
Ratio of net expenses
to average net assets <F6> 0.75% 0.50% 0.75% 0.50% 0.75% 0.50% 0.71% 0.51% 0.60% 0.59%
Ratio of net investment income
to average net assets <F6> 4.08% 4.33% 4.11% 4.36% 3.99% 4.24% 4.25% 4.45% 4.04% 3.75%
Portfolio turnover rate <F4> <F7> 8.02% 8.02% 11.22% 11.22% 30.46% 30.46% 44.13% 44.13% 58.54% 3.23%
<F1> Commencement of operations.
<F2> On January 9, 1995, all previously existing series of shares of each Fund were reclassified as Series A shares. Effective on
January 9, 1995, Institutional shareowners exchanged their Series A shares for the Funds' Institutional Series shares. For
the year ended October 31, 1995, the Financial Highlights ratios of net expenses to average net assets, ratios of net
investment income to average net assets, total return and the per share income from investment operations and distributions
are presented on a basis whereby the Fund's net investment income, net expenses, net realized and unrealized gains (losses)
and distributions for the period November 1, 1994 through January 9, 1995, were allocated to each class of shares based upon
the relative net assets of each class of shares as of the close of business on January 9, 1995, and the results thereof
combined with the results of operations and distributions for each applicable class for the period January 10, 1995 through
October 31, 1995.
<F3> For the Tax-Exempt Intermediate Bond Fund, substantially all investment income is exempt from Federal income tax.
<F4> Not annualized for the period ended October 31, 1993, for the Intermediate Bond Market and Tax-Exempt Intermediate Bond
Funds, and for the periods ended April 30, 1998 for all funds.
<F5> The total return calculation does not reflect the 2% front end sales charge for Series A.
<F6> Annualized for the period ended October 31, 1993, for the Intermediate Bond Market and Tax-Exempt Intermediate Bond Funds,
and for the periods ended April 30, 1998 for all funds.
<F7> Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares
issued.
<F8> Net investment income per share is calculated using ending balances prior to consideration of adjustments for permanent
book and tax differences.
</TABLE>
See notes to the financial statements.
FIRSTAR
FUNDS
(logo)
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
BOND IMMDEX(TM) FUND
-----------------------------------------------------------------------------------------
Six months ended Year ended Year ended Year ended
April 30, October 31, October 31, October 31, Year ended
1998 1997 1996 1995<F2> October 31,
--------------- --------------- --------------- --------------- ---------------
Series Series Series Series Series Series Series Series
Per Share Data: A Inst"l. A Inst'l. A Inst'l. A Inst'l. 1994 1993
------ ------ ------ ------ ------ ------- ------- ------ ------- -------
Net asset value, (Unaudited)
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
beginning of period $28.16 $28.16 $27.54 $27.55 $27.82 $27.82 $25.67 $25.67 $28.91 $27.31
Income from investment operations:
Net investment income <F3> 0.82 0.86 1.66 1.75 1.61<F8> 1.70<F8> 1.68 1.74 1.65 1.68
Net realized and unrealized
gains (losses) on securities 0.08 0.09 0.64 0.61 (0.26) (0.27) 2.30 2.29 (2.74) 1.83
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations 0.90 0.95 2.30 2.36 1.35 1.43 3.98 4.03 (1.09) 3.51
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income (0.82) (0.86) (1.68) (1.75) (1.63) (1.70) (1.79) (1.84) (1.65) (1.70)
Distributions from capital gains _ _ _ _ _ _ (0.04) (0.04) (0.50) (0.21)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total distributions (0.82) (0.86) (1.68) (1.75) (1.63) (1.70) (1.83) (1.88) (2.15) (1.91)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of period $28.24 $28.25 $28.16 $28.16 $27.54 $27.55 $27.82 $27.82 $25.67 $28.91
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Total return <F4> <F5> 3.24% 3.40% 8.68% 8.90% 5.06% 5.35% 16.05% 16.26% (3.89)% 13.30%
Supplemental data and ratios:
Net assets, in thousands,
end of period $77,064 $439,020 $64,144 $408,018 $42,671 $370,556 $21,875 $290,274 $256,778 $260,468
Ratio of net expenses
to average net assets <F6> 0.67% 0.42% 0.67% 0.42% 0.68% 0.43% 0.64% 0.44% 0.48% 0.50%
Ratio of net investment income
to average net assets <F6> 5.92% 6.17% 6.08% 6.33% 5.98% 6.23% 6.31% 6.51% 6.14% 6.10%
Portfolio turnover rate <F4> <F7> 12.14% 12.14% 35.12% 35.12% 33.38% 33.38% 41.67% 41.67% 49.70% 81.18%
<F1> Commencement of operations.
<F2> On January 9, 1995, all previously existing series of shares of each Fund were reclassified as Series A shares. Effective on
January 9, 1995, Institutional shareowners exchanged their Series A shares for the Funds' Institutional Series shares. For
the year ended October 31, 1995, the Financial Highlights ratios of net expenses to average net assets, ratios of net
investment income to average net assets, total return and the per share income from investment operations and distributions
are presented on a basis whereby the Fund's net investment income, net expenses, net realized and unrealized gains (losses)
and distributions for the period November 1, 1994 through January 9, 1995, were allocated to each class of shares based upon
the relative net assets of each class of shares as of the close of business on January 9, 1995, and the results thereof
combined with the results of operations and distributions for each applicable class for the period January 10, 1995 through
October 31, 1995.
<F3> For the Tax-Exempt Intermediate Bond Fund, substantially all investment income is exempt from Federal income tax.
<F4> Not annualized for the period ended October 31, 1993, for the Intermediate Bond Market and Tax-Exempt Intermediate Bond
Funds, and for the periods ended April 30, 1998 for all funds.
<F5> The total return calculation does not reflect the 2% front end sales charge for Series A.
<F6> Annualized for the period ended October 31, 1993, for the Intermediate Bond Market and Tax-Exempt Intermediate Bond Funds,
and for the periods ended April 30, 1998 for all funds.
<F7> Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares
issued.
<F8> Net investment income per share is calculated using ending balances prior to consideration of adjustments for permanent
book and tax differences.
</TABLE>
See notes to the financial statements.
FIRSTAR
FUNDS
(logo)
SHORT-TERM BOND MARKET FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
LONG-TERM INVESTMENTS 97.6%
ASSET-BACKED SECURITIES 24.5%
AUTO LOAN RECEIVABLES 0.5%
General Motors Acceptance Corp. Grantor,
$ 789 Series 1991-A1, Class A, 8.17%, 1/02/00 $ 801
USAA Auto Loan Grantor Trust,
40 Series 1994-1, Class A, 5.00%, 11/15/99 40
--------
841
--------
CREDIT CARD RECEIVABLES 13.5%
Banc One Credit Card Master Trust:
1,500 Series 1995-B, Class A, 6.30%, 9/15/00 1,514
1,250 Series 1995-A, Class A, 6.15%, 7/15/02 1,257
Chase Manhattan Grantor Trust,
571 Series 1995-B, Class A, 5.90%, 9/15/99 571
Chemical Master Credit Card Trust I,
3,030 Series 1995-2, Class A, 6.23%, 6/15/03 3,055
Citibank Credit Card Master Trust I, Principal Only,
5,000 Series 1996-1, Class A, 0.00%, 2/07/01 4,249
Discover Card Master Trust I,
2,000 Series 1993-B, Class A, 6.75%, 2/15/00 2,022
Household Affinity Credit Card Master Trust I,
1,550 Series 1993-2, Class A, 5.60%, 11/15/00 1,543
NationsBank Credit Card Master Trust,
3,938 Series 1995-1, Class A, 6.45%, 8/15/00 3,988
Sears Credit Account Master Trust,
1,000 Series 1995-2, Class A, 8.10%, 6/15/04 1,033
Spiegel Credit Card Master Trust:
2,000 Series 1994-B, Class A, 8.15%, 6/15/04 2,066
2,325 Series 1995-A, Class A, 7.50%, 9/15/04 2,394
--------
23,692
--------
HOME EQUITY LOAN RECEIVABLES 10.5%
Advanta Home Equity Loan Trust,
2,147 Series 1993-2, Class A2, 6.15%, 10/25/09 2,131
Corestates Home Equity Trust,
3,000 Series 1996-1, Class A3, 7.00%, 12/15/09 3,056
EQCC Home Equity Loan Trust:
295 Series 1993-3, Class A, 5.15%, 9/15/08 288
1,385 Series 1993-4, Class A, 5.725%, 12/15/08 1,368
679 Series 1996-1, Class A2, 5.82%, 9/15/09 677
GE Home Equity Loan Asset-Backed Certificates:
204 Series 1991-1, Class A, 7.20%, 8/30/11 205
2,500 Series 1991-1, Class B, 8.70%, 9/15/11 2,618
Household Finance Corp,
1,718 Series 1992-2, Class A, 6.65%, 11/20/12 1,719
Security Pacific Home Equity Loan:
1,187 Series 1991-1, Class B, 8.85%, 5/15/98 1,189
941 Series 1991-2, Class B, 8.15%, 6/15/20 946
The Money Store Home Equity Trust:
1,022 Series 1992-A, Class A, 6.95%, 1/15/07 1,026
1,745 Series 1993-B, Class A3, 6.10%, 5/15/22 1,735
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
HOME EQUITY LOAN RECEIVABLES 10.5% (CONT.)
UCFC Home Equity Loan,
$1,385 Series 1995-A2, Class A7, 8.30%, 2/10/26 $ 1,441
--------
18,399
--------
CORPORATE BONDS 22.8%
Bear Stearns Company Senior Notes:
1,000 6.75%, 8/15/00 1,015
800 9.375%, 6/01/01 872
Beneficial Corp. Notes,
800 8.20%, 3/15/02 851
Big Rivers Electric Corporation Co-op Utility Trust
1,500 Certificates, 9.50%, 2/15/17 1,587
BP America, Inc. Guaranteed Debentures,
2,000 10.00%, 7/01/18 2,103
Chase Manhattan Corp. Subordinated Notes,
700 10.00%, 6/15/99 730
Continental Bank Subordinated Notes,
1,840 11.25%, 7/01/01 1,853
Jack Eckerd Corporation Senior Subordinated Notes,
1,304 9.25%, 02/15/04 1,387
General Motors Acceptance Corp. Notes,
922 9.625%, 5/15/00 984
Heller Financial, Inc. Notes,
2,790 8.00%, 12/15/98 2,821
Household Finance Corp. Debentures,
2,000 9.625%, 7/15/00 2,137
Lehman Brothers Holdings, Inc. Debentures,
1,000 9.875%, 10/15/00 1,080
Lehman Brothers Holdings, Inc. Notes:
3,000 8.875%, 2/15/00 3,138
2,386 7.625%, 7/15/99 2,424
1,100 6.65%, 11/08/99 1,112
Lehman Brothers, Inc. Senior Subordinated Notes:
750 7.625%, 8/01/98 753
2,739 10.00%, 5/15/99 2,845
Mississippi Power & Light Notes,
1,000 8.80%, 4/01/05 1,000
Paine Webber Group, Inc. Medium Term Notes:
1,000 5.83%, 2/02/99 998
1,000 6.31%, 7/22/99 1,002
Salomon, Inc. Medium Term Notes,
1,500 10.125%, 6/01/99 1,565
Salomon, Inc. Senior Notes:
206 7.25%, 1/15/00 210
800 7.75%, 5/15/00 824
Security Pacific Corporation Subordinate Notes,
1,008 11.50%, 11/15/00 1,131
Transamerica Financial Corp. Subordinated Notes,
2,500 6.75%, 6/01/00 2,531
USF&G Corporation Senior Notes,
3,075 7.00%, 5/15/98 3,076
--------
40,029
--------
See notes to the financial statements.
FIRSTAR
FUNDS
(logo)
SHORT-TERM BOND MARKET FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
MORTGAGE-BACKED SECURITIES 13.8%
Collateralized Mortgage Obligation Trust,
$1,565 Series 15, Class E, 5.00%, 3/20/18 $ 1,491
Collateralized Mortgage Securities Corp.,
564 Series 1991-6, Class PH, 7.00%, 5/20/20 566
Green Tree Financial Corp. Pass-Thru Certificates:
1,001 Series 1992-2, Class A4, 8.15%, 1/15/18 1,048
554 Series 1993-3, Class A4, 5.45%, 10/15/18 553
1,330 Series 1993-3, Class A5, 5.75%, 10/15/18 1,317
1,073 Series 1993-4, Class A2, 5.85%, 1/15/19 1,074
750 Series 1994-4, Class A3, 7.70%, 7/15/19 765
2,500 Series 1994-8, Class A4, 8.50%, 4/15/25 2,601
1,500 Series 1995-9, Class A4, 6.45%, 1/15/27 1,512
Marine Midland, Real Estate Mortgage Investment
Conduit (REMIC), Series 1992-3, Class A12,
699 8.00%, 10/25/23 708
Merrill Lynch Mortgage Investors, Inc.,
3,003 Series 1992-B, Class A, 7.85%, 4/15/12 3,026
Morgan Stanley Mortgage Trust,
1,030 Series 40, Class 6, 7.00%, 2/20/20 1,034
Prudential Home Mortgage Securities:
342 Series 1993-24, Class A1, 5.50%, 6/25/00 341
2,319 Series 1993-24, Class A2, 5.50%, 7/25/00 2,291
Prudential Securities Financial Asset Funding Corp.,
997 Series 1993-4, Class A3, 6.83%, 9/25/09 1,001
Prudential Securities Secured Financing Corp.,
2,261 Series 1994-5, Class A1, 5.66%, 5/25/24 2,209
Security Pacific Acceptance Corp.,
2,682 Series 1992-2, Class A3, 7.50%, 6/15/12 2,700
--------
24,237
--------
INTERNATIONAL/YANKEE (U.S. $ DENOMINATED) 6.7%
Ford Capital BV Debentures,
1,450 9.875%, 5/15/02 1,626
Ford Capital BV Notes,
1,638 10.125%, 11/15/00 1,789
Korea Development Bank Bonds,
2,000 7.125%, 9/17/01 1,891
Quebec Province CDA Debentures,
1,000 13.25%, 9/15/14 1,134
Sumitomo Bank International Notes,
5,000 9.55%, 7/15/00 5,341
--------
11,781
--------
OTHER 0.7%
Florida Housing Finance Agency:
360 Antigua Club-A-2, 8.625%, 8/01/01 382
370 Brittany Apartments-C-2, 8.625%, 8/01/02 397
455 Maitland Club-B-2, 8.625%, 8/01/01 482
--------
1,261
--------
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
U.S. GOVERNMENT AGENCY-BACKED
MORTGAGE ISSUES 13.7%
Federal Home Loan Mortgage Corporation (FHLMC)
Participation Certificates:
$ 30 7.00%, 12/01/01 $ 30
134 7.75%, 7/01/09 138
Federal Home Loan Mortgage Corporation (FHLMC)
Real Estate Mortgage Investment Conduit (REMIC):
784 Series 1243, Class K, 7.50%, 8/15/01 794
306 Series 153, Class F, 7.75%, 8/15/15 306
1,285 Series 1149, Class K, 7.50%, 7/15/20 1,292
2,515 Series 1101, Class L, 6.95%, 9/15/20 2,532
77 Series 1169, Class D, 7.00%, 5/15/21 78
925 Series 1286, Class E, 7.00%, 10/15/21 932
Federal National Mortgage Association (FNMA)
Real Estate Mortgage Investment Conduit (REMIC):
1,619 Series X-19A, Class A, 6.50%, 10/25/00 1,622
2,000 Series 1993-G06, Class K, 7.00%, 11/25/01 2,020
1,228 Series 1991-63, Class G, 6.95%, 5/25/06 1,239
1,000 Series 1993-86, Class E, 6.00%, 1/25/07 999
1,180 Series 1992-93, Class G, 7.50%, 6/25/07 1,189
151 Series 1992-138, Class C, 6.00%, 12/25/18 150
1,311 Series G92-11, Class HB, 7.00%, 11/25/19 1,311
697 Series G92-35, Class C, 7.50%, 7/25/20 704
817 Series 1991-154, Class PH, 7.50%, 9/25/20 823
3,547 Series 1991-82, Class PL, 7.00%, 12/15/20 3,566
3,179 Series G92-53, Class H, 7.00%, 7/25/21 3,187
U.S. Department of Veterans Affairs Mortgage Trust
1,000 (REMIC), Series 1992-1, Class J, 7.75%, 2/15/01 1,014
--------
23,926
--------
U.S. TREASURY OBLIGATIONS 15.4%
U.S. Treasury Bonds,
7,000 10.75%, 2/15/03 8,459
U.S. Treasury Notes:
11,500 6.625%, 7/31/01 11,827
6,500 6.625%, 3/31/02 6,713
--------
26,999
--------
Total Long-Term Investments (Cost $170,703) 171,165
--------
Number
of Shares
(in thousands)
- ------------------
SHORT-TERM INVESTMENTS 1.6%
INVESTMENT COMPANIES 1.6%
10 Financial Square Prime Obligation Fund 10
2,698 Short-Term Investments Co. Liquid Assets Portfolio 2,698
--------
Total Short-Term Investments (Cost $2,708) 2,708
--------
Total Investments (Cost $173,411) 99.2% 173,873
--------
Other Assets, less Liabilities 0.8% 1,372
--------
TOTAL NET ASSETS 100.0% $175,245
========
See notes to the financial statements.
FIRSTAR
FUNDS
(logo)
INTERMEDIATE BOND MARKET FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
LONG-TERM INVESTMENTS 96.8%
ASSET-BACKED SECURITIES 20.5%
AUTO LOAN RECEIVABLES 0.4%
General Motors Acceptance Corp. Grantor,
$ 337 Series 1995-A, Class A, 7.15%, 3/15/00 $ 337
Keycorp Auto Grantor Trust,
495 Series 1995-A, Class A, 5.80%, 7/15/00 495
Premier Auto Trust,
436 Series 1993-5, Class A2, 4.22%, 3/02/99 434
--------
1,266
--------
CREDIT CARD RECEIVABLES 15.9%
AT&T Universal Card MasterTrust,
3,000 Series 1995-2, Class A, 5.95%, 10/17/00 3,005
Advanta Credit Card Master Trust,
1,000 Series 1995-F, Class A1, 6.05%, 8/01/03 1,004
American Express Master Trust,
2,000 Series 1994-2, Class A, 7.60%, 8/15/02 2,090
Banc One Credit Card Master Trust:
7,375 Series 1995-B, Class A, 6.30%, 9/15/00 7,446
1,000 Series 1995-A, Class A, 6.15%, 7/15/02 1,006
Chemical Master Credit Card Trust I,
571 Series 1995-3, Class A, 6.23%, 8/15/02 577
Citibank Credit Card Master Trust, Principal Only,
11,900 Series 1996-1, 0.00%, 2/07/01 10,113
Discover Card Master Trust I,
500 Series 1993-3, Class A, 6.20%, 5/16/06 502
First Chicago Master Trust II,
4,075 Series 1994-L, Class A, 7.15%, 2/15/00 4,128
HFC Private Label Credit Card Master Trust II,
1,667 Series 1994-2, Class A, 7.80%, 9/20/03 1,687
Household Affinity Credit Card Master Trust I,
3,300 Series 1993-2, Class A, 5.60%, 11/15/00 3,284
MBNA Master Credit Card Trust,
745 Series 1995-F, Class A, 6.60%, 8/15/00 757
NationsBank Credit Card Master Trust,
2,500 Series 1995-1, Class A, 6.45%, 8/15/00 2,532
Sears Credit Account Master Trust:
5,900 Series 1994-1, Class A, 7.00%, 8/15/00 5,978
2,400 Series 1995-3, Class A, 7.00%, 10/15/04 2,453
Speigel Credit Card Master Trust,
950 Series 1994-B, Class A, 8.15%, 6/15/04 981
--------
47,543
--------
HOME EQUITY LOAN RECEIVABLES 4.2%
Advanta Home Equity Loan Trust,
1,588 Series 1993-1, Class A2, 5.95%, 5/25/09 1,570
Corestates Home Equity Trust,
1,375 Series 1996-1, Class A3, 7.00%, 12/15/09 1,401
EQCC Home Equity Loan Trust:
1,800 Series 1994-4, 8.68%, 10/15/08 1,871
1,523 Series 1993-4, Class A, 5.725%, 12/15/08 1,505
2,060 Series 1994-1, Class A, 5.80%, 3/15/09 2,038
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
HOME EQUITY LOAN RECEIVABLES 4.2% (CONT.)
Security Pacific Acceptance Corp.,
$ 628 Series 1991-2, Class B, 8.55%, 9/15/11 $ 634
Security Pacific Home Equity Loan:
784 Series 1991-1, 8.85%, 5/15/98 785
799 Series 1991-2, 8.15%, 6/15/20 803
UCFC Home Equity Loan,
2,039 Series 1995-C2, Class A6, 6.825%, 10/10/26 2,065
--------
12,672
--------
CORPORATE BONDS 30.6%
Aetna Services, Inc. Debentures,
1,375 6.75%, 9/15/13 1,331
Aetna Services, Inc. Company Guarantee,
3,000 6.75%, 8/15/01 3,046
American General Finance Corp. Debentures,
650 9.625%, 7/15/00 696
American General Finance Corp. Notes,
1,000 8.00%, 2/15/00 1,033
BankAmerica Corporation Subordinated Notes:
465 9.75%, 7/01/00 500
2,000 10.00%, 2/01/03 2,299
Bankers Trust - NY, Subordinated Debentures,
1,000 9.50%, 6/14/00 1,065
Bear Stearns Company Senior Notes:
1,312 6.75%, 8/15/00 1,332
2,000 9.375%, 6/01/01 2,179
Caterpillar, Inc. Sinking Fund Debentures,
2,112 9.75%, 6/01/19 2,271
Chase Manhattan Corp. Debentures,
1,015 10.00%, 6/15/99 1,058
Chase Manhattan Corp. Subordinated Notes,
2,300 9.375%, 7/01/01 2,517
Chrysler Financial Corp. Debentures,
700 12.75%, 11/01/99 766
Commonwealth Edison First Mortgage,
850 9.75%, 2/15/20 938
Consolidated Edison Co. Debentures,
100 7.60%, 1/15/00 103
Continental Bank N.A. Subordinated Notes,
2,875 12.50%, 4/01/01 3,338
Continental Cablevision, Inc. Debentures:
1,050 8.875%, 9/15/05 1,182
3,475 9.50%, 8/01/13 4,073
Deseret Generation & Transmission Co-op Debentures,
734 9.375%, 1/02/11 763
Jack Eckerd Corporation Senior Subordinated Notes,
2,449 9.25%, 2/15/04 2,605
Federal Express Corporation Notes,
1,500 9.65%, 6/15/12 1,930
Federal Express Sinking Fund Pass-Thru Certificates,
1,000 7.89%, 9/23/08 1,066
See notes to the financial statements.
FIRSTAR
FUND
(logo)
INTERMEDIATE BOND MARKET FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
CORPORATE BONDS 30.6% (CONT.)
First Chicago Corp. Subordinated Notes,
$ 236 11.25%, 2/20/01 $ 267
First Interstate Bancorp Subordinated Notes,
500 9.90%, 11/15/01 559
First National Bank of Omaha Subordinated Notes,
1,600 7.32%, 12/01/10 1,663
First USA Bank Senior Notes,
1,000 5.85%, 2/22/01 996
Fleet Mortgage Group Notes,
2,405 6.50%, 6/15/00 2,428
Ford Motor Company Debentures,
850 9.50%, 9/15/11 1,070
Ford Motor Credit Co. Debentures,
1,097 9.50%, 4/15/00 1,165
Ford Motor Credit Co. Notes,
375 6.375%, 4/15/00 377
General Motors Acceptance Corp. Debentures,
1,988 8.625%, 6/15/99 2,045
General Motors Acceptance Corp. Notes:
1,050 8.00%, 10/01/99 1,074
2,217 9.375%, 4/01/00 2,348
1,000 9.625%, 12/15/01 1,112
General Motors Corp. Debentures,
1,355 9.625%, 12/01/00 1,472
Georgia Pacific Corp. Debentures:
1,150 9.50%, 12/01/11 1,410
775 9.50%, 5/15/22 882
Goldman Sachs Group Notes,
5,000 6.25%, 2/01/03 (Acquired 2/01/96; Cost $4,988)* 4,977
Household Finance Corp. Senior Subordinated Notes,
2,468 9.55%, 4/01/00 2,613
Household Finance Corp. Subordinated Notes,
1,445 9.625%, 7/15/00 1,544
International Lease Finance Corp. Medium Term Notes,
500 8.25%, 10/19/98 505
Lehman Brothers Holdings, Inc. Medium Term Notes,
1,750 8.875%, 2/15/00 1,830
Lehman Brothers Holdings, Inc. Notes:
2,000 6.90%, 7/15/99 2,021
1,500 6.65%, 11/08/99 1,516
940 8.875%, 3/01/02 1,017
Lehman Brothers, Inc. Senior Subordinated Notes:
2,280 10.00%, 5/15/99 2,368
1,000 6.125%, 2/01/01 997
National Westminster Bank Debentures,
700 9.375%, 11/15/03 799
National Westminster Bank Subordinated Notes,
700 9.45%, 5/01/01 765
NCNB Corp. Subordinated Notes,
2,380 10.20%, 7/15/15 3,187
News America Holdings Debentures,
750 10.125%, 10/15/12 884
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
CORPORATE BONDS 30.6% (CONT.)
Paine Webber Group, Inc. Notes,
$ 500 8.875%, 3/15/05 $ 562
Paine Webber Group, Inc. Medium Term Notes,
1,800 7.70%, 2/11/00 1,842
J.C. Penney Company, Inc. Debentures,
1,950 9.75%, 6/15/21 2,171
Salomon, Inc. Medium Term Notes,
1,300 10.125%, 6/01/99 1,356
Salomon, Inc. Senior Notes:
1,450 7.75%, 5/15/00 1,493
1,100 6.75%, 2/15/03 1,118
Salomon Smith Barney Holdings, Inc. Notes,
1,400 6.625%, 6/01/00 1,413
The Charles Schwab Corp. Medium Term Notes,
650 6.06%, 10/02/00 648
Security Pacific Corp. Subordinated Notes,
1,000 11.00%, 3/01/01 1,122
--------
91,707
--------
MORTGAGE-BACKED SECURITIES 3.8%
Green Tree Financial Corp. Pass-Thru Certificates,
350 Series 1993-4, Class A3, 6.25%, 1/15/19 351
MDC Asset Investors Trust,
Real Estate Mortgage Investment Conduit (REMIC),
883 Series VIII, Class 8, 7.75%, 9/25/17 896
Merrill Lynch Mortgage Investors, Inc. Notes,
124 8.375%, 2/09/00 129
Prudential Securities Financial Asset Funding Corp.,
995 Series 1993-8, Class A, 5.775%, 11/15/14 982
Prudential Securities Secured Financing Corp.:
1,864 Series 1993-1, Class A, 6.44%, 2/16/21 1,844
2,764 Series 1994-5, Class A1, 5.66%, 5/25/24 2,700
Salomon Brothers Mortgage Securities,
1,396 Series 1986-1, Class A, 6.00%, 12/25/11 1,380
Westam Mortgage Financial Corporation,
2,990 Series 11, Class A, 6.36%, 8/26/20 3,056
--------
11,338
--------
INTERNATIONAL/YANKEE (U.S. $ DENOMINATED) 8.1%
Dresdner Bank of New York Subordinated Debentures,
650 7.25%, 9/15/15 673
Ford Capital BV Debentures,
600 9.50%, 6/01/10 740
Ford Capital BV Notes,
4,153 10.125%, 11/15/00 4,536
Hydro-Quebec Corporation Debentures,
2,250 11.75%, 2/01/12 3,273
Korea Development Bank Bonds,
1,075 7.125%, 9/17/01 1,016
Korea Electric Power Debentures:
820 7.75%, 4/01/13 707
750 6.75%, 8/01/27 658
See notes to the financial statements.
FIRSTAR
FUND
(logo)
INTERMEDIATE BOND MARKET FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
INTERNATIONAL/YANKEE (U.S. $ DENOMINATED) 8.1% (CONT.)
Midland Bank PLC Subordinated Notes,
$ 4,225 6.95%, 3/15/11 $ 4,282
National Bank of Hungary Debentures,
1,350 8.875%, 11/01/13 1,562
Norsk Hydro A/S Debentures,
1,350 9.00%, 4/15/12 1,630
Pohang Iron & Steel Notes,
875 7.125%, 7/15/04 774
Quebec Province Local Government Guarantee,
400 13.25%, 9/15/14 454
Sumitomo Bank International Notes,
1,600 9.55%, 7/15/00 1,709
Wharf Capital International Ltd. Notes:
800 8.875%, 11/01/04 775
1,725 7.625%, 3/13/07 1,493
--------
24,282
--------
U.S. GOVERNMENT AGENCY-BACKED
MORTGAGE ISSUES 6.2%
Federal Home Loan Mortgage Corporation (FHLMC)
Real Estate Mortgage Investment Conduit (REMIC):
187 Series 1624, Class KE, 6.00%, 10/15/02 187
872 Series 1289, Class PR, 7.50%, 2/15/03 894
997 Series 1456, Class LA, 7.50%, 5/15/03 1,019
578 Series 1496, Class KA, 6.00%, 12/15/03 576
934 Series 8, Class VB, 7.00%, 4/25/03 952
300 Series 1551, Class E, 6.50%, 9/15/07 303
1,200 Series 1101, Class L, 6.95%, 9/15/20 1,208
832 Series 1167, Class E, 7.50%, 11/15/21 855
2,445 Series 1286, Class A, 6.00%, 5/15/22 2,419
Federal National Mortgage Association (FNMA)
Real Estate Mortgage Investment Conduit (REMIC):
653 Series 1993-23, Class PU, 7.50%, 1/25/00 660
500 Series 1992-73, Class L, 7.50%, 1/25/01 511
1,250 Series 1992-18, Class HB, 7.20%, 3/25/02 1,266
3,500 Series 1993-37, Class B, 7.00%, 7/25/02 3,556
863 Series 1992-103, Class L, 7.50%, 11/25/02 880
538 Series 1990-89, Class K, 6.50%, 7/25/20 538
1,971 Series 1991-77, Class PH, 7.00%, 11/25/20 1,981
359 Series 1991-82, Class PL, 7.00%, 12/15/20 361
U.S. Department of Veterans Affairs Mortgage
500 Trust (REMIC),Series 1992-2,
Class J, 7.00%, 3/15/01 501
--------
18,667
--------
U.S. TREASURY OBLIGATIONS 27.6%
U.S. Treasury Bonds:
28,850 10.75%, 2/15/03 34,863
10,000 13.75%, 8/15/04 14,175
26,050 10.75%, 8/15/05 33,670
--------
82,708
--------
Total Long-Term Investments (Cost $286,056) 290,183
--------
Number of Market
Shares Value
(in thousands) (in thousands)
- --------------- ---------------
SHORT-TERM INVESTMENTS 1.5%
INVESTMENT COMPANIES 1.5%
10 Financial Square Prime Obligation Fund $ 10
4,347 Short-Term Investments Co. Liquid Assets Portfolio 4,347
--------
Total Short-Term Investments (Cost $4,357) 4,357
--------
Total Investments (Cost $290,413) 98.3% 294,540
--------
Other Assets, less Liabilities 1.7% 5,131
--------
TOTAL NET ASSETS 100.0% $299,671
========
* Unregistered security
See notes to the financial statements.
FIRSTAR
FUND
(logo)
TAX-EXEMPT INTERMEDIATE BOND FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
GENERAL OBLIGATION 7.7%
Elgin, Illinois,
$ 2,990 7.25%, 1/01/04 $ 3,408
Lake County, Illinois, School District 112,
1,415 9.00%, 12/01/05 1,810
Washington State:
100 6.75%, 10/01/01 104
1,000 6.30%, 9/01/02 1,071
--------
Total General Obligation (Cost $6,791) 6,393
--------
REVENUE BONDS 1.8%
HOUSING 1.3%
South Dakota Housing Development Authority -
1,105 Homeownership Mortgage, 4.85%, 5/01/01 1,111
--------
UNIVERSITY 0.5%
New England Education Student Loan Marketing
360 Corporation, 5.80%, 3/01/02 375
--------
Total Revenue Bonds (Cost $1,471) 1,486
--------
PREREFUNDED AND ESCROWED
TO MATURITY 70.0%
Adams County, Mississippi Hospital Revenue,
1,000 8.00%, 10/01/16, Prerefunded 10/01/01 1,135
Alaska State Housing Finance Corporation,
1,465 6.375%, 12/01/12, Prerefunded 12/01/02 1,603
Anniston, Alabama Regional Medical Center Board
1,160 Project, 8.00%, 7/01/11, Escrowed to Maturity 1,458
Arizona State Municipal Funding Program,
1,500 8.75%, 8/01/07, Escrowed to Maturity 1,962
Arizona Health Facilities Hospital Revenue,
2,000 7.25%, 11/01/14, Prerefunded 11/01/03 2,275
Central Arizona Water Conservation District,
2,000 6.50%, 11/01/11, Prerefunded 5/01/01 2,161
Cherokee County, Oklahoma,
1,340 0.00%, 11/01/11, Escrowed to Maturity 677
Chicago, Illinois Motor Fuel Tax Revenue,
1,000 7.05%, 1/01/07, Prerefunded 1/01/01 1,088
Clark County, Nevada School District,
345 7.00%, 6/01/09, Prerefunded 6/01/01 375
Cleveland, Ohio Parking Facilities Revenue,
1,125 8.10%, 9/15/22, Prerefunded 9/15/02 1,315
Convention Center Authority - Rhode Island Revenue,
1,000 6.65%, 5/15/12, Prerefunded 5/15/01 1,085
Danville, Indiana Community Elementary School
1,000 Building Corp., First Mortgage, 6.90%, 1/15/10,
Prerefunded 1/15/02 1,103
Delaware County, Pennsylvania - Elwyn Inc. Project,
1,000 8.35%, 6/01/15, Prerefunded 6/01/00 1,102
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
PREREFUNDED AND ESCROWED
TO MATURITY 70.0% (CONT.)
Des Plaines, Illinois Hospital Facilities -
Holy Family Hospital Project,
$ 590 10.75%, 1/01/14, Prerefunded 7/01/02 $ 733
Douglas County, Nebraska Hospital Authority Revenue,
1,000 7.25%, 11/01/21, Prerefunded 11/01/01 1,114
Elizabeth-Forward Pennsylvania School District,
1,000 7.25%, 1/15/10, Prerefunded 1/15/00 1,051
Farmington, New Mexico Power Revenue Bonds,
1,705 9.875%, 1/01/13, Prerefunded 7/01/05 2,227
Fruita, Colorado, Escrowed to Maturity:
500 9.25%, 10/01/01 561
500 9.25%, 4/01/03 602
Fulco, Georgia Hospital Authority Anticipation Certificates,
1,090 6.25%, 9/01/13, Prerefunded 9/01/02 1,191
Hodgkins, Illinois,
1,300 9.50%, 12/01/09, Prerefunded 12/01/01 1,551
Houston, Texas Airport Systems Revenue,
950 8.20%, 7/01/05, Escrowed to Maturity 1,122
Illinois Educational Facilities Authority -
Chicago College Of Osteopathic Medicine,
Escrowed To Maturity,
310 8.75%, 7/01/99 320
Illinois Educational Facilities Authority -
Loyola University,
3,355 7.125%, 7/01/21, Prerefunded 7/01/01 3,696
Intermountain Power Agency, Utah Supply Revenue,
2,500 0.00%, 7/01/21, Prerefunded 7/01/00 254
Louisiana Public Facilities Authority Hospital Revenue,
1,915 7.25%, 10/01/22, Prerefunded 10/01/02 2,168
Louisville, Kentucky Water & Sewer Revenue,
1,000 6.00%, 11/15/07, Escrowed to Maturity 1,098
Maricopa County, Arizona School District No. 1, Phoenix
1,000 Elementary, 6.60%, 7/01/03, Prerefunded 7/01/01 1,078
Metropolitan Government Nashville & Davidson
County, Tennessee Water & Sewer,
8,010 0.00%, 12/01/13, Prerefunded 12/01/02 2,092
Metropolitan Nashville Airport,
500 7.75%, 7/01/07, Prerefunded 7/01/01 560
Michigan State Hospital Financial Authority,
Sisters of Mercy Health Corp.,
900 7.50%, 2/15/18, Prerefunded 2/15/01 992
Nevada State Colorado River Community,
1,130 6.50%, 7/01/19, Prerefunded 7/01/04 1,262
New Jersey State Turnpike Authority Revenue,
25 6.75%, 1/01/09, Escrowed to Maturity 28
Oklahoma State Industrial Authority Revenue,
St. Anthony Hospital, Escrowed to Maturity,
1,030 6.125%, 6/01/03 1,100
Peninsula Ports Authority Virginia Health
Care Facilities - Mary Immaculate Project,
2,000 7.00%, 8/01/17, Prerefunded to 8/01/04 & 8/01/06 2,244
Pennsylvania State Industrial Development Authority -
1,000 Series A, 7.00%, 1/01/11, Prerefunded 7/01/01 1,098
See notes to the financial statements.
FIRSTAR
FUND
(logo)
TAX-EXEMPT INTERMEDIATE BOND FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
PREREFUNDED AND ESCROWED
TO MATURITY 70.0% (CONT.)
Philadelphia, Pennsylvania Regional Port Authority,
Lease Revenue Bonds, 7.15%, 8/01/20,
$1,000 Prerefunded 8/01/00 $ 1,065
Phoenix, Arizona Street & Highway Users,
Partially Prerefunded 7/01/02, Remainder Escrowed
to Maturity:
1,000 6.50%, 7/01/09 1,099
4,700 6.25%, 7/01/11 5,115
San Marcos, California Certificate Participation,
1,085 0.00%, 2/15/06, Escrowed to Maturity 760
Tucson, Arizona Street & Highway User Revenue Bonds,
1,000 9.25%, 7/01/02, Escrowed to Maturity 1,178
University of Illinois,
1,005 6.10%, 10/01/03, Escrowed to Maturity 1,087
Virginia State Residential Authority - Solid Waste Disposal
1,000 System, 7.30%, 4/01/15, Prerefunded 4/01/00 1,078
Wausau, Wisconsin School District,
1,000 6.50%, 4/01/10, Prerefunded 4/01/02 1,077
Williston, North Dakota,
80 6.00%, 6/01/98, Escrowed to Maturity 80
--------
Total Prerefunded and Escrowed to Maturity
(Cost $57,304) 58,020
--------
INSURED BONDS 21.4%
EDUCATION 2.9%
Cook County, Illinois Niles Twp. School District,
1,560 0.00%, 12/01/07 976
Cook County, Illinois Cicero School District,
1,000 8.50%, 12/01/04 1,229
Merrillville, Indiana Multi-School Building Corporation,
200 6.375%, 7/01/03 219
--------
2,424
--------
ELECTRIC 2.7%
Springfield, Illinois Electric Revenue,
1,000 6.00%, 3/01/04 1,078
1,050 6.00%, 3/01/06 1,152
--------
2,230
--------
GENERAL OBLIGATION 11.8%
Amarillo, Texas Independent School District,
1,035 7.00%, 2/01/06 1,190
Bolingbrook, Illinois,
1,080 0.00%, 1/01/05 796
Chicago, Illinois,
675 11.60%, 1/01/01 799
Chicago, Illinois Park District,
2,770 6.00%, 1/01/07 3,070
Maricopa County, Arizona Elementary School District
No. 068, Alhambra,
1,000 5.625%, 7/01/03, Partially Prerefunded 1,056
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
GENERAL OBLIGATION 11.8% (CONT.)
Palatine, Illinois,
$1,405 9.90%, 1/01/16, Crossover Refunded 1/01/00 $ 1,561
Rocklin, California Unified School District,
1,235 6.70%, 9/01/04 1,325
--------
9,797
--------
PUBLIC FACILITIES & IMPROVEMENTS 4.0%
Illinois State Certificates of Participation,
1,000 6.00%, 7/01/06 1,085
Mun-Del Building Corp., Indiana,
1,000 7.00%, 1/05/05 1,062
Texas State Turnpike Authority, Dallas,
1,000 6.50%, 1/01/08 1,143
--------
3,290
--------
Total Insured Municipal Bonds (Cost $16,973) 17,741
--------
Number
of Shares
(in thousands)
INVESTMENT COMPANIES 1.2%
10 Financial Square Tax-Exempt Money Market 10
944 Tax Free Investment Trust 944
--------
Total Investment Companies (Cost $954) 954
--------
Total Investments (Cost $83,493) 102.1% 84,594
--------
Liabilities, less Other Assets (2.1)% (1,736)
--------
TOTAL NET ASSETS 100.0% $82,858
========
See notes to the financial statements.
FIRSTAR
FUND
(logo)
BOND IMMDEX(TM) FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
LONG-TERM INVESTMENTS 95.1%
ASSET-BACKED SECURITIES 10.6%
AUTO LOAN RECEIVABLES 0.4%
Ford Credit Grantor Trust,
$ 537 Series 1995-A, Class A, 5.90%, 5/15/00 $ 538
General Motors Acceptance Corp. Grantor Trust,
643 Series 1995-A, Class A, 7.15%, 3/15/00 643
Premier Auto Trust:
203 Series 1993-4, Class A2, 4.65%, 2/02/99 203
148 Series 1993-5, Class A2, 4.22%, 3/02/99 147
420 Series 1993-6, Class B, 4.875%, 11/02/99 420
--------
1,951
--------
CREDIT CARD RECEIVABLES 10.2%
Advanta Credit Card Master Trust,
4,200 Series 1995-F, Class A1, 6.05%, 8/01/03 4,217
Banc One Credit Card Master Trust,
8,000 Series 1995-B, Class A, 6.30%, 9/15/00 8,077
Citibank Credit Card Master Trust, Principal Only,
6,465 Series 1996-1, 0.00%, 2/07/01 5,494
First Chicago Master Trust II,
1,800 Series 1994-L, Class A, 7.15%, 2/15/00 1,823
HFC Private Label Credit Card Master Trust II,
274 Series 1993-2, Class A3, 4.65%, 12/20/08 274
Household Affinity Credit Card Master Trust I,
3,750 Series 1993-2, Class A, 5.60%, 11/15/00 3,732
NationsBank Credit Card Master Trust,
9,839 Series 1995-1, Class A, 6.45%, 8/15/00 9,964
Sears Credit Account Master Trust:
11,750 Series 1994-1, Class A, 7.00%, 8/15/00 11,905
1,700 Series 1995-2, Class A, 8.10%, 1/15/01 1,756
5,300 Series 1995-3, Class A, 7.00%, 10/15/04 5,416
--------
52,658
--------
CORPORATE BONDS 31.2%
Alabama Power Company First Mortgage Bond,
1,000 9.00%, 12/01/24 1,103
American Airline Equipment Pass-Thru Certificates,
1,500 10.21%, 1/01/10 1,868
BankAmerica Corporation Subordinated Notes,
3,539 10.00%, 2/01/03 4,067
Barclays North American Captial Corp. Debentures,
925 9.75%, 5/15/21 1,048
Bear Stearns Company Notes,
63 6.50%, 6/15/00 64
Bear Stearns Company Senior Notes,
500 6.75%, 8/15/00 508
Boston Edison Company Debentures,
4,900 9.375%, 8/15/21 5,441
Burlington Northern Railroad Company Equipment
Trust Certificates,
500 11.85%, 1/15/99 520
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
CORPORATE BONDS 31.2% (CONT.)
Chase Manhattan Corp. Notes,
$ 7,802 10.00%, 6/15/99 $8,135
Chrysler Financial Corp. Debentures,
1,927 12.75%, 11/01/99 2,110
Commonwealth Edison Co. First Mortgage,
6,050 9.75%, 2/15/20 6,673
Continental Bank Subordinated Notes,
1,963 12.50%, 4/01/01 2,279
Continental Cablevision, Inc. Debentures:
2,050 8.875%, 9/15/05 2,307
6,075 9.50%, 8/01/13 7,120
Deseret Generation & Transmission Co-op Debentures,
2,348 9.375%, 1/02/11 2,440
Federal Express Corporation Debentures,
2,163 9.625%, 10/15/19 2,317
Federal Express Corporation Notes,
4,400 9.65%, 6/15/12 5,662
First Chicago Corp. Subordinated Notes:
3,844 9.00%, 6/15/99 3,971
1,270 9.875%, 8/15/00 1,372
First National Bank Chicago Debentures,
1,100 8.08%, 1/05/18 1,258
First National Bank Omaha Subordinated Notes,
3,100 7.32%, 12/01/10 3,221
First USA Bank Notes,
1,125 5.85%, 2/22/01 1,120
Ford Motor Company Notes,
2,650 9.50%, 9/15/11 3,336
GTE Corporation Debentures,
500 10.25%, 11/01/20 560
GTE North, Inc. Debentures,
1,100 9.60%, 1/01/21 1,216
Geico Corporation Debentures,
2,000 9.15%, 9/15/21 2,260
General Motors Acceptance Corp. Medium Term Notes,
1,000 7.50%, 7/22/99 1,018
General Motors Acceptance Corp. Notes:
1,375 8.00%, 10/01/99 1,406
1,037 9.625%, 5/15/00 1,107
General Motors Corp. Debentures:
1,699 9.625%, 12/01/00 1,845
807 9.125%, 7/15/01 878
Georgia Pacific Corp. Debentures:
1,511 9.50%, 12/01/11 1,853
4,605 9.875%, 11/01/21 5,128
975 9.50%, 5/15/22 1,109
Goldman Sachs Group Notes,
10,000 6.25%, 2/01/03 (Acquired 2/01/96; Cost $9,974)<F1> 9,954
Household Finance Corp. Subordinated Notes,
4,327 9.625%, 7/15/00 4,623
Lehman Brothers Holdings, Inc. Debentures,
2,365 9.875%, 10/15/00 2,554
See notes to the financial statements.
FIRSTAR
FUND
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BOND IMMDEX(TM) FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
CORPORATE BONDS 31.2% (CONT.)
Lehman Brothers Holdings, Inc. Medium Term Notes:
$3,825 6.65%, 11/08/99 $ 3,867
1,805 8.875%, 2/15/00 1,888
Lehman Brothers Holdings, Inc. Notes,
1,700 6.90%, 7/15/99 1,718
Lehman Brothers, Inc. Senior Subordinated Notes,
7,232 10.00%, 5/15/99 7,512
The May Department Stores Company Debentures,
1,725 9.875%, 6/15/21 1,966
Mississippi Power & Light Notes,
1,000 8.80%, 4/01/05 1,000
Mobile Energy Services LLC Debentures,
700 8.665%, 1/01/17 755
National Westminster Bancorp. Inc., Debentures,
1,000 9.375%, 11/15/03 1,142
NCNB Corp. Subordinated Notes,
5,155 10.20%, 7/15/15 6,902
News America Holdings Debentures,
2,200 10.125%, 10/15/12 2,594
Paine Webber Group, Inc. Notes,
1,540 8.875%, 3/15/05 1,731
Paine Webber Group Medium Term Notes,
2,450 6.73%, 1/20/04 2,468
Parker Hannifin Debentures,
400 9.75%, 2/15/21 442
J.C. Penney Company, Inc. Debentures,
4,000 9.75%, 6/15/21 4,453
Salomon, Inc. Notes,
3,450 7.00%, 6/15/03 3,545
Salomon, Inc. Senior Notes:
2,850 7.75%, 5/15/00 2,935
2,100 6.75%, 2/15/03 2,134
The Charles Schwab Corp. Medium Term Notes:
2,000 5.84%, 9/30/99 1,995
2,250 5.90%, 10/01/99 2,246
Security Pacific Corp. Subordinated Notes,
680 11.50%, 11/15/00 763
Tenneco, Inc. Debentures,
3,150 7.45%, 12/15/25 3,296
Union Camp Corp. Debentures,
850 10.00%, 5/01/19 910
Westvaco Corp. Debentures,
1,200 10.125%, 6/01/19 1,298
--------
161,011
--------
MORTGAGE-BACKED SECURITIES 0.3%
Prudential Securities Secured Financing Corp.,
1,550 Series 1993-1, Class A, 6.44%, 2/16/21 1,533
--------
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
INTERNATIONAL/YANKEE (U.S. $ DENOMINATED) 9.9%
British Telecommunications Finance Debentures,
$2,761 9.625%, 2/15/19 $ 2,966
Dresdner Bank Subordinated Debentures,
3,500 7.25%, 9/15/15 3,626
Ford Capital BV Debentures,
425 9.875%, 5/15/02 477
Ford Capital BV Notes:
4,072 10.125%, 11/15/00 4,447
3,917 9.375%, 5/15/01 4,248
1,400 9.50%, 6/01/10 1,727
Hydro-Quebec Debentures:
3,500 11.75%, 2/01/12 5,091
750 9.75%, 1/15/18 848
Korea Development Bank Bond,
1,800 7.125%, 9/17/01 1,702
Korea Electric Power Debentures:
2,020 7.75%, 4/01/13 1,741
1,400 6.75%, 8/01/27 1,228
Midland Bank PLC Subordinated Notes,
5,000 6.95%, 3/15/11 5,067
National Bank of Hungary Debentures,
2,400 8.875%, 11/01/13 2,777
Newfoundland (Province of) Canada,
1,975 10.00%, 12/01/20 2,722
Norsk Hydro A/S Debentures,
2,900 9.00%, 4/15/12 3,501
Pohang Iron & Steel Notes,
1,575 7.125%, 7/15/04 1,393
Quebec Province Debentures,
2,000 11.00%, 6/15/15 2,254
Sweden (Kingdom of) Debentures,
1,100 11.125%, 6/01/15 1,630
Wharf Capital International Ltd. Notes:
1,700 8.875%, 11/01/04 1,646
2,675 7.625%, 3/13/07 2,315
--------
51,406
--------
U.S. GOVERNMENT AGENCY-BACKED
MORTGAGE ISSUES 6.9%
Federal Home Loan Mortgage Corporation (FHLMC),
105 Participation Certificates, 7.50%, 4/01/07 107
Federal Home Loan Mortgage Corporation (FHLMC)
Real Estate Mortgage Investment Conduit (REMIC):
1,115 Series 1022, Class J, 6.00%, 12/15/20 1,102
2,770 Series 1118, Class Z, 8.25%, 7/15/21 2,867
351 Series 1169, Class D, 7.00%, 5/15/21 354
2,800 Series 162, Class F, 7.00%, 5/15/21 2,834
7 Series 1259, Class IC, 1007.05%, 10/15/05 24
2,541 Series 1790-A, Class A, 7.00%, 4/15/22 2,566
656 Series 6, Class C, 9.05%, 6/15/19 684
2,479 Series 188, Class H, 7.00%, 9/15/21 2,507
1,809 Series 1201, Class E, 7.40%, 12/15/21 1,840
See notes to the financial statements.
FIRSTAR
FUND
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BOND IMMDEX(TM) FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
U.S. GOVERNMENT AGENCY-BACKED
MORTGAGE ISSUES 6.9% (CONT.)
Federal National Mortgage Association (FNMA),
Participation Certificates:
$ 434 7.50%, 8/01/07 $ 447
127 7.75%, 6/01/08 133
Federal National Mortgage Association (FNMA)
Real Estate Mortgage Investment Conduit (REMIC):
1,000 Series 1990-61, Class H, 7.00%, 6/25/20 1,013
904 Series 1990-102, Class J, 6.50%, 8/25/20 900
3,800 Series 1991-56, Class M, 6.75%, 6/25/21 3,820
5 Series 1992-29, Class K, 977.92%, 11/25/00 53
650 Series 1993-87, Class KD, 6.00%, 6/25/03 647
18 Series 1992-145, Class N, 1010.06%, 1/25/06 390
950 Series X-225C, Class TE, 5.45%, 10/25/18 941
1,338 Series 1988-24, Class G, 7.00%, 10/25/18 1,353
1,265 Series 1989-44, Class H, 9.00%, 7/25/19 1,326
314 Series 1989-90, Class E, 8.70%, 12/25/19 333
1,421 Series 1990-30, Class E, 6.50%, 3/25/20 1,422
120 Series 1990-72, Class A, 9.00%, 7/25/20 121
538 Series 1990-72, Class B, 9.00%, 7/25/20 575
4,896 Series 1990-105, Class J, 6.50%, 9/25/20 4,886
926 Series 1990-106, Class J, 8.50%, 9/25/20 963
1,638 Series 1992-120, Class C, 6.50%, 7/25/22 1,635
--------
35,843
--------
U.S. TREASURY OBLIGATIONS 36.2%
U.S. Treasury Bonds:
28,000 10.75%, 8/15/05 36,190
111,355 9.25%, 2/15/16 150,468
--------
186,658
--------
Total Long-Term Investments (Cost $469,191) 491,060
--------
Number Market
of Shares Value
(in thousands) (in thousands)
- --------------- ---------------
SHORT-TERM INVESTMENTS 4.3%
INVESTMENT COMPANIES 1.4%
10 Financial Square Prime Obligation Fund $ 10
6,992 Short-Term Investments Co. Liquid Assets Portfolio 6,992
--------
7,002
--------
Principal
Amount
(in thousands)
- ---------------
VARIABLE RATE DEMAND NOTES 2.9%
$15,000 Warner-Lambert Co. 15,000
--------
Total Short-Term Investments (Cost $22,002) 22,002
--------
Total Investments (Cost $491,193) 99.4% 513,062
--------
Other Assets, less Liabilities 0.6% 3,022
--------
TOTAL NET ASSETS 100.0% $516,084
========
* Unregistered security
See notes to the financial statements.
FIRSTAR
FUND
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SHORT-TERM BOND MARKET FUND
INTERMEDIATE BOND MARKET FUND
TAX-EXEMPT INTERMEDIATE BOND FUND
BOND IMMDEX(TM) FUND
NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION
Firstar Funds, Inc. (the "Company") was incorporated on February 15, 1988,
as a Wisconsin Corporation and is registered as an open-end management
investment company under the Investment Company Act of 1940. The Short-Term Bond
Market, Intermediate Bond Market, Tax-Exempt Intermediate Bond and Bond
IMMDEX(TM) Funds (the "Funds") are separate, diversified investment portfolios
of the Company. The Short-Term Bond Market Fund and Bond IMMDEX(TM) Fund
commenced operations on December 29, 1989; the Intermediate Bond Market Fund
commenced operations on January 5, 1993; and the Tax-Exempt Inter mediate Bond
Fund commenced operations on February 8, 1993. The objective of the Short-Term
Bond Market Fund is to seek to provide an annual rate of total return, before
Fund expenses, comparable to the annual rate of total return of the Lehman
Brothers 1-3 year Government/Corporate Bond Index. The objective of the
Intermediate Bond Market Fund is to seek to provide an annual rate of total
return, before Fund expenses, comparable to the annual rate of total return of
the Lehman Brothers Intermediate Government/Corporate Bond Index. The objective
of the Tax-Exempt Intermediate Bond Fund is to seek to provide current income
that is substantially exempt from federal income tax and emphasize total return
with relatively low volatility of principal. The objective of the Bond
IMMDEX(TM) Fund is to seek to provide an annual rate of total return, before
Fund expenses, comparable to the annual rate of total return of the Lehman
Brothers Government/Corporate Bond Index.
The Company has issued two classes of Fund shares in each of the
Funds: Series A and Series Institutional. The Series A shares are subject to a
0.25% service organization fee and to an initial sales charge imposed at the
time of purchase, in accordance with the Funds' prospectus. The maximum sales
charge is 2% of the offering price or 2.04% of the net asset value. Each class
of shares for each Fund has identical rights and privileges except with respect
to shareowner organization fees paid by Series A shares, voting rights on
matters affecting a single class of shares and the exchange privileges of each
class of shares.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
a) Investment Valuation - Securities which are traded on a recognized exchange
are valued at the last sale price on the securities exchange on which such
securities are primarily traded or at the last sale price on the national
securities market. Exchange-traded securities for which there were no
transactions are valued at the current bid prices. Securities traded on only
over-the-counter markets are valued on the basis of closing over-the-counter bid
prices. Instruments with a remaining maturity of 60 days or less are valued on
an amortized cost basis which approximates market value. Securities for which
quotations are not readily available and other assets are valued at fair value
as determined by the investment adviser under the supervision of the Board of
Directors.
b) Federal Income Taxes - No provision for federal income taxes has been made
since the Funds have complied to date with the provisions of the Internal
Revenue Code available to regulated investment companies and intend to continue
to so comply in future years.
c) Income and Expenses - The Funds are charged for those expenses that are
directly attributable to each portfolio, such as advisory, administration and
certain shareowner service fees. Expenses that are not directly attributable to
a portfolio are typically allocated among the Company's portfolios in proportion
to their respective net assets, number of shareowner accounts or net sales,
where applicable. Net investment income other than class specific expenses, and
realized and unrealized gains and losses are allocated daily to each class of
shares based upon the relative net asset value of outstanding shares (or the
value of dividend-eligible shares, as appropriate) of each class of shares at
the beginning of the day (after adjusting for the current day's capital share
activity of the respective class).
d) Distributions to Shareowners - Dividends from net investment income of the
Short-Term Bond Market, Intermediate Bond Market, Tax-Exempt Intermediate Bond
and Bond IMMDEX(TM) Funds are declared and paid monthly. Distributions of net
realized capital gains, if any, will be declared at least annually.
e) Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
f) Unregistered Security - The Intermediate Bond Market and Bond IMMDEX(TM)
Funds own a certain investment security which is unregistered and thus
restricted to resale. This security is valued by the Funds after giving due
consideration to pertinent factors including recent private sales, market
conditions and the issuer's financial performance. Where future disposition of
this security requires registration under the Securities Act of 1933, the Funds
have the right to include their security in such registration, generally without
cost to the Funds. The Funds have no right to require registration of
unregistered securities.
See notes to the financial statements.
FIRSTAR
FUND
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g) Other - Investment and shareowner transactions are recorded on trade date.
The Funds determine the gain or loss realized from investment transactions by
comparing the original cost of the security lot sold with the net sale proceeds.
Interest income is recognized on an accrual basis. Discounts and premiums on
bonds are amortized over the life of the respective bond. Generally accepted
accounting principles require that permanent financial reporting and tax
differences be reclassified to capital stock.
3. INVESTMENT TRANSACTIONS
The aggregate purchases and sales, in thousands, of securities, excluding
short-term investments, for the Funds for the period ended April 30, 1998, were
as follows:
SHORT-TERM INTERMEDIATE TAX-EXEMPT BOND
BOND MARKET BOND MARKET INTERMEDIATE IMMDEX(TM)
FUND FUND BONDFUND FUND
Purchases:
------------------------------------------------------------
U.S. Government $15,302 $27,681 - $71,689
Other 44,133 37,561 $20,662 23,813
Sales:
U.S. Government 30,706 24,373 - 19,323
Other 52,114 8,041 6,043 38,491
At April 30, 1998, gross unrealized appreciation and depreciation of investments
for federal income tax purposes, in thousands, were as follows:
-----------------------------------------------------------
SHORT-TERM INTERMEDIATE TAX-EXEMPT BOND
BOND MARKET BOND MARKET INTERMEDIATE IMMDEX(TM)
FUND FUND BOND FUND FUND
------------------------------------------------------------
Appreciation $907 $5,261 $1,280 $24,314
(Depreciation) (485) (1,134) (182) (2,615)
------- ------- ------- -------
Net unrealized
appreciation
on investments $422 $4,127 $1,098 $21,699
======= ======= ======= =======
At April 30, 1998, the cost of investments, in thousands, for federal income
tax purposes was $173,451, $290,413, $83,496 and $491,363 for the Short-Term
Bond Market, Intermediate Bond Market, Tax-Exempt Intermediate Bond and Bond
IMMDEX(TM) Funds, respectively. At October 31, 1997, the Short-Term Bond Market,
Intermediate Bond Market and Tax-Exempt Intermediate Bond Funds had accumulated
net realized capital loss carryovers, in thousands, of $1,248, $252 and $50,
respectively, expiring in 2002. The Short-Term Bond Market, Intermediate Bond
Market and Bond IMMDEX(TM) Funds had accumulated net realized capital loss
carryovers, in thousands, of $189, $568 and $515, respectively, expiring in
2003. The Short-Term Bond Market and Bond IMMDEX(TM) Funds had accumulated net
realized capital loss carryovers, in thousands, of $79 and $24, respectively,
expiring in 2004. The Short-Term Bond Market Fund had accumulated net realized
capital loss carryovers, in thousands, of $1,082, expiring in 2005. To the
extent each Fund realizes future net capital gains, taxable distributions to its
respective shareowners will be offset by any unused capital loss carryover.
See notes to the financial statements.
FIRSTAR
FUND
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<TABLE>
<CAPTION>
4. CAPITAL SHARE TRANSACTIONS
Transactions, in thousands, of shares of the Funds were as follows:
SHORT-TERM INTERMEDIATE TAX-EXEMPT BOND
BOND MARKET BOND MARKET INTERMEDIATE IMMDEX(TM)
FUND FUND BOND FUND FUND
------------------ ------------------ ------------------ ------------------
Amount Shares Amount Shares Amount Shares Amount Shares
------ ------ ------ ------ ------ ------ ------ ------
SIX MONTHS ENDED <C> <C> <C> <C> <C> <C> <C> <C>
APRIL 30, 1998:
Series A shares:
Shares sold $14,332 1,394 $5,864 567 $13,051 1,255 $18,394 649
Shares issued to owners
in reinvestment
of dividends 1,837 179 424 41 421 41 1,788 63
Shares redeemed (14,603) (1,421) (1,769) (171) (7,528) (723) (7,404) (261)
--------- --------- --------- --------- --------- --------- --------- ---------
Net increase $1,566 152 $4,519 437 $ 5,944 573 $12,778 451
========= ========= ========= ========= ========= ========= ========= =========
Series Institutional shares:
Shares sold $29,320 2,851 $47,946 4,637 $17,827 1,713 $81,117 2,857
Shares issued to owners
in reinvestment
of dividends 2,382 233 4,306 419 306 30 10,766 382
Shares redeemed (59,118) (5,754) (32,071) (3,098) (12,447) (1,200) (62,171) (2,186)
--------- --------- --------- --------- --------- --------- --------- ---------
Net increase (decrease) $(27,416) (2,670) $20,181 1,958 $ 5,686 543 $29,712 1,053
========= ========= ========= ========= ========= ========= ========= =========
YEAR ENDED OCTOBER 31, 1997:
Series A shares:
Shares sold $ 30,209 2,949 $ 7,985 784 $13,524 1,317 $ 30,638 1,111
Shares issued to owners
in reinvestment
of dividends 3,315 325 739 73 561 55 2,728 99
Shares redeemed (26,932) (2,629) (5,689) (557) (5,799) (564) (13,274) (482)
--------- --------- --------- --------- --------- --------- --------- ---------
Net increase $ 6,592 645 $ 3,035 300 $ 8,286 808 $ 20,092 728
========= ========= ========= ========= ========= ========= ========= =========
Series Institutional shares:
Shares sold $ 41,412 4,034 $108,111 10,593 $21,675 2,110 $ 99,564 3,611
Shares issued to owners
in reinvestment
of dividends 7,603 744 7,516 740 432 42 20,489 746
Shares redeemed (60,562) (5,912) (37,572) (3,678) (7,177) (699) (91,596) (3,322)
--------- --------- --------- --------- --------- --------- --------- ---------
Net increase (decrease) $(11,547) (1,134) $ 78,055 7,655 $14,930 1,453 $ 28,457 1,035
========= ========= ========= ========= ========= ========= ========= =========
</TABLE>
See notes to the financial statements.
FIRSTAR
FUND
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5. INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Funds have entered into an Investment Advisory Agreement with Firstar
Investment Research & Management Company, LLC ("FIRMCO"). FIRMCO is a
subsidiary of Firstar Corporation, a publicly held bank holding company.
Pursuant to its Advisory Agreement with the Funds, FIRMCO is entitled to receive
a fee, calculated daily and payable monthly, at the annual rates presented below
as applied to each Fund's daily net assets. For the period ended April 30, 1998,
FIRMCO voluntarily waived the following fees, in thousands, by Fund:
SHORT-TERM INTERMEDIATE TAX-EXEMPT BOND
BOND MARKET BOND MARKET INTERMEDIATE IMMDEX(TM)
FUND FUND BOND FUND FUND
------------ ------------ ------------ ------------
Annual rate 0.60% 0.50% 0.50% 0.30%
Fees waived $265 $199 $98 _
Firstar Trust Company, an affiliate of FIRMCO, serves as custodian, transfer
agent and accounting services agent for the Funds.
The Company has entered into a Co-Administration Agreement with B.C. Ziegler
and Company and Firstar Trust Company (the "Co-Administrators") for certain
administrative services. Pursuant to the Co-Administration Agreement with the
Company, the Co-Administrators are entitled to receive a fee, calculated daily
and payable monthly, at the annual rate of 0.125% of the Company's first $2
billion of average aggregate daily net assets, plus 0.10% of the Company's
average aggregate daily net assets in excess of $2 billion. For the period ended
April 30, 1998, $66, $106, $30 and $183 of administration fees, in thousands,
were voluntarily waived for the Short-Term Bond Market, Intermediate Bond
Market, Tax-Exempt Intermediate Bond and Bond IMMDEX(TM) Funds, respectively.
The Company entered into Servicing Agreements with certain Service
Organizations, including FIRMCO affiliates, for the Series A class of shares.
The Service Organizations are entitled to receive fees from the Funds up to the
annual rate of 0.25% of the average daily net asset value of the Series A shares
for certain support and/or distribution services to customers of the Service
Organizations who are beneficial owners of Series A shares. These services may
include assisting customers in processing purchase, exchange and redemption
requests; processing dividend and distribution payments from the Funds; and
providing information periodically to customers showing their positions in
Series A shares. Service Organization fees, in thousands, incurred by the Short-
Term Bond Market, Intermediate Bond Market, Tax-Exempt Intermediate Bond and
Bond IMMDEX(TM) Funds aggregated $83, $28, $27 and $87, respectively, for the
period ended April 30, 1998.
Each Director of the Company who is not affiliated with FIRMCO receives a fee
from the Company for service as a Director and is eligible to participate in a
deferred compensation plan with respect to these fees. Participants in the plan
may designate their deferred Director's fees as if invested in any one of the
Firstar Funds (with the exception of the MicroCap Fund) or in 90-day U.S.
Treasury bills. The value of each Director's deferred compensation account will
increase or decrease as if it were invested in shares of the selected Firstar
Funds or 90-day U.S. Treasury bills. The Funds maintain their proportionate
share of the Company's liability for deferred fees.
See notes to the financial statements.
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FIRSTAR FUNDS ARE AVAILABLE THROUGH:
- - THE FIRSTAR FUNDS CENTER,
- - INVESTMENT SPECIALISTS WHO ARE REGISTERED
REPRESENTATIVES OF FIRSTAR INVESTMENT SERVICES, INC.
A REGISTERED BROKER/DEALER, NASD AND SIPC MEMBER,
- - AND THROUGH SELECTED SHAREHOLDER ORGANIZATIONS.
This report is authorized for distribution only when preceded or
accompanied by a current prospectus.
TO OPEN AN ACCOUNT OR REQUEST INFORMATION
1-800-982-8909
1-414-287-3710
FOR ACCOUNT BALANCES AND INVESTOR SERVICES
1-800-228-1024
1-414-287-3808
FIRSTAR FUNDS CENTER
615 EAST MICHIGAN STREET
P.O. BOX 3011
MILWAUKEE, WI 53201-3011
WWW.FIRSTARFUNDS.COM
TO GET THERE, START HERE.(SM)
FIRSTAR
FUND
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FORM #40-0247 6/98
-------------
RETAIL CLASS
-------------
SHORT-TERM BOND MARKET FUND
INTERMEDIATE BOND MARKET FUND
TAX-EXEMPT INTERMEDIATE BOND FUND
BOND IMMDEX(TM) FUND
SEMI-ANNUAL REPORT
APRIL 30, 1998
TO GET THERE, START HERE.(SM)
FIRSTAR
FUND
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NOTICE TO INVESTORS
- - Shares of Firstar Funds:
- ARE NOT INSURED BY THE FDIC, the US Government or any other governmental
agency;
- are not bank deposits or obligations of or guaranteed by Firstar Bank, its
parent company or its affiliates;
- are subject to investment risks, including possible loss of principal; and
- are offered by B.C. Ziegler and Company, member NASD, SIPC, and an
independent third-party distributor.
- -Firstar Bank affiliates serve as investment adviser, custodian, transfer
agent, administrator, and accounting services agent and receive compensation
for such services as disclosed in the current prospectus.
TABLE OF CONTENTS
Page(s)
SHAREOWNER LETTER........................................................1-2
STEADY GROWTH, LOW INFLATION AND A FLAT YIELD CURVE......................3-5
LOOKING AHEAD.............................................................5
SHORT-TERM BOND MARKET FUND REVIEW.......................................6-7
INTERMEDIATE BOND MARKET FUND REVIEW.....................................8-9
TAX-EXEMPT INTERMEDIATE BOND FUND REVIEW................................10-11
BOND IMMDEX(TM) FUND REVIEW.............................................12-13
STATEMENT OF ASSETS AND LIABILITIES.......................................14
STATEMENT OF OPERATIONS...................................................15
STATEMENT OF CHANGES IN NET ASSETS........................................16
FINANCIAL HIGHLIGHTS....................................................17-20
SCHEDULE OF INVESTMENTS.................................................21-30
NOTES TO THE FINANCIAL STATEMENTS.......................................31-34
FIRSTAR
FUNDS
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JUNE 1998
DEAR SHAREHOLDER:
INVESTMENT REVIEW
During the first half of our fiscal year, financial markets were strong,
rewarding investors that stayed the course. Robust U.S. employment gains, rising
incomes and declining levels of inflation drove consumer confidence to record
highs. Gains in consumer spending (responsible for two-thirds of U.S. economic
activity) on everything from housing to apparel to financial services kept U.S.
economic growth at impressive levels.
Despite solid economic underpinnings, the Asian financial crisis and the fear
that inflation is "just around the corner" will sustain above-average volatility
in the financial markets. However, even with all the ups and downs, we continue
to believe the long-term return potential of stocks and high quality bonds calls
for a consistent approach to asset allocation. Remember, it's time, not timing,
and a disciplined approach to asset allocation that wins the investment
marathon.
The Taxpayer Relief Act of 1997 created additional opportunities for IRA
investors to more aggressively prepare for their retirement. Many of you may
have already taken advantage of the new tax legislation by starting a Roth IRA.
Now, more than ever, it's important to consult your tax adviser to understand
how you can best benefit from favorable new tax laws.
The renaming of our fund family - from Portico to Firstar Funds - on February 1,
1998 aligned us more closely with our parent company and eliminated any
confusion over the relationship between the two organizations. Many enhancements
have been made to Firstar Funds literature as well as to the Firstar Funds' web
site at www.firstarfunds.com. Newly introduced, Firstar Funds Direct allows you
to access information regarding your account(s) on-line. Look for transactional
capabilities to become available on-line this summer. These are just a few of
the ways we are adding value to our servicing efforts. Our goal is to make it
easy and convenient for you to access your account(s) - 24 hours a day, seven
days a week.
MARKET OUTLOOK
Looking ahead, our market forecast is predicated on the following trends:
- - The Asian "flu" has devolved to "pneumonia."
- - The absence of a Japanese economic "tugboat" to pull the Pacific Rim out of
its decline (a la the U.S. in the 1995 Mexican crisis) will deepen and
lengthen the region's financial woes.
- - Reduced demand for U.S. exports due to the dollar's strength and a surge in
Asian imports will balloon the U.S. trade deficit to $200-$250 billion in
1998, creating a drag on the U.S. economy equivalent to 2%-3% of GDP.
- - Rising U.S. wages along with today's competitive, no-pricing-power
environment are squeezing corporate profits and increasing the "urge to
merge" as companies have no alternative but to acquire their competitors and
then cut costs to grow earnings.
- - Competition from imports and global overcapacity in manufacturing (e.g.
autos) and commodities (e.g. oil) will keep U.S. inflation subdued with the
Consumer Price Index (CPI) rising just 1%-1.5% in 1998.
- - Low unemployment and rising "real" (inflation-adjusted) wages in the U.S. are
fueling a boom in consumer spending, sustaining the current U.S. economic
expansion (now in its eighth year) despite the weakness in U.S. foreign trade
and the drag from a federal budget surplus.
- - After the first quarter's strong 4.8% advance in real GDP, U.S. economic
growth will slow to a 2%-3% rate, bringing the full-year 1998 gain in
economic output to approximately 3%.
- - Prospects for continued low levels of inflation and a slowdown in U.S.
economic growth make today's historically high inflation-adjusted bond yields
very attractive.
FIRSTAR
FUNDS
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- - U.S. bond market supply/demand trends favor lower interest rates as a likely
$75 billion swing in the federal budget from deficit to surplus reduces
supply while a strong dollar attracts foreign capital and increases demand.
- - A profits squeeze for the big, multi-national U.S. companies due to rising
wages, Asia's woes and a strong dollar could signal a cyclical peak in the
relative outperformance of large company stocks as their earnings growth
slows and the price-to-earnings multiples awarded their stocks are
compressed.
- - With stock performance driven by just two variables - earnings and the
multiple investors are willing to put on those earnings - prospects for small
and medium-sized company stocks are getting brighter given their
underexposure to Asia, improved relative earnings growth and attractive
valuations (i.e. price-to-earnings multiples).
- - During the next several months, we expect one, perhaps two, stock market
declines of 10%-15%. Yet despite the likelihood of increased market
volatility in the near-term, we are sticking with our beginning-of-the-year
outlook for above-average stock market returns in calendar 1998.
IN SUMMARY
Looking ahead, we see continued moderate economic growth and low levels of
inflation. Although market volatility may heighten anxiety levels, we believe
1998 will be another good year for investors. Finally, given the market's
tremendous gains over the past few years, it may be an opportune time to review
your portfolio. Uneven gains can sidetrack a well-planned investment strategy.
Make sure you are properly diversified.
As always, we appreciate your confidence in the Firstar Funds and encourage you
to read the portfolio reviews that follow.
(photo) (photo)
J. SCOTT HARKNESS, CFA MARY ELLEN STANEK, CFA
Chairman/Chief President
Investment Officer
Firstar Investment Research & Management Company, LLC (FIRMCO)
FIRSTAR
FUNDS
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STEADY GROWTH, LOW INFLATION AND A FLAT YIELD CURVE
The economy has continued on its steady growth/low inflation trek producing
ideal conditions for the financial markets. First quarter GDP (Gross Domestic
Product) grew by 4.8% after adjusting for inflation. Inflation, as measured by
the CPI (Consumer Price Index), was unchanged in the first quarter and for the
12 months ended March 31, 1998 was up just 1.4%. With inflation (the number one
enemy of the bond market) on the retreat, the bond market, along with the stock
market, has advanced. Long-term yields have fallen 20 basis points over the last
6 months while short-term yields, supported by a determined Federal Reserve, are
essentially unchanged. The result has been further flattening of an already flat
U.S. Treasury yield curve (see graph, below).
Maturity 10/31/97 4/30/98
(years) Yield (%) Yield (%)
-------- --------- ---------
1 5.35 5.38
2 5.61 5.57
3 5.68 5.60
5 5.72 5.64
7 5.84 5.73
10 5.83 5.67
30 6.15 5.95
We believe that inflation will remain subdued and see the flat yield curve as an
indication of the market's confidence in the Fed's resolve to contain inflation.
FIRSTAR
FUNDS
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HIGH REAL YIELDS
While nominal yields may appear low by historical standards, real yields, or
nominal yields less inflation, are high as the following chart shows. We believe
the bond market currently offers good value to investors seeking attractive
inflation-adjusted returns.
REAL YIELDS
HISTORICAL VS. CURRENT
(3, 5 & 10 YR. U.S. TREASURY NOTES)
--------------------------------------
TREASURY HISTORICAL AVERAGE CURRENT
NOTE (1960-PRESENT) (4/30/98)
------- ----------------- --------
3 YR. 2.42% 4.18%
5 YR. 2.57% 4.21%
10 YR. 2.77% 4.24%
- --------------------------------------------------------------------------------
FIRSTAR FAMILY OF FIXED-INCOME FUNDS
- --------------------------------------------------------------------------------
SHORT-TERM INTERMEDIATE-TERM BOND FUNDS LONG-TERM
BOND FUND BOND FUND
- --------------------------------------------------------------------------------
FIRSTAR FIRSTAR FIRSTAR FIRSTAR
SHORT-TERM INTERMEDIATE TAX-EXEMPT BOND
BOND MARKET BOND MARKET INTERMEDIATE IMMDEX (TM)
FUND FUND BOND FUND FUND
- --------------------------------------------------------------------------------
LEHMAN LEHMAN LEHMAN LEHMAN
BROTHERS BROTHERS BROTHERS BROTHERS
BENCHMARK 1-3 YEAR INTERMEDIATE 5-YEAR GENERAL GOV'T./CORP.
GOV'T./CORP. GOV'T./CORP. OBLIGATION BOND
BOND INDEX BOND INDEX BOND INDEX INDEX
AVERAGE QUALITY
OF HOLDINGS<F1> AA AA AAA AA
AVERAGE MATURITY 2.8 YEARS 5.3 YEARS 5.1 YEARS 10.6 YEARS
- --------------------------------------------------------------------------------
DURATION 1.7 YEARS 3.3 YEARS 4.2 YEARS 5.4 YEARS
- --------------------------------------------------------------------------------
PRINCIPAL VOLATILITY LOW MODERATE MODERATE MODERATE-HIGH
- --------------------------------------------------------------------------------
Lehman Brothers is neither a sponsor of nor affiliated with Firstar Funds. An
investment cannot be made in an index. Average quality, maturity and duration
reflect the portfolio as of April 30, 1998, and will change from time to time in
connection with the management of the portfolios pursuant to the policies
described in the current prospectus.
<F1> Dollar weighted average quality of portfolio securities held by the Funds.
FIRSTAR
FUNDS
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GUESSING ON RATES - A DANGEROUS GAME
Despite declining inflation and high real yields, many bond managers anticipated
higher inflation and rising interest rates for this year. They shortened the
duration and decreased the interest rate sensitivity of their portfolios
relative to their benchmarks late last year. By keeping their portfolios shorter
than their benchmarks, they hoped to outperform by minimizing the effects of the
rise in rates they saw coming. With a slight decrease in rates so far this year,
many of these managers now find themselves behind the performance of their
benchmarks. WE MAINTAIN THAT ATTEMPTING TO TIME CHANGES IN INTEREST RATES IS
EXTREMELY DIFFICULT AND, IN THE LONG RUN, A SELF-DEFEATING GAME.
Our unwavering approach for the Firstar bond funds is to adhere to our
structured, or duration-matched, fixed-income management style. Our management
approach does not change with the market; we match the interest rate sensitivity
(duration) of each fund to that of its benchmark. Because we can effectively
measure and control the price risk of a portfolio so that the return mirrors the
selected index, it is possible to enhance the return without measurably
increasing the risk of the portfolio (relative to the benchmark). Thus, keeping
risks in line with objectives, our goal for each fund is to outperform its
benchmark on a consistent basis before fund expenses. We believe that
incremental outperformance on a consistent basis leads to superior performance
in the long run.
LOOKING AHEAD
For the balance of 1998, we expect many of the same key trends to continue.
Moderate economic growth coupled with continued low levels of inflation provide
attractive real or inflation-adjusted yields across all bond portfolios. We
expect the yield curve to remain flat and volatility to remain high. In this
environment, our long-standing approach to stay duration-neutral to our
benchmark and add value through our issue selection, sector allocation and yield
curve positioning decisions will provide our shareowners with attractive
inflation-adjusted returns.
MARY ELLEN STANEK, CFA
TERESA R. WESTMAN, CFA
DANIEL A. TRANCHITA, CFA
WARREN D. PIERSON, CFA
Portfolio Managers
Firstar Investment Research & Management Company, LLC (FIRMCO)
FIRSTAR
FUNDS
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SHORT-TERM BOND MARKET FUND
FIRSTAR SHORT-TERM BOND MARKET FUND seeks to provide an annual rate of total
return comparable to that of the Lehman Brothers 1-3 Year Government/Corporate
Bond Index, before Fund expenses. In order to achieve its objective, the Fund
may invest in securities with maturities longer than three years, in addition to
shorter bonds and notes.
INTEREST RATE SENSITIVITY AND RETURN
This Fund's maturity mix gives it an overall AVERAGE PORTFOLIO MATURITY OF 2.8
YEARS, and a DURATION OF 1.7 YEARS. Because the Short-Term Bond Market Fund's
duration of 1.7 years is less than the durations of the other Firstar taxable
bond funds, when interest rates increase it will display less downward price
movement than the Intermediate Bond Market Fund and the Bond IMMDEX (TM) Fund.
But, when interest rates decrease, this Fund will also exhibit less price
appreciation than the Intermediate Bond Market Fund and the Bond IMMDEX (TM)
Fund.
The shorter average maturity and duration of this Fund did not have a
significant impact on its performance for the six months ended April 30, 1998. A
slight decrease in interest rates (2-year U.S. Treasury rates decreased by 5
basis points to 5.57%) resulted in a six-month total return for the Fund of
+2.69% (no-load). This compares to the Fund's benchmark, the Lehman Brothers 1-3
Year Government Corporate Bond Index, which had a total return of +2.89% for the
same period. Additionally, THIS REPRESENTS A HIGH REAL RATE OF RETURN WHEN
COMPARED TO THE CPI, WHICH OVER THE SAME PERIOD INCREASED ONLY A HALF OF ONE
PERCENT.
SECTOR ALLOCATION
While the Fund's duration is the single most significant determinant of its
return, other factors are important too. The Fund's exposure to credit-sensitive
issues including corporate bonds and notes and asset-backed securities is one
determinant of its relative performance. CORPORATE BONDS AND NOTES ARE SELECTED
FOR THE FUND IN A RESEARCH-INTENSIVE PROCESS FROM THE FIXED-INCOME INVESTMENT
GRADE UNIVERSE. Sectors that we currently favor include: finance, banking and
brokerage, dollar-denominated international, asset-backed securities, and
mortgage-backed securities. Asset-backed securities in the Fund are all rated
highly by Moody's or Standard & Poor's. They represent the highest credit
quality of non-U.S. Government investments in the portfolio. ALMOST TWO-THIRDS
OF THE FUND (66%) IS INVESTED IN OBLIGATIONS RATED Aaa/AAA OR HIGHER.
FOREIGN EXPOSURE
THE FUND DOES NOT INVEST IN SECURITIES DENOMINATED IN FOREIGN CURRENCIES. AS
SUCH, IT HAS NO DIRECT EXPOSURE TO FOREIGN CURRENCY FLUCTUATIONS. The Fund does,
however, invest in Yankee securities. Yankees are obligations of foreign
entities denominated in U.S. dollars. Yankee investments total 7% of the Fund
and include credits of Canadian, European and Asian entities. Currently, Yankee
bond obligations are the fastest growing sector of the U.S. domestic corporate
bond market. Investing in Yankee issues has enabled us to capitalize on
opportunities in foreign bonds without exposing our investors to currency risk.
With recent market turmoil originating in the Pacific Rim countries, spreads on
some of the Fund's Yankee issues have widened significantly. This has resulted
in negative relative performance on these securities. AT CURRENT YIELD LEVELS,
WE FEEL THE FUND'S YANKEE BONDS REPRESENT EXCEPTIONAL VALUE. We anticipate that
they will outperform similarly rated investments in the coming year. See page 21
for a complete listing of portfolio holdings.
CONSISTENCY IS THE HALLMARK OF OUR APPROACH
Since Firstar Short-Term Bond Market Fund's inception on 12/29/89, we have
adhered to the same disciplined management approach. The past five years have
brought us more volatility in the fixed-income markets than many would have
expected. THE HALLMARK OF OUR APPROACH HAS BEEN THE FUND'S CONSISTENT
PERFORMANCE IN ALL MARKET CLIMATES. Firstar Short-Term Bond Market Fund's
returns have been comparable to the benchmark in periods of rising interest
rates and falling interest rates. Our goal is to continue to deliver this same
consistent performance in the future. We look forward to continuing to serve you
as Firstar Fund shareowners.
(PHOTO) (PHOTO)
MARY ELLEN STANEK, CFA DANIEL A. TRANCHITA, CFA
PORTFOLIO MANAGER PROFILE
- --------------------------------------------------------------------------------
MARY ELLEN STANEK, CFA, President of Firstar Investment Research & Management
Company, LLC (FIRMCO) and DANIEL A. TRANCHITA, CFA, Vice President and Senior
Portfolio Manager, co-manage the Fund - Mary Ellen since its inception on
December 29, 1989 and Dan since January 1, 1993. Mary Ellen has 19 years of
investment management experience and was named a Director of FIRMCO in 1992.
Prior to joining FIRMCO, she headed the Fixed Income and Quantitative Investment
Management Department at Firstar Trust Company. Mary Ellen received her BA from
Marquette University in 1978 and her MBA from the University of Wisconsin-
Milwaukee in 1984. Dan has been with Firstar since 1989 and has nine years of
investment management experience. He received his BA in 1987 and his MBA in 1989
from Marquette University. Mary Ellen and Dan are both Chartered Financial
Analysts.
FIRSTAR
FUNDS
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FIRSTAR SHORT-TERM FIRSTAR SHORT-TERM
BOND MARKET FUND - BOND MARKET FUND -
A - NO LOAD A - LOAD <F1>
------------------ ------------------
12/29/89 10,000 9,800
10/90 10,464 10,259
10/91 11,865 11,632
10/92 12,966 12,713
10/93 13,835 13,567
10/94 14,037 13,769
10/95 15,264 14,972
10/96 16,109 15,801
10/97 17,109 16,782
4/98 17,569 17,234
This chart assumes an initial investment of $10,000 made on 12/29/89
(inception). Performance reflects fee waivers in effect. In the absence of fee
waivers, total return would be reduced. Returns shown include the reinvestment
of all dividends and other distributions. Past performance is not predictive of
future performance. Investment return and principal value will fluctuate, so
that your shares, when redeemed, may be worth more or less than their original
cost.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RATE OF RETURN (%)
FOR PERIODS ENDED APRIL 30, 1998
- --------------------------------------------------------------------------------
FISCAL SINCE
YEAR-TO- 1 3 5 INCEPTION
DATE YEAR YEARS YEARS 12/29/89
- --------------------------------------------------------------------------------
FIRSTAR SHORT-TERM BOND MARKET FUND -
A - NO LOAD 2.7 6.7 6.4 5.4 7.0
FIRSTAR SHORT-TERM BOND MARKET FUND -
A - LOAD <F1> 0.6 4.6 5.7 5.0 6.7
Lehman Brothers 1-3 Year Gov't./Corp.
Bond Index<F2> 2.9 7.2 6.8 5.5 7.0
- --------------------------------------------------------------------------------
<F2> Reflects maximum sales charge of 2.0%.
<F2> The Lehman Brothers 1-3 Year Gov't./Corp. Bond Index is an unmanaged market
value weighted index measuring both principal price changes of, and income
provided by, the underlying universe of securities that comprise the
index. Securities included in the index must meet the following criteria:
fixed as opposed to variable rate; not less than one year to maturity; not
more than three years remaining to maturity; and minimum outstanding par
value of $100 million. An investment cannot be made directly in an index.
Effective at the close of business on January 9, 1995, Firstar Funds began to
offer Series A (retail) shares and Series Institutional shares. Series A shares,
unlike the Series Institutional shares, have a 2% maximum sales load and are
subject to an annual 0.25% service organization fee. In addition, the purchase
price adjustment on the Fund no longer applies to either the Series A or Series
Institutional shares. The load performance for the Series A shares has been
restated to reflect the impact of the sales charge (and the elimination of the
purchase price adjustment). The no-load performance for the Series A shares has
been restated to reflect the elimination of the purchase price adjustment. Prior
to January 10, 1995, Series A performance does not reflect the service
organization fees. If service organization fees had been reflected, performance
would be reduced. Performance reflects fee waivers in effect. In the absence of
fee waivers, total return would be reduced.
A = Series A (retail class)
SECTOR DISTRIBUTION
4/30/98
- -----------------------------------
U.S. Treasury 15%
- -----------------------------------
U.S. Government Agency 14%
- -----------------------------------
Mortgage-Backed 14%
- -----------------------------------
Finance, Banking, Brokerage 17%
- -----------------------------------
Industrial 5%
- -----------------------------------
Utility 1%
- -----------------------------------
International/Yankee 7%
- -----------------------------------
Asset-Backed 24%
- -----------------------------------
Cash 2%
- -----------------------------------
Taxable Municipal 1%
- -----------------------------------
Total 100%
- -----------------------------------
PORTFOLIO COMPOSITION
4/30/98
- -----------------------------------
Average Maturity 2.8 Years
- -----------------------------------
Average Duration 1.7 Years
- -----------------------------------
QUALITY DISTRIBUTION
4/30/98
- -----------------------------------
U.S. Treasury 15%
- -----------------------------------
U.S. Government Agency 14%
- -----------------------------------
Aaa 37%
- -----------------------------------
Aa 5%
- -----------------------------------
A 24%
- -----------------------------------
Baa 4%
- -----------------------------------
Ba 1%
- -----------------------------------
Total 100%
- -----------------------------------
SEC 30-DAY YIELD
- -----------------------------------
5.43%
- -----------------------------------
TOTAL FUND NET ASSETS
4/30/98
- -----------------------------------
$175,244,901
- -----------------------------------
FIRSTAR
FUNDS
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INTERMEDIATE BOND MARKET FUND
FIRSTAR INTERMEDIATE BOND MARKET FUND seeks to provide an annual rate of total
return comparable to that of the Lehman Brothers Intermediate
Government/Corporate Bond Index, before Fund expenses. In order to achieve its
objective, the Fund may invest in securities with long remaining maturities (10
years or longer), in addition to shorter bonds and notes.
INTEREST RATE SENSITIVITY AND RETURN
This Fund's maturity mix gives it an overall AVERAGE PORTFOLIO MATURITY OF 5.3
YEARS, and a DURATION OF 3.3 YEARS. Because the Intermediate Bond Market Fund's
duration of just over three years is between the durations of the other Firstar
taxable bond funds, when interest rates increase it will display more downward
price movement than the Short-Term Bond Market Fund and less than the Bond
IMMDEX(TM) Fund. But, when interest rates decrease, this Fund will exhibit
greater price appreciation than the Short-Term Bond Market Fund and less than
the Bond IMMDEX(TM) Fund.
The intermediate average maturity and duration of the fund did not have a
significant impact on its performance for the six months ended April 30, 1998. A
slight decrease in interest rates (5-year U.S. Treasury rates decreased by 0.1%
to 5.6%) resulted in a six-month total return for the Fund of +2.69% (no-load).
This compares to the Fund's benchmark, the Lehman Brothers Intermediate
Government Corporate Bond Index, which had a total return of +3.11% for the same
period. Additionally, THIS REPRESENTS A HIGH REAL RATE OF RETURN WHEN COMPARED
TO THE CPI, WHICH OVER THE SAME PERIOD INCREASED ONLY A HALF OF ONE PERCENT.
SECTOR ALLOCATION
While the Fund's duration is the single most significant determinant of its
return, other factors are important too. The Fund's exposure to credit-sensitive
issues including corporate bonds and notes and asset-backed securities is one
determinant of its relative performance. CORPORATE BONDS AND NOTES ARE SELECTED
FOR THE FUND IN A RESEARCH-INTENSIVE PROCESS FROM THE FIXED-INCOME INVESTMENT
GRADE UNIVERSE. Sectors that we currently favor include: finance, banking and
brokerage, dollar-denominated international, and asset-backed securities. Asset-
backed securities in the Fund are all rated Aaa/AAA by Moody's or Standard &
Poor's. They represent the highest credit quality of non-U.S. Government
investments available. OVER HALF OF THE FUND (59%) IS INVESTED IN OBLIGATIONS
RATED Aaa/AAA OR HIGHER.
FOREIGN EXPOSURE
THE FUND DOES NOT INVEST IN SECURITIES DENOMINATED IN FOREIGN CURRENCIES. AS
SUCH, IT HAS NO DIRECT EXPOSURE TO FOREIGN CURRENCY FLUCTUATIONS. The Fund does,
however, invest in Yankee securities. Yankees are obligations of foreign
entities denominated in U.S. dollars. Yankee investments total 8% of the Fund
and include credits of Canadian, European and Asian entities. Currently, Yankee
bond obligations are the fastest growing sector of the U.S. domestic corporate
bond market. Investing in Yankee issues has enabled us to capitalize on
opportunities in foreign bonds without exposing our investors to currency risk.
With recent market turmoil originating in the Pacific Rim countries, spreads on
some of the Fund's Yankee issues have widened significantly. This has resulted
in negative relative performance on these securities. AT CURRENT YIELD LEVELS,
WE FEEL THE FUND'S YANKEE BONDS REPRESENT EXCEPTIONAL VALUE. We anticipate that
they will outperform similarly rated investments in the coming year. See page 23
for a complete listing of portfolio holdings.
CONSISTENCY IS THE HALLMARK OF OUR APPROACH
Since Firstar Intermediate Bond Market Fund's inception on 1/5/93, we have
adhered to the same disciplined management approach. The past five years have
brought us more volatility in the fixed-income markets than many would have
expected. THE HALLMARK OF OUR APPROACH HAS BEEN THE FUND'S CONSISTENT
PERFORMANCE IN ALL MARKET CLIMATES. Firstar Intermediate Bond Market Fund's
returns have been comparable to the benchmark in periods of rising interest
rates and falling interest rates. Our goal is to continue to deliver this same
consistent performance in the future. We look forward to continuing to serve you
as Firstar Fund shareowners.
(PHOTO) (PHOTO)
MARY ELLEN STANEK, CFA TERESA R. WESTMAN, CFA
PORTFOLIO MANAGER PROFILE
- --------------------------------------------------------------------------------
MARY ELLEN STANEK, CFA, President of Firstar Investment Research & Management
Company, LLC (FIRMCO) and TERESA R. WESTMAN, CFA, Senior Vice President and
Senior Portfolio Manager have co-managed the Fund since its inception on January
5, 1993. Mary Ellen has 19 years of investment management experience and was
named a Director of FIRMCO in 1992. Prior to joining FIRMCO, she headed the
Fixed Income and Quantitative Investment Management Department at Firstar Trust
Company. Mary Ellen received her BA from Marquette University in 1978 and her
MBA from the University of Wisconsin-Milwaukee in 1984. Teresa has been with
Firstar since 1987 and has 11 years of investment management experience. Teresa
received her BA from Augustana College in 1985 and her MBA from the University
of Chicago in 1991. Mary Ellen and Teresa are both Chartered Financial
Analysts.
FIRSTAR
FUNDS
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FIRSTAR INTERMEDIATE FIRSTAR INTERMEDIATE
BOND MARKET FUND - BOND MARKET FUND -
A - NO LOAD A - LOAD <F1>
------------------ ------------------
1/5/93 10,000 9,800
10/93 10,858 10,646
10/94 10,671 10,463
10/95 11,956 11,723
10/96 12,614 12,369
10/97 13,508 13,246
4/98 13,872 13,6032
This chart assumes an initial investment of $10,000 made on 1/5/93 (inception).
Performance reflects fee waivers in effect. In the absence of fee waivers, total
return would be reduced. Returns shown include the reinvestment of all dividends
and other distributions. Past performance is not predictive of future
performance. Investment return and principal value will fluctuate, so that your
shares, when redeemed, may be worth more or less than their original cost.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RATE OF RETURN (%)
FOR PERIODS ENDED APRIL 30, 1998
- --------------------------------------------------------------------------------
FISCAL SINCE
YEAR-TO- 1 3 5 INCEPTION
DATE YEAR YEARS YEARS 1/5/93
- --------------------------------------------------------------------------------
FIRSTAR INTERMEDIATE BOND MARKET FUND -
A - NO LOAD 2.7 8.3 7.3 5.8 6.3
FIRSTAR INTERMEDIATE BOND MARKET FUND -
A - LOAD<F1> 0.6 6.0 6.6 5.4 6.0
LEHMAN BROTHERS INTERMEDIATE
GOV'T./CORP. BOND INDEX<F2> 3.1 8.9 7.7 6.1 6.6
- --------------------------------------------------------------------------------
<F1> Reflects maximum sales charge of 2.0%
<F2> The Lehman Brothers Intermediate Gov't./Corp. Bond Index is an unmanaged
market value weighted index measuring both principal price changes of, and
income provided by, the underlying universe of securities that comprise
the index. Securities included in the index must meet the following
critieria: fixed as opposed to variable rate; remaining maturity of one to
ten years; minimum outstanding par value of $100 million; and rated
investment grade or higher by Moody's, Standard & Poor's, or Fitch, in that
order. An investment cannot be made directly in an index.
Effective at the close of business on January 9, 1995, Firstar Funds began to
offer Series A (retail) shares and Series Institutional shares. Series A shares,
unlike the Series Institutional shares, have a 2% maximum sales load and are
subject to an annual 0.25% service organization fee. In addition, the purchase
price adjustment on the Fund no longer applies to either the Series A or Series
Institutional shares. The load performance for the Series A shares has been
restated to reflect the impact of the sales charge (and the elimination of the
purchase price adjustment). The no-load performance for the Series A shares has
been restated to reflect the elimination of the purchase price adjustment. Prior
to January 10, 1995, Series A performance does not reflect the service
organization fees. If service organization fees had been reflected, performance
would be reduced. Performance reflects fee waivers in effect. In the absence of
fee waivers, total return would be reduced.
A = Series A (retail class)
SECTOR DISTRIBUTION
4/30/98
- -----------------------------------
U.S. Treasury 28%
- -----------------------------------
U.S. Government Agency 6%
- -----------------------------------
Mortgage-Backed 4%
- -----------------------------------
Finance, Banking, Brokerage 22%
- -----------------------------------
Industrial 9%
- -----------------------------------
International/Yankee 8%
- -----------------------------------
Asset-Backed 21%
- -----------------------------------
Cash 2%
- -----------------------------------
Total 100%
- -----------------------------------
PORTFOLIO COMPOSITION
4/30/98
- -----------------------------------
Average Maturity 5.3 Years
- -----------------------------------
Average Duration 3.3 Years
- -----------------------------------
QUALITY DISTRIBUTION
4/30/98
- -----------------------------------
U.S. Treasury 28%
- -----------------------------------
U.S. Government Agency 6%
- -----------------------------------
Aaa 25%
- -----------------------------------
Aa 3%
- -----------------------------------
A 29%
- -----------------------------------
Baa 8%
- -----------------------------------
Ba 1%
- -----------------------------------
Total 100%
- -----------------------------------
SEC 30-DAY YIELD
- -----------------------------------
5.44%
- -----------------------------------
TOTAL FUND NET ASSETS
4/30/98
- -----------------------------------
$299,670,746
- -----------------------------------
FIRSTAR
FUNDS
(logo)
TAX-EXEMPT INTERMEDIATE BOND FUND
FIRSTAR TAX-EXEMPT INTERMEDIATE BOND FUND seeks to provide current income exempt
from federal income taxes and emphasizes total return with relatively low
volatility of principal. Currently, the Fund does not purchase any issues which
are subject to the alternative minimum tax.
INTEREST RATE SENSITIVITY AND RETURN
In order to achieve its objectives, the Fund invests in bonds of short and
intermediate maturity. These bonds have a lower price sensitivity to changes in
interest rates than longer maturity bonds and, therefore, tend to be more stable
in value. As of April 30, 1998, the Fund's maturity mix gives it an overall
AVERAGE PORTFOLIO MATURITY OF 5.1 YEARS, and a DURATION OF 4.2 YEARS.
For the six months ended April 30, 1998, THE TOTAL RETURN OF THE FUND WAS
+1.90% (no-load). With the CPI increasing just 0.5% over the same time period,
THIS REPRESENTS A HIGH REAL RATE OF RETURN for short- to intermediate-term
tax-exempt bonds.
SECTOR ALLOCATION
With credit spreads in the municipal bond market remaining tight, the Fund
continues to focus on high quality holdings. As of April 30, 1998, the Fund has
an average quality rating of AAA with 70% OF THE FUND'S HOLDINGS SECURED WITH
U.S. TREASURY ISSUES (prerefunded municipal bonds).
CONSISTENCY IS THE HALLMARK OF OUR APPROACH
Since Firstar Tax-Exempt Intermediate Bond Fund's inception on 2/8/93, we have
adhered to the same disciplined management approach. Over the past five years,
the municipal bond market has seen considerable volatility. THE HALLMARK OF OUR
APPROACH HAS BEEN THE FUND'S CONSISTENT PERFORMANCE IN ALL MARKET CLIMATES. Our
goal is to continue to deliver this same consistent performance in the future.
We look forward to continuing to serve you as Firstar Fund shareowners.
(PHOTO)
WARREN D. PIERSON, CFA
PORTFOLIO MANAGER PROFILE
- --------------------------------------------------------------------------------
WARREN D. PIERSON, CFA, Vice President and Senior Portfolio Manager of Firstar
Investment Research & Management Company, LLC (FIRMCO) has managed the Fund
since June 22, 1993. Since joining Firstar in 1985, his responsibilities have
included trading government and government agency issues, as well as money
market instruments. His current portfolio management responsibilities focus on
the tax-exempt bond market. Warren received his BA from Lawrence University in
1984, and has 13 years of investment management experience. He is a Chartered
Financial Analyst, as well as a member of the Association for Investment
Management and Research and the Milwaukee Investment Analysts Society.
FIRSTAR
FUNDS
(logo)
FIRSTAR TAX-EXEMPT FIRSTAR TAX-EXEMPT
INTERMEDIATE INTERMEDIATE
BOND FUND - BOND FUND -
A - NO LOAD A - LOAD <F1>
------------------ ------------------
2/8/93 10,000 9,800
10/93 10,536 10,329
10/94 10,459 10,254
10/95 11,408 11,184
10/96 11,849 11,616
10/97 12,513 12,266
4/98 12,750 12,500
This chart assumes an initial investment of $10,000 made on 2/8/93 (inception).
Performance reflects fee waivers in effect. In the absence of fee waivers, total
return would be reduced. Returns shown include the reinvestment of all dividends
and other distributions. Past performance is not predictive of future
performance. Investment return and principal value will fluctuate, so that your
shares, when redeemed, may be worth more or less than their original cost.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RATE OF RETURN (%)
FOR PERIODS ENDED APRIL 30, 1998
- --------------------------------------------------------------------------------
FISCAL SINCE
YEAR-TO- 1 3 5 INCEPTION
DATE YEAR YEARS YEARS 2/8/93
- --------------------------------------------------------------------------------
FIRSTAR TAX-EXEMPT INTERMEDIATE
BOND FUND - A - NO LOAD 1.9 6.5 5.6 5.0 4.9
FIRSTAR TAX-EXEMPT INTERMEDIATE
BOND FUND - A - LOAD<F1> 0.1 4.1 4.7 4.4 4.4
Lehman Brothers 5 Year General
Obligation Bond Index<F2> 1.9 6.9 6.3 5.4 5.4
- --------------------------------------------------------------------------------
<F1> Reflects maximum sales charge of 2.0%.
<F1> The Lehman Brothers 5 Year General Obligation Bond Index, an unmanaged
index, is a total return performance benchmark for the investment-grade
tax-exempt bond market. To be included in this index, a municipal bond must
be a state or local General Obligation bond; have a minimum credit rating
of at least Baa; have been issued as part of an offering of at least $50
million; have a maturity amount outstanding of at least $3 million; have
been issued within the last five years; and have a maturity of 4 to 6
years. An investment cannot be made directly in an index.
Effective at the close of business on January 9, 1995, Firstar Funds began to
offer Series A (retail) shares and Series Institutional shares. Series A shares,
unlike the Series Institutional shares, have a 2% maximum sales load and are
subject to an annual 0.25% service organization fee. The load performance for
the Series A shares has been restated to reflect the impact of the sales charge.
Prior to January 10, 1995, Series A performance does not reflect the service
organization fees. If service organization fees had been reflected, performance
would be reduced. Performance reflects fee waivers in effect. In the absence of
fee waivers, total return would be reduced.
A = Series A (retail class)
SECTOR DISTRIBUTION
4/30/98
- -----------------------------------
General Obligations 7%
- -----------------------------------
Escrowed/Prerefunded 70%
- -----------------------------------
Insured 21%
- -----------------------------------
Revenue 2%
- -----------------------------------
Total 100%
- -----------------------------------
QUALITY DISTRIBUTION
4/30/98
- -----------------------------------
Aaa 91%
- -----------------------------------
Aa 9%
- -----------------------------------
A 0%
- -----------------------------------
Total 100%
- -----------------------------------
PORTFOLIO COMPOSITION
4/30/98
- -----------------------------------
Average Maturity 5.1 Years
- -----------------------------------
Average Duration 4.2 Years
- -----------------------------------
SEC30-DAY YIELD
- -----------------------------------
3.69%
- -----------------------------------
TOTAL FUND NET ASSETS
4/30/98
- -----------------------------------
$82,857,805
- -----------------------------------
FIRSTAR
FUNDS
(logo)
BOND IMMDEX(TM) FUND
FIRSTAR BOND IMMDEX(TM) FUND seeks to provide an annual rate of total return
comparable to that of the Lehman Brothers Government/Corporate Bond Index,
before Fund expenses. In order to achieve its objective, the Fund may invest in
securities with very long remaining maturities (30 years or longer), in addition
to shorter bonds and notes.
INTEREST RATE SENSITIVITY AND RETURN
This Fund's maturity mix gives it an overall AVERAGE PORTFOLIO MATURITY OF 10.6
YEARS, and a DURATION OF 5.4 YEARS. Because the Bond IMMDEX(TM) Fund's duration
of just over five years is the longest of all the Firstar taxable bond funds, it
will display the greatest downward price movement when interest rates increase,
but will exhibit the greatest price appreciation when interest rates decrease.
The longer average maturity and duration of the Fund did not have a significant
impact on its performance for the six months ended April 30, 1998. A slight
decrease in interest rates (10-year U.S. Treasury rates decreased by 0.1% to
5.7%) resulted in a six-month total return for the Fund of +3.24% (no-load).
This is in line with the Fund's benchmark, the Lehman Brothers Government
Corporate Bond Index, which had a total return of +3.64% for the same period.
Additionally, THIS REPRESENTS A HIGH REAL RATE OF RETURN WHEN COMPARED TO THE
CPI, WHICH OVER THE SAME PERIOD INCREASED ONLY A HALF OF ONE PERCENT.
SECTOR ALLOCATION
While the Fund's duration is the single most significant determinant of its
return, other factors are important too. The Fund's exposure to credit-sensitive
issues including corporate bonds and notes and asset-backed securities is one
determinant of its relative performance. CORPORATE BONDS AND NOTES ARE SELECTED
FOR THE FUND IN A RESEARCH-INTENSIVE PROCESS FROM THE FIXED-INCOME INVESTMENT
GRADE UNIVERSE. Sectors that we currently favor include: finance, banking and
brokerage, dollar-denominated international, and asset-backed securities. Asset-
backed securities in the Fund are all rated Aaa/AAA by Moody's or Standard &
Poor's. They represent the highest credit quality of non-U.S. Government
investments available. OVER HALF OF THE FUND (59%) IS INVESTED IN OBLIGATIONS
RATED Aaa/AAA OR HIGHER.
FOREIGN EXPOSURE
THE FUND DOES NOT INVEST IN SECURITIES DENOMINATED IN FOREIGN CURRENCIES. AS
SUCH, IT HAS NO DIRECT EXPOSURE TO FOREIGN CURRENCY FLUCTUATIONS. The Fund does,
however, invest in Yankee securities. Yankees are obligations of foreign
entities denominated in U.S. dollars. Yankee investments total 10% of the Fund
and include credits of Canadian, European and Asian entities. Currently, Yankee
bond obligations are the fastest growing sector of the U.S. domestic corporate
bond market. Investing in Yankee issues has enabled us to capitalize on
opportunities in foreign bonds without exposing our investors to currency risk.
With recent market turmoil originating in the Pacific Rim countries, spreads on
some of the Fund's Yankee issues have widened significantly. This has resulted
in negative relative performance on these securities. AT CURRENT YIELD LEVELS,
WE FEEL THE FUND'S YANKEE BONDS REPRESENT EXCEPTIONAL VALUE. We anticipate that
they will outperform similarly rated investments in the coming year. See page 28
for a complete listing of portfolio holdings.
CONSISTENCY IS THE HALLMARK OF OUR APPROACH
Since Firstar Bond IMMDEX(TM) Fund's inception on 12/29/89, we have adhered to
the same disciplined management approach. The past eight years have brought us
more volatility in the fixed-income markets than many would have expected. THE
HALLMARK OF OUR APPROACH HAS BEEN THE FUND'S CONSISTENT PERFORMANCE IN ALL
MARKET CLIMATES. Firstar Bond IMMDEX(TM)'s returns have been comparable to the
benchmark in periods of rising interest rates and falling interest rates. Our
goal is to continue to deliver this same consistent performance in the future.
We look forward to continuing to serve you as Firstar Fund shareowners.
(PHOTO) (PHOTO)
MARY ELLEN STANEK, CFA TERESA R. WESTMAN, CFA
PORTFOLIO MANAGER PROFILE
- --------------------------------------------------------------------------------
MARY ELLEN STANEK, CFA, President of Firstar Investment Research & Management
Company, LLC (FIRMCO) and TERESA R. WESTMAN, CFA, Senior Vice President and
Senior Portfolio Manager co-manage the Fund - Mary Ellen since its inception on
December 29, 1989 and Teresa since January 1, 1992. Mary Ellen has 19 years of
investment management experience and was named a Director of FIRMCO in 1992.
Prior to joining FIRMCO, she headed the Fixed Income and Quantitative Investment
Management Department at Firstar Trust Company. Mary Ellen received her BA from
Marquette University in 1978 and her MBA from the University of Wisconsin-
Milwaukee in 1984. Teresa has been with Firstar since 1987 and has 11 years of
investment management experience. Teresa received her BA from Augustana College
in 1985 and her MBA from the University of Chicago in 1991. Mary Ellen and
Teresa are both Chartered Financial Analysts.
FIRSTAR
FUNDS
(logo)
FIRSTAR BOND FIRSTAR BOND
IMMDEX(TM) FUND - IMMDEX(TM) FUND -
A - NO LOAD FUND - A - LOAD <F1>
------------------ ------------------
12/29/89 10,000 9,800
10/90 10,421 10,213
10/91 12,105 11,863
10/92 13,375 13,108
10/93 15,154 14,851
10/94 14,565 14,274
10/95 16,903 16,565
10/96 17,758 17,403
10/97 19,300 18,914
4/98 19,925 19,526
This chart assumes an initial investment of $10,000 made on 12/29/89
(inception). Performance reflects fee waivers in effect. In the absence of fee
waivers, total return would be reduced. Returns shown include the reinvestment
of all dividends and other distributions. Past performance is not predictive of
future performance. Investment return and principal value will fluctuate, so
that your shares, when redeemed, may be worth more or less than their original
cost.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RATE OF RETURN (%)
FOR PERIODS ENDED APRIL 30, 1998
- --------------------------------------------------------------------------------
FISCAL SINCE
YEAR-TO- 1 3 5 INCEPTION
DATE YEAR YEARS YEARS 12/29/89
- --------------------------------------------------------------------------------
FIRSTAR BOND IMMDEX(TM) FUND -
A - NO-LOAD 3.2 10.7 8.6 6.9 8.6
FIRSTAR BOND IMMDEX(TM) FUND -
A - LOAD<F1> 1.2 8.5 7.9 6.4 8.4
Lehman Brothers Gov't./Corp.
Bond Index<F2> 3.6 11.3 8.9 6.9 8.6
- --------------------------------------------------------------------------------
<F1> Reflects maximum sales charge of 2.0%.
<F2> The Lehman Brothers Gov't./Corp. Bond Index is an unmanaged market value
weighted index measuring both principal price changes of, and income
provided by, the underlying universe of securities that comprise the index.
Securities included in the index must meet the following critieria: fixed
as opposed to variable rate; not less than one year to maturity; minimum
out standing par value of $100 million; and rated investment grade or
higher by Moody's, Standard & Poor's, or Fitch, in that order. An
investment cannot be made directly in an index.
Effective at the close of business on January 9, 1995, Firstar Funds began to
offer Series A (retail) shares and Series Institutional shares. Series A shares,
unlike the Series Institutional shares, have a 2% maximum sales load and are
subject to an annual 0.25% service organization fee. In addition, the purchase
price adjustment on the Fund no longer applies to either the Series A or Series
Institutional shares. The load performance for the Series A shares has been
restated to reflect the impact of the sales charge (and the elimination of the
purchase price adjustment). The no-load performance for the Series A shares has
been restated to reflect the elimination of the purchase price adjustment. Prior
to January 10, 1995, Series A performance does not reflect the service
organization fees. If service organization fees had been reflected, performance
would be reduced. Performance reflects fee waivers in effect. In the absence of
fee waivers, total return would be reduced.
A = Series A (retail class)
SECTOR DISTRIBUTION
4/30/98
- -----------------------------------
U.S. Treasury 36%
- -----------------------------------
U.S. Government Agency 7%
- -----------------------------------
Mortgage-Backed 0%
- -----------------------------------
Finance, Banking, Brokerage 20%
- -----------------------------------
Industrial 10%
- -----------------------------------
Utility 3%
- -----------------------------------
International/Yankee 10%
- -----------------------------------
Asset-Backed 11%
- -----------------------------------
Cash 3%
- -----------------------------------
Total 100%
- -----------------------------------
PORTFOLIO COMPOSITION
4/30/98
- -----------------------------------
Average Maturity 10.6 Years
- -----------------------------------
Average Duration 5.4 Years
- -----------------------------------
QUALITY DISTRIBUTION
4/30/98
- -----------------------------------
U.S. Treasury 36%
- -----------------------------------
U.S. Government Agency 7%
- -----------------------------------
Aaa 16%
- -----------------------------------
Aa 3%
- -----------------------------------
A 25%
- -----------------------------------
Baa 12%
- -----------------------------------
Ba 1%
- -----------------------------------
Total 100%
- -----------------------------------
SEC 30-DAY YIELD
- -----------------------------------
5.50%
- -----------------------------------
TOTAL FUND NET ASSETS
4/30/98
- -----------------------------------
$516,083,949
- -----------------------------------
FIRSTAR
FUNDS
(logo)
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
APRIL 30, 1998 SHORT-TERM INTERMEDIATE TAX-EXEMPT BOND
(UNAUDITED) BOND MARKET BOND MARKET INTERMEDIATE IMMDEX(TM)
FUND FUND BOND FUND FUND
------------ ------------ ------------ ------------
<C> <C> <C> <C>
ASSETS:
Investments, at value (cost $173,411, $290,413,
$83,493 and $491,193, respectively) $173,873 $294,540 $ 84,594 $513,062
Interest receivable 2,243 4,426 1,510 8,385
Capital shares sold 915 919 2,085 1,469
Cash - 69 - -
Other assets 25 23 25 26
---------- --------- --------- ---------
Total Assets 177,056 299,977 88,214 522,942
--------- --------- --------- ---------
LIABILITIES:
Payable for securities purchased 1,039 - - 5,756
Capital shares redeemed 608 126 5,277 844
Payable to affiliates 131 156 53 237
Accrued expenses and other liabilities 33 24 26 21
--------- --------- --------- ---------
Total Liabilities 1,811 306 5,356 6,858
--------- --------- --------- ---------
NET ASSETS $175,245 $299,671 $ 82,858 $516,084
========= ========= ========= =========
NET ASSETS CONSIST OF:
Capital stock $177,238 $295,803 $ 81,761 $494,573
Undistributed net investment income 74 140 28 250
Undistributed accumulated net realized losses (2,529) (399) (32) (608)
Unrealized net appreciation on investments 462 4,127 1,101 21,869
--------- --------- --------- ---------
Total Net Assets $175,245 $299,671 $ 82,858 $516,084
========= ========= ========= =========
SERIES A:
Net assets $ 66,923 $ 25,172 $ 25,101 $ 77,064
Shares authorized ($.0001 par value) 500,000 500,000 500,000 500,000
Shares issued and outstanding 6,536 2,443 2,427 2,729
Net asset value and redemption price per share <F1> $10.24 $10.30 $10.34 $28.24
========= ========= ========= =========
Maximum offering price per share <F1> $10.45 $10.51 $10.55 $28.82
========= ========= ========= =========
SERIES INSTITUTIONAL:
Net assets $108,322 $274,499 $ 57,757 $439,020
Shares authorized ($.0001 par value) 500,000 500,000 500,000 500,000
Shares issued and outstanding 10,577 26,644 5,584 15,539
Net asset value, redemption price and offering
price per share <F1> $10.24 $10.30 $10.34 $28.25
========= ========= ========= =========
<F1> Amounts may not recalculate due to rounding.
</TABLE>
See notes to the financial statements.
FIRSTAR
FUNDS
(logo)
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS)
SIX MONTHS ENDED APRIL 30, 1998 SHORT-TERM INTERMEDIATE TAX-EXEMPT BOND
(UNAUDITED) BOND MARKET BOND MARKET INTERMEDIATE IMMDEX(TM)
FUND FUND BOND FUND FUND
------------ ------------ ------------ ----------
<C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $5,820 $9,045 $1,919 $16,311
------------ ------------ ------------ ------------
EXPENSES:
Investment advisory fees 529 712 198 741
Administration fees 97 157 44 273
Shareowner servicing and accounting costs 71 76 46 95
Service organization fees - Series A 83 28 27 87
Custody fees 21 25 10 48
Federal and state registration fees 14 22 10 24
Professional fees 13 13 10 14
Reports to shareowners 19 5 3 18
Directors' fees and expenses 4 4 4 4
Other 3 3 1 7
------------ ------------ ------------ ------------
Total expenses before waiver 854 1,045 353 1,311
Less: Waiver of expenses (331) (305) (128) (183)
------------ ------------ ------------ ------------
Net expenses 523 740 225 1,128
------------ ------------ ------------ ------------
NET INVESTMENT INCOME 5,297 8,305 1,694 15,183
------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on investment transactions 104 421 21 89
Change in unrealized appreciation (depreciation)
on investments (673) (707) (215) 1,251
------------ ------------ ------------ ------------
Net gain (loss) on investments (569) (286) (194) 1,340
------------ ------------ ------------ ------------
NET INCREASEIN NET ASSETS
RESULTING FROM OPERATIONS $4,728 $8,019 $1,500 $16,523
============ ============ ============ ============
</TABLE>
See notes to the financial statements.
FIRSTAR
FUNDS
(logo)
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
(AMOUNTS IN THOUSANDS)
SHORT-TERM INTERMEDIATE TAX-EXEMPT BOND
BOND MARKET BOND MARKET INTERMEDIATE BOND IMMDEX(TM)
FUND FUND FUND FUND
------------------- ------------------- ------------------- ------------------
Six months Year Six months Year Six months Year Six months Year
ended ended ended ended ended ended ended ended
Apr. 30, Oct. 31, Apr. 30, Oct. 31, Apr. 30, Oct. 31, Apr. 30, Oct. 31,
1998 1997 1998 1997 1998 1997 1998 1997
-------- -------- -------- -------- -------- -------- -------- -------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 5,297 $ 12,672 $ 8,305 $ 13,379 $ 1,694 $ 2,460 $15,183 $ 27,218
Net realized gain (loss) on investments 104 (1,101) 421 242 21 48 89 447
Change in unrealized appreciation
(depreciation) on investments (673) 1,426 (707) 3,016 (215) 805 1,251 9,973
-------- -------- -------- -------- -------- -------- -------- --------
Net increase in net assets
resulting from operations 4,728 12,997 8,019 16,637 1,500 3,313 16,523 37,638
-------- -------- -------- -------- -------- -------- -------- --------
CAPITAL SHARE TRANSACTIONS:
Shares sold 43,652 71,621 53,810 116,096 30,878 35,199 99,511 130,202
Shares issued to owners in
reinvestment of dividends 4,219 10,918 4,730 8,255 727 993 12,554 23,217
Shares redeemed (73,721) (87,494) (33,840) (43,261) (19,975) (12,976) (69,575) (104,870)
-------- -------- -------- -------- -------- -------- -------- --------
Net increase (decrease) in net assets
resulting from capital share
transactions (25,850) (4,955) 24,700 81,090 11,630 23,216 42,490 48,549
-------- -------- -------- -------- -------- -------- -------- --------
DISTRIBUTIONS TO SERIES A
SHAREOWNERS:
From net investment income <F1> (1,969) (3,625) (633) (1,090) (433) (589) (2,067) (3,214)
-------- -------- -------- -------- -------- -------- -------- --------
DISTRIBUTIONS TO SERIES
INSTITUTIONAL SHAREOWNERS:
From net investment income <F1> (3,315) (9,075) (7,627) (12,285) (1,246) (1,875) (13,024) (24,038)
-------- -------- -------- -------- -------- -------- -------- --------
TOTAL INCREASE (DECREASE)IN NET ASSETS (26,406) (4,658) 24,459 84,352 11,451 24,065 43,922 58,935
NET ASSETS:
Beginning of period 201,651 206,309 275,212 190,860 71,407 47,342 472,162 413,227
-------- -------- -------- -------- -------- -------- -------- --------
End of period (including undistributed
net investment income of $74, $62,
$140, $96, $28, $13, $250 and $158,
respectively) $175,245 $201,651 $299,671 $275,212 $82,858 $71,407 $516,084 $472,162
======== ======== ======== ======== ======== ======== ======== ========
<F1> For the Tax-Exempt Intermediate Bond Fund, substantially all distributions from net investment income are exempt from federal
income tax.
</TABLE>
See notes to the financial statements.
FIRSTAR
FUNDS
(logo)
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
SHORT-TERM BOND MARKET FUND
-----------------------------------------------------------------------------------------
Six months ended Year ended Year ended Year ended
April 30, October 31, October 31, October 31, Year ended
1998 1997 1996 1995<F2> October 31,
--------------- --------------- --------------- --------------- ---------------
Series Series Series Series Series Series Series Series
Per Share Data: A Inst"l. A Inst'l. A Inst'l. A Inst'l. 1994 1993
------ ------ ------ ------ ------ ------- ------- ------ ------- -------
Net asset value, (Unaudited)
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
beginning of period $10.27 $10.27 $10.25 $10.25 $10.28 $10.28 $10.03 $10.03 $10.56 $10.60
Income from investment operations:
Net investment income <F3> 0.30 0.32 0.60 0.62 0.58<F8> 0.61<F8> 0.61 0.63 0.56 0.58
Net realized and unrealized
gains (losses) on securities (0.03) (0.03) 0.02 0.02 (0.03) (0.03) 0.24 0.24 (0.41) 0.10
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations 0.27 0.29 0.62 0.64 0.55 0.58 0.85 0.87 0.15 0.68
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income (0.30) (0.32) (0.60) (0.62) (0.58) (0.61) (0.60) (0.62) (0.56) (0.58)
Distributions from capital gains - - - - - - - - (0.12) (0.14)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total distributions (0.30) (0.32) (0.60) (0.62) (0.58) (0.61) (0.60) (0.62) (0.68) (0.72)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of period $10.24 $10.24 $10.27 $10.27 $10.25 $10.25 $10.28 $10.28 $10.03 $10.56
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Total return <F4> <F5> 2.69% 2.82% 6.21% 6.47% 5.54% 5.80% 8.74% 8.95% 1.46% 6.70%
Supplemental data and ratios:
Net assets, in thousands,
end of period $66,923 $108,322 $65,567 $136,084 $58,843 $147,466 $47,730 $94,959 $122,368 $142,518
Ratio of net expenses
to average net assets <F6> 0.75% 0.50% 0.75% 0.50% 0.75% 0.50% 0.69% 0.50% 0.50% 0.52%
Ratio of net investment income
to average net assets <F6> 5.86% 6.11% 5.79% 6.04% 5.67% 5.92% 6.04% 6.23% 5.43% 5.53%
Portfolio turnover rate <F4> <F7> 34.11% 34.11% 77.12% 77.12% 59.62% 59.62% 100.58% 100.58% 76.13% 87.62%
<F1> Commencement of operations.
<F2> On January 9, 1995, all previously existing series of shares of each Fund were reclassified as Series A shares. Effective
on January 9, 1995, Institutional shareowners exchanged their Series A shares for the Funds' Institutional Series shares.
For the year ended October 31, 1995, the Financial Highlights ratios of net expenses to average net assets, ratios of net
investment income to average net assets, total return and the per share income from investment operations and
distributions are presented on a basis whereby the Fund's net investment income, net expenses, net realized and
unrealized gains (losses) and distributions for the period November 1, 1994 through January 9, 1995, were allocated to
each class of shares based upon the relative net assets of each class of shares as of the close of business on January 9,
1995, and the results thereof combined with the results of operations and distributions for each applicable class for the
period January 10, 1995 through October 31, 1995.
<F3> For the Tax-Exempt Intermediate Bond Fund, substantially all investment income is exempt from Federal income tax.
<F4> Not annualized for the period ended October 31, 1993, for the Intermediate Bond Market and Tax-Exempt Intermediate Bond
Funds, and for the periods ended April 30, 1998 for all funds.
<F5> The total return calculation does not reflect the 2% front end sales charge for Series A.
<F6> Annualized for the period ended October 31, 1993, for the Intermediate Bond Market and Tax-Exempt Intermediate Bond
Funds, and for the periods ended April 30, 1998 for all funds.
<F7> Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares
issued.
<F8> Net investment income per share is calculated using ending balances prior to consideration of adjustments for permanent
book and tax differences.)
</TABLE>
See notes to the financial statements.
FIRSTAR
FUNDS
(logo)
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
INTERMEDIATE BOND MARKET FUND
------------------------------------------------------------------------------------------
Six months Year Year Year
ended ended ended ended
April 30, October 31, October 31, October 31, Jan. 5,
1998 1997 1996 1995<F2> Year 1993 <F1>
---------------- ---------------- ---------------- ---------------- ended through
Series Series Series Series Series Series Series Series Oct. 31, Oct. 31,
Per Share Data: A Int'l. A Inst'l. A Inst'l. A Inst'l. 1994 1993
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, (Unaudited)
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
beginning of period $10.31 $10.31 $10.19 $10.19 $10.21 $10.21 $9.67 $9.67 $10.45 $10.00
Income from investment operations:
Net investment income <F3> 0.28 0.30 0.58 0.60 0.56<F8> 0.59<F8> 0.60 0.62 0.51 0.40
Net realized and unrealized
gains (losses) on securities (0.01) (0.01) 0.12 0.12 (0.02) (0.02) 0.53 0.53 (0.69) 0.45
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations 0.27 0.29 0.70 0.72 0.54 0.57 1.13 1.15 (0.18) 0.85
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income (0.28) (0.30) (0.58) (0.60) (0.56) (0.59) (0.59) (0.61) (0.51) (0.40)
Distributions from capital gains - - - - - - - - (0.09) -
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total distributions (0.28) (0.30) (0.58) (0.60) (0.56) (0.59) (0.59) (0.61) (0.60) (0.40)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of period $10.30 $10.30 $10.31 $10.31 $10.19 $10.19 $10.21 $10.21 $9.67 $10.45
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Total return <F4> <F5> 2.69% 2.81% 7.09% 7.36% 5.51% 5.77% 12.04% 12.25% (1.73)% 8.58%
Supplemental data and ratios:
Net assets, in thousands,
end of period $25,172 $274,499 $20,691 $254,521 $17,392 $173,468 $11,576 $128,941 $88,306 $56,794
Ratio of net expenses
to average net assets <F6> 0.75% 0.50% 0.75% 0.50% 0.75% 0.50% 0.69% 0.50% 0.50% 0.50%
Ratio of net investment income
to average net assets <F6> 5.60% 5.85% 5.71% 5.96% 5.59% 5.84% 6.07% 6.26% 5.19% 4.65%
Portfolio turnover rate <F4> <F7> 11.92% 11.92% 40.61% 40.61% 59.29% 59.29% 66.69% 66.69% 56.25% 82.37%
<F1> Commencement of operations.
<F2> On January 9, 1995, all previously existing series of shares of each Fund were reclassified as Series A shares. Effective on
January 9, 1995, Institutional shareowners exchanged their Series A shares for the Funds' Institutional Series shares. For
the year ended October 31, 1995, the Financial Highlights ratios of net expenses to average net assets, ratios of net
investment income to average net assets, total return and the per share income from investment operations and distributions
are presented on a basis whereby the Fund's net investment income, net expenses, net realized and unrealized gains (losses)
and distributions for the period November 1, 1994 through January 9, 1995, were allocated to each class of shares based upon
the relative net assets of each class of shares as of the close of business on January 9, 1995, and the results thereof
combined with the results of operations and distributions for each applicable class for the period January 10, 1995 through
October 31, 1995.
<F3> For the Tax-Exempt Intermediate Bond Fund, substantially all investment income is exempt from Federal income tax.
<F4> Not annualized for the period ended October 31, 1993, for the Intermediate Bond Market and Tax-Exempt Intermediate Bond
Funds, and for the periods ended April 30, 1998 for all funds.
<F5> The total return calculation does not reflect the 2% front end sales charge for Series A.
<F6> Annualized for the period ended October 31, 1993, for the Intermediate Bond Market and Tax-Exempt Intermediate Bond Funds,
and for the periods ended April 30, 1998 for all funds.
<F7> Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares
issued.
<F8> Net investment income per share is calculated using ending balances prior to consideration of adjustments for permanent
book and tax differences.
</TABLE>
See notes to the financial statements.
FIRSTAR
FUNDS
(logo)
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
TAX-EXEMPT INTERMEDIATE BOND FUND
------------------------------------------------------------------------------------------
Six months Year Year Year
ended ended ended ended
April 30, October 31, October 31, October 31, Jan. 5,
1998 1997 1996 1995<F2> Year 1993 <F1>
---------------- ---------------- ---------------- ---------------- ended through
Series Series Series Series Series Series Series Series Oct. 31, Oct. 31,
Per Share Data: A Int'l. A Inst'l. A Inst'l. A Inst'l. 1994 1993
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, (Unaudited)
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
beginning of period $10.35 $10.36 $10.21 $10.21 $10.23 $10.24 $9.78 $9.78 $10.26 $10.00
Income from investment operations:
Net investment income <F3> 0.21 0.22 0.42 0.44 0.40<F8> 0.43<F8> 0.42 0.44 0.41 0.27
Net realized and unrealized
gains (losses) on securities (0.01) (0.02) 0.14 0.15 (0.01) (0.03) 0.45 0.46 (0.48) 0.26
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations 0.20 0.20 0.56 0.59 0.39 0.40 0.87 0.90 (0.07) 0.53
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income (0.21) (0.22) (0.42) (0.44) (0.41) (0.43) (0.42) (0.44) (0.41) (0.27)
Distributions from capital gains - - - - - - - - - -
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total distributions (0.21) (0.22) (0.42) (0.44) (0.41) (0.43) (0.42) (0.44) (0.41) (0.27)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of period $10.34 $10.34 $10.35 $10.36 $10.21 $10.21 $10.23 $10.24 $9.78 $10.26
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Total return <F4> <F5> 1.90% 1.93% 5.60% 5.96% 3.87% 4.02% 9.07% 9.38% (0.73)% 5.36%
Supplemental data and ratios:
Net assets, in thousands,
end of period $25,101 $57,757 $19,199 $52,208 $10,690 $36,652 $7,711 $27,595 $26,167 $23,866
Ratio of net expenses
to average net assets <F6> 0.75% 0.50% 0.75% 0.50% 0.75% 0.50% 0.71% 0.51% 0.60% 0.59%
Ratio of net investment income
to average net assets <F6> 4.08% 4.33% 4.11% 4.36% 3.99% 4.24% 4.25% 4.45% 4.04% 3.75%
Portfolio turnover rate <F4> <F7> 8.02% 8.02% 11.22% 11.22% 30.46% 30.46% 44.13% 44.13% 58.54% 3.23%
<F1> Commencement of operations.
<F2> On January 9, 1995, all previously existing series of shares of each Fund were reclassified as Series A shares. Effective on
January 9, 1995, Institutional shareowners exchanged their Series A shares for the Funds' Institutional Series shares. For
the year ended October 31, 1995, the Financial Highlights ratios of net expenses to average net assets, ratios of net
investment income to average net assets, total return and the per share income from investment operations and distributions
are presented on a basis whereby the Fund's net investment income, net expenses, net realized and unrealized gains (losses)
and distributions for the period November 1, 1994 through January 9, 1995, were allocated to each class of shares based upon
the relative net assets of each class of shares as of the close of business on January 9, 1995, and the results thereof
combined with the results of operations and distributions for each applicable class for the period January 10, 1995 through
October 31, 1995.
<F3> For the Tax-Exempt Intermediate Bond Fund, substantially all investment income is exempt from Federal income tax.
<F4> Not annualized for the period ended October 31, 1993, for the Intermediate Bond Market and Tax-Exempt Intermediate Bond
Funds, and for the periods ended April 30, 1998 for all funds.
<F5> The total return calculation does not reflect the 2% front end sales charge for Series A.
<F6> Annualized for the period ended October 31, 1993, for the Intermediate Bond Market and Tax-Exempt Intermediate Bond Funds,
and for the periods ended April 30, 1998 for all funds.
<F7> Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares
issued.
<F8> Net investment income per share is calculated using ending balances prior to consideration of adjustments for permanent
book and tax differences.
</TABLE>
See notes to the financial statements.
FIRSTAR
FUNDS
(logo)
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
BOND IMMDEX(TM) FUND
-----------------------------------------------------------------------------------------
Six months ended Year ended Year ended Year ended
April 30, October 31, October 31, October 31, Year ended
1998 1997 1996 1995<F2> October 31,
--------------- --------------- --------------- --------------- ---------------
Series Series Series Series Series Series Series Series
Per Share Data: A Inst"l. A Inst'l. A Inst'l. A Inst'l. 1994 1993
------ ------ ------ ------ ------ ------- ------- ------ ------- -------
Net asset value, (Unaudited)
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
beginning of period $28.16 $28.16 $27.54 $27.55 $27.82 $27.82 $25.67 $25.67 $28.91 $27.31
Income from investment operations:
Net investment income <F3> 0.82 0.86 1.66 1.75 1.61<F8> 1.70<F8> 1.68 1.74 1.65 1.68
Net realized and unrealized
gains (losses) on securities 0.08 0.09 0.64 0.61 (0.26) (0.27) 2.30 2.29 (2.74) 1.83
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations 0.90 0.95 2.30 2.36 1.35 1.43 3.98 4.03 (1.09) 3.51
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income (0.82) (0.86) (1.68) (1.75) (1.63) (1.70) (1.79) (1.84) (1.65) (1.70)
Distributions from capital gains _ _ _ _ _ _ (0.04) (0.04) (0.50) (0.21)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total distributions (0.82) (0.86) (1.68) (1.75) (1.63) (1.70) (1.83) (1.88) (2.15) (1.91)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of period $28.24 $28.25 $28.16 $28.16 $27.54 $27.55 $27.82 $27.82 $25.67 $28.91
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Total return <F4> <F5> 3.24% 3.40% 8.68% 8.90% 5.06% 5.35% 16.05% 16.26% (3.89)% 13.30%
Supplemental data and ratios:
Net assets, in thousands,
end of period $77,064 $439,020 $64,144 $408,018 $42,671 $370,556 $21,875 $290,274 $256,778 $260,468
Ratio of net expenses
to average net assets <F6> 0.67% 0.42% 0.67% 0.42% 0.68% 0.43% 0.64% 0.44% 0.48% 0.50%
Ratio of net investment income
to average net assets <F6> 5.92% 6.17% 6.08% 6.33% 5.98% 6.23% 6.31% 6.51% 6.14% 6.10%
Portfolio turnover rate <F4> <F7> 12.14% 12.14% 35.12% 35.12% 33.38% 33.38% 41.67% 41.67% 49.70% 81.18%
<F1> Commencement of operations.
<F2> On January 9, 1995, all previously existing series of shares of each Fund were reclassified as Series A shares. Effective on
January 9, 1995, Institutional shareowners exchanged their Series A shares for the Funds' Institutional Series shares. For
the year ended October 31, 1995, the Financial Highlights ratios of net expenses to average net assets, ratios of net
investment income to average net assets, total return and the per share income from investment operations and distributions
are presented on a basis whereby the Fund's net investment income, net expenses, net realized and unrealized gains (losses)
and distributions for the period November 1, 1994 through January 9, 1995, were allocated to each class of shares based upon
the relative net assets of each class of shares as of the close of business on January 9, 1995, and the results thereof
combined with the results of operations and distributions for each applicable class for the period January 10, 1995 through
October 31, 1995.
<F3> For the Tax-Exempt Intermediate Bond Fund, substantially all investment income is exempt from Federal income tax.
<F4> Not annualized for the period ended October 31, 1993, for the Intermediate Bond Market and Tax-Exempt Intermediate Bond
Funds, and for the periods ended April 30, 1998 for all funds.
<F5> The total return calculation does not reflect the 2% front end sales charge for Series A.
<F6> Annualized for the period ended October 31, 1993, for the Intermediate Bond Market and Tax-Exempt Intermediate Bond Funds,
and for the periods ended April 30, 1998 for all funds.
<F7> Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares
issued.
<F8> Net investment income per share is calculated using ending balances prior to consideration of adjustments for permanent
book and tax differences.
</TABLE>
See notes to the financial statements.
FIRSTAR
FUNDS
(logo)
SHORT-TERM BOND MARKET FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
LONG-TERM INVESTMENTS 97.6%
ASSET-BACKED SECURITIES 24.5%
AUTO LOAN RECEIVABLES 0.5%
General Motors Acceptance Corp. Grantor,
$ 789 Series 1991-A1, Class A, 8.17%, 1/02/00 $ 801
USAA Auto Loan Grantor Trust,
40 Series 1994-1, Class A, 5.00%, 11/15/99 40
--------
841
--------
CREDIT CARD RECEIVABLES 13.5%
Banc One Credit Card Master Trust:
1,500 Series 1995-B, Class A, 6.30%, 9/15/00 1,514
1,250 Series 1995-A, Class A, 6.15%, 7/15/02 1,257
Chase Manhattan Grantor Trust,
571 Series 1995-B, Class A, 5.90%, 9/15/99 571
Chemical Master Credit Card Trust I,
3,030 Series 1995-2, Class A, 6.23%, 6/15/03 3,055
Citibank Credit Card Master Trust I, Principal Only,
5,000 Series 1996-1, Class A, 0.00%, 2/07/01 4,249
Discover Card Master Trust I,
2,000 Series 1993-B, Class A, 6.75%, 2/15/00 2,022
Household Affinity Credit Card Master Trust I,
1,550 Series 1993-2, Class A, 5.60%, 11/15/00 1,543
NationsBank Credit Card Master Trust,
3,938 Series 1995-1, Class A, 6.45%, 8/15/00 3,988
Sears Credit Account Master Trust,
1,000 Series 1995-2, Class A, 8.10%, 6/15/04 1,033
Spiegel Credit Card Master Trust:
2,000 Series 1994-B, Class A, 8.15%, 6/15/04 2,066
2,325 Series 1995-A, Class A, 7.50%, 9/15/04 2,394
--------
23,692
--------
HOME EQUITY LOAN RECEIVABLES 10.5%
Advanta Home Equity Loan Trust,
2,147 Series 1993-2, Class A2, 6.15%, 10/25/09 2,131
Corestates Home Equity Trust,
3,000 Series 1996-1, Class A3, 7.00%, 12/15/09 3,056
EQCC Home Equity Loan Trust:
295 Series 1993-3, Class A, 5.15%, 9/15/08 288
1,385 Series 1993-4, Class A, 5.725%, 12/15/08 1,368
679 Series 1996-1, Class A2, 5.82%, 9/15/09 677
GE Home Equity Loan Asset-Backed Certificates:
204 Series 1991-1, Class A, 7.20%, 8/30/11 205
2,500 Series 1991-1, Class B, 8.70%, 9/15/11 2,618
Household Finance Corp,
1,718 Series 1992-2, Class A, 6.65%, 11/20/12 1,719
Security Pacific Home Equity Loan:
1,187 Series 1991-1, Class B, 8.85%, 5/15/98 1,189
941 Series 1991-2, Class B, 8.15%, 6/15/20 946
The Money Store Home Equity Trust:
1,022 Series 1992-A, Class A, 6.95%, 1/15/07 1,026
1,745 Series 1993-B, Class A3, 6.10%, 5/15/22 1,735
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
HOME EQUITY LOAN RECEIVABLES 10.5% (CONT.)
UCFC Home Equity Loan,
$1,385 Series 1995-A2, Class A7, 8.30%, 2/10/26 $ 1,441
--------
18,399
--------
CORPORATE BONDS 22.8%
Bear Stearns Company Senior Notes:
1,000 6.75%, 8/15/00 1,015
800 9.375%, 6/01/01 872
Beneficial Corp. Notes,
800 8.20%, 3/15/02 851
Big Rivers Electric Corporation Co-op Utility Trust
1,500 Certificates, 9.50%, 2/15/17 1,587
BP America, Inc. Guaranteed Debentures,
2,000 10.00%, 7/01/18 2,103
Chase Manhattan Corp. Subordinated Notes,
700 10.00%, 6/15/99 730
Continental Bank Subordinated Notes,
1,840 11.25%, 7/01/01 1,853
Jack Eckerd Corporation Senior Subordinated Notes,
1,304 9.25%, 02/15/04 1,387
General Motors Acceptance Corp. Notes,
922 9.625%, 5/15/00 984
Heller Financial, Inc. Notes,
2,790 8.00%, 12/15/98 2,821
Household Finance Corp. Debentures,
2,000 9.625%, 7/15/00 2,137
Lehman Brothers Holdings, Inc. Debentures,
1,000 9.875%, 10/15/00 1,080
Lehman Brothers Holdings, Inc. Notes:
3,000 8.875%, 2/15/00 3,138
2,386 7.625%, 7/15/99 2,424
1,100 6.65%, 11/08/99 1,112
Lehman Brothers, Inc. Senior Subordinated Notes:
750 7.625%, 8/01/98 753
2,739 10.00%, 5/15/99 2,845
Mississippi Power & Light Notes,
1,000 8.80%, 4/01/05 1,000
Paine Webber Group, Inc. Medium Term Notes:
1,000 5.83%, 2/02/99 998
1,000 6.31%, 7/22/99 1,002
Salomon, Inc. Medium Term Notes,
1,500 10.125%, 6/01/99 1,565
Salomon, Inc. Senior Notes:
206 7.25%, 1/15/00 210
800 7.75%, 5/15/00 824
Security Pacific Corporation Subordinate Notes,
1,008 11.50%, 11/15/00 1,131
Transamerica Financial Corp. Subordinated Notes,
2,500 6.75%, 6/01/00 2,531
USF&G Corporation Senior Notes,
3,075 7.00%, 5/15/98 3,076
--------
40,029
--------
See notes to the financial statements.
FIRSTAR
FUNDS
(logo)
SHORT-TERM BOND MARKET FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
MORTGAGE-BACKED SECURITIES 13.8%
Collateralized Mortgage Obligation Trust,
$1,565 Series 15, Class E, 5.00%, 3/20/18 $ 1,491
Collateralized Mortgage Securities Corp.,
564 Series 1991-6, Class PH, 7.00%, 5/20/20 566
Green Tree Financial Corp. Pass-Thru Certificates:
1,001 Series 1992-2, Class A4, 8.15%, 1/15/18 1,048
554 Series 1993-3, Class A4, 5.45%, 10/15/18 553
1,330 Series 1993-3, Class A5, 5.75%, 10/15/18 1,317
1,073 Series 1993-4, Class A2, 5.85%, 1/15/19 1,074
750 Series 1994-4, Class A3, 7.70%, 7/15/19 765
2,500 Series 1994-8, Class A4, 8.50%, 4/15/25 2,601
1,500 Series 1995-9, Class A4, 6.45%, 1/15/27 1,512
Marine Midland, Real Estate Mortgage Investment
Conduit (REMIC), Series 1992-3, Class A12,
699 8.00%, 10/25/23 708
Merrill Lynch Mortgage Investors, Inc.,
3,003 Series 1992-B, Class A, 7.85%, 4/15/12 3,026
Morgan Stanley Mortgage Trust,
1,030 Series 40, Class 6, 7.00%, 2/20/20 1,034
Prudential Home Mortgage Securities:
342 Series 1993-24, Class A1, 5.50%, 6/25/00 341
2,319 Series 1993-24, Class A2, 5.50%, 7/25/00 2,291
Prudential Securities Financial Asset Funding Corp.,
997 Series 1993-4, Class A3, 6.83%, 9/25/09 1,001
Prudential Securities Secured Financing Corp.,
2,261 Series 1994-5, Class A1, 5.66%, 5/25/24 2,209
Security Pacific Acceptance Corp.,
2,682 Series 1992-2, Class A3, 7.50%, 6/15/12 2,700
--------
24,237
--------
INTERNATIONAL/YANKEE (U.S. $ DENOMINATED) 6.7%
Ford Capital BV Debentures,
1,450 9.875%, 5/15/02 1,626
Ford Capital BV Notes,
1,638 10.125%, 11/15/00 1,789
Korea Development Bank Bonds,
2,000 7.125%, 9/17/01 1,891
Quebec Province CDA Debentures,
1,000 13.25%, 9/15/14 1,134
Sumitomo Bank International Notes,
5,000 9.55%, 7/15/00 5,341
--------
11,781
--------
OTHER 0.7%
Florida Housing Finance Agency:
360 Antigua Club-A-2, 8.625%, 8/01/01 382
370 Brittany Apartments-C-2, 8.625%, 8/01/02 397
455 Maitland Club-B-2, 8.625%, 8/01/01 482
--------
1,261
--------
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
U.S. GOVERNMENT AGENCY-BACKED
MORTGAGE ISSUES 13.7%
Federal Home Loan Mortgage Corporation (FHLMC)
Participation Certificates:
$ 30 7.00%, 12/01/01 $ 30
134 7.75%, 7/01/09 138
Federal Home Loan Mortgage Corporation (FHLMC)
Real Estate Mortgage Investment Conduit (REMIC):
784 Series 1243, Class K, 7.50%, 8/15/01 794
306 Series 153, Class F, 7.75%, 8/15/15 306
1,285 Series 1149, Class K, 7.50%, 7/15/20 1,292
2,515 Series 1101, Class L, 6.95%, 9/15/20 2,532
77 Series 1169, Class D, 7.00%, 5/15/21 78
925 Series 1286, Class E, 7.00%, 10/15/21 932
Federal National Mortgage Association (FNMA)
Real Estate Mortgage Investment Conduit (REMIC):
1,619 Series X-19A, Class A, 6.50%, 10/25/00 1,622
2,000 Series 1993-G06, Class K, 7.00%, 11/25/01 2,020
1,228 Series 1991-63, Class G, 6.95%, 5/25/06 1,239
1,000 Series 1993-86, Class E, 6.00%, 1/25/07 999
1,180 Series 1992-93, Class G, 7.50%, 6/25/07 1,189
151 Series 1992-138, Class C, 6.00%, 12/25/18 150
1,311 Series G92-11, Class HB, 7.00%, 11/25/19 1,311
697 Series G92-35, Class C, 7.50%, 7/25/20 704
817 Series 1991-154, Class PH, 7.50%, 9/25/20 823
3,547 Series 1991-82, Class PL, 7.00%, 12/15/20 3,566
3,179 Series G92-53, Class H, 7.00%, 7/25/21 3,187
U.S. Department of Veterans Affairs Mortgage Trust
1,000 (REMIC), Series 1992-1, Class J, 7.75%, 2/15/01 1,014
--------
23,926
--------
U.S. TREASURY OBLIGATIONS 15.4%
U.S. Treasury Bonds,
7,000 10.75%, 2/15/03 8,459
U.S. Treasury Notes:
11,500 6.625%, 7/31/01 11,827
6,500 6.625%, 3/31/02 6,713
--------
26,999
--------
Total Long-Term Investments (Cost $170,703) 171,165
--------
Number
of Shares
(in thousands)
- ------------------
SHORT-TERM INVESTMENTS 1.6%
INVESTMENT COMPANIES 1.6%
10 Financial Square Prime Obligation Fund 10
2,698 Short-Term Investments Co. Liquid Assets Portfolio 2,698
--------
Total Short-Term Investments (Cost $2,708) 2,708
--------
Total Investments (Cost $173,411) 99.2% 173,873
--------
Other Assets, less Liabilities 0.8% 1,372
--------
TOTAL NET ASSETS 100.0% $175,245
========
See notes to the financial statements.
FIRSTAR
FUNDS
(logo)
INTERMEDIATE BOND MARKET FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
LONG-TERM INVESTMENTS 96.8%
ASSET-BACKED SECURITIES 20.5%
AUTO LOAN RECEIVABLES 0.4%
General Motors Acceptance Corp. Grantor,
$ 337 Series 1995-A, Class A, 7.15%, 3/15/00 $ 337
Keycorp Auto Grantor Trust,
495 Series 1995-A, Class A, 5.80%, 7/15/00 495
Premier Auto Trust,
436 Series 1993-5, Class A2, 4.22%, 3/02/99 434
--------
1,266
--------
CREDIT CARD RECEIVABLES 15.9%
AT&T Universal Card MasterTrust,
3,000 Series 1995-2, Class A, 5.95%, 10/17/00 3,005
Advanta Credit Card Master Trust,
1,000 Series 1995-F, Class A1, 6.05%, 8/01/03 1,004
American Express Master Trust,
2,000 Series 1994-2, Class A, 7.60%, 8/15/02 2,090
Banc One Credit Card Master Trust:
7,375 Series 1995-B, Class A, 6.30%, 9/15/00 7,446
1,000 Series 1995-A, Class A, 6.15%, 7/15/02 1,006
Chemical Master Credit Card Trust I,
571 Series 1995-3, Class A, 6.23%, 8/15/02 577
Citibank Credit Card Master Trust, Principal Only,
11,900 Series 1996-1, 0.00%, 2/07/01 10,113
Discover Card Master Trust I,
500 Series 1993-3, Class A, 6.20%, 5/16/06 502
First Chicago Master Trust II,
4,075 Series 1994-L, Class A, 7.15%, 2/15/00 4,128
HFC Private Label Credit Card Master Trust II,
1,667 Series 1994-2, Class A, 7.80%, 9/20/03 1,687
Household Affinity Credit Card Master Trust I,
3,300 Series 1993-2, Class A, 5.60%, 11/15/00 3,284
MBNA Master Credit Card Trust,
745 Series 1995-F, Class A, 6.60%, 8/15/00 757
NationsBank Credit Card Master Trust,
2,500 Series 1995-1, Class A, 6.45%, 8/15/00 2,532
Sears Credit Account Master Trust:
5,900 Series 1994-1, Class A, 7.00%, 8/15/00 5,978
2,400 Series 1995-3, Class A, 7.00%, 10/15/04 2,453
Speigel Credit Card Master Trust,
950 Series 1994-B, Class A, 8.15%, 6/15/04 981
--------
47,543
--------
HOME EQUITY LOAN RECEIVABLES 4.2%
Advanta Home Equity Loan Trust,
1,588 Series 1993-1, Class A2, 5.95%, 5/25/09 1,570
Corestates Home Equity Trust,
1,375 Series 1996-1, Class A3, 7.00%, 12/15/09 1,401
EQCC Home Equity Loan Trust:
1,800 Series 1994-4, 8.68%, 10/15/08 1,871
1,523 Series 1993-4, Class A, 5.725%, 12/15/08 1,505
2,060 Series 1994-1, Class A, 5.80%, 3/15/09 2,038
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
HOME EQUITY LOAN RECEIVABLES 4.2% (CONT.)
Security Pacific Acceptance Corp.,
$ 628 Series 1991-2, Class B, 8.55%, 9/15/11 $ 634
Security Pacific Home Equity Loan:
784 Series 1991-1, 8.85%, 5/15/98 785
799 Series 1991-2, 8.15%, 6/15/20 803
UCFC Home Equity Loan,
2,039 Series 1995-C2, Class A6, 6.825%, 10/10/26 2,065
--------
12,672
--------
CORPORATE BONDS 30.6%
Aetna Services, Inc. Debentures,
1,375 6.75%, 9/15/13 1,331
Aetna Services, Inc. Company Guarantee,
3,000 6.75%, 8/15/01 3,046
American General Finance Corp. Debentures,
650 9.625%, 7/15/00 696
American General Finance Corp. Notes,
1,000 8.00%, 2/15/00 1,033
BankAmerica Corporation Subordinated Notes:
465 9.75%, 7/01/00 500
2,000 10.00%, 2/01/03 2,299
Bankers Trust - NY, Subordinated Debentures,
1,000 9.50%, 6/14/00 1,065
Bear Stearns Company Senior Notes:
1,312 6.75%, 8/15/00 1,332
2,000 9.375%, 6/01/01 2,179
Caterpillar, Inc. Sinking Fund Debentures,
2,112 9.75%, 6/01/19 2,271
Chase Manhattan Corp. Debentures,
1,015 10.00%, 6/15/99 1,058
Chase Manhattan Corp. Subordinated Notes,
2,300 9.375%, 7/01/01 2,517
Chrysler Financial Corp. Debentures,
700 12.75%, 11/01/99 766
Commonwealth Edison First Mortgage,
850 9.75%, 2/15/20 938
Consolidated Edison Co. Debentures,
100 7.60%, 1/15/00 103
Continental Bank N.A. Subordinated Notes,
2,875 12.50%, 4/01/01 3,338
Continental Cablevision, Inc. Debentures:
1,050 8.875%, 9/15/05 1,182
3,475 9.50%, 8/01/13 4,073
Deseret Generation & Transmission Co-op Debentures,
734 9.375%, 1/02/11 763
Jack Eckerd Corporation Senior Subordinated Notes,
2,449 9.25%, 2/15/04 2,605
Federal Express Corporation Notes,
1,500 9.65%, 6/15/12 1,930
Federal Express Sinking Fund Pass-Thru Certificates,
1,000 7.89%, 9/23/08 1,066
See notes to the financial statements.
FIRSTAR
FUND
(logo)
INTERMEDIATE BOND MARKET FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
CORPORATE BONDS 30.6% (CONT.)
First Chicago Corp. Subordinated Notes,
$ 236 11.25%, 2/20/01 $ 267
First Interstate Bancorp Subordinated Notes,
500 9.90%, 11/15/01 559
First National Bank of Omaha Subordinated Notes,
1,600 7.32%, 12/01/10 1,663
First USA Bank Senior Notes,
1,000 5.85%, 2/22/01 996
Fleet Mortgage Group Notes,
2,405 6.50%, 6/15/00 2,428
Ford Motor Company Debentures,
850 9.50%, 9/15/11 1,070
Ford Motor Credit Co. Debentures,
1,097 9.50%, 4/15/00 1,165
Ford Motor Credit Co. Notes,
375 6.375%, 4/15/00 377
General Motors Acceptance Corp. Debentures,
1,988 8.625%, 6/15/99 2,045
General Motors Acceptance Corp. Notes:
1,050 8.00%, 10/01/99 1,074
2,217 9.375%, 4/01/00 2,348
1,000 9.625%, 12/15/01 1,112
General Motors Corp. Debentures,
1,355 9.625%, 12/01/00 1,472
Georgia Pacific Corp. Debentures:
1,150 9.50%, 12/01/11 1,410
775 9.50%, 5/15/22 882
Goldman Sachs Group Notes,
5,000 6.25%, 2/01/03 (Acquired 2/01/96; Cost $4,988)* 4,977
Household Finance Corp. Senior Subordinated Notes,
2,468 9.55%, 4/01/00 2,613
Household Finance Corp. Subordinated Notes,
1,445 9.625%, 7/15/00 1,544
International Lease Finance Corp. Medium Term Notes,
500 8.25%, 10/19/98 505
Lehman Brothers Holdings, Inc. Medium Term Notes,
1,750 8.875%, 2/15/00 1,830
Lehman Brothers Holdings, Inc. Notes:
2,000 6.90%, 7/15/99 2,021
1,500 6.65%, 11/08/99 1,516
940 8.875%, 3/01/02 1,017
Lehman Brothers, Inc. Senior Subordinated Notes:
2,280 10.00%, 5/15/99 2,368
1,000 6.125%, 2/01/01 997
National Westminster Bank Debentures,
700 9.375%, 11/15/03 799
National Westminster Bank Subordinated Notes,
700 9.45%, 5/01/01 765
NCNB Corp. Subordinated Notes,
2,380 10.20%, 7/15/15 3,187
News America Holdings Debentures,
750 10.125%, 10/15/12 884
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
CORPORATE BONDS 30.6% (CONT.)
Paine Webber Group, Inc. Notes,
$ 500 8.875%, 3/15/05 $ 562
Paine Webber Group, Inc. Medium Term Notes,
1,800 7.70%, 2/11/00 1,842
J.C. Penney Company, Inc. Debentures,
1,950 9.75%, 6/15/21 2,171
Salomon, Inc. Medium Term Notes,
1,300 10.125%, 6/01/99 1,356
Salomon, Inc. Senior Notes:
1,450 7.75%, 5/15/00 1,493
1,100 6.75%, 2/15/03 1,118
Salomon Smith Barney Holdings, Inc. Notes,
1,400 6.625%, 6/01/00 1,413
The Charles Schwab Corp. Medium Term Notes,
650 6.06%, 10/02/00 648
Security Pacific Corp. Subordinated Notes,
1,000 11.00%, 3/01/01 1,122
--------
91,707
--------
MORTGAGE-BACKED SECURITIES 3.8%
Green Tree Financial Corp. Pass-Thru Certificates,
350 Series 1993-4, Class A3, 6.25%, 1/15/19 351
MDC Asset Investors Trust,
Real Estate Mortgage Investment Conduit (REMIC),
883 Series VIII, Class 8, 7.75%, 9/25/17 896
Merrill Lynch Mortgage Investors, Inc. Notes,
124 8.375%, 2/09/00 129
Prudential Securities Financial Asset Funding Corp.,
995 Series 1993-8, Class A, 5.775%, 11/15/14 982
Prudential Securities Secured Financing Corp.:
1,864 Series 1993-1, Class A, 6.44%, 2/16/21 1,844
2,764 Series 1994-5, Class A1, 5.66%, 5/25/24 2,700
Salomon Brothers Mortgage Securities,
1,396 Series 1986-1, Class A, 6.00%, 12/25/11 1,380
Westam Mortgage Financial Corporation,
2,990 Series 11, Class A, 6.36%, 8/26/20 3,056
--------
11,338
--------
INTERNATIONAL/YANKEE (U.S. $ DENOMINATED) 8.1%
Dresdner Bank of New York Subordinated Debentures,
650 7.25%, 9/15/15 673
Ford Capital BV Debentures,
600 9.50%, 6/01/10 740
Ford Capital BV Notes,
4,153 10.125%, 11/15/00 4,536
Hydro-Quebec Corporation Debentures,
2,250 11.75%, 2/01/12 3,273
Korea Development Bank Bonds,
1,075 7.125%, 9/17/01 1,016
Korea Electric Power Debentures:
820 7.75%, 4/01/13 707
750 6.75%, 8/01/27 658
See notes to the financial statements.
FIRSTAR
FUND
(logo)
INTERMEDIATE BOND MARKET FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
INTERNATIONAL/YANKEE (U.S. $ DENOMINATED) 8.1% (CONT.)
Midland Bank PLC Subordinated Notes,
$ 4,225 6.95%, 3/15/11 $ 4,282
National Bank of Hungary Debentures,
1,350 8.875%, 11/01/13 1,562
Norsk Hydro A/S Debentures,
1,350 9.00%, 4/15/12 1,630
Pohang Iron & Steel Notes,
875 7.125%, 7/15/04 774
Quebec Province Local Government Guarantee,
400 13.25%, 9/15/14 454
Sumitomo Bank International Notes,
1,600 9.55%, 7/15/00 1,709
Wharf Capital International Ltd. Notes:
800 8.875%, 11/01/04 775
1,725 7.625%, 3/13/07 1,493
--------
24,282
--------
U.S. GOVERNMENT AGENCY-BACKED
MORTGAGE ISSUES 6.2%
Federal Home Loan Mortgage Corporation (FHLMC)
Real Estate Mortgage Investment Conduit (REMIC):
187 Series 1624, Class KE, 6.00%, 10/15/02 187
872 Series 1289, Class PR, 7.50%, 2/15/03 894
997 Series 1456, Class LA, 7.50%, 5/15/03 1,019
578 Series 1496, Class KA, 6.00%, 12/15/03 576
934 Series 8, Class VB, 7.00%, 4/25/03 952
300 Series 1551, Class E, 6.50%, 9/15/07 303
1,200 Series 1101, Class L, 6.95%, 9/15/20 1,208
832 Series 1167, Class E, 7.50%, 11/15/21 855
2,445 Series 1286, Class A, 6.00%, 5/15/22 2,419
Federal National Mortgage Association (FNMA)
Real Estate Mortgage Investment Conduit (REMIC):
653 Series 1993-23, Class PU, 7.50%, 1/25/00 660
500 Series 1992-73, Class L, 7.50%, 1/25/01 511
1,250 Series 1992-18, Class HB, 7.20%, 3/25/02 1,266
3,500 Series 1993-37, Class B, 7.00%, 7/25/02 3,556
863 Series 1992-103, Class L, 7.50%, 11/25/02 880
538 Series 1990-89, Class K, 6.50%, 7/25/20 538
1,971 Series 1991-77, Class PH, 7.00%, 11/25/20 1,981
359 Series 1991-82, Class PL, 7.00%, 12/15/20 361
U.S. Department of Veterans Affairs Mortgage
500 Trust (REMIC),Series 1992-2,
Class J, 7.00%, 3/15/01 501
--------
18,667
--------
U.S. TREASURY OBLIGATIONS 27.6%
U.S. Treasury Bonds:
28,850 10.75%, 2/15/03 34,863
10,000 13.75%, 8/15/04 14,175
26,050 10.75%, 8/15/05 33,670
--------
82,708
--------
Total Long-Term Investments (Cost $286,056) 290,183
--------
Number of Market
Shares Value
(in thousands) (in thousands)
- --------------- ---------------
SHORT-TERM INVESTMENTS 1.5%
INVESTMENT COMPANIES 1.5%
10 Financial Square Prime Obligation Fund $ 10
4,347 Short-Term Investments Co. Liquid Assets Portfolio 4,347
--------
Total Short-Term Investments (Cost $4,357) 4,357
--------
Total Investments (Cost $290,413) 98.3% 294,540
--------
Other Assets, less Liabilities 1.7% 5,131
--------
TOTAL NET ASSETS 100.0% $299,671
========
* Unregistered security
See notes to the financial statements.
FIRSTAR
FUND
(logo)
TAX-EXEMPT INTERMEDIATE BOND FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
GENERAL OBLIGATION 7.7%
Elgin, Illinois,
$ 2,990 7.25%, 1/01/04 $ 3,408
Lake County, Illinois, School District 112,
1,415 9.00%, 12/01/05 1,810
Washington State:
100 6.75%, 10/01/01 104
1,000 6.30%, 9/01/02 1,071
--------
Total General Obligation (Cost $6,791) 6,393
--------
REVENUE BONDS 1.8%
HOUSING 1.3%
South Dakota Housing Development Authority -
1,105 Homeownership Mortgage, 4.85%, 5/01/01 1,111
--------
UNIVERSITY 0.5%
New England Education Student Loan Marketing
360 Corporation, 5.80%, 3/01/02 375
--------
Total Revenue Bonds (Cost $1,471) 1,486
--------
PREREFUNDED AND ESCROWED
TO MATURITY 70.0%
Adams County, Mississippi Hospital Revenue,
1,000 8.00%, 10/01/16, Prerefunded 10/01/01 1,135
Alaska State Housing Finance Corporation,
1,465 6.375%, 12/01/12, Prerefunded 12/01/02 1,603
Anniston, Alabama Regional Medical Center Board
1,160 Project, 8.00%, 7/01/11, Escrowed to Maturity 1,458
Arizona State Municipal Funding Program,
1,500 8.75%, 8/01/07, Escrowed to Maturity 1,962
Arizona Health Facilities Hospital Revenue,
2,000 7.25%, 11/01/14, Prerefunded 11/01/03 2,275
Central Arizona Water Conservation District,
2,000 6.50%, 11/01/11, Prerefunded 5/01/01 2,161
Cherokee County, Oklahoma,
1,340 0.00%, 11/01/11, Escrowed to Maturity 677
Chicago, Illinois Motor Fuel Tax Revenue,
1,000 7.05%, 1/01/07, Prerefunded 1/01/01 1,088
Clark County, Nevada School District,
345 7.00%, 6/01/09, Prerefunded 6/01/01 375
Cleveland, Ohio Parking Facilities Revenue,
1,125 8.10%, 9/15/22, Prerefunded 9/15/02 1,315
Convention Center Authority - Rhode Island Revenue,
1,000 6.65%, 5/15/12, Prerefunded 5/15/01 1,085
Danville, Indiana Community Elementary School
1,000 Building Corp., First Mortgage, 6.90%, 1/15/10,
Prerefunded 1/15/02 1,103
Delaware County, Pennsylvania - Elwyn Inc. Project,
1,000 8.35%, 6/01/15, Prerefunded 6/01/00 1,102
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
PREREFUNDED AND ESCROWED
TO MATURITY 70.0% (CONT.)
Des Plaines, Illinois Hospital Facilities -
Holy Family Hospital Project,
$ 590 10.75%, 1/01/14, Prerefunded 7/01/02 $ 733
Douglas County, Nebraska Hospital Authority Revenue,
1,000 7.25%, 11/01/21, Prerefunded 11/01/01 1,114
Elizabeth-Forward Pennsylvania School District,
1,000 7.25%, 1/15/10, Prerefunded 1/15/00 1,051
Farmington, New Mexico Power Revenue Bonds,
1,705 9.875%, 1/01/13, Prerefunded 7/01/05 2,227
Fruita, Colorado, Escrowed to Maturity:
500 9.25%, 10/01/01 561
500 9.25%, 4/01/03 602
Fulco, Georgia Hospital Authority Anticipation Certificates,
1,090 6.25%, 9/01/13, Prerefunded 9/01/02 1,191
Hodgkins, Illinois,
1,300 9.50%, 12/01/09, Prerefunded 12/01/01 1,551
Houston, Texas Airport Systems Revenue,
950 8.20%, 7/01/05, Escrowed to Maturity 1,122
Illinois Educational Facilities Authority -
Chicago College Of Osteopathic Medicine,
Escrowed To Maturity,
310 8.75%, 7/01/99 320
Illinois Educational Facilities Authority -
Loyola University,
3,355 7.125%, 7/01/21, Prerefunded 7/01/01 3,696
Intermountain Power Agency, Utah Supply Revenue,
2,500 0.00%, 7/01/21, Prerefunded 7/01/00 254
Louisiana Public Facilities Authority Hospital Revenue,
1,915 7.25%, 10/01/22, Prerefunded 10/01/02 2,168
Louisville, Kentucky Water & Sewer Revenue,
1,000 6.00%, 11/15/07, Escrowed to Maturity 1,098
Maricopa County, Arizona School District No. 1, Phoenix
1,000 Elementary, 6.60%, 7/01/03, Prerefunded 7/01/01 1,078
Metropolitan Government Nashville & Davidson
County, Tennessee Water & Sewer,
8,010 0.00%, 12/01/13, Prerefunded 12/01/02 2,092
Metropolitan Nashville Airport,
500 7.75%, 7/01/07, Prerefunded 7/01/01 560
Michigan State Hospital Financial Authority,
Sisters of Mercy Health Corp.,
900 7.50%, 2/15/18, Prerefunded 2/15/01 992
Nevada State Colorado River Community,
1,130 6.50%, 7/01/19, Prerefunded 7/01/04 1,262
New Jersey State Turnpike Authority Revenue,
25 6.75%, 1/01/09, Escrowed to Maturity 28
Oklahoma State Industrial Authority Revenue,
St. Anthony Hospital, Escrowed to Maturity,
1,030 6.125%, 6/01/03 1,100
Peninsula Ports Authority Virginia Health
Care Facilities - Mary Immaculate Project,
2,000 7.00%, 8/01/17, Prerefunded to 8/01/04 & 8/01/06 2,244
Pennsylvania State Industrial Development Authority -
1,000 Series A, 7.00%, 1/01/11, Prerefunded 7/01/01 1,098
See notes to the financial statements.
FIRSTAR
FUND
(logo)
TAX-EXEMPT INTERMEDIATE BOND FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
PREREFUNDED AND ESCROWED
TO MATURITY 70.0% (CONT.)
Philadelphia, Pennsylvania Regional Port Authority,
Lease Revenue Bonds, 7.15%, 8/01/20,
$1,000 Prerefunded 8/01/00 $ 1,065
Phoenix, Arizona Street & Highway Users,
Partially Prerefunded 7/01/02, Remainder Escrowed
to Maturity:
1,000 6.50%, 7/01/09 1,099
4,700 6.25%, 7/01/11 5,115
San Marcos, California Certificate Participation,
1,085 0.00%, 2/15/06, Escrowed to Maturity 760
Tucson, Arizona Street & Highway User Revenue Bonds,
1,000 9.25%, 7/01/02, Escrowed to Maturity 1,178
University of Illinois,
1,005 6.10%, 10/01/03, Escrowed to Maturity 1,087
Virginia State Residential Authority - Solid Waste Disposal
1,000 System, 7.30%, 4/01/15, Prerefunded 4/01/00 1,078
Wausau, Wisconsin School District,
1,000 6.50%, 4/01/10, Prerefunded 4/01/02 1,077
Williston, North Dakota,
80 6.00%, 6/01/98, Escrowed to Maturity 80
--------
Total Prerefunded and Escrowed to Maturity
(Cost $57,304) 58,020
--------
INSURED BONDS 21.4%
EDUCATION 2.9%
Cook County, Illinois Niles Twp. School District,
1,560 0.00%, 12/01/07 976
Cook County, Illinois Cicero School District,
1,000 8.50%, 12/01/04 1,229
Merrillville, Indiana Multi-School Building Corporation,
200 6.375%, 7/01/03 219
--------
2,424
--------
ELECTRIC 2.7%
Springfield, Illinois Electric Revenue,
1,000 6.00%, 3/01/04 1,078
1,050 6.00%, 3/01/06 1,152
--------
2,230
--------
GENERAL OBLIGATION 11.8%
Amarillo, Texas Independent School District,
1,035 7.00%, 2/01/06 1,190
Bolingbrook, Illinois,
1,080 0.00%, 1/01/05 796
Chicago, Illinois,
675 11.60%, 1/01/01 799
Chicago, Illinois Park District,
2,770 6.00%, 1/01/07 3,070
Maricopa County, Arizona Elementary School District
No. 068, Alhambra,
1,000 5.625%, 7/01/03, Partially Prerefunded 1,056
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
GENERAL OBLIGATION 11.8% (CONT.)
Palatine, Illinois,
$1,405 9.90%, 1/01/16, Crossover Refunded 1/01/00 $ 1,561
Rocklin, California Unified School District,
1,235 6.70%, 9/01/04 1,325
--------
9,797
--------
PUBLIC FACILITIES & IMPROVEMENTS 4.0%
Illinois State Certificates of Participation,
1,000 6.00%, 7/01/06 1,085
Mun-Del Building Corp., Indiana,
1,000 7.00%, 1/05/05 1,062
Texas State Turnpike Authority, Dallas,
1,000 6.50%, 1/01/08 1,143
--------
3,290
--------
Total Insured Municipal Bonds (Cost $16,973) 17,741
--------
Number
of Shares
(in thousands)
INVESTMENT COMPANIES 1.2%
10 Financial Square Tax-Exempt Money Market 10
944 Tax Free Investment Trust 944
--------
Total Investment Companies (Cost $954) 954
--------
Total Investments (Cost $83,493) 102.1% 84,594
--------
Liabilities, less Other Assets (2.1)% (1,736)
--------
TOTAL NET ASSETS 100.0% $82,858
========
See notes to the financial statements.
FIRSTAR
FUND
(logo)
BOND IMMDEX(TM) FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
LONG-TERM INVESTMENTS 95.1%
ASSET-BACKED SECURITIES 10.6%
AUTO LOAN RECEIVABLES 0.4%
Ford Credit Grantor Trust,
$ 537 Series 1995-A, Class A, 5.90%, 5/15/00 $ 538
General Motors Acceptance Corp. Grantor Trust,
643 Series 1995-A, Class A, 7.15%, 3/15/00 643
Premier Auto Trust:
203 Series 1993-4, Class A2, 4.65%, 2/02/99 203
148 Series 1993-5, Class A2, 4.22%, 3/02/99 147
420 Series 1993-6, Class B, 4.875%, 11/02/99 420
--------
1,951
--------
CREDIT CARD RECEIVABLES 10.2%
Advanta Credit Card Master Trust,
4,200 Series 1995-F, Class A1, 6.05%, 8/01/03 4,217
Banc One Credit Card Master Trust,
8,000 Series 1995-B, Class A, 6.30%, 9/15/00 8,077
Citibank Credit Card Master Trust, Principal Only,
6,465 Series 1996-1, 0.00%, 2/07/01 5,494
First Chicago Master Trust II,
1,800 Series 1994-L, Class A, 7.15%, 2/15/00 1,823
HFC Private Label Credit Card Master Trust II,
274 Series 1993-2, Class A3, 4.65%, 12/20/08 274
Household Affinity Credit Card Master Trust I,
3,750 Series 1993-2, Class A, 5.60%, 11/15/00 3,732
NationsBank Credit Card Master Trust,
9,839 Series 1995-1, Class A, 6.45%, 8/15/00 9,964
Sears Credit Account Master Trust:
11,750 Series 1994-1, Class A, 7.00%, 8/15/00 11,905
1,700 Series 1995-2, Class A, 8.10%, 1/15/01 1,756
5,300 Series 1995-3, Class A, 7.00%, 10/15/04 5,416
--------
52,658
--------
CORPORATE BONDS 31.2%
Alabama Power Company First Mortgage Bond,
1,000 9.00%, 12/01/24 1,103
American Airline Equipment Pass-Thru Certificates,
1,500 10.21%, 1/01/10 1,868
BankAmerica Corporation Subordinated Notes,
3,539 10.00%, 2/01/03 4,067
Barclays North American Captial Corp. Debentures,
925 9.75%, 5/15/21 1,048
Bear Stearns Company Notes,
63 6.50%, 6/15/00 64
Bear Stearns Company Senior Notes,
500 6.75%, 8/15/00 508
Boston Edison Company Debentures,
4,900 9.375%, 8/15/21 5,441
Burlington Northern Railroad Company Equipment
Trust Certificates,
500 11.85%, 1/15/99 520
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
CORPORATE BONDS 31.2% (CONT.)
Chase Manhattan Corp. Notes,
$ 7,802 10.00%, 6/15/99 $8,135
Chrysler Financial Corp. Debentures,
1,927 12.75%, 11/01/99 2,110
Commonwealth Edison Co. First Mortgage,
6,050 9.75%, 2/15/20 6,673
Continental Bank Subordinated Notes,
1,963 12.50%, 4/01/01 2,279
Continental Cablevision, Inc. Debentures:
2,050 8.875%, 9/15/05 2,307
6,075 9.50%, 8/01/13 7,120
Deseret Generation & Transmission Co-op Debentures,
2,348 9.375%, 1/02/11 2,440
Federal Express Corporation Debentures,
2,163 9.625%, 10/15/19 2,317
Federal Express Corporation Notes,
4,400 9.65%, 6/15/12 5,662
First Chicago Corp. Subordinated Notes:
3,844 9.00%, 6/15/99 3,971
1,270 9.875%, 8/15/00 1,372
First National Bank Chicago Debentures,
1,100 8.08%, 1/05/18 1,258
First National Bank Omaha Subordinated Notes,
3,100 7.32%, 12/01/10 3,221
First USA Bank Notes,
1,125 5.85%, 2/22/01 1,120
Ford Motor Company Notes,
2,650 9.50%, 9/15/11 3,336
GTE Corporation Debentures,
500 10.25%, 11/01/20 560
GTE North, Inc. Debentures,
1,100 9.60%, 1/01/21 1,216
Geico Corporation Debentures,
2,000 9.15%, 9/15/21 2,260
General Motors Acceptance Corp. Medium Term Notes,
1,000 7.50%, 7/22/99 1,018
General Motors Acceptance Corp. Notes:
1,375 8.00%, 10/01/99 1,406
1,037 9.625%, 5/15/00 1,107
General Motors Corp. Debentures:
1,699 9.625%, 12/01/00 1,845
807 9.125%, 7/15/01 878
Georgia Pacific Corp. Debentures:
1,511 9.50%, 12/01/11 1,853
4,605 9.875%, 11/01/21 5,128
975 9.50%, 5/15/22 1,109
Goldman Sachs Group Notes,
10,000 6.25%, 2/01/03 (Acquired 2/01/96; Cost $9,974)<F1> 9,954
Household Finance Corp. Subordinated Notes,
4,327 9.625%, 7/15/00 4,623
Lehman Brothers Holdings, Inc. Debentures,
2,365 9.875%, 10/15/00 2,554
See notes to the financial statements.
FIRSTAR
FUND
(logo)
BOND IMMDEX(TM) FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
CORPORATE BONDS 31.2% (CONT.)
Lehman Brothers Holdings, Inc. Medium Term Notes:
$3,825 6.65%, 11/08/99 $ 3,867
1,805 8.875%, 2/15/00 1,888
Lehman Brothers Holdings, Inc. Notes,
1,700 6.90%, 7/15/99 1,718
Lehman Brothers, Inc. Senior Subordinated Notes,
7,232 10.00%, 5/15/99 7,512
The May Department Stores Company Debentures,
1,725 9.875%, 6/15/21 1,966
Mississippi Power & Light Notes,
1,000 8.80%, 4/01/05 1,000
Mobile Energy Services LLC Debentures,
700 8.665%, 1/01/17 755
National Westminster Bancorp. Inc., Debentures,
1,000 9.375%, 11/15/03 1,142
NCNB Corp. Subordinated Notes,
5,155 10.20%, 7/15/15 6,902
News America Holdings Debentures,
2,200 10.125%, 10/15/12 2,594
Paine Webber Group, Inc. Notes,
1,540 8.875%, 3/15/05 1,731
Paine Webber Group Medium Term Notes,
2,450 6.73%, 1/20/04 2,468
Parker Hannifin Debentures,
400 9.75%, 2/15/21 442
J.C. Penney Company, Inc. Debentures,
4,000 9.75%, 6/15/21 4,453
Salomon, Inc. Notes,
3,450 7.00%, 6/15/03 3,545
Salomon, Inc. Senior Notes:
2,850 7.75%, 5/15/00 2,935
2,100 6.75%, 2/15/03 2,134
The Charles Schwab Corp. Medium Term Notes:
2,000 5.84%, 9/30/99 1,995
2,250 5.90%, 10/01/99 2,246
Security Pacific Corp. Subordinated Notes,
680 11.50%, 11/15/00 763
Tenneco, Inc. Debentures,
3,150 7.45%, 12/15/25 3,296
Union Camp Corp. Debentures,
850 10.00%, 5/01/19 910
Westvaco Corp. Debentures,
1,200 10.125%, 6/01/19 1,298
--------
161,011
--------
MORTGAGE-BACKED SECURITIES 0.3%
Prudential Securities Secured Financing Corp.,
1,550 Series 1993-1, Class A, 6.44%, 2/16/21 1,533
--------
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
INTERNATIONAL/YANKEE (U.S. $ DENOMINATED) 9.9%
British Telecommunications Finance Debentures,
$2,761 9.625%, 2/15/19 $ 2,966
Dresdner Bank Subordinated Debentures,
3,500 7.25%, 9/15/15 3,626
Ford Capital BV Debentures,
425 9.875%, 5/15/02 477
Ford Capital BV Notes:
4,072 10.125%, 11/15/00 4,447
3,917 9.375%, 5/15/01 4,248
1,400 9.50%, 6/01/10 1,727
Hydro-Quebec Debentures:
3,500 11.75%, 2/01/12 5,091
750 9.75%, 1/15/18 848
Korea Development Bank Bond,
1,800 7.125%, 9/17/01 1,702
Korea Electric Power Debentures:
2,020 7.75%, 4/01/13 1,741
1,400 6.75%, 8/01/27 1,228
Midland Bank PLC Subordinated Notes,
5,000 6.95%, 3/15/11 5,067
National Bank of Hungary Debentures,
2,400 8.875%, 11/01/13 2,777
Newfoundland (Province of) Canada,
1,975 10.00%, 12/01/20 2,722
Norsk Hydro A/S Debentures,
2,900 9.00%, 4/15/12 3,501
Pohang Iron & Steel Notes,
1,575 7.125%, 7/15/04 1,393
Quebec Province Debentures,
2,000 11.00%, 6/15/15 2,254
Sweden (Kingdom of) Debentures,
1,100 11.125%, 6/01/15 1,630
Wharf Capital International Ltd. Notes:
1,700 8.875%, 11/01/04 1,646
2,675 7.625%, 3/13/07 2,315
--------
51,406
--------
U.S. GOVERNMENT AGENCY-BACKED
MORTGAGE ISSUES 6.9%
Federal Home Loan Mortgage Corporation (FHLMC),
105 Participation Certificates, 7.50%, 4/01/07 107
Federal Home Loan Mortgage Corporation (FHLMC)
Real Estate Mortgage Investment Conduit (REMIC):
1,115 Series 1022, Class J, 6.00%, 12/15/20 1,102
2,770 Series 1118, Class Z, 8.25%, 7/15/21 2,867
351 Series 1169, Class D, 7.00%, 5/15/21 354
2,800 Series 162, Class F, 7.00%, 5/15/21 2,834
7 Series 1259, Class IC, 1007.05%, 10/15/05 24
2,541 Series 1790-A, Class A, 7.00%, 4/15/22 2,566
656 Series 6, Class C, 9.05%, 6/15/19 684
2,479 Series 188, Class H, 7.00%, 9/15/21 2,507
1,809 Series 1201, Class E, 7.40%, 12/15/21 1,840
See notes to the financial statements.
FIRSTAR
FUND
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BOND IMMDEX(TM) FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
(UNAUDITED)
Principal Market
Amount Value
(in thousands) (in thousands)
- --------------- ---------------
U.S. GOVERNMENT AGENCY-BACKED
MORTGAGE ISSUES 6.9% (CONT.)
Federal National Mortgage Association (FNMA),
Participation Certificates:
$ 434 7.50%, 8/01/07 $ 447
127 7.75%, 6/01/08 133
Federal National Mortgage Association (FNMA)
Real Estate Mortgage Investment Conduit (REMIC):
1,000 Series 1990-61, Class H, 7.00%, 6/25/20 1,013
904 Series 1990-102, Class J, 6.50%, 8/25/20 900
3,800 Series 1991-56, Class M, 6.75%, 6/25/21 3,820
5 Series 1992-29, Class K, 977.92%, 11/25/00 53
650 Series 1993-87, Class KD, 6.00%, 6/25/03 647
18 Series 1992-145, Class N, 1010.06%, 1/25/06 390
950 Series X-225C, Class TE, 5.45%, 10/25/18 941
1,338 Series 1988-24, Class G, 7.00%, 10/25/18 1,353
1,265 Series 1989-44, Class H, 9.00%, 7/25/19 1,326
314 Series 1989-90, Class E, 8.70%, 12/25/19 333
1,421 Series 1990-30, Class E, 6.50%, 3/25/20 1,422
120 Series 1990-72, Class A, 9.00%, 7/25/20 121
538 Series 1990-72, Class B, 9.00%, 7/25/20 575
4,896 Series 1990-105, Class J, 6.50%, 9/25/20 4,886
926 Series 1990-106, Class J, 8.50%, 9/25/20 963
1,638 Series 1992-120, Class C, 6.50%, 7/25/22 1,635
--------
35,843
--------
U.S. TREASURY OBLIGATIONS 36.2%
U.S. Treasury Bonds:
28,000 10.75%, 8/15/05 36,190
111,355 9.25%, 2/15/16 150,468
--------
186,658
--------
Total Long-Term Investments (Cost $469,191) 491,060
--------
Number Market
of Shares Value
(in thousands) (in thousands)
- --------------- ---------------
SHORT-TERM INVESTMENTS 4.3%
INVESTMENT COMPANIES 1.4%
10 Financial Square Prime Obligation Fund $ 10
6,992 Short-Term Investments Co. Liquid Assets Portfolio 6,992
--------
7,002
--------
Principal
Amount
(in thousands)
- ---------------
VARIABLE RATE DEMAND NOTES 2.9%
$15,000 Warner-Lambert Co. 15,000
--------
Total Short-Term Investments (Cost $22,002) 22,002
--------
Total Investments (Cost $491,193) 99.4% 513,062
--------
Other Assets, less Liabilities 0.6% 3,022
--------
TOTAL NET ASSETS 100.0% $516,084
========
* Unregistered security
See notes to the financial statements.
FIRSTAR
FUND
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SHORT-TERM BOND MARKET FUND
INTERMEDIATE BOND MARKET FUND
TAX-EXEMPT INTERMEDIATE BOND FUND
BOND IMMDEX(TM) FUND
NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION
Firstar Funds, Inc. (the "Company") was incorporated on February 15, 1988,
as a Wisconsin Corporation and is registered as an open-end management
investment company under the Investment Company Act of 1940. The Short-Term Bond
Market, Intermediate Bond Market, Tax-Exempt Intermediate Bond and Bond
IMMDEX(TM) Funds (the "Funds") are separate, diversified investment portfolios
of the Company. The Short-Term Bond Market Fund and Bond IMMDEX(TM) Fund
commenced operations on December 29, 1989; the Intermediate Bond Market Fund
commenced operations on January 5, 1993; and the Tax-Exempt Inter mediate Bond
Fund commenced operations on February 8, 1993. The objective of the Short-Term
Bond Market Fund is to seek to provide an annual rate of total return, before
Fund expenses, comparable to the annual rate of total return of the Lehman
Brothers 1-3 year Government/Corporate Bond Index. The objective of the
Intermediate Bond Market Fund is to seek to provide an annual rate of total
return, before Fund expenses, comparable to the annual rate of total return of
the Lehman Brothers Intermediate Government/Corporate Bond Index. The objective
of the Tax-Exempt Intermediate Bond Fund is to seek to provide current income
that is substantially exempt from federal income tax and emphasize total return
with relatively low volatility of principal. The objective of the Bond
IMMDEX(TM) Fund is to seek to provide an annual rate of total return, before
Fund expenses, comparable to the annual rate of total return of the Lehman
Brothers Government/Corporate Bond Index.
The Company has issued two classes of Fund shares in each of the
Funds: Series A and Series Institutional. The Series A shares are subject to a
0.25% service organization fee and to an initial sales charge imposed at the
time of purchase, in accordance with the Funds' prospectus. The maximum sales
charge is 2% of the offering price or 2.04% of the net asset value. Each class
of shares for each Fund has identical rights and privileges except with respect
to shareowner organization fees paid by Series A shares, voting rights on
matters affecting a single class of shares and the exchange privileges of each
class of shares.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
a) Investment Valuation - Securities which are traded on a recognized exchange
are valued at the last sale price on the securities exchange on which such
securities are primarily traded or at the last sale price on the national
securities market. Exchange-traded securities for which there were no
transactions are valued at the current bid prices. Securities traded on only
over-the-counter markets are valued on the basis of closing over-the-counter bid
prices. Instruments with a remaining maturity of 60 days or less are valued on
an amortized cost basis which approximates market value. Securities for which
quotations are not readily available and other assets are valued at fair value
as determined by the investment adviser under the supervision of the Board of
Directors.
b) Federal Income Taxes - No provision for federal income taxes has been made
since the Funds have complied to date with the provisions of the Internal
Revenue Code available to regulated investment companies and intend to continue
to so comply in future years.
c) Income and Expenses - The Funds are charged for those expenses that are
directly attributable to each portfolio, such as advisory, administration and
certain shareowner service fees. Expenses that are not directly attributable to
a portfolio are typically allocated among the Company's portfolios in proportion
to their respective net assets, number of shareowner accounts or net sales,
where applicable. Net investment income other than class specific expenses, and
realized and unrealized gains and losses are allocated daily to each class of
shares based upon the relative net asset value of outstanding shares (or the
value of dividend-eligible shares, as appropriate) of each class of shares at
the beginning of the day (after adjusting for the current day's capital share
activity of the respective class).
d) Distributions to Shareowners - Dividends from net investment income of the
Short-Term Bond Market, Intermediate Bond Market, Tax-Exempt Intermediate Bond
and Bond IMMDEX(TM) Funds are declared and paid monthly. Distributions of net
realized capital gains, if any, will be declared at least annually.
e) Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
f) Unregistered Security - The Intermediate Bond Market and Bond IMMDEX(TM)
Funds own a certain investment security which is unregistered and thus
restricted to resale. This security is valued by the Funds after giving due
consideration to pertinent factors including recent private sales, market
conditions and the issuer's financial performance. Where future disposition of
this security requires registration under the Securities Act of 1933, the Funds
have the right to include their security in such registration, generally without
cost to the Funds. The Funds have no right to require registration of
unregistered securities.
See notes to the financial statements.
FIRSTAR
FUND
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g) Other - Investment and shareowner transactions are recorded on trade date.
The Funds determine the gain or loss realized from investment transactions by
comparing the original cost of the security lot sold with the net sale proceeds.
Interest income is recognized on an accrual basis. Discounts and premiums on
bonds are amortized over the life of the respective bond. Generally accepted
accounting principles require that permanent financial reporting and tax
differences be reclassified to capital stock.
3. INVESTMENT TRANSACTIONS
The aggregate purchases and sales, in thousands, of securities, excluding
short-term investments, for the Funds for the period ended April 30, 1998, were
as follows:
SHORT-TERM INTERMEDIATE TAX-EXEMPT BOND
BOND MARKET BOND MARKET INTERMEDIATE IMMDEX(TM)
FUND FUND BONDFUND FUND
Purchases:
------------------------------------------------------------
U.S. Government $15,302 $27,681 - $71,689
Other 44,133 37,561 $20,662 23,813
Sales:
U.S. Government 30,706 24,373 - 19,323
Other 52,114 8,041 6,043 38,491
At April 30, 1998, gross unrealized appreciation and depreciation of investments
for federal income tax purposes, in thousands, were as follows:
-----------------------------------------------------------
SHORT-TERM INTERMEDIATE TAX-EXEMPT BOND
BOND MARKET BOND MARKET INTERMEDIATE IMMDEX(TM)
FUND FUND BOND FUND FUND
------------------------------------------------------------
Appreciation $907 $5,261 $1,280 $24,314
(Depreciation) (485) (1,134) (182) (2,615)
------- ------- ------- -------
Net unrealized
appreciation
on investments $422 $4,127 $1,098 $21,699
======= ======= ======= =======
At April 30, 1998, the cost of investments, in thousands, for federal income
tax purposes was $173,451, $290,413, $83,496 and $491,363 for the Short-Term
Bond Market, Intermediate Bond Market, Tax-Exempt Intermediate Bond and Bond
IMMDEX(TM) Funds, respectively. At October 31, 1997, the Short-Term Bond Market,
Intermediate Bond Market and Tax-Exempt Intermediate Bond Funds had accumulated
net realized capital loss carryovers, in thousands, of $1,248, $252 and $50,
respectively, expiring in 2002. The Short-Term Bond Market, Intermediate Bond
Market and Bond IMMDEX(TM) Funds had accumulated net realized capital loss
carryovers, in thousands, of $189, $568 and $515, respectively, expiring in
2003. The Short-Term Bond Market and Bond IMMDEX(TM) Funds had accumulated net
realized capital loss carryovers, in thousands, of $79 and $24, respectively,
expiring in 2004. The Short-Term Bond Market Fund had accumulated net realized
capital loss carryovers, in thousands, of $1,082, expiring in 2005. To the
extent each Fund realizes future net capital gains, taxable distributions to its
respective shareowners will be offset by any unused capital loss carryover.
See notes to the financial statements.
FIRSTAR
FUND
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<TABLE>
<CAPTION>
4. CAPITAL SHARE TRANSACTIONS
Transactions, in thousands, of shares of the Funds were as follows:
SHORT-TERM INTERMEDIATE TAX-EXEMPT BOND
BOND MARKET BOND MARKET INTERMEDIATE IMMDEX(TM)
FUND FUND BOND FUND FUND
------------------ ------------------ ------------------ ------------------
Amount Shares Amount Shares Amount Shares Amount Shares
------ ------ ------ ------ ------ ------ ------ ------
SIX MONTHS ENDED <C> <C> <C> <C> <C> <C> <C> <C>
APRIL 30, 1998:
Series A shares:
Shares sold $14,332 1,394 $5,864 567 $13,051 1,255 $18,394 649
Shares issued to owners
in reinvestment
of dividends 1,837 179 424 41 421 41 1,788 63
Shares redeemed (14,603) (1,421) (1,769) (171) (7,528) (723) (7,404) (261)
--------- --------- --------- --------- --------- --------- --------- ---------
Net increase $1,566 152 $4,519 437 $ 5,944 573 $12,778 451
========= ========= ========= ========= ========= ========= ========= =========
Series Institutional shares:
Shares sold $29,320 2,851 $47,946 4,637 $17,827 1,713 $81,117 2,857
Shares issued to owners
in reinvestment
of dividends 2,382 233 4,306 419 306 30 10,766 382
Shares redeemed (59,118) (5,754) (32,071) (3,098) (12,447) (1,200) (62,171) (2,186)
--------- --------- --------- --------- --------- --------- --------- ---------
Net increase (decrease) $(27,416) (2,670) $20,181 1,958 $ 5,686 543 $29,712 1,053
========= ========= ========= ========= ========= ========= ========= =========
YEAR ENDED OCTOBER 31, 1997:
Series A shares:
Shares sold $ 30,209 2,949 $ 7,985 784 $13,524 1,317 $ 30,638 1,111
Shares issued to owners
in reinvestment
of dividends 3,315 325 739 73 561 55 2,728 99
Shares redeemed (26,932) (2,629) (5,689) (557) (5,799) (564) (13,274) (482)
--------- --------- --------- --------- --------- --------- --------- ---------
Net increase $ 6,592 645 $ 3,035 300 $ 8,286 808 $ 20,092 728
========= ========= ========= ========= ========= ========= ========= =========
Series Institutional shares:
Shares sold $ 41,412 4,034 $108,111 10,593 $21,675 2,110 $ 99,564 3,611
Shares issued to owners
in reinvestment
of dividends 7,603 744 7,516 740 432 42 20,489 746
Shares redeemed (60,562) (5,912) (37,572) (3,678) (7,177) (699) (91,596) (3,322)
--------- --------- --------- --------- --------- --------- --------- ---------
Net increase (decrease) $(11,547) (1,134) $ 78,055 7,655 $14,930 1,453 $ 28,457 1,035
========= ========= ========= ========= ========= ========= ========= =========
</TABLE>
See notes to the financial statements.
FIRSTAR
FUND
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5. INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Funds have entered into an Investment Advisory Agreement with Firstar
Investment Research & Management Company, LLC ("FIRMCO"). FIRMCO is a
subsidiary of Firstar Corporation, a publicly held bank holding company.
Pursuant to its Advisory Agreement with the Funds, FIRMCO is entitled to receive
a fee, calculated daily and payable monthly, at the annual rates presented below
as applied to each Fund's daily net assets. For the period ended April 30, 1998,
FIRMCO voluntarily waived the following fees, in thousands, by Fund:
SHORT-TERM INTERMEDIATE TAX-EXEMPT BOND
BOND MARKET BOND MARKET INTERMEDIATE IMMDEX(TM)
FUND FUND BOND FUND FUND
------------ ------------ ------------ ------------
Annual rate 0.60% 0.50% 0.50% 0.30%
Fees waived $265 $199 $98 _
Firstar Trust Company, an affiliate of FIRMCO, serves as custodian, transfer
agent and accounting services agent for the Funds.
The Company has entered into a Co-Administration Agreement with B.C. Ziegler
and Company and Firstar Trust Company (the "Co-Administrators") for certain
administrative services. Pursuant to the Co-Administration Agreement with the
Company, the Co-Administrators are entitled to receive a fee, calculated daily
and payable monthly, at the annual rate of 0.125% of the Company's first $2
billion of average aggregate daily net assets, plus 0.10% of the Company's
average aggregate daily net assets in excess of $2 billion. For the period ended
April 30, 1998, $66, $106, $30 and $183 of administration fees, in thousands,
were voluntarily waived for the Short-Term Bond Market, Intermediate Bond
Market, Tax-Exempt Intermediate Bond and Bond IMMDEX(TM) Funds, respectively.
The Company entered into Servicing Agreements with certain Service
Organizations, including FIRMCO affiliates, for the Series A class of shares.
The Service Organizations are entitled to receive fees from the Funds up to the
annual rate of 0.25% of the average daily net asset value of the Series A shares
for certain support and/or distribution services to customers of the Service
Organizations who are beneficial owners of Series A shares. These services may
include assisting customers in processing purchase, exchange and redemption
requests; processing dividend and distribution payments from the Funds; and
providing information periodically to customers showing their positions in
Series A shares. Service Organization fees, in thousands, incurred by the Short-
Term Bond Market, Intermediate Bond Market, Tax-Exempt Intermediate Bond and
Bond IMMDEX(TM) Funds aggregated $83, $28, $27 and $87, respectively, for the
period ended April 30, 1998.
Each Director of the Company who is not affiliated with FIRMCO receives a fee
from the Company for service as a Director and is eligible to participate in a
deferred compensation plan with respect to these fees. Participants in the plan
may designate their deferred Director's fees as if invested in any one of the
Firstar Funds (with the exception of the MicroCap Fund) or in 90-day U.S.
Treasury bills. The value of each Director's deferred compensation account will
increase or decrease as if it were invested in shares of the selected Firstar
Funds or 90-day U.S. Treasury bills. The Funds maintain their proportionate
share of the Company's liability for deferred fees.
See notes to the financial statements.
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FIRSTAR FUNDS ARE AVAILABLE THROUGH:
- - THE FIRSTAR FUNDS CENTER,
- - INVESTMENT SPECIALISTS WHO ARE REGISTERED
REPRESENTATIVES OF FIRSTAR INVESTMENT SERVICES, INC.
A REGISTERED BROKER/DEALER, NASD AND SIPC MEMBER,
- - AND THROUGH SELECTED SHAREHOLDER ORGANIZATIONS.
This report is authorized for distribution only when preceded or
accompanied by a current prospectus.
TO OPEN AN ACCOUNT OR REQUEST INFORMATION
1-800-982-8909
1-414-287-3710
FOR ACCOUNT BALANCES AND INVESTOR SERVICES
1-800-228-1024
1-414-287-3808
FIRSTAR FUNDS CENTER
615 EAST MICHIGAN STREET
P.O. BOX 3011
MILWAUKEE, WI 53201-3011
WWW.FIRSTARFUNDS.COM
TO GET THERE, START HERE.(SM)
FIRSTAR
FUND
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FORM #40-0246 6/98
