-----------------------------------
2000 Annual Report October 31, 2000
-----------------------------------
discover
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(LOGO) FIRSTAR FUNDS
Money Market Fund
Institutional Money Market Fund
Tax-Exempt Money Market Fund
U.S. Government Money Market Fund
U.S. Treasury Money Market Fund
<PAGE>
----------------------------------------------
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, includ
ing possible loss of principal; and
- are offered by Quasar Distributors, LLC,
member NASD, SIPC, and an affiliated
distributor.
- There can be no assurance that the money
market funds will be able to maintain a
stable net asset value of $1.00 per share.
- Firstar Bank affiliates serve as investment
adviser, custodian, transfer agent,
administrator, accounting services agent
and distributor and receive compensation for
such services as disclosed in the current
prospectus.
----------------------------------------------
TABLE OF CONTENTS
Page(s)
SHAREHOLDER LETTER........................................................1
FIRSTAR MONEY MARKET FUNDS YIELD COMPARISONS..............................2
LOOKING AHEAD - THE FORECAST..............................................2
STATEMENT OF ASSETS AND LIABILITIES.......................................3
STATEMENT OF OPERATIONS...................................................4
STATEMENT OF CHANGES IN NET ASSETS.......................................6-7
FINANCIAL HIGHLIGHTS.....................................................8-11
SCHEDULE OF INVESTMENTS.................................................12-19
NOTES TO THE FINANCIAL STATEMENTS.......................................20-21
REPORT OF INDEPENDENT ACCOUNTANTS.........................................22
NOTES TO THE FINANCIAL STATEMENTS.......................................23-24
CHANGE OF ACCOUNTANTS.....................................................25
REPORT OF INDEPENDENT ACCOUNTANTS.........................................26
<PAGE>
(LOGO) FIRSTAR FUNDS
December 2000
DEAR SHAREHOLDER:
INVESTMENT REVIEW
Money Market Funds continued to provide strong inflation-adjusted returns. In an
attempt to slow down economic growth and fend off inflation, the Federal Reserve
increased the overnight lending rate from 5.50% at the beginning of the year to
6.50% during the first half of 2000. As a result, money market rates rose
steadily through the early part of the year. The Federal Reserve maintained the
overnight lending rate at 6.50% in subsequent months, and, as a result, money
market rates have leveled off.
STRATEGY
Firstar Money Market Funds are managed with quality and safety of principal as
primary goals. All securities purchased by the Funds must meet our internal high
standards for minimal credit risk and must also meet the strict guidelines set
by the Securities and Exchange Commission ("SEC"). Our credit research team
closely monitors all invesments to ensure quality standards are met.
--------------------------------------------------------------------------------
FIRSTAR MONEY MARKET FUNDS 7-DAY YIELDS
--------------------------------------------------------------------------------
PERIOD ENDED OCTOBER 31, 2000
-----------------------------
INSTITUTIONAL
MONEY MARKET
FUND<F1><F2>
CURRENT EFFECTIVE
6.29% 6.49%
-----------------------------
-----------------------------
MONEY MARKET
FUND<F1>
CURRENT EFFECTIVE
5.91% 6.08%
-----------------------------
-----------------------------
TAX-EXEMPT
MONEY MARKET
FUND
CURRENT EFFECTIVE
3.59% 3.65%
-----------------------------
-----------------------------
U.S. GOVERNMENT
MONEY MARKET
FUND<F1>
CURRENT EFFECTIVE
5.87% 6.05%
-----------------------------
-----------------------------
U.S. TREASURY
MONEY MARKET
FUND<F2>
CURRENT EFFECTIVE
5.53% 5.68%
-----------------------------
<F1> After fee waivers. Had fees not been waived, current and effective yields
would have been 5.70% and 5.87% for the Money Market Fund, 6.11% and 6.31%
for the Institutional Money Market Fund, 5.64% and 5.82% for the U.S.
Government Money Market Fund. Reflects past performance; yields will vary.
An investment in any one of the Firstar Money Market Funds is neither
insured nor guaranteed by the U.S. Government nor is there any assurance
the Funds will be able to maintain a stable net asset value of $1.00 per
share.
<F2> Institutional Shares.
Current yield refers to income earned by a fund's investments over a 7-day
period. It is then annualized and stated as a percentage of the investment.
Effective yield is the same as current yield except that it assumes the income
earned by an investment in a fund will be reinvested.
<PAGE>
(LOGO) FIRSTAR FUNDS
--------------------------------------------------------------------------------
FIRSTAR MONEY MARKET FUNDS YIELD COMPARISONS<F1>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
IBC'S
MONEY
FIRSTAR FUND
TAX- AVERAGE/TM FIRSTAR FIRSTAR
IBC'S IBC'S EXEMPT /ALL U.S. U.S. IBC'S
IBC'S MONEY FIRSTAR MONEY MONEY TAX-FREE FIRSTAR IBC'S TREASURY TREASURY MONEY
FIRSTAR INSTITUTIONAL FUND TAX- FUND MARKET TAX U.S. MONEY MONEY MONEY FUND
INSTITUTIONAL AVERAGE/TM FIRSTAR AVERAGE/TM EXEMPT AVERAGE/ TAX EQUIVALENT GOV'T. FUND MARKET MARKET AVERAGE/TM
MONEY /ALL MONEY /ALL MONEY TM/ALL EQUIVALENT YIELD MONEY AVERAGE/TM RETAIL INSTI- /U.S.
MARKET TAXABLE MARKET TAXABLE MARKET TAX-FREE YIELD<F2> <F2> MARKET /GOV'T. A TUTIONAL TREASURY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------------------------
2000
October 6.28% 6.14% 5.90% 5.99% 3.58% 3.68% 5.59% 5.75% 5.84% 5.80% 5.32% 5.47% 5.56%
------------------------------------------------------------------------------------------------------------------------------------
September 6.27% 6.15% 5.91% 6.00% 3.59% 3.65% 5.61% 5.70% 5.83% 5.80% 5.35% 5.50% 5.55%
------------------------------------------------------------------------------------------------------------------------------------
August 6.28% 6.14% 5.89% 5.99% 3.48% 3.52% 5.44% 5.50% 5.83% 5.77% 5.33% 5.48% 5.47%
------------------------------------------------------------------------------------------------------------------------------------
July 6.27% 6.11% 5.87% 5.96% 3.33% 3.43% 5.20% 5.36% 5.83% 5.71% 5.28% 5.44% 5.35%
------------------------------------------------------------------------------------------------------------------------------------
June 6.17% 6.03% 5.76% 5.87% 3.55% 3.62% 5.55% 5.66% 5.70% 5.65% 5.29% 5.44% 5.29%
------------------------------------------------------------------------------------------------------------------------------------
May 5.91% 5.77% 5.53% 5.62% 3.95% 4.04% 6.17% 6.31% 5.44% 5.40% 4.98% 5.13% 5.16%
------------------------------------------------------------------------------------------------------------------------------------
April 5.71% 5.62% 5.41% 5.46% 3.28% 3.37% 5.13% 5.31% 5.25% 5.28% 4.93% 5.07% 5.13%
------------------------------------------------------------------------------------------------------------------------------------
March 5.63% 5.48% 5.25% 5.32% 3.09% 3.11% 4.83% 4.86% 5.10% 5.14% 4.78% 4.93% 5.00%
------------------------------------------------------------------------------------------------------------------------------------
February 5.59% 5.37% 5.19% 5.22% 2.83% 2.93% 4.42% 4.55% 4.89% 5.01% 4.62% 4.77% 4.79%
------------------------------------------------------------------------------------------------------------------------------------
January 5.47% 5.24% 5.10% 5.11% 3.10% 2.86% 4.84% 4.41% 4.69% 4.76% 4.36% 4.56% 4.64%
------------------------------------------------------------------------------------------------------------------------------------
1999
December 5.50% 5.20% 5.19% 5.06% 3.09% 3.23% 4.83% 4.88% 4.75% 4.76% 4.31% 4.46% 4.57%
------------------------------------------------------------------------------------------------------------------------------------
November 5.31% 5.06% 4.92% 4.92% 2.82% 3.02% 4.41% 4.70% 4.56% 4.67% 4.34% 4.49% 4.39%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
We compare our Funds to the IBC's Money Fund Averages, which are composites of
professionally managed money market investment funds with similar objectives.
<F1> After fee waivers. Had fees not been waived, performance would be reduced.
Reflects past performance; yields will vary. An investment in any one of
the Firstar Money Market Funds is neither insured nor guaranteed by the
U.S.Government nor is there any assurance the Funds will be able to
maintain a stable net asset value of $1.00 per share.
<F2> Assumes a 36% tax bracket.
LOOKING AHEAD - THE FORECAST
Looking ahead, we expect controlled economic growth. Next year, we anticipate
the Federal Reserve will take a loosening stance and roll interest rates back
slightly. As always, we will continue to manage the funds in a manner that
provides for preservation of capital and liquidity while maintaining superior
credit quality.
We appreciate your continued confidence in the Firstar Money Market Funds.
Brad Peters, CFA, CPA, CFP
Margaret Radske
Maclovio Vega
Portfolio Managers
Firstar Investment Research & Management Company, LLC (FIRMCO)
<PAGE>
(LOGO) FIRSTAR FUNDS
STATEMENT OF ASSETS AND LIABILITIES
(Amounts in thousands, except per share data)
OCTOBER 31, 2000
<TABLE>
<CAPTION>
U.S. U.S.
INSTITUTIONAL TAX-EXEMPT GOVERNMENT TREASURY
MONEY MONEY MONEY MONEY MONEY
MARKET FUND MARKET FUND MARKET FUND MARKET FUND MARKET FUND
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at amortized cost $ 3,011,857 $ 172,852 $ 184,315 $ 61,094 $2,713,958
Investments in repurchase agreements - - - - 1,597,000
Receivable for securities matured - - - - -
Interest receivable 2,241 153 1,498 22 22,431
Other 46 14 11 8 66
------------- ------------- ------------- ------------- -------------
Total Assets 3,014,144 173,019 185,824 61,124 4,333,455
------------- ------------- ------------- ------------- -------------
LIABILITIES:
Dividends payable 15,005 899 541 283 18,771
Payable to affiliates 1,062 157 126 76 3,250
Payable for 12b-1 fees - - - - 287
Accrued expenses and other liabilities 57 86 26 304 206
------------- ------------- ------------- ------------- -------------
Total Liabilities 16,124 1,142 693 663 22,514
------------- ------------- ------------- ------------- -------------
NET ASSETS $2,998,020 $ 171,877 $ 185,131 $ 60,461 $4,310,941
============= ============= ============= ============= =============
SERIES A:
Net assets - $ 171,877 $ 185,131 $ 60,461 $2,284,168
Shares authorized - 5,000,000 5,000,000 5,000,000 unlimited<F1>
Shares issued and outstanding - 171,877 185,131 60,461 2,284,168
NET ASSET VALUE,
REDEMPTION PRICE AND
OFFERING PRICE PER SHARE $ - $ 1.00 $ 1.00 $ 1.00 $ 1.00
============= ============= ============= ============= =============
SERIES INSTITUTIONAL:
Net assets $2,998,020 - - - $2,026,773
Shares authorized 5,000,000 - - - unlimited<F1>
Shares issued and outstanding 2,998,020 - - - 2,026,773
NET ASSET VALUE,
REDEMPTION PRICE AND
OFFERING PRICE PER SHARE $ 1.00 $ - $ - $ - $ 1.00
============= ============= ============= ============= =============
<F1> No Par Value.
</TABLE>
See notes to the financial statements.
<PAGE>
(LOGO) FIRSTAR FUNDS
STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS)
YEAR ENDED OCTOBER 31, 2000
<TABLE>
<CAPTION>
U.S. U.S.
INSTITUTIONAL TAX-EXEMPT GOVERNMENT TREASURY
MONEY MONEY MONEY MONEY MONEY
MARKET FUND MARKET FUND MARKET FUND MARKET FUND MARKET FUND<F1>
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $150,524 $12,247 $6,794 $5,451 $195,844
EXPENSES:
Investment advisory fees 11,567 986 843 468 16,407
Administration fees 2,544 210 179 100 3,610
Service organization fees 4 106 - 1 8,204
12b-1 fees - Series A - - - - 2,111
Custody fees 299 37 30 33 820
Transfer agent fees and expenses 176 284 37 37 681
Fund accounting fees 109 49 41 44 221
Professional fees 42 43 43 43 16
Reports to shareholders 13 140 11 22 331
Federal and state registration fees 50 33 20 16 428
Directors' fees and expenses 9 8 8 8 6
Other 37 9 3 7 41
------------- ------------- ------------- ------------- -------------
Total expenses before waiver 14,850 1,905 1,215 779 32,876
Less: Waiver of fees (5,523) (426) - (107) (3,277)
------------- ------------- ------------- ------------- -------------
Net Expenses 9,327 1,479 1,215 672 29,599
------------- ------------- ------------- ------------- -------------
NET INVESTMENT INCOME $141,197 $10,768 $5,579 $4,779 $166,245
============= ============= ============= ============= =============
<F1> For the period December 1, 1999 through October 31, 2000.
</TABLE>
See notes to the financial statements.
<PAGE>
(LOGO) FIRSTAR FUNDS
This page left intentionally blank.
<PAGE>
(LOGO) FIRSTAR FUNDS
STATEMENT OF CHANGES IN NET ASSETS
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
INSTITUTIONAL TAX-EXEMPT
MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND
---------------------------- ---------------------------- ----------------------------
Year Year Year Year Year Year
ended ended ended ended ended ended
Oct. 31, 2000 Oct. 31, 1999 Oct. 31, 2000 Oct. 31, 1999 Oct. 31, 2000 Oct. 31, 1999
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $141,197 $104,359 $10,768 $12,640 $5,579 $3,476
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets
resulting from operations 141,197 104,359 10,768 12,640 5,579 3,476
------------ ------------ ------------ ------------ ------------ ------------
CAPITAL SHARE
TRANSACTIONS:
Shares sold 5,645,519 7,441,516 1,509,160 1,076,363 279,958 257,973
Shares issued to
owners in reinvestment
of dividends 6,397 4,367 9,929 12,321 1,307 1,319
Shares redeemed (5,010,147) (6,713,602) (1,630,693) (1,094,291) (249,323) (228,554)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) 641,769 732,281 (111,604) (5,607) 31,942 30,738
------------ ------------ ------------ ------------ ------------ ------------
DIVIDENDS PAID FROM:
Net investment income:
Series A - - (10,768) (12,640) (5,579) (3,476)
Series Institutional (141,197) (104,359) - - - -
------------ ------------ ------------ ------------ ------------ ------------
(141,197) (104,359) (10,768) (12,640) (5,579) (3,476)
------------ ------------ ------------ ------------ ------------ ------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS 641,769 732,281 (111,604) (5,607) 31,942 30,738
NET ASSETS:
Beginning of year 2,356,251 1,623,970 283,481 289,088 153,189 122,451
------------ ------------ ------------ ------------ ------------ ------------
End of year $2,998,020 $2,356,251 $171,877 $283,481 $185,131 $153,189
============ ============ ============ ============ ============ ============
<F1> For the period December 1, 1999 through October 31, 2000.
</TABLE>
<TABLE>
<CAPTION>
U.S. GOVERNMENT U.S. TREASURY
MONEY MARKET FUND MONEY MARKET FUND
---------------------------- ----------------------------
Year Year Eleven months Year
ended ended ended Oct. 31, ended
Oct. 31, 2000 Oct. 31, 1999 2000<F1> Nov. 30, 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income $4,779 $10,770 $166,245 $80,549
------------ ------------ ------------ ------------
Net increase in net assets
resulting from operations 4,779 10,770 166,245 80,549
------------ ------------ ------------ ------------
CAPITAL SHARE
TRANSACTIONS:
Shares sold 332,922 891,590 10,326,219 8,570,767
Shares issued to
owners in reinvestment
of dividends 1,074 1,870 53,582 7,206
Shares redeemed (482,550) (917,621) (8,884,747) (7,427,660)
------------ ------------ ------------ ------------
Net increase (decrease) (148,554) (24,161) 1,495,054 1,150,314
------------ ------------ ------------ ------------
DIVIDENDS PAID FROM:
Net investment income:
Series A (4,779) (10,770) (71,037) (24,520)
Series Institutional - - (95,208) (56,029)
------------ ------------ ------------ ------------
(4,779) (10,770) (166,245) (80,549)
------------ ------------ ------------ ------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS (148,554) (24,161) (1,495,054) (1,150,314)
NET ASSETS:
Beginning of year 209,015 233,176 2,815,887 1,665,573
------------ ------------ ------------ ------------
End of year $60,461 $209,015 $4,310,941 $2,815,887
============ ============ ============ ============
<F1> For the period December 1, 1999 through October 31, 2000.
</TABLE>
See notes to the financial statements.
<PAGE>
(LOGO) FIRSTAR FUNDS
FINANCIAL HIGHLIGHTS
RETAIL A SHARES
PER SHARE DATA
<TABLE>
<CAPTION>
Supplemental Data and Ratios
-------------------------------------
Ratio of Net
Net Asset Dividends from Net Net Assets, Ratio of Investment
Value, Net Net Asset Value, End of Net Expenses Income
Beginning Investment Investment End of Period to Average to Average Total
of Period Income Income Period (000s) Net Assets Net Assets Return
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MONEY MARKET FUND
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1996 $1.00 $0.05 $(0.05) $1.00 $224,036 0.60%<F1> 4.94% 5.06%
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1997 1.00 0.05 (0.05) 1.00 261,017 0.60%<F1> 4.98% 5.12%
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1998 1.00 0.05 (0.05) 1.00 289,088 0.60%<F1> 5.05% 5.16%
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1999 1.00 0.04 (0.04) 1.00 283,481 0.72%<F1> 4.44% 4.52%
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 2000 1.00 0.06 (0.06) 1.00 171,877 0.75%<F1> 5.48% 5.65%
------------------------------------------------------------------------------------------------------------------------------------
TAX-EXEMPT MONEY MARKET FUND
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1996 1.00 0.035 (0.03)<F5> 1.00 79,328 0.60%<F2> 3.09% 3.13%
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1997 1.00 0.035 (0.03)<F5> 1.00 108,639 0.60%<F2> 3.06% 3.12%
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1998 1.00 0.035 (0.03)<F5> 1.00 122,451 0.60%<F2> 3.02% 3.04%
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1999 1.00 0.035 (0.03)<F5> 1.00 153,189 0.71%<F2> 2.51% 2.53%
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 2000 1.00 0.035 (0.03)<F5> 1.00 185,131 0.72% 3.32% 3.35%
------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT MONEY MARKET FUND
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1996 1.00 0.05 (0.05) 1.00 198,334 0.60%<F3> 4.84% 4.96%
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1997 1.00 0.05 (0.05) 1.00 198,592 0.60%<F3> 4.83% 4.99%
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1998 1.00 0.05 (0.05) 1.00 233,176 0.60%<F3> 4.90% 4.97%
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1999 1.00 0.04 (0.04) 1.00 209,015 0.68%<F3> 4.30% 4.37%
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 2000 1.00 0.05 (0.05) 1.00 60,461 0.72%<F3> 5.12% 5.46%
------------------------------------------------------------------------------------------------------------------------------------
U.S. TREASURY MONEY MARKET FUND
------------------------------------------------------------------------------------------------------------------------------------
Year Ended November 30, 1996 1.00 0.05 (0.05) 1.00 829,259 0.70%<F4> 4.69% 4.80%
------------------------------------------------------------------------------------------------------------------------------------
Year Ended November 30, 1997 1.00 0.05 (0.05) 1.00 469,400 0.73%<F4> 4.73% 4.85%
------------------------------------------------------------------------------------------------------------------------------------
Year Ended November 30, 1998 1.00 0.05 (0.05) 1.00 542,430 0.88%<F4> 4.58% 4.69%
------------------------------------------------------------------------------------------------------------------------------------
Year Ended November 30, 1999 1.00 0.04 (0.04) 1.00 1,049,641 0.92%<F4> 3.98% 4.02%
------------------------------------------------------------------------------------------------------------------------------------
Period Ended October 31, 2000<F6> 1.00 0.05 (0.05) 1.00 2,284,168 0.99% 4.98%<F7> 5.04%<F8>
<F4><F7>
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<F1> Without fees waived, ratios of net expenses to average net assets for the
fiscal years ended October 31, 2000, 1999, 1998, 1997, 1996 would have been
0.97%, 0.85%, 0.86%, 0.84%, 0.81%, respectively.
<F2> Without fees waived, ratios of net expenses to average net assets for the
fiscal years ended October 31, 1999, 1998, 1997, 1996 would have been
0.73%, 0.75%, 0.75%, 0.78%, respectively.
<F3> Without fees waived, ratios of net expenses to average net assets for the
fiscal years ended October 31, 2000, 1999, 1998, 1997, 1996 would have been
0.83%, 0.69%, 0.71%, 0.70%, 0.71%, respectively.
<F4> Without fees waived, ratios of net expenses to average net assets for the
periods ended October 31, 2000 and November 30, 1999, 1998, 1997, 1996
would have been 1.09%, 1.08%, 1.08%, 0.93%, 0.90%, respectively.
<F5> For the Tax-Exempt Money Market Fund, substantially all investment income
is exempt from federal income tax.
<F6> Effective in 2000, the Fund's fiscal year end was changed to October 31
from November 30.
<F7> Annualized.
<F8> Not annualized.
See notes to the financial statements.
<PAGE>
(LOGO) FIRSTAR FUNDS
FINANCIAL HIGHLIGHTS
INSTITUTIONAL
PER SHARE DATA
<TABLE>
<CAPTION>
Supplemental Data and Ratios
-------------------------------------
Ratio of Net
Net Asset Dividends from Net Net Assets, Ratio of Investment
Value, Net Net Asset Value, End of Net Expenses Income
Beginning Investment Investment End of Period to Average to Average Total
of Period Income Income Period (000s) Net Assets Net Assets Return
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INSTITUTIONAL MONEY MARKET FUND
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1996 $1.00 $0.05 $(0.05) $1.00 $ 750,051 0.35%<F1> 5.19% 5.32%
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1997 1.00 0.05 (0.05) 1.00 1,201,341 0.35%<F1> 5.23% 5.38%
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1998 1.00 0.05 (0.05) 1.00 1,623,970 0.35%<F1> 5.30% 5.41%
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 1999 1.00 0.05 (0.05) 1.00 2,356,251 0.38%<F1> 4.76% 4.85%
------------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31, 2000 1.00 0.06 (0.06) 1.00 2,998,020 0.39%<F1> 5.92% 6.05%
------------------------------------------------------------------------------------------------------------------------------------
U.S. TREASURY MONEY MARKET FUND
------------------------------------------------------------------------------------------------------------------------------------
Period Ended November 30, 1997<F6> 1.00 0.03 (0.03) 1.00 659,296 0.72% 4.87%<F4> 3.37%<F5>
<F2><F4>
------------------------------------------------------------------------------------------------------------------------------------
Year Ended November 30, 1998 1.00 0.05 (0.05) 1.00 1,123,144 0.73%<F2> 4.73% 4.84%
------------------------------------------------------------------------------------------------------------------------------------
Year Ended November 30, 1999 1.00 0.04 (0.04) 1.00 1,766,246 0.77%<F2> 4.13% 4.18%
------------------------------------------------------------------------------------------------------------------------------------
Period Ended October 31, 2000<F3> 1.00 0.05 (0.05) 1.00 2,026,773 0.84% 5.13%<F4> 5.20%<F5>
<F2><F4>
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<F1> Without fees waived, ratios of net expenses to average net assets for the
fiscal years ended October 31, 2000, 1999, 1998, 1997, 1996 would have been
0.62%, 0.62%, 0.64%, 0.66%, 0.64%, respectively.
<F2> Without fees waived, ratios of net expenses to average net assets for the
periods ended October 31, 2000 and November 30, 1999, 1998, 1997 would have
been 0.94%, 0.93%, 0.93%, 0.92%, respectively.
<F3> Effective in 2000, the Fund's fiscal year end was changed to October 31
from November 30.
<F4> Annualized.
<F5> Not annualized.
<F6> Reflects operations for the period from March 25, 1997 (date of initial
public investment) to November 30, 1997.
<PAGE>
(LOGO) FIRSTAR FUNDS
INSTITUTIONAL MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 2000
Principal Amount Amortized Cost
(in thousands) (in thousands)
--------------- --------------
COMMERCIAL PAPER 90.5%
ASSET BACKED 23.0%
Ciesco L.P.:
$50,000 6.49%, 11/06/00 $ 49,955
32,518 6.55%, 1/12/01 32,092
50,000 6.50%, 1/23/01 49,251
Corporate Asset Funding Co., Inc.:
50,000 6.48%, 11/03/00 49,982
35,000 6.48%, 11/29/00 34,824
50,000 6.47%, 12/06/00 49,685
CXC, Inc.:
29,900 6.51%, 11/03/00 29,889
50,000 6.55%, 1/05/01 49,409
60,000 6.53%, 1/16/01 59,173
Edison Asset Securitization, L.L.C.,
50,000 6.53%, 11/09/00 49,927
FCAR Owners Trust:
50,000 6.48%, 11/21/00 49,820
25,000 6.46%, 12/27/00 24,749
New Center Asset Trust,
50,000 6.50%, 11/21/00 49,820
Sheffield Receivables Corp.:
50,000 6.51%, 11/02/00 49,991
62,150 6.51%, 11/27/00 61,858
------------
690,425
------------
AUTO & TRUCKS 7.1%
DaimlerChrysler Holding Company,
60,000 6.48%, 11/27/00 59,719
Ford Credit Europe PLC:
50,000 6.47%, 12/11/00 49,641
20,000 6.45%, 12/27/00 19,799
General Motors Acceptance Corporation:
50,000 6.52%, 1/11/01 49,357
35,000 6.52%, 1/31/01 34,423
------------
212,939
------------
BANKING - FOREIGN 7.6%
Deutsche Bank Financial, Inc.:
50,000 6.53%, 1/19/01 49,284
50,000 6.47%, 2/14/01 49,057
Dresdner US Finance, Inc.:
50,000 6.48%, 11/07/00 49,946
80,000 6.54%, 1/03/01 79,084
------------
227,371
------------
Principal Amount Amortized Cost
(in thousands) (in thousands)
--------------- --------------
COMMUNICATIONS & MEDIA 13.2%
AT&T Corporation:
$50,000 6.48%, 12/01/00 $ 49,730
48,915 6.48%, 12/12/00 48,554
50,000 6.54%, 1/04/01 49,419
Bellsouth Capital Funding:
5,000 6.45%, 12/12/00 4,963
40,000 6.48%, 11/01/00 40,000
British Telecommunications PLC,
50,000 6.51%, 12/07/00 49,675
Motorola, Inc.:
56,635 6.47%, 12/19/00 56,146
50,000 6.43%, 3/15/01 48,803
SBC Communications, Inc.,
50,000 6.47%, 11/20/00 49,829
------------
397,119
------------
FINANCE - MISCELLANEOUS 15.1%
ABB Treasury Center, Inc.,
50,000 6.47%, 12/20/00 49,560
American Express Credit Company:
50,000 6.46%, 12/11/00 49,641
50,000 6.46%, 12/19/00 49,569
CIT Group Holding, Inc.:
50,000 6.52%, 1/08/01 49,384
50,000 6.53%, 1/25/01 49,229
General Electric Capital Corporation:
35,000 6.52%, 1/17/01 34,512
50,000 6.47%, 2/12/01 49,074
Household Finance Corporation,
50,000 6.54%, 1/18/01 49,292
National Rural Utilities CFC:
31,140 6.49%, 11/06/00 31,112
40,000 6.71%, 7/20/01 40,000
------------
451,373
------------
FINANCE - SERVICES 10.3%
Associates Corporation:
50,000 6.63%, 11/01/00 50,000
50,000 6.51%, 1/17/01 49,304
Goldman Sachs Group, L.P.,
50,000 6.52%, 1/02/01 49,439
Hartford Financial Services, Inc.,
31,159 6.52%, 11/10/00 31,108
Merrill Lynch & Company, Inc.:
50,000 6.51%, 1/10/01 49,367
50,000 6.55%, 1/11/01 49,354
30,000 6.51%, 1/12/01 29,609
------------
308,181
------------
See notes to the financial statements.
<PAGE>
(LOGO) FIRSTAR FUNDS
INSTITUTIONAL MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 2000
Principal Amount Amortized Cost
(in thousands) (in thousands)
--------------- --------------
INSURANCE 3.1%
Metlife Funding Corporation,
$42,721 6.48%, 11/15/00 $ 42,613
Prudential Funding Corporation,
50,000 6.55%, 1/02/01 49,436
------------
92,049
------------
METALS & MINING 1.7%
Alcoa, Inc.,
50,000 6.60%, 11/01/00 50,000
------------
MISCELLANEOUS 2.0%
International Lease Financial Corporation,
60,000 6.48%, 11/03/00 59,978
------------
PRINTING AND PUBLISHING 5.0%
Gannett, Inc.:
50,000 6.50%, 11/08/00 49,937
40,700 6.50%, 11/14/00 40,605
35,000 6.48%, 11/17/00 34,899
McGraw-Hill Cos., Inc.,
23,000 6.47%, 11/28/00 22,888
------------
148,329
------------
OIL & GAS - SERVICES 0.8%
Pacific Gas & Electric Co.,
25,500 6.51%, 1/30/01 25,085
------------
SOVEREIGN 1.6%
Quebec (Province of) Canada,
50,000 6.51%, 12/14/00 49,611
------------
Total Commercial Paper 2,712,460
------------
FUNDING AGREEMENTS 2.8%
Travelers Insurance Company:
40,000 6.86%, 2/19/01<F1> 40,000
43,000 6.87%, 6/29/01<F1> 43,000
------------
Total Funding Agreements 83,000
------------
VARIABLE RATE DEMAND NOTES 0.9%
28,000 Alliant Energy Corporation 28,000
------------
Total Variable Rate Demand Notes 28,000
------------
Number of Shares Amortized Cost
(in thousands) (in thousands)
--------------- --------------
INVESTMENT COMPANIES 6.3%
97,031 Financial Square Premium Money Market Fund $ 97,031
91,366 Short-Term Investments Co.
Liquid Assets Portfolio 91,366
------------
Total Investment Companies 188,397
------------
Total Investments 100.5% 3,011,857
------------
Liabilities, less Other Assets (0.5)% (13,837)
------------
NET ASSETS 100.0% $2,998,020
============
<F1> Illiquid security
See notes to the financial statements.
<PAGE>
(LOGO) FIRSTAR FUNDS
MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 2000
Principal Amount Amortized Cost
(in thousands) (in thousands)
--------------- --------------
COMMERCIAL PAPER 86.1%
ASSET BACKED SECURITY 12.1%
CXC, Inc.,
$6,000 6.48%, 11/27/00 $ 5,972
Edison Asset Securitization, L.L.C.:
5,000 6.50%, 11/13/00 4,989
5,000 6.52%, 1/08/01 4,939
New Center Asset Trust,
5,000 6.50%, 11/21/00 4,982
------------
20,882
------------
AUTOS & TRUCKS 5.8%
Ford Motor Credit Company,
5,000 6.49%, 11/17/00 4,986
General Motors Acceptance Corporation,
5,000 6.47%, 11/21/00 4,982
------------
9,968
------------
BANKING - FOREIGN 5.2%
Deutsche Bank Finance, Inc.,
5,000 6.46%, 12/28/00 4,949
Dresdner US Finance, Inc.,
4,000 6.48%, 11/07/00 3,996
------------
8,945
------------
COMMUNICATIONS 15.6%
AT&T Corp.:
4,000 6.48%, 12/13/00 3,970
5,000 6.54%, 1/04/01 4,942
British Telecommunications PLC:
4,000 6.53%, 11/09/00 3,994
5,000 6.51%, 12/07/00 4,968
Motorola, Inc.:
5,000 6.49%, 12/15/00 4,960
4,000 6.52%, 11/08/00 3,995
------------
26,829
------------
FINANCE - MISCELLANEOUS 10.1%
ABB Treasury Center, Inc.,
5,000 6.49%, 11/02/00 4,999
National Rural Utilities CFC,
3,500 6.49%, 11/15/00 3,491
Sheffield Receivables Corp.:
5,000 6.51%, 11/03/00 4,998
4,000 6.55%, 1/23/01 3,940
------------
17,428
------------
Principal Amount Amortized Cost
(in thousands) (in thousands)
--------------- --------------
FINANCE - SERVICES 8.4%
American Express,
$4,500 6.46%, 12/19/00 $ 4,461
Associates Corporation,
5,000 6.50%, 1/19/01 4,929
Goldman Sachs Group, L.P.,
5,000 6.50%, 11/16/00 4,986
------------
14,376
------------
INSURANCE 5.2%
American Family Financial Services, Inc.,
5,000 6.52%, 1/16/01 4,931
Prudential Funding Corporation:
4,000 6.51%, 11/01/00 4,000
------------
8,931
------------
MISCELLANEOUS 7.5%
Bestfoods, Inc.,
4,000 6.49%, 11/09/00 3,994
Colgate-Palmolive Co.,
5,000 6.47%, 11/17/00 4,986
International Lease Financial Corporation,
4,000 6.50%, 1/10/01 3,949
------------
12,929
------------
OIL & GAS - SERVICES 5.2%
Pacific Gas & Electric Co.:
5,000 6.51%, 1/12/01 4,935
4,000 6.51%, 1/17/01 3,944
------------
8,879
------------
PRINTING & PUBLISHING 8.1%
Gannett, Inc.,
5,000 6.50%, 11/08/00 4,994
Reed Elsevier, Inc.:
4,000 6.49%, 11/20/00 3,986
5,000 6.48%, 12/04/00 4,970
------------
13,950
------------
SOVEREIGN 2.9%
Quebec (Province of) Canada,
5,000 6.51%, 12/14/00 4,961
------------
Total Commercial Paper 148,078
------------
See notes to the financial statements.
<PAGE>
(LOGO) FIRSTAR FUNDS
MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999
Principal Amount Amortized Cost
(in thousands) (in thousands)
--------------- --------------
FUNDING AGREEMENTS 4.1%
Travelers Insurance Corporation,
$7,000 6.87%, 6/29/01<F1> $ 7,000
------------
Total Funding Agreements 7,000
------------
VARIABLE RATE DEMAND NOTES 4.1%
7,000 Alliant Energy Corporation 7,000
------------
Total Variable Rate Demand Notes 7,000
------------
Number
of Shares
(in thousands)
--------------
INVESTMENT COMPANIES 6.3%
2,827 Financial Square Prime Obligation Fund 2,827
7,947 Short-Term Investments Co.
Liquid Assets Portfolio 7,947
------------
Total Investment Companies 10,774
------------
Total Investments 100.6% 172,852
------------
Liabilities, less Other Assets (0.6)% (975)
------------
NET ASSETS 100.0% $171,877
============
<F1> Illiquid security
See notes to the financial statements.
<PAGE>
(LOGO) FIRSTAR FUNDS
TAX-EXEMPT MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 2000
Principal Amount Amortized Cost
(in thousands) (in thousands)
--------------- --------------
ALASKA 1.3%
Valdez, Alaska, Marine Term Revenue,
$2,500 4.39%, 5/01/31<F1><F2> $ 2,500
------------
ARIZONA 2.8%
Central Arizona, Water Conservation District,
5,175 7.13%, 11/01/11, Prerefunded 11/01/00 5,279
------------
COLORADO 0.5%
Jefferson County, Colorado, General Obligation
1,000 School District, 5.00%, 6/27/01<F1><F2> 1,004
------------
FLORIDA 4.6%
Florida Housing Finance Agency -
3,000 Carlton Multifamily, 4.19%, 12/01/08<F1><F2> 3,000
Putnam County, Florida Development Authority -
5,485 Seminole Electric, 4.14%, 3/15/14<F1><F2> 5,485
------------
8,485
------------
GEORGIA 1.4%
Richmond County, Georgia
2,575 4.50%, 3/01/01 2,578
------------
ILLINOIS 28.9%
Berwyn, Illinois, Revenue,
MacNeal Memorial Hospital
Association, 7.00%,
2,000 6/01/15, Prerefunded, 6/01/01 2,069
Cook County, Illinois,
3,700 4.39%, 5/01/20<F1><F2> 3,700
Hoffman Estates, Illinois, Economic Development,
3,910 7.63%, 11/15/09, Prerefunded 11/15/00 3,993
Illinois Development Finance Authority,
3,200 Lake Forest Academy, 4.39%, 12/01/24<F1><F2> 3,200
Illinois Development Finance Authority,
9,000 Presbyterian Home Lake-A,
4.39%, 9/01/31<F1><F2> 9,000
Illinois Development Finance Authority,
4,800 Rest Haven, 4.39%, 1/01/27<F1><F2> 4,800
Illinois Development Finance Authority,
3,215 St. Paul's House, 4.39%, 2/01/25<F1><F2> 3,215
Illinois Development Finance Authority,
6,000 St. Ignatius College Prep,
4.39%, 6/01/24<F1><F2> 6,000
Illinois Education Facilities Authority,
2,000 Chicago Zoological Society,
4.39%, 12/15/25<F1><F2> 2,000
Illinois Health Facilities Authority,
3,500 Recreational Facilities,
4.29%, 12/01/25<F1><F2> 3,500
Illinois Health Facilities Authority,
Southern Illinois Healthcare Enterprises,
2,500 4.49%, 3/01/21<F1><F2> 2,500
Oakbrook Terrace, Illinois,
Industrial Development,
4,100 4.34%, 12/01/25<F1><F2> 4,100
Principal Amount Amortized Cost
(in thousands) (in thousands)
--------------- --------------
ILLINOIS 28.9% (CONT'D.)
Orland Hills, Illinois, Multifamily,
$2,470 4.39%, 12/01/04<F1><F2> $ 2,470
South Barrington, Illinois, Cook County,
3,000 General Obligation, 4.34%, 12/01/27<F1><F2> 3,000
------------
53,547
------------
INDIANA 11.0%
Indiana Health Facilities Finance Authority,
Henry County Memorial Hospital,
5,700 4.34%, 4/01/13<F1><F2> 5,700
Indiana Health Facilities Finance Authority,
2,100 4.34%, 1/12/20<F1><F2> 2,100
Indiana Hospital Equipment Finance Authority,
6,100 Nursing Home Improvements,
4.34%, 12/01/15<F1><F2> 6,100
Indiana Tate Development Finance Authority,
3,895 Greater Indianapolis Association,
4.44%, 10/01/17<F1><F2> 3,895
Indianapolis, Indiana, Economic
2,600 Development Revenue, 4.34%, 4/01/05<F1><F2> 2,600
------------
20,395
------------
KENTUCKY 5.1%
Mason County, Kentucky, Pollution Control,
6,400 4.44%, 10/15/14<F1><F2> 6,400
Mason County, Kentucky, Pollution Control,
1,900 Series 1984B, 4.44%, 10/15/14<F1><F2> 1,900
Nashville & Davidson County, Tennessee,
1,225 General Obligation, 5.50%, 5/15/01<F1><F2> 1,230
------------
9,530
------------
MASSACHUSETTS 3.9%
Massachusetts State,
2,000 7.10%, 3/01/01<F1><F2> 2,018
Massachusetts State Health &
Educational Facilities,
Fallon Healthcare, 6.75%, 6/01/20,
5,000 Prerefunded 6/01/01 5,166
------------
7,184
------------
MINNESOTA 2.6%
Minnesota State Higher Educational Authority,
4,745 Bethal College, 4.39%, 4/01/28<F1><F2> 4,745
------------
MISSOURI 0.7%
St. Louis, Missouri, Redevelopment Authority,
1,255 7.75%, 7/01/21, Prerefunded, 12/11/00 1,285
------------
See notes to the financial statements.
<PAGE>
(LOGO) FIRSTAR FUNDS
TAX-EXEMPT MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 2000
Principal Amount Amortized Cost
(in thousands) (in thousands)
--------------- --------------
NEBRASKA 1.6%
Omaha,Nebraska Auditorium
Facilities Corporation,
$ 3,000 Revenue Bonds, 4.45%, 8/15/01<F1><F2> $ 3,002
------------
NEVADA 0.8%
Nevada State,
1,500 6.00%, 5/01/09, Prerefunded, 5/01/01 1,527
------------
NEW YORK 1.7%
Cattaraugus County, New York,
St. Bonaventure University,
3,000 8.30%, 12/01/10, Prerefunded 12/01/00 3,070
------------
NORTH CAROLINA 2.5%
North Carolina Educational Facilities,
4,550 Var-Bowman Grey School,
4.38%, 9/01/20<F1><F2> 4,550
------------
OHIO 4.8%
Columbus, Ohio,
1,500 General Obligation, 4.19%, 12/01/17<F1><F2> 1,500
Cuyahoga County, Ohio, Cleveland Clinic
4,400 Hospital Revenue, 4.39%, 1/01/24<F1><F2> 4,400
Ohio State University General Receipts,
3,000 Revenue Bonds, 4.34%, 12/01/14<F1><F2> 3,000
------------
8,900
------------
PENNSYLVANIA 0.6%
Delaware County, Pennsylvania,
Haverford College, 7.38%, 11/15/20,
1,000 Prerefunded 11/15/00 1,021
------------
RHODE ISLAND 1.1%
Convention Center Authority, Rhode Island,
2,000 6.70%, 5/15/20<F1><F2> 2,060
------------
TEXAS 6.2%
Bexar County, Texas, Multifamily,
1,450 4.49%, 6/01/05<F1><F2> 1,450
Carrollton, Texas, School District,
1,000 6.60%, 2/15/02, Prerefunded, 2/15/01 1,006
Harris County, Texas, Health Facilities,
5,000 Hospital Revenue, 4.60%, 12/01/25<F1><F2> 5,000
North Central Texas Health Facilities Development,
2,000 6.85%, 5/15/16<F1><F2> 2,062
Texas Higher Education Authority,
1,880 4.39%, 12/01/25<F1><F2> 1,880
------------
11,398
------------
Principal Amount Amortized Cost
(in thousands) (in thousands)
--------------- --------------
VIRGINIA 0.7%
Martinsville, Virginia, Industrial Development
$1,250 Authority, 7.00%, 1/01/06,
Prerefunded, 1/01/01 $ 1,255
WASHINGTON 4.7%
Chelan County, Washington, Public Utility
4,800 Revenue, 4.39%, 6/01/15<F1><F2> 4,800
Washington State Housing Finance - Community
3,830 Multifamily Mortgage, 4.39%, 10/01/20<F1><F2> 3,830
------------
8,630
------------
WISCONSIN 6.0%
Northwestern Mutual Life, Tax-Exempt
91 Mortgage Certificates, 5.00%, 2/15/09<F1><F2> 91
Wisconsin State Health & Educational Facilities -
5,000 Marshfield Clinic, 4.34%, 6/01/10<F1><F2> 5,000
Wisconsin State Health & Educational Facilities -
1,900 Blood Center, 4.41%, 6/01/19<F1><F2> 1,900
Wisconsin State Health & Educational Facilities -
2,005 Sinai Samaritan, 4.44%, 9/01/19<F1><F2> 2,005
Wisconsin State Health & Educational Facilities -
St. Luke's Medical Center, 7.10%, 8/15/11,
2,000 Prerefunded, 8/15/01 2,080
------------
11,076
------------
Total Municipal Bonds $173,021
------------
Number
of Shares
(in thousands)
--------------
INVESTMENT COMPANIES 6.1%
4,294 Financial Square Tax-Exempt Money Market Fund 4,294
7,000 Tax Free Cash Reserves 7,000
------------
Total Investment Companies 11,294
------------
Total Investments 99.6% 184,315
------------
Other Assets, less Liabilities 0.4% 816
------------
NET ASSETS 100.0% $185,131
=============
<F1> Variable rate security
<F2> Stated maturity with option to put
See notes to the financial statements.
<PAGE>
(LOGO) FIRSTAR FUNDS
U.S. GOVERNMENT MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 2000
Principal Amount Amortized Cost
(in thousands) (in thousands)
--------------- --------------
U.S. GOVERNMENT AGENCIES 93.8%
FEDERAL FARM CREDIT BANK 22.9%
Federal Farm Credit Bank Discount Notes:
$2,055 6.39%, 11/06/00 $ 2,053
4,250 6.35%, 11/14/00 4,240
4,600 6.32%, 12/04/00 4,574
3,000 6.34%, 12/12/00 2,978
------------
13,845
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION 27.4%
Federal Home Loan Mortgage Corporation
Discount Notes:
3,000 6.38%, 11/22/00 2,989
3,500 6.40%, 11/28/00 3,483
2,000 6.37%, 12/28/00 1,980
2,750 6.38%, 1/17/01 2,712
2,500 6.44%, 1/18/01 2,465
3,000 6.42%, 1/24/01 2,955
------------
16,584
------------
FEDERAL NATIONAL MORTGAGE ASSN. 27.8%
Federal National Mortgage Assn.
Discount Notes:
4,000 6.37%, 12/21/00 3,965
7,500 6.44%, 1/04/01 7,414
2,500 6.43%, 1/11/01 2,468
3,000 6.43%, 1/25/01 2,955
------------
16,802
------------
OTHER 15.7%
Tennessee Valley Authority Discount Notes:
3,000 6.38%, 11/02/00 2,999
2,000 6.36%, 11/13/00 1,996
4,500 6.35%, 11/27/00 4,479
------------
9,474
------------
Total U.S. Government Agencies 56,706
------------
Number of Shares Amortized Cost
(in thousands) (in thousands)
--------------- --------------
INVESTMENT COMPANIES 7.3%
1,694 Financial Square Government Obligation Fund $ 1,694
2,694 Short-Term Investments Co. Treasury Portfolio 2,694
------------
Total Investment Companies 4,388
------------
Total Investments 101.1% 61,094
------------
Liabilities, less Other Assets (1.1)% (633)
------------
NET ASSETS 100.0% $60,461
============
See notes to the financial statements.
<PAGE>
(LOGO) FIRSTAR FUNDS
U.S. TREASURY MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 2000
Principal Amount Amortized Cost
(in thousands) (in thousands)
--------------- --------------
U.S. TREASURIES 53.1%
U.S. TREASURY BILLS 29.3%
$ 25,000 6.35%, 12/21/00 $ 24,780
250,000 6.20%, 12/28/00 247,546
10,000 6.13%, 1/04/01 9,891
100,000 6.17%, 1/25/01 98,543
250,000 6.17%, 2/01/01 246,058
100,000 6.11%, 2/08/01 98,320
100,000 6.08%, 2/22/01 98,093
150,000 5.99%, 3/08/01 146,830
150,000 6.02%, 3/22/01 146,465
150,000 5.96%, 4/05/01 146,154
------------
1,262,680
------------
U.S. TREASURY BONDS 4.6%
200,000 5.75%, 11/15/00 199,965
------------
U.S. TREASURY NOTES 19.2%
100,000 8.50%, 11/15/00 100,079
125,000 5.50%, 12/31/00 124,792
100,000 4.50%, 1/31/01 99,538
150,000 7.75%, 2/15/01 150,592
150,000 6.25%, 4/30/01 149,890
50,000 5.63%, 5/15/01 49,794
150,000 6.50%, 5/31/01 150,115
------------
824,800
------------
Total U.S. Treasuries 2,287,445
------------
REPURCHASE AGREEMENTS 37.0%
Lehman Brothers, Inc., 6.30%, dated 10/31/00,
due 11/01/00, repurchase price $30,005
30,000 (Collateralized by U.S.
Government Securities) 30,000
Merrill Lynch, Pierce, Fenner and Smith, Inc.,
6.50%, dated 10/31/00, due 11/01/00,
repurchase price $500,090
500,000 (Collateralized by U.S.
Government Securities) 500,000
Warburg Dillon Read, LLC, 6.57%, dated
10/31/00, due 11/01/00,
repurchase price $1,067,195
1,067,000 (Collateralized by U.S.
Government Securities) 1,067,000
------------
Total Repurchase Agreements 1,597,000
------------
Number of Shares Amortized Cost
(in thousands) (in thousands)
--------------- --------------
INVESTMENT COMPANIES 9.9%
Financial Square
211,432 Treasury Obligation Portfolio $ 211,432
Short-Term Investments Co.
215,081 Treasury Portfolio 215,081
------------
Total Investment Companies 426,513
------------
Total Investments 100.0% 4,310,958
------------
Liabilities, less Other Assets 0.0% (17)
------------
TOTAL NET ASSETS 100.0% $4,310,941
============
See notes to the financial statements.
<PAGE>
(LOGO) FIRSTAR FUNDS
INSTITUTIONAL MONEY MARKET FUND
MONEY MARKET FUND
TAX-EXEMPT MONEY MARKET FUND
U.S. GOVERNMENT MONEY MARKET FUND
NOTES TO THE FINANCIAL STATEMENTS
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, as amended. The
Institutional Money Market, Money Market, Tax-Exempt Money Market and U.S.
Government Money Market Funds (the "Funds"), are separate, diversified
investment portfolios of the Company. The Institutional Money Market, Money
Market, Tax-Exempt Money Market and U.S. Government Money Market Funds
commenced operations on March 16, 1988, April 26, 1991, June 27, 1988 and
August 1, 1988, respectively.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
a) Investment Valuation - The securities are valued on the basis of amortized
cost for financial reporting purposes and federal income tax purposes, which
approximates market value. Variable rate demand notes and funding agreements are
valued at cost which approximates market value. Investment companies are valued
at net asset value which approximates market value.
b) Federal Income Taxes - It is each Fund's policy to meet the requirements of
the Internal Revenue Code applicable to regulated investment companies and each
fund intends to distribute investment company net taxable income and net capital
gains to shareholders. Therefore, no federal income tax provision is required.
c) 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.
d) Expenses - The Funds are charged for those expenses that are directly
attributable to each portfolio such as advisory, administration, service
organization fees 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.
e) Distributions to Shareowners - Dividends from net investment income are
declared daily and paid monthly. Distributions of net realized capital gains, if
any, will be declared at least annually.
f) Other - The Funds recognize interest income on the accrual basis. For
securities with put provisions, discounts and premiums are amortized to the
earlier of the put date or maturity. For the remainder of securities, discounts
and premiums are amortized over the expected life of the respective securities.
Investment and shareowner transactions are recorded on trade date. Realized
gains and losses from investment transactions are reported on an identified cost
basis which is the same basis the Funds use for federal income tax purposes.
Transactions in capital shares at $1.00 per share are shown in the Statement of
Changes in Net Assets. Generally accepted accounting principles require that
permanent financial reporting and tax differences be reclassified in the capital
accounts.
3. 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 rate of 0.50% on the first
$2 billion of each Fund's average daily net assets, and 0.40% of each Fund's
average daily net assets in excess of $2 billion. For the year ended October 31,
2000, FIRMCO voluntarily waived $4,653, $426 and $107 of its advisory fees, in
thousands, for the Institutional Money Market, Money Market and U.S. Government
Money Market Funds, respectively.
Firstar Bank Milwaukee, N.A. serves as custodian and Firstar Mutual Fund
Services, LLC serves as transfer agent and accounting services agent for the
Funds. Both companies are affiliates of FIRMCO.
The Company has entered into an Administration Agreement with Firstar
Mutual Fund Services, LLC (the "Administrator"), for certain administrative
services. Pursuant to the Administration Agreement with the Company, the
Administrator is entitled to receive a fee, computed 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 year ended October 31, 2000,
$870 of administration fees, in thousands, were voluntarily waived for the
Institutional Money Market Fund.
<PAGE>
(LOGO) FIRSTAR FUNDS
The Company has entered into a Distribution Agreement with Quasar Distributors,
LLC (the "Distributor"), as its agent for the sale and distribution of shares of
the Funds. Quasar is an affiliate of FIRMCO. Pursuant to the Distribution
Agreement, the Distributor is entitled to receive a fee, computed daily and
payable monthly at the annual rate of .01% (one basis point) of the Fund's
average daily net assets.
The Funds have adopted a Service and Distribution Plan pursuant to Rule
12b-1 of the Investment Company Act of 1940 and incurred expenses of $106, $4
and $1, in thousands, for the Money Market Fund, the Institutional Money Market
Fund and the U.S. Government Money Market Fund, respectively, for the year ended
October 31, 2000. No expenses were incurred for the Tax-Exempt Money Market Fund
for the year ended October 31, 2000.
Each Director of the Company who is not affiliated with FIRMCO receives an
annual 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.
4. SUBSEQUENT EVENTS
At meetings held on June 16, 2000 and July 13, 2000, the Board of
Directors of Firstar Funds, Inc. ("Firstar Funds") approved (i) an
Agreement and Plan of Reorganization providing for the acquisition of
Mercantile Mutual Funds, Inc. ("Mercantile Funds") by Firstar Funds,
(ii) an Agreement and Plan of Reorganization providing for the acquisition
of Firstar Stellar Funds ("Stellar Funds") by Firstar Funds, and (iii)
an Agreement and Plan of Reorganization providing for the acquisition of
Firstar Select Funds ("Select Funds") by Firstar Funds. The Board of
Directors and shareholders of Mercantile Funds (other than the Mercantile
Conning Money Market Portfolio) and Select Funds and the Board of Trustees
and shareholders of Stellar Funds each ratified their applicable
agreements.
On November 27, 2000, certain portfolios of the Firstar Funds, including
newly formed shell portfolios (which were organized solely to acquire the
assets and continue the business of certain portfolios of Mercantile
Funds, Stellar Funds and Select Funds) merged with certain portfolios
of Mercantile Funds and Stellar Funds. On December 11, 2000, certain other
portfolios of Mercantile Funds (other than the Mercantile Conning Money
Market Portfolio), Stellar Funds and Select Funds merged into shell
portfolios of Firstar Funds. Below is a table (in thousands) that
illustrates the specifics of the mergers related to the funds in these
financial statements.
<TABLE>
<CAPTION>
SHARES
VALUE OF ISSUED TO UNREALIZED
FUND NET ASSETS SHAREHOLDERS EFFECTIVE GAIN/(LOSS) OF
MERGED TRANSFERRED BY OF FUND DATE OF MERGING FUND AT TAX STATUS
MERGING FUND NAME INTO MERGING FUND MERGED INTO MERGER TIME OF MERGER OF TRANSFER NEW FIRSTAR FUNDS NAME
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Mercantile Firstar Money $286,935 11/27/2000 $ - Non- Firstar Money Market
Money Market Market <F1> taxable
------------------------------------------------------------------------------------------------------------------------------------
Retail A 286,936
------------------------------------------------------------------------------------------------------------------------------------
Mercantile Tax- Firstar Tax- 110,323 11/27/2000 - Non- Firstar Tax-Exempt
Exempt Money Exempt Money taxable Money Market
Market Market<F1>
------------------------------------------------------------------------------------------------------------------------------------
Retail A 166
------------------------------------------------------------------------------------------------------------------------------------
Series 110,168
Institutional
------------------------------------------------------------------------------------------------------------------------------------
Firstar Stellar Firstar Tax- 227,545 11/27/2000 Non- Firstar Tax-Exempt
Tax-Free Money Exempt Money taxable Money Market
Market Market<F1>
------------------------------------------------------------------------------------------------------------------------------------
Retail A 227,560
------------------------------------------------------------------------------------------------------------------------------------
<F1> Accounting survivor; performance history carries over.
</TABLE>
<PAGE>
(LOGO) FIRSTAR FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
FIRSTAR FUNDS, INC:
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Institutional Money Market
Fund, Money Market Fund, Tax-Exempt Money Market Fund and U.S. Government Money
Market Fund, (four of the portfolios comprising Firstar Funds, Inc., hereafter
referred to as the "Funds"), at October 31, 2000, the results of each of their
operations, the changes in each of their net assets and the financial highlights
for each of the periods indicated, all in conformity with accounting principles
generally accepted in the United States of America. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at October
31, 2000 by correspondence with the custodian, provide a reasonable basis for
our opinion.
PricewaterhouseCoopers LLP
Milwaukee, Wisconsin
December 29, 2000
<PAGE>
(LOGO) FIRSTAR FUNDS
U.S. TREASURY MONEY MARKET FUND
NOTES TO THE FINANCIAL STATEMENTS
1. ORGANIZATION
Firstar Stellar Funds (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end management
investment company. (See Subsequent Events Footnote) The financial statements of
the U.S. Treasury Money Market Fund (the "Fund") are presented herein along with
the Fund's investment objective:
PORTFOLIO NAME INVESTMENT OBJECTIVE
--------------------- -----------------------------------
U.S. Treasury Stability of principal and current
Money Market Fund income consistent with stability
(Formerly known as Treasury Fund) of principal.
The U.S. Treasury Money Market Fund offers two classes of shares, (Series A
and Series Institutional - formerly know as C and Y shares, respectively).
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
a) Investment Valuations - The securities are valued on the basis of amortized
cost for financial reporting purposes and federal income tax purposes which
approximates market value. Investments in open-end regulated investment
companies are valued at net asset value which approximates market value.
b) Repurchase Agreements - It is the policy of the Fund to require a
custodian bank to take possession, to have legally segregated in the Federal
Reserve Book Entry System, or to have segregated within the custodian bank's
vault, all securities held as collateral under repurchase agreement
transactions. Additionally, procedures have been established by the Fund to
monitor, on a daily basis, the market value of each repurchase agreement's
collateral to ensure that the value of collateral at least equals the repurchase
price to be paid under the repurchase agreement transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed by
the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards approved or established by the Board of Trustees (the "Trustees").
Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Fund could receive less
than the repurchase price on the sale of collateral securities.
c) Investment Income, Expenses and Distributions - Interest income and
expenses are accrued daily. 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). Distributions to
shareholders are recorded on the ex-dividend date.
d) Federal Taxes - It is the Fund's policy to comply with the provisions of
the Internal Revenue Code, as amended (the "Code"), applicable to regulated
investment companies and to distribute to shareholders each year substantially
all of its net investment income and net realized gains, if any. Accordingly,
no provisions for federal taxes are necessary.
The character of distributions made during the year from net investment
income or net realized gain may differ from the characterization for federal
income tax purposes due to differences in the recognition of income, expense and
gain items for financial statement and tax purposes. Where appropriate,
reclassifications between net asset accounts are made for such differences that
are permanent in nature.
e) When-Issued and Delayed Delivery Transactions - The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintain security positions such that
sufficient liquid assets will be available to make payment for the securities
purchased. Securities purchased on a when-issued or delayed delivery basis are
marked to market daily and begin earning interest on the settlement date.
f) 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 amounts of assets, liabilities,
revenues and expenses reported in the financial statements. Actual results could
differ from those estimates.
g) Other - Investment transactions are accounted for on the trade date.
Transactions in capital shares at $1.00 per share are shown in the Statement
of Changes in Net Assets.
3. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
a) General - Certain officers of Firstar Investment Research & Management
Company, LLC (FIRMCO) and Firstar Mutual Fund Services, LLC ("Firstar") serve as
officers of the Trust. FIRMCO and Firstar are related by virtue of each being a
subsidiary of Firstar Corporation.
<PAGE>
(LOGO) FIRSTAR FUNDS
b) Investment Advisory Fees - FIRMCO serves as the Trust's investment adviser
(the "Adviser"). Prior to April 1, 2000, the Funds were managed by Firstar Bank,
N.A. As part of an internal restructuring of the investment advisory function
within Firstar Corporation, the investment management resources of Firstar Bank,
N.A. have been consolidated with those of FIRMCO. The Adviser receives for its
services an annual investment advisory fee based on a percentage of the Fund's
average daily net assets as follows:
FUND ANNUAL RATE
------ -----------
U.S. Treasury Money Market Fund 0.50%
c) Administrative Fees - Firstar provides the Fund with certain
administrative personnel and services. Firstar receives a fee at an annual rate
of 0.11% of the average daily net assets of the Fund for the period.
d) Distribution Services Fees - Pursuant to the provisions of a distribution
plan adopted in accordance with the Investment Company Act Rule 12b-1 (the
"Plan"), Series A shares of the Fund may pay to the distributor of the Funds an
amount computed at an annual rate of up to 0.25% of the average daily net assets
to finance any activity which is principally intended to result in the sale of
shares subject to the Plan. Currently, Series A shares of the U.S. Treasury
Money Market Fund are accruing and paying to the distributor an amount computed
at an annual rate of 0.15% of the average daily net assets. Edgewood Services,
Inc. served as the distributor of the Fund through July 31, 2000. Effective
August 1, 2000, Quasar Distributors, LLC became the distributor of the Fund.
e) Shareholder Services Fees - Under the terms of the Shareholder Services
Agreement with Firstar Bank, N.A., the Fund may accrue and pay Firstar Bank,
N.A. up to 0.25% of average daily net assets for the period. For the period
December 1, 1999 to January 31, 2000, Firstar Bank, N.A. waived 0.15% of this
Shareholder Servicing Fee. Effective February 1, 2000, this waiver was reduced
to 0.09%. The fee paid to Firstar Bank, N.A. is used to finance certain
services for shareholders and to maintain shareholder accounts.Firstar Bank,
N.A. can modify or terminate this limitation at any time at its sole discretion.
f) Transfer and Dividend Disbursing Agent Fees - Firstar serves as transfer
and dividend disbursing agent for the Fund. The fee paid to Firstar is based on
the size, type and number of accounts and transactions made by shareholders.
g) Portfolio Accounting Fees - Firstar is the Fund's accounting services
agent. Firstar is responsible for maintaining the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, subject to an annual minimum of $39,000, plus
out-of-pocket expenses.
h) Custodian Fees - Firstar Bank, N.A. is the Fund's custodian for which it
receives a fee. The fee is based on the level of the Fund's average daily net
assets for the period, plus out-of-pocket expenses.
4. SUBSEQUENT EVENT - AGREEMENT AND PLAN OF REORGANIZATION (UNAUDITED)
On June 7, 2000, as ratified on July 20, 2000, the Board of Trustees
of the Fund approved an Agreement and Plan of Reorganization (the
"Agreement") providing for the transfer of substantially all of the assets
and liabilities of each of the Trust's portfolios to corresponding
portfolios of Firstar Funds, Inc. ("Firstar Funds") in exchange for shares
of such Firstar Funds in a tax-free reorganization. At a special meeting of
shareholders of the Trust held on November 24, 2000, the shareholders of each
of the Trust's portfolios voted to approve the Agreement. The results of the
shareholder meeting are as follows (no shares represented broker non-votes
other than 2,226 shares of the Firstar U.S. Government Income Fund):
FUND FOR AGAINST ABSTAIN
---- ----------- ----------- ------------
Treasury 3,061,140,107 4,974,967 3,276,121
Tax-Free Money Market 182,173,399 32,746 460,959
Ohio Tax-Free Money Market 60,153,523 0 0
Strategic Income 13,130,869 10,764 66,620
U.S. Governemtn Income 16,086,380 0 0
Insured Tax-Free Bond 15,572,734 0 313
Growth Equity 9,651,548 138,077 58,823
Relative Value 16,515,694 14,132 30,210
Science & Technology 5,975,816 7,692 4,987
Stellar 3,553,064 16,116 52,856
Capital Appreciation 5,227,067 1,490 840
International Equity 5,576,031 0 0
5. SUBSEQUENT EVENT - PORTFOLIO MERGERS
At meetings held on June 16, 2000 and July 13, 2000, the Board of
Directors of Firstar Funds, Inc. ("Firstar Funds") approved (i) an
Agreement and Plan of Reorganization providing for the acquisition of
Mercantile Mutual Funds, Inc. ("Mercantile Funds") by Firstar Funds,
(ii) an Agreement and Plan of Reorganization providing for the acquisition
of Firstar Stellar Funds ("Stellar Funds") by Firstar Funds, and (iii)
an Agreement and Plan of Reorganization providing for the acquisition of
Firstar Select Funds ("Select Funds") by Firstar Funds. The Board of
Directors and shareholders of Mercantile Funds (other than the Mercantile
Conning Money Market Portfolio) and Select Funds and the Board of Trustees
and shareholders of Stellar Funds each approved their applicable
agreements.
On November 27, 2000, certain portfolios of the Firstar Funds, including
newly formed shell portfolios (which were organized solely to acquire the
assets and continue the business of certain portfolios of Mercantile
Funds, Stellar Funds and Select Funds) merged with certain portfolios
of Mercantile Funds and Stellar Funds. On December 11, 2000, certain other
portfolios of Mercantile Funds (other than the Mercantile Conning Money
Market Portfolio), Stellar Funds and Select Funds merged into shell
portfolios of Firstar Funds. Below is a table (in thousands) that
illustrates the specifics of the mergers related to the funds in these
financial statements.
<TABLE>
<CAPTION>
SHARES
VALUE OF ISSUED TO UNREALIZED
FUND NET ASSETS SHAREHOLDERS EFFECTIVE GAIN/(LOSS) OF
MERGED TRANSFERRED BY OF FUND DATE OF MERGING FUND AT TAX STATUS
MERGING FUND NAME INTO MERGING FUND MERGED INTO MERGER TIME OF MERGER OF TRANSFER NEW FIRSTAR FUNDS NAME
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Firstar U.S. Firstar Stellar 133,616 11/27/2000 - Non- Firstar U.S. Treasury
Treasury Money Treasury <F1> Taxable Money Market
Market
------------------------------------------------------------------------------------------------------------------------------------
Series
Institutional 133,616
------------------------------------------------------------------------------------------------------------------------------------
Mercantile Firstar 159,014 11/27/2000 - Non- Firstar Tax-Exempt
Treasury Money Stellar Taxable Money Market
Market Treasury<F1>
------------------------------------------------------------------------------------------------------------------------------------
Series 159,016
Institutional
------------------------------------------------------------------------------------------------------------------------------------
Firstar Stellar Firstar U.S. 4,074,065 11/27/2000 Non- Firstar U.S. Treasury
Treasury Treasury Money Taxable Money Market
Market<F2>
------------------------------------------------------------------------------------------------------------------------------------
Retail A 2,289,736
------------------------------------------------------------------------------------------------------------------------------------
Series Institutional 1,784,330
------------------------------------------------------------------------------------------------------------------------------------
<F1> Accounting survivor; performance history carries over.
<F2> Shell portfolio.
</TABLE>
CHANGE OF ACCOUNTANTS
On October 19, 2000, Arthur Andersen LLP resigned as the U.S. Treasury
Money Market Fund's ("Fund") independent auditors. Arthur Andersen LLP reports
on the Fund's financial statements for the fiscal years ended November 30, 1999
and November 30, 1998 contained no adverse opinion or disclaimer of opinion nor
were they qualified or modified as to uncertainty, audit scope or accounting
principles. During the Fund's fiscal years ended November 30, 1999 and November
30, 1998 and the interim period commencing December 1, 1999 and ending October
16, 2000, (i) there were no disagreements with Arthur Andersen LLP on any matter
of accounting principles or practices, financial statement disclosure or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of Arthur Andersen LLP, would have caused it to make reference to
the subject matter of the disagreements in connection with its reports on the
Fund's financial statements for such years, and (ii) there were no "reportable
events" of the kind described in Item 304(a)(1)(v) of Regulation S-K under the
Securities Exchange Act of 1934, as amended.
On October 19, 2000, the Fund by action of its Board of Trustees engaged
PricewaterhouseCoopers LLP ("PwC") as the independent auditors to audit the
Fund's financial statements for the 11-month fiscal period ending October 31,
2000. During the Fund's fiscal years ended November 30, 1999 and November 30,
1998 and the interim period commencing December 1, 1999 and ending October 19,
2000, neither the Fund nor anyone on its behalf has consulted PwC on items which
(i) concerned the application of accounting principles to a specified
transaction, either completed or proposed, or the type of audit opinion that
might be rendered on the Fund's financial statements or (ii) concerned the
subject of a disagreement (as defined in paragraph (a)(1)(v) of Item 304 or
Regulation S-K) or reportable events (as described in paragraph (a)(1)(v)) of
said Item 304.
<PAGE>
(LOGO) FIRSTAR FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders of
Firstar Stellar Funds:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the U.S. Treasury Money Market
Fund, (formerly know as Treasury Fund; one of the portfolios comprising Firstar
Stellar Funds, hereafter referred to as the "Fund") at October 31, 2000, the
results of its operations, the changes in its net assets and the financial
highlights for the period then ended, all in conformity with accounting
principles generally accepted in the United States of America. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audit. We
conducted our audit of these financial statements in accordance with auditing
standards generally accepted in the United States of America, which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates make by management, and evaluating the overall financial
statement presentation. We believe that our audit, which included confirmation
of securities at October 31, 2000 by correspondence with the custodian,
provides a reasonable basis for our opinion. The financial statements
of the Fund as of November 30, 1999 and for all periods presented ended at or
prior thereto where audited by other independent accountants whose report dated
January 7, 2000 expressed an unqualified opinion on those statements.
PricewaterhouseCoopers LLP
Milwaukee, Wisconsin
December 29, 2000
<PAGE>
This report is authorized for distribution only when preceded or
accompanied by a current prospectus.
FOR A PROSPECTUS OR INVESTOR SERVICE INFORMATION
1-800-677-FUND
FIRSTAR FUNDS CENTER
615 EAST MICHIGAN STREET
P.O. BOX 3011
MILWAUKEE, WI 53201-3011
WWW.FIRSTARFUNDS.COM
(LOGO) FIRSTAR FUNDS
FORM # ANNMM-00
