VISION
U.S. Government
Securities
Fund
Seeks current income by investing primarily in
securities that are guaranteed for payment of principal
and interest by the U.S. Government, its agencies
or instrumentalities (Fund shares themselves
are not guaranteed). Capital appreciation is a
secondary investment consideration.
- --------------------------------------------------------------------------------
VISION
New York Tax-Free
Money Market
Seeks current income that is exempt from
federal regular income tax, (some of the income
may be subject to the federal alternative
minimum tax) and New York State and
New York City personal income taxes, and is
consistent with preservation of capital.
- --------------------------------------------------------------------------------
VISION
Growth and Income
Fund
Seeks to provide long-term growth of capital and
income by investing in a diversified portfolio
consisting primarily of equity securities (common
stock and convertible securities) and debt securities
(bonds and notes).
- --------------------------------------------------------------------------------
VISION
Capital Appreciation
Fund
Seeks to produce long-term capital appreciation,
primarily through a diversified portfolio of mid-capitalization
stocks selected for their ability to appreciate in value.
- --------------------------------------------------------------------------------
VISION
Money Market
Fund
Seeks current income with liquidity and
stability of principal by investing in high-
quality money market instruments.
- --------------------------------------------------------------------------------
VISION
Treasury Money Market
Fund
Primarily seeks current income with liquidity
and stability of principal by investing in direct
obligations of the U.S. Treasury, which are
guaranteed by the U.S. Government for timely
payment of principal and interest, (Fund shares
themselves are not guaranteed), and repurchase
agreements secured by these obligations.
- --------------------------------------------------------------------------------
VISION
New York Tax-Free
Money Market
Fund
Seeks as high a level of current interest income that
is exempt from federal regular income tax (some of
the income may be subject to the federal alternative
minimum tax) as is consistent with liquidity and
relative stability of principal. In addition, the Fund
seeks to provide income that is exempt from
New York State and New York City
personal income taxes.
- --------------------------------------------------------------------------------
For more complete information about any of the
Vision Funds, contact (800) 836-2211 for a
prospectus. Please read the prospectus carefully
before investing.
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report of the Vision Growth and Income
Fund for the six-month period ended October 31, 1996. It begins with an
investment review by the fund's portfolio manager, followed by a list of the
fund's stock holdings and complete financial information.
On October 31, 1996, the fund's portfolio consisted of high-quality stocks
issued by companies that are household names, such as Boeing, Bristol-Myers
Squibb, Chase Manhattan, Coca-Cola, Disney, Honda, Intel, Johnson & Johnson,
Mattel, Microsoft, and Sears.
On October 31, 1996, the fund had produced a strong six-month total return of
12.38% (unadjusted for the fund's sales charge) resulting from dividends
totaling $0.07 per share, an 11% increase in share price,* and a favorable stock
market environment.
By the end of the reporting period, shareholders had invested a total of $80.6
million in Vision Growth & Income Fund--a $15 million increase since the first
day of the period. Thank you for joining them. We welcome your questions and
comments as we keep you informed about the progress of your investment.
Sincerely,
Edward C. Gonzales
President
December 15, 1996
* Performance quoted is based on net asset value and reflects past performance.
Performance is not indicative of future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost. Total return for the
period adjusted for the fund's sales charge was 6.18%.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
The Vision Growth and Income Fund continued to achieve good gains in the second
fiscal quarter as the stock market traveled a rising, albeit bumpy, path to new
highs. For the six month period ended October 31, 1996, the fund's total return
was an impressive 12.38% versus the Lipper Growth & Income Mutual Fund Index*
return of 6.5%. For the first ten months of calendar 1996, the fund has
outperformed the Lipper Growth & Income Mutual Fund Index* with a total return
of 19.91%** versus 15.0%.
Reports of strong employment gains, released in early July 1996, suggested a
quickening economy and prompted the question when, not if, the Federal Reserve
Board (the "Fed") would raise interest rates. Bond prices dropped sharply,
leaving bond investors in worse shape than they had been through the first seven
months of 1994, a year that eventually recorded the worst bond losses since the
twenties. Money flowed out of equity mutual funds, and the "blue chip" names
experienced their largest declines in over five years. Technology and financial
shares, which had been market leaders, were especially hard hit, and the NASDAQ
market lost 8.8% in July. Subsequent economic data of August and September
suggested a more modest, sustainable expansion. Inflation fears abated, and the
Fed left rates unchanged. Money flowed back into equity mutual funds, and
technology, financials, and global leaders returned to prominence. The Standard
and Poor's 500 Index*** and the Dow Jones Industrial Average+ achieved record
highs. Bonds rallied, with the long Treasury issue ending the quarter yielding
just under 7.0%, about where it had begun.
As you will see on the attached portfolio holdings statement, emphasis has
remained on growth stocks. This has been a helpful attribute so far this year as
growth stocks have, in general, performed better than value stocks. Despite the
downturn in July, technology shares have been among the strongest performers in
the market. By design, the greatest emphasis within the growth portion of the
fund has been in the area of Information/Communication with Intel
(semiconductors), Cisco Systems (network routers), and Microsoft (software)
occupying core positions and providing strong returns. Large capitalization,
multi-national companies with leading market positions comprise another large
fraction of the fund's growth stock holdings, and have had strong performance as
well. Examples include: Coca-Cola, Johnson & Johnson, Pfizer, Boeing, American
International Group, and Monsanto.
Financial stocks have represented the largest single category of the value stock
portion of the fund this period. Low price-earnings ratios, good dividends, and
above-average prospects for earnings growth have justified good returns on
Citicorp, Chase Manhattan, Allmerica, and Federal National
* The Lipper Growth and Income Mutual Fund Index compares the performance of
30 of the largest growth and income open-ended mutual funds. This index is
unmanaged and actual investments cannot be made in an index.
** The fund's one-year and since inception (11/29/93) total returns are 20.63%
and 14.15%, respectively, based on offering price.
*** The S&P 500 is an unmanaged index of common stocks in industry,
transportation, and financial and public utility companies. Investments
cannot be made in an index.
Dow Jones Industrial Average ("DJIA") is an unmanaged index which represents
share prices of selected blue chip industrial corporations as well as public
utility and transportation companies. The DJIA indicates daily changes in the
average price of stocks in any of its categories. It also reports total sales
for each group of industries. Because it represents the top corporations of
America, the DJIA's index movements are leading economic indicators for the
stock market as a whole.
Mortgage Association. IBM remained a stellar performer, reflecting the market's
recognition of the value of that company's management turnaround.
Our expectation that economic activity would moderate, but not stall, as 1996
unfolded has thus far been fulfilled. Corporate profit margins, which inevitably
rise and fall as an integral part of the business cycle, seem to be near their
cyclical peak. Accommodative central banks around the world, however, appear
willing to provide liquidity sufficient to fuel further growth and extend the
cycle. Where enthusiasm drives company, industry, or sector valuations to
excess, the rapid rotation of this aging bull market should enforce price
disciplines that can be costly. Nevertheless, based upon prospects for economic
growth and low inflation, equity should remain a favored asset class. We will
continue to invest in growth and value companies that we believe have the
management, market position, and muscle to thrive in a slow growth world.
VISION GROWTH AND INCOME FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
OCTOBER 31, 1996 YEAR ENDED APRIL 30,
(UNAUDITED) 1996 1995 1994(a)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $13.35 $10.35 $ 9.93 $10.00
- -----------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------
Net investment income 0.06 0.13 0.21 0.07
- -----------------------------------------------------------
Net realized and unrealized gain (loss) on investments 1.59 2.98 0.43 (0.08)
- ----------------------------------------------------------- ------- --------- --------- -----------
Total from investment operations 1.65 3.11 0.64 (0.01)
- ----------------------------------------------------------- ------- --------- --------- -----------
LESS DISTRIBUTIONS
- -----------------------------------------------------------
Distributions from net investment income (0.07) (0.11) (0.22) (0.06)
- ----------------------------------------------------------- ------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $14.93 $13.35 $10.35 $ 9.93
- ----------------------------------------------------------- ------- --------- --------- -----------
TOTAL RETURN (B) 12.38% 30.18% 6.61% (0.12%)
- -----------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------------------------------
Expenses 1.16%(c) 1.16% 0.47% 0.00%(c)
- -----------------------------------------------------------
Net investment income 0.91%(c) 1.09% 2.16% 2.24%(c)
- -----------------------------------------------------------
Expense waiver/reimbursement (d) -- (c) -- 0.96% 2.15%(c)
- -----------------------------------------------------------
SUPPLEMENTAL DATA
- -----------------------------------------------------------
Net assets, end of period (000 omitted) $80,636 $65,119 $39,358 $22,944
- -----------------------------------------------------------
Average comission rate paid $0.0719 -- -- --
- -----------------------------------------------------------
Portfolio turnover 31 % 77% 79% 27 %
- -----------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from November 29, 1993 (date of initial
public investment) to April 30, 1994.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
VISION GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ----------- ------------------------------------------------------------------------------------- -------------
COMMON STOCKS--91.8%
- --------------------------------------------------------------------------------------------------
AUTOMOBILE--0.6%
-------------------------------------------------------------------------------------
11,000 Honda Motor Company, Ltd. $ 523,875
------------------------------------------------------------------------------------- -------------
BANKING--6.5%
-------------------------------------------------------------------------------------
32,000 Chase Manhattan Corp. 2,744,000
-------------------------------------------------------------------------------------
25,000 Citicorp 2,475,000
------------------------------------------------------------------------------------- -------------
Total 5,219,000
------------------------------------------------------------------------------------- -------------
CHEMICALS--3.3%
-------------------------------------------------------------------------------------
40,000 Monsanto Co. 1,585,000
-------------------------------------------------------------------------------------
25,000 Praxair, Inc. 1,106,250
------------------------------------------------------------------------------------- -------------
Total 2,691,250
------------------------------------------------------------------------------------- -------------
CONSUMER GOODS-RETAIL--4.7%
-------------------------------------------------------------------------------------
26,000 Home Depot, Inc. 1,423,500
-------------------------------------------------------------------------------------
49,413 Mattel, Inc. 1,426,800
-------------------------------------------------------------------------------------
20,000 Sears, Roebuck & Co. 967,500
------------------------------------------------------------------------------------- -------------
Total 3,817,800
------------------------------------------------------------------------------------- -------------
DEFENSE--4.0%
-------------------------------------------------------------------------------------
18,500 Boeing Co. 1,764,438
-------------------------------------------------------------------------------------
21,000 General Dynamics Corp. 1,441,125
------------------------------------------------------------------------------------- -------------
Total 3,205,563
------------------------------------------------------------------------------------- -------------
DRUGS--5.8%
-------------------------------------------------------------------------------------
15,000 Bristol-Myers Squibb Co. 1,586,250
-------------------------------------------------------------------------------------
35,000 Johnson & Johnson 1,723,750
-------------------------------------------------------------------------------------
16,000 Pfizer, Inc. 1,324,000
------------------------------------------------------------------------------------- -------------
Total 4,634,000
------------------------------------------------------------------------------------- -------------
</TABLE>
VISION GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ----------- ------------------------------------------------------------------------------------- -------------
COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------------------
ELECTRONICS--3.2%
-------------------------------------------------------------------------------------
27,000 General Electric Co. $ 2,612,250
------------------------------------------------------------------------------------- -------------
ENERGY--3.6%
-------------------------------------------------------------------------------------
8,500 Atlantic Richfield Company 1,126,250
-------------------------------------------------------------------------------------
4,500 Royal Dutch Petroleum Co., ADR 744,187
-------------------------------------------------------------------------------------
10,000 Texaco, Inc. 1,016,250
------------------------------------------------------------------------------------- -------------
Total 2,886,687
------------------------------------------------------------------------------------- -------------
ENTERTAINMENT--1.8%
-------------------------------------------------------------------------------------
22,000 Walt Disney Co. 1,449,250
------------------------------------------------------------------------------------- -------------
FOOD AND BEVERAGE--1.4%
-------------------------------------------------------------------------------------
22,000 Coca Cola Co. 1,111,000
------------------------------------------------------------------------------------- -------------
FOREST PRODUCTS--4.1%
-------------------------------------------------------------------------------------
16,000 Georgia-Pacific Corp. 1,200,000
-------------------------------------------------------------------------------------
23,000 Kimberly-Clark Corp. 2,144,750
------------------------------------------------------------------------------------- -------------
Total 3,344,750
------------------------------------------------------------------------------------- -------------
HEALTH CARE--2.8%
-------------------------------------------------------------------------------------
18,600 Medtronic, Inc. 1,197,375
-------------------------------------------------------------------------------------
25,000 Tambrands, Inc. 1,065,625
------------------------------------------------------------------------------------- -------------
Total 2,263,000
------------------------------------------------------------------------------------- -------------
INDUSTRIAL PRODUCTS--1.6%
-------------------------------------------------------------------------------------
36,000 (a)Thermo Electron Corp. 1,314,000
------------------------------------------------------------------------------------- -------------
INSURANCE--5.1%
-------------------------------------------------------------------------------------
33,000 Allmerica Financial Corp. 1,002,375
-------------------------------------------------------------------------------------
21,000 American International Group, Inc. 2,281,125
-------------------------------------------------------------------------------------
35,000 GCR Holdings, Ltd. 813,750
------------------------------------------------------------------------------------- -------------
Total 4,097,250
------------------------------------------------------------------------------------- -------------
</TABLE>
VISION GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ----------- ------------------------------------------------------------------------------------- -------------
COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------------------
MANUFACTURING--1.7%
-------------------------------------------------------------------------------------
21,000 Harsco Corp. $ 1,341,375
------------------------------------------------------------------------------------- -------------
MORTGAGE--2.1%
-------------------------------------------------------------------------------------
43,000 Federal National Mortgage Association 1,682,375
------------------------------------------------------------------------------------- -------------
OIL & GAS--8.9%
-------------------------------------------------------------------------------------
44,000 Enron Corp. 2,046,000
-------------------------------------------------------------------------------------
7,000 Mobil Corp. 817,250
-------------------------------------------------------------------------------------
16,000 Schulmberger Ltd. 1,586,000
-------------------------------------------------------------------------------------
28,000 (a)Triton Energy Corp. 1,249,500
-------------------------------------------------------------------------------------
40,000 Unocal Corp. 1,465,000
------------------------------------------------------------------------------------- -------------
Total 7,163,750
------------------------------------------------------------------------------------- -------------
PACKAGING--1.2%
-------------------------------------------------------------------------------------
20,000 Crown Cork and Seal, Inc. 960,000
------------------------------------------------------------------------------------- -------------
REAL ESTATE--7.8%
-------------------------------------------------------------------------------------
36,000 Beacon Properties Corp. 1,057,500
-------------------------------------------------------------------------------------
40,000 Equity Residential Properties Trust 1,470,000
-------------------------------------------------------------------------------------
30,000 FelCor Suite Hotels, Inc. 982,500
-------------------------------------------------------------------------------------
47,000 Merry Land & Investment Co., Inc. 987,000
-------------------------------------------------------------------------------------
39,500 Nationwide Health Properties, Inc. 888,750
-------------------------------------------------------------------------------------
5,000 Post Properties, Inc. 197,500
-------------------------------------------------------------------------------------
20,100 (a)Prentiss Properties Trust 414,563
-------------------------------------------------------------------------------------
17,000 Security Capital Industrial Trust 308,125
------------------------------------------------------------------------------------- -------------
Total 6,305,938
------------------------------------------------------------------------------------- -------------
TECHNOLOGY--13.4%
-------------------------------------------------------------------------------------
18,000 (a)Cisco Systems, Inc. 1,113,750
-------------------------------------------------------------------------------------
12,000 (a)Computer Sciences Corp. 891,000
-------------------------------------------------------------------------------------
19,500 International Business Machine 2,515,500
-------------------------------------------------------------------------------------
</TABLE>
VISION GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ----------- ------------------------------------------------------------------------------------- -------------
COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------------------
TECHNOLOGY--CONTINUED
-------------------------------------------------------------------------------------
15,000 Intel Corp. $ 1,648,125
-------------------------------------------------------------------------------------
12,000 (a)Microsoft Corp. 1,647,000
-------------------------------------------------------------------------------------
20,000 (a)Seagate Technology, Inc. 1,335,000
-------------------------------------------------------------------------------------
38,000 (a)Storage Technology Corp. 1,619,750
------------------------------------------------------------------------------------- -------------
Total 10,770,125
------------------------------------------------------------------------------------- -------------
TELECOMMUNICATIONS--5.0%
-------------------------------------------------------------------------------------
33,000 Ericsson (LM) Telephone Co., ADR 911,625
-------------------------------------------------------------------------------------
37,000 GTE Corp. 1,558,625
-------------------------------------------------------------------------------------
11,000 Motorola, Inc. 506,000
-------------------------------------------------------------------------------------
20,000 SBC Communications, Inc. 972,500
-------------------------------------------------------------------------------------
5,000 Telefonica del Peru S.A. 103,125
------------------------------------------------------------------------------------- -------------
Total 4,051,875
------------------------------------------------------------------------------------- -------------
TRANSPORTATION--1.5%
-------------------------------------------------------------------------------------
48,000 (a)Continental Airlines, Inc. 1,206,000
------------------------------------------------------------------------------------- -------------
WHOLESALE--1.7%
-------------------------------------------------------------------------------------
30,000 Alco Standard Corp. 1,391,250
------------------------------------------------------------------------------------- -------------
TOTAL COMMON STOCKS (IDENTIFIED COST, $57,060,101) 74,042,363
------------------------------------------------------------------------------------- -------------
CONVERTIBLE PREFERRED STOCKS--5.2%
- --------------------------------------------------------------------------------------------------
FINANCIAL--4.1%
-------------------------------------------------------------------------------------
13,000 (c)Sun America, PFD, 7.25% 807,625
-------------------------------------------------------------------------------------
34,000 SunAmerica, Inc. 1,275,000
-------------------------------------------------------------------------------------
22,449 Travelers Group, Inc. 1,217,858
------------------------------------------------------------------------------------- -------------
Total 3,300,483
------------------------------------------------------------------------------------- -------------
TELECOMMUNICATIONS--1.1%
-------------------------------------------------------------------------------------
12,000 Telecomunicacoes Brasileiras, ADR 894,000
------------------------------------------------------------------------------------- -------------
TOTAL CONVERTIBLE PREFERRED STOCKS (IDENTIFIED COST, $3,136,993) 4,194,483
------------------------------------------------------------------------------------- -------------
</TABLE>
VISION GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ----------- ------------------------------------------------------------------------------------- -------------
MUTUAL FUND SHARES--2.5%
- --------------------------------------------------------------------------------------------------
$ 914,386 Seven Seas Money Market Fund (at net asset value) $ 2,006,731
------------------------------------------------------------------------------------- -------------
TOTAL INVESTMENTS (IDENTIFIED COST, $62,203,825)(B) $ 80,243,577
------------------------------------------------------------------------------------- -------------
</TABLE>
(a) Non-income producing.
(b) The cost of investments for federal tax purposes amounts to $62,203,825.
The net unrealized appreciation of investments on a federal tax basis
amounts to $18,039,752 which is comprised of $18,393,947 appreciation and
$354,195 depreciation at October 31, 1996.
(c) At or prior to maturity, the company may redeem the STRYPES initially
equal to $86.568, declining by $0.00966 on each day following the issue
date to $76.686 on April 15, 1999, and equal to $76.106 thereafter,
payable in shares of Sun-America common stock or, at the company's option,
cash with an equal value. At maturity, holders receive 2 shares of
Sunamerica (SAI) or the cash equivalent.
Note: The categories of investments are shown as a percentage of net assets
($80,636,258) at October 31, 1996.
The following abbreviations are used in this portfolio:
ADR--American Depositary Receipts
PFD--Preferred
STRYPES--Structured Yield Product Exchangeable for Stock
(See Notes which are an integral part of the Financial Statements)
VISION GROWTH AND INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------------------------
Investments in securities, at value (identified and tax cost $62,203,825) $ 80,243,577
- ---------------------------------------------------------------------------------------------------
Cash 290
- ---------------------------------------------------------------------------------------------------
Income receivable 84,762
- ---------------------------------------------------------------------------------------------------
Receivable for investments sold 149,880
- ---------------------------------------------------------------------------------------------------
Receivable for shares sold 157,674
- ---------------------------------------------------------------------------------------------------
Deferred expenses 11,872
- --------------------------------------------------------------------------------------------------- -------------
Total assets 80,648,055
- ---------------------------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------------------------
Accrued expenses $ 11,797
- ---------------------------------------------------------------------------------------- ---------
NET ASSETS for 5,401,603 shares outstanding $ 80,636,258
- --------------------------------------------------------------------------------------------------- -------------
NET ASSETS CONSISTS OF:
- ---------------------------------------------------------------------------------------------------
Paid in capital $ 59,289,245
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 18,039,752
- ---------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments 3,244,478
- ---------------------------------------------------------------------------------------------------
Undistributed net investment income 62,783
- --------------------------------------------------------------------------------------------------- -------------
Total Net Assets $ 80,636,258
- --------------------------------------------------------------------------------------------------- -------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
- ---------------------------------------------------------------------------------------------------
Net Asset Value and Redemption Proceeds Per Share ($80,636,258 / 5,401,603 shares outstanding) $14.93
- --------------------------------------------------------------------------------------------------- -------------
Offering Price Per Share (100/94.50 of $14.93)* $15.80
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
*See "What Fund Shares Cost" in the Prospectus.
(See Notes which are an integral part of the Financial Statements)
VISION GROWTH AND INCOME FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Dividends $ 695,545
- ---------------------------------------------------------------------------------------------------
Interest 43,953
- --------------------------------------------------------------------------------------------------- ------------
Total investment income 739,498
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------
Investment advisory fee $ 249,949
- ---------------------------------------------------------------------------------------
Administrative personnel and services fee 37,906
- ---------------------------------------------------------------------------------------
Custodian fees 14,216
- ---------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 50,854
- ---------------------------------------------------------------------------------------
Directors' fees 2,883
- ---------------------------------------------------------------------------------------
Auditing fees 7,100
- ---------------------------------------------------------------------------------------
Legal fees 2,991
- ---------------------------------------------------------------------------------------
Portfolio accounting fees 19,867
- ---------------------------------------------------------------------------------------
Share registration costs 10,779
- ---------------------------------------------------------------------------------------
Printing and postage 8,833
- ---------------------------------------------------------------------------------------
Insurance premiums 2,060
- ---------------------------------------------------------------------------------------
Miscellaneous 5,399
- --------------------------------------------------------------------------------------- ----------
Total expenses 412,837
- ---------------------------------------------------------------------------------------
Net investment income 326,661
- --------------------------------------------------------------------------------------------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ---------------------------------------------------------------------------------------------------
Net realized gain on investments 1,699,708
- ---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments 6,626,688
- --------------------------------------------------------------------------------------------------- ------------
Net realized and unrealized gain on investments 8,326,396
- --------------------------------------------------------------------------------------------------- ------------
Change in net assets resulting from operations $ 8,653,057
- --------------------------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
VISION GROWTH AND INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
OCTOBER 31, 1996 ENDED
(UNAUDITED) APRIL 30, 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------------------------
Net investment income $ 326,661 $ 555,866
- -------------------------------------------------------------------------
Net realized gain on investments ($1,699,708 net gain and $1,761,551 net
gain, respectively, as computed for federal tax purposes) 1,699,708 3,963,102
- -------------------------------------------------------------------------
Net change in unrealized appreciation of investments 6,626,688 8,253,407
- ------------------------------------------------------------------------- -------------------- ----------------
Change in net assets resulting from operations 8,653,057 12,772,375
- ------------------------------------------------------------------------- -------------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------------------------------------
Distributions from net investment income (350,383) (473,581)
- ------------------------------------------------------------------------- -------------------- ----------------
SHARE TRANSACTIONS--
- -------------------------------------------------------------------------
Proceeds from sale of shares 9,684,445 17,414,577
- -------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 187,944 243,366
- -------------------------------------------------------------------------
Cost of shares redeemed (2,657,473) (4,195,783)
- ------------------------------------------------------------------------- -------------------- ----------------
Change in net assets resulting from share transactions 7,214,916 13,462,160
- ------------------------------------------------------------------------- -------------------- ----------------
Change in net assets 15,517,590 25,760,954
- -------------------------------------------------------------------------
NET ASSETS:
- -------------------------------------------------------------------------
Beginning of period 65,118,668 39,357,714
- ------------------------------------------------------------------------- -------------------- ----------------
End of period (including undistributed net investment income of $62,783
and $86,505, respectively) $ 80,636,258 $ 65,118,668
- ------------------------------------------------------------------------- -------------------- ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
VISION GROWTH AND INCOME FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Vision Group of Funds, Inc. (the "Corporation") is registered under the
Investment Company Act of 1940, as amended (the "Act") as an open-end,
management investment company. The Corporation consists of seven portfolios. The
financial statements included herein are only those of Vision Growth and Income
Fund (the "Fund"), a diversified portfolio. The financial statements of the
other portfolios are presented separately. The assets of each portfolio are
segregated and a shareholder's interest is limited to the portfolio in which
shares are held. The investment objective of the Fund is to provide long-term
growth of capital and income.
(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.
INVESTMENT VALUATIONS--Listed equity securities are valued at the last sale
price reported on national securities exchanges. Short-term securities are
valued at the prices provided by an independent pricing service. However,
short-term securities with remaining maturities of sixty days or less at
the time of purchase may be valued at amortized cost, which approximates
fair market value. Investments in other open-ended regulated investment
companies are valued at net asset value.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
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 reviewed or established by the Board of Directors (the
"Directors"). 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.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal
VISION GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
Revenue Code, as amended (the "Code"). Dividend income and distributions to
shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
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 maintains 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.
DEFERRED EXPENSES--The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized over a period not to exceed five years from the Fund's
commencement date.
OPTION CONTRACTS WRITTEN--The Fund may purchase put options on its
portfolio securities. These options will be used as a hedge to attempt to
protect securities which the Fund holds against fluctuations in value. The
Fund may also write put and call options on all or any portion of its
portfolio securities to generate income for the Fund. The Fund will write
put and call options on securities either held in its portfolio or for
which the Fund has the right to obtain without payment of future
consideration or for which it has segregated cash in the amount of any
additional consideration. The Fund may also purchase call options on
securities to protect against price movements in particular securities
which the Fund intends to purchase. A written option obligates the Fund to
deliver (a call) or to receive (a put), the contract amount upon exercise
by the holder of the option. By writing call options, the Fund may forego
potential gains on the underlying security. By writing a put option, the
Fund risks becoming obligated to purchase the underlying security for more
than its current market price upon exercise. Premiums received from writing
options are recorded as a liability and an unrealized gain or loss is
measured by the difference between the current value and the premium
received. For the period ended October 31, 1996, the Fund had realized gain
(loss) on option contracts of $69,348.
VISION GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
The following is a summary of the Fund's written option activity:
<TABLE>
<CAPTION>
NUMBER OF
CONTRACTS PROCEEDS
<S> <C> <C>
Outstanding at May 1, 1996 0 $0
- -------------------------------------------
Contracts opened 240 $318,852
- -------------------------------------------
Contracts expired 0 $0
- -------------------------------------------
Contracts exercised 240 $388,200
- -------------------------------------------
Contracts closed 0 $0
- -------------------------------------------
Outstanding at October 31, 1996 0 $0
- -------------------------------------------
</TABLE>
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,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) CAPITAL STOCK
At October 31, 1996, there were 1,000,000,000 shares of $0.001 par value capital
stock authorized. Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
OCTOBER 31, APRIL 30,
1996 1996
<S> <C> <C>
Shares sold 699,463 1,412,452
- ----------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 13,505 19,938
- ----------------------------------------------------------------------------------
Shares redeemed (190,901) (353,723)
- ---------------------------------------------------------------------------------- -------------- --------------
Net change resulting from share transactions 522,067 1,078,667
- ---------------------------------------------------------------------------------- -------------- --------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Manufacturers and Traders Trust Company, the Fund's
investment adviser (the "Adviser"), receives for its services an annual
investment advisory fee equal to 0.70% of the Fund's average daily net assets.
The Adviser has entered into a sub-advisory contract with Harbor Capital
Management Company, Inc. (the "Sub-Adviser"). The Adviser shall pay Sub-Adviser
up to 0.50% of the Fund's average daily net assets up to $100 million and 0.40%
of such assets in excess thereof.
VISION GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. The fee paid to FAS is based
on the level of average aggregate net assets of the Corporation for the period.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
reimburse Federated Securities Corp. ("FSC") the principal distributor, from the
net assets of the Fund to finance activities intended to result in the sale of
the Fund's shares. The Plan provides that the Fund may incur distribution
expenses up to 0.25% of the average daily net assets of the Fund, annually, to
compensate FSC. The Fund did not pay or accrue distribution expenses during the
period ended October 31, 1996.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Manufacturers and Traders Trust Company, the Fund will pay Manufacturers
and Traders Trust Company up to 0.25% of average daily net assets of the Fund
for the period. This fee is to obtain certain services for shareholders and to
maintain shareholder accounts. The Fund did not pay or accrue shareholder
services expenses during the period ended October 31, 1996.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company, through
its subsidiary, Federated Shareholder Services Company ("FSSC"), serves as
transfer and dividend disbursing agent for the Fund for which it receives a fee.
The fee paid to FSSC is based on the size, type, and number of accounts and
transactions made by shareholders.
ORGANIZATIONAL EXPENSES--Organizational expenses of $18,626 were borne initially
by FAS. The Fund has agreed to reimburse FAS for the organizational expenses
during the five year period following November 2, 1993 (date the Fund became
effective). For the period ended October 31, 1996, the Fund paid $4,830 pursuant
to this agreement.
GENERAL--Certain Officers of the Corporation are Officers and Directors or
Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended October 31, 1996, were as follows:
<TABLE>
<S> <C>
PURCHASES $ 27,265,088
- --------------------------------------------------------------------------------------------------- -------------
SALES $ 21,237,852
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
DIRECTORS OFFICERS
- -----------------------------------------------------------------------
Randall I. Benderson Edward C. Gonzales
Joseph J. Castiglia President and Treasurer
Daniel R. Gernatt, Jr. Charles L. Davis, Jr.
George K. Hambleton, Jr. Vice President and Assistant Treasurer
Victor R. Siclari
Secretary
C. Todd Gibson
Assistant Secretary
SHARES OF THE VISION FUNDS ARE NOT FDIC INSURED OR OTHERWISE PROTECTED BY THE
U.S. GOVERNMENT, ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR GUARANTEED BY,
MANUFACTURERS AND TRADERS TRUST COMPANY ("M&T BANK"), AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
[LOGO OF VISION GROUP OF FUNDS]
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
OCTOBER 31, 1996
- --------------------------------------------------------------------------------
VISION
Growth
and Income
Fund
- --------------------------------------------------------------------------------
Manufacturers and Traders Trust Company
Investment Adviser to the Funds
One M&T Plaza
Buffalo, NY 14240-4556
[RECYCLED PAPER LOGO]
Federated Securities Corp.
Distributor
Federated Investors Tower
Pittsburgh, PA 15222-3779
Cusip 92830F604
GOO161-O1 (12/96)
VISION
U.S. Government
Securities
Fund
Seeks current income by investing primarily in
securities that are guaranteed for payment of principal
and interest by the U.S. Government, its agencies or
instrumentalities (Fund shares themselves are not
guaranteed). Capital appreciation is a
secondary investment consideration.
- --------------------------------------------------------
VISION
New York Tax-Free
Securities
Fund
Seeks current income that is exempt from
federal regular income tax, (some of the income
may be subject to the federal alternative minimum tax)
and New York State and New York City personal income taxes,
and is consistent with preservation of capital.
- --------------------------------------------------------
VISION
Growth and Income
Securities
Fund
Seeks to provide long-term growth of capital and
income by investing in a diversified portfolio consisting
primarily of equity securities (common stock and convertible
securities) and debt securities (bonds and notes).
- --------------------------------------------------------
VISION
Capital Appreciation
Securities
Fund
Seeks to produce long-term capital appreciation,
primarily through a diversified portfolio of
mid-capitalization stocks selected for their ability
to appreciate in value.
- --------------------------------------------------------
VISION
Money Market
Securities
Fund
Seeks current income with liquidity and stability
of principal by investing in high-quality money
market instruments.
- --------------------------------------------------------
VISION
Treasury Money Market
Securities
Fund
Primarily seeks current income with liquidity
and stability of principal by investing in direct
obligations of the U.S. Treasury, which are guaranteed
by the U.S. Government for timely payment of principal
and interest, (Fund shares themselves are not guaranteed),
and repurchase agreements secured by these obligations.
- --------------------------------------------------------
VISION
New York Tax-Free
Securities
Fund
Seeks as high a level of current interest income
that is exempt from federal regular income tax (some
of the income may be subject to the federal alternative
minimum tax) as is consistent with liquidity and relative
stability of principal. In addition, the Fund seeks to
provide income that is exempt from New York State and
New York City personal income taxes.
- --------------------------------------------------------
For more complete information about any of the Vision Funds,
contact (800) 836-2211 for a prospectus. Please read the
prospectus carefully before investing.
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the first report to shareholders for Vision Capital
Appreciation Fund. This document covers the period from July 3, 1996, when the
fund first began operations, through October 31, 1996. Inside, you will find
operating and financial information for the fund including a list of fund
holdings and financial statements.
Vision Capital Appreciation Fund is the newest and most aggressive member of the
Vision family. To help your investment grow over time, it focuses primarily on
stocks issued by mid-size companies selected for their ability to appreciate in
value. These holdings are diversified among key business sectors, while
concentrating on sectors that offer opportunities for value.
In just four months of operation in a favorable stock market environment, the
fund produced a cumulative total return of 9.17% (unadjusted for the fund's
sales charge) resulting from dividends totaling $0.03 per share and an 9%
increase in share price.*
By the end of the period, shareholders had invested a total of $15 million in
Vision Capital Appreciation Fund. Thank you being among the first to take
advantage of the growth potential of mid-size companies through this fund. We
welcome your questions and comments as we keep you informed about the progress
of your investment.
Sincerely,
Edward C. Gonzales
President
December 15, 1996
* Performance quoted is based on net asset value and reflects past performance.
Performance is not indicative of future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost. Cumulative total return
for the period adjusted for the fund's sales charge was 3.18%.
A. Please insert the following "Financial Highlights" table as page 4 of the
prospectus. In addition, please add the heading "Financial Highlights" to
the Table of Contents page as the first entry.
VISION CAPITAL APPRECIATION FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
PERIOD ENDED
OCTOBER 31, 1996
(UNAUDITED)(A)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
- --------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------
Net investment income 0.03
- --------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments 0.89
- -------------------------------------------------------------------------------------------- -------
Total from investment operations 0.92
- -------------------------------------------------------------------------------------------- -------
LESS DISTRIBUTIONS
- --------------------------------------------------------------------------------------------
Distributions from net investment income (0.03)
- -------------------------------------------------------------------------------------------- -------
NET ASSET VALUE, END OF PERIOD $ 10.89
- -------------------------------------------------------------------------------------------- -------
TOTAL RETURN (B) 9.17%
- --------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------------------------------------------
Expenses 0.00%(c)
- --------------------------------------------------------------------------------------------
Net investment income 1.05%(c)
- --------------------------------------------------------------------------------------------
Expense waiver/reimbursement (d) 2.07%(c)
- --------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted)
$14,967
- --------------------------------------------------------------------------------------------
Average commission rate paid 0.0531
- --------------------------------------------------------------------------------------------
Portfolio turnover 8 %
- --------------------------------------------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from July 3, 1996 (date of initial
public investment) to October 31, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
B. Please insert the following as the last sentence of the first paragraph
under the section entitled "Voting Rights and Other Information" on page
23.
"As of December 4, 1996, Reho & Co., Buffalo, New York, owned 75.25% of the
voting securities of the Fund, and, therefore, may for certain purposes be
deemed to control the Fund and be able to affect the outcome of certain
matters presented for a vote of shareholders."
C. Please insert the following Financial Statements after the section
entitled "How the Fund Shows Performance" and before the address page. In
addition, please add the heading "Financial Statements" to the Table of
Contents page after the heading "How the Fund Shows Performance."
VISION CAPITAL APPRECIATION FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ---------- -------------------------------------------------------------------------------------- -------------
COMMON STOCKS--93.1%
- --------------------------------------------------------------------------------------------------
AUTO PARTS & EQUIPMENT--1.3%
--------------------------------------------------------------------------------------
8,300 (a)Gentex Corp. $ 197,125
-------------------------------------------------------------------------------------- -------------
BANKING--3.2%
--------------------------------------------------------------------------------------
5,300 Star Banc Corp. 477,000
-------------------------------------------------------------------------------------- -------------
BASIC INDUSTRY--4.7%
--------------------------------------------------------------------------------------
10,000 IMC Global, Inc. 375,000
--------------------------------------------------------------------------------------
4,500 Potash Corporation Sask, Inc. 318,938
-------------------------------------------------------------------------------------- -------------
Total 693,938
-------------------------------------------------------------------------------------- -------------
BUILDING PRODUCTS--2.1%
--------------------------------------------------------------------------------------
9,600 Medusa Corp. 315,600
-------------------------------------------------------------------------------------- -------------
CHEMICALS--0.9%
--------------------------------------------------------------------------------------
8,500 Albemarle Corp. 137,062
-------------------------------------------------------------------------------------- -------------
COMPUTERS--8.6%
--------------------------------------------------------------------------------------
12,300 (a)Banctec, Inc. 250,613
--------------------------------------------------------------------------------------
16,400 (a)Cheyenne Software, Inc. 498,150
--------------------------------------------------------------------------------------
20,500 (a)EMC Corp., Mass 538,125
-------------------------------------------------------------------------------------- -------------
Total 1,286,888
-------------------------------------------------------------------------------------- -------------
</TABLE>
VISION CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ---------- -------------------------------------------------------------------------------------- -------------
COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------------------
CONSUMER DURABLES--2.5%
--------------------------------------------------------------------------------------
14,000 Oakwood Homes Corp. $ 371,000
-------------------------------------------------------------------------------------- -------------
DIVERSIFIED OPERATIONS--5.0%
--------------------------------------------------------------------------------------
7,200 Harnischfeger Industries, Inc. 288,000
--------------------------------------------------------------------------------------
9,400 Tyco International Ltd. 466,475
-------------------------------------------------------------------------------------- -------------
Total 754,475
-------------------------------------------------------------------------------------- -------------
FINANCE--12.3%
--------------------------------------------------------------------------------------
8,400 Beneficial Corp. 491,400
--------------------------------------------------------------------------------------
19,900 (a)Olympic Financial Ltd. 315,913
--------------------------------------------------------------------------------------
16,600 Schwab (Charles) Corp. 415,000
--------------------------------------------------------------------------------------
20,700 Synovus Financial Corp. 618,412
-------------------------------------------------------------------------------------- -------------
Total 1,840,725
-------------------------------------------------------------------------------------- -------------
FOOD SERVICES--5.0%
--------------------------------------------------------------------------------------
15,400 Flowers Industry, Inc. 359,975
--------------------------------------------------------------------------------------
6,900 (a)Vons Companies, Inc. 382,088
-------------------------------------------------------------------------------------- -------------
Total 742,063
-------------------------------------------------------------------------------------- -------------
HEALTHCARE--4.7%
--------------------------------------------------------------------------------------
15,700 (a)Apria Healthcare Group, Inc. 300,262
--------------------------------------------------------------------------------------
9,000 (a)Healthcare COMPARE Corp. 396,000
-------------------------------------------------------------------------------------- -------------
Total 696,262
-------------------------------------------------------------------------------------- -------------
HOTEL--2.8%
--------------------------------------------------------------------------------------
18,900 (a)Mirage Resorts, Inc. 415,800
-------------------------------------------------------------------------------------- -------------
INDUSTRIAL PRODUCTS--1.1%
--------------------------------------------------------------------------------------
4,600 (a)Thermo Electron Corp. 167,900
-------------------------------------------------------------------------------------- -------------
INSURANCE--1.8%
--------------------------------------------------------------------------------------
9,300 TIG Holdings, Inc. 268,537
-------------------------------------------------------------------------------------- -------------
LOTTERY SERVICES--2.1%
--------------------------------------------------------------------------------------
10,800 (a)Gtech Holdings Corp. 318,600
-------------------------------------------------------------------------------------- -------------
</TABLE>
VISION CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ---------- -------------------------------------------------------------------------------------- -------------
COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------------------
MEDICAL INSTRUMENTS/PRODUCTS--5.2%
--------------------------------------------------------------------------------------
10,200 (a)St. Jude Medicine, Inc. $ 402,900
--------------------------------------------------------------------------------------
10,000 (a)Steris Corp. 377,500
-------------------------------------------------------------------------------------- -------------
Total 780,400
-------------------------------------------------------------------------------------- -------------
OIL/GAS--9.0%
--------------------------------------------------------------------------------------
19,400 (a)Global Marine, Inc. 356,475
--------------------------------------------------------------------------------------
7,500 Tosco Corp. 420,937
--------------------------------------------------------------------------------------
6,600 Transocean Offshore, Inc. 417,450
--------------------------------------------------------------------------------------
6,600 Valero Energy Corp. 156,750
-------------------------------------------------------------------------------------- -------------
Total 1,351,612
-------------------------------------------------------------------------------------- -------------
RETAIL--3.9%
--------------------------------------------------------------------------------------
6,800 (a)Consolidated Stores Corp. 262,650
--------------------------------------------------------------------------------------
17,500 (a)Staples, Inc. 325,938
-------------------------------------------------------------------------------------- -------------
Total 588,588
-------------------------------------------------------------------------------------- -------------
SERVICES--2.4%
--------------------------------------------------------------------------------------
12,300 (a)Calenergy, Inc. 356,700
-------------------------------------------------------------------------------------- -------------
TECHNOLOGY--11.9%
--------------------------------------------------------------------------------------
11,400 (a)Analog Devices, Inc. 296,400
--------------------------------------------------------------------------------------
8,400 (a)Cisco Systems, Inc. 519,750
--------------------------------------------------------------------------------------
14,400 (a)Newbridge Networks Corp. 455,400
--------------------------------------------------------------------------------------
3,300 (a)Sun Microsystems, Inc. 201,300
--------------------------------------------------------------------------------------
19,800 (a)Teradyne, Inc. 314,325
-------------------------------------------------------------------------------------- -------------
Total 1,787,175
-------------------------------------------------------------------------------------- -------------
TELECOMMUNICATIONS--2.0%
--------------------------------------------------------------------------------------
6,000 (a)MFS Communications, Inc. 300,750
-------------------------------------------------------------------------------------- -------------
</TABLE>
VISION CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ---------- -------------------------------------------------------------------------------------- -------------
COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------------------
TRANSPORTATION--0.6%
--------------------------------------------------------------------------------------
4,200 Atlantic Southeast Airlines, Inc. $ 88,200
-------------------------------------------------------------------------------------- -------------
TOTAL COMMON STOCKS (IDENTIFIED COST $12,905,638) 13,936,400
-------------------------------------------------------------------------------------- -------------
MUTUAL FUND SHARES--5.8%
- --------------------------------------------------------------------------------------------------
$ 872,221 Seven Seas Money Market Fund (at net asset value) 872,221
-------------------------------------------------------------------------------------- -------------
TOTAL INVESTMENTS (IDENTIFIED COST $13,777,859)(B) $ 14,808,621
-------------------------------------------------------------------------------------- -------------
</TABLE>
(a) Non-income producing security.
(b) The cost of investments for federal tax purposes amounts to $13,777,859. The
net unrealized appreciation of investments on a federal tax basis amounts to
$1,030,762 which is comprised of $1,450,200 appreciation and $419,438
depreciation at October 31, 1996.
Note: The categories of investments are shown as a percentage of net assets
($14,966,988) at
October 31, 1996.
(See Notes which are an integral part of the Financial Statements)
VISION CAPITAL APPRECIATION FUND
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------------------------
Investments in securities, at value
(identified and tax cost $13,777,859) $ 14,808,621
- ---------------------------------------------------------------------------------------------------
Income receivable 7,677
- ---------------------------------------------------------------------------------------------------
Receivable for shares sold 137,814
- ---------------------------------------------------------------------------------------------------
Deferred expenses 31,811
- --------------------------------------------------------------------------------------------------- -------------
Total assets 14,985,923
- ---------------------------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------------------------
Accrued expenses 18,935
- --------------------------------------------------------------------------------------------------- -------------
NET ASSETS for 1,373,753 shares outstanding $ 14,966,988
- --------------------------------------------------------------------------------------------------- -------------
NET ASSETS CONSISTS OF:
- ---------------------------------------------------------------------------------------------------
Paid in capital $ 13,800,229
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 1,030,762
- ---------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments 125,947
- ---------------------------------------------------------------------------------------------------
Undistributed net investment income 10,050
- --------------------------------------------------------------------------------------------------- -------------
Total Net Assets $ 14,966,988
- --------------------------------------------------------------------------------------------------- -------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
- ---------------------------------------------------------------------------------------------------
Net Asset Value and Redemption Proceeds Per Share
($14,966,988 / 1,373,753 shares outstanding) $10.89
- --------------------------------------------------------------------------------------------------- -------------
Offering Price Per Share (100/94.50 of $10.89)* $11.52
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
*See "What Fund Shares Cost" in the Prospectus.
(See Notes which are an integral part of the Financial Statements)
VISION CAPITAL APPRECIATION FUND
STATEMENT OF OPERATIONS
PERIOD ENDED OCTOBER 31, 1996 (UNAUDITED)*
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Dividends $ 26,738
- ---------------------------------------------------------------------------------------------------
Interest 15,042
- --------------------------------------------------------------------------------------------------- ------------
Total investment income 41,780
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------
Investment advisory fee $ 33,799
- ---------------------------------------------------------------------------------------
Administrative personnel and services fee 16,576
- ---------------------------------------------------------------------------------------
Custodian fees 5,567
- ---------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 5,965
- ---------------------------------------------------------------------------------------
Directors' fees 1,193
- ---------------------------------------------------------------------------------------
Legal fees 1,590
- ---------------------------------------------------------------------------------------
Portfolio accounting fees 8,748
- ---------------------------------------------------------------------------------------
Share registration costs 4,771
- ---------------------------------------------------------------------------------------
Printing and postage 1,988
- ---------------------------------------------------------------------------------------
Insurance premiums 795
- ---------------------------------------------------------------------------------------
Taxes 398
- ---------------------------------------------------------------------------------------
Miscellaneous 795
- --------------------------------------------------------------------------------------- ----------
Total expenses 82,185
- ---------------------------------------------------------------------------------------
Waivers and reimbursements--
- ----------------------------------------------------------------------------
Waiver of investment advisory fee ($33,799)
- ----------------------------------------------------------------------------
Waiver of administrative personnel and services fee (16,576)
- ----------------------------------------------------------------------------
Reimbursement of other operating expenses by Adviser (31,810)
- ---------------------------------------------------------------------------- ---------
Total waivers and reimbursements (82,185)
- --------------------------------------------------------------------------------------- ----------
Net expenses --
- --------------------------------------------------------------------------------------------------- ------------
Net investment income 41,780
- --------------------------------------------------------------------------------------------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ---------------------------------------------------------------------------------------------------
Net realized gain on investments 125,947
- ---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments 1,030,762
- --------------------------------------------------------------------------------------------------- ------------
Net realized and unrealized gain on investments 1,156,709
- --------------------------------------------------------------------------------------------------- ------------
Change in net assets resulting from operations $ 1,198,489
- --------------------------------------------------------------------------------------------------- ------------
</TABLE>
*For the period from July 3, 1996 (date of initial public investment) to October
31, 1996.
(See Notes which are an integral part of the Financial Statements)
VISION CAPITAL APPRECIATION FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED
OCTOBER 31,1996*
(UNAUDITED)
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------------------------------------------
Net investment income $ 41,780
- -------------------------------------------------------------------------------------------
Net realized gain on investments ($125,947 net gain as computed
for federal tax purposes) 125,947
- -------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments 1,030,762
- ------------------------------------------------------------------------------------------- ---------------------
Change in net assets resulting from operations 1,198,489
- ------------------------------------------------------------------------------------------- ---------------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------------------------------------------------------
Distributions from net investment income (31,730)
- ------------------------------------------------------------------------------------------- ---------------------
SHARE TRANSACTIONS--
- -------------------------------------------------------------------------------------------
Proceeds from sale of shares 13,772,534
- -------------------------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment
of distributions declared 31,278
- -------------------------------------------------------------------------------------------
Cost of shares redeemed (3,583)
- ------------------------------------------------------------------------------------------- ---------------------
Change in net assets resulting from share transactions 13,800,229
- ------------------------------------------------------------------------------------------- ---------------------
Change in net assets 14,966,988
- -------------------------------------------------------------------------------------------
NET ASSETS:
- -------------------------------------------------------------------------------------------
Beginning of period --
- ------------------------------------------------------------------------------------------- ---------------------
End of period (including undisributed net investment income of $10,050) $ 14,966,988
- ------------------------------------------------------------------------------------------- ---------------------
</TABLE>
*For the period from July 3, 1996 (date of initial public investment) to October
31, 1996.
(See Notes which are an integral part of the Financial Statements)
VISION CAPITAL APPRECIATION FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Vision Group of Funds, Inc. (the "Corporation") is registered under the
Investment Company Act of 1940, as amended (the "Act") as an open-end,
management investment company. The Corporation consists of seven portfolios. The
financial statements included herein are only those of Vision Capital
Appreciation Fund (the "Fund"), a diversified portfolio. The financial
statements of the other portfolios are presented separately. The assets of each
portfolio are segregated and a shareholder's interest is limited to the
portfolio in which shares are held. The investment objective of the Fund is to
produce long-term capital appreciation.
(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.
INVESTMENT VALUATIONS--Listed equity securities are valued at the last sale
price reported on a national securities exchange. Short-term securities are
valued at the prices provided by an independent pricing service. However,
short-term securities with remaining maturities of sixty days or less at
the time of purchase may be valued at amortized cost, which approximates
fair market value. Investments in other open-end regulated investment
companies are valued at net asset value.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code"). Dividend
income and distributions to shareholders are recorded on the ex-dividend
date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
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 maintains 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.
DEFERRED EXPENSES--The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred
and are being amortized over a period not to exceed five years from the
Fund's commencement date.
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,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) CAPITAL STOCK
At October 31, 1996, there were 1,000,000,000 shares of $0.001 par value capital
stock authorized.
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
PERIOD ENDED
OCTOBER 31, 1996(A)
<S> <C>
Shares sold 1,371,121
- ------------------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 2,979
- ------------------------------------------------------------------------------------------
Shares redeemed (347)
- ------------------------------------------------------------------------------------------ ------------
Net change resulting from share transactions 1,373,753
- ------------------------------------------------------------------------------------------ ------------
</TABLE>
(a) For the period from July 3, 1996 (date of initial public investment) to
October 31, 1996.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Manufacturers and Traders Trust Company, the Fund's
investment adviser (the "Adviser"), receives for its services an annual
investment advisory fee equal to 0.85% of the Fund's average daily net assets.
The Adviser may voluntarily choose to waive a portion of its fee and/or
reimburse certain operating expenses of the Fund. The Adviser can modify or
terminate this voluntary waiver and/or reimbursement at any time at its sole
discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. The fee paid to FAS is based
on the level of average aggregate net assets of the Corporation for the period.
FAS may voluntarily choose to waive a portion of its fee.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
reimburse Federated Securities Corp. ("FSC"), the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund. The Plan provides that the Fund may incur distribution
expenses up to 0.25% of the average daily net assets of the Fund, annually, to
compensate FSC. The Fund did not pay or accrue distribution expenses during the
period ended October 31, 1996.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Manufacturers and Traders Trust Company, the Fund will pay Manufacturers
and Traders Trust Company up to 0.25% of average daily net assets of the Fund
for the period. This fee is to obtain certain services for shareholders and to
maintain shareholder accounts. The Fund did not pay or accrue shareholder
services expenses during the period ended October 31, 1996.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated Services
Company, through its subsidiary, Federated Shareholder Services Company
("FSSC"), serves as transfer and dividend disbursing agent for the Fund. The fee
paid to FSSC is based on the size, type, and number of accounts and transactions
made by shareholders.
ORGANIZATIONAL EXPENSES--Organizational expenses of $21,200 were borne initially
by FAS. The Fund has agreed to reimburse FAS for the organizational expenses
during the five year period following effective date. For the period ended
October 31, 1996, the Fund paid $1,178 pursuant to this agreement.
GENERAL--Certain Officers of the Corporation are Officers and Directors or
Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended October 31, 1996, were as follows:
<TABLE>
<CAPTION>
<S> <C>
PURCHASES $ 13,780,852
- --------------------------------------------------------------------------------------------------- -------------
SALES $ 1,001,160
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
<TABLE>
<CAPTION>
DIRECTORS OFFICERS
- ------------------------------------------------------------------------------------------------
<S> <C>
Randall I. Benderson Edward C. Gonzales
Joseph J. Castiglia President and Treasurer
Daniel R. Gernatt, Jr. Charles L. Davis, Jr.
George K. Hambleton, Jr. Vice President and Assistant Treasurer
Victor R. Siclari
Secretary
C. Todd Gibson
Assistant Secretary
</TABLE>
SHARES OF THE VISION FUNDS ARE NOT FDIC INSURED OR OTHERWISE PROTECTED BY THE
U.S. GOVERNMENT, ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR GUARANTEED BY,
MANUFACTURERS AND TRADERS TRUST COMPANY ("M&T BANK"), AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
This report is authorized for distribution to prospective investors only when
preceded
or accompanied by the Fund's prospectus which contains facts concerning its
objective and policies, management fees, expenses and other information.
[LOGO of VISION]
SEMI-ANNUAL REPORT
AND SUPPLEMENT
TO PROSPECTUS DATED
JUNE 5, 1996
- ------------------
Vision
Capital
Appreciation
Fund
- ------------------
OCTOBER 31, 1996
Manufacturers and Traders Trust Company
Investment Adviser to the Funds
One M&T Plaza
Buffalo, NY 14240-4556
Federated Securities Corp.
Distributor
Federated Investors Tower
Pittsburgh, PA 15222-3779
Cusip 92830F703
GOO158-O1 (12/96)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report of the Vision New York Tax-Free
Fund for the six-month period ended October 31, 1996. It begins with an
investment review by the fund's portfolio manager, followed by a list of the
fund's municipal bond holdings and complete financial information.
As a shareholder, you are pursuing monthly, double tax-free income (triple
tax-free income if you are a New York City resident).*
The fund weathered a continued difficult bond market during the six-month
reporting period characterized by fluctuating interest rates and bond prices.
Nevertheless, the fund's portfolio-- which on October 31, 1996, consisted of
nearly 100 high-quality municipal bonds--performed relatively well. Shareholders
received a monthly tax-free income stream totaling $0.24 per share over the
six-month period, and the fund's net asset value increased from $9.90 at the
beginning of the period to $10.19 at the period's end. As a result of the income
stream and increase in share price, as of October 31, 1996, the fund achieved a
six-month total return of 5.43% (unadjusted for the fund's sales charge).**
By the end of the reporting period, tax-sensitive New York residents had
invested a total of $34 million in the Vision New York Tax-Free Fund. Thank you
for joining them. We welcome your questions and comments as we keep you informed
about the progress of your investment.
Sincerely,
Edward C. Gonzales
President
December 15, 1996
* Income may be subject to the federal alternative minimum tax.
** Performance quoted is based on net asset value and reflects past performance.
Performance is not indicative of future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost. The fund's total return
for the period adjusted for the sales charge was 0.65%.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Overall, yields on municipal securities fell during the first six months of the
Vision New York Tax-Free Fund's fiscal year. On April 30, 1996, the municipal
bond market, as measured by the Bond Buyer 40 Bond Index* (yield to par basis),
was 6.50%. The yield peaked on June 10, 1996, at 6.65%, then proceeded down,
ending the semi-annual reporting period at 5.94% on October 31, 1996.
The fund took advantage of the higher yields available in the early part of the
summer by extending maturities or the duration of the fund. The total return for
the period ended October 31, 1996, of 5.43%, based on net asset value, exceeded
the 4.90% return of the Lehman Brothers New York Tax-Exempt Index.** This return
was accomplished even though the fund maintained a higher credit profile than
the index. The net asset value of the fund rose from $9.90 on May 1, 1996, to
$10.19 on October 31, 1996.
Municipal yields (as measured by the Bond Buyer 40 Bond Index*) were as high as
97.0% of 30 Year Treasury Bond yields on May 8, 1996, and as low as 86.2% on
September 17, 1996. This relationship was 89.2% on October 31, 1996.
Current conditions warrant a continuation of the longer than neutral (or
benchmark) duration for the portfolio. We are convinced a yield premium is still
embedded in market interest rates that represent a "fear factor" of faster
economic growth, coupled with increases in the level of inflation. As this yield
premium diminishes, we will move from an offensive to a defensive posture,
seeking to preserve the capital we have recently accumulated.
- ---------
* The Bond Buyer 40 Bond Index is comprised of 40 actively quoted and traded
long-term municipal bonds.
** The Lehman Brothers New York Tax-Exempt Index is a total return performance
benchmark for the New York long-term, investment grade, tax-exempt bond
market. This index is unmanaged and actual investments can not be made in an
index.
VISION NEW YORK TAX-FREE FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
OCTOBER 31,
1996 YEAR ENDED APRIL 30,
<S> <C> <C> <C> <C>
(UNAUDITED) 1996 1995 1994(A)
NET ASSET VALUE, BEGINNING OF PERIOD $9.90 $9.67 $9.61 $10.00
- -------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------
Net investment income 0.24 0.46 0.46 0.20
- -------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.29 0.23 0.06 (0.39)
- ------------------------------------------------------------------- ------- --------- --------- -----------
Total from investment operations 0.53 0.69 0.52 (0.19)
- -------------------------------------------------------------------
LESS DISTRIBUTIONS
- -------------------------------------------------------------------
Distributions from net investment income (0.24) (0.46) (0.46) (0.20)
- ------------------------------------------------------------------- ------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $10.19 $ 9.90 $ 9.67 $ 9.61
- ------------------------------------------------------------------- ------- --------- --------- -----------
TOTAL RETURN (B) 5.43% 7.18% 5.58% (1.22%)
- -------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------------------------------
Expenses 0.99%(c) 1.04% 0.40% 0.00%(c)
- -------------------------------------------------------------------
Net investment income 4.77%(c) 4.60% 4.80% 4.79%(c)
- -------------------------------------------------------------------
Expense waiver/reimbursement (d) 0.37%(c) 0.34% 1.12% 1.78%(c)
- -------------------------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------------------------
Net assets, end of period (000 omitted) $34,039 $32,621 $27,346 $25,225
- -------------------------------------------------------------------
Portfolio turnover 45 % 113% 51% 21 %
- -------------------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from September 22, 1993 (date of
initial public investment) to April 30, 1994.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
VISION NEW YORK TAX-FREE FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ----------- -------------
LONG-TERM MUNICIPAL SECURITIES--97.6%
- --------------------------------------------------------------------------------------
$ 25,000 Alden, NY, Central School District, GO UT Bonds, 6.25%,
6/15/2009 AAA $ 27,589
------------------------------------------------------------------------
1,000,000 Allegany County, NY, Industrial Development, Solid Waste Disposal,
Revenue Bonds, 6.625%, 9/1/2016 A 1,050,600
------------------------------------------------------------------------
25,000 Amherst, NY, GO UT Bonds, 6.20% (Public Improvements)/ (FGIC Insured),
4/1/2002 AAA 27,003
------------------------------------------------------------------------
25,000 Beacon, NY, City School District, GO UT Bonds, 5.10%,
7/15/2006 AAA 25,336
------------------------------------------------------------------------
100,000 Brighton, NY, Central School District, GO UT Bonds, 5.40%, 6/1/2011 AAA 100,345
------------------------------------------------------------------------
50,000 Brockport, NY, Central School District, GO UT Bonds, 5.40%, 6/15/2011 AAA 50,150
------------------------------------------------------------------------
50,000 Broome County, NY, COPs, Public Safety Facility, 5.25%,
4/1/2022 AAA 47,156
------------------------------------------------------------------------
70,000 Buffalo & Ft. Erie, NY, Pub B, Revenue Bonds, 6.00%,
1/1/2004 AAA 75,191
------------------------------------------------------------------------
100,000 Canandaigua, NY, City School District, GO UT Bonds, 5.00% (AMBAC
Insured), 6/1/2009 AAA 98,392
------------------------------------------------------------------------
50,000 Chautauqua County, NY, GO UT Bonds, 6.40% (FGIC Insured), 9/15/2004 AAA 55,484
------------------------------------------------------------------------
50,000 Cheektowaga-Maryvale, NY,Union Free School District, GO UT Bonds, 6.625%
(FGIC Insured), 6/15/2008 AAA 56,974
------------------------------------------------------------------------
50,000 Cheektowaga, NY, GO UT Bonds, (Series A), 6.55%,
10/15/2008 A 55,669
------------------------------------------------------------------------
100,000 Cheektowaga, NY, Central School District, GO UT Bonds, 5.875%, 6/1/2014 Aaa 103,566
------------------------------------------------------------------------
25,000 Cheektowaga, NY, GO UT Bonds, 5.65%, 8/15/2005 A 26,196
------------------------------------------------------------------------
</TABLE>
VISION NEW YORK TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ----------- -------------
LONG-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
$ 50,000 Chemung County, NY, GO UT Bonds, 6.80% (AMBAC Insured), 7/15/2006 AAA $ 57,243
------------------------------------------------------------------------
25,000 Chenango County, NY, 6.40%, 12/15/2008 A 27,730
------------------------------------------------------------------------
50,000 Churchville Chili, NY, Central School District, GO UT Bonds, 5.50%,
6/15/2009 AAA 51,256
------------------------------------------------------------------------
25,000 Dutchess County, NY, GO UT Bonds, 8.50%, 7/15/2007 Aa1 32,243
------------------------------------------------------------------------
25,000 East Bloomfield, NY, Central School District, 7.125%,
6/15/2004 AAA 28,919
------------------------------------------------------------------------
50,000 Erie County, NY, Water Authority, Revenue Bonds, (Series A), 6.00%,
12/1/2008 AAA 53,345
------------------------------------------------------------------------
1,380,000 Essex County, NY, Industrial Development Agency, Solid Waste
Disposal/International Paper, Revenue Bonds, 5.80%, 12/1/2019 A- 1,354,967
------------------------------------------------------------------------
55,000 Evans & Brant, NY, Central School District, GO UT Bonds, 6.85% (MBIA
Insured), 6/15/2009 AAA 63,567
------------------------------------------------------------------------
20,000 Frontier, NY, Central School District, Hamburg Township, GO UT Bonds,
9.50%, 6/1/2002 AAA 24,759
------------------------------------------------------------------------
70,000 General Brown Central School District, GO UT Bonds, 5.70% (MBIA
Insured), 6/15/2014 AAA 71,210
------------------------------------------------------------------------
25,000 Genesee County, NY, GO UT Bonds, 5.30%, 8/15/2009 Aaa 25,153
------------------------------------------------------------------------
50,000 Greece, NY, Central School District, GO UT Bonds, 6.00% (FGIC Insured),
6/15/2004 AAA 54,071
------------------------------------------------------------------------
30,000 Greece, NY, GO UT Bonds, 6.25%, 12/1/2007 AAA 33,119
------------------------------------------------------------------------
50,000 Guilderland, NY, GO UT Bonds, 6.40%, 9/15/2015 AAA 56,154
------------------------------------------------------------------------
100,000 Hamburg, NY, Central School District, GO UT Bonds, 6.10% (AMBAC
Insured), 5/15/2004 AAA 109,097
------------------------------------------------------------------------
25,000 Hamburg, NY, 6.30%, 11/15/2010 AAA 27,782
------------------------------------------------------------------------
50,000 Hanover Town, NY, GO UT Bonds, 9.80%, 9/1/2004 AAA 66,672
------------------------------------------------------------------------
</TABLE>
VISION NEW YORK TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ----------- -------------
LONG-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
$ 1,025,000 Housing, NY, Refunded Corporate Revenue Bonds, 5.00%, 11/1/2013 AA $ 954,931
------------------------------------------------------------------------
100,000 Housing, NY, Refunded Corporate Revenue Bonds, 5.00%, 11/1/2018 AA 90,358
------------------------------------------------------------------------
25,000 Irondequoit, NY, GO UT Bonds, 5.00%, 8/15/2011 AAA 24,099
------------------------------------------------------------------------
25,000 Ithaca, NY, GO UT Bonds, 6.40%, 4/1/2009 Aa 27,585
------------------------------------------------------------------------
30,000 Ithaca Town, NY, GO UT Bonds, 6.70%, 7/15/2005 Aa 33,959
------------------------------------------------------------------------
50,000 Ithaca Town, NY, 6.80%, 5/15/2003 Aa 56,285
------------------------------------------------------------------------
1,370,000 Jamestown, NY, Housing Authority Mortgage Revenue Bonds, 6.125% (Bradmar
Village Project)/(HUD Section 8 Insured), 7/1/2010 A- 1,388,043
------------------------------------------------------------------------
30,000 Kenmore, NY, GO UT Bonds, 5.20% (AMBAC Insured),
2/15/2010 AAA 29,898
------------------------------------------------------------------------
25,000 LaGrange, NY, Public Impt., GO UT Bonds, 7.70%, 4/15/2006 AAA 30,023
------------------------------------------------------------------------
50,000 Lakewood, NY, Public Impt., 5.50%, 4/1/2012 Baa1 49,792
------------------------------------------------------------------------
100,000 Lancaster Town, NY, GO UT Bonds, 5.70% (MBIA Insured), 6/1/2009 AAA 104,486
------------------------------------------------------------------------
25,000 Lewiston Town, NY, GO UT Bonds, 5.50%, 5/1/2014 Aaa 25,295
------------------------------------------------------------------------
50,000 Monroe County, NY, Industrial Development Agency, Civic
Facility-Nazareth College, Revenue Bonds, 5.80%, 6/1/2010 AAA 51,403
------------------------------------------------------------------------
25,000 Monroe County, NY, Public Impt., Unrefunded Balance, GO UT Bonds, 6.05%,
6/1/2013 AAA 25,894
------------------------------------------------------------------------
50,000 New Paltz, NY, Central School District, 6.00% (AMBAC Insured), 6/15/2008 AAA 54,249
------------------------------------------------------------------------
100,000 New York City, Housing Dev. Corp. Multi-Unit Mtg. Loan, (Series A),
Revenue Bonds, 7.35% (FHA Insured), 6/1/2019 AAA 106,155
------------------------------------------------------------------------
1,500,000 New York City, Industrial Development Agency, Civic Facility Revenue,
(Nightingale-Bamford School Project), Revenue Bonds, 5.85%, 1/15/2020 A 1,503,435
------------------------------------------------------------------------
</TABLE>
VISION NEW YORK TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ----------- -------------
LONG-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
$ 1,500,000 New York, NY, Industrial Development Agency, Revenue Bonds, 6.90%,
8/1/2024 Baa2 $ 1,597,800
------------------------------------------------------------------------
450,000 New York State, GO UT Bonds, 9.875%, 11/15/2004 A- 597,267
------------------------------------------------------------------------
1,000,000 New York State, GO UT Bonds, 12.00%, 11/15/2003 A- 1,423,890
------------------------------------------------------------------------
340,000 New York State, GO UT Bonds, 6.30%, 9/15/2012 A 361,740
------------------------------------------------------------------------
20,000 New York State Dormitory Authority Revenue Bonds,
(Series D), 5.00% (University of Rochester), 7/1/2005 AAA 20,371
------------------------------------------------------------------------
1,200,000 New York State Dormitory Authority Revenue Bonds,
(Series F), 5.00% (City University), 7/1/2020 BBB 1,035,036
------------------------------------------------------------------------
1,200,000 New York State Dormitory Authority Revenue Bonds, 5.75% (Department of
Health), 7/1/2006 BBB 1,233,936
------------------------------------------------------------------------
100,000 New York State Dormitory Authority Revenue Bonds, 6.00% (Colgate
University)/(MBIA GO of Univ. Insured), 7/1/2016 AAA 107,143
------------------------------------------------------------------------
255,000 New York State, HFA, 5.90%, (Hospital & Nursing Home Project) 11/1/2006 A 257,670
------------------------------------------------------------------------
1,000,000 New York State, HFA, (Series A), 6.25%, 9/15/2010 BBB 1,029,330
------------------------------------------------------------------------
1,000,000 New York State Local Government Assistance Corp., GO Revenue Refunding
Bonds (Series E), 6.00% (GO of Corp. Insured), 4/1/2014 A 1,057,250
------------------------------------------------------------------------
300,000 New York State Local Government Assistance Corp., Revenue Bonds, (Series
B), 6.00% (GO of Corp. Insured),
4/1/2018 A 302,928
------------------------------------------------------------------------
1,000,000 New York State Medical Care Facilities Finance Agency Revenue Bonds,
(Series B), 6.00%,(Hospital and Nursing Home Imps.)/(FHA 242 Insured),
Buffalo General Hospital, 8/15/2014 AAA 1,009,840
------------------------------------------------------------------------
995,000 New York State Medical Care Facilities Finance Agency Revenue Bonds,
(Series D), 6.35%, (Hospital and Nursing Home Imps.)/(FHA 242 Insured),
Millard Filmore Hospital, 2/15/2012 AA 1,071,416
------------------------------------------------------------------------
</TABLE>
VISION NEW YORK TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ----------- -------------
LONG-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
$ 1,000,000 New York State Medical Care Facilities Finance Agency Revenue Bonds,
(Series A), 6.375% (FHA 242 Insured), Hospital for Special Surgery,
8/15/2024 AA $ 1,038,970
------------------------------------------------------------------------
2,500,000 New York State Mortgage Agency, Revenue Bonds,
(Series 33), 5.40%, 10/1/2017 Aa 2,397,125
------------------------------------------------------------------------
75,000 Newburgh, NY, GO UT Bonds, 6.40%, 4/15/2008 A1 83,000
------------------------------------------------------------------------
175,000 Niagara County, NY, GO UT Bonds, 7.10% (MBIA Insured), 2/15/2010 AAA 206,636
------------------------------------------------------------------------
25,000 Niagara Falls, NY, Bridge Commission Revenue Bonds, 5.25% (FGIC
Insured), 10/1/2015 AAA 24,341
------------------------------------------------------------------------
50,000 North Tonawanda City, NY, GO UT Bonds, 6.05% (FGIC Insured), 10/1/2006 AAA 54,697
------------------------------------------------------------------------
1,110,000 Oneonta, NY, Housing Development Refunding Revenue Bonds, (Series A),
5.45% (MBIA FHA 221 D 3 Insured),
7/1/2022 AAA 1,056,942
------------------------------------------------------------------------
100,000 Onondaga County, NY, IDA Pollution Control Revenue Bonds,
(Anheuser-Busch Company, Inc. Project), 6.625%,
8/1/2006 AA- 110,137
------------------------------------------------------------------------
2,000,000 Onondaga County, NY, IDA Revenue Bonds, 5.75% (Bristol-Meyers Squibb),
3/1/2024 AAA 2,046,360
------------------------------------------------------------------------
50,000 Ontario County, NY, GO UT Bonds, 5.50%, 5/15/2011 Aa 51,029
------------------------------------------------------------------------
25,000 Orchard Park, NY, Central School District, GO UT Bonds, 6.50%, 6/1/2002 AAA 27,561
------------------------------------------------------------------------
40,000 Otsego County, NY, GO UT Bonds, 6.625%, 12/1/2005 AAA 45,464
------------------------------------------------------------------------
50,000 Penfield, NY, Central School District, GO UT Bonds, 5.20%, 6/15/2010 AAA 50,091
------------------------------------------------------------------------
1,400,000 Puerto Rico Electric Power Authority, Revenue Bonds, (Series S), 7.00%,
7/1/2007 BBB+ 1,603,574
------------------------------------------------------------------------
</TABLE>
VISION NEW YORK TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ----------- -------------
LONG-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
$ 505,000 Puerto Rico Industrial Medical & Environmental Pollution Control
Facility, Revenue Bonds, (American Home-A-Rmkt), 5.10%, 12/1/2018 A2 $ 462,737
------------------------------------------------------------------------
15,000 Rochester, NY, GO UT Bonds, 6.00%, 8/1/2001 AA 15,961
------------------------------------------------------------------------
300,000 Rockland County, NY, GO UT Bonds, 7.00%, 4/1/2008 AAA 347,865
------------------------------------------------------------------------
250,000 Rockland County, NY, Solid Waste Management Authority, Revenue Bonds,
(Series B), 5.55%, 12/15/2016 AAA 250,530
------------------------------------------------------------------------
100,000 Spring Valley, NY, GO UT Bonds, 5.70%, 4/1/2012 AAA 103,330
------------------------------------------------------------------------
70,000 Sweet Home Central School District, NY, GO UT Bonds, 5.60% (AMBAC
Insured), 1/15/2008 AAA 72,729
------------------------------------------------------------------------
1,400,000 34th Street Partnership, Inc., NY, Capital Impt.--34th Street Business,
Special Assessment, 5.50%, 1/1/2023 A1 1,315,944
------------------------------------------------------------------------
65,000 Tompkins County, NY, GO UT Bonds, 5.625%, (Series B),
9/15/2013 Aa 65,787
------------------------------------------------------------------------
275,000 Tompkins, NY, Health Care Co., Recon. Home, Inc., 10.80%, (FHA Insured),
2/1/2028 A 359,948
------------------------------------------------------------------------
250,000 Triborough Bridge & Tunnel Authority, NY, General Purpose Revenue Bonds
(Series Y), 6.00% (GO of Auth. Insured), 1/1/2012 A+ 266,580
------------------------------------------------------------------------
150,000 Triborough Bridge & Tunnel Authority, NY, Special Obligation Refunding
Bonds, 6.625% (Series A), 1/1/2017 AAA 162,114
------------------------------------------------------------------------
50,000 Union Endicott, NY, Central School District, GO UT Bonds, 5.50%, (Series
A), 7/15/2010 AAA 50,766
------------------------------------------------------------------------
50,000 Victor, NY, 7.20%, 12/15/2005 A 57,367
------------------------------------------------------------------------
50,000 Victor, NY, Central School District, GO UT Bonds, 6.40%,
11/15/2006 AAA 56,122
------------------------------------------------------------------------
35,000 Wallkill, NY, Central School District, GO UT Bonds, 5.75%, 7/15/2014 A 35,879
------------------------------------------------------------------------
30,000 Webster, NY, Central School District, GO UT Bonds, 6.25%, 6/15/2003 AAA 32,770
------------------------------------------------------------------------
</TABLE>
VISION NEW YORK TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ----------- -------------
LONG-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
$ 50,000 West Seneca, NY, Central School District, GO UT Bonds, 5.625%, 6/15/2011 AAA $ 51,365
------------------------------------------------------------------------
25,000 West Seneca, NY, GO UT Bonds, 6.65%, 6/1/2005 AAA 28,400
------------------------------------------------------------------------
1,000,000 Westchester County, NY, IDA Resource Recovery Revenue Bonds (Series A),
5.75% (Resco Co.)/(AMBAC Insured),
7/1/2009 AAA 1,026,380
------------------------------------------------------------------------
65,000 Williamsville, NY, Central School District, GO UT Bonds, 6.50% (MBIA
Insured), 12/1/2010 AAA 73,395
------------------------------------------------------------------------ -------------
TOTAL LONG-TERM MUNICIPAL SECURITIES
(IDENTIFIED COST, $32,448,791)(A) $ 33,230,341
------------------------------------------------------------------------ -------------
</TABLE>
* Please refer to the Appendix of the Statement of Additional Information for an
explanation of the credit ratings. Current credit ratings are unaudited.
(a) The cost of investments for federal tax purposes amounts to $32,448,791. The
net unrealized appreciation on a federal tax basis amounts to $781,550 which
is comprised of $814,108 appreciation and $32,558 depreciation at October
31, 1996.
Note: The categories of investments are shown as a percentage of net assets
($34,039,199) at October 31, 1996.
The following abbreviations are used in this portfolio:
AMBAC-- American Municipal Bond Assurance Corporation
COPs-- Certificates of Participation
FGIC-- Financial Guaranty Insurance Company
FHA-- Federal Housing Administration
GO-- General Obligation
HFA-- Housing Finance Authority
HUD-- Housing & Urban Development
IDA-- Industrial Development Authority
MBIA-- Municipal Bond Investors Assurance
PCR-- Pollution Control Revenue
UT-- Unlimited Tax
(See Notes which are an integral part of the Financial Statements)
VISION NEW YORK TAX-FREE FUND
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------------------------
Investments in securities, at value (identified and tax cost $32,448,791) $ 33,230,341
- ---------------------------------------------------------------------------------------------------
Income receivable 552,715
- ---------------------------------------------------------------------------------------------------
Receivable for investments sold 602,156
- ---------------------------------------------------------------------------------------------------
Receivable for shares sold 54,247
- ---------------------------------------------------------------------------------------------------
Deferred expenses 10,217
- --------------------------------------------------------------------------------------------------- -------------
Total assets 34,449,676
- ---------------------------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------------------------
Payable for investments purchased $ 316,400
- ---------------------------------------------------------------------------------------
Payable to Bank 64,317
- ---------------------------------------------------------------------------------------
Income distribution payable 29,760
- --------------------------------------------------------------------------------------- ----------
Total liabilities 410,477
- --------------------------------------------------------------------------------------------------- -------------
NET ASSETS for 3,341,294 shares outstanding $ 34,039,199
- --------------------------------------------------------------------------------------------------- -------------
NET ASSETS CONSISTS OF:
- ---------------------------------------------------------------------------------------------------
Paid in capital $ 33,653,854
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 781,550
- ---------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (402,107)
- ---------------------------------------------------------------------------------------------------
Undistributed net investment income 5,902
- --------------------------------------------------------------------------------------------------- -------------
Total Net Assets $ 34,039,199
- --------------------------------------------------------------------------------------------------- -------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
- ---------------------------------------------------------------------------------------------------
Net Asset Value and Redemption Proceeds Per Share ($34,039,199 / 3,341,294) $10.09
- --------------------------------------------------------------------------------------------------- -------------
Offering Price Per Share (100/95.50 of $10.19)* $10.67
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
*See "What Shares Cost" in the Prospectus.
(See Notes which are an integral part of the Financial Statements)
VISION NEW YORK TAX-FREE FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Interest $ 942,095
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------
Investment advisory fee $ 114,524
- ---------------------------------------------------------------------------------------
Administrative personnel and services fee 25,206
- ---------------------------------------------------------------------------------------
Custodian fees 9,714
- ---------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 25,906
- ---------------------------------------------------------------------------------------
Directors' fees 2,484
- ---------------------------------------------------------------------------------------
Auditing fees 5,969
- ---------------------------------------------------------------------------------------
Legal fees 2,407
- ---------------------------------------------------------------------------------------
Portfolio accounting fees 18,807
- ---------------------------------------------------------------------------------------
Share registration costs 6,599
- ---------------------------------------------------------------------------------------
Printing and postage 3,174
- ---------------------------------------------------------------------------------------
Taxes 144
- ---------------------------------------------------------------------------------------
Insurance premiums 1,704
- ---------------------------------------------------------------------------------------
Miscellaneous 5,193
- --------------------------------------------------------------------------------------- ----------
Total expenses 221,831
- ---------------------------------------------------------------------------------------
Waivers--
- ---------------------------------------------------------------------------------------
Waiver of investment advisory fee ($ 52,055)
- ----------------------------------------------------------------------------
Waiver of administrative personnel and services fee (7,521)
- ---------------------------------------------------------------------------- ---------
Total waivers (59,576)
- --------------------------------------------------------------------------------------- ----------
Net expenses 162,255
- --------------------------------------------------------------------------------------------------- ------------
Net investment income 779,840
- --------------------------------------------------------------------------------------------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ---------------------------------------------------------------------------------------------------
Net realized loss on investments (8,888)
- ---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments 908,841
- --------------------------------------------------------------------------------------------------- ------------
Net realized and unrealized gain on investments 899,953
- --------------------------------------------------------------------------------------------------- ------------
Change in net assets resulting from operations $ 1,679,793
- --------------------------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
VISION NEW YORK TAX-FREE FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
OCTOBER 31, 1996 APRIL 30,
(UNAUDITED) 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ----------------------------------------------------------------------------
OPERATIONS--
- ----------------------------------------------------------------------------
Net investment income $ 779,840 $ 1,376,221
- ----------------------------------------------------------------------------
Net realized gain (loss) on investments ($8,888 and $3,553 net loss,
respectively, as computed for federal tax purposes) (8,888) 143,963
- ----------------------------------------------------------------------------
Net change in unrealized appreciation of investments 908,841 445,203
- ---------------------------------------------------------------------------- -------------------- --------------
Change in net assets resulting from operations 1,679,793 1,965,387
- ---------------------------------------------------------------------------- -------------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ----------------------------------------------------------------------------
Distributions from net investment income (773,938) (1,379,433)
- ---------------------------------------------------------------------------- -------------------- --------------
SHARE TRANSACTIONS--
- ----------------------------------------------------------------------------
Proceeds from sale of shares 4,220,850 10,446,768
- ----------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment
of distributions declared 587,566 1,072,509
- ----------------------------------------------------------------------------
Cost of shares redeemed (4,295,879) (6,830,896)
- ---------------------------------------------------------------------------- -------------------- --------------
Change in net assets resulting from share transactions 512,537 4,688,381
- ---------------------------------------------------------------------------- -------------------- --------------
Change in net assets 1,418,392 5,274,335
- ----------------------------------------------------------------------------
NET ASSETS:
- ----------------------------------------------------------------------------
Beginning of period 32,620,807 27,346,472
- ---------------------------------------------------------------------------- -------------------- --------------
End of period (Including undistributed net investment income
of $5,902 and $0, respectively) $ 34,039,199 $ 32,620,807
- ---------------------------------------------------------------------------- -------------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
VISION NEW YORK TAX-FREE FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Vision Group of Funds, Inc. (the "Corporation") is registered under the
Investment Company Act of 1940, as amended (the "Act") as an open-end,
management investment company. The Corporation consists of seven portfolios. The
financial statements included herein are only those of Vision New York Tax-Free
Fund (the "Fund"), a non-diversified portfolio. The financial statements of the
other portfolios are presented separately. The assets of each portfolio are
segregated and a shareholder's interest is limited to the portfolio in which
shares are held. The investment objective of the Fund is to provide current
income which is exempt from federal income tax and the personal income taxes
imposed by the State of New York and New York municipalities and is consistent
with preservation of capital.
(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.
INVESTMENT VALUATIONS--Municipal bonds are valued by an independent pricing
service, taking into consideration yield, liquidity, risk, credit quality,
coupon, maturity, type of issue, and any other factors or market data the
pricing service deems relevant. Short-term securities are valued at the
prices provided by an independent pricing service. However, short-term
securities with remaining maturities of sixty days or less at the time of
purchase may be valued at amortized cost, which approximates fair market
value.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
At April 30, 1996, the Fund, for federal tax purposes, had a capital loss
carryforward of $393,221, which will reduce the Fund's taxable income
arising from future net realized gain on investments, if any, to the extent
permitted by the Code, and thus will reduce the amount of the distributions
to shareholders which would otherwise be necessary to relieve the Fund of
any liability for federal tax. Pursuant to the Code, such capital loss
carryforward will expire as follows:
VISION NEW YORK TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EXPIRATION EXPIRATION
YEAR AMOUNT
<S> <C>
2003 $389,666
2004 $3,553
</TABLE>
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 maintains 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.
DEFERRED EXPENSES--The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized over a period not to exceed five years from the Fund's
commencement date.
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 amount of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) CAPITAL STOCK
At October 31, 1996, there were 1,000,000,000 shares of $0.001 par value capital
stock authorized. Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
OCTOBER 31, APRIL 30,
1996 1996
<S> <C> <C>
Shares sold 421,456 1,040,591
- --------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 58,705 106,562
- --------------------------------------------------------------------------------
Shares redeemed (432,376) (681,796)
- -------------------------------------------------------------------------------- -------------- --------------
Net change resulting from share transactions 47,785 465,357
- -------------------------------------------------------------------------------- -------------- --------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Manufacturers and Traders Trust Company, the Fund's
investment adviser (the "Adviser"), receives for its services an annual
investment advisory fee equal to 0.70% of
VISION NEW YORK TAX-FREE FUND
- --------------------------------------------------------------------------------
the Fund's average daily net assets. The Adviser may voluntarily choose to waive
a portion or all of its fee. The Adviser can modify or terminate this voluntary
waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. The fee paid to FAS is based
on the level of average aggregate net assets of the Corporation for the period.
FAS may voluntarily choose to waive a portion of its fee.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
reimburse Federated Securities Corp. ("FSC"), the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund. The Plan provides that the Fund may incur distribution expenses up
to 0.25% of the average daily net assets of the Fund, annually, to compensate
FSC. The Fund did not pay or accrue distribution expenses during the period
ended October 31, 1996.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Manufacturers and Traders Trust Company, the Fund will pay Manufacturers
and Traders Trust Company up to 0.25% of average daily net assets of the Fund
for the period. This fee is to obtain certain services for shareholders and to
maintain shareholder accounts. The Fund did not pay or accrue shareholder
services expenses during the period ended October 31, 1996.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company, through
its subsidiary, Federated Shareholder Services Company ("FSSC"), serves as
transfer and dividend disbursing agent for the Fund for which it receives a fee.
The fee paid to FSSC is based on the size, type, and number of accounts and
transactions made by shareholders.
ORGANIZATIONAL EXPENSES--Organizational expenses of $27,242 were borne initially
by FAS. The Fund has agreed to reimburse FAS for the organizational expenses
during the five year period following August 16, 1993 (date the Fund became
effective). For the period ended October 31, 1996, the Fund paid $6,896 pursuant
to this agreement.
GENERAL--Certain Officers of the Corporation are Officers and Directors or
Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended October 31, 1996, were as follows:
<TABLE>
<CAPTION>
<S> <C>
PURCHASES $ 18,609,663
- --------------------------------------------------------------------------------------------------- -------------
SALES $ 14,551,559
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
VISION NEW YORK TAX-FREE FUND
- --------------------------------------------------------------------------------
(6) CONCENTRATION OF RISK
Since the Fund invests a substantial portion of its assets in issuers located in
one state, they will be more susceptible to factors adversely affecting issuers
of that state than would a comparable tax-exempt mutual fund that invests
nationally. In order to reduce the credit risk associated with such factors, at
October 31, 1996, 30.0% of the securities in the portfolio of investments are
backed by letters of credit or bond insurance of various financial institutions
and financial guaranty assurance agencies. The value of investments insured or
supported (backed) by a letter of credit from any one institution or agency did
not exceed 5.1% of total investments.
DIRECTORS OFFICERS
- -----------------------------------------------------------------------
<TABLE>
<S> <C>
Randall I. Benderson Edward C. Gonzales
Joseph J. Castiglia President and Treasurer
Daniel R. Gernatt, Jr. Charles L. Davis, Jr.
George K. Hambleton, Jr. Vice President and Assistant Treasurer
Victor R. Siclari
Secretary
C. Todd Gibson
Assistant Secretary
</TABLE>
SHARES OF THE VISION FUNDS ARE NOT FDIC INSURED OR OTHERWISE PROTECTED BY THE
U.S. GOVERNMENT, ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR GUARANTEED BY,
MANUFACTURERS AND TRADERS TRUST COMPANY ("M&T BANK"), AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
This report is authorized for distribution to prospective investors only when
preceded
or accompanied by the Fund's prospectus which contains facts concerning its
objective and policies, management fees, expenses and other information.
VISION
U.S. Government
Securities
Fund
Seeks current income by investing primarily in securities that are
guaranteed for payment of principal and interest by the
U.S. Government, its agencies or instrumentalities
(Fund shares themselves are not guaranteed). Capital appreciation is a
secondary investment consideration.
- --------------------------------------------------------------------------------
VISION
New York Tax-Free
Fund
Seeks current income that is exempt from
federal regular income tax, (some of the income may be subject
to the federal alternative
minimum tax) and New York State and
New York City personal income taxes, and is
consistent with preservation of capital.
- --------------------------------------------------------------------------------
VISION
Growth and Income
Fund
Seeks to provide long-term growth of capital and income
by investing in a diversified portfolio
consisting primarily of equity securities
(common stock and convertible securities) and debt securities
(bonds and notes).
- --------------------------------------------------------------------------------
VISION
Capital Appreciation
Fund
Seeks to produce long-term capital appreciation,
primarily through a diversified portfolio of
mid-capitalization stocks selected for
their ability to appreciate in value.
- --------------------------------------------------------------------------------
VISION
Money Market
Fund
Seeks current income with liquidity and
stability of principal by investing in high-
quality money market instruments.
- --------------------------------------------------------------------------------
VISION
Treasury Money Market
Fund
Primarily seeks current income with liquidity
and stability of principal by investing in direct obligations
of the U.S. Treasury, which are
guaranteed by the U.S. Government for timely payment
of principal and interest, (Fund shares themselves are
not guaranteed), and repurchase agreements secured by these obligations.
- --------------------------------------------------------------------------------
VISION
New York Tax-Free
Money Market
Fund
Seeks as high a level of current interest income that
is exempt from federal regular income tax (some of the income
may be subject to the federal alternative minimum tax) as is
consistent with liquidity and relative stability of principal.
In addition, the Fund seeks to provide income that is exempt from
New York State and New York City
personal income taxes.
- --------------------------------------------------------------------------------
For more complete information about any of the Vision Funds,
contact (800) 836-2211 for a prospectus. Please read the prospectus
carefully before investing.
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report of the Vision U.S. Government
Securities Fund for the six-month period ended October 31, 1996. It begins with
an investment review by the fund's portfolio manager, followed by a list of the
fund's government security holdings and complete financial information.
During the six-month reporting period, the fund's portfolio, which consisted
primarily of U.S. government securities, weathered a difficult bond market
generally characterized by fluctuating interest rates and bond prices.
Nevertheless, the fund paid a monthly income stream totaling $0.29 per share and
its net asset value increased from $9.31 at the beginning of the reporting
period to $9.44 on October 31, 1996. As a result of the income stream and
increase in share price, on October 31, 1996, the fund had achieved a six-month
total return of 4.59% (unadjusted for the fund's sales charge).*
By the end of the reporting period, shareholders had invested a total of $34.5
million in Vision U.S. Government Securities Fund. Thank you for joining them.
We welcome your questions and comments as we keep you informed about the
progress of your investment.
Sincerely,
Edward C. Gonzales
President
December 15, 1996
* Performance quoted is based on net asset value and reflects past performance.
Performance is not indicative of future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost. Total return for the
period adjusted for the fund's sales charge was -0.13%.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Overall, yields on fixed income securities fell during the first six months of
the Vision U.S. Government Securities Fund's fiscal year. On April 30, 1996, the
yield of the U.S. Treasury 10-Year Note was 6.66%. The 10-Year Note yield peaked
on July 5, 1996, at 7.06%, then proceeded down, ending the semi-annual period at
6.37% on October 31, 1996.
The fund took advantage of the higher yields available in the early part of the
summer by extending maturities or the duration of the fund. The fund's
mortgage-backed securities holdings were concentrated in lower coupon issues,
which fully participated in the recent bond rally. Higher coupon mortgages tend
to be riskier in declining rate environments, since homeowner mortgage
prepayments can significantly shorten up the average life of a security at the
precise time the investor wants longer average life securities (to realize price
appreciation in a rally). The fund's total return for the the period ended
October 31, 1996, was 4.59%, based on the net asset value. The net asset value
of the fund rose from $9.31 on May 1, 1996, to $9.44 on October 31, 1996.
Current conditions warrant a continuation of the longer than neutral (or
benchmark) duration for the portfolio. We are convinced a yield premium is still
embedded in market interest rates that represents a "fear factor" of faster
economic growth, coupled with increases in the level of inflation. As this yield
premium diminishes, we will move from an offensive to a defensive posture,
seeking to preserve the capital we have recently accumulated.
VISION U.S. GOVERNMENT SECURITIES FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
OCTOBER 31, 1996 APRIL 30,
(UNAUDITED) 1996 1995 1994(A)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.31 $ 9.09 $ 9.25 $ 10.00
- ----------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------
Net investment income 0.29 0.52 0.56 0.34
- ----------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.13 0.22 (0.16) (0.75)
- ---------------------------------------------------------- ------- --------- --------- -----------
Total from investment operations 0.42 0.74 0.40 (0.41)
- ---------------------------------------------------------- ------- --------- --------- -----------
LESS DISTRIBUTIONS
- ----------------------------------------------------------
Distributions from net investment income (0.29) (0.52) (0.56) (0.34)
- ---------------------------------------------------------- ------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 9.44 $ 9.31 $ 9.09 $ 9.25
- ---------------------------------------------------------- ------- --------- --------- -----------
TOTAL RETURN (B) 4.59% 8.10% 4.59% (4.23%)
- ----------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------
Expenses 1.11%(c) 1.16% 0.43% 0.00%(c)
- ----------------------------------------------------------
Net investment income 6.17%(c) 5.41% 6.20% 6.11%(c)
- ----------------------------------------------------------
Expense waiver/reimbursement (d) 0.19%(c) 0.17% 1.01% 1.86%(c)
- ----------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------
Net assets, end of period (000 omitted) $34,490 $34,492 $29,573 $24,468
- ----------------------------------------------------------
Portfolio turnover 76% 132% 78% 320%
- ----------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from September 22, 1993 (date of initial
public investment) to April 30, 1994.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
VISION U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- ----------------------------------------------------------------------------------- -------------
LONG-TERM OBLIGATIONS--98.2%
- --------------------------------------------------------------------------------------------------
ASSET BACKED SECURITIES--3.9%
-----------------------------------------------------------------------------------
$ 1,000,000 Green Tree Financial Corp., 1995-D, Class A2, 6.25%, 9/15/2025 $ 1,001,870
-----------------------------------------------------------------------------------
61,565 OSCC Home Equity Loan Trust, Series 1992, Class A2, 6.95%,
5/15/2007 61,603
-----------------------------------------------------------------------------------
290,268 TMS Home Equity Loan Trust, Series 1992-C, Class A1, 6.20%,
10/15/2007 286,413
----------------------------------------------------------------------------------- -------------
Total Asset-Backed Securities (identified cost $1,341,839) 1,349,886
----------------------------------------------------------------------------------- -------------
COLLATERALIZED MORTGAGE OBLIGATIONS--6.5%
-----------------------------------------------------------------------------------
234,000 FHLMC Series 1552, Class HB, 6.50%, 11/15/2022 221,123
-----------------------------------------------------------------------------------
105,000 FHLMC Series 1637, Class GA, 5.80%, 6/15/2023 98,859
-----------------------------------------------------------------------------------
58,000 FHLMC Series 33, Class H, 7.50%, 6/25/2023 59,064
-----------------------------------------------------------------------------------
200,000 FHLMC Series 1686, Class PJ, 5.00%, 2/15/2024 168,052
-----------------------------------------------------------------------------------
497,000 FNMA Series 1993-G16, Class J, REMIC, 5.00%, 12/25/2021 417,361
-----------------------------------------------------------------------------------
430,000 FNMA Series 1993-155, REMIC, 7.00%, 12/25/2022 426,302
-----------------------------------------------------------------------------------
183,607 FNMA Series 1994-22, Class A, REMIC, 5.00%, 3/25/2022 178,372
-----------------------------------------------------------------------------------
130,000 FNMA Series 1993-204, Class C, REMIC, 6.20%, 2/25/2023 120,539
-----------------------------------------------------------------------------------
150,000 FNMA Series 1993-127, Class H, REMIC, 6.50%, 7/25/2023 135,656
-----------------------------------------------------------------------------------
153,000 FNMA Series 1993-223, Class C, REMIC, 6.50%, 5/25/2023 147,129
-----------------------------------------------------------------------------------
171,000 FNMA Series 1994-55, Class H, REMIC, 7.00%, 3/25/2024 161,694
-----------------------------------------------------------------------------------
117,000 FNMA Series 1994-3, Class PL, 5.50%, 1/25/2024 95,505
----------------------------------------------------------------------------------- -------------
Total Collateralized Mortgage Obligations (identified cost $2,135,738) 2,229,656
----------------------------------------------------------------------------------- -------------
PASS-THROUGH MORTGAGE-BACKED SECURITIES--29.7%
-----------------------------------------------------------------------------------
31,999 FHLMC, 8.00%, 5/1/2006 32,679
-----------------------------------------------------------------------------------
110,105 FHLMC, 8.00%, 9/1/2007 113,373
-----------------------------------------------------------------------------------
79,430 FHLMC, 8.25%, 12/1/2007 82,320
-----------------------------------------------------------------------------------
19,134 FHLMC, 9.00%, 9/1/2019 20,138
-----------------------------------------------------------------------------------
</TABLE>
VISION U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
OR SHARES VALUE
<C> <S> <C>
- ------------- ----------------------------------------------------------------------------------- -------------
LONG-TERM OBLIGATIONS--CONTINUED
- --------------------------------------------------------------------------------------------------
PASS-THROUGH MORTGAGE-BACKED SECURITIES--CONTINUED
-----------------------------------------------------------------------------------
$ 1,284,959 FHLMC, 6.00%, 1/1/2026 $ 1,202,220
-----------------------------------------------------------------------------------
3,887,663 FHLMC, 6.00%, 2/1/2026 3,628,861
-----------------------------------------------------------------------------------
1,524,525 FHLMC, 6.00%, 3/1/2026 1,423,038
-----------------------------------------------------------------------------------
1,418,760 FHLMC, 6.00%, 3/1/2026 1,324,313
-----------------------------------------------------------------------------------
80,250 FNMA, 9.00%, 12/1/2002 83,584
-----------------------------------------------------------------------------------
237,575 FNMA, 8.75%, 5/1/2010 248,745
-----------------------------------------------------------------------------------
1,966,640 FNMA, 6.00%, 1/1/2026 1,837,550
-----------------------------------------------------------------------------------
241,533 GNMA, 8.00%, 12/15/2016 251,039
----------------------------------------------------------------------------------- -------------
Total Pass-through Mortgage-Backed Securities (identified cost $10,305,243) 10,247,860
----------------------------------------------------------------------------------- -------------
U.S. AGENCY BONDS 25.0%
-----------------------------------------------------------------------------------
5,000,000 Private Expt Funding Corp., 9.50%, 3/31/1999 5,400,700
-----------------------------------------------------------------------------------
160,309 Small Business Administration, Deb., Series 1991, Class 20H,
8.85%, 8/1/2011 175,195
-----------------------------------------------------------------------------------
3,000,000 U.S. Dept. Housing & Urban Development, Series 1996, Class A, 6.83%, 8/1/2003 3,059,790
----------------------------------------------------------------------------------- -------------
Total U.S. Agency Bonds (identified cost $8,554,262) 8,635,685
----------------------------------------------------------------------------------- -------------
U.S. TREASURY BONDS--33.1%
-----------------------------------------------------------------------------------
3,500,000 10.75%, 5/15/2003 4,342,660
-----------------------------------------------------------------------------------
1,000,000 12.50%, 8/15/2014 1,504,892
-----------------------------------------------------------------------------------
3,850,000 11.75%, 11/15/2014 5,576,762
----------------------------------------------------------------------------------- -------------
Total U.S. Treasury Bonds (identified cost $11,228,283) 11,424,314
----------------------------------------------------------------------------------- -------------
TOTAL LONG-TERM OBLIGATIONS (IDENTIFIED COST $33,565,365) 33,887,401
----------------------------------------------------------------------------------- -------------
MUTUAL FUND SHARES--0.2%
- --------------------------------------------------------------------------------------------------
76,196 Seven Seas Money Market Fund (AT NET ASSET VALUE) 76,196
----------------------------------------------------------------------------------- -------------
TOTAL INVESTMENTS (IDENTIFIED COST $33,641,561) $ 33,963,597
----------------------------------------------------------------------------------- -------------
</TABLE>
VISION U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
(a) The cost of investments for federal tax purposes amounts to $33,641,561
realized appreciation of investments on a federal tax basis amounts to
$322,036, which is comprised of $114,980 depreciation and $437,016
appreciation at October 31, 1996.
The following abbreviations are used in this portfolio:
FHLMC--Federal Home Loan Mortgage Corporation
FNMA--Federal National Mortgage Association
GNMA--Government National Mortgage Association
REMIC--Real Estate Mortgage Investment Conduit
Note: The categories of investments are shown as a percentage of net assets
($34,490,065) at October 31, 1996.
(See Notes which are an integral part of the Financial Statements)
VISION U.S. GOVERNMENT SECURITIES FUND
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------------------------
Investments in securities, at value (identified and tax cost $33,641,561) $ 33,963,597
- ---------------------------------------------------------------------------------------------------
Cash 614
- ---------------------------------------------------------------------------------------------------
Income receivable 587,716
- ---------------------------------------------------------------------------------------------------
Receivable for shares sold 28,252
- ---------------------------------------------------------------------------------------------------
Deferred expenses 8,222
- --------------------------------------------------------------------------------------------------- -------------
Total assets 34,588,401
- ---------------------------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------------------------
Income distribution payable $ 93,312
- ----------------------------------------------------------------------------------------
Payable for shares redeemed 5,024
- ---------------------------------------------------------------------------------------- ---------
Total liabilities 98,336
- --------------------------------------------------------------------------------------------------- -------------
NET ASSETS for 3,652,347 shares outstanding $ 34,490,065
- --------------------------------------------------------------------------------------------------- -------------
NET ASSETS CONSISTS OF:
- ---------------------------------------------------------------------------------------------------
Paid in capital $ 35,118,106
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 322,036
- ---------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (974,490)
- ---------------------------------------------------------------------------------------------------
Undistributed net investment income 24,413
- --------------------------------------------------------------------------------------------------- -------------
Total Net Assets $ 34,490,065
- --------------------------------------------------------------------------------------------------- -------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
- ---------------------------------------------------------------------------------------------------
Net Asset Value and Redemption Proceeds Per Share
($34,490,165 / 3,652,347 shares outstanding) $9.44
- --------------------------------------------------------------------------------------------------- -------------
Offering Price Per Share (100/95.50 of $9.44)* $9.88
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
*See "What Shares Cost" in the Prospectus.
(See Notes which are an integral part of the Financial Statements)
VISION U.S. GOVERNMENT SECURITIES FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Interest $ 1,244,228
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------
Investment advisory fee $ 119,627
- ---------------------------------------------------------------------------------------
Administrative personnel and services fee 25,206
- ---------------------------------------------------------------------------------------
Custodian fees 8,978
- ---------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 21,767
- ---------------------------------------------------------------------------------------
Directors' fees 2,576
- ---------------------------------------------------------------------------------------
Auditing fees 5,678
- ---------------------------------------------------------------------------------------
Legal fees 2,502
- ---------------------------------------------------------------------------------------
Portfolio accounting fees 17,173
- ---------------------------------------------------------------------------------------
Shares registration costs 6,353
- ---------------------------------------------------------------------------------------
Printing and postage 6,106
- ---------------------------------------------------------------------------------------
Insurance premiums 1,614
- ---------------------------------------------------------------------------------------
Miscellaneous 4,601
- --------------------------------------------------------------------------------------- ----------
Total expenses 222,181
- ---------------------------------------------------------------------------------------
Waivers--
- ---------------------------------------------------------------------------------------
Waiver of investment advisory fee ($25,634)
- ----------------------------------------------------------------------------
Waiver of administrative personnel and services fee (6,808)
- ---------------------------------------------------------------------------- ---------
Total waivers (32,442)
- --------------------------------------------------------------------------------------- ----------
Net expenses 189,739
- --------------------------------------------------------------------------------------------------- ------------
Net investment income 1,054,489
- --------------------------------------------------------------------------------------------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ---------------------------------------------------------------------------------------------------
Net realized (loss) on investments (662,995)
- ---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments 1,135,780
- --------------------------------------------------------------------------------------------------- ------------
Net realized and unrealized gain on investments 472,785
- --------------------------------------------------------------------------------------------------- ------------
Change in net assets resulting from operations $ 1,527,274
- --------------------------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
VISION U.S. GOVERNMENT SECURITIES FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
OCTOBER 31, 1996 APRIL 30,
(UNAUDITED) 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------------------------
OPERATIONS--
- -----------------------------------------------------------------------------
Net investment income $ 1,054,489 $ 1,755,128
- -----------------------------------------------------------------------------
Net realized gain (loss) on investments transactions ($662,995 net loss and
$0 net gain, respectively, as computed for federal tax purposes) (662,995) 354,242
- -----------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of
investments 1,135,780 238,052
- ----------------------------------------------------------------------------- -------------------- -------------
Change in net assets resulting from operations 1,527,274 2,347,422
- ----------------------------------------------------------------------------- -------------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------------------------------------------------
Distributions from net investment income (1,054,489) (1,755,128)
- ----------------------------------------------------------------------------- -------------------- -------------
SHARE TRANSACTIONS--
- -----------------------------------------------------------------------------
Proceeds from sale of shares 3,006,446 7,520,520
- -----------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment
of distributions declared 519,369 926,773
- -----------------------------------------------------------------------------
Cost of shares redeemed (3,800,234) (4,321,294)
- ----------------------------------------------------------------------------- -------------------- -------------
Change in net assets resulting from share transactions (274,419) 4,125,999
- ----------------------------------------------------------------------------- -------------------- -------------
Change in net assets 198,366 4,718,293
- -----------------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------------
Beginning of period 34,291,699 29,573,406
- ----------------------------------------------------------------------------- -------------------- -------------
End of period (including undistributed net investment income
of $24,413 and $24,413, respectively) $ 34,490,065 $ 34,291,699
- ----------------------------------------------------------------------------- -------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
VISION U.S. GOVERNMENT SECURITIES FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Vision Group of Funds, Inc. (the "Corporation") is registered under the
Investment Company Act of 1940, as amended (the "Act") as an open-end,
management investment company. The Corporation consists of seven portfolios. The
financial statements included herein are only those of Vision U.S. Government
Securities Fund (the "Fund"), a diversified portfolio. The financial statements
of the other portfolios are presented separately. The assets of each portfolio
are segregated and a shareholder's interest is limited to the portfolio in which
shares are held. The Investment objective of the Fund is to seek current income.
(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.
INVESTMENT VALUATIONS--U.S. government securities are generally valued at
the mean of the latest bid and asked price as furnished by an independent
pricing service. Listed corporate bonds, and other fixed income and
asset-backed securities, unlisted securities and short-term securities are
valued at the prices provided by an independent pricing service. Short-term
securities with remaining maturities of sixty days or less at the time of
purchase may be valued at amortized cost, which approximates fair market
value. Investments in other open-end regulated investment companies are
valued at net asset value.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
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 reviewed or established by the Board of Directors (the
"Directors"). 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.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the
VISION U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Internal Revenue Code, as amended (the "Code"). Distributions to
shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
At April 30, 1996, the Fund, for federal tax purposes, had a capital loss
carryforward of $311,493, which will reduce the Fund's taxable income
arising from future net realized gain on investments, if any, to the extent
permitted by the Code, and thus will reduce the amount of the distributions
to shareholders which would otherwise be necessary to relieve the Fund of
any liability for federal tax. Pursuant to the Code, such capital loss
carryforward will expire in 2003.
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 maintains 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.
DEFERRED EXPENSES--The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized over a period not to exceed five years from the Fund's
commencement date.
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,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) CAPITAL STOCK
At October 31, 1996, there were 1,000,000,000 shares of $0.001 par value capital
stock authorized. Transactions in capital stock were as follows:
VISION U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD
ENDED YEAR ENDED
OCTOBER 31, APRIL 30,
<S> <C> <C>
1996 1996
Shares sold 325,050 788,355
- ----------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 56,088 97,196
- ----------------------------------------------------------------------------------
Shares redeemed (411,458) (455,199)
- ---------------------------------------------------------------------------------- -------------- --------------
Net change resulting from share transactions (30,320) 430,352
- ---------------------------------------------------------------------------------- -------------- --------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Manufacturers and Traders Trust Company, the Fund's
investment adviser (the "Adviser"), receives for its services an annual
investment advisory fee equal to 0.70% of the Fund's average daily net assets.
The Adviser may voluntarily choose to waive a portion of its fee. The Adviser
can modify or terminate this voluntary waiver at any time at its sole
discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. The fee paid to FAS is based
on the level of average aggregate net assets of the Corporation for the period.
FAS may voluntarily choose to waive a portion of its fee.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
reimburse Federated Securities Corp. ("FSC") the principal distributor, from the
net assets of the Fund to finance activities intended to result in the sale of
the Fund's shares. The Plan provides that the Fund may incur distribution
expenses up to 0.25% of the average daily net assets of the Fund, annually, to
compensate FSC. The Fund did not pay or accrue distribution expenses during the
period ended October 31, 1996.
SHAREHOLDER SERVICES FEE--Under the terms of Shareholder Services Agreement with
Manufacturers and Traders Trust Company, the Fund will pay Manufacturers and
Traders Trust Company up to 0.25% of average daily net assets of the Fund for
the period. This fee is to obtain certain services for shareholders and to
maintain shareholder accounts. The Fund did not pay or accrue shareholder
services expenses during the period ended October 31, 1996.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated Services
Company, through its subsidiary, Federated Shareholder Services Company
("FSSC"), serves as transfer and dividend disbursing agent for the Fund. The fee
paid to FSSC is based on the size, type, and number of accounts and transactions
made by shareholders.
ORGANIZATIONAL EXPENSES--Organizational expenses of $21,313 were borne initially
by FAS. The Fund has agreed to reimburse FAS for the organizational expenses
during the five year period
VISION U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
following effective date. For the period ended October 31, 1996, the Fund paid
$5,348 pursuant to this agreement.
GENERAL--Certain Officers of the Corporation are Officers and Directors or
Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term, for the period ended
October 31, 1996, were as follows:
<TABLE>
<CAPTION>
<S> <C>
PURCHASES $ 31,423,837
- --------------------------------------------------------------------------------------------------- -------------
SALES $ 31,659,370
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
DIRECTORS OFFICERS
- -----------------------------------------------------------------------
<TABLE>
<S> <C>
Randall I. Benderson Edward C. Gonzales
Joseph J. Castiglia President and Treasurer
Daniel R. Gernatt, Jr. Charles L. Davis, Jr.
George K. Hambleton, Jr. Vice President and Assistant Treasurer
Victor R. Siclari
Secretary
C. Todd Gibson
Assistant Secretary
</TABLE>
SHARES OF THE VISION FUNDS ARE NOT FDIC INSURED OR OTHERWISE PROTECTED BY THE
U.S. GOVERNMENT, ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR GUARANTEED BY,
MANUFACTURERS AND TRADERS TRUST COMPANY ("M&T BANK"), AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
This report is authorized for distribution to prospective investors only when
preceded
or accompanied by the Fund's prospectus which contains facts concerning its
objective and policies, management fees, expenses and other information.
[LOGO OF VISION]
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
OCTOBER 31, 1996
----------------------
VISION
U.S. GOVERNMENT
SECURITIES
Fund
----------------------
Federated Securities Corp.
Distributor
Federated Investors Tower
Pittsburgh, PA 15222-3779
Manufacturers and Traders Trust Company
Investment Adviser to the Funds
One M&T Plaza
Buffalo, NY 14240-4556
[RECYCLED PAPER LOGO]
Cusip 92830F406
GOO143-O2 (12/96)
VISION
U.S. Government
Securities
Fund
Seeks current income by investing primarily in
securities that are guaranteed for payment of principal
and interest by the U.S. Government, its agencies
or instrumentalities (Fund shares themselves
are not guaranteed). Capital appreciation is a
secondary investment consideration.
- --------------------------------------------------------------------------------
VISION
New York Tax-Free
Money Market
Seeks current income that is exempt from
federal regular income tax, (some of the income
may be subject to the federal alternative
minimum tax) and New York State and
New York City personal income taxes, and is
consistent with preservation of capital.
- --------------------------------------------------------------------------------
VISION
Growth and Income
Fund
Seeks to provide long-term growth of capital and
income by investing in a diversified portfolio
consisting primarily of equity securities (common
stock and convertible securities) and debt securities
(bonds and notes).
- --------------------------------------------------------------------------------
VISION
Capital Appreciation
Fund
Seeks to produce long-term capital appreciation,
primarily through a diversified portfolio of mid-capitalization
stocks selected for their ability to appreciate in value.
- --------------------------------------------------------------------------------
VISION
Money Market
Fund
Seeks current income with liquidity and
stability of principal by investing in high-
quality money market instruments.
- --------------------------------------------------------------------------------
VISION
Treasury Money Market
Fund
Primarily seeks current income with liquidity
and stability of principal by investing in direct
obligations of the U.S. Treasury, which are
guaranteed by the U.S. Government for timely
payment of principal and interest, (Fund shares
themselves are not guaranteed), and repurchase
agreements secured by these obligations.
- --------------------------------------------------------------------------------
VISION
New York Tax-Free
Money Market
Fund
Seeks as high a level of current interest income that
is exempt from federal regular income tax (some of
the income may be subject to the federal alternative
minimum tax) as is consistent with liquidity and
relative stability of principal. In addition, the Fund
seeks to provide income that is exempt from
New York State and New York City
personal income taxes.
- --------------------------------------------------------------------------------
For more complete information about any of the
Vision Funds, contact (800) 836-2211 for a
prospectus. Please read the prospectus carefully
before investing.
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Annual Report of the Vision Money Market Funds for
the six-month period ended October 31, 1996. It contains complete financial
information including an investment review by the portfolio managers and a
complete list of investments for Vision Money Market Fund, Vision Treasury Money
Market Fund, and Vision New York Tax-Free Money Market Fund.
Each Vision money market fund gives you a convenient way to keep your ready cash
working every day. You also have easy access to your money, and a high degree of
safety because each fund is managed to pursue a stable $1.00 share price.* The
following is a summary of fund activity for the six-month reporting period.
Vision Money Market Fund, which invests in a diversified portfolio of corporate
and U.S. government money market securities, paid dividends totaling $0.02 per
share. Assets reached $575 million at the end of the reporting period.
Vision Treasury Money Market Fund, which invests exclusively in U.S. Treasury
securities, paid dividends totaling $0.02 per share. Assets rose significantly,
to end the reporting period at $424 million.
Vision New York Tax-Free Money Market Fund, which invests in New York municipal
money market securities, paid double tax-free dividends (triple tax-free
dividends to New York City residents)** totaling $0.01 per share. Assets reached
$76 million at the end of the reporting period.
Thank you for putting your cash to work--every day--through the Vision Money
Market Funds. We will continue to keep you up to date on your investment, and
provide your account with the highest level of service.
Sincerely,
[LOGO]
Edward C. Gonzales
President
December 15, 1996
* Although money market funds seek to maintain a stable net asset value of
$1.00 per share, there is no assurance that they will be able to do so. An
investment in the funds is neither insured nor guaranteed by the U.S.
government.
** Income may be subject to federal alternative minimum tax.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
MONEY MARKET FUND
Over the last six months, the Vision Group of Funds' Money Market Fund has
continued to grow and outperform the comparable Donoghue money fund average.*
At October 31, 1996, the Fund's 7-day yield was 4.82% while its average
maturity was 40 days.**
During the first half of 1996, the U.S. economy was expanding at a stronger than
expected rate of growth, which many observers viewed as a potential pressure on
the rate of inflation. Speculation grew during the summer and fall that the
Federal Reserve Board (the "Fed") would move to tighten monetary policy. In
fact, the market seemed to have priced in a tightening during this period and
allowed the fund managers to add longer-term securities at attractive yields.
However, with inflationary pressure still under control and evidence the economy
was slowing, the Fed did not tighten policy, and yields retreated. Tightness in
the labor markets has continued to exist and we will continue to monitor
economic developments with respect to the direction of the economy and its
implications for the fund.
TREASURY MONEY MARKET FUND
The Vision Group of Funds' Treasury Money Market Fund has continued to
outperform its comparable Donoghue money fund average* while maintaining a high
quality portfolio. As of October 31, 1996, the Fund's 7-day net yield was 4.74%
while the average maturity of the portfolio was 54 days.**
During the first half of 1996, the U.S. economy was expanding at a stronger than
expected rate of growth, which many observers viewed as a potential pressure on
the rate of inflation. Speculation grew during the summer and fall that the
Federal Reserve Board (the "Fed") would move to tighten monetary policy. In
fact, the market seemed to have priced in a tightening during this period and
allowed the fund managers to add longer-term securities at attractive yields.
However, with inflationary pressure still under control and evidence the economy
was slowing, the Fed did not tighten policy, and yields retreated. Tightness in
the labor markets has continued to exist and we will continue to monitor
economic developments with respect to the direction of the economy and its
implications for the fund.
NEW YORK TAX-FREE MONEY MARKET FUND
The Vision Group of Funds' New York Tax-Free Money Market Fund has continued to
enjoy good asset growth and the ability to outperform the comparable Donoghue
New York money fund average.* As of October 31, 1996, the Fund's 7-day net yield
was 3.03% while the average maturity was 45 days.**
* Donoghue's Money Fund Report publishes annualized yields of hundreds of money
market funds on a weekly basis and through its money market insight
publication, reports monthly and year-to-date investment results for the same
money funds.
** Performance quoted represents past performance and is not indicative of
future results. Yields will vary.
Over the last six months, the economy has gradually decelerated from second
quarter Gross Domestic Product exceeding 4.7% to third quarter growth of
approximately 2.0%. Equally as important for New York investors was the
stalemate over New York State's budget and changes to the supply/demand
situation.
We continue to manage the portfolio conservatively and devote substantial
resources to reviewing the portfolio's credit quality.
VISION MONEY MARKET FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Distributions to
Net Asset Shareholders
Value, Net from Net Net Asset
Year Ended beginning of Investment Investment Value, end of Total
April 30, period Income Income period Return(b)
MONEY MARKET FUND
<S> <C> <C> <C> <C> <C>
1989(a) $ 1.00 0.07 (0.07) $ 1.00 7.52%
1990 $ 1.00 0.08 (0.08) $ 1.00 8.58%
1991 $ 1.00 0.07 (0.07) $ 1.00 7.21%
1992 $ 1.00 0.05 (0.05) $ 1.00 4.60%
1993 $ 1.00 0.03 (0.03) $ 1.00 3.21%
1994 $ 1.00 0.03 (0.03) $ 1.00 3.01%
1995 $ 1.00 0.05 (0.05) $ 1.00 4.77%
1996 $ 1.00 0.05 (0.05) $ 1.00 5.33%
1996(e) $ 1.00 0.02 (0.02) $ 1.00 2.45%
TREASURY MONEY MARKET FUND
1989(a) $ 1.00 0.07 (0.07) $ 1.00 7.08%
1990 $ 1.00 0.08 (0.08) $ 1.00 8.17%
1991 $ 1.00 0.07 (0.07) $ 1.00 6.96%
1992 $ 1.00 0.04 (0.04) $ 1.00 4.54%
1993 $ 1.00 0.03 (0.03) $ 1.00 3.05%
1994 $ 1.00 0.03 (0.03) $ 1.00 2.88%
1995 $ 1.00 0.04 (0.04) $ 1.00 4.57%
1996 $ 1.00 0.05 (0.05) $ 1.00 5.25%
1996(e) $ 1.00 0.02 (0.02) $ 1.00 2.38%
NEW YORK TAX-FREE MONEY MARKET FUND
1989(a) $ 1.00 0.04 (0.04) $ 1.00 4.55%
1990 $ 1.00 0.05 (0.05) $ 1.00 5.24%
1991 $ 1.00 0.05 (0.05) $ 1.00 4.73%
1992 $ 1.00 0.03 (0.03) $ 1.00 2.99%
1993 $ 1.00 0.02 (0.02) $ 1.00 1.68%
1994 $ 1.00 0.02 (0.02) $ 1.00 1.88%
1995 $ 1.00 0.03 (0.03) $ 1.00 2.84%
1996 $ 1.00 0.03 (0.03) $ 1.00 3.20%
1996(e) $ 1.00 0.01 (0.01) $ 1.00 1.49%
</TABLE>
(a) Reflects operations for the period from June 1, 1988 (date of initial
public offering) to April 30, 1989.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(e) Six months ended October 31, 1996 (unaudited).
(See Notes which are an integral part of the Financial Statements)
VISION MONEY MARKET FUNDS
FINANCIAL HIGHLIGHTS--CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratios to Average Net Assets
Net Assets,
Net end of
Year Ended Investment Expense Waiver/ period (000
April 30, Expenses Income Reimbursement(d) omitted)
MONEY MARKET FUND
<S> <C> <C> <C> <C>
1989(a) 0.74%(c) 8.00%(c) 0.29%(c) $ 84,668
1990 0.72% 8.19% 0.25% $ 121,227
1991 0.81% 6.99% 0.09% $ 86,973
1992 0.75% 4.40% 0.06% $ 143,670
1993 0.36% 3.13% 0.39% $ 226,298
1994 0.28% 2.98% 0.42% $ 266,626
1995 0.51% 4.80% 0.19% $ 431,316
1996 0.58% 5.19% 0.11% $ 489,229
1996(e) 0.60%(c) 4.83%(c) 0.11%(c) $ 575,067
TREASURY MONEY MARKET FUND
1989(a) 0.68%(c) 7.48%(c) 0.34%(c) $ 31,388
1990 0.86% 7.88% 0.25% $ 32,986
1991 0.75% 6.52% 0.06% $ 91,682
1992 0.75% 4.38% 0.04% $ 100,373
1993 0.40% 2.98% 0.39% $ 128,825
1994 0.31% 2.86% 0.43% $ 197,521
1995 0.51% 4.53% 0.19% $ 210,526
1996 0.57% 5.10% 0.09% $ 372,884
1996(e) 0.59%(c) 4.72%(c) 0.10%(c) $ 423,760
NEW YORK TAX-FREE MONEY MARKET FUND
1989(a) 0.68%(c) 4.83%(c) 0.45%(c) $ 8,309
1990 0.83% 5.11% 0.65% $ 8,494
1991 0.69% 4.66% 0.87% $ 9,445
1992 0.95% 2.92% 0.65% $ 7,028
1993 0.71% 1.67% 0.63% $ 17,899
1994 0.41% 1.88% 0.58% $ 40,180
1995 0.40% 2.76% 0.52% $ 41,238
1996 0.48% 3.14% 0.38% $ 65,763
1996(e) 0.48%(c) 2.93%(c) 0.37%(c) $ 75,996
</TABLE>
VISION MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
(A)CORPORATE OBLIGATIONS--78.5%
- ------------------------------------------------------------------------------------------------
BANKING--11.8%
---------------------------------------------------------------------------------
$ 8,335,000 (b)Atlas Iron Processors Inc., 5.50%, 11/13/1996 $ 8,335,000
---------------------------------------------------------------------------------
20,000,000 (b)Bank One Milwaukee, 5.25%, 11/13/1996 19,992,937
---------------------------------------------------------------------------------
15,000,000 Commerzbank U.S. Finance, 5.24%, 11/7/1996 14,986,900
---------------------------------------------------------------------------------
25,000,000 Toronto Dominion Holdings, 5.56%, 3/11/1997 24,498,055
--------------------------------------------------------------------------------- --------------
Total 67,812,892
--------------------------------------------------------------------------------- --------------
CHEMICALS--4.3%
---------------------------------------------------------------------------------
25,000,000 Du Pont (E.I.) de Nemours & Co., 5.38%, 12/4/1996 24,876,708
--------------------------------------------------------------------------------- --------------
ENTERTAINMENT--2.6%
---------------------------------------------------------------------------------
15,000,000 Disney (Walt) Co., 5.60%, 3/5/1997 14,710,667
--------------------------------------------------------------------------------- --------------
FINANCE-AUTOMOTIVE--4.3%
---------------------------------------------------------------------------------
25,000,000 Ford Motor Credit Corp., 5.25%, 11/6/1996 24,981,771
--------------------------------------------------------------------------------- --------------
FINANCE-COMMERCIAL--31.1%
---------------------------------------------------------------------------------
20,000,000 American Express Credit Corp., 5.28%, 12/2/1996 19,909,067
---------------------------------------------------------------------------------
25,100,000 Apreco, Inc., 5.26%, 11/20/1996 25,030,320
---------------------------------------------------------------------------------
20,017,000 BAT Capital Corp., 5.25%, 11/21/1996 19,958,617
---------------------------------------------------------------------------------
25,000,000 Ciesco LP, 5.29%, 11/19/1996 24,933,875
---------------------------------------------------------------------------------
10,000,000 General Electric Capital Corp., Medium Term Note, 5.30%, 1/3/1997 9,999,673
---------------------------------------------------------------------------------
15,000,000 General Electric Capital Corp., 5.73%, 6/2/1997 14,491,462
---------------------------------------------------------------------------------
25,000,000 John Deere Capital Corp., 5.27%, 11/25/1996 24,912,167
---------------------------------------------------------------------------------
25,000,000 Pitney Bowes Credit Corp., 5.60%, 2/27/1997 24,541,111
---------------------------------------------------------------------------------
15,000,000 Transamerica Finance Group, Inc., 5.31%, 1/14/1997 14,836,275
--------------------------------------------------------------------------------- --------------
Total 178,612,567
--------------------------------------------------------------------------------- --------------
FINANCE-RETAIL--11.6%
---------------------------------------------------------------------------------
20,007,000 (b)Associates Corporation of North America, 5.23%, 11/13/1996 20,007,000
---------------------------------------------------------------------------------
25,000,000 Beneficial Corp., 5.33%, 11/13/1996 24,955,583
---------------------------------------------------------------------------------
</TABLE>
VISION MONEY MARKET FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
(A)CORPORATE OBLIGATIONS--CONTINUED
- ------------------------------------------------------------------------------------------------
FINANCE-RETAIL--CONTINUED
---------------------------------------------------------------------------------
$ 22,000,000 Commercial Credit Co., 5.30%, 11/14/1996 $ 21,957,894
--------------------------------------------------------------------------------- --------------
Total 66,920,477
--------------------------------------------------------------------------------- --------------
INSURANCE--4.7%
---------------------------------------------------------------------------------
27,000,000 Prudential Funding Corp., 5.42%, 12/3/1996 26,869,920
--------------------------------------------------------------------------------- --------------
OIL & OIL FINANCE--3.8%
---------------------------------------------------------------------------------
22,000,000 Chevron Oil Finance Co., 5.20%, 11/1/1996 22,000,000
--------------------------------------------------------------------------------- --------------
PHARMACEUTICALS--4.3%
---------------------------------------------------------------------------------
25,000,000 Eli Lilly & Co., 5.29%, 12/17/1996 24,831,174
--------------------------------------------------------------------------------- --------------
TOTAL CORPORATE OBLIGATIONS 451,616,176
--------------------------------------------------------------------------------- --------------
(A)U.S. GOVERNMENT AGENCY--11.2%
- ------------------------------------------------------------------------------------------------
15,390,000 Federal Home Loan Bank, Discount Notes, 5.43%, 12/10/1996 15,299,468
---------------------------------------------------------------------------------
20,000,000 Federal Home Loan Bank, Discount Notes, 5.25%, 1/7/1997 19,804,583
---------------------------------------------------------------------------------
14,800,000 Federal Home Loan Bank, Discount Notes, 5.28%, 2/25/1997 14,548,203
---------------------------------------------------------------------------------
15,000,000 Federal National Mortgage Association, Medium Term Note, 5.31%, 4/4/1997 14,995,478
--------------------------------------------------------------------------------- --------------
TOTAL U.S. GOVERNMENT AGENCY 64,647,732
--------------------------------------------------------------------------------- --------------
(C)REPURCHASE AGREEMENT--10.4%
- ------------------------------------------------------------------------------------------------
59,556,000 State Street Bank & Trust Co., 5.52%, dated 10/31/1996, due 11/1/1996 59,556,000
--------------------------------------------------------------------------------- --------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(D) $ 575,819,908
--------------------------------------------------------------------------------- --------------
</TABLE>
(a) Each issue, with the exception of variable rate securities, shows the
coupon or rate of discount at the time of purchase, if applicable.
(b) Denotes variable rate securities which show current rate and next demand
date.
(c) The repurchase agreement is fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.
(d) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($575,067,237) at October 31, 1996.
(See Notes which are an integral part of the Financial Statements)
VISION TREASURY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- -------------- --------------------------------------------------------------------------------- --------------
U.S. TREASURY OBLIGATIONS--54.2%
- -------------------------------------------------------------------------------------------------
$ 233,000,000 U.S. Treasury Bills, 11/7/1996-9/18/1997 $ 229,713,745
--------------------------------------------------------------------------------- --------------
(A) REPURCHASE AGREEMENTS--46.2%
- -------------------------------------------------------------------------------------------------
75,000,000 J.P. Morgan Securities, 5.52%, dated 10/31/1996, due 11/1/1996 75,000,000
---------------------------------------------------------------------------------
90,625,000 State Street Bank and Trust Company, 5.52%, dated 10/31/1996,
due 11/1/1996 90,625,000
---------------------------------------------------------------------------------
30,000,000 CS First Boston Corp., 5.26%, dated 10/30/1996, due 11/6/1996 30,000,000
--------------------------------------------------------------------------------- --------------
TOTAL REPURCHASE AGREEMENTS 195,625,000
--------------------------------------------------------------------------------- --------------
TOTAL INVESTMENTS, AT AMORTIZED COST (B) $ 425,338,745
--------------------------------------------------------------------------------- --------------
</TABLE>
(a) The repurchase agreements are fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($423,759,659) at October 31, 1996.
(See Notes which are an integral part of the Financial Statements)
VISION NEW YORK TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ---------- -------------
SHORT-TERM MUNICIPAL SECURITIES--99.4%
- --------------------------------------------------------------------------------------
NEW YORK--95.5%
------------------------------------------------------------------------
$ 1,300,000 Babylon, NY, (Series B) Weekly VRDNs,
(Bank of Nova Scotia SPA) VMIG1 $ 1,300,000
------------------------------------------------------------------------
850,000 Babylon, NY, TANs 4.00% UT GO Bonds (Series A),
4/18/1997 NR 850,746
------------------------------------------------------------------------
2,850,000 Chautauqua County, NY, IDA Weekly VRDNs, (Key Bank LOC) A-1+ 2,850,000
------------------------------------------------------------------------
1,855,000 Chemung County, NY, BANs, 4.00% UT GO Bonds,
10/17/1997 NR 1,857,561
------------------------------------------------------------------------
1,600,000 Erie County, NY, Water Authority (Series A) Weekly VRDNs, (AMBAC
Insured) VMIG1 1,600,000
------------------------------------------------------------------------
300,000 Erie County, NY, Water Authority (Series B) Weekly VRDNs, (AMBAC
Insured) VMIG1 300,000
------------------------------------------------------------------------
500,000 Harrison, NY, Central School District, BANs, 4.00% UT GO Bonds,
3/20/1997 NR 500,311
------------------------------------------------------------------------
1,000,000 Hempstead Town, NY, BANs, 4.25% UT GO Bonds
(Series E), 10/30/1997 NR 1,004,318
------------------------------------------------------------------------
2,500,000 Municipal Assistance Co. for New York, 3.50% CP
(Series F), 12/12/1996 A-1+ 2,500,000
------------------------------------------------------------------------
1,000,000 Municipal Assistance Co. for New York, 3.50% CP
(Series F), 12/17/1996 A-1+ 1,000,000
------------------------------------------------------------------------
1,000,000 Nassau County, NY, BANS, 4.00% UT GO Bonds
(Series B), 11/15/1996 MIG1 1,000,150
------------------------------------------------------------------------
2,000,000 New Rochelle, NY, City School District, BANs, 4.10%
UT GO Bonds, 1/15/1997 NR 2,001,607
------------------------------------------------------------------------
$ 1,700,000 New York, NY, Cultural Resource Revenue Bonds (Series B) Weekly VRDNs,
(American Museum of Natural History)/ (MBIA Insured)) VMIG1 $ 1,700,000
------------------------------------------------------------------------
</TABLE>
VISION NEW YORK TAX-FREE MONEY MARKET FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ---------- -------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
NEW YORK--CONTINUED
------------------------------------------------------------------------
1,000,000 New York, NY, HDC (Series A) Weekly VRDNs,
(Upper Fifth Ave.)/(Bankers Trust Co. LOC) VMIG1 1,000,000
------------------------------------------------------------------------
2,800,000 New York, NY, HDC (Series A) Weekly VRDNs,
(East 96th Street)/(Bank of Tokyo-Mitsubishi LOC) VMIG1 2,800,000
------------------------------------------------------------------------
2,900,000 New York, NY, HDC (Series A) Daily VRDNs,
(E. 17th Street)/(Chemical Bank LOC) A-1 2,900,000
------------------------------------------------------------------------
3,388,200 New York, NY, HDC (Series A) Weekly VRDNs VMIG1 3,388,200
------------------------------------------------------------------------
1,950,000 New York, NY, IDA Weekly VRDNs, (Childrens Oncology Society)/(Barclays
Bank of New York LOC) A-1+ 1,950,000
------------------------------------------------------------------------
300,000 New York, NY, Daily VRDNs (Series A-5)/
(Kredietbank N.V. LOC) VMIG1 300,000
------------------------------------------------------------------------
600,000 New York, NY, Daily VRDNs (Series A-10)/
(Morgan Guaranty Trust Co. LOC) VMIG1 600,000
------------------------------------------------------------------------
600,000 New York, NY, Daily VRDNs (Series B-2)/
(Morgan Guaranty Trust Co. LOC) VMIG1 600,000
------------------------------------------------------------------------
300,000 New York, NY, Daily VRDNs (Series B-2)/
(Morgan Guaranty Trust Co. LOC) VMIG1 300,000
------------------------------------------------------------------------
1,000,000 New York, NY, Daily VRDNs (Series B-4)/
(Union Bank of Switzerland LOC) VMIG1 1,000,000
------------------------------------------------------------------------
1,000,000 New York, NY, Water Financial Authority & Sewer System Revenue (Series
A) Daily VRDNs, (FGIC Insured) VMIG1 1,000,000
------------------------------------------------------------------------
1,099,000 New York State Dormatory Authority, 3.72% CP 12/10/1996 A-1 1,099,000
------------------------------------------------------------------------
2,000,000 New York State Dormatory Authority, 3.45% CP
(Series 1996), 12/16/1996 A-1 2,000,000
------------------------------------------------------------------------
$ 1,000,000 New York State Energy Research and Development Authority (Series A)
Weekly VRDNs, (Long Island Lighting Co.)/ (Union Bank of Switzerland
LOC) VMIG1 $ 1,000,000
------------------------------------------------------------------------
</TABLE>
VISION NEW YORK TAX-FREE MONEY MARKET FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ---------- -------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
NEW YORK--CONTINUED
------------------------------------------------------------------------
1,800,000 New York State Energy Research and Development
Authority, Monthly VRDNs, (Rochester Gas &
Electric)/(Bank of New York LOC) P-1 1,800,000
------------------------------------------------------------------------
1,200,000 New York State Energy Research & Development
Authority, (Series A) Daily VRDNs, (Niagara Mohawk
Power Corp.)/(Toronto Dominion Bank LOC) VMIG1 1,200,000
------------------------------------------------------------------------
400,000 New York State Energy Research & Development
Authority, (Series B) Daily VRDNs, (Niagara Mohawk
Power Corp.)/(Toronto Dominion Bank LOC) VMIG1 400,000
------------------------------------------------------------------------
1,000,000 New York State Energy Research & Development
Authority, (Series D) Daily VRDNs, (New York Electric
& Gas)/(Union Bank of Switzerland LOC) VMIG1 1,000,000
------------------------------------------------------------------------
3,400,000 New York State Environmental Facility Solid Waste
Revenue Refunding Bonds, VRNs, (General Electric Co.) AAA 3,400,000
------------------------------------------------------------------------
1,100,000 New York State, HFA Weekly VRDNs, (Normandie Court)/ (Societe Generale
LOC) VMIG1 1,100,000
------------------------------------------------------------------------
3,000,000 New York State Local Government Assistance Corp.,
(Series E) Weekly VRDNs, (Canadian Imperial Bank LOC) VMIG1 3,000,000
------------------------------------------------------------------------
1,000,000 New York State Medical Care Facility Financial Agency, (Series II-A)
Weekly VRDNs, (Chemical Bank LOC) VMIG1 1,000,000
------------------------------------------------------------------------
1,000,000 New York State Power Authority, 3.65% CP
(General Purpose), 12/11/1996 P-1 1,000,000
------------------------------------------------------------------------
570,000 New York State Power Authority, 3.70% CP
(General Purpose), 3/1/1997 VMIG1 570,000
------------------------------------------------------------------------
700,000 New York State Power Authority, 3.70% CP
(General Purpose), 3/1/1997 VMIG1 700,000
------------------------------------------------------------------------
$ 1,000,000 New York State, (Series R) 3.30% CP 11/7/1996 A-1 $ 1,000,000
------------------------------------------------------------------------
2,500,000 New York State, (Series Q) 3.50% CP 11/7/1996 A-1 2,500,000
------------------------------------------------------------------------
</TABLE>
VISION NEW YORK TAX-FREE MONEY MARKET FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ ---------- -------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
NEW YORK--CONTINUED
------------------------------------------------------------------------
2,100,000 Niagara Falls, NY, Bridge Commission (Series A) Weekly VRDNs, (FGIC
Insured) VMIG1 2,100,000
------------------------------------------------------------------------
1,180,000 North Hempstead, NY, BANs (Series E), 4.125% 11/1/1996 NR 1,180,000
------------------------------------------------------------------------
1,000,000 Onondaga County, NY, IDA (Series B) Monthly VRDNs, (Pass & Seymour,
Inc.)/(Banque National de Paris LOC) A-1 1,000,000
------------------------------------------------------------------------
1,800,000 Oyster Bay, NY, TANs, 3.875% UT GO Bonds, 2/14/1997 NR 1,801,370
------------------------------------------------------------------------
2,525,000 Port Authority of New York & New Jersey, 3.40% CP,
12/6/1996 A-1+ 2,525,000
------------------------------------------------------------------------
2,000,000 Rochester, NY, BANs, 4.50% (Series III), UT GO Bonds,
10/30/1997 NR 2,014,400
------------------------------------------------------------------------
1,400,000 St. Lawrence County, NY, IDA, PCR Daily VRDNs,
(Bank of Nova Scotia LOC) P-1 1,400,000
------------------------------------------------------------------------
1,000,000 Suffolk County, NY, Water Authority, BANs Weekly VRDNs VMIG1 1,000,000
------------------------------------------------------------------------
2,500,000 Yonkers, NY, IDA Weekly VRDNs, (AMBAC Insured) VMIG1 2,500,000
------------------------------------------------------------------------ -------------
Total 72,592,663
------------------------------------------------------------------------ -------------
PUERTO RICO--3.9%
------------------------------------------------------------------------
3,000,000 Commonwealth of Puerto Rico Development Bank, 3.55% CP, 12/4/1996 A-1+ 3,000,000
------------------------------------------------------------------------ -------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(A) $ 75,592,663
------------------------------------------------------------------------ -------------
</TABLE>
* Please refer to the Appendix of the Statement of Additional Information for
an explanation of the credit ratings.
(a) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($75,996,405) at October 31, 1996.
VISION NEW YORK TAX-FREE MONEY MARKET FUND
- --------------------------------------------------------------------------------
The following abbreviations are used in this portfolio:
AMBAC--American Municipal Bond Assurance Corporation
BANs--Bond Anticipation Notes
CP--Commercial Paper
FGIC--Financial Guaranty Insurance Company
GO--General Obligation
HDC--Housing Development Corporation
HFA--Housing Finance Authority
IDA--Industrial Development Authority
LOC(s)--Letter(s) of Credit
MBIA--Municipal Bond Investors Assurance
PCR--Pollution Control Revenue
RANs--Revenue Anticipation Notes
SPA--Standby Purchase Agreement
TANs--Tax Anticipation Notes
UT--Unlimited Tax
VRDNs--Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
VISION MONEY MARKET FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NEW YORK
TREASURY TAX-FREE
MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND Fund
<S> <C> <C> <C>
ASSETS:
- ------------------------------------------------------
Investments in securities $ 516,263,908 $ 229,713,745 $ 75,592,663
- ------------------------------------------------------
Investments in repurchase agreements 59,556,000 195,625,000 --
- ------------------------------------------------------ ------------------ ------------------ ------------------
Total investments, at amortized cost and value 575,819,908 425,338,745 75,592,663
- ------------------------------------------------------
Cash 865 1,086 26,820
- ------------------------------------------------------
Income receivable 499,175 34,163 397,622
- ------------------------------------------------------
Receivable for shares sold 438,572 7,121 104,837
- ------------------------------------------------------
Receivable for investments sold -- 2,848 --
- ------------------------------------------------------
Prepaid expenses 2,229 -- --
- ------------------------------------------------------ ------------------ ------------------ ------------------
Total assets 576,760,749 425,383,963 76,121,942
- ------------------------------------------------------ ------------------ ------------------ ------------------
LIABILITIES:
- ------------------------------------------------------
Income distribution payable 1,354,153 1,611,874 121,102
- ------------------------------------------------------
Payable for shares redeemed 339,359 12,430 --
- ------------------------------------------------------
Accrued expenses -- -- 4,435
- ------------------------------------------------------ ------------------ ------------------ ------------------
Total liabilities 1,693,512 1,624,304 125,537
- ------------------------------------------------------ ------------------ ------------------ ------------------
NET ASSETS $ 575,067,237 $ 423,759,659 $ 75,996,405
- ------------------------------------------------------ ------------------ ------------------ ------------------
NET ASSET VALUE, Offering Price and Redemption
Proceeds Per Share: $1.00 $1.00 $1.00
- ------------------------------------------------------ ------------------ ------------------ ------------------
SHARES OUTSTANDING: 575,067,237 423,759,659 75,996,405
- ------------------------------------------------------ ------------------ ------------------ ------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
VISION MONEY MARKET FUNDS
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NEW YORK
TREASURY TAX-FREE
MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND
<S> <C> <C> <C>
INVESTMENT INCOME:
- ------------------------------------------------------
Interest $ 14,821,512 $ 11,907,293 $ 1,265,316
- ------------------------------------------------------ ------------------ ------------------ ------------------
EXPENSES:
- ------------------------------------------------------
Investment advisory fee 1,368,460 1,121,385 185,234
- ------------------------------------------------------
Administrative personnel and services fee 290,445 237,764 39,324
- ------------------------------------------------------
Custodian fees 37,193 32,204 11,939
- ------------------------------------------------------
Transfer and dividend disbursing agent fees and
expenses 130,310 24,136 17,480
- ------------------------------------------------------
Directors' fees 3,207 2,646 3,285
- ------------------------------------------------------
Auditing fees 4,984 6,705 7,304
- ------------------------------------------------------
Legal fees 2,437 4,118 3,033
- ------------------------------------------------------
Portfolio accounting fees 46,326 40,890 19,118
- ------------------------------------------------------
Share registration costs 34,165 37,961 11,802
- ------------------------------------------------------
Printing and postage 3,097 3,636 10,967
- ------------------------------------------------------
Taxes 27,629 18,621 3,280
- ------------------------------------------------------
Insurance premiums 5,974 4,176 2,052
- ------------------------------------------------------
Miscellaneous 2,437 1,986 1,607
- ------------------------------------------------------ ------------------ ------------------ ------------------
TOTAL EXPENSES 1,956,664 1,536,228 316,425
- ------------------------------------------------------ ------------------ ------------------ ------------------
Waivers--
- ------------------------------------------------------
Waiver of investment advisory fee (302,401) (205,728) (134,966)
- ------------------------------------------------------
Waiver of administrative personnel and services fee (27,570) (11,636) (1,843)
- ------------------------------------------------------ ------------------ ------------------ ------------------
TOTAL WAIVERS (329,971) (217,364) (136,809)
- ------------------------------------------------------ ------------------ ------------------ ------------------
NET EXPENSES 1,626,693 1,318,864 179,616
- ------------------------------------------------------ ------------------ ------------------ ------------------
NET INVESTMENT INCOME $ 13,194,819 $ 10,588,429 $ 1,085,700
- ------------------------------------------------------ ------------------ ------------------ ------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
VISION MONEY MARKET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY NEW YORK TAX-FREE
MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR ENDED YEAR
OCTOBER 31, ENDED OCTOBER 31, ENDED OCTOBER 31, ENDED
1996 APRIL 30, 1996 APRIL 30, 1996 APRIL 30,
(UNAUDITED) 1996 (UNAUDITED) 1996 (UNAUDITED) 1996
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE)
IN NET ASSETS
- -----------------------
OPERATIONS--
- -----------------------
Net investment income $ 13,194,819 $ 24,286,778 $ 10,588,429 $ 17,347,687 $ 1,085,700 $ 1,746,353
- ----------------------- -------------- -------------- -------------- -------------- ------------- ------------
DISTRIBUTIONS TO
SHAREHOLDERS--
- -----------------------
Distributions from
net investment income (13,194,819) (24,286,778) (10,588,429) (17,347,687) (1,085,700) (1,746,353)
- ----------------------- -------------- -------------- -------------- -------------- ------------- ------------
SHARE TRANSACTIONS--
- -----------------------
Proceeds from sale of
shares 1,622,318,659 1,490,775,012 1,534,892,175 2,358,398,692 99,723,803 153,490,772
- -----------------------
Net asset value of
shares issued to
shareholders in
payment of
distributions
declared 5,638,324 7,919,317 1,259,968 1,995,102 409,466 568,773
- -----------------------
Cost of shares
redeemed (1,542,119,160) (1,440,781,276) (1,485,276,536) (2,198,036,127) (89,899,820) (129,534,647)
- ----------------------- -------------- -------------- -------------- -------------- ------------- ------------
Change in net
assets from share
transactions 85,837,823 57,913,053 50,875,607 162,357,667 10,233,449 24,524,898
- ----------------------- -------------- -------------- -------------- -------------- ------------- ------------
Change in net
assets 85,837,823 57,913,053 50,875,607 162,357,667 10,233,449 24,524,898
- -----------------------
NET ASSETS:
- -----------------------
Beginning of period 489,229,414 431,316,361 372,884,052 210,526,385 65,762,956 41,238,058
- ----------------------- -------------- -------------- -------------- -------------- ------------- ------------
End of period $ 575,067,237 $ 489,229,414 $ 423,759,659 $ 372,884,052 $75,996,405 $ 65,762,956
- ----------------------- -------------- -------------- -------------- -------------- ------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
VISION MONEY MARKET FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Vision Group of Funds, Inc. (the "Corporation") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as an open-end
management investment company. The Corporation consists of seven portfolios
(individually referred to as the "Fund," or collectively as the "Funds"). The
following diversified Funds are presented herein:
<TABLE>
<CAPTION>
PORTFOLIO NAME INVESTMENT OBJECTIVE
<S> <C>
Vision Money Market Fund ("Money Market") Seeks current income with liquidity and stability of
principal by investing in high quality money market
instruments.
Vision Treasury Money Market Fund ("Treasury Seeks current income with liquidity and stability of
Money Market") principal by investing in direct obligations of the U.S.
Treasury, such as Treasury bills and notes, and repurchase
agreements secured by these obligations.
Vision New York Tax-Free Money Market Fund ("New Seeks as high a level of current interest income that is
York Tax-Free Money Market") exempt from federal regular income tax as is consistent
with liquidity and relative stability of principal.
</TABLE>
The financial statements of the other portfolios are presented separately. The
assets of each portfolio are segregated and a shareholder's interest is limited
to the portfolio in which shares are held.
(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.
INVESTMENT VALUATIONS--The Funds' use of the amortized cost method to value
their portfolio securities is in accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS--It is the policy of the Funds to require the
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 Funds 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 Funds will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Funds' adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Directors (the
"Directors"). Risks may arise from the potential inability of
counterparties to honor the terms of the repurchase agreement. Accordingly,
the Funds could receive less than the repurchase price on the sale of
collateral securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Funds' policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of their income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Funds may engage in
when-issued or delayed delivery transactions. The Funds record 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.
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,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) CAPITAL STOCK
At October 31, 1996, there were 1,000,000,000 shares of $0.001 par value capital
stock authorized with respect to each Fund. Capital paid-in for Money Market
aggregated $574,492,169, par value was $575,068; Treasury Money Market
aggregated $423,336,116, par value was $423,543, New York Tax-Free Money Market
aggregated $75,920,308, par value was $76,097. Transactions in capital stock
were as follows:
VISION MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NEW YORK TAX-FREE
MONEY MARKET TREASURY MONEY MARKET MONEY MARKET
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30,
1996 1996 1996 1996 1996 1996
<S> <C> <C> <C> <C> <C> <C>
Shares sold 1,622,318,659 1,490,775,012 1,534,892,175 2,358,398,692 99,723,803 153,490,772
- ---------------------------
Shares issued to sharehold-
ers in payment of
distributions declared 5,638,324 7,919,317 1,259,968 1,995,102 409,466 568,773
- ---------------------------
Shares redeemed (1,542,119,160) (1,440,781,276) (1,485,276,536) (2,198,036,127) (89,899,820) (129,534,647)
- --------------------------- ------------- ------------- ------------- ------------- ----------- -----------
Net change resulting from
share transactions 85,837,823 57,913,053 50,875,607 162,357,667 10,233,449 24,524,898
- --------------------------- ------------- ------------- ------------- ------------- ----------- -----------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Manufacturers and Traders Trust Company, the Funds'
investment adviser (the "Adviser"), receives for its services an annual
investment advisory fee equal to 0.50% of each Fund's average daily net assets.
The Adviser may voluntarily choose to waive a portion of its fee. The Adviser
can modify or terminate this voluntary waiver at any time at its sole
discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Funds
with certain administrative personnel and services. The fee paid to FAS is based
on the level of average aggregate net assets of the Corporation for the period.
FAS may voluntarily choose to waive a portion of its fee.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company,
through its subsidiary, Federated Shareholder Services Company ("FSSC"), serves
as transfer and dividend disbursing agent for the Funds. The fee paid to FSSC is
based on the size, type, and number of accounts and transactions made by
shareholders.
SECURITY DEFAULT--On June 25, 1996, an Oswego County Board of Education Bond
(the "Bond") held by the Fund went into technical default, the day it was to
mature. On June 26, 1996, the Adviser purchased the Bond from the Fund at face
value plus accrued interest in accordance with Rule 17a-9 under the Act. On June
27, 1996, the Fund received full payment from the issuer of the Bond. The Fund
then reimbursed the Adviser for the purchase of the Bond.
GENERAL--Certain Officers of the Corporation are Officers and Directors or
Trustees of the above companies.
VISION MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
(5) CONCENTRATION OF CREDIT RISK
Since New York Tax-Free Money Market invests a substantial portion of its assets
in issuers located in one state, it will be more susceptible to factors
adversely affecting issuers of that state than would be a comparable tax-exempt
mutual fund that invests nationally. In order to reduce the credit risk
associated with such factors, at October 31, 1996, 48.2% of the securities in
the portfolio of investments are backed by letters of credit or bond insurance
of various financial institutions and financial guaranty assurance agencies. The
value of investments insured by or supported (backed) by a letter of credit from
any one institution or agency did not exceed 12.1% of total investments.
Directors Officers
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Randall I. Benderson Edward C. Gonzales
Joseph J. Castiglia President and Treasurer
Daniel R. Gernatt, Jr. Charles L. Davis, Jr.
George K. Hambleton, Jr. Vice President and Assistant Treasurer
Victor R. Siclari
Secretary
C. Todd Gibson
Assistant Secretary
</TABLE>
SHARES OF THE VISION FUNDS ARE NOT FDIC INSURED OR OTHERWISE PROTECTED
BY THE U.S. GOVERNMENT, ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR
GUARANTEED BY, MANUFACTURERS AND TRADERS TRUST COMPANY ("M&T BANK"),
AND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE
PRINCIPAL AMOUNT INVESTED.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Funds' prospectus which contains facts concerning
their objective and policies, management fees, expenses and other information.
[LOGO OF VISION GROUP OF FUNDS]
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
OCTOBER 31, 1996
- --------------------------------------------------------------------------------
Vision
Money Market
Fund
- --------------------------------------------------------------------------------
Vision
Treasury
Money Market
Fund
- --------------------------------------------------------------------------------
Vision
New York Tax-Free
Money Market
Fund
- --------------------------------------------------------------------------------
Manufacturers and Traders Trust Company
Investment Adviser to the Funds
One M&T Plaza
Buffalo, NY 14240-4556
[RECYCLED PAPER LOGO]
Federated Securities Corp.
Distributor
Federated Investors Tower
Pittsburgh, PA 15222-3779
Cusip 92830F307
Cusip 92830F109
Cusip 92830F208
1112503 (12/96)
