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).
- --------------------------------------------------------------------------------
VISION
New York Municipal
Income Fund
(formerly, VISION New York
Tax-Free Fund)
Seeks current income that is exempt from
federal, New York State and
New York City income taxes*, as is
consistent with preservation of capital.
- --------------------------------------------------------------------------------
VISION
Equity Income Fund
Seeks to provide current income by investing in a
diversified portfolio consisting primarily of income-
producing equity securities of domestic companies
(common and preferred stock and convertible
securities). Capital appreciation is a secondary
investment consideration.
- --------------------------------------------------------------------------------
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 short-term
U.S. Treasury obligations, which are fully
guaranteed for payment of principal and interest
by the U.S. government.**
- --------------------------------------------------------------------------------
VISION
New York Tax-Free
Money Market Fund
Seeks a high level of current interest income that is exempt from
federal, New York State
and New York City income taxes,* as well as
liquidity and stability of principal.**
- --------------------------------------------------------------------------------
*Some income may be subject to the federal
alternative minimum tax.
**Money market mutual 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 these funds is neither insured nor
guaranteed by the U.S. government.
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 Investor:
I am pleased to present the Semi-Annual Report of the VISION Equity and Income
Funds for the six-month period ended October 31, 1997. This report begins with a
discussion by each fund's management about the economy, the market, and fund
strategies over the reporting period. Next, you'll find a complete list of
portfolio holdings and financial statements for each fund.
The following highlights summarize the performance of each VISION equity and
income fund over the six-month reporting period.
VISION U.S. GOVERNMENT SECURITIES FUND
The fund's portfolio of U.S. government securities paid dividends totaling $0.31
per share. In an improved bond market environment, the fund's net asset value
rose from $9.28 at the beginning of the reporting period to $9.60 at the
reporting period's end. As a result, the fund achieved a total return of 6.89%
(2.05% adjusted for the fund's sales charge).* At the end of the reporting
period, the fund's total net assets reached $54 million.
VISION NEW YORK MUNICIPAL INCOME FUND (FORMERLY, VISION NEW YORK TAX-FREE FUND)
The fund's portfolio of high-quality, New York municipal bonds paid $0.22 per
share.** In an improved bond market environment, the fund's net asset value rose
from $10.08 at the beginning of the reporting period to $10.47 at the reporting
period's end. Through dividends and net asset value increase, the fund achieved
a total return of 6.12% (1.39% adjusted for the fund's sales charge).* By the
end of the reporting period, tax-sensitive New York residents had invested a
total of $40 million in the fund.
VISION GROWTH AND INCOME FUND
In a highly positive stock market environment that was impacted by volatility
later in the reporting period, the fund's portfolio--which focuses on quality,
value stocks issued by mid-size companies-- delivered strong performance to
shareholders. The fund achieved a total return of 22.83% (16.07% adjusted for
the fund's sales charge)* through dividends totaling $0.05 per share and a
significant share price increase of $15.11 to $18.51. The fund's total net
assets grew to reach $133 million at the end of the reporting period.
VISION CAPITAL APPRECIATION FUND
The fund's more aggressive portfolio of stocks issued by mid-size companies
resulted in extremely strong performance to shareholders. The fund achieved a
six-month total return of 25.13% (18.20% adjusted for the fund's sales charge)*
through a significant share price increase of $11.26 to $14.09. The fund's total
net assets grew to reach $52 million at the end of the reporting period.
* Performance quoted reflects past performance and 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.
** Income may be subject to the federal alternative minimum tax.
Thank you for pursuing the opportunities of one or more key financial markets
through the professional management and diversification of the VISION Equity and
Income Funds. We look forward to keeping you up-to-date on your progress.
Sincerely,
Edward C. Gonzales
President
December 15, 1997
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
VISION U.S. GOVERNMENT SECURITIES FUND
Yields on U.S. fixed income securities fell during the first six months of the
Vision U.S. Government Securities Fund's fiscal year. On April 30, 1997, the
yield of the U.S. Treasury 10-Year Note was 6.72%. The 10-Year Note yield peaked
on May 28, 1997 at 6.80%, then proceeded down, ending the semi-annual period at
5.84% on October 31, 1997.
The fund successfully participated in the early summer rally. The fund's average
maturity and duration were reduced in late July concurrent with the redemption
in market yields. The fund's total return for the May 1, 1997 to October 31,
1997 period was 6.89%,* based on net asset value (2.05% adjusted for the fund's
sales charge). This compares with a 7.07% return on the Lehman Brothers
Aggregate Bond Index,** which unlike the fund, is not subject to any expenses or
fees. The fund also maintained a higher credit quality than the Lehman Brothers
Aggregate Bond Index** during the six month reporting period. The net asset
value of the fund rose from $9.29 on May 1, 1997 to $9.60 on October 31, 1997.
Current conditions warrant a defensive portfolio posture. One year ago we
discussed a "yield premium" that was embedded in market interest rates. This
yield premium was the result of a "fear factor" in the market which consisted of
two items: fear of faster economic growth, and fear of increases in the level of
inflation. While U.S. economic growth has been reasonably strong, it has not
accelerated appreciably. The performance of the U.S. credit market has
discredited the inflation fear. The U.S. credit markets are currently
discounting a 2.30% inflation rate for the next ten years. This is down sharply
from the 3.15% expectation that was priced in the markets on April 30, 1997. We
previously mentioned that as the "yield premium" diminishes, we would move from
an offensive to a defensive posture, seeking to preserve the capital that we
anticipated would accumulate. We have reduced our duration or interest rate risk
as yields have diminished. We continue to emphasize income production in the
portfolio. We will seek increases in principal returns only when the risks of
doing so are greatly minimized.
* Performance quoted reflects past performance and 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 Lehman Brothers Aggregate Bond Index is a total return index measuring
both the capital price changes and income provided by the underlying
universe of securities, weighted by market value outstanding. The Aggregate
Bond Index is comprised of the Lehman Brothers Government Bond Index,
Corporate Bond Index, Mortgage-Backed Securities Index and the Yankee Bond
Index. These indices include: U.S. Treasury obligations, including bonds and
notes; U.S. agency obligations, including those of the Farm Credit System,
including the National Bank of Cooperatives and Banks for Cooperatives;
foreign obligations, U.S. investment-grade corporate debt and
mortgage-backed obligations. All corporate debt included in the Aggregate
Bond Index has a minimum rating of BBB by S&P or Fitch, or a minimum rating
of Baa by Moody's. This index is unmanaged, and investments cannot be made
in an index.
VISION NEW YORK MUNICIPAL INCOME FUND
(FORMERLY, VISION NEW YORK TAX-FREE FUND)
Yields on municipal securities fell during the first six months of the Vision
New York Municipal Income Fund's fiscal year. On April 30, 1997, the municipal
bond market, as measured by the Bond Buyer 40 Bond Index* (yield to par basis),
was 6.15%, which also represented the yield peak for the six month reporting
period. Yields subsequently proceeded to fall, reaching a low yield of 5.38% on
July 31, 1997, and ended the semi-annual reporting period at 5.59% on October
31, 1997.
The fund successfully participated in the early summer rally. The fund's average
maturity and duration were reduced in late July concurrent with the reduction in
market yields. The fund's total return for the May 1, 1997 to October 31, 1997
period was 6.12%,** based on net asset value (1.39% adjusted for the fund's
sales charge). This compares with a 6.75% return on the Lehman New York
Tax-Exempt Index,+ which, unlike the fund, is not subject to any expenses or
fees. The fund also maintained a higher credit quality than the Lehman Brothers
New York Tax-Exempt Index+ during the six month reporting period. The net asset
value of the fund rose from $10.10 on May 1, 1997 to $10.47 on October 31, 1997.
Municipal yields during the six month reporting period (as measured by the Bond
Buyer 40 Bond Index)* were as high as 90.1% of 30-Year Treasury Bond yield on
October 31, 1997, and as low as 84.0% on June 13, 1997.
Current conditions warrant a defensive portfolio posture. One year ago we
discussed a "yield premium" that was embedded in market interest rates. This
yield premium was the result of a "fear factor" in the market which consisted of
two items: fear of faster economic growth, and fear of increases in the level of
inflation. While U.S. economic growth has been reasonably strong, it has not
accelerated appreciably. The performance of the U.S. credit markets has
discredited the inflation fear. The U.S. credit markets are currently
discounting a 2.30% inflation rate for the next ten years. This is down sharply
from the 3.15% expectation that was priced in the markets on April 30, 1997. We
previously mentioned that as the "yield premium" diminishes, we would move from
an offensive to a defensive posture, seeking to preserve the capital that we
anticipated would accumulate. We have reduced our duration or interest rate risk
as yields have diminished. We continue to emphasize income production in the
portfolio. We will seek increases in principal returns only when the risks of
doing so are greatly minimized.
* The Bond Buyer 40 Bond Index is comprised of 40 actively quoted and traded
long-term municipal bonds.
** Performance quoted reflects past performance and 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 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 and includes approximately 22,000 municipal bonds classified as
general obligation bonds, revenue bonds, insured bonds and prerefunded bonds.
This index is unmanaged, and investments cannot be made in an index.
VISION GROWTH AND INCOME FUND
The Vision Growth and Income Fund had a very good second fiscal quarter as the
market moved higher with investor interests broadening to the smaller
companies.* For the six month reporting period ended October 31, 1997, the
fund's total return was an impressive 22.83%** (16.07% adjusted for the fund's
sales charge) versus the Lipper Growth & Income Mutual Fund Index*** return of
15.21%. For the first ten months of calendar 1997, the fund has outperformed the
Lipper Growth & Income Mutual Fund Index*** with a total return of 21.91%**
versus 21.46%.+
The economy continues to show surprising strength with the third quarter
registering growth of 3.2% in real Gross Domestic Product ("GDP") and most
indicators pointing to similar strength during the fourth quarter. Even if the
fourth quarter of 1997 is weak, the full year should come in above 3.5%. There
is strength in this economy with retail sales strong and housing sales
improving. Industrial production remains healthy and capacity utilization is
approaching the two-year peak. Unemployment remains under 5% and the "wealth
effect", due to the continued strong financial markets, provides strong support
to consumer confidence.
The end of October found investors focused on the financial crisis in Hong Kong,
extending into Japan and other southeast Asian countries. That decline appears
to be more of a justification to take profits after three years to substantial
gains in the stock market. We remain confident that the U.S. is growing in
economic strength globally and while the international crisis is worrisome, the
U.S. economy is very broad and diverse. While we have worried that the Federal
Reserve Board (the "Fed") would have to make a move to slow growth, weakness in
foreign markets may reduce demand sufficiently to slow growth to a more
sustainable level.
The substantial gains of the third calendar quarter have forced us to trim some
positions in order to keep the fund focused on the midcap area of the market.
The overall structure remains biased to the financial and technology sectors.
The financial sector is dominated by small regional banks that are very
profitable on a stand-alone basis but the industry is consolidating into a few
very large regional banks. The technology sector is broad in scope with holdings
in companies that focus on the Internet, communications, semiconductor equipment
and networking. Corporate America will continue to spend on technology to reduce
costs and improve productivity. The Vision Growth and Income Fund portfolio is
focused on medium-sized companies that, for the most part, are domestic with
little foreign currency risk. We feel that this will be a benefit in the coming
years.
* Small cap stocks have historically experienced greater volatility than
average.
** Performance quoted reflects past performance and 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 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 one-year and since inception (November 29, 1993) annualized total returns
for the fund were 29.64% (22.51% adjusted for the fund's sales charge) and
19.62% (17.91% adjusted for the fund's sales charge), respectively.
VISION CAPITAL APPRECIATION FUND
The Vision Capital Appreciation Fund had a very good second fiscal quarter as
the market moved higher with investor interests broadening to the smaller
companies.* For the six month period ended October 31, 1997, the fund's total
return was an impressive 25.13%** (18.20% adjusted for the fund's sales charge)
versus the Lipper Mid-Cap Mutual Fund Index*** return of 22.99%. For the first
ten months of calendar 1997, the fund has outperformed the Lipper Mid-Cap Mutual
Fund Index*** with a total return of 20.94%** versus 16.68%.+
The economy continued to show surprising strength with the third quarter real
GDP registering growth of 3.2% and most indicators pointing to similar strength
during the fourth quarter. Even if the fourth quarter of 1997 is weak, we
believe that the full year should come in above 3.5%. There is strength in this
economy with retail sales strong and housing sales improving. Industrial
production remains healthy and capacity utilization is approaching a two-year
peak. Unemployment remains under 5% and the "wealth effect", due to the
continued strong financial markets, provides strong support to consumer
confidence.
The end of October found investors focused on the financial crisis in Hong Kong
which is extending into Japan and other southeast Asian countries. That decline
appears to be more of a justification to take profits after three years to
substantial gains in the U.S. stock market. We remain confident that the U.S. is
growing in economic strength globally and while the international crisis is
worrisome, the U.S. economy is very broad and diverse. While we have worried
that the Fed would have to make a move to slow growth, weakness in foreign
markets may reduce demand sufficiently to slow growth to a more sustainable
level, alleviating the need for Fed action.
The substantial gains of the third calendar quarter have forced us to trim some
positions in order to keep the fund focused on the midcap area of the market.
The overall structure remains biased to the financial and technology sectors.
The financial sector is dominated by small regional banks that are very
profitable on a stand-alone basis but the industry is consolidating into a few
very large regional banks. The technology sector is broad in scope with holdings
in companies that focus on the Internet, communications, semiconductor equipment
and networking. Corporate America will continue to spend on technology to reduce
costs and improve productivity. The Vision Capital Appreciation Fund portfolio
is focused on small companies that, for the most part, are domestic with little
foreign currency risk.* We feel that this will be a benefit in the coming years.
* Small cap stocks have historically experienced greater violatility than
average.
** Performance quoted reflects past performance and 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.
*** Lipper indices measure the performance of the 30 largest mutual funds in
each respective fund category.
+ The one-year and since inception (July 3, 1996) annualized total returns for
the fund were 30.63% (23.49% adjusted for the fund's sales charge) and 30.55%
(25.13% adjusted for the fund's sales charge), respectively.
SHAREHOLDER MEETING RESULTS
A Special Meeting of Shareholders of Vision New York Municipal Income Fund
(formerly, Vision New York Tax-Free Fund) was held on September 29, 1997. On
July 24, 1997, the record date for shareholders voting at the meeting, there
were 3,701,338 total outstanding shares. The following item was considered by
shareholders and the results of their voting were as follows:
AGENDA ITEM
Approval of the proposed revision of the Fundamental Investment Limitation of
Vision New York Tax-Free Fund. The following is the revised limitation:
"Under normal market conditions, at least 80% of the Fund's net assets will be
invested in securities the interest on which is exempt from federal regular
income tax. The Fund may invest in securities the interest on which may be
subject to the alternative minimum tax or 'AMT.' "
<TABLE>
<CAPTION>
ABSTENTIONS
AND
FOR AGAINST BROKER NON-VOTES
<S> <C> <C>
1,780,949 80,460 153,969
</TABLE>
VISION EQUITY AND INCOME FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
NET ASSET NET REALIZED DISTRIBUTIONS DISTRIBUTIONS
YEAR VALUE, NET AND UNREALIZED TOTAL FROM FROM NET IN EXCESS OF
ENDED BEGINNING INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT NET INVESTMENT
APRIL 30, OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME INCOME
<S> <C> <C> <C> <C> <C> <C>
U.S. GOVERNMENT SECURITIES FUND
1994(a) $ 10.00 0.34 (0.75) (0.41) (0.34) --
1995 $ 9.25 0.56 (0.16) 0.40 (0.56) --
1996 $ 9.09 0.52 0.22 0.74 (0.52) --
1997 $ 9.31 0.58 (0.03) 0.55 (0.58) --
1997(j) $ 9.28 0.31 0.32 0.63 (0.31) --
<CAPTION>
NEW YORK MUNICIPAL INCOME FUND
<S> <C> <C> <C> <C> <C> <C>
1994(a) $ 10.00 0.20 (0.39) (0.19) (0.20) --
1995 $ 9.61 0.46 0.06 0.52 (0.46) --
1996 $ 9.67 0.46 0.23 0.69 (0.46) --
1997 $ 9.90 0.48 0.18 0.66 (0.48) --
1997(j) $ 10.08 0.22 0.39 0.61 (0.22) --
<CAPTION>
GROWTH AND INCOME FUND
<S> <C> <C> <C> <C> <C> <C>
1994(e) $ 10.00 0.07 (0.08) (0.01) (0.06) --
1995 $ 9.93 0.21 0.43 0.64 (0.22) --
1996 $ 10.35 0.13 2.98 3.11 (0.11) --
1997 $ 13.35 0.13 2.35 2.48 (0.13) --
1997(j) $ 15.11 0.04 3.41 3.45 (0.05) --
<CAPTION>
CAPITAL APPRECIATION FUND
<S> <C> <C> <C> <C> <C> <C>
1997(f) $ 10.00 0.02(h) 1.35 1.37 (0.02) (0.03)(i)
1997(j) $ 11.26 (0.04) 2.87 2.83 -- --
<CAPTION>
DISTRIBUTIONS
YEAR FROM NET
ENDED REALIZED TOTAL
APRIL 30, GAINS DISTRIBUTIONS
<S> <C> <C>
U.S. GOVE
1994(a) -- (0.34)
1995 -- (0.56)
1996 -- (0.52)
1997 -- (0.58)
1997(j) -- (0.31)
<CAPTION>
NEW YORK
<S> <C> <C>
1994(a) -- (0.20)
1995 -- (0.46)
1996 -- (0.46)
1997 -- (0.48)
1997(j) -- (0.22)
<CAPTION>
GROWTH AN
<S> <C> <C>
1994(e) -- (0.06)
1995 -- (0.22)
1996 -- (0.11)
1997 (0.59) (0.72)
1997(j) -- (0.05)
<CAPTION>
CAPITAL A
<S> <C> <C>
1997(f) (0.06) (0.11)
1997(j) -- --
</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.
(e) Reflects operations for the period from November 29, 1993 (date of initial
public investment) to April 30, 1994.
(f) Reflects operations for the period from July 3, 1996 (date of initial
public investment) to April 30, 1997.
(g) Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged. This
disclosure is required for fiscal years beginning on or after September 1,
1995.
(h) Per share information presented is based upon the monthly average number of
shares outstanding due to large fluctuations in the number of shares
outstanding during the period.
(i) Distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles. These
distributions do not represent a return of capital for federal tax
purposes.
(j) For the six-months ended October 31, 1997 (unaudited).
(See Notes which are an integral part of the Financial Statements)
VISION EQUITY AND INCOME FUNDS
FINANCIAL HIGHLIGHTS--CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS
NET ASSETS,
YEAR NET ASSET NET EXPENSE END AVERAGE
ENDED VALUE, END TOTAL INVESTMENT WAIVER/ OF PERIOD COMMISSION
APRIL 30, OF PERIOD RETURN(B) EXPENSES INCOME REIMBURSEMENT(D) (000 OMITTED) RATE PAID(G)
U.S. GOVERNMENT SECURITIES FUND
<S> <C> <C> <C> <C> <C> <C> <C>
1994(a) $ 9.25 (4.23%) 0.00%(c) 6.11%(c) 1.86%(c) $ 24,468 --
1995 $ 9.09 4.59% 0.43% 6.20% 1.01% $ 29,573 --
1996 $ 9.31 8.10% 1.16% 5.41% 0.17% $ 34,492 --
1997 $ 9.28 6.05% 1.11% 6.23% 0.20% $ 44,485 --
1997(j) $ 9.60 6.89% 1.10%(c) 6.48%(c) 0.10%(c) $ 54,808 --
<CAPTION>
NEW YORK MUNICIPAL INCOME FUND
<S> <C> <C> <C> <C> <C> <C> <C>
1994(a) $ 9.61 (1.22%) 0.00%(c) 4.79%(c) 1.78%(c) $ 25,225 --
1995 $ 9.67 5.58% 0.40% 4.80% 1.12% $ 27,346 --
1996 $ 9.90 7.18% 1.04% 4.60% 0.34% $ 32,621 --
1997 $ 10.08 6.76% 1.01% 4.74% 0.38% $ 35,480 --
1997(j) $ 10.47 6.12% 1.02%(c) 4.26%(c) 0.37%(c) $ 39,603 --
<CAPTION>
GROWTH AND INCOME FUND
<S> <C> <C> <C> <C> <C> <C> <C>
1994(e) $ 9.93 (0.12%) 0.00%(c) 2.24%(c) 2.15%(c) $ 22,944 --
1995 $ 10.35 6.61% 0.47% 2.16% 0.96% $ 39,358 --
1996 $ 13.35 30.18% 1.16% 1.09% -- $ 65,119 --
1997 $ 15.11 18.61% 1.14% 0.87% -- $ 114,090 $ 0.0549
1997(j) $ 18.51 22.83% 1.20% 0.42% -- $ 132,814
<CAPTION>
CAPITAL APPRECIATION FUND
<S> <C> <C> <C> <C> <C> <C> <C>
1997(f) $ 11.26 13.97% 0.88%(c) 0.18%(c) 0.96%(c) $ 33,440 $ 0.0628
1997(j) $ 14.09 25.13% 1.52%(c) (0.73%)(c) 0.01%(c) $ 52,312 $ 0.0141
<CAPTION>
<S> <C>
YEAR
ENDED PORTFOLIO
APRIL 30, TURNOVER
U.S. GOVE
<S> <C>
1994(a) 320%
1995 78%
1996 132%
1997 121%
1997(j) 32%
<CAPTION>
NEW YORK
<S> <C>
1994(a) 21%
1995 51%
1996 113%
1997 79%
1997(j) 29%
<CAPTION>
GROWTH AN
<S> <C>
1994(e) 27%
1995 79%
1996 77%
1997 134%
1997(j) 44%
<CAPTION>
CAPITAL A
<S> <C>
1997(f) 41%
1997(j) 65%
</TABLE>
VISION U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ ------------------------------------------------------------------------------------ -------------
<C> <S> <C>
LONG-TERM OBLIGATIONS--96.7%
- --------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--1.9%
- --------------------------------------------------------------------------------------------------
$ 676,831 Greentree Home Improvement Trust 1995-D, 6.250%, 9/15/2025 $ 677,250
------------------------------------------------------------------------------------
40,793 Old Stone Credit Corp. Home Equity Trust, 6.950%, 5/15/2007 41,289
------------------------------------------------------------------------------------
204,944 The Money Store Home Equity Trust 1992-C, 6.200%, 10/15/2017 205,198
------------------------------------------------------------------------------------
100,000 The Money Store Home Equity Trust 1994-C, 7.800%, 10/15/2021 104,236
------------------------------------------------------------------------------------ -------------
TOTAL ASSET-BACKED SECURITIES (IDENTIFIED COST $1,017,145) 1,027,973
------------------------------------------------------------------------------------ -------------
COLLATERALIZED MORTGAGE OBLIGATIONS--12.6%
- --------------------------------------------------------------------------------------------------
30,000 FHLMC Series 1598, Class E, REMIC, 5.60%, 11/15/2005 29,871
------------------------------------------------------------------------------------
30,000 FHLMC Series 1697, Class PG, REMIC, 5.80%, 4/15/2006 29,897
------------------------------------------------------------------------------------
250,000 FHLMC Series 1455, Class H, REMIC, 7.00%, 6/15/2021 258,523
------------------------------------------------------------------------------------
105,000 FHLMC Series 1637, Class GA, REMIC, 5.80%, 6/15/2023 101,139
------------------------------------------------------------------------------------
58,000 FHLMC Series 33, Class H, REMIC, 7.50%, 6/25/2023 60,440
------------------------------------------------------------------------------------
242,000 FHLMC Series 1577, Class PK, REMIC, 6.50%, 9/15/2023 240,855
------------------------------------------------------------------------------------
745,000 FHLMC Series 20, Class H, REMIC, 5.50%, 10/25/2023 663,378
------------------------------------------------------------------------------------
416,000 FHLMC Series 23, Class PK, REMIC, 6.00%, 11/25/2023 386,452
------------------------------------------------------------------------------------
133,000 FHLMC Series 1644, Class K, REMIC, 6.75%, 12/15/2023 130,759
------------------------------------------------------------------------------------
55,000 FHLMC Series 1686, Class PJ, REMIC, 5.00%, 2/15/2024 49,134
------------------------------------------------------------------------------------
562,000 FHLMC Series 42, Class I, REMIC, 8.00%, 10/17/2024 637,617
------------------------------------------------------------------------------------
248,000 FNMA Series 1992-196, Class J, REMIC, 6.00%, 11/25/2007 243,028
------------------------------------------------------------------------------------
50,000 FNMA Series G93-1, Class HA, REMIC, 7.50%, 2/25/2021 51,940
------------------------------------------------------------------------------------
554,000 FNMA Series 1992-136, Class PJ, REMIC, 6.00%, 5/25/2021 518,068
------------------------------------------------------------------------------------
307,000 FNMA Series 1992-131, REMIC, 8.00%, 1/25/2022 327,723
------------------------------------------------------------------------------------
134,031 FNMA Series 1994-22, Class A, REMIC, 5.00%, 3/25/2022 131,916
------------------------------------------------------------------------------------
218,000 FNMA Series 1993-147, Class J, REMIC, 6.50%, 7/25/2022 215,894
------------------------------------------------------------------------------------
42,000 FNMA Series 1993-38, Class L, REMIC, 5.00%, 8/25/2022 37,360
------------------------------------------------------------------------------------
$ 26,000 FNMA Series 1993-160, Class PK, REMIC, 6.50%, 11/25/2022, $ 25,839
------------------------------------------------------------------------------------
</TABLE>
VISION U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ ------------------------------------------------------------------------------------ -------------
<C> <S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS--CONTINUED
- --------------------------------------------------------------------------------------------------
35,000 FNMA Series 1993-198, Class K, REMIC, 6.00%, 12/25/2022 33,759
------------------------------------------------------------------------------------
1,063,000 FNMA Series 1993-204, Class C, REMIC, 6.20%, 2/25/2023 1,046,577
------------------------------------------------------------------------------------
175,000 FNMA Series 1993-223, Class C, REMIC, 6.50%, 5/25/2023 172,491
------------------------------------------------------------------------------------
345,000 FNMA Series 1993-127, Class H, REMIC, 6.50%, 7/25/2023 332,187
------------------------------------------------------------------------------------
612,000 FNMA Series 1993-183, Class K, REMIC, 6.50%, 7/25/2023 605,146
------------------------------------------------------------------------------------
63,000 FNMA Series 1993-113, Class PK, REMIC, 6.50%, 7/25/2023 61,775
------------------------------------------------------------------------------------
200,000 FNMA Series 1993-252, Class N, REMIC, 6.50%, 8/25/2023 198,240
------------------------------------------------------------------------------------
80,000 FNMA Series 1993-202, Class J, REMIC, 6.50%, 11/25/2023 77,770
------------------------------------------------------------------------------------
152,000 FNMA Series 1994-3, Class PL, REMIC, 5.50%, 1/25/2024 133,661
------------------------------------------------------------------------------------
181,000 FNMA Series 1994-55, Class H, REMIC, 7.00%, 3/25/2024 182,376
------------------------------------------------------------------------------------ -------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (IDENTIFIED COST $6,571,711) 6,983,815
------------------------------------------------------------------------------------ -------------
CORPORATE BONDS--4.9%
- --------------------------------------------------------------------------------------------------
100,000 Baltimore Gas & Electric Co., 5.50%, 7/15/2000 98,897
------------------------------------------------------------------------------------
100,000 General Electric Capital Corp., 8.30%, 9/20/2009 115,978
------------------------------------------------------------------------------------
500,000 New Plan Realty Trust, 6.80%, 5/15/2002 509,910
------------------------------------------------------------------------------------
800,000 Ohio National Life Insurance Company, 8.50%, 5/15/2026 872,776
------------------------------------------------------------------------------------
1,000,000 Pennsylvania Electric Co., 7.92%, 12/20/2002 1,069,700
------------------------------------------------------------------------------------ -------------
TOTAL CORPORATE BONDS (IDENTIFIED COST $2,582,866) 2,667,261
------------------------------------------------------------------------------------ -------------
PASS-THROUGH MORTGAGE-BACKED SECURITIES--26.3%
- --------------------------------------------------------------------------------------------------
114,409 FHLMC, 10.50%, 3/1/2001 121,713
------------------------------------------------------------------------------------
74,993 FHLMC, 6.75%, 12/1/2006 76,224
------------------------------------------------------------------------------------
277,923 FHLMC, 7.00%, 11/1/2007 282,264
------------------------------------------------------------------------------------
377,219 FHLMC, 7.00%, 11/1/2010 383,703
------------------------------------------------------------------------------------
343,323 FHLMC, 7.00%, 11/1/2017 349,654
------------------------------------------------------------------------------------
73,710 FHLMC, 7.50%, 11/1/2009 76,313
------------------------------------------------------------------------------------
345,255 FHLMC, 7.50%, 3/1/2008 357,446
------------------------------------------------------------------------------------
85,775 FHLMC, 7.50%, 3/1/2017 88,455
------------------------------------------------------------------------------------
$ 110,454 FHLMC, 8.00%, 1/1/2010 $ 113,250
------------------------------------------------------------------------------------
</TABLE>
VISION U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ ------------------------------------------------------------------------------------ -------------
<C> <S> <C>
PASS-THROUGH MORTGAGE-BACKED SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------------------
527,520 FHLMC, 8.00%, 11/1/2008 543,345
------------------------------------------------------------------------------------
115,126 FHLMC, 8.00%, 12/1/2010 118,580
------------------------------------------------------------------------------------
17,494 FHLMC, 8.00%, 3/1/2007 17,964
------------------------------------------------------------------------------------
73,557 FHLMC, 8.00%, 5/1/2002 75,101
------------------------------------------------------------------------------------
25,886 FHLMC, 8.00%, 5/1/2006 26,525
------------------------------------------------------------------------------------
90,409 FHLMC, 8.00%, 9/1/2007 93,121
------------------------------------------------------------------------------------
1,220,277 FHLMC, 8.25%, 10/1/2017 1,276,141
------------------------------------------------------------------------------------
64,287 FHLMC, 8.25%, 12/1/2007 66,366
------------------------------------------------------------------------------------
194,454 FHLMC, 8.25%, 5/1/2008 198,526
------------------------------------------------------------------------------------
84,475 FHLMC, 8.25%, 5/1/2009 88,013
------------------------------------------------------------------------------------
130,767 FHLMC, 8.25%, 8/1/2009 134,996
------------------------------------------------------------------------------------
86,737 FHLMC, 8.50%, 4/1/2006 90,523
------------------------------------------------------------------------------------
75,437 FHLMC, 8.50%, 6/1/2002 77,677
------------------------------------------------------------------------------------
384,191 FHLMC, 8.50%, 7/1/2004 395,835
------------------------------------------------------------------------------------
153,568 FHLMC, 8.50%, 9/1/2009 157,983
------------------------------------------------------------------------------------
48,444 FHLMC, 8.75%, 8/1/2008 49,776
------------------------------------------------------------------------------------
123,103 FHLMC, 9.00%, 3/1/2002 127,412
------------------------------------------------------------------------------------
17,269 FHLMC, 9.00%, 9/1/2019 18,440
------------------------------------------------------------------------------------
205,328 FHLMC, 9.25%, 6/1/2002 212,161
------------------------------------------------------------------------------------
711,160 FNMA, 6.00%, 5/1/2009 703,323
------------------------------------------------------------------------------------
166,240 FNMA, 6.50%, 4/1/2004 167,902
------------------------------------------------------------------------------------
54,293 FNMA, 6.69%, 1/1/2014 53,275
------------------------------------------------------------------------------------
178,945 FNMA, 7.50%, 11/1/2009 186,942
------------------------------------------------------------------------------------
315,920 FNMA, 8.00%, 1/1/2006 324,706
------------------------------------------------------------------------------------
301,143 FNMA, 8.00%, 1/1/2010 314,411
------------------------------------------------------------------------------------
146,472 FNMA, 8.00%, 4/1/2002 151,095
------------------------------------------------------------------------------------
138,239 FNMA, 8.25%, 7/1/2009 143,854
------------------------------------------------------------------------------------
$ 124,983 FNMA, 8.50%, 10/1/2002 $ 129,514
------------------------------------------------------------------------------------
</TABLE>
VISION U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ ------------------------------------------------------------------------------------ -------------
<C> <S> <C>
PASS-THROUGH MORTGAGE-BACKED SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------------------
86,045 FNMA, 8.50%, 3/1/2012 90,831
------------------------------------------------------------------------------------
175,135 FNMA, 8.75%, 5/1/2010 185,944
------------------------------------------------------------------------------------
139,981 FNMA, 9.00%, 10/1/2006 147,855
------------------------------------------------------------------------------------
54,445 FNMA, 9.00%, 12/1/2002 56,640
------------------------------------------------------------------------------------
103,099 FNMA, 9.75%, 9/1/2017 112,845
------------------------------------------------------------------------------------
7,089 GNMA, 11.75%, 2/15/1998 7,148
------------------------------------------------------------------------------------
12,586 GNMA, 7.25%, 10/15/2005 12,981
------------------------------------------------------------------------------------
52,008 GNMA, 7.25%, 11/15/2005 53,642
------------------------------------------------------------------------------------
34,061 GNMA, 7.25%, 2/15/2005 35,104
------------------------------------------------------------------------------------
59,890 GNMA, 7.25%, 3/15/2005 61,724
------------------------------------------------------------------------------------
93,935 GNMA, 7.25%, 3/15/2005 96,811
------------------------------------------------------------------------------------
21,312 GNMA, 7.25%, 7/15/2005 21,982
------------------------------------------------------------------------------------
73,330 GNMA, 7.50%, 12/15/2005 76,355
------------------------------------------------------------------------------------
81,228 GNMA, 7.50%, 6/20/2007 83,487
------------------------------------------------------------------------------------
275,986 GNMA, 8.00%, 10/15/2007 287,025
------------------------------------------------------------------------------------
134,992 GNMA, 8.00%, 12/15/2009 139,548
------------------------------------------------------------------------------------
220,760 GNMA, 8.00%, 12/15/2016 232,626
------------------------------------------------------------------------------------
245,139 GNMA, 8.00%, 2/15/2010 254,945
------------------------------------------------------------------------------------
56,871 GNMA, 8.00%, 6/15/2006 59,021
------------------------------------------------------------------------------------
92,491 GNMA, 8.00%, 7/15/2024 96,278
------------------------------------------------------------------------------------
51,758 GNMA, 8.00%, 8/15/2006 53,554
------------------------------------------------------------------------------------
974,917 GNMA, 8.00%, 9/15/2007 1,019,705
------------------------------------------------------------------------------------
162,812 GNMA, 8.15%, 9/15/2015 168,307
------------------------------------------------------------------------------------
169,879 GNMA, 8.25%, 6/15/2008 178,845
------------------------------------------------------------------------------------
140,049 GNMA, 8.375%, 4/15/2010 145,957
------------------------------------------------------------------------------------
459,803 GNMA, 8.50%, 10/20/2009 476,903
------------------------------------------------------------------------------------
788,052 GNMA, 8.50%, 9/15/2008 831,639
------------------------------------------------------------------------------------
$ 82,929 GNMA, 8.75%, 2/15/2002 $ 85,753
------------------------------------------------------------------------------------
</TABLE>
VISION U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ ------------------------------------------------------------------------------------ -------------
<C> <S> <C>
PASS-THROUGH MORTGAGE-BACKED SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------------------
497,030 GNMA, 9.00%, 10/20/2024 529,958
------------------------------------------------------------------------------------
150,249 GNMA, 9.00%, 4/15/2001 156,071
------------------------------------------------------------------------------------
715,482 GNMA, 9.00%, 4/20/2023 764,450
------------------------------------------------------------------------------------
39,023 GNMA, 9.00%, 5/15/2001 40,535
------------------------------------------------------------------------------------
46,621 GNMA, 9.50%, 4/15/2001 48,427
------------------------------------------------------------------------------------ -------------
TOTAL PASS-THROUGH MORTGAGE-BACKED SECURITIES
(IDENTIFIED COST $14,236,487) 14,405,425
------------------------------------------------------------------------------------ -------------
MUNICIPALS--1.5%
- --------------------------------------------------------------------------------------------------
250,000 Connecticut Development Authority, 8.55%, 8/15/2008 278,635
------------------------------------------------------------------------------------
75,000 Connecticut State HEFA, 7.07%, 11/1/2001 76,169
------------------------------------------------------------------------------------
100,000 Greater Orlando (FL) Aviation Authority, 8.25%, 10/1/2004 110,612
------------------------------------------------------------------------------------
200,000 Miami, FL, 8.65%, 7/1/2019 245,010
------------------------------------------------------------------------------------
100,000 New York City, NY, 10.50%, 11/15/2012 117,107
------------------------------------------------------------------------------------ -------------
TOTAL MUNICIPALS (IDENTIFIED COST $809,206) 827,533
------------------------------------------------------------------------------------ -------------
U.S. AGENCY BONDS--34.5%
- --------------------------------------------------------------------------------------------------
1,500,000 Housing and Urban Development, 6.59%, 8/1/2000 1,524,975
------------------------------------------------------------------------------------
700,000 Housing and Urban Development, 9.10%, 8/1/2000 757,148
------------------------------------------------------------------------------------
1,000,000 Housing and Urban Development, 6.31%, 8/1/2003 1,011,849
------------------------------------------------------------------------------------
3,000,000 Housing and Urban Development, 6.83%, 8/1/2003 3,109,860
------------------------------------------------------------------------------------
5,000,000 Private Export Funding Corp., 9.50%, 3/31/1999 5,260,250
------------------------------------------------------------------------------------
141,202 Small Business Administration, 8.85%, 8/1/2011 154,840
------------------------------------------------------------------------------------
4,883,074 Small Business Administration, 6.95%, 11/1/2016 5,047,194
------------------------------------------------------------------------------------
1,971,955 Small Business Administration, 6.70%, 12/1/2016 2,013,938
------------------------------------------------------------------------------------ -------------
TOTAL U.S. AGENCY BONDS (IDENTIFIED COST $18,668,511) 18,880,054
------------------------------------------------------------------------------------ -------------
U.S. TREASURY BONDS--15.0%
- --------------------------------------------------------------------------------------------------
1,000,000 11.75%, 2/15/2001 1,178,790
------------------------------------------------------------------------------------
3,250,000 14.00%, 11/15/2011 5,049,200
------------------------------------------------------------------------------------
</TABLE>
VISION U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
OR SHARES VALUE
- ------------ ------------------------------------------------------------------------------------ -------------
<C> <S> <C>
U.S. TREASURY BONDS--CONTINUED
- --------------------------------------------------------------------------------------------------
$ 1,500,000 9.00%, 11/15/2018 $ 1,987,020
------------------------------------------------------------------------------------ -------------
TOTAL U.S. TREASURY BONDS (IDENTIFIED COST $7,896,797) 8,215,010
------------------------------------------------------------------------------------ -------------
TOTAL LONG-TERM OBLIGATIONS (IDENTIFIED COST $51,782,723) 53,007,071
------------------------------------------------------------------------------------ -------------
MUTUAL FUND SHARES--0.2%
- --------------------------------------------------------------------------------------------------
94,764 SSGA US Government Money Market Fund, 5.180%
(AT NET ASSET VALUE) 94,764
------------------------------------------------------------------------------------ -------------
REPURCHASE AGREEMENT--4.6%
- --------------------------------------------------------------------------------------------------
2,500,000 J.P. Morgan & Co., Inc., 5.650%, dated 10/31/1997, due 11/3/1997
(AT AMORTIZED COST) 2,500,000
------------------------------------------------------------------------------------ -------------
TOTAL INVESTMENTS (IDENTIFIED COST $54,377,487)(A) $ 55,601,835
------------------------------------------------------------------------------------ -------------
</TABLE>
(a) The cost of investments for federal tax purposes amounts to $54,377,487. The
net unrealized appreciation of investments on a federal tax basis amounts to
$1,224,348 which is comprised of $1,363,252 appreciation and $138,904
depreciation at October 31, 1997.
Note: The categories of investments are shown as a percentage of net assets
($54,808,362) at
October 31, 1997.
The following acronyms are used throughout this portfolio:
HEFA--Health and Education Facilities Authority
REMIC--Real Estate Mortgage Investment Conduit
(See Notes which are an integral part of the Financial Statements)
VISION NEW YORK MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ------------ ---------------------------------------------------------------------- ------------- -------------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--96.2%
- ------------------------------------------------------------------------------------
NEW YORK--86.2%
----------------------------------------------------------------------
$ 45,000 34th Street Partnership, Inc., NY, 5.50% (Original Issue Yield:
5.613%), 1/1/2023 NR $ 44,513
----------------------------------------------------------------------
25,000 Alden Central School District, NY, GO UT, 6.25% (AMBAC INS)/(Original
Issue Yield: 6.40%), 6/15/2009 AAA 28,486
----------------------------------------------------------------------
525,000 Allegany County, NY IDA, Revenue Bonds, 6.625%
(Atlantic Richfield Co.)/(Original Issue Yield: 6.625%),
9/1/2016 A 569,215
----------------------------------------------------------------------
25,000 Amherst, NY, GO UT, 6.20% (FGIC INS)/(Original Issue Yield: 6.00%),
4/1/2002 AAA 26,974
----------------------------------------------------------------------
30,000 Batavia, NY, GO UT Bonds, 6.55% (MBIA INS)/(Original Issue Yield:
6.60%), 5/1/2005 AAA 33,980
----------------------------------------------------------------------
530,000 Battery Park, NY City Authority, Series A, 5.70% (Original Issue
Yield: 5.699%), 11/1/2020 AA 545,417
----------------------------------------------------------------------
25,000 Beacon, NY City School District, GO UT, 5.10% (Original Issue Yield:
5.25%), 7/15/2006 AAA 25,995
----------------------------------------------------------------------
100,000 Brighton, NY Central School District, GO UT, 5.40% (Original Issue
Yield: 5.55%), 6/1/2011 AAA 103,302
----------------------------------------------------------------------
10,000 Brighton, NY, 8.00% (MBIA INS), 10/15/2002 AAA 11,650
----------------------------------------------------------------------
50,000 Brockport, NY Central School District, GO UT, 5.40% (Original Issue
Yield: 5.55%), 6/15/2011 AAA 51,405
----------------------------------------------------------------------
50,000 Broome County, NY, Certificate of Participation, 5.25% (MBIA
INS)/(Original Issue Yield: 5.578%), 4/1/2022 NR 48,656
----------------------------------------------------------------------
70,000 Buffalo & Fort Erie, NY Public Bridge Authority, 6.00% (MBIA
INS)/(Original Issue Yield: 5.05%), 1/1/2004 AAA 75,829
----------------------------------------------------------------------
30,000 Canandaigua, NY City School District, GO UT, 7.15% (United States
Treasury PRF), 6/1/2000 (@102) AAA 32,834
----------------------------------------------------------------------
</TABLE>
VISION NEW YORK MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ------------ ---------------------------------------------------------------------- ------------- -------------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--CONTINUED
- ------------------------------------------------------------------------------------
NEW YORK--CONTINUED
----------------------------------------------------------------------
$ 10,000 Canandaigua, NY, GO UT, 8.80% (Original Issue Yield: 9.30%), 3/1/2005 NR $ 12,519
----------------------------------------------------------------------
30,000 Carmel, NY, 6.30%, 11/15/2011 NR 33,997
----------------------------------------------------------------------
50,000 Chautauqua County, NY, GO UT, 6.40% (FGIC INS)/ (Original Issue Yield:
6.30%), 9/15/2004 AAA 55,809
----------------------------------------------------------------------
100,000 Cheektowaga, NY Central School District, GO UT, 5.875% (FGIC
INS)/(Original Issue Yield: 5.95%), 6/1/2014 NR 106,610
----------------------------------------------------------------------
25,000 Cheektowaga, NY, GO UT, 5.65%, 8/15/2005 NR 26,666
----------------------------------------------------------------------
50,000 Cheektowaga, NY, GO UT, 6.55%, 10/15/2008 NR 57,617
----------------------------------------------------------------------
50,000 Cheektowaga-Maryvale, NY Union Free School District, GO UT, 6.625%
(FGIC INS), 6/15/2008 AAA 58,383
----------------------------------------------------------------------
50,000 Chemung County, NY, GO UT, 6.80% (AMBAC INS)/ (Original Issue Yield:
6.80%), 7/15/2006 AAA 58,047
----------------------------------------------------------------------
25,000 Chenango County, NY, 6.40%, 12/15/2008 NR 28,811
----------------------------------------------------------------------
25,000 Churchville Chili, NY Central School District, GO UT, 5.50% (FGIC
INS)/(Original Issue Yield: 5.50%), 6/15/2009 AAA 26,774
----------------------------------------------------------------------
25,000 Clarence, NY Central School District, GO UT, 5.30% (FGIC
INS)/(Original Issue Yield: 4.90%), 6/1/2006 NR 26,337
----------------------------------------------------------------------
25,000 Dutchess County, NY, GO UT, 8.50%, 7/15/2007 NR 32,504
----------------------------------------------------------------------
25,000 East Aurora, NY Union Free School District, GO UT, 5.20% (FGIC
INS)/(Original Issue Yield: 4.80%), 6/15/2006 NR 26,329
----------------------------------------------------------------------
25,000 East Bloomfield, NY Central School District, 7.125%
(MBIA INS), 6/15/2004 AAA 28,897
----------------------------------------------------------------------
25,000 East Irondequoit, NY Central School District, GO UT, 6.90%, 12/1/2002 NR 27,975
----------------------------------------------------------------------
25,000 East Rochester, NY Union Free School District, GO UT, 6.30% (AMBAC
INS), 6/15/2003 AAA 27,446
----------------------------------------------------------------------
</TABLE>
VISION NEW YORK MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ------------ ---------------------------------------------------------------------- ------------- -------------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--CONTINUED
- ------------------------------------------------------------------------------------
NEW YORK--CONTINUED
----------------------------------------------------------------------
$ 50,000 Endwell, NY, GO UT Fire District Bonds, 7.00% (Original Issue Yield:
7.35%), 3/1/2014 NR $ 58,996
----------------------------------------------------------------------
50,000 Erie County, NY Water Authority, Series A, 6.00% (AMBAC INS)/(Original
Issue Yield: 7.25%), 12/1/2008 AAA 54,995
----------------------------------------------------------------------
25,000 Erie County, NY, GO UT General Improvement Bonds, 9.60% (MBIA
INS)/(Original Issue Yield: 9.55%), 10/15/2000 AAA 28,776
----------------------------------------------------------------------
50,000 Erie County, NY, GO UT, 10.00% (MBIA INS), 10/15/2002 AAA 62,520
----------------------------------------------------------------------
1,000,000 Essex Cnty, NY IDA, Solid Waste Disposal Revenue Bonds (Series A),
5.80% (International Paper Co.), 12/1/2019 A- 1,021,380
----------------------------------------------------------------------
55,000 Evans & Brant, NY Central School District, GO UT, 6.85% (MBIA
INS)/(Original Issue Yield: 6.90%), 6/15/2009 AAA 65,493
----------------------------------------------------------------------
25,000 Fairport, NY Central School District, GO UT, 5.00% (MBIA INS),
6/15/2003 AAA 25,890
----------------------------------------------------------------------
20,000 Frontier Central School District, NY, Hamburg Township, GO UT, 9.50%
(MBIA INS)/(Original Issue Yield: 9.50%),
6/1/2002 AAA 24,269
----------------------------------------------------------------------
70,000 General Brown Central School District, NY, Brownville & Dexter, GO UT,
5.70% (MBIA INS)/(Original Issue Yield: 5.80%), 6/15/2014 AAA 72,854
----------------------------------------------------------------------
25,000 Genesee County, NY, GO UT, 5.30% (FGIC INS)/(Original Issue Yield:
5.20%), 8/15/2009 NR 26,142
----------------------------------------------------------------------
25,000 Greece, NY Central School District, GO UT, 6.00% (FGIC INS)/(Original
Issue Yield: 5.55%), 6/15/2004 AAA 27,245
----------------------------------------------------------------------
30,000 Greece, NY, GO UT, 6.25% (AMBAC INS), 12/1/2007 AAA 33,982
----------------------------------------------------------------------
50,000 Guilderland, NY, GO UT, 6.40% (FGIC INS)/(Original Issue Yield:
6.65%), 9/15/2015 AAA 57,848
----------------------------------------------------------------------
25,000 Hamburg Town, NY, GO UT, 6.30% (MBIA INS)/(Original Issue Yield:
6.45%), 11/15/2010 AAA 28,681
----------------------------------------------------------------------
50,000 Hanover Town, NY, GO UT, 9.80% (MBIA INS), 9/1/2004 AAA 66,271
----------------------------------------------------------------------
</TABLE>
VISION NEW YORK MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ------------ ---------------------------------------------------------------------- ------------- -------------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--CONTINUED
- ------------------------------------------------------------------------------------
NEW YORK--CONTINUED
----------------------------------------------------------------------
$ 130,000 Holiday Square Housing Development Corp., NY, Section 8 Assisted
Project, 5.80% (Holiday Square Management Co.)/ (Federal National
Mortgage Association COL)/(Original Issue Yield: 5.943%), 1/15/2024 NR $ 132,202
----------------------------------------------------------------------
20,000 Holland, NY Central School District, GO UT, 6.00% (FGIC INS)/(Original
Issue Yield: 5.50%), 6/15/2003 AAA 21,754
----------------------------------------------------------------------
100,000 Housing NY Corp., Revenue Bonds, 5.00% (Original Issue Yield: 5.65%),
11/1/2018 AA 94,293
----------------------------------------------------------------------
25,000 (a)Housing NY Corp., Revenue Refunding Bonds, 5.00% (Original Issue
Yield: 5.60%), 11/1/2013 AA 24,172
----------------------------------------------------------------------
15,000 Irondequoit, NY, 6.80% (Original Issue Yield: 7.20%),
3/1/2011 NR 17,651
----------------------------------------------------------------------
50,000 Ithaca, NY, 6.80%, 5/15/2003 NR 56,154
----------------------------------------------------------------------
25,000 Ithaca, NY, GO UT, 6.40% (Original Issue Yield: 6.80%),
4/1/2009 NR 28,578
----------------------------------------------------------------------
30,000 Ithaca, NY, GO UT, 6.625% (Original Issue Yield: 6.70%),
7/15/2005 NR 34,215
----------------------------------------------------------------------
1,345,000 Jamestown, NY Housing Authority, Mortgage Revenue Bonds, 6.125%
(Bradmar Village Project)/(HUD Section 8 LOC), 7/1/2010 A- 1,388,443
----------------------------------------------------------------------
20,000 Kenmore, NY, GO UT, 6.35% (MBIA INS), 10/15/2009 AAA 22,992
----------------------------------------------------------------------
25,000 La Grange, NY, GO UT Public Improvement Bonds, 7.70% (AMBAC
INS)/(Original Issue Yield: 7.75%), 4/15/2006 AAA 30,302
----------------------------------------------------------------------
50,000 Lakewood, NY, GO UT Public Improvement Bonds, 5.50% (Original Issue
Yield: 5.70%), 4/1/2012 NR 51,103
----------------------------------------------------------------------
25,000 Lancaster Town, NY, GO UT Bonds, 5.30% (FSA INS),
6/1/2005 AAA 26,437
----------------------------------------------------------------------
25,000 Lansing, NY, GO UT, 6.90% (Original Issue Yield: 7.10%), 3/15/2009 NR 29,534
----------------------------------------------------------------------
</TABLE>
VISION NEW YORK MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ------------ ---------------------------------------------------------------------- ------------- -------------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--CONTINUED
- ------------------------------------------------------------------------------------
NEW YORK--CONTINUED
----------------------------------------------------------------------
$ 25,000 Lewiston Town, NY, GO UT Refunding Bonds, 5.50% (FSA INS)/(Original
Issue Yield: 5.55%), 5/1/2014 AAA $ 26,350
----------------------------------------------------------------------
25,000 Lockport Town, NY, GO UT, 5.45% (FGIC INS)/(Original Issue Yield:
5.05%), 9/15/2006 NR 26,815
----------------------------------------------------------------------
2,250,000 Metropolitan Transportation Authority, New York, Revenue Refunding
Bonds, 7.50% (AMBAC INS)/(Original Issue Yield: 7.738%), 7/1/2017 AAA 2,345,850
----------------------------------------------------------------------
25,000 Monroe County, NY IDA, Revenue Bonds, 5.80% (Nazareth College)/(MBIA
INS)/(Original Issue Yield: 5.799%),
6/1/2010 AAA 26,699
----------------------------------------------------------------------
50,000 Monroe County, NY, GO UT (Series A), 8.50% (Original Issue Yield:
8.75%), 5/1/2000 NR 55,272
----------------------------------------------------------------------
25,000 Monroe County, NY, GO UT Public Improvement Bonds, 6.05% (AMBAC
INS)/(United States Treasury PRF)/ (Original Issue Yield: 6.049%),
6/1/2004 (@102) AAA 27,824
----------------------------------------------------------------------
75,000 Municipal Assistance Corp of New York, Refunding Revenue Bonds, 7.60%,
7/1/2005 AA 78,285
----------------------------------------------------------------------
25,000 Municipal Assistance Corp of New York, Series 63, 7.70% (MBIA
INS)/(Original Issue Yield: 7.699%), 7/1/2008 AAA 26,137
----------------------------------------------------------------------
50,000 New Paltz, NY Central School District, GO UT Bonds, 6.00% (AMBAC INS),
6/15/2008 AAA 55,783
----------------------------------------------------------------------
100,000 New York City Housing Development Corp., Series A, 7.35% (FHA
INS)/(Original Issue Yield: 7.349%), 6/1/2019 AAA 106,707
----------------------------------------------------------------------
1,825,000 New York City, NY IDA, 5.85% (Nightingale-Bamford School
Project)/(Original Issue Yield: 5.85%), 1/15/2020 A 1,861,318
----------------------------------------------------------------------
220,000 New York City, NY IDA, Revenue Bonds, 5.65% (United Air
Lines)/(Original Issue Yield: 5.682%), 10/1/2032 BB+ 221,410
----------------------------------------------------------------------
1,500,000 New York City, NY IDA, Special Facilities Revenue Bonds, 6.90%
(American Airlines), 8/1/2024 BBB- 1,671,930
----------------------------------------------------------------------
</TABLE>
VISION NEW YORK MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ------------ ---------------------------------------------------------------------- ------------- -------------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--CONTINUED
- ------------------------------------------------------------------------------------
NEW YORK--CONTINUED
----------------------------------------------------------------------
$ 500,000 New York City, NY, GO UT (Series B), 5.875% (Connie Lee LOC)/(Original
Issue Yield: 6.21%), 8/15/2016 AAA $ 519,390
----------------------------------------------------------------------
50,000 New York State Dormitory Authority, College & University Revenue
Refunding Bonds, 6.50% (University of Rochester, NY)/(Original Issue
Yield: 6.585%), 7/1/2009 A+ 51,097
----------------------------------------------------------------------
20,000 New York State Dormitory Authority, Revenue Bonds, 5.00% (Rochester
University-Strong Memorial Hospital),
7/1/2005 AAA 20,898
----------------------------------------------------------------------
230,000 New York State Dormitory Authority, Revenue Bonds, 5.85% (Arden
Hill)/(FHA INS), 8/1/2026 AAA 240,937
----------------------------------------------------------------------
500,000 New York State Dormitory Authority, Revenue Bonds, 5.85% (Wesley
Health System)/(FHA INS), 8/1/2026 AAA 523,775
----------------------------------------------------------------------
100,000 New York State Dormitory Authority, Revenue Bonds, 6.00% (Colgate
University)/(MBIA INS)/(Original Issue Yield: 5.25%), 7/1/2016 AAA 110,490
----------------------------------------------------------------------
1,000,000 New York State Dormitory Authority, Revenue Bonds, 6.05% (Lutheran
Center at Poughkeepsie)/(Key Bank of New York LOC)/(Original Issue
Yield: 6.08%), 7/1/2026 NR 1,057,410
----------------------------------------------------------------------
145,000 New York State Dormitory Authority, Revenue Refunding Bonds, 7.15% (R
& J Jewish Geriatric Center)/(FHA INS),
8/1/2014 AAA 166,267
----------------------------------------------------------------------
100,000 New York State Dormitory Authority, Revenue Refunding Bonds, 7.75%
(Long Island Medical Center)/(FHA INS)/ (Original Issue Yield: 7.77%),
8/15/2027 AAA 102,838
----------------------------------------------------------------------
2,625,000 New York State Environmental Facilities Corp., Solid Waste Disposal
Revenue Bonds (Series A), 5.70% (Occidental Petroleum Corp.)/(Original
Issue Yield: 5.75%), 9/1/2028 BBB 2,628,386
----------------------------------------------------------------------
250,000 New York State HFA, Hospital & Nursing Home Project, 5.90% (Original
Issue Yield: 5.934%), 11/1/2006 BBB 252,710
----------------------------------------------------------------------
</TABLE>
VISION NEW YORK MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ------------ ---------------------------------------------------------------------- ------------- -------------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--CONTINUED
- ------------------------------------------------------------------------------------
NEW YORK--CONTINUED
----------------------------------------------------------------------
$ 100,000 New York State HFA, Revenue Refunding Bonds, 7.90% (United States
Treasury COL), 11/1/2006 AAA $ 121,014
----------------------------------------------------------------------
320,000 New York State HFA, Revenue Refunding Bonds, 8.00% (Original Issue
Yield: 8.079%), 11/1/2008 BBB+ 356,704
----------------------------------------------------------------------
1,150,000 New York State HFA, Series C, 6.00% (ECH Housing, Inc.)/ (Original
Issue Yield: 5.999%), 8/15/2016 NR 1,208,466
----------------------------------------------------------------------
1,000,000 New York State HFA, Service Contract Obligation Revenue Bonds (Series
A), 6.25% (Original Issue Yield: 6.35%),
9/15/2010 BBB 1,074,610
----------------------------------------------------------------------
100,000 New York State Medical Care Facilities Finance Agency, (Series A),
7.10% (FHA INS)/(Original Issue Yield: 7.10%), 8/15/2001 AA 102,874
----------------------------------------------------------------------
500,000 New York State Medical Care Facilities Finance Agency, 7.60% (FHA
INS), 2/15/2029 AA 530,740
----------------------------------------------------------------------
995,000 New York State Medical Care Facilities Finance Agency, Hospital &
Nursing Home Revenue Bonds (Series B), 6.00% (FHA INS)/(Original Issue
Yield: 6.218%), 8/15/2014 AAA 1,054,809
----------------------------------------------------------------------
1,000,000 New York State Medical Care Facilities Finance Agency, Revenue Bonds
(Series A), 6.375% (FHA INS)/(Original Issue Yield: 6.394%), 8/15/2024 AA 1,085,300
----------------------------------------------------------------------
400,000 New York State Medical Care Facilities Finance Agency, Revenue Bonds,
7.10%, 2/15/2027 BBB 413,200
----------------------------------------------------------------------
45,000 New York State Medical Care Facilities Finance Agency, Revenue Bonds,
7.625% (FHA INS)/(Original Issue Yield: 7.666%), 2/15/2023 AA 46,339
----------------------------------------------------------------------
1,000,000 New York State Medical Care Facilities Finance Agency, Series A
Revenue Bonds, 5.875% (Mercy Medical Center)/ (Natwest Bancorp
LOC)/(Original Issue Yield: 6.00%),
11/1/2015 AA- 1,045,520
----------------------------------------------------------------------
</TABLE>
VISION NEW YORK MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ------------ ---------------------------------------------------------------------- ------------- -------------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--CONTINUED
- ------------------------------------------------------------------------------------
NEW YORK--CONTINUED
----------------------------------------------------------------------
$ 100,000 New York State Medical Care Facilities Finance Agency, Series A
Revenue Bonds, 7.00% (BIG and FHA INSs),
2/15/2007 AAA $ 102,248
----------------------------------------------------------------------
20,000 New York State Mortgage Agency, Revenue Bonds, 7.30%, 4/1/2017 NR 20,234
----------------------------------------------------------------------
95,000 New York State Mortgage Agency, Revenue Bonds, 7.45% (FHA INS),
10/1/2010 NR 99,769
----------------------------------------------------------------------
20,000 New York State Mortgage Agency, Revenue Refunding Bonds, 6.875% (MGIC
Investment Corp. INS), 4/1/2014 NR 20,235
----------------------------------------------------------------------
15,000 New York State Power Authority, Series V, 7.80% (Original Issue Yield:
7.853%), 1/1/2006 AA- 15,403
----------------------------------------------------------------------
25,000 New York State Power Authority, Series V, 7.875% (Original Issue
Yield: 7.901%), 1/1/2007 AA- 25,675
----------------------------------------------------------------------
200,000 New York State, GO UT Refunding Bonds, 9.875% (Original Issue Yield:
7.30%), 11/15/2005 A- 269,148
----------------------------------------------------------------------
1,000,000 New York State, GO UT, 12.00% (Original Issue Yield: 7.60%),
11/15/2003 A- 1,389,500
----------------------------------------------------------------------
450,000 New York State, GO UT, 9.875% (Original Issue Yield: 7.60%),
11/15/2004 A- 591,471
----------------------------------------------------------------------
75,000 Newburgh, NY, GO UT, 6.40%, 4/15/2008 NR 85,568
----------------------------------------------------------------------
175,000 Niagara County, NY, GO UT, 7.10% (MBIA INS), 2/15/2010 AAA 211,859
----------------------------------------------------------------------
25,000 Niagara Falls, NY Bridge Commission, Series B, 5.25% (FGIC
INS)/(Original Issue Yield: 5.35%), 10/1/2015 AAA 25,451
----------------------------------------------------------------------
20,000 Niagara Frontier Transportation Authority, Revenue Bonds, 6.00%
(Greater Buffalo International Airport)/(AMBAC INS)/(Original Issue
Yield: 6.15%), 4/1/2007 AAA 21,641
----------------------------------------------------------------------
50,000 North Tonawanda, NY, GO UT Bonds, 6.05% (FGIC INS), 10/1/2006 AAA 55,639
----------------------------------------------------------------------
</TABLE>
VISION NEW YORK MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ------------ ---------------------------------------------------------------------- ------------- -------------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--CONTINUED
- ------------------------------------------------------------------------------------
NEW YORK--CONTINUED
----------------------------------------------------------------------
$ 25,000 Nyack, NY Unified Free School District, GO UT, 5.20% (AMBAC INS),
6/15/2004 AAA $ 26,166
----------------------------------------------------------------------
185,000 Onondaga County, NY IDA, Revenue Bonds, 6.625% (Anheuser-Busch Cos.,
Inc.)/(Original Issue Yield: 6.70%),
8/1/2006 A+ 209,836
----------------------------------------------------------------------
50,000 Ontario County, NY, GO UT, 5.50% (Original Issue Yield: 5.65%),
5/15/2011 NR 53,147
----------------------------------------------------------------------
25,000 Orchard Park, NY Central School District, GO UT, 6.50% (FGIC
INS)/(Original Issue Yield: 6.25%), 6/1/2002 NR 27,386
----------------------------------------------------------------------
25,000 Ossining Village, NY, 8.10% (FGIC INS), 7/15/2001 AAA 28,320
----------------------------------------------------------------------
40,000 Otsego County, NY, GO UT, 6.625% (AMBAC INS),
12/1/2005 AAA 45,851
----------------------------------------------------------------------
50,000 Penfield, NY Central School District, GO UT, 5.20% (Original Issue
Yield: 5.40%), 6/15/2010 AAA 51,453
----------------------------------------------------------------------
25,000 Perry Central School District, NY, GO UT, 5.10%
(MBIA INS), 6/15/2001 AAA 25,850
----------------------------------------------------------------------
100,000 Port Authority of New York and New Jersey, Revenue Refunding Bonds,
7.125% (Original Issue Yield: 7.283%),
6/1/2025 AA- 107,958
----------------------------------------------------------------------
25,000 Putnam County, NY, 7.10%, 8/15/2002 NR 28,085
----------------------------------------------------------------------
175,000 Riverton Housing Corp., Revenue Bonds, 6.65% (FHA INS), 8/1/2024 AA 193,032
----------------------------------------------------------------------
15,000 Rochester, NY, GO UT, 6.00% (Original Issue Yield: 6.40%), 8/1/2001 AA 15,943
----------------------------------------------------------------------
50,000 Rockland County, NY, GO UT, 7.00% (MBIA INS)/(Original Issue Yield:
7.10%), 4/1/2008 AAA 59,612
----------------------------------------------------------------------
20,000 Saugerties, NY, GO UT, 5.375% (FSA INS)/(Original Issue Yield: 5.70%),
6/15/2015 NR 20,669
----------------------------------------------------------------------
</TABLE>
VISION NEW YORK MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ------------ ---------------------------------------------------------------------- ------------- -------------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--CONTINUED
- ------------------------------------------------------------------------------------
NEW YORK--CONTINUED
----------------------------------------------------------------------
$ 660,000 Schenectady, NY Municipal Housing Authority, Revenue Bonds, 6.40%
(Annie Schaffer Senior Center, Inc.)/(Original Issue Yield: 6.399%),
5/1/2014 NR $ 697,151
----------------------------------------------------------------------
40,000 Silver Creek, NY Central School District, GO UT, 6.60% (AMBAC
INS)/(Original Issue Yield: 6.60%), 5/15/2005 AAA 45,676
----------------------------------------------------------------------
10,000 Spackenkill, NY Unified Free School District, GO UT, 6.125%, 9/15/2014 NR 11,132
----------------------------------------------------------------------
25,000 Spencerport, NY Central School District, GO UT, 6.00% (MBIA
INS)/(Original Issue Yield: 6.05%), 6/15/2006 AAA 27,654
----------------------------------------------------------------------
300,000 Suffolk County, NY Water Authority, Revenue Refunding Bonds, 7.375%
(AMBAC INS)/(Original Issue Yield: 7.42%), 6/1/2012 AAA 314,694
----------------------------------------------------------------------
70,000 Sweet Home Central School District NY, GO UT, 5.60% (AMBAC
INS)/(Original Issue Yield: 5.70%), 1/15/2008 AAA 75,409
----------------------------------------------------------------------
1,525,000 Syracuse, NY Senior Citizens Housing Corp., Series A, 6.125% (East
Hill Village Apartments), 11/1/2010 A- 1,609,714
----------------------------------------------------------------------
1,000,000 Tompkins County, NY IDA, Revenue Bonds, 6.05% (Ithacare Center
Project)/(FHA INS), 2/1/2017 AAA 1,061,980
----------------------------------------------------------------------
65,000 Tompkins County, NY, GO UT (Series B), 5.625% (Original Issue Yield:
5.80%), 9/15/2013 NR 67,271
----------------------------------------------------------------------
290,000 Tompkins, NY Health Care Corp., 10.80% (FHA INS),
2/1/2028 A 385,230
----------------------------------------------------------------------
350,000 Triborough Bridge & Tunnel Authority, NY, Revenue Refunding Bonds
(Series L), 8.125% (Original Issue Yield: 8.22%), 1/1/2012 A+ 359,447
----------------------------------------------------------------------
150,000 Triborough Bridge & Tunnel Authority, NY, Special Obligation Revenue
Bonds (Series A), 6.625% (MBIA INS)/ (Original Issue Yield: 6.86%),
1/1/2017 AAA 162,414
----------------------------------------------------------------------
</TABLE>
VISION NEW YORK MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ------------ ---------------------------------------------------------------------- ------------- -------------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--CONTINUED
- ------------------------------------------------------------------------------------
NEW YORK--CONTINUED
----------------------------------------------------------------------
$ 50,000 Union Endicott, NY Central School District, GO UT (Series A), 5.50%
(FSA INS)/(Original Issue Yield: 5.55%), 7/15/2010 AAA $ 52,318
----------------------------------------------------------------------
50,000 Victor, NY Central School District, GO UT, 6.40% (FGIC INS)/(Original
Issue Yield: 6.55%), 11/15/2006 AAA 56,991
----------------------------------------------------------------------
50,000 Victor, NY, 7.20% (Original Issue Yield: 7.20%), 12/15/2005 NR 58,411
----------------------------------------------------------------------
35,000 Wallkill, NY Central School District, GO UT, 5.75%,
7/15/2014 NR 37,678
----------------------------------------------------------------------
15,000 Warwick Valley, NY Central School District, GO UT, 6.55% (FGIC
INS)/(Original Issue Yield: 6.70%), 6/1/2008 AAA 17,374
----------------------------------------------------------------------
30,000 Webster, NY Central School District, GO UT, 6.25% (AMBAC
INS)/(Original Issue Yield: 6.20%), 6/15/2003 AAA 32,861
----------------------------------------------------------------------
50,000 West Seneca, NY Central School District, GO UT, 5.625% (FGIC
INS)/(Original Issue Yield: 5.70%), 6/15/2011 AAA 52,870
----------------------------------------------------------------------
25,000 West Seneca, NY, GO UT, 6.65% (MBIA INS)/(Original Issue Yield:
6.80%), 6/1/2005 AAA 28,593
----------------------------------------------------------------------
65,000 Williamsville, NY Central School District, GO UT, 6.50% (MBIA
INS)/(Original Issue Yield: 6.80%), 12/1/2010 AAA 75,634
---------------------------------------------------------------------- -------------
Total 34,147,954
---------------------------------------------------------------------- -------------
PUERTO RICO--10.0%
----------------------------------------------------------------------
165,000 Puerto Rico Industrial, Medical & Environmental PCA, Industrial
Improvement Revenue Bonds, 6.50% (Abbott Laboratories), 7/1/2009 NR 165,851
----------------------------------------------------------------------
25,000 Puerto Rico Industrial, Medical & Environmental PCA, Revenue Bonds,
5.10% (American Home Products Corp.)/ (Original Issue Yield: 5.30%),
12/1/2018 NR 24,276
----------------------------------------------------------------------
2,300,000 Puerto Rico Industrial, Medical & Environmental PCA, Revenue Bonds,
7.50% (Upjohn Co.), 12/1/2023 AA- 2,459,413
----------------------------------------------------------------------
</TABLE>
VISION NEW YORK MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ------------ ---------------------------------------------------------------------- ------------- -------------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--CONTINUED
- ------------------------------------------------------------------------------------
PUERTO RICO--CONTINUED
----------------------------------------------------------------------
$ 1,200,000 (b)Puerto Rico Industrial, Medical & Environmental PCA, Series A,
6.75% (Motorola, Inc.), 1/1/2014 AA- $ 1,325,532
---------------------------------------------------------------------- -------------
Total 3,975,072
---------------------------------------------------------------------- -------------
TOTAL INVESTMENTS (IDENTIFIED COST $36,845,492)(C) $ 38,123,026
---------------------------------------------------------------------- -------------
</TABLE>
* Please refer to the Appendix of the Statement of Additional Information for
an explanation of the credit ratings. Current credit ratings are unaudited.
At October 31, 1997, 15.5% of the total investments at market value were
subject to alternative minimum tax.
(a) Denotes a private placement security. At October 31, 1997, these securities
amounted to $24,172, which represents 0.10% of total net assets.
(b) Denotes a restricted security which is subject to restrictions under Federal
Securities laws. At October 31, 1997, these securities amounted to
$1,325,532, which represents 3.3% of total net assets.
(c) The cost of investments for federal tax purposes amounts to $36,845,492.
The net unrealized appreciation of investments on a federal tax basis
amounts to $1,277,534 which is comprised of $1,279,561 appreciation and
$2,027 depreciation at October 31, 1997.
Note: The categories of investments are shown as a percentage of net assets
($39,602,807) at
October 31, 1997.
The following acronyms are used throughout this portfolio:
AMBAC--American Municipal Bond Assurance Corporation BIG--Bond Investors
Guaranty COL--Collateralized FGIC--Financial Guaranty Insurance Company
FHA--Federal Housing Administration FSA--Financial Security Assurance
GO--General Obligation HFA--Housing Finance Authority IDA--Industrial
Development Authority INS--Insured
VISION NEW YORK MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
LOC--Letter of Credit
MBIA--Municipal Bond Investors Assurance
PCA--Pollution Control Authority
PRF--Prerefunded
UT--Unlimited Tax
(See Notes which are an integral part of the Financial Statements)
VISION GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ----------------------------------------------------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS--97.0%
- -------------------------------------------------------------------------------------------------
CAPITAL EQUIPMENT & SERVICES--9.9%
-----------------------------------------------------------------------------------
116,175 Cincinnati Milacron, Inc. $ 3,223,856
-----------------------------------------------------------------------------------
56,300 Deere & Co. 2,962,788
-----------------------------------------------------------------------------------
35,600 Northrop Corp. 3,889,300
-----------------------------------------------------------------------------------
69,300 PACCAR, Inc. 3,122,831
----------------------------------------------------------------------------------- --------------
Total 13,198,775
----------------------------------------------------------------------------------- --------------
CAPITAL GOODS--1.7%
-----------------------------------------------------------------------------------
58,875 (a)UCAR International, Inc. 2,207,812
----------------------------------------------------------------------------------- --------------
CONSUMER CYCLICAL--13.2%
-----------------------------------------------------------------------------------
82,000 Carnival Corp., Class A 3,977,000
-----------------------------------------------------------------------------------
232,525 Clayton Homes, Inc. 3,822,130
-----------------------------------------------------------------------------------
67,425 Home Depot, Inc. 3,750,516
-----------------------------------------------------------------------------------
49,225 Springs Industries, Inc., Class A 2,282,809
-----------------------------------------------------------------------------------
107,050 Tandy Corp. 3,679,844
----------------------------------------------------------------------------------- --------------
Total 17,512,299
----------------------------------------------------------------------------------- --------------
CONSUMER NON-CYCLICAL--9.3%
-----------------------------------------------------------------------------------
112,350 Bergen Brunswig Corp., Class A 4,501,022
-----------------------------------------------------------------------------------
95,450 Breed Technologies, Inc. 2,105,866
-----------------------------------------------------------------------------------
122,079 (a)HEALTHSOUTH Corp. 3,120,651
-----------------------------------------------------------------------------------
58,675 (a)Wellpoint Health Networks, Inc. 2,684,381
----------------------------------------------------------------------------------- --------------
Total 12,411,920
----------------------------------------------------------------------------------- --------------
ENERGY--22.9%
-----------------------------------------------------------------------------------
67,214 Burlington Resources, Inc. 3,289,303
-----------------------------------------------------------------------------------
118,600 (a)Nabors Industries, Inc. 4,877,425
-----------------------------------------------------------------------------------
82,750 New Century Energies, Inc. 3,454,812
-----------------------------------------------------------------------------------
80,950 (a)Newpark Resources, Inc. 3,359,425
-----------------------------------------------------------------------------------
</TABLE>
VISION GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ----------------------------------------------------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
- -------------------------------------------------------------------------------------------------
ENERGY--CONTINUED
-----------------------------------------------------------------------------------
73,025 Phillips Petroleum Co. $ 3,532,584
-----------------------------------------------------------------------------------
54,375 Schlumberger Ltd. 4,757,813
-----------------------------------------------------------------------------------
60,850 Tidewater, Inc. 3,997,084
-----------------------------------------------------------------------------------
75,075 Unocal Corp. 3,096,844
----------------------------------------------------------------------------------- --------------
Total 30,365,290
----------------------------------------------------------------------------------- --------------
FINANCIAL SERVICES--22.7%
-----------------------------------------------------------------------------------
32,900 Bankers Trust New York Corp. 3,882,200
-----------------------------------------------------------------------------------
50,575 First American Corp. 2,402,313
-----------------------------------------------------------------------------------
73,425 First Commerce Corp. 4,717,556
-----------------------------------------------------------------------------------
18,500 General RE Corp. 3,647,969
-----------------------------------------------------------------------------------
30,000 Hartford Financial Services Group, Inc. 2,430,000
-----------------------------------------------------------------------------------
22,375 J.P. Morgan & Co., Inc. 2,455,656
-----------------------------------------------------------------------------------
255,025 Reliance Group Holdings, Inc. 3,219,691
-----------------------------------------------------------------------------------
133,550 Reliastar Financial Corp. 4,991,431
-----------------------------------------------------------------------------------
40,700 Union Planters Corp. 2,414,019
----------------------------------------------------------------------------------- --------------
Total 30,160,835
----------------------------------------------------------------------------------- --------------
TECHNOLOGY--9.6%
-----------------------------------------------------------------------------------
41,075 AMP, Inc. 1,848,375
-----------------------------------------------------------------------------------
71,400 (a)Adaptec, Inc. 3,458,437
-----------------------------------------------------------------------------------
34,550 Avnet, Inc. 2,174,491
-----------------------------------------------------------------------------------
42,650 (a)Cisco Systems, Inc. 3,498,633
-----------------------------------------------------------------------------------
119,750 (a)Silicon Graphics, Inc. 1,758,828
----------------------------------------------------------------------------------- --------------
Total 12,738,764
----------------------------------------------------------------------------------- --------------
TRANSPORTATION--2.6%
-----------------------------------------------------------------------------------
108,775 USFreightways Corp. 3,521,591
----------------------------------------------------------------------------------- --------------
UTILITIES--5.1%
-----------------------------------------------------------------------------------
141,025 Ohio Edison Co. 3,490,369
-----------------------------------------------------------------------------------
</TABLE>
VISION GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
- ------------ ----------------------------------------------------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
- -------------------------------------------------------------------------------------------------
UTILITIES--CONTINUED
-----------------------------------------------------------------------------------
75,175 WICOR, Inc. $ 3,241,922
----------------------------------------------------------------------------------- --------------
Total 6,732,291
----------------------------------------------------------------------------------- --------------
TOTAL COMMON STOCKS (IDENTIFIED COST $104,562,131) 128,849,577
----------------------------------------------------------------------------------- --------------
MUTUAL FUND--3.0%
- -------------------------------------------------------------------------------------------------
$ 3,958,496 Seven Seas Money Market Fund 3,958,496
----------------------------------------------------------------------------------- --------------
TOTAL MUTUAL FUNDS (AT AMORTIZED COST) 3,958,496
----------------------------------------------------------------------------------- --------------
TOTAL INVESTMENTS (IDENTIFIED COST $108,520,627)(B) $ 132,808,073
----------------------------------------------------------------------------------- --------------
</TABLE>
(a) Non-income producing security.
(b) The cost of investments for federal tax purposes amounts to $108,520,627.
The net unrealized appreciation of investments on a federal tax basis
amounts to $24,287,446 which is comprised of $27,188,976 appreciation and
$2,901,530 depreciation at October 31, 1997.
Note: The categories of investments are shown as a percentage of net assets
($132,813,924) at October 31, 1997.
(See Notes which are an integral part of the Financial Statements)
VISION CAPITAL APPRECIATION FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------------------------ -------------
<C> <S> <C>
COMMON STOCKS--92.5%
- --------------------------------------------------------------------------------------------------
CAPITAL EQUIPMENT & SERVICES--9.0%
------------------------------------------------------------------------------------
41,200 (a)Coltec Industries, Inc. $ 824,000
------------------------------------------------------------------------------------
16,200 Cummins Engine Co., Inc. 987,187
------------------------------------------------------------------------------------
39,100 (a)Jacobs Engineering Group, Inc. 1,055,700
------------------------------------------------------------------------------------
27,100 (a)Kulicke & Soffa Industries 697,825
------------------------------------------------------------------------------------
44,400 (a)M.S. Carriers, Inc. 1,125,263
------------------------------------------------------------------------------------ -------------
Total 4,689,975
------------------------------------------------------------------------------------ -------------
CONSUMER CYCLICAL--7.7%
------------------------------------------------------------------------------------
40,000 (a)AccuStaff, Inc. 1,142,500
------------------------------------------------------------------------------------
52,500 (a)CompUSA, Inc. 1,719,375
------------------------------------------------------------------------------------
29,443 (a)Consolidated Stores Corp. 1,174,040
------------------------------------------------------------------------------------ -------------
Total 4,035,915
------------------------------------------------------------------------------------ -------------
CONSUMER NON-CYCLICAL--16.2%
------------------------------------------------------------------------------------
56,000 Biomet, Inc. 1,396,500
------------------------------------------------------------------------------------
72,350 Flowers Industries, Inc. 1,374,650
------------------------------------------------------------------------------------
130,700 Food Lion, Inc., Class A 1,012,925
------------------------------------------------------------------------------------
23,300 (a)HealthCare COMPARE Corp. 1,252,375
------------------------------------------------------------------------------------
48,900 (a)Staples, Inc. 1,283,625
------------------------------------------------------------------------------------
68,400 (a)Watson Pharmaceuticals, Inc. 2,171,700
------------------------------------------------------------------------------------ -------------
Total 8,491,775
------------------------------------------------------------------------------------ -------------
ELECTRONIC TECHNOLOGY--5.7%
------------------------------------------------------------------------------------
32,000 (a)Apex MPC Solutions, Inc. 824,000
------------------------------------------------------------------------------------
22,100 (a)Photronic Labs, Inc. 947,538
------------------------------------------------------------------------------------
44,200 (a)Tracor, Inc. 1,182,350
------------------------------------------------------------------------------------ -------------
Total 2,953,888
------------------------------------------------------------------------------------ -------------
</TABLE>
VISION CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------------------------ -------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------------------
ENERGY--12.6%
------------------------------------------------------------------------------------
28,500 Diamond Offshore Drilling, Inc. $ 1,774,125
------------------------------------------------------------------------------------
53,500 (a)Global Marine, Inc. 1,665,187
------------------------------------------------------------------------------------
28,700 Tosco Corp. 947,100
------------------------------------------------------------------------------------
20,800 Valero Energy Corp. 626,600
------------------------------------------------------------------------------------
69,600 Vintage Petroleum, Inc. 1,592,100
------------------------------------------------------------------------------------ -------------
Total 6,605,112
------------------------------------------------------------------------------------ -------------
FINANCIAL SERVICES--23.3%
------------------------------------------------------------------------------------
34,800 Amsouth Bancorporation 1,672,575
------------------------------------------------------------------------------------
38,700 Bear Stearns Cos., Inc. 1,535,906
------------------------------------------------------------------------------------
39,700 CNB Bancshares, Inc. 1,583,037
------------------------------------------------------------------------------------
31,700 (a)Golden State Bancorp, Inc. 1,054,025
------------------------------------------------------------------------------------
21,300 Lehman Brothers Holdings, Inc. 1,002,431
------------------------------------------------------------------------------------
46,500 Schwab (Charles) Corp. 1,586,813
------------------------------------------------------------------------------------
19,300 Star Banc Corp. 946,906
------------------------------------------------------------------------------------
34,950 Summit Bancorp 1,491,928
------------------------------------------------------------------------------------
61,450 Synovus Financial Corp. 1,336,538
------------------------------------------------------------------------------------ -------------
Total 12,210,159
------------------------------------------------------------------------------------ -------------
TECHNOLOGY--18.0%
------------------------------------------------------------------------------------
31,700 (a)Adaptec, Inc. 1,535,469
------------------------------------------------------------------------------------
41,100 (a)Bay Networks, Inc. 1,299,787
------------------------------------------------------------------------------------
51,900 (a)DII Group, Inc. 1,278,037
------------------------------------------------------------------------------------
28,200 (a)EMC Corp. Mass 1,579,200
------------------------------------------------------------------------------------
29,800 (a)Gtech Holdings Corp. 961,050
------------------------------------------------------------------------------------
33,700 (a)Tech Data Corp. 1,499,650
------------------------------------------------------------------------------------
42,700 (a)VLSI Technology, Inc. 1,264,989
------------------------------------------------------------------------------------ -------------
Total 9,418,182
------------------------------------------------------------------------------------ -------------
TOTAL COMMON STOCKS (IDENTIFIED COST $42,415,307) 48,405,006
------------------------------------------------------------------------------------ -------------
</TABLE>
VISION CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
- ------------ ------------------------------------------------------------------------------------ -------------
<C> <S> <C>
MUTUAL FUND SHARES--4.9%
- --------------------------------------------------------------------------------------------------
$ 2,558,446 Seven Seas Money Market Fund (at net asset value) 2,558,446
------------------------------------------------------------------------------------ -------------
TOTAL INVESTMENTS (IDENTIFIED COST $44,973,753)(B) $ 50,963,452
------------------------------------------------------------------------------------ -------------
</TABLE>
(a) Non-income producing security.
(b) The cost of investments for federal tax purposes amounts to $44,973,753. The
net unrealized appreciation of investments on a federal tax basis amounts to
$5,989,699 which is comprised of $7,820,920 appreciation and $1,831,221
depreciation at October 31, 1997.
Note: The categories of investments are shown as a percentage of net assets
($52,311,843) at
October 31, 1997.
(See Notes which are an integral part of the Financial Statements)
VISION EQUITY AND INCOME FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
OCTOBER 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT NEW YORK GROWTH AND CAPITAL
SECURITIES MUNICIPAL INCOME APPRECIATION
FUND INCOME FUND FUND FUND
<S> <C> <C> <C> <C>
ASSETS:
- ---------------------------------------------------
Investments in securities, at value $55,601,835 $38,123,026 1$32,808,073 $50,963,452
- ---------------------------------------------------
Cash -- 741,295 -- --
- ---------------------------------------------------
Income receivable 982,499 809,670 157,650 29,560
- ---------------------------------------------------
Receivable for shares sold 127,854 75,372 115,017 197,229
- ---------------------------------------------------
Receivable for investments sold -- -- -- 1,147,141
- ---------------------------------------------------
Deferred Expenses 1,740 2,235 2,068 --
- --------------------------------------------------- ----------------- ------------- ------------ ------------
Total assets 56,713,928 39,751,598 133,082,808 52,337,382
- --------------------------------------------------- ----------------- ------------- ------------ ------------
LIABILITIES:
- ---------------------------------------------------
Income distribution payable 290,818 135,954 -- --
- ---------------------------------------------------
Payable for investments purchased 1,597,914 -- -- --
- ---------------------------------------------------
Payable to Bank -- -- 215,062 --
- ---------------------------------------------------
Payable for shares redeemed 1,000 -- -- --
- ---------------------------------------------------
Accrued expenses 15,834 12,786 53,822 25,539
- --------------------------------------------------- ----------------- ------------- ------------ ------------
Total liabilities 1,905,566 148,740 268,884 25,539
- --------------------------------------------------- ----------------- ------------- ------------ ------------
NET ASSETS $54,808,362 $39,602,858 1$32,813,924 $52,311,843
- --------------------------------------------------- ----------------- ------------- ------------ ------------
NET ASSETS CONSISTS OF:
- ---------------------------------------------------
Paid in capital $54,477,560 $38,163,208 $83,738,099 $42,882,677
- ---------------------------------------------------
Net unrealized appreciation (depreciation) of
investments 1,224,348 1,277,534 24,287,446 5,989,699
- ---------------------------------------------------
Accumulated net realized gain (loss) on investments (899,547) 159,476 24,756,954 3,604,666
- ---------------------------------------------------
Accumulated undistributed net investment income/
Net investment loss 6,001 2,640 31,425 (165,199)
- --------------------------------------------------- ----------------- ------------- ------------ ------------
Total Net Assets $54,808,362 $39,602,858 1$32,813,924 $52,311,843
- --------------------------------------------------- ----------------- ------------- ------------ ------------
NET ASSET VALUE, Offering Price and Redemption
Proceeds Per Share:
- ---------------------------------------------------
Net Asset Value and Redemption Proceeds Per Share $9.60 $10.47 $18.51 $14.09
- --------------------------------------------------- ----------------- ------------- ------------ ------------
Offering Price Per Share* $10.05 ** $10.96 ** $19.59 *** $14.91 ***
- --------------------------------------------------- ----------------- ------------- ------------ ------------
SHARES OUTSTANDING: 5,710,509 3,781,355 7,174,254 3,713,471
- --------------------------------------------------- ----------------- ------------- ------------ ------------
Investments, at identified cost $ 54,377,487 $ 36,845,492 $108,520,626 $44,973,753
- --------------------------------------------------- ----------------- ------------- ------------ ------------
Investments, at tax cost $ 54,377,487 $ 36,845,492 $108,520,626 $44,973,753
- --------------------------------------------------- ----------------- ------------- ------------ ------------
</TABLE>
*See "What Shares Cost" in the Prospectus.
**Computation of offering price per share 100/95.5 of net asset value.
***Computation of offering price per share 100/94.5 of net asset value.
(See Notes which are an integral part of the Financial Statements)
VISION EQUITY AND INCOME FUNDS
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT NEW YORK GROWTH AND CAPITAL
SECURITIES MUNICIPAL INCOME APPRECIATION
FUND INCOME FUND FUND FUND
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------
Dividends $ -- $ -- $1,027,946 $ 105,079
- ---------------------------------------------------
Interest 1,855,482 1,016,095 87,737 75,154
- --------------------------------------------------- ----------------- ------------- ------------ ------------
TOTAL INVESTMENT INCOME 1,855,482 1,016,095 1,115,683 180,233
- ---------------------------------------------------
EXPENSES:
- ---------------------------------------------------
Investment advisory fee 171,448 134,741 480,038 193,022
- ---------------------------------------------------
Administrative personnel and services fee 25,779 25,206 70,570 26,037
- ---------------------------------------------------
Custodian fees 4,180 1,639 8,513 4,188
- ---------------------------------------------------
Transfer and dividend disbursing agent fees and
expenses 26,212 27,622 68,278 31,236
- ---------------------------------------------------
Directors' fees 478 83 1,340 890
- ---------------------------------------------------
Auditing fees 8,297 7,324 7,465 7,564
- ---------------------------------------------------
Legal fees 3,668 3,263 3,508 1,977
- ---------------------------------------------------
Portfolio accounting fees 26,037 34,465 25,917 21,303
- ---------------------------------------------------
Shareholder services fees -- -- 119,573 41,451
- ---------------------------------------------------
Capital stock registration costs 8,187 9,166 10,231 7,791
- ---------------------------------------------------
Printing and postage 8,535 12,222 15,978 4,986
- ---------------------------------------------------
Taxes 3,117 3,550 6,062 2,252
- ---------------------------------------------------
Insurance premiums 1,917 1,941 2,089 2,252
- ---------------------------------------------------
Miscellaneous 7,103 6,839 6,392 3,168
- --------------------------------------------------- ----------------- ------------- ------------ ------------
TOTAL EXPENSES 294,958 268,061 825,954 348,117
- --------------------------------------------------- ----------------- ------------- ------------ ------------
Waivers--
- ---------------------------------------------------
Waiver of investment advisory fee (25,102) (66,677) -- --
- ---------------------------------------------------
Waiver of administrative personnel and services
fees (571) (5,392) -- (2,685)
- --------------------------------------------------- ----------------- ------------- ------------ ------------
TOTAL WAIVERS (25,673) (72,069) -- (2,685)
- --------------------------------------------------- ----------------- ------------- ------------ ------------
NET EXPENSES 269,285 195,992 825,954 345,432
- --------------------------------------------------- ----------------- ------------- ------------ ------------
NET INVESTMENT INCOME $ 1,586,197 $ 820,103 $ 289,729 $ (165,199)
- --------------------------------------------------- ----------------- ------------- ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ---------------------------------------------------
Net realized gain (loss) on investments 122,398 329,746 6,126,931 2,999,809
- ---------------------------------------------------
Net change in unrealized appreciation
(depreciation) of investments 1,529,748 1,081,809 20,733,473 5,663,975
- --------------------------------------------------- ----------------- ------------- ------------ ------------
Net realized and unrealized gain (loss) on
investments 1,652,146 1,411,555 26,860,404 8,663,784
- --------------------------------------------------- ----------------- ------------- ------------ ------------
Change in net assets resulting from
operations $ 3,238,343 $ 2,231,658 $27,150,133 $8,498,585
- --------------------------------------------------- ----------------- ------------- ------------ ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
VISION EQUITY AND INCOME FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT NEW YORK MUNICIPAL
SECURITIES FUND INCOME FUND
<S> <C> <C> <C> <C>
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
OCTOBER 31, ENDED OCTOBER 31, ENDED
1997 APRIL 30, 1997 APRIL 30,
(UNAUDITED) 1997 (UNAUDITED) 1997
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------------
Net investment income $1,586,197 $2,301,980 $ 820,103 $1,589,604
- -------------------------------------------------------------
Net realized gain (loss) in investments 122,398 (710,450) 329,746 222,949
- -------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of
investments 1,529,748 508,343 1,081,809 323,016
- ------------------------------------------------------------- ----------- ---------- ----------- ----------
Change in net assets resulting from operations 3,238,343 2,099,873 2,231,658 2,135,569
- -------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------------------------
Distributions from net investment income (1,604,510) (2,302,079) (820,103) (1,586,964)
- -------------------------------------------------------------
Distributions in excess of net investment income -- -- -- --
- -------------------------------------------------------------
Distributions from net realized gains -- -- -- --
- ------------------------------------------------------------- ----------- ---------- ----------- ----------
Change in net assets resulting from distributions to
shareholders (1,604,510) (2,302,079) (820,103) (1,586,964)
- ------------------------------------------------------------- ----------- ---------- ----------- ----------
SHARE TRANSACTIONS--
- -------------------------------------------------------------
Proceeds from sales of shares 10,912,056 15,979,092 6,330,984 8,656,290
- -------------------------------------------------------------
Net asset value of shares issued to shareholders in payment
of distributions declared 732,848 1,169,547 491,758 1,194,289
- -------------------------------------------------------------
Cost of shares redeemed (2,955,416) (6,753,091) (4,111,224) (7,540,206)
- ------------------------------------------------------------- ----------- ---------- ----------- ----------
Change in net assets resulting from share transactions 8,689,488 10,395,548 2,711,518 2,310,373
- ------------------------------------------------------------- ----------- ---------- ----------- ----------
Change in net assets 10,323,321 10,193,342 4,123,073 2,858,978
- -------------------------------------------------------------
NET ASSETS:
- -------------------------------------------------------------
Beginning of period 44,485,041 34,291,699 35,479,785 32,620,807
- ------------------------------------------------------------- ----------- ---------- ----------- ----------
End of period 5$4,808,362 $44,485,041 3$9,602,858 $35,479,785
- ------------------------------------------------------------- ----------- ---------- ----------- ----------
Undistributed net investment income included in net assets
at end of period $ 6,103 $ 24,314 $ 2,640 $ 2,640
- ------------------------------------------------------------- ----------- ---------- ----------- ----------
Net gain (loss) as computed for federal tax purposes $ 122,398 $ (662,897) $ 329,746 $ 222,949
- ------------------------------------------------------------- ----------- ---------- ----------- ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
VISION EQUITY AND INCOME FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH AND INCOME CAPITAL APPRECIATION
FUND FUND
SIX MONTHS YEAR SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED
OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30,
1997 1997 1997 1997*
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------------
Net investment income $ 289,729 $ 755,116 $(165,199) $ 29,376
- ------------------------------------------------------------
Net realized gain (loss) in investments 6,126,931 20,391,748 2,999,809 772,135
- ------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of
investments 20,733,473 (7,859,091) 5,663,975 325,724
- ------------------------------------------------------------ ----------- ----------- ----------- ----------
Change in net assets resulting from operations 27,150,133 13,287,773 8,498,585 1,127,235
- ------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------------
Distributions from net investment income (367,700) (732,162) -- (29,376)
- ------------------------------------------------------------
Distributions in excess of net investment income -- -- -- (41,266)**
- ------------------------------------------------------------
Distributions from net realized gains -- (3,306,559) -- (126,012)
- ------------------------------------------------------------ ----------- ----------- ----------- ----------
Change in net assets resulting from distributions to
shareholders (367,700) (4,038,721) -- (196,654)
- ------------------------------------------------------------ ----------- ----------- ----------- ----------
SHARE TRANSACTIONS--
- ------------------------------------------------------------
Proceeds from sales of shares 16,783,362 53,236,024 12,698,378 32,772,622
- ------------------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 258,962 2,340,952 -- 192,580
- ------------------------------------------------------------
Cost of shares redeemed (25,101,140) (15,854,389) (2,325,636) (455,267)
- ------------------------------------------------------------ ----------- ----------- ----------- ----------
Change in net assets resulting from share transactions (8,058,816) 39,722,587 10,372,742 32,509,935
- ------------------------------------------------------------ ----------- ----------- ----------- ----------
Change in net assets 18,723,617 48,971,639 18,871,327 33,440,516
- ------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------
Beginning of period 114,090,307 65,118,668 33,440,516 --
- ------------------------------------------------------------ ----------- ----------- ----------- ----------
End of period $132,813,924 $114,090,307 5$2,311,843 $33,440,516
- ------------------------------------------------------------ ----------- ----------- ----------- ----------
Undistributed net investment income included in net assets
at end of period $ 31,425 $ 109,394 -- --
- ------------------------------------------------------------ ----------- ----------- ----------- ----------
Net gain (loss) as computed for federal tax purposes $ 6,126,931 $20,210,516 $2,999,809 $ 781,236
- ------------------------------------------------------------ ----------- ----------- ----------- ----------
</TABLE>
*For the period from July 3, 1996 (date of inital public investment) to April
30, 1997.
**Distributions are in accordance with income tax regulations which may differ
from generally accepted accounting principles. These distributions do not
represent a return of capital for federal tax purposes.
(See Notes which are an integral part of the Financial Statements)
VISION EQUITY AND INCOME FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1997 (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 eight portfolios
(individually referred to as the "Fund", or collectively as the "Funds"). The
following Funds are presented herein:
<TABLE>
<CAPTION>
PORTFOLIO NAME INVESTMENT OBJECTIVE
<S> <C>
Vision U.S. Government Securities Fund ("U.S. Current income by investing primarily in securities that
Government Securities Fund") (d) are guaranteed for payment of principal and interest by the
U.S. Government,
its agencies or instrumentalities. Capital
appreciation is a secondary investment consideration.
Vision New York Municipal Income Fund ("New York Current income which is exempt
from federal regular income Municipal Income Fund") (n) tax, and the personal
income taxes imposed by the State of
New York and New York
municipalities and is
consistent with preservation
of capital.
Vision Growth and Income Fund ("Growth and Long-term growth of capital and
income. Income Fund") (d) Vision Capital Appreciation Fund ("Capital Long-term
capital appreciation by investing in a Appreciation Fund") (d) diversified
portfolio consisting primarily of common stocks
that the adviser believes offer opportunity for growth of
capital.
</TABLE>
(d) Diversified
(n) Non-diversified
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.
VISION EQUITY AND INCOME FUNDS
- --------------------------------------------------------------------------------
INVESTMENT VALUATIONS--Listed equity securities are valued at the last sale
price reported on a national securities exchange. 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. 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. 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. Investments in other open-end regulated investment
companies are valued at net asset value.
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.
At April 30, 1997 the following funds had capital loss carryforwards for
federal tax purposes, which will reduce each 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 each Fund of
any liability for federal tax. Pursuant to the Code, such capital loss
carryforwards will expire as listed below:
VISION EQUITY AND INCOME FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CAPITAL LOSS CAPITAL LOSS TOTAL CAPITAL
CARRYFORWARD TO CARRYFORWARD TO LOSS
FUND EXPIRE IN 2003 EXPIRE IN 2004 CARRYFORWARDS
<S> <C> <C> <C>
U.S. Government Securities Fund $ 311,493 $ 662,897 $ 974,390
New York Municipal Income Fund 166,717 3,555 170,272
</TABLE>
Net realized capital losses on U.S. Government Securities Fund of $47,552
attributable to security transactions incurred after October 31, 1996, are
treated as arising on the first day of the Fund's next taxable year (May 1,
1997).
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.
DEFERRED EXPENSES--The costs incurred by the Funds with respect to
registration of their shares in their first fiscal year, excluding the
initial expense of registering their shares, have been deferred and are
being amortized over a period not to exceed five years from the Funds'
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.
RESTRICTED SECURITIES--Restricted securities are securities that may only
be resold upon registration under federal securities laws or in
transactions exempt from such registration. In some cases, the issuer of
restricted securities has agreed to register such securities for resale, at
the issuer's expense either upon demand by the Fund or in connection with
another registered offering of the securities. Many restricted securities
may be resold in the secondary market in transactions exempt from
registration. Such restricted securities may be determined to be liquid
under criteria established by the Directors. The Fund will not incur any
registration costs upon such resales. The Fund's restricted securities are
valued at the price provided by dealers in the secondary market or, if no
market prices are available, at the fair value as determined by the Fund's
pricing committee.
Additional information on each restricted security held at October 31, 1997
is as follows:
<TABLE>
<CAPTION>
NEW YORK MUNICIPAL INCOME FUND
ACQUISITION ACQUISITION
SECURITY DATE: COST:
<S> <C> <C>
Puerto Rico Industrial, Medical & Environmental PCA 1/24/1997 $ 1,294,045
</TABLE>
OTHER--Investment transactions are accounted for on the trade date.
VISION EQUITY AND INCOME FUNDS
- --------------------------------------------------------------------------------
(3) CAPITAL STOCK
At October 31, 1997, there were 1,000,000,000 shares of $0.001 par value capital
stock authorized with respect to each Fund. Transactions in capital stock were
as follows:
<TABLE>
<CAPTION>
U.S. GOVERNMENT NEW YORK MUNICIPAL
SECURITIES FUND INCOME FUND
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30,
1997 1997 1997 1997
<S> <C> <C> <C> <C>
Shares sold 1,155,169 1,710,458 611,780 858,336
- -------------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 77,674 125,662 47,459 118,381
- -------------------------------------------------------------
Shares redeemed (313,604) (727,517) (396,385) (751,725)
- ------------------------------------------------------------- ------------ ----------- ------------ -----------
Net change resulting from share transactions 919,239 1,108,603 262,854 224,992
- ------------------------------------------------------------- ------------ ----------- ------------ -----------
</TABLE>
<TABLE>
<CAPTION>
GROWTH AND INCOME CAPITAL APPRECIATION
FUND FUND
SIX MONTHS YEAR SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED
OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30,
1997 1997 1997 1997(A)
<S> <C> <C> <C> <C>
Shares sold 974,142 3,564,637 907,521 2,993,059
- ------------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 14,932 154,932 -- 17,066
- ------------------------------------------------------------
Shares redeemed (1,363,215) (1,050,710) (164,696) (39,479)
- ------------------------------------------------------------ ------------ ---------- ------------ -----------
Net change resulting from share transactions (374,141) 2,668,859 742,825 2,970,646
- ------------------------------------------------------------ ------------ ---------- ------------ -----------
</TABLE>
(a) For the period from July 3, 1996 (date of initial public investment) to
April 30, 1997.
(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 based on a percentage of each Fund's average daily net
assets (see below). The Adviser may voluntarily choose to waive any portion of
its fee or reimburse other operating expenses. The Adviser can modify or
terminate this voluntary waiver or reimbursement at any time at its sole
discretion.
VISION EQUITY AND INCOME FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ANNUAL
FUND RATE
<S> <C>
U.S. Government Securities Fund 0.70%
New York Municipal Income Fund 0.70%
Growth and Income Fund 0.70%
Capital Appreciation Fund 0.85%
</TABLE>
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. FAS can modify or
terminate this voluntary waiver at any time at its sold discretion.
DISTRIBUTION SERVICES FEE--The Corporation has adopted a Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, each
Fund will reimburse Federated Securities Corp. ("FSC"), the principal
distributor, from the net assets of the Funds to finance activities intended to
result in the sale of the Funds' shares. The Plan provides that the Funds may
incur distribution expenses up to 0.25% of the average daily net assets of the
Fund, annually, to reimburse FSC. The Funds did not pay or accrue Distribution
Services Fees during the period ended October 31, 1997.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Manufacturers and Traders Trust Company, the Funds will pay Manufacturers
and Traders Trust Company up to 0.25% of average daily net assets of the Funds
for the period. The fee paid to Manufacturers and Traders Trust Company is used
to finance certain services for shareholders and to maintain shareholder
accounts. Certain funds did not pay or accrue these fees.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ"), 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.
ORGANIZATIONAL EXPENSES--Organizational expenses were borne initially by FAS.
The Funds have agreed to reimburse FAS for the organizational expenses during
the five year period following each Fund's effective date. For the period ended
October 31, 1997, the following amounts were paid pursuant to this agreement:
VISION EQUITY AND INCOME FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMOUNT REIMBURSED
TO FAS FOR THE
EXPENSES OF PERIOD ENDED
ORGANIZING THE FUND OCTOBER 31, 1997
<S> <C> <C>
U.S. Government Securities Fund $ 21,313 $2,958
New York Municipal Income Fund $ 27,242 $2,934
Growth and Income Fund $ 18,626 $3,083
Capital Appreciation Fund $ 19,915 $1,982
</TABLE>
GENERAL--Certain of the 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, 1997, were as follows:
<TABLE>
<CAPTION>
FUND PURCHASES SALES
<S> <C> <C>
U.S. Government Securities Fund $ 23,462,057 $ 15,344,696
New York Municipal Income Fund $ 12,692,918 $ 10,559,925
Growth and Income Fund $ 56,605,500 $ 64,529,968
Capital Appreciation Fund $ 35,919,830 $ 26,726,672
</TABLE>
(6) CONCENTRATION OF CREDIT RISK
Since New York Municipal Income Fund 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, 1997, 37.9% 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 15.2% of total investments.
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 Funds' prospectus which contains facts concerning
their objectives and policies, management fees, expenses and other information.
[LOGO OF VISION GROUP OF FUNDS, INC.]
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
OCTOBER 31, 1997
VISION
U.S. Government
Securities Fund
- --------------------------------------------------------------------------------
VISION
New York Municipal
Income Fund
- --------------------------------------------------------------------------------
VISION
Growth and Income
Fund
- --------------------------------------------------------------------------------
VISION
Capital Appreciation
Fund
Federated Securities Corp.
Distributor
Federated Investors Tower
Pittsburgh, PA 15222-3779
Cusip 92830F406 Manufacturers and Traders Trust Company
Cusip 92830F505 Investment Adviser to the Funds
Cusip 92830F604 [LOGO OF One M&T Plaza
Cusip 92830F703 RECYCLED PAPER] Buffalo, NY 14240-4556
G00158-03 (12/97)
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).
- --------------------------------------------------------------------------------
VISION
New York Municipal
Income Fund
(formerly, VISION New York
Tax-Free Fund)
Seeks current income that is exempt from
federal, New York State and
New York City income taxes*, as is
consistent with preservation of capital.
- --------------------------------------------------------------------------------
VISION
Equity Income Fund
Seeks to provide current income by investing in a
diversified portfolio consisting primarily of income-
producing equity securities of domestic companies
(common and preferred stock and convertible securities).
Capital appreciation is a secondary
investment consideration.
- --------------------------------------------------------------------------------
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 short-term
U.S. Treasury obligations, which are fully
guaranteed for payment of principal and interest
by the U.S. government.**
- --------------------------------------------------------------------------------
VISION
New York Tax-Free
Money Market Fund
Seeks a high level of current interest income that is exempt from
federal, New York State
and New York City income taxes,* as well as
liquidity and stability of principal.**
- --------------------------------------------------------------------------------
*Some income may be subject to the federal
alternative minimum tax.
**Money market mutual 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 these funds is neither insured nor
guaranteed by the U.S. government.
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 Money Market Funds
for the six-month period ended October 31, 1997. It contains complete financial
information--including a list of portfolio holdings--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 convenient, easy access to your money, and a
high degree of safety.* The following highlights summarize fund activity for the
six-month reporting period.
VISION MONEY MARKET FUND, a diversified portfolio of corporate and U.S.
government money market securities, paid dividends totaling $0.03 per share.
Assets reached $624 million at the end of the period.
VISION TREASURY MONEY MARKET FUND, which invests exclusively in U.S. Treasury
securities, paid dividends totaling $0.03 per share. Assets rose to reach $398
million at the end of the period.
VISION NEW YORK TAX-FREE MONEY MARKET FUND, a portfolio of New York municipal
money market securities, paid double-tax-free dividends (triple-tax-free
dividends to New York City residents) totaling $0.02 per share.** Assets totaled
$82 million at the end of the 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,
/s/ Edward C. Gonzales
Edward C. Gonzales
President
December 15, 1997
* Although money market funds seek to maintain a stable net asset value of
$1.00, there is no assurance that they will be able to do so. An investment
in these funds is neither insured nor guaranteed by the U.S. government.
** Income may be subject to the federal alternative minimum tax.
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(A)
<S> <C> <C> <C> <C> <C>
<CAPTION>
MONEY MARKET FUND
<S> <C> <C> <C> <C> <C>
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%
1997 $ 1.00 0.05 (0.05) $ 1.00 4.93%
1998(d) $ 1.00 0.03 (0.03) $ 1.00 2.55%
<CAPTION>
TREASURY MONEY MARKET FUND
<S> <C> <C> <C> <C> <C>
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%
1997 $ 1.00 0.05 (0.05) $ 1.00 4.82%
1998(d) $ 1.00 0.03 (0.03) $ 1.00 2.48%
<CAPTION>
NEW YORK TAX-FREE MONEY MARKET FUND
<S> <C> <C> <C> <C> <C>
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%
1997 $ 1.00 0.03 (0.03) $ 1.00 2.96%
1998(d) $ 1.00 0.02 (0.02) $ 1.00 1.59%
</TABLE>
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) Computed on an annualized basis.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) For the six months ended October 31, 1997 (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(C) OMITTED)
<S> <C> <C> <C> <C>
<CAPTION>
MONEY MARKET FUND
<S> <C> <C> <C> <C>
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
1997 0.61% 4.77% 0.10% $ 599,817
1998(d) 0.63%(b) 5.00%(b) 0.07%(b) $ 623,719
<CAPTION>
TREASURY MONEY MARKET FUND
<S> <C> <C> <C> <C>
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
1997 0.58% 4.75% 0.10% $ 373,485
1998(d) 0.58%(b) 4.94%(b) 0.09%(b) $ 397,532
<CAPTION>
NEW YORK TAX-FREE MONEY MARKET FUND
<S> <C> <C> <C> <C>
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
1997 0.50% 2.95% 0.35% $ 56,618
1998(d) 0.52%(b) 3.13%(b) 0.30%(b) $ 81,890
</TABLE>
VISION MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------- --------------------------------------------------------------------------------- --------------
<C> <S> <C>
(A)CORPORATE OBLIGATIONS--88.8%
- ------------------------------------------------------------------------------------------------
BANKING--9.3%
---------------------------------------------------------------------------------
$ 7,445,000 (b)Atlas Iron Processors, Inc., Series 1994, 5.81%, 11/7/1997 $ 7,445,000
---------------------------------------------------------------------------------
25,000,000 Commerzbank U.S. Finance, Inc., 5.61%, 1/12/1998 24,723,500
---------------------------------------------------------------------------------
25,822,000 Toronto Dominion Holdings (USA), Inc., 5.57%, 1/2/1998 25,577,408
--------------------------------------------------------------------------------- --------------
Total 57,745,908
--------------------------------------------------------------------------------- --------------
CHEMICALS--4.0%
---------------------------------------------------------------------------------
25,000,000 Dow Chemical Co., 5.56%, 12/5/1997 24,869,549
--------------------------------------------------------------------------------- --------------
DIVERSIFIED--4.3%
---------------------------------------------------------------------------------
27,000,000 General Electric Capital Corp., 5.70%, 1/20/1998 26,668,200
--------------------------------------------------------------------------------- --------------
ENTERTAINMENT--3.9%
---------------------------------------------------------------------------------
25,000,000 Disney (Walt) Co., 5.62%, 2/5/1998 24,631,333
--------------------------------------------------------------------------------- --------------
FINANCE-AUTOMOTIVE AND FARM EQUIPMENT--12.6%
---------------------------------------------------------------------------------
27,000,000 Daimler Benz North America Corp., 5.61%, 11/5/1997 26,983,470
---------------------------------------------------------------------------------
27,000,000 Ford Motor Credit Corp., 5.76%, 12/29/1997 26,756,400
---------------------------------------------------------------------------------
25,000,000 John Deere Capital Corp., 5.63% 1/27/1998 24,665,896
--------------------------------------------------------------------------------- --------------
Total 78,405,766
--------------------------------------------------------------------------------- --------------
FINANCIAL RETAIL--16.7%
---------------------------------------------------------------------------------
30,000,000 American Express Credit Corp., 5.53%, 12/5/1997 29,844,733
---------------------------------------------------------------------------------
25,039,000 (b)Associates Corp. of North America, 5.497%, 11/5/1997 25,039,000
---------------------------------------------------------------------------------
25,000,000 Beneficial Corp., 5.57%, 12/1/1997 24,884,582
---------------------------------------------------------------------------------
25,000,000 Commercial Credit Co., 5.63%, 1/26/1998 24,668,542
--------------------------------------------------------------------------------- --------------
Total 104,436,857
--------------------------------------------------------------------------------- --------------
TOBACCO, FOOD & BEVERAGE--9.1%
---------------------------------------------------------------------------------
27,000,000 BAT Capital Corp., 5.61%, 11/12/1997 26,954,378
---------------------------------------------------------------------------------
30,000,000 Heinz (H.J.) Co., 5.53%, 11/18/1997 29,922,225
--------------------------------------------------------------------------------- --------------
Total 56,876,603
--------------------------------------------------------------------------------- --------------
INSURANCE--8.0%
---------------------------------------------------------------------------------
25,000,000 American General Finance Corp., 5.52%, 11/19/1997 24,931,250
---------------------------------------------------------------------------------
</TABLE>
VISION MONEY MARKET FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------- --------------------------------------------------------------------------------- --------------
<C> <S> <C>
(A)CORPORATE OBLIGATIONS--CONTINUED
- ------------------------------------------------------------------------------------------------
INSURANCE--CONTINUED
---------------------------------------------------------------------------------
25,000,000 Prudential Funding Corp., 5.56%, 11/7/1997 $ 24,977,042
--------------------------------------------------------------------------------- --------------
Total 49,908,292
--------------------------------------------------------------------------------- --------------
SPECIAL PURPOSE CORPORATION (ASSET BACKED)--8.0%
---------------------------------------------------------------------------------
25,000,000 Apreco, Inc., 5.58%, 12/15/1997 24,831,333
---------------------------------------------------------------------------------
25,000,000 Ciesco, L.P., 5.55%, 11/3/1997 24,992,347
--------------------------------------------------------------------------------- --------------
Total 49,823,680
--------------------------------------------------------------------------------- --------------
TELECOMMUNICATIONS--12.9%
---------------------------------------------------------------------------------
30,000,000 AT&T Corp., 5.61%, 1/14/1998 29,658,058
---------------------------------------------------------------------------------
25,800,000 Ameritech Corp., 5.59% 11/21/1997 25,721,310
---------------------------------------------------------------------------------
25,000,000 Bell Atlantic Financial Services, Inc., 5.56% 11/7/1997 24,976,979
--------------------------------------------------------------------------------- --------------
Total 80,356,347
--------------------------------------------------------------------------------- --------------
TOTAL CORPORATE OBLIGATIONS 553,722,535
--------------------------------------------------------------------------------- --------------
(A)U.S. GOVERNMENT AGENCY--4.4%
- ------------------------------------------------------------------------------------------------
17,820,000 Federal Farm Credit Bank, 5.69%, 6/26/1998 17,194,125
---------------------------------------------------------------------------------
10,000,000 Federal National Mortgage Association, 5.69%, 12/11/1997 9,940,778
--------------------------------------------------------------------------------- --------------
TOTAL U.S. GOVERNMENT AGENCY 27,134,903
--------------------------------------------------------------------------------- --------------
(C)REPURCHASE AGREEMENT--7.3%
- ------------------------------------------------------------------------------------------------
45,418,000 J.P. Morgan & Co., Inc., 5.65%, dated 10/31/1997, due 11/3/1997 45,418,000
--------------------------------------------------------------------------------- --------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(D) $ 626,275,438
--------------------------------------------------------------------------------- --------------
</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
($623,719,010) at October 31, 1997.
(See Notes which are an integral part of the Financial Statements)
VISION TREASURY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- -------------- -------------------------------------------------------------------------------- --------------
<C> <S> <C>
U.S. TREASURY OBLIGATIONS--52.8%
- ------------------------------------------------------------------------------------------------
U.S. TREASURY BILLS--25.0%
--------------------------------------------------------------------------------
$ 100,000,000 11/6/1997-1/8/1998 $ 99,521,714
-------------------------------------------------------------------------------- --------------
U.S. TREASURY NOTES--27.8%
--------------------------------------------------------------------------------
110,000,000 5.00%-8.125%, 1/31/1998-4/15/1998 110,484,132
-------------------------------------------------------------------------------- --------------
TOTAL U.S. TREASURY OBLIGATIONS 210,005,846
-------------------------------------------------------------------------------- --------------
(A)REPURCHASE AGREEMENTS--47.2%
- ------------------------------------------------------------------------------------------------
90,000,000 J.P. Morgan Securities, Inc., 5.650%, dated 10/31/1997, due 11/3/1997 90,000,000
--------------------------------------------------------------------------------
97,695,000 Nomura Securities Intenational, Inc., 5.650%, dated 10/31/1997, due 11/3/1997 97,695,000
-------------------------------------------------------------------------------- --------------
TOTAL REPURCHASE AGREEMENTS 187,695,000
-------------------------------------------------------------------------------- --------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(B) $ 397,700,846
-------------------------------------------------------------------------------- --------------
</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
($397,532,204) at October 31, 1997.
(See Notes which are an integral part of the Financial Statements)
VISION NEW YORK TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ------------ ------------------------------------------------------------------------ ---------- -------------
<C> <S> <C> <C>
(A)SHORT-TERM MUNICIPALS--100.0%
- --------------------------------------------------------------------------------------
NEW YORK--96.8%
------------------------------------------------------------------------
$ 2,850,000 Chautauqua County, NY IDA, IDR Bonds Weekly VRDNs (Belknap Business
Forms)/(Key Bank of New York LOC) A-1 $ 2,850,000
------------------------------------------------------------------------
2,800,000 Elmira City, NY, (Series B), 4.00% BANs, 3/30/1998 MIG-1 2,802,776
------------------------------------------------------------------------
3,000,000 Municipal Assistance Corp of New York, 3.75% CP, Mandatory Tender
12/11/1997 A-1+ 3,000,000
------------------------------------------------------------------------
2,000,000 New Rochelle, NY, 4.00% BANs, 4/30/1998 NR 2,002,416
------------------------------------------------------------------------
2,800,000 New York City Housing Development Corp., (Series 1993A) Weekly VRDNs
(Columbus Gardens)/(Citibank NA, New York LOC) A-1+ 2,800,000
------------------------------------------------------------------------
1,000,000 New York City Housing Development Corp., (Series A) Weekly VRDNs (Upper
Fifth Avenue)/(Bankers Trust Co., New York LOC) VMIG-1 1,000,000
------------------------------------------------------------------------
1,800,000 New York City Housing Development Corp., East 17th St. Properties
Mortgage Revenue Bonds (Series A) Daily VRDNs (Chase Manhattan Bank
N.A., New York LOC) A-1 1,800,000
------------------------------------------------------------------------
3,400,000 New York City Municipal Water Finance Authority, (Series C) Daily VRDNs
(FGIC INS)/(FGIC Securities Purchase, Inc. LIQ) VMIG-1 3,400,000
------------------------------------------------------------------------
1,950,000 New York City, NY IDA, Revenue Bonds Weekly VRDNs (Children's Oncology
Society)/(Barclays Bank, New York LOC) A-1+ 1,950,000
------------------------------------------------------------------------
1,700,000 New York City, NY, (Subseries A-5) Daily VRDNs (Kredietbank LOC) VMIG-1 1,700,000
------------------------------------------------------------------------
1,500,000 New York City, NY, (Subseries A-8) Daily VRDNs (Morgan Guaranty Trust
Co., New York LOC) VMIG-1 1,500,000
------------------------------------------------------------------------
1,100,000 New York City, NY, (Subseries B-4) Daily VRDNs (Union Bank of
Switz.
LOC) VMIG-1 1,100,000
------------------------------------------------------------------------
$ 100,000 New York City, NY, GO UT (Sub-Series B-4) Daily VRDNs (Union Bank of
Switz. LOC) VMIG-1 $ 100,000
------------------------------------------------------------------------
</TABLE>
VISION NEW YORK TAX-FREE MONEY MARKET FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ------------ ------------------------------------------------------------------------ ---------- -------------
<C> <S> <C> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------------
NEW YORK--CONTINUED
------------------------------------------------------------------------
1,600,000 New York City, NY, Series C Daily VRDNs (Morgan Guaranty Trust Co., New
York LOC) VMIG-1 1,600,000
------------------------------------------------------------------------
300,000 New York City, NY, Subseries B-3 Daily VRDNs (Morgan Guaranty Trust Co.,
New York LOC) VMIG-1 300,000
------------------------------------------------------------------------
2,000,000 New York State Dormitory Authority, (Columbia University), 3.70% CP
(Columbia University GTD), Mandatory Tender
11/7/1997 A-1+ 2,000,000
------------------------------------------------------------------------
1,000,000 New York State Dormitory Authority, (Series 1989C), 3.70% CP
(Sloan-Kettering Memorial Cancer Center)/(Chemical Bank LOC), Mandatory
Tender 12/12/1997 A-1+ 1,000,000
------------------------------------------------------------------------
3,800,000 New York State Energy Research & Development Authority Daily VRDNs
(Niagara Mohawk Power Corp.)/(Toronto-Dominion Bank LOC) A-1+ 3,800,000
------------------------------------------------------------------------
1,000,000 New York State Energy Research & Development Authority, (Series B)
Weekly VRDNs (Rochester Gas & Electric Corp)/ (MBIA INS) VMIG-1 1,000,000
------------------------------------------------------------------------
3,595,000 New York State Energy Research & Development Authority, Gas Facilities
Revenue Bonds (1997 Series A-1) Weekly VRDNs (Brooklyn Union Gas
Co.)/(MBIA INS)/(Union Bank of Switzerland, Zurich LIQ) VMIG-1 3,595,000
------------------------------------------------------------------------
1,400,000 New York State Energy Research & Development Authority, PCR, (1994
Series D) Daily VRDNs (Union Bank of Switzerland, Zurich LOC) VMIG-1 1,400,000
------------------------------------------------------------------------
1,000,000 New York State Energy Research & Development Authority, Revenue Bonds
(Series A) Weekly VRDNs (Long Island Lighting Co.) VMIG-1 1,000,000
------------------------------------------------------------------------
1,900,000 New York State Environmental Facilities Corp., 3.70% CP, Mandatory
Tender 12/9/1997 (GTD by General Electric) A-1 1,900,000
------------------------------------------------------------------------
1,000,000 New York State Environmental Facilities Corp., 3.75% CP, Mandatory
Tender 12/9/1997 (GTD by General Electric) A-1 1,000,000
------------------------------------------------------------------------
$ 3,925,000 New York State HFA, Revenue Bonds Weekly VRDNs (Normandie Corp.)
(Landsbank Hessen-Thurigen LOC) VMIG-1 $ 3,925,000
------------------------------------------------------------------------
</TABLE>
VISION NEW YORK TAX-FREE MONEY MARKET FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ------------ ------------------------------------------------------------------------ ---------- -------------
<C> <S> <C> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------------
NEW YORK--CONTINUED
------------------------------------------------------------------------
2,800,000 New York State Local Government Assistance Corp., (Series E) Weekly
VRDNs (Canadian Imperial Bank of Commerce, Toronto LOC) VMIG-1 2,800,000
------------------------------------------------------------------------
1,000,000 New York State Medical Care Facilities Finance Agency Weekly VRDNs
(Pooled Loan Program)/(Chase Manhattan Bank N.A., New York LOC) VMIG-1 1,000,000
------------------------------------------------------------------------
700,000 New York State Power Authority, 3.75% TOBs 3/1/1998 VMIG-1 700,000
------------------------------------------------------------------------
1,000,000 New York State Power Authority, 3.75% TOBs, Mandatory Tender 3/1/1998 VMIG-1 1,000,000
------------------------------------------------------------------------
1,000,000 New York State Power Authority, 3.80% CP, Mandatory Tender 11/18/1997 A-1 1,000,000
------------------------------------------------------------------------
535,000 New York State Power Authority, Revenue Bonds, 3.75% TOBs 3/1/1998 VMIG-1 535,000
------------------------------------------------------------------------
2,500,000 New York State, (Series N), 3.65% CP, Mandatory Tender
11/6/1997 (W. Deutche Landesbank LOC) A-1 2,500,000
------------------------------------------------------------------------
1,000,000 Niagara County, NY IDA, Solid Waste Disposal Facility Revenue Bonds
(Series 1994 A) Weekly VRDNs (American Ref-Fuel Co.)/(Air Products &
Chemicals, Inc. and Browning-Ferris Industries, Inc. GTDs) A-1 1,000,000
------------------------------------------------------------------------
2,800,000 Niagara Falls, NY Bridge Commission, Revenue Bonds (Series 1993A) Weekly
VRDNs (FGIC INS)/(credit local) VMIG-1 2,800,000
------------------------------------------------------------------------
1,000,000 Onondaga County, NY IDA, Revenue Bonds (Series B) Monthly VRDNs (Pass &
Seymour, Inc.)/(Banque Nationale de Paris LOC) A-1 1,000,000
------------------------------------------------------------------------
660,000 Penfield, NY, 3.75% BANs, 12/23/1997 NR 660,041
------------------------------------------------------------------------
2,275,000 Port Authority of New York and New Jersey, 3.60% CP, Mandatory Tender
12/8/1997 (Bank of Nova Scotia LOC) A-1+ 2,275,000
------------------------------------------------------------------------
965,000 Port Authority of New York and New Jersey, 3.65% CP, Mandatory Tender
11/12/1997 (Bank of Nova Scotia LOC) A-1+ 965,000
------------------------------------------------------------------------
$ 540,000 Port Authority of New York and New Jersey, 3.70% CP, Mandatory Tender
12/8/1997 (Bank of Nova Scotia LOC) A-1+ $ 540,000
------------------------------------------------------------------------
</TABLE>
VISION NEW YORK TAX-FREE MONEY MARKET FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ------------ ------------------------------------------------------------------------ ---------- -------------
<C> <S> <C> <C>
(A)SHORT-TERM MUNICIPALS--CONTINUED
- --------------------------------------------------------------------------------------
NEW YORK--CONTINUED
------------------------------------------------------------------------
1,000,000 Rockland County, NY, 4.25% RANs, 4/15/1998 NR 1,001,741
------------------------------------------------------------------------
1,000,000 Seneca County, NY IDA Weekly VRDNs (New York Chiropractic
College)/(Barclays Bank PLC, London LOC) A-1+ 1,000,000
------------------------------------------------------------------------
2,600,000 St. Lawrence County, NY IDA, Refunding Revenue Bonds Daily VRDNs
(Reynolds Metals Co.) (Bank of Nova Scotia LOC) P-1 2,600,000
------------------------------------------------------------------------
1,000,000 Suffolk County, NY Water Authority Weekly VRDNs (Bank of Nova Scotia,
Toronto SA) VMIG-1 1,000,000
------------------------------------------------------------------------
2,000,000 Suffolk County, NY, (Series II), 4.25% TANs (Canadian Imperial
Bank of Commerce, NY, Natwest Bancorp and Westdeutsche Landesbank
Girozentrale
LOCs), 9/10/1998 VMIG-1 2,007,435
------------------------------------------------------------------------
1,000,000 Triborough Bridge & Tunnel Authority, NY Weekly VRDNs (FGIC SA) VMIG-1 1,000,000
------------------------------------------------------------------------
1,000,000 Trust For Cultural Resources of New York City, Revenue Bonds (Series B)
Weekly VRDNs (American Museum of National History)/(MBIA INS) VMIG-1 1,000,000
------------------------------------------------------------------------
2,375,000 Yonkers, NY IDA, Civic Facility Revenue Bonds, (Series 1994)
Weekly VRDNs (Consumers Union Facility)/(AMBAC INS)/(Credit Local
de France
LIQ) A-1+ 2,375,000
------------------------------------------------------------------------ -------------
Total 79,284,409
------------------------------------------------------------------------ -------------
PUERTO RICO--3.2%
------------------------------------------------------------------------
2,600,000 Puerto Rico Government Development Bank, 3.70% CP, Mandatory Tender
12/10/1997 A-1+ 2,600,000
------------------------------------------------------------------------ -------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(B) $ 81,884,409
------------------------------------------------------------------------ -------------
</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) At October 31, 1997, 4.7% of the total investments at market value were
subject to alternative minimum tax.
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($81,889,710) at October 31, 1997.
VISION NEW YORK TAX-FREE MONEY MARKET FUND
- --------------------------------------------------------------------------------
The following acronyms are used throughout this portfolio:
AMBAC--American Municipal Bond Assurance Corporation BANs--Bond Anticipation
Notes CP--Commercial Paper FGIC--Financial Guaranty Insurance Company
GO--General Obligation GTD--Guaranty HFA--Housing Finance Authority
IDA--Industrial Development Authority IDR--Industrial Development Revenue
INS--Insured LIQ--Liquidity Agreement LOCs--Letter(s) of Credit LOC--Letter of
Credit MBIA--Municipal Bond Investors Assurance PCR--Pollution Control Revenue
PLC--Public Limited Company RANs--Revenue Anticipation Notes SA--Support
Agreement TANs--Tax Anticipation Notes TOBs--Tender Option Bonds 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, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NEW YORK
TREASURY TAX-FREE
MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND
<S> <C> <C> <C>
ASSETS:
- ------------------------------------------------------
Investments in repurchase agreements $ 45,418,000 $ 187,695,000 $ --
- ------------------------------------------------------
Investments in securities 580,857,438 210,005,846 81,884,409
- ------------------------------------------------------ ------------------ ------------------ ------------------
Total investments, at amortized cost and value 626,275,438 397,700,846 81,884,409
- ------------------------------------------------------
Cash 231 190,293 --
- ------------------------------------------------------
Income receivable 162,813 1,288,272 348,604
- ------------------------------------------------------
Receivable for shares sold 1,306 307 --
- ------------------------------------------------------
Receivable for investments sold -- -- --
- ------------------------------------------------------
Prepaid expenses -- -- --
- ------------------------------------------------------ ------------------ ------------------ ------------------
Total assets 626,439,788 399,179,718 82,233,013
- ------------------------------------------------------ ------------------ ------------------ ------------------
LIABILITIES:
- ------------------------------------------------------
Income distribution payable 2,669,880 1,623,408 214,771
- ------------------------------------------------------
Payable for shares redeemed -- -- --
- ------------------------------------------------------
Payable to Bank -- -- 107,330
- ------------------------------------------------------
Accrued expenses 50,898 24,106 21,202
- ------------------------------------------------------ ------------------ ------------------ ------------------
Total liabilities 2,720,778 1,647,514 343,303
- ------------------------------------------------------ ------------------ ------------------ ------------------
NET ASSETS $ 623,719,010 $ 397,532,204 $ 81,889,710
- ------------------------------------------------------ ------------------ ------------------ ------------------
NET ASSET VALUE, Offering Price and Redemption
Proceeds Per Share: $1.00 $1.00 $1.00
- ------------------------------------------------------ ------------------ ------------------ ------------------
SHARES OUTSTANDING: 623,719,010 397,532,204 81,889,710
- ------------------------------------------------------ ------------------ ------------------ ------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
VISION MONEY MARKET FUNDS
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NEW YORK
TREASURY TAX-FREE
MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND
<S> <C> <C> <C>
INVESTMENT INCOME:
- ------------------------------------------------------
Interest $ 17,227,631 $ 11,061,284 $ 1,325,520
- ------------------------------------------------------ ------------------ ------------------ ------------------
EXPENSES:
- ------------------------------------------------------
Investment advisory fee 1,529,700 1,001,961 181,735
- ------------------------------------------------------
Administrative personnel and services fee 314,932 205,784 37,386
- ------------------------------------------------------
Custodian fees 15,967 14,430 3,445
- ------------------------------------------------------
Transfer and dividend disbursing agent fees and
expenses 153,975 23,997 19,936
- ------------------------------------------------------
Directors' fees 11,986 3,957 71
- ------------------------------------------------------
Auditing fees 9,095 6,012 6,558
- ------------------------------------------------------
Legal fees 9,011 7,915 2,560
- ------------------------------------------------------
Portfolio accounting fees 31,180 26,353 23,878
- ------------------------------------------------------
Share registration costs 9,848 18,489 6,637
- ------------------------------------------------------
Printing and postage 6,035 5,911 4,820
- ------------------------------------------------------
Taxes 42,497 12,175 5,413
- ------------------------------------------------------
Insurance premiums 167 2,054 1,114
- ------------------------------------------------------
Miscellaneous 6,035 2,004 4,307
- ------------------------------------------------------ ------------------ ------------------ ------------------
TOTAL EXPENSES 2,140,428 1,331,042 297,860
- ------------------------------------------------------ ------------------ ------------------ ------------------
Waivers--
- ------------------------------------------------------
Waiver of investment advisory fee (201,737) (171,140) --
- ------------------------------------------------------
Waiver of administrative personnel and services fees -- -- (110,307)
- ------------------------------------------------------ ------------------ ------------------ ------------------
TOTAL WAIVERS (201,737) (171,140) (110,307)
- ------------------------------------------------------ ------------------ ------------------ ------------------
NET EXPENSES 1,938,691 1,159,902 187,553
- ------------------------------------------------------ ------------------ ------------------ ------------------
NET INVESTMENT INCOME $ 15,288,940 $ 9,901,382 $ 1,137,967
- ------------------------------------------------------ ------------------ ------------------ ------------------
</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
1997 APRIL 30, 1997 APRIL 30, 1997 APRIL 30,
(UNAUDITED) 1997 (UNAUDITED) 1997 (UNAUDITED) 1997
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE)
IN NET ASSETS
- -----------------------
OPERATIONS--
- -----------------------
Net investment income $ 15,288,940 $ 27,303,759 $ 9,901,382 $ 21,796,019 $ 1,137,967 $ 2,073,551
- ----------------------- -------------- -------------- -------------- -------------- ------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS--
- -----------------------
Distributions from
net investment income (15,288,940) (27,303,759) 9,901,382 (21,796,019) (1,137,967) (2,073,551)
- ----------------------- -------------- -------------- -------------- -------------- ------------ ------------
SHARE TRANSACTIONS--
- -----------------------
Proceeds from sales
of shares 8,268,177,200 8,645,835,065 2,481,869,208 3,654,497,462 490,497,469 176,252,479
- -----------------------
Net asset value of
shares issued to
shareholders in
payment of
distributions
declared 5,614,497 11,569,142 1,618,453 2,819,179 399,575 779,290
- -----------------------
Cost of shares
redeemed (8,249,889,929) (8,546,816,379) (2,459,440,094) (3,656,716,056) (465,625,274) (186,176,785)
- ----------------------- -------------- -------------- -------------- -------------- ------------ ------------
Change in
net assets
from share
transactions 23,901,768 110,587,828 24,047,567 600,585 25,271,770 (9,145,016)
- ----------------------- -------------- -------------- -------------- -------------- ------------ ------------
Change in net
assets 23,901,768 110,587,828 24,047,567 600,585 25,271,770 (9,145,016)
- -----------------------
NET ASSETS:
- -----------------------
Beginning of period 599,817,242 489,229,414 373,484,637 372,884,052 56,617,940 65,762,956
- ----------------------- -------------- -------------- -------------- -------------- ------------ ------------
End of period $ 623,719,010 $ 599,817,242 $ 397,532,204 $ 373,484,637 $ 81,889,710 $ 56,617,940
- ----------------------- -------------- -------------- -------------- -------------- ------------ ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
VISION MONEY MARKET FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1997 (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 diversified
portfolios and one non-diversified portfolio (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
VISION MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
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, 1997, 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 $623,095,291, par value was $623,719; Treasury Money Market
aggregated $397,134,672, par value was $397,532, New York Tax-Free Money Market
aggregated $81,807,821, par value was $81,889. 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,
1997 1997 1997 1997 1997 1997
<S> <C> <C> <C> <C> <C> <C>
Shares sold 8,268,177,200 8,645,835,065 2,481,869,208 3,654,497,462 490,497,469 176,252,479
- ---------------------------
Shares issued to sharehold-
ers in payment of
distributions declared 5,614,497 11,569,142 1,618,453 2,819,179 399,575 779,290
- ---------------------------
Shares redeemed (8,249,889,929) (8,546,816,379) (2,459,440,094) (3,656,716,056) (465,625,274) (186,176,785)
- --------------------------- ------------- ------------- ------------- ------------- ----------- -----------
Net change resulting from
share transactions 23,901,768 110,587,828 24,047,567 600,585 25,271,770 9,145,016
- --------------------------- ------------- ------------- ------------- ------------- ----------- -----------
</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 any 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.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Manufacturers and Trader Trust Company, the Funds will pay Manufacturers
and Traders Trust Company up to 0.25% of average daily net assets of the Funds
for the period. The fee paid to Manufacturers and Traders Trust Company is used
to finance certain services for shareholders and to maintain shareholder
accounts. The Funds did not pay or accrue Shareholder Services fees during the
period ended October 31, 1997.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ"), 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.
GENERAL--Certain of the 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, 1997, 49.2% 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 27.1% 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.
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.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Funds' prospectus which contains facts concerning
their objectives and policies, management fees, expenses and other information.
[LOGO OF VISION GROUP OF FUNDS, INC.]
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
OCTOBER 31, 1997
Vision
Money Market
Fund
- --------------------------------------------------------------------------------
Vision
Treasury
Money Market
Fund
- --------------------------------------------------------------------------------
Vision
New York Tax-Free
Money Market
Fund
- --------------------------------------------------------------------------------
Federated Securities Corp.
Distributor
Federated Investors Tower
Pittsburgh, PA 15222-3779 Manufacturers and Traders Trust Company
Cusip 92830F307 Investment Adviser to the Funds
Cusip 92830F109 [LOGO OF One M&T Plaza
Cusip 92830F208 RECYCLED PAPER] Buffalo, NY 14240-4556
1112503 (12/97)
[LOGO OF VISION EQUITY INCOME FUND]
VISION EQUITY INCOME FUND
(A PORTFOLIO OF VISION GROUP OF FUNDS, INC.)
Semi-Annual Report and Supplement to Prospectus dated September 25, 1997
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report and Supplement to the Prospectus
for Vision Equity Income Fund. This information covers the initial period of the
fund's operation (September 26, 1997) through October 31, 1997. It begins with
the financial highlights, followed by a list of the fund's holdings and complete
financial information.
This new addition to the VISION Group of Funds, Inc. is a conservative way to
pursue income and capital appreciation from income-producing equity securities.
It invests in undervalued, high yielding stocks that are relatively 'cheap'
compared to more aggressive growth stocks.* These stocks, issued by large
companies, typically offer dividend growth (and the opportunity for future
growth) and a steady stream of income.
Thank you for being among the first to participate in VISION Equity Income Fund.
We welcome your questions and comments as we keep you informed about the
progress of your investment.
Sincerely,
/s/ Edward C. Gonzales
Edward C. Gonzales
President
December 15, 1997
*Lower rated bonds involve a higher degree of risk than investment grade bonds
in return for higher yield potential.
A. Please insert the following "Financial Highlights" table as page 5 of the
Prospectus. In addition, please add the heading "Financial Highlights" to
the Table of Contents page after the heading "A Summary of the Fund's
Expenses."
VISION EQUITY INCOME FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
PERIOD ENDED
(UNAUDITED)
OCTOBER 31, 1997(A)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.99
- ----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------
Net investment income 0.01
- ----------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.19)
- ---------------------------------------------------------------------------------------------- -------
Total from investment operations (0.18)
- ---------------------------------------------------------------------------------------------- -------
NET ASSET VALUE, END OF PERIOD $ 9.81
- ---------------------------------------------------------------------------------------------- -------
TOTAL RETURN (B) (1.80%)
- ----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------------------------------------
Expenses 1.41%*
- ----------------------------------------------------------------------------------------------
Net investment income 1.08%*
- ----------------------------------------------------------------------------------------------
Expense waiver/reimbursement (c) 1.15%*
- ----------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $15,858
- ----------------------------------------------------------------------------------------------
Average commission rate paid (d) $0.0028
- ----------------------------------------------------------------------------------------------
Portfolio turnover 0%
- ----------------------------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from September 26, 1997 (date of
initial public investment) to October 31, 1997.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged.
(See Notes which are an integral part of the Financial Statements)
B. Please insert the following at the end of the first paragraph in the
subsection entitled "Voting Rights and Other Information" on page 26 of the
Prospectus.
"As of December 3, 1997, Reho & Co., Buffalo, New York owned 59.78% 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. As of December 3, 1997, Tice
& Co., Buffalo, New York owned 30.88% 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
"Yield" and before the Addresses page. In addition, please add the heading
"Financial Statements" to the Table of Contents page after the heading
"Voting Rights and Other Information."
VISION EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------------------------------ -------------
<C> <S> <C>
COMMON STOCKS--97.0%
- ------------------------------------------------------------------------------------------------------
AUTOMOBILE--4.7%
------------------------------------------------------------------------------------------
10,000 Chrysler Corp. $ 352,500
------------------------------------------------------------------------------------------
8,900 Ford Motor Co. 388,819
------------------------------------------------------------------------------------------ -------------
Total 741,319
------------------------------------------------------------------------------------------ -------------
CAPITAL EQUIPMENT & SERVICES--6.6%
------------------------------------------------------------------------------------------
7,300 Caterpillar, Inc. 374,125
------------------------------------------------------------------------------------------
6,900 Cooper Industries, Inc. 359,662
------------------------------------------------------------------------------------------
6,200 Illinois Tool Works, Inc. 304,963
------------------------------------------------------------------------------------------ -------------
Total 1,038,750
------------------------------------------------------------------------------------------ -------------
CHEMICALS--3.7%
------------------------------------------------------------------------------------------
3,500 Air Products & Chemicals, Inc. 266,000
------------------------------------------------------------------------------------------
3,500 Dow Chemical Co. 317,625
------------------------------------------------------------------------------------------ -------------
Total 583,625
------------------------------------------------------------------------------------------ -------------
CONSUMER CYCLICAL--4.3%
------------------------------------------------------------------------------------------
7,000 Carnival Corp., Class A 339,500
------------------------------------------------------------------------------------------
5,800 Penney (J.C.) Co., Inc. 340,388
------------------------------------------------------------------------------------------ -------------
Total 679,888
------------------------------------------------------------------------------------------ -------------
CONSUMER NON-CYCLICAL--13.5%
------------------------------------------------------------------------------------------
9,500 Allied-Signal, Inc. 342,000
------------------------------------------------------------------------------------------
4,900 McGraw-Hill Cos., Inc. 320,338
------------------------------------------------------------------------------------------
3,500 Merck & Co., Inc. 312,375
------------------------------------------------------------------------------------------
12,700 Premark International, Inc. 343,694
------------------------------------------------------------------------------------------
12,200 Sonoco Products Co. 392,688
------------------------------------------------------------------------------------------
4,900 V.F. Corp. 437,938
------------------------------------------------------------------------------------------ -------------
Total 2,149,033
------------------------------------------------------------------------------------------ -------------
ELECTRONIC EQUIPMENT--2.5%
------------------------------------------------------------------------------------------
5,000 Pitney Bowes, Inc. 396,563
------------------------------------------------------------------------------------------ -------------
ENERGY--16.4%
------------------------------------------------------------------------------------------
8,200 New Century Energies, Inc. 342,350
------------------------------------------------------------------------------------------
</TABLE>
VISION EQUITY INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------------------------------ -------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------------
ENERGY--CONTINUED
------------------------------------------------------------------------------------------
4,500 Atlantic Richfield Co. $ 370,406
------------------------------------------------------------------------------------------
5,000 Chevron Corp. 414,687
------------------------------------------------------------------------------------------
4,900 Exxon Corp. 301,044
------------------------------------------------------------------------------------------
5,200 Mobil Corp. 378,625
------------------------------------------------------------------------------------------
6,000 Royal Dutch Petroleum Co., ADR 315,750
------------------------------------------------------------------------------------------
5,600 Schlumberger Ltd. 490,000
------------------------------------------------------------------------------------------ -------------
Total 2,612,862
------------------------------------------------------------------------------------------ -------------
FINANCIAL SERVICES--23.2%
------------------------------------------------------------------------------------------
3,800 American International Group, Inc. 387,837
------------------------------------------------------------------------------------------
4,000 Bankers Trust New York Corp. 472,000
------------------------------------------------------------------------------------------
5,600 Comerica, Inc. 442,750
------------------------------------------------------------------------------------------
7,800 Federal National Mortgage Association 377,812
------------------------------------------------------------------------------------------
7,400 First Commerce Corp. 475,450
------------------------------------------------------------------------------------------
1,200 General RE Corp. 236,625
------------------------------------------------------------------------------------------
3,500 J.P. Morgan & Co., Inc. 384,125
------------------------------------------------------------------------------------------
5,700 Jefferson-Pilot Corp. 440,681
------------------------------------------------------------------------------------------
12,200 Reliastar Financial Corp. 455,975
------------------------------------------------------------------------------------------ -------------
Total 3,673,255
------------------------------------------------------------------------------------------ -------------
NATURAL RESOURCES--1.8%
------------------------------------------------------------------------------------------
13,800 Cyprus Amax Minerals 288,937
------------------------------------------------------------------------------------------ -------------
TECHNOLOGY--4.1%
------------------------------------------------------------------------------------------
5,600 Avnet, Inc. 352,450
------------------------------------------------------------------------------------------
3,900 Intel Corp. 300,300
------------------------------------------------------------------------------------------ -------------
Total 652,750
------------------------------------------------------------------------------------------ -------------
UTILITIES--16.2%
------------------------------------------------------------------------------------------
9,800 AT&T Corp. 479,587
------------------------------------------------------------------------------------------
5,300 Bell Atlantic Corp. 423,337
------------------------------------------------------------------------------------------
10,800 DPL, Inc. 267,975
------------------------------------------------------------------------------------------
6,000 GTE Corp. 254,625
------------------------------------------------------------------------------------------
5,300 General Electric Co. 342,181
------------------------------------------------------------------------------------------
17,400 Houston Industries, Inc. 378,450
------------------------------------------------------------------------------------------
</TABLE>
VISION EQUITY INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------------------------------ -------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------------
UTILITIES--CONTINUED
------------------------------------------------------------------------------------------
17,100 Ohio Edison Co. $ 423,225
------------------------------------------------------------------------------------------ -------------
Total 2,569,380
------------------------------------------------------------------------------------------ -------------
TOTAL COMMON STOCKS (IDENTIFIED COST $15,912,857) 15,386,362
------------------------------------------------------------------------------------------ -------------
MUTUAL FUND SHARES--2.4%
- ------------------------------------------------------------------------------------------------------
375,694 Seven Seas Money Market Fund (AT NET ASSET VALUE) 375,694
------------------------------------------------------------------------------------------ -------------
TOTAL INVESTMENTS (IDENTIFIED COST $16,288,551)(B) $ 15,762,056
------------------------------------------------------------------------------------------ -------------
</TABLE>
(a) Non-income producing security.
(b) The cost of investments for federal tax purposes amounts to $16,288,551. The
net unrealized depreciation of investments on a federal tax basis amounts to
$526,495 which is comprised of $157,230 appreciation and $683,725
depreciation at October 31, 1997.
Note: The categories of investments are shown as a percentage of net assets
($15,857,968) at October 31, 1997.
The following acronyms are used throughout this portfolio:
ADR--American Depositary Receipt
(See Notes which are an integral part of the Financial Statements)
VISION EQUITY INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------------------------------
Total investments in securities, at value
(identified and tax cost $16,288,551) $ 15,762,056
- -------------------------------------------------------------------------------------------------------
Cash 201
- -------------------------------------------------------------------------------------------------------
Income receivable 25,152
- -------------------------------------------------------------------------------------------------------
Receivable for shares sold 84,784
- ------------------------------------------------------------------------------------------------------- -------------
Total assets 15,872,193
- ------------------------------------------------------------------------------------------------------- -------------
LIABILITIES:
- --------------------------------------------------------------------------------------------
Accrued expenses $ 14,225
- -------------------------------------------------------------------------------------------- ---------
Total liabilities 14,225
- ------------------------------------------------------------------------------------------------------- -------------
NET ASSETS for 1,616,411 shares outstanding $ 15,857,968
- ------------------------------------------------------------------------------------------------------- -------------
NET ASSETS CONSISTS OF:
- -------------------------------------------------------------------------------------------------------
Paid in capital $ 16,373,536
- -------------------------------------------------------------------------------------------------------
Net unrealized depreciation of investments (526,495)
- -------------------------------------------------------------------------------------------------------
Undistributed net investment income 10,927
- ------------------------------------------------------------------------------------------------------- -------------
Total Net Assets $ 15,857,968
- ------------------------------------------------------------------------------------------------------- -------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- -------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($15,857,968 / 1,616,411 shares outstanding) $9.81
- ------------------------------------------------------------------------------------------------------- -------------
Offering Price Per Share (100/94.50 of $9.81)* $10.38
- ------------------------------------------------------------------------------------------------------- -------------
Redemption Proceeds Per Share $9.81
- ------------------------------------------------------------------------------------------------------- -------------
</TABLE>
*See "What Fund Shares Cost" in the Prospectus.
(See Notes which are an integral part of the Financial Statements)
VISION EQUITY INCOME FUND
STATEMENT OF OPERATIONS
PERIOD ENDED OCTOBER 31, 1997 (UNAUDITED)*
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------------------------------
Dividends $ 22,608
- ----------------------------------------------------------------------------------------------------------
Interest 2,544
- ---------------------------------------------------------------------------------------------------------- -----------
Total income 25,152
- ----------------------------------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------------------
Investment advisory fee $ 7,062
- -----------------------------------------------------------------------------------------------
Administrative personnel and services fee 4,521
- -----------------------------------------------------------------------------------------------
Custodian fees 51
- -----------------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 2,128
- -----------------------------------------------------------------------------------------------
Directors'/Trustees' fees 41
- -----------------------------------------------------------------------------------------------
Legal fees 355
- -----------------------------------------------------------------------------------------------
Portfolio accounting fees 1,976
- -----------------------------------------------------------------------------------------------
Share registration costs 1,455
- -----------------------------------------------------------------------------------------------
Printing and postage 760
- -----------------------------------------------------------------------------------------------
Taxes 101
- -----------------------------------------------------------------------------------------------
Miscellaneous 7,358
- ----------------------------------------------------------------------------------------------- ---------
Total expenses 25,808
- -----------------------------------------------------------------------------------------------
Waivers--
- ------------------------------------------------------------------------------------
Waiver of investment advisory fee $(7,062)
- ------------------------------------------------------------------------------------
Waiver of administrative personnel and services fee (4,521)
- ------------------------------------------------------------------------------------ ---------
Total waivers (11,583)
- ----------------------------------------------------------------------------------------------- ---------
Net expenses 14,225
- ---------------------------------------------------------------------------------------------------------- -----------
Net investment income 10,927
- ---------------------------------------------------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ----------------------------------------------------------------------------------------------------------
Net change in unrealized (depreciation) of investments (526,495)
- ---------------------------------------------------------------------------------------------------------- -----------
Net realized and unrealized loss on investments (526,495)
- ---------------------------------------------------------------------------------------------------------- -----------
Change in net assets resulting from operations $ (515,568)
- ---------------------------------------------------------------------------------------------------------- -----------
</TABLE>
*For the period from September 26, 1997 (date of initial public investment) to
October 31, 1997.
(See Notes which are an integral part of the Financial Statements)
VISION EQUITY INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED
(UNAUDITED)
OCTOBER 31, 1997*
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------------------------------------------------
Net investment income $ 10,927
- ------------------------------------------------------------------------------------------------
Net change in unrealized depreciation (526,495)
- ------------------------------------------------------------------------------------------------ ---------------------
Change in net assets resulting from operations (515,568)
- ------------------------------------------------------------------------------------------------ ---------------------
SHARE TRANSACTIONS--
- ------------------------------------------------------------------------------------------------
Proceeds from sale of shares 16,373,536
- ------------------------------------------------------------------------------------------------
Net asset value of shares issued to shareholders
in payment of distributions declared --
- ------------------------------------------------------------------------------------------------
Cost of shares redeemed --
- ------------------------------------------------------------------------------------------------ ---------------------
Change in net assets resulting from share transactions 16,373,536
- ------------------------------------------------------------------------------------------------ ---------------------
Change in net assets 15,857,968
- ------------------------------------------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------------------------------------------
Beginning of period --
- ------------------------------------------------------------------------------------------------ ---------------------
End of period (including undistributed net investment income of $10,927) $ 15,857,968
- ------------------------------------------------------------------------------------------------ ---------------------
</TABLE>
*For the period from September 26, 1997 (date of initial public investment) to
October 31, 1997.
(See Notes which are an integral part of the Financial Statements)
VISION EQUITY INCOME FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1997 (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 eight portfolios. The
financial statements included herein are only those of Vision Equity Income Fund
(the "Fund"). 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.
(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.
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.
VISION EQUITY INCOME FUND
- --------------------------------------------------------------------------------
(3) CAPITAL STOCK
At October 31, 1997, 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, 1997
<S> <C>
Shares sold 1,616,411
- -------------------------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared --
- -------------------------------------------------------------------------------------------------
Shares redeemed --
- ------------------------------------------------------------------------------------------------- --------------------
Net change resulting from share transactions 1,616,411
- ------------------------------------------------------------------------------------------------- --------------------
</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 any 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
compensate 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 shares,
annually, to compensate FSC. The Fund did not pay or accrue distribution
expenses during the period ended October 31, 1997.
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. The fee paid to Manufacturers and Traders Trust Company is used
to finance certain services for shareholders and to maintain shareholder
accounts. For the period ended October 31, 1997, the Fund did not incur a
shareholder services fee.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated Services
Company ("FServ"), 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 $4,000 were borne by the
Adviser. The Fund has reimbursed the Adviser for these expenses. These expenses
have been deferred and are being amortized over the five year period following
the Fund's effective date. For the year ended October 31, 1997, the Fund
expensed $65 of organizational expenses.
GENERAL--Certain of the Officers and Directors of the Corporation are Officers
and Directors or Trustees of the above companies.
VISION EQUITY INCOME FUND
- --------------------------------------------------------------------------------
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended October 31, 1997, were as follows:
<TABLE>
<CAPTION>
<S> <C>
PURCHASES $ 15,912,857
- ------------------------------------------------------------------------------------------------------- -------------
SALES $ 0
- ------------------------------------------------------------------------------------------------------- -------------
</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.
Vision
Equity Income
Fund
---------------------------------------------
Semi-Annual Report
and Supplement to
Prospectus Dated
September 25, 1997
MANUFACTURERS AND TRADERS
TRUST COMPANY
---------------------------------------
Investment Adviser
A subsidiary of First Empire State
Corporation
[BIRD LOGO] FEDERATED INVESTORS
FEDERATED SECURITIES CORP., DISTRIBUTOR
Cusip 92830F802
G00158-04 (12/97) TRG00158-04
