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 first Annual Report of the VISION Equity Income Fund
for the period from September 26, 1997, when the fund began operations, through
April 30, 1998. This report begins with a discussion by the fund's management
about the economy, the market, and fund strategies over the period. Next, you
will find a complete list of portfolio holdings and financial statements.
VISION EQUITY INCOME FUND seeks to provide income and, secondarily, capital
appreciation by investing primarily in undervalued, high yielding stocks that
are relatively "cheap" compared to more aggressive growth stocks. At the end of
the reporting period, the fund's portfolio included many stocks issued by
household names, such as AT&T, Chrysler, Exxon, Ford, General Electric, Merck,
J.C. Penney.
In general, the reporting period was a very positive, yet volatile period for
stocks. The fund achieved a cumulative total return on April 30, 1998 of 15.51%
(9.17% adjusted for the fund's sales charge)* through income distributions
totaling $0.07 per share and a significant share price increase from $9.99 to
$11.47. Fund assets totaled $37.4 million at the end of the reporting period.
Thank you for participating in a relatively conservative approach to stocks
through the professional management and diversification of VISION Equity Income
Fund. We will continue to keep you up-to-date on your investment progress.
Sincerely,
/s/ Edward C. Gonzales
Edward C. Gonzales
President
June 15, 1998
*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.
INVESTMENT REVIEW
- -------------------------------------------------------------------------------
VISION EQUITY INCOME FUND
In slightly more than seven months since the inception of the Vision Equity
Income Fund, the fund's cumulative total return based on net asset value was
15.51% (9.17% adjusted for the fund's sales charge).* This compared to the total
returns of the S&P/Barra Value Index of 16.55%** and the Lipper Equity Income
Fund Average of 13.47% for the same time period.**
The fund continued its contrarian investment strategy of seeking out-of-favor
large-cap stocks offering above average dividend yields. The investing public,
over the short period of time since the fund's inception, showed a bias toward
the more glamorous portion of the S&P 500 with little in dividend income and
higher volatility. The technology sector is a prime example, experiencing a
significant rally in the first quarter while the more conservative stocks lagged
behind the broad market. The fund tended to lag behind in this type of
environment due to the disciplined and conservative approach used to manage its
investments. This allowed the fund to collect an outsized yield on its
investments while waiting for earnings prospects and market psychology to
improve for these "unloved" issues. This strategy led the fund to purchase such
stocks as AT&T Corp., the telecommunications company; Comerica Corp., a regional
bank headquartered in Detroit; and Reliastar Financial Corp., an insurance
company. Of course, while we believe the companies owned by the fund represent
good values with favorable prospects, we continue to closely monitor them.
Our biggest concern for the past two years has been the threat of wage
inflation. Everything that we see points to the labor market as a problem. The
Federal Reserve Board (the "Fed") has mentioned, on numerous occasions, that the
labor markets are tight in most of the districts. Over the past fiscal year
offsetting factors helped keep inflation under control. For example, this past
quarter lower energy costs were the offset to any inflationary pressures.
Productivity increases and "debottlenecking" helped to contain any problems
associated with a lack of capacity or wage inflation. Overall, commodity prices
continued to be under pressure. We remain cautious and give credit to the Fed on
their management skills.
The broad economy continues to show surprising resilience in the face of
significant trade problems with Asia. Looking ahead, the first quarter of the
fund's fiscal year may be stronger than most expect due to the favorable weather
patterns in the U.S. However, this economic strength may be at the expense of
the second quarter. Going forward we should see a trend of weaker economic
activity sufficient to leave the Fed in a hold position. We have not seen the
bulk of the impact from the Asian economic problems but the second and third
quarters should provide significant information.
We expect equity returns to moderate from the levels of the past three years
with added volatility in both the stock and bond markets. So far, the red ink
that we expected has been contained within sporadic earnings announcements.
There is an opportunity to make money and to hedge against the possibility of
deflation by extending the duration of fixed income holdings. This year may be
disappointing for investors more from the standpoint of expectations rather than
real returns.
*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 S&P/Barra Value Index is constructed by sorting the S&P 500 based on their
price/book ratios, with the low price/book companies forming the index. This
index is unmanaged, and investments cannot be made in the index. The Lipper
Equity Income Fund Average represents the average of the total returns reported
by all of the mutual funds designated by Lipper Analytical Services, Inc. as
falling into the Equity Income category. Lipper figures do not reflect sales
charges.
VISION EQUITY INCOME FUND
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTED IN VISION EQUITY INCOME FUND
The graph below illustrates the hypothetical investment of $10,000* in the
Vision Equity Income Fund (the "Fund") from September 26, 1997 (Start of
Performance) to April 30, 1998, compared to the Standard & Poors 500 Index ("S&P
500").+
[GRAPH APPEARS HERE-SEE APPENDIX]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 5.50% ($10,000 investment minus $550 sales charge
= $9,450). The Fund's performance assumes the reinvestment of all dividends
and distributions. The S&P 500 has been adjusted to reflect reinvestment of
dividends on securities in the index.
**Total return quoted reflects all applicable sales charges.
+The S&P 500 is not adjusted to reflect sales charges, expenses, or other fees
that the SEC requires to be reflected in the Fund's performance. This index is
unmanaged.
VISION EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- --------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS--96.5%
--------------------------------------------------
AEROSPACE & DEFENSE--2.2%
---------------------------------------
18,500 Allied-Signal, Inc. $ 810,531
--------------------------------------- -----------
AUTOS--4.2%
---------------------------------------
19,400 Chrysler Corp. 779,638
---------------------------------------
17,300 Ford Motor Co. 792,556
--------------------------------------- -----------
Total 1,572,194
--------------------------------------- -----------
CHEMICALS--3.4%
---------------------------------------
6,800 Air Products & Chemicals, Inc. 584,375
---------------------------------------
6,900 Dow Chemical Co. 667,144
--------------------------------------- -----------
Total 1,251,519
--------------------------------------- -----------
CONSUMER CYCLICAL--2.6%
---------------------------------------
13,700 Carnival Corp., Class A 953,006
--------------------------------------- -----------
DIVERSIFIED--2.3%
---------------------------------------
10,300 General Electric Co. 876,788
--------------------------------------- -----------
ELECTRONIC EQUIPMENT--4.7%
---------------------------------------
17,300 Harris Corp. 836,888
---------------------------------------
19,500 Pitney Bowes, Inc. 936,000
--------------------------------------- -----------
Total 1,772,888
--------------------------------------- -----------
ENERGY--2.4%
---------------------------------------
10,900 Schlumberger Ltd. 903,338
--------------------------------------- -----------
FINANCIAL SERVICES--13.9%
---------------------------------------
4,114 Associates First Capital Corp., Class A 307,522
---------------------------------------
7,800 Bankers Trust New York Corp. 1,007,175
---------------------------------------
16,400 Comerica, Inc. 1,097,775
---------------------------------------
15,000 Federal National Mortgage Association 898,125
---------------------------------------
11,600 Fleet Financial Group, Inc. 1,001,950
---------------------------------------
</TABLE>
VISION EQUITY INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- ---------------------------------- -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
---------------------------------------------
FINANCIAL SERVICES--CONTINUED
----------------------------------
6,700 J.P. Morgan & Co., Inc. $ 879,375
---------------------------------- -----------
Total 5,191,922
---------------------------------- -----------
INSURANCE--9.5%
----------------------------------
7,400 American International Group, Inc. 973,562
----------------------------------
2,400 General RE Corp. 536,550
----------------------------------
16,650 Jefferson-Pilot Corp. 977,147
----------------------------------
23,600 Reliastar Financial Corp. 1,076,750
---------------------------------- -----------
Total 3,564,009
---------------------------------- -----------
MANUFACTURING--9.4%
----------------------------------
13,400 Cooper Industries, Inc. 896,125
----------------------------------
12,000 Illinois Tool Works, Inc. 846,000
----------------------------------
24,600 Premark International, Inc. 821,025
----------------------------------
23,600 Sonoco Products Co. 948,424
---------------------------------- -----------
Total 3,511,574
---------------------------------- -----------
OIL--10.3%
----------------------------------
16,300 Ashland, Inc. 861,863
----------------------------------
8,800 Atlantic Richfield Co. 686,400
----------------------------------
9,700 Chevron Corp. 802,068
----------------------------------
9,600 Exxon Corp. 700,200
----------------------------------
10,200 Mobil Corp. 805,800
---------------------------------- -----------
Total 3,856,331
---------------------------------- -----------
PHARMACEUTICALS--2.2%
----------------------------------
6,800 Merck & Co., Inc. 819,400
---------------------------------- -----------
RAW MATERIALS--2.2%
----------------------------------
13,600 Union Camp Corp. 821,100
---------------------------------- -----------
RETAIL--4.7%
----------------------------------
11,200 Penney (J.C.) Co., Inc. 795,900
----------------------------------
</TABLE>
VISION EQUITY INCOME FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- -------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
-------------------------------------------------------------
RETAIL--CONTINUED
--------------------------------------------------
19,000 V.F. Corp. $ 988,000
-------------------------------------------------- -----------
Total 1,783,900
-------------------------------------------------- -----------
SERVICES--2.0%
--------------------------------------------------
9,600 McGraw-Hill Cos., Inc. 743,400
-------------------------------------------------- -----------
TECHNOLOGY--1.8%
--------------------------------------------------
10,900 Avnet, Inc. 672,394
-------------------------------------------------- -----------
TELECOMMUNICATIONS--7.5%
--------------------------------------------------
19,100 AT&T Corp. 1,147,193
--------------------------------------------------
10,300 Bell Atlantic Corp. 963,694
--------------------------------------------------
11,600 GTE Corp. 677,875
-------------------------------------------------- -----------
Total 2,788,762
-------------------------------------------------- -----------
UTILITIES-ELECTRIC--11.2%
--------------------------------------------------
20,400 Carolina Power & Light Co. 878,475
--------------------------------------------------
31,450 DPL, Inc. 571,997
--------------------------------------------------
33,300 FirstEnergy Corp. 1,007,325
--------------------------------------------------
33,900 Houston Industries, Inc. 985,218
--------------------------------------------------
15,900 New Century Energies, Inc. 755,250
-------------------------------------------------- -----------
Total 4,198,265
-------------------------------------------------- -----------
TOTAL COMMON STOCKS (IDENTIFIED COST $33,570,611) 36,091,321
-------------------------------------------------- -----------
MUTUAL FUND SHARES--2.9%
-------------------------------------------------------------
1,075,838 SSGA US Money Market Fund, Series A (AT NET ASSET
VALUE) 1,075,838
-------------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST $34,646,449)(A) $37,167,159
-------------------------------------------------- -----------
</TABLE>
(a) The cost of investments for federal tax purposes amounts to $34,646,449. The
net unrealized appreciation of investments on a federal tax basis amounts to
$2,520,710 which is comprised of $2,726,012 appreciation and $205,302
depreciation at April 30, 1998.
Note: The categories of investments are shown as a percentage of net assets
($37,402,925) at April 30, 1998.
(See Notes which are an integral part of the Financial Statements)
VISION EQUITY INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -----------------------------------------------------
Total investments in securities, at value
(identified and tax cost $34,646,449) $37,167,159
- -----------------------------------------------------
Income receivable 56,929
- -----------------------------------------------------
Receivable for shares sold 223,478
- -----------------------------------------------------
Deferred organizational costs 253
- ----------------------------------------------------- ----------
Total assets 37,447,819
- -----------------------------------------------------
LIABILITIES:
- -----------------------------------------------------
Accrued expenses 44,894
- ----------------------------------------------------- -------
Total liabilities 44,894
- ----------------------------------------------------- -----------
Net Assets for 3,260,662 shares outstanding $37,402,925
- ----------------------------------------------------- ===========
NET ASSETS CONSIST OF:
- -----------------------------------------------------
Paid in capital $34,817,754
- -----------------------------------------------------
Net unrealized appreciationof investments 2,520,710
- -----------------------------------------------------
Accumulated net realized gain on investments 35,433
- -----------------------------------------------------
Undistributed net investment income 29,028
- ----------------------------------------------------- -----------
Total Net Assets $37,402,925
- ----------------------------------------------------- ===========
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION
PROCEEDS PER SHARE:
- -----------------------------------------------------
Net Asset Value and Redemption Proceeds Per
Share ($37,402,925/3,260,662 shares outstanding) $11.47
- ----------------------------------------------------- ===========
Offering Price Per Share (100/94.50 of $11.47)* $12.14
- ----------------------------------------------------- ===========
</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 APRIL 30, 1998 (A)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------
Dividends $ 269,680
- ----------------------------------------------------------
Interest 29,517
- ---------------------------------------------------------- ----------
Total income 299,197
- ----------------------------------------------------------
EXPENSES:
- ------------------------------------------------
Investment advisory fee $ 83,847
- ------------------------------------------------
Administrative personnel and services fee 21,621
- ------------------------------------------------
Custodian fees 713
- ------------------------------------------------
Transfer and dividend disbursing agent fees and
expenses 20,618
- ------------------------------------------------
Directors'/Trustees' fees 571
- ------------------------------------------------
Legal fees 4,994
- ------------------------------------------------
Portfolio accounting fees 15,869
- ------------------------------------------------
Share registration costs 20,475
- ------------------------------------------------
Printing and postage 10,701
- ------------------------------------------------
Taxes 1,427
- ------------------------------------------------
Miscellaneous 11,003
- ------------------------------------------------ --------
Total expenses 191,839
- ------------------------------------------------
Waivers and reimbursements--
- ---------------------------------------
Waiver of investment advisory fee $(53,453)
- ---------------------------------------
Waiver of administrative personnel and
services fee (8,630)
- --------------------------------------- --------
Total waivers (62,083)
- ------------------------------------------------ --------
Net expenses 129,756
- ---------------------------------------------------------- ----------
Net investment income 169,441
- ---------------------------------------------------------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ----------------------------------------------------------
Net realized gain on investments 35,433
- ----------------------------------------------------------
Net change in unrealized appreciation of investments 2,520,710
- ---------------------------------------------------------- ----------
Net realized and unrealized gain on investments 2,556,143
- ---------------------------------------------------------- ----------
Change in net assets resulting from operations $2,725,584
- ---------------------------------------------------------- ----------
</TABLE>
(a) For the period from September 26, 1997 (date of initial public investment)
to April 30, 1998.
(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
APRIL 30, 1998(A)
-----------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------------
Net investment income $ 169,441
- ------------------------------------------------------------
Net realized gain on investments ($35,433, as computed for
federal tax purposes) 35,433
- ------------------------------------------------------------
Net change in unrealized appreciation/depreciation 2,520,710
- ------------------------------------------------------------ -----------
Change in net assets resulting from operations 2,725,584
- ------------------------------------------------------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------------
Distributions from net investment income (140,413)
- ------------------------------------------------------------ -----------
Change in net assets resulting from distributions to
shareholders (140,413)
- ------------------------------------------------------------ -----------
SHARE TRANSACTIONS--
- ------------------------------------------------------------
Proceeds from sale of shares 35,322,334
- ------------------------------------------------------------
Net asset value of shares issued to shareholders in payment
of distributions declared 90,671
- ------------------------------------------------------------
Cost of shares redeemed (595,251)
- ------------------------------------------------------------ -----------
Change in net assets resulting from share transactions 34,817,754
- ------------------------------------------------------------ -----------
Change in net assets 37,402,925
- ------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------
Beginning of period --
- ------------------------------------------------------------ -----------
End of period (including undistributed net investment income
of $29,028) $37,402,925
- ------------------------------------------------------------ -----------
</TABLE>
(a) For the period from September 26, 1997 (date of initial public investment)
to April 30, 1998.
(See Notes which are an integral part of the Financial Statements)
VISION EQUITY INCOME FUND
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
PERIOD ENDED
APRIL 30,
1998(A)
- ------------------------------------------------ ------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.99
- ------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------
Net investment income 0.08
- ------------------------------------------------
Net realized and unrealized gain on investments 1.47
- ------------------------------------------------ -------
Total from investment operations 1.55
- ------------------------------------------------ -------
LESS DISTRIBUTIONS
- ------------------------------------------------
Total distributions from net investment income (0.07)
- ------------------------------------------------ -------
NET ASSET VALUE, END OF PERIOD $11.47
- ------------------------------------------------ -------
TOTAL RETURN (B) 15.51%
- ------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------------------
Expenses 1.08%*
- ------------------------------------------------
Net investment income 1.41%*
- ------------------------------------------------
Expense waiver/reimbursement (c) 0.52%*
- ------------------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------------------
Net assets, end of period (000 omitted) $37,403
- ------------------------------------------------
Average commission rate paid (d) $0.0707
- ------------------------------------------------
Portfolio turnover 11%
- ------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from September 26, 1997 (date of initial
public investment) to April 30, 1998.
(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)
VISION EQUITY INCOME FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1998
- -------------------------------------------------------------------------------
(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.
VISION EQUITY INCOME FUND
- -------------------------------------------------------------------------------
OTHER--Investment transactions are accounted for on the trade date.
(3) CAPITAL STOCK
At April 30, 1998, 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
APRIL 30, 1998(A)
- --------------------------------------------------------- -----------------
<S> <C>
Shares sold 3,309,512
- ---------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 8,251
- ---------------------------------------------------------
Shares redeemed (57,101)
- --------------------------------------------------------- ---------
Net change resulting from share transactions 3,260,662
- --------------------------------------------------------- ---------
</TABLE>
(a) For the period from September 26, 1997 (date of initial public investment)
to April 30, 1998.
(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, TRANSFER AND DIVIDEND DISBURSING AGENT AND FUND ACCOUNTING
FEE--Federated Services Company ("FServ") provides the Fund with certain
administrative personnel and fund accounting services. FServ, through its
subsidiary Federated Shareholder Services Company, serves as transfer and
dividend disbursing agent for the Fund. The fee paid to FServ is based on the
level of average aggregate net assets of the Corporation for the period. FServ
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 April 30, 1998.
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 April 30, 1998, the Fund did not incur a
shareholder services fee.
VISION EQUITY INCOME FUND
- -------------------------------------------------------------------------------
ORGANIZATIONAL EXPENSES--Organizational expenses of $253 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 April 30, 1998, the Fund expensed
$0 of organizational expenses.
GENERAL--Certain of the Officers and Directors 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 April 30, 1998, were as follows:
<TABLE>
<S> <C>
- ------------------------------
PURCHASES $36,273,104
- ------------------------------ ===========
SALES $ 2,466,022
- ------------------------------ ===========
</TABLE>
(6) YEAR 2000 (UNAUDITED)
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and Administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by the Fund's other service providers. At this
time, however, there can be no assurance that these steps will be sufficient to
avoid any adverse impact to the Fund.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
- -------------------------------------------------------------------------------
To the Board of Directors and Shareholders of VISION GROUP OF FUNDS, INC.:
We have audited the accompanying statement of assets and liabilities of Vision
Equity Income Fund (one of the portfolios of Vision Group of Funds, Inc.),
including the portfolio of investments, as of April 30, 1998, and related
statement of operations for the period then ended, the statement of changes in
net assets for the period then ended, and financial highlights for the period
presented therein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of April 30, 1998, by
correspondence with the custodian and brokers or other appropriate auditing
procedures where replies from brokers were not received. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Vision
Equity Income Fund, at April 30, 1998, the results of its operations for the
period then ended, the change in its net assets for the period then ended, and
financial highlights for the period presented therein, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
June 17, 1998
DIRECTORS OFFICERS
- --------------------------------------------------------------------------------
Randall I. Benderson Edward C. Gonzales
President and Treasurer
Joseph J. Castiglia Charles L. Davis, Jr.
Vice President and Assistant Treasurer
Daniel R. Gernatt, Jr.
Beth S. Broderick
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.
Federated Securities Corp.
Distributor
Federated Investors Tower
Pittsburgh, PA 15222-3779
[RECYCLED LOGO APPEARS HERE]
Cusip 92830F802
G00158-08 (6/98)
LOGO OF VISION GROUP OF FUNDS, INC.
ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1998
VISION
Equity Income
Fund
Manufacturers and Traders Trust Company
Investment Adviser to the Funds
One M&T Plaza
Buffalo, NY 14240-4556
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 Annual Report of the VISION Money Market Funds for
the 12-month reporting period from May 1, 1997 through April 30, 1998. 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
12-month reporting period.
VISION MONEY MARKET FUND, a diversified portfolio of corporate and U.S.
government money market securities, paid dividends totaling $0.05 per share.
Assets reached $686.2 million at the end of the reporting period.
VISION TREASURY MONEY MARKET FUND, which invests exclusively in U.S. Treasury
securities, paid dividends totaling $0.05 per share. Assets rose to reach $441.4
million at the end of the reporting 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 $0.03 per share.** Assets totaled
$73.3 million at the end of the reporting period.
Thank you for putting your cash to work--every day--through the VISION Money
Market Funds. We will continue to keep you up to date on your investment, and
provide your account with the highest level of service.
Sincerely,
/s/ Edward C. Gonzales
Edward C. Gonzales
President
June 15, 1998
*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 this
fund is neither insured nor guaranteed by the U.S. government.
**Income may be subject to the federal alternative minimum tax.
VISION MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- -------------------------------------------------- ------------
<C> <S> <C>
(A) CORPORATE OBLIGATIONS--85.4%
--------------------------------------------------------------
AUTOS--7.9%
--------------------------------------------------
$25,000,000 Daimler Benz North America Corp., 5.563%, 7/2/1998 $ 24,764,056
--------------------------------------------------
30,000,000 Ford Motor Credit Corp., 5.546%, 7/13/1998 29,667,242
-------------------------------------------------- ------------
Total 54,431,298
-------------------------------------------------- ------------
BANKING--8.0%
--------------------------------------------------
7,445,000 (b)Atlas Iron Processors, Inc., Series 1994,
5.750%, 5/6/1998 7,445,000
--------------------------------------------------
18,000,000 Commerzbank U.S. Finance, Inc., 5.515%, 5/19/1998 17,951,040
--------------------------------------------------
30,000,000 Toronto Dominion Holdings (USA), Inc., 5.530%,
10/5/1998 29,296,117
-------------------------------------------------- ------------
Total 54,692,157
-------------------------------------------------- ------------
CHEMICALS--3.6%
--------------------------------------------------
25,000,000 Du Pont (E.I.) de Nemours & Co., 5.493%, 5/7/1998 24,977,458
-------------------------------------------------- ------------
DIVERSIFIED--4.4%
--------------------------------------------------
30,000,000 General Electric Capital Corp., 5.515%, 5/15/1998 29,936,767
-------------------------------------------------- ------------
ENTERTAINMENT--3.6%
--------------------------------------------------
25,000,000 Disney (Walt) Co., 5.531%, 9/21/1998 24,466,729
-------------------------------------------------- ------------
FARM EQUIPMENT & LEASING--3.6%
--------------------------------------------------
25,000,000 Deere (John) Capital Corp., 5.557%, 7/17/1998 24,708,576
-------------------------------------------------- ------------
FINANCIAL RECEIVABLES--8.7%
--------------------------------------------------
30,000,000 Apreco, Inc., 5.591%, 6/25/1998 29,746,083
--------------------------------------------------
30,000,000 CIESCO, L.P., 5.536%, 6/5/1998 29,839,583
-------------------------------------------------- ------------
Total 59,585,666
-------------------------------------------------- ------------
FINANCIAL RETAIL--17.4%
--------------------------------------------------
30,000,000 American Express Credit Corp., 5.702%, 5/4/1998 29,986,075
--------------------------------------------------
30,000,000 (b)Associates Corp. of North America, 5.497%,
4/30/1998 30,000,000
--------------------------------------------------
30,000,000 Beneficial Corp., 5.477%, 5/29/1998 29,874,467
--------------------------------------------------
30,000,000 Commercial Credit Co., 5.539%, 6/17/1998 29,784,975
-------------------------------------------------- ------------
Total 119,645,517
-------------------------------------------------- ------------
</TABLE>
VISION MONEY MARKET FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- --------------------------------------------- ------------
<C> <S> <C>
(A) CORPORATE OBLIGATIONS--CONTINUED
---------------------------------------------------------
FOOD & BEVERAGE--3.6%
---------------------------------------------
$25,000,000 Coca-Cola Co., 5.506%, 6/1/1998 $ 24,883,104
--------------------------------------------- ------------
INSURANCE--13.0%
---------------------------------------------
30,000,000 American General Finance Corp., 5.616%,
8/19/1998 29,494,000
---------------------------------------------
30,000,000 Prudential Funding Corp., 5.603%, 7/29/1998 29,592,083
---------------------------------------------
30,000,000 Transamerica Finance Corp., 5.541%, 5/20/1998 29,912,758
--------------------------------------------- ------------
Total 88,998,841
--------------------------------------------- ------------
OIL--8.0%
---------------------------------------------
30,000,000 Chevron U.S.A., Inc., 5.536%, 6/8/1998 29,826,467
---------------------------------------------
25,000,000 Texaco, Inc., 5.566%, 6/19/1998 24,813,528
--------------------------------------------- ------------ ---
Total 54,639,995
--------------------------------------------- ------------
TELECOMMUNICATIONS--3.6%
---------------------------------------------
25,000,000 BellSouth Telecommunications, Inc., 5.561%,
6/12/1998 24,839,583
--------------------------------------------- ------------
TOTAL CORPORATE OBLIGATIONS 585,805,691
--------------------------------------------- ------------
(A) U.S. GOVERNMENT AGENCIES--9.1%
---------------------------------------------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--3.6%
---------------------------------------------
25,000,000 5.495%, 6/3/1998 24,877,854
---------------------------------------------
FEDERAL FARM CREDIT BANK--2.6%
---------------------------------------------
17,820,000 5.690%, 6/26/1998 17,672,115
---------------------------------------------
STUDENT LOAN MARKETING ASSOCIATION--2.9%
---------------------------------------------
20,000,000 5.283%, 5/15/1998 19,966,496
--------------------------------------------- ------------
TOTAL U.S. GOVERNMENT AGENCIES 62,516,465
--------------------------------------------- ------------
</TABLE>
VISION MONEY MARKET FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- ---------------------------------------------- ------------
<C> <S> <C>
(C) REPURCHASE AGREEMENT--5.6%
----------------------------------------------------------
$38,678,000 State Street Bank and Trust Co., 5.470%, dated
4/30/1998, due 5/1/1998 $ 38,678,000
---------------------------------------------- ------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(D) $687,000,156
---------------------------------------------- ------------
</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
($686,258,693) at April 30, 1998.
(See Notes which are an integral part of the Financial Statements)
VISION TREASURY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------ ------------------------------------------------- ------------
<C> <S> <C>
U.S. TREASURY OBLIGATIONS--53.6%
--------------------------------------------------------------
U.S. TREASURY BILLS--13.5%
-------------------------------------------------
$ 60,000,000 5.0525%-5.075%, 6/4/1998-10/8/1998 $ 59,535,791
-------------------------------------------------
U.S. TREASURY NOTES--40.1%
-------------------------------------------------
177,000,000 4.750%-8.250%, 5/31/1998-9/30/1998 177,214,880
------------------------------------------------- ------------
TOTAL U.S. TREASURY OBLIGATIONS 236,750,671
------------------------------------------------- ------------
(A) REPURCHASE AGREEMENTS--46.0%
--------------------------------------------------------------
100,000,000 Goldman Sachs Group, LP, 5.480%, dated 4/30/1998,
due 5/1/1998 100,000,000
-------------------------------------------------
85,000,000 CS First Boston Corp., 5.480%, dated 4/30/1998,
due 5/1/1998 85,000,000
-------------------------------------------------
18,119,000 State Street Bank and Trust Co., 5.470%, dated
4/30/1998, due 5/1/1998 18,119,000
------------------------------------------------- ------------
TOTAL REPURCHASE AGREEMENTS 203,119,000
------------------------------------------------- ------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(B) $439,869,671
------------------------------------------------- ------------
</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
($441,422,142) at April 30, 1998.
(See Notes which are an integral part of the Financial Statements)
VISION NEW YORK TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
---------- --------------------------------------------- ------- -----------
<C> <S> <C> <C>
(A) SHORT-TERM MUNICIPALS--99.6%
--------------------------------------------------------
NEW YORK--99.6%
---------------------------------------------
$2,750,000 Chautauqua County, NY IDA, IDR Bonds Weekly
VRDNs (Belknap Business Forms)/(Key Bank of
New York LOC)/(AMT) A-1 $ 2,750,000
---------------------------------------------
1,500,000 Monroe County, NY, GO, 3.35% CP, Mandatory
Tender 6/10/1998 A1+ 1,500,000
---------------------------------------------
3,000,000 Municipal Assistance Corp of New York,
(Series F), 3.55% CP, Mandatory Tender
6/10/1998 A1+/P1 3,000,000
---------------------------------------------
1,000,000 Municipal Assistance Corp of New York, 3.30%
CP, Mandatory Tender 5/13/1998 A1+/P1 1,000,000
---------------------------------------------
2,800,000 New York City Housing Development Corp.,
(Series 1993A) Weekly VRDNs (Columbus
Gardens)/(Citibank NA, New York LOC) A1+ 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
---------------------------------------------
2,000,000 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) A1 2,000,000
---------------------------------------------
1,500,000 New York City Municipal Water Finance
Authority, Water and Sewer System Revenue
Bonds (Series 1995 A) Daily VRDNs (FGIC
INS)/(FGIC Securities Purchase, Inc. LIQ) VMIG-1 1,500,000
---------------------------------------------
300,000 New York City, NY Daily VRDNs (Morgan
Guaranty Trust Co., New York LOC) VMIG-1 300,000
---------------------------------------------
1,950,000 New York City, NY IDA, Revenue Bonds
Weekly VRDNs (Ronald McDonald
House)/(Barclays Bank, New York LOC) A1+ 1,950,000
---------------------------------------------
100,000 New York City, NY, (Subseries B-4) Daily
VRDNs (Morgan Guaranty Trust Co., New York
LOC) VMIG-1 100,000
---------------------------------------------
100,000 New York City, NY, GO UT Bonds (Series B-2) Daily VRDNs
(Union Bank of Switzerland 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
--------------------------------------------
$ 150,000 New York City, NY, GO UT Bonds (Series B-2)
Daily VRDNs (Morgan Guaranty Trust Co., New
York LOC) VMIG-1 $ 150,000
--------------------------------------------
1,700,000 New York City, NY, Series C Daily VRDNs
(Morgan Guaranty Trust Co., New York LOC) VMIG-1 1,700,000
--------------------------------------------
500,000 New York City, NY, Subseries A-10 Daily
VRDNs (Morgan Guaranty Trust Co., New York
LOC) VMIG-1 500,000
--------------------------------------------
500,000 New York City, NY, Subseries A-10 Daily
VRDNs (Morgan Guaranty Trust Co., New York
LOC) VMIG-1 500,000
--------------------------------------------
3,000,000 New York State Dormitory Authority,
(Columbia University Program), 3.25% CP,
Mandatory Tender 6/9/1998 A1+/P1 3,000,000
--------------------------------------------
3,300,000 New York State Energy Research & Development
Authority Daily VRDNs (Niagara Mohawk Power
Corp.)/(Toronto-Dominion Bank LOC) A1+ 3,300,000
--------------------------------------------
2,000,000 New York State Energy Research & Development
Authority, (Series B) Weekly VRDNs
(Rochester Gas & Electric Corp)/(MBIA
Insurance Corporation INS) VMIG-1 2,000,000
--------------------------------------------
500,000 New York State Energy Research & Development
Authority, (Series C) Daily VRDNs (Niagara
Mohawk Power Corp.)/(Canadian Imperial Bank
of Commerce, Toronto LOC) P-1 500,000
--------------------------------------------
2,595,000 New York State Energy Research & Development
Authority, Gas Facilities Revenue Bonds
(1997 Series A-1) Weekly VRDNs (Brooklyn
Union Gas Co.)/(MBIA Insurance Corporation
INS)/(Union Bank of Switzerland, Zurich LIQ) VMIG-1 2,595,000
--------------------------------------------
1,000,000 New York State Energy Research & Development
Authority, PCR Revenue Bonds (Series 1994 C)
Daily VRDNs (Morgan Guaranty Trust Co., New
York LOC) VMIG-1 1,000,000
--------------------------------------------
1,000,000 New York State Energy Research & Development
Authority, Revenue Bonds (Series A) Weekly
VRDNs (Long Island Lighting Co.)/(Union Bank
of Switzerland LOC)/(AMT) VMIG-1 1,000,000
--------------------------------------------
500,000 New York State Energy Research & Development
Authority, Revenue Bonds (Series B) Daily
VRDNs (Niagara Mohawk Power Corp.) A1+ 500,000
--------------------------------------------
</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
--------------------------------------------
$ 2,400,000 New York State Environmental Facilities
Corp., 3.55% CP, Mandatory Tender 6/15/1998 A1/P1 $ 2,400,000
--------------------------------------------
1,000,000 New York State Environmental Facilities
Corp., 3.60% CP, Mandatory Tender
6/15/1998/(AMT) A1/P1 1,000,000
--------------------------------------------
700,000 New York State Environmental Facilities
Corp., Resource Recovery Improvement Bonds
Daily VRDNs (OFS Equity Huntington
Project)/(Union Bank of Switzerland
LOC)/(AMT) A1+ 700,000
--------------------------------------------
1,925,000 New York State HFA, Revenue Bonds Weekly
VRDNs (Normandie Corp.)/(Heleba Bank
LOC)/(AMT) VMIG-1 1,925,000
--------------------------------------------
2,700,000 New York State Local Government Assistance
Corp., (Series E) Weekly VRDNs (Canadian
Imperial Bank of Commerce, Toronto LOC) VMIG-1 2,700,000
--------------------------------------------
950,000 New York State Medical Care Facilities
Finance Agency Weekly VRDNs (Pooled Loan
Program)/(Chase Manhattan Bank N.A., New
York LOC) VMIG-1 950,000
--------------------------------------------
1,000,000 New York State Power Authority, 3.30% CP,
Mandatory Tender 5/1/1998 A1/P1 1,000,000
--------------------------------------------
1,000,000 New York State Power Authority, 3.60% TOBs
9/1/1998 VMIG-1 1,000,000
--------------------------------------------
700,000 New York State Power Authority, 3.60% TOBs
9/1/1998 VMIG-1 700,000
--------------------------------------------
500,000 New York State Power Authority, Revenue
Bonds, 3.60% TOBs 9/1/1998 VMIG-1 500,000
--------------------------------------------
3,000,000 New York State, 3.50% CP, Mandatory Tender
6/11/1998
(WestDeutsche Landesbank Girozentrale LOC) A1/P1 3,000,000
--------------------------------------------
2,800,000 Niagara Falls, NY Bridge Commission, Revenue
Bonds (Series 1993A) Weekly VRDNs (FGIC
INS)/(Industrial Bank of Japan Ltd., Tokyo
LIQ) VMIG-1 2,800,000
--------------------------------------------
1,250,000 Oyster Bay, NY, GO UT, 4.00% RANs, 1/29/1999 NR 1,252,871
--------------------------------------------
1,000,000 Port Authority of New York and New Jersey,
(Series B), 3.10% CP, Mandatory Tender
5/11/1998 (Bank of Nova Scotia LOC) A1+/P1 1,000,000
--------------------------------------------
</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
--------------------------------------------
$ 2,845,000 Port Authority of New York and New Jersey,
(Series B), 3.50% CP, Mandatory Tender
6/4/1998 (Bank of Nova Scotia LOC) A1+/P1 $ 2,845,000
--------------------------------------------
2,000,000 Putnam County, NY, GO UT, 4.25% TANs,
8/25/1998 NR 2,003,093
--------------------------------------------
1,000,000 Seneca County, NY IDA Weekly VRDNs (New York
Chiropractic College)/(Fleet Bank N.A. LOC) A-1 1,000,000
--------------------------------------------
1,900,000 St. Lawrence County, NY IDA, Refunding
Revenue Bonds Daily VRDNs (Reynolds Metals
Co.)/(Bank of Nova Scotia LOC) P1 1,900,000
--------------------------------------------
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 MIG-1 2,003,135
--------------------------------------------
2,000,000 Suffolk County, NY, GO UT (Series RA-1),
4.25% TRANs, 8/13/1998 MIG-1 2,003,414
--------------------------------------------
3,200,000 Westchester County, NY, GO UT (Series A),
4.60% Bonds, 12/15/1998 Aaa 3,217,483
--------------------------------------------
2,375,000 Yonkers, NY IDA, Civic Facility Revenue
Bonds, (Series 1994) Weekly VRDNs (Consumers
Union Facility)/(AMBAC INS)/(Credit Local de
France LIQ) VMIG-1 2,375,000
-------------------------------------------- -----------
TOTAL INVESTMENTS (AT AMORTIZED COST)(B) $73,019,996
-------------------------------------------- -----------
</TABLE>
(a) At April 30, 1998, 10.1% of the total investments at market value were
subject to alternative minimum tax.
(b) Also represents cost for federal tax purposes.
* Please refer to the Appendix of the Statement of Additional Information for an
explanation of the credit ratings. Current credit ratings are unaudited.
Note: The categories of investments are shown as a percentage of net assets
($73,344,906) at April 30, 1998.
VISION NEW YORK TAX-FREE MONEY MARKET FUND
- --------------------------------------------------------------------------------
The following acronyms are used throughout this portfolio:
AMBAC--American Municipal Bond LOCs--Letter(s) of Credit
Assurance Corporation LOC--Letter of Credit
AMT--Alternative Minimum Tax MBIA--Municipal Bond Investors
CP--Commercial Paper Assurance
FGIC--Financial Guaranty Insurance CompanyPCR--Pollution Control Revenue
GO--General Obligation RANs--Revenue Anticipation Notes
HFA--Housing Finance Authority TANs--Tax Anticipation Notes
IDA--Industrial Development Authority TOBs--Tender Option Bonds
IDR--Industrial Development Revenue TRANs--Tax and Revenue Anticipation
INS--Insured Notes
LIQ--Liquidity Agreement 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
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NEW YORK
TREASURY TAX-FREE
MONEY MONEY MONEY
MARKET MARKET MARKET
FUND FUND FUND
- -------------------------------------- ------------ ------------ -----------
<S> <C> <C> <C>
ASSETS:
- --------------------------------------
Investments in securities $648,322,156 $236,750,671 $73,019,996
- --------------------------------------
Investments in repurchase agreements 38,678,000 203,119,000 --
- -------------------------------------- ------------ ------------ -----------
Total investments, at amortized cost
and value 687,000,156 439,869,671 73,019,996
- --------------------------------------
Cash 393 908 --
- --------------------------------------
Income receivable 419,354 3,075,797 388,028
- --------------------------------------
Receivable for shares sold 542,053 429,716 1,492,665
- -------------------------------------- ------------ ------------ -----------
Total assets 687,961,956 443,376,092 74,900,689
- --------------------------------------
LIABILITIES:
- --------------------------------------
Income distribution payable 1,476,002 1,803,147 86,540
- --------------------------------------
Payable for shares redeemed 154,350 65,768 27,433
- --------------------------------------
Payable to Bank -- -- 1,419,836
- --------------------------------------
Accrued expenses 72,911 85,035 21,974
- -------------------------------------- ------------ ------------ -----------
Total liabilities 1,703,263 1,953,950 1,555,783
- -------------------------------------- ------------ ------------ -----------
NET ASSETS $686,258,693 $441,422,142 $73,344,906
- -------------------------------------- ------------ ------------ -----------
NET ASSET VALUE, Offering Price and
Redemption Proceeds Per Share: $1.00 $1.00 $1.00
- -------------------------------------- ------------ ------------ -----------
SHARES OUTSTANDING: 686,258,693 441,422,142 73,344,906
- -------------------------------------- ------------ ------------ -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
VISION MONEY MARKET FUNDS
STATEMENTS OF OPERATIONS
YEAR ENDED APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NEW YORK
TAX-FREE
TREASURY MONEY
MONEY MONEY MARKET
MARKET FUND MARKET FUND FUND
- -------------------------------------- ----------- ----------- ----------
<S> <C> <C> <C>
INVESTMENT INCOME:
- --------------------------------------
Interest $35,654,620 $25,569,696 $2,796,471
- -------------------------------------- ----------- ----------- ----------
EXPENSES:
- --------------------------------------
Investment advisory fee 3,158,235 2,304,815 389,766
- --------------------------------------
Administrative personnel and services
fee 735,859 543,332 91,198
- --------------------------------------
Custodian fees 29,456 32,670 6,618
- --------------------------------------
Transfer and dividend disbursing agent
fees and expenses 232,583 39,571 30,754
- --------------------------------------
Directors' fees 22,777 9,169 71
- --------------------------------------
Auditing fees 17,188 13,829 12,904
- --------------------------------------
Legal fees 17,104 18,338 5,028
- --------------------------------------
Portfolio accounting fees 41,473 31,081 28,447
- --------------------------------------
Share registration costs 18,501 41,940 12,984
- --------------------------------------
Printing and postage 11,990 13,728 9,403
- --------------------------------------
Taxes 80,265 27,809 10,701
- --------------------------------------
Insurance premiums 727 4,660 2,172
- --------------------------------------
Miscellaneous 15,905 4,610 8,537
- -------------------------------------- ----------- ----------- ----------
TOTAL EXPENSES 4,382,063 3,085,552 608,583
- -------------------------------------- ----------- ----------- ----------
Waivers--
- --------------------------------------
Waiver of investment advisory fee (336,623) (379,597) (218,264)
- -------------------------------------- ----------- ----------- ----------
NET EXPENSES 4,045,440 2,705,955 390,319
- -------------------------------------- ----------- ----------- ----------
NET INVESTMENT INCOME $31,609,180 $22,863,741 $2,406,152
- -------------------------------------- ----------- ----------- ----------
</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
--------------------------------- --------------------------------- ------------------------------
YEAR ENDED APRIL 30, YEAR ENDED APRIL 30, YEAR ENDED APRIL 30,
--------------------------------- --------------------------------- ------------------------------
1998 1997 1998 1997 1998 1997
- --------------------- ---------------- --------------- ---------------- --------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE)
IN NET ASSETS
- ---------------------
OPERATIONS--
- ---------------------
Net investment
income $ 31,609,180 $ 27,303,759 $ 22,863,741 $ 21,796,019 $ 2,406,152 $ 2,073,551
- --------------------- ---------------- --------------- ---------------- --------------- --------------- -------------
DISTRIBUTIONS TO
SHAREHOLDERS--
- ---------------------
Distributions from
net investment
income (31,609,180) (27,303,759) (22,863,741) (21,796,019) (2,406,152) (2,073,551)
- --------------------- ---------------- --------------- ---------------- --------------- --------------- -------------
SHARE TRANSACTIONS--
- ---------------------
Proceeds from sales
of shares 18,911,301,933 8,645,835,065 13,346,041,424 3,654,497,462 1,153,995,180 176,252,479
- ---------------------
Net asset value of
shares issued to
shareholders in
payment of
distributions
declared 14,408,441 11,569,142 3,467,336 2,819,179 1,148,312 779,290
- ---------------------
Cost of shares
redeemed (18,839,268,923) (8,546,816,379) (13,281,571,255) (3,656,716,056) (1,138,416,526) (186,176,785)
- --------------------- ---------------- --------------- ---------------- --------------- --------------- -------------
Change in net
assets from share
transactions 86,441,451 110,587,828 67,937,505 600,585 16,726,966 (9,145,016)
- --------------------- ---------------- --------------- ---------------- --------------- --------------- -------------
Change in net
assets 86,441,451 110,587,828 67,937,505 600,585 16,726,966 (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 $ 686,258,693 $ 599,817,242 $ 441,422,142 $ 373,484,637 $ 73,344,906 $ 56,617,940
- --------------------- ---------------- --------------- ---------------- --------------- --------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
VISION MONEY MARKET FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
NET ASSET VALUE, NET DISTRIBUTIONS TO NET ASSET
YEAR ENDED BEGINNING INVESTMENT SHAREHOLDERS FROM NET VALUE, END
APRIL 30, OF PERIOD INCOME INVESTMENT INCOME OF PERIOD
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MONEY MARKET FUND
1989(a) $1.00 0.07 (0.07) $1.00
1990 $1.00 0.08 (0.08) $1.00
1991 $1.00 0.07 (0.07) $1.00
1992 $1.00 0.05 (0.05) $1.00
1993 $1.00 0.03 (0.03) $1.00
1994 $1.00 0.03 (0.03) $1.00
1995 $1.00 0.05 (0.05) $1.00
1996 $1.00 0.05 (0.05) $1.00
1997 $1.00 0.05 (0.05) $1.00
1998 $1.00 0.05 (0.05) $1.00
TREASURY MONEY MARKET FUND
1989(a) $1.00 0.07 (0.07) $1.00
1990 $1.00 0.08 (0.08) $1.00
1991 $1.00 0.07 (0.07) $1.00
1992 $1.00 0.04 (0.04) $1.00
1993 $1.00 0.03 (0.03) $1.00
1994 $1.00 0.03 (0.03) $1.00
1995 $1.00 0.04 (0.04) $1.00
1996 $1.00 0.05 (0.05) $1.00
1997 $1.00 0.05 (0.05) $1.00
1998 $1.00 0.05 (0.05) $1.00
NEW YORK TAX-FREE MONEY MARKET FUND
1989(a) $1.00 0.04 (0.04) $1.00
1990 $1.00 0.05 (0.05) $1.00
1991 $1.00 0.05 (0.05) $1.00
1992 $1.00 0.03 (0.03) $1.00
1993 $1.00 0.02 (0.02) $1.00
1994 $1.00 0.02 (0.02) $1.00
1995 $1.00 0.03 (0.03) $1.00
1996 $1.00 0.03 (0.03) $1.00
1997 $1.00 0.03 (0.03) $1.00
1998 $1.00 0.03 (0.03) $1.00
- -------------------------------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from June 1, 1988 (date of initial public
offering) to April 30, 1989.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(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 EXPENSE NET ASSETS,
TOTAL INVESTMENT WAIVER/ END OF PERIOD
RETURN(B) EXPENSES INCOME REIMBURSEMENT(D) (000 OMITTED)
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
7.52% 0.74%(c) 8.00%(c) 0.29%(c) $ 84,668
8.58% 0.72% 8.19% 0.25% $121,227
7.21% 0.81% 6.99% 0.09% $ 86,973
4.60% 0.75% 4.40% 0.06% $143,670
3.21% 0.36% 3.13% 0.39% $226,298
3.01% 0.28% 2.98% 0.42% $266,626
4.77% 0.51% 4.80% 0.19% $431,316
5.33% 0.58% 5.19% 0.11% $489,229
4.93% 0.61% 4.77% 0.10% $599,817
5.11% 0.64% 5.00% 0.05% $686,259
7.08% 0.68%(c) 7.48%(c) 0.34%(c) $ 31,388
8.17% 0.86% 7.88% 0.25% $ 32,986
6.96% 0.75% 6.52% 0.06% $ 91,682
4.54% 0.75% 4.38% 0.04% $100,373
3.05% 0.40% 2.98% 0.39% $128,825
2.88% 0.31% 2.86% 0.43% $197,521
4.57% 0.51% 4.53% 0.19% $210,526
5.25% 0.57% 5.10% 0.09% $372,884
4.82% 0.58% 4.75% 0.10% $373,485
4.98% 0.59% 4.96% 0.08% $441,422
4.55% 0.68%(c) 4.83%(c) 0.45%(c) $ 8,309
5.24% 0.83% 5.11% 0.65% $ 8,494
4.73% 0.69% 4.66% 0.87% $ 9,445
2.99% 0.95% 2.92% 0.65% $ 7,028
1.68% 0.71% 1.67% 0.63% $ 17,899
1.88% 0.41% 1.88% 0.58% $ 40,180
2.84% 0.40% 2.76% 0.52% $ 41,238
3.20% 0.48% 3.14% 0.38% $ 65,763
2.96% 0.50% 2.95% 0.35% $ 56,618
3.14% 0.50% 3.09% 0.28% $ 73,345
- -------------------------------------------------------------------------------------
</TABLE>
VISION MONEY MARKET FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1998
- -------------------------------------------------------------------------------
(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 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
- -------------------------------------------------------------------------------------
<C> <S>
Vision Money Market Fund ("Money Seeks current income with liquidity and
Market") stability of principal by investing in high
quality money market instruments.
- -------------------------------------------------------------------------------------
Vision Treasury Money Market Fund Seeks current income with liquidity and
("Treasury Money Market") stability of 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 Seeks as high a level of current
interest Fund ("New York Tax-Free Money income that is exempt from federal
regular Market") income tax
as is consistent with liquidity and relative
stability of principal.
</TABLE>
The financial statements of the other portfolios are presented separately. The
assets of each portfolio are segregated and a shareholder's interest is limited
to the portfolio in which shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Funds' use of the amortized cost method to value
their portfolio securities is in accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS--It is the policy of the Funds to require the custodian
bank to take possession, to have legally segregated in the Federal Reserve
Book Entry System, or to have segregated within the custodian bank's vault,
all securities held as collateral under repurchase agreement transactions.
Additionally, procedures have been established by the Funds to monitor, on a
daily basis, the market value of each repurchase agreement's collateral to
ensure that the value of collateral at least equals the repurchase price to be
paid under the repurchase agreement transaction.
VISION MONEY MARKET FUNDS
- -------------------------------------------------------------------------------
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 April 30, 1998, 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 $685,572,434, par value was $686,259; Treasury Money Market
aggregated $440,980,720, par value was $441,422, New York Tax-Free Money Market
aggregated $73,271,561, par value was $73,345. Transactions in capital stock
were as follows:
<TABLE>
<CAPTION>
MONEY MARKET
-------------------------------
YEAR ENDED APRIL 30,
-------------------------------
1998 1997
- --------------------------------------------- --------------- --------------
<S> <C> <C>
Shares sold 18,911,301,933 8,645,835,065
- ---------------------------------------------
Shares issued to shareholders in payment of
distributions declared 14,408,441 11,569,142
- ---------------------------------------------
Shares redeemed (18,839,268,923) (8,546,816,379)
- --------------------------------------------- --------------- --------------
Net change resulting from share transactions 86,441,451 110,587,828
- --------------------------------------------- --------------- --------------
</TABLE>
VISION MONEY MARKET FUNDS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY MONEY MARKET
-------------------------------
YEAR ENDED APRIL 30,
-------------------------------
1998 1997
- --------------------------------------------- --------------- --------------
<S> <C> <C>
Shares sold 13,346,041,424 3,654,497,462
- ---------------------------------------------
Shares issued to shareholders in payment of
distributions declared 3,467,336 2,819,179
- ---------------------------------------------
Shares redeemed (13,281,571,255) (3,656,716,056)
- --------------------------------------------- --------------- --------------
Net change resulting from share transactions 67,937,505 600,585
- --------------------------------------------- --------------- --------------
<CAPTION>
NEW YORK TAX-FREE
MONEY MARKET
-------------------------------
YEAR ENDED APRIL 30,
-------------------------------
1998 1997
- --------------------------------------------- --------------- --------------
<S> <C> <C>
Shares sold 1,153,995,180 176,252,479
- ---------------------------------------------
Shares issued to shareholders in payment of
distributions declared 1,148,312 779,290
- ---------------------------------------------
Shares redeemed (1,138,416,526) (186,176,785)
- --------------------------------------------- --------------- --------------
Net change resulting from share transactions 16,726,966 (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, TRANSFER AND DIVIDEND DISBURSING AGENT AND FUND ACCOUNTING
FEE--Federated Services Company ("FServ") provides the Funds with certain
administrative personnel and fund accounting services. FServ, through its
subsidiary Federated Shareholder Services Company, serves as transfer and
dividend disbursing agent for the Funds. The fee paid to FServ is based on the
level of average aggregate net assets of the Corporation for the period. FServ
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
fiscal year ended April 30, 1998.
VISION MONEY MARKET FUNDS
- -------------------------------------------------------------------------------
GENERAL--Certain of the Officers of the Corporation are Officers and Directors
or Trustees of the above companies.
(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 April 30, 1998, 67.0% of the total market value
of 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 7.9% of the
total market value of investments.
(6) SUBSEQUENT EVENT
Effective May 1, 1998, Money Market Fund and Treasury Money Market Fund will
offer two classes of shares, its existing class (to be designated as Class A
Shares), and a new class (to be designated as Class S Shares).
(7) YEAR 2000 (UNAUDITED)
Similar to other financial organizations, the Funds could be adversely affected
if the computer systems used by the Funds' service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Funds' Adviser and Administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by the Funds' other service providers. At this
time, however, there can be no assurance that these steps will be sufficient to
avoid any adverse impact to the Funds.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
- -------------------------------------------------------------------------------
To the Board of Directors and Shareholders of VISION GROUP OF FUNDS, INC.:
We have audited the accompanying statements of assets and liabilities of Vision
Money Market Fund, Vision Treasury Money Market Fund, and Vision New York
Tax-Free Money Market Fund (three of the portfolios of Vision Group of Funds,
Inc.), including the portfolios of investments, as of April 30, 1998, and
related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
financial highlights for each of the periods presented therein. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of April
30, 1998, by correspondence with the custodian and brokers or other appropriate
auditing procedures where replies from brokers were not received. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios of Vision Group of Funds, Inc., as identified
above, at April 30, 1998, the results of their operations for the year then
ended, the changes in their net assets for each of the two years in the period
then ended, and financial highlights for each of the periods presented therein,
in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
June 17, 1998
<PAGE>
DIRECTORS OFFICERS
- --------------------------------------------------------------------------------
Randall I. Benderson Edward C. Gonzales
President and Treasurer
Joseph J. Castiglia Charles L. Davis, Jr.
Vice President and Assistant Treasurer
Daniel R. Gernatt, Jr. Beth S. Broderick
Vice President and Assistant Treasurer
George K. Hambleton, Jr. 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.
Federated Securities Corp.
Distributor
Federated Investors Tower
Pittsburgh, PA 15222-3779
Cusip 92830F307
Cusip 92830F109
Cusip 92830F208 [RECYCLED LOGO APPEARS HERE]
G00158-06 (6/98)
LOGO OF VISION GROUP OF FUNDS, INC.
ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1998
VISION
Money Market
Fund
-------------------------------------
VISION
Treasury
Money Market
Fund
-------------------------------------
VISION
New York Tax-Free
Money Market
Fund
Manufacturers and Traders Trust Company
Investment Adviser to the Funds
One M&T Plaza
Buffalo, NY 14240-4556
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 Annual Report of the VISION Equity and Income Funds
for the 12-month period from May 1, 1997 through April 30, 1998. This report
begins with a discussion by each fund's management about the economy, the
market, and fund strategies over the period. Next, you will find a complete list
of portfolio holdings and financial statements for each fund.
In general, the 12-month reporting period was a very positive period for the
VISION Equity and Income Funds, as the following highlights show.
VISION U.S. GOVERNMENT SECURITIES FUND
The fund's portfolio of U.S. government securities paid dividends totaling $0.61
per share. The fund's net asset value rose from $9.28 at the beginning of the
period to $9.61 at the period's end. Through income distributions and the
increase in net asset value, the fund achieved a total return on April 30, 1998
of 10.42% (5.42% adjusted for the fund's sales charge).* At the end of the
reporting period, the fund's assets totaled $53.9 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 tax-free
income distributions totaling $0.46 per share and capital gains totaling $0.04
per share.** The fund's net asset value rose from $10.08 at the beginning of the
period to $10.42 at the period's end. Through income distributions, capital
gains and the net asset value increase, the fund achieved a total return on
April 30, 1998 of 8.37% (3.54% adjusted for the fund's sales charge).* By the
end of the reporting period, tax-sensitive New York residents had invested a
total of $43.4 million in the fund.
VISION GROWTH AND INCOME FUND
The fund's portfolio--which focuses on quality, value stocks issued by midsize
companies--delivered strong performance to shareholders. The fund achieved a
total return on April 30, 1998 of 31.40% (24.17% adjusted for the fund's sales
charge)* through dividends totaling $0.09 per share, capital gains totaling
$3.34 per share and a share price increase of $1.02. Fund assets reached $143.4
million at the end of the reporting period.
VISION CAPITAL APPRECIATION FUND
The fund's relatively aggressive portfolio of stocks issued by mid-size
companies resulted in extremely strong performance to shareholders. The fund
achieved a total return on April 30, 1998 of 40.07% (32.31% adjusted for the
fund's sales charge)* through capital gains totaling $0.86 per share and a
significant share price increase from $11.26 to $14.77. Fund assets totaled $75
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 choosing one or more of the VISION Equity and Income Funds to
pursue your financial goals. We look forward to keeping you up-to-date on your
progress.
Sincerely,
/s/ Edward C. Gonzales
Edward C. Gonzales
President
June 15, 1998
INVESTMENT REVIEW
- -------------------------------------------------------------------------------
VISION U.S. GOVERNMENT SECURITIES FUND
Yields on U.S. fixed income securities fell during the Vision U.S. Government
Securities Fund's fiscal year. On April 30, 1997, the yield of the U.S. Treasury
ten-year note was 6.69%. The ten-year note peaked on May 28, 1997 at 6.80%, then
reached a low of 5.39% on January 12, 1998, but regained some strength to end
the reporting period at 5.68% on April 30, 1998.
What happened in 1997 and early 1998? On March 25, 1997, the Federal Reserve
Board (the "Fed") raised the federal funds target rate to 5.50%. This level has
remained unchanged to date. Economic growth over the past year was relatively
strong. The year-over-year percentage change for the chain- weighted real Gross
Domestic Product for the quarter ended March 31, 1998 was 3.70%. This growth
rate was higher than the 2.0-2.5% rate that is generally recognized as the Fed's
non-inflation threatening rate of economic growth. However, the year-over-year
percentage change in the consumer price index (CPI) for the year ended April 30,
1998 reached a cycle low of 1.40%. Looking forward, a key topic of debate in the
fixed income market is whether the best news on inflation is already behind us.
Over the fiscal year weak economic activity in Asia helped place downward
pressure on commodity prices and increased demand for U.S. dollars. This
activity contributed to the subdued inflation rate. However, there is some
evidence that the majority of the benefits in health care cost containment have
already been achieved. Additionally, the recent strength in U.S. economic growth
has led to relatively tight labor markets. Tight labor markets increase the
susceptibility of the economy to labor shortages and bottlenecks which could
prove inflationary. Both real and nominal interest rates remain attractive as
long as inflation rates remain subdued.
The fund posted a 10.42% total return based on net asset value (5.42% adjusted
for the fund's sales charge)* for the one year period ended April 30, 1998. This
compares to returns for the Lipper General Government Index and the Morningstar
General U.S. Government Bond Average of 10.27% and 8.86%, respectively.** The
fund's duration was slightly longer than the market average. We continued to
emphasize government securities that provided higher current income, especially
in the environment of reduced interest rate volatility. We increased the fund's
portfolio weighting of corporate and taxable municipal bonds coincident with a
widening of yield spreads in these sectors. In the mortgage-backed security
sector, we continued to emphasize very old, low balance mortgages in an attempt
to diminish prepayment risk.
*Performance quoted reflects past performance and is not indicative of future
results. Investment return and principal value will fluctuate, so than 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. Morningstar figures represent the average of the
total returns reported by all of the mutual funds designated by Morningstar,
Inc., an independent mutual fund rating service, as falling into the category
indicated. Morningstar figures do not reflect sales charges.
VISION NEW YORK MUNICIPAL INCOME FUND (FORMERLY, VISION NEW YORK TAX-FREE
FUND)
Yields on municipal securities fell during Vision New York Municipal Income
Fund's fiscal year. The municipal bond market, as measured by the Bond Buyer 40
Index* (yield to par basis) began the fiscal year at 6.09% and ended the fiscal
year at 5.68% on April 30, 1998. Measured as a percentage of the U.S. 30 year
Treasury yield, the Bond Buyer 40 Index ranged between 84.0% on June 13, 1996 to
95.5% on April 30, 1998.
What happened in 1997 and early 1998? On March 25, 1997, the Federal Reserve
Board (the "Fed") raised the federal funds target rate to 5.50%. This level has
remained unchanged to date. Economic growth over the past year was relatively
strong. The year-over-year percentage change for the chain- weighted real Gross
Domestic Product for the quarter ended March 31, 1998 was 3.70%. This growth
rate was higher than the 2.0-2.5% rate that is generally recognized as the Fed's
non-inflation threatening rate of economic growth. However, the year-over-year
percentage change in the consumer price index (CPI) for the year ended April 30,
1998 reached a cycle low of 1.40%. Looking forward, a key topic of debate in the
fixed income market is whether the best news on inflation is already behind us.
Over the fiscal year weak economic activity in Asia helped place downward
pressure on commodity prices and increased demand for U.S. dollars. This
activity contributed to the subdued inflation rate. However, there is some
evidence that the majority of the benefits in health care cost containment have
already been achieved. Additionally, the recent strength in U.S. economic growth
has led to relatively tight labor markets. Tight labor markets increase the
susceptibility of the economy to labor shortages and bottlenecks which could
prove inflationary. Both real and nominal interest rates remain attractive as
long as inflation rates remain subdued.
The fund posted a total return of 8.37% based on net asset value (3.54% adjusted
for the fund's sales charge)** for the one year period ended April 30, 1998.
This compares to returns for the Lipper N.Y. Municipal Index and the Morningstar
N.Y. Municipal Average of 8.72% and 8.15%, respectively.*** Municipal securities
under-performed government securities. Recent supply pressures contributed to
this under-performance. We took advantage of the relative attractiveness of
municipal securities by extending the duration of the fund's portfolio. We
continued to emphasize securities that provided higher current income,
especially in the current environment of reduced interest rate volatility. We
also continued to favor higher quality securities since yield spreads on lower
rated securities are not sufficient relative to the risks assumed. The credit
quality in the State of New York on average improved over the past fiscal year.
On February 25, 1998 Moody's upgraded the credit rating of New York City from
Baa1 to A3.
*The Bond Buyer 40 Bond Index is comprised of 40 actively quoted and traded
long-term municipal bonds. This index is unmanaged, and investments cannot be
made in an index.
**Performance quoted reflects past performance and is not indicative of future
results. Investment return and principal value will fluctuate, so than 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. Morningstar figures represent the average of the
total returns reported by all of the mutual funds designated by Morningstar,
Inc., an independent mutual fund rating service, as falling into the category
indicated. Morningstar figures do not reflect sales charges.
VISION GROWTH AND INCOME FUND
The Vision Growth and Income Fund achieved good results over the past fiscal
year as the stock market continued to advance. For the fiscal year ended April
30, 1998, the fund's total return was 31.40%, based on net asset value (24.17%
adjusted for the fund's sales charge).* The Lipper Growth and Income Mutual Fund
Average generated a return of 34.77%, while the Standard & Poor's 500 Index
("S&P 500") returned 41.07% for the same period.**
The fund's performance lagged during the second half of the fiscal year
primarily due to an overweight position in energy which suffered due to a
decline in the price of oil and an underweight position in both technology and
pharmaceuticals--two sectors which outperformed the overall equity markets early
in calendar 1998. Mid-sized companies continued to make up the majority of the
fund's holdings due to our expectations for stronger earnings growth as well as
their relative valuations. The mid-cap sector of the U.S. equity market lagged
the performance of large mega-cap stocks as represented by the S&P 500. As
mid-cap companies continue to exhibit strong earnings growth, we would expect
their relative performance to improve.
The fund looks to invest in quality mid-sized companies which have consistent
earnings growth and sell at attractive valuations. Industries that benefit from
major secular trends, such as changing demographics, increased use of technology
or corporate outsourcing, are emphasized. While income is considered important,
principal appreciation is the primary concern.
Looking forward to fiscal 1999, we believe that earnings growth for most
corporations will become more difficult than has recently been experienced. Many
companies are having difficulty increasing prices and labor costs are beginning
to rise. A lot of corporate resources, both time and money, are being dedicated
to fixing the Year 2000 problem. Exports are suffering due to the various
monetary crises experienced around the world and the resultant slowdown in those
economies.
While we have concerns regarding fiscal 1999, there are still many positive
factors in place. The federal budget looks to be in a surplus. Inflation remains
firmly under control. The U.S. consumer appears to be in excellent financial
condition. Mergers and acquisitions continue at a brisk pace. Companies continue
to buy back large amounts of their own stock. Demographics, particularly
increased savings by baby boomers, continue to provide liquidity. New products
and innovations abound. The use of technology continues to enhance productivity.
More and more international markets are opening their doors to U.S. companies.
Overall, we believe the forces behind the market's rise continue to remain
positive. Though a "correction" could occur at any time, we would consider this
"normal" and not the initial stage of a protracted bear market. We look for U.S.
equities to continue to exhibit positive total returns. We are constantly
identifying exciting and attractive investment opportunities for the fund.
*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 figures represent the average of the total returns reported by all of
the mutual funds designed by Lipper Analytical Services, Inc. as falling into
the category indicated. Lipper figures do not reflect sales charges. The S&P
500 is an unmanaged capitalization weighted index designed to measure
performance of the broad domestic economy through changes in the aggregate
market value of 500 stocks representing all major industries. Investments
cannot be made in an index.
VISION CAPITAL APPRECIATION FUND
The Vision Capital Appreciation Fund provided a total return of 40.07% based on
net asset value (32.31% adjusted for the fund's sales charge) for the twelve
month period ended April 30, 1998.* The Russell Mid-Cap Growth Index** benchmark
returned 40.84% over the same time period. Since inception performance continued
to be impressive when compared to the Russell benchmark. On April 30, 1998 the
fund returned 59.63% based on net asset value (50.88% adjusted for the fund's
sales charge) since inception (July 3, 1996) which exceeded the Russell Mid-Cap
Growth Index return of 47.24% by 1,239 basis points. Investors in the fund
should focus on a long-term investment horizon and recognize that mid-cap growth
stocks tend to trade differently than the S&P 500.*** We feel that this will be
one of the more attractive areas of the market over the coming five to seven
years.
This past year has been a roller coaster of emotions with periods when investors
did not care about the value present in smaller-capitalization areas of the
market. Then there was the third quarter of 1997 when the fund gained
substantially. The international picture in October led to a correction in the
fourth quarter of 1997 and by January 1998 investors expected the worst.
Problems in the Asian market would spread to South America and on to Africa. The
ripple effect would damage global growth, or so many expected. This was quickly
forgotten and the strength of the U.S. economy continued with investors drawn to
this market due to the strength of the currency and the investment
opportunities. The two sectors which hurt fund performance, energy and
technology, appear to us to be only a temporary burden. The weather, driven by
El Nino, created less demand for energy than most anticipated resulting in
significant inventories and declining prices. The energy stocks quickly
discounted the worst case scenario, that there would be a global slowdown and
stockpiles would remain well in excess of demand. That appears to be behind us
and the two to three year outlook for energy should support our investment
decisions. The international problems that affected our technology holdings may
be tougher to solve. Declining currency values relative to the U.S. dollar
created concern about our ability to compete with the Asian economies. The
greatly feared dumping of technology goods at a deep discount did not occur but
the slower demand for U.S. goods in Asia seems to be unfolding. We focused on
companies that had some degree of earnings visibility. We also preferred to hold
good companies that declined, due to unfounded fears, and now wait for the
recovery.
Our biggest concern for the past two years has been the threat of wage
inflation. Everything that we see points to the labor market as a problem. The
Federal Reserve Board (the "Fed") has mentioned, on numerous occasions, that the
labor markets are tight in most of the districts. Over the past fiscal year
offsetting factors helped keep inflation under control. For example, this past
quarter lower energy costs were the offset to any inflationary pressures.
Productivity increases and "debottlenecking" helped to contain any problems
associated with a lack of capacity or wage inflation. Overall, commodity prices
*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 Russell Mid-Cap Growth Index measures the performance of those Russell
Mid-cap companies with higher price-to-book ratios and higher forecasted growth
values. This index is unmanaged, and investments cannot be made in an index.
***The S&P 500 is an unmanaged capitalization weighted index designed to measure
performance of the broad domestic economy through changes in the aggregate
market value of 500 stocks representing all major industries.
Investments cannot be made in an index.
continued to be under pressure. We remain cautious and give credit to the Fed
on their management skills.
The broad economy continued to show surprising resilience in the face of
significant trade problems with Asia. Looking ahead the first quarter of the
fund's fiscal year may be stronger than most expect due to the favorable weather
patterns in the U.S. However, this economic strength may be at the expense of
the second quarter. Going forward we should see a trend of weaker economic
activity sufficient to leave the Fed in a hold position. We have not seen the
bulk of the impact from the Asian economic problem but the second and third
quarters should provide significant information.
We expect equity returns to moderate from the levels of the past three years
with added volatility in both the stock and bond markets. So far, the red ink
that we expected has been contained within sporadic earnings announcements.
There is an opportunity to make money and to hedge against the possibility of
deflation by extending the duration of fixed income holdings. This year may be
disappointing for investors more from the standpoint of expectations rather than
real returns.
VISION U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTED IN VISION U.S. GOVERNMENT SECURITIES FUND
The graph below illustrates the hypothetical investment of $10,000* in the
Vision U.S. Government Securities Fund (the "Fund") from September 22, 1993
(start of performance) to April 30, 1998, compared to the Lehman Brothers
Aggregate Bond Index ("LBABI").+
[GRAPH APPEARS HERE-SEE APPENDIX]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THE ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF
OR GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
*Represents a hypothetical investment of $10,000 in the Fund after deducting the
maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge =
$9,550). The Fund's performance assumes the reinvestment of all dividends and
distributions. The LBABI has been adjusted to reflect reinvestment of dividends
on securities in the index.
**The return quoted reflects all applicable sales charges.
+The LBABI is not adjusted to reflect sales charges, expenses, or other fees
that the SEC requires to be reflected in the Fund's performance. This index is
unmanaged.
VISION NEW YORK MUNICIPAL INCOME FUND
(FORMERLY, VISION NEW YORK TAX-FREE FUND)
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTED IN VISION NEW YORK MUNICIPAL INCOME FUND
The graph below illustrates the hypothetical investment of $10,000* in the
Vision New York Municipal Income Fund (the "Fund") from September 22, 1993
(start of performance) to April 30, 1998, compared to the Lehman Brothers New
York Tax-Exempt Index ("LBNYTEI").+
[GRAPH APPEARS HERE-SEE APPENDIX]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge
= $9,550). The Fund's performance assumes the reinvestment of all dividends
and distributions. The LBNYTEI has been adjusted to reflect reinvestment of
dividends on securities in the index.
** Total return quoted reflects all applicable sales charges.
+The LBNYTEI is not adjusted to reflect sales charges, expenses, or other fees
that the SEC requires to be reflected in the Fund's performance. This index is
unmanaged.
VISION GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTED IN VISION GROWTH AND INCOME FUND
The graph below illustrates the hypothetical investment of $10,000* in the
Vision Growth and Income Fund (the "Fund") from November 29, 1993 (start of
performance) to April 30, 1998, compared to the Standard & Poor's Daily Price
Index of 500 Common Stocks ("S&P 500") and the Russell Midcap Index ("RMCI").+
[GRAPH APPEARS HERE-SEE APPENDIX]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THE ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF
OR GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
*Represents a hypothetical investment of $10,000 in the Fund after deducting the
maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge =
$9,550). The Fund's performance assumes the reinvestment of all dividends and
distributions. The S&P 500 and the RMCI have been adjusted to reflect
reinvestment of dividends on securities in the indexes.
**On July 1, 1996 the sales charge for the Vision Growth and Income Fund changed
to 5.50%. The start of performance total return is based on the original 4.50%
sales charge. The 1 year total return is based on the current sales charge of
5.50%. The graph above is based on the original 4.50% sales charge.
+The S&P 500 and the RMCI are not adjusted to reflect sales charges, expenses,
or other fees that the SEC requires to be reflected in the Fund's performance.
These indexes are unmanaged.
VISION CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTED IN VISION CAPITAL APPRECIATION FUND
The graph below illustrates the hypothetical investment of $10,000* in the
Vision Capital Appreciation Fund (the "Fund") from July 3, 1996 (start of
performance) to April 30, 1998, compared to the Russell Midcap Growth Index
("RMGI")+
[GRAPH APPEARS HERE-SEE APPENDIX]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN THE ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF
OR GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
*Represents a hypothetical investment of $10,000 in the Fund after deducting the
maximum sales charge of 5.50% ($10,000 investment minus $550 sales charge =
$9,450). The Fund's performance assumes the reinvestment of all dividends and
distributions. The RMGI has been adjusted to reflect reinvestment of dividends
on securities in the index.
**Total return quoted reflects all applicable sales charges.
+The RMGI is not adjusted to reflect sales charges, expenses, or other fees that
the SEC requires to be reflected in the Fund's performance. This index is
unmanaged.
VISION U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- ----------------------------------------------------- -----------
<C> <S> <C>
ASSET-BACKED SECURITIES--1.5%
----------------------------------------------------------------
$ 203,186 Greentree Home Improvement Trust 1995-D, 6.250%,
9/15/2025 $ 203,561
-----------------------------------------------------
33,852 Old Stone Credit Corp. Home Equity Trust, 6.950%,
5/15/2007 34,093
-----------------------------------------------------
102,137 Provident Bank Home Equity Loan Trust 1996-1, 7.600%,
10/25/2012 105,069
-----------------------------------------------------
173,852 The Money Store Home Equity Trust 1992-C, 6.200%,
10/15/2017 173,454
-----------------------------------------------------
258,000 The Money Store Home Equity Trust 1994-C, 7.800%,
10/15/2021 266,300
----------------------------------------------------- -----------
TOTAL ASSET-BACKED SECURITIES (IDENTIFIED COST
$772,928) 782,477
----------------------------------------------------- -----------
COLLATERALIZED MORTGAGE OBLIGATIONS--13.5%
----------------------------------------------------------------
55,000 FHLMC Series 1686-PJ, REMIC, 5.000%, 2/15/2024 48,762
-----------------------------------------------------
974,000 FHLMC Series 20-H, REMIC, 5.500%, 10/25/2023 871,584
-----------------------------------------------------
30,000 FHLMC Series 1598-E, REMIC, 5.600%, 11/15/2005 29,864
-----------------------------------------------------
30,000 FHLMC Series 1697-PG, REMIC, 5.800%, 4/15/2006 29,914
-----------------------------------------------------
105,000 FHLMC Series 1637-GA, REMIC, 5.800%, 6/15/2023 101,793
-----------------------------------------------------
160,000 FHLMC Series 1534-H, REMIC, 6.000%, 1/15/2023 154,269
-----------------------------------------------------
583,000 FHLMC Series 23-PK, REMIC, 6.000%, 11/25/2023 544,703
-----------------------------------------------------
279,000 FHLMC Series 1577-PK, REMIC, 6.500%, 9/15/2023 281,943
-----------------------------------------------------
133,000 FHLMC Series 1644-K, REMIC, 6.750%, 12/15/2023 131,847
-----------------------------------------------------
250,000 FHLMC Series 1455-H, REMIC, 7.000%, 6/15/2021 260,445
-----------------------------------------------------
58,000 FHLMC Series 33-H, REMIC, 7.500%, 6/25/2023 60,843
-----------------------------------------------------
597,000 FHLMC Series 42-I, REMIC, 8.000%, 10/17/2024 675,147
-----------------------------------------------------
111,874 FNMA Series 1994-22-A, REMIC, 5.000%, 3/25/2022 110,326
-----------------------------------------------------
42,000 FNMA Series 1993-38-L, REMIC, 5.000%, 8/25/2022 37,185
-----------------------------------------------------
152,000 FNMA Series 1994-30-PL, REMIC, 5.500%, 1/25/2024 132,392
-----------------------------------------------------
111,000 FNMA Series 1993-198-K, REMIC, 6.000%, 12/25/2022 108,656
-----------------------------------------------------
788,000 FNMA Series 1992-136-PJ, REMIC, 6.000%, 5/25/2021 755,093
-----------------------------------------------------
26,000 FNMA Series 1993-160-PK, REMIC, 6.500%, 11/25/2022 25,985
-----------------------------------------------------
155,000 FNMA Series 1993-202-J, REMIC, 6.500%, 11/25/2023 151,857
-----------------------------------------------------
</TABLE>
VISION U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- ----------------------------------------------------- -----------
<C> <S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS--CONTINUED
----------------------------------------------------------------
$ 175,000 FNMA Series 1993-223-C, REMIC, 6.500%, 5/25/2023 $ 175,040
-----------------------------------------------------
395,000 FNMA Series 1993-113-PK, REMIC, 6.500%, 7/25/2023 393,969
-----------------------------------------------------
484,000 FNMA Series 1993-127-H, REMIC, 6.500%, 7/25/2023 473,792
-----------------------------------------------------
297,000 FNMA Series 1993-252-N, REMIC, 6.500%, 8/25/2023 293,106
-----------------------------------------------------
181,000 FNMA Series 1994-55-H, REMIC, 7.000%, 3/25/2024 182,656
-----------------------------------------------------
50,000 FNMA Series G93-1-HA, REMIC, 7.500%, 2/25/2021 51,484
-----------------------------------------------------
307,000 FNMA Series 1992-131, REMIC, 8.000%, 1/25/2022 323,296
-----------------------------------------------------
860,000 Vendee Mortgage Trust 1993-1, 7.000%, 11/15/2012 885,972
----------------------------------------------------- -----------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (IDENTIFIED
COST $6,935,839) 7,291,923
----------------------------------------------------- -----------
CORPORATE BONDS--13.9%
----------------------------------------------------------------
105,000 AON Corp., 6.875%, 10/1/1999 106,442
-----------------------------------------------------
100,000 Baltimore Gas & Electric Co., 5.500%, 7/15/2000 98,993
-----------------------------------------------------
1,000,000 Boeing Co., 6.625%, 2/15/2038 995,240
-----------------------------------------------------
800,000 Delmarva Power and Light Co., 8.500%, 2/1/2022 888,792
-----------------------------------------------------
250,000 First Union National Bank, Charlotte, N.C., 6.180%,
2/15/2036 248,153
-----------------------------------------------------
1,000,000 Florida Power Corp., 8.000%, 12/1/2022 1,071,400
-----------------------------------------------------
160,000 Ford Motor Credit Corp., 6.375%, 12/15/2005 160,066
-----------------------------------------------------
150,000 GTE North, Inc., 8.500%, 12/15/2031 162,087
-----------------------------------------------------
100,000 General Electric Capital Corp., 8.300%, 9/20/2009 115,944
-----------------------------------------------------
100,000 J.P. Morgan & Co., Inc., 8.000%, 5/30/2005 101,253
-----------------------------------------------------
363,690 NYNEX Corp., 9.550%, 5/1/2010 423,852
-----------------------------------------------------
500,000 New Plan Realty Trust, 6.800%, 5/15/2002 508,620
-----------------------------------------------------
800,000 Ohio National Life Insurance Co., 8.500%, 5/15/2026 894,888
-----------------------------------------------------
100,000 Pennsylvania Power & Light Co., 8.500%, 5/1/2022 108,056
-----------------------------------------------------
1,000,000 Potomac Edison Co., 8.000%, 6/1/2006 1,034,310
-----------------------------------------------------
60,000 Potomac Electric Power Co., 8.500%, 5/15/2027 65,448
-----------------------------------------------------
75,000 Private Export Funding Corp., 7.950%, 11/1/2006 82,249
-----------------------------------------------------
125,000 Public Service Co. Colo, 8.750%, 3/1/2022 137,108
-----------------------------------------------------
</TABLE>
VISION U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- ---------------------------------------------------- -----------
<C> <S> <C>
CORPORATE BONDS--CONTINUED
---------------------------------------------------------------
$ 245,000 Virginia Electric Power Co., 8.750%, 4/1/2021 $ 268,246
---------------------------------------------------- -----------
TOTAL CORPORATE BONDS (IDENTIFIED COST $7,363,382) 7,471,147
---------------------------------------------------- -----------
GOVERNMENT AGENCIES--24.2%
---------------------------------------------------------------
328,582 Federal Home Loan Mortgage Corp., 10.250%, 3/15/2009 345,090
----------------------------------------------------
26,138 Federal Home Loan Mortgage Corp., 8.200%, 9/15/2007 26,268
----------------------------------------------------
279,516 Federal Home Loan Mortgage Corp., 9.875%, 3/15/2009 304,909
----------------------------------------------------
1,000,000 Housing and Urban Development, 6.310%, 8/1/2003 1,018,159
----------------------------------------------------
500,000 Housing and Urban Development, 6.590%, 8/1/2000 508,160
----------------------------------------------------
3,000,000 Housing and Urban Development, 6.830%, 8/1/2003 3,112,110
----------------------------------------------------
700,000 Housing and Urban Development, 9.100%, 8/1/2000 747,257
----------------------------------------------------
1,923,972 Small Business Administration, 6.700%, 12/1/2016 1,927,993
----------------------------------------------------
4,792,825 Small Business Administration, 6.950%, 11/1/2016 4,930,619
----------------------------------------------------
129,490 Small Business Administration, 8.850%, 8/1/2011 140,656
---------------------------------------------------- -----------
TOTAL GOVERNMENT AGENCIES (IDENTIFIED COST
$12,766,258) 13,061,221
---------------------------------------------------- -----------
GOVERNMENTS/AGENCIES--1.1%
---------------------------------------------------------------
564,000 Israel AID, 6.800%, 2/15/2012 (IDENTIFIED COST
$579,792) 595,364
---------------------------------------------------- -----------
MORTGAGE BACKED SECURITIES--21.9%
---------------------------------------------------------------
65,005 FHLMC, 10.500%, 3/1/2001 68,595
----------------------------------------------------
58,024 FHLMC, 6.750%, 12/1/2006 58,522
----------------------------------------------------
262,810 FHLMC, 7.000%, 11/1/2007 264,700
----------------------------------------------------
318,466 FHLMC, 7.000%, 11/1/2010 324,638
----------------------------------------------------
261,675 FHLMC, 7.000%, 11/1/2017 267,890
----------------------------------------------------
27,714 FHLMC, 7.250%, 1/1/2005 28,104
----------------------------------------------------
100,716 FHLMC, 7.250%, 11/1/2009 102,132
----------------------------------------------------
57,297 FHLMC, 7.500%, 11/1/2009 58,497
----------------------------------------------------
311,329 FHLMC, 7.500%, 3/1/2008 319,305
----------------------------------------------------
75,048 FHLMC, 7.500%, 3/1/2017 77,721
----------------------------------------------------
166,103 FHLMC, 7.500%, 6/1/2008 170,619
----------------------------------------------------
</TABLE>
VISION U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- ------------------------ -----------
<C> <S> <C>
MORTGAGE BACKED SECURITIES--
CONTINUED
-----------------------------------
$ 70,763 FHLMC, 7.500%, 7/1/2007 $ 72,245
------------------------
98,223 FHLMC, 8.000%, 1/1/2010 100,586
------------------------
491,387 FHLMC, 8.000%, 11/1/2008 505,514
------------------------
103,253 FHLMC, 8.000%, 12/1/2010 106,221
------------------------
15,134 FHLMC, 8.000%, 3/1/2007 15,522
------------------------
66,152 FHLMC, 8.000%, 5/1/2002 67,462
------------------------
24,255 FHLMC, 8.000%, 5/1/2006 24,854
------------------------
81,155 FHLMC, 8.000%, 9/1/2007 83,488
------------------------
57,723 FHLMC, 8.250%, 12/1/2007 59,752
------------------------
159,029 FHLMC, 8.250%, 5/1/2008 162,209
------------------------
81,228 FHLMC, 8.250%, 5/1/2009 84,084
------------------------
109,062 FHLMC, 8.250%, 8/1/2009 113,527
------------------------
52,390 FHLMC, 8.500%, 4/1/2006 54,536
------------------------
54,557 FHLMC, 8.500%, 6/1/2002 56,194
------------------------
336,207 FHLMC, 8.500%, 7/1/2004 346,925
------------------------
140,370 FHLMC, 8.500%, 9/1/2009 144,756
------------------------
41,489 FHLMC, 8.750%, 8/1/2008 42,033
------------------------
111,365 FHLMC, 9.000%, 3/1/2002 114,880
------------------------
16,179 FHLMC, 9.000%, 9/1/2019 17,220
------------------------
174,165 FHLMC, 9.250%, 6/1/2002 179,718
------------------------
53,275 FNMA, 6.000%, 1/1/2014 52,425
------------------------
660,429 FNMA, 6.000%, 5/1/2009 654,650
------------------------
143,712 FNMA, 6.500%, 4/1/2004 145,957
------------------------
162,604 FNMA, 7.500%, 11/1/2009 167,989
------------------------
273,165 FNMA, 8.000%, 1/1/2006 279,909
------------------------
267,195 FNMA, 8.000%, 1/1/2010 276,964
------------------------
114,025 FNMA, 8.000%, 4/1/2002 117,090
------------------------
122,227 FNMA, 8.250%, 7/1/2009 127,594
------------------------
</TABLE>
VISION U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- ------------------------ -----------
<C> <S> <C>
MORTGAGE BACKED SECURITIES--
CONTINUED
-----------------------------------
$ 114,348 FNMA, 8.500%, 10/1/2002 $ 118,493
------------------------
78,825 FNMA, 8.500%, 3/1/2012 82,988
------------------------
135,092 FNMA, 8.750%, 5/1/2010 143,873
------------------------
116,061 FNMA, 9.000%, 10/1/2006 122,336
------------------------
49,250 FNMA, 9.000%, 12/1/2002 51,127
------------------------
99,711 FNMA, 9.750%, 9/1/2017 109,059
------------------------
11,916 GNMA, 7.250%, 10/15/2005 12,154
------------------------
45,235 GNMA, 7.250%, 11/15/2005 46,140
------------------------
31,449 GNMA, 7.250%, 2/15/2005 32,078
------------------------
52,233 GNMA, 7.250%, 3/15/2005 53,278
------------------------
87,028 GNMA, 7.250%, 3/15/2005 88,769
------------------------
19,563 GNMA, 7.250%, 7/15/2005 19,954
------------------------
66,541 GNMA, 7.500%, 12/15/2005 68,703
------------------------
69,124 GNMA, 7.500%, 6/20/2007 71,111
------------------------
231,265 GNMA, 8.000%, 10/15/2007 239,648
------------------------
130,972 GNMA, 8.000%, 12/15/2009 134,902
------------------------
189,221 GNMA, 8.000%, 12/15/2016 199,570
------------------------
239,008 GNMA, 8.000%, 2/15/2010 247,672
------------------------
54,106 GNMA, 8.000%, 6/15/2006 56,152
------------------------
76,678 GNMA, 8.000%, 7/15/2024 79,769
------------------------
41,795 GNMA, 8.000%, 8/15/2006 43,179
------------------------
85,279 GNMA, 8.000%, 9/15/2006 88,504
------------------------
826,467 GNMA, 8.000%, 9/15/2007 864,435
------------------------
160,675 GNMA, 8.150%, 9/15/2015 166,098
------------------------
141,091 GNMA, 8.250%, 6/15/2008 148,697
------------------------
116,602 GNMA, 8.375%, 4/15/2010 121,321
------------------------
399,976 GNMA, 8.500%, 10/20/2009 414,975
------------------------
713,706 GNMA, 8.500%, 9/15/2008 750,062
------------------------
</TABLE>
VISION U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- ---------------------------------------------------- -----------
<C> <S> <C>
MORTGAGE BACKED SECURITIES--CONTINUED
---------------------------------------------------------------
$ 63,175 GNMA, 8.750%, 2/15/2002 $ 65,228
----------------------------------------------------
379,165 GNMA, 9.000%, 10/20/2024 403,694
----------------------------------------------------
37,054 GNMA, 9.000%, 4/15/2001 38,411
----------------------------------------------------
131,146 GNMA, 9.000%, 4/15/2001 136,089
----------------------------------------------------
588,901 GNMA, 9.000%, 4/20/2023 627,733
----------------------------------------------------
29,734 GNMA, 9.000%, 5/15/2001 30,823
---------------------------------------------------- -----------
TOTAL MORTGAGE BACKED SECURITIES (IDENTIFIED COST
$11,688,113) 11,792,052
---------------------------------------------------- -----------
MUNICIPALS--18.0%
---------------------------------------------------------------
947,879 Atlanta, GA Downtown Development Authority, 6.250%,
2/1/2009 951,670
----------------------------------------------------
225,000 Chicago, IL Public Building Commission, 7.000%,
1/1/2007 239,220
----------------------------------------------------
250,000 Connecticut Development Authority, 8.550%, 8/15/2008 279,838
----------------------------------------------------
265,000 Connecticut Municipal Electric Energy Cooperative,
5.700%, 1/1/2004 261,415
----------------------------------------------------
75,000 Connecticut State HEFA, 7.070%, 11/1/2001 75,945
----------------------------------------------------
100,000 Greater Orlando (FL) Aviation Authority, 8.250%,
10/1/2004 110,713
----------------------------------------------------
250,000 HUD 92A Detroit, 7.120%, 8/1/2001 258,875
----------------------------------------------------
200,000 Miami, FL, 8.650%, 7/1/2019 250,120
----------------------------------------------------
3,100,000 Minneapolis/St. Paul, MN Airport Commission, 8.950%,
1/1/2022 3,465,180
----------------------------------------------------
900,000 New Jersey State, 8.350%, 8/1/2010 977,004
----------------------------------------------------
100,000 New York City, NY, 10.500%, 11/15/2012 115,780
----------------------------------------------------
80,000 New York City, NY, 9.900%, 2/1/2015 91,616
----------------------------------------------------
2,500,000 Oakland, CA, 6.910%, 12/15/2007 2,619,400
---------------------------------------------------- -----------
TOTAL MUNICIPALS (IDENTIFIED COST $9,616,491) 9,696,776
---------------------------------------------------- -----------
U.S. TREASURY BONDS--3.7%
---------------------------------------------------------------
1,500,000 9.000%, 11/15/2018 (IDENTIFIED COST $1,892,109) 2,020,500
---------------------------------------------------- -----------
</TABLE>
VISION U.S. GOVERNMENT SECURITIES FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- ---------------------------------------------------- -----------
<C> <S> <C>
MUTUAL FUND SHARES--0.3%
------------------------------------------------------------
134,898 SSGA US Government Money Market Fund, 5.170% (AT NET
ASSET VALUE) $ 134,898
---------------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST $51,749,810)(A) $52,846,358
---------------------------------------------------- -----------
</TABLE>
(a) The cost of investments for federal tax purposes amounts to $51,749,810. The
net unrealized appreciation of investments on a federal tax basis amounts to
$1,096,548 which is comprised of $1,142,198 appreciation and $45,650
depreciation at April 30, 1998.
Note: The categories of investments are shown as a percentage of net assets
($53,921,828) at April 30, 1998.
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
(FORMERLY, VISION NEW YORK TAX-FREE FUND)
PORTFOLIO OF INVESTMENTS
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
---------- --------------------------------------------- ------- -----------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--98.0%
--------------------------------------------------------
NEW YORK--94.4%
---------------------------------------------
$ 45,000 34th Street Partnership, Inc., NY, 5.50%
(Original Issue Yield: 5.613%), 1/1/2023 NR $ 44,996
---------------------------------------------
25,000 Alden Central School District, NY, GO UT, 6.25% (AMBAC
INS)/(Original Issue Yield:
6.40%), 6/15/2009 AAA 28,524
---------------------------------------------
525,000 Allegany County, NY IDA, Revenue Bonds,
6.625% (Atlantic Richfield Co.)/(Original
Issue Yield 6.625%), 9/1/2016/(AMT) A 568,675
---------------------------------------------
25,000 Amherst, NY, GO UT, 6.20% (FGIC
INS)/(Original Issue Yield: 6.00%), 4/1/2002 AAA 26,714
---------------------------------------------
30,000 Batavia, NY, GO UT Bonds, 6.55% (MBIA
INS)/(Original Issue Yield: 6.60%), 5/1/2005 AAA 33,717
---------------------------------------------
25,000 Beacon, NY City School District, GO UT, 5.10%
(Original Issue Yield: 5.25%), 7/15/2006 AAA 25,897
---------------------------------------------
100,000 Brighton, NY Central School District, GO UT,
5.40% (Original Issue Yield: 5.55%), 6/1/2011 AAA 103,905
---------------------------------------------
10,000 Brighton, NY, 8.00% (MBIA INS), 10/15/2002 AAA 11,462
---------------------------------------------
50,000 Brockport, NY Central School District, GO UT,
5.40% (Original Issue Yield: 5.55%),
6/15/2011 AAA 51,643
---------------------------------------------
50,000 Broome County, NY, Certificate of
Participation, 5.25% (MBIA INS)/(Original
Issue Yield: 5.578%), 4/1/2022 NR 49,195
---------------------------------------------
70,000 Buffalo & Fort Erie, NY Public Bridge
Authority, 6.00% (MBIA INS)/(Original Issue
Yield: 5.05%), 1/1/2004 AAA 75,379
---------------------------------------------
30,000 Canandaigua, NY City School District, GO UT, 7.15% (United States
Treasury PRF), 6/1/2003
(@102) AAA 32,394
---------------------------------------------
10,000 Canandaigua, NY, GO UT, 8.80% (Original Issue
Yield: 9.30%), 3/1/2005 NR 12,387
---------------------------------------------
30,000 Carmel, NY, 6.30%, 11/15/2011 NR 34,105
---------------------------------------------
</TABLE>
VISION NEW YORK MUNICIPAL INCOME FUND
(FORMERLY, VISION NEW YORK TAX-FREE FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
---------- --------------------------------------------- ------- -----------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--CONTINUED
--------------------------------------------------------
NEW YORK--CONTINUED
---------------------------------------------
$ 50,000 Chautauqua County, NY, GO UT, 6.40% (FGIC
INS)/(Original Issue Yield: 6.30%), 9/15/2004 AAA $ 55,416
---------------------------------------------
100,000 Cheektowaga, NY Central School District, GO UT, 5.875% (FGIC
INS)/(Original Issue Yield:
5.95%), 6/1/2014 NR 107,229
---------------------------------------------
25,000 Cheektowaga, NY, GO UT, 5.65%, 8/15/2005 NR 26,577
---------------------------------------------
50,000 Cheektowaga, NY, GO UT, 6.55%, 10/15/2008 NR 57,084
---------------------------------------------
50,000 Cheektowaga-Maryvale, NY Union Free School
District, GO UT, 6.625% (FGIC INS), 6/15/2008 AAA 58,207
---------------------------------------------
50,000 Chemung County, NY, GO UT, 6.80% (AMBAC
INS)/(Original Issue Yield: 6.80%), 7/15/2006 AAA 57,505
---------------------------------------------
25,000 Chenango County, NY, 6.40%, 12/15/2008 NR 28,532
---------------------------------------------
25,000 Churchville Chili, NY Central School
District, GO UT, 5.50% (FGIC INS)/(Original
Issue Yield: 5.50%), 6/15/2009 AAA 26,817
---------------------------------------------
25,000 Clarence, NY Central School District, GO UT, 5.30% (FGIC
INS)/(Original Issue Yield:
4.90%), 6/1/2006 NR 26,221
---------------------------------------------
25,000 Dutchess County, NY, GO UT, 8.50%, 7/15/2007 NR 32,304
---------------------------------------------
25,000 East Aurora, NY Union Free School District, GO UT, 5.20% (FGIC
INS)/(Original Issue
Yield: 4.80%), 6/15/2006 NR 26,248
---------------------------------------------
25,000 East Bloomfield, NY Central School District,
7.125% (MBIA INS), 6/15/2004 AAA 28,631
---------------------------------------------
25,000 East Irondequoit, NY Central School District,
GO UT, 6.90%, 12/1/2002 NR 27,569
---------------------------------------------
25,000 East Rochester, NY Union Free School
District, GO UT, 6.30% (AMBAC INS), 6/15/2003 AAA 27,193
---------------------------------------------
50,000 Endwell, NY, GO UT Fire District Bonds, 7.00%
(Original Issue Yield: 7.35%), 3/1/2014 NR 58,585
---------------------------------------------
50,000 Erie County, NY Water Authority, Series A, 6.00% (AMBAC
INS)/(Original Issue Yield:
7.25%), 12/1/2008 AAA 54,458
---------------------------------------------
</TABLE>
VISION NEW YORK MUNICIPAL INCOME FUND
(FORMERLY, VISION NEW YORK TAX-FREE FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
---------- --------------------------------------------- ------- -----------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--CONTINUED
--------------------------------------------------------
NEW YORK--CONTINUED
---------------------------------------------
$ 25,000 Erie County, NY, GO UT General Improvement
Bonds, 9.60% (MBIA INS)/(Original Issue
Yield: 9.55%), 10/15/2000 AAA $ 28,135
---------------------------------------------
50,000 Erie County, NY, GO UT, 10.00% (MBIA INS),
10/15/2002 AAA 61,073
---------------------------------------------
1,030,000 Essex Cnty, NY IDA, Solid Waste Disposal
Revenue Bonds (Series A), 5.80%
(International Paper Co.), 12/1/2019/(AMT) A- 1,055,420
---------------------------------------------
55,000 Evans & Brant, NY Central School District, GO UT, 6.85% (MBIA
INS)/(Original Issue Yield:
6.90%), 6/15/2009 AAA 65,313
---------------------------------------------
25,000 Fairport, NY Central School District, GO UT,
5.00% (MBIA INS), 6/15/2003 AAA 25,801
---------------------------------------------
20,000 Frontier Central School District, NY, Hamburg
Township, GO UT, 9.50% (MBIA INS)/(Original
Issue Yield: 9.50%), 6/1/2002 AAA 23,792
---------------------------------------------
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 73,201
---------------------------------------------
25,000 Genesee County, NY, GO UT, 5.30% (FGIC
INS)/(Original Issue Yield: 5.20%), 8/15/2009 NR 26,259
---------------------------------------------
25,000 Greece, NY Central School District, GO UT, 6.00% (FGIC
INS)/(Original Issue Yield:
5.55%), 6/15/2004 AAA 27,084
---------------------------------------------
30,000 Greece, NY, GO UT, 6.25% (AMBAC INS),
12/1/2007 AAA 33,727
---------------------------------------------
50,000 Guilderland, NY, GO UT, 6.40% (FGIC
INS)/(Original Issue Yield: 6.65%), 9/15/2015 AAA 57,997
---------------------------------------------
25,000 Hamburg Town, NY, GO UT, 6.30% (MBIA
INS)/(Original Issue Yield: 6.45%),
11/15/2010 AAA 28,719
---------------------------------------------
50,000 Hanover Town, NY, GO UT, 9.80% (MBIA INS),
9/1/2004 AAA 64,678
---------------------------------------------
25,000 Hilton Central School District, NY, GO UT,
6.85%, 6/15/2001 NR 26,953
---------------------------------------------
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 132,470
---------------------------------------------
</TABLE>
VISION NEW YORK MUNICIPAL INCOME FUND
(FORMERLY, VISION NEW YORK TAX-FREE FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
---------- --------------------------------------------- ------- -----------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--CONTINUED
--------------------------------------------------------
NEW YORK--CONTINUED
---------------------------------------------
$ 20,000 Holland, NY Central School District, GO UT, 6.00% (FGIC
INS)/(Original Issue Yield:
5.50%), 6/15/2003 AAA $ 21,590
---------------------------------------------
100,000 Housing NY Corp., Revenue Bonds, 5.00%
(Original Issue Yield: 5.65%), 11/1/2018 AA 95,196
---------------------------------------------
25,000 Housing NY Corp., Revenue Refunding Bonds,
5.00% (Original Issue Yield: 5.60%),
11/1/2013 AA 24,369
---------------------------------------------
15,000 Irondequoit, NY, 6.80% (Original Issue Yield:
7.20%), 3/1/2011 NR 17,664
---------------------------------------------
50,000 Ithaca, NY, 6.80%, 5/15/2003 NR 55,601
---------------------------------------------
25,000 Ithaca, NY, GO UT, 6.40% (Original Issue
Yield: 6.80%), 4/1/2009 NR 28,516
---------------------------------------------
30,000 Ithaca, NY, GO UT, 6.625% (Original Issue
Yield: 6.70%), 7/15/2005 NR 33,944
---------------------------------------------
1,315,000 Jamestown, NY Housing Authority, Mortgage
Revenue Bonds, 6.125% (Bradmar Village
Project)/(HUD Section 8 LOC), 7/1/2010 A- 1,362,116
---------------------------------------------
20,000 Kenmore, NY, GO UT, 6.35% (MBIA INS),
10/15/2009 AAA 22,984
---------------------------------------------
25,000 La Grange, NY, GO UT Public Improvement
Bonds, 7.70% (AMBAC INS)/(Original Issue
Yield: 7.75%), 4/15/2006 AAA 29,997
---------------------------------------------
50,000 Lakewood, NY, GO UT Public Improvement Bonds,
5.50% (Original Issue Yield: 5.70%), 4/1/2012 NR 50,933
---------------------------------------------
25,000 Lancaster Town, NY, GO UT Bonds, 5.30% (FSA
INS), 6/1/2005 AAA 26,341
---------------------------------------------
25,000 Lansing, NY, GO UT, 6.90% (Original Issue
Yield: 7.10%), 3/15/2009 NR 29,450
---------------------------------------------
25,000 Lewiston Town, NY, GO UT Refunding Bonds, 5.50% (FSA INS)/(Original
Issue Yield:
5.55%), 5/1/2014 AAA 26,422
---------------------------------------------
25,000 Lockport Town, NY, GO UT, 5.45% (FGIC
INS)/(Original Issue Yield: 5.05%), 9/15/2006 NR 26,713
---------------------------------------------
25,000 Monroe County, NY IDA, Revenue Bonds, 5.80% (Nazareth College)/(MBIA
INS)/(Original Issue
Yield: 5.799%), 6/1/2010 AAA 26,716
---------------------------------------------
</TABLE>
VISION NEW YORK MUNICIPAL INCOME FUND
(FORMERLY, VISION NEW YORK TAX-FREE FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
---------- --------------------------------------------- ------- -----------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--CONTINUED
--------------------------------------------------------
NEW YORK--CONTINUED
---------------------------------------------
$ 50,000 Monroe County, NY, GO UT (Series A), 8.50%
(Original Issue Yield: 8.75%), 5/1/2000 NR $ 54,261
---------------------------------------------
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 27,557
---------------------------------------------
75,000 Municipal Assistance Corp of New York,
Refunding Revenue Bonds, 7.60%, 7/1/2005 NR 76,942
---------------------------------------------
25,000 Municipal Assistance Corp of New York, Series 63, 7.70% (MBIA
INS)/(Original Issue Yield:
7.699%), 7/1/2008 AAA 25,652
---------------------------------------------
50,000 New Paltz, NY Central School District, GO UT
Bonds, 6.00% (AMBAC INS), 6/15/2008 AAA 55,720
---------------------------------------------
50,000 New York City Housing Development Corp.,
Revenue Refunding Bonds, 5.85% (FHA INS),
5/1/2026 AA 51,298
---------------------------------------------
100,000 New York City Housing Development Corp.,
Series A, 7.35% (FHA INS)/(Original Issue
Yield: 7.349%), 6/1/2019 AAA 106,694
---------------------------------------------
300,000 New York City Municipal Water Finance
Authority Daily VRDNs (FGIC INS)/(FGIC
Securities Purchase, Inc. LIQ) AAA 300,000
---------------------------------------------
1,790,000 New York City, NY IDA, 5.85% (Nightingale-
Bamford School Project)/(Original Issue
Yield: 5.85%), 1/15/2020 A 1,837,704
---------------------------------------------
1,000,000 New York City, NY IDA, Refunding Revenue
Bonds, 5.65% (Brooklyn Navy Yard Cogeneration
Partners, L.P. Project)/(Original Issue
Yield: 5.74%), 10/1/2028/(AMT) BBB- 994,190
---------------------------------------------
260,000 New York City, NY IDA, Revenue Bonds, 5.65% (United Air
Lines)/(Original Issue Yield:
5.682%), 10/1/2032/(AMT) BB+ 261,290
---------------------------------------------
1,500,000 New York City, NY IDA, Special Facilities
Revenue Bonds, 6.90% (American Airlines),
8/1/2024/(AMT) BBB- 1,663,470
---------------------------------------------
2,250,000 New York City, NY, GO UT, 5.25% (FGIC
INS)/(Original Issue Yield: 5.49%), 8/1/2016 AAA 2,236,748
---------------------------------------------
500,000 New York City, NY, Series C Daily VRDNs
(Morgan Guaranty Trust Co., New York LOC) AAA 500,000
---------------------------------------------
</TABLE>
VISION NEW YORK MUNICIPAL INCOME FUND
(FORMERLY, VISION NEW YORK TAX-FREE FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
---------- --------------------------------------------- ------- -----------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--CONTINUED
--------------------------------------------------------
NEW YORK--CONTINUED
---------------------------------------------
$ 15,000 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+ $ 15,329
---------------------------------------------
3,000,000 New York State Dormitory Authority, Refunding
Revenue Bonds (Series B), 5.50% (Original
Issue Yield: 6.00%), 8/15/2017 A- 3,026,460
---------------------------------------------
20,000 New York State Dormitory Authority, Revenue
Bonds, 5.00% (Rochester University-Strong
Memorial Hospital), 7/1/2005 AAA 20,724
---------------------------------------------
500,000 New York State Dormitory Authority, Revenue
Bonds, 5.125% (St. Clares Hospital)/(Original
Issue Yield: 5.25%), 2/15/2012 BBB+ 489,560
---------------------------------------------
170,000 New York State Dormitory Authority, Revenue
Bonds, 5.25% (St. Clares Hospital)/(Original
Issue Yield: 5.35%), 2/15/2016 BBB+ 165,954
---------------------------------------------
900,000 New York State Dormitory Authority, Revenue
Bonds, 5.25%, 7/1/2015 A- 888,408
---------------------------------------------
750,000 New York State Dormitory Authority, Revenue
Bonds, 5.75% (New York University)/(MBIA
INS), 7/1/2014 AAA 808,350
---------------------------------------------
225,000 New York State Dormitory Authority, Revenue
Bonds, 5.85% (Arden Hill)/(FHA INS), 8/1/2026 AAA 231,712
---------------------------------------------
495,000 New York State Dormitory Authority, Revenue
Bonds, 5.85% (Wesley Health System)/(FHA
INS), 8/1/2026 AAA 509,766
---------------------------------------------
100,000 New York State Dormitory Authority, Revenue
Bonds, 6.00% (Colgate University)/(MBIA
INS)/(Original Issue Yield: 5.25%), 7/1/2016 AAA 110,697
---------------------------------------------
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 1,055,620
---------------------------------------------
15,000 New York State Dormitory Authority, Revenue Bonds, 7.85% (FHA
INS)/(Original Issue Yield:
7.849%), 2/1/2029 AAA 15,654
---------------------------------------------
140,000 New York State Dormitory Authority, Revenue
Refunding Bonds, 7.15% (R & J Jewish
Geriatric Center)/(FHA INS), 8/1/2014 AAA 158,600
---------------------------------------------
</TABLE>
VISION NEW YORK MUNICIPAL INCOME FUND
(FORMERLY, VISION NEW YORK TAX-FREE FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
---------- --------------------------------------------- ------- -----------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--CONTINUED
--------------------------------------------------------
NEW YORK--CONTINUED
---------------------------------------------
$ 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 $ 102,249
---------------------------------------------
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/(AMT) BBB 2,647,601
---------------------------------------------
25,000 New York State HFA, (Series A), 6.90%,
8/15/2007/(AMT) NR 26,835
---------------------------------------------
260,000 New York State HFA, Hospital & Nursing Home Project, 5.90% (Original
Issue Yield:
5.934%), 11/1/2006 BBB 262,811
---------------------------------------------
100,000 New York State HFA, Revenue Refunding Bonds,
7.90% (United States Treasury COL), 11/1/2006 AAA 117,834
---------------------------------------------
320,000 New York State HFA, Revenue Refunding Bonds,
8.00% (Original Issue Yield: 8.079%),
11/1/2008 BBB+ 350,589
---------------------------------------------
1,150,000 New York State HFA, Series C, 6.00% (ECH Housing, Inc.)/(Original
Issue Yield:
5.999%), 8/15/2016 NR 1,210,640
---------------------------------------------
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+ 1,079,820
---------------------------------------------
500,000 New York State Medical Care Facilities
Finance Agency, 7.60% (FHA INS), 2/15/2029 AA 522,570
---------------------------------------------
995,000 New York State Medical Care Facilities
Finance Agency, Hospital & Nursing Home
Revenue Bonds (Series B), 6.00% (Buffalo
General Hospital)/(FHA INS)/(Original Issue
Yield: 6.218%), 8/15/2014 AAA 1,046,601
---------------------------------------------
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 1,081,800
---------------------------------------------
320,000 New York State Medical Care Facilities
Finance Agency, Revenue Bonds, 5.55%
(Original Issue Yield: 5.60%), 2/15/2001 A- 320,282
---------------------------------------------
</TABLE>
VISION NEW YORK MUNICIPAL INCOME FUND
(FORMERLY, VISION NEW YORK TAX-FREE FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
---------- --------------------------------------------- ------- -----------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--CONTINUED
--------------------------------------------------------
NEW YORK--CONTINUED
---------------------------------------------
$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- $ 1,050,240
---------------------------------------------
20,000 New York State Mortgage Agency, Revenue
Bonds, 7.30%, 4/1/2017/(AMT) NR 20,188
---------------------------------------------
90,000 New York State Mortgage Agency, Revenue
Bonds, 7.45% (FHA INS), 10/1/2010 NR 93,988
---------------------------------------------
20,000 New York State Mortgage Agency, Revenue
Refunding Bonds, 6.875% (MGIC Investment
Corp. INS), 4/1/2014 NR 20,187
---------------------------------------------
200,000 New York State, GO UT Refunding Bonds, 9.875%
(Original Issue Yield: 7.30%), 11/15/2005 A 265,154
---------------------------------------------
1,000,000 New York State, GO UT, 12.00% (Original Issue
Yield: 7.60%), 11/15/2003 A 1,360,090
---------------------------------------------
450,000 New York State, GO UT, 9.875% (Original Issue
Yield: 7.60%), 11/15/2004 A 582,921
---------------------------------------------
75,000 Newburgh, NY, GO UT, 6.40%, 4/15/2008 NR 85,077
---------------------------------------------
235,000 Niagara County, NY, GO UT Bonds (Series A),
5.25% (MBIA INS), 8/15/2012 AAA 240,447
---------------------------------------------
175,000 Niagara County, NY, GO UT, 7.10% (MBIA INS),
2/15/2010 AAA 211,169
---------------------------------------------
25,000 Niagara Falls, NY Bridge Commission, Series B, 5.25% (FGIC
INS)/(Original Issue Yield:
5.35%), 10/1/2015 AAA 25,632
---------------------------------------------
20,000 Niagara Frontier Transportation Authority,
Revenue Bonds, 6.00% (Greater Buffalo
International Airport)/(AMBAC INS)/(Original
Issue Yield: 6.15%), 4/1/2007/(AMT) AAA 21,514
---------------------------------------------
50,000 North Tonawanda, NY, GO UT Bonds, 6.05% (FGIC
INS), 10/1/2006 AAA 55,306
---------------------------------------------
25,000 Nyack, NY Unified Free School District, GO
UT, 5.20% (AMBAC INS), 6/15/2004 AAA 26,117
---------------------------------------------
400,000 Oneida, NY Health Care Corp. , Revenue Bonds
(Series A), 7.20% (FHA INS), 8/1/2031 A 433,640
---------------------------------------------
</TABLE>
VISION NEW YORK MUNICIPAL INCOME FUND
(FORMERLY, VISION NEW YORK TAX-FREE FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
---------- --------------------------------------------- ------- -----------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--CONTINUED
--------------------------------------------------------
NEW YORK--CONTINUED
---------------------------------------------
$ 185,000 Onondaga County, NY IDA, Revenue Bonds,
6.625% (Anheuser-Busch Cos., Inc.)/(Original
Issue Yield: 6.70%), 8/1/2006 A+ $ 207,032
---------------------------------------------
50,000 Ontario County, NY, GO UT, 5.50% (Original
Issue Yield: 5.65%), 5/15/2011 NR 53,388
---------------------------------------------
25,000 Orchard Park, NY Central School District, GO UT, 6.50% (FGIC
INS)/(Original Issue Yield:
6.25%), 6/1/2002 AAA 27,079
---------------------------------------------
25,000 Ossining Village, NY, 8.10% (FGIC INS),
7/15/2001 AAA 27,839
---------------------------------------------
40,000 Otsego County, NY, GO UT, 6.625% (AMBAC INS),
12/1/2005 AAA 45,492
---------------------------------------------
50,000 Penfield, NY Central School District, GO UT,
5.20% (Original Issue Yield: 5.40%),
6/15/2010 AAA 51,711
---------------------------------------------
25,000 Perry Central School District, NY, GO UT,
5.10% (MBIA INS), 6/15/2001 AAA 25,697
---------------------------------------------
100,000 Port Authority of New York and New Jersey,
Revenue Refunding Bonds, 7.125% (Original
Issue Yield: 7.283%), 6/1/2025 AA- 106,118
---------------------------------------------
25,000 Putnam County, NY, 7.10%, 8/15/2002 NR 27,680
---------------------------------------------
175,000 Riverton Housing Corp., Revenue Bonds, 6.65%
(FHA INS), 8/1/2024 AA 193,393
---------------------------------------------
15,000 Rochester, NY, GO UT, 6.00% (Original Issue
Yield: 6.40%), 8/1/2001 AA 15,774
---------------------------------------------
50,000 Rockland County, NY, GO UT, 7.00% (MBIA
INS)/(Original Issue Yield: 7.10%), 4/1/2008 AAA 59,141
---------------------------------------------
20,000 Saugerties, NY, GO UT, 5.375% (FSA
INS)/(Original Issue Yield: 5.70%), 6/15/2015 NR 20,808
---------------------------------------------
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 697,165
---------------------------------------------
40,000 Silver Creek, NY Central School District, GO UT, 6.60% (AMBAC
INS)/(Original Issue Yield:
6.60%), 5/15/2005 AAA 45,304
---------------------------------------------
</TABLE>
VISION NEW YORK MUNICIPAL INCOME FUND
(FORMERLY, VISION NEW YORK TAX-FREE FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
---------- --------------------------------------------- ------- -----------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--CONTINUED
--------------------------------------------------------
NEW YORK--CONTINUED
---------------------------------------------
$ 10,000 Spackenkill, NY Unified Free School District,
GO UT, 6.125%, 9/15/2014 NR $ 11,199
---------------------------------------------
25,000 Spencerport, NY Central School District, GO UT, 6.00% (MBIA
INS)/(Original Issue Yield:
6.05%), 6/15/2006 AAA 27,491
---------------------------------------------
300,000 Suffolk County, NY Water Authority, Revenue
Refunding Bonds, 7.375% (AMBAC INS)/(Original
Issue Yield: 7.42%), 6/1/2012 AAA 309,831
---------------------------------------------
70,000 Sweet Home Central School District NY, GO UT, 5.60% (AMBAC
INS)/(Original Issue Yield:
5.70%), 1/15/2008 AAA 75,341
---------------------------------------------
1,510,000 Syracuse, NY Senior Citizens Housing Corp.,
Series A, 6.125% (East Hill Village
Apartments), 12/1/2010 A- 1,591,646
---------------------------------------------
1,000,000 Tompkins County, NY IDA, Revenue Bonds, 6.05%
(Ithacare Center Project)/(FHA INS), 2/1/2017 AAA 1,060,780
---------------------------------------------
65,000 Tompkins County, NY, GO UT (Series B), 5.625%
(Original Issue Yield: 5.80%), 9/15/2013 NR 67,517
---------------------------------------------
290,000 Tompkins, NY Health Care Corp., 10.80% (FHA
INS), 2/1/2028 A 382,945
---------------------------------------------
1,000,000 Triborough Bridge & Tunnel Authority, NY, Revenue Bonds, 5.20%
(Original Issue Yield:
5.55%), 1/1/2022 A+ 982,560
---------------------------------------------
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 160,469
---------------------------------------------
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 52,556
---------------------------------------------
50,000 Victor, NY Central School District, GO UT, 6.40% (FGIC
INS)/(Original Issue Yield:
6.55%), 11/15/2006 AAA 56,599
---------------------------------------------
50,000 Victor, NY, 7.20% (Original Issue Yield:
7.20%), 12/15/2005 NR 57,829
---------------------------------------------
35,000 Wallkill, NY Central School District, GO UT,
5.75%, 7/15/2014 NR 37,848
---------------------------------------------
15,000 Warwick Valley, NY Central School District, GO UT, 6.55% (FGIC
INS)/(Original Issue
Yield: 6.70%), 6/1/2008 AAA 17,316
---------------------------------------------
</TABLE>
VISION NEW YORK MUNICIPAL INCOME FUND
(FORMERLY, VISION NEW YORK TAX-FREE FUND)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
---------- --------------------------------------------- ------- -----------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--CONTINUED
--------------------------------------------------------
NEW YORK--CONTINUED
---------------------------------------------
$ 30,000 Webster, NY Central School District, GO UT, 6.25% (AMBAC
INS)/(Original Issue Yield:
6.20%), 6/15/2003 AAA $ 32,563
---------------------------------------------
50,000 West Seneca, NY Central School District, GO UT, 5.625% (FGIC
INS)/(Original Issue Yield:
5.70%), 6/15/2011 AAA 53,168
---------------------------------------------
25,000 West Seneca, NY, GO UT, 6.65% (MBIA
INS)/(Original Issue Yield: 6.80%), 6/1/2005 AAA 28,359
---------------------------------------------
65,000 Williamsville, NY Central School District, GO UT, 6.50% (MBIA
INS)/(Original Issue Yield:
6.80%), 12/1/2010 AAA 75,579
--------------------------------------------- -----------
Total 41,041,622
--------------------------------------------- -----------
PUERTO RICO--3.6%
---------------------------------------------
165,000 (a)Puerto Rico Industrial, Medical &
Environmental PCA, Industrial Improvement
Revenue Bonds, 6.50% (Abbott Laboratories),
7/1/2009 NR 165,898
---------------------------------------------
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 24,074
---------------------------------------------
50,000 Puerto Rico Industrial, Medical &
Environmental PCA, Revenue Bonds, 7.50%
(Upjohn Co.), 12/1/2023 AA- 52,448
---------------------------------------------
1,200,000 (b)Puerto Rico Industrial, Medical & Environmental PCA, Series A,
6.75%
(Motorola, Inc.), 1/1/2014 AA- 1,320,641
--------------------------------------------- -----------
Total 1,563,061
--------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST
$41,489,956)(C) $42,604,683
--------------------------------------------- -----------
</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 April 30, 1998, 17.0% of the total investments at market value were subject
to alternative minimum tax.
(a) Denotes a private placement security. At April 30, 1998, these securities
amounted to $165,898 which represents 0.38% of total net assets.
VISION NEW YORK MUNICIPAL INCOME FUND
(FORMERLY, VISION NEW YORK TAX-FREE FUND)
- -------------------------------------------------------------------------------
(b) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At April 30, 1998, these securities amounted
to $1,320,641 which represents 3.04% of net assets.
(c) The cost of investments for federal tax purposes amounts to $41,489,956. The
net unrealized appreciation/depreciation of investments on a federal tax
basis amounts to $1,114,727 which is comprised of $1,217,759 appreciation
and $103,032 depreciation at April 30, 1998.
Note: The categories of investments are shown as a percentage of net assets
($43,455,677) at April 30, 1998.
The following acronyms are used throughout this portfolio:
AMBAC--American Municipal Bond Assurance Corporation AMT--Alternative Minimum
Tax 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 LIQ--Liquidity Agreement LOC--Letter of Credit MBIA--Municipal Bond
Investors Assurance PCA--Pollution Control Authority PRF--Prerefunded
UT--Unlimited Tax VRDNs--Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
VISION GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- ---------------------------------- ------------
<C> <S> <C>
COMMON STOCKS--94.5%
---------------------------------------------
BASIC MATERIALS--5.2%
----------------------------------
94,500 Boise Cascade Corp. $ 3,549,656
----------------------------------
76,000 Crown Cork & Seal Co., Inc. 3,956,750
---------------------------------- ------------
Total 7,506,406
---------------------------------- ------------
CAPITAL EQUIPMENT & SERVICES--7.4%
----------------------------------
116,025 Cincinnati Milacron, Inc. 3,604,027
----------------------------------
56,225 Deere & Co. 3,285,648
----------------------------------
35,600 Northrop Corp. 3,762,475
---------------------------------- ------------
Total 10,652,150
---------------------------------- ------------
CAPITAL GOODS--4.3%
----------------------------------
57,000 Kennametal, Inc. 3,038,813
----------------------------------
175,500 (a)Signature Resorts, Inc. 3,137,063
---------------------------------- ------------
Total 6,175,876
---------------------------------- ------------
CONSUMER CYCLICAL--7.9%
----------------------------------
47,950 Home Depot, Inc. 3,338,519
----------------------------------
48,925 Springs Industries, Inc., Class A 2,693,933
----------------------------------
106,900 Tandy Corp. 5,318,275
---------------------------------- ------------
Total 11,350,727
---------------------------------- ------------
CONSUMER NON-CYCLICAL--6.2%
----------------------------------
112,125 Bergen Brunswig Corp., Class A 5,087,672
----------------------------------
179,250 Flowers Industries, Inc. 3,831,469
---------------------------------- ------------
Total 8,919,141
---------------------------------- ------------
ENERGY--13.3%
----------------------------------
56,500 Baker Hughes, Inc. 2,288,250
----------------------------------
61,275 (a)EVI, Inc. 3,262,894
----------------------------------
122,000 (a)Nabors Industries, Inc. 3,072,875
----------------------------------
</TABLE>
VISION GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
--------- ---------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
--------------------------------------------------
ENERGY--CONTINUED
----------------------------------------
82,650 New Century Energies, Inc. $ 3,925,940
----------------------------------------
69,250 Phillips Petroleum Co. 3,432,203
----------------------------------------
74,975 Unocal Corp. 3,069,289
---------------------------------------- ------------
Total 19,051,451
---------------------------------------- ------------
FINANCIAL--5.8%
----------------------------------------
41,200 BankBoston Corp. 4,447,025
----------------------------------------
89,700 Regions Financial Corp. 3,913,163
---------------------------------------- ------------
Total 8,360,188
---------------------------------------- ------------
FINANCIAL SERVICES--15.8%
----------------------------------------
32,900 Bankers Trust New York Corp. 4,248,213
----------------------------------------
48,075 First American Corp. 2,370,698
----------------------------------------
29,900 Hartford Financial Services Group, Inc. 3,311,425
----------------------------------------
248,475 Reliance Group Holdings, Inc. 4,301,723
----------------------------------------
81,925 Reliastar Financial Corp. 3,737,828
----------------------------------------
75,350 Union Planters Corp. 4,634,025
---------------------------------------- ------------
Total 22,603,912
---------------------------------------- ------------
HEALTHCARE--4.5%
----------------------------------------
105,362 (a)Genesis Health Ventures, Inc. 2,785,508
----------------------------------------
121,779 (a)Healthsouth Corp. 3,676,211
---------------------------------------- ------------
Total 6,461,719
---------------------------------------- ------------
SERVICES--5.1%
----------------------------------------
191,300 Hollinger International Publishing, Inc. 2,965,150
----------------------------------------
109,100 Spieker Properties, Inc. 4,323,088
---------------------------------------- ------------
Total 7,288,238
---------------------------------------- ------------
TECHNOLOGY--8.3%
----------------------------------------
38,925 AMP, Inc. 1,530,239
----------------------------------------
50,050 (a)Atmel Corp. 1,010,384
----------------------------------------
34,800 Avnet, Inc. 2,146,725
----------------------------------------
</TABLE>
VISION GROWTH AND INCOME FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- --------------------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
--------------------------------------------------------------
TECHNOLOGY--CONTINUED
---------------------------------------------------
49,438 (a)Cisco Systems, Inc. $ 3,621,297
---------------------------------------------------
104,900 Mead Corp. 3,632,163
--------------------------------------------------- ------------
Total 11,940,808
--------------------------------------------------- ------------
TRANSPORTATION--5.2%
---------------------------------------------------
49,200 (a)USAir Group, Inc. 3,499,350
---------------------------------------------------
108,625 USFreightways Corp. 3,883,344
--------------------------------------------------- ------------
Total 7,382,694
--------------------------------------------------- ------------
UTILITIES--5.5%
---------------------------------------------------
140,775 FirstEnergy Corp. 4,258,444
---------------------------------------------------
75,075 WICOR, Inc. 3,598,908
--------------------------------------------------- ------------
Total 7,857,352
--------------------------------------------------- ------------
TOTAL COMMON STOCKS (IDENTIFIED COST $110,099,823) 135,550,662
--------------------------------------------------- ------------
MUTUAL FUND SHARES--2.0%
--------------------------------------------------------------
2,842,109 Seven Seas Money Market Fund (at net asset value) 2,842,109
--------------------------------------------------- ------------
TOTAL INVESTMENTS (IDENTIFIED COST $112,941,932)(B) $138,392,771
--------------------------------------------------- ------------
</TABLE>
(a) Non-income producing security.
(b) The cost of investments for federal tax purposes amounts to $113,005,577.
The net unrealized appreciation of investments on a federal tax basis
amounts to $25,387,194 which is comprised of $26,760,244 appreciation and
$1,373,050 depreciation at April 30, 1998.
Note: The categories of investments are shown as a percentage of net assets
($143,404,067) at April 30, 1998.
(See Notes which are an integral part of the Financial Statements)
VISION CAPITAL APPRECIATION FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
--------- ---------------------------------- -----------
<C> <S> <C>
COMMON STOCKS--97.8%
--------------------------------------------
BUSINESS SERVICES--2.5%
----------------------------------
52,000 (a)AccuStaff, Inc. $ 1,865,500
---------------------------------- -----------
CAPITAL EQUIPMENT & SERVICES--3.6%
----------------------------------
53,600 (a)Coltec Industries, Inc. 1,340,000
----------------------------------
62,100 (a)Kulicke & Soffa Industries 1,335,150
---------------------------------- -----------
Total 2,675,150
---------------------------------- -----------
CONSUMER CYCLICAL--3.7%
----------------------------------
68,100 (a)CompUSA, Inc. 1,264,106
----------------------------------
38,243 (a)Consolidated Stores Corp. 1,529,720
---------------------------------- -----------
Total 2,793,826
---------------------------------- -----------
CONSUMER NON-CYCLICAL--17.5%
----------------------------------
72,800 Biomet, Inc. 2,184,000
----------------------------------
94,150 Flowers Industries, Inc. 2,012,456
----------------------------------
170,200 Food Lion, Inc., Class A 1,723,275
----------------------------------
95,200 (a)Staples, Inc. 2,350,250
----------------------------------
68,100 (a)Total Renal Care Holdings, Inc. 2,255,813
----------------------------------
60,300 (a)Watson Pharmaceuticals, Inc. 2,592,900
---------------------------------- -----------
Total 13,118,694
---------------------------------- -----------
CONSTRUCTION SERVICES--3.8%
----------------------------------
50,800 (a)Jacobs Engineering Group, Inc. 1,695,450
----------------------------------
43,400 (a)Mastec, Inc. 1,160,950
---------------------------------- -----------
Total 2,856,400
---------------------------------- -----------
ELECTRONIC TECHNOLOGY--12.3%
----------------------------------
88,000 (a)Apex MPC Solutions, Inc. 2,629,000
----------------------------------
88,600 (a)CHS Electronics, Inc. 1,849,525
----------------------------------
68,700 (a)Photronic Labs, Inc. 2,533,313
----------------------------------
</TABLE>
VISION CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
--------- -------------------------------- -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
------------------------------------------
ELECTRONIC TECHNOLOGY--CONTINUED
--------------------------------
56,800 (a)Tracor, Inc. $ 2,232,950
-------------------------------- -----------
Total 9,244,788
-------------------------------- -----------
ENERGY--7.0%
--------------------------------
37,100 Diamond Offshore Drilling, Inc. 1,878,188
--------------------------------
69,500 (a)Global Marine, Inc. 1,637,594
--------------------------------
49,300 Tosco Corp. 1,756,313
-------------------------------- -----------
Total 5,272,095
-------------------------------- -----------
FINANCIAL SERVICES--19.5%
--------------------------------
45,200 Amsouth Bancorporation 2,819,350
--------------------------------
51,600 CNB Bancshares, Inc. 2,528,400
--------------------------------
30,700 Crestar Financial Corp. 1,836,244
--------------------------------
41,000 (a)Golden State Bancorp, Inc. 1,599,000
--------------------------------
27,400 Lehman Brothers Holdings, Inc. 1,947,113
--------------------------------
25,500 Star Banc Corp. 1,611,281
--------------------------------
45,450 Summit Bancorp 2,278,181
-------------------------------- -----------
Total 14,619,569
-------------------------------- -----------
HEALTHCARE--5.0%
--------------------------------
53,100 Bard (C.R.), Inc. 1,901,644
--------------------------------
48,000 Integrated Health Services, Inc. 1,851,000
-------------------------------- -----------
Total 3,752,644
-------------------------------- -----------
SOFTWARE TECHNOLOGY--1.6%
--------------------------------
65,100 (a)Midway Games, Inc. 1,204,350
-------------------------------- -----------
TECHNOLOGY--16.4%
--------------------------------
52,800 (a)Bay Networks, Inc. 1,237,500
--------------------------------
37,100 (a)Cytec Industries, Inc. 2,031,225
--------------------------------
67,400 (a)DII Group, Inc. 1,567,050
--------------------------------
74,500 (a)EMC Corp. Mass 3,436,310
--------------------------------
32,500 (a)Lexmark Intl. Group, Class A 1,880,938
--------------------------------
</TABLE>
VISION CAPITAL APPRECIATION FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
--------- ----------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
---------------------------------------------------------------
TECHNOLOGY--CONTINUED
-----------------------------------------------------
66,000 (a) VWR Scientific Products Corp. $ 2,169,750
----------------------------------------------------- -----------
Total 12,322,773
----------------------------------------------------- -----------
TRANSPORTATION--4.9%
-----------------------------------------------------
72,800 (a)M.S. Carriers, Inc. 2,475,200
-----------------------------------------------------
23,100 (a)Northwest Airlines Corp., Class A 1,212,750
----------------------------------------------------- -----------
Total 3,687,950
----------------------------------------------------- -----------
TOTAL COMMON STOCKS (AT IDENTIFIED COST $61,654,755) 73,413,739
----------------------------------------------------- -----------
MUTUAL FUND SHARES--1.9%
---------------------------------------------------------------
1,431,667 Seven Seas Money Market Fund (at net asset value) 1,431,667
----------------------------------------------------- -----------
TOTAL INVESTMENTS (AT IDENTIFIED COST $63,086,422)(B) $74,845,406
----------------------------------------------------- -----------
</TABLE>
(a) Non-income producing security.
(b) The cost of investments for federal tax purposes amounts to $63,098,192. The
net unrealized appreciation of investments on a federal tax basis amounts to
$11,747,214 which is comprised of $13,658,507 of appreciation and $1,911,293
of depreciation at April 30, 1998.
Note: The categories of investments are shown as a percentage of net assets
($75,094,614) at April 30, 1998.
(See Notes which are an integral part of the Financial Statements)
VISION EQUITY AND INCOME FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NEW YORK
U.S. GOVERNMENT MUNICIPAL GROWTH AND CAPITAL
SECURITIES INCOME INCOME APPRECIATION
FUND FUND(A) FUND FUND
- ------------------------ --------------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
ASSETS:
- ------------------------
Investments in
securities, at value $52,846,358 $42,604,683 $138,392,771 $74,845,406
- ------------------------ ----------- ----------- ------------ -----------
Cash -- 41,897 -- --
- ------------------------
Income receivable 1,020,283 782,363 260,459 52,171
- ------------------------
Receivable for shares
sold 252,413 120,901 199,456 243,006
- ------------------------
Receivable for
investments sold -- -- 10,511,897 --
- ------------------------
Deferred organizational
costs 2,207 2,201 1,542 16,079
- ------------------------
Other assets 870 945 828 --
- ------------------------ ----------- ----------- ------------ -----------
Total assets 54,122,131 43,552,990 149,366,953 75,156,662
- ------------------------ ----------- ----------- ------------ -----------
LIABILITIES:
- ------------------------
Income distribution
payable 136,074 44,306 9,552 --
- ------------------------
Payable for investments
purchased -- -- 5,711,994 --
- ------------------------
Payable to Bank 1,649 -- -- --
- ------------------------
Payable for shares
redeemed 27,713 26,401 197,258 22,595
- ------------------------
Accrued expenses 34,867 26,606 44,082 39,453
- ------------------------ ----------- ----------- ------------ -----------
Total liabilities 200,303 97,313 5,962,886 62,048
- ------------------------ ----------- ----------- ------------ -----------
NET ASSETS $53,921,828 $43,455,677 $143,404,067 $75,094,614
- ------------------------ ----------- ----------- ------------ -----------
NET ASSETS CONSISTS OF:
- ------------------------
Paid in capital $53,562,491 $42,260,773 $109,903,605 $61,676,100
- ------------------------
Net unrealized
appreciation
(depreciation) of
investments 1,096,548 1,114,727 25,450,839 11,758,984
- ------------------------
Accumulated net realized
gain (loss) on
investments (686,113) 80,177 7,795,106 1,659,530
- ------------------------
Accumulated
undistributed net
investment income/
Distributions in excess
of net investment income (51,098) -- 254,517 --
- ------------------------ ----------- ----------- ------------ -----------
Total Net Assets $53,921,828 $43,455,677 $143,404,067 $75,094,614
- ------------------------ ----------- ----------- ------------ -----------
NET ASSET VALUE,
Offering Price and
Redemption Proceeds Per
Share:
- ------------------------
Net Asset Value and
Redemption Proceeds Per
Share $9.61 $10.42 $16.13 $14.77
- ------------------------ ----------- ----------- ------------ -----------
Offering Price Per
Share* $10.06** $10.91** $17.07*** $15.63***
- ------------------------ ----------- ----------- ------------ -----------
SHARES OUTSTANDING: 5,613,021 4,170,692 8,891,228 5,085,531
- ------------------------ ----------- ----------- ------------ -----------
Investments, at
identified cost $51,749,810 $41,489,956 $112,941,932 $63,086,422
- ------------------------ ----------- ----------- ------------ -----------
Investments, at tax cost $51,749,810 $41,489,956 $113,005,577 $63,098,192
- ------------------------ ----------- ----------- ------------ -----------
</TABLE>
*See "What Fund 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.
(a)Formerly, New York Tax-Free Fund.
(See Notes which are an integral part of the Financial Statements)
VISION EQUITY AND INCOME FUNDS
STATEMENTS OF OPERATIONS
YEAR ENDED APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NEW YORK GROWTH AND CAPITAL
U.S. GOVERNMENT MUNICIPAL INCOME APPRECIATION
SECURITIES FUND INCOME FUND(A) FUND FUND
- -------------------------- --------------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
- --------------------------
Dividends $ -- $ -- $ 2,336,597 $ 284,216
- --------------------------
Interest 3,965,859 2,115,236 237,458 173,354
- -------------------------- ---------- ---------- ----------- -----------
Total investment income 3,965,859 2,115,236 2,574,055 457,570
- --------------------------
EXPENSES:
- --------------------------
Investment advisory fee 378,409 279,035 968,660 453,674
- --------------------------
Administrative personnel
and services fee 64,077 52,701 160,835 65,857
- --------------------------
Custodian fees 7,748 2,763 14,810 7,782
- --------------------------
Transfer and dividend
disbursing agent fees and
expenses 40,690 41,321 106,455 53,782
- --------------------------
Directors' fees 896 83 2,390 2,116
- --------------------------
Auditing fees 15,401 13,186 13,237 17,990
- --------------------------
Legal fees 6,802 5,915 6,131 3,510
- --------------------------
Portfolio accounting fees 34,848 49,265 33,902 32,466
- --------------------------
Shareholder services fees -- -- 294,081 118,114
- --------------------------
Share registration costs 17,683 17,863 17,578 21,133
- --------------------------
Printing and postage 15,639 21,447 28,047 9,403
- --------------------------
Taxes 5,833 6,355 10,784 4,408
- --------------------------
Insurance premiums 3,588 3,370 3,663 4,408
- --------------------------
Miscellaneous 13,162 12,143 11,115 6,143
- -------------------------- ---------- ---------- ----------- -----------
TOTAL EXPENSES 604,776 505,447 1,671,688 800,786
- -------------------------- ---------- ---------- ----------- -----------
WAIVERS--
- --------------------------
Waiver of investment
advisory fee (45,997) (117,123) -- --
- --------------------------
Waiver of administrative
personnel and services
fees (571) (6,213) -- (2,685)
- -------------------------- ---------- ---------- ----------- -----------
TOTAL WAIVERS (46,568) (123,336) -- (2,685)
- -------------------------- ---------- ---------- ----------- -----------
NET EXPENSES 558,208 382,111 1,671,688 798,101
- -------------------------- ---------- ---------- ----------- -----------
NET INVESTMENT
INCOME/(NET OPERATING
LOSS) $3,407,651 $1,733,125 $ 902,367 $ (340,531)
- -------------------------- ---------- ---------- ----------- -----------
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS:
- --------------------------
Net realized gain (loss)
on investments 335,832 400,518 13,984,928 4,792,594
- --------------------------
Net change in unrealized
appreciation
(depreciation) of
investments 1,401,949 919,002 21,896,866 11,433,260
- -------------------------- ---------- ---------- ----------- -----------
Net realized and
unrealized gain (loss)
on investments 1,737,781 1,319,520 35,881,794 16,225,854
- -------------------------- ---------- ---------- ----------- -----------
Change in net assets
resulting from
operations $5,145,432 $3,052,645 $36,784,161 $15,885,323
- -------------------------- ---------- ---------- ----------- -----------
</TABLE>
(a)Formerly, New York Tax-Free Fund.
(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(A)
--------------------------- ------------------------
YEAR ENDED APRIL 30, YEAR ENDED APRIL 30,
--------------------------- ------------------------
1998 1997 1998 1997
- ------------------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS:
- ------------------------
OPERATIONS--
- ------------------------
Net investment income $ 3,407,651 $ 2,301,980 $ 1,733,125 $ 1,589,604
- ------------------------
Net realized gain
(loss) in investments 335,832 (710,450) 400,518 222,949
- ------------------------
Net change in
unrealized appreciation
(depreciation) of
investments 1,401,949 508,343 919,002 323,016
- ------------------------ ----------- ----------- ----------- -----------
Change in net assets
resulting from
operations 5,145,432 2,099,873 3,052,645 2,135,569
- ------------------------ ----------- ----------- ----------- -----------
DISTRIBUTIONS TO
SHAREHOLDERS--
- ------------------------
Distributions from net
investment income (3,407,651) (2,302,079) (1,735,765) (1,586,964)
- ------------------------
Distributions in excess
of net investment
income (75,412)(b) -- -- --
- ------------------------
Distributions from net
realized gains -- -- (150,071) --
- ------------------------ ----------- ----------- ----------- -----------
Change in net assets
resulting from
distributions to
shareholders (3,483,063) (2,302,079) (1,885,836) (1,586,964)
- ------------------------ ----------- ----------- ----------- -----------
SHARE TRANSACTIONS--
- ------------------------
Proceeds from sales of
shares 23,612,425 15,979,092 11,968,960 8,656,290
- ------------------------
Net asset value of
shares issued to
shareholders in payment
of distributions
declared 1,983,653 1,169,547 1,370,147 1,194,289
- ------------------------
Cost of shares redeemed (17,821,660) (6,753,091) (6,530,024) (7,540,206)
- ------------------------ ----------- ----------- ----------- -----------
Change in net assets
resulting from share
transactions 7,774,418 10,395,548 6,809,083 2,310,373
- ------------------------ ----------- ----------- ----------- -----------
Change in net assets 9,436,787 10,193,342 7,975,892 2,858,978
- ------------------------
NET ASSETS:
- ------------------------
Beginning of period 44,485,041 34,291,699 35,479,785 32,620,807
- ------------------------ ----------- ----------- ----------- -----------
End of period $53,921,828 $44,485,041 $43,455,677 $35,479,785
- ------------------------ ----------- ----------- ----------- -----------
Undistributed net
investment income
included in net assets
at end of period $ -- $ 24,314 $ -- $ 2,640
- ------------------------ ----------- ----------- ----------- -----------
Net gain (loss) as
computed for federal
tax purposes $ 474,215 $ (662,897) $ 400,518 $ 222,949
- ------------------------ ----------- ----------- ----------- -----------
</TABLE>
(a) Formerly, New York Tax-Free Fund.
(b) 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 tax purposes.
(See Notes which are an integral part of the Financial Statements)
VISION EQUITY AND INCOME FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CAPITAL APPRECIATION
GROWTH AND INCOME FUND FUND
-------------------------- ------------------------
YEAR ENDED APRIL 30, YEAR ENDED APRIL 30,
-------------------------- ------------------------
1998 1997 1998 1997(A)
- ------------------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS:
- ------------------------
OPERATIONS--
- ------------------------
Net investment income
(operating loss) $ 902,367 $ 755,116 $ (340,531) $ 29,376
- ------------------------
Net realized gain
(loss) in investments 13,984,928 20,391,748 4,792,594 772,135
- ------------------------
Net change in
unrealized appreciation
(depreciation) of
investments 21,896,866 (7,859,091) 11,433,260 325,724
- ------------------------ ------------ ------------ ----------- -----------
Change in net assets
resulting from
operations 36,784,161 13,287,773 15,885,323 1,127,235
- ------------------------ ------------ ------------ ----------- -----------
DISTRIBUTIONS TO
SHAREHOLDERS--
- ------------------------
Distributions from net
investment income (757,244) (732,162) -- (29,376)
- ------------------------
Distributions in excess
of net investment
income -- -- -- (41,266)(b)
- ------------------------
Distributions from net
realized gains (24,819,846) (3,306,559) (3,397,390) (126,012)
- ------------------------ ------------ ------------ ----------- -----------
Change in net assets
resulting from
distributions to
shareholders (25,577,090) (4,038,721) (3,397,390) (196,654)
- ------------------------ ------------ ------------ ----------- -----------
SHARE TRANSACTIONS--
- ------------------------
Proceeds from sales of
shares 42,968,234 53,236,024 33,555,464 32,772,622
- ------------------------
Net asset value of
shares issued to
shareholders in payment
of distributions
declared 19,837,767 2,340,952 2,836,886 192,580
- ------------------------
Cost of shares redeemed (44,699,312) (15,854,389) (7,226,185) (455,267)
- ------------------------ ------------ ------------ ----------- -----------
Change in net assets
resulting from share
transactions 18,106,689 39,722,587 29,166,165 32,509,935
- ------------------------ ------------ ------------ ----------- -----------
Change in net assets 29,313,760 48,971,639 41,654,098 33,440,516
- ------------------------
NET ASSETS:
- ------------------------
Beginning of period 114,090,307 65,118,668 33,440,516 --
- ------------------------ ------------ ------------ ----------- -----------
End of period $143,404,067 $114,090,307 $75,094,614 $33,440,516
- ------------------------ ------------ ------------ ----------- -----------
Undistributed net
investment income
included in net assets
at end of period $ 254,517 $ 109,394 $ -- $ --
- ------------------------ ------------ ------------ ----------- -----------
Net gain (loss) as
computed for federal
tax purposes $ 14,013,086 $ 20,210,516 $ 4,795,280 $ 781,236
- ------------------------ ------------ ------------ ----------- -----------
</TABLE>
(a) For the period from July 3, 1996 (date of inital public investment) to April
30, 1997.
(b) 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)
[This Page Intentionally Left Blank]
VISION EQUITY AND INCOME FUNDS
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
NET DISTRIBUTIONS
NET ASSET INVESTMENT NET REALIZED DISTRIBUTIONS IN EXCESS OF DISTRIBUTIONS
YEAR VALUE, INCOME AND UNREALIZED TOTAL FROM FROM NET NET FROM NET
ENDED BEGINNING (OPERATING GAIN (LOSS) ON INVESTMENT INVESTMENT INVESTMENT REALIZED TOTAL
APRIL 30, OF PERIOD LOSS) INVESTMENTS OPERATIONS INCOME INCOME GAINS DISTRIBUTIONS
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. GOVERNMENT SECURITIES FUND
1994(a) $10.00 0.34 (0.75) (0.41) (0.34) -- -- (0.34)
1995 $9.25 0.56 (0.16) 0.40 (0.56) -- -- (0.56)
1996 $9.09 0.52 0.22 0.74 (0.52) -- -- (0.52)
1997 $9.31 0.58 (0.03) 0.55 (0.58) -- -- (0.58)
1998 $9.28 0.60 0.34 0.94 (0.60) (0.01)(i) -- (0.61)
NEW YORK MUNICIPAL INCOME FUND (FORMERLY, NEW YORK TAX-FREE FUND)
1994(a) $10.00 0.20 (0.39) (0.19) (0.20) -- -- (0.20)
1995 $9.61 0.46 0.06 0.52 (0.46) -- -- (0.46)
1996 $9.67 0.46 0.23 0.69 (0.46) -- -- (0.46)
1997 $9.90 0.48 0.18 0.66 (0.48) -- -- (0.48)
1998 $10.08 0.46 0.38 0.84 (0.46) -- (0.04) (0.50)
GROWTH AND INCOME FUND
1994(e) $10.00 0.07 (0.08) (0.01) (0.06) -- -- (0.06)
1995 $9.93 0.21 0.43 0.64 (0.22) -- -- (0.22)
1996 $10.35 0.13 2.98 3.11 (0.11) -- -- (0.11)
1997 $13.35 0.13 2.35 2.48 (0.13) -- (0.59) (0.72)
1998 $15.11 0.11 4.34 4.45 (0.09) -- (3.34) (3.43)
CAPITAL APPRECIATION FUND
1997(f) $10.00 0.02(h) 1.35 1.37 (0.02) (0.03)(i) (0.06) (0.11)
1998 $11.26 (0.07) 4.44 4.37 -- -- (0.86) (0.86)
- ------------------------------------------------------------------------------------------------------------------
</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.
(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 NET ASSETS,
NET ASSET INVESTMENT EXPENSE END AVERAGE
VALUE, END TOTAL INCOME WAIVER/ OF PERIOD COMMISSION PORTFOLIO
OF PERIOD RETURN(B) EXPENSES (OPERATING LOSS) REIMBURSEMENT(D) (000 OMITTED) RATE PAID(G) TURNOVER
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$9.25 (4.23%) 0.00%(c) 6.11%(c) 1.86%(c) $24,468 -- 320%
$9.09 4.59% 0.43% 6.20% 1.01% $29,573 -- 78%
$9.31 8.10% 1.16% 5.41% 0.17% $34,492 -- 132%
$9.28 6.05% 1.11% 6.23% 0.20% $44,485 -- 121%
$9.61 10.42% 1.03% 6.30% 0.09% $53,922 -- 70%
$9.61 (1.22%) 0.00%(c) 4.79%(c) 1.78%(c) $25,225 -- 21%
$9.67 5.58% 0.40% 4.80% 1.12% $27,346 -- 51%
$9.90 7.18% 1.04% 4.60% 0.34% $32,621 -- 113%
$10.08 6.76% 1.01% 4.74% 0.38% $35,480 -- 79%
$10.42 8.37% 0.96% 4.35% 0.31% $43,456 -- 45%
$9.93 (0.12%) 0.00%(c) 2.24%(c) 2.15%(c) $22,944 -- 27%
$10.35 6.61% 0.47% 2.16% 0.96% $39,358 -- 79%
$13.35 30.18% 1.16% 1.09% -- $65,119 -- 77%
$15.11 18.61% 1.14% 0.87% -- $114,090 $0.0549 134%
$16.13 31.40% 1.21% 0.65% -- $143,404 $0.0542 88%
$11.26 13.97% 0.88%(c) 0.18%(c) 0.96%(c) $33,440 $0.0628 41%
$14.77 40.07% 1.50% (0.64%) 0.01% $75,095 $0.0547 86%
- -------------------------------------------------------------------------------------------------------
</TABLE>
VISION EQUITY AND INCOME FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1998
- -------------------------------------------------------------------------------
(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
- -------------------------------------------------------------------------------------
<C> <S>
Vision U.S. Government Securities Fund Current income by investing primarily in
("U.S. Government Securities Fund") (d) securities that are guaranteed for
payment of principal and interest by the
U.S. Government, its agencies or
instrumentalities. Capital appreciation
is a secondary investment objective.
- -------------------------------------------------------------------------------------
Vision New York Municipal Income Fund Current income which is exempt from
("New York Municipal Income Fund") (n) federal regular income tax, and the
(formerly, Vision New York Tax-Free personal income taxes imposed by the Fund)
State of New York and New York
Municipalities and is consistent
with preservation of capital.
- -------------------------------------------------------------------------------------
Vision Growth and Income Fund ("Growth Long-term growth of capital and income.
and Income Fund") (d)
- -------------------------------------------------------------------------------------
Vision Capital Appreciation Fund Long-term capital appreciation by
("Capital Appreciation Fund") (d) investing in a 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, 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.
Distributions in excess of net investment income were a result of certain book
and tax timing differences. These distributions do not represent a return of
capital for federal income tax purposes.
Income and capital gain distributions are determined in accordance with income
tax regulations which may differ from generally accepted accounting
principals. These differences are primarily due to differing treatments for
short-term capital gain distributions. The following reclassification has been
made to the financial statements.
VISION EQUITY AND INCOME FUNDS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCREASE (DECREASE)
--------------------------------------
ACCUMULATED NET UNDISTRIBUTED NET
FUND NAME REALIZED GAIN (LOSS) INVESTMENT INCOME
--------- -------------------- -----------------
<S> <C> <C>
Capital Appreciation Fund $(340,531) $340,531
</TABLE>
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, 1998 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:
<TABLE>
<CAPTION>
CAPITAL LOSS
CARRYFORWARD TO
FUND NAME EXPIRE IN 2005
--------- ---------------
<S> <C>
U.S. Government Securities Fund $500,175
</TABLE>
Net realized capital losses on U.S. Government Securities Fund of $185,935
attributable to security transactions incurred after October 31, 1997, are
treated as arising on the first day of the Fund's next taxable year (May 1,
1998).
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.
VISION EQUITY AND INCOME FUNDS
- -------------------------------------------------------------------------------
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 April 30, 1998 is
as follows:
<TABLE>
<CAPTION>
NEW YORK MUNICIPAL INCOME FUND
ACQUISITION ACQUISITION
SECURITY DATE COST
-------- ----------- -----------
<S> <C> <C>
Puerto Rico Industrial, Medical & Environmental PCA 1/24/97 $1,282,788
</TABLE>
OTHER--Investment transactions are accounted for on the trade date.
(3) CAPITAL STOCK
At April 30, 1998, 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
--------------------- ----------------------
YEAR ENDED APRIL 30, YEAR ENDED APRIL 30,
--------------------- ----------------------
1998 1997 1998 1997
- ----------------------------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Shares sold 2,474,532 1,710,458 1,147,398 858,336
- -----------------------------
Shares issued to shareholders
in payment of distributions
declared 207,650 125,662 131,036 118,381
- -----------------------------
Shares redeemed (1,860,431) (727,517) (626,243) (751,725)
- ----------------------------- ---------- --------- ---------- ---------
Net change resulting from
share transactions 821,751 1,108,603 652,191 224,992
- ----------------------------- ---------- --------- ---------- ---------
</TABLE>
VISION EQUITY AND INCOME FUNDS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH AND INCOME CAPITAL APPRECIATION
FUND FUND
---------------------- -----------------------
YEAR ENDED APRIL 30, YEAR ENDED APRIL 30,
---------------------- -----------------------
1998 1997 1998 1997(A)
- --------------------------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Shares sold 2,600,661 3,564,637 2,401,323 2,993,059
- ---------------------------
Shares issued to
shareholders in payment of
distributions declared 1,327,720 154,932 223,026 17,066
- ---------------------------
Shares redeemed (2,585,548) (1,050,710) (509,464) (39,479)
- --------------------------- ---------- ---------- ---------- ----------
Net change resulting from
share transactions 1,342,833 2,668,859 2,114,885 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.
<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, TRANSFER AND DIVIDEND DISBURSING AGENT AND FUND ACCOUNTING
FEE--Federated Services Company ("FServ") provides the Funds with certain
administrative personnel and Fund Accounting services. FServ, through its
subsidiary Federated Shareholder Services Company, serves as transfer and
dividend disbursing agent for the Funds. The fee paid to FServ is based on the
level of average aggregate net assets of the Corporation for the period. FServ
may voluntarily choose to waive a portion of its fee. FServ can modify or
terminate this voluntary waiver at any time at its sole 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
fees during the period ended April 30, 1998.
VISION EQUITY AND INCOME FUNDS
- -------------------------------------------------------------------------------
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.
ORGANIZATIONAL EXPENSES--Organizational expenses were borne initially by
Federated Administrative Services ("FAS"). Each Fund has reimbursed FAS for
these expenses. These expenses have been deferred and are being amortized over
the five year period following each Fund's effective date. For the year ended
April 30, 1998, the following amounts were expensed by each Fund:
<TABLE>
<CAPTION>
EXPENSES OF AMOUNT AMORTIZED
ORGANIZING THE FOR THE PERIOD ENDED
FUND APRIL 30, 1998
-------------- --------------------
<S> <C> <C>
U.S. Government Securities Fund $21,313 $ 7,154
New York Municipal Income Fund $27,242 $ 9,065
Growth and Income Fund $18,626 $12,373
Capital Appreciation Fund $19,915 $ 3,836
</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
year ended April 30, 1998, were as follows:
<TABLE>
<CAPTION>
FUND PURCHASES SALES
- ---- ------------ ------------
<S> <C> <C>
U.S. Government Securities Fund $ 48,792,714 $ 36,924,483
New York Municipal Income Fund $ 23,582,527 $ 17,532,001
Growth and Income Fund $119,597,466 $129,842,240
Capital Appreciation Fund $ 69,900,294 $ 43,260,473
</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 April 30, 1998, 36.5% of the total market value
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
3.2% of the total market value of investments.
VISION EQUITY AND INCOME FUNDS
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(7) YEAR 2000 (UNAUDITED)
Similar to other financial organizations, the Funds could be adversely affected
if the computer systems used by the Funds' service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Funds' Adviser and Administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by the Funds' other service providers. At this
time, however, there can be no assurance that these steps will be sufficient to
avoid any adverse impact to the Funds.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
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To the Board of Directors and Shareholders of VISION GROUP OF FUNDS, INC.:
We have audited the accompanying statements of assets and liabilities of Vision
U.S. Government Securities Fund, Vision New York Municipal Income Fund
(formerly, Vision New York Tax-Free Fund), Vision Growth and Income Fund, and
Vision Capital Appreciation Fund (four of the portfolios of Vision Group of
Funds, Inc.), including the portfolios of investments, as of April 30, 1998, and
related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
financial highlights for each of the periods presented therein. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of April
30, 1998, by correspondence with the custodian and brokers or other appropriate
auditing procedures where replies from brokers were not received. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios of Vision Group of Funds, Inc., as identified
above, at April 30, 1998, the results of their operations for the year then
ended, the changes in their net assets for each of the two years in the period
then ended, and financial highlights for each of the periods presented therein,
in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
June 17, 1998
DIRECTORS OFFICERS
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Randall I. Benderson Edward C. Gonzales
President and Treasurer
Joseph J. Castiglia Charles L. Davis, Jr.
Vice President and Assistant Treasurer
Daniel R. Gernatt, Jr. Beth S. Broderick
Vice President and Assistant Treasurer
George K. Hambleton, Jr. 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 NO 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.
Federated Securities Corp.
Distributor
Federated Investors Tower
Pittsburgh, PA 15222-3779
Cusip 92830F406
Cusip 92830F505
Cusip 92830F604
Cusip 92830F703 [RECYCLED LOGO APPEARS HERE]
G00158-07 (6/98)
LOGO OF VISION GROUP OF FUNDS, INC.
ANNUAL REPORT
TO SHAREHOLDERS
APRIL 30, 1998
VISION
U.S. Government
Securities Fund
- --------------------------------------------------------------------------------
VISION
New York Municipal
Income Fund
(formerly, VISION New York Tax-Free Fund)
- --------------------------------------------------------------------------------
VISION
Growth and Income
Fund
- --------------------------------------------------------------------------------
VISION
Capital Appreciation
Fund
Manufacturers and Traders Trust Company
Investment Adviser to the Funds
One M&T Plaza
Buffalo, NY 14240-4556
Appendix
Vision Equity Income Fund
The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are displayed in the upper left
quadrant of the graph. The Vision Equity Income Fund., (the "Fund") is
represented by a solid line. The Standard & Poor's 500 Index (the "Index") is
represented by a broken line. The line graph is a visual representation of a
comparison of change in value of a $10,000 hypothetical investment in the Fund
and the Index. The "x" axis reflects computation periods from 9/26/97 to
4/30/98. The "y" axis reflects the cost of the investment. The right margin
reflects the ending value of the hypothetical investment in the Fund, based on a
5.50% sales charge, as compared to the Index. The ending values were $10,916 and
$11,840, respectively. The legend below the graphic presentation indicates the
Fund's Average Annual Total Return for the period from Start of Performance
(9/26/97) to 4/30/98 (cumulative). The total return was 9.17%. Vision U.S.
Government Securities Fund The graphic presentation here displayed consists of a
line graph. The corresponding components of the line graph are displayed in the
upper left quadrant of the graph. The Vision U.S. Government Securities Fund.,
(the "Fund") is represented by a solid line. The Lehman Brothers Aggregate Bond
Index (the "Index") is represented by a broken line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the Fund and the Index. The "x" axis reflects computation periods
from 9/22/93 to 4/30/98. The "y" axis reflects the cost of the investment. The
right margin reflects the ending value of the hypothetical investment in the
Fund, based on a 4.50% sales charge, as compared to the Index. The ending values
were $12,108 and $13,349, respectively. The legend below the graphic
presentation indicates the Fund's Average Annual Total Return for the 1 Year and
Start of Performance (9/22/93) periods ended 4/30/98. The total returns were
5.42% and 4.24%, respectively. Vision New York Municipal Income Fund The graphic
presentation here displayed consists of a line graph. The corresponding
components of the line graph are displayed in the upper left quadrant of the
graph. The Vision New York Municipal Income Fund., (the "Fund") is represented
by a solid line. The Lehman Brothers New York Tax-Exempt Index (the "Index") is
represented by a broken line. The line graph is a visual representation of a
comparison of change in value of a $10,000 hypothetical investment in the Fund
and the Index. The "x" axis reflects computation periods from 9/22/93 to
4/30/98. The "y" axis reflects the cost of the investment. The right margin
reflects the ending value of the hypothetical investment in the Fund, based on a
4.50% sales charge, as compared to the Index. The ending values were $12,352 and
$12,809, respectively. The legend below the graphic presentation indicates the
Fund's Average Annual Total Return for the 1 Year and Start of Performance
(9/22/93) periods ended 4/30/98. The total returns were 3.54% and 4.69%,
respectively. Vision Growth and Income Fund The graphic presentation here
displayed consists of a line graph. The corresponding components of the line
graph are displayed in the upper left quadrant of the graph. The Vision Growth
and Income Fund., (the "Fund") is represented by a solid line. The Standard &
Poor's Daily Price Index of 500 Common Stocks and (the "S&P 500") is represented
by a broken line and the Russell Midcap Index (the "RMCI") is represented by a
doted line. The line graph is a visual representation of a comparison of change
in value of a $10,000 hypothetical investment in the Fund, the S&P 500 and the
RMCI. The "x" axis reflects computation periods from 11/29/93 to 4/30/98. The
"y" axis reflects the cost of the investment. The right margin reflects the
ending value of the hypothetical investment in the Fund, based on a 4.50% sales
charge, as compared to the S&P 500 and RMCI. The ending values were $20,632,
$26,637, and $23,281, respectively. The legend below the graphic presentation
indicates the Fund's Average Annual Total Return for the 1 Year and Start of
Performance (11/29/93) periods ended 4/30/98. The total returns were 24.17% and
17.80%, respectively.
<PAGE>
Vision Capital Appreciation Fund
The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are displayed in the upper left
quadrant of the graph. The Vision Capital Appreciation Fund., (the "Fund") is
represented by a solid line. The Russell Midcap Growth Index (the "Index") is
represented by a broken line. The line graph is a visual representation of a
comparison of change in value of a $10,000 hypothetical investment in the Fund
and the Index. The "x" axis reflects computation periods from 7/3/96 to 4/30/98.
The "y" axis reflects the cost of the investment. The right margin reflects the
ending value of the hypothetical investment in the Fund, based on a 5.50% sales
charge, as compared to the Index. The ending values were $15,086 and $14,724,
respectively. The legend below the graphic presentation indicates the Fund's
Average Annual Total Return for the 1 Year and Start of Performance (7/3/96)
periods ended 4/30/98. The total returns were 32.31% and 25.22%, respectively.
