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[LOGO]
E M E R A L D
F U N D S
A N N U A L R E P O R T
EMERALD EQUITY FUND
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EMERALD
SMALL CAPITALIZATION FUND
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EMERALD BALANCED FUND
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EMERALD SHORT - TERM
FIXED INCOME FUND
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EMERALD U.S. GOVERNMENT
SECURITIES FUND
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EMERALD MANAGED
BOND FUND
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EMERALD
FLORIDA TAX-EXEMPT FUND
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EMERALD PRIME FUND
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EMERALD TREASURY FUND
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EMERALD TAX-EXEMPT FUND
THIRTIETH OF NOVEMBER
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1995
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This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus for one of the Emerald Funds
discussed within.
THE EMERALD FUNDS ARE NOT INSURED OR PROTECTED BY THE FDIC OR ANY OTHER
GOVERNMENT AGENCY, ARE NOT DEPOSITS OR OBLIGATIONS OF BARNETT BANK, ARE NOT
GUARANTEED BY THE BANK AND INVOLVE INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS
OF PRINCIPAL.
Investments in the Prime, Treasury and Tax-Exempt Funds are neither insured nor
guaranteed by the U.S. Government, and yields will fluctuate. There can be no
assurance that the Funds will be able to maintain a stable net asset value of
$1.00 per share.
Barnett Banks Trust Company, N.A. serves as investment adviser to the Emerald
Funds, is paid a fee for its services and is unaffiliated with Emerald Asset
Management, Inc., the Funds' distributor.
The service contractors for the Emerald Funds may from time to time voluntarily
waive fees or reimburse Fund expenses, which temporarily increases the return to
investors. These fee waivers and reimbursements may be discontinued at any time,
which would reduce performance results.
The Emerald Funds prospectuses contain more complete information, including
charges and expenses. Please read the prospectus carefully before investing.
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TABLE OF
CONTENTS
<TABLE>
<S> <C>
CHAIRMAN'S LETTER
ECONOMIC REPORT FROM THE INVESTMENT ADVISER 3
EMERALD FUND FACTS 4
INTERVIEWS WITH YOUR PORTFOLIO MANAGERS
EMERALD EQUITY FUND 6
EMERALD SMALL CAPITALIZATION FUND 10
EMERALD BALANCED FUND 14
EMERALD SHORT-TERM FIXED INCOME FUND 18
EMERALD U.S. GOVERNMENT SECURITIES FUND 22
EMERALD MANAGED BOND FUND 26
EMERALD FLORIDA TAX-EXEMPT FUND 30
EMERALD PRIME, TREASURY & TAX-EXEMPT FUNDS 34
FINANCIAL STATEMENTS
EMERALD EQUITY FUND 36
EMERALD SMALL CAPITALIZATION FUND 43
EMERALD BALANCED FUND 49
EMERALD SHORT-TERM FIXED INCOME FUND 59
EMERALD U.S. GOVERNMENT SECURITIES FUND 64
EMERALD MANAGED BOND FUND 70
EMERALD FLORIDA TAX-EXEMPT FUND 76
EMERALD PRIME FUND 82
EMERALD TREASURY FUND 88
EMERALD TAX-EXEMPT FUND 92
NOTES TO FINANCIAL STATEMENTS 101
REPORT OF INDEPENDENT ACCOUNTANTS 143
</TABLE>
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CHAIRMAN'S LETTER
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Dear Shareholder:
The 12 months ended November 30, 1995, were an extraordinary time for the
financial markets. After a year of sharp declines in the bond market and a
virtually flat stock market, both rallied in 1995. As interest rates declined,
the bond market recouped its losses of the previous year, and the stock market
had one of its strongest bull markets in history.
What did this mean for the Emerald Funds? We are pleased to report that the Fund
family as a whole turned in solid performance. Particularly noteworthy was the
Emerald Equity Fund, which performed very well when compared to its peers. As
reported by Lipper Analytical Services, the Emerald Equity Fund placed among the
top 30% in its category for the year ending November 30, 1995, based upon total
return.*
You will find a complete discussion of the performance of the Emerald Funds
during the past 12 months, as well as detailed financial statements, in the
report that follows. We urge you to read the report closely.
Given the markets' recent strength, many of you have asked whether now is still
a good time to invest. No one can predict the future with confidence. However,
we believe that if present conditions hold -- namely low inflation coupled with
moderate economic growth -- the markets should continue to generate positive
returns next year, albeit at a slower pace than in the past year. It's also
possible that we will see periods of profit-taking, which could cause stock
prices to fall back somewhat from time to time.
Our best advice: This is a good time to review your investments to make sure
they are still appropriate for your long-term objectives. This is also an
excellent time to implement a dollar-cost averaging program, if you're not
already doing so. By investing a fixed amount of money regularly over a long
period of time, you can even out the effects of market fluctuations by buying
more Fund shares when prices are low and fewer shares when prices are high. Of
course, dollar-cost averaging does not assure a profit or protect against a loss
in declining markets, and you should be prepared to continue such an investment
program during periods of extreme share price fluctuations. For more information
on how you can start a regular investment program with the Emerald Funds, please
call 1-800-637-6336.
As part of our ongoing effort to meet the needs of our shareholders, the Emerald
Funds plan to introduce new funds in 1996 to give you even more investment
options. In addition, we intend to implement new programs designed to improve
the level of service quality you receive.
In closing, we would like to thank you for your continued confidence in the
Emerald Funds. As always, if you would like a prospectus, have any questions or
require any assistance, please do not hesitate to call us at 1-800-637-6336.
And we wish you the very best for the new year.
Sincerely,
<TABLE>
<S> <C>
Chesterfield Smith Richard H. Jones
Chairman Chief Asset Management
The Emerald Funds Executive
Barnett Banks, Inc.
December 22, 1995
</TABLE>
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* For the 12 months ending November 30, 1995, the Emerald Equity Fund ranked
183rd out of 643 growth funds. The ranking is for Class A Shares and does not
take sales charges into account. Past performance is no guarantee of future
results.
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ECONOMIC REPORT FROM THE INVESTMENT ADVISER
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FED ENGINEERS "SOFT LANDING"
By raising short-term interest rates steadily throughout 1994 and into early
1995, the Federal Reserve Board was able to put the brakes on an economy that
had started to soar. Economic growth has slowed from a rate of 5.1% in the
fourth quarter of 1994 to an expected rate of about 2.5% for all of 1995 -- low
enough to keep inflation in check and just fast enough to keep corporate profits
growing. Despite the fact that this recovery is already longer than average, we
do not expect a recession in 1996. If the economy softens further, however, we
believe that the Fed would act quickly to cut short-term interest rates.
A FOUNDATION FOR CONTINUED GROWTH
While the Fed deserves a great deal of credit for prolonging the economic
expansion into its fifth year, there are other forces at work as well. The first
is the globalization of the economy. With the spread of capitalism comes new
markets. In addition, global competition has kept wages and prices at bay in the
U.S.
The second major force is the aging of the U.S. population. The first "baby
boomers" are about to turn 50, changing their spending patterns away from
consumption and more toward investment. Assets in savings accounts and mutual
funds are at record levels. This trend has been a positive force for the stock
and bond markets. And it has also been a major factor in holding interest rates
down -- as the cost of money responds like any other commodity to the forces of
supply and demand.
THE WORLD'S MOST EFFICIENT ECONOMY
A third factor is the boom in U.S. productivity, making ours the most efficient
economy in the world. Companies continue to restructure in response to foreign
competition. Employers continue to announce layoffs, which puts downward
pressure on wages and prices, particularly at the retail level. Meanwhile,
American innovation and technology are sought throughout the world -- which
helped fuel the surge in technology stocks in 1995. Although relatively slow,
U.S. economic growth still exceeds that of Japan and much of Europe.
As we enter 1996, presidential and congressional politics will also continue to
affect the economy and the financial markets. Although, as of this writing, the
President and Congress continue to battle over the budget, both sides agree at
least that a balanced budget in the near term is important. Investors will be
watching progress in Washington very closely. Generally speaking, meaningful
steps toward greater fiscal responsibility will be viewed favorably by the
financial markets.
PLEASE READ THE PORTFOLIO MANAGER INTERVIEWS TO
LEARN MORE ABOUT THE STRATEGIES USED TO MANAGE
EACH EMERALD FUND AND ITS PERFORMANCE DURING
THIS PERIOD. REMEMBER, INVESTMENT RETURNS AND
PRINCIPAL VALUE WILL VARY WITH MARKET
CONDITIONS. PAST PERFORMANCE IS NOT INDICATIVE
OF FUTURE RESULTS. AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST.
3
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FUND FACTS
The Emerald Funds provide shareholders with a variety of features to
make investing in the Funds easy, convenient and manageable.
<TABLE>
<CAPTION>
EMERALD FUND
FEATURES EMERALD FUND BENEFITS
<S> <C>
Professional The investment managers at Barnett Banks Trust Company,
Investment N.A. are experienced investment professionals who
Management oversee the investments in each mutual fund.
Low Minimum Initial investments in the Funds can be as low as
Investment $1,000 for a regular account.
Dedicated Customer Account information is available at your fingertips.
Service Just call 1-800-637-6336.
E-Z Matic Investments can be made monthly or twice monthly with
Investment Plan automatic transfers from your checking account to your
Fund account -- with an initial investment minimum of
$500 and just $100 for subsequent investments.*
Periodic Investment With the Periodic Investment Plan, your minimum initial
Plan investment and subsequent investment amounts are just
$50.*
Dollar-Cost Dollar-cost averaging is an investment practice in
Averaging which you invest a fixed dollar amount on a consistent
basis, allowing you to set your investment goals and
watch your money accumulate automatically.*
Systematic Automatic withdrawals from your Fund account can be
Withdrawals made and credited to any account you designate.
Free Exchange Shares of the Funds can be exchanged into shares of
Privileges other Emerald Funds at no cost.**
Regular, You will receive account statements after each
Informative transaction, plus regular financial reports
Statements and highlighting performance and investment strategies.
Reports
Retirement Programs Emerald Funds may be appropriate for retirement
accounts, including IRAs.
Dividend Automatically reinvest any dividend income and capital
Reinvestment gains in additional shares of the Fund at no cost.
Daily Redemptions Shares are redeemable each business day (at the net
asset value per share next determined after receipt of
your redemption request) by mail, telephone or bank
wire.
</TABLE>
* The E-Z Matic Investment Plan, Periodic Investment Plan and dollar-cost
averaging do not assure a profit and do not protect against loss in declining
markets. You should consider your financial ability to continue your
investment program during periods of extreme share price fluctuations.
** Exchange privileges may be modified or discontinued by the Funds at any time.
Upon redemption, shares may be worth more or less than their original cost.
4
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5
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INTERVIEW (as of November 30, 1995)
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EMERALD EQUITY FUND
PHOTO As Senior Equity Portfolio manager for Barnett, Mr.
Creighton serves on the Equity Strategy Committee and
G. Russell manages the Emerald Equity Fund and Emerald Balanced
Creighton, Fund. Mr. Creighton's portfolio management experience
C.F.A. dates back to 1981, when he joined Barnett as an equity
PORTFOLIO MANAGER manager. He is a Chartered Financial Analyst and holds an
14 years of M.B.A. in Finance.
investment INVESTMENT GOAL
experience The Fund's investment goal is to seek long-term capital
appreciation by investing primarily in common stocks. As
a secondary objective, the Fund seeks potential dividend
income growth.
The Fund is best suited for those seeking capital
appreciation over the long- term, wanting to diversify
their investment portfolios with a common stock
alternative and for those willing to assume the risk
associated with equity investments.
PORTFOLIO
COMPOSITION*
The portfolio holds
stocks in a variety
of industries that
we believe will
prosper.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Computer & Computer Services 13%
Electrical Equipment & Electronics 8%
Food, Beverage & Tobacco 9%
Other 39%
Finance & Insurance 11%
Utilities 7%
Health Care 13%
</TABLE>
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TOP TEN HOLDINGS*
The ten largest holdings in the portfolio include internationally diversified
companies with household names such as General Electric, PepsiCo and Johnson &
Johnson.
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
Capital Cities ABC Inc. 2.77% Merck & Co. Inc. 1.90%
......................................................... ..........................................................
Philip Morris Cos. Inc. 2.69 Travelers Corp. 1.90
......................................................... ..........................................................
General Electric Co. 2.60 Schering Plough Corp. 1.78
......................................................... ..........................................................
PepsiCo Inc. 2.16 Foundation Health Corp. 1.75
......................................................... ..........................................................
Johnson & Johnson 2.11 IBP Inc. 1.73
......................................................... ..........................................................
Total 21.39%
......................................................... ..........................................................
</TABLE>
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*The composition of the Fund's holdings is subject to change.
6
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EMERALD EQUITY FUND (as of November 30, 1995)
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GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DATE A SHARES S&P 500 S&P BARRA GROWTH
<S> <C> <C> <C>
6/28/91 9,551 10,000 10,000
9/30/91 10,130 10,535 10,636
12/31/91 11,238 11,418 11,970
3/31/92 10,633 11,130 11,348
6/30/92 10,490 11,342 11,319
9/30/92 11,058 11,700 11,831
12/31/92 11,707 12,289 12,585
3/31/93 11,901 12,825 12,522
6/30/93 11,596 12,886 12,265
9/30/93 11,843 13,219 12,260
12/31/93 12,207 13,526 12,797
3/31/94 11,647 13,013 12,243
6/30/94 11,315 13,068 12,233
9/30/94 11,794 13,706 13,107
12/31/94 11,405 13,704 13,197
3/31/95 12,385 15,038 14,493
6/30/95 13,758 16,473 15,990
9/30/95 15,247 17,782 17,258
11/30/95 15,427 18,496 18,023
</TABLE>
A LONG-TERM PERSPECTIVE
A $10,000 investment made at the inception of the Fund would have grown to
$15,427 by November 30, 1995. In this example, $10,000 invested in the S&P Barra
Growth Index, an unmanaged index of growth stocks, and the S&P 500, an unmanaged
index of large-company stocks, would have had ending values of $18,023 and
$18,496, respectively. The comparison to the S&P 500 and the S&P Barra Growth
Indices is meant to provide you with a general sense of how the Fund is
performing compared to standard benchmarks of the market. These indices do not
reflect any expenses that accompany a real investment such as sales charges,
expenses for Fund operation, management fees, or the cash reserves necessary to
provide daily liquidity in a mutual fund. The Fund's performance reflects the
maximum front-end (Class A Shares) or the one-year contingent deferred (Class B
shares) sales charge of 4.50 percent and 4.00 percent, respectively.
The service contractors are voluntarily reimbursing a portion of the expenses
for Class B Shares. If the service contractors had not reimbursed expenses,
total returns would have been lower. This voluntary reimbursement of expenses
may be modified or terminated at any time, which would reduce the performance.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. PERFORMANCE WILL VARY FOR
EACH CLASS OF SHARES DUE TO DIFFERENCES IN EXPENSES PAID WITH RESPECT TO EACH
CLASS OF SHARES.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF 11/30/95
A SHARES* B SHARES**
<S> <C> <C>
1 Year 28.77% 28.96%
3 Year 7.94% NA
Since Inception 10.28% 10.27%
Inception Date 6/28/91 3/01/94
</TABLE>
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* Reflects 4.50% sales charge.
** Reflects 4.00% one-year contingent deferred sales charge. The maximum
contingent deferred sales charge is 4.50%.
7
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EMERALD EQUITY FUND (as of November 30, 1995)
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WHAT FACTORS AFFECTED YOUR PERFORMANCE?
Interest rates fell dramatically, the economy was strong and corporate profits
grew at double-digit rates. For the year ended November 30, 1995, the Fund had a
total return of 34.82% (Class A Shares),+ so it was a very good year. It would
have been even better had technology stocks not sold off in late fall. Over the
last 60 days of the period, we saw a two-tiered market in which most of the
gains came from the big stocks that make up the Dow Jones Industrial Average.
Since we continue to be overweighted in the technology sector, we lost some
ground against our benchmark index at the very end of the period and slightly
lagged the S&P 500's return of 36.97% for the year ended November 30.
WHY DID TECHNOLOGY STOCKS RETREAT?
Equity research departments at some of the major Wall Street firms began to
downgrade the stocks out of fear that sales were cooling off and prices would
fall. But these are the realities of an economy that is slowing down. Even
though we do not expect to see earnings growth rates of 60% as we did over the
past year, we believe that a growth rate of 25% in 1996 for this sector is very
realistic -- which is still pretty astounding in the context of an economy that
may grow by 2% to 3% at best. Today, the average semiconductor stock -- which is
up 130% from the beginning of the year -- is off 30% from its high. We think
this correction in technology is temporary and that the group still offers
excellent value since the stocks we own are generally selling at only seven to
nine times earnings. We continue to be overweighted in technology compared to
the S&P 500, with holdings in semiconductors, software, computers and
telecommunications.
ASIDE FROM TECHNOLOGY, WHAT OTHER TYPES OF STOCKS ARE IN THE PORTFOLIO?
We continue to focus on companies selling at below-market multiples that have
above-market growth rates. This has led us to increase our exposure to more
traditional growth companies that are less affected by changes in the economy,
such as drug and health-care stocks. An example is Foundation Health, our
largest holding in the HMO area. The stock has been trading at 12 times
earnings, below the S&P 500, which is trading at 16. We believe that earnings
could grow by 20% next year since HMOs will likely benefit from efforts to
restrain the growth in Medicare spending through more efficient delivery of
health-care services. Another holding is Merck, the world's largest
pharmaceutical company and one of the first to position itself to withstand
increased competition. The company has taken steps to make sure that it is the
low-cost producer and to establish an international distribution network. One of
our largest holdings continues to be General Electric -- a traditional,
large-capitalization, high-quality, well-diversified multinational company that
is currently growing slightly faster than the S&P 500.
Recently, we sold our Coca-Cola holdings and switched to PepsiCo. The reason:
While both are expected to grow about 15% next year, Pepsi appears to have more
growth potential, trading at 19 times earnings compared to Coke's price/earnings
ratio of 27. We own Mobil, but the Fund is underweighted in energy, primarily
because of the likelihood that oil prices may go down in a weak economic
environment. In general, we are sensitive to the fact that we are in the latter
phase of the current economic expansion, leading us to reduce the Fund's
exposure to technology. Nevertheless, we believe that these companies offer good
value at current price levels.
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+ The returns with the maximum front-end sales charge for Class A Shares (4.50%)
and the one-year contingent deferred sales charge for Class B Shares (4.00%)
were 28.77% and 28.96%, respectively.
8
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9
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INTERVIEW (as of November 30, 1995)
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EMERALD SMALL CAPITALIZATION FUND
PHOTO Mr. McQuiddy joined Barnett in 1983 as an equity analyst
and was selected in 1987 to manage Barnett's newly
Dean McQuiddy, created Small Cap Equity Commingled Fund. A portion of
C.F.A. the Fund was later converted into the Emerald Small
PORTFOLIO MANAGER Capitalization Fund. Total Small Capitalization assets
12 years of under management have grown from $2 million in 1987 to
investment more than $85 million today. Mr. McQuiddy is a Chartered
experience Financial Analyst and holds a B.S. in Finance.
INVESTMENT GOAL
The Fund's investment goal is to seek long-term capital
appreciation.*
The Fund is best suited for investors who seek long-term
rewards that may exceed those provided by a fund
investing in larger, more established companies and for
investors who can accept the investment risk of an
investment in smaller companies.
PORTFOLIO
COMPOSITION**
The portfolio
focuses on smaller
companies that we
feel are growing
faster than the
market as a whole.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Banking & Finance 8%
Computer & Computer Services 22%
Building & Building Products 10%
Electrical Equipment & Electronics 9%
Medical 7%
Other 44%
</TABLE>
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TOP TEN HOLDINGS**
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
STOCKS NET ASSETS STOCKS NET ASSETS
<S> <C> <C> <C>
Computer Products Inc. 3.40% Auspex Systems Inc. 2.57%
......................................................... ..........................................................
Aspect Telecom Corp. 3.12 Toll Brothers Inc. 2.48
......................................................... ..........................................................
Jack Henry & Associates Inc. 3.12 Structural Dynamics Research Corp. 2.36
......................................................... ..........................................................
Advanced Technology Labs 3.05 Trident Micro Systems 2.36
......................................................... ..........................................................
Wolverine World Wide Inc. 2.78 American Business Information 2.22
......................................................... ..........................................................
Total 27.46%
......................................................... ..........................................................
</TABLE>
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* Small cap funds typically carry additional risks since smaller companies
generally have a higher risk of failure and, by definition, are not as well
established as "blue chip" companies. Historically, smaller companies' stocks
have experienced a greater degree of market volatility than stocks on
average.
** The composition of the Fund's holdings is subject to change.
10
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EMERALD SMALL CAPITALIZATION FUND (as of November 30, 1995)
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GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DATE A SHARES B SHARES LIPPER AVERAGE RUSSELL 2000
<S> <C> <C> <C> <C>
03/01/94 9,550 10,000 10,000 10,000
03/31/94 8,949 8,931 9,467 9,473
06/30/94 8,121 8,075 9,310 9,104
09/30/94 9,113 9,040 10,099 9,735
12/31/94 9,022 8,940 10,070 9,554
03/31/95 9,386 9,325 10,624 9,994
06/30/95 10,455 10,401 11,599 10,931
09/30/95 11,703 11,669 12,985 12,011
11/30/95 11,630 11,564 13,035 11,957
</TABLE>
A LONG-TERM PERSPECTIVE
A $10,000 investment made at the inception of the Fund would have been worth
$11,630 (Class A Shares) and $11,564 (Class B Shares) by November 30, 1995. By
comparison, a similar investment in the Lipper Small Company Growth Funds
Average, a composite of 242 similar mutual funds, would have had a value of
$13,035. In this example, $10,000 invested in the Russell 2000 Index, an
unmanaged index comprised of 2,000 domestically traded common stocks of
small-capitalization companies, would have had a value of $11,957. The
comparison to the Russell 2000 Index is meant to provide you with a general
sense of how the Fund is performing compared to a standard benchmark of the
market. The Russell 2000 Index does not reflect any expenses that accompany a
real investment such as sales charges, expenses for Fund operation, management
fees, or the cash reserves necessary to provide daily liquidity in a mutual
fund. The Fund's performance reflects the maximum front-end (Class A Shares) or
the one-year contingent deferred (Class B Shares) sales charge of 4.50 percent
and 4.00 percent, respectively.
The service contractors are voluntarily reimbursing a portion of the expenses
for Class A and B Shares. If the service contractors had not reimbursed
expenses, total returns would have been lower. This voluntary reimbursement of
expenses may be modified or terminated at any time, which would reduce the
performance.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. PERFORMANCE WILL VARY FOR
EACH CLASS OF SHARES DUE TO DIFFERENCES IN EXPENSES PAID WITH RESPECT TO EACH
CLASS OF SHARES.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF 11/30/95
A SHARES* B SHARES**
<S> <C> <C>
1 Year 26.19% 27.00%
Since Inception 9.00% 8.64%
Inception Date 3/1/94
</TABLE>
----------------
* Reflects 4.50% sales charge.
** Reflects 4.00% one-year contingent deferred sales charge. The maximum
contingent deferred sales charge is 4.50%.
11
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EMERALD SMALL CAPITALIZATION FUND (as of November 30, 1995)
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WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
The Fund returned 32.19% (Class A Shares)+ for the fiscal year ended November
30, 1995, outperforming the 28.50% return of its benchmark, the Russell 2000, an
unmanaged index that reflects the performance of the small-capitalization stock
market. The kind of stocks that we buy were rewarded in the marketplace --
especially in the second half of the fiscal year. We look for stocks of
companies with very strong and consistent earnings growth and momentum. During
the past year, many Fund holdings experienced significant upward revisions in
analysts' earnings estimates, while selling at very reasonable multiples of
their growth rates. Since overall economic growth and corporate profitability
are slowing, it makes sense that investors would gravitate toward stocks like
these, which were expected to continue to deliver consistent earnings growth.
In addition, we were overweighted in sectors that did well during the first 10
to 11 months of this year, specifically technology stocks -- both software and
hardware manufacturers. But even with the sell-off in the technology sector at
the end of the period, technology turned out to be the single best-performing
group for the 12 months ended November 30, 1995.
Investors in small-cap funds need to keep in mind that this type of fund
typically has some additional risks since smaller companies generally have a
higher risk of failure than more established "blue chip" companies.
Historically, while stocks of smaller companies have performed well over time,
they have also experienced a greater degree of market volatility than stocks on
average.
WHAT ARE SOME REPRESENTATIVE PORTFOLIO HOLDINGS?
We try to buy stocks of companies that are growing faster than reflected in
their price/earnings multiples. One example is Jack Henry & Associates, which
provides software systems for the financial industry. The company has had very
strong earnings growth and the stock has done very well. Presently, it is
selling for about 25 times next year's earnings -- and we still like it. A
second company is Wolverine World Wide, which has had exceptionally strong
earnings growth -- 66% on average annually over the past three years. The stock
was recently selling at about 17 times estimated 1996 earnings. One reason for
the company's growth is the fashion trend toward the wilderness-type boot; their
footwear sells under the brand names Hushpuppies and Wolverine. Another company
is Toll Brothers, which builds moderately priced to expensive houses in 80
cities throughout the East and Northeast. Over the past three years, the company
has experienced average earnings growth of more than 40% per year, which we
expect to slow to about 30% in 1995, still a high rate. Even with this growth,
the stock has been selling at only about 11 times estimated 1996 earnings. The
average stock in the Fund has a market capitalization of about $450 million.
WHAT IMPACT DID A STRENGTHENING DOLLAR HAVE ON SMALL-CAPITALIZATION STOCKS?
A strong dollar is good for stocks of smaller domestic companies since they do
not have the currency exposure of large, multinational firms. When the dollar
strengthens, as it did toward the end of this fiscal year, earnings for these
larger companies can be depressed because foreign earnings translate into fewer
dollars. Stocks of smaller companies whose sales are predominantly domestic do
not have this problem. More important, overseas investors will be more attracted
to our markets if our currency is stable or increasing in value. Currently, the
percentage of U.S. stocks held by foreigners is very low relative to what it was
before the dollar peaked in the mid-80s. These investors might have had nominal
gains, but they lost money when their gains were converted to their own
currency. A strengthening dollar should lead to greater investment in the U.S.
- ---------------
+ The returns with the maximum front-end sales charge for Class A Shares (4.50%)
and the one-year contingent deferred sales charge for Class B Shares (4.00%)
were 26.19% and 27.00%, respectively.
12
<PAGE>
EMERALD SMALL CAPITALIZATION FUND (as of November 30, 1995)
- --------------------------------------------------------------------------------
WHAT IS YOUR OUTLOOK FOR SMALL-CAPITALIZATION STOCKS?
Some analysts say that the S&P 500 will be hard pressed to show more than 5% to
10% earnings growth in 1996. However, the kind of stocks that we are buying are
forecast to have earnings growth in excess of 20%. Yet small-capitalization
stocks are still selling at very reasonable valuations. The Russell 2000 is
selling at a 30% premium to the S&P 500. Historically, this premium has been as
high as 100%. As far as the Fund is concerned, we are still overweighted in
technology issues, particularly software and service providers. The reason:
Information processing as a percentage of Gross Domestic Product has jumped from
about 5% in 1980 to more than 20% today. Semiconductors are everywhere -- in
your phone, in your car, in your television -- and this trend is going to
accelerate.
WOULD THE PROPOSED CAPITAL GAINS TAX CUT HAVE AN IMPACT ON YOUR FUND?
I think it would have a tremendous impact. If taxes on capital gains are
lowered, rational investors will gravitate toward stocks whose returns come more
from capital gains than from dividends or interest.
13
<PAGE>
INTERVIEW (as of November 30, 1995)
- --------------------------------------------------------------------------------
EMERALD BALANCED FUND
PHOTO As Senior Equity Portfolio manager for Barnett, Mr.
Creighton serves on the Equity Strategy Committee and
G. Russell manages the Emerald Balanced Fund and Emerald Equity
Creighton, Fund. Mr. Creighton's portfolio management experience
C.F.A. dates back to 1981, when he joined Barnett as an equity
PORTFOLIO MANAGER manager. He is a Chartered Financial Analyst and holds an
14 years of M.B.A. in Finance.
investment INVESTMENT GOAL
experience The Fund's investment goal is to seek attractive
investment return through a combination of capital growth
and current income.
The Fund is best suited for investors who want an asset
allocation among equity securities, fixed-income
securities and cash equivalents based on prevailing
market and economic conditions.
PORTFOLIO
COMPOSITION*
The Fund's adviser
seeks to determine
relative values
among stocks, bonds
and cash equivalents
and weights the
portfolio
accordingly.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Bonds 44%
Cash & Cash Equivalents 7%
Stocks 49%
</TABLE>
- --------------------------------------------------------------------------------
TOP FIVE EQUITY AND BOND HOLDINGS*
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
EQUITIES NET ASSETS BONDS NET ASSETS
<S> <C> <C> <C>
Capital Cities ABC Inc. 1.17% U.S. Treasury Strip, 2/15/07 3.33%
......................................................... ..........................................................
New England Telegraph & Telephone, 7.88%,
General Electric Co. 1.16 11/15/29 2.96
......................................................... ..........................................................
Philip Morris Cos. Inc. 0.98 FNMA, 6.48% 2/18/04 2.60
......................................................... ..........................................................
PepsiCo Inc. 0.92 FNMA, Pool #247516, 8.50%, 8/1/11 2.23
......................................................... ..........................................................
Merck & Co. Inc. 0.81 Dean Witter Discover, 6.09%, 12/15/95 1.62
......................................................... ..........................................................
Total Equities 5.04% Total Bonds 12.74%
......................................................... ..........................................................
</TABLE>
- ---------------
* The composition of the Fund's holdings is subject to change.
14
<PAGE>
EMERALD BALANCED FUND (as of November 30, 1995)
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DATE A SHARES B SHARES LIPPER AVERAGE S&P 500 SHEARSON LEHMAN
<S> <C> <C> <C> <C> <C>
04/11/94 9,551 10,000 10,000 10,000 10,000
06/30/94 9,482 9,393 9,715 10,006 9,922
09/30/94 9,680 9,571 10,004 10,495 9,983
12/31/94 9,582 9,467 9,898 10,493 10,021
03/31/95 10,212 10,135 10,516 11,515 10,526
06/30/95 11,147 11,068 11,282 12,613 11,167
09/30/95 11,904 11,833 11,910 13,616 11,273
11/30/95 12,124 12,038 12,252 14,163 11,591
</TABLE>
A LONG-TERM PERSPECTIVE
A $10,000 investment made at the inception of the Fund would have had a value of
$12,124 (Class A Shares) and $12,038 (Class B Shares) by November 30, 1995. By
comparison, a similar investment in the Lipper Balanced Funds Average, a
composite of 162 similar mutual funds, would have had a value of $12,252. In
this example, $10,000 invested in the S&P 500, an unmanaged index of
large-company stocks, and the Lehman Brothers Aggregate Bond Index, an unmanaged
index comprised of investment-grade corporate debt securities, U.S. Treasury and
U.S. Government agency debt securities with maturities of more than one year,
would have had values of $14,163 and $11,591, respectively. The comparison to
the S&P 500 and the Lehman Brothers Aggregate Bond Index is meant to provide you
with a general sense of how the Fund is performing compared to standard
benchmarks for the stock and bond markets. These indices do not reflect any
expenses that accompany a real investment such as sales charges, expenses for
Fund operation, management fees, or the cash reserves necessary to provide daily
liquidity in a mutual fund. The Fund's performance reflects the maximum
front-end (Class A Shares) or the one-year contingent deferred (Class B Shares)
sales charge of 4.50 percent and 4.00 percent, respectively.
The service contractors are voluntarily reimbursing a portion of the expenses
for Class A and B Shares. If the service contractors had not reimbursed
expenses, total returns would have been lower. This voluntary reimbursement of
expenses may be modified or terminated at any time, which would reduce the
performance.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. PERFORMANCE WILL VARY FOR
EACH CLASS OF SHARES DUE TO DIFFERENCES IN EXPENSES PAID WITH RESPECT TO EACH
CLASS OF SHARES.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF 11/30/95
A SHARES* B SHARES**
<S> <C> <C>
1 Year 21.69% 22.48%
Since Inception 12.45% 11.96%
Inception Date 4/11/94
</TABLE>
-----------------
* Reflects 4.50% sales charge.
** Reflects 4.00% one-year contingent deferred sales charge. The maximum
contingent deferred sales charge is 4.50%.
15
<PAGE>
EMERALD BALANCED FUND (as of November 30, 1995)
- --------------------------------------------------------------------------------
WHY DID STOCKS AND BONDS DO SO WELL IN 1995?
The basic factor was the dramatic decline in interest rates. Stocks do well in a
falling interest-rate environment because investors have fewer alternatives that
are more attractive. In addition, the economy was much stronger than
anticipated. Because Corporate America had spent a decade restructuring, the
stronger economy translated into skyrocketing corporate profits. Valuation
levels were especially attractive after the weak performance of the stock market
in 1994. The combination of these factors -- strong corporate earnings,
attractive valuations and falling interest rates -- created the perfect
opportunity for the stock market to explode upward. The bond market is more
directly driven by lower interest rates, particularly intermediate- and
long-term rates, which fell sharply during 1995, causing prices to rise. In this
context, the Fund had a total return of 27.45% (Class A Shares),+ roughly midway
between the Fund's benchmark indices, the S&P 500, up 36.97%, and the Lehman
Brothers Aggregate Bond Index, up 15.96% for the 12 months ended November 30,
1995.
HOW DID YOUR ALLOCATION BETWEEN STOCKS AND BONDS CHANGE DURING THE YEAR?
Over the course of a normal market cycle, we would expect to be 60% in stocks
and 40% in bonds. We began the year closer to 50/50 because we had more
confidence that interest rates were going to come down than we did that there
would be an explosive increase in the stock market. As the stock market began to
improve and economic momentum began to pick up, we allowed our equity exposure
to increase to around 56%. In September, we once again had more confidence in
our falling interest-rate scenario than in the stock market, so we began taking
profits in stocks. As of November 30, 1995, the Fund is back to 50/50, ending
the year where it started with regard to asset allocation, but with some
tactical moves in the interim.
WHAT IS YOUR CURRENT OUTLOOK FOR STOCKS VS. BONDS?
We think bonds are very attractive right now. We are fairly confident that the
Federal Reserve Board will reduce short-term interest rates, and there is still
room for long-term interest rates to fall. Long-term bonds typically pay three
percentage points more than the inflation rate. If inflation remains at 2.0% to
2.5%, as it is now, then it is possible that long-term bond yields could decline
to 5.0% to 5.5% -- and falling yields mean rising bond prices. The fact that the
stock market is up 35% for the period may concern some people, but the S&P's
price-earnings multiple is only 16, which is only a hair above the mean of 15.5%
over the past 40 years. Corporate earnings were strong enough to justify the big
returns in the stock market in 1995. But it is no secret that the economy is
slowing. Most economists are looking for corporate earnings to rise no more than
5% next year.
However, we believe that the stock market can still be strong under such
conditions. The price-earnings multiple could increase as a result of low
inflation and low interest rates. The current environment is very similar to
that in the 1960s, which experienced mild economic growth, modest corporate
profits and low interest rates and inflation. The market multiple at that time
was 18 to 19 times earnings. The economy appears to be making a transition from
an expanding economy and accelerating corporate profits to a slower economy and
slower growth in corporate profits -- but we see growth potential nevertheless.
- ---------------
+ The returns with the maximum front-end sales charge for Class A Shares (4.50%)
and the one-year contingent deferred sales charge for Class B Shares (4.00%)
were 21.69% and 22.48%, respectively.
For 1995, a portion of the Emerald Balanced Fund qualified for exemption from
the Florida intangibles tax. Investors may want to consult with their tax
adviser.
16
<PAGE>
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17
<PAGE>
INTERVIEW (as of November 30, 1995)
- --------------------------------------------------------------------------------
EMERALD SHORT-TERM FIXED INCOME FUND
PHOTO Ms. Lunsford is responsible for more than $2 billion in
assets as portfolio manager for the Emerald Short-Term
Jacqueline R. Fixed Income Fund and Emerald Money Market Funds. Before
Lunsford, joining Barnett in 1988, she spent 9 years as a money
C.F.A. manager with the First Kentucky Trust Company in
PORTFOLIO MANAGER Louisville, Ky. Ms. Lunsford currently serves as
16 years of President of the Jacksonville Financial Analysts Society
investment and is a member of the Association for Investment
experience Management and Research and the Treasury Management
Association. She is a Chartered Financial Analyst and
holds a B.S. in finance.
INVESTMENT GOAL
The Fund's investment goal is to seek positive current
income that is consistent with relative stability of
principal through investments in investment-grade
securities and high-quality money-market instruments.
The Fund is best suited for investors who want more
current income than normally available from a money
market fund and less principal volatility than normally
associated with a long-term fund.*
PORTFOLIO
COMPOSITION**
The portfolio
focuses on
short-term cor-
porate and
government bonds
typically offering
higher yields than
money-market
instruments in
return for some
fluctuations in
share price.
Currently, the
portfolio's average
maturity is 2.5
years.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
U.S. Government Obligations 42%
Corporate Obligations 49%
Cash & Cash Equivalents 9%
</TABLE>
- ---------------
* Short-term fixed income funds have a lower degree of market risk than
longer-term corporate or government bond funds. Conversely, bonds and bond
funds with longer maturities may offer higher yields than shorter-term bonds
or fixed- income funds such as this Fund.
** The composition of the Fund's holdings is subject to change.
18
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND (as of November 30, 1995)
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DATE A SHARES B SHARES LIPPER AVERAGE MERRILL LYNCH
<S> <C> <C> <C> <C>
04/11/94 9,750 10,000 10,000 10,000
06/30/94 9,748 9,536 9,933 10,015
09/30/94 9,833 9,606 10,018 10,105
12/31/94 9,830 9,552 10,008 10,092
03/31/95 10,144 9,884 10,301 10,484
06/30/95 10,498 10,217 10,656 10,905
09/30/95 10,657 10,339 10,819 11,071
11/30/95 10,815 10,486 10,998 11,299
</TABLE>
A LONG-TERM PERSPECTIVE
A $10,000 investment made at the inception of the Fund would have had a value of
$10,815 (Class A Shares) and $10,486 (Class B Shares) by November 30, 1995. By
comparison, a similar investment in the Lipper Short Investment Grade Debt Funds
Average, a composite of 119 similar short-term mutual funds, would have had a
value of $10,998. The Merrill Lynch Government/Corporate Short-Term Index is an
unmanaged index comprised of short-term investment-grade corporate debt
securities, and U.S. Treasury and U.S. Government agency debt securities. In
this example, $10,000 invested in the Merrill Lynch Government/Corporate
Short-Term Index would have had a value of $11,299. The comparison to the
Merrill Lynch Government/Corporate Short-Term Index is meant to provide you with
a general sense of how the Fund is performing compared to a standard benchmark
of the market. This index does not reflect any expenses that accompany a real
investment such as sales charges, expenses for Fund operation, management fees,
or the cash reserves necessary to provide daily liquidity in a mutual fund. The
Fund's performance reflects the maximum front-end (Class A Shares) or the
one-year contingent deferred (Class B Shares) sales charge of 2.50 percent and
4.00 percent, respectively.
The service contractors are voluntarily reimbursing a portion of the expenses
for Class A and B Shares. If the service contractors had not reimbursed
expenses, the SEC 30-day yield would have been -5.11% and -29.46% for Class A
and B Shares, respectively, and total returns would have been lower. This
voluntary reimbursement of expenses may be modified or terminated at any time,
which would reduce the performance.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. PERFORMANCE WILL VARY FOR
EACH CLASS OF SHARES DUE TO DIFFERENCES IN EXPENSES PAID WITH RESPECT TO EACH
CLASS OF SHARES.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF 11/30/95
A SHARES* B SHARES**
<S> <C> <C>
1 Year 7.49% 5.24%
Since Inception 4.89% 2.93%
Inception Date 4/11/94
CURRENT SEC 30-DAY YIELD 5.18% 4.61%
</TABLE>
------------------
* Reflects 2.50% sales charge.
** Reflects 4.00% one-year contingent deferred sales charge. The maximum
contingent deferred sales charge is 4.50%.
19
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND (as of November 30, 1995)
- --------------------------------------------------------------------------------
WHAT FACTORS AFFECTED THE PERFORMANCE OF THE SHORT-TERM FIXED INCOME FUND?
Two major factors affected performance during the year ended November 30, 1995.
The first was an environment of rapidly falling interest rates, after months of
steadily rising rates in 1994. The Federal Reserve Board tightened the money
supply for the last time in February 1995, after which the economy stabilized
and then began to slow. During the spring of 1995, economists began to speculate
that the Fed would need to lower interest rates in order to keep the economy
moving at a moderate pace. Short-term fixed-income securities quickly became
more expensive, thus reducing yields, as this projected move was immediately
priced into the market. Indeed, as of November 30, 1995, three-year Treasury
securities were yielding two percentage points less than a year earlier.
The second factor that depressed yields was a lack of new issuance, which, due
to general supply/demand factors, kept securities' prices higher than normal
throughout the year. For the 12 months ended November 30, 1995, the Fund had a
total return of 10.25% (Class A Shares),+ compared to 12.26% for the Merrill
Lynch Government/Corporate Short-Term Index.
WHAT STRATEGIES WERE EMPLOYED TO MAXIMIZE PERFORMANCE RESULTS?
As interest rates began to decline in the spring of 1995, we began to lengthen
average maturities by purchasing longer-term instruments in an effort to lock in
higher rates. However, the shortage of new issues in the intermediate-term
market -- and the resulting high prices of these securities -- made it
increasingly difficult to pursue this strategy. As a result, the average
maturities in the Short-Term Fixed Income Fund will likely remain in their
current ranges over the next few months.
ARE THERE ANY SIGNIFICANT FACTORS THAT COULD AFFECT THE FUND IN THE MONTHS
AHEAD?
Since inflation seems to be under control and the economy is continuing to
slowly struggle forward, we feel that the most significant influence on the
securities markets is the balanced budget package. Will it be passed? In what
form, and when? Economists and investors throughout the world are watching the
proceedings between Congress and the President quite closely. A long delay or a
complete breakdown in negotiations could cause interest rates to rise -- and
bond prices to fall -- as investors lose confidence that a balanced budget might
become a reality. If the budget package is passed, then the yield on the Short-
Term Fixed Income Fund should remain fairly stable, since interest rates
affecting this Fund have already fallen substantially.
- ---------------
+ The returns with the maximum front-end sales charge for Class A Shares (2.50%)
and the one-year contingent deferred sales charge for Class B Shares (4.00%)
were 7.49% and 5.24%, respectively.
For 1995, a portion of the Emerald Short-Term Fixed Income Fund qualified for
exemption from the Florida intangibles tax. Investors may want to consult with
their tax adviser.
20
<PAGE>
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21
<PAGE>
INTERVIEW (as of November 30, 1995)
- --------------------------------------------------------------------------------
EMERALD U.S. GOVERNMENT SECURITIES FUND
PHOTO Mr. Cantor's responsibilities include serving as
economist and both manager and strategist for Barnett's
Andrew Cantor, fixed-income portfolios. Before joining Barnett in 1983,
C.F.A. he was at Gulf United Corp., where he managed more than
PORTFOLIO MANAGER $1 billion in fixed-income investments. Mr. Cantor serves
20 years of on the Board of Directors of the Jacksonville Financial
investment Analysts Society and is a member of the Association for
experience Investment Management and Research. He is a Chartered
Financial Analyst and holds a B.S. in Mathematics and an
M.A. in Economics.
INVESTMENT GOAL
The Fund's investment goal is to seek consistent income
from U.S. Government securities and repurchase agreements
collateralized by the same.
The Fund is best suited for those seeking current yield
from U.S. Government securities and a monthly income
check and for investors who do not mind fluctuations in
price and yield. This Fund is also well suited for IRA
investors.
PORTFOLIO
COMPOSITION*
The portfolio is
comprised entirely
of U.S. Government
securities including
direct and agency
securities. The
portfolio emphasizes
U.S. Government
agency
mortgage-backed
securities.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
U.S. Government Obligations 13%
Cash Equivalents 2%
U.S. Government Agencies 85%
</TABLE>
- ---------------
*The composition of the Fund's holdings is subject to change.
22
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND (as of November 30, 1995)
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DATE A SHARES LIPPER AVERAGE LEHMAN
<S> <C> <C> <C> <C>
7/31/91 9,551 10,000 10,000
9/30/91 10,033 10,019 10,420
12/31/91 10,612 10,524 10,945
3/31/92 10,392 10,351 10,789
6/30/92 10,857 10,747 11,218
9/30/92 11,324 11,201 11,694
12/31/92 11,334 11,166 11,727
3/31/93 11,745 11,599 12,191
6/30/93 12,054 11,874 12,498
9/30/93 12,314 12,148 12,803
12/31/93 12,369 12,133 12,815
3/31/94 12,095 11,815 12,460
6/30/94 11,941 11,648 12,343
9/30/94 11,974 11,684 12,415
12/31/94 11,963 11,660 12,462
3/31/95 12,549 12,198 13,072
6/30/95 13,081 12,854 13,838
9/30/95 13,261 13,067 14,100
11/30/95 13,534 13,410 14,486
</TABLE>
A LONG-TERM PERSPECTIVE
A $10,000 investment made at the inception of the Fund would have grown to
$13,534 by November 30, 1995. By comparison, a similar investment in the Lipper
Intermediate Government Funds Average, a composite of 30 similar mutual funds,
would have had an ending value of $13,410. In this example, $10,000 invested in
the Lehman Brothers Mortgage Index, an unmanaged index of U.S. Government agency
and Treasury securities and agency mortgage-backed securities, would have had an
ending value of $14,486. The comparison to the Lehman Brothers Mortgage Index is
meant to provide you with a general sense of how the Fund is performing compared
to a standard benchmark of the market. This index does not reflect any expenses
that accompany a real investment such as sales charges, expenses for Fund
operation, management fees, or the cash reserves necessary to provide daily
liquidity in a mutual fund. The Fund's performance reflects the maximum
front-end (Class A Shares) or the one-year contingent deferred (Class B Shares)
sales charge of 4.50 percent and 4.00 percent, respectively.
The service contractors are voluntarily reimbursing a portion of the class
expenses for Class B Shares. If the service contractors had not reimbursed
expenses, the SEC 30-day yield would have been 4.22% for Class B Shares and
total returns would have been lower. This voluntary reimbursement of expenses
may be modified or terminated at any time, which would reduce the performance.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. PERFORMANCE WILL VARY FOR
EACH CLASS OF SHARES DUE TO DIFFERENCES IN EXPENSES PAID WITH RESPECT TO EACH
CLASS OF SHARES.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF 11/30/95
A SHARES* B SHARES**
<S> <C> <C>
1 Year 8.71% 9.29%
3 Year 5.02% NA
Since Inception 7.22% 3.02%
Inception Date 7/31/91 3/01/94
CURRENT SEC 30-DAY YIELD 5.99% 5.78%
</TABLE>
----------------
* Reflects 4.50% sales charge.
** Reflects 4.00% one-year contingent deferred sales charge. The maximum
contingent deferred sales charge is 4.50%.
23
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND (as of November 30, 1995)
- --------------------------------------------------------------------------------
WHAT FACTORS AFFECTED YOUR PERFORMANCE?
While it was a good year for the bond market in general and returns were strong
across the board, we faced a challenge in the U.S. Government Securities Fund,
which has a large proportion of mortgage-backed securities. These securities,
which comprise about two-thirds of the portfolio, do not appreciate as fast as
other bonds in a falling interest-rate environment. The reason is that
homeowners have the right to prepay their mortgages without penalty. To
compensate for this risk, mortgage-backed securities offer higher yields.
However, when rates fall rapidly -- as they did in 1995 -- the dampening effect
of prepayments overwhelms the yield advantage. The Fund's total return for the
12 months ended November 30, 1995, was 13.85% (Class A Shares).+ Both of our
benchmarks, the Lipper Intermediate Government Funds Average and the Lehman
Brothers Mortgage Index, which returned 12.87% and 17.03%, respectively, have a
lower percentage of mortgage-backed securities than we have in the U.S.
Government Securities Fund. It is important to remember that these bonds did not
go down in value. They simply did not appreciate as much as U.S. Treasuries.
GIVEN THE CURRENT ENVIRONMENT, WHAT IS YOUR STRATEGY FOR THIS FUND?
At this point, we think that mortgage rates and other long-term interest rates
are not likely to fall much further, while short-term rates could drop by a
greater magnitude because of the slowing economy. As a result, we think our
current allocation of mortgage-backed securities is appropriate. Mortgage
prepayments should stabilize, which should allow us to continue to earn higher
yields than we would get from U.S. Treasuries. The last time rates bottomed was
in the fall of 1993, when short-term rates were down to 3% and long-term rates
were about 5 3/4%. Today, long-term rates are within a quarter of a percentage
point of that low, while short-term rates are two and a half percentage points
above their low -- which means there is certainly more room for short-term rates
to come down. Falling short-term rates would benefit the non-mortgage portion of
the portfolio, because of its relatively short maturity.
WITH ECONOMIC GROWTH IN THE THIRD QUARTER AT 4.2%, IS THE ECONOMY REALLY
SLOWING?
There is evidence pointing to a much slower economy in the current quarter. Some
of the underlying measures of demand, consumption and expenditures were not
quite as strong as a 4.2% growth rate would indicate. In addition, much of that
4.2% number was inventory building, which can be misleading since there are
indications that there has been some deceleration. But the economy is slow
enough to calm inflation fears, and at the same time it is fast enough to keep
us out of recession. The state of the economy, inflation and interest rates
present a nice backdrop for the financial markets in general. Some people have
called this a "Goldilocks" environment for the economy -- not too hot and not
too cold. The Federal Reserve Board has been shooting for this so-called "soft
landing." It appears, for the time being at least, that it has had a lot of
success.
WHAT CHALLENGES DO YOU SEE IN 1996?
The terms of the chairman and vice chairman of the Federal Reserve expire in
early 1996, and there is every reason to expect that Chairman Greenspan will be
reappointed. However, any uncertainty about this as the election season heats up
could upset the market. The bond market has also built into it an expectation
that somehow the warring parties in Washington are going to come to a meeting of
the minds with respect to the budget. Something substantive must be done with
the budget deficit before the Fed would be willing to lower short-term rates
significantly. Foreign investors are looking at Washington, too. They want to
see some progress on the budget to ensure that we are getting our fiscal house
in order.
- ---------------
+ The returns with the maximum front-end sales charge for Class A Shares (4.50%)
and the one-year contingent deferred sales charge for Class B Shares (4.00%)
were 8.71% and 9.29%, respectively.
For 1995, a portion of the Emerald U.S. Government Securities Fund qualified
for exemption from the Florida intangibles tax. Investors may want to consult
with their tax adviser.
24
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25
<PAGE>
INTERVIEW (as of November 30, 1995)
- --------------------------------------------------------------------------------
EMERALD MANAGED BOND FUND
PHOTO Mr. Cantor's responsibilities include serving as
economist and both manager and strategist for Barnett's
Andrew Cantor, fixed-income portfolios. Before joining Barnett in 1983,
C.F.A. he was at Gulf United Corp., where he managed more than
PORTFOLIO MANAGER $1 billion in fixed-income investments. Mr. Cantor serves
20 years of on the Board of Directors of the Jacksonville Financial
investment Analysts Society and is a member of the Association for
experience Investment Management and Research. He is a Chartered
Financial Analyst and holds a B.S. in Mathematics and an
M.A. in Economics.
INVESTMENT GOAL
The Fund's investment goal is primarily to seek a high
level of current income and, secondarily, to seek capital
appreciation.
The Fund is best suited for investors who want current
income from corporate and government securities and who
can accept fluctuations in price and yield.
PORTFOLIO
COMPOSITION*
The portfolio
emphasizes quality
corporate bonds.
These
investment-grade
securities offer a
high degree of
diversification as
well as the
opportunity for
strong yields to
investors.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CORPORATE OBLIGATIONS 59%
<S> <C>
Cash & Cash Equivalents 3%
Taxable Municipal Obligations 1%
U.S. Government & Agency Obligations 37%
</TABLE>
- ---------------
*The composition of the Fund's holdings is subject to change.
26
<PAGE>
EMERALD MANAGED BOND FUND (as of November 30, 1995)
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C> <C>
Date A shares B shares Lipper Average Lehman
04/11/94 9,550 10,000 10,000 10,000
06/30/94 9,509 9,509 9,790 9,922
09/30/94 9,534 9,513 9,809 9,983
12/31/94 9,564 9,532 9,827 10,021
03/31/95 10,043 10,037 10,299 10,526
06/30/95 10,736 10,666 10,935 11,167
09/30/95 10,919 10,843 11,138 11,273
11/30/95 11,276 11,197 11,469 11,591
</TABLE>
A LONG-TERM PERSPECTIVE
A $10,000 investment made at the inception of the Fund would have been worth
$11,276 (Class A Shares) and $11,197 (Class B Shares) by November 30, 1995. By
comparison, a similar investment in the Lipper A-Rated Corporate Debt Funds
Average, a composite of 96 similar mutual funds, would have had a value of
$11,469. In this example, $10,000 invested in the Lehman Brothers Aggregate Bond
Index, an unmanaged index comprised of investment-grade corporate debt
securities and U.S. Treasury and U.S. Government agency debt securities with
maturities of more than one year, would have had a value of $11,591. The
comparison to the Lehman Brothers Aggregate Bond Index is meant to provide you
with a general sense of how the Fund is performing compared to a standard
benchmark of the market. This index does not reflect any expenses that accompany
a real investment such as sales charges, expenses for Fund operation, management
fees, or the cash reserves necessary to provide daily liquidity in a mutual
fund. The Fund's performance reflects the maximum front-end (Class A Shares) or
one-year contingent deferred (Class B Shares) sales charge of 4.50 percent and
4.00 percent, respectively.
The service contractors are voluntarily reimbursing a portion of the expenses
for Class A and B Shares. If the service contractors had not reimbursed
expenses, the 30-day SEC yield would have been 2.93% and -0.60% for Class A and
B Shares, respectively, and total returns would have been lower. This voluntary
reimbursement of expenses may be modified or terminated at any time, which would
reduce the performance.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. PERFORMANCE WILL VARY FOR
EACH CLASS OF SHARES DUE TO DIFFERENCES IN EXPENSES PAID WITH RESPECT TO EACH
CLASS OF SHARES.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF 11/30/95
A SHARES* B SHARES**
<S> <C> <C>
1 Year 13.14% 13.06%
Since Inception 7.59% 7.13%
Inception Date 4/11/94
CURRENT SEC 30-DAY YIELD 5.81% 5.38%
</TABLE>
----------------
* Reflects 4.50% sales charge.
** Reflects 4.00% one-year contingent deferred sales charge. The maximum
contingent deferred sales charge is 4.50%.
27
<PAGE>
EMERALD MANAGED BOND FUND (as of November 30, 1995)
- --------------------------------------------------------------------------------
WHAT FACTORS AFFECTED YOUR PERFORMANCE?
There were primarily two: falling intermediate- and long-term interest rates and
the growing perception that Washington would make progress toward deficit
reduction. Unlike mortgage-backed securities, U.S. Treasuries and corporate
bonds -- the majority of the Fund's holdings -- do not have prepayment risk.
When interest rates fall, these securities appreciate. As a result of a series
of interest-rate hikes by the Federal Reserve in 1994, economic growth slowed
dramatically in 1995. The slowdown in growth dampened fears that inflation was
going to accelerate and set the stage for the Fed's quarter-point reductions in
short-term rates in July and December. So far, the anticipation of further rate
cuts has driven down intermediate- and long-term rates by as much as two
percentage points. The wheels that have been set in motion regarding reduced
federal spending played a big part as well. Thus, a more accommodative Federal
Reserve, low inflation, and changing fiscal policy created a rather euphoric
bond market. As a result, the Managed Bond Fund has done extremely well with a
return of 18.47% (Class A Shares)+ for the 12 months ended November 30, 1995.
Its benchmark, the Lehman Brothers Aggregate Bond Index, returned 15.96% for the
same period.
WHAT ARE SOME REPRESENTATIVE CORPORATE BONDS IN THE PORTFOLIO?
The largest holding is Bell Telephone of Pennsylvania (4.98% of the portfolio).
This is an 8.35% bond, rated AA, maturing 12-15-2030, with a put option that can
be exercised on three separate dates in 1997, 1999 and 2002. If interest rates
go up dramatically, then this put feature gives us some meaningful downside
protection because these bonds are redeemable at par on those dates. In
addition, notwithstanding all the changes that are going on in the
telecommunications field as a whole, the regional telephone industry is probably
one of the strongest sectors of Corporate America from the standpoint of
creditworthiness. About 16% of the portfolio is invested in the debt of
telephone issuers. We also have some bonds issued by "captive" finance companies
such as General Motors Acceptance Corp. and Caterpillar Finance, which provide
financing to dealers and customers of GM and Caterpillar Tractor, respectively.
These bonds have proven to be very stable over time. Financial companies have a
strong incentive to maintain their ratings, because their profitability depends
on the difference between what they pay for funds and the rate at which they
lend money. The higher their credit quality, the lower the rates at which they
can borrow. It is important for them to issue debt at competitive rates in order
to maintain profitability.
IS THERE ANY CONCERN RIGHT NOW ABOUT INFLATION?
Prospective inflation has been the bogeyman of the financial markets for a long
time now, yet we see no significant inflation on the horizon. For the 12 months
ended November 30, 1995, the Consumer Price Index indicated an inflation rate of
2.8%. Moreover, some analysts believe that the inflation numbers that we look at
actually overstate inflation and that the real rate of inflation is as much as a
percentage point lower than the CPI. Another factor contributing to subdued
inflation is the inability of retailers to raise prices. Consumer demand hasn't
been strong enough, and it does not look like it will pick up anytime soon. For
example, airline promotions warn that once the promotion ends, prices will go
back up. A month goes by and some form of promotion is reinstated once again.
People have become very accustomed to value shopping for many things -- travel,
computers, clothing and so on. In addition, increased productivity, plentiful
energy supplies and global competition are forces that will likely keep
inflation low.
- ---------------
+ The returns with the maximum front-end sales charge for Class A Shares (4.50%)
and the one-year contingent deferred sales charge for Class B Shares (4.00%)
were 13.14% and 13.06%, respectively.
For 1995, a portion of the Emerald Managed Bond Fund qualified for exemption
from the Florida intangibles tax. Investors may want to consult with their tax
adviser.
28
<PAGE>
[This page intentionally left blank]
29
<PAGE>
INTERVIEW (as of November 30, 1995)
- --------------------------------------------------------------------------------
EMERALD FLORIDA TAX-EXEMPT FUND
PHOTO Mr. Byrne joined Barnett in 1987. He is Director of
Securities Trading and has responsibility for managing
Douglas K. Byrne, all of Barnett's municipal bond funds. His nearly three
PORTFOLIO MANAGER decades of investment experience have focused on
28 years of fixed-income portfolio management for the state of Texas,
investment the Teacher's Retirement System of Texas and First City
experience National Bank in Austin, Texas. He holds a B.S. and an
M.B.A. in Finance.
INVESTMENT GOAL
The Fund's investment goal is to seek high tax-free
income by investing primarily in debt obligations of the
state of Florida or counties, municipalities or other
issuing agencies within the state.*
The Fund is best suited for quality-conscious investors
in the state of Florida who are subject to the
intangibles tax and those who are seeking a high current
tax-free yield or a monthly tax-free income check.
Investors must be willing to accept fluctuations in price
and yield.
PORTFOLIO
COMPOSITION**
By design, the
portfolio focuses on
holding bonds in the
highest four rating
categories used by
Moody's Investor
Services and
Standard & Poor's.
The emphasis within
the four rating
classifications,
however, is in the
top two. By
emphasizing quality,
the Fund seeks to
minimize risk during
this challenging
period in the
economy. Ratings are
assigned by Moody's
Investor Services.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Not rated 23%
BBB 2%
Aaa 36%
Aa 26%
A 6%
Baa 7%
</TABLE>
- ---------------
*Investors may be subject to the federal alternative minimum tax and to certain
state and local taxes.
**The composition of the Fund's holdings is subject to change.
30
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND (as of November 30, 1995)
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DATE A SHARES LIPPER AVERAGE MERRILL LYNCH
<S> <C> <C> <C>
08/01/91 9,551 10,000 10,000
09/30/91 9,800 9,746 10,297
12/31/91 10,087 10,090 10,619
03/31/92 10,172 10,096 10,624
06/30/92 10,657 10,530 11,130
09/30/92 10,916 10,765 11,333
12/31/92 11,175 11,004 11,599
03/31/93 11,668 11,425 12,081
06/30/93 12,173 11,869 12,484
09/30/93 12,648 12,296 12,815
12/31/93 12,752 12,422 12,948
03/31/94 11,915 11,660 12,166
06/30/94 12,021 11,763 12,129
09/30/94 12,068 11,800 12,218
12/31/94 11,877 11,653 12,084
03/31/95 12,682 12,467 12,951
06/30/95 12,841 12,715 13,186
09/30/95 13,121 13,011 13,603
11/30/95 13,623 13,493 14,137
</TABLE>
A LONG-TERM PERSPECTIVE
A $10,000 investment made at the inception of the Fund would have grown to
$13,623 (Class A Shares) by November 30, 1995. By comparison, a similar
investment in the Lipper Florida Tax-Exempt Municipal Funds Average, an
unmanaged average consisting of 16 similar funds, would have had an ending value
of $13,493. In this example, $10,000 invested in the Merrill Lynch Municipal
Index, an unmanaged index of municipal bonds, would have had an ending value of
$14,137. The comparison to the Merrill Lynch Municipal Index is meant to provide
you with a general sense of how the Fund is performing compared to a standard
benchmark of the market. This index does not reflect any expenses that accompany
a real investment such as sales charges, expenses for Fund operation, management
fees, or the cash reserves necessary to provide daily liquidity in a mutual
fund. The Fund's performance reflects the maximum front-end (Class A Shares) or
the one-year contingent deferred (Class B Shares) sales charge of 4.50 percent
and 4.00 percent, respectively.
The service contractors are voluntarily reimbursing a portion of the class
expenses for Class B Shares. If the service contractors had not reimbursed
expenses, the SEC 30-day yield would have been 3.52% and total return would have
been lower. This voluntary reimbursement of expenses may be modified or
terminated at any time, which would reduce the performance.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. PERFORMANCE WILL VARY FOR
EACH CLASS OF SHARES DUE TO DIFFERENCES IN EXPENSES PAID WITH RESPECT TO EACH
CLASS OF SHARES.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF 11/30/95
A SHARES* B SHARES**
<S> <C> <C>
1 Year 12.79% 13.48%
3 Year 5.67% NA
Since Inception 7.39% 2.60%
Inception Date 8/01/91 3/01/94
CURRENT SEC 30-DAY YIELD 4.28% 4.01%
</TABLE>
-----------------
* Reflects 4.50% sales charge.
** Reflects 4.00% one-year contingent deferred sales charge. The maximum
contingent deferred sales charge is 4.50%.
31
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND (as of November 30, 1995)
- --------------------------------------------------------------------------------
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
Due to a more conservative posture than that of many other municipal funds, the
Fund's performance trailed its benchmarks for the 12 months ended November 30,
1995. However, we made up a lot of ground in the past three months by extending
maturities, thereby locking in higher rates. For the period, the Florida
Tax-Exempt Fund posted a total return of 18.17% (Class A Shares)+ compared to
19.16% for the Merrill Lynch Municipal Index. Overall, the municipal bond market
was adversely affected by two developments: the booming stock market and
investor fears about tax reform.
The surge in the stock market, which was up more than 30% over the 12 months,
absorbed many of the investment dollars that became available when coupons were
paid and bonds matured. In fact, $308 billion worth of bonds matured this year,
while new issuance amounted to only about $140 billion. This supply/ demand
imbalance should have created more demand, but it did not because of continuing
concern over tax legislation and the tremendous move in the stock market. A
30-year high-grade Florida bond is currently yielding about 5.60%, roughly 90%
of the 6.20% yield of a 30-year U.S. Treasury bond, giving investors
higher-than-normal yields. Typically, the percentage is 80% to 85% for
high-grade bonds.
HOW SEVERELY IS THE PROSPECT OF TAX REFORM AFFECTING THE MUNICIPAL MARKET?
All of the rhetoric about the various tax proposals has spooked the marketplace.
From our perspective, there are two types of tax changes that could hurt
municipals. The first is a value-added tax that would be built into the price of
goods. Such a tax would be so inflationary and make our exports so
noncompetitive that we do not consider this a viable option. The second is a
national sales tax -- in effect doing away with an income tax and imposing a
consumption-based tax, which of all the proposals probably has the best chance
of passing. Municipal bonds would lose their tax advantage because no income
would be taxed. This would force municipalities to compete in the world
marketplace for investment dollars. We have seen that happen with certain
taxable municipal bonds this year. For example, the City of Miami Beach issued a
taxable municipal bond this spring that had to offer one percentage point more
in yield than U.S. Treasuries with the same maturity -- even though this was an
insured general obligation of a city that has an A-rated underlying credit.
Without tax advantages, a municipal bond has to offer a higher yield than a U.S.
Treasury bond with a comparable maturity.
WHAT WAS THE IMPACT OF THE ORANGE COUNTY, CALIFORNIA, BANKRUPTCY ON MUNICIPAL
BONDS?
Not much in 1995. For a few weeks in late 1994, municipal bonds offered higher
yields of three- to five-tenths of a point, but yields settled again by February
1995. Orange County actually had a positive side. There was a push for
additional disclosure, a tightening of credit requirements and more thorough
analysis by the rating agencies, which is a very positive long-term development
for this market. Historically, the rating agencies would simply accept
statements from the political subdivisions that they were using prudent
investment policies, rather than looking at them. Now, they are looking at them.
HOW HAS THE PORTFOLIO CHANGED DURING THE YEAR?
It is still a high-grade AA portfolio. But we lengthened the portfolio's average
maturity to lock in higher rates as interest rates began to decline. As of
November 30, 1995, the average maturity of the portfolio was about 22 years, up
from 20 years on November 30, 1994. Recent purchases include Jacksonville
Electric Authority, which is one of the most efficiently operated electric
utilities in the country. Another addition is Miami Water & Sewer bonds. We have
focused on essential services and reduced our exposure to health care because of
the debate over Medicare and Medicaid reductions. We believe that the move
toward HMO-type providers is going to hurt hospital occupancy rates. However,
the Florida economy is very viable and growing steadily. The housing,
agriculture, tourism and service industries are all healthy. But
- ---------------
+ The returns with the maximum front-end sales charge for Class A Shares (4.50%)
and the one-year contingent deferred sales charge for Class B Shares (4.00%)
were 12.79% and 13.48%, respectively.
32
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND (as of November 30, 1995)
- --------------------------------------------------------------------------------
there is concern that the budget compromise in Washington will shift
responsibility for social programs to the state and local levels. To maintain
the same quality of service, state and local taxes are going to have to go up.
Because Florida does not have a state income tax and so many retirees are moving
here with assets that are subject to the intangibles tax, we expect that the
state will raise the intangibles tax to help fund some of its new
responsibilities. That should make Florida municipals, which are not subject to
the intangibles tax, worth that much more.
WHAT IS YOUR OUTLOOK FOR THE FLORIDA MUNICIPAL BOND MARKET?
There could be another modest decline in short-term taxable rates. But any
movement in short-term rates is already reflected in the long end of the
marketplace. We expect 30-year municipal bond yields to remain in a trading
range of 5.0% to 6.5%. Credit quality is going to be the key over the next
couple of years to protecting assets. We are in a very orderly process of
selling bonds that we think have the potential to decline in value and buying
those that we have identified as stable or have the potential to generate higher
returns due to their location, industry or the services that they provide. We
expect to de-emphasize general obligation bonds because of the shifting of
responsibilities to the states. We are also reducing positions in some of the
electrical utilities in the portfolio because of deregulation. When deregulation
takes effect in 1997, certain municipal electric utilities in the state will
have problems competing with investor-owned utilities. Jacksonville Electric
Authority is an exception; it has already taken steps to make it remarkably
competitive in that arena. Others have not. They were in a protected market
environment, a cocoon, for years. That shell is coming off and they will have to
adjust the way they do things to remain viable.
- ---------------
For 1995, the Emerald Florida Tax-Exempt Fund qualified for exemption from the
Florida intangibles tax. Investors may want to consult with their tax adviser.
33
<PAGE>
INTERVIEW (as of November 30, 1995)
- --------------------------------------------------------------------------------
EMERALD PRIME, TREASURY AND TAX-EXEMPT FUNDS*
PHOTO Ms. Lunsford is responsible for more than $2 billion in
assets as portfolio manager for the Emerald Short-Term
Jacqueline R. Fixed Income Fund and Emerald Money Market Funds. Before
Lunsford, joining Barnett in 1988, she spent 9 years as a money
C.F.A. manager with the First Kentucky Trust Company in
PORTFOLIO MANAGER Louisville, Ky. Ms. Lunsford currently serves as
16 years of President of the Jacksonville Financial Analysts Society
investment and is a member of the Association for Investment
experience Management and Research and the Treasury Management
Association. She is a Chartered Financial Analyst and
holds a B.S. in Finance.
INVESTMENT GOAL
The Emerald Money Market Funds seek to provide a high
level of current income consistent with liquidity, the
preservation of capital and a stable net asset value. In
addition, the Emerald Tax-Exempt Fund seeks to provide
income that is free from federal income tax. These Funds
are suitable for investors who are seeking a flexible and
convenient way to manage their cash. Each Fund seeks its
objective by investing in:
PRIME FUND
A broad range of U.S. Government, bank and corporate
short-term money- market obligations.
TREASURY FUND
Short-term U.S. Treasury securities and other government
obligations, which are guaranteed full faith and credit
by the U.S. Treasury, and repurchase agreements
collateralized by the same.
TAX-EXEMPT FUND
Short-term municipal obligations.
Investors may be subject to the federal alternative
minimum tax and to certain state and local taxes.
- ---------------
* Investments in the Prime, Treasury and Tax-Exempt Funds are neither insured
nor guaranteed by the U.S. Government, and yields will fluctuate. Although
these Funds seek to maintain a stable net asset value (NAV) of $1.00 per
share, there is no assurance that they will be able to do so.
For 1995, the Emerald Treasury Fund qualified for exemption from the Florida
intangibles tax. Investors may want to consult with their tax adviser.
34
<PAGE>
EMERALD PRIME, TREASURY AND TAX-EXEMPT FUNDS (as of November 30, 1995)
- --------------------------------------------------------------------------------
WHAT FACTORS AFFECTED THE PERFORMANCE OF THE MONEY MARKET FUNDS?
Two major factors affected performance during the past year: changes in the
direction of interest rates and supply and demand imbalances. In 1994, the
Federal Reserve Board boosted short-term rates six times to slow down a surging
economy, with the last increase in February 1995. Soon afterward, the economy
stabilized and then began to slow. In the spring of this year, economists began
to speculate that the Fed would need to lower short-term interest rates in order
to keep the economy moving at a moderate pace. This expectation drove down
longer-term rates, which are determined by market forces.
Although the Fed pushed short-term rates slightly lower in July 1995 and again
in December, recent decreases have not been large enough to offset the previous
increases. As a result, yields on short-term investments are still higher than
they were at the end of November 1994. Indeed, as of November 30, 1995, the
Prime and Treasury Funds were yielding approximately .70 of a percentage point
above their levels a year ago, and the Tax-Exempt Fund was yielding
approximately 1.3 percentage points more. The performance of the Funds remains
comparable to industry averages as tracked by Lipper Analytical Services. The
Prime Fund returned 5.27%, the Treasury Fund returned 5.10%, and the Tax-Exempt
Fund returned 3.09%, for the 12 months ended November 30, 1995, compared to
average returns of 5.35%, 5.24% and 3.32% for comparable funds in the respective
Lipper categories.*
We feel that our consistent performance is due to our active management style
and our ability to quickly adapt our strategies to changing economic and market
conditions.
WHAT STRATEGIES WERE EMPLOYED TO MAXIMIZE PERFORMANCE RESULTS?
As interest rates began to decline in the spring of 1995, we began to lengthen
the average maturities of the Funds by purchasing longer-term instruments.
However, the shortage of new issuance in the short-term market -- and the
resulting high prices of these securities -- has made it increasingly difficult
to pursue this strategy. As a result, the average maturities of the Prime,
Treasury and Tax-Exempt Funds will likely remain in their current ranges over
the next few months.
WHAT FACTORS COULD AFFECT THE FUNDS IN THE MONTHS AHEAD?
Since inflation seems to be under control and the economy continues to slowly
struggle forward, we feel that the most significant influence on the securities
markets is the balanced budget package. Will it be passed? In what form, and
when? Economists and investors throughout the world are watching this quite
closely. A long delay or a complete breakdown in negotiations could cause
interest rates to rise as investors lose confidence that a balanced budget might
become a reality. If a budget package is passed and interest rates fall, we feel
that there will be a more significant decline in yields in the short-term sector
than in the intermediate- and longer-term sectors, since the latter have already
fallen rapidly. If the budget package is delayed and interest rates rise, then
we would expect the opposite to occur: Short-term yields would rise very little,
while intermediate- and longer-term rates could rise sharply. Therefore, yields
on money market funds would not be affected as much as the total returns on
intermediate- and long-term bond funds.
<TABLE>
<CAPTION>
7-DAY YIELDS AS OF 11/30/95*
INVESTOR
SHARES**
<S> <C>
Prime Trust Fund 5.05%
Treasury Trust Fund 4.91%
Tax-Exempt Fund 2.98%
</TABLE>
- ---------------
* Returns are based on the total cumulative returns for the 12 months ended
November 30, 1995, without a sales charge. The Prime Fund was ranked with 255
other money market funds, the Treasury Fund with 91 other U.S. Treasury money
market funds, and the Tax-Exempt Fund with 121 other tax-exempt money market
funds. Past performance is not predictive of future results.
** The service contractors are voluntarily waiving and reimbursing a portion of
the expenses for the Prime, Treasury and Tax- Exempt Funds. If the service
contractors had not waived or reimbursed expenses, total returns and yields
would have been lower. Had these waivers and/or reimbursements not been in
effect, the 7-day yields would have been 4.97%, 4.61% and 2.64% for the
Prime, Treasury and Tax-Exempt Funds, respectively. This voluntary waiver and
reimbursement of expenses may be modified or terminated at any time, which
would reduce the performance.
35
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
COMMON STOCKS -- 93.4%
APPAREL & SHOES -- 1.5%
Nike, Inc. ................................................................... 52,800 $ 3,062,400
------------
BUILDING & BUILDING PRODUCTS -- 1.4%
Clayton Homes, Inc. .......................................................... 102,231 2,862,468
------------
CHEMICALS -- 2.1%
Dow Chemical Co. ............................................................. 28,500 2,019,937
Praxair, Inc. ................................................................ 73,400 2,137,775
------------
4,157,712
------------
COMPUTERS & COMPUTER SERVICES -- 12.8%
Broderbund Software, Inc.* ................................................... 26,900 1,741,775
Cadence Design Systems, Inc.* ................................................ 93,450 3,364,200
Cisco Systems, Inc.* ......................................................... 40,000 3,365,000
Compaq Computer Corp.* ....................................................... 58,300 2,885,850
CompUSA, Inc.* ............................................................... 48,800 1,811,700
Computer Associates International, Inc. ...................................... 49,350 3,232,425
Dell Computer Corp.* ......................................................... 33,800 1,495,650
Intel Corp. .................................................................. 15,200 925,300
LSI Logic Corp.* ............................................................. 29,400 1,231,125
Micron Technology, Inc. ...................................................... 38,800 2,124,300
Read-Rite Corp.* ............................................................. 76,400 2,072,350
System Software Associates, Inc. ............................................. 26,100 939,600
------------
25,189,275
------------
ELECTRICAL EQUIPMENT & ELECTRONICS -- 8.1%
Applied Materials* ........................................................... 46,000 2,236,750
Cypress Semiconductor Corp.* ................................................. 126,400 1,975,000
General Electric Co. ......................................................... 76,600 5,151,350
KLA Instruments Corp.* ....................................................... 33,200 1,145,400
Lam Research Corp.* .......................................................... 27,700 1,516,575
Philips Electronics N.V., ADR ................................................ 46,500 1,819,312
Teradyne, Inc.* .............................................................. 45,600 1,191,300
US Robotics Corp.* ........................................................... 9,900 1,086,525
------------
16,122,212
------------
ENTERTAINMENT & LEISURE -- 5.9%
Callaway Golf Co. ............................................................ 73,900 1,468,763
Capital Cities/ABC, Inc. ..................................................... 44,400 5,488,950
Carnival Corp. ............................................................... 82,200 2,137,200
Mattel, Inc. ................................................................. 94,538 2,647,064
------------
11,741,977
------------
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
FINANCE & INSURANCE -- 11.4%
AFLAC, Inc. .................................................................. 44,937 $ 1,831,183
BankAmerica Corp. ............................................................ 39,300 2,500,462
Bank of Boston Corp. ......................................................... 58,100 2,694,387
The Bank of New York ......................................................... 52,950 2,495,268
BayBanks, Inc. ............................................................... 19,200 1,593,600
Equifax, Inc. ................................................................ 72,100 3,019,187
Green Tree Financial Corp. ................................................... 95,200 2,689,400
MBNA Corp. ................................................................... 49,400 1,994,525
Transport Holdings, Inc.* .................................................... 263 10,323
Travelers Group Inc. ......................................................... 63,300 3,766,350
------------
22,594,685
------------
FOOD, BEVERAGE & TOBACCO -- 8.9%
Canandaigua Wine, Inc.* ...................................................... 23,900 800,650
IBP, Inc. .................................................................... 54,900 3,431,250
McDonald's Corp. ............................................................. 56,800 2,534,700
Outback Steakhouse, Inc.* .................................................... 32,500 1,186,250
PepsiCo, Inc. ................................................................ 77,500 4,281,875
Philip Morris Cos., Inc. ..................................................... 60,700 5,326,425
------------
17,561,150
------------
FOREST PRODUCTS & PAPER -- 3.8%
Federal Paper Board Co. ...................................................... 53,700 2,792,400
Harnischfeger Industries, Inc. ............................................... 39,400 1,334,675
Kimberly-Clark Corp. ......................................................... 43,200 3,321,000
------------
7,448,075
------------
HEALTH CARE -- 13.0%
Abbott Laboratories .......................................................... 70,342 2,857,644
Amgen, Inc.* ................................................................. 55,200 2,739,300
Becton Dickinson and Company ................................................. 37,100 2,587,725
Boston Scientific Corp.* ..................................................... 42,600 1,725,300
Columbia/HCA Healthcare Corp. ................................................ 28,700 1,481,638
Cordis Corp.* ................................................................ 17,400 1,844,400
Foundation Health Corp.* ..................................................... 75,700 3,463,275
HealthCare COMPARE Corp.* .................................................... 65,400 2,558,775
Johnson & Johnson ............................................................ 48,400 4,192,650
Lincare Holdings, Inc.* ...................................................... 29,200 781,100
Nellcor Puritan Bennett* ..................................................... 6,700 385,250
OrNda Healthcorp* ............................................................ 59,400 1,165,725
------------
25,782,782
------------
IRON/STEEL & OTHER METALS -- 1.1%
Phelps Dodge Corp. ........................................................... 32,100 2,178,788
------------
OFFICE & BUSINESS EQUIPMENT -- 1.0%
The Olsten Corp. ............................................................. 51,300 2,052,000
------------
OIL & GAS -- 4.7%
Halliburton Co. .............................................................. 37,200 1,613,550
Mobil Corp. .................................................................. 23,900 2,494,563
</TABLE>
37
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
OIL & GAS -- (CONTINUED)
Occidental Petroleum Corp. ................................................... 103,400 $ 2,287,725
Williams Companies ........................................................... 72,300 3,036,600
------------
9,432,438
------------
PERSONAL CARE -- 1.5%
Gillette Co. ................................................................. 57,200 2,967,250
------------
PHARMACEUTICALS -- 3.7%
Merck & Co., Inc. ............................................................ 60,900 3,768,188
Schering-Plough Corp. ........................................................ 61,400 3,522,825
------------
7,291,013
------------
PHOTOGRAPHIC PRODUCTS -- 0.7%
Eastman Kodak Co. ............................................................ 21,400 1,455,200
------------
RAILROAD FREIGHT -- 1.3%
Burlington Northern Santa Fe Corp. ........................................... 31,800 2,563,875
------------
RETAIL -- 4.0%
Dollar General Corp. ......................................................... 61,900 1,679,038
General Nutrition Cos. Inc.* ................................................. 101,400 2,243,475
Home Depot, Inc. ............................................................. 39,998 1,774,911
Staples, Inc.* ............................................................... 90,600 2,310,300
------------
8,007,724
------------
UTILITIES & TELECOMMUNICATIONS -- 6.5%
ADC Telecommunications, Inc.* ................................................ 32,100 1,460,550
Ameritech Corp. .............................................................. 62,100 3,415,500
Cincinnati Bell, Inc. ........................................................ 53,000 1,583,375
Sprint Corp. ................................................................. 80,900 3,236,000
Worldcom, Inc.* .............................................................. 98,200 3,191,500
------------
12,886,925
------------
TOTAL COMMON STOCKS (COST $140,306,487)......................................... 185,357,949
------------
UNIT INVESTMENT TRUSTS -- 3.2%
S&P Depository Receipts ...................................................... 103,100 6,279,429
------------
TOTAL UNIT INVESTMENT TRUSTS (COST $5,789,891).................................. 6,279,429
------------
SHORT-TERM INVESTMENTS -- 3.7%
Dreyfus Cash Management Fund ................................................. 7,333,115 7,333,115
Provident Institutional Cash Fund ............................................ 17,071 17,071
</TABLE>
38
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
SHORT-TERM INVESTMENTS -- (CONTINUED)
Provident Institutional Temp Cash Fund ....................................... 7,854 $ 7,854
------------
TOTAL SHORT-TERM INVESTMENTS (COST $7,358,040).................................. 7,358,040
------------
TOTAL INVESTMENTS (COST $153,454,418) (A) -- 100.3%............................. 198,995,418
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.3%)................................. (700,033)
------------
NET ASSETS -- 100.0% $198,295,385
------------
------------
</TABLE>
- ---------------
* Non-income producing security.
ADR -- American Depository Receipt.
(a)The cost for financial reporting purposes is substantially the same for
federal income tax purposes and differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation....... $ 46,739,671
Unrealized depreciation....... (1,198,671)
------------
Net unrealized appreciation... $ 45,541,000
------------
------------
See Notes to Financial Statements.
39
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (cost $153,454,418) ........ $ 198,995,418
Cash .......................................................... 115,640
Receivable from brokers for investment securities sold ........ 2,895,650
Interest receivable ........................................... 19,564
Dividends receivable .......................................... 139,415
Receivable for capital shares issued .......................... 56,167
Deferred organization costs ................................... 9,684
Prepaid expenses and other .................................... 33,144
-------------
Total assets .................................................... 202,264,682
-------------
LIABILITIES:
Dividends payable ............................................. 25,871
Payable to brokers for investment securities purchased ........ 2,703,394
Payable for capital shares redeemed ........................... 1,004,495
Payable for organization costs ................................ 1,098
Accrued expenses and other payables:
Investment Advisory fees .................................... 88,370
Administration fees ......................................... 13,493
Distribution expenses (A Shares) ............................ 4,780
Distribution expenses (B Shares) ............................ 1,818
Custodian and transfer agent fees ........................... 34,658
Other ....................................................... 91,320
-------------
Total liabilities ............................................... 3,969,297
-------------
NET ASSETS ...................................................... $ 198,295,385
-------------
-------------
Net Asset Value and Redemption Price per Share:
Class A Shares:
($22,209,143/1,519,455 shares of beneficial interest issued
and outstanding $0.001 par value, unlimited number of shares
authorized) ................................................ $ 14.62
Sales Charge -- 4.50% of offering price ..................... 0.69
-------------
Maximum Offering Price ...................................... $ 15.31
-------------
-------------
Net Asset Value and Offering Price per Share:
Class B Shares:
($2,262,590/157,171 shares of beneficial interest issued and
outstanding $0.001 par value, unlimited number of shares
authorized) ................................................ $ 14.40
-------------
-------------
Net Asset Value, Offering Price and Redemption Price per Share:
Institutional Shares:
($173,823,652/11,877,849 shares of beneficial interest issued
and outstanding $0.001 par value, unlimited number of shares
authorized) ................................................ $ 14.63
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par ......................... $ 13,550
Additional paid-in capital .................................... 135,709,435
Accumulated net realized gains on investment transactions ..... 17,031,400
Net unrealized appreciation of investments .................... 45,541,000
-------------
Net Assets, November 30, 1995 ................................... $ 198,295,385
-------------
-------------
</TABLE>
- ------------
See Notes to Financial Statements.
40
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the year ended November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends ............................................................ $ 2,680,462
Interest -- (includes $240,355 in dividends from investments in money
market funds) ...................................................... 242,839
------------
2,923,301
EXPENSES:
Investment Advisory fees ........................................... $ 1,155,425
Administration fees ................................................ 96,285
Shareholder and Administration Services fees (Class A Shares) ...... 29,926
Shareholder and Administration Services fees (Class B Shares) ...... 2,523
Distribution expenses (Class A Shares) ............................. 49,877
Distribution expenses (Class B Shares) ............................. 16,820
Transfer agent fees and expenses ................................... 121,831
Custodian fees and expenses ........................................ 86,436
Legal fees ......................................................... 17,375
Audit fees ......................................................... 52,369
Reports to shareholders (Class A Shares) ........................... 14,915
Reports to shareholders (Class B Shares) ........................... 19,054
Reports to shareholders (Institutional Shares) ..................... 23,572
Registration fees .................................................. 40,027
Trustees' fees ..................................................... 17,272
Insurance expense .................................................. 7,304
Amortization of organization costs ................................. 14,387
Other expenses ..................................................... 11,773
-----------
1,777,171
Less: Expense reimbursements ......................................... (17,806) 1,759,365
----------- ------------
Net Investment Income ................................................ 1,163,936
------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS:
Net realized gains on securities transactions ...................... 17,929,629
Net change in unrealized appreciation (depreciation) of
investments ...................................................... 39,601,156
------------
Net Realized and Unrealized Gains on Investments ..................... 57,530,785
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................. $ 58,694,721
------------
------------
</TABLE>
- ------------
See Notes to Financial Statements.
41
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
-------------------------------
NOVEMBER 30, NOVEMBER 30,
1995 1994
-------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income ........................................................ $ 1,163,936 $ 2,215,865
Net realized gains (losses) on securities transactions ....................... 17,929,629 (798,998)
Net change in unrealized appreciation (depreciation) of investments .......... 39,601,156 (5,684,272)
-------------- ---------------
Net increase (decrease) in net assets resulting from operations .............. 58,694,721 (4,267,405)
-------------- ---------------
Dividends to shareholders from net investment income
Class A Shares ............................................................... (29,869) (335,149)
Class B Shares ............................................................... -- (2,379)
Institutional Shares ......................................................... (1,134,067) (1,877,842)
-------------- ---------------
Total dividends to shareholders from net investment income ..................... (1,163,936) (2,215,370)
-------------- ---------------
Distributions to shareholders from net realized gains
Class A Shares ............................................................... -- (5,185,045)
Class B Shares ............................................................... -- (18,674)
Institutional Shares ......................................................... -- (2,811,662)
-------------- ---------------
Total distributions to shareholders from net realized gains .................... -- (8,015,381)
-------------- ---------------
Fund Share Transactions
Net proceeds from shares subscribed .......................................... 31,008,809 257,954,299
Net asset value of shares issued to shareholders in reinvestment of dividends
and distributions .......................................................... 1,205,477 4,031,916
Cost of shares redeemed ...................................................... (76,668,089) (200,911,989)
-------------- ---------------
Net increase (decrease) in net assets from Fund share transactions ........... (44,453,803) 61,074,226
-------------- ---------------
Total Increase ................................................................. 13,076,982 46,576,070
NET ASSETS:
Beginning of period .......................................................... 185,218,403 138,642,333
-------------- ---------------
End of period ................................................................ $ 198,295,385 $ 185,218,403
-------------- ---------------
-------------- ---------------
</TABLE>
- ------------
See Notes to Financial Statements.
42
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
COMMON STOCKS -- 87.8%
APPAREL -- 3.5%
Authentic Fitness Corp. ................................................................ 30,500 $ 644,312
Wolverine World Wide, Inc. ............................................................. 82,700 2,605,050
------------
3,249,362
------------
BANKING & FINANCE -- 8.4%
California Federal Bank* ............................................................... 92,400 1,409,100
Coast Savings Financial, Inc.* ......................................................... 50,600 1,511,675
North Fork Bancorporation .............................................................. 18,900 439,425
Olympic Financial Limited* ............................................................. 32,500 666,250
Peoples Heritage Financial Group, Inc. ................................................. 83,100 1,745,100
Silicon Valley Bancshares* ............................................................. 30,800 685,300
T R Financial Corp. .................................................................... 57,100 1,427,500
------------
7,884,350
------------
BUILDING & BUILDING PRODUCTS -- 9.8%
American Buildings Co.* ................................................................ 33,000 746,625
D.R. Horton, Inc.* ..................................................................... 185,080 1,850,800
Granite Construction, Inc. ............................................................. 52,400 1,454,100
Rexel, Inc.* ........................................................................... 125,000 1,687,500
Texas Industries, Inc. ................................................................. 21,900 1,122,375
Toll Brothers, Inc.* ................................................................... 128,300 2,325,438
------------
9,186,838
------------
CHEMICALS -- 1.9%
Duriron Co., Inc. ...................................................................... 60,800 1,748,000
------------
COMMUNICATIONS EQUIPMENT & SYSTEMS -- 2.8%
Lo-Jack Corp.* ......................................................................... 154,400 1,428,200
Microdyne Corp.* ....................................................................... 31,700 657,775
United Video Satellite Group, Inc.* .................................................... 17,300 501,700
------------
2,587,675
------------
COMPUTERS & COMPUTER SERVICES -- 21.9%
American Software, Inc.* ............................................................... 126,600 791,250
Auspex Systems, Inc.* .................................................................. 162,300 2,414,212
Ciber, Inc.* ........................................................................... 67,100 2,046,550
Computer Products, Inc.* ............................................................... 256,200 3,186,487
Dialog Corp.* .......................................................................... 2,400 75,900
Electronics For Imaging, Inc.* ......................................................... 15,500 1,333,000
Henry, Jack & Associates ............................................................... 121,100 2,921,538
NetManage, Inc.* ....................................................................... 57,600 1,303,200
Optical Data Systems* .................................................................. 23,800 493,850
Structural Dynamics Research Corp.* .................................................... 108,600 2,212,725
TCSI Corp.* ............................................................................ 88,700 1,574,425
Trident Microsystems, Inc.* ............................................................ 62,900 2,209,363
------------
20,562,500
------------
ELECTRONICS & ELECTRONIC EQUIPMENT -- 9.3%
Checkpoint Systems, Inc.* .............................................................. 51,500 1,590,062
Eltron International, Inc.* ............................................................ 50,000 1,850,000
</TABLE>
43
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
ELECTRONICS & ELECTRONIC EQUIPMENT -- (CONTINUED)
Intermagnetics General Corp.* .......................................................... 25,100 $ 564,750
Intervoice, Inc.* ...................................................................... 94,800 2,073,750
Jabil Circuit, Inc.* ................................................................... 70,000 1,452,500
LTX Corp.* ............................................................................. 69,500 860,063
Nu Horizons Electronics, Inc.* ......................................................... 19,200 306,178
------------
8,697,303
------------
EMERGENCY SERVICES -- 0.8%
Rural/Metro Corp.* ..................................................................... 34,900 855,050
------------
ENTERTAINMENT -- 0.9%
Anchor Gaming* ......................................................................... 35,200 721,600
------------
ENVIRONMENTAL MANAGEMENT -- 0.3%
Zurn Industries, Inc. .................................................................. 12,700 311,150
------------
FOOD, BEVERAGE & TOBACCO -- 3.4%
Performance Food Group* ............................................................... 22,600 536,750
Richfood Holdings, Inc. ................................................................ 40,900 1,150,313
Robert Mondavi Corp.* .................................................................. 46,600 1,485,375
------------
3,172,438
------------
HEALTH CARE -- 6.8%
ConMed Corp.* .......................................................................... 56,000 1,764,000
Express Scripts, Inc.* ................................................................. 14,300 589,875
Fresenius USA, Inc.* ................................................................... 86,300 1,488,675
Medisense, Inc.* ....................................................................... 34,300 883,225
Renal Treatment Centers, Inc.* ......................................................... 17,200 694,450
Techne Corp.* .......................................................................... 41,500 980,438
------------
6,400,663
------------
HEALTH CARE & SUPPLIES -- 4.2%
Advanced Technology Labs, Inc.* ........................................................ 133,200 2,863,800
EMPI, Inc.* ............................................................................ 55,100 1,019,350
Sterling Healthcare Group, Inc.* ....................................................... 1,000 12,500
------------
3,895,650
------------
MANUFACTURING -- 2.4%
Altron, Inc.* .......................................................................... 62,600 1,846,700
Credence Systems Corp.* ................................................................ 2,000 59,500
Global Industrial Tech, Inc.* .......................................................... 17,400 308,850
------------
2,215,050
------------
METALS -- 0.3%
Wolverine Tube, Inc.* .................................................................. 10,200 345,525
------------
OFFICE & BUSINESS EQUIPMENT SERVICES -- 5.3%
American Business Information, Inc.* ................................................... 114,300 2,085,975
Day Runner, Inc.* ...................................................................... 41,600 1,175,200
Herman Miller, Inc. .................................................................... 17,100 542,925
Nu-Kote Holding* ....................................................................... 61,200 1,208,700
------------
5,012,800
------------
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
OIL & GAS (DOMESTIC) -- 0.6%
Reading & Bates Corp.* ................................................................. 39,800 $ 522,375
------------
PHARMACEUTICALS -- 0.0%
Rexall Sundown, Inc.* .................................................................. 800 15,600
------------
TELECOMMUNICATIONS -- 5.2%
Aspect Telecommunications Corp.* ....................................................... 86,000 2,924,000
EIS International, Inc.* ............................................................... 39,200 612,500
U.S. Long Distance Corp.* .............................................................. 105,200 1,380,750
------------
4,917,250
------------
TOTAL COMMON STOCKS (COST $70,448,413).................................................... 82,301,179
------------
SHORT-TERM INVESTMENTS -- 8.9%
OPEN-END INVESTMENT COMPANIES -- 5.7%
Dreyfus Cash Management Fund ........................................................... 4,570,759 4,570,759
Provident Institutional Temporary Cash Fund ............................................ 795,601 795,601
------------
TOTAL OPEN-END INVESTMENT COMPANIES (COST $5,366,360)..................................... 5,366,360
------------
</TABLE>
<TABLE>
<CAPTION>
MOODY'S/S&P
RATINGS MATURITY PRINCIPAL
(UNAUDITED) RATE DATE AMOUNT
-------------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
COMMERCIAL PAPER -- 3.2%
Rexam PLC....................................... P1/A1 5.75% 12/5/95 $3,000,000 2,998,083
-------------
TOTAL COMMERCIAL PAPER (COST $2,998,083).......... 2,998,083
-------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL SHORT-TERM INVESTMENTS (COST $8,364,443)......................................... 8,364,443
------------
TOTAL INVESTMENTS (COST $78,812,856) (A) -- 96.7%...................................... 90,665,622
OTHER ASSETS IN EXCESS OF LIABILITIES -- 3.3%.......................................... 3,110,108
------------
NET ASSETS -- 100.0%................................................................... $ 93,775,730
------------
------------
</TABLE>
- ---------------
* Non-income producing security.
(a) The cost for financial reporting purposes is substantially the same for
federal income tax purposes and differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation....... $ 14,187,013
Unrealized depreciation....... (2,334,247)
------------
Net unrealized appreciation... $ 11,852,766
------------
------------
See Notes to Financial Statements
45
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $78,812,856)........................ $90,665,622
Cash.......................................................................... 774,952
Interest receivable........................................................... 12,960
Dividends receivable.......................................................... 17,661
Receivable for capital shares issued.......................................... 48,277
Receivable to brokers for investment securities sold.......................... 4,136,130
Deferred organization costs................................................... 38,373
Prepaid expenses.............................................................. 9,964
-----------
Total assets.................................................................... 95,703,939
-----------
LIABILITIES:
Net payable to Investment Adviser............................................. 1,225
Payable for capital shares redeemed........................................... 11,490
Payable to brokers for investment securities purchased........................ 1,735,786
Accrued expenses and other payables:
Investment Advisory fees.................................................... 81,409
Administration fees......................................................... 3,208
Shareholder and Administration Services fees (Class A and Class B Shares)... 1,202
Distribution expenses (A Shares)............................................ 536
Distribution expenses (B Shares)............................................ 886
Custodian and transfer agent fees........................................... 25,576
Other....................................................................... 66,891
-----------
Total liabilities............................................................... 1,928,209
-----------
NET ASSETS...................................................................... $93,775,730
-----------
-----------
Net Asset Value and Redemption Price per Share:
Class A Shares:
($2,656,990/208,049 shares of beneficial interest issued and outstanding
$0.001 par value, unlimited number of shares authorized)................... $ 12.77
Sales charge -- 4.50% of offering price..................................... 0.60
-----------
Maximum Offering Price...................................................... $ 13.37
-----------
-----------
Net Asset Value and Offering Price per Share:
Class B Shares:
($2,557,918/203,830 shares of beneficial interest issued and outstanding
$0.001 par value, unlimited number of shares authorized)................... $ 12.55
-----------
-----------
Net Asset Value, Offering Price and Redemption Price per Share:
Institutional Shares:
($88,560,822/6,927,590 shares of beneficial interest issued and outstanding
$0.001 par value, unlimited number of shares authorized)................... $ 12.78
-----------
-----------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par......................................... $ 7,339
Additional paid-in capital.................................................... 74,800,580
Accumulated net realized gains on investment transactions..................... 7,115,045
Net unrealized appreciation of investments.................................... 11,852,766
-----------
Net Assets, November 30, 1995................................................... $93,775,730
-----------
-----------
</TABLE>
- -------------
See Notes to Financial Statements.
46
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the year ended November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividend income............................................................... $ 224,270
Interest income -- (includes $231,973 in dividends from investments in money
market funds)............................................................... 324,735
------------
549,005
EXPENSES:
Investment Advisory fees...................................................... $ 742,502
Administration fees........................................................... 37,116
Shareholder and Administration Services fees (Class A Shares)................. 2,916
Shareholder and Administration Services fees (Class B Shares)................. 3,078
Distribution expenses (Class A Shares)........................................ 4,747
Distribution expenses (Class B Shares)........................................ 20,053
Transfer agent fees and expenses.............................................. 83,121
Custodian fees and expenses................................................... 82,608
Legal fees.................................................................... 10,311
Audit fees.................................................................... 29,609
Reports to shareholders (Class A Shares)...................................... 3,210
Reports to shareholders (Class B Shares)...................................... 11,080
Reports to shareholders (Institutional Shares)................................ 29,977
Registration fees............................................................. 24,960
Trustees' fees................................................................ 12,338
Insurance expense............................................................. 1,829
Amortization of organization costs............................................ 11,727
Other expenses................................................................ 4,673
-----------
1,115,855
Less: Expense reimbursements.................................................... (63,816) 1,052,039
----------- ------------
Net Investment Loss:............................................................ (503,034)
------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS:
Net realized gains on securities transactions................................. 11,174,347
Net change in unrealized appreciation (depreciation) of investments........... 9,904,841
------------
Net Realized and Unrealized Gains on Investments.............................. 21,079,188
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ $ 20,576,154
------------
------------
</TABLE>
- -------------
See Notes to Financial Statements.
47
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 4, 1994
NOVEMBER 30, TO NOVEMBER 30,
1995 1994(A)
------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment loss........................................................... $ (503,034) $ (248,372)
Net realized gains (losses) on securities transactions........................ 11,174,347 (3,556,268)
Net change in unrealized appreciation (depreciation) of investments........... 9,904,841 1,947,925
------------- ----------------
Net increase (decrease) in net assets resulting from operations............... 20,576,154 (1,856,715)
------------- ----------------
Fund Share Transactions
Net proceeds from shares subscribed........................................... 24,392,804 63,485,684
Cost of shares redeemed....................................................... (8,022,428) (4,799,769)
------------- ----------------
Net increase in net assets from Fund share transactions....................... 16,370,376 58,685,915
------------- ----------------
Total Increase.................................................................. 36,946,530 56,829,200
NET ASSETS:
Beginning of period........................................................... 56,829,200 --
------------- ----------------
End of period................................................................. $ 93,775,730 $ 56,829,200
------------- ----------------
------------- ----------------
</TABLE>
- ---------------
(a) Commencement of operations.
See Notes to Financial Statements.
48
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL
RATINGS MATURITY AMOUNT VALUE
(UNAUDITED) RATE DATE (000) (NOTE 2)
--------------- --------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C>
LONG-TERM INVESTMENTS -- 95.2%
ASSET-BACKED SECURITIES -- 1.3%
Bank One Auto 1995, A-4 ................................. Aaa/AAA 6.90% 4/15/98 $ 1,000 $ 1,017,559
------------
TOTAL ASSET-BACKED SECURITIES (COST $999,219).............. 1,017,559
------------
CORPORATE OBLIGATIONS -- 23.1%
BANKING & FINANCE COMPANIES -- 11.2%
American Express Credit Corp. ........................... Aa3/A+ 8.50 6/15/99 350 378,362
Associates Corp., N.A., Medium Term Note ................ Aa-/AA3 5.62 3/14/97 750 749,552
Caterpillar Financial Services Corp., Floating Rate
Medium Term Note ...................................... A2/A 5.67 4/1/99 1,000 983,327
CNA Financial Corp. Senior Note ......................... A3/A- 8.88 3/1/98 500 528,392
Dean Witter Discover, Floating Rate Note ................ A2/A 6.09 12/15/95 1,250 1,250,086
General Electric Capital Corp. .......................... Aaa/AAA 8.30 9/20/09 250 297,643
General Motors Acceptance Corp., Medium Term Notes ...... Baa1/BBB+ 7.85 11/17/97 1,000 1,037,508
General Motors Acceptance Corp., Medium Term Notes ...... A3/A- 8.88 6/1/10 250 300,961
Interamerican Development Bank .......................... Aaa/AAA 8.40 9/1/09 500 600,792
Key Corp., Medium Term Note ............................. A1/A- 7.00 5/11/05 500 518,789
Merrill Lynch ........................................... A1/A+ 6.70 8/1/00 1,000 1,008,179
NYNEX Capital Funding, Variable Rate Medium Term
Note(a) ............................................... A3/A- 7.63 10/15/09 875 990,189
------------
8,643,780
------------
ELECTRONIC EQUIPMENT -- 1.3%
Motorola, Inc. .......................................... Aa3/AA 6.50 9/1/25 1,000 1,031,890
------------
FOOD & BEVERAGE -- 0.7%
Coca-Cola Enterprises, Inc. ............................. Aa-/A3 8.00 1/4/05 500 568,442
------------
OIL & GAS -- 0.2%
Texaco Capital Income, Debenture ........................ A/A+ 8.65 1/30/98 150 158,921
------------
TELECOMMUNICATIONS -- 6.2%
A T & T Corp., Senior Notes, Callable 1/15/02 @ 103.21 .. Aa3/AA 8.13 1/15/22 400 427,000
Chesapeake & Potomac Telephone of Maryland, Put date
10/15/96 @100.......................................... Aa3/AA 8.00 10/15/29 500 580,494
New England Telegraph & Telephone ....................... Aa2/AA- 7.88 11/15/29 2,000 2,289,282
Pacific Telephone & Telegraph ........................... Aa3/AA- 7.25 2/1/08 50 50,063
Southern Bell ........................................... Aaa/AAA 8.63 9/1/26 900 936,577
Southwestern Bell ....................................... A1/AA 7.35 5/1/12 500 507,130
------------
4,790,546
------------
UTILITIES -- 2.4%
Northern States Powers .................................. A1/AA- 5.50 2/1/99 750 742,256
Wisconsin Electric Power, Callable 9/1/14 @ 100 ......... Aa2/AA+ 9.13 9/1/24 1,000 1,068,114
------------
1,810,370
------------
</TABLE>
49
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL
RATINGS MATURITY AMOUNT VALUE
(UNAUDITED) RATE DATE (000) (NOTE 2)
--------------- --------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C>
WASTE DISPOSAL -- 1.1%
WMX Technologies, Inc. .................................. A1/A+ 6.22% 4/30/04 $ 750 $ 816,095
------------
TOTAL CORPORATE OBLIGATIONS (COST $17,107,513)............. 17,820,044
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 12.2%
FEDERAL HOME LOAN MORTGAGE CORP. -- 3.2%
Federal Home Loan Mortgage Corp., Pool M80052 ........... 8.50% 7/1/98 123 126,717
Federal Home Loan Mortgage Corp., Pool M80099 ........... 8.00 6/1/99 198 203,464
Federal Home Loan Mortgage Corp., 5 Year Balloon ........ 8.50 2/1/00 407 418,898
Federal Home Loan Mortgage Corp., 5 Year Balloon, Pool
L90152 ................................................ 8.00 2/1/00 416 428,450
Federal Home Loan Mortgage Corp. ........................ 6.20 9/8/08 660 641,483
Federal Home Loan Mortgage Corp., Pool 288434 ........... 8.00 7/1/10 444 458,704
Federal Home Loan Mortgage Corp., CMO 138-D** ........... 8.50 2/15/21 200 206,782
------------
2,484,498
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 8.9%
Federal National Mortgage Association, 7 Year Balloon,
Pool 50609 ............................................ 8.00 6/1/99 231 237,485
Federal National Mortgage Association, Medium Term Note,
Callable 1/21/97 @ 100 ................................ 6.14 1/21/04 1,000 972,501
Federal National Mortgage Association ................... 6.48 2/18/04 2,000 2,007,302
Federal National Mortgage Association, Pool 124975 ...... 7.50 8/1/08 916 938,930
Federal National Mortgage Association, Pool 247516 ...... 8.50 8/1/11 1,637 1,722,328
Federal National Mortgage Association, CMO 1991-1G** .... 7.00 1/25/21 1,000 1,013,109
------------
6,891,655
------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION -- 0.0%
Government National Mortgage Association, Pool 220063 ... 10.00 2/15/18 26 28,407
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $9,061,928)........................................ 9,404,560
------------
U.S. GOVERNMENT OBLIGATIONS -- 7.6%
U.S. TREASURY BONDS -- 1.7%
U.S. Treasury Bond ...................................... 12.00 8/15/13 500 759,375
U.S. Treasury Bond ...................................... 7.50 11/15/16 500 574,530
------------
1,333,905
------------
U.S. TREASURY NOTES -- 2.3%
U.S. Treasury Note ...................................... 4.00 1/31/96 750 748,359
U.S. Treasury Note ...................................... 5.88 3/31/99 1,000 1,011,875
------------
1,760,234
------------
U.S. TREASURY STRIPS -- 3.6%
U.S. Treasury Strip ..................................... 6.77%+ 2/15/07 5,000 2,569,380
U.S. Treasury Strip ..................................... 7.59%+ 8/15/08 500 232,437
------------
2,801,817
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(COST $5,482,916)........................................ 5,895,956
------------
</TABLE>
50
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
COMMON STOCKS -- 48.1%
APPAREL & SHOES -- 1.0%
Authentic Fitness Corp. .......................................................................... 2,600 $ 54,925
Nike, Inc. ....................................................................................... 7,800 452,400
Wolverine World Wide, Inc. ....................................................................... 7,550 237,825
------------
745,150
------------
BUILDING & BUILDING PRODUCTS -- 1.3%
American Buildings Co.* .......................................................................... 3,000 67,875
Clayton Homes, Inc. .............................................................................. 14,856 415,968
D.R. Horton, Inc.* ............................................................................... 16,920 169,200
Granite Construction, Inc. ....................................................................... 4,800 133,200
Toll Brothers, Inc.* ............................................................................. 11,700 212,063
------------
998,306
------------
BUSINESS SERVICES -- 0.1%
Nu-Kote Holding* ................................................................................. 5,600 110,600
------------
CHEMICALS -- 1.1%
Dow Chemical Co. ................................................................................. 4,500 318,937
Duriron Co. Inc. ................................................................................. 5,600 161,000
Praxair, Inc. .................................................................................... 12,000 349,500
------------
829,437
------------
COMMUNICATIONS EQUIPMENT & SYSTEMS -- 0.3%
Lo-Jack Corp.* ................................................................................... 14,100 130,425
Microdyne Corp.* ................................................................................. 2,900 60,175
United Video Satellite Group, Inc.* .............................................................. 1,500 43,500
------------
234,100
------------
COMPUTERS & COMPUTER SERVICES -- 7.5%
Altron, Inc.* .................................................................................... 5,700 168,150
American Software, Inc.* ......................................................................... 11,500 71,875
Auspex Systems, Inc.* ............................................................................ 15,000 223,125
Broderbund Software, Inc.* ....................................................................... 4,300 278,425
Cadence Design Systems, Inc.* .................................................................... 15,400 554,400
Ciber, Inc.* ..................................................................................... 6,100 186,050
Cisco Systems, Inc.* ............................................................................. 6,500 546,812
Compaq Computer Corp.* ........................................................................... 9,900 490,050
CompUSA, Inc.* ................................................................................... 8,000 297,000
Computer Associates International, Inc. .......................................................... 8,000 524,000
Computer Products, Inc.* ......................................................................... 23,500 292,281
Dell Computer Corp.* ............................................................................. 5,600 247,800
Dialog Corp.* .................................................................................... 200 6,325
Electronics For Imaging, Inc.* ................................................................... 1,400 120,400
Henry, Jack & Associates ......................................................................... 11,100 267,787
Intel Corp. ...................................................................................... 3,000 182,625
LSI Logic Corp.* ................................................................................. 4,800 201,000
NetManage, Inc.* ................................................................................. 2,800 63,350
Optical Data Systems, Inc.* ...................................................................... 2,200 45,650
Read-Rite Corp.* ................................................................................. 12,500 339,063
Structural Dynamics Research Corp.* .............................................................. 9,800 199,675
System Software Associates, Inc. ................................................................. 4,300 154,800
TCSI Corp.* ...................................................................................... 8,000 142,000
Trident Microsystems, Inc.* ...................................................................... 5,800 203,725
------------
5,806,368
------------
</TABLE>
51
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
ELECTRICAL EQUIPMENT & ELECTRONICS -- 5.2%
Applied Materials, Inc.* ......................................................................... 8,000 $ 389,000
Checkpoint Systems, Inc.* ........................................................................ 4,600 142,025
Cypress Semiconductor Corp.* ..................................................................... 22,000 343,750
Eltron International, Inc.* ...................................................................... 4,600 170,200
General Electric Co. ............................................................................. 13,300 894,425
Intermagnetics General Corp.* .................................................................... 2,300 51,750
Intervoice, Inc.* ................................................................................ 8,700 190,313
Jabil Circuit, Inc.* ............................................................................. 6,400 132,800
KLA Instruments Corp.* ........................................................................... 5,800 200,100
Lam Research Corp.* .............................................................................. 4,500 246,375
LTX Corp.* ....................................................................................... 6,300 77,962
Micron Technology, Inc. .......................................................................... 6,300 344,925
Nu Horizons Electronics, Inc.* ................................................................... 1,800 28,704
Philips Electronics N.V. ADR ..................................................................... 7,100 277,788
Rexel, Inc.* ..................................................................................... 11,500 155,250
Teradyne, Inc.* .................................................................................. 7,500 195,938
U.S. Robotics Corp.* ............................................................................. 1,600 175,600
------------
4,016,905
------------
EMERGENCY SERVICES -- 0.1%
Rural/Metro Corp.* ............................................................................... 3,200 78,400
------------
ENTERTAINMENT & LEISURE -- 2.6%
Anchor Gaming* ................................................................................... 3,100 63,550
Callaway Golf Co. ................................................................................ 12,400 246,450
Capital Cities/ABC, Inc. ......................................................................... 7,300 902,462
Carnival Cruise Lines, Inc. ...................................................................... 13,700 356,200
Mattel, Inc. ..................................................................................... 14,862 416,136
------------
1,984,798
------------
FINANCE & INSURANCE -- 5.5%
AFLAC, Inc. ...................................................................................... 7,550 307,663
BankAmerica Corp. ................................................................................ 6,600 419,925
Bank of Boston Corp. ............................................................................. 8,200 380,275
Bank of New York Co., Inc. ....................................................................... 7,500 353,437
BayBanks, Inc. ................................................................................... 3,000 249,000
California Federal Bank* ......................................................................... 8,400 128,100
Coast Savings Financial, Inc.* ................................................................... 4,600 137,425
Equifax, Inc. .................................................................................... 10,500 439,687
Green Tree Financial Corp. ....................................................................... 15,600 440,700
MBNA Corp. ....................................................................................... 8,300 335,113
North Fork Bancorporation ........................................................................ 1,700 39,525
Olympic Financial Ltd.* .......................................................................... 2,900 59,450
Peoples Heritage Financial Group, Inc. ........................................................... 7,600 159,600
Silicon Valley Bancshares* ....................................................................... 2,800 62,300
T R Financial Corp. .............................................................................. 5,200 130,000
Transport Holdings, Inc.* ........................................................................ 45 1,766
Travelers Group, Inc. ............................................................................ 10,300 612,850
------------
4,256,816
------------
FOOD, BEVERAGE & TOBACCO -- 3.9%
Canandaigua Wine, Inc.* .......................................................................... 4,000 134,000
IBP, Inc. ........................................................................................ 9,100 568,750
McDonald's Corp. ................................................................................. 8,200 365,925
Outback Steakhouse, Inc.* ........................................................................ 5,300 193,450
</TABLE>
52
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
FOOD, BEVERAGE & TOBACCO -- (CONTINUED)
PepsiCo, Inc. .................................................................................... 12,900 $ 712,725
Performance Food Group Co.* ...................................................................... 2,100 49,875
Philip Morris Cos., Inc. ......................................................................... 8,600 754,650
Richfood Holdings, Inc. .......................................................................... 3,700 104,063
Robert Mondavi Corp.* ............................................................................ 4,500 143,438
------------
3,026,876
------------
FOREST PRODUCTS & PAPER -- 1.5%
Federal Paper Board Co., Inc. .................................................................... 7,800 405,600
Harnischfeger Industries, Inc. ................................................................... 6,400 216,800
Kimberly-Clark Corp. ............................................................................. 7,200 553,500
------------
1,175,900
------------
HEALTH CARE -- 5.6%
Advanced Technology Labs, Inc.* .................................................................. 9,900 212,850
Amgen, Inc.* ..................................................................................... 8,000 397,000
Becton Dickinson and Company ..................................................................... 5,500 383,625
Boston Scientific Corp.* ......................................................................... 7,100 287,550
Columbia/HCA Healthcare Corp. .................................................................... 4,100 211,662
CONMED Corp.* .................................................................................... 5,100 160,650
Cordis Corp.* .................................................................................... 2,800 296,800
EMPI, Inc.* ...................................................................................... 5,000 92,500
Express Scripts, Inc.* ........................................................................... 1,300 53,625
Foundation Health Corp.* ......................................................................... 12,500 571,875
Fresensius USA, Inc.* ............................................................................ 7,900 136,275
HealthCare COMPARE Corp.* ........................................................................ 10,500 410,812
Johnson & Johnson ................................................................................ 5,800 502,425
Lincare Holdings Corp.* .......................................................................... 4,900 131,075
Medisense, Inc.* ................................................................................. 3,100 79,825
Nellcor Puritan Bennett, Inc.* ................................................................... 1,000 57,500
OrNda Health* .................................................................................... 9,700 190,363
Renal Treatment Centers, Inc.* ................................................................... 1,600 64,600
Sterling Heathcare Group, Inc.* .................................................................. 100 1,250
Techne Corp.* .................................................................................... 3,800 89,775
------------
4,332,037
------------
MANUFACTURING -- 0.3%
Credence Systems Corp.* .......................................................................... 200 5,950
Parker Hannifin Corp. ............................................................................ 6,050 222,338
------------
228,288
------------
METALS -- 0.6%
INDRESCO, Inc.* .................................................................................. 1,600 28,400
Phelps Dodge Corp. ............................................................................... 4,700 319,013
Texas Industries, Inc. ........................................................................... 2,000 102,500
Wolverine Tube, Inc.* ............................................................................ 800 27,100
------------
477,013
------------
OFFICE & BUSINESS EQUIPMENT & SERVICES -- 0.9%
American Business Information* ................................................................... 12,600 229,950
Day Runner, Inc.* ................................................................................ 3,700 104,525
Herman Miller, Inc. .............................................................................. 1,600 50,800
The Olsten Corp. ................................................................................. 7,400 296,000
------------
681,275
------------
OIL & GAS INDUSTRY -- 1.9%
Halliburton Co. .................................................................................. 6,100 264,587
</TABLE>
53
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
OIL & GAS INDUSTRY -- (CONTINUED)
Mobil Corp. ...................................................................................... 3,700 386,188
Occidental Petroleum Corp. ....................................................................... 16,500 $ 365,063
Reading & Bates Corp.* ........................................................................... 3,700 48,563
Williams Companies, Inc. ......................................................................... 10,500 441,000
------------
1,505,401
------------
PERSONAL CARE -- 0.6%
Gillette Co. ..................................................................................... 8,700 451,312
------------
PHARMACEUTICALS -- 2.2%
Abbott Laboratories .............................................................................. 11,700 475,312
Merck & Co.* ..................................................................................... 10,100 624,938
Rexall Sundown, Inc.* ............................................................................ 100 1,950
Schering-Plough Corp. ............................................................................ 9,600 550,800
------------
1,653,000
------------
PHOTOGRAPHIC PRODUCTS -- 0.3%
Eastman Kodak Co. ................................................................................ 3,800 258,400
------------
RAILROAD FREIGHT -- 0.7%
Burlington Northern Santa Fe, Corp. .............................................................. 5,000 403,125
Illinois Central Corp. ........................................................................... 3,000 121,500
------------
524,625
------------
RECREATION -- 0.0%
Zurn Industries, Inc. ............................................................................ 1,200 29,400
------------
RETAIL -- 1.7%
Dollar General Corp. ............................................................................. 10,600 287,525
General Nutrition Co., Inc. ...................................................................... 17,200 380,550
Home Depot, Inc. ................................................................................. 6,366 282,491
Staples, Inc.* ................................................................................... 13,350 340,425
------------
1,290,991
------------
UTILITIES & TELECOMMUNICATIONS -- 3.2%
ADC Telecommunications, Inc.* .................................................................... 5,100 232,050
Ameritech Corp. .................................................................................. 10,400 572,000
Aspect Telecommunications Corp.* ................................................................. 7,800 265,200
Cincinnati Bell, Inc.* ........................................................................... 8,700 259,912
EIS Intermational, Inc.* ......................................................................... 3,600 56,250
Sprint Corp. ..................................................................................... 11,600 464,000
U.S. Long Distance Corp.* ........................................................................ 9,400 123,375
Worldcom, Inc.* .................................................................................. 15,600 507,000
------------
2,479,787
------------
TOTAL COMMON STOCKS (COST $29,841,600).............................................................. 37,175,185
------------
UNIT INVESTMENT TRUSTS -- 2.9%
S&P Depository Receipts .......................................................................... 36,200 2,204,804
------------
TOTAL UNIT INVESTMENT TRUSTS (COST $1,691,310)...................................................... 2,204,804
------------
TOTAL LONG-TERM INVESTMENTS (COST $64,184,486)...................................................... 73,518,108
------------
</TABLE>
54
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
SHORT-TERM INVESTMENTS -- 3.9%
OPEN-END MUTUAL FUNDS -- 3.9%
Dreyfus Cash Management Fund ..................................................................... 2,860,793 $ 2,860,793
Provident Institutional Temporary Cash Fund ...................................................... 150,303 150,303
------------
TOTAL SHORT-TERM INVESTMENTS (COST $3,011,096)...................................................... 3,011,096
------------
TOTAL INVESTMENTS (COST $67,195,584) (B) -- 99.1%................................................... 76,529,204
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.9%....................................................... 685,632
------------
NET ASSETS -- 100.0%................................................................................ $ 77,214,836
------------
------------
</TABLE>
- ---------------
* Non-income producing security.
** Collateralized Mortgage Obligation.
+ Effective yield at date of issuance.
(a) Steps up to 8.23% on 10/15/99.
(b)The cost for financial reporting purposes is substantially the same for
federal income tax purposes and differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation....... $77,470,610
Unrealized depreciation....... (68,136,990)
-----------
Net unrealized appreciation... $ 9,333,620
-----------
-----------
ADR -- American Depository Receipt.
See Notes to Financial Statements.
55
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (cost $67,195,584)................................... $ 76,529,204
Cash.................................................................................... 83,087
Receivable from brokers for investment securities sold.................................. 876,430
Interest receivable..................................................................... 398,316
Dividends receivable.................................................................... 25,665
Receivable for capital shares issued.................................................... 88,769
Receivable from Investment Adviser...................................................... 55,286
Deferred organization costs............................................................. 42,260
Prepaid expenses........................................................................ 11,698
-------------
Total assets.............................................................................. 78,110,715
-------------
LIABILITIES:
Payable to brokers for investment securities purchased.................................. 618,349
Dividends payable....................................................................... 10,605
Payable for capital shares redeemed..................................................... 147,225
Accrued expenses and other payables:
Administration fees................................................................... 19,769
Shareholder and Administration Services fees (Class A and Class B Shares)............. 2,367
Distribution expenses (A Shares)...................................................... 278
Distribution expenses (B Shares)...................................................... 2,168
Custodian and transfer agent fees..................................................... 22,655
Other................................................................................. 72,463
-------------
Total liabilities......................................................................... 895,879
-------------
NET ASSETS................................................................................ $ 77,214,836
-------------
-------------
Net Asset Value and Redemption Price per Share:
Class A Shares:
($1,081,567/90,005 shares of beneficial interest issued and outstanding $0.001 par
value, unlimited number of shares authorized)........................................ $ 12.02
Sales Charge -- 4.50% of offering price................................................. 0.57
-------------
Maximum Offering Price.................................................................. $ 12.59
-------------
-------------
Net Asset Value and Offering Price per Share:
Class B Shares:
($2,303,382/193,593 shares of beneficial interest issued and outstanding $0.001 par
value, unlimited number of shares authorized)........................................ $ 11.90
-------------
-------------
Net Asset Value, Offering Price and Redemption Price per Share:
Institutional Shares:
($73,829,887/6,198,209 shares of beneficial interest issued and outstanding $0.001 par
value, unlimited number of shares authorized)........................................ $ 11.91
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par................................................... $ 6,482
Additional paid-in capital.............................................................. 66,556,375
Accumulated net realized gains on investment transactions............................... 1,318,359
Net unrealized appreciation of investments.............................................. 9,333,620
-------------
Net Assets, November 30, 1995............................................................. $ 77,214,836
-------------
-------------
</TABLE>
- ---------------
See Notes to Financial Statements.
56
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the year ended November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest -- (includes $107,659 in dividends from investments in money market
funds)........................................................................ $ 1,977,289
Dividends....................................................................... 412,319
------------
2,389,608
EXPENSES:
Investment Advisory fees...................................................... $ 371,499
Administration fees........................................................... 30,958
Shareholder and Administration Services fees (Class A Shares)................. 1,064
Shareholder and Administration Services fees (Class B Shares)................. 2,453
Distribution expenses (Class A Shares)........................................ 1,836
Distribution expenses (Class B Shares)........................................ 16,107
Transfer agent fees and expenses.............................................. 82,422
Audit fees.................................................................... 28,854
Legal fees.................................................................... 17,814
Reports to shareholders (Class A Shares)...................................... 14,704
Reports to shareholders (Class B Shares)...................................... 19,507
Reports to shareholders (Institutional Shares)................................ 14,134
Registration fees............................................................. 25,789
Custodian fees and expenses................................................... 84,590
Trustees' fees................................................................ 13,415
Insurance expense............................................................. 1,699
Amortization of organization costs............................................ 12,621
Other expenses................................................................ 5,682
----------
745,148
Less: Expense reimbursements.................................................... (526,354) 218,794
---------- ------------
Net Investment Income........................................................... 2,170,814
------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS:
Net realized gains on securities transactions................................. 2,133,006
Net change in unrealized appreciation (depreciation) of investments........... 10,437,485
------------
Net Realized and Unrealized Gains on Investments................................ 12,570,491
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ $ 14,741,305
------------
------------
</TABLE>
- ------------
See Notes to Financial Statements.
57
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED APRIL 11, 1994
NOVEMBER 30, TO NOVEMBER 30,
1995 1994(A)
------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income......................................................... $ 2,170,814 $ 1,159,164
Net realized gains (losses) on securities transactions........................ 2,133,006 (708,910)
Net change in unrealized appreciation (depreciation) of investments........... 10,437,485 (1,103,865)
------------- ---------------
Net increase (decrease) in net assets resulting from operations............... 14,741,305 (653,611)
------------- ---------------
Dividends to shareholders from net investment income
Class A Shares................................................................ (23,530) (8,875)
Class B Shares................................................................ (40,515) (18,828)
Institutional Shares.......................................................... (2,106,769) (1,131,461)
------------- ---------------
Total dividends to shareholders from net investment income...................... (2,170,814) (1,159,164)
------------- ---------------
Distributions to shareholders in excess of net investment income
Class A Shares................................................................ -- (810)
Class B Shares................................................................ -- (1,717)
Institutional Shares.......................................................... -- (103,210)
------------- ---------------
Total distributions to shareholders in excess of net investment income.......... -- (105,737)
------------- ---------------
Fund Share Transactions
Net proceeds from shares subscribed........................................... 21,231,603 57,681,365
Net asset value of shares issued to shareholders in reinvestment of
dividends................................................................... 2,659,558 735,831
Cost of shares redeemed....................................................... (12,151,179) (3,594,321)
------------- ---------------
Net increase in net assets from Fund share transactions....................... 11,739,982 54,822,875
------------- ---------------
Total Increase.................................................................. 24,310,473 52,904,363
NET ASSETS:
Beginning of period........................................................... 52,904,363 --
------------- ---------------
End of period................................................................. $ 77,214,836 $ 52,904,363
------------- ---------------
------------- ---------------
</TABLE>
- ---------------
(a) Commencement of operations.
See Notes to Financial Statements.
58
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL
RATINGS MATURITY AMOUNT VALUE
(UNAUDITED) RATE DATE (000) (NOTE 2)
----------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
CORPORATE OBLIGATIONS -- 42.1%
BROKERAGE SERVICES -- 11.8%
Lehman Brothers Holdings, Inc., Corporate Note ........... A3/A 7.63 % 7/15/99 $ 500 $ 520,859
Merrill Lynch & Co., Inc., Corporate Note ................ A1/A+ 10.38 2/1/99 149 167,992
Morgan Stanley Group, Inc., Corporate Note ............... A1/A+ 7.50 9/1/99 500 525,177
Salomon Brothers, Inc., Senior Medium Term Note .......... A2/A 9.25 6/19/96 500 507,616
------------
1,721,644
------------
FINANCE -- 17.8%
Ford Motor Credit, Corporate Note ........................ A2/A 9.38 12/15/97 500 533,520
General Motor Acceptance Corp., Corporate Medium Term
Note ................................................... A3/A- 7.13 6/1/99 250 258,937
General Motor Acceptance Corp., Corporate Note ........... A3/A- 7.50 5/23/00 500 527,067
IBM Credit Corp., Corporate Medium Term Note ............. A1/A 4.55 12/15/95 500 499,868
Potomac Capital Investment Corp., Medium Term Note B ..... A3/A- 7.25 7/15/97 750 762,030
------------
2,581,422
------------
FINANCIAL SERVICES -- 5.5%
Avco Financial Services, Inc., Corporate Note ............ A2/A 7.38 8/15/01 750 797,042
------------
LEASING -- 3.5%
International Lease Finance Corp., Medium Term Note ...... A2/A+ 7.00 8/15/98 500 514,585
------------
WASTE MANAGEMENT -- 3.5%
WMX Technologies, Inc., Corporate Note ................... A1/A+ 6.65 5/15/05 500 503,273
------------
TOTAL CORPORATE OBLIGATIONS (COST $5,915,100)............... 6,117,966
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 31.3%
Federal Home Loan Bank ................................... 7.60 5/20/00 1,000 1,009,587
Federal Home Loan Bank (a) ............................... 6.10 11/29/00 500 500,000
Federal Home Loan Mortgage Corp. ......................... 6.20 10/10/97 500 500,228
Federal National Mortgage Assoc. ......................... 6.10 10/15/97 500 500,309
Federal National Mortgage Assoc. ......................... 7.84 2/23/98 1,000 1,005,595
Federal National Mortgage Assoc. ......................... 7.77 7/18/01 1,000 1,036,143
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (COST
$4,504,698)............................................... 4,551,862
------------
U.S. GOVERNMENT OBLIGATIONS -- 7.7%
U.S. Treasury Note ....................................... 9.38 % 4/15/96 1,100 1,116,155
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS (COST $1,114,947)......... 1,116,155
------------
</TABLE>
59
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P
RATINGS MATURITY VALUE
(UNAUDITED) RATE DATE SHARES (NOTE 2)
----------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 8.8%
OPEN-END INVESTMENT COMPANIES
Dreyfus Cash Management Fund ............................. 608,877 $ 608,877
Provident Cash Management Fund ........................... 668,834 668,834
------------
TOTAL OPEN-END INVESTMENT COMPANIES (COST $1,277,711)....... 1,277,711
------------
<CAPTION>
PRINCIPAL
AMOUNT
(000)
----------
<S> <C> <C> <C> <C> <C>
COMMERICAL PAPER -- 3.4%
ELECTRONIC EQUIPMENT -- 3.4%
Hitachi America Corp. .................................... P1/A1 5.77 % 1/30/96 $ 500 495,137
------------
TOTAL COMMERCIAL PAPER (COST $495,192)...................... 495,137
------------
TOTAL SHORT-TERM INVESTMENTS (COST $1,772,903).............. 1,772,848
------------
TOTAL INVESTMENTS (COST $13,307,648) (B) -- 93.3%........... 13,558,831
OTHER ASSETS IN EXCESS OF LIABILITIES -- 6.7%............... 976,229
------------
NET ASSETS -- 100.0%........................................ $ 14,535,060
------------
------------
</TABLE>
- ---------------
(a) Callable 11/29/96 at option of this issue or step-up to 6.45%.
(b)The cost for financial reporting purposes is substantially the same for
federal income tax purposes and differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation....... $ 257,049
Unrealized depreciation....... (5,866)
------------
Net unrealized appreciation... $ 251,183
------------
------------
See Notes to Financial Statements.
60
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $13,307,648) .................. $ 13,558,831
Interest receivable ..................................................... 204,818
Receivable for capital shares issued .................................... 805,672
Receivable from Investment Adviser ...................................... 42,230
Deferred organization costs ............................................. 42,278
Prepaid expenses ........................................................ 14,644
------------
Total assets .............................................................. 14,668,473
------------
LIABILITIES:
Dividends payable ....................................................... 30,400
Payable for capital shares redeemed ..................................... 5,000
Accrued expenses and other payables:
Administration fees ................................................... 5,753
Shareholder and Administration Services fees (Class A and Class B
Shares) .............................................................. 362
Distribution expenses (A Shares) ...................................... 65
Distribution expenses (B Shares) ...................................... 88
Custodian and transfer agent fees ..................................... 14,319
Other ................................................................. 77,426
------------
Total liabilities ......................................................... 133,413
------------
NET ASSETS ................................................................ $ 14,535,060
------------
------------
Net Asset Value and Redemption Price per Share:
Class A Shares:
($342,521/33,770 shares of beneficial interest issued and outstanding
$0.001 par value, unlimited number of shares authorized) ............. $ 10.14
Sales charge -- 2.50% of offering price ............................... 0.26
------------
Maximum Offering Price ................................................ $ 10.40
------------
------------
Net Asset Value and Offering Price per Share:
Class B Shares:
($155,904/15,484 shares of beneficial interest issued and outstanding
$0.001 par value, unlimited number of shares authorized) ............. $ 10.07
------------
------------
Net Asset Value, Offering Price and Redemption Price per Share:
Institutional Shares:
($14,036,635/1,383,426 shares of beneficial interest and outstanding
$0.001 par value, unlimited number of shares authorized) ............. $ 10.15
------------
------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par ................................... $ 1,433
Additional paid-in capital .............................................. 14,230,828
Accumulated net realized gains on investment transactions ............... 51,616
Net unrealized appreciation of investments .............................. 251,183
------------
Net Assets, November 30, 1995 ............................................. $ 14,535,060
------------
------------
</TABLE>
- ---------------
See Notes to Financial Statements.
61
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Statements of Operations
For the year ended November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest income -- (includes $67,882 in dividends from investments in money
market funds) ........................................................... $ 1,358,783
EXPENSES:
Investment Advisory fees ................................................ $ 84,074
Administration fees ..................................................... 10,509
Shareholder and Administration Services fees (Class A Shares) ........... 408
Shareholder and Administration Services fees (Class B Shares) ........... 144
Distribution expenses (Class A Shares) .................................. 681
Distribution expenses (Class B Shares) .................................. 898
Transfer agent fees and expenses ........................................ 67,903
Legal fees .............................................................. 18,267
Audit fees .............................................................. 30,847
Reports to shareholders (Class A Shares) ................................ 14,903
Reports to shareholders (Class B Shares) ................................ 19,987
Reports to shareholders (Institutional Shares) .......................... 14,767
Custodian fees and expenses ............................................. 32,646
Registration fees ....................................................... 20,985
Trustees' fees .......................................................... 13,917
Insurance expense ....................................................... 749
Amortization of organization costs ...................................... 12,627
Other expenses .......................................................... 3,503
----------
347,815
Less: Expense reimbursements .............................................. (278,214) 69,601
---------- -----------
Net Investment Income ..................................................... 1,289,182
-----------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS:
Net realized gains on securities transactions ........................... 51,616
Net change in unrealized appreciation (depreciation) of investments ..... 806,674
-----------
Net Realized and Unrealized Gains on Investments .......................... 858,290
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ...................... $ 2,147,472
-----------
-----------
</TABLE>
- -------------
See Notes to Financial Statements.
62
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED APRIL 11, 1994
NOVEMBER 30, TO NOVEMBER 30,
1995 1994(A)
------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income ........................................................ $ 1,289,182 $ 735,796
Net realized gains on securities transactions ................................ 51,616 --
Net change in unrealized appreciation (depreciation) of investments .......... 806,674 (555,490)
------------- ----------------
Net increase in net assets resulting from operations ......................... 2,147,472 180,306
------------- ----------------
Dividends to shareholders from net investment income
Class A Shares ............................................................... (15,632) (3,668)
Class B Shares ............................................................... (4,862) (336)
Institutional Shares ......................................................... (1,268,688) (731,792)
------------- ----------------
Total dividends to shareholders from net investment income ..................... (1,289,182) (735,796)
------------- ----------------
Fund Share Transactions
Net proceeds from shares subscribed .......................................... 11,311,423 28,300,465
Net asset value of shares issued to shareholders in reinvestment of
dividends .................................................................. 1,086,235 714,391
Cost of shares redeemed ...................................................... (22,595,293) (4,584,961)
------------- ----------------
Net increase (decrease) in net assets from Fund share transactions ........... (10,197,635) 24,429,895
------------- ----------------
Total Increase (Decrease) ...................................................... (9,339,345) 23,874,405
NET ASSETS:
Beginning of period .......................................................... 23,874,405 --
------------- ----------------
End of period ................................................................ $ 14,535,060 $ 23,874,405
------------- ----------------
------------- ----------------
</TABLE>
- -------------
(a) Commencement of operations.
See Notes to Financial Statements.
63
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY PRINCIPAL VALUE
RATE DATE AMOUNT (NOTE 2)
--------- --------- ---------- -------------
<S> <C> <C> <C> <C>
U.S GOVERNMENT AGENCY OBLIGATIONS -- 85.2%
FEDERAL HOME LOAN BANK -- 1.5%
Federal Home Loan Bank ........................................... 5.89% 7/24/00 $1,500,000 $ 1,518,035
-------------
FEDERAL HOME LOAN MORTGAGE CORP. -- 39.3%
Federal Home Loan Mortgage Corp., 5 Year Balloon, Gold ........... 7.00 1/1/97 508,366 515,265
Federal Home Loan Mortgage Corp., Debenture ...................... 7.91 1/13/97 2,000,000 2,055,034
Federal Home Loan Mortgage Corp., Callable 1/16/97 ............... 8.20 1/16/98 5,000,000 5,154,670
Federal Home Loan Mortgage Corp., 5 Year Balloon, Pool #M17443 ... 7.00 3/1/98 420,698 426,407
Federal Home Loan Mortgage Corp., 5 Year Balloon, Pool #G50237 ... 8.00 1/1/00 2,145,334 2,179,525
Federal Home Loan Mortgage Corp., 7 Year Balloon, Gold Pool
#M80156 ........................................................ 6.50 3/1/00 408,953 413,190
Federal Home Loan Mortgage Corp., 7 Year Balloon, Gold Pool
#M80331 ........................................................ 8.00 7/1/01 3,596,044 3,700,758
Federal Home Loan Mortgage Corp., 7 Year Balloon, Pool #M80332 ... 7.50 8/1/01 1,862,205 1,908,312
Federal Home Loan Mortgage Corp., Pool #200053 ................... 8.50 9/1/01 2,120,371 2,191,105
Federal Home Loan Mortgage Corp., Pool #200064 ................... 8.00 1/1/02 1,366,318 1,403,986
Federal Home Loan Mortgage Corp., 7 Year Balloon, Pool #M80358 ... 9.00 2/1/02 1,443,945 1,496,288
Federal Home Loan Mortgage Corp., Debenture, Callable 2/28/96 .... 7.54 8/28/02 1,500,000 1,510,069
Federal Home Loan Mortgage Corp., Debenture, Callable 2/2/00 ..... 8.53 2/2/05 2,000,000 2,170,274
Federal Home Loan Mortgage Corp., Debenture, Callable 4/6/98 ..... 8.02 4/6/05 1,000,000 1,041,811
Federal Home Loan Mortgage Corp., CMO PAC 1090-H* ................ 8.50 12/15/06 1,000,000 1,032,289
Federal Home Loan Mortgage Corp., Debenture, Callable 10/29/98 ... 6.08 10/29/08 2,200,000 2,124,428
Federal Home Loan Mortgage Corp., Pool #257156 ................... 8.75 1/1/09 1,021,070 1,049,721
Federal Home Loan Mortgage Corp., Gold Pool #D90560 .............. 5.50 12/1/13 426,490 406,283
Federal Home Loan Mortgage Corp., CMO PAC 1212-CA* ............... 6.50 7/15/16 3,000,000 3,005,397
Federal Home Loan Mortgage Corp., Pool #306558 ................... 9.25 6/1/18 3,179,118 3,333,748
Federal Home Loan Mortgage Corp., Pool #308392 ................... 10.00 9/1/18 122,908 133,835
Federal Home Loan Mortgage Corp., CMO PAC 1133-F* ................ 7.00 11/15/18 361,519 361,396
Federal Home Loan Mortgage Corp., CMO 1092-K* .................... 8.50 6/15/21 1,000,000 1,077,969
Federal Home Loan Mortgage Corp., CMO, PAC-172-J* ................ 7.00 7/15/21 1,000,000 1,010,089
Federal Home Loan Mortgage Corp., CMO 1508-MA* ................... 6.31 5/15/23 868,636 845,217
-------------
40,547,066
-------------
FEDERAL NATIONAL MORTGAGE ASSOC. -- 29.8%
Federal National Mortgage Assoc., Pool #108471 ................... 9.00 11/1/97 173,783 178,171
Federal National Mortgage Assoc., 7 Year Balloon, Pool #50394 .... 8.50 1/1/98 183,292 188,868
Federal National Mortgage Assoc., 7 Year Balloon, Pool #124418 ... 8.00 8/1/99 4,426,719 4,554,647
Federal National Mortgage Assoc., Debenture, Callable 8/11/97 .... 7.00 8/11/99 2,000,000 2,039,720
Federal National Mortgage Assoc. ................................. 6.60 3/26/01 1,000,000 1,004,761
Federal National Mortgage Assoc., Pool #303478 ................... 8.50 11/1/01 1,540,109 1,586,958
Federal National Mortgage Assoc., CMO 1992-37B* .................. 8.00 5/25/02 1,301,000 1,368,885
Federal National Mortgage Assoc., CMO, Series 1993-54, Class
VB* ............................................................ 7.00 2/25/04 1,000,000 1,031,809
Federal National Mortgage Assoc. ................................. 8.40 10/25/04 3,000,000 3,218,157
Federal National Mortgage Assoc. ................................. 6.63 6/20/05 1,500,000 1,566,780
Federal National Mortgage Assoc. ................................. 6.72 8/1/05 1,000,000 1,051,379
</TABLE>
64
<PAGE>
<TABLE>
<CAPTION>
MATURITY PRINCIPAL VALUE
RATE DATE AMOUNT (NOTE 2)
--------- --------- ---------- -------------
<S> <C> <C> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOC. -- (CONTINUED)
Federal National Mortgage Assoc., CMO 91-119M* ................... 8.50% 11/25/08 $1,500,000 $ 1,569,974
Federal National Mortgage Assoc., CMO 91-126PH* .................. 8.40 4/25/14 33,618 33,524
Federal National Mortgage Assoc., Pool #70056 .................... 9.00 12/1/16 454,993 479,330
Federal National Mortgage Assoc., CMO 92-73E* .................... 7.50 5/25/19 5,000,000 5,028,345
Federal National Mortgage Assoc., CMO 91-1H* ..................... 7.00 8/25/19 44,885 44,765
Federal National Mortgage Assoc. ................................. 9.05 5/10/21 1,500,000 1,631,589
Federal National Mortgage Assoc., CMO G94-7* ..................... 7.50 11/17/23 4,058,497 4,190,751
-------------
30,768,413
-------------
GOVERNMENT NATIONAL MORTGAGE ASSOC. -- 9.0%
Government National Mortgage Assoc., Pool #145690 ................ 11.00 3/15/01 57,289 62,008
Government National Mortgage Assoc., Pool #265082 ................ 9.50 3/15/04 216,586 230,643
Government National Mortgage Assoc., Pool #270156 ................ 9.50 4/15/04 178,475 190,058
Government National Mortgage Assoc., Pool #44868 ................. 13.00 1/15/11 21,661 25,235
Government National Mortgage Assoc., Pool #040767 ................ 13.00 2/15/11 50,080 58,343
Government National Mortgage Assoc., Pool #45234 ................. 13.00 2/15/11 19,355 22,549
Government National Mortgage Assoc., Pool #45855 ................. 13.00 4/15/11 33,307 38,803
Government National Mortgage Assoc., Pool #253768 ................ 9.00 6/15/18 60,800 64,483
Government National Mortgage Assoc., Pool #254348 ................ 10.00 10/15/18 194,823 214,187
Government National Mortgage Assoc., Pool #315147 ................ 8.00 3/15/22 1,704,910 1,769,491
Government National Mortgage Assoc., Pool #339902 ................ 8.00 2/15/23 1,669,076 1,731,098
Government National Mortgage Assoc., Pool #392713 ................ 8.00 11/15/24 1,490,826 1,545,076
Government National Mortgage Assoc., Pool #395392 ................ 8.50 4/15/25 3,143,758 3,284,243
-------------
9,236,217
-------------
OTHER -- 5.6%
Export Funding Trust ............................................. 8.21 12/29/06 1,938,408 2,141,343
Housing & Urban Development ...................................... 8.24 8/1/02 2,000,000 2,202,500
Rural Electric Co-op, Series 87A6, Grantor Trust Cert. (Soyland)
Power Co-op, Inc., Callable 3/20/97 @ 105.82 ................... 9.70 9/30/17 800,000 875,751
Tennessee Valley Authority ....................................... 8.25 9/15/34 500,000 535,017
-------------
5,754,611
-------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $85,144,986)................................................ 87,824,342
-------------
U.S. GOVERNMENT OBLIGATIONS -- 12.6%
U.S. TREASURY BONDS -- 7.1%
U.S. Treasury Bond ............................................... 12.75 11/15/10 2,500,000 3,766,402
U.S. Treasury Bond ............................................... 7.25 5/15/16 1,000,000 1,118,436
U.S. Treasury Bond ............................................... 8.13 8/15/21 2,000,000 2,473,750
-------------
7,358,588
-------------
U.S. TREASURY STRIPS -- 5.5%
U.S. Treasury Strip .............................................. 5.78+ 11/15/03 5,000,000 3,177,505
U.S. Treasury Strip .............................................. 5.93+ 11/15/05 2,500,000 1,397,223
U.S. Treasury Strip .............................................. 6.17+ 5/15/09 2,500,000 1,103,625
-------------
5,678,353
-------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(COST $12,395,345)................................................ 13,036,941
-------------
</TABLE>
65
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- -------------
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 1.1%
Dreyfus Cash Management Fund ..................................... 1,112,012 $ 1,112,012
-------------
TOTAL SHORT-TERM INVESTMENTS
(COST $1,112,012)................................................. 1,112,012
-------------
TOTAL INVESTMENTS
(COST $98,652,343) (A) -- 98.9%................................... 101,973,295
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.1%....................... 1,113,812
-------------
NET ASSETS -- 100.0%................................................ $ 103,087,107
-------------
-------------
</TABLE>
- ---------------
* Collateralized Mortgage Obligation.
+ Effective Yield at date of issuance.
(a)The cost for financial reporting purposes is substantially the same for
federal income tax purposes and differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation....... $ 3,427,179
Unrealized depreciation....... (106,227)
------------
Net unrealized appreciation... $ 3,320,952
------------
------------
PAC -- Planned Amortization Class.
See Notes to Financial Statements.
66
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $98,652,343).................................. $ 101,973,295
Interest receivable..................................................................... 1,352,025
Receivable for capital shares issued.................................................... 22,678
Deferred organization costs............................................................. 9,630
Prepaid expenses and cash............................................................... 9,457
-------------
Total assets.............................................................................. 103,367,085
-------------
LIABILITIES:
Dividends payable....................................................................... 97,743
Payable for capital shares redeemed..................................................... 41,119
Accrued expenses and other payables:
Investment Advisory fees.............................................................. 26,308
Administration fees................................................................... 1,109
Shareholder and Administration Service fees (Class A and Class B Shares).............. 4,596
Distribution expenses (A Shares)...................................................... 5,465
Distribution expenses (B Shares)...................................................... 307
Custodian and transfer agent fees..................................................... 32,419
Other................................................................................. 70,912
-------------
Total liabilities......................................................................... 279,978
-------------
NET ASSETS................................................................................ $ 103,087,107
-------------
-------------
Net Asset Value and Redemption Price per Share:
Class A Shares:
($26,911,680/2,590,933 shares of beneficial interest issued and outstanding $0.001 par
value, unlimited number of shares authorized)........................................ $ 10.39
Sales charge -- 4.50% of offering price............................................... 0.49
-------------
Maximum Offering Price................................................................ $ 10.88
-------------
-------------
Net Asset Value and Offering Price per Share:
Class B Shares:
($1,422,052/136,973 shares of beneficial interest issued and outstanding $0.001 par
value, unlimited number of shares authorized)........................................ $ 10.38
-------------
-------------
Net Asset Value, Offering Price and Redemption Price per Share:
Institutional Shares:
($74,753,375/7,213,553 shares of beneficial interest issued and outstanding $0.001 par
value, unlimited number of shares authorized)........................................ $ 10.36
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par................................................... $ 9,941
Additional paid-in capital.............................................................. 104,064,344
Accumulated net realized losses on investment transactions.............................. (4,301,597)
Distributions in excess of net investment income........................................ (6,533)
Net unrealized appreciation of investments.............................................. 3,320,952
-------------
Net Assets, November 30, 1995............................................................. $ 103,087,107
-------------
-------------
</TABLE>
- ---------------
See Notes to Financial Statements.
67
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the year ended November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest income -- (includes $86,747 in dividends from investments in money
market funds)............................................................... $ 7,520,080
EXPENSES:
Investment Advisory fees...................................................... $ 400,689
Administration fees........................................................... 50,152
Shareholder and Administration Service fees (Class A Shares).................. 42,088
Shareholder and Administration Service fees (Class B Shares).................. 1,996
Distribution expenses (Class A Shares)........................................ 70,145
Distribution expenses (Class B Shares)........................................ 13,340
Transfer agent fees and expenses.............................................. 107,240
Legal fees.................................................................... 17,160
Audit fees.................................................................... 45,562
Custodian fees and expenses................................................... 80,109
Reports to shareholders (Class A Shares)...................................... 7,476
Reports to shareholders (Class B Shares)...................................... 13,311
Reports to shareholders (Institutional Shares)................................ 10,548
Registration fees............................................................. 13,096
Trustees' fees................................................................ 12,195
Insurance expense............................................................. 3,353
Amortization of organization expenses......................................... 14,015
Other expenses................................................................ 11,300
----------
913,775
Less: Expense reimbursements.................................................... (27,009) 886,766
---------- ------------
Net Investment Income........................................................... 6,633,314
------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized losses on securities transactions................................ (96,694)
Net change in unrealized appreciation (depreciation) of investments........... 6,904,058
------------
Net Realized and Unrealized Gains on Investments.............................. 6,807,364
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ $ 13,440,678
------------
------------
</TABLE>
- ---------------
See Notes to Financial Statements.
68
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
--------------------------
NOVEMBER 30, NOVEMBER 30,
1995 1994
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income......................................................... $ 6,633,314 $ 7,175,675
Net realized losses on securities transactions................................ (96,694) (4,163,807)
Net change in unrealized appreciation (depreciation) of investments........... 6,904,058 (6,887,140)
------------ ------------
Net increase (decrease) in net assets resulting from operations............... 13,440,678 (3,875,272)
------------ ------------
Dividends to shareholders from net investment income
Class A Shares................................................................ (1,785,749) (3,952,631)
Class B Shares................................................................ (80,467) (39,883)
Institutional Shares.......................................................... (4,773,631) (3,183,161)
------------ ------------
Total dividends to shareholders from net investment income...................... (6,639,847) (7,175,675)
------------ ------------
Distributions in excess of net investment income
Class A Shares................................................................ -- (127,953)
Class B Shares................................................................ -- (2,331)
Institutional Shares.......................................................... -- (149,326)
------------ ------------
Total distributions in excess of net investment income.......................... -- (279,610)
------------ ------------
Distributions to shareholders from net realized gains
Class A Shares................................................................ -- (1,211,453)
Class B Shares................................................................ -- (63)
Institutional Shares.......................................................... -- (3,262)
------------ ------------
Total distributions to shareholders from net realized gains..................... -- (1,214,778)
------------ ------------
Distributions in excess of net realized gains
Class A Shares................................................................ -- (277,488)
Class B Shares................................................................ -- (14)
Institutional Shares.......................................................... -- (747)
------------ ------------
Total distributions in excess of net realized gains............................. -- (278,249)
------------ ------------
Fund Share Transactions
Net proceeds from shares subscribed........................................... 11,569,600 90,752,395
Net asset value of shares issued to shareholders in reinvestment of dividends
and distributions........................................................... 5,409,402 6,615,333
Cost of shares redeemed....................................................... (22,116,958) (128,447,728)
------------ ------------
Net decrease in net assets from Fund share transactions....................... (5,137,956) (31,080,000)
------------ ------------
Total Increase (Decrease)....................................................... 1,662,875 (43,903,584)
NET ASSETS:
Beginning of period........................................................... 101,424,232 145,327,816
------------ ------------
End of period................................................................. $103,087,107 $101,424,232
------------ ------------
------------ ------------
</TABLE>
- ---------------
See Notes to Financial Statements.
69
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S/ S&P PRINCIPAL
RATINGS MATURITY AMOUNT VALUE
(UNAUDITED) RATE DATE (000) (NOTE 2)
------------- ------ --------- -------- ------------
<S> <C> <C> <C> <C> <C>
LONG-TERM INVESTMENTS -- 96.6%
CORPORATE BONDS -- 59.0%
AUTOMOTIVE FINANCE -- 4.1%
General Motors Acceptance Corp. .................................... A3/A- 7.95%+ 10/15/02 $ 1,500 $ 1,699,736
General Motors Acceptance Corp.*** ................................. A3/A- 8.75 7/15/05 1,000 1,162,740
------------
2,862,476
------------
BANKING & FINANCE COMPANIES -- 19.8%
American Express Credit Corp. ...................................... Aa3/A+ 6.13 11/15/01 1,500 1,507,911
American General Finance Corp. ..................................... A1/A+ 8.13 8/15/09 500 567,000
Associates Corp., N.A., Series A*** ................................ Aa3/AA- 7.95 2/16/98 500 572,006
Associates Corp., N.A., Series B*** ................................ Aa3/AA- 7.95 3/3/98 300 343,204
General Re Corp., Series A ......................................... Aa1/AAA 9.00 9/12/09 1,800 2,210,675
Key Corp. .......................................................... A1/A- 7.00 5/11/05 1,500 1,556,368
Merrill Lynch Corp. ................................................ A1/A+ 7.25 6/14/04 1,000 1,024,550
Morgan Stanley Group, Floating Rate Note** ......................... A1/A+ 5.58 3/22/99 3,000 2,957,058
Progress Capital Corp.(b) .......................................... A1/A+ 8.23 9/12/96 1,000 1,017,770
SouthTrust Bank Atlanta ............................................ A3/A- 7.74 5/15/25 2,000 2,192,112
------------
13,948,654
------------
CHEMICALS -- 0.8%
Monsanto Co. -- ESOP Debenture ..................................... A1/A 8.13 12/15/06 500 572,012
------------
COMMUNICATION EQUIPMENT -- 5.1%
Motorola, Inc. ..................................................... Aa3/AA 6.50 9/1/25 2,000 2,063,780
Southern Bell Telephone ............................................ Aaa/AAA 8.63 9/1/26 1,500 1,560,962
------------
3,624,742
------------
FINANCE COMPANIES -- 1.6%
Caterpillar Finance, Inc. ......................................... A2/A 8.88 6/1/00 1,000 1,110,840
------------
MACHINERY -- 5.6%
Caterpillar, Inc. .................................................. A2/A 8.95 5/12/00 2,000 2,231,164
CSR America, Inc. .................................................. A2/A 6.88 7/21/05 1,700 1,746,165
------------
3,977,329
------------
TELECOMMUNICATIONS -- 17.5%
Bell Telephone Debenture ........................................... Aa1/AA 8.35 12/15/30 2,750 3,435,641
British Telecommunications Finance, Yankee Bond .................... Aaa/AAA 9.63 2/15/19 2,000 2,291,138
General Telephone of Northwest, Series BB .......................... A2/A+ 8.75 4/15/16 1,305 1,358,673
New England Telegraph & Telephone .................................. Aa2/AA- 7.88 11/15/29 2,750 3,147,763
Southern California Edison ......................................... A2/A+ 8.63 4/15/19 2,000 2,109,238
------------
12,342,453
------------
WASTE DISPOSAL -- 4.5%
WMX Technologies, Inc.*** .......................................... A1/A+ 6.22 4/30/97 2,000 2,176,252
</TABLE>
70
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/ S&P PRINCIPAL
RATINGS MATURITY AMOUNT VALUE
(UNAUDITED) RATE DATE (000) (NOTE 2)
------------- ------ --------- -------- ------------
<S> <C> <C> <C> <C> <C>
WASTE DISPOSAL -- (CONTINUED)
WMX Technologies, Inc. ............................................. A1/A+ 6.65% 5/15/05 $ 1,000 $ 1,028,116
------------
3,204,368
------------
TOTAL CORPORATE OBLIGATIONS (COST $39,928,834)........................ 41,642,874
------------
MUNICIPAL BONDS (TAXABLE) -- 0.8%
City of Miami Beach ................................................ Aaa/AAA 8.55 9/1/15 500 552,014
------------
TOTAL MUNICIPAL BONDS (TAXABLE) (COST $498,613)....................... 552,014
------------
U.S. GOVERNMENT AGENCY
OBLIGATIONS -- 32.2%
FEDERAL HOME LOAN MORTGAGE CORP. -- 18.6%
Federal Home Loan Mortgage Corp. ................................... Aaa/AAA 8.20 1/16/98 1,600 1,649,494
Federal Home Loan Mortgage Corp., CMO 1166-B* ...................... Aaa/AAA 8.00 11/15/98 2,000 2,063,198
Federal Home Loan Mortgage Corp., Pool #L90152 ..................... Aaa/AAA 8.00 2/1/00 2,082 2,142,248
Federal Home Loan Mortgage Corp., Pool #200032 ..................... Aaa/AAA 9.00 4/1/01 3 2,727
Federal Home Loan Mortgage Corp., Pool #200040 ..................... Aaa/AAA 9.00 6/1/01 6 5,869
Federal Home Loan Mortgage Corp., Note ............................. Aaa/AAA 7.05 3/24/04 1,000 1,026,939
Federal Home Loan Mortgage Corp., Pool #380070 ..................... Aaa/AAA 9.00 1/1/05 181 189,074
Federal Home Loan Mortgage Corp. ................................... Aaa/AAA 6.49 10/3/05 2,000 2,063,000
Federal Home Loan Mortgage Corp., CMO 1212-CA* ..................... Aaa/AAA 6.50 7/15/16 1,000 1,001,799
Federal Home Loan Mortgage Corp., CMO 25-F* ........................ Aaa/AAA 9.50 12/15/18 194 196,224
Federal Home Loan Mortgage Corp., CMO 1141-F* ...................... Aaa/AAA 8.50 10/15/20 1,000 1,033,999
Federal Home Loan Mortgage Corp., CMO 1163-I* ...................... Aaa/AAA 6.95 12/15/20 750 761,497
Federal Home Loan Mortgage Corp., CMO 172-J* ....................... Aaa/AAA 7.00 7/15/21 1,000 1,010,089
------------
13,146,157
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 12.1%
Federal National Mortgage Association, Pool #50609, 7 Yr. Balloon
Participation Certificate......................................... Aaa/AAA 8.00 6/1/99 308 316,647
Federal National Mortgage Association, Pool #304786, 7 Yr. Balloon
Participation Certificate......................................... Aaa/AAA 8.50 2/1/02 613 632,430
Federal National Mortgage Association, CMO G94-6VB* ................ Aaa/AAA 8.00 11/17/03 2,280 2,453,849
Federal National Mortgage Association, Pool #124975 ................ Aaa/AAA 7.50 8/1/08 916 938,711
Federal National Mortgage Association, CMO 91-126 PH* .............. Aaa/AAA 8.40 4/25/14 34 33,524
Federal National Mortgage Association, CMO G94-7A* ................. Aaa/AAA 7.50 11/17/23 4,058 4,190,751
------------
8,565,912
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 1.5%
Government National Mortgage Association, Pool #133357 ............. Aaa/AAA 11.00 7/15/00 20 21,448
Government National Mortgage Association, Pool #140135 ............. Aaa/AAA 11.00 11/15/00 60 64,928
Government National Mortgage Association, Pool #044586 ............. Aaa/AAA 13.00 1/15/11 4 5,171
Government National Mortgage Association, Pool #044783 ............. Aaa/AAA 13.00 1/15/11 53 62,274
</TABLE>
71
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/ S&P PRINCIPAL
RATINGS MATURITY AMOUNT VALUE
(UNAUDITED) RATE DATE (000) (NOTE 2)
------------- ------ --------- -------- ------------
<S> <C> <C> <C> <C> <C>
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- (CONTINUED)
Government National Mortgage Association, Pool #045097 ............. Aaa/AAA 13.00% 1/15/11 $ 32 $ 37,831
Government National Mortgage Association, Pool #045753 ............. Aaa/AAA 13.00 2/15/11 28 33,012
Government National Mortgage Association, Pool #200919 ............. Aaa/AAA 8.00 5/15/17 438 455,339
Government National Mortgage Association, Pool #207980 ............. Aaa/AAA 8.00 5/15/17 16 16,424
Government National Mortgage Association, Pool #202853 ............. Aaa/AAA 9.00 7/15/17 305 323,455
------------
1,019,882
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $22,206,669).................................................. 22,731,951
------------
U.S. GOVERNMENT OBLIGATIONS -- 4.6%
U.S. TREASURY STRIPS -- 3.9%
U.S. Treasury Strip ................................................ 6.92+ 5/15/09 2,500 1,103,625
U.S. Treasury Strip ................................................ 7.73+ 5/15/13 5,000 1,673,345
------------
2,776,970
------------
U.S. TREASURY BONDS -- 0.7%
U.S. Treasury Bond ................................................. 6.25 8/15/23 500 500,155
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(COST $2,787,305)................................................... 3,277,125
------------
TOTAL LONG-TERM INVESTMENTS (COST $65,421,421)........................ 68,203,964
------------
<CAPTION>
SHARES
--------
<S> <C> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 1.2%
Dreyfus Cash Management Fund ....................................... 839,964 839,964
------------
TOTAL SHORT-TERM INVESTMENTS (COST $839,964).......................... 839,964
------------
TOTAL INVESTMENTS (COST $66,261,385) (A)-- 97.8%...................... 69,043,928
OTHER ASSETS IN EXCESS OF LIABILITIES -- 2.2%......................... 1,354,005
------------
NET ASSETS -- 100.0%.................................................. $ 70,397,933
------------
------------
</TABLE>
- ---------------
+ Effective yield at date of issuance.
* Collateralized Mortgage Obligation.
** Variable rate security. Maturity date reflects the later of the next
interest rate change date or the next put date.
*** Put and demand features exist allowing the Fund to require the repurchase of
the investment within variable time periods. Maturity date reflects the next
put date.
(a)The cost for financial reporting purposes is substantially the same for
federal income tax purposes and differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation....... $ 2,859,629
Unrealized depreciation....... (77,086)
------------
Net unrealized appreciation... $ 2,782,543
------------
------------
(b)144a security which is restricted as to resale to institutional investors.
See Notes to Financial Statements.
72
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $66,261,385)........................ $ 69,043,928
Cash.......................................................................... 1,085,542
Interest receivable........................................................... 862,486
Receivable from Investment Adviser............................................ 14,451
Receivable for capital shares issued.......................................... 45,385
Deferred organization costs................................................... 42,797
Prepaid expenses.............................................................. 9,907
------------
Total assets.................................................................... 71,104,496
------------
LIABILITIES:
Dividends payable............................................................. 42,861
Payable for capital shares redeemed........................................... 549,404
Accrued expenses and other payables:
Administration fees......................................................... 19,894
Shareholder and Administration Services fees (Class A and Class B Shares)... 3,791
Distribution expenses (A Shares)............................................ 302
Distribution expenses (B Shares)............................................ 230
Custodian and transfer agent fees........................................... 20,789
Other....................................................................... 69,292
------------
Total liabilities............................................................... 706,563
------------
NET ASSETS...................................................................... $ 70,397,933
------------
------------
Net Asset Value and Redemption Price per Share:
Class A Shares:
($819,870/77,444 shares of beneficial interest issued and outstanding $0.001
par value, unlimited number of shares authorized).......................... $ 10.59
Sales charge -- 4.50% of offering price..................................... 0.50
------------
Maximum Offering Price...................................................... $ 11.09
------------
------------
Net Asset Value and Offering Price per Share:
Class B Shares:
($655,116/62,205 shares of beneficial interest issued and outstanding $0.001
par value, unlimited number of shares authorized).......................... $ 10.53
------------
------------
Net Asset Value, Offering Price and Redemption Price per Share:
Institutional Shares:
($68,922,947/6,532,701 shares of beneficial interest issued and outstanding
$0.001 par value, unlimited number of shares authorized)................... $ 10.55
------------
------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par......................................... $ 6,673
Additional paid-in capital.................................................... 66,964,128
Accumulated net realized gains on investment transactions..................... 644,589
Net unrealized appreciation of investments.................................... 2,782,543
------------
Net Assets, November 30, 1995................................................... $ 70,397,933
------------
------------
</TABLE>
- ---------------
See Notes to Financial Statements.
73
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the year ended November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest income -- (includes $43,648 in dividends from investments in money
market funds)............................................................... $ 4,847,193
EXPENSES:
Investment Advisory fees...................................................... $266,371
Administration fees........................................................... 33,391
Shareholder and Administration Services fees (Class A Shares)................. 2,021
Shareholder and Administration Services fees (Class B Shares)................. 1,039
Distribution expenses (Class A Shares)........................................ 2,539
Distribution expenses (Class B Shares)........................................ 5,219
Transfer agent fees and expenses.............................................. 77,918
Registration fees............................................................. 24,924
Legal fees.................................................................... 16,112
Audit fees.................................................................... 30,797
Custodian fees and expenses................................................... 61,464
Reports to shareholders (Class A Shares)...................................... 14,945
Reports to shareholders (Class B Shares)...................................... 18,487
Reports to shareholders (Institutional Shares)................................ 20,028
Trustees' fees................................................................ 13,941
Insurance expense............................................................. 2,154
Amortization of organization expenses......................................... 12,827
Other expenses................................................................ 3,126
--------
607,303
Less: Expense reimbursements (380,759) 226,544
-------- ------------
Net Investment Income........................................................... 4,620,649
------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS:
Net realized gains on securities transactions................................. 1,689,008
Net change in unrealized appreciation (depreciation) of investments........... 4,960,847
------------
Net Realized and Unrealized Gains on Investments.............................. 6,649,855
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ $ 11,270,504
------------
------------
</TABLE>
- ---------------
See Notes to Financial Statements.
74
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED APRIL 11, 1994
NOVEMBER 30, TO NOVEMBER 30,
1995 1994(A)
------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income............................................... $ 4,620,649 $ 3,030,941
Net realized gains (losses) on securities transactions.............. 1,689,008 (880,858)
Net change in unrealized appreciation (depreciation) of
investments....................................................... 4,960,847 (2,178,304)
------------- ----------------
Net increase (decrease) in net assets resulting from operations..... 11,270,504 (28,221)
------------- ----------------
Dividends to shareholders from net investment income
Class A Shares...................................................... (65,731) (13,867)
Class B Shares...................................................... (83,217) (10,030)
Institutional Shares................................................ (4,471,701) (3,007,044)
------------- ----------------
Total dividends to shareholders from net investment income............ (4,620,649) (3,030,941)
------------- ----------------
Distributions to shareholders in excess of net investment income
Class A Shares...................................................... -- (748)
Class B Shares...................................................... -- (541)
Institutional Shares................................................ -- (162,272)
------------- ----------------
Total distributions to shareholders in excess of net investment
income.............................................................. -- (163,561)
------------- ----------------
Fund Share Transactions
Net proceeds from shares subscribed................................. 18,125,128 83,324,654
Net asset value of shares issued to shareholders in reinvestment of
dividends......................................................... 4,149,790 2,594,383
Cost of shares redeemed............................................. (26,178,656) (15,044,498)
------------- ----------------
Net increase (decrease) in net assets from Fund share
transactions...................................................... (3,903,738) 70,874,539
------------- ----------------
Total Increase........................................................ 2,746,117 67,651,816
NET ASSETS:
Beginning of period................................................. 67,651,816 --
------------- ----------------
End of period (net of distributions in excess of net investment
income of $0 and $163,561, respectively).......................... $ 70,397,933 $ 67,651,816
------------- ----------------
------------- ----------------
</TABLE>
- ---------------
(a) Commencement of operations.
See Notes to Financial Statements.
75
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL
RATINGS MATURITY AMOUNT VALUE
(UNAUDITED) RATE DATE (000) (NOTE 2)
------------------- ---------- --------- --------- --------------
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS -- 96.8%
FLORIDA -- 74.0%
Collier County, Health Facilities Authority
Revenue, Callable 12/1/04 @ 102........... A-+/BBB+ 6.25% 12/1/07 $ 700 $ 704,977
Collier County, Health Facilities Authority
Revenue, Callable 12/1/04 @ 102........... A-+/BBB+ 6.38 12/1/08 700 720,349
Collier County, Health Facilities Authority
Revenue, Callable 12/1/04 @ 102........... A-+/BBB+ 7.00 12/1/19 5,175 5,409,220
Dade County, Health Fac. Auth., Hospital
Rev., Rfdg., South Miami Hospital (AMBAC
Insured).................................. Aaa/AAA 7.00 10/1/18 1,000 1,120,920
Escambia County, Pollution Control Rev.
Rfdg., Gulf Power Project................. A2/A 6.75 3/1/22 1,250 1,300,700
Florida State Bd. of Education Capital
Outlay Public Education................... Aa/AA 6.40 6/1/19 4,000 4,264,440
Florida State Bd. of Education Capital
Outlay Public Education, Series C Callable
6/1/02 @ 101.............................. Aa/AA 6.63 6/1/22 9,500 10,453,040
Florida State General Obligation Bonds,
Jacksonville Transportation Authority..... Aa/AA 6.40 7/1/16 1,000 1,071,830
Florida State General Obligation Bonds,
Pollution Control, Ser. Y................. Aa/AA 6.50 7/1/11 1,000 1,095,470
Florida State General Obligation Bonds,
Pollution Control, Ser. Y................. Aa/AA 6.50 7/1/13 1,500 1,634,370
Florida State General Obligation Bonds,
Pollution Control, Ser. Y................. Aa/AA 6.60 7/1/17 1,000 1,099,850
Florida State Turnpike Authority Revenue,
Callable 7/1/05 @ 101, 7/1/06 @ 100 (FGIC
Insured).................................. Aaa/AAA 5.50 7/1/21 14,000 13,932,660
Gainesville Utility System Revenue.......... Aa/AA 6.50 10/1/11 3,000 3,468,330
Greater Orlando Aviation Auth. Fac. Rev.
Rfdg. Ser. B (FGIC Insured)............... Aaa/AAA 6.55 10/1/08 1,000 1,123,140
Halifax Hospital, Medical Center Hospital
Rev., Daytona (MBIA Insured).............. Aaa/AAA 6.75 10/1/11 1,250 1,383,213
Hillsborough County, Ind. Development Auth.,
Pollution Control Rev. Rfdg. Tampa
Electric Proj. Ser. 1991.................. Aa3/AA 7.88 8/1/21 325 382,402
Jacksonville Elec. Auth. Rev., St. John's
River Power Pk............................ Aa1/AA+ 7.00 10/1/09 1,200 1,325,280
Jacksonville Elec. Auth. Rev., St. John's
River Power Pk............................ Aa1/AA+ 5.38 10/1/15 8,000 8,023,600
</TABLE>
76
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL
RATINGS MATURITY AMOUNT VALUE
(UNAUDITED) RATE DATE (000) (NOTE 2)
------------------- ---------- --------- --------- --------------
<S> <C> <C> <C> <C> <C>
FLORIDA -- (CONTINUED)
Jacksonville Health Fac. Auth. Rfdg.,
St. Luke's Hospital Assn.................. NR/AA+ 7.10% 11/15/06 $ 1,250 $ 1,390,150
Jacksonville Sales Tax Revenue, Callable
10/1/05 @ 101, (FGIC Insured)............. Aaa/AAA 5.38 10/1/18 5,000 4,986,550
Martin County Industrial Dev. Authority,
Rev., Indianatown Cogeneration PJ-A (AMT),
Callable 12/15/04 @ 102................... Baa3/BBB- 7.88 12/15/25 2,500 2,870,675
Martin County Industrial Dev. Authority,
Rev., Indianatown Cogeneration PJ-B (AMT),
Callable 12/15/04 @ 102................... Baa3/BBB- 8.05 12/15/25 2,500 2,832,100
Miami Beach Water & Sewer Revenue, Callable
9/1/05 @ 102, (FSA Insured)............... Aaa/AAA 5.38 9/1/15 5,000 5,016,850
Ocala Water & Sewer Revenue, Callable
10/1/05 @ 102, 10/1/07 @ 100, (AMBAC
Insured).................................. Aaa/AAA+ 5.50 10/1/20 4,000 3,980,880
Okaloosa County Gas District Rev., Callable
10/1/04 @ 102 (MBIA Insured).............. Aaa/AAA 6.88 10/1/19 5,000 5,587,950
Orange County Tourist Auth. Tax Dev., Rev.,
Ser. B (AMBAC Insured).................... Aaa/AAA 6.50 10/1/19 4,000 4,367,640
Orlando Utility Comm. Water & Elec. Rev.
Rfdg., Sub - Ser. D....................... Aa/AA- 6.75 10/1/17 3,000 3,591,420
Pensacola Sales Excise Tax Rev. Ser. B (MBIA
Insured).................................. Aaa/AAA 6.75 10/1/12 1,000 1,101,860
Sarasota County Utilities System Rev.,
Series 1994 (FGIC Insured), Callable
10/1/04 @ 102............................. Aaa/AAA 6.50 10/1/22 2,000 2,191,860
St. Petersburg Health Fac. Auth., Rev.,
Allegheny Health (MBIA Insured)........... Aaa/AAA 7.00 12/1/15 1,000 1,119,420
St. Petersburg Hosp., Health Fac. Auth.,
Rev. All Childrens' Hosp., Inc, Ser. A
(MBIA Insured)............................ Aaa/AAA 6.50 11/15/10 1,500 1,659,105
Sunrise Lakes, Phase 4 Recreation District
Revenue, Unlimited General Obligation
Bonds, Ser. A, Callable 8/1/05 @ 102...... BBB/BBB-+ 6.75 8/1/24 2,500 2,667,375
--------------
101,877,626
--------------
GUAM -- 17.0%
Guam Airport Auth. Rev. Bonds, Ser. B
(AMT)..................................... NR/BBB 6.40 10/1/05 2,435 2,514,551
Guam Airport Auth. Rev. Bonds, Ser. 1993A... NR/BBB 6.38 10/1/10 3,820 3,886,544
Guam Airport Auth. Rev. Bonds, Ser. B
(AMT)..................................... NR/BBB 6.70 10/1/23 9,150 9,431,180
Guam Power Auth. Rev. Bonds, Ser. A,
Callable 10/1/03 @102, 10/1/14 @100....... NR/BBB 5.25 10/1/23 5,000 4,355,550
</TABLE>
77
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL
RATINGS MATURITY AMOUNT VALUE
(UNAUDITED) RATE DATE (000) (NOTE 2)
------------------- ---------- --------- --------- --------------
<S> <C> <C> <C> <C> <C>
GUAM -- (CONTINUED)
Guam Power Auth. Rev. Bonds, Ser. A Callable
10/1/04 @102, 10/1/06 @100................ NR/BBB 6.75% 10/1/24 $ 3,000 $ 3,173,370
--------------
23,361,195
--------------
PUERTO RICO -- 5.8%
Puerto Rico Electric Power Authority,
Prerefunded 7/1/01 @ 102.................. Baa1/A 7.00 7/1/21 3,825 4,403,455
Puerto Rico Industrial Tourist EDL Medical &
Environmental Control Fac. Financing
Auth., Hospital Revenue Bond 1995, Auxilio
Mutuo Obligation Group, Ser. A (MBIA
Insured), Callable 1/1/05 @ 102........... Aaa/AAA 6.25 7/1/16 1,000 1,077,510
Puerto Rico Industrial Tourist EDL Medical &
Environmental Control Fac. Financing
Auth., Dr. Pila Hospital, PJ-A (FHA
Insured), Callable 8/1/05 @ 101.5......... NR/AAA 6.13 8/1/25 1,000 1,037,430
Univ. of Puerto Rico, Univ. Rev., Ser. L,
Prerefunded 6/1/98 @ 100.................. Aaa/A 6.50 6/1/13 1,500 1,587,735
--------------
8,106,130
--------------
TOTAL MUNICIPAL BONDS
(COST $124,733,795).......................... 133,344,951
--------------
<CAPTION>
SHARES
---------
<S> <C> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 4.2%
Dreyfus Cash Management Fund.................. 5,745,043 5,745,043
--------------
TOTAL SHORT-TERM INVESTMENTS
(COST $5,745,043).............................. 5,745,043
--------------
TOTAL INVESTMENTS
(COST $130,478,838) (A) -- 101.0%.............. 139,089,994
LIABILITIES IN EXCESS OF OTHER ASSETS --
(1.0%)......................................... (1,394,530)
--------------
NET ASSETS -- 100.0%............................ $ 137,695,464
--------------
--------------
</TABLE>
- ---------------
+ Represents rating by Fitch Investors.
(a)The cost for financial reporting purposes is substantially the same for
federal income tax purposes and differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation....... $ 8,611,156
Unrealized depreciation....... (0)
------------
Net unrealized appreciation... $ 8,611,156
------------
------------
AMBAC -- American Municipal Bond Assurance Corp.
FGIC -- Financial Guaranty Insurance Corp.
FHA -- Federal Housing Administration.
FSA -- Financial Security Assurance Holding.
MBIA -- Municipal Bond Insurance Association.
NR -- Not Rated.
AMT -- Interest on security is subject to Federal Alternative Minimum Tax.
See Notes to Financial Statements.
78
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $130,478,838) ........................... $ 139,089,994
Receivable for capital shares issued .............................................. 1,081,698
Interest receivable ............................................................... 2,447,854
Receivable from Administrator ..................................................... 2,413
Deferred organization costs ....................................................... 9,316
Prepaid expenses and cash ......................................................... 9,281
-------------
Total assets ........................................................................ 142,640,556
-------------
LIABILITIES:
Payable for investment securities purchased ....................................... 4,375,050
Payable for capital shares redeemed ............................................... 222,718
Dividends payable ................................................................. 165,564
Accrued expenses and other payables:
Investment Advisory fees ........................................................ 35,577
Shareholder and Administration Services fees (Class A and Class B Shares) ....... 12,652
Distribution expenses (Class A Shares) .......................................... 19,173
Distribution expenses (Class B Shares) .......................................... 4,140
Custodian and transfer agent fees ............................................... 35,576
Other ........................................................................... 74,642
-------------
Total liabilities ................................................................... 4,945,092
-------------
NET ASSETS .......................................................................... $ 137,695,464
-------------
-------------
Net Asset Value and Redemption Price per Share:
Class A Shares:
($94,016,808/8,476,731 shares of beneficial interest issued and outstanding
$0.001 par value, unlimited number of shares authorized) ....................... $ 11.09
Sales charge -- 4.50% of offering price ......................................... 0.52
-------------
Maximum Offering Price .......................................................... $ 11.61
-------------
-------------
Net Asset Value and Offering Price per Share:
Class B Shares:
($9,699,452/876,199 shares of beneficial interest issued and outstanding $0.001
par value, unlimited number of shares authorized) .............................. $ 11.07
-------------
-------------
Net Asset Value, Offering Price and Redemption Price per Share:
Institutional Shares:
($33,979,204/3,062,950 shares of beneficial interest issued and outstanding
$0.001 par value, unlimited number of shares authorized) ....................... $ 11.09
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par ............................................. $ 12,416
Additional paid-in capital ........................................................ 133,841,876
Accumulated undistributed net investment income.................................... 269,978
Accumulated net realized losses on investment transactions ........................ (5,039,962)
Net unrealized appreciation of investments ........................................ 8,611,156
-------------
Net Assets, November 30, 1995 ....................................................... $ 137,695,464
-------------
-------------
</TABLE>
- ------------
See Notes to Financial Statements.
79
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the year ended November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest Income -- (includes $112,858 in dividends from investments in
money market funds) ................................................ $ 8,571,851
EXPENSES:
Investment Advisory fees ........................................... $ 557,888
Administration fees ................................................ 69,736
Shareholder and Administration Services fees (Class A Shares) ...... 151,096
Shareholder and Administration Services fees (Class B Shares) ...... 11,406
Distribution expenses (Class A Shares) ............................. 251,826
Distribution expenses (Class B Shares) ............................. 76,047
Transfer agent fees and expenses ................................... 99,373
Custodian fees and expenses ........................................ 87,168
Legal fees ......................................................... 16,941
Audit fees ......................................................... 45,724
Reports to shareholders (Class A Shares) ........................... 14,340
Reports to shareholders (Class B Shares) ........................... 13,146
Reports to shareholders (Institutional Shares) ..................... 5,278
Organization expenses .............................................. 13,894
Trustees' fees ..................................................... 12,310
Insurance expense .................................................. 4,777
Registration fees .................................................. 25,434
Other expenses ..................................................... 13,788
-----------
1,470,172
Less: Expense reimbursements ......................................... (49,903) 1,420,269
----------- ------------
Net Investment Income ................................................ 7,151,582
------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains on securities transactions ...................... 2,033,503
Net change in unrealized appreciation (depreciation) of
investments ...................................................... 14,521,163
------------
Net Realized and Unrealized Gains on Investments ................... 16,554,666
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................. $ 23,706,248
------------
------------
</TABLE>
- ------------
See Notes to Financial Statements.
80
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------
NOVEMBER 30, NOVEMBER 30,
1995 1994
------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income ........................................................ $ 7,151,582 $ 9,258,547
Net realized gains (losses) on securities transactions ....................... 2,033,503 (7,066,969)
Net change in unrealized appreciation (depreciation) of investments .......... 14,521,163 (15,956,419)
------------- ----------------
Net increase (decrease) in net assets resulting from operations .............. 23,706,248 (13,764,841)
------------- ----------------
Dividends to shareholders from net investment income
Class A Shares ............................................................... (5,123,622) (7,715,810)
Class B Shares ............................................................... (349,572) (133,289)
Institutional Shares ......................................................... (1,678,388) (1,409,448)
------------- ----------------
Total dividends to shareholders from net investment income ..................... (7,151,582) (9,258,547)
------------- ----------------
Distributions to shareholders from net realized gains
Class A Shares ............................................................... -- (1,513,732)
Class B Shares ............................................................... -- (5,762)
Institutional Shares ......................................................... -- (37,216)
------------- ----------------
Total distributions to shareholders from net realized gains .................... -- (1,556,710)
------------- ----------------
Fund Share Transactions
Net proceeds from shares subscribed .......................................... 16,413,128 73,910,188
Net asset value of shares issued to shareholders in reinvestment of
dividends .................................................................. 4,818,028 7,600,580
Cost of shares redeemed ...................................................... (44,445,874) (120,338,761)
------------- ----------------
Net decrease in net assets from Fund share transactions ...................... (23,214,718) (38,827,993)
------------- ----------------
Total Decrease ................................................................. (6,660,052) (63,408,091)
NET ASSETS:
Beginning of period .......................................................... 144,355,516 207,763,607
------------- ----------------
End of period (including accumulated undistributed net investment income of
$269,978 and $269,978, respectively) ....................................... $ 137,695,464 $ 144,355,516
------------- ----------------
------------- ----------------
</TABLE>
- ------------
See Notes to Financial Statements.
81
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S&P/MOODY'S PRINCIPAL AMORTIZED
RATING MATURITY AMOUNT COST
(UNAUDITED) RATE DATE (000) (NOTE 2)
---------------- --------- --------- --------- --------------
<S> <C> <C> <C> <C> <C>
BANK NOTES -- 8.6%
Bank of America, Seattle First National Medium
Term Note* ................................... A1/P1 5.74% 12/29/95 $ 35,000 $ 35,000,000
Bank of New York (Delaware), Medium Term
Note* ........................................ A1/P1 5.88 10/25/96 38,000 38,000,000
Huntington National Bank-Floating Rate Bank
Note* ........................................ A1/P1 5.82 12/1/95 35,000 35,000,000
Nations Bank Corp-Floating Rate Medium Term Note
* ............................................ A1/P1 5.94 12/20/95 23,850 23,874,161
Nations Bank Texas-Floating Rate Medium Term
Note * ....................................... A1/P1 5.87 12/1/95 25,000 25,000,000
--------------
TOTAL BANK NOTES (AMORTIZED COST $156,874,161).... 156,874,161
--------------
BANKERS ACCEPTANCES -- 1.4%
Fuji Bank, Ltd., Los Angeles Branch ............ A1/P1 5.81 12/6/95 10,000 9,991,931
Fuji Bank, Ltd., Los Angeles Branch ............ A1/P1 5.79 12/11/95 15,000 14,975,875
--------------
TOTAL BANKERS ACCEPTANCES (AMORTIZED COST
$24,967,806).................................... 24,967,806
--------------
YANKEE CERTIFICATES OF DEPOSIT -- 14.5%
Bank of Tokyo, Ltd., Portland, Oregon Branch ... A1/P1 5.95 12/29/95 25,000 25,000,000
Dai Ichi Kangyo Bank, Ltd., New York Branch .... A1/P1 5.83 12/20/95 35,000 34,999,722
Deutsche Bank, New York Branch ................. A1+/P1 6.05 7/25/96 35,000 35,000,000
Fuji Bank, Ltd., New York Branch ............... A1/P1 5.96 12/7/95 55,000 55,000,631
Sanwa Bank, Ltd., New York Branch .............. A1+/P1 5.94 12/7/95 12,000 12,000,138
Sanwa Bank, Ltd., New York Branch .............. A1+/P1 5.92 12/11/95 25,000 25,000,069
Sumitomo Bank, Ltd., New York Branch ........... A1/P1 5.87 12/11/95 30,000 30,000,166
Sumitomo Bank, Ltd., New York Branch ........... A1/P1 5.82 12/13/95 20,000 20,000,066
Sumitomo Bank, Ltd., New York Branch ........... A1/P1 5.86 12/27/95 25,000 25,000,180
--------------
TOTAL YANKEE CERTIFICATES OF DEPOSIT (AMORTIZED
COST $262,000,972).............................. 262,000,972
--------------
COMMERCIAL PAPER -- 21.8%
DOMESTIC -- 15.7%
Alpine Securitization .......................... A1+/P1 5.78 12/19/95 71,133 70,927,426
Bankers Trust-Floating Rate * .................. A1/P1 5.89 12/1/95 25,000 25,000,000
Bear Stearns ................................... A1/P1 5.72 12/22/95 20,000 19,933,267
Bridgestone/Firestone .......................... A1/P1 5.80 12/4/95 14,000 13,993,233
Countrywide Funding ............................ A1/F1** 5.75 12/8/95 23,000 22,974,285
Countrywide Funding ............................ A1/F1** 5.77 12/12/95 22,000 21,961,213
Dakota SCCMT ................................... A1+/P1 5.73 12/6/95 35,000 34,972,146
Dynamic Funding ................................ A1/P1 5.80 12/1/95 23,200 23,200,000
Enterprise Funding (c) ......................... A1/P1 5.77 12/26/95 13,601 13,546,501
Ford Motor Credit Corp. ........................ A1/P1 5.70 12/22/95 38,000 37,873,650
--------------
284,381,721
--------------
</TABLE>
82
<PAGE>
<TABLE>
<CAPTION>
S&P/MOODY'S PRINCIPAL AMORTIZED
RATING MATURITY AMOUNT COST
(UNAUDITED) RATE DATE (000) (NOTE 2)
---------------- --------- --------- --------- --------------
<S> <C> <C> <C> <C> <C>
FOREIGN -- 6.1%
Den Danske Bank ................................ A1/P1 5.73% 12/29/95 $ 28,000 $ 27,875,213
Ontario Hydro .................................. A1+/P1 5.69 12/29/95 35,000 34,845,106
Yorkshire Building Society ..................... A1/P1 5.71 12/29/95 48,000 47,786,827
--------------
110,507,146
--------------
TOTAL COMMERCIAL PAPER (AMORTIZED COST
$394,888,867)................................... 394,888,867
--------------
CORPORATE OBLIGATIONS -- 30.7%
Bankers Trust - Floating Rate Note * ........... A1/P1 5.89 12/1/95 50,000 50,000,000
Beta Finance - Medium Term Corporate Note
(a) .......................................... A1+/P1 5.97 7/17/96 35,000 35,000,000
Beta Finance - Corporate Floating Rate Note * .. A1+/P1 5.90 12/1/95 40,000 40,000,000
C.S. First Boston Corp., - Medium Term Floating
Rate Note *(a) ............................... A1/P1 5.99 1/2/96 40,000 40,000,000
C.S. First Boston Corp., - Extendible Floating
Rate Note (c) * .............................. A1/P1 5.91 12/21/95 35,000 35,000,000
Ford Motor Credit Corp., - Medium Term Floating
Rate Note * .................................. A1/P1 6.06 1/15/96 40,000 40,084,758
Goldman Sachs & Co., - Floating Rate Note * .... A1+/P1 5.91 12/5/95 50,000 50,000,000
PHH Corp.,- Medium Term Floating Rate Note * ... A1/P1 5.86 12/1/95 50,000 49,989,380
SMM Trust 1995 B - Medium Term Floating Rate
Note * ....................................... A1+/P1 5.88 12/4/95 30,000 30,000,000
SMM Trust 1995 N - Medium Term Floating Rate
Note * ....................................... A1+/P1 5.93 2/15/96 35,000 35,000,000
Steers 1994-1st USA Bank - Medium Term Floating
Rate Note *(a) ............................... A1+/P1 5.81 12/15/95 50,000 50,000,000
Steers/Anagram - Floating Rate Note *(a) ....... A1+/D1+** 5.86 12/26/95 35,000 35,000,000
Steers/Merrill Lynch - Floating Rate Note
*(a) ......................................... F1**/P1 5.86 12/18/95 65,000 64,999,387
--------------
TOTAL CORPORATE OBLIGATIONS (AMORTIZED COST
$555,073,525)................................... 555,073,525
--------------
MASTER NOTE -- 2.7%
Lehman Brothers PLC, Master Note (c) ........... A1/D1** 5.91 12/20/95 50,000 50,000,000
--------------
TOTAL MASTER NOTES (AMORTIZED COST $50,000,000)... 50,000,000
--------------
TIME DEPOSITS -- 6.9%
Bank of Tokyo, Ltd., Grand Cayman Branch ....... A1/P1 5.90 12/28/95 25,000 25,000,000
Bank of Tokyo, Ltd., Grand Cayman Branch ....... A1/P1 5.97 12/29/95 30,000 30,000,000
Mitsubishi Bank, Ltd., London Branch ........... A1+/P1 5.81 12/27/95 30,000 30,000,000
South Trust Bank Variable Rate, Grand Cayman
Branch * ..................................... A1/P1 5.81 12/29/95 40,000 40,000,000
--------------
TOTAL TIME DEPOSITS (AMORTIZED COST
$125,000,000)................................... 125,000,000
--------------
</TABLE>
83
<PAGE>
<TABLE>
<CAPTION>
S&P/MOODY'S PRINCIPAL AMORTIZED
RATING MATURITY AMOUNT COST
(UNAUDITED) RATE DATE (000) (NOTE 2)
---------------- --------- --------- --------- --------------
<S> <C> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 3.6%
Federal Home Loan Bank ......................... AAA/Aaa*** 5.90% 7/25/96 $ 30,000 $ 30,000,000
Federal National Mortgage Assoc. Variable Rate
Medium Term Note* ............................ AAA/Aaa*** 5.81 10/4/96 35,000 34,988,218
--------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(AMORTIZED COST $64,988,218).................... 64,988,218
--------------
TOTAL INVESTMENTS IN SECURITIES (AMORTIZED COST
$1,633,793,549)................................. 1,633,793,549
--------------
REPURCHASE AGREEMENTS -- 11.5%
Merrill Lynch Securities, Inc., dated 11/30/95
with a maturity value of $103,755,219
(Collateralized by $164,243,682 various U.S.
Government Agencies, 3.63% - 13.90%, 3/15/97 -
11/25/23, market value -- $105,813,665)....... 5.95 12/1/95 103,738 103,738,073
Salomon Brothers, dated 11/30/95, with a
maturity value of $103,755,219 (Collateralized
by $135,515,984 various U.S. Government
agencies, 5.50% - 9.50%, 10/1/06 - 11/1/25,
market value -- $106,407,853)................. 5.95 12/1/95 103,738 103,738,073
--------------
TOTAL REPURCHASE AGREEMENTS (AMORTIZED COST
$207,476,146)................................... 207,476,146
--------------
TOTAL INVESTMENTS (AMORTIZED COST $1,841,269,695)
(B) -- 101.7%................................... 1,841,269,695
PAYABLE TO BROKERS FOR SECURITIES PURCHASED --
(1.9%).......................................... (35,090,411)
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.2%..... 3,480,405
--------------
NET ASSETS -- 100.0%.............................. $1,809,659,689
--------------
--------------
</TABLE>
- -------------
(a) 144a security which is restricted as to resale to institutional investors.
(b)Cost for federal income tax and financial reporting purposes are the same.
(c)Represents a restricted security.
* Variable rate security. Maturity date reflects the later of the next
interest rate change date or the next put date.
**Duff Phelps or Fitch Investors ratings.
***Long-Term rating.
See Notes to Financial Statements.
84
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities (amortized cost $1,633,793,549)............................... $ 1,633,793,549
Repurchase agreements (amortized cost $207,476,146)..................................... 207,476,146
Cash.................................................................................... 194,531
Interest receivable..................................................................... 9,785,378
Prepaid expenses and other.............................................................. 5,910
---------------
Total assets.............................................................................. 1,851,255,514
---------------
LIABILITIES:
Dividends payable....................................................................... 5,545,108
Payable to brokers for securities purchased............................................. 35,090,411
Accrued expenses:
Investment Advisory fees.............................................................. 272,079
Administration fees................................................................... 131,661
Shareholder Services fees (Emerald Service Shares).................................... 429,903
Custodian and transfer agent fees..................................................... 71,679
Other................................................................................. 54,984
---------------
Total liabilities......................................................................... 41,595,825
---------------
NET ASSETS................................................................................ $ 1,809,659,689
---------------
---------------
Shares Outstanding ($0.001 par value, unlimited number of shares authorized):
Emerald Shares.......................................................................... 462,636,209
Emerald Service Shares.................................................................. 901,831,725
Investor Shares......................................................................... 444,841,816
---------------
Total Shares Outstanding.................................................................. 1,809,309,750
---------------
---------------
Net Asset Value, offering price and redemption price per share:
Emerald Shares.......................................................................... $ 1.00
Emerald Service Shares.................................................................. 1.00
Investor Shares......................................................................... 1.00
---------------
---------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par................................................... $ 1,809,310
Additional paid-in capital.............................................................. 1,807,500,440
Accumulated net realized gains on investment transactions............................... 349,939
---------------
Net Assets, November 30, 1995............................................................. $ 1,809,659,689
---------------
---------------
</TABLE>
- ------------
See Notes to Financial Statements.
85
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the year ended November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest...................................................................... $ 97,394,992
EXPENSES:
Investment Advisory fees...................................................... $ 4,036,274
Administration fees........................................................... 1,451,221
Shareholder Services fees (Emerald Service Shares)............................ 2,814,354
Distribution expenses (Investor Shares)....................................... 1,523,904
Transfer agent fees and expenses.............................................. 107,225
Custodian fees and expenses................................................... 501,967
Insurance expense............................................................. 47,414
Legal fees.................................................................... 18,603
Audit fees.................................................................... 39,423
Reports to shareholders (Investor Shares)..................................... 122,497
Reports to shareholders (Emerald Shares)...................................... 17,371
Reports to shareholders (Emerald Service Shares).............................. 12,162
Trustees' fees................................................................ 12,767
Registration fees............................................................. 50,203
Organization costs............................................................ 571
Other expenses................................................................ 47,358
-------------
10,803,314
Less: Fee waivers and expense reimbursements.................................. (392,096) 10,411,218
------------- -------------
Net Investment Income:.......................................................... 86,983,774
REALIZED GAINS ON INVESTMENTS:
Net realized gains on securities transactions................................. 410,900
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ $ 87,394,674
-------------
-------------
</TABLE>
- ------------
See Notes to Financial Statements.
86
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
----------------------------------
NOVEMBER 30, NOVEMBER 30,
1995 1994
--------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income............................................... $ 86,983,774 $ 51,203,807
Net realized gains (losses) on securities transactions.............. 410,900 (4,215,244)
--------------- ----------------
Net increase in net assets resulting from operations................ 87,394,674 46,988,563
--------------- ----------------
Dividends to shareholders from net investment income
Emerald Shares...................................................... (28,634,317) (20,344,804)
Emerald Service Shares.............................................. (42,688,668) (24,761,375)
Investor Shares..................................................... (15,660,789) (6,097,628)
--------------- ----------------
Total dividends to shareholders from net investment income............ (86,983,774) (51,203,807)
--------------- ----------------
Fund Share Transactions (at $1.00 per share)
Net proceeds from shares subscribed................................. 5,168,375,553 5,443,207,056
Net asset value of shares issued to shareholders in reinvestment of
dividends and distributions....................................... 21,301,269 10,425,249
Cost of shares redeemed............................................. (4,836,350,261) (5,308,737,968)
--------------- ----------------
Net increase in net assets from Fund share transactions............. 353,326,561 144,894,337
--------------- ----------------
Increase due to voluntary capital contribution........................ -- 4,257,069
--------------- ----------------
Total Increase........................................................ 353,737,461 144,936,162
NET ASSETS:
Beginning of period................................................. 1,455,922,228 1,310,986,066
--------------- ----------------
End of period....................................................... $ 1,809,659,689 $ 1,455,922,228
--------------- ----------------
--------------- ----------------
</TABLE>
- ------------
See Notes to Financial Statements.
87
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
MATURITY AMOUNT COST
RATE DATE (000) (NOTE 2)
----------- --------- --------- -------------
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 100.2%
U.S. GOVERNMENT OBLIGATIONS -- 41.2%
U.S. TREASURY BILLS -- 18.3%
U.S. Treasury Bill................................................. 5.64%+ 12/21/95 $ 50,000 $ 49,844,722
U.S. Treasury Bill................................................. 5.29+ 3/7/96 100,000 98,571,271
-------------
148,415,993
-------------
U.S. TREASURY NOTES -- 22.9%
U.S. Treasury Note................................................. 4.00 1/31/96 75,000 74,789,094
U.S. Treasury Note................................................. 4.63 2/15/96 35,000 34,927,637
U.S. Treasury Note................................................. 4.63 2/29/96 25,000 24,941,084
U.S. Treasury Note................................................. 9.38 4/15/96 50,000 50,676,676
-------------
185,334,491
-------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(AMORTIZED COST $333,750,484)...................................... 333,750,484
-------------
REPURCHASE AGREEMENTS -- 59.0%
CS First Boston Corp., dated 11/30/95, with a maturity value of
$40,006,556 (Collateralized by $36,545,000 U.S. Treasury Notes,
8.88%, 2/15/99, market value - $40,994,173)...................... 5.90 12/1/95 40,000 40,000,000
Fuji Securities, Inc., dated 11/30/95, with a maturity value of
$74,197,115 (Collateralized by $144,660,000 various U.S.
Government securities, 0.00% - 12.75% 4/30/96 - 2/15/23, market
value - $75,669,761)............................................. 5.90 12/1/95 74,185 74,184,957
J.P. Morgan Securities, dated 11/30/95, with a maturity value of
$40,006,556 (Collateralized by $37,218,000 U.S. Treasury Notes,
8.25%, 7/15/98, market value - $41,951,664)...................... 5.90 12/1/95 40,000 40,000,000
Merrill Lynch Securities, Inc., dated 11/30/95, with a maturity
value of $74,197,116 (Collateralized by $168,004,000 U.S.
Treasury Stripped Notes, 5.75% - 12.00%, 2/15/96 -2/15/20, market
value - $75,669,442)............................................. 5.90 12/1/95 74,185 74,184,958
Morgan Stanley & Co., dated 11/30/95, with a maturity value of
$150,096,833 (Collateralized by $184,699,338 Government National
Mortgage Assoc., 6.50% - 8.50%, 1/1/00 - 3/20/25, market value -
$154,946,737)................................................... 5.81 12/4/95 150,000 150,000,000
Prudential Securities, Inc., dated 11/30/95, with a maturity value
of $40,006,544 (Collateralized by $50,437,000 various U.S.
Treasury securities, 0.00% - 6.88%, 4/30/97 - 6/15/23, market
value - $40,800,025)............................................. 5.89 12/1/95 40,000 40,000,000
Sanwa BGK Securities, dated 11/30/95, with a maturity value of
$60,009,833 (Collateralized by $59,233,000 U.S. Treasury Notes
and Bills, 0.00% - 6.88%, 9/19/96 - 2/15/03, market value -
$61,200,163).................................................... 5.90 12/1/95 60,000 60,000,000
-------------
TOTAL REPURCHASE AGREEMENTS (AMORTIZED COST $478,369,915)............ 478,369,915
-------------
TOTAL INVESTMENTS (AMORTIZED COST $812,120,399) (A) -- 100.2%........ 812,120,399
LIABILITIES IN EXCESS OF ASSETS -- (0.2%)............................ (1,072,574)
-------------
NET ASSETS -- 100.0%................................................. $ 811,047,825
-------------
-------------
</TABLE>
- ---------------
+ Effective yield at date of issuance.
(a)Cost for federal income tax and financial reporting purposes are the same.
See Notes to Financial Statements.
88
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities (amortized cost $333,750,484)............................ $ 333,750,484
Repurchase agreements (amortized cost $478,369,915)................................ 478,369,915
Interest receivable................................................................ 2,449,984
Prepaid expenses and other......................................................... 20,572
-------------
Total assets......................................................................... 814,590,955
-------------
LIABILITIES:
Dividends payable.................................................................. 3,090,411
Accrued expenses and other payables:
Investment Advisory fees......................................................... 136,024
Administration fees.............................................................. 40,287
Shareholder Services fees (Emerald Service Shares)............................... 152,403
Distribution expenses (Investor Shares).......................................... 17,401
Custodian and transfer agent fees................................................ 46,207
Other............................................................................ 60,397
-------------
Total liabilities.................................................................... 3,543,130
-------------
NET ASSETS........................................................................... $ 811,047,825
-------------
-------------
Shares Outstanding ($0.001 par value, unlimited number of shares authorized):
Emerald Shares..................................................................... 236,482,130
Emerald Service Shares............................................................. 525,808,234
Investor Shares.................................................................... 49,065,263
-------------
-------------
Total Shares Outstanding............................................................. 811,355,627
-------------
-------------
Net Asset Value, offering price and redemption price per share:
Emerald Shares..................................................................... $ 1.00
Emerald Service Shares............................................................. 1.00
Investor Shares.................................................................... 1.00
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par.............................................. $ 811,356
Additional paid-in capital......................................................... 810,544,271
Accumulated net realized losses on investment transactions......................... (307,802)
-------------
Net Assets, November 30, 1995........................................................ $ 811,047,825
-------------
-------------
</TABLE>
- -------------
See Notes to Financial Statements.
89
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the year ended November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME: $ 48,196,732
-------------
EXPENSES:
Investment Advisory fees............................................ $ 2,049,210
Administration fees................................................. 797,128
Shareholder Services fees (Emerald Service Shares).................. 1,898,193
Distribution expenses (Investor Shares)............................. 200,869
Transfer agent fees and expenses.................................... 81,992
Custodian fees and expenses......................................... 339,437
Insurance expense................................................... 50,294
Legal fees.......................................................... 17,344
Audit fees.......................................................... 29,474
Reports to shareholders (Emerald Shares)............................ 2,808
Reports to shareholders (Emerald Service Shares).................... 10,095
Reports to shareholders (Investor Shares)........................... 39,058
Trustees' fees...................................................... 12,448
Other expenses...................................................... 53,738
------------
5,582,088
Less: Fee waivers and expense reimbursements.......................... (225,991) 5,356,097
------------ -------------
Net Investment Income................................................. 42,840,635
REALIZED LOSSES ON INVESTMENTS:
Net realized losses on securities transactions...................... (195,517)
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. $ 42,645,118
-------------
-------------
</TABLE>
- ------------
See Notes to Financial Statements.
90
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------
NOVEMBER 30, NOVEMBER 30,
1995 1994
-------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income......................................................... $ 42,840,635 $ 31,451,367
Net realized losses on securities transactions................................ (195,517) (71,013)
-------------- ----------------
Net increase in net assets resulting from operations.......................... 42,645,118 31,380,354
-------------- ----------------
Dividends to shareholders from net investment income
Emerald Shares................................................................ (13,077,345) (14,395,122)
Emerald Service Shares........................................................ (27,761,370) (16,162,692)
Investor Shares............................................................... (2,001,920) (893,553)
-------------- ----------------
Total dividends to shareholders from net investment income...................... (42,840,635) (31,451,367)
-------------- ----------------
Fund Share Transactions (at $1.00 per Share)
Net proceeds from shares subscribed........................................... 2,613,725,098 2,482,018,262
Net asset value of shares issued to shareholders in reinvestment of
dividends................................................................... 3,365,762 1,616,555
Cost of shares redeemed....................................................... (2,714,202,606) (2,501,757,721)
-------------- ----------------
Net decrease in net assets from Fund share transactions......................... (97,111,746) (18,122,904)
-------------- ----------------
Total Decrease.................................................................. (97,307,263) (18,193,917)
NET ASSETS:
Beginning of period........................................................... 908,355,088 926,549,005
-------------- ----------------
End of period................................................................. $ 811,047,825 $ 908,355,088
-------------- ----------------
-------------- ----------------
</TABLE>
- ------------
See Notes to Financial Statements.
91
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL AMORTIZED
RATINGS+ MATURITY AMOUNT COST
(UNAUDITED) RATE DATE (000) (NOTE 2)
--------------- --------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
MUNICIPAL SECURITIES -- 99.7%
ALABAMA -- 2.5%
Birmingham General Obligation (LC First Alabama
Bank)*............................................. VMIG1/Aa2 3.70% 12/7/95 $ 3,000 $ 3,000,000
A-1+/AA
Homewood Industrial Dev. Bd., Revenue Bonds, Keebler
Co. Proj. (LC Northern Trust)*..................... NR/NR 3.85 12/7/95 560 560,000
NR/NR
Montgomery Cnty, PC & Solid Waste Dis. Rev. Ref.
Bonds, General Electric Co. Proj., Series 1990..... P-1/Aaa 3.75 12/14/95 1,300 1,300,000
-------------
A-1+/AAA 4,860,000
-------------
ALASKA -- 2.0%
Anchorage Higher Educational Revenue, Alaska Pacific
Univ. (LC Seattle First National Bank)*............ NR/NR 3.90 12/7/95 3,900 3,900,000
-------------
A-1+/AA-
ARIZONA -- 3.3%
Salt River Project, Ag. Imp. & Pwr. Dist............. P-1/NR 3.80 12/8/95 2,450 2,450,000
A-1+/NR
Salt River Project, Ag. Imp. & Pwr. Dist............. P-1/NR 3.75 12/14/95 4,000 4,000,000
-------------
A-1+/NR 6,450,000
-------------
COLORADO -- 0.6%
Pitkin County, Industrial Development, Aspen Skiing
Co. Project, Ser. B (AMT) (LC First National Bank
Chicago)*.......................................... NR/NR 3.95 12/1/95 1,200 1,200,000
-------------
A-1/A+
DISTRICT OF COLUMBIA -- 1.1%
District of Columbia, American University (LC
National Westminster)*............................. VMIG1/Aa2 3.65 12/7/95 2,200 2,200,000
-------------
NR/NR
FLORIDA -- 4.8%
City of Jacksonville, Commercial Paper Notes......... P-1/NR 3.80 12/13/95 1,500 1,500,000
A-1/NR
City of Jacksonville Pollution Auth. Rev. Ref. Bonds,
Florida Pwr. & Light Co. Proj...................... P-1/A1 3.70 12/15/95 8,000 8,000,000
-------------
A-1/AA- 9,500,000
-------------
</TABLE>
92
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL AMORTIZED
RATINGS+ MATURITY AMOUNT COST
(UNAUDITED) RATE DATE (000) (NOTE 2)
--------------- --------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
GEORGIA -- 5.2%
Burke County Development Auth. Adj. Tender PC Rev.
Ref. Bds., Ogelthorpe Power Corp. (LC - Credit
Suisse)*........................................... P-1/Aa1 3.75% 2/13/96 $ 3,300 $ 3,300,000
A-1+/AA+
Columbia County, Elderly Auth., Residential Care
Facility Rev., Augusta Residential Ctr. on Aging
(LC Trust Co. Bank, Atlanta)*...................... VMIG1/Aa3 3.75 12/7/95 3,000 3,000,000
NR/NR
Fulton County Development Auth. Rev., Georgia Tech.
Athletic Assn., Inc. (LC Trust Co. Bank,
Atlanta)*.......................................... NR/Aa3 3.75 12/7/95 3,000 3,000,000
NR/NR
Municipal Gas Auth. of Georgia, Gas Rev. Bonds, Ser.
B (LC Wachovia Bank)............................... VMIG1/Aa2 3.90 3/14/96 1,000 1,000,000
-------------
NR/NR 10,300,000
-------------
ILLINOIS -- 15.9%
Cook County General Obligation, Capital Equipment,
Ser. A*............................................ VMIG1/MIG1 3.80 12/7/95 1,800 1,800,000
A-1/A+
Illinois Educational Facs. Auth. Rev., DePaul Univ.,
Ser. 1992 CP-1 (LC Sanwa Bank, Chicago)*........... VMIG1/Aa3 4.05 12/7/95 2,300 2,300,000
A-1+/AA-
Illinois Educational Facs. Auth. Rev., Field Museum
Nat. Hist. (LC Sanwa Bank)*........................ VMIG1/Aa3 4.00 12/7/95 5,700 5,700,000
NR/NR
Illinois Health Fac. Auth., Revolving Fund,
University of Chicago.............................. VMIG1/Aaa 3.90 2/8/96 8,400 8,400,000
A-1+/AA
Illinois Health Fac. Auth. Rev., Franciscan Sisters
Health*............................................ VMIG1/A 4.10 12/1/95 2,850 2,850,000
NR/NR
Illinois Health Fac. Auth. Rev., Elmhurst Memorial
Hospital, Series B*................................ VMIG1/A1 4.10 12/1/95 1,950 1,950,000
NR/NR
Rockton Village Industrial Project Rev., Specialty
Equipment Co., Inc. Project, Ser. 1994, (AMT) (LC
Barclays Bank)*.................................... NR/NR 4.00 12/7/95 2,300 2,300,000
A-1+/AA
Village of Hillside, Econ. Dev. Rev., L&J
Technologies Proj., Ser. 94 (AMT) (LC Northern
Trust)*............................................ NR/NR 4.00 12/7/95 6,000 6,000,000
-------------
A-1+/AA- 31,300,000
-------------
INDIANA -- 6.4%
Evansville Industrial Dev. Auth., Keebler Co. Proj.,
Ser. 93 (LC - Northern Trust)*..................... NR/NR 3.85 12/7/95 505 505,000
NR/NR
Gary Environmental Improvement Rev., U.S. Steel
Corp., Ser. 84 (LC Bank of Nova Scotia)*........... P1/Aa3 3.90 12/15/95 1,000 1,000,000
A-1+/AA-
</TABLE>
93
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL AMORTIZED
RATINGS+ MATURITY AMOUNT COST
(UNAUDITED) RATE DATE (000) (NOTE 2)
--------------- --------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
INDIANA -- (CONTINUED)
Indiana Dev. Fin. Auth. Rev. Mid America Project.
(AMT) (LC Union Bank of Switzerland)*.............. NR/NR 4.10% 12/7/95 $ 5,000 $ 5,000,000
A-1+/AAA
Indiana Health Fac. Financing Auth. Rev. (LC Comerica
Bank)*............................................. VMIG1/A1 3.90 12/7/95 1,400 1,400,000
NR/NR
Indiana Hospital Equipment Financing Auth., Ser. 85-A
(MBIA Insured)*.................................... VMIG1/Aaa 3.90 12/7/95 4,800 4,800,000
-------------
A-1/AAA 12,705,000
-------------
KENTUCKY -- 1.0%
Kentucky Housing Corp., Housing Rev., Ser. E AMT*.... VMIG1/Aaa 3.70% 12/20/95 2,000 2,000,000
-------------
A-1+/AAA
LOUISIANA -- 14.4%
Calcasieu Parish Industrial Dev. Environmental Rev.,
Citgo Petroleum Corp. (AMT) (LC Banque Nationale de
Paris)*............................................ VMIG1/Aa3 3.90 12/1/95 1,000 1,000,000
NR/NR
Jefferson Parish Hospital Service Dist. No. 1, West
Jefferson Medical Center (LC Citibank, New
York)*............................................. VMIG1/Aa3 3.75 12/7/95 10,070 10,070,000
A-1/AA-
Lake Charles District Port. Fac. Rev., Citgo
Petroleum Corp., Ser. 1984 (LC West Deutsche
Landesbank)*....................................... P1/Aa1 3.65 12/7/95 3,300 3,300,000
NR/NR
Louisiana Public Facility Auth. Rev., College & Univ.
Equip. & Cap., Ser. A (FGIC Insured)*.............. VMIG1/Aaa 3.60 12/7/95 4,500 4,500,000
A-1/AAA
Louisiana Public Facility Auth. Rev., Multifamily
Mortgage, Edgewood, General Electric Capital
Guaranty*.......................................... NR/NR 3.70 12/7/95 2,200 2,200,000
A-1+/AAA
Plaquemines Port, Harbor & Terminal, Electro-Coal
Transfer Corp., Ser. 1985C......................... P1/NR 3.90 12/12/95 2,000 2,000,000
A-1/NR
Plaquemines Port, Harbor & Terminal, Electro-Coal
Transfer Corp., Ser. 1985C......................... P1/NR 3.90 2/23/96 5,275 5,275,000
-------------
A-1/NR 28,345,000
-------------
MARYLAND -- 2.8%
Baltimore County, Ser. 1995.......................... P-1/NR 3.80 12/11/95 5,500 5,500,000
-------------
A-1+/NR
MAINE -- 3.3%
Bailesyville PCR Bonds, Georgia Pacific Corp., (LC
Bank of Tokyo)*.................................... P-1/Aa3 3.88 12/7/95 6,500 6,500,000
-------------
NR/NR
</TABLE>
94
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL AMORTIZED
RATINGS+ MATURITY AMOUNT COST
(UNAUDITED) RATE DATE (000) (NOTE 2)
--------------- --------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
MISSOURI -- 3.6%
Missouri Health & Education Fac. SSM Health Care (LC
Mitsubishi Bank, Ltd.)*............................ VMIG1/Aa3 4.00% 12/1/95 $ 5,000 $ 5,000,000
NR/NR
Missouri Hsg. Dev. Comm. Rev., Single Family Mtge.
Rev., Ser. 1995 D (AMT)............................ NR/NR 4.20 11/1/96 2,000 2,000,000
-------------
A-1+/AAA 7,000,000
-------------
MINNESOTA -- 0.7%
Becker Pollution Control Rev. Northern States Power
Co., Ser. 1993A.................................... VMIG1/NR 3.60 5/10/96 1,400 1,400,000
-------------
A-1/NR
NEBRASKA -- 1.0%
Nebraska Invt. Fin. Auth., Indl. Dev. Rev., Fremont
Beef Project (LC Sanwa Bank Ltd.)*................. P-1/NR 4.25 12/7/95 2,000 2,000,000
-------------
NR/NR
NEW YORK -- 4.9%
New York City General Obligation, Tax Anticipation
Notes, Ser. 1996A.................................. MIG1/NR 4.50 2/15/96 9,700 9,713,012
-------------
SP-1+/NR
NORTH DAKOTA -- 0.2%
Grand Forks Health Care Facs. United Hosp. Oblig.
Group Project (LC Fuji Bank Ltd., Chicago)*........ VMIG1/A1 4.10 12/1/95 500 500,000
-------------
NR/NR
OHIO -- 0.5%
Summit County Industrial Dev. Auth., Keebler Co.
Project, Ser. 93 (LC Northern Trust)*.............. NR/NR 3.85 12/7/95 995 995,000
-------------
NR/NR
PENNSYLVANIA -- 0.3%
Columbia County, Industrial Dev. Auth. Rev., Kleerdex
Co. Proj., (AMT) Ser. 90, (LC Bank of Tokyo)*...... NR/NR 4.30 12/7/95 700 700,000
-------------
A-1/A+
SOUTH CAROLINA -- 2.0%
South Carolina Public Service Commercial Paper
Notes.............................................. P-1/NR 3.80 12/13/95 4,000 4,000,000
-------------
A-1/NR
TENNESSEE -- 0.8%
Sullivan County Industrial Dev. Board Modern Forge
Project, (AMT), Ser. 90, (LC - Northern Trust)*.... NR/NR 4.00 12/7/95 1,500 1,500,000
-------------
A-1+/AA-
</TABLE>
95
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL AMORTIZED
RATINGS+ MATURITY AMOUNT COST
(UNAUDITED) RATE DATE (000) (NOTE 2)
--------------- --------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
TEXAS -- 14.6%
Board of Regents of the University of Texas, Comm.
Paper Notes........................................ P-1/NR 3.80% 12/15/95 $ 9,800 $ 9,800,000
A-1+/NR
Brazos River Harbor Navigation, Dist. (AMT) Harbor
Rev., Dow Chemical Project 1992, Ser. A.*.......... P1/A1 3.90 12/1/95 500 500,000
A-1/A
City of Houston Ser. A, Commercial Paper Notes....... P-1/NR 3.75 3/7/96 3,700 3,700,000
A-1+/NR
City of Houston, Ser. 93-E*.......................... VMIG1/Aa 4.00 4/1/96 1,700 1,700,000
A-1+/AA-
Gulf Coast Industrial Dev. Auth., Marine Term. Rev.,
Ser. 1993, Amoco Oil Co. Project (AMT)*............ P-1/Aa1 3.80 12/1/95 1,100 1,100,000
A-1+/AAA
Gulf Coast Industrial Dev. Auth., Solid Waste
Disposal Rev., Citgo Petroleum Corp. (LC
NationsBank, Texas) (AMT)*......................... VMIG1/A1 3.85 12/1/95 1,100 1,100,000
NR/NR
San Antonio Water System Commercial Paper Notes, Ser.
1995............................................... P-1/NR 3.80 12/8/95 3,700 3,700,000
A-1/NR
Tarrant County Housing Fin. Corp., Multifamily
Hsg.-Sf. Apts. Projects (LC Societe Generale)*..... VMIG1/Aa2 3.65 12/7/95 4,050 4,050,000
NR/NR
Texas Tax & Revenue Anticipation Notes, Ser. A....... MIG1/NR 4.75 8/30/96 1,900 1,908,864
SP-1+/NR
Texas A & M University Board of Regents, Ser. B...... P-1/NR 3.90 2/28/96 1,200 1,200,000
-------------
A-1+/NR 28,758,864
-------------
UTAH -- 1.0%
Intermountain Power Agy., Pwr. Supply Rev., Ser. A
(Pre-Refunded on 7/1/96 @ 102)..................... AAA/NR 7.75 7/1/96 1,925 2,005,814
-------------
AA-/NR
VERMONT -- 3.5%
Vermont General Obligation, Commercial Paper Notes,
Ser. F............................................. P1/NR 3.85 12/13/95 6,900 6,900,000
-------------
A-1+/NR
VIRGINIA -- 2.5%
Louisa County, Industrial Development Auth. (LC
NationsBank, Virginia)*.............................. NR/NR 3.75 12/7/95 5,000 5,000,000
-------------
A-1/A+
</TABLE>
96
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL AMORTIZED
RATINGS+ MATURITY AMOUNT COST
(UNAUDITED) RATE DATE (000) (NOTE 2)
--------------- --------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
WASHINGTON -- 0.8%
Pierce County Economic Dev. Corp., Dock & Wharf Fac.
Rev., SCS Industries Project (LC Bank of Tokyo,
Portland)*......................................... P1/NR 4.25% 12/7/95 $ 1,000 $ 1,000,000
NR/NR
Washington Health Care Facs. Auth. Rev., Fred
Hutchinson Cancer, Ser. A (LC Morgan Guaranty
Trust)*............................................ VMIG1/Aa1 3.90 12/1/95 600 600,000
-------------
NR/NR 1,600,000
-------------
TOTAL MUNICIPAL SECURITIES (AMORTIZED COST
$196,832,690)(A) -- 99.7%............................ 196,832,690
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.3%.......... 611,661
-------------
NET ASSETS -- 100.0%................................... $ 197,444,351
-------------
-------------
</TABLE>
- ---------------
+ The ratings provided consist of short-term and long-term ratings for both
Moody's and S&P. The rating consists of the short-term/long-term Moody's
ratings and the second consists of short-term/long-term S&P ratings.
* Variable rate security. Maturity date reflects the later of the next rate
change date or the next put date.
(a) Cost for federal income tax and financial reporting purposes are the same.
FGIC -- Financial Guaranty Insurance Corp.
LC -- Letter of credit.
AMT -- Interest on security is subject to Federal Alternative Minimum Tax.
NR -- Not rated.
See Notes to Financial Statements.
97
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment in securities (amortized cost $196,832,690) ............................ $ 196,832,690
Cash .............................................................................. 74,687
Interest receivable ............................................................... 1,160,697
Prepaid expenses and other ........................................................ 8,494
-------------
Total assets ........................................................................ 198,076,568
-------------
LIABILITIES:
Dividends payable ................................................................. 479,529
Accrued expenses and other payables:
Investment Advisory fees ........................................................ 14,627
Administration fees ............................................................. 14,627
Distribution expenses (Investor Shares) ......................................... 13,830
Shareholder Services fees (Emerald Service Shares) .............................. 23,141
Custodian and transfer agent fees ............................................... 16,689
Other ........................................................................... 69,774
-------------
Total liabilities ................................................................... 632,217
-------------
NET ASSETS .......................................................................... $ 197,444,351
-------------
-------------
Shares Outstanding ($0.001 par value, unlimited number of shares authorized):
Emerald Shares .................................................................. 156,377,768
Emerald Service Shares .......................................................... 2,855,359
Investor Shares ................................................................. 38,242,869
-------------
Total Shares Outstanding ............................................................ 197,475,996
-------------
-------------
Net Asset Value, offering price and redemption price per share:
Emerald Shares .................................................................... $ 1.00
Emerald Service Shares ............................................................ 1.00
Investor Shares ................................................................... 1.00
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par ............................................. $ 197,476
Additional paid-in capital ........................................................ 197,278,520
Accumulated net realized losses on investment transactions ........................ (31,645)
-------------
Net Assets, November 30, 1995 ....................................................... $ 197,444,351
-------------
-------------
</TABLE>
- ------------
See Notes to Financial Statements.
98
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the year ended November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest ............................................................. $ 7,971,839
EXPENSES:
Investment Advisory fees ........................................... $ 506,689
Administration fees ................................................ 304,013
Distribution expenses (Investor Shares) ............................ 188,796
Shareholder Services fees (Emerald Service Shares) ................. 10,478
Transfer agent fees and expenses ................................... 61,637
Custodian fees and expenses ........................................ 85,061
Reports to shareholders (Emerald Shares) ........................... 4,269
Reports to shareholders (Emerald Service Shares) ................... 7,571
Reports to shareholders (Investor Shares) .......................... 40,796
Legal and audit fees ............................................... 53,387
Trustees' fees ..................................................... 12,266
Insurance expense .................................................. 6,684
Registration fees .................................................. 20,660
Organization fees .................................................. 571
Other expenses ..................................................... 11,281
-----------
1,314,159
Less: Fee waivers and expense reimbursements ......................... (309,650) 1,004,509
----------- -----------
Net Investment Income ................................................ 6,967,330
REALIZED LOSSES ON INVESTMENTS:
Net realized losses on securities transactions ..................... (903)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................. $ 6,966,427
-----------
-----------
</TABLE>
- ------------
See Notes to Financial Statements.
99
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------
NOVEMBER 30, NOVEMBER 30,
1995 1994
-------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income ........................................................ $ 6,967,330 $ 4,494,772
Net realized losses on securities transactions ............................... (903) (3,430)
-------------- ----------------
Net increase in net assets resulting from operations ......................... 6,966,427 4,491,342
-------------- ----------------
Dividends to shareholders from net investment income
Emerald Shares ............................................................... (5,722,875) (3,682,883)
Emerald Service Shares ....................................................... (95,436) (61,167)
Investor Shares .............................................................. (1,149,019) (750,722)
-------------- ----------------
Total dividends to shareholders from net investment income ..................... (6,967,330) (4,494,772)
-------------- ----------------
Fund Share Transactions (at $1.00 per share)
Net proceeds from shares subscribed .......................................... 504,374,576 528,918,517
Net asset value of shares issued to shareholders in reinvestment of
dividends .................................................................. 1,626,585 856,850
Cost of shares redeemed ...................................................... (513,562,638) (518,386,286)
-------------- ----------------
Net increase (decrease) in net assets from Fund share transactions ........... (7,561,477) 11,389,081
-------------- ----------------
Total Increase (Decrease) ...................................................... (7,562,380) 11,385,651
NET ASSETS:
Beginning of period .......................................................... 205,006,731 193,621,080
-------------- ----------------
End of period ................................................................ $ 197,444,351 $ 205,006,731
-------------- ----------------
-------------- ----------------
</TABLE>
- ------------
See Notes to Financial Statements.
100
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
NOTE 1 -- GENERAL
Emerald Funds (the "Trust") was organized as a Massachusetts business trust on
March 15, 1988. The Trust is registered under the Investment Company Act of
1940, as amended (the "Act"), as an open-end, management investment company. The
Trust operates as a series company currently comprising thirteen portfolios. The
accompanying financial statements and notes relate to all of the portfolios of
the Trust that conducted investment operations during the fiscal year ended
November 30, 1995, (the "Funds") with the exception of Prime Trust Fund and
Treasury Trust Fund, for which separate financial statements have been prepared.
The Tax-Exempt Trust Fund has not yet commenced operations.
Barnett Banks Trust Company, N.A. ("Barnett") serves as the Funds'
investment adviser. Rodney Square Management Corporation (the "Sub-Adviser"), a
subsidiary of Wilmington Trust Company, serves as the Tax-Exempt Fund's
investment sub-adviser. Concord Holding Corporation ("Concord") serves as the
Funds' administrator and Emerald Asset Management, Inc. (the "Distributor")
serves as the distributor of the Funds' shares. Concord is a wholly owned
subsidiary of The BISYS Group, Inc. and the Distributor is a wholly owned
subsidiary of Concord.
The Prime Fund, Treasury Fund and Tax-Exempt Fund (collectively, the "money
market funds") each issue three classes of shares: Emerald Shares, Emerald
Service Shares and Investor Shares. Emerald Shares, Emerald Service Shares and
Investor Shares are substantially the same except that Emerald Service Shares
bear the fees that are payable under a Shareholder Services Plan (the "Service
Plan"), and Investor Shares bear the fees that are payable under a plan adopted
by the Board of Trustees pursuant to Rule 12b-1 under the Act (the "Distribution
Plan") and fees payable under a Shareholder and Administrative Services Plan
(the "Shareholder Plan"). In addition to fees paid pursuant to the Service Plan,
the Distribution Plan and the Shareholder Plan, each class of shares of each
Fund also bears the expenses associated with the printing of their shareholder
reports applicable to the particular class.
The Equity Fund, Small Capitalization Fund, Balanced Fund, Short-Term Fixed
Income Fund, U.S. Government Securities Fund, Managed Bond Fund and Florida
Tax-Exempt Fund (collectively, the "variable net asset value funds") are
authorized to issue three classes of shares: Class A Shares, Class B Shares and
Institutional Shares. Class A Shares, Class B Shares and Institutional Shares
are substantially the same, except that Class A Shares and Class B Shares bear
the fees payable under the Distribution Plan and also bear the fees payable
under the Shareholder Plan. In addition to the fees paid pursuant to the
Distribution Plan and the Shareholder Plan, each class also bears the expenses
associated with the printing of their shareholder reports.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements.
A)Security Valuation:
The money market funds each value portfolio securities at amortized cost, which
approximates market value. The amortized cost method involves valuing a security
at cost on the date of purchase and thereafter assuming a constant amortization
to maturity of the difference between the principal amount due at maturity and
initial cost. In addition, the money market funds may not (a) purchase any
instrument with a remaining maturity greater than thirteen months unless such
instrument is subject to a demand feature, or (b) maintain a dollar-weighted
average maturity which exceeds 90 days.
The Equity Fund, the Small Capitalization Fund, the Balanced Fund, the
Short-Term Fixed Income Fund, the U.S. Government Securities Fund and the
Managed Bond Fund value portfolio securities (other than debt securities with
remaining maturities of 60 days or less) at the last reported sales price on the
securities exchange on which such securities are primarily traded or at the last
sales price on the NASDAQ National Securities Market. Securities not listed on
an exchange or the National Securities Market, or securities for which there
were no transactions are valued at the mean between the current quoted bid and
asked prices on the date of valuation. Bid price is used when no asked price is
available.
101
<PAGE>
- --------------------------------------------------------------------------------
The Funds may also use an independent pricing service, approved by the Board of
Trustees, to value certain of its securities. Such prices reflect market values
which may be established through the use of electronic data processing
techniques and matrix systems. Restricted securities and securities for which
market quotations are not readily available, if any, are valued at fair value
using methods approved by the Board of Trustees. Debt securities with remaining
maturities of 60 days or less are normally valued at amortized cost.
The Florida Tax-Exempt Fund values portfolio securities each business day
through the use of an independent pricing service approved by the Board of
Trustees. When, in the judgment of the pricing service, quoted bid prices for
portfolio securities are readily available and are representative of the bid
side of the market, these investments are valued at the mean between quoted bid
prices (as obtained by the pricing service from dealers in such securities) and
asked prices (as calculated by the pricing service based upon its evaluation of
the market for such securities). Other investments are carried at fair value as
determined by the pricing service, through the use of electronic data processing
techniques and matrix systems. Securities with maturities of 60 days or less are
normally valued at amortized cost.
B)Securities Transactions and Investment Income:
Securities transactions are recorded on the trade date. Realized gains and
losses on the sales of investments are calculated on the identified cost basis.
Interest income, including accretion of discount and amortization of premium on
investments, is accrued daily. Dividend income is recorded on the ex-dividend
date.
C)Dividends and Distributions to Shareholders:
Dividends from net investment income are declared daily to shareholders and are
paid monthly for every Fund except the Equity Fund, the Small Capitalization
Fund and the Balanced Fund. The Equity Fund and Balanced Fund declare and pay
dividends, if any, quarterly. The Small Capitalization Fund declares and pays
dividends, if any, annually. Distributions of net realized gains, if any, will
be paid at least annually. However, to the extent that net realized gains of a
Fund can be reduced by any capital loss carryovers of that Fund, such gains will
not be distributed. Dividends and distributions are recorded by the Funds on the
ex-dividend date.
The amounts of dividends from net investment income and of distributions
from net realized gains are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the composition of net assets based on their federal
tax-basis treatment; temporary differences do not require reclassification.
Dividends and distributions to shareholders which exceed net investment income
and net realized capital gains for financial reporting purposes but not for tax
purposes are reported as dividends in excess of net investment income or net
distributions in excess of net realized gains. To the extent they exceed net
investment income and net realized gains for tax purposes, they are reported as
distributions of capital.
D)Repurchase Agreements:
The Fund's custodian and other banks acting in a sub-custodian capacity take
possession of the collateral pledged for investments in repurchase agreements.
The underlying collateral is valued daily on a mark-to-market basis to determine
that the value, including accrued interest, exceeds the repurchase price. In the
event of the seller's default of the obligation to repurchase, the Funds have
the right to liquidate the collateral and apply the proceeds in satisfaction of
the obligation. Under certain circumstances, in the event of default or
bankruptcy by the other party to the agreement, realization and/or retention of
the collateral may be subject to legal proceedings.
E)Lending Securities:
If the Prime Fund or the Treasury Fund lends its securities, the Fund receives
from the borrower collateral, in the form of cash or U.S. Government securities
or, in the case of the Prime Fund, securities of U.S. Government agencies or
instrumentalities or an irrevocable letter of credit issued by a bank that meets
the credit standards of the Prime Fund, in an amount at least equal at all times
to the market value
102
<PAGE>
- --------------------------------------------------------------------------------
of the securities loaned. The Fund continues to receive interest on the
securities loaned and may simultaneously earn interest on the collateral held.
The Fund records and values such collateral at its market value on the date of
receipt and marks-to-market such collateral on a daily basis through maturity
date. If the borrower defaults and the value of the collateral declines or if
bankruptcy proceedings are commenced with respect to the borrower of the
security, realization of the collateral by the Funds may be delayed or limited.
F)Expenses:
The Trust accounts separately for the assets, liabilities and operations of each
Fund. Direct expenses of a Fund are charged to that Fund while general Trust
expenses are allocated among the Trust's respective portfolios.
The investment income and expenses of a Fund (other than expenses incurred
under the Service Plan, the Distribution Plan, the Shareholder Plan, and the
reports to shareholders expenses) and realized and unrealized gains and losses
on investments of a Fund are allocated to separate classes of shares based upon
their relative net asset value on the date income is earned or expenses and
realized and unrealized gains and losses are incurred.
All costs incurred by the Funds in connection with the organization of the
Trust and the initial public offering of shares of the Funds, principally
professional fees and printing costs, have been deferred. Upon commencement of
investment operations of each Fund, the deferred organization expenses are being
amortized on a straight-line basis over a period of five years.
G)Federal Income Taxes:
For federal income tax purposes, each Fund is treated as a separate entity for
the purpose of determining its qualification as a regulated investment company
under the Internal Revenue Code (the"Code"). It is the policy of each Fund to
meet the requirements of the Code applicable to regulated investment companies,
including the requirement that it distribute substantially all of its taxable
income to shareholders. Therefore, no federal income tax provision is required.
At November 30, 1995, the following Funds had the following capital loss
carryovers:
<TABLE>
<CAPTION>
EXPIRATION
AMOUNT DATE
---------- -----------
<S> <C> <C>
U.S. Government Securities
Fund.......................... $4,163,807 2002
269,154 2003
----------
4,432,961
----------
----------
Florida Tax-Exempt Fund........ $5,026,752 2002
Treasury Fund.................. $ 4,829 2000
40,894 2001
70,799 2002
195,517 2003
----------
$ 312,039
----------
----------
Tax-Exempt Fund................ $ 8,643 1997
14,779 1998
2,875 2000
1,015 2001
3,430 2002
903 2003
----------
$ 31,645
----------
----------
</TABLE>
These capital loss carryovers may be used to offset any future realized
gains on securities transactions to the extent provided in the regulations under
the Code. To the extent utilized, each Fund will reduce amounts otherwise
payable to shareholders from net realized gains. For the fiscal year ended
November 30, 1995, the Prime Fund, Equity Fund, Small Capitalization Fund,
Balanced Fund, Managed Bond Fund and Florida Tax-Exempt Fund utilized $48,107,
$562,233, $3,435,342, $668,948, $870,405 and $2,055,210 of capital loss
carryovers, respectively.
NOTE 3 -- AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into Investment Advisory Agreements with Barnett,
Administration Agreements with Concord and a Distribution Agreement with the
Distributor. In, addition, Barnett has entered into a Sub-Advisory Agreement
with the Sub-Adviser with respect to the Tax-Exempt Fund.
As investment adviser, Barnett manages the investments of each Fund except
the Tax-Exempt Fund and is responsible for all purchases and sales of each
Fund's portfolio securities (except the Tax-Exempt Fund's). The Sub-Adviser has
similar responsibilities for the Tax-Exempt Fund, subject to the general
supervision of both the Board of Trustees and Barnett.
103
<PAGE>
- --------------------------------------------------------------------------------
For its services, Barnett is entitled to receive a fee based on each Fund's
average daily net assets at the following annual rates:
<TABLE>
<S> <C>
Equity Fund......................... 0.60%
Small Capitalization Fund........... 1.00%
Balanced Fund....................... 0.60%
Short-Term Fixed Income Fund........ 0.40%
U.S. Government Securities Fund..... 0.40%
Managed Bond Fund................... 0.40%
Florida Tax-Exempt Fund............. 0.40%
Prime Fund.......................... 0.25%
Treasury Fund....................... 0.25%
Tax-Exempt Fund..................... 0.25%
</TABLE>
Barnett has agreed to pay the Sub-Adviser a sub-advisory fee at an annual
rate of 0.15% of average daily net assets of the Tax-Exempt Fund. Barnett has
also agreed to waive a portion of its fee from the Tax-Exempt Fund equal to
0.10% of the average daily net assets of the Fund. For the year ended November
30, 1995, Barnett waived fees of $202,676 from the Tax-Exempt Fund.
Barnett has voluntarily agreed to limit the fees it receives from the Prime
Fund and the Treasury Fund to the following annual rates: 0.25% of each Fund's
first $600 million of average daily net assets, 0.23%of the next $400 million of
each Fund's average daily net assets, 0.21% of the next $1 billion of each of
the Fund's average daily net assets and 0.19% of each Fund's average daily net
assets in excess of $2 billion. For the year ended November 30, 1995, Barnett
waived fees of $325,805 and $43,932 for the Prime Fund and Treasury Fund,
respectively. For the year ended November 30, 1995, there were no fees waived by
Barnett for the variable net asset value funds.
As administrator, Concord assists in supervising the operations of the
Funds. For its services, Concord is entitled to a fee, accrued daily and payable
monthly, at the following annual rates:
EQUITY FUND, SMALL CAPITALIZATION FUND, BALANCED FUND, SHORT-TERM FIXED INCOME
FUND, U.S. GOVERNMENT SECURITIES FUND, MANAGED BOND FUND AND FLORIDA TAX-EXEMPT
FUND
0.05% of each Fund's daily net assets.
PRIME FUND/TREASURY FUND
0.10% of each Fund's first $600 million of daily net assets
0.09% of each Fund's next $400 million of daily net assets
0.08% of each Fund's next $1 billion of daily net assets, and
0.07% of each Fund's daily net assets in excess of $2 billion
TAX-EXEMPT FUND
0.15% of the Fund's daily net assets
For the year ended November 30, 1995, there were no fees waived by Concord
for the Funds.
Under the Shareholder Plan with respect to Class A Shares and Class B Shares
of the variable net asset value funds, Concord has agreed to provide various
shareholder and administrative support services to the shareholders of Class A
Shares and Class B shares. For its services, Concord is entitled to a fee
("Shareholder and Administrative Services Fee") accrued daily and paid monthly
at an annual rate of 0.15% of the respective average daily net assets of Class A
and Class B Shares. For the year ended November 30, 1995, there were no fees
waived by Concord for the variable net asset value funds with respect to the
Shareholder Plan.
Barnett, Concord and the Sub-Adviser have voluntarily agreed to reimburse
Fund expenses with respect to each money market fund to the extent a Fund's
ordinary operating expenses (including fees payable to Barnett, the Sub-Adviser
and Concord and excluding fees payable under the Service Plan, the Distribution
Plan and the Shareholder Plan) exceed 0.40% of such Fund's average daily net
assets. This voluntary reimbursement may be terminated at any time. For the year
ended November 30, 1995, Barnett and Concord each agreed to reimburse expenses
in the amount of $33,145 to the Prime Fund and $91,028 to the Treasury Fund for
expenses in excess of this limitation. For the year ended November 30, 1995,
Concord and the Sub-Adviser reimbursed expenses in the amount of $53,487 for the
Tax-Exempt Fund, pursuant to this voluntary agreement.
104
<PAGE>
- --------------------------------------------------------------------------------
Barnett and Concord have voluntarily agreed to reimburse Fund expenses to
the extent the expenses of each variable net asset value fund exceed a
predetermined level determined from time to time by both Barnett and Concord.
For the year ended November 30, 1995, Barnett and Concord reimbursed Fund
expenses in the following amounts pursuant to these voluntary limitations:
<TABLE>
<CAPTION>
BARNETT CONCORD
--------- ---------
<S> <C> <C>
Equity Fund....................... $ 13,355 $ 4,451
Small Capitalization Fund......... 53,824 9,992
Balanced Fund..................... 526,354 0
Short-Term Fixed Income Fund...... 278,214 0
U.S. Government Securities Fund... 17,957 9,052
Managed Bond Fund................. 380,759 0
Florida Tax-Exempt Fund........... 33,887 16,016
</TABLE>
For the year ended November 30, 1995, the Distributor and affiliates of
Barnett advised the Funds that they retained the following amounts from
commissions earned on the sale of each Fund's shares:
<TABLE>
<CAPTION>
AFFILIATES
DISTRIBUTOR OF BARNETT
----------- -----------
<S> <C> <C>
Equity Fund..................... $ 1,113 $ 11,904
Small Capitalization Fund....... 199 11,041
Balanced Fund................... 859 21,641
Short-Term Fixed Income Fund.... 426 1,571
U.S. Government Securities
Fund........................... 466 3,567
Managed Bond Fund............... 165 7,289
Florida Tax-Exempt Fund......... 793 7,261
</TABLE>
Under the Service Plan, institutions ("Service Organizations") agree to
provide support services to their clients who are beneficial owners of Emerald
Service Shares of the money market funds. For these services, the Funds agreed
to pay the Service Organizations an annual fee of 0.35% of the average daily net
asset value of each Fund's Emerald Service Shares outstanding. These payments
are borne solely by Emerald Service Shares. Services are provided by Service
Organizations which may include the Distributor, Barnett, the Sub-Adviser and
their affiliates. For the year ended November 30, 1995, the Prime Fund, Treasury
Fund and Tax-Exempt Fund incurred expenses of $2,814,354, $1,898,193 and
$10,478, respectively, pursuant to the Service Plan, substantially all of which
was earned by Barnett and its affiliates.
Under the Distribution Plan with respect to Investor Shares of the money
market funds, each Fund pays the Distributor for distribution expenses incurred
in connection with the advertising and marketing of each Fund's Investor Shares
and with the implementation and operation of the Distribution Plan. Payments by
each Fund for distribution expenses under the Distribution Plan for Investor
Shares may not exceed an annual rate of 0.25% of the average daily net asset
value of each Fund's outstanding Investor Shares. In addition, the Shareholder
Plan provides for payments to the Administrator for certain administrative
services that are related to the distribution of Investor Shares. The
Administrator is entitled to payment for these services at the annual rate of
0.25% of the average daily net asset value of each Fund's outstanding Investor
Shares. For the year ended November 30, 1995, the Prime Fund, Treasury Fund and
Tax-Exempt Fund paid fees of $1,523,904, $200,869 and $188,796, respectively
pursuant to the Distribution Plan and the Shareholder Plan.
The variable net asset value funds have each adopted Distribution Plans.
Under the Distribution Plans, each Fund reimburses the Distributor for the
distribution and shareholder support expenses incurred in connection with shares
of each Fund. Under the Distribution Plan for Class A Shares, payments by each
Fund may not exceed an annual rate of 0.25% of the average daily net assets of
Class A Shares. Under the Distribution Plan for Class B Shares, distribution
payments may not exceed 1.00% of the average daily net assets of the Class B
Shares. Of this amount, not more than 0.25% of such value will be used to
compensate Service Organizations for maintenance and service to Class B
shareholder accounts and not more than 0.75% will be paid to the Distributor as
reimbursement for commissions, transaction fees and additional expenses related
to promotional and primary distribution activities.
For the year ended November 30, 1995, the variable net asset value funds
paid the following amounts pursuant to the Distribution Plans:
<TABLE>
<CAPTION>
A SHARES B SHARES
--------- -----------
<S> <C> <C>
Equity Fund...................... $ 49,877 $ 16,820
Small Capitalization Fund........ 4,747 20,053
Balanced Fund.................... 1,836 16,107
Short-Term Fixed Income Fund..... 681 898
U.S. Government Securities
Fund............................ 70,145 13,340
Managed Bond Fund................ 2,539 5,219
Florida Tax-Exempt Fund.......... 251,826 76,047
</TABLE>
105
<PAGE>
- --------------------------------------------------------------------------------
The Trust was informed that the amounts paid to Barnett and Concord pursuant
to the Distribution Plan are as follows:
<TABLE>
<CAPTION>
A SHARES
--------------------
BARNETT CONCORD
--------- ---------
<S> <C> <C>
Equity Fund........................ $ 18,625 $ 0
Small Capitalization Fund.......... 1,074 0
Balanced Fund...................... 521 0
Short-Term Fixed Income Fund....... 152 0
U.S. Government Securities Fund.... 14,792 0
Managed Bond Fund.................. 976 0
Florida Tax-Exempt Fund............ 44,307 0
<CAPTION>
B SHARES
--------------------
BARNETT CONCORD
--------- ---------
<S> <C> <C>
Equity Fund........................ $ 884 $ 13,858
Small Capitalization Fund.......... 979 16,017
Balanced Fund...................... 838 13,242
Short-Term Fixed Income Fund....... 11 766
U.S. Government Securities Fund.... 572 11,134
Managed Bond Fund.................. 226 4,288
Florida Tax-Exempt Fund............ 3,553 62,228
</TABLE>
Certain officers of the Trust are "affiliated persons" (as defined in the
Act) of Concord or the Distributor. Each Trustee receives an annual fee of
$14,000 and a meeting fee of $1,500 per meeting for services relating to all of
the portfolios constituting the Trust. Prior to June 1, 1995, each Trustee
received an annual fee of $9,000. For the year ended November 30, 1995, the
Funds incurred the following legal expenses of a law firm, a partner of which
serves as Secretary to the Trust:
<TABLE>
<S> <C>
Equity Fund........................ $ 17,375
Small Capitalization Fund.......... 10,311
Balanced Fund...................... 17,814
Short-Term Fixed Income Fund....... 18,267
U.S. Government Securities Fund.... 17,160
Managed Bond Fund.................. 16,112
Florida Tax-Exempt Fund............ 16,941
Prime Fund......................... 18,603
Treasury Fund...................... 17,344
Tax-Exempt Fund.................... 16,925
</TABLE>
On June 30, 1994, Barnett purchased two securities from the Prime Fund at an
amount $4,257,069 in excess of the securities' fair market value. The Fund
recorded a realized loss on the sale and a capital contribution of an equal
amount from Barnett. Barnett received no shares of the Prime Fund or other
consideration in exchange for such contribution. For tax purposes, this capital
contribution was applied against the realized losses for the year ended November
30, 1994. Accordingly, this amount has been reclassified from additional paid-in
capital against accumulated net realized losses in the statement of assets and
liabilities.
NOTE 4 -- SECURITIES TRANSACTIONS
For the year ended November 30, 1995, the cost of purchases and the proceeds
from sales of portfolio securities (excluding short-term investments) were as
follows:
<TABLE>
<CAPTION>
PURCHASES SALES
------------ ------------
<S> <C> <C>
Equity Fund.............. $173,238,130 $224,350,430
Small Capitalization
Fund.................... 165,236,774 158,520,850
Balanced Fund............ 58,988,543 49,680,749
Short-Term Fixed Income
Fund.................... 6,558,859 14,680,909
U.S. Government
Securities Fund......... 88,012,404 92,575,176
Managed Bond Fund........ 60,371,906 65,388,237
Florida Tax-Exempt Fund.. 116,167,882 141,567,103
</TABLE>
106
<PAGE>
- --------------------------------------------------------------------------------
NOTE 5 -- CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Funds are summarized below:
EQUITY FUND (000 OMITTED):
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, 1995 NOVEMBER 30, 1994*
---------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- --------- ---------
<S> <C> <C> <C> <C>
Class A Shares
Sold.................................................................. 374 $ 4,789 1,317 $ 15,584
Reinvestment of dividends............................................. 2 31 44 3,149
Redeemed.............................................................. (672) (8,159) (11,277) (137,704)
----------- --------- --------- ---------
Net decrease -- Class A................................................. (296) (3,339) (9,916) (118,971)
----------- --------- --------- ---------
Class B Shares
Sold.................................................................. 63 841 142 1,619
Reinvestment of dividends............................................. -- -- 1 2
Redeemed.............................................................. (44) (540) (5) (44)
----------- --------- --------- ---------
Net increase -- Class B................................................. 19 301 138 1,577
----------- --------- --------- ---------
Institutional Shares
Sold.................................................................. 2,006 25,379 20,498 240,802
Reinvestment of dividends............................................. 90 1,175 391 880
Redeemed.............................................................. (5,283) (67,969) (5,824) (63,164)
----------- --------- --------- ---------
Net increase (decrease) -- Institutional................................ (3,187) (41,415) 15,065 178,518
----------- --------- --------- ---------
Net increase (decrease) in Fund......................................... (3,464) $ (44,453) 5,287 $ 61,124
----------- --------- --------- ---------
----------- --------- --------- ---------
</TABLE>
- ---------------
* For the period March 1, 1994 (initial offering date) through November 30, 1994
for the Class B and Institutional Shares.
SMALL CAPITALIZATION FUND (000 OMITTED):
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, 1995 NOVEMBER 30, 1994*+
---------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- --------- ---------
<S> <C> <C> <C> <C>
Class A Shares
Sold................................................................... 96 $ 1,111 174 $ 1,726
Redeemed............................................................... (51) (549) (10) (102)
----------- --------- --------- ---------
Net increase -- Class A.................................................. 45 562 164 1,624
----------- --------- --------- ---------
Class B Shares
Sold................................................................... 61 712 188 1,826
Redeemed............................................................... (39) (428) (7) (67)
----------- --------- --------- ---------
Net increase -- Class B.................................................. 22 284 181 1,759
----------- --------- --------- ---------
Institutional Shares
Sold................................................................... 2,004 22,569 6,028 59,933
Redeemed............................................................... (616) (7,045) (489) (4,630)
----------- --------- --------- ---------
Net increase -- Institutional............................................ 1,388 15,524 5,539 55,303
----------- --------- --------- ---------
Net increase in Fund..................................................... 1,455 $ 16,370 5,884 $ 58,686
----------- --------- --------- ---------
----------- --------- --------- ---------
</TABLE>
- ---------------
* For the period March 1, 1994 (initial offering date) through November 30, 1994
for Class A and Class B Shares.
+ For the period January 4, 1994 (commencement of operations) through November
30, 1994 for the Institutional Shares.
107
<PAGE>
- --------------------------------------------------------------------------------
BALANCED FUND (000 OMITTED):
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, 1995 NOVEMBER 30, 1994*
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Class A Shares
Sold................................................................... 52 $ 569 62 $ 630
Reinvestment of dividends.............................................. 2 25 1 4
Redeemed............................................................... (21) (218) (6) (74)
----------- --------- ----- ---------
Net increase -- Class A.................................................. 33 376 57 560
----------- --------- ----- ---------
Class B Shares
Sold................................................................... 93 1,055 135 1,328
Reinvestment of dividends.............................................. 4 40 1 11
Redeemed............................................................... (26) (293) (13) (105)
----------- --------- ----- ---------
Net increase -- Class B.................................................. 71 802 123 1,234
----------- --------- ----- ---------
Institutional Shares
Sold................................................................... 1,769 19,608 5,583 55,723
Reinvestment of dividends.............................................. 241 2,594 71 721
Redeemed............................................................... (1,123) (11,640) (343) (3,415)
----------- --------- ----- ---------
Net increase -- Institutional............................................ 887 10,562 5,311 53,029
----------- --------- ----- ---------
Net increase in Fund..................................................... 991 $ 11,740 5,491 $ 54,823
----------- --------- ----- ---------
----------- --------- ----- ---------
</TABLE>
- ---------------
* For the period April 11, 1994 (commencement of operations) through November
30, 1994.
SHORT-TERM FIXED INCOME FUND (000 OMITTED):
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, 1995 NOVEMBER 30, 1994*
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Class A Shares
Sold................................................................... 26 $ 258 24 $ 239
Reinvestment of dividends.............................................. 1 12 -- 2
Redeemed............................................................... (16) (164) (1) (15)
----------- --------- ----- ---------
Net increase -- Class A.................................................. 11 106 23 226
----------- --------- ----- ---------
Class B Shares
Sold................................................................... 14 135 9 86
Reinvestment of dividends.............................................. -- 5 -- --
Redeemed............................................................... (7) (72) -- --
----------- --------- ----- ---------
Net increase -- Class B.................................................. 7 68 9 86
----------- --------- ----- ---------
Institutional Shares
Sold................................................................... 1,089 10,918 2,813 27,976
Reinvestment of dividends.............................................. 107 1,069 72 712
Redeemed............................................................... (2,233) (22,359) (465) (4,570)
----------- --------- ----- ---------
Net increase (decrease) -- Institutional................................. (1,037) (10,372) 2,420 24,118
----------- --------- ----- ---------
Net increase (decrease) in Fund.......................................... (1,019) $ (10,198) 2,452 $ 24,430
----------- --------- ----- ---------
----------- --------- ----- ---------
</TABLE>
- ---------------
* For the period April 11, 1994 (commencement of operations) through November
30, 1994.
108
<PAGE>
- --------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES FUND (000 OMITTED):
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, 1995 NOVEMBER 30, 1994*
---------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- --------- ---------
<S> <C> <C> <C> <C>
Class A Shares
Sold.................................................................. 171 $ 1,804 761 $ 7,984
Reinvestment of dividends............................................. 152 1,543 413 4,314
Redeemed.............................................................. (908) (9,169) (11,471) (119,544)
----------- --------- --------- ---------
Net decrease -- Class A................................................. (585) (5,822) (10,297) (107,246)
----------- --------- --------- ---------
Class B Shares
Sold.................................................................. 52 527 156 1,589
Reinvestment of dividends............................................. 3 30 2 21
Redeemed.............................................................. (47) (425) (29) (283)
----------- --------- --------- ---------
Net increase -- Class B................................................. 8 132 129 1,327
----------- --------- --------- ---------
Institutional Shares
Sold.................................................................. 915 9,239 7,772 81,180
Reinvestment of dividends............................................. 379 3,836 228 2,281
Redeemed.............................................................. (1,218) (12,523) (861) (8,621)
----------- --------- --------- ---------
Net increase -- Institutional........................................... 76 552 7,139 74,840
----------- --------- --------- ---------
Net decrease in Fund.................................................... (501) $ (5,138) (3,029) $ (31,079)
----------- --------- --------- ---------
----------- --------- --------- ---------
</TABLE>
- ---------------
* For the period March 1, 1994 (initial offering date) through November 30, 1994
for Class B and Institutional Shares.
MANAGED BOND FUND (000 OMITTED):
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER PERIOD ENDED
30, 1995 NOVEMBER 30, 1994*
---------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- --------- ---------
<S> <C> <C> <C> <C>
Class A Shares
Sold.................................................................. 167 $ 1,661 76 $ 745
Reinvestment of dividends............................................. 3 32 1 8
Redeemed.............................................................. (156) (1,595) (13) (123)
----------- --------- --------- ---------
Net increase -- Class A................................................. 14 98 64 630
----------- --------- --------- ---------
Class B Shares
Sold.................................................................. 21 220 56 556
Reinvestment of dividends............................................. 2 18 1 7
Redeemed.............................................................. (9) (89) (9) (92)
----------- --------- --------- ---------
Net increase -- Class B................................................. 14 149 48 471
----------- --------- --------- ---------
Institutional Shares
Sold.................................................................. 1,642 16,244 8,204 82,023
Reinvestment of dividends............................................. 371 4,100 288 2,579
Redeemed.............................................................. (2,456) (24,495) (1,517) (14,829)
----------- --------- --------- ---------
Net increase (decrease) -- Institutional................................ (443) (4,151) 6,975 69,773
----------- --------- --------- ---------
Net increase (decrease) in Fund......................................... (415) $ (3,904) 7,087 $ 70,874
----------- --------- --------- ---------
----------- --------- --------- ---------
</TABLE>
- ---------------
* For the period April 11, 1994 (commencement of operations) through November
30, 1994.
109
<PAGE>
- --------------------------------------------------------------------------------
FLORIDA TAX-EXEMPT FUND (000 OMITTED):
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, 1995 NOVEMBER 30, 1994*
---------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- --------- ---------
<S> <C> <C> <C> <C>
Class A Shares
Sold................................................................... 360 $ 4,051 1,894 $ 21,130
Reinvestment of dividends.............................................. 394 4,178 670 7,248
Redeemed............................................................... (3,367) (35,837) (9,816) (106,915)
----------- --------- --------- ---------
Net decrease -- Class A.................................................. (2,613) (27,608) (7,252) (78,537)
----------- --------- --------- ---------
Class B Shares
Sold................................................................... 367 3,916 596 6,345
Reinvestment of dividends.............................................. 20 210 8 87
Redeemed............................................................... (81) (854) (34) (354)
----------- --------- --------- ---------
Net increase -- Class B.................................................. 306 3,272 570 6,078
----------- --------- --------- ---------
Institutional Shares
Sold................................................................... 792 8,446 4,176 46,435
Reinvestment of dividends.............................................. 40 430 25 266
Redeemed............................................................... (739) (7,755) (1,232) (13,070)
----------- --------- --------- ---------
Net increase -- Institutional............................................ 93 1,121 2,969 33,631
----------- --------- --------- ---------
Net decrease in Fund..................................................... (2,214) $ (23,215) (3,713) $ (38,828)
----------- --------- --------- ---------
----------- --------- --------- ---------
</TABLE>
- ---------------
* For the period March 1, 1994 (initial offering date) through November 30, 1994
for Class B and Institutional Shares.
110
<PAGE>
- --------------------------------------------------------------------------------
PRIME FUND (000 OMITTED)
(AT $1.00 PER SHARE):
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1995 1994
------------ ------------
<S> <C> <C>
Emerald Shares
Shares sold............... 2,397,638 2,451,959
Shares issued to
shareholders in
reinvestment of
dividends and
distributions........... 1 342
Shares redeemed........... (2,348,560) (2,549,465)
------------ ------------
Net increase (decrease) in
Emerald Shares............. 49,079 (97,164)
------------ ------------
Emerald Service Shares
Shares sold............... 2,305,635 2,742,976
Shares issued to
shareholders in
reinvestment of
dividends and
distributions........... 5,644 3,558
Shares redeemed........... (2,243,151) (2,532,029)
------------ ------------
Net increase in Emerald
Service Shares............. 68,128 214,505
------------ ------------
Investor Shares
Shares sold............... 465,103 248,273
Shares issued to
shareholders in
reinvestment of
dividends and
distributions........... 15,656 6,525
Shares redeemed........... (244,639) (227,245)
------------ ------------
Net increase in Investor
Shares..................... 236,120 27,553
------------ ------------
Total increase in Fund
shares..................... 353,327 144,894
------------ ------------
------------ ------------
</TABLE>
TREASURY FUND (000 OMITTED)
(AT $1.00 PER SHARE):
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1995 1994
------------ ------------
<S> <C> <C>
Emerald Shares
Shares sold............... 778,340 904,240
Shares redeemed........... (825,813) (1,121,685)
------------ ------------
Net decrease in Emerald
Shares..................... (47,473) (217,445)
------------ ------------
Emerald Service Shares
Shares sold............... 1,705,061 1,489,756
Shares issued to
shareholders in
reinvestment of
dividends and
distributions........... 1,364 725
Shares redeemed........... (1,772,681) (1,302,244)
------------ ------------
Net increase (decrease) in
Emerald Service Shares..... (66,256) 188,237
------------ ------------
Investor Shares
Shares sold............... 130,324 88,022
Shares issued to
shareholders in
reinvestment of
dividends and
distributions........... 2,002 891
Shares redeemed........... (115,709) (77,828)
------------ ------------
Net increase in Investor
Shares..................... 16,617 11,085
------------ ------------
Total decrease in Fund
shares..................... (97,112) (18,123)
------------ ------------
------------ ------------
</TABLE>
111
<PAGE>
- --------------------------------------------------------------------------------
TAX-EXEMPT FUND (000 OMITTED)
(AT $1.00 PER SHARE):
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1995 1994
------------ ------------
<S> <C> <C>
Emerald Shares
Shares sold............... 411,931 414,315
Shares issued to
shareholders in
reinvestment of
dividends and
distributions........... 458 14
Shares redeemed........... (418,892) (398,994)
------------ ------------
Net increase (decrease) in
Emerald Shares............. (6,503) 15,335
------------ ------------
Emerald Service Shares
Shares sold............... 1,051 4,077
Shares issued to
shareholders in
reinvestment of
dividends and
distributions........... 20 9
Shares redeemed........... (2,244) (544)
------------ ------------
Net increase (decrease) in
Emerald Service Shares..... (1,173) 3,542
------------ ------------
Investor Shares
Shares sold............... 91,392 110,526
Shares issued to
shareholders in
reinvestment of
dividends and
distributions........... 1,149 834
Shares redeemed........... (92,426) (118,848)
------------ ------------
Net increase (decrease) in
Investor Shares............ 115 (7,488)
------------ ------------
Total increase (decrease) in
Fund shares................ (7,561) 11,389
------------ ------------
------------ ------------
</TABLE>
NOTE 6 -- CONCENTRATION OF CREDIT RISK
The Prime Fund and Tax-Exempt Fund invest substantially all of their assets in a
diversified portfolio of high quality U.S. dollar denominated money market
instruments as disclosed in the Portfolio of Investments by security type or, in
the case of the Tax-Exempt Fund, by state of issuer. The Florida Tax-Exempt Fund
invests substantially all of its assets in a non-diversified portfolio of
tax-exempt debt obligations primarily consisting of securities issued by the
State of Florida, its municipalities, counties, and other taxing districts. The
issuers' abilities to meet their obligations may be affected by domestic and
foreign or, in the case of the Florida Tax-Exempt Fund, Florida economic,
regional and political developments.
The Prime Fund had the following concentrations by industry sector at November
30, 1995 ( as a percentage of total investments):
<TABLE>
<CAPTION>
% OF
INDUSTRY CLASS PORTFOLIO
- -------------------------------------------- ----------
<S> <C>
Banks -- International...................... 21.7%
Financial Services.......................... 20.0
Repurchase Agreements....................... 11.3
Brokerage Services.......................... 10.6
Banks -- Regional........................... 8.6
Banks -- Money Center....................... 6.2
Financial Services -- Mortgage.............. 5.1
Automobiles................................. 4.2
U.S. Government Agency Securities........... 3.5
Financial Services -- Diversified........... 3.5
Finance Companies........................... 2.7
Utilities -- Electric....................... 1.9
Tire & Rubber............................... 0.7
-----
100.0%
-----
-----
</TABLE>
At November 30, 1995, the Florida Tax-Exempt Fund and the Tax-Exempt Fund had
the following concentrations by industry sector (as a percentage of total
investments):
<TABLE>
<CAPTION>
FLORIDA
TAX-EXEMPT TAX- EXEMPT TAX- EXEMPT
INDUSTRY CLASS FUND FUND
- ------------------------------------ ---------- ----------
<S> <C> <C>
Health & Medical Facilities......... 11.2% 16.9%
Pollution Control & Waste
Management......................... 1.2 13.5
Education Facilities................ 11.7 11.7
General Obligations................. 5.4 11.5
Miscellaneous....................... -- 7.1
Industrial Development Revenue...... 11.3 6.5
Education........................... -- 6.3
Power Projects...................... 19.4 6.0
Tax Revenue Anticipation Notes...... -- 5.9
Public Facilities................... -- 2.5
Housing Developments................ -- 2.0
Water Projects...................... -- 1.9
Revenue............................. -- 1.5
Solid Waste......................... -- 1.2
Equipment Leasing................... -- 1.2
Home Building and Land
Development........................ -- 1.0
Pre-Refunded Securities............. -- 1.0
Homebuilders........................ -- 1.0
Resource Recovery Facilities........ -- 0.8
Utility Projects.................... 6.7 0.5
Airport Facilities.................. 12.2 --
Turnpike, Road & Bridge
Development........................ 10.0 --
Sewer Projects...................... 6.5 --
Sales Tax Revenue................... 4.4 --
----- -----
100.0% 100.0%
----- -----
----- -----
</TABLE>
112
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
------------------------------------------------------ PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1995 1994 1993 1992 1991*
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
NET ASSET VALUE, BEGINNING OF PERIOD........... $ 10.86 $ 11.82 $ 11.97 $ 10.24 $ 10.00
------------ ------------ ------------ ------------ ------------
Income from investment operations:
Net investment income........................ 0.02 0.08 0.15 0.16 0.12
Net realized and unrealized gains (losses) on
securities................................. 3.76 (0.39) (0.08) 1.73 0.24
------------ ------------ ------------ ------------ ------------
Total income (loss) from investment
operations................................. 3.78 (0.31) 0.07 1.89 0.36
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income......... (0.02) (0.08) (0.15) (0.16) (0.12)
Distributions from net realized gains on
securities................................. (0.00) (0.57) (0.07) (0.00) (0.00)
------------ ------------ ------------ ------------ ------------
Total dividends and distributions............ (0.02) (0.65) (0.22) (0.16) (0.12)
------------ ------------ ------------ ------------ ------------
Net change in net asset value.................. 3.76 (0.96) (0.15) 1.73 0.24
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD................. $ 14.62 $ 10.86 $ 11.82 $ 11.97 $ 10.24
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total return (excludes sales charge)........... 34.82% (2.91%) 0.58% 18.49% 3.54%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)............. $ 22,209 $ 19,705 $ 138,642 $ 152,939 $ 98,953
Ratio of expenses to average net assets...... 1.37% 1.07% 0.86% 0.76% 0.00%+
Ratio of net investment income to average net
assets..................................... 0.15% 0.36% 1.22% 1.41% 2.64%+
Ratio of expenses to average net assets**.... (a) 1.29% 1.21% 1.18% 1.22%+
Ratio of net investment income to average net
assets**................................... (a) 0.13% 0.87% 0.99% 1.42%+
Portfolio turnover........................... 104% 113% 102% 40% 13%
</TABLE>
- ---------------
* For the period June 28, 1991 (commencement of operations) through November
30, 1991.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
+ Annualized.
++ Unannualized.
(a) There were no waivers or reimbursements during the period.
See Notes to Financial Statements.
113
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1995 1994*
------------- -------------
<S> <C> <C>
CLASS B SHARES
NET ASSET VALUE, BEGINNING OF PERIOD........................................... $ 10.83 $ 11.92
------ ------
Income from investment operations:
Net investment income (loss)................................................. (0.12) 0.02
Net realized and unrealized gains (losses) on securities..................... 3.69 (0.94)
------ ------
Total income (loss) from investment operations............................... 3.57 (0.92)
------ ------
Less dividends and distributions:
Dividends from net investment income......................................... (0.00) (0.02)
Distributions from net realized gains on securities.......................... (0.00) (0.15)
------ ------
Total dividends and distributions............................................ (0.00) (0.17)
------ ------
Net change in net asset value.................................................. 3.57 (1.09)
------ ------
NET ASSET VALUE, END OF PERIOD................................................. $ 14.40 $ 10.83
------ ------
------ ------
Total return (excludes redemption charge)...................................... 32.96% (7.72%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)............................................. $ 2,263 $ 1,498
Ratio of expenses to average net assets...................................... 2.61% 2.50%+
Ratio of net investment income (loss) to average net assets.................. (1.11%) 0.15%+
Ratio of expenses to average net assets**.................................... 3.67% (a)
Ratio of net investment income (loss) to average net assets**................ (2.17%) (a)
Portfolio turnover........................................................... 104% 113%
</TABLE>
- ---------------
* For the period March 1, 1994 (initial offering date) through November 30,
1994.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
+ Annualized.
++ Unannualized.
(a) There were no waivers or reimbursements during the period.
See Notes to Financial Statements.
114
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1995 1994*
------------ ------------
<S> <C> <C>
INSTITUTIONAL SHARES
NET ASSET VALUE, BEGINNING OF PERIOD........................................... $ 10.89 $ 11.94
------------ ------------
Income from investment operations:
Net investment income........................................................ 0.08 0.11
Net realized and unrealized gains (losses) on securities..................... 3.74 (0.90)
------------ ------------
Total income (loss) from investment operations............................... 3.82 (0.79)
------------ ------------
Less dividends and distributions:
Dividends from net investment income......................................... (0.08) (0.11)
Distributions from net realized gains on securities.......................... (0.00) (0.15)
------------ ------------
Total dividends and distributions............................................ (0.08) (0.26)
------------ ------------
Net change in net asset value.................................................. 3.74 (1.05)
------------ ------------
NET ASSET VALUE, END OF PERIOD................................................. $ 14.63 $ 10.89
------------ ------------
------------ ------------
Total return................................................................... 35.21% (6.62%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)............................................. $ 173,824 $ 164,015
Ratio of expenses to average net assets**.................................... 0.84% 0.79%+
Ratio of net investment income to average net assets**....................... 0.67% 1.46%+
Portfolio turnover........................................................... 104% 113%
</TABLE>
- ---------------
* For the period March 1, 1994 (initial offering date) through November 30,
1994.
** There were no waivers or reimbursements for the year ended November 30, 1995
or for the period ended November 30, 1994.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
115
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1995 1994*
------------- -------------
<S> <C> <C>
CLASS A SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.............................................. $ 9.66 $ 10.49
------ ------
Income from investment operations:
Net investment loss............................................................. (0.04) (0.04)
Net realized and unrealized gains (losses) on securities........................ 3.15 (0.79)
------ ------
Net change in net asset value..................................................... 3.11 (0.83)
------ ------
NET ASSET VALUE, END OF PERIOD.................................................... $ 12.77 $ 9.66
------ ------
------ ------
Total return (excludes sales charge).............................................. 32.19% (7.91%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................................................ $ 2,657 $ 1,583
Ratio of expenses to average net assets......................................... 1.54% 1.54%+
Ratio of net investment loss to average net assets.............................. (0.81%) (0.67%)+
Ratio of expenses to average net assets**....................................... 2.43% 2.50%+
Ratio of net investment loss to average net assets**............................ (1.70%) (1.63%)+
Portfolio turnover.............................................................. 229% 118%
</TABLE>
- ---------------
* For the period March 1, 1994 (initial offering date) through November 30,
1994.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
116
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1995 1994*
------------ ------------
<S> <C> <C>
CLASS B SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.............................................. $ 9.58 $ 10.49
------ ------
Income from investment operations:
Net investment loss............................................................. (0.08) (0.08)
Net realized and unrealized gains (losses) on securities........................ 3.05 (0.83)
------ ------
Net change in net asset value..................................................... 2.97 (0.91)
------ ------
NET ASSET VALUE, END OF PERIOD.................................................... $ 12.55 $ 9.58
------ ------
------ ------
Total return (excludes redemption charge)......................................... 31.00% (8.67%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................................................ $ 2,558 $ 1,737
Ratio of expenses to average net assets......................................... 2.37% 2.32%+
Ratio of net investment loss to average net assets.............................. (1.64%) (1.48%)+
Ratio of expenses to average net assets**....................................... 3.29% 2.50%+
Ratio of net investment loss to average net assets**............................ (2.56%) (1.66%)+
Portfolio turnover.............................................................. 229% 118%
</TABLE>
- ---------------
* For the period March 1, 1994 (initial offering date) through November 30,
1994.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
117
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1995 1994*
------------ ------------
<S> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.............................................. $ 9.66 $ 10.00
------------ ------------
Income from investment operations:
Net investment loss............................................................. (0.03) (0.04)
Net realized and unrealized gains (losses) on securities........................ 3.15 (0.30)
------------ ------------
Net change in net asset value..................................................... 3.12 (0.34)
------------ ------------
NET ASSET VALUE, END OF PERIOD.................................................... $ 12.78 $ 9.66
------------ ------------
------------ ------------
Total return...................................................................... 32.30% (3.40%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................................................ $ 88,561 $ 53,509
Ratio of expenses to average net assets......................................... 1.39% 1.29%+
Ratio of net investment loss to average net assets.............................. (0.65%) (0.54%)+
Ratio of expenses to average net assets**....................................... 1.42% 1.48%+
Ratio of net investment loss to average net assets**............................ (0.68%) (0.73%)+
Portfolio turnover.............................................................. 229% 118%
</TABLE>
- ---------------
* For the period January 4, 1994 (commencement of operations) through November
30, 1994.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
118
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1995 1994*
------------- -------------
<S> <C> <C>
CLASS A SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.............................................. $ 9.72 $ 10.00
------ ------
Income from investment operations:
Net investment income........................................................... 0.30 0.24
Net realized and unrealized gains (losses) on securities........................ 2.30 (0.28)
------ ------
Total income (loss) from investment operations.................................. 2.60 (0.04)
------ ------
Less dividends and distributions:
Dividends from net investment income............................................ (0.30) (0.22)
Distributions in excess of net investment income................................ (0.00) (0.02)
------ ------
Total dividends and distributions............................................... (0.30) (0.24)
------ ------
Net change in net asset value..................................................... 2.30 (0.28)
------ ------
NET ASSET VALUE, END OF PERIOD.................................................... $ 12.02 $ 9.72
------ ------
------ ------
Total return (excludes sales charge).............................................. 27.45% (0.40%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................................................ $ 1,082 $ 543
Ratio of expenses to average net assets......................................... 0.72% 0.68%+
Ratio of net investment income to average net assets............................ 3.14% 3.70%+
Ratio of expenses to average net assets**....................................... 4.20% 2.50%+
Ratio of net investment income (loss) to average net assets**................... (0.34%) 1.88%+
Portfolio turnover.............................................................. 87% 33%
</TABLE>
- ---------------
* For the period April 11, 1994 (commencement of operations) through November
30, 1994.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
119
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1995 1994*
------------- -------------
<S> <C> <C>
CLASS B SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.............................................. $ 9.63 $ 10.00
------ ------
Income from investment operations:
Net investment income........................................................... 0.22 0.21
Net realized and unrealized gains (losses) on securities........................ 2.27 (0.37)
------ ------
Total income (loss) from investment operations.................................. 2.49 (0.16)
------ ------
Less dividends and distributions:
Dividends from net investment income............................................ (0.22) (0.19)
Distributions in excess of net investment income................................ (0.00) (0.02)
------ ------
Total dividends and distributions............................................... (0.22) (0.21)
------ ------
Net change in net asset value..................................................... 2.27 (0.37)
------ ------
NET ASSET VALUE, END OF PERIOD.................................................... $ 11.90 $ 9.63
------ ------
------ ------
Total return (excludes redemption charge)......................................... 26.48% (1.66%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................................................ $ 2,303 $ 1,191
Ratio of expenses to average net assets......................................... 1.46% 1.43%+
Ratio of net investment income to average net assets............................ 2.40% 3.02%+
Ratio of expenses to average net assets**....................................... 3.74% 2.50%+
Ratio of net investment income to average net assets**.......................... 0.12% 1.95%+
Portfolio turnover.............................................................. 87% 33%
</TABLE>
- ---------------
* For the period April 11, 1994 (commencement of operations) through November
30, 1994.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
120
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1995 1994*
------------ ------------
<S> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.............................................. $ 9.63 $ 10.00
------------ ------------
Income from investment operations:
Net investment income........................................................... 0.33 0.27
Net realized and unrealized gains (losses) on securities........................ 2.28 (0.37)
------------ ------------
Total income (loss) from investment operations.................................. 2.61 (0.10)
------------ ------------
Less dividends and distributions:
Dividends from net investment income............................................ (0.33) (0.25)
Distributions in excess of net investment income................................ (0.00) (0.02)
------------ ------------
Total dividends and distributions............................................... (0.33) (0.27)
------------ ------------
Net change in net asset value..................................................... 2.28 (0.37)
------------ ------------
NET ASSET VALUE, END OF PERIOD.................................................... $ 11.91 $ 9.63
------------ ------------
------------ ------------
Total return...................................................................... 27.99% (1.02%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................................................ $ 73,830 $ 51,170
Ratio of expenses to average net assets......................................... 0.32% 0.28%+
Ratio of net investment income to average net assets............................ 3.54% 4.11%+
Ratio of expenses to average net assets**....................................... 1.10% 1.25%+
Ratio of net investment income to average net assets**.......................... 2.76% 3.14%+
Portfolio turnover.............................................................. 87% 33%
</TABLE>
- ---------------
* For the period April 11, 1994 (commencement of operations) through November
30, 1994.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
121
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1995 1994*
------------- -------------
<S> <C> <C>
CLASS A SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.............................................. $ 9.74 $ 10.00
------ ------
Income from investment operations:
Net investment income........................................................... 0.57 0.32
Net unrealized gains (losses) on securities..................................... 0.40 (0.26)
------ ------
Total income from investment operations......................................... 0.97 0.06
------ ------
Dividends from net investment income.............................................. (0.57) (0.32)
------ ------
Net change in net asset value..................................................... 0.40 (0.26)
------ ------
NET ASSET VALUE, END OF PERIOD.................................................... $ 10.14 $ 9.74
------ ------
------ ------
Total return (excludes sales charge).............................................. 10.25% 0.65%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................................................ $ 343 $ 223
Ratio of expenses to average net assets......................................... 0.71% 0.67%+
Ratio of net investment income to average net assets............................ 5.72% 5.20%+
Ratio of expenses to average net assets**....................................... 9.10% 2.50%+
Ratio of net investment income (loss) to average net assets**................... (2.67%) 3.36%+
Portfolio turnover.............................................................. 33% 0%
</TABLE>
- ---------------
* For the period April 11, 1994 (commencement of operations) through November
30, 1994.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
122
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1995 1994*
------------ -------------
<S> <C> <C>
CLASS B SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.............................................. $ 9.69 $ 10.00
------------ ------
Income from investment operations:
Net investment income........................................................... 0.50 0.28
Net unrealized gains (losses) on securities..................................... 0.38 (0.31)
------------ ------
Total income (loss) from investment operations.................................. 0.88 (0.03)
------------ ------
Dividends from net investment income.............................................. (0.50) (0.28)
------------ ------
Net change in net asset value..................................................... 0.38 (0.31)
------------ ------
NET ASSET VALUE, END OF PERIOD.................................................... $ 10.07 $ 9.69
------------ ------
------------ ------
Total return (excludes redemption charge)......................................... 9.24% (0.35%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................................................ $ 156 $ 85
Ratio of expenses to average net assets......................................... 1.48% 1.43%+
Ratio of net investment income to average net assets............................ 5.07% 3.47%+
Ratio of expenses to average net assets**....................................... 28.63% 2.50%+
Ratio of net investment income (loss) to average net assets**................... (22.07%) 2.40%+
Portfolio turnover.............................................................. 33% 0%
</TABLE>
- ---------------
* For the period April 11, 1994 (commencement of operations) through November
30, 1994.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
123
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1995 1994*
------------ ------------
<S> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.............................................. $ 9.74 $ 10.00
------------ ------------
Income from investment operations:
Net investment income........................................................... 0.61 0.35
Net unrealized gains (losses) on securities..................................... 0.41 (0.26)
------------ ------------
Total income from investment operations......................................... 1.02 0.09
------------ ------------
Dividends from net investment income.............................................. (0.61) (0.35)
------------ ------------
Net change in net asset value..................................................... 0.41 (0.26)
------------ ------------
NET ASSET VALUE, END OF PERIOD.................................................... $ 10.15 $ 9.74
------------ ------------
------------ ------------
Total return...................................................................... 10.80% 0.90%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................................................ $ 14,037 $ 23,566
Ratio of expenses to average net assets......................................... 0.32% 0.28%+
Ratio of net investment income to average net assets............................ 6.14% 5.55%+
Ratio of expenses to average net assets**....................................... 1.43% 1.60%+
Ratio of net investment income to average net assets**.......................... 5.03% 4.24%+
Portfolio turnover.............................................................. 33% 0%
</TABLE>
- ---------------
* For the period April 11, 1994 (commencement of operations) through November
30, 1994.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
124
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------------------------------- PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1995 1994 1993 1992 1991*
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
CLASS A SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD........... $ 9.72 $ 10.79 $ 10.52 $ 10.46 $ 10.00
------------ ------------ ------------ ------------ ------------
Income from investment operations:
Net investment income........................ 0.64 0.58 0.66 0.77 0.27
Net realized and unrealized gains (losses) on
securities................................. 0.67 (0.94) 0.41 0.12 0.46
------------ ------------ ------------ ------------ ------------
Total income (loss) from investment
operations................................. 1.31 (0.36) 1.07 0.89 0.73
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income......... (0.64) (0.58) (0.66) (0.77) (0.27)
Distributions in excess of net investment
income..................................... (0.00) (0.01) (0.00) (0.00) (0.00)
Distributions from net realized gains on
securities................................. (0.00) (0.10) (0.14) (0.06) (0.00)
Distributions in excess of net realized
gains...................................... (0.00) (0.02) (0.00) (0.00) (0.00)
------------ ------------ ------------ ------------ ------------
Total dividends and distributions.............. (0.64) (0.71) (0.80) (0.83) (0.27)
------------ ------------ ------------ ------------ ------------
Net change in net asset value.................. 0.67 (1.07) 0.27 0.06 0.46
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD................. $ 10.39 $ 9.72 $ 10.79 $ 10.52 $ 10.46
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total return (excludes sales charge)........... 13.85% (3.45%) 10.40% 8.79% 7.34%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)............. $ 26,912 $ 30,855 $ 145,328 $ 94,006 $ 34,693
Ratio of expenses to average net assets...... 1.27% 0.98% 0.64% 0.28% 0.00%+
Ratio of net investment income to average net
assets..................................... 7.02% 5.68% 5.91% 7.18% 7.88%+
Ratio of expenses to average net assets**.... (a) 1.09% 1.06% 0.99% 1.47%+
Ratio of net investment income to average net
assets**................................... (a) 5.57% 5.49% 6.42% 6.41%+
Portfolio turnover........................... 89% 133% 72% 50% 34%
</TABLE>
- ---------------
* For the period July 31, 1991 (commencement of operations) through November
30, 1991.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
+ Annualized.
++ Unannualized.
(a) There were no waivers or reimbursements during the period.
See Notes to Financial Statements.
125
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1995 1994*
------------ ------------
<S> <C> <C>
CLASS B SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.......................................... $ 9.72 $ 10.48
------ ------
Income from investment operations:
Net investment income....................................................... 0.60 0.39
Net realized and unrealized gains (losses) on securities.................... 0.66 (0.75)
------ ------
Total income (loss) from investment operations.............................. 1.26 (0.36)
------ ------
Less dividends and distributions:
Dividends from net investment income........................................ (0.60) (0.39)
Distributions in excess of net investment income............................ (0.00) (0.01)
------ ------
Total dividends and distributions............................................. (0.60) (0.40)
------ ------
Net change in net asset value................................................. 0.66 (0.76)
------ ------
NET ASSET VALUE, END OF PERIOD................................................ $ 10.38 $ 9.72
------ ------
------ ------
Total return (excludes redemption charge)..................................... 13.29% (3.52%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)............................................ $ 1,422 $ 1,255
Ratio of expenses to average net assets..................................... 1.74% 1.55%+
Ratio of net investment income to average net assets........................ 6.72% 4.85%+
Ratio of expenses to average net assets**................................... 3.97% 2.50%+
Ratio of net investment income to average net assets**...................... 4.49% 3.90%+
Portfolio turnover.......................................................... 89% 133%
</TABLE>
- ---------------
* For the period March 1, 1994 (initial offering date) through November 30,
1994.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
126
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1995 1994*
------------ ------------
<S> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.......................................... $ 9.71 $ 10.47
------------ ------------
Income from investment operations:
Net investment income....................................................... 0.68 0.46
Net realized and unrealized gains (losses) on securities.................... 0.65 (0.75)
------------ ------------
Total income (loss) from investment operations.............................. 1.33 (0.29)
------------ ------------
Less dividends and distributions:
Dividends from net investment income........................................ (0.68) (0.46)
Distributions in excess of net investment income............................ (0.00) (0.01)
------------ ------------
Total dividends and distributions............................................. (0.68) (0.47)
------------ ------------
Net change in net asset value................................................. 0.65 (0.76)
------------ ------------
NET ASSET VALUE, END OF PERIOD................................................ $ 10.36 $ 9.71
------------ ------------
------------ ------------
Total return.................................................................. 14.10% (2.83%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)............................................ $ 74,753 $ 69,314
Ratio of expenses to average net assets..................................... 0.83% 0.68%+
Ratio of net investment income to average net assets........................ 7.46% 5.90%+
Ratio of expenses to average net assets**................................... (a) 0.69%+
Ratio of net investment income to average net assets**...................... (a) 5.90%+
Portfolio turnover.......................................................... 89% 133%
</TABLE>
- ---------------
* For the period March 1, 1994 (initial offering date) through November 30,
1994.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
+ Annualized.
++ Unannualized.
(a) There were no waivers or reimbursements during the period.
See Notes to Financial Statements.
127
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1995 1994*
------------ ------------
<S> <C> <C>
CLASS A SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.......................................... $ 9.54 $ 10.00
------ ------
Income from investment operations:
Net investment income....................................................... 0.66 0.43
Net realized and unrealized gains (losses) on securities.................... 1.05 (0.46)
------ ------
Total income (loss) from investment operations.............................. 1.71 (0.03)
------ ------
Less dividends and distributions:
Dividends from net investment income........................................ 0.66 (0.41)
Distributions in excess of net investment income............................ 0.00 (0.02)
------ ------
Total dividends and distributions............................................. (0.66) (0.43)
------ ------
Net change in net asset value................................................. 1.05 (0.46)
------ ------
NET ASSET VALUE, END OF PERIOD................................................ $ 10.59 $ 9.54
------ ------
------ ------
Total return (excludes sales charge).......................................... 18.47% (0.35%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)............................................ $ 820 $ 609
Ratio of expenses to average net assets..................................... 0.71% 0.65%+
Ratio of net investment income to average net assets........................ 6.49% 6.29%+
Ratio of expenses to average net assets**................................... 3.17% 2.50%+
Ratio of net investment income to average net assets**...................... 4.03% 4.44%+
Portfolio turnover.......................................................... 92% 83%
</TABLE>
- ---------------
* For the period April 11, 1994 (commencement of operations) through November
30, 1994.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
128
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1995 1994*
------------ ------------
<S> <C> <C>
CLASS B SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.......................................... $ 9.53 $ 10.00
------ ------
Income from investment operations:
Net investment income....................................................... 0.58 0.38
Net realized and unrealized gains (losses) on securities.................... 1.00 (0.47)
------ ------
Total income (loss) from investment operations.............................. 1.58 (0.09)
------ ------
Less dividends and distributions:
Dividends from net investment income........................................ 0.58 (0.36)
Distributions in excess of net investment income............................ 0.00 (0.02)
------ ------
Total dividends and distributions............................................. (0.58) (0.38)
------ ------
Net change in net asset value................................................. 1.00 (0.47)
------ ------
NET ASSET VALUE, END OF PERIOD................................................ $ 10.53 $ 9.53
------ ------
------ ------
Total return (excludes redemption charge)..................................... 17.06% (0.93%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)............................................ $ 655 $ 455
Ratio of expenses to average net assets..................................... 1.45% 1.34%+
Ratio of net investment income to average net assets........................ 5.75% 5.44%+
Ratio of expenses to average net assets**................................... 6.47% 2.50%+
Ratio of net investment income to average net assets**...................... 0.73% 4.28%+
Portfolio turnover.......................................................... 92% 83%
</TABLE>
- ---------------
* For the period April 11, 1994 (commencement of operations) through November
30, 1994.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
129
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1995 1994*
------------ ------------
<S> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.......................................... $ 9.55 $ 10.00
------------ ------------
Income from investment operations:
Net investment income....................................................... 0.70 0.45
Net realized and unrealized gains (losses) on securities.................... 1.00 (0.45)
------------ ------------
Total income from investment operations..................................... 1.70 0.00
------------ ------------
Less dividends and distributions:
Dividends from net investment income........................................ 0.70 (0.43)
Distributions in excess of net investment income............................ 0.00 (0.02)
------------ ------------
Total dividends and distributions............................................. (0.70) (0.45)
------------ ------------
Net change in net asset value................................................. 1.00 (0.45)
------------ ------------
NET ASSET VALUE, END OF PERIOD................................................ $ 10.55 $ 9.55
------------ ------------
------------ ------------
Total return.................................................................. 18.36% (0.01%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)............................................ $ 68,923 $ 66,588
Ratio of expenses to average net assets..................................... 0.31% 0.27%+
Ratio of net investment income to average net assets........................ 6.95% 6.83%+
Ratio of expenses to average net assets**................................... 0.83% 0.86%+
Ratio of net investment income to average net assets**...................... 6.43% 6.25%+
Portfolio turnover.......................................................... 92% 83%
</TABLE>
- ---------------
* For the period April 11, 1994 (commencement of operations) through November
30, 1994.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
130
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------------------------------- PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1995 1994 1993 1992 1991*
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
CLASS A SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD........... $ 9.87 $ 11.33 $ 10.55 $ 10.14 $ 10.00
------------ ------------ ------------ ------------ ------------
Income from investment operations:
Net investment income........................ 0.54 0.53 0.61 0.68 0.21
Net realized and unrealized gains (losses) on
securities................................. 1.22 (1.37) 0.78 0.45 0.14
------------ ------------ ------------ ------------ ------------
Total income (loss) from investment
operations................................. 1.76 (0.84) 1.39 1.13 0.35
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income......... (0.54) (0.53) (0.61) (0.68) (0.21)
Distributions from net realized gains on
securities................................. (0.00) (0.09) (0.00) (0.04) (0.00)
------------ ------------ ------------ ------------ ------------
Total dividends and distributions.............. (0.54) (0.62) (0.61) (0.72) (0.21)
------------ ------------ ------------ ------------ ------------
Net change in net asset value.................. 1.22 (1.46) 0.78 0.41 0.14
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD................. $ 11.09 $ 9.87 $ 11.33 $ 10.55 $ 10.14
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total return (excludes sales charge)........... 18.17% (7.75%) 13.37% 11.51% 3.49%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)............... $ 94,017 $ 109,426 $ 207,764 $ 106,946 $ 10,589
Ratio of expenses to average net assets...... 1.07% 0.96% 0.65% 0.25% 0.00%
Ratio of net investment income to average net
assets..................................... 5.08% 4.96% 5.32% 6.39% 6.40%+
Ratio of expenses to average net assets**.... (a) 1.04% 1.00% 1.21% 3.42%+
Ratio of net investment income to average net
assets**................................... (a) 4.88% 4.97% 5.43% 2.98%+
Portfolio turnover........................... 89% 89% 48% 105% 45%
</TABLE>
- ---------------
* For the period August 1, 1991 (commencement of operations) through November
30, 1991.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
+ Annualized.
++ Unannualized.
(a) There were no waivers or reimbursements during the period.
See Notes to Financial Statements.
131
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1995 1994*
------------ ------------
<S> <C> <C>
CLASS B SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.......................................... $ 9.87 $ 11.06
------ ------
Income from investment operations:
Net investment income....................................................... 0.50 0.36
Net realized and unrealized gains (losses) on securities.................... 1.20 (1.18)
------ ------
Total income (loss) from investment operations.............................. 1.70 (0.82)
------ ------
Less dividends and distributions:
Dividends from net investment income........................................ (0.50) (0.36)
Distributions from net realized gains on securities......................... (0.00) (0.01)
------ ------
Total dividends and distributions............................................. (0.50) (0.37)
------ ------
Net change in net asset value................................................. 1.20 (1.19)
------ ------
NET ASSET VALUE, END OF PERIOD................................................ $ 11.07 $ 9.87
------ ------
------ ------
Total return (excludes redemption charge)..................................... 17.48% (7.56%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)............................................ $ 9,699 $ 5,621
Ratio of expenses to average net assets..................................... 1.48% 1.36%+
Ratio of net investment income to average net assets........................ 4.57% 4.30%+
Ratio of expenses to average net assets**................................... 2.11% 2.29%+
Ratio of net investment income to average net assets**...................... 3.94% 3.37%+
Portfolio turnover.......................................................... 89% 89%
</TABLE>
- ---------------
* For the period March 1, 1994 (initial offering date) through November 30,
1994.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
132
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1995 1994*
------------ ------------
<S> <C> <C>
INSTITUTIONAL CLASS SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.......................................... $ 9.87 $ 11.07
------------ ------------
Income from investment operations:
Net investment income....................................................... 0.57 0.42
Net realized and unrealized gains (losses) on securities.................... 1.22 (1.19)
------------ ------------
Total income (loss) from investment operations.............................. 1.79 (0.77)
------------ ------------
Less dividends and distributions:
Dividends from net investment income........................................ (0.57) (0.42)
Distributions from net realized gains on securities......................... (0.00) (0.01)
------------ ------------
Total dividends and distributions............................................. (0.57) (0.43)
------------ ------------
Net change in net asset value................................................. 1.22 (1.20)
------------ ------------
NET ASSET VALUE, END OF PERIOD................................................ $ 11.09 $ 9.87
------------ ------------
------------ ------------
Total return.................................................................. 18.55% (7.07%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)............................................ $ 33,979 $ 29,309
Ratio of expenses to average net assets..................................... 0.74% 0.71%+
Ratio of net investment income to average net assets........................ 5.39% 5.34%+
Ratio of expenses to average net assets**................................... (a) 0.71%+
Ratio of net investment income to average net assets**...................... (a) 5.33%
Portfolio turnover.......................................................... 89% 89%
</TABLE>
- ---------------
* For the period March 1, 1994 (initial offering date) through November 30,
1994.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
+ Annualized.
++ Unannualized.
(a) There were no waivers or reimbursements during the period.
See Notes to Financial Statements.
133
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
------------------------------------------------------------------------
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1995 1994 1993 1992 1991
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
EMERALD SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD............ $ 1.0000 $ 0.9999 $ 1.0001 $ 1.0000 $ 0.9999
------------ ------------ ------------ ------------ ------------
Income from investment operations:
Net investment income......................... 0.0566 0.0390 0.0316 0.0407 0.0637
Net realized gains (losses) on securities..... 0.0002 (0.0028) (0.0001) 0.0001 0.0001
------------ ------------ ------------ ------------ ------------
Total income from investment operations....... 0.0568 0.0362 0.0315 0.0408 0.0638
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income.......... (0.0566) (0.0390) (0.0316) (0.0407) (0.0637)
Distributions from net realized gains on
securities.................................. (0.0000) (0.0000) (0.0001) (0.0000) (0.0000)
------------ ------------ ------------ ------------ ------------
Total dividends and distributions............... (0.0566) (0.0390) (0.0317) (0.0407) (0.0637)
------------ ------------ ------------ ------------ ------------
Voluntary capital contribution.................. 0.0000 0.0029 0.0000 0.0000 0.0000
------------ ------------ ------------ ------------ ------------
Net change in net asset value................... 0.0002 0.0001 (0.0002) 0.0001 0.0001
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD.................. $ 1.0002 $ 1.0000 $ 0.9999 $ 1.0001 $ 1.0000
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total return.................................... 5.81% 3.97% 3.21% 4.14% 6.56%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s).............. $ 462,726 $ 413,541 $ 510,683 $1,947,016 $ 512,919
Ratio of expenses to average net assets....... 0.37% 0.37% 0.35% 0.37% 0.40%
Ratio of net investment income to average net
assets...................................... 5.66% 3.92% 3.21% 3.84% 6.27%
Ratio of expenses to average net assets*...... 0.39% (a) (a) (a) 0.42%
Ratio of net investment income to average net
assets*..................................... 5.64% (a) (a) (a) 6.25%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
(a) There were no waivers or reimbursements during the period.
See Notes to Financial Statements.
134
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
------------------------------------------------------------------------
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1995 1994 1993 1992 1991
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
EMERALD SERVICE SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.............. $ 1.0000 $ 0.9999 $ 1.0001 $ 1.0000 $ 0.9999
------------ ------------ ------------ ------------ ------------
Income from investment operations:
Net investment income........................... 0.0536 0.0355 0.0281 0.0371 0.0602
Net realized gains (losses) on securities....... 0.0002 (0.0028) (0.0001) 0.0001 0.0001
------------ ------------ ------------ ------------ ------------
Total income from investment operations......... 0.0538 0.0327 0.0280 0.0372 0.0603
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income............ (0.0536) (0.0355) (0.0281) (0.0371) (0.0602)
Distributions from net realized gains on
securities.................................... (0.0000) (0.0000) (0.0001) (0.0000) (0.0000)
------------ ------------ ------------ ------------ ------------
Total dividends and distributions................. (0.0536) (0.0355) (0.0282) (0.0371) (0.0602)
------------ ------------ ------------ ------------ ------------
Voluntary capital contribution.................... 0.0000 0.0029 0.0000 0.0000 0.0000
------------ ------------ ------------ ------------ ------------
Net change in net asset value..................... 0.0002 0.0001 (0.0002) 0.0001 0.0001
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD.................... $ 1.0002 1.0000 $ 0.9999 $ 1.0001 $ 1.0000
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total return...................................... 5.49% 3.61% 2.85% 3.78% 6.19%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................ $ 902,006 $ 833,667 $ 619,149 $ 548,622 $ 182,928
Ratio of expenses to average net assets......... 0.72% 0.72% 0.71% 0.72% 0.75%
Ratio of net investment income to average net
assets........................................ 5.31% 3.59% 2.80% 3.54% 5.63%
Ratio of expenses to average net assets*........ 0.74% (a) (a) (a) 0.77%
Ratio of net investment income to average net
assets*....................................... 5.29% (a) (a) (a) 5.61%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
(a) There were no waivers or reimbursements during the period.
See Notes to Financial Statements.
135
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------------------------------- PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1995 1994 1993 1992 1991*
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
INVESTOR SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.............. $ 1.0000 $ 0.9999 $ 1.0001 $ 1.0000 $ 1.0000
------------ ------------ ------------ ------------ ------------
Income from investment operations:
Net investment income........................... 0.0515 0.0339 0.0266 0.0356 0.0181
Net realized gains (losses) on securities....... 0.0002 (0.0028) (0.0001) 0.0001 0.0000
------------ ------------ ------------ ------------ ------------
Total income from investment operations......... 0.0517 0.0311 0.0265 0.0357 0.0181
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income............ (0.0515) (0.0339) (0.0266) (0.0356) (0.0181)
Distributions from net realized gains on
securities.................................... (0.0000) (0.0000) (0.0001) (0.0000) (0.0000)
------------ ------------ ------------ ------------ ------------
Total dividends and distributions................. (0.0515) (0.0339) (0.0267) (0.0356) (0.0181)
------------ ------------ ------------ ------------ ------------
Voluntary capital contribution.................... 0.0000 0.0029 0.0000 0.0000 0.0000
------------ ------------ ------------ ------------ ------------
Net change in net asset value..................... 0.0002 0.0001 (0.0002) 0.0001 0.0000
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD.................... $ 1.0002 $ 1.0000 $ 0.9999 $ 1.0001 $ 1.0000
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total return...................................... 5.27% 3.44% 2.70% 3.62% 1.82%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................ $ 444,928 $ 208,714 $ 181,155 $ 96,730 $ 16,465
Ratio of expenses to average net assets......... 0.90% 0.88% 0.86% 0.87% 0.90%+
Ratio of net investment income to average net
assets........................................ 5.13% 3.40% 2.63% 3.33% 4.80%+
Ratio of expenses to average net assets**....... 0.93% (a) (a) (a) 0.91%+
Ratio of net investment income to average net
assets**...................................... 5.10% (a) (a) (a) 4.79%+
</TABLE>
- ---------------
* For the period July 29, 1991 (initial offering date) through November 30,
1991.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
+ Annualized
++ Unannualized
(a) There were no waivers or reimbursements during the period.
See Notes to Financial Statements.
136
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
------------------------------------------------------------------------
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1995 1994 1993 1992 1991
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
EMERALD SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.............. $ 0.9999 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
------------ ------------ ------------ ------------ ------------
Income from investment operations:
Net investment income........................... 0.0548 0.0368 0.0291 0.0368 0.0590
Net realized gains (losses) on securities....... (0.0003) (0.0001) 0.0000 0.0000 0.0000
------------ ------------ ------------ ------------ ------------
Total income from investment operations......... 0.0545 0.0367 0.0291 0.0368 0.0590
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income............ (0.0548) (0.0368) (0.0291) (0.0368) (0.0590)
------------ ------------ ------------ ------------ ------------
Net change in net asset value................... (0.0003) (0.0001) 0.0000 0.0000 0.0000
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD.................... $ 0.9996 $ 0.9999 $ 1.0000 $ 1.0000 $ 1.0000
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total return...................................... 5.62% 3.74% 2.95% 3.75% 6.07%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................ $ 236,392 $ 283,920 $ 501,377 $ 452,170 $ 575,103
Ratio of expenses to average net assets......... 0.40% 0.39% 0.40% 0.38% 0.40%
Ratio of net investment income to average net
assets........................................ 5.49% 3.73% 2.91% 3.74% 5.86%
Ratio of expenses to average net assets*........ 0.42% (a) (a) (a) 0.41%
Ratio of net investment income to average net
assets*....................................... 5.46% (a) (a) (a) 5.85%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
(a) There were no waivers or reimbursements during the period.
See Notes to Financial Statements.
137
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
------------------------------------------------------------------------
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1995 1994 1993 1992 1991
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
EMERALD SERVICE SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.............. $ 0.9999 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
------------ ------------ ------------ ------------ ------------
Income from investment operations:
Net investment income........................... 0.0513 0.0331 0.0256 0.0333 0.0555
Net realized losses on securities............... (0.0003) (0.0001) 0.0000 0.0000 0.0000
------------ ------------ ------------ ------------ ------------
Total income from investment operations......... 0.0510 0.0330 0.0256 0.0333 0.0555
------------ ------------ ------------ ------------ ------------
Dividends from net investment income............ (0.0513) (0.0331) (0.0256) (0.0333) (0.0555)
------------ ------------ ------------ ------------ ------------
Net change in net asset value................... (0.0003) (0.0001) 0.0000 0.0000 0.0000
------------ ------------ ------------ ------------ ------------
Net asset value, end of period.................... $ 0.9996 $ 0.9999 $ 1.0000 $ 1.0000 $ 1.0000
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total return...................................... 5.25% 3.36% 2.59% 3.39% 5.70%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................ $ 525,609 $ 591,991 $ 403,809 $ 372,691 $ 219,912
Ratio of expenses to average net assets......... 0.75% 0.74% 0.75% 0.73% 0.75%
Ratio of net investment income to average net
assets........................................ 5.13% 3.38% 2.56% 3.30% 5.09%
Ratio of expenses to average net assets*........ 0.77% (a) (a) (a) 0.76%
Ratio of net investment income to average net
assets*....................................... 5.11% (a) (a) (a) 5.08%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
(a) There were no waivers or reimbursements during the period.
See Notes to Financial Statements.
138
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
------------------------------------------------------------------------
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1995 1994 1993 1992 1991*
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
INVESTOR SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD........... $ 0.9999 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
------------ ------------ ------------ ------------ ------------
Income from investment operations:
Net investment income........................ 0.0498 0.0316 0.0241 0.0318 0.0162
Net realized losses on securities............ (0.0003) (0.0001) 0.0000 0.0000 0.0000
------------ ------------ ------------ ------------ ------------
Total income from investment operations...... 0.0495 0.0315 0.0241 0.0318 0.0162
------------ ------------ ------------ ------------ ------------
Dividends from net investment income......... (0.0498) (0.0316) (0.0241) (0.0318) (0.0162)
------------ ------------ ------------ ------------ ------------
Net change in net asset value................ (0.0003) (0.0001) 0.0000 0.0000 0.0000
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD................. $ 0.9996 $ 0.9999 $ 1.0000 $ 1.0000 $ 1.0000
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total return................................... 5.10% 3.21% 2.44% 3.23% 1.63%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)............. $ 49,047 $ 32,444 $ 21,362 $ 3,762 $ 1,099
Ratio of expenses to average net assets...... 0.90% 0.90% 0.90% 0.88% 0.90%+
Ratio of net investment income to average net
assets..................................... 4.98% 3.13% 2.42% 3.12% 4.34%+
Ratio of expenses to average net assets**.... 1.04% 1.00% (a) (a) 0.91%+
Ratio of net investment income to average net
assets**................................... 4.84% 3.03% (a) (a) 4.33%+
</TABLE>
- ---------------
* For the period July 29, 1991 (initial offering date) through November 30,
1991.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
+ Annualized.
++ Unannualized.
(a) There were no waivers or reimbursements during the period.
See Notes to Financial Statements.
139
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
------------------------------------------------------------------------
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1995 1994 1993 1992** 1991
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
EMERALD SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.............. $ 0.9999 $ 0.9999 $ 0.9998 $ 0.9998 $ 0.9997
------------ ------------ ------------ ------------ ------------
Income from investment operations:
Net investment income........................... 0.0355 0.0242 0.0214 0.0290 0.0446
Net realized and unrealized gains (losses) on
securities.................................... (0.0003) 0.0000 0.0001 0.0000 0.0001
------------ ------------ ------------ ------------ ------------
Total income from investment operations......... 0.0352 0.0242 0.0215 0.0290 0.0447
------------ ------------ ------------ ------------ ------------
Dividends from net investment income............ (0.0355) (0.0242) (0.0214) (0.0290) (0.0446)
------------ ------------ ------------ ------------ ------------
Net change in net asset value................... (0.0003) 0.0000 0.0001 0.0000 0.0001
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD.................... $ 0.9996 $ 0.9999 $ 0.9999 $ 0.9998 $ 0.9998
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total return...................................... 3.61% 2.45% 2.16% 2.94% 4.55%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................ $ 156,353 $ 162,856 $ 147,525 $ 158,692 $ 122,151
Ratio of expenses to average net assets......... 0.40% 0.40% 0.40% 0.40% 0.39%
Ratio of net investment income to average net
assets........................................ 3.53% 2.42% 2.13% 2.88% 4.46%
Ratio of expenses to average net assets*........ 0.52% 0.46% 0.56% 0.57% 0.54%
Ratio of net investment income to average net
assets*....................................... 3.41% 2.36% 1.97% 2.71% 4.31%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
** Effective April 22, 1992, Rodney Square Management Corporation, a subsidiary
of Wilmington Trust Company, became the Fund's investment Sub-Adviser.
See Notes to Financial Statements.
140
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
------------------------------------------------------------------------
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1995 1994 1993 1992** 1991
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
EMERALD SERVICE SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.............. $ 0.9999 $ 0.9999 $ 0.9998 $ 0.9998 $ 0.9997
------------ ------------ ------------ ------------ ------------
Income from investment operations:
Net investment income........................... 0.0319 0.0206 0.0179 0.0255 0.0411
Net realized and unrealized gains (losses) on
securities.................................... (0.0003) 0.0000 0.0001 0.0000 0.0001
------------ ------------ ------------ ------------ ------------
Total income from investment operations......... 0.0316 0.0206 0.0180 0.0255 0.0412
------------ ------------ ------------ ------------ ------------
Dividends from net investment income............ (0.0319) (0.0206) (0.0179) (0.0255) (0.0411)
------------ ------------ ------------ ------------ ------------
Net change in net asset value................... (0.0003) 0.0000 0.0001 0.0000 0.0001
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD.................... $ 0.9996 $ 0.9999 $ 0.9999 $ 0.9998 $ 0.9998
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total return...................................... 3.24% 2.08% 1.80% 2.58% 4.19%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................ $ 2,855 $ 4,028 $ 487 $ 111 $ 11
Ratio of expenses to average net assets......... 0.75% 0.75% 0.75% 0.75% 0.75%
Ratio of net investment income to average net
assets........................................ 3.19% 2.17% 1.75% 2.65% 5.08%
Ratio of expenses to average net assets*........ 1.20% 1.59% 0.92% 0.92% 0.91%
Ratio of net investment income to average net
assets*....................................... 2.74% 1.33% 1.58% 2.48% 4.92%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
** Effective April 22, 1992, Rodney Square Management Corporation, a subsidiary
of Wilmington Trust Company, became the Fund's investment Sub-Adviser.
See Notes to Financial Statements.
141
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
------------------------------------------------------------------------
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1995 1994 1993 1992*** 1991*
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
INVESTOR SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD........... $ 0.9999 $ 0.9999 $ 0.9998 $ 0.9998 $ 0.9998
------------ ------------ ------------ ------------ ------------
Income from investment operations:
Net investment income........................ 0.0305 0.0192 0.0164 0.0240 0.0126
Net realized and unrealized gains (losses) on
securities................................. (0.0003) 0.0000 0.0001 0.0000 0.0000
------------ ------------ ------------ ------------ ------------
Total income from investment operations...... 0.0302 0.0192 0.0165 0.0240 0.0126
------------ ------------ ------------ ------------ ------------
Dividends from net investment income......... (0.0305) (0.0192) (0.0164) (0.0240) (0.0126)
------------ ------------ ------------ ------------ ------------
Net change in net asset value................ (0.0003) 0.0000 0.0001 0.0000 0.0000
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD................. $ 0.9996 $ 0.9999 $ 0.9999 $ 0.9998 $ 0.9998
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total return................................... 3.09% 1.94% 1.65% 2.43% 0.96%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)............. $ 38,243 $ 38,123 $ 45,609 $ 16,477 $ 1,155
Ratio of expenses to average net assets...... 0.90% 0.90% 0.90% 0.90% 0.87%+
Ratio of net investment income to average net
assets..................................... 3.04% 1.90% 1.62% 2.21% 3.42%+
Ratio of expenses to average net assets**.... 1.15% 1.02% 1.06% 1.07% 0.97%+
Ratio of net investment income to average net
assets**................................... 2.79% 1.78% 1.46% 2.04% 3.32%+
</TABLE>
- ---------------
* For the period July 29, 1991 (initial offering date) through November 30,
1991.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
*** Effective April 22, 1992, Rodney Square Management Corporation, a subsidiary
of Wilmington Trust Company, became the Fund's investment Sub-Adviser.
+ Annualized
++ Unannualized
See Notes to Financial Statements.
142
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees
and Shareholders of
Emerald Funds
In our opinion, the accompanying statements of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Emerald Equity Fund, Emerald
Florida Tax-Exempt Fund, Emerald U.S. Government Securities Fund, Emerald Small
Capitalization Fund, Emerald Balanced Fund, Emerald Managed Bond Fund, Emerald
Short-Term Fixed Income Fund, Emerald Prime Fund, Emerald Treasury Fund and
Emerald Tax-Exempt Fund (ten of the portfolios constituting the Emerald Funds,
hereafter referred to as the "Funds") at November 30, 1995, the results of each
of their operations, the changes in each of their net assets and the financial
highlights for each of the periods presented, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at November 30, 1995 by
correspondence with the custodians and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
New York, New York
January 24, 1996
143
<PAGE>
FEDERAL INCOME TAX STATUS OF DIVIDENDS (UNAUDITED)
Emerald Equity Fund, Emerald Balanced Fund, Emerald Short-Term Fixed Income
Fund, Emerald Managed Bond Fund, Emerald Prime Fund and Emerald Treasury Fund
have determined that all dividends and distributions paid during the fiscal year
ended November 30, 1995, were paid from net investment income and are subject to
Federal income tax.
Emerald U.S. Government Securities Fund has determined that 99.9% of the
dividends and distributions paid during the fiscal year ended November 30, 1995,
were paid from net investment income and are subject to Federal income tax.
Emerald Florida Tax-Exempt Fund has determined that all dividends and
distributions paid during the fiscal year ended November 30, 1995, were paid
from net investment income and are exempt from Federal income tax. A portion of
these dividends were subject to the Alternative Minimum Tax.
Emerald Tax-Exempt Fund has determined that all dividends and distributions paid
during the fiscal year ended November 30, 1995, were paid from net investment
income and are exempt from Federal income tax. Additionally, a portion of the
income dividends were paid from income derived from securities subject to the
Alternative Minimum Tax.
144
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EMEBMMAN95
