<PAGE>
[LOGO]
E M E R A L D
F U N D S
S E M I - A N N U A L R E P O R T
EMERALD EQUITY FUND
----
EMERALD
SMALL CAPITALIZATION FUND
----
EMERALD BALANCED FUND
----
EMERALD SHORT - TERM
FIXED INCOME FUND
----
EMERALD U.S. GOVERNMENT
SECURITIES FUND
----
EMERALD MANAGED
BOND FUND
----
EMERALD
FLORIDA TAX-EXEMPT FUND
----
EMERALD PRIME FUND
----
EMERALD TREASURY FUND
----
EMERALD TAX-EXEMPT FUND
THIRTY-FIRST OF MAY
----
1996
<PAGE>
The accompanying financial statements, as of May 31, 1996, have not been
audited, and accordingly, no opinion is expressed on them.
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.
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 Capital Advisors, Inc. serves as investment advisor 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 prospectuses carefully before investing.
MUTUAL FUNDS
- ARE NOT FDIC INSURED
- HAVE NO BANK GUARANTEE
- MAY LOSE VALUE
<PAGE>
TABLE OF
CONTENTS
<TABLE>
<S> <C>
CHAIRMAN'S LETTER 2
ECONOMIC REPORT FROM THE INVESTMENT ADVISOR 3
EMERALD FUND FACTS 5
INTERVIEWS WITH YOUR PORTFOLIO MANAGERS
EMERALD EQUITY FUND 6
EMERALD SMALL CAPITALIZATION FUND 9
EMERALD BALANCED FUND 12
EMERALD SHORT-TERM FIXED INCOME FUND 14
EMERALD U.S. GOVERNMENT SECURITIES FUND 16
EMERALD MANAGED BOND FUND 19
EMERALD FLORIDA TAX-EXEMPT FUND 22
EMERALD PRIME, TREASURY & TAX-EXEMPT FUNDS 25
FINANCIAL STATEMENTS
EMERALD EQUITY FUND 27
EMERALD EQUITY VALUE FUND 34
EMERALD INTERNATIONAL EQUITY FUND 41
EMERALD SMALL CAPITALIZATION FUND 47
EMERALD BALANCED FUND 53
EMERALD SHORT-TERM FIXED INCOME FUND 63
EMERALD U.S. GOVERNMENT SECURITIES FUND 68
EMERALD MANAGED BOND FUND 73
EMERALD FLORIDA TAX-EXEMPT FUND 79
EMERALD PRIME FUND 84
EMERALD TREASURY FUND 90
EMERALD TAX-EXEMPT FUND 94
NOTES TO FINANCIAL STATEMENTS 102
FINANCIAL HIGHLIGHTS 116
RESULTS OF SPECIAL SHAREHOLDER MEETING 150
</TABLE>
<PAGE>
CHAIRMAN'S LETTER
- --------------------------------------------------------------------------------
Dear Shareholder:
Led by small and midsized companies, the stock market continued to post
above-average gains during the six months ended May 31, 1996. Entering its sixth
year, this is now the longest bull market in history.
We are pleased to report that the Emerald Balanced Fund and the Emerald Small
Capitalization Fund beat their benchmarks during the six-month period. In
addition, as reported by Lipper Analytical Services, the Emerald Balanced Fund
placed among the top third in its fund category for the 12 months ended May 31,
1996. Based on total return over such time period, the Emerald Balanced Fund
ranked 55 out of 160 flexible portfolio funds.*
Due to rising interest rates, the bond market was volatile. However, the Emerald
fixed-income funds held their own in this difficult environment. You will find a
complete discussion of each of the Emerald Funds' performances during the past
six months as well as detailed financial statements, in the report that follows.
We urge you to read the report closely.
As part of our ongoing effort to enhance services available to shareholders, we
have extended shareholder service hours and expanded the information available
24 hours a day by touch-tone telephone. To receive the assistance of a
shareholder services representative, call 1-800-637-3759 from 8 a.m. to 9 p.m.
EST. Our automated telephone service is available through the same number 24
hours a day to access price quotes, your account balance or your Fund's
performance.
We would like to thank you for your continued confidence in the Emerald Funds.
If you have any questions or require any assistance, please do not hesitate to
call an Emerald Fund investment specialist at 1-800-637-3759.
Sincerely,
Chesterfield Smith Richard H. Jones
Chairman Chief Asset Management Executive
The Emerald Funds Barnett Banks, Inc.
June 11, 1996
- ---------------
* Past performance is no guarantee of future results.
<PAGE>
ECONOMIC REPORT FROM THE INVESTMENT ADVISOR
- --------------------------------------------------------------------------------
THE ECONOMY: STRONGER THAN EXPECTED
Last winter, investors were concerned about the economy entering a recession.
Corporate profits were expected to flatten and perhaps fall below the high
levels achieved in 1995. But the first half of 1996 has essentially continued
the economic expansion into a sixth straight year. Gross Domestic Product -- a
measurement of the total value of goods and services produced in the U.S. --
rose 2.3% during the first quarter and would have been even higher had there not
been a strike at General Motors. Recession concerns, which were pervasive as
recently as three months ago, have dissipated, giving way to worries of renewed
inflation.
We do not believe that economic growth will accelerate further in the near
future. In fact, the recent increase in interest rates will likely reduce growth
in the second half of 1996. We expect economic growth for all of 1996 to average
about 2.5% -- a continued expansion, but at a slow-to-moderate rate.
INFLATION: EXCLUDING FOOD AND ENERGY, STILL MODEST
For the 12 months ended April 30, 1996, the Consumer Price Index rose 2.9%. In
comparison, the CPI rose 2.5% for the year ended December 31, 1995. However,
excluding food and energy price increases -- which we believe are temporary --
inflation is essentially unchanged.
Our expectation for modest economic growth implies that consumer demand will not
be strong enough to cause prices to rise significantly at the wholesale or
retail level. For each of the past five calendar years, the Consumer Price Index
has ranged from 2.7% to 3.1%. We believe inflation in 1996 will continue to fall
in that range.
INTEREST RATES: UP SHARPLY, BUT EXPECTED TO COOL
There was little change in short-term interest rates during the past six months.
However, intermediate- and long-term interest rates rose considerably. Driven by
market forces rather than the actions of the Federal Reserve Board, the yield on
a 10-year U.S. Treasury bond rose from 6.13% on November 30, 1995, to 7.00% on
May 31, 1996. Rising interest rates increase the cost of doing business and
create a volatile bond market.
We believe, however, that pressures on interest rates will subside as the
economy shows more noticeable signs of softening in the second half of the year.
Nevertheless, it is unlikely that the Federal Reserve will lower short-term
interest rates any time soon.
THE STOCK MARKET: TOUGH AS NAILS
Rising interest rates, downward revisions in corporate profits and inflation
fears would normally be enough to cause a stock market correction. But investors
seem to be looking beyond the current scenario. As overall corporate profit
growth slowed, the stocks of companies that exhibit sustained growth regardless
of economic conditions did the best on Wall Street. Typically, these companies
are not the Fortune 500, but rather the small to midsized businesses that have a
special niche in the market.
In addition, the market for initial public offerings was extremely brisk, as
investors sought to capitalize on new technology such as the Internet. However,
the IPO market's surging strength is often an indication that the overall stock
market is reaching full value. When this happens, the market is likely to react
quickly and negatively to unexpected developments such as higher interest rates
or significantly lower earnings reports. As a result, we expect -- and you
should expect -- some short-term volatility. However, we believe that the
long-term outlook for the market is excellent based on the economy's
slow-growth, low-inflation mode.
3
<PAGE>
- --------------------------------------------------------------------------------
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.
4
<PAGE>
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 Capital Advisors,
Investment Inc. 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.
5
<PAGE>
INTERVIEW (as of May 31, 1996)
- --------------------------------------------------------------------------------
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 and Emerald Balanced Funds.
Creighton, Mr. Creighton's portfolio management experience dates
C.F.A. back to 1981, when he joined Barnett as an equity
PORTFOLIO MANAGER manager. He is a Chartered Financial Analyst and holds an
15 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 17%
Electrical Equipment & Electronics 5%
Food, Beverage & Tobacco 6%
Phamaceuticals 3%
Retail 3%
Other 31%
Telecommunications 7%
Apparel 3%
Finance & Insurance 10%
Oil & Gas 5%
Health Care 10%
</TABLE>
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
The 10 largest holdings in the portfolio include internationally diversified
companies with household names, such as General Electric, PepsiCo and Nike.
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
General Electric Co. 2.71% CompUSA Inc. 1.91%
......................................................... ..........................................................
Nike Inc. Cl. B 2.37% Travelers Corp. 1.76%
......................................................... ..........................................................
Worldcom Inc. 2.15% Cadence Design Systems Inc. 1.63%
......................................................... ..........................................................
Cisco Systems Inc. 1.95% Williams Companies 1.63%
......................................................... ..........................................................
PepsiCo Inc. 1.93% Computer Associates 1.61%
......................................................... ..........................................................
Total 19.65%
......................................................... ..........................................................
</TABLE>
- ---------------
* The composition of the Fund's holdings is subject to change.
6
<PAGE>
EMERALD EQUITY FUND (as of May 31, 1996)
- --------------------------------------------------------------------------------
WHAT CONTRIBUTED TO THE FUND'S STRONG PERFORMANCE?
For the six-month period ended May 31, 1996, the Fund produced a total return of
11.53%, closely tracking the 11.78% rise in the S&P 500 Stock Index, a common
barometer of stock market performance. Our focus on finding companies that are
growing faster than the overall market has clearly helped us. We've also been
very successful in identifying companies that have experienced positive earnings
surprises. This means that about 90% of the stocks that we owned either met or
exceeded Wall Street analysts' expectations. A second reason that we did well is
that we are overweighted in technology and health care. Early in an economic
cycle, stocks of economically sensitive companies, such as automobile and
building materials manufacturers, tend to outperform the market. As the economy
matures and pent-up demand is satisfied, however, there's a shift away from
cyclical companies toward companies with stable, predictable earnings that are
not dependent upon the economic cycle. That's one reason health care is
particularly attractive now. There's also no question that the small- to mid-cap
area of the market has been the strongest area this year. We have a fairly
healthy exposure in that segment of the market, which has helped us relative to
the S&P 500.
WHAT AREAS OF TECHNOLOGY HAVE WORKED OUT WELL?
In late 1995, we began selling some of our semiconductor stocks and shifted the
focus more toward software, computer networking and telephone equipment stocks.
All three of those areas have significantly outperformed the market. We're still
in the early stages of what technology is capable of doing, so there's a need
for software to make these new powerful computers interact. For me,
technological change is really the next great revolution taking place in
society, and I think we should be positioned to take advantage of potential
growth opportunities. We own a handful of companies that have had some stellar
performance over the last six months, specifically CompUSA, up 130%; U.S.
Robotics, up 70%; Cincinnati Bell, up 60%; Cadence Design & Technology, up 35%;
and Cisco Systems, which is up 33%. Each of these holdings comprises anywhere
from 1.63% of the Fund's portfolio (Cadence Design and Technology) to 1.95%
(Cisco Systems).*
WHAT IS YOUR CURRENT STRATEGY?
Because I think that we're at the latter stage of this economic cycle, my
tendency is to emphasize those companies with stable, predictable earnings
rather than those that are economically sensitive. The increase in long-term
interest rates by a full percentage point over the past six months is going to
do an awful lot to slow any positive momentum that's out there. For that reason,
we're underweighted in basic materials and consumer cyclicals such as
automobiles and energy. I don't believe the recent run-up in energy prices is
sustainable because there is no energy crisis. A lot of alternative sources of
energy, such as some of the new solar and wind technologies, are becoming more
and more cost effective, particularly when compared to the current price of oil.
I believe we'll see increasing potential for these technologies as energy
sources -- and investment opportunities -- as they begin to meet the growing
need for power around the world.
----------------
*The composition of the Fund's portfolio is subject to change.
7
<PAGE>
EMERALD EQUITY FUND (as of May 31, 1996)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF MAY 31, 1996*
<S> <C>
1 Year 30.56%
5 Year 11.36%
10 Year 11.70%
Since Inception 13.75%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND
NAV WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THE ORIGINAL COST.
During the periods indicated, fee waivers and expense reimbursements were in
effect. Without these waivers and reimbursements, performance would have been
lower.
- ---------------
*The inception date for performance purposes is 12/31/79. The quoted performance
of the Emerald Equity Fund includes performance of a common trust fund for
employee benefit plan accounts that were managed by the predecessor of Barnett
Capital Advisors, Inc. (the "Commingled Fund") prior to the establishment of
the Fund on 6/28/91. On that date, the assets of the Commingled Fund were
transferred to the Fund in connection with its commencement of operations. The
Commingled Fund was operated using substantially the same investment objective,
policies and techniques as the Fund. During that time, the Commingled Fund was
not registered under the Investment Company Act of 1940 (the "1940 Act") and
therefore was not subject to certain investment restrictions that are imposed
under the 1940 Act. If the Commingled Fund had been registered under the 1940
Act, the Commingled Fund's performance may have been adversely affected.
Because the Commingled Fund did not charge any expenses, its performance has
been adjusted to reflect the Fund's estimated expenses at the time of its
inception, which were 0.49% of average daily net assets. The performance
information for the period subsequent to the Fund's inception also assumes
reinvestment of all net investment income and realized capital gains and takes
into account actual expenses of the Fund's Retail Shares.
8
<PAGE>
INTERVIEW (as of May 31, 1996)
- --------------------------------------------------------------------------------
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
13 years of under management have grown from $2 million in 1987 to
investment more than $180 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>
Communication Equip. & Systems 7%
Computer & Computer Services 16%
Entertainment 5%
Electrical Equipment & Electronics 12%
Financial Services 11%
Retail 7%
Leisure & Recreation 4%
Medical Care & Services 9%
Other 29%
</TABLE>
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS**
The portfolio's 10 largest holdings include such up-and-coming companies as
Checkpoint Systems, Regal Cinemas and Longhorn Steaks.
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
Checkpoint Systems Inc. 3.04% AMC Entertainment 2.34%
......................................................... ..........................................................
P-Com Inc. 2.64% Regal Cinemas 2.32%
......................................................... ..........................................................
Ross Stores 2.54% Americredit Corp. 2.25%
......................................................... ..........................................................
Aames Financial Corp. 2.48% Longhorn Steaks Inc. 2.24%
......................................................... ..........................................................
Coastcast Corp. 2.48% Brightpoint Inc. 2.20%
......................................................... ..........................................................
Total 24.53%
......................................................... ..........................................................
</TABLE>
- ---------------
* 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, small companies' stocks
have experienced a greater degree of market volatility than average.
** The composition of the Fund's holdings is subject to change.
9
<PAGE>
EMERALD SMALL CAPITALIZATION FUND (as of May 31, 1996)
- --------------------------------------------------------------------------------
WHY HAVE SMALL-CAPITALIZATION STOCKS PERFORMED SO WELL?
After several months of underperformance, small-cap stocks took back the market
leadership in late January 1996, as investors gravitated toward stocks that can
deliver consistent earnings growth -- and this has been reflected in the Fund's
performance. For the six-month period ended May 31, 1996, the Fund produced a
total return of 23.07%, outperforming the Russell 2000, an unmanaged index that
reflects the performance of the small-capitalization stock market, which was up
18.16% for the period. We believe that the stocks in our portfolio have the
potential to increase their 1996 earnings by 30% compared to 1995. In contrast,
we expect that larger companies will be fortunate if their earnings climb by 10%
to 12%.
WHAT INDUSTRIES HAVE PERFORMED PARTICULARLY WELL?
The average energy stock in the portfolio was up more than 25% in this six-month
span. We were overweighted in energy relative to the Russell 2000. Oil prices
have gone up, but more importantly, the rates for drilling equipment have been
skyrocketing. Because the price of oil has gone up, people are more interested
in exploring for it again, and there's a limited supply of equipment. It's a
fixed-cost business and any marginal revenues flow straight down to the bottom
line. We became interested in stocks such as Pride Petroleum and Noble Drilling
because we saw their earnings estimates start to increase dramatically.
Retail has been another strong area. Our department-store stocks, discounters
and computer chains are up 25% to 30% in value. Within the past six months,
sales comparisons have improved, partly because 1995 was so poor, but also
because the consumer started feeling more positive. The economic expansion has
gone on for a long time, and stock market prosperity spills over to consumer
spending. Strong performers include Ross Stores (2.54% of the portfolio), which
specializes in midpriced women's apparel, and Techdata (1.39%), a wholesaler of
hardware and software.*
The health-care area also has a number of companies that have historically been
consistent performers regardless of the economic environment, including
distributors of prescription drugs and medical devices and hospital management
companies. We refer to such stocks as "ruler stocks" -- since you can put a
ruler on their historic upward earnings growth.
HOW DO YOU GO ABOUT SELECTING STOCKS?
We don't base our decisions on broad economic trends. We don't make big bets and
big predictions in terms of what sectors of the market are going to do well.
Instead, we have a very quantitatively driven bottom-up process that
consistently emphasizes certain factors such as strong sales and earnings
growth, as well as strong changes in analysts' earnings estimates.
Of course, we don't want to pay too much for a company, so we try to buy those
superior growth rates at a reasonable price. The average price/earnings multiple
in the portfolio has increased this year from about 15 to 18 times 1996
estimated earnings. We're having to pay more for these growth rates, but the
premium that we're paying is not much higher than that of the overall market,
which is currently selling at about 16 times 1996 estimated earnings.
WHAT IS YOUR VIEW OF THE INITIAL PUBLIC OFFERING MARKET?
We have a quantitative system that examines the entire history of a company over
five or six years. With an IPO, a lot of the time we don't have that history.
Some people say we're missing a lot of opportunities, since some IPOs have done
very well recently. However, if we haven't thoroughly investigated the business
fundamentals of a particular company, we won't take a risk by investing in it.
- ---------------
* The composition of the Fund's portfolio is subject to change.
10
<PAGE>
EMERALD SMALL CAPITALIZATION FUND (as of May 31, 1996)
- --------------------------------------------------------------------------------
WHAT IS YOUR OUTLOOK FOR SMALL-CAPITALIZATION STOCKS?
In the short run, I think there are some warning signs, such as the strong IPO
market and the tremendous flows of money coming into small-cap funds. But longer
term, we have a very positive outlook for small and mid-cap stocks. The growth
rates of many of these companies are higher than larger companies, while the
valuations are still reasonable. I would be a lot more concerned about these
small stocks if they were selling at 30 times earnings, which is about parallel
to their growth rates. Right now, our portfolio is averaging about 18 times 1996
estimated earnings, so we've got a long way to go before we reach the excesses
that we have seen in the past.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF MAY 31, 1996*
<S> <C>
1 Year 50.10%
3 Year 21.86%
5 Year 21.81%
Since Inception 14.46%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND
NAV WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THE ORIGINAL COST.
During the periods indicated, fee waivers and expense reimbursements were in
effect. Without these waivers and reimbursements, performance would have been
lower.
*The inception date for performance purposes is 12/31/86. The quoted performance
of the Emerald Small Capitalization Fund includes performance of a common trust
fund for employee benefit plan accounts that were managed by the predecessor of
Barnett Capital Advisors, Inc. (the "Commingled Fund") prior to the
establishment of the Fund on 1/4/94. On that date, the assets of the Commingled
Fund were transferred to the Fund in connection with its commencement of
operations. The Commingled Fund was operated using substantially the same
investment objective, policies and techniques as the Fund. During that time,
the Commingled Fund was not registered under the Investment Company Act of 1940
(the "1940 Act") and therefore was not subject to certain investment
restrictions that are imposed under the 1940 Act. If the Commingled Fund had
been registered under the 1940 Act, the Commingled Fund's performance may have
been adversely affected. Because the Commingled Fund did not charge any
expenses, its performance has been adjusted to reflect the Fund's estimated
expenses at the time of its inception, which were 1.54% of average daily net
assets. The performance information for the period subsequent to the Fund's
inception also assumes reinvestment of all net investment income and realized
capital gains and takes into account actual expenses of the Fund's
Institutional Shares for the period from 1/4/94 to 3/1/94 and of the Fund's
Retail Shares thereafter.
11
<PAGE>
INTERVIEW (as of May 31, 1996)
- --------------------------------------------------------------------------------
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 and Emerald Equity Funds.
Creighton, Mr. Creighton's portfolio management experience dates
C.F.A. back to 1981, when he joined Barnett as an equity
PORTFOLIO MANAGER manager. He is a Chartered Financial Analyst and holds an
15 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 advisor 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 41%
Cash & Cash Equivalents 1%
Stocks 58%
</TABLE>
- --------------------------------------------------------------------------------
TOP 5 EQUITY AND BOND HOLDINGS*
The Balanced Fund's top equity holdings mirror those of the Equity Fund, and on
the bond side, we include such traditional holdings as FHLMC, FNMA and U.S.
Treasury Notes.
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
EQUITIES NET ASSETS BONDS NET ASSETS
<S> <C> <C> <C>
General Electric Co. 1.18% FHLMC, Gold Pool #E20195, 7.5%, 9/1/00 3.00%
......................................................... ..........................................................
Nike Inc. Cl. B 1.00% U.S. Treasury Strip, 2/15/07 2.82%
......................................................... ..........................................................
New England Telegraph & Telephone, 7.8%,
Worldcom Inc. 0.98% 11/15/29 2.46%
......................................................... ..........................................................
Cisco Systems Inc. 0.91% FNMA, 6.48%, 2/18/04 2.25%
......................................................... ..........................................................
PepisCo Inc. 0.90% U.S. Treasury Notes, 5.88%, 2/15/04 2.24%
......................................................... ..........................................................
Total Equities 4.97% Total Bonds 12.77%
......................................................... ..........................................................
</TABLE>
- ---------------
* The composition of the Fund's holdings is subject to change.
12
<PAGE>
EMERALD BALANCED FUND (as of May 31, 1996)
- --------------------------------------------------------------------------------
WHAT CONTRIBUTED TO THE FUND'S STRONG PERFORMANCE?
At the beginning of the six-month period, 44% of the portfolio was invested in
bonds, 49% was invested in stocks and the rest was in cash. Over the past few
months, we've increased our equity exposure to 58%, and we've reduced our bond
exposure to 41%, which has paid off for the Fund. For the six-month period ended
May 31, 1996, the Fund produced a total return of 6.85%, which is very good,
given the weak performance of the bond market in the past six months. In
comparison, the Lehman Brothers Aggregate Bond Index, which reflects bond
performance, had a return of -1.16% and the Standard & Poor's 500 Stock Index,
widely used to represent stock market performance, was up 11.78%.
The Balanced Fund has also benefited from the solid performance of
small-capitalization stocks, which comprise about 12% of the portfolio and about
22% of our equity exposure.
WHY HAS THE STOCK MARKET CONTINUED TO OUTPERFORM THE BOND MARKET?
At the beginning of the year, we thought interest rates would stay low. The
30-year U.S. Treasury bond was at 6%. There was talk about slowing economic
growth, low inflation and a deficit reduction plan that was being debated in
Congress. Today, we have much higher interest rates. The budget talks collapsed.
Economic momentum, instead of slowing, actually began to accelerate, which
helped drive up interest rates -- and rising interest rates drive down bond
prices.
It is surprising that the stock market has done as well as it has. I think what
is driving it as much as anything are the changing demographics of society,
particularly the fact that baby boomers are getting to the age where they are
starting to look at retirement. They realize that they have not saved enough, so
they're starting to put more and more of their cash into the stock market
thinking that's the quickest way to get the money to grow. Plus, a lot of
corporations have shifted away from defined benefit plans and into defined
contribution or 401(k) plans. As a result, people are taking that money and
putting it into equity mutual funds.
WHAT IS YOUR STRATEGY IN THE BALANCED FUND?
Over a normal market cycle, we expect to be about 60% invested in stocks and 40%
in bonds, which is about where we are now. With that type of ratio, you can
potentially get about 80% of the return of a fully invested stock position with
maybe half the risk. Right now, our outlook is neutral with regard to stocks vs.
bonds. I wouldn't see us making major shifts toward bonds at this point because,
even though the stock market is more fully valued than it was six months ago, we
still think that it offers attractive value over the near term when you consider
the cash flowing into it.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF MAY 31, 1996
<S> <C>
1 Year 20.05%
Since Inception 15.29%
Inception Date 4/11/94
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND
NAV WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THE ORIGINAL COST.
During the periods indicated, fee waivers and expense reimbursements were in
effect. Without these waivers and reimbursements, performance would have been
lower.
13
<PAGE>
INTERVIEW (as of May 31, 1996)
- --------------------------------------------------------------------------------
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 and Emerald Money Market Funds. Before
Lunsford, joining Barnett in 1988, she spent nine years as a money
C.F.A. manager with the First Kentucky Trust Company in
PORTFOLIO MANAGER Louisville, KY. Ms. Lunsford currently serves as
17 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 corporate and government bonds typically
offering higher yields than money-market instruments in return for some fluctua-
tions in share price. Currently, the portfolio's average maturity is 2.33 years.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
U.S. Government Obligations 25%
Corporate Obligations 69%
Cash & Cash Equivalents 6%
</TABLE>
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS**
The top 10 holdings in the portfolio include securities and money-market
instruments issued by Goldman Sachs and Sears.
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
SLMA, 7.67%, 3/8/00 11.03% Enterprise, DCP, 6/24/96 4.91%
......................................................... ..........................................................
FNMA, 7.77%, 7/18/01 5.52% Hanson CP, 5.37%, 7/18/96 4.90%
......................................................... ..........................................................
Goldman Sachs, 6.20%, 12/15/00 5.29% Southern Cal Edison, 5.88%, 1/15/01 4.69%
......................................................... ..........................................................
Barton CP, 6/13/96 4.92% Sears Roebuck, 5.67%, 2/7/01 4.66%
......................................................... ..........................................................
Delaware CP, 5.30%, 6/17/96 4.92% Avco Finan. Serv., 7.38%, 8/15/01 4.16%
......................................................... ..........................................................
Total 55.00%
......................................................... ..........................................................
</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.
14
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND (as of May 31, 1996)
- --------------------------------------------------------------------------------
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE, AND WHAT STRATEGIES DID YOU EMPLOY
TO MAXIMIZE RETURN?
Months of declining short-term interest rates came to an abrupt halt during the
first quarter of 1996. Although the Federal Reserve Board (Fed) pushed
short-term rates 25 basis points (0.25 percentage points) lower at the end of
January, unexpectedly strong economic indicators in February and March dashed
hopes of further easing by the Fed. The change in interest-rate expectations by
investors during February and March caused yields on short- and
intermediate-term Treasury securities to rise. By mid-April, the three-year
Treasury note was yielding 6.23% versus 5.29% on December 31, 1995, and 4.95%
(the low) in mid-February. This shift in rates precipitated a buying opportunity
for the Fund and enabled us to increase return by extending the Fund's average
maturity to 2.33 years.
WHAT IS YOUR OUTLOOK FOR THE FUND OVER THE NEXT SIX MONTHS?
Since the economy is continuing to show strength, we believe that the Fed may
decide to raise interest rates in the near future. This could adversely affect
the markets for two reasons: First, it could fuel the fear of inflation due to
the strengthening economy; and second, it could increase uncertainty about what
the Fed will do and when, in a presidential election year. Given these factors,
we expect short- and intermediate-term interest rates to continue to slowly rise
in the short run and then stabilize over the next few months. Therefore, we have
shortened the Fund's average maturity slightly at present, so we will be in a
position to take advantage of this rise in interest rates as it occurs.
WHAT MAKES THE SHORT-TERM FIXED INCOME FUND ATTRACTIVE AT THIS TIME?
With the possibility of higher interest rates ahead, there has already been some
volatility in the fixed-income and equity markets. The rise in rates, when it
comes, will likely cause even more volatility. The short
weighted-average-maturity structure of the Short-Term Fixed Income Fund has kept
it from experiencing much of this fluctuation. Therefore, this Fund is an
excellent alternative for the investor who feels that the equity and longer-term
fixed-income markets are currently too volatile for his or her objectives, but
who still wants to earn a higher rate of interest than can be achieved in a
money market fund.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF MAY 31, 1996*
<S> <C>
1 Year 4.50%
5 Year 5.80%
10 Year 6.76%
Since Inception 8.29%
CURRENT SEC 30-DAY YIELD 5.31%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND
NAV WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THE ORIGINAL COST.
During the periods indicated, fee waivers and expense reimbursements were in
effect. Without these waivers and reimbursements, performance would have been
lower. If the service contractors had not waived fees or reimbursed expenses,
the SEC 30-day yield would have been 3.20%.
*The inception date for performance purposes is 12/31/79. The quoted performance
of the Emerald Short-Term Fixed Income Fund includes performance of a common
trust fund for employee benefit plan accounts that were managed by the
predecessor of Barnett Capital Advisors, Inc. (the "Commingled Fund") prior to
the establishment of the Fund on 4/11/94. On that date, the assets of the
Commingled Fund were transferred to the Fund in connection with its
commencement of operations. The Commingled Fund was operated using
substantially the same investment objective, policies and techniques as the
Fund. During that time, the Commingled Fund was not registered under the
Investment Company Act of 1940 (the "1940 Act") and therefore was not subject
to certain investment restrictions that are imposed under the 1940 Act. If the
Commingled Fund had been registered under the 1940 Act, the Commingled Fund's
performance may have been adversely affected. Because the Commingled Fund did
not charge any expenses, its performance has been adjusted to reflect the
Fund's estimated expenses at the time of its inception, which were 0.68% of
average daily net assets. The performance information for the period subsequent
to the Fund's inception also assumes reinvestment of all net investment income
and realized capital gains and takes into account actual expenses of the Fund's
Retail Shares.
15
<PAGE>
INTERVIEW (as of May 31, 1996)
- --------------------------------------------------------------------------------
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
21 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 principally of U.S. Government securities including
direct and agency securities. The portfolio emphasizes U.S. Government agency
mortgage-backed securities. Currently, the portfolio's average maturity is 7.6
years after adjusting for mortgage prepayments.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
U.S. Government Obligations 96%
Corporate Obligations 3%
Cash Equivalents 1%
</TABLE>
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
Some of the top government securities included in this portfolio are FNMA and
FHLMC.
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
FNMA, 8.00%, 8/1/99 7.13% GNMA, 8.50%, 4/15/25 4.48%
......................................................... ..........................................................
Tennessee Valley Authority, 5.98%, 4/1/36 7.02% FHLMC, 6.50%, 7/15/16 4.34%
......................................................... ..........................................................
U.S. Treasury Bonds, 12.75%, 11/15/10 6.12% U.S. Treasury Bond, 8.13%, 8/15/21 3.89%
......................................................... ..........................................................
FHLMC, 8.20%, 1/16/98 5.33% Export Funding Trust, 8.21%, 12/29/06 3.50%
......................................................... ..........................................................
FHLMC, 9.25%, 6/1/18 4.70% FHLMC, 6.08%, 10/29/08 3.48%
......................................................... ..........................................................
Total 49.99%
......................................................... ..........................................................
</TABLE>
- ---------------
* The composition of the Fund's holdings is subject to change.
16
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND (as of May 31, 1996)
- --------------------------------------------------------------------------------
WHAT FACTORS AFFECTED PERFORMANCE DURING THE PAST SIX MONTHS?
The major factor has been the increase in interest rates. As you can see,
interest rates on two-year, five-year and 10-year Treasuries have increased
sharply in the past six months:
<TABLE>
<CAPTION>
1 YEAR AGO 6 MONTHS AGO 5/31/96
<S> <C> <C> <C>
2-YEAR TREASURIES 5.83% 5.35% 6.24%
5-YEAR TREASURIES 6.05% 5.52% 6.63%
10-YEAR TREASURIES 6.65% 6.13% 7.00%
</TABLE>
During a period of rising interest rates, virtually all bonds experience a
decline in market values. The magnitude of decline is generally a function of
maturity, with longer maturity bonds generally declining by a greater amount
than short maturity securities. Only with perfect foresight and by selling
virtually all bond holdings, could an investor avoid experiencing the market
value declines that characterized the bond market during the past five months.
Our goal during this period has been to limit such declines by maintaining a
relatively short maturity structure. It should be remembered that Fund values
will fluctuate with changes in interest rates.
Our maturity structure and our allocation to mortgage-backed securities enabled
us to outperform many government bond funds in our peer group. At the beginning
of the year, the Fund's average maturity was 12.97 years, but after adjusting
for mortgage principal prepayments, the average maturity was only 5.94 years.
The Fund's duration -- a measure of the sensitivity to interest rate changes --
was 3.1 years. This represented a relatively defensive posture. In addition, 55%
of the portfolio was invested in mortgage-backed securities, which as an asset
class performed very well during this period. Mortgage-backed securities tend to
hold up better in a rising rate environment for a number of reasons. First, they
typically offer higher yields than Treasury bonds of similar maturity terms.
Second, they pay principal (scheduled and prepayments) along with interest which
typically gives them a shorter duration than would otherwise be the case.
WHY IS THIS A GOOD TIME TO INVEST IN GOVERNMENT BONDS?
We view the yield environment that exists today as one that offers relatively
attractive returns for investing in high-quality securities. Bonds of the U.S.
Government or its agencies offer yields near 7%, or in some cases slightly
higher. These higher yields appear particularly attractive in an environment
where inflation rates appear to be holding steady at near 3% (during the 12
months ended May 31, 1996, the Consumer Price Index increased at 2.9%).
Moreover, the current economic expansion, now in its sixth year, may well show
some signs of weakening by late this year or early next year. This would further
strengthen the case for government bonds as inflation rates would likely fall
further and the appeal of high-quality fixed-income securities would be further
enhanced.
17
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND (as of May 31, 1996)
- --------------------------------------------------------------------------------
WHAT IS YOUR OUTLOOK FOR THE FUND?
While the tone of the bond market has been negative, the Fund is currently
generating an attractive yield. If rates fall, then there is the potential for
price appreciation as well as income. It could go the other way if interest
rates go higher, but we think that the worst is behind us in the government bond
market.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF MAY 31, 1996
<S> <C>
1 Year 3.34%
3 Year 4.35%
Since Inception 7.32%
Inception Date 7/31/91
CURRENT SEC 30-DAY YIELD 6.89%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND
NAV WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THE ORIGINAL COST.
During the periods indicated, fee waivers and expense reimbursements were in
effect. Without these waivers and reimbursements, performance would have been
lower. If the service contractors had not waived fees or reimbursed expenses,
the SEC 30-day yield would have been 6.68%.
18
<PAGE>
INTERVIEW (as of May 31, 1996)
- --------------------------------------------------------------------------------
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
21 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. Currently, the portfolio's average maturity is 10.09
years.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Corporate Obligations 44%
Cash & Cash Equivalents 2%
Taxable Municipal Obligations 3%
U.S. Government & Agency Obligations 51%
</TABLE>
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
With the largest industry segment of the portfolio being finance, some of our
top holdings include the following:
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
Tennessee Valley Authority, 5.98%, 4/1/36 5.65% FNMA, 8.00%, 11/17/03 3.31%
......................................................... ..........................................................
FNMA, 7.50%, 11/17/23 4.95% FHLMC, 6.95%, 12/15/20 3.25%
......................................................... ..........................................................
U.S. West Cap, 6.31%, 11/1/05 4.13% British Telecom Finance, 9.63%, 2/15/19 3.13%
......................................................... ..........................................................
Travelers Group, 6.88%, 6/1/25 4.07% Caterpillar, 8.95%, 5/12/00 3.01%
......................................................... ..........................................................
BHP Finance USA, 6.42%, 3/1/26 3.70% WMX Technologies, 6.22%, 4/30/04 2.89%
......................................................... ..........................................................
Total 38.09%
......................................................... ..........................................................
</TABLE>
- ---------------
* The composition of the Fund's holdings is subject to change.
19
<PAGE>
EMERALD MANAGED BOND FUND (as of May 31, 1996)
- --------------------------------------------------------------------------------
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
The Fund's average duration (4.8 years) -- a measure of the Fund's sensitivity
to changes in interest rates -- is about the same as our benchmark, the Lehman
Brothers Aggregate Bond Index (4.75 years). As a result, the negative impact of
rising interest rates has affected us about the same as other similar funds.
What helped us during the past six months was a high percentage of corporate
bonds, which have outperformed government bonds. Tied to the perception of
stronger economic growth is the perception that the overall credit quality of
the corporate sector has been improving.
DESCRIBE SOME REPRESENTATIVE CORPORATE BONDS IN THE PORTFOLIO.
The largest industry segment is finance, which represented 26% of the corporate
bond part of the portfolio as of May 31, 1996. Many of these bonds, such as Ford
Motor Credit (3.43% of the portfolio) and General Motors Acceptance Corp.
(3.84%), derive their credit strength from their industrial parent.* We are
reducing our weighting in this sector somewhat because there's some concern on
our part about consumer debt levels. We increased our allocation to
mortgage-backed securities to 28%, slightly higher than the percentage six
months ago. Right now, U.S. Government bonds and mortgage-backed securities
comprise 51% of the portfolio.
DESCRIBE AN INTERESTING SECURITY IN THE FUND.
We own "put" bonds issued by the Tennessee Valley Authority due April 1, 2036,
with a put option dated April 1, 1998. A put option gives us the right to "put
back," or redeem, the bond in two years, which we would want to do if interest
rates continue to rise. As interest rates rise, the bond's price behaves as if
it's going to mature in two years instead of 40. In a period of rising rates,
bonds maturing soon do not fall as much as those maturing further into the
future. In contrast, if interest rates fall, then the bond behaves as if it is a
longer-term bond, because the holder of the bond would not want to put it in
1998. So it offers much of the upside potential of a long-term bond if interest
rates fall, and it provides the downside protection of a short-term bond if
interest rates were to move higher.
WHAT IS YOUR OUTLOOK FOR THE BOND MARKET?
The mood in the bond market is still negative, but it has a way of turning
rather quickly. We think that the impact of rising interest rates is self
limiting. If rates continue moving higher, that would depress the economy and
precipitate more pronounced weakness in the second half of the year,
particularly in the interest-rate sensitive areas of housing and other durable
goods. The positive part of a low unemployment level, such as we have now, is
that a lot of tax revenues are coming in, so the federal budget deficit has been
coming down in absolute terms as well as in relation to the Gross Domestic
Product. In fact, the deficit is the lowest it has been in quite a while. A
lower deficit helps reduce interest rates, which is a positive for the bond
market.
- ---------------
* The composition of the Fund's portfolio is subject to change.
20
<PAGE>
EMERALD MANAGED BOND FUND (as of May 31, 1996)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF MAY 31, 1996*
<S> <C>
1 Year 4.48%
3 Year 5.53%
5 Year 8.11%
Since Inception 8.40%
CURRENT SEC 30-DAY YIELD 5.93%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND
NAV WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THE ORIGINAL COST.
During the periods indicated, fee waivers and expense reimbursements were in
effect. Without these waivers and reimbursements, performance would have been
lower. If the service contractors had not waived fees or reimbursed expenses,
the SEC 30-day yield would have been 4.88%.
* The inception date for performance purposes is 4/30/87. The quoted performance
of the Emerald Managed Bond Fund includes performance of a common trust fund
for employee benefit plan accounts that were managed by the predecessor of
Barnett Capital Advisors, Inc. (the "Commingled Fund") prior to the
establishment of the Fund on 4/11/94. On that date, the assets of the
Commingled Fund were transferred to the Fund in connection with its
commencement of operations. The Commingled Fund was operated using
substantially the same investment objective. policies and techniques as the
Fund. During that time, the Commingled Fund was not registered under the
Investment Company Act of 1940 (the "1940 Act") and therefore was not subject
to certain investment restrictions that are imposed under the 1940 Act. If the
Commingled Fund had been registered under the 1940 Act, the Commingled Fund's
performance may have been adversely affected. Because the Commingled Fund did
not charge any expenses, its performance has been adjusted to reflect the
Fund's estimated expenses at the time of its inception, which were 0.67% of
average daily net assets. The performance information for the period
subsequent to the Fund's inception also assumes reinvestment of all net
investment income and realized capital gains and takes into account actual
expenses of the Fund's Retail Shares.
21
<PAGE>
INTERVIEW (as of May 31, 1996)
- --------------------------------------------------------------------------------
EMERALD FLORIDA TAX-EXEMPT FUND
PHOTO Mr. Byrne joined Barnett in 1987 and is responsible for
managing Barnett's municipal bond funds. His nearly three
Douglas K. Byrne, decades of investment experience have focused on
PORTFOLIO MANAGER fixed-income portfolio management for the state of Texas,
29 years of the Teacher's Retirement System of Texas and First City
investment National Bank in Austin, Texas. He holds a B.S. and an
experience 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 in the chart are assigned by Moody's Investor
Services. Currently, the portfolio's average maturity is 21.09 years.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Cash & Cash Equivalents 1%
Not Rated 14%
Aaa 56%
Aa 17%
A 7%
Baa 5%
</TABLE>
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS**
Some of the top Florida municipal bonds included in the portfolio are:
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
Jacksonville FL River City Project, 5.38%, Jacksonville FL Sales Tax Rev., 5.65%,
10/1/18 5.76% 10/1/14 4.03%
......................................................... ..........................................................
Okaloosa Cnty. FL Gas Dist. Rev., 6.88%, 4.47% Florida State Dept. Environmental
10/1/19 Preservation, 5.50%, 7/1/13 4.00%
......................................................... ..........................................................
Collier County FL, 7.00%, 12/1/19 4.33% Dade County FL, 5.75%, 10/1/15 3.99%
......................................................... ..........................................................
Bay County FL, 5.25%, 4/1/06 4.12% Florida State Board of Education, 5.60%,
6/1/20 3.93%
......................................................... ..........................................................
Guam Government, 5.75%, 9/1/04 4.05% Dade County FL, 5.60%, 10/1/26 3.91%
......................................................... ..........................................................
Total 42.59%
......................................................... ..........................................................
</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.
22
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND (as of May 31, 1996)
- --------------------------------------------------------------------------------
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
In December, we were very bullish on the municipal bond market. Interest rates
were falling, and we were anticipating a great deal of refunding of older bonds
on January 1, fueling demand. As a result, we moved about 45% of the portfolio
into a type of bond that does very well in a falling interest rate environment
- -- discount bonds with lower coupons. (Bonds sell at a discount when their price
is below their par value.) Through the month of December, we were quite correct
in our stance. However, in early January, the cash from bonds that were redeemed
did not go back into the municipal bond market as we had expected, but instead,
went into stocks or other financial instruments.
In addition, in mid-February the Labor Department announced a very strong
employment number, which tends to raise inflation fears, and this report had a
negative effect on the fixed-income markets. Inflation concerns have also
increased due to increasing gasoline prices. The fear of inflation is what
drives interest rates, Federal Reserve Board policy and investor sentiment.
Rising interest rates have a negative impact on fixed-income securities.
Municipal bonds are fixed-income instruments just as U.S. Treasury bonds are,
and they trade at a relative value to Treasuries all the time. Generally, as the
Treasury market goes, so goes the municipal market.
Another major factor affecting the performance of municipal bonds in general was
the talk of a flat tax during the presidential primary season. However, I think
the tax reform issue is dead for now -- at least until after the election.
HOW HAVE YOU ADJUSTED THE PORTFOLIO?
Since the March decline, the portfolio took a more defensive posture. That is,
we shortened the average maturity from 23 years to 21 years. A shorter maturity
means that the portfolio is less sensitive to changes in interest rates.
However, our internal forecast is for interest rates to come down over the
balance of the year. We do not believe that gasoline prices will continue to
rise because there is no shortage of crude oil. Therefore, the portfolio will
stay in a positive mode, but not as aggressive as we were last fall. That means
that we will continue to buy lower-coupon bonds at discounts to their market
value in the belief that interest rates will decline and bond prices will
appreciate. With interest rates coming down, a discount bond paying a coupon of
5% may generate more total return than a similar bond selling at par (face
value) or at a premium (above par).
Credit quality in the portfolio has remained very high and will remain very
high. I don't believe in taking significant credit bets. We believe there is
opportunity in informed risk, and we will take informed risk. However, we will
not take significant credit risk, nor do we currently intend to lower the
average credit rating of the bonds in the Fund, which is currently at AA2
because the reward for incremental yield isn't there. We like essential services
like water and sewer revenue bonds. For example, we recently purchased Dade
County Water & Sewer Revenue Bonds, 5.50% due 2025 at a discount to yield of
nearly 6%.
23
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND (as of May 31, 1996)
- --------------------------------------------------------------------------------
WHAT IS YOUR OUTLOOK FOR THE FLORIDA MUNICIPAL BOND MARKET?
My outlook is positive. Economic underpinnings for bond issuers in the state are
strong. Florida's economy has grown at a healthy pace, with increases in
population and employment. As of the end of 1995, the unemployment rate was
5.3%, slightly below the national average. The state's population growth has
accelerated in recent years.
In addition, the supply of bonds is shrinking. Before the Tax Reform Act of
1986, there was a tremendous amount of bond issuance, and these bonds are now 10
years old. They were issued at much higher interest rates with 10 years of call
protection. The call protection has now expired, and the bonds have either been
refinanced at lower interest rates or redeemed. The forecast nationally is for
$400 billion in bonds to be retired and about $170 billion to be issued. Supply
is shrinking, which is good for people who own tax-exempts. Recently, many
people have gone into the stock market. But that won't last forever.
<TABLE>
<CAPTION>
AVERAGE TOTAL ANNUAL RETURN AS OF MAY 31, 1996
<S> <C>
1 Year 1.93%
3 Year 3.68%
Since Inception 7.07%
Inception Date 8/1/91
CURRENT SEC 30-DAY YIELD 5.12%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND
NAV WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THE ORIGINAL COST.
During the periods indicated, fee waivers and expense reimbursements were in
effect. Without these waivers and reimbursements, performance would have been
lower. If the service contractors had not waived fees or reimbursed expenses,
the SEC 30-day yield would have been 4.85%.
24
<PAGE>
INTERVIEW (as of May 31, 1996)
- --------------------------------------------------------------------------------
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 and Emerald Money Market Funds. Before
Lunsford, joining Barnett in 1988, she spent nine years as a money
C.F.A. manager with the First Kentucky Trust Company in
PORTFOLIO MANAGER Louisville, KY. Ms. Lunsford currently serves as
17 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.
25
<PAGE>
EMERALD PRIME, TREASURY AND TAX-EXEMPT FUNDS (as of May 31, 1996)
- --------------------------------------------------------------------------------
WHAT FACTORS AFFECTED THE PERFORMANCE OF THE MONEY MARKET FUNDS, AND WHAT
STRATEGIES WERE EMPLOYED TO MAXIMIZE PERFORMANCE RESULTS?
Months of declining short-term interest rates came to an abrupt halt during the
first quarter of 1996. Short-term interest rates were pushed lower one last time
at the end of January as the Federal Reserve Board (Fed) lowered the Fed Funds
rate -- the rate banks charge each other for overnight loans -- another 25 basis
points (0.25 percentage points), but unexpectedly strong economic indicators in
February and March dashed hopes of further easing by the Fed. As a result the
short-term yield curve resumed its normal upward slope for prime issuance toward
the end of the first quarter, which has allowed us to increase yield by
extending the average maturities of the money market funds. For the preceding
several months the yield curve had been flat, which meant that money managers
did not receive higher yields for investing in securities with longer
maturities, as they normally would. The shift in the yield curve has also
sparked new issuance of one-year/quarterly callable notes, and the purchase of a
small position in these securities is also partially responsible for the Prime
Fund's higher returns and its longer average maturity.
WHAT FACTORS COULD AFFECT THE FUNDS IN THE MONTHS AHEAD?
Since the economy is continuing to show strength, many believe that the Fed may
decide to raise interest rates in the near future. However, since the fall
presidential election is so close, any increase will probably not be more than a
nominal 25 basis points and will likely come at the end of August, well in
advance of the election. If the economy does not slow in the second half of
1996, short-term rates could well rise another 25 basis points before year-end.
This potential rise in rates has not, as yet, been fully priced into the
short-term market, as issuers remain reluctant to pay investors higher rates.
However, many investors are refusing to purchase longer-term securities at their
current rates. Instead, we are placing our excess cash in either overnight or
other very short-term securities. This will cause the average maturities of the
money market funds to shorten, which we believe is beneficial, because then we
will be in the position to extend our average maturities and take advantage of
higher yields as they become available.
<TABLE>
<CAPTION>
SEC 7-DAY YIELDS AS OF MAY 31, 1996
INVESTOR SHARES
<S> <C>
Prime Fund 4.63%
Treasury Fund 4.31%
Tax-Exempt Fund 2.80%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
During the periods indicated, fee waivers and expense reimbursements were in
effect. Without these waivers and reimbursements, performance would have been
lower. Had these waivers or reimbursements not been in effect, the SEC 7-day
yields would have been 4.60% and 4.24% for the Prime and Treasury Funds,
respectively.
26
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
LONG-TERM INVESTMENTS -- 98.9%
COMMON STOCKS -- 95.2%
AIRLINES -- 1.4%
AMR Corp.* ................................................................... 35,500 $ 3,350,312
------------
APPAREL & SHOES -- 3.2%
Nike, Inc. ................................................................... 54,300 5,450,363
Tommy Hilfiger* .............................................................. 33,500 1,842,500
------------
7,292,863
------------
AUTOMOTIVE -- 1.9%
Chrysler Corp. ............................................................... 35,800 2,385,175
Lear Seating* ................................................................ 50,500 1,950,562
------------
4,335,737
------------
BUILDING & BUILDING PRODUCTS -- 3.3%
Clayton Homes, Inc. .......................................................... 81,788 1,574,419
Foster Wheeler ............................................................... 37,800 1,682,100
Johnson Controls ............................................................. 22,500 1,569,375
Raychem Corp. ................................................................ 38,500 2,877,875
------------
7,703,769
------------
CHEMICALS -- 1.8%
Imperial Chemical Industries ................................................. 30,700 1,630,937
Praxair, Inc. ................................................................ 61,100 2,482,188
------------
4,113,125
------------
COMPUTERS & COMPUTER SERVICES -- 16.7%
Adaptec, Inc.* ............................................................... 22,700 1,359,162
BMC Software* ................................................................ 17,500 1,102,500
C-Cube Microsystems* ......................................................... 19,000 950,000
Cadence Design Systems, Inc.* ................................................ 66,050 3,748,337
Cisco Systems, Inc.* ......................................................... 81,800 4,478,550
CompUSA, Inc.* ............................................................... 100,400 4,392,500
Computer Associates International, Inc. ...................................... 50,850 3,699,337
Gateway 2000, Inc.* .......................................................... 30,500 1,155,187
Honeywell, Inc. .............................................................. 39,200 1,989,400
Intel Corp. .................................................................. 26,500 2,000,750
Komag, Inc.* ................................................................. 29,000 1,004,125
Maxim Integrated* ............................................................ 44,600 1,516,400
Microsoft Corp.* ............................................................. 20,000 2,375,000
Oak Technologies, Inc.* ...................................................... 27,300 348,075
Seagate Technologies* ........................................................ 21,400 1,257,250
Sterling Software, Inc.* ..................................................... 21,700 1,746,850
Sun Microsystems, Inc.* ...................................................... 44,600 2,793,075
U.S. Robotics Corp.* ......................................................... 27,200 2,495,600
------------
38,412,098
------------
</TABLE>
27
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
CONSUMER PRODUCTS -- 2.2%
Black & Decker ............................................................... 40,200 $ 1,653,225
Gillette Co. ................................................................. 58,800 3,476,550
------------
5,129,775
------------
ELECTRICAL EQUIPMENT & ELECTRONICS -- 5.2%
Applied Materials* ........................................................... 38,600 1,437,850
General Electric Co. ......................................................... 75,300 6,231,075
Glenayre Technologies, Inc.* ................................................. 24,800 1,221,400
KEMET Corp.* ................................................................. 70,000 1,557,500
SCI System, Inc.* ............................................................ 33,600 1,512,000
------------
11,959,825
------------
ENERGY -- 0.5%
Calenergy Co., Inc.* ......................................................... 45,300 1,211,775
------------
ENTERTAINMENT & LEISURE -- 4.6%
Callaway Golf Co. ............................................................ 76,100 2,292,512
Carnival Cruise Lines, Inc. .................................................. 100,000 2,975,000
Mattel, Inc. ................................................................. 121,297 3,305,343
Walt Disney Co. .............................................................. 31,662 1,923,467
------------
10,496,322
------------
FINANCE & INSURANCE -- 10.0%
BankAmerica Corp. ............................................................ 40,400 3,040,100
BayBanks, Inc. ............................................................... 19,800 2,138,400
Equifax, Inc. ................................................................ 95,000 2,351,250
Green Tree Financial Corp. ................................................... 69,100 2,263,025
MBNA Corp. ................................................................... 76,750 2,350,469
NationsBank .................................................................. 34,300 2,782,588
Paine Webber Group ........................................................... 74,600 1,631,875
SunAmerica, Inc. ............................................................. 41,900 2,346,400
Travelers Corp. .............................................................. 97,650 4,052,475
------------
22,956,582
------------
FIRE PROTECTION SYSTEMS -- 0.5%
Tyco Laboratories ............................................................ 30,500 1,204,750
------------
FOOD, BEVERAGE & TOBACCO -- 6.0%
Boston Chicken* .............................................................. 65,500 2,136,937
Dole Food Co. ................................................................ 61,700 2,329,175
Outback Steakhouse, Inc.* .................................................... 63,100 2,389,913
PepsiCo, Inc. ................................................................ 133,600 4,442,200
Philip Morris Cos., Inc. ..................................................... 24,500 2,434,688
------------
13,732,913
------------
FOREST PRODUCTS & PAPER -- 1.8%
Harnischfeger Industries, Inc. ............................................... 54,900 1,921,500
International Paper Co. ...................................................... 54,397 2,169,080
------------
4,090,580
------------
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
HEALTH CARE -- 10.3%
Amgen, Inc. .................................................................. 41,700 $ 2,481,150
Becton Dickinson ............................................................. 25,700 2,184,500
Boston Scientific Corp.* ..................................................... 36,400 1,560,650
Foundation Health Corp.* ..................................................... 45,700 1,816,575
HealthCare COMPARE Corp.* .................................................... 67,300 3,255,637
HEALTHSOUTH Corp.* ........................................................... 69,600 2,436,000
Johnson & Johnson ............................................................ 35,100 3,417,862
Medtronic, Inc. .............................................................. 18,000 1,012,500
Nellcor Puritan Bennett, Inc.* ............................................... 16,600 904,700
OrNda Healthcorp* ............................................................ 72,400 1,819,050
Pfizer, Inc. ................................................................. 39,300 2,780,475
------------
23,669,099
------------
HOTELS -- 0.8%
Marriot International Corp. .................................................. 38,200 1,814,500
------------
OFFICE & BUSINESS EQUIPMENT -- 3.3%
Alco Standard ................................................................ 52,300 3,268,750
Hewlett Packard .............................................................. 15,900 1,697,325
The Olsten Corp. ............................................................. 79,200 2,435,400
------------
7,401,475
------------
OIL & GAS -- 5.1%
Halliburton Co. .............................................................. 43,000 2,391,875
Mobil Corp. .................................................................. 24,600 2,776,725
USX-Marathon Group ........................................................... 125,500 2,745,313
Williams Cos., Inc. .......................................................... 74,400 3,738,600
------------
11,652,513
------------
PHARMACEUTICALS -- 3.4%
Elan Corp.* .................................................................. 40,100 2,516,275
Merck & Co. .................................................................. 45,700 2,953,362
Schering-Plough Corp. ........................................................ 41,700 2,444,663
------------
7,914,300
------------
PHOTOGRAPHIC PRODUCTS -- 1.3%
Eastman Kodak Co. ............................................................ 39,000 2,900,625
------------
RETAIL -- 3.5%
Consolidated Stores Corp ..................................................... 36,800 1,393,800
General Nutrition Co.* ....................................................... 121,300 1,880,150
Home Depot, Inc. ............................................................. 31,598 1,615,448
Staples, Inc.* ............................................................... 156,800 3,136,000
------------
8,025,398
------------
UTILITIES & TELECOMMUNICATIONS -- 7.4%
Ameritech Corp. .............................................................. 62,800 3,548,200
Andrew Corp.* ................................................................ 37,000 2,007,250
Cincinnati Bell, Inc. ........................................................ 54,600 2,900,625
Sprint Corp. ................................................................. 83,300 3,529,838
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
UTILITIES & TELECOMMUNICATIONS -- (CONTINUED)
WorldCom, Inc.* .............................................................. 101,100 $ 4,941,263
------------
16,927,176
------------
WASTE MANAGEMENT -- 1.0%
U.S.A. Waste Services* ....................................................... 80,600 2,377,700
------------
TOTAL COMMON STOCKS (COST $163,616,579)......................................... 218,673,212
------------
UNIT INVESTMENT TRUSTS -- 3.7%
S&P 500 Depository Receipts .................................................. 75,700 5,062,438
S&P 400 Mid-Cap Receipts* .................................................... 72,900 3,473,000
------------
TOTAL UNIT INVESTMENT TRUSTS (COST $8,067,821).................................. 8,535,438
------------
TOTAL LONG-TERM INVESTMENTS (COST $171,684,400)................................. 227,208,650
------------
SHORT-TERM INVESTMENTS -- 2.0%
OPEN-END INVESTMENT COMPANIES -- 2.0%
Dreyfus Cash Management ...................................................... 2,457 2,457
Provident Institutional Temp Cash Fund ....................................... 4,561,645 4,561,645
------------
TOTAL SHORT-TERM INVESTMENTS (COST $4,564,102).................................. 4,564,102
------------
TOTAL INVESTMENTS (COST $176,248,502)(A) -- 100.9%.............................. 231,772,752
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.9)%................................. (1,991,617)
------------
NET ASSETS -- 100.0% $229,781,135
------------
------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $229,781,135.
* Non-income producing security.
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting purposes in excess of federal income tax reporting of
$249,200. Cost for federal income tax purposes differs from value by net
unrealized appreciation of securities as follows:
Unrealized appreciation....... $ 57,079,212
Unrealized depreciation....... (1,804,162)
------------
Net unrealized appreciation... $ 55,275,050
------------
------------
See Notes to Financial Statements.
30
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $176,248,502) ....... $ 231,772,752
Interest receivable ........................................... 11,818
Dividends receivable........................................... 241,268
Receivable for capital shares issued........................... 456,325
Receivable from brokers for investment securities sold......... 1,762,660
Deferred organization costs.................................... 1,175
Prepaid expenses and other..................................... 15,546
-------------
Total assets..................................................... 234,261,544
-------------
LIABILITIES:
Bank overdraft ................................................ 49,829
Dividends payable.............................................. 139,024
Payable for capital shares redeemed............................ 43,142
Payable to brokers for investment securities purchased......... 4,038,141
Accrued expenses and other payables:
Investment Advisory fees..................................... 122,334
Administration fees.......................................... 10,352
Shareholder Processing fees (Retail Shares).................. 6,524
Combined Distribution and Service fees (Retail Shares)....... 6,528
Custodian and transfer agent fees............................ 36,708
Other........................................................ 27,827
-------------
Total liabilities................................................ 4,480,409
-------------
NET ASSETS....................................................... $ 229,781,135
-------------
-------------
Net Asset Value, Offering Price and Redemption Price per Share:
Retail Shares:
($29,609,367/1,997,038 shares of beneficial interest issued
and outstanding $0.001 par value, unlimited number of shares
authorized)................................................. $ 14.83
-------------
-------------
Institutional Shares:
($200,171,768/13,470,660 shares of beneficial interest issued
and outstanding $0.001 par value, unlimited number of shares
authorized)................................................. $ 14.86
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par.......................... $ 15,463
Additional paid-in capital..................................... 161,336,455
Undistributed net investment income............................ 264
Accumulated net realized gains on investment transactions...... 12,904,703
Net unrealized appreciation of investments..................... 55,524,250
-------------
Net Assets, May 31, 1996......................................... $ 229,781,135
-------------
-------------
</TABLE>
- ------------
See Notes to Financial Statements.
31
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the six months ended May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends .......................................................... $ 1,411,308
EXPENSES:
Investment Advisory fees ........................................... $ 634,656
Administration fees ................................................ 63,359
Shareholder Processing fees (Retail Shares) ........................ 24,839
Combined Distribution and Service fees (Retail Shares) ............. 31,620
Combined Distribution and Service fees (Class B Shares) ............ 6,670
Transfer agent fees and expenses ................................... 56,638
Custodian fees and expenses ........................................ 30,469
Legal fees ......................................................... 6,680
Audit fees ......................................................... 11,562
Reports to shareholders (Retail Shares) ............................ 1,749
Reports to shareholders (Institutional Shares) ..................... 23,523
Amortization of organization costs ................................. 8,510
Registration fees .................................................. 14,006
Trustees' fees ..................................................... 4,757
Other expenses ..................................................... 6,290
-----------
925,328
Less: Expense reimbursements ......................................... (651) 924,677
----------- ------------
Net Investment Income ................................................ 486,631
------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS:
Net realized gains on securities transactions ...................... 13,318,348
Net change in unrealized appreciation of investments ............... 9,983,250
------------
Net Realized and Unrealized Gains on Investments ..................... 23,301,598
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................. $ 23,788,229
------------
------------
</TABLE>
- ------------
See Notes to Financial Statements.
32
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED NOVEMBER 30,
MAY 31, 1996 1995
------------ ------------
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income .......................... $ 486,631 $ 1,163,936
Net realized gains on securities
transactions ................................. 13,318,348 17,929,629
Net change in unrealized appreciation of
investments .................................. 9,983,250 39,601,156
------------ ------------
Net increase in net assets resulting from
operations ................................... 23,788,229 58,694,721
------------ ------------
Dividends to shareholders from net investment
income
Retail Shares .................................. (24,107) (29,869)
Class B Shares ................................. (1,075) --
Institutional Shares ........................... (461,185) (1,134,067)
------------ ------------
Total dividends to shareholders from net
investment income .............................. (486,367) (1,163,936)
------------ ------------
Distributions to shareholders from net realized
gains
Retail Shares .................................. (1,985,635) --
Class B Shares ................................. (15,246,479) --
Institutional Shares ........................... (212,931) --
------------ ------------
Total distributions to shareholders from net
realized gains ................................. (17,445,045) --
------------ ------------
Fund Share Transactions
Net proceeds from shares subscribed ............ 34,635,070 31,008,809
Net asset value of shares issued to shareholders
in reinvestment of dividends and
distributions ................................ 15,590,127 1,205,477
Cost of shares redeemed ........................ (24,596,264) (76,668,089)
------------ ------------
Net increase (decrease) in net assets from Fund
share transactions ........................... 25,628,933 (44,453,803)
------------ ------------
Total Increase ................................... 31,485,750 13,076,982
NET ASSETS:
Beginning of period ............................ 198,295,385 185,218,403
------------ ------------
End of period (including accumulated
undistributed net investment income of $264
and $0, respectively) ........................ $229,781,135 $198,295,385
------------ ------------
------------ ------------
</TABLE>
- ------------
See Notes to Financial Statements.
33
<PAGE>
EMERALD EQUITY VALUE FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
LONG-TERM INVESTMENTS -- 98.4%
COMMON STOCKS -- 98.4%
AEROSPACE & AIR TRANSPORTATION -- 2.8%
AMR Corp.* ............................................................................. 300 $ 28,313
Delta Air Lines ........................................................................ 200 16,575
Raytheon Co. ........................................................................... 300 15,975
------------
60,863
------------
AUTOMOTIVE -- 4.7%
Chrysler Corp. ......................................................................... 200 13,325
Echlin, Inc. ........................................................................... 600 20,625
Ford Motor Co. ......................................................................... 600 21,900
General Motors Co. ..................................................................... 300 16,538
TRW, Inc. .............................................................................. 300 28,275
------------
100,663
------------
BANKING -- 5.1%
Chase Manhattan Corp. .................................................................. 400 28,000
Citicorp ............................................................................... 700 58,800
Mellon Bank Corp. ...................................................................... 400 22,850
------------
109,650
------------
BUILDING & FOREST PRODUCTS -- 1.0%
Weyerhauser Co. ........................................................................ 500 22,688
------------
CHEMICALS -- 4.6%
B.F. Goodrich Co. ...................................................................... 800 31,700
Dow Chemical ........................................................................... 600 50,175
Olin Corp. ............................................................................. 200 18,500
------------
100,375
------------
COMPUTERS & COMPUTER SERVICES -- 4.5%
International Business Machines ........................................................ 300 32,025
Seagate Technology Inc.* ............................................................... 300 17,625
Xerox Corp. ............................................................................ 300 47,213
------------
96,863
------------
CONTAINERS -- 1.1%
American President Cos., Ltd. .......................................................... 900 23,737
------------
ELECTRICAL EQUIPMENT & ELECTRONICS -- 3.1%
Cypress Semiconductor Corp.* ........................................................... 1,100 15,125
Eaton Corp. ............................................................................ 400 23,150
Rockwell International Corp. ........................................................... 200 11,675
Texas Instruments, Inc. ................................................................ 300 16,875
------------
66,825
------------
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
FINANCE & INSURANCE -- 14.8%
American Financial Group, Inc. ......................................................... 500 $ 15,000
BankAmerica Corp. ..................................................................... 600 45,150
BayBanks, Inc. ......................................................................... 500 54,000
Corestates Financial Corp. ............................................................. 600 23,625
Federal Home Loan Mortgage Corp. ....................................................... 300 24,787
Federal National Mortgage Assoc. ....................................................... 1,200 37,050
Finova Group ........................................................................... 300 15,900
First Tennessee National Corp. ......................................................... 600 20,175
NationsBank Corp. ...................................................................... 300 24,338
Salomon, Inc. .......................................................................... 700 29,313
Travelers Group, Inc. .................................................................. 750 31,125
------------
320,463
------------
FOOD, BEVERAGE & TOBACCO -- 5.8%
Canandaigua Wine Co., Inc.* ............................................................ 300 9,075
Dole Food Co. .......................................................................... 300 11,325
IBP Corp. .............................................................................. 1,000 27,375
Philip Morris Cos., Inc. ............................................................... 200 19,875
Safeway, Inc.* ......................................................................... 1,000 33,750
Vons Cos., Inc.* ....................................................................... 400 14,600
Wendy's International, Inc. ............................................................ 500 9,000
------------
125,000
------------
FOREST PRODUCTS & PAPER -- 3.1%
Harnischifeger Industries, Inc. ........................................................ 700 24,500
International Paper Co. ................................................................ 709 28,271
Union Camp Corp. ....................................................................... 300 15,788
------------
68,559
------------
HEALTH CARE -- 0.6%
Baxter International, Inc. ............................................................. 300 13,275
------------
INSURANCE -- 4.3%
Allstate Corp. ......................................................................... 400 16,900
Cigna Corp. ............................................................................ 200 22,975
Conseco, Inc. .......................................................................... 600 21,750
Lowes Corp. ............................................................................ 400 31,900
------------
93,525
------------
IRON / STEEL & OTHER MATERIALS -- 2.7%
Aluminum Co. of America ................................................................ 700 43,138
USX U.S. Steel Group Inc. .............................................................. 500 15,500
------------
58,638
------------
MANUFACTURING -- 2.3%
Johnson Controls ....................................................................... 300 20,925
Parker-Hannifin Corp. .................................................................. 700 28,525
------------
49,450
------------
METALS -- 0.7%
Reynolds Metal Co. ..................................................................... 300 16,200
------------
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
MINERAL RESOURCES -- 1.0%
Cyprus Amax Minerals Co. ............................................................... 900 $ 21,600
------------
OIL & GAS -- 16.6%
Amoco Corp. ............................................................................ 500 36,250
Atlantic Richfield Co. ................................................................. 200 23,925
Coastal Corp. .......................................................................... 700 28,700
Exxon Corp. ............................................................................ 1,100 93,225
Mobil Corp. ............................................................................ 600 67,725
Pacific Enterprises .................................................................... 500 13,187
Panenergy Corp. ........................................................................ 1,000 32,125
Texaco, Inc. ........................................................................... 500 41,875
USX-Marathon Group ..................................................................... 1,000 21,875
------------
358,887
------------
RAILROADS -- 1.3%
Conrail, Inc. .......................................................................... 400 28,100
------------
REAL ESTATE -- 0.1%
Castle & Cooke, Inc.* .................................................................. 66 1,155
------------
RETAIL -- 2.9%
Rite Aid Corp. ......................................................................... 700 20,562
Sears Roebuck & Co. .................................................................... 500 25,437
Tandy Corp. ............................................................................ 300 16,200
------------
62,199
------------
TRANSPORTATION -- 0.7%
Federal Express Corp.* ................................................................. 200 15,323
------------
UTILITIES - ELECTRIC -- 5.9%
DQE, Inc. .............................................................................. 600 16,125
Entergy Corp. .......................................................................... 900 23,625
FPL Group, Inc. ........................................................................ 900 38,475
Illinova Corp. ......................................................................... 700 18,375
Unicom Corp. ........................................................................... 1,100 30,388
------------
126,988
------------
UTILITIES & TELECOMMUNICATIONS -- 8.7%
Ameritech Corp. ........................................................................ 1,400 79,100
Bell Atlantic Corp. .................................................................... 300 18,712
GTE Corp. .............................................................................. 1,100 47,025
WorldCom, Inc.* ........................................................................ 900 43,988
------------
188,825
------------
TOTAL COMMON STOCKS (COST $1,966,043)..................................................... 2,129,851
------------
TOTAL LONG-TERM INVESTMENTS (COST $1,966,043)............................................. 2,129,851
------------
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
SHORT-TERM INVESTMENTS -- 2.1%
OPEN-END INVESTMENT COMPANIES -- 2.1%
Provident Institutional Temp Cash Fund ................................................. 44,707 $ 44,707
------------
TOTAL SHORT-TERM INVESTMENTS (COST $44,707)............................................... 44,707
------------
TOTAL INVESTMENTS (COST $2,010,750)(A) -- 100.5%.......................................... 2,174,558
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.5%)........................................... (11,227)
------------
NET ASSSETS -- 100.0% $ 2,163,331
------------
------------
</TABLE>
- ---------------
*Percentages indicated are based on net assets of $2,163,331.
(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....... $ 194,724
Unrealized depreciation....... (30,916)
------------
Net unrealized appreciation... $ 163,808
------------
------------
*Represents non-income producing security.
See Notes to Financial Statements.
37
<PAGE>
EMERALD EQUITY VALUE FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (cost $2,010,750) .......... $ 2,174,558
Dividends receivable .......................................... 7,425
Deferred organization costs ................................... 12,700
Prepaid expenses and other .................................... 25,743
-------------
Total assets .................................................... 2,220,426
-------------
LIABILITIES:
Payable to Investment Adviser ................................. 13,120
Dividends payable ............................................. 13,858
Payable to brokers for investment securities purchased ........ 90
Accrued expenses and other payables:
Transfer agent fees ......................................... 26,042
Other ....................................................... 3,985
-------------
Total liabilities ............................................... 57,095
-------------
NET ASSETS ...................................................... $ 2,163,331
-------------
-------------
Net Asset Value, Offering Price and Redemption Price per Share:
Retail Shares:
($1,087/101 shares of beneficial interest issued and
outstanding $0.001 par value, unlimited number of shares
authorized) ................................................ $ 10.81
-------------
-------------
Institutional Shares:
($2,162,244/200,101 shares of beneficial interest issued and
outstanding $0.001 par value, unlimited number of shares
authorized) ................................................ $ 10.81
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par ......................... $ 200
Additional paid-in capital .................................... 2,000,816
Accumulated net realized losses on investment transactions .... (1,493)
Net unrealized appreciation of investments .................... 163,808
-------------
Net Assets, May 31, 1996 ........................................ $ 2,163,331
-------------
-------------
</TABLE>
- -------------
See Notes to Financial Statements.
38
<PAGE>
EMERALD EQUITY VALUE FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the period ended May 31, 1996 (a)(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends .......................................................... $ 23,646
Interest ........................................................... 2,199
------------
25,845
EXPENSES:
Investment Advisory fees ........................................... $ 5,400
Administration fees ................................................ 644
Transfer agent fees and expenses ................................... 32,916
Custodian fees and expenses ........................................ 3,768
Legal fees ......................................................... 125
Audit fees ......................................................... 3,713
Registration fees .................................................. 8,618
Amortization of organization costs ................................. 4,212
Other expenses ..................................................... 187
-----------
59,583
Less: Fee waivers and expense reimbursements ......................... (59,583) --
----------- ------------
Net Investment Income: ............................................... 25,845
------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS:
Net realized losses on securities transactions ..................... (1,493)
Net change in unrealized appreciation of investments ............... 163,808
------------
Net Realized and Unrealized Gains on Investments ..................... 162,315
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................. $ 188,160
------------
------------
</TABLE>
- ------------
(a) For the period December 27, 1995 (commencement of operations) through May
31, 1996.
See Notes to Financial Statements.
39
<PAGE>
EMERALD EQUITY VALUE FUND
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED
MAY 31,
1996(A)
--------------
(UNAUDITED)
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income ......................................................................... $ 25,845
Net realized losses on securities transactions ................................................ (1,493)
Net change in unrealized appreciation of investments .......................................... 163,808
--------------
Net increase in net assets resulting from operations .......................................... 188,160
--------------
Dividends to shareholders from net investment income
Retail Shares ................................................................................. (13)
Institutional Shares .......................................................................... (25,832)
--------------
Total dividends to shareholders from net investment income ...................................... (25,845)
--------------
Fund Share Transactions
Net proceeds from shares subscribed ........................................................... 2,001,010
Net asset value of shares issued to shareholders in reinvestment of dividends and
distributions ............................................................................... 6
--------------
Net increase in net assets from Fund share transactions ....................................... 2,001,016
--------------
Total Increase .................................................................................. 2,163,331
Net Assets:
Beginning of period ........................................................................... --
--------------
End of period ................................................................................. $ 2,163,331
--------------
--------------
</TABLE>
- ------------
(a) For the period December 27, 1995 (commencement of operations) through May
31, 1996.
See Notes to Financial Statements.
40
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
LONG-TERM INVESTMENTS -- 98.2%
COMMON STOCKS -- 98.2%
AIRLINES -- 1.0%
British Airways, ADR ......................................................... 250 $ 21,687
------------
APPAREL -- 1.9%
Benetton Group Spa, ADR ...................................................... 1,633 40,008
------------
AUTOMOTIVE -- 7.9%
Daimler-Benz AG, ADR ......................................................... 1,943 105,894
Fiat SPA, ADR ................................................................ 2,680 46,230
Honda Motor Co Ltd, ADR ...................................................... 359 17,142
------------
169,266
------------
BANKING & FINANCE -- 13.8%
Australia and New Zealand Banking, ADR ....................................... 430 10,320
Banco Bilbao Vizcaya, ADR .................................................... 786 29,180
Banco Santander SA, ADR ...................................................... 269 12,172
Bank of Tokyo-Mitsubishi, ADR ................................................ 3,190 75,364
Barclays PLC, ADR ............................................................ 468 22,054
Corporacion Bancaria de Espana-ADR ........................................... 650 13,650
Invesco PLC, ADR ............................................................. 106 4,055
Istituto Mobiliare Italia, ADR ............................................... 3,807 94,699
National Westminster Bank, ADR ............................................... 219 12,647
Westpac Banking, ADR ......................................................... 965 22,316
------------
296,457
------------
BEVERAGES -- 9.0%
Cadbury Schweppes PLC, ADR ................................................... 157 4,477
Kirin Brewery Co., ADR ....................................................... 895 112,323
LVMH Moet Hennesey, ADR ...................................................... 1,561 76,099
------------
192,899
------------
BROADCASTING & CABLE -- 1.4%
Carlton Comm PLC, ADR ........................................................ 811 30,615
------------
BUILDING & BUILDING PRODUCTS -- 0.1%
Fletcher Challenge Building, ADR* ............................................ 104 2,132
------------
CHEMICALS -- 4.4%
Akzo Nobel NV, ADR ........................................................... 375 22,734
Norsk Hydro A/S, ADR ......................................................... 329 15,422
Rhone-Poulenc SA, ADR ........................................................ 2,299 56,613
------------
94,769
------------
</TABLE>
41
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
COMMERCIAL SERVICES -- 0.6%
BET PLC, ADR ................................................................. 956 13,384
------------
ELECTRICAL EQUIPMENT & ELECTRONICS -- 12.8%
Hitachi LTD, ADR ............................................................. 629 $ 58,969
Kyocera Corp., ADR ........................................................... 185 25,391
NEC Corp., ADR ............................................................... 1,263 69,781
Pioneer Electronics, ADR ..................................................... 1,060 24,645
Sony Corp., ADR .............................................................. 425 27,253
TDK Corp., ADR ............................................................... 367 20,873
Thomson CSF, ADR ............................................................. 1,880 48,645
------------
275,557
------------
ENTERTAINMENT & LEISURE -- 1.0%
Rank Organization, ADR ....................................................... 1,408 22,880
------------
FOREST PRODUCTS & PAPER -- 0.4%
Fletcher Challange Paper, ADR* ............................................... 208 3,796
Fletcher Challange Forests, ADR .............................................. 425 5,525
------------
9,321
------------
INSURANCE -- 5.0%
Tokio Marine & Fire Insurance Co., ADR ....................................... 1,667 108,355
------------
MANUFACTURING -- 1.2%
Memtec LTD., ADR ............................................................. 248 7,564
Tomkins PLC, ADR ............................................................. 1,100 17,738
------------
25,302
------------
MEDICAL EQUIPMENT -- 3.2%
Novo-Nordisk, ADR ............................................................ 2,003 69,354
------------
OFFICE & BUSINESS EQUIPMENT SERVICES -- 3.2%
Canon, Inc., ADR ............................................................. 697 68,306
------------
OIL & GAS -- 7.1%
Elf Aquitaine, ADR ........................................................... 2,420 88,633
Fletcher Challange Energy, ADR* .............................................. 104 2,184
Petroleum Geo-Services, ADR* ................................................. 302 9,249
Royal Dutch Petroleum Co. -- New York, ADR ................................... 175 26,250
Total S.A., ADR .............................................................. 694 24,984
------------
151,300
------------
PHARMACEUTICALS -- 0.3%
Nycomed ASA, ADR Class B* .................................................... 286 5,577
Zeneca Group PLC, ADR ........................................................ 16 1,026
------------
6,603
------------
PHOTOGRAPHY -- 1.0%
Fuji Photo Film, ADR ......................................................... 347 21,514
------------
</TABLE>
42
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
PRINTING & PUBLISHING -- 2.6%
Elesvier NV, ADR ............................................................. 1,782 $ 55,465
------------
RETAIL -- 5.2%
Ito-Yokado Co. LTD., ADR ..................................................... 252 56,763
Koninklijke Ahold NV, ADR .................................................... 1,015 54,303
------------
111,066
------------
STEEL -- 0.2%
British Steel PLC, ADR ....................................................... 157 4,219
------------
TELECOMMUNICATIONS -- 10.6%
Alcatel Alsthom CGE, ADR ..................................................... 2,721 49,998
General Cable plc, ADR* ...................................................... 537 8,491
L.M. Ericsson Telecommunications, ADR ........................................ 404 9,317
Nippon Telegraph & Telephone, ADR ............................................ 1,547 56,562
Nokia Corp., ADR - A ......................................................... 232 10,092
PT Indosat, ADR .............................................................. 32 1,096
Royal PTT Nederland, ADR ..................................................... 330 11,921
Stet Soc Finanz Telef, ADR ................................................... 2,122 75,596
Tele-Danmark A/S, ADR ........................................................ 178 4,428
------------
227,501
------------
TOBACCO -- 0.4%
BAT Industries plc, ADR ...................................................... 530 8,679
------------
UTILITIES -- ELECTRIC -- 3.9%
Empresa Nacional Electridad, ADR ............................................. 805 50,111
National Power plc, ADR ...................................................... 608 19,380
Powergen plc, ADR ............................................................ 444 14,430
------------
83,921
------------
TOTAL COMMON STOCKS (COST $1,996,568)........................................... 2,110,560
------------
TOTAL LONG-TERM INVESTMENTS (COST $1,996,568)................................... 2,110,560
------------
SHORT-TERM INVESTMENTS -- 1.3%
OPEN-END INVESTMENT COMPANIES -- 1.3%
Provident Institutional Temp Cash Fund ....................................... 27,286 27,286
------------
TOTAL SHORT-TERM INVESTMENTS (COST $27,286)..................................... 27,286
------------
TOTAL INVESTMENTS (COST $2,023,855) (A) -- 99.5%................................ 2,137,846
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.5%................................... 9,967
------------
NET ASSETS -- 100.0% $ 2,147,813
------------
------------
</TABLE>
- ---------------
Percentages are based on net assets of $2,147,813.
ADR -- American Depository Receipts
(a) The cost for financial reporting purposes is substantially the same for
federal income tax purposes and differs from value by that net realized
appreciation of securities as follows:
Unrealized appreciation....... $ 153,522
Unrealized depreciation....... (39,531)
------------
Net unrealized appreciation... $ 113,991
------------
------------
*Represents non-income producing security.
See Notes to Financial Statements.
43
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (cost $2,023,855) .......... $ 2,137,846
Dividends receivable .......................................... 8,163
Deferred organization costs ................................... 12,698
Prepaid expenses and other .................................... 31,074
-------------
Total assets .................................................... 2,189,781
-------------
LIABILITIES:
Payable to Investment Adviser ................................. 11,887
Payable to brokers for investment securities purchased ........ 246
Accrued expenses and other payables:
Transfer agent fees ......................................... 25,853
Other ....................................................... 3,982
-------------
Total liabilities ............................................... 41,968
-------------
NET ASSETS ...................................................... $ 2,147,813
-------------
-------------
Net Asset Value, Offering Price and Redemption Price per Share:
Retail Shares:
($1,066/100 shares of beneficial interest issued and
outstanding $0.001 par value, unlimited number of shares
authorized)................................................. $ 10.65
-------------
-------------
Institutional Shares:
($2,146,747/201,510 shares of beneficial interest issued and
outstanding $0.001 par value, unlimited number of shares
authorized) $ 10.65
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par ......................... $ 202
Additional paid-in capital .................................... 2,015,809
Accumulated undistributed net investment income ............... 15,207
Accumulated net realized gains on investment transactions ..... 2,604
Net unrealized appreciation of investments .................... 113,991
-------------
Net Assets, May 31, 1996 ........................................ $ 2,147,813
-------------
-------------
</TABLE>
- ------------
See Notes to Financial Statements.
44
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the period ended May 31, 1996 (a)(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends............................................................. $ 13,874
Interest.............................................................. 2,495
---------
16,369
EXPENSES:
Investment Advisory fees.............................................. $ 8,794
Administration fees................................................... 629
Transfer agent fees and expenses...................................... 32,916
Custodian fees and expenses........................................... 5,760
Legal fees............................................................ 125
Audit fees............................................................ 3,713
Registration fees..................................................... 8,618
Amortization of organization costs.................................... 4,212
Other expenses........................................................ 187
---------
64,954
Less: Fee waivers and expense reimbursements............................ (64,954) --
--------- ---------
Net Investment Income: 16,369
---------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS:
Net realized gains on securities transactions......................... 2,604
Net change in unrealized appreciation of investments.................. 113,991
---------
Net Realized and Unrealized Gains on Investments...................... 116,595
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................... $ 132,964
---------
---------
</TABLE>
- ---------------
(a) For the period December 27, 1995 (commencement of operations) through May
31, 1996.
See Notes to Financial Statements.
45
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD
ENDED
MAY 31, 1996(A)
---------------
(UNAUDITED)
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income ......................................................................... $ 16,369
Net realized gains on securities transactions ................................................. 2,604
Net change in unrealized appreciation of investments .......................................... 113,991
---------------
Net increase in net assets resulting from operations .......................................... 132,964
---------------
Dividends to shareholders from net investment income
Institutional Shares .......................................................................... (1,162)
---------------
Fund Share Transactions
Net proceeds from shares subscribed ........................................................... 2,016,011
---------------
Total Increase .................................................................................. 2,147,813
NET ASSETS:
Beginning of period ........................................................................... --
---------------
End of period (including undistributed net investment income of $15,207) ...................... $ 2,147,813
---------------
---------------
</TABLE>
- ---------------
(a) For the period December 27, 1995 (commencement of operations) through May
31, 1996.
See Notes to Financial Statements.
46
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- -------------
<S> <C> <C>
LONG-TERM INVESTMENTS -- 94.8%
COMMON STOCKS -- 94.8%
AIRLINES -- 1.9%
Alaska Air Group ...................................................................... 69,100 $ 1,787,962
Mesa Airlines* ........................................................................ 57,300 759,225
-------------
2,547,187
-------------
APPAREL -- 3.7%
Claire's Stores ....................................................................... 62,800 1,570,000
Ross Stores ........................................................................... 86,600 3,399,050
-------------
4,969,050
-------------
AUTOMOBILE PARTS -- 3.2%
Gentex Corp.* ......................................................................... 15,700 710,425
Intermet Corp. ........................................................................ 122,100 2,060,438
Masland ............................................................................... 31,900 837,375
Myers Industries ...................................................................... 32,500 662,188
-------------
4,270,426
-------------
BANKING & FINANCE -- 10.7%
Aames Financial Corp. ................................................................. 101,250 3,315,937
Americredit Corp.* .................................................................... 198,900 3,008,362
Amresco, Inc. ......................................................................... 41,400 760,725
California Federal Bank* .............................................................. 115,600 2,124,150
First Merchants Acceptance Co.* ....................................................... 110,200 2,479,500
Imperial Credit Industries* ........................................................... 90,800 2,655,900
-------------
14,344,574
-------------
BUILDING & BUILDING PRODUCTS -- 2.7%
D.R. Horton, Inc.* .................................................................... 16,966 178,143
NCI Building Systems* ................................................................. 42,600 1,459,050
Redman Industries* .................................................................... 87,900 1,922,813
-------------
3,560,006
-------------
COMMUNICATIONS EQUIPMENT & SYSTEMS -- 6.5%
Brightpoint, Inc.* .................................................................... 113,200 2,943,200
Colonial Data Technologies* ........................................................... 67,300 1,312,350
Davox Corp.* .......................................................................... 30,300 916,575
P-Com, Inc.* .......................................................................... 118,300 3,534,213
-------------
8,706,338
-------------
COMPUTERS & COMPUTER SERVICES -- 15.5%
Applied Magnetics Corp.* .............................................................. 127,000 2,174,875
Aspen Technology* ..................................................................... 13,000 721,500
Auspex Systems, Inc.* ................................................................. 97,300 2,250,062
Brooktrout Technologies* .............................................................. 4,600 209,300
Chips & Technologies* ................................................................. 159,600 1,795,500
Comshare, Inc.* ....................................................................... 70,300 2,073,850
Genicom Corp.* ........................................................................ 196,200 1,152,675
Infocus Systems* ...................................................................... 15,900 914,250
Mylex Corp.* .......................................................................... 113,600 2,939,400
National Data Corp. ................................................................... 41,000 1,547,750
Tech Data Corp.* ...................................................................... 80,000 1,860,000
Technology Solutions Co.* ............................................................. 17,800 629,675
U.S. Office Products* ................................................................. 35,000 1,330,000
</TABLE>
47
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- -------------
<S> <C> <C>
COMPUTERS & COMPUTER SERVICES -- (CONTINUED)
Wall Data, Inc.* ...................................................................... 52,400 $ 1,179,000
-------------
20,777,837
-------------
COSMETICS -- 1.9%
Parlux Fragrances* .................................................................... 224,900 2,586,350
-------------
EDUCATION -- 1.6%
National Education Corp.* ............................................................. 116,500 2,169,813
-------------
ELECTRONICS & ELECTRONIC EQUIPMENT -- 12.4%
Aetrium, Inc.* ........................................................................ 7,900 153,062
Altron, Inc.* ......................................................................... 95,050 2,257,437
Checkpoint Systems, Inc.* ............................................................. 104,800 4,074,100
Data Documents, Inc.* ................................................................. 600 7,650
Genrad, Inc.* ......................................................................... 37,200 632,400
International Rectifier Corp.* ........................................................ 70,100 1,822,600
Jabil Circuit, Inc.* .................................................................. 76,000 1,007,000
Kuhlman Corp. ......................................................................... 123,100 2,123,475
Nu Horizons Electronics, Inc. * ....................................................... 199,300 2,939,675
Smart Modular Technologies, Inc.* ..................................................... 64,200 1,292,025
Zygo Corp.* ........................................................................... 5,000 292,500
-------------
16,601,924
-------------
ENTERTAINMENT -- 4.7%
AMC Entertainment* .................................................................... 94,400 3,138,800
Regal Cinemas* ........................................................................ 66,900 3,102,488
-------------
6,241,288
-------------
HEALTH CARE & SUPPLIES -- 5.2%
Chronimed, Inc.* ...................................................................... 77,000 1,578,500
CNS, Inc.* ............................................................................ 49,600 1,097,400
Collagen .............................................................................. 102,400 2,201,600
ConMed Corp.* ......................................................................... 35,800 1,181,400
PHP Healthcare* ....................................................................... 31,500 1,043,438
-------------
7,102,338
-------------
HOME FURNISHINGS -- 0.5%
Ethan Allen Interiors, Inc. ........................................................... 26,500 695,625
-------------
INSURANCE -- 0.5%
CRA Managed Care, Inc.* ............................................................... 10,900 501,400
-------------
MACHINERY & EQUIPMENT -- 2.9%
Advanced Technology Labs, Inc.* ....................................................... 72,600 2,559,150
DT Industries, Inc. ................................................................... 62,100 1,203,186
Lindsay Manufacturing Co. ............................................................. 2,200 84,150
-------------
3,846,486
-------------
MANUFACTURING -- 3.1%
Maverick Tube* ........................................................................ 196,800 2,583,000
Paragon Trade Brands* ................................................................. 62,100 1,529,213
-------------
4,112,213
-------------
MEDICAL -- 3.6%
FPA Medical Management* ............................................................... 61,300 1,080,413
Lincare Holdings* ..................................................................... 37,300 1,408,075
</TABLE>
48
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- -------------
<S> <C> <C>
MEDICAL -- (CONTINUED)
Prime Medical Services* ............................................................... 119,000 $ 2,275,875
-------------
4,764,363
-------------
OIL & GAS -- 3.6%
Energy Ventures, Inc.* ................................................................ 56,700 1,892,363
Helmerich & Payne ..................................................................... 48,600 1,761,750
Pride Petroleum* ...................................................................... 68,300 1,178,175
-------------
4,832,288
-------------
PUBLISHING -- 0.9%
Media General ......................................................................... 33,300 1,248,750
-------------
RECREATION & LEISURE -- 3.8%
Coastcast Corp.* ...................................................................... 129,400 3,315,875
Galoob Lewis* ......................................................................... 83,900 1,824,825
-------------
5,140,700
-------------
RESTAURANTS -- 2.2%
Longhorn Steaks, Inc.* ................................................................ 116,600 3,002,450
-------------
RETAIL -- SPECIAL -- 3.0%
Finish Line, Inc.* .................................................................... 76,300 1,907,500
InaCom Corp.* ......................................................................... 98,000 2,082,500
-------------
3,990,000
-------------
WHOLESALE -- FOOD -- 0.7%
Richfood Holdings, Inc. ............................................................... 26,000 871,000
-------------
TOTAL COMMON STOCKS (COST $110,068,314).................................................. 126,882,406
-------------
TOTAL LONG-TERM INVESTMENTS (COST $110,068,314).......................................... 126,882,406
-------------
SHORT-TERM INVESTMENTS -- 4.4%
OPEN-END INVESTMENT COMPANIES -- 4.4%
Dreyfus Cash Management Fund .......................................................... 563,297 563,297
Provident Institutional Temp Cash Fund ................................................ 5,387,322 5,387,322
-------------
TOTAL SHORT-TERM INVESTMENTS (COST $5,950,619)........................................... 5,950,619
-------------
TOTAL INVESTMENTS (COST $116,018,933) -- 99.2%........................................... 132,833,025
Other assets in excess of liabilities -- 0.8% 1,069,059
-------------
NET ASSETS -- 100.0% $ 133,902,084
-------------
-------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $133,902,084.
* Non-income producing security.
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting purposes in excess of federal income tax reporting of
$50,950. Cost for federal income tax purposes differs from value by net
unrealized appreciation of securities as follows:
Unrealized appreciation....... $ 18,950,726
Unrealized depreciation....... (2,187,584)
------------
Net unrealized appreciation... $ 16,763,142
------------
------------
See Notes to Financial Statements
49
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $116,018,933)............................ $ 132,833,025
Cash............................................................................... 82
Interest receivable................................................................ 9,666
Dividends receivable............................................................... 15,209
Receivable for capital shares issued............................................... 564,231
Receivable from brokers for investment securities sold............................. 3,944,992
Deferred organization costs........................................................ 32,083
Prepaid expenses and other......................................................... 15,400
-------------
Total assets......................................................................... 137,414,688
-------------
LIABILITIES:
Dividends payable.................................................................. 10
Payable for capital shares redeemed................................................ 46,516
Payable to brokers for investment securities purchased............................. 3,243,509
Accrued expenses and other payables:
Investment Advisory fees......................................................... 109,479
Administration fees.............................................................. 5,520
Shareholder Processing fees (Retail Shares)...................................... 1,884
Combined Distribution and Service fees (Retail Shares)........................... 1,884
Custodian and transfer agent fees................................................ 24,779
Other............................................................................ 79,023
-------------
Total liabilities.................................................................... 3,512,604
-------------
NET ASSETS........................................................................... $ 133,902,084
-------------
-------------
Net Asset Value, Offering Price and Redemption Price per Share:
Retail Shares:
($9,342,981/643,461 shares of beneficial interest issued and outstanding $0.001
par value, unlimited number of shares authorized)............................... $ 14.52
-------------
-------------
Institutional Shares:
($124,559,103/8,549,328 shares of beneficial interest issued and outstanding
$0.001 par value, unlimited number of shares authorized)........................ $ 14.57
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par.............................................. $ 9,193
Additional paid-in capital......................................................... 98,220,370
Accumulated net realized gains on investment transactions.......................... 19,279,495
Net unrealized appreciation of investments......................................... 16,814,092
Distributions in excess of net investment income................................... (421,066)
-------------
Net Assets, May 31, 1996............................................................. $ 133,902,084
-------------
-------------
</TABLE>
- ------------
See Notes to Financial Statements.
50
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the six months ended May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends....................................... $ 276,550
Interest........................................ 36,385
-----------
312,935
EXPENSES:
Investment Advisory fees........................ $ 532,448
Administration fees............................. 32,562
Shareholder Processing fees (Retail Shares)..... 5,899
Combined Distribution and Service fees (Retail
Shares)....................................... 6,104
Combined Distribution and Service fees (Class B
Shares)....................................... 7,145
Transfer agent fees and expenses................ 42,722
Custodian fees and expenses..................... 28,115
Legal fees...................................... 2,795
Audit fees...................................... 5,556
Reports to shareholders (Class B Shares)........ 612
Reports to shareholders (Institutional
Shares)....................................... 14,453
Amortization of organization costs.............. 6,290
Registration fees............................... 14,814
Trustees' fees.................................. 2,167
Other expenses.................................. 36,294
-----------
737,976
Less: Expense reimbursements...................... (3,975) 734,001
----------- -----------
Net Investment Loss: (421,066)
-----------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS:
Net realized gains on securities transactions... 19,473,869
Net change in unrealized appreciation of
investments................................... 4,961,326
-----------
Net Realized and Unrealized Gains on
Investments................................... 24,435,195
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS...................................... $24,014,129
-----------
-----------
</TABLE>
- ------------
See Notes to Financial Statements.
51
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
MAY 31, NOVEMBER
1996 30, 1995
-------------- -----------
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment loss............................. $ (421,066) $ (503,034)
Net realized gains on securities transactions... 19,473,869 11,174,347
Net change in unrealized appreciation of
investments................................... 4,961,326 9,904,841
-------------- -----------
Net increase in net assets resulting from
operations.................................... 24,014,129 20,576,154
-------------- -----------
Distributions to shareholders from net realized
gains:
Retail Shares................................... (211,250) --
Class B Shares.................................. (6,891,681) --
Institutional Shares............................ (206,488) --
-------------- -----------
Total distributions to shareholders from net
realized gains.................................. (7,309,419) --
-------------- -----------
Fund Share Transactions
Net proceeds from shares subscribed............. 26,477,575 24,392,804
Net asset value of shares issued to shareholders
in reinvestment of dividends and
distributions................................. 6,529,948 --
Cost of shares redeemed......................... (9,585,879) (8,022,428)
-------------- -----------
Net increase in net assets from Fund share
transactions.................................. 23,421,644 16,370,376
-------------- -----------
Total Increase.................................... 40,126,354 36,946,530
Net Assets:
Beginning of period............................. 93,775,730 56,829,200
-------------- -----------
End of period (net of distributions in excess of
net investment income of $421,066 and $0,
respectively)................................. $ 133,902,084 $93,775,730
-------------- -----------
-------------- -----------
</TABLE>
- ------------
See Notes to Financial Statements.
52
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
MOODY'S/S&P MATURITY AMOUNT VALUE
RATINGS RATE DATE (000) (NOTE 2)
--------------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
LONG-TERM INVESTMENTS -- 99.8%
ASSET-BACKED SECURITIES -- 1.2%
Bank One Auto 1995, A-4 .............................. Aaa/AAA 6.90% 4/15/98 $ 1,000 $ 1,008,669
------------
TOTAL ASSET-BACKED SECURITIES (COST $999,219)........... 1,008,669
------------
CORPORATE OBLIGATIONS -- 15.9%
BANKING & FINANCE COMPANIES -- 7.9%
American Express Credit Corp., Debenture ............. Aa3/A+ 8.50 6/15/99 350 366,607
Associated Corp., N.A., Medium Term Note ............. Aa3/AA 5.62 3/14/97 750 748,070
Caterpillar Financial Services Corp., Floating Rate
Medium Term Note ................................... A2/A 5.78 4/1/99 1,000 988,045
CNA Financial Corp. Senior Note ...................... A3/A- 8.88 3/1/98 500 518,271
General Electric Capital Corp., Debenture ............ Aaa/AAA 8.30 9/20/09 250 270,330
General Motors Acceptance Corp., Medium Term Notes ... Baa1/BBB+ 7.85 11/17/97 1,000 1,020,124
General Motors Acceptance Corp., Medium Term Notes ... A3/A- 8.88 6/1/10 250 272,861
Interamerican Development Bank, Debenture ............ Aaa/AAA 8.40 9/1/09 500 553,900
Merrill Lynch ........................................ A1/A+ 6.70 8/1/00 1,000 1,007,291
NYNEX Capital Funding, Variable Rate Medium Term
Note(a) ............................................ A3/A- 7.63 10/15/09 875 908,168
------------
6,653,667
------------
FOOD & BEVERAGE -- 0.6%
Coca-Cola Enterprises, Inc. .......................... A3/A- 8.00 1/4/05 500 529,160
------------
OIL & GAS -- 0.2%
Texaco Capital Income, Debenture ..................... A1/A+ 8.65 1/30/98 150 155,186
------------
TELECOMMUNICATIONS -- 4.2%
A T & T Corp., Senior Notes, Callable 1/15/02 @
103.21 ............................................. Aa3/AA 8.13 1/15/22 400 408,500
Chesapeake & Potomac Telephone of Maryland, Debenture,
Putable 10/15/96 @ 100 ............................. Aa3/AA 8.00 10/15/29 500 532,976
New England Telegraph & Telephone, Debenture ......... Aa2/AA- 7.88 11/15/29 2,000 2,071,226
Pacific Telephone & Telegraph, Callable 2/1/97 @
101.45 ............................................. Aa3/AA- 7.25 2/1/08 50 48,036
Southwestern Bell, Debenture, Callable 5/1/97 @
102.02 ............................................. A1/AA 7.38 5/1/12 500 478,939
------------
3,539,677
------------
UTILITIES -- 2.1%
Northern States Powers ............................... A1/AA- 5.50 2/1/99 750 727,326
Wisconsin Electric Power, Callable 9/1/97 @ 105.95 ... Aa2/AA+ 9.13 9/1/24 1,000 1,061,631
------------
1,788,957
------------
WASTE DISPOSAL -- 0.9%
WMX Technologies, Inc., Putable 4/30/97 @ 100 ........ A1/A+ 6.22 4/30/04 750 768,859
------------
TOTAL CORPORATE OBLIGATIONS (COST $13,399,264).......... 13,435,506
------------
</TABLE>
53
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
RATE DATE (000) (NOTE 2)
---------- --------- --------- ------------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 14.3%
FEDERAL HOME LOAN MORTGAGE CORP. -- 5.6%
Federal Home Loan Mortgage Corp., Pool M80052 ..................... 8.50% 7/1/98 $ 100 $ 103,081
Federal Home Loan Mortgage Corp., Pool M80099 ..................... 8.00 6/1/99 179 184,245
Federal Home Loan Mortgage Corp., 5 Year Balloon, Pool L90152 ..... 8.00 2/1/00 354 356,562
Federal Home Loan Mortgage Corp., 5 Year Balloon .................. 8.50 2/1/00 320 324,748
Federal Home Loan Mortgage Corp., Pool E20195 ..................... 7.50 9/1/00 2,521 2,522,145
Federal Home Loan Mortgage Corp., Debenture ....................... 6.20 9/8/08 660 592,601
Federal Home Loan Mortgage Corp., Pool 288434 ..................... 8.00 7/1/10 396 403,270
Federal Home Loan Mortgage Corp., CMO 138-D** ..................... 8.50 2/15/21 200 204,514
------------
4,691,166
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 8.7%
Federal National Mortgage Association Corp., ...................... 6.35 6/10/05 500 475,027
Federal National Mortgage Association Corp., 7 Year Balloon, Pool
50609 ........................................................... 8.00 6/1/99 207 212,684
Federal National Mortgage Association Corp. , Medium Term Note .... 6.63 4/18/01 500 497,185
Federal National Mortgage Association Corp., Medium Term Note,
Callable 1/21/97 @ 100 .......................................... 6.14 1/21/04 1,000 925,510
Federal National Mortgage Association Corp., Medium Term Note,
Callable 2/18/97 @ 100 .......................................... 6.48 2/18/04 2,000 1,894,858
Federal National Mortgage Association Corp., Pool 124975 .......... 7.50 8/1/08 839 843,144
Federal National Mortgage Association Corp., Pool 247516 .......... 8.50 8/1/11 1,449 1,488,875
Federal National Mortgage Association Corp., CMO 1991-1G** ........ 7.00 1/25/21 1,000 977,239
------------
7,314,522
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 0.0%
Government National Mortgage Association, Pool 220063 ............. 10.00 2/15/18 8 8,536
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (COST $12,063,604).......... 12,014,224
------------
U.S. GOVERNMENT OBLIGATIONS -- 10.0%
U.S. TREASURY BONDS -- 0.8%
U.S. Treasury Bond ................................................ 12.00 8/15/13 500 698,281
------------
U.S. TREASURY NOTES -- 6.1%
U.S. Treasury Note ................................................ 5.75 10/31/00 1,000 967,186
U.S. Treasury Note ................................................ 5.88 2/15/04 2,000 1,886,250
U.S. Treasury Note ................................................ 5.88 11/15/05 1,000 931,250
U.S. Treasury Note ................................................ 5.63 2/15/06 1,500 1,376,718
------------
5,161,404
------------
U.S. TREASURY STRIPS -- 3.1%
U.S. Treasury Strip ............................................... 6.77+ 2/15/07 5,000 2,377,305
U.S. Treasury Strip ............................................... 7.59+ 8/15/08 500 212,445
------------
2,589,750
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS (COST $8,730,182).................. 8,449,435
------------
</TABLE>
54
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
COMMON STOCKS -- 54.8%
AIRLINES -- 0.9%
Alaska Air Group, Inc. ................................................................. 5,900 $ 152,663
AMR Corp.* ............................................................................. 6,100 575,688
Mesa Airlines Inc.* .................................................................... 3,900 51,675
------------
780,026
------------
APPAREL & SHOES -- 1.4%
Nike, Inc. ............................................................................. 8,400 843,150
Tommy Hilfinger* ....................................................................... 5,700 313,500
------------
1,156,650
------------
BUILDING & BUILDING PRODUCTS -- 0.9%
Clayton Homes, Inc. .................................................................... 13,970 268,923
D.R. Horton, Inc.* ..................................................................... 1,473 15,467
Foster Wheeler Corp. ................................................................... 6,400 284,800
NCI Building Systems* .................................................................. 3,100 106,175
Redman Industies, Inc.* ................................................................ 7,100 155,313
------------
830,678
------------
CHEMICALS -- 0.3%
Imperial Chemical Industries ........................................................... 4,300 228,438
------------
COMMUNICATIONS EQUIPMENT & SYSTEMS -- 0.6%
Brightpoint, Inc.* ..................................................................... 8,800 228,800
P-Com, Inc.* ........................................................................... 9,200 274,850
------------
503,650
------------
COMPUTERS & COMPUTER SERVICES -- 8.5%
Adaptec, Inc.* ......................................................................... 3,900 233,513
Altron, Inc.* .......................................................................... 7,000 166,250
Applied Magnetics Corp.* ............................................................... 9,800 167,825
Aspen Technology* ...................................................................... 900 49,950
Auspex Systems, Inc.* .................................................................. 8,200 189,625
BMC Software* .......................................................................... 3,000 189,000
Brooktrout Technologies* ............................................................... 400 18,200
Cadence Design Systems, Inc.* .......................................................... 10,600 601,550
Chips & Technologies* .................................................................. 12,000 135,000
Cisco Systems, Inc.* ................................................................... 14,000 766,500
CompUSA, Inc.* ......................................................................... 17,200 752,500
Computer Associates International, Inc. ................................................ 8,600 625,650
Comshare, Inc.* ........................................................................ 4,900 144,550
Gateway 2000 Inc.* ..................................................................... 5,300 200,738
Genicom Corp.* ......................................................................... 13,500 79,313
Hewlett Packard Co. .................................................................... 2,800 298,900
Honeywell, Inc. ........................................................................ 5,900 299,425
Infocus Systems* ....................................................................... 1,300 74,750
Intel Corp. ............................................................................ 4,600 347,300
Microsoft Corp.* ....................................................................... 3,400 403,750
Mylex Corp.* ........................................................................... 8,900 230,288
National Data Corp. .................................................................... 3,300 124,575
Oak Technologies, Inc. ................................................................. 4,800 61,200
Sterling Software, Inc.* ............................................................... 3,700 297,850
Sun Microsystems, Inc.* ................................................................ 7,100 444,638
Tech Data Corp.* ....................................................................... 7,200 167,400
Technology Solutions Co.* .............................................................. 1,300 45,988
Wall Data, Inc.* ....................................................................... 3,400 76,500
------------
7,192,728
------------
</TABLE>
55
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
ELECTRICAL EQUIPMENT & ELECTRONICS -- 5.9%
Aetrium Inc.* .......................................................................... 600 $ 11,625
Applied Materials* ..................................................................... 6,600 245,850
C-Cube Microsystems* ................................................................... 3,300 165,000
Checkpoint Systems, Inc.* .............................................................. 8,300 322,663
Davox Corp.* ........................................................................... 2,700 81,675
General Electric Co. ................................................................... 12,000 993,000
Genrad Inc.* ........................................................................... 3,000 51,000
Gentex Corp.* .......................................................................... 1,100 49,775
International Rectifier Corp.* ......................................................... 4,900 127,400
Jabil Circut, Inc.* .................................................................... 4,200 55,650
Johnson Controls, Inc. ................................................................. 3,800 265,050
KEMET Corp.* ........................................................................... 12,000 267,000
Komag, Inc.* ........................................................................... 5,000 173,125
Kuhlman Corp. .......................................................................... 9,100 156,975
Maxim Integrated Products* ............................................................. 7,700 261,800
Nu Horizons Electronics, Inc.* ......................................................... 16,200 238,950
Raychem Corp. .......................................................................... 6,600 493,350
SCI System, Inc.* ...................................................................... 5,100 229,500
Seagate Technology* .................................................................... 3,500 205,625
Smart Modular Technologies* ............................................................ 4,500 90,563
U.S. Robotics Corp.* ................................................................... 4,800 440,400
Zygo Corp.* ............................................................................ 200 11,700
------------
4,937,676
------------
ENTERTAINMENT & LEISURE -- 3.9%
AMC Entertainment* ..................................................................... 7,300 242,725
Callaway Golf Co. ...................................................................... 13,400 403,673
Carnival Cruise Lines, Inc. ............................................................ 16,100 478,975
Coastcast Corp.* ....................................................................... 10,000 256,250
Galoob Lewis Toys Inc.* ................................................................ 6,900 150,075
Marriot International Corp.* ........................................................... 5,500 261,250
Mattel, Inc. ........................................................................... 20,077 547,098
Media General "A"* ..................................................................... 2,200 82,500
Regal Cinemas, Inc.* ................................................................... 6,100 282,888
Tyco International, Ltd.* .............................................................. 5,300 209,350
Walt Disney Co. ........................................................................ 5,681 345,121
------------
3,259,905
------------
FINANCE & INSURANCE -- 6.0.%
Aames Financial Corp. .................................................................. 7,850 257,088
Amercredit Inc.* ....................................................................... 16,400 248,050
Amresco Inc. ........................................................................... 2,700 49,613
BankAmerica Corp. ...................................................................... 7,000 526,750
BayBanks, Inc. ......................................................................... 3,200 345,600
California Federal Bank* ............................................................... 10,500 192,938
CRA Mnaaged Care, Inc.* ................................................................ 700 32,200
Equifax, Inc. .......................................................................... 15,600 386,100
First Merchants Acceptance Corp.* ...................................................... 8,600 193,500
Green Tree Financial Corp. ............................................................. 11,000 360,250
Imperial Credit Industries* ............................................................ 7,100 207,675
MBNA Corp. ............................................................................. 13,300 407,313
NationsBank Corp. ...................................................................... 5,900 478,638
Paine Webber Group, Inc ................................................................ 12,800 280,000
SunAmerica, Inc. ....................................................................... 7,300 408,800
Travelers Corp. ........................................................................ 16,650 690,975
------------
5,065,490
------------
</TABLE>
56
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
FOOD, BEVERAGE & TOBACCO -- 3.1%
Boston Chicken* ........................................................................ 11,200 $ 365,400
Dole Food Co. .......................................................................... 10,100 381,275
Longhorn Steaks, Inc.* ................................................................. 8,300 213,725
Outback Steakhouse, Inc.* .............................................................. 10,900 412,838
PepsiCo , Inc. ......................................................................... 22,800 758,100
Philip Morris Cos., Inc. ............................................................... 4,200 417,375
Richfood Holdings ...................................................................... 2,100 70,350
------------
2,619,063
------------
FOREST PRODUCTS & PAPER -- 1.4%
Alco Standard Corporation .............................................................. 8,200 512,500
Harnischfeger Industries, Inc. ......................................................... 9,500 332,500
International Paper Co. ................................................................ 7,901 315,052
------------
1,160,052
------------
HEALTH CARE -- 5.0%
Advanced Technology Labs, Inc.* ........................................................ 5,700 200,925
Becton Dickinson ....................................................................... 4,100 348,500
Boston Scientific Corp.* ............................................................... 6,200 265,825
Chronimed, Inc.* ....................................................................... 6,000 123,000
CNS Inc.* .............................................................................. 4,000 88,500
Collagen Corp. ......................................................................... 8,300 178,440
ConMed Corp.* .......................................................................... 2,400 79,200
Foundation Health Corp.* ............................................................... 7,400 294,150
FPA Medical Management, Inc.* .......................................................... 4,200 74,025
HealthCare COMPARE Corp.* .............................................................. 11,300 546,638
HEALTHSOUTH Corp.* ..................................................................... 11,500 402,500
Johnson & Johnson ...................................................................... 6,000 584,250
Lincare Holdings Corp.* ................................................................ 2,800 105,700
Medtronic, Inc. ........................................................................ 2,800 157,500
Nellcor Puritan Bennett, Inc.* ......................................................... 2,800 152,600
OrNda Healthcorp* ...................................................................... 12,400 311,550
PHP Healthcare Corp.* .................................................................. 2,000 66,250
Prime Medical Services Inc.* ........................................................... 10,800 206,550
------------
4,186,103
------------
MANUFACTURING -- 1.9%
Black & Decker Corp. ................................................................... 6,500 267,313
Chrysler Corp. ......................................................................... 6,200 413,075
DT Industries, Inc. .................................................................... 4,600 89,125
Intermet Corp. ......................................................................... 10,000 168,750
Lear Seating Corp.* .................................................................... 8,600 332,175
Lindsay Manufacturing Co. .............................................................. 100 3,825
Masland ................................................................................ 2,100 55,125
Maverick Tube Corp.* ................................................................... 16,600 217,875
Myers Industries ....................................................................... 2,500 50,938
------------
1,598,201
------------
OFFICE & BUSINESS EQUIPMENT & SERVICES -- 0.8%
Data Documents, Inc.* .................................................................. 100 1,275
National Education Corp.* .............................................................. 10,600 197,425
The Olsten Corp. ....................................................................... 12,000 369,000
U.S. Office Products Co.* .............................................................. 2,700 102,600
------------
670,300
------------
OIL & GAS -- 3.2%
Energy Ventures, Inc.* ................................................................. 3,800 126,825
Halliburton Co. ........................................................................ 7,400 411,625
Helmerich & Payne ...................................................................... 3,600 130,500
</TABLE>
57
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
OIL & GAS -- (CONTINUED)
Mobil Corp. ............................................................................ 4,000 $ 451,500
Praxair, Inc. .......................................................................... 10,000 406,250
Pride Petroleum* ....................................................................... 5,900 101,775
USX-Marathon Group ..................................................................... 21,400 468,125
Williams Cos., Inc. .................................................................... 11,300 567,825
------------
2,664,425
------------
PERSONAL CARE -- 1.0%
Gillette Co. ........................................................................... 9,400 555,775
Paragon Trade Brands, Inc.* ............................................................ 5,300 130,510
Parlux Fragrances, Inc.* ............................................................... 16,700 192,050
------------
878,335
------------
PHARMACEUTICALS -- 2.6%
Amgen, Inc. ............................................................................ 6,900 410,550
Elan Corp., ADR* ....................................................................... 6,600 414,150
Merck & Co. ............................................................................ 7,900 510,538
Pfizer Inc. ............................................................................ 6,500 459,875
Schering-Plough Corp. .................................................................. 6,900 404,513
------------
2,199,626
------------
PHOTOGRAPHIC PRODUCTS -- 0.6%
Eastman Kodak Co. ...................................................................... 6,400 476,000
------------
RETAIL -- 2.5%
Claire's Stores ........................................................................ 4,600 115,000
Consolidated Stores Corp. .............................................................. 5,600 212,100
Ethan Allen Interiors, Inc. ............................................................ 1,800 47,250
Finish Line, Inc.* ..................................................................... 5,600 140,000
General Nutrition Co.* ................................................................. 20,700 320,845
Home Depot, Inc. ....................................................................... 5,366 274,337
InaCom Corp.* .......................................................................... 7,200 153,000
Ross Stores, Inc. ...................................................................... 7,300 286,525
Staples, Inc.* ......................................................................... 26,775 535,500
------------
2,084,557
------------
UTILITIES & TELECOMMUNICATIONS -- 3.8%
Ameritech Corp. ........................................................................ 9,800 553,700
Andrew Corp.* .......................................................................... 6,100 330,925
Calenergy, Inc.* ....................................................................... 7,200 192,600
Cincinnati Bell, Inc. .................................................................. 9,400 499,375
Colonial Data Technology Corp.* ........................................................ 5,300 103,350
Glenayre Technologies, Inc.* ........................................................... 4,050 199,463
Sprint Corp. ........................................................................... 12,500 529,688
Worldcom, Inc.* ........................................................................ 16,900 825,988
------------
3,235,089
------------
WASTE MANAGEMENT -- 0.5%
U.S.A. Waste Services, Inc.* ........................................................... 13,800 407,100
------------
TOTAL COMMON STOCKS (COST $36,341,652).................................................... 46,134,092
------------
</TABLE>
58
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
UNIT INVESTMENT TRUSTS -- 3.6%
S&P 400 Mid-Cap Receipt* ............................................................... 4,500 $ 214,383
S&P 500 Depositary Receipt* ............................................................ 41,500 2,775,314
------------
TOTAL UNIT INVESTMENT TRUSTS (COST $2,643,694)............................................ 2,989,697
------------
TOTAL LONG-TERM INVESTMENTS (COST $74,177,615)............................................ 84,031,623
------------
SHORT-TERM INVESTMENTS -- 0.7%
OPEN-END INVESTMENT COMPANIES -- 3.6%
Dreyfus Cash Management Fund ........................................................... 89,572 89,572
Provident Institutional TempCash Fund .................................................. 470,918 470,918
------------
TOTAL SHORT-TERM INVESTMENTS (COST $560,490).............................................. 560,490
------------
TOTAL INVESTMENTS (COST $74,738,106)(B) -- 100.5%......................................... 84,592,113
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.5%)........................................... (406,717)
------------
NET ASSETS -- 100.0%...................................................................... $ 84,185,396
------------
------------
</TABLE>
- ---------------
Percentages are based on net assets of $84,185,396.
* Non-income producing security.
** Collateralized Mortgage Obligation.
+ Effective yield at date of purchase.
ADR -- American Depositary Receipt.
(a) Steps up to 8.23% on 10/15/99.
(b) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting purposes in excess of federal income tax reporting of
$65,992. Cost for federal income tax purposes differs from value by net
unrealized appreciation of securities as follows:
Unrealized appreciation....... $ 10,184,152
Unrealized depreciation....... (396,137)
------------
Net unrealized appreciation... $ 9,788,015
------------
------------
See Notes to Financial Statements
59
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $74,738,106) ........ $ 84,592,113
Interest receivable ........................................... 439,954
Dividends receivable .......................................... 40,365
Receivable for capital shares issued .......................... 75,411
Receivable from brokers for investment securities sold ........ 1,066,153
Deferred organization costs ................................... 35,970
Prepaid expenses and other .................................... 15,846
-------------
Total assets .................................................... 86,265,812
-------------
LIABILITIES:
Dividends payable ............................................. 593,438
Payable for capital shares redeemed ........................... 5,100
Payable to brokers for investment securities purchased ........ 1,363,876
Accrued expenses and other payables:
Investment Advisory fees .................................... 54,935
Administration fees ......................................... 1,804
Shareholder Processing fees (Retail Shares) ................. 5,448
Combined Distribution and Service fees (Retail Shares) ...... 1,101
Custodian and transfer agent fees ........................... 18,770
Other ....................................................... 35,944
-------------
Total liabilities ............................................... 2,080,416
-------------
NET ASSETS ...................................................... $ 84,185,396
-------------
-------------
Net Asset Value, Offering Price and Redemption Price per Share:
Retail Shares:
($4,954,695/398,227 shares of beneficial interest issued and
outstanding $0.001 par value, unlimited number of shares
authorized) ................................................ $ 12.44
-------------
-------------
Institutional Shares:
($79,230,701/6,427,191 shares of beneficial interest issued
and outstanding $0.001 par value, unlimited number of shares
authorized) ................................................ $ 12.33
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par ......................... $ 6,825
Additional paid-in capital .................................... 70,722,085
Accumulated net realized gains on investment transactions ..... 3,602,469
Net unrealized appreciation of investments .................... 9,854,007
Undistributed net investment income ........................... 10
-------------
Net Assets, May 31, 1996 ........................................ $ 84,185,396
-------------
-------------
</TABLE>
- ------------
See Notes to Financial Statements.
60
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the six months ended May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest -- (includes $75,615 in dividends from investments in money
market funds) .................................................... $ 1,238,536
Dividends .......................................................... 221,250
------------
1,459,786
EXPENSES:
Investment Advisory fees ........................................... $ 238,730
Administration fees ................................................ 23,812
Shareholder Processing fees (Retail Shares) ........................ 4,031
Combined Distribution and Service fees (Retail Shares) ............. 3,634
Combined Distribution and Service fees (Class B Shares) ............ 6,867
Transfer agent fees and expenses ................................... 40,198
Custodian fees and expenses ........................................ 25,227
Legal fees ......................................................... 608
Audit fees ......................................................... 3,997
Reports to shareholders (Institutional Shares) ..................... 12,524
Amortization of organization costs ................................. 6,290
Registration fees .................................................. 14,798
Trustees' fees ..................................................... 1,949
Other expenses ..................................................... 1,440
-----------
384,105
Less: Fee waivers and expense reimbursements ......................... (163,668) 220,437
----------- ------------
Net Investment Income: 1,239,349
------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS:
Net realized gains on securities transactions ...................... 3,715,381
Net change in unrealized appreciation of investments ............... 520,387
------------
Net Realized and Unrealized Gains on Investments ..................... 4,235,768
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................. $ 5,475,117
------------
------------
</TABLE>
- ------------
See Notes to Financial Statements.
61
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED NOVEMBER
MAY 31, 30,
1996 1995
---------- ----------
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income ........................................... $1,239,349 $2,170,814
Net realized gains on securities transactions ................... 3,715,381 2,133,006
Net change in unrealized appreciation of investments ............ 520,387 10,437,485
---------- ----------
Net increase in net assets resulting from operations ............ 5,475,117 14,741,305
---------- ----------
Dividends to shareholders from net investment income
Retail Shares ................................................... (40,043) (23,530)
Class B Shares .................................................. (13,670) (40,515)
Institutional Shares ............................................ (1,185,626) (2,106,769)
---------- ----------
Total dividends to shareholders from net investment income ........ (1,239,339) (2,170,814)
---------- ----------
Distributions to shareholders from net realized gains
Retail Shares ................................................... (22,583) --
Class B Shares .................................................. (1,363,343) --
Institutional Shares ............................................ (45,345) --
---------- ----------
Total distributions to shareholders from net realized gains ....... (1,431,271) --
---------- ----------
Fund Share Transactions
Net proceeds from shares subscribed ............................. 15,011,881 21,231,603
Net asset value of shares issued to shareholders in reinvestment
of dividends .................................................. 2,035,131 2,659,558
Cost of shares redeemed ......................................... (12,880,959) (12,151,179)
---------- ----------
Net increase in net assets from Fund share transactions ......... 4,166,053 11,739,982
---------- ----------
Total Increase .................................................... 6,970,560 24,310,473
Net Assets:
Beginning of period ............................................. 77,214,836 52,904,363
---------- ----------
End of period (including accumulated undistributed net
investment income of $10 and $0, respectively) $84,185,396 $77,214,836
---------- ----------
---------- ----------
</TABLE>
- -------------
See Notes to Financial Statements.
62
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
MOODY'S/S&P MATURITY AMOUNT VALUE
RATINGS RATE DATE (000) (NOTE 2)
----------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
CORPORATE OBLIGATIONS -- 48.6%
BROKERAGE SERVICES -- 14.5%
Goldman Sachs, Medium Term Note .......................... A1/A+ 6.20 % 12/15/00 $ 1,000 $ 965,262
Lehman Brothers Holdings, Corporate Note ................. A3/A 7.63 7/15/99 500 507,869
Merrill Lynch & Co., Inc., Corporate Note ................ A1/A+ 10.38 2/1/99 149 161,807
Morgan Stanley Group, Corporate Note ..................... A1/A+ 7.50 9/1/99 500 508,642
Salomon Brothers, Senior Medium Term Note ................ A2/A 9.25 6/19/96 500 500,669
------------
2,644,249
------------
FINANCE -- 15.8%
Ford Motor Credit, Corporate Note ........................ A2/A 9.38 12/15/97 500 521,066
General Motor Acceptance Corp., Medium Term Note ......... A3/A- 7.13 6/1/99 250 251,759
General Motor Acceptance Corp., Medium Term Note ......... A3/A- 7.50 5/23/00 500 507,735
Potomac Capital Investment Corp., Medium Term Note B ..... A3/A- 7.25 7/15/97 750 754,920
Sears Roebuck Acceptance Corp., Medium Term Note ......... A2/A- 5.67 2/7/01 900 850,711
------------
2,886,191
------------
FINANCIAL SERVICES -- 4.2%
Avco Financial Services, Corporate Note .................. A2/A 7.38 8/15/01 750 759,127
------------
LEASING -- 2.8%
International Lease Finance Corp., Medium Term Note ...... A2/A+ 7.00 8/15/98 500 504,358
------------
UTILITIES -- 8.6%
Hydro Quebec, Corporate Note ............................. A2/A+ 6.37 1/15/02 750 718,841
Southern California Edison, Corporate Note ............... A3/A 5.88 1/15/01 900 856,449
------------
1,575,290
------------
WASTE MANAGEMENT -- 2.7%
WMX Technologies, Inc., Corporate Note ................... A1/A+ 6.65 5/15/05 500 497,926
------------
TOTAL CORPORATE OBLIGATIONS (COST $8,951,878)............... 8,867,141
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 24.6%
Federal Home Loan Bank, Callable 12/26/96 @ 100 .......... Aaa/AAA 6.32 12/26/00 500 485,936
Federal Home Loan Bank (a) ............................... Aaa/AAA 6.10 11/29/00 500 481,614
Federal National Mortgage Assoc., Variable Rate Note* .... Aaa/AAA 5.56 10/15/96 500 499,990
Federal National Mortgage Assoc., Callable 7/18/97 @
100 .................................................... Aaa/AAA 7.77 7/18/01 1,000 1,007,597
Student Loan Marketing Assoc., Callable 3/8/97 @ 100 ..... Aaa/AAA 7.67 3/8/00 2000 2,014,102
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (COST
$4,527,268)............................................... 4,489,239
------------
</TABLE>
63
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MOODY'S/S&P MATURITY AMOUNT VALUE
RATINGS RATE DATE (000) (NOTE 2)
----------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 25.8%
COMMERCIAL PAPER -- 19.6%
Barton Capital Corp. ..................................... P1/A1 5.30 % 6/13/96 $ 900 $ 898,675
Delaware Funding Corp. ................................... P1/A1 5.30 6/17/96 900 898,145
Enterprise Funding Corp. ................................. P1/A1 5.31 6/24/96 900 897,212
Hanson Finance plc ....................................... P1/A1 5.37 7/18/96 900 893,549
------------
TOTAL COMMERCIAL PAPER (COST $3,587,990).................... 3,587,581
------------
<CAPTION>
SHARES
----------
<S> <C> <C> <C> <C> <C>
OPEN-END INVESTMENT COMPANIES -- 6.2%
Dreyfus Cash Management Fund ............................. 210,378 210,378
Provident Cash Management Fund ........................... 917,930 917,930
------------
TOTAL OPEN-END INVESTMENT COMPANIES (COST $1,128,308)....... 1,128,308
------------
TOTAL SHORT-TERM INVESTMENTS (COST $4,716,298).............. 4,715,889
------------
TOTAL INVESTMENTS (COST $18,195,444) (B) -- 99.0%........... 18,072,269
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.0%............... 183,353
------------
NET ASSETS -- 100.0%........................................ $ 18,255,622
------------
------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $18,255,622
(a) Callable 11/29/96 at option of this issuer 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
depreciation of securities as follows:
Unrealized appreciation....... $ 91,525
Unrealized depreciation....... (214,700)
----------
Net unrealized depreciation... $ (123,175)
----------
----------
*Variable rate security. Maturity date reflects the next rate change date.
See Notes to Financial Statements.
64
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $18,195,444) ........ $ 18,072,269
Interest receivable ........................................... 263,545
Receivable for capital shares issued .......................... 1,300
Receivable from brokers for investment securities sold ........ 5,623
Receivable from Investment Adviser ............................ 17,398
Deferred organization costs ................................... 35,988
Prepaid expenses and other .................................... 12,281
-------------
Total assets .................................................... 18,408,404
-------------
LIABILITIES:
Dividends payable ............................................. 91,767
Payable for capital shares redeemed ........................... 4,784
Accrued expenses and other payables:
Administration fees ......................................... 1,312
Shareholder Processing fees (Retail Shares) ................. 206
Combined Distribution and Service fees (Retail Shares)....... 207
Custodian and transfer agent fees............................ 15,317
Other........................................................ 39,189
-------------
Total liabilities ............................................... 152,782
-------------
NET ASSETS ...................................................... $ 18,255,622
-------------
-------------
Net Asset Value, Offering Price and Redemption Price per Share:
Retail Shares:
($983,316/99,243 shares of beneficial interest issued and
outstanding $0.001 par value, unlimited number of shares
authorized) ................................................ $ 9.91
-------------
-------------
Institutional Shares:
($17,272,306/1,742,760 shares of beneficial interest issued
and outstanding $0.001 par value, unlimited number of shares
authorized) ................................................ $ 9.91
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par ......................... $ 1,842
Additional paid-in capital .................................... 18,384,939
Accumulated net realized losses on investment transactions .... (7,984)
Net unrealized depreciation of investments .................... (123,175)
-------------
Net Assets, May 31, 1996 ........................................ $ 18,255,622
-------------
-------------
</TABLE>
- ------------
See Notes to Financial Statements.
65
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Statements of Operations
For the six months ended May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest -- (includes $33,567 in dividends from investments in money
market funds) ...................................................... $ 568,638
EXPENSES:
Investment Advisory fees ........................................... $ 35,780
Administration fees ................................................ 5,367
Shareholder Processing fees (Retail Shares) ........................ 604
Combined Distribution and Service fees (Retail Shares) ............. 670
Combined Distribution and Service fees (Class B Shares) ............ 366
Transfer agent fees and expenses ................................... 38,414
Custodian fees and expenses ........................................ 4,361
Audit fees ......................................................... 4,598
Reports to shareholders (Institutional Shares) ..................... 3,157
Amortization of organization costs ................................. 6,290
Registration fees .................................................. 13,001
Trustees' fees ..................................................... 132
Other expenses ..................................................... 185
-----------
112,925
Less: Fee waivers and expense reimbursements ......................... (73,416) 39,509
----------- ------------
Net Investment Income ................................................ 529,129
------------
REALIZED AND UNREALIZED LOSSES ON INVESTMENTS:
Net realized losses on securities transactions ..................... (11,435)
Net change in unrealized depreciation of investments................ (374,358)
------------
Net Realized and Unrealized Losses on Investments .................... (385,793)
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................. $ 143,336
------------
------------
</TABLE>
- ------------
See Notes to Financial Statements.
66
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED NOVEMBER
MAY 31, 30, 1995
1996 -----------
-----------
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income ..................... $ 529,129 $ 1,289,182
Net realized gains (losses) on securities
transactions ............................ (11,435) 51,616
Net unrealized change in appreciaton
(depreciation) of investments ........... (374,358) 806,674
----------- -----------
Net increase in net assets resulting from
operations .............................. 143,336 2,147,472
----------- -----------
Dividends to shareholders from net investment
income
Retail Shares ............................. (14,639) (15,632)
Class B Shares ............................ (2,024) (4,862)
Institutional Shares ...................... (512,466) (1,268,688)
----------- -----------
Total dividends to shareholders from net
investment income ......................... (529,129) (1,289,182)
----------- -----------
Distributions to shareholders from net
realized gains
Retail Shares ............................. (983) --
Class B Shares ............................ (46,651)
Institutional Shares ...................... (531) --
----------- -----------
Total distributions to shareholders from net
realized gains ............................ (48,165) --
----------- -----------
Fund Share Transactions
Net proceeds from shares subscribed ....... 8,677,008 11,311,423
Net asset value of shares issued to
shareholders in reinvestment of
dividends ............................... 205,690 1,086,235
Cost of shares redeemed ................... (4,728,178) (22,595,293)
----------- -----------
Net increase (decrease) in net assets from
Fund share transactions ................. 4,154,520 (10,197,635)
----------- -----------
Total Increase (Decrease) ................... 3,720,562 (9,339,345)
NET ASSETS:
Beginning of period ....................... 14,535,060 23,874,405
----------- -----------
End of period ............................. $18,255,622 $14,535,060
----------- -----------
----------- -----------
</TABLE>
- ------------
See Notes to Financial Statements.
67
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY PRINCIPAL VALUE
RATE DATE AMOUNT (NOTE 2)
------------ ---------- ---------- ------------
<S> <C> <C> <C> <C>
LONG-TERM INVESTMENTS -- 98.3%
U.S GOVERNMENT AGENCY OBLIGATIONS -- 82.6%
FEDERAL HOME LOAN MORTGAGE CORP. -- 40.6%
Federal Home Loan Mortgage Corp., Callable 1/16/97 ....... 8.20 % 1/16/98 $3,000,000 $ 3,038,604
Federal Home Loan Mortgage Corp., 5 Year Balloon, Gold ... 7.00 2/1/98 375,572 378,907
Federal Home Loan Mortgage Corp., 5 Year Balloon, Pool
#M17443 ................................................ 7.00 3/1/98 331,021 333,961
Federal Home Loan Mortgage Corp., 7 Year Balloon, Gold
Pool #M80156 ........................................... 6.50 3/1/00 379,230 375,396
Federal Home Loan Mortgage Corp., 7 Year Balloon, Pool
#M80332 ................................................ 7.50 8/1/01 1,637,490 1,659,497
Federal Home Loan Mortgage Corp., Pool #200053 ........... 8.50 9/1/01 1,794,686 1,847,466
Federal Home Loan Mortgage Corp., Pool #200064 ........... 8.00 1/1/02 1,156,795 1,179,445
Federal Home Loan Mortgage Corp., 7 Year Balloon, Pool
#M80358 ................................................ 9.00 2/1/02 959,816 990,110
Federal Home Loan Mortgage Corp., Debenture, Callable
2/2/00 @ 100 ........................................... 8.53 2/2/05 1,000,000 1,034,977
Federal Home Loan Mortgage Corp. ......................... 6.28 3/6/06 2,000,000 1,874,090
Federal Home Loan Mortgage Corp., Debenture, Callable
10/29/98 @ 100 ......................................... 6.08 10/29/08 2,200,000 1,982,977
Federal Home Loan Mortgage Corp., Gold Pool #D90560 ...... 5.50 12/1/13 418,659 376,843
Federal Home Loan Mortgage Corp., CMO PAC 1212-CA * ...... 6.50 7/15/16 2,474,974 2,474,824
Federal Home Loan Mortgage Corp., Pool #306558 ........... 9.25 6/1/18 2,574,177 2,680,797
Federal Home Loan Mortgage Corp., Pool #308392 ........... 10.00 9/1/18 117,033 126,929
Federal Home Loan Mortgage Corp., CMO 1092-K * ........... 8.50 6/15/21 1,000,000 1,030,039
Federal Home Loan Mortgage Corp., CMO, PAC-172-J * ....... 7.00 7/15/21 1,000,000 955,549
Federal Home Loan Mortgage Corp., CMO 1508-MA * .......... 6.31 5/15/23 868,636 784,386
------------
23,124,797
------------
FEDERAL NATIONAL MORTGAGE ASSOC. -- 14.3%
Federal National Mortgage Assoc., Pool #108471 ........... 9.00 11/1/97 138,324 141,541
Federal National Mortgage Assoc., 7 Year Balloon, Pool
#50394 ................................................. 8.50 1/1/98 143,518 147,731
Federal National Mortgage Assoc., 7 Year Balloon, Pool
#124418 ................................................ 8.00 8/1/99 3,957,902 4,063,575
Federal National Mortgage Assoc., Pool #303478 ........... 8.50 11/1/01 1,382,614 1,423,193
Federal National Mortgage Assoc., CMO, Series 1993-54,
Class VB * ............................................. 7.00 2/25/04 1,000,000 993,569
Federal National Mortgage Assoc. ......................... 6.72 8/1/05 1,000,000 974,389
Federal National Mortgage Assoc., Pool #70056 ............ 9.00 12/1/16 405,763 421,957
------------
8,165,955
------------
GOVERNMENT NATIONAL MORTGAGE ASSOC. -- 13.5%
Government National Mortgage Assoc., Pool #145690 ........ 11.00 3/15/01 34,977 37,536
Government National Mortgage Assoc., Pool #265082 ........ 9.50 3/15/04 187,712 197,749
Government National Mortgage Assoc., Pool #270156 ........ 9.50 4/15/04 167,344 176,292
Government National Mortgage Assoc., Pool #44868 ......... 13.00 1/15/11 15,127 17,547
Government National Mortgage Assoc., Pool #040767 ........ 13.00 2/15/11 40,943 47,493
Government National Mortgage Assoc., Pool #45234 ......... 13.00 2/15/11 17,688 20,518
Government National Mortgage Assoc., Pool #45855 ......... 13.00 4/15/11 29,494 34,212
Government National Mortgage Assoc., Pool #253768 ........ 9.00 6/15/18 52,202 54,925
Government National Mortgage Assoc., Pool #254348 ........ 10.00 10/15/18 126,860 138,920
Government National Mortgage Assoc., Pool #315147 ........ 8.00 3/15/22 1,563,979 1,571,281
</TABLE>
68
<PAGE>
<TABLE>
<CAPTION>
MATURITY PRINCIPAL VALUE
RATE DATE AMOUNT (NOTE 2)
------------ ---------- ---------- ------------
<S> <C> <C> <C> <C>
GOVERNMENT NATIONAL MORTGAGE ASSOC. -- (CONTINUED)
Government National Mortgage Assoc., Pool #339902 ........ 8.00 % 2/15/23 $1,567,446 $ 1,573,526
Government National Mortgage Assoc., Pool #392713 ........ 8.00 11/15/24 1,270,280 1,273,976
Government National Mortgage Assoc., Pool #395392 ........ 8.50 4/15/25 2,490,003 2,553,031
------------
7,697,006
------------
OTHER -- 14.2%
Export Funding Trust ..................................... 8.21 12/29/06 1,886,147 1,998,138
Tennessee Valley Authority ............................... 8.63 11/15/29 1,500,000 1,576,789
Tennessee Valley Authority ............................... 8.25 9/15/34 500,000 491,742
Tennessee Valley Authority ............................... 5.98 4/1/36 4,000,000 4,003,684
------------
8,070,353
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (COST
$46,483,517).............................................. 47,058,111
------------
U.S. GOVERNMENT OBLIGATIONS -- 15.7%
U.S. TREASURY BONDS/NOTE -- 13.4%
U.S. Treasury Bond ....................................... 12.75 11/15/10 2,500,000 3,486,715
U.S. Treasury Bond ....................................... 7.25 5/15/16 1,000,000 1,009,686
U.S. Treasury Bond ....................................... 8.13 8/15/21 2,000,000 2,218,750
U.S. Treasury Note ....................................... 5.88 2/15/04 1,000,000 943,125
------------
7,658,276
------------
U.S. TREASURY STRIPS -- 2.3%
U.S. Treasury Strip ...................................... 5.93 + 11/15/05 2,500,000 1,305,003
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS (COST $9,193,344)......... 8,963,279
------------
TOTAL LONG-TERM INVESTMENTS (COST $55,676,861).............. 56,021,390
------------
<CAPTION>
SHARES
----------
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 0.7%
OPEN-END INVESTMENT COMPANIES -- 0.7%
Dreyfus Cash Management Fund ............................. 408,166 408,166
Provident Institutional Trust Money Market Fund .......... 1 1
------------
TOTAL SHORT-TERM INVESTMENTS (COST $408,167)................ 408,167
------------
TOTAL INVESTMENTS (COST $56,085,028) (A) -- 99.0%........... 56,429,557
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.0%............... 587,313
------------
NET ASSETS -- 100.0%........................................ $ 57,016,870
------------
------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $57,016,870.
(a) The cost for financial statement purposes is substantially the same for
federal income tax purposes and differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation....... $ 588,015
Unrealized depreciation....... (243,486)
------------
Net unrealized appreciation... $ 344,529
------------
------------
* Collateralized Mortgage Obligation.
+ Effective Yield at date of issuance.
See Notes to Financial Statements.
69
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $56,085,028) ........ $ 56,429,557
Cash .......................................................... 1,722
Interest receivable ........................................... 659,032
Dividends receivable ..........................................
Receivable for capital shares issued .......................... 1,343
Receivable from brokers for investment securities sold ........ 357,966
Deferred organization costs ................................... 2,382
Prepaid expenses and other .................................... 14,804
-------------
Total assets .................................................... 57,466,806
-------------
LIABILITIES:
Dividends payable ............................................. 306,977
Payable for capital shares redeemed ........................... 60,390
Accrued expenses and other payables:
Investment Advisory fees .................................... 14,607
Administration fees ......................................... 1,179
Combined Distribution and Service fees (Retail Shares) ...... 4,800
Custodian and transfer agent fees ........................... 35,118
Other ....................................................... 26,865
-------------
Total liabilities ............................................... 449,936
-------------
NET ASSETS ...................................................... $ 57,016,870
-------------
-------------
Net Asset Value, Offering Price and Redemption Price per Share:
Retail Shares:
($24,429,084/2,436,032 shares of beneficial interest issued
and outstanding $0.001 par value, unlimited number of shares
authorized) ................................................ $ 10.03
-------------
-------------
Institutional Shares:
($32,587,786/3,256,868 shares of beneficial interest issued
and outstanding $0.001 par value, unlimited number of shares
authorized) ................................................ $ 10.01
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par ......................... $ 5,692
Additional paid-in capital .................................... 60,363,836
Accumulated net realized losses on investment transactions .... (3,744,697)
Net unrealized appreciation of investments .................... 344,529
Undistributed net investment income ........................... 47,510
-------------
Net Assets, May 31, 1996 ........................................ $ 57,016,870
-------------
-------------
</TABLE>
- ------------
See Notes to Financial Statements.
70
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the six months ended May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest -- (includes $33,171 in dividends from
investments in money market funds) .................. $ 2,792,256
EXPENSES:
Investment Advisory fees ............................ $ 157,353
Administration fees ................................. 44,766
Combined Distribution and Service fees (Retail
Shares) ........................................... 32,462
Combined Distribution and Service fees (Class B
Shares) ........................................... 3,907
Transfer agent fees and expenses .................... 50,923
Custodian fees and expenses ......................... 17,326
Legal fees .......................................... 2,280
Audit fees .......................................... 5,464
Reports to shareholders (Retail Shares) ............. 6,369
Reports to shareholders (Class B Shares) ............ 510
Reports to shareholders (Institutional Shares) ...... 8,615
Amortization of organization costs .................. 7,248
Registration fees ................................... 13,867
Trustees' fees ...................................... 2,088
Other expenses ...................................... 2,015
-----------
355,193
Less: Expense reimbursements .......................... (7,653) 347,540
----------- -----------
Net Investment Income ................................. 2,444,716
-----------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized gains on securities transactions ....... 556,900
Net change in unrealized depreciation of
investments ....................................... (2,976,423)
-----------
Net Realized and Unrealized Losses on Investments ..... (2,419,523)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS .......................................... $ 25,193
-----------
-----------
</TABLE>
- ------------
See Notes to Financial Statements.
71
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED NOVEMBER
MAY 31, 30,
1996 1995
----------- -----------
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income ......................................... $ 2,444,716 $ 6,633,314
Net realized gains (losses) on securities transactions ........ 556,900 (96,694)
Net change in unrealized appreciation (depreciation) of
investments ................................................. (2,976,423) 6,904,058
----------- -----------
Net increase in net assets resulting from operations .......... 25,193 13,440,678
----------- -----------
Dividends to shareholders from net investment income
Retail Shares ................................................. (750,635) (1,785,749)
Class B Shares ................................................ (21,601) (80,467)
Institutional Shares .......................................... (1,618,437) (4,773,631)
----------- -----------
Total dividends to shareholders from net investment income ...... (2,390,673) (6,639,847)
----------- -----------
Fund Share Transactions
Net proceeds from shares subscribed ........................... 10,253,483 11,569,600
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions ................. 1,484,034 5,409,402
Cost of shares redeemed ....................................... (55,442,274) (22,116,958)
----------- -----------
Net decrease in net assets from Fund share transactions ....... (43,704,757) (5,137,956)
----------- -----------
Total Increase (Decrease) ....................................... (46,070,237) 1,662,875
NET ASSETS:
Beginning of period ........................................... 103,087,107 101,424,232
----------- -----------
End of period (including accumulated undistributed net
investment income of $47,510, and net of distributions in
excess of net investment income of $6,533, respectively) .... $57,016,870 $103,087,107
----------- -----------
----------- -----------
</TABLE>
- ------------
See Notes to Financial Statements.
72
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
MOODY'S/S&P MATURITY AMOUNT VALUE
RATINGS RATE DATE (000) (NOTE 2)
------------- ------ --------- -------- ------------
<S> <C> <C> <C> <C> <C>
LONG-TERM INVESTMENTS -- 96.9%
CORPORATE OBLIGATIONS -- 43.2%
AUTOMOTIVE FINANCE -- 7.2%
Ford Motor Credit .................................................. A1/A+ 6.65% 8/7/00 $ 1,000 $ 985,107
Ford Motor Credit .................................................. A1/A+ 6.11 12/28/01 1,500 1,426,956
General Motors Acceptance Corp. .................................... A3/A- 9.00 10/15/02 1,500 1,627,161
General Motors Acceptance Corp.,
Putable 7/15/94 through 7/15/97 @100.............................. A3/A- 8.75 7/15/05 1,000 1,075,845
------------
5,115,069
------------
BANKING & FINANCE COMPANIES -- 14.2%
American General Finance Corp. ..................................... A1/A+ 8.13 8/15/09 500 520,270
BHP Finance USA .................................................... A2/A 6.42 3/1/26 2,750 2,626,789
General Re Corp., Series A ......................................... Aa1/AAA 9.00 9/12/09 1,800 2,010,886
Merrill Lynch Corp. , Medium Term Note ............................. A1/A+ 7.25 6/14/04 1,000 1,015,369
Progress Capital Corp., Medium Term Note (a) ....................... A1/A+ 8.23 9/12/96 1,000 1,006,340
Travelers Group Inc. ............................................... A1/A+ 6.88 6/1/25 3,000 2,882,709
------------
10,062,363
------------
CHEMICALS -- 0.7%
Monsanto Co. -- ESOP Debenture ..................................... A1/A 8.13 12/15/06 500 527,962
------------
COMMUNICATION EQUIPMENT -- 4.1%
US West Capital Funding Inc., Putable 11/1/00 @100 ................. A2/A+ 6.31 11/1/05 3,000 2,929,053
------------
MACHINERY -- 3.0%
Caterpillar, Inc. .................................................. A2/A 8.95 5/12/00 2,000 2,134,926
------------
TELECOMMUNICATIONS -- 9.7%
British Telecommunications Finance, Yankee Bond .................... Aaa/AAA 9.63 2/15/19 2,000 2,219,436
Citizens Utilities Co., Putable 10/1/01 @100 ....................... Aa3/AA+ 7.68 10/1/34 1,750 1,844,379
Consolidated Edison Co. ............................................ A1/A+ 6.50 2/1/01 1,500 1,463,862
General Telephone of Northwest, Series BB .......................... A2/A+ 8.75 4/15/16 1,305 1,364,089
------------
6,891,766
------------
WASTE DISPOSAL -- 4.3%
WMX Technologies, Inc., Putable 4/30/97 @100 ....................... A1/A+ 6.22 4/30/04 2,000 2,050,290
WMX Technologies, Inc., Putable 5/15/00 @100 ....................... A1/A+ 6.65 5/15/05 1,000 995,851
------------
3,046,141
------------
TOTAL CORPORATE OBLIGATIONS (COST $31,373,949)........................ 30,707,280
------------
MUNICIPAL BONDS (TAXABLE) -- 3.0%
City of Miami Beach ................................................ Aaa/AAA 8.55 9/1/15 500 530,342
Los Angeles County, CA, Pension Obligation,
Series A (MBIA Insured) .......................................... Aaa/AAA 8.30 6/30/02 1,500 1,589,014
------------
TOTAL MUNICIPAL BONDS (TAXABLE) (COST $2,076,070)..................... 2,119,356
------------
</TABLE>
73
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
RATE DATE (000) (NOTE 2)
------ --------- -------- ------------
<S> <C> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 40.1%
FEDERAL HOME LOAN MORTGAGE CORP. -- 20.0%
Federal Home Loan Mortgage Corp., Callable 1/16/97 @100 ............ 8.20% 1/16/98 $ 1,600 $ 1,620,589
Federal Home Loan Mortgage Corp., CMO 1166-B* ...................... 8.00 11/15/98 2,000 2,041,478
Federal Home Loan Mortgage Corp., Pool #L90152 ..................... 8.00 2/1/00 1,768 1,782,811
Federal Home Loan Mortgage Corp., Pool #200032 ..................... 9.00 4/1/01 2 2,352
Federal Home Loan Mortgage Corp., Pool #200040 ..................... 9.00 6/1/01 5 4,947
Federal Home Loan Mortgage Corp., Note ............................. 7.05 3/24/04 1,000 967,905
Federal Home Loan Mortgage Corp., Pool #380070 ..................... 9.00 1/1/05 157 162,992
Federal Home Loan Mortgage Corp. ................................... 6.49 10/3/05 500 477,886
Federal Home Loan Mortgage Corp., .................................. 6.64 3/13/06 2,000 1,886,122
Federal Home Loan Mortgage Corp., CMO 1212-CA* ..................... 6.50 7/15/16 825 824,941
Federal Home Loan Mortgage Corp., CMO 25-F* ........................ 9.50 12/15/18 90 90,873
Federal Home Loan Mortgage Corp., CMO 1141-F* ...................... 8.50 10/15/20 1,000 1,025,409
Federal Home Loan Mortgage Corp., CMO 1163-I* ...................... 6.95 12/15/20 2,350 2,306,405
Federal Home Loan Mortgage Corp., CMO 172-J* ....................... 7.00 7/15/21 1,000 955,549
------------
14,150,259
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 13.2%
Federal National Mortgage Association .............................. 6.35 6/10/05 430 408,523
Federal National Mortgage Association, Pool #50609, 7 Yr. Balloon
Participation Certificate ........................................ 8.00 6/1/99 276 283,579
Federal National Mortgage Association .............................. 6.63 4/18/01 1,500 1,486,977
Federal National Mortgage Association, Pool #304786, 7 Yr. Balloon
Participation Certificate ........................................ 8.50 2/1/02 438 448,910
Federal National Mortgage Association, CMO G94-6VB* ................ 8.00 11/17/03 2,280 2,350,475
Federal National Mortgage Association, Pool #124975 ................ 7.50 8/1/08 839 839,911
Federal National Mortgage Association, CMO G94-7A* ................. 7.50 11/17/23 3,634 3,511,419
------------
9,329,794
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 1.3%
Government National Mortgage Association, Pool #133357 ............. 11.00 7/15/00 18 19,269
Government National Mortgage Association, Pool #140135 ............. 11.00 11/15/00 56 59,192
Government National Mortgage Association, Pool #044586 ............. 13.00 1/15/11 4 5,092
Government National Mortgage Association, Pool #044783 ............. 13.00 1/15/11 47 54,049
Government National Mortgage Association, Pool #045097 ............. 13.00 1/15/11 28 32,908
</TABLE>
74
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
RATE DATE (000) (NOTE 2)
------ --------- -------- ------------
<S> <C> <C> <C> <C> <C>
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- (CONTINUED)
Government National Mortgage Association, Pool #045753 ............. 13.00% 2/15/11 $ 26 $ 30,538
Government National Mortgage Association, Pool #200919 ............. 8.00 5/15/17 411 415,092
Government National Mortgage Association, Pool #207980 ............. 8.00 5/15/17 15 15,599
Government National Mortgage Association, Pool #202853 ............. 9.00 7/15/17 265 278,775
------------
910,514
------------
TENNESSEE VALLEY AUTHORITY -- 5.6%
Tennessee Valley Authority, Putable 4/1/98 @100 .................... 5.98 4/1/36 4,000 4,003,684
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $28,754,576).................................................. 28,394,251
------------
U.S. GOVERNMENT OBLIGATIONS -- 10.6%
U.S. TREASURY STRIPS -- 6.0%
U.S. Treasury Strip ................................................ 6.65+ 11/15/03 1,500 907,620
U.S. Treasury Strip ................................................ 6.81+ 2/15/04 1,400 830,973
U.S. Treasury Strip ................................................ 6.92+ 5/15/09 2,500 1,004,155
U.S. Treasury Strip ................................................ 7.73+ 5/15/13 5,000 1,483,285
------------
4,226,033
------------
U.S. TREASURY BONDS -- 4.6%
U.S. Treasury Bond ................................................. 5.88 2/15/04 2,000 1,937,559
U.S. Treasury Bond ................................................. 6.00 2/15/26 1,500 1,313,904
------------
3,251,463
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(COST $7,485,818)................................................... 7,477,496
------------
TOTAL LONG-TERM INVESTMENTS (COST $69,690,413)........................ 68,698,383
------------
<CAPTION>
SHARES
--------
<S> <C> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 2.3%
OPEN-END INVESTMENT COMPANIES -- 2.3%
Dreyfus Cash Management Fund ....................................... 107,232 107,232
Provident Institutional Cash Fund .................................. 1,531,246 1,531,246
------------
TOTAL SHORT-TERM INVESTMENTS (COST $1,638,478)........................ 1,638,478
------------
TOTAL INVESTMENTS (COST $71,328,891) (B) -- 99.2%..................... 70,336,861
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.8%......................... 569,801
------------
NET ASSETS -- 100.0%.................................................. $ 70,906,662
------------
------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $70,906,662.
(a) 144a security which is restricted as to resale to institutional investors.
(b) The cost for financial reporting purposes is substantially the same for
federal income tax purposes and differs from value by net unrealized
depreciation of securities as follows:
Unrealized appreciation....... $ 96,827
Unrealized depreciation....... (1,088,857)
------------
Net unrealized depreciation... $ (992,030)
------------
------------
+ 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.
MBIA -- Municipal Bond Insurance Association.
See Notes to Financial Statements.
75
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $71,328,891) ............................ $ 70,336,861
Interest receivable ............................................................... 965,572
Receivable for capital shares issued .............................................. 182,900
Receivable from brokers for investment securities sold ............................ 1,558,955
Deferred organization costs ....................................................... 36,322
Prepaid expenses and other ........................................................ 14,915
-------------
Total assets ........................................................................ 73,095,525
-------------
LIABILITIES:
Dividends payable ................................................................. 382,118
Payable for capital shares redeemed ............................................... 7,334
Payable to brokers for investment securities purchased ............................ 1,688,221
Accrued expenses and other payables:
Investment Advisory fees ........................................................ 43,913
Administration fees ............................................................. 16,489
Shareholder Processing fees (Retail Shares) ..................................... 357
Combined Distribution and Service fees (Retail Shares) .......................... 357
Custodian and transfer agent fees ............................................... 17,773
Other ........................................................................... 32,301
-------------
Total liabilities ................................................................... 2,188,863
-------------
NET ASSETS .......................................................................... $ 70,906,662
-------------
-------------
Net Asset Value, Offering Price and Redemption Price per Share:
Retail Shares:
($1,809,993/180,358 shares of beneficial interest issued and outstanding $0.001
par value, unlimited number of shares authorized) .............................. $ 10.04
-------------
-------------
Institutional Shares:
($69,096,669/6,919,855 shares of beneficial interest issued and outstanding
$0.001 par value, unlimited number of shares authorized) ....................... $ 9.99
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par ............................................. $ 7,100
Additional paid-in capital ........................................................ 71,271,672
Accumulated net realized gains on investment transactions ......................... 619,920
Net unrealized depreciation of investments ........................................ (992,030)
-------------
Net Assets, May 31, 1996 ............................................................ $ 70,906,662
-------------
-------------
</TABLE>
- ------------
See Notes to Financial Statements.
76
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the six months ended May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest -- (includes $42,926 in dividends from investments in money
market funds) ...................................................... $ 2,377,614
EXPENSES:
Investment Advisory fees ........................................... $ 140,174
Administration fees ................................................ 20,770
Shareholder Processing fees (Retail Shares) ........................ 1,467
Combined Distribution and Service fees (Retail Shares) ............. 1,597
Combined Distribution and Service fees (Class B Shares) ............ 1,601
Transfer agent fees and expenses ................................... 40,892
Custodian fees and expenses ........................................ 10,705
Legal fees ......................................................... 1,394
Audit fees ......................................................... 4,598
Reports to shareholders (Institutional Shares) ..................... 11,296
Amortization of organization costs ................................. 6,475
Registration fees .................................................. 13,219
Trustees' fees ..................................................... 1,394
Other expenses ..................................................... 1,473
-----------
257,055
Less: Fee waivers and expense reimbursements ......................... (95,388) 161,667
----------- ------------
Net Investment Income: ............................................... 2,215,947
------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized gains on securities transactions ...................... 630,471
Net change in unrealized depreciation of investments ............... (3,774,573)
------------
Net Realized and Unrealized Losses on Investments .................... (3,144,102)
------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ................. $ (928,155)
------------
------------
</TABLE>
- ------------
See Notes to Financial Statements.
77
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED NOVEMBER
MAY 31, 1996 30, 1995
---------------- -----------
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income........................... $ 2,215,947 $ 4,620,649
Net realized gains on securities
transactions ................................. 630,471 1,689,008
Net change in unrealized appreciation
(depreciation) of investments ................ (3,774,573) 4,960,847
---------------- -----------
Net increase (decrease) in net assets resulting
from operations .............................. (928,155) 11,270,504
---------------- -----------
Dividends to shareholders from net investment
income
Retail Shares .................................. (37,756) (65,731)
Class B Shares ................................. (8,459) (83,217)
Institutional Shares ........................... (2,169,732) (4,471,701)
---------------- -----------
Total dividends to shareholders from net
investment income .............................. (2,215,947) (4,620,649)
---------------- -----------
Distributions to shareholders from net realized
gains
Retail Shares .................................. (8,744) --
Class B Shares ................................. (640,731) --
Institutional Shares ........................... (5,665) --
---------------- -----------
Total distributions to shareholders from net
realized gains ................................. (655,140) --
---------------- -----------
Fund Share Transactions
Net proceeds from shares subscribed ............ 18,070,521 18,125,128
Net asset value of shares issued to shareholders
in reinvestment of dividends ................. 2,135,100 4,149,790
Cost of shares redeemed ........................ (15,897,650) (26,178,656)
---------------- -----------
Net increase (decrease) in net assets from Fund
share transactions ........................... 4,307,971 (3,903,738)
---------------- -----------
Total Increase ................................... 508,729 2,746,117
NET ASSETS:
Beginning of period ............................ 70,397,933 67,651,816
---------------- -----------
End of period .................................. $ 70,906,662 $70,397,933
---------------- -----------
---------------- -----------
</TABLE>
- ------------
See Notes to Financial Statements.
78
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
MOODY'S/S&P MATURITY AMOUNT VALUE
RATINGS RATE DATE (000) (NOTE 2)
---------------- --------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C>
LONG-TERM INVESTMENTS -- 97.7%
MUNICIPAL BONDS -- 97.7%
FLORIDA -- 85.2%
Bay County, Pollution Control Gulf Power,
(AMBAC Insured)................................... Aaa/AAA 5.25% 4/1/06 $ 5,000 $ 5,012,950
Collier County, Health Facilities Authority Revenue,
Callable 12/1/04 @ 102............................ A-+/BBB+ 6.25 12/1/07 700 704,816
Collier County, Health Facilities Authority Revenue,
Callable 12/1/04 @ 102............................ A-+/BBB+ 6.38 12/1/08 700 706,664
Collier County, Health Facilities Authority Revenue,
Callable 12/1/04 @ 102............................ A-+/BBB+ 7.00 12/1/19 5,175 5,271,203
Dade County, Aviation Revenue, Callable 10/1/06
@ 102, 10/1/08 @ 100 (MBIA Insured) (AMT)......... Aaa/AAA 5.75 10/1/15 5,000 4,854,850
Dade County, Aviation Revenue, Callable 10/1/06
@ 102, 10/1/08 @ 100 (MBIA Insured)............... Aaa/AAA 5.60 10/1/26 5,000 4,751,750
Dade County, Seaport General Obligation, Callable
10/1/06 @ 102, 10/1/08 @ 100 (MBIA Insured)....... Aaa/AAA 5.13 10/1/16 5,000 4,530,450
Dade County, Water Sewer Revenue, Callable 10/1/05 @
102 (FGIC Insured)................................ Aaa/AAA 5.50 10/1/25 5,000 4,699,000
Escambia County, Pollution Control Revenue
Refunding, Gulf Power Project, Callable 3/1/97 @
102,
DTP 99............................................ A2/A 6.75 3/1/22 1,250 1,275,188
Florida Board of Education, Capital Outlay 1995
series, Callable 6/1/05 @ 101, 6/1/06 @ 100....... Aa/AA 5.50 6/1/21 5,000 4,687,600
Florida State Board of Education,
Callable 6/1/05 @ 101, 6/1/06 @ 100............... Aaa/AAA 5.50 6/1/17 3,000 2,865,270
Florida State Board of Education,
Callable 6/1/06 @ 101............................. Aaa/AAA 5.60 6/1/20 5,000 4,787,100
Florida State Dept of Environmental Protection,
Callable 7/1/06 @ 101 (MBIA Insured).............. Aaa/AAA 5.50 7/1/13 5,000 4,867,550
Florida State Turnpike Authority Revenue, Callable
7/1/05 @ 101, 7/1/06 @ 100 (FGIC Insured)......... Aaa/AAA 5.50 7/1/21 5,000 4,724,000
Gainesville Utility System Revenue, Non callable.... Aa/AA 6.50 10/1/11 3,000 3,289,770
Gainesville Utility System Revenue, Callable 10/1/06
@ 102, 10/1/08 @ 100.............................. Aa/AA 5.20 10/1/22 5,000 4,500,850
Jacksonville Electric Authority Revenue., St John's
River Power Pk, Callable 10/1/04 @ 101............ Aa/AA 5.38 10/1/15 5,000 4,680,050
Jacksonville Sales Tax Revenue, Callable
10/1/05 @ 101, 10/1/06 @ 100 (FGIC Insured)....... Aaa/AAA 5.65 10/1/14 5,000 4,901,750
Jacksonville Sales Tax Revenue Callable
10/1/05 @ 101 (FGIC Insured)...................... Aaa/AAA 5.38 10/1/18 7,500 7,009,725
Martin County Industrial Development Authority
Revenue, Indianatown Cogeneration PJ-A (AMT),
Callable 12/15/04 @ 102........................... Baa3/BBB- 7.88 12/15/25 2,500 2,787,200
Martin County Industrial Development Authority
Revenue, Indianatown Cogeneration PJ-B (AMT),
Callable 12/15/04 @ 102........................... Baa3/BBB- 8.05 12/15/25 2,500 2,753,400
Miami Beach Water & Sewer Revenue, Callable 9/1/05 @
102 (FSA Insured)................................. Aaa/AAA 5.38 9/1/15 5,000 4,724,600
Ocala Water & Sewer Revenue, Callable 10/1/05
@ 102, 10/1/07 @ 100 (AMBAC Insured).............. Aaa/AAA+ 5.50 10/1/20 4,000 3,816,680
Okaloosa County Gas Tax Revenue., Callable 10/1/04 @
102 (MBIA Insured)................................ Aaa/AAA 6.88 10/1/19 5,000 5,435,350
Orlando Utility Comm. Water & Electric Revenue
Refunding, Sub - Series D, Non callable........... Aa/AA- 6.75 10/1/17 3,000 3,359,790
</TABLE>
79
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MOODY'S/S&P MATURITY AMOUNT VALUE
RATINGS+ RATE DATE (000) (NOTE 2)
---------------- --------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS -- (CONTINUED)
Sunrise Lakes, Phase 4 Recreation District Revenue,
Unlimited General Obligation Bonds, Series A,
Callable 8/1/05 @ 102............................. NR/BBB- 6.75% 8/1/24 $ 2,500 $ 2,606,275
------------
103,603,831
------------
GUAM -- 11.7%
Guam Airport Authority, General Revenue Bonds,
Series B (AMT), Callable 10/1/03 @ 102 ........... NR/BBB 6.40 10/1/05 2,435 2,461,127
Guam Airport Authority, General Revenue Bonds,
Series 1993A, Callable 10/1/03 @ 102 ............. NR/BBB 6.38 10/1/10 3,820 3,759,759
Guam Government, Callable 3/1/99 @ 100 ............. NR/BBB 5.75 9/1/04 5,000 4,922,250
Guam Power Authority, General Revenue Bonds, Series
A, Callable 10/1/04 @ 102, 10/1/06 @ 100 ......... NR/BBB 6.75 10/1/24 3,000 3,049,800
------------
14,192,936
------------
PUERTO RICO -- 0.8%
Puerto Rico Industrial Tourist EDL Medical &
Environmental Control Facility Financing
Authority, Hospital Revenue Bond 1995, Auxilio
Mutuo Obligation Group, Series A, (MBIA Insured),
Callable 1/1/05 @ 102............................. Aaa/AAA 6.25 7/1/16 1,000 1,026,800
------------
TOTAL MUNICIPAL BONDS (COST $118,230,580)............. 118,823,567
------------
TOTAL LONG-TERM INVESTMENTS (COST $118,230,580)....... 118,823,567
------------
<CAPTION>
SHARES
----------
<S> <C> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 1.2%
OPEN-END INVESTMENT COMPANIES -- 1.2%
Dreyfus Municipal Cash Management Plus Fund ........ 1,442,560 1,442,560
Provident Institutional Municipal Fund ............. 1 1
------------
TOTAL SHORT-TERM INVESTMENTS (COST $1,442,561)........ 1,442,561
------------
TOTAL INVESTMENTS (COST $119,673,141) (A) -- 98.9%.... 120,266,128
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.1%......... 1,395,399
------------
NET ASSETS -- 100.0%.................................. $121,661,527
------------
------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $121,661,527.
+ Represents rating by Fitch Investors.
AMBAC -- AMBAC Indemnity Corporation.
AMT -- Interest on security is subject to Federal Alternative Minimum Tax.
FGIC -- Financial Guaranty Insurance Corporation.
FSA -- Financial Security Assurance Holding.
MBIA -- Municipal Bond Insurance Association.
NR -- No Moody's rating available.
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting purposes in excess of federal income tax reporting of
$63,008. Cost for federal income tax purposes differs from value by net
unrealized appreciation of securities as follows:
Unrealized appreciation....... $ 2,268,684
Unrealized depreciation....... (1,738,705)
------------
Net unrealized appreciation... $ 529,979
------------
------------
See Notes to Financial Statements.
80
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $119,673,141) ....... $ 120,266,128
Interest receivable ........................................... 2,062,824
Receivable for capital shares issued .......................... 209,641
Receivable from brokers for investment securities sold ........ 1,707,806
Receivable from Investment Adviser ............................ 2,880
Receivable from Administrator ................................. 8,456
Deferred organization costs ................................... 2,286
Prepaid expenses and other .................................... 16,566
-------------
Total assets .................................................... 124,276,587
-------------
LIABILITIES:
Bank overdraft ................................................ 247,574
Dividends payable ............................................. 549,102
Payable for capital shares redeemed ........................... 255,223
Payable to brokers for investment securities purchased ........ 1,442,559
Accrued expenses and other payables:
Shareholder Processing fees (Retail Shares) ................. 20,311
Combined Distribution and Service fees (Retail Shares) ...... 20,325
Custodian and transfer agent fees ........................... 41,930
Other ....................................................... 38,036
-------------
Total liabilities ............................................... 2,615,060
-------------
NET ASSETS ...................................................... $ 121,661,527
-------------
-------------
Net Asset Value, Offering Price and Redemption Price per Share:
Retail Shares:
($88,928,990/8,420,139 shares of beneficial interest issued
and outstanding $0.001 par value, unlimited number of shares
authorized) $ 10.56
-------------
-------------
Institutional Shares:
($32,732,537/3,096,279 shares of beneficial interest issued
and outstanding $0.001 par value, unlimited number of shares
authorized) $ 10.57
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par ......................... $ 11,496
Additional paid-in capital .................................... 124,111,779
Accumulated undistributed net investment income ............... 269,978
Accumulated net realized losses on investment transactions .... (3,324,713)
Net unrealized appreciation of investments .................... 592,987
-------------
Net Assets, May 31, 1996 ........................................ $ 121,661,527
-------------
-------------
</TABLE>
- ------------
See Notes to Financial Statements.
81
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the six months ended May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest -- (includes $34,558 in dividends from investments in money
market funds) .................................................... $ 3,893,100
EXPENSES:
Investment Advisory fees ........................................... $ 264,308
Administration fees ................................................ 38,918
Shareholder Processing fees (Retail Shares) ........................ 89,315
Combined Distribution and Service fees (Retail Shares) ............. 115,960
Combined Distribution and Service fees (Class B Shares) ............ 26,917
Transfer agent fees and expenses ................................... 57,775
Custodian fees and expenses ........................................ 18,641
Legal fees ......................................................... 3,225
Audit fees ......................................................... 7,413
Reports to shareholders (Retail Shares) ............................ 23,728
Reports to shareholders (Class B Shares) ........................... 1,632
Reports to shareholders (Institutional Shares) ..................... 5,039
Amortization of organization costs ................................. 7,030
Registration fees .................................................. 13,867
Trustees' fees ..................................................... 3,145
Insurance expense .................................................. 2,068
Other expenses ..................................................... 713
-----------
679,694
Less: Expense reimbursements ......................................... (57,345) 622,349
----------- ------------
Net Investment Income ................................................ 3,270,751
------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains on securities transactions ...................... 1,715,249
Net change in unrealized depreciation of investments ............... (8,018,169)
------------
Net Realized and Unrealized Losses on Investments .................. (6,302,920)
------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ................. $ (3,032,169)
------------
------------
</TABLE>
- ------------
See Notes to Financial Statements.
82
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
MAY 31, NOVEMBER 30,
1996 1995
----------- ------------
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income ........................................ $ 3,270,751 $ 7,151,582
Net realized gains on securities transactions ................ 1,715,249 2,033,503
Net change in unrealized appreciation (depreciation) of
investments ................................................ (8,018,169) 14,521,163
----------- ------------
Net increase (decrease) in net assets resulting from
operations ................................................. (3,032,169) 23,706,248
----------- ------------
Dividends to shareholders from net investment income
Retail Shares ................................................ (2,265,329) (5,123,622)
Class B Shares ............................................... (117,234) (349,572)
Institutional Shares ......................................... (888,188) (1,678,388)
----------- ------------
Total dividends to shareholders from net investment income ..... (3,270,751) (7,151,582)
----------- ------------
Fund Share Transactions
Net proceeds from shares subscribed .......................... 18,278,203 16,413,128
Net asset value of shares issued to shareholders in
reinvestment of dividends .................................. 1,627,213 4,818,028
Cost of shares redeemed ...................................... (29,636,433) (44,445,874)
----------- ------------
Net decrease in net assets from Fund share transactions ...... (9,731,017) (23,214,718)
----------- ------------
Total Decrease ................................................. (16,033,937) (6,660,052)
NET ASSETS:
Beginning of period .......................................... 137,695,464 144,355,516
----------- ------------
End of period (including accumulated undistributed net
investment income of $269,978 and $269,978,
respectively) .............................................. $121,661,527 $137,695,464
----------- ------------
----------- ------------
</TABLE>
- ------------
See Notes to Financial Statements.
83
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
S&P/MOODY'S MATURITY AMOUNT COST
RATINGS RATE DATE (000) (NOTE 2)
--------------- --------- --------- --------- --------------
<S> <C> <C> <C> <C> <C>
BANK NOTES -- 13.2%
DOMESTIC -- 11.9%
Bank of New York (Delaware), Variable Rate Bank
Note*........................................... A1/P1 5.88% 7/25/96 $ 38,000 $ 38,000,000
Huntington National Bank Variable Rate Bank
Note*........................................... A1/P1 5.39 6/3/96 35,000 35,000,000
Key Bank New York-Floating Rate Bank Note*........ A1/P1 5.26 6/3/96 75,000 74,949,201
NationsBank Corp-Variable Rate Bank Note*......... A1/P1 5.56 6/19/96 23,850 23,858,854
NationsBank Texas-Floating Rate Bank Note*........ A1/P1 5.37 6/3/96 35,000 34,999,584
Society National Bank Cleveland-Bank Note,
Callable 8/21/96 @ 100.......................... A1/P1 5.92 5/21/97 40,000 40,000,000
--------------
FOREIGN -- 1.3%
Abbey National Treasury Bank Note................. A1+/P1 5.05 3/3/97 28,000 27,948,550
--------------
TOTAL BANK NOTES (AMORTIZED COST -- $274,756,189)... 274,756,189
--------------
YANKEE CERTIFICATES OF
DEPOSIT -- 15.1%
Fuji Bank, Ltd., New York Branch.................. A1/P1 5.45 6/7/96 40,000 40,000,044
Fuji Bank, Ltd., New York Branch.................. A1/P1 5.46 7/3/96 40,000 40,000,332
Hong Kong Shanghai Bank, New York Branch, Callable
6/3/96 @ 100.................................... A1/P1 5.24 3/3/97 38,000 38,000,000
Sanwa Bank, Ltd., New York Branch................. A1+/P1 5.51 6/18/96 35,000 35,000,691
Sanwa Bank, Ltd., Chicago Branch.................. A1/P1 5.39 6/28/96 25,000 25,000,332
Sumitomo Bank, Ltd., New York Branch.............. A1/P1 5.44 6/3/96 40,000 40,000,000
Sumitomo Bank, Ltd., New York Branch.............. A1/P1 5.44 6/10/96 35,000 35,000,068
Sumitomo Bank, Ltd., New York Branch.............. A1/P1 5.41 6/24/96 20,000 20,000,116
Sumitomo Bank, Ltd., New York Branch.............. A1/P1 5.44 7/3/96 40,000 40,000,000
--------------
TOTAL YANKEE CERTIFICATES OF DEPOSIT (AMORTIZED COST
$313,001,583)..................................... 313,001,583
--------------
EURO CERTIFICATES OF DEPOSIT -- 1.7%
Sanwa Bank, Ltd., London Branch................... A1/P1 5.42 7/19/96 35,000 35,000,443
--------------
TOTAL EURO CERTIFICATES OF DEPOSIT (AMORTIZED COST
$35,000,443)...................................... 35,000,443
--------------
COMMERCIAL PAPER -- 25.6%
DOMESTIC -- 18.8%
ABN AMRO North American Finance................... A1+/P1 5.22 12/4/96 35,000 34,066,200
Bankers Trust Company............................. A1+/P1 5.28 12/30/96 40,000 38,768,000
Compagnie Bancaire................................ A1/P1 5.31 6/28/96 30,000 29,889,375
Countrywide Funding Corp.......................... A1/P2 5.30 6/20/96 30,000 29,924,917
Dynamic Funding Corp.............................. A2/P1 5.45 6/5/96 15,000 14,995,458
Dynamic Funding Corp.............................. A2/P1 5.42 6/6/96 37,819 37,801,918
Hitachi America - LTD............................. A1+/P1 5.36 8/7/96 19,000 18,816,122
Intl Nederlanden Funding.......................... A1+/P1 5.27 6/25/96 30,000 29,903,383
Mitsubishi Motors Inc............................. A1/P1 5.39 6/6/96 30,000 29,986,525
Sanwa Business Credit Inc......................... A2/P1 5.37 6/28/96 30,000 29,888,125
Sanwa Business Credit Inc......................... A2/P1 5.36 7/15/96 30,000 29,812,400
Sanwa Business Credit Inc......................... A2/P1 5.40 6/7/96 35,000 34,979,000
</TABLE>
84
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
S&P/MOODY'S MATURITY AMOUNT COST
RATINGS RATE DATE (000) (NOTE 2)
--------------- --------- --------- --------- --------------
<S> <C> <C> <C> <C> <C>
DOMESTIC -- (CONTINUED)
Sigma Finance Inc. (d)............................ A1+/P1 5.35% 8/28/96 $ 31,000 $ 30,603,804
--------------
389,435,227
--------------
FOREIGN -- 6.8%
Abbey National Treasury........................... A1+/P1 5.35 11/29/96 30,000 29,201,957
Hanson Finance - PLC.............................. A1/P1 5.35 7/11/96 45,000 44,745,875
Hanson Finance - PLC.............................. A1/P1 5.35 7/22/96 29,000 28,788,824
Hanson Finance - PLC.............................. A1/P1 5.35 7/25/96 20,000 19,845,445
Yorkshire Building Society........................ A1/P1 5.32 10/28/96 20,000 19,565,533
--------------
142,147,634
--------------
TOTAL COMMERCIAL PAPER (AMORTIZED COST
$531,582,861)..................................... 531,582,861
--------------
CORPORATE OBLIGATIONS -- 26.2%
ABT 1996-A/Household CCMT - Variable Rate Note*
(d)............................................. A1+/P1 5.46 6/17/96 35,000 35,000,000
Beta Finance - Corporate Floating Rate Note*...... A1+/P1 5.40 6/3/96 40,000 40,000,000
C.S. First Boston Corp., - Extendable Variable
Rate Note*(b)................................... A1/P1 5.54 6/4/96 35,000 35,000,000
C.S. First Boston Corp., - Extendable.............
Variable Rate Note (b)*........................... A1/P1 5.45 6/4/96 15,000 15,000,000
Ford Motor Credit Corp., - Variable Rate Note*.... A1/P1 5.79 7/15/96 40,000 40,035,604
Merrill Lynch and Co. Medium Term Note (c)........ A1+/P1 6.00 5/12/97 31,000 31,000,000
Morgan Stanley - Variable Rate Note*.............. A1+/P1 5.54 6/15/96 50,000 50,000,000
PHH Corp - Floating Rate Note*.................... A1/P1 5.36 6/3/96 50,000 49,997,922
SMM Trust 1995 B - Variable Rate Note*............ A1+/P1 5.49 6/2/96 30,000 30,000,000
SMM Trust 1995 N - Variable Rate Note*............ A1+/P1 5.55 8/15/96 35,000 35,000,000
Steers 1994-1st USA Bank - Variable Rate Note*
(d)............................................. A1+/P1 5.44 6/17/96 50,000 50,000,000
Steers 1995-1st USA Bank - Variable Rate Note*
(d)............................................. A1+/P1 5.46 6/10/96 30,000 30,000,000
Steers/Merrill Lynch - Variable Rate Note* (d).... **F1/P1 5.48 6/18/96 65,000 64,999,880
Steers Series A3/Household - Variable Rate Note*
(d)............................................. A1+/P1 5.45 6/17/96 35,000 35,000,000
--------------
TOTAL CORPORATE OBLIGATIONS (AMORTIZED COST
$541,033,406)..................................... 541,033,406
--------------
MASTER NOTES -- 4.8%
Lehman Brothers plc, Foreign Master Note.......... A1/P2 5.54 6/3/96 50,000 50,000,000
Lehman Brothers plc, Foreign Master Note.......... A1/P2 5.54 7/3/96 50,000 50,000,000
--------------
TOTAL MASTER NOTES (AMORTIZED COST $100,000,000).... 100,000,000
--------------
TIME DEPOSITS -- 6.6%
Bank of Tokyo Mitsubishi Bank - London Branch..... A1+/P1 5.50 7/8/96 35,000 35,000,000
Bank of Tokyo Mitsubishi Bank - Grand Cayman
Branch.......................................... A1+/P1 5.53 7/11/96 35,000 35,000,000
Bank of Tokyo Mitsubishi Bank - London Branch..... A1/P1 5.44 8/16/96 25,000 25,000,000
South Trust Bank - Grand Cayman Branch, Variable
Rate Time Deposit*.............................. A1/P1 5.47 7/1/96 42,000 42,000,000
--------------
TOTAL TIME DEPOSITS (AMORTIZED COST $137,000,000)... 137,000,000
--------------
</TABLE>
85
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
S&P/MOODY'S MATURITY AMOUNT COST
RATINGS RATE DATE (000) (NOTE 2)
--------------- --------- --------- --------- --------------
<S> <C> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 3.4%
Federal Home Loan Bank, Medium Term Note Callable
6/14/96 @ 100................................... AAA/Aaa 5.31% 3/14/97 $ 35,000 $ 35,000,000
Federal National Mortgage Assoc. Floating Rate
Note............................................ AAA/Aaa 5.46 10/4/96 35,000 34,995,295
--------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (AMORTIZED
COST $69,995,295)................................. 69,995,295
--------------
TOTAL INVESTMENTS IN SECURITIES (AMORTIZED COST
$2,002,369,777)................................... 2,002,369,777
--------------
REPURCHASE AGREEMENTS -- 9.7%
Fuji Securities, dated 5/31/96, with a maturity
value of $100,575,876 (Collateralized by
$222,588,000 various U.S. Government Agencies,
0.00% - 8.75%, 7/15/96 - 7/15/15, market value -
$102,541,765).................................. 5.36 6/3/96 100,531 100,530,972
Merrill Lynch Government Securities, Inc., dated
5/31/96 with a maturity value of $100,576,463
(Collateralized by $98,592,000 various U.S.
Government Agencies 0.00% - 7.00%, 8/15/20 -
3/15/24, market value - $102,544,066)........... 5.43 6/3/96 100,531 100,530,973
--------------
TOTAL REPURCHASE AGREEMENTS (AMORTIZED COST
$201,061,945)..................................... 201,061,945
--------------
TOTAL INVESTMENTS (AMORTIZED COST $2,203,431,722)(A)
-- 106.3%......................................... 2,203,431,722
PAYABLE TO BROKERS FOR SECURITIES PURCHASED --
(6.3%)............................................ (129,833,208)
--------------
NET ASSETS -- 100.0%................................ $2,073,598,514
--------------
--------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $2,073,598,514.
(a) Cost for federal income tax and financial reporting purposes are the same.
(b) Represents a restricted security.
(c) Convertible to Floating Rate Note on 7/12/96.
(d) 144a security which is restricted as to resale to institutional investors.
* Variable rate security. Maturity date reflects the next rate change date.
** Fitch Investors rating
PLC - Public Liability Company.
See Notes to Financial Statements.
86
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities (amortized cost $2,002,369,777) ..... $ 2,002,369,777
Repurchase agreements (amortized cost $201,061,945) ........... 201,061,945
Cash .......................................................... 240,067
Interest receivable ........................................... 10,447,641
Receivable for capital shares issued .......................... 21,050,892
Receivable from brokers for investment securities sold ........ 215,611,087
Prepaid expenses and other .................................... 124,115
---------------
Total assets .................................................... 2,450,905,524
---------------
LIABILITIES:
Dividends payable ............................................. 8,938,002
Payable for capital shares redeemed ........................... 5,544,659
Payable to brokers for investment securities purchased ........ 361,652,259
Accrued expenses and other payables:
Investment Advisory fees .................................... 339,338
Administration fees ......................................... 113,322
Shareholder Processing and Services fees (Service Shares) ... 391,667
Combined Distribution and Service fees (Retail Shares) ...... 121,638
Custodian and transfer agent fees ........................... 82,618
Other ....................................................... 123,507
---------------
Total liabilities ............................................... 377,307,010
---------------
NET ASSETS ...................................................... $ 2,073,598,514
---------------
---------------
Shares Outstanding ($0.001 par value, unlimited number of shares
authorized):
Institutional Shares .......................................... 645,797,821
Service Shares ................................................ 886,994,853
Retail Shares ................................................. 540,813,893
---------------
Total Shares Outstanding ........................................ 2,073,606,567
---------------
---------------
Net Asset Value, Offering Price and Redemption Price per Share:
Institutional Shares .......................................... $ 1.00
Service Shares ................................................ 1.00
Retail Shares ................................................. 1.00
---------------
---------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par ......................... $ 2,073,607
Additional paid-in capital .................................... 2,071,532,960
Accumulated net realized losses on investment transactions .... (8,053)
---------------
Net Assets, May 31, 1996 ........................................ $ 2,073,598,514
---------------
---------------
</TABLE>
- ------------
See Notes to Financial Statements.
87
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the six months ended May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest ............................................................. $ 56,308,210
EXPENSES:
Investment Advisory fees ........................................... $ 2,267,527
Administration fees ................................................ 874,979
Shareholder Processing and Services fees (Service Shares) .......... 1,509,734
Shareholder Processing fees (Retail Shares) ........................ 233,621
Combined Distribution and Service fees (Retail Shares) ............. 1,051,183
Transfer agent fees and expenses ................................... 73,154
Custodian fees and expenses ........................................ 210,014
Legal fees ......................................................... 65,614
Audit fees ......................................................... 95,916
Reports to shareholders (Institutional Shares) ..................... 22,858
Reports to shareholders (Service Shares) ........................... 14,711
Reports to shareholders (Retail Shares) ............................ 132,147
Registration fees .................................................. 44,609
Trustees' fees ..................................................... 45,146
Insurance expense .................................................. 27,935
Other expenses ..................................................... 20,562
-----------
6,689,710
Less: Expense reimbursements ......................................... (60,507) 6,629,203
----------- ------------
Net Investment Income 49,679,007
REALIZED GAINS ON INVESTMENTS:
Net realized gains on securities transactions ...................... 883
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................. $ 49,679,890
------------
------------
</TABLE>
- ------------
See Notes to Financial Statements.
88
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED MAY 31, NOVEMBER 30,
1996 1995
-------------- --------------
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income ..................................... $ 49,679,007 $ 86,983,774
Net realized gains on securities transactions ............. 883 410,900
-------------- --------------
Net increase in net assets resulting from operations ...... 49,679,890 87,394,674
-------------- --------------
Dividends to shareholders from net investment income
Institutional Shares ...................................... (16,439,312) (28,634,317)
Service Shares ............................................ (21,137,328) (42,688,668)
Retail Shares ............................................. (12,102,367) (15,660,789)
-------------- --------------
Total dividends to shareholders from net investment
income .................................................... (49,679,007) (86,983,774)
-------------- --------------
Distributions to shareholders from net realized gains
Institutional Shares ...................................... (94,766) --
Service Shares ............................................ (175,645) --
Retail Shares ............................................. (88,464) --
-------------- --------------
Total distributions to shareholders from net realized
gains ..................................................... (358,875) --
-------------- --------------
Fund Share Transactions (at $1.00 per share)
Net proceeds from shares subscribed ....................... 3,033,737,000 5,168,375,553
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions ............. 11,545,865 21,301,269
Cost of shares redeemed ................................... (2,780,986,048) (4,836,350,261)
-------------- --------------
Net increase in net assets from Fund share transactions ... 264,296,817 353,326,561
-------------- --------------
Total Increase .............................................. 263,938,825 353,737,461
NET ASSETS:
Beginning of period ....................................... 1,809,659,689 1,455,922,228
-------------- --------------
End of period ............................................. $2,073,598,514 $1,809,659,689
-------------- --------------
-------------- --------------
</TABLE>
- ------------
See Notes to Financial Statements.
89
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
MATURITY AMOUNT COST
RATE DATE (000) (NOTE 2)
---------- --------- --------- -------------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS -- 39.1%
U.S. TREASURY NOTES -- 39.1%
U.S. Treasury Note.................................................. 6.13% 7/31/96 $ 100,000 $ 100,180,726
U.S. Treasury Note.................................................. 4.38 8/15/96 75,000 74,904,283
U.S. Treasury Note.................................................. 6.25 8/31/96 61,000 61,123,887
U.S. Treasury Note.................................................. 7.25 11/15/96 50,000 50,398,995
U.S. Treasury Note.................................................. 6.50 4/30/97 50,000 50,362,803
-------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(AMORTIZED COST $336,970,694)....................................... 336,970,694
-------------
REPURCHASE AGREEMENTS -- 60.8%
C.S. First Boston Corp., dated 5/31/96 with a maturity value of
$40,017,667 (Collateralized by $40,165,000 U.S. Treasury Notes,
6.88%, 3/31/97, market value - $41,001,973)....................... 5.30 6/3/96 40,000 40,000,000
J.P. Morgan Securities, dated 5/31/96 with a maturity value of
$110,049,271 (Collateralized by $113,835,438 Government National
Mortgage Assoc., 7.00% - 7.50%, 1/15/26 - 12/15/26, market value -
$112,221,200).................................................... 5.38 6/3/96 110,000 110,000,000
J.P. Morgan Securities, dated 4/17/96 with a maturity value of
$81,060,000 (Collateralized by $227,269,091 Government National
Assoc., 8.50% - 9.00%, 8/15/16 - 12/15/22, market value -
$82,218,286)..................................................... 5.30 6/3/96 80,000 80,000,000
Merrill Lynch Securities, Inc., dated 5/31/96 with a maturity value
of $106,732,209 (Collateralized by $510,680,000 various U.S.
Government Securities, 0.00% - 8.88%, 8/1/96 - 8/15/25, market
value - $108,819,666)............................................. 5.30 6/3/96 106,685 106,685,090
Morgan Stanley & Co., dated 5/31/96 with a maturity value of
$40,017,917 (Collateralized by $53,366,512 Government National
Mortgage Assoc., 7.00% - 8.00%, 1/15/08 - 11/15/25, market value -
$41,520,928)..................................................... 5.38 6/3/96 40,000 40,000,000
Sanwa BGK Securities, dated 5/31/96 with a maturity value of
$40,017,767 (Collateralized by $40,548,762 U.S. Treasury Notes
and Bonds, 5.63% - 8.75%, 5/15/97 - 11/15/24, market value
$40,800,692)..................................................... 5.33 6/3/96 40,000 40,000,000
Smith Barney, dated 5/31/96 with a maturity value of $106,732,387
(Collateralized by $102,537,000 various U.S. Government
Securities, 0.00% - 9.13%, 11/15/96 - 5/15/20, market value -
$108,819,426)..................................................... 5.32 6/3/96 106,685 106,685,090
-------------
TOTAL REPURCHASE AGREEMENTS (AMORTIZED COST $523,370,180)............. 523,370,180
-------------
TOTAL INVESTMENTS (AMORTIZED COST $860,340,874) (A) -- 99.9%.......... 860,340,874
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.1%......................... 1,225,393
-------------
NET ASSETS -- 100.0%.................................................. $ 861,566,267
-------------
-------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $861,566,267.
(a) Cost for federal income tax and financial reporting purposes are the same.
See Notes to Financial Statements.
90
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities (amortized cost $336,970,694) ............................. $ 336,970,694
Repurchase agreements (amortized cost $523,370,180) ................................. 523,370,180
Interest receivable ................................................................. 8,285,048
Receivable for capital shares issued ................................................ 8,406,238
Receivable from brokers for investment securities sold .............................. 487,653,347
Prepaid expenses and other .......................................................... 40,007
-------------
Total assets .......................................................................... 1,364,725,514
-------------
LIABILITIES:
Dividends payable ................................................................... 3,532,206
Payable for capital shares redeemed ................................................. 5,119,107
Payable to brokers for investment securities purchased .............................. 493,934,039
Accrued expenses and other payables:
Investment Advisory fees .......................................................... 166,515
Administration fees ............................................................... 61,167
Shareholder Processing and Services fees (Service Shares) ......................... 38,042
Combined Distribution and Service fees (Retail Shares) ............................ 168,877
Custodian and transfer agent fees ................................................. 67,517
Other ............................................................................. 71,777
-------------
Total liabilities ..................................................................... 503,159,247
-------------
NET ASSETS ............................................................................ $ 861,566,267
-------------
-------------
Shares Outstanding ($0.001 par value, unlimited number of shares authorized):
Institutional Shares ................................................................ 236,234,195
Service Shares ...................................................................... 580,211,046
Retail Shares ....................................................................... 45,648,346
-------------
Total Shares Outstanding .......................................................... 862,093,587
-------------
-------------
Net Asset Value, Offering Price and Redemption Price per Share:
Institutional Shares ................................................................ $ 1.00
Service Shares ...................................................................... 1.00
Retail Shares ....................................................................... 1.00
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interst, at par ................................................ $ 862,093
Additional paid-in capital .......................................................... 861,231,494
Accumulated net realized losses on investment transactions .......................... (527,320)
-------------
Net Assets, May 31, 1996 .............................................................. $ 861,566,267
-------------
-------------
</TABLE>
- -------------
See Notes to Financial Statements.
91
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the six months ended May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest ........................................................... $ 23,867,086
EXPENSES:
Investment Advisory fees ........................................... $ 1,080,940
Administration fees ................................................ 428,764
Shareholder Processing fees (Retail Shares) ........................ 19,736
Shareholder Processing and Services fees (Service Shares) .......... 997,519
Combined Distribution and Service fees (Retail Shares) ............. 122,030
Transfer agent fees and expenses ................................... 53,750
Custodian fees and expenses ........................................ 102,632
Legal fees ......................................................... 28,258
Audit fees ......................................................... 42,219
Reports to shareholders (Institutional Shares) ..................... 7,544
Reports to shareholders (Service Shares) ........................... 10,655
Reports to shareholders (Retail Shares) ............................ 12,652
Trustees' fees ..................................................... 19,735
Registration fees .................................................. 12,401
Insurance expense .................................................. 13,538
Other expenses ..................................................... 25,883
-----------
2,978,256
Less: Expense reimbursements ......................................... (71,013) 2,907,243
----------- ------------
Net Investment Income: ............................................... 20,959,843
REALIZED LOSSES ON INVESTMENTS:
Net realized losses on securities transactions ..................... (219,518)
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................. $ 20,740,325
------------
------------
</TABLE>
- ------------
See Notes to Financial Statements.
92
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED NOVEMBER 30,
MAY 31, 1996 1995
--------------- --------------
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income .......................... $ 20,959,843 $ 42,840,635
Net realized losses on securities
transactions ................................. (219,518) (195,517)
--------------- --------------
Net increase in net assets resulting from
operations ................................... 20,740,325 42,645,118
--------------- --------------
Dividends to shareholders from net investment
income
Institutional Shares ........................... (6,777,264) (13,077,345)
Service Shares ................................. (12,910,155) (27,761,370)
Retail Shares .................................. (1,272,424) (2,001,920)
--------------- --------------
Total dividends to shareholders from net
investment income .............................. (20,959,843) (42,840,635)
--------------- --------------
Fund Share Transactions (at $1.00 per Share)
Net proceeds from shares subscribed ............ 1,628,607,794 2,613,725,098
Net asset value of shares issued to shareholders
in reinvestment of dividends ................. 1,951,675 3,365,762
Cost of shares redeemed ........................ (1,579,821,509) (2,714,202,606)
--------------- --------------
Net increase (decrease) in net assets from Fund
share transactions ........................... 50,737,960 (97,111,746)
--------------- --------------
Total Increase (Decrease) ...................... 50,518,442 (97,307,263)
NET ASSETS
Beginning of period ............................ 811,047,825 908,355,088
--------------- --------------
End of period .................................. $ 861,566,267 $ 811,047,825
--------------- --------------
--------------- --------------
</TABLE>
- ------------
See Notes to Financial Statements.
93
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
MOODY'S/S&P MATURITY AMOUNT COST
RATINGS+ RATE DATE (000) (NOTE 2)
--------------- --------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
MUNICIPAL SECURITIES -- 99.7%
ALABAMA -- 4.1%
Birmingham General Obligation Warrants, Series A (LC
First Alabama Bank)* .............................. VMIG1/Aa2 3.75% 6/7/96 $ 1,000 $ 1,000,000
A-1+/AA
Geneva County Industrial Development Board Revenue
Bonds, Brooks Ag. Co. Project (AMT) (LC First
Alabama Bank)* .................................... NR/NR 4.20 6/7/96 5,900 5,900,000
A-1+/AA-
Homewood Industrial Development Board Revenue Bonds,
Keebler Co. Project. (LC Bank of Nova Scotia)* .... NR/NR 3.85 6/7/96 560 560,000
-------------
NR/NR 7,460,000
-------------
CONNECTICUT -- 2.8%
Mashantucket Pequot Tribe Commercial Paper (LC Bank
of America) ....................................... P-1/NR 3.45 6/21/96 5,000 5,000,000
-------------
A-1+/NR
FLORIDA -- 1.7%
City of Jacksonville -- PCR Ref. Bonds Florida Power
& Light Co. Project ............................... P-1/A1 3.70 9/10/96 3,000 3,000,000
-------------
A-1+/AA-
GEORGIA -- 5.8%
Georgia Municipal Gas Authority, Gas Revenue Bonds
Southern Portfolio I Project Series D (LC
Wachovia) ......................................... NR/NR 3.70 10/18/96 7,200 7,200,000
A1+/AA+
Rockdale County Hospital Authority Revenue
Anticipation Certificates (LC Trust Company Bank,
Atlanta)* ......................................... VMIG1/Aa3 3.70 6/7/96 3,235 3,235,000
-------------
NR/NR
10,435,000
-------------
IDAHO -- 0.2%
Idaho Health Facilities Authority Revenue Bonds, St.
Lukes Regional Medical Center Project (LC Credit
Suisse, N.Y.)* .................................... VMIG1/Aa2 3.70 6/3/96 300 300,000
-------------
NR/NR
ILLINOIS -- 11.0%
Illinois Development Financing Authority Economic
Development Revenue Bonds, Addison 450 LP Project
(AMT) (LC American National Bank Trust,
Chicago)* ......................................... NR/Aa3 3.90 6/7/96 1,000 1,000,000
NR/NR
Illinois Education Fac. Auth. Commercial Paper Rev.
Notes Pooled Financing Program (LC Northern Trust
Co.) .............................................. P-1/NR 3.60 7/12/96 7,000 7,000,000
NR/NR
</TABLE>
94
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
MOODY'S/S&P MATURITY AMOUNT COST
RATINGS+ RATE DATE (000) (NOTE 2)
--------------- --------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
ILLINOIS -- (CONTINUED)
Illinois Health Facilities Authority Revolving Fund,
University of Chicago, Mandatory Put, 8/8/96 @
100 ............................................... VMIG1/Aaa 3.25% 8/6/96 $ 8,500 $ 8,500,000
A-1+/AA
Rockton Industrial Project Revenue Bonds, Specialty
Equipment Companies Inc. Project, Series 1994 (AMT)
(LC Barclays Bank)* ............................... NR/NR 4.00 6/7/96 3,300 3,300,000
-------------
A-1+/AA 19,800,000
-------------
INDIANA -- 6.7%
Evansville Industrial Development Revenue Bonds,
Keebler Co. Project (LC Bank of Nova Scotia)* ..... NR/NR 3.85 6/7/96 505 505,000
NR/NR
Gary Environmental Improvement Revenue Revenue Bonds,
U.S. Steel Corporation, Project (LC Bank of Nova
Scotia)* .......................................... P1/Aa3 3.85 6/3/96 1,000 1,000,000
A-1+/AA-
Indiana Development Fin. Authority Revenue Bonds, Mid
America Project, Series 1995 (LC Union Bank of
Switzerland)* ..................................... NR/NR 3.95 6/7/96 3,800 3,800,000
A-1+/AAA
Indiana Health Facilities Financing Authority Revenue
Bonds (LC Comerica Bank)* ......................... VMIG1/A1 3.75 6/7/96 5,000 5,000,000
NR/NR
Rockport Industrial Pollution Control Revenue Bonds,
Indiana Michigan Power Co Project-B (AMBAC Insured)
SBPA -- The Bank of New York* ..................... NR/NR 3.70 6/7/96 1,800 1,800,000
-------------
A-1/AAA 12,105,000
-------------
KENTUCKY -- 1.6%
Jefferson County Pollution Control Revenue Bond
Series 1992-A Louisville Gas & Electric Co.
Project ........................................... VMIGI/Aa2 3.70 10/9/96 1,700 1,700,000
A-1+/AA
Trimble County Pollution Control Revenue Bonds Series
1992A Louisville Gas & Electric Co. Project ....... VMIGI/Aa2 3.70 9/10/96 1,200 1,200,000
-------------
A-1+/AA 2,900,000
-------------
LOUISIANA -- 7.0%
Louisiana Public Facilities Authority Hospital
Revenue Bonds, Willis-Knighton Medical Center
Project (AMBAC Insured) SBPA -- Mellon Bank* ...... VMIG1/Aaa 3.70 6/7/96 8,500 8,500,000
A-1/AAA
Plaquemines Port Harbor & Terminal Dist. Marine
Terminal Facilities Rev. Ref. Electric Coal
Transfer Corp. .................................... P-1/A1 3.65 8/8/96 4,100 4,100,000
-------------
A-1+/AA- 12,600,000
-------------
MICHIGAN -- 5.1%
Michigan State Hospital Financing Authority Revenue
Bonds, Mt. Clemens Hospital (LC Comerica Bank)* ... VMIG1/A1 3.75 6/7/96 7,100 7,100,000
NR/NR
</TABLE>
95
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
MOODY'S/S&P MATURITY AMOUNT COST
RATINGS+ RATE DATE (000) (NOTE 2)
--------------- --------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
MICHIGAN -- (CONTINUED)
Michigan State Housing Development Authority Revenue
Bonds, Rental Housing, Series C Revenue (LC Credit
Suisse, N.Y.)* .................................... NR/NR 3.70% 6/7/96 $ 2,050 $ 2,050,000
-------------
A-1+/AA+ 9,150,000
-------------
MINNESOTA -- 0.7%
Becker Pollution Control Revenue, Series 1993A
Northern States Power Co. ......................... VMIG1/A2 3.70 9/11/96 1,300 1,300,000
-------------
A-1/A+
MISSISSIPPI -- 3.5%
Claiborne MS PRC, Southern Miss. Elect. Power, Gtd by VMIG1/Aa3
National Rural Utilities CFC ...................... A1+/AA- 3.75 8/16/96 2,400 2,400,000
Mississippi Hospital Equipment and Facilities
Authority Variable Rate Demand Revenue Bonds,
Mississippi Baptist Medical Center Project, Series
1990B (LC Sanwa Bank Ltd.)* ....................... VMIG1/Aa3 3.70 6/7/96 3,800 3,800,000
-------------
NR/NR 6,200,000
-------------
MISSOURI -- 1.1%
Missouri Housing Development Commission, Single
Family Mortgage Revenue Bonds, Series 1995D (AMT)
Mandatory Put 11/1/96 @ 100 ....................... NR/NR 4.20 11/1/96 2,000 2,000,000
-------------
A-1+/AAA
MONTANA -- 2.8%
Forsyth Pollution Control Revenue Bonds, PacificCorp
Project (LC Industrial Bank of Japan Ltd.)* ....... P-1/A1 3.95 6/3/96 5,000 5,000,000
-------------
A-1/A
NEVADA -- 6.6%
Clark County Pollution Control Revenue Bonds, Nevada
Power Co Project -- Series D (LC Societe
Generale)* ........................................ NR/NR 3.75 6/7/96 10,400 10,400,000
A-1+/AA-
Washoe County General Obligation LTD, (FGIC Insured)
Pre-funded 7/15/96 @ 102 .......................... NR/Aaa 7.13 7/15/96 1,500 1,534,662
-------------
NR/AAA 11,934,662
-------------
NORTH CAROLINA -- 7.2%
Mecklenburg County, General Obligation Series 1996C
Sub Series A* ..................................... VMIG1/Aaa 3.70 6/7/96 5,000 5,000,000
A-1/AAA
Union County Industrial Facilities and Pollution
Control Financing Authority Industrial Development
Revenue Bonds (LC Morgan Guaranty Trust)* ......... VMIG1/Aa1 3.70 6/7/96 7,900 7,900,000
-------------
NR/NR 12,900,000
-------------
</TABLE>
96
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
MOODY'S/S&P MATURITY AMOUNT COST
RATINGS+ RATE DATE (000) (NOTE 2)
--------------- --------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
OHIO -- 0.5%
Summit County Industrial Development Revenue Bonds,
Keebler Co. Project, Series 93 (LC Northern
Trust)* ........................................... NR/NR 3.85% 6/7/96 $ 995 $ 995,000
-------------
NR/NR
PENNSYLVANIA -- 3.3%
Lehigh County General Purpose Auth. Hospital Central
Svc. Cup. Asset Fin. (MBIA Insured) SBPA -- PNC ... NR/Aaa 3.50 6/21/96 5,900 5,900,000
-------------
A-1/AAA
SOUTH DAKOTA -- 2.9%
Lawrence County Pollution Control Revenue Bonds,
Homestead Mining Project (LC Bank of Nova
Scotia)* .......................................... P-1/Aa3 3.80 6/7/96 5,300 5,300,000
-------------
A-1+/AA-
TENNESSEE -- 0.8%
Sullivan County Industrial Development Board Revenue
Bonds, Modern Forge Co. Project, (AMT), Series 90
(LC Northern Trust)* .............................. NR/NR 4.00 6/7/96 1,500 1,500,000
-------------
A-1+/AA-
TEXAS -- 7.3%
Houston, General Obligation Series 1993E , Put
10/1/96 @ 100 ..................................... VMIG1/Aa 3.50 10/1/96 1,200 1,200,000
A-1+/AA-
Port Arthur Navigation District, Star Enterprises
Project (LC Swiss Bank)* .......................... NR/NR 3.80 6/7/96 1,400 1,400,000
A-1+/AA+
State of Texas Revenue Anticipation Note, Series
A ................................................. MIG1/NR 4.75 8/30/96 5,700 5,712,540
SP-1+/NR
Texas Public Finance Auth. Commercial Paper Notes ... P-1/NR 3.50 7/24/96 4,700 4,700,000
-------------
A-1+/NR 13,012,540
-------------
UTAH -- 5.0%
Intermountain Power Agency of Utah, Power Supply
Revenue, Series A, Callable 7/1/96 @ 102 (Pre-
refunded on 7/1/96 @102) .......................... NR/Aaa 7.75 6/3/96 1,925 1,969,063
NR/AA-
Intermountain Power -- V-R Power Supply Rev. Ref.
Bonds, Series 1995F (LC Bank of America) .......... VMIGI/Aa3 3.50 6/14/96 5,000 5,000,000
A-1+/AA-
Intermountain Power -- V-R Power Supply Rev. Ref.
Bonds, Series 1995F (LC Bank of America) .......... VMIGI/Aa3 3.70 9/9/96 2,000 2,000,000
-------------
A-1+/AA- 8,969,063
-------------
VIRGINIA -- 2.8%
Louisa County, Industrial Development Auth., Pooled
Fin. Prog. (LC NationsBank)* ...................... NR/NR 3.80 6/7/96 5,000 5,000,000
-------------
A-1/A+
</TABLE>
97
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
MOODY'S/S&P MATURITY AMOUNT COST
RATINGS+ RATE DATE (000) (NOTE 2)
--------------- --------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
WASHINGTON -- 2.2%
King County Sewer Rev. Bond Anticipation CP Notes ... P-1/NR 3.70% 8/26/96 $ 4,000 $ 4,000,000
-------------
A-1/NR
WISCONSIN -- 3.9%
City of Oak Creek Pollution Control Revenue Bonds,
Wisconsin Electric Power Co. Project* ............. P-1/Aa3 3.85 6/7/96 2,000 2,000,000
NR/AA
Pleasant Prairie Pollution Control Revenue Bonds,
Wisconsin Electric Power Co. Project, Series C* ... P-1/Aa3 3.75 6/7/96 5,000 5,000,000
-------------
A-1+/AA 7,000,000
-------------
WYOMING -- 3.1%
Sweetwater Cty -- PCR Ref. Bonds Series 1988A P-1/Aaa
Pacificorp Proj. (LC Union Bank of Switzerland)* .. A-1+/AAA 3.55 7/19/96 2,700 2,700,000
Sweetwater Cty -- Pcr Ref. Bond Series 1992 P-1/Aaa
Pacificorp Proj. (LC Union Bank of Switzerland)* .. A-1+/AAA 3.70 7/26/96 2,900 2,900,000
-------------
5,600,000
-------------
TOTAL MUNICIPAL SECURITIES (AMORTIZED COST
$179,361,265)(A) -- 99.7%............................ 179,361,265
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.3%.......... 558,448
-------------
NET ASSETS -- 100.0%
$ 179,919,713
-------------
-------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $179,919,713
(a) Cost for federal income tax and financial reporting purpose are the same.
* Variable rate security. Maturity date reflects the next rate change date.
+ The ratings provided consist of short-term and long-term ratings for both
Moody's and S&P. The first row consists of the short-term/long-term Moody's
ratings and the second consists of short-term/long-term S&P ratings.
AMBAC -- AMBAC Indemnity Corporation.
AMT -- Interest on securities subject to Federal Alternative Minimum Tax.
FGIC -- Financial Guaranty Insurance Corp.
LC -- Letter of credit.
MBIA -- Municipal Bond Insurance Association.
NR -- Not rated.
SBPA -- Standby Bond Purchase Agreement.
See Notes to Financial Statements.
98
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities (amortized cost $179,361,265) ....... $ 179,361,265
Cash .......................................................... 65,312
Interest receivable ........................................... 1,140,257
Receivable for capital shares issued .......................... 378,580
Receivable from brokers for investment securities sold ........ 5,466,334
Prepaid expenses and other .................................... 13,438
-------------
Total assets .................................................... 186,425,186
-------------
LIABILITIES:
Dividends payable ............................................. 524,922
Payable for capital shares redeemed ........................... 5,841,203
Accrued expenses and other payables:
Investment Advisory fees .................................... 23,785
Administration fees ......................................... 12,755
Shareholder Processing and Services fees (Service Shares) ... 21,224
Custodian and transfer agent fees ........................... 19,665
Other ....................................................... 61,919
-------------
Total liabilities ............................................... 6,505,473
-------------
NET ASSETS ...................................................... $ 179,919,713
-------------
-------------
Shares Outstanding ($0.001 par value, unlimited number of
shares authorized):
Institutional Shares .......................................... 133,623,985
Service Shares ................................................ 2,877,686
Retail Shares ................................................. 43,469,687
-------------
Total Shares Outstanding .................................... 179,971,358
-------------
-------------
Net Asset Value, Offering Price and Redemption Price per Share:
Institutional Shares .......................................... $ 1.00
Service Shares ................................................ 1.00
Retail Shares ................................................. 1.00
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par ......................... $ 179,972
Additional paid-in capital .................................... 179,791,386
Accumulated net realized losses on investment transactions .... (51,645)
-------------
Net Assets, May 31, 1996 ........................................ $ 179,919,713
-------------
-------------
</TABLE>
- ------------
See Notes to Financial Statements.
99
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the six months ended May 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest .................................... $ 3,467,874
EXPENSES:
Investment Advisory fees .................. $ 237,759
Administration fees ....................... 119,996
Shareholder Processing fees (Retail
Shares) ................................. 19,488
Shareholder Processing and Services fees
(Service Shares) ........................ 4,891
Combined Distribution and Service fees
(Retail Shares) ......................... 93,314
Transfer agent fees and expenses .......... 37,423
Custodian fees and expenses ............... 32,517
Reports to shareholders (Institutional
Shares) ................................. 7,836
Reports to shareholders (Service
Shares) ................................. 1,737
Reports to shareholders (Retail Shares) ... 11,906
Legal fees ................................ 6,106
Audit fees ................................ 10,598
Registration fees ......................... 11,648
Trustees' fees ............................ 4,744
Insurance expense ......................... 3,145
Other expenses ............................ 1,675
-----------
604,783
Less: Fee waivers and expense
reimbursements ............................ (118,239) 486,544
----------- -----------
Net Investment Income: ...................... 2,981,330
REALIZED LOSSES ON INVESTMENTS:
Net realized losses on securities
transactions ............................ (20,000)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS ................................ $ 2,961,330
-----------
-----------
</TABLE>
- ------------
See Notes to Financial Statements.
100
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED NOVEMBER 30,
MAY 31, 1996 1995
------------- ------------
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income .......................... $ 2,981,330 $ 6,967,330
Net realized losses on securities
transactions ................................. (20,000) (903)
------------- ------------
Net increase in net assets resulting from
operations ................................... 2,961,330 6,966,427
------------- ------------
Dividends to shareholders from net investment
income
Institutional Shares ........................... (2,327,618) (5,722,875)
Service Shares ................................. (40,653) (95,436)
Retail Shares .................................. (613,059) (1,149,019)
------------- ------------
Total dividends to shareholders from net
investment income .............................. (2,981,330) (6,967,330)
------------- ------------
Fund Share Transactions (at $1.00 per share)
Net proceeds from shares subscribed ............ 318,635,119 504,374,576
Net asset value of shares issued to shareholders
in reinvestment of dividends ................. 503,958 1,626,585
Cost of shares redeemed ........................ (336,643,715) (513,562,638)
------------- ------------
Net decrease in net assets from Fund share
transactions ................................. (17,504,638) (7,561,477)
------------- ------------
Total Decrease ................................... (17,524,638) (7,562,380)
NET ASSETS:
Beginning of period ............................ 197,444,351 205,006,731
------------- ------------
End of period .................................. $ 179,919,713 $197,444,351
------------- ------------
------------- ------------
</TABLE>
- ------------
See Notes to Financial Statements.
101
<PAGE>
EMEBMMSAN96
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
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 fifteen portfolios. The
accompanying financial statements and notes relate to all of the portfolios of
the Trust that conducted investment operations during the six months ended May
31, 1996 (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.
The investment objective of the Equity Fund is to seek long-term capital
appreciation. The Fund normally invests at least 65% of its total assets in
equity securities. The investment objective of the Equity Value Fund is to seek
long-term capital appreciation. The Fund invests primarily in common stock,
preferred stock and debt obligations convertible into common stock that the
investment adviser believes to be undervalued. The investment objective of the
International Equity Fund is to seek long-term capital appreciation. The Fund
invests at least 65% of its assets in equity securities of foreign issuers. The
investment objective of the Small Capitalization Fund is to provide long-term
capital appreciation. The Fund pursues its objective by investing primarily in
equity securities such as common stocks and instruments convertible or
exchangeable into common stock. The investment objective of the Balanced Fund is
to provide an attractive investment return through a combination of growth of
capital and current income. The Fund seeks to achieve its objective by
allocating assets among three major asset groups: equity securities, fixed
income securities, and cash equivalences. The investment objective of the Short-
Term Fixed Income Fund is to seek consistently positive current income with
relative stability of principal by investing in investment grade securities and
high quality money market instruments. The investment objective of the Managed
Bond Fund is to seek a high level of current income and, secondarily, capital
appreciation. The investment objective of the U.S. Government Securities Fund is
to seek consistently positive income by investing principally in U.S. Government
securities and repurchase agreements collateralized by such securities. The Fund
will always invest at least 65% of its total assets in such instruments. The
primary investment objective of the Florida Tax-Exempt Fund is to seek to
provide high tax-free income and current liquidity. In seeking to attain its
objective, the Fund invests its assets primarily in municipal obligations that
are rated investment grade or above by one or more Nationally Recognized
Statistical Rating Organizations at the time of purchase. The investment
objective of both the Prime and Treasury Funds is to seek to provide a high
level of current income consistent with liquidity, the preservation of capital
and a stable net asset value. The Prime Fund pursues its objective by investing
in a broad range of short-term government, bank and corporate obligations. The
Treasury Fund seeks to achieve its objective by investing in obligations that
the U.S. Treasury has issued or to which the U.S. Treasury has pledged its full
faith and credit to guarantee the payment of principal and interest. The
investment objective of the Tax-Exempt Fund is to seek to provide a high level
of current income that is exempt from federal income taxes, consistent with
liquidity, the preservation of capital and a stable net asset value. The Fund
invests in high quality debt obligations of states, territories, and possessions
of the United States and the District of Columbia, and of their agencies,
authorities, instrumentalities and political sub-divisions ("municipal
obligations"). Under normal circumstances, the Fund invests 80% or more of its
net assets in municipal obligations.
Barnett Banks Trust Company, N.A. ("Barnett") serves as the Funds'
investment adviser. Effective June 28, 1996, Barnett Capital Advisors, Inc. will
assume the investment advisory responsibilities of Barnett. Rodney Square
Management Corporation (the "Sub-Adviser"), a subsidiary of Wilmington Trust
Company, serves as the Tax-Exempt Fund's investment sub-adviser. Effective April
1, 1996, BISYS Fund Services Limited Partnership ("BISYS") became the Funds'
administrator. Emerald Asset Management, Inc. (the "Distributor") serves as the
distributor of the Funds' shares. BISYS is a wholly owned subsidiary and the
Distributor is an indirectly owned subsidiary of The BISYS Group, Inc.
102
<PAGE>
- --------------------------------------------------------------------------------
The Prime Fund, Treasury Fund and Tax-Exempt Fund (collectively, the "money
market funds") each issue three classes of shares: Institutional Shares, Service
Shares and Retail Shares. Prior to April 1, 1996, the Institutional Shares were
referred to as Emerald Shares, the Service Shares were referred to as Emerald
Service Shares and the Retail Shares were referred to as Investor Shares.
Institutional Shares, Service Shares and Retail Shares are substantially the
same except that Service Shares bear the fees that are payable under a
Shareholder Processing and Services Plan (the "Service Plan") and Retail Shares
bear the fees that are payable under a Combined Distribution and Service Plan
(the "Combined Plan") adopted by the Board of Trustees pursuant to Rule 12b-1
under the Act and fees payable under a Shareholder Processing Plan (the
"Processing Plan"). In addition to fees paid pursuant to the Service Plan, the
Combined Plan and the Processing 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, Equity Value Fund, International 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 two
classes of shares: Retail Shares and Institutional Shares. Prior to April 1,
1996, Retail Shares were referred to as Class A Shares. Effective March 11,
1996, Class B Shares were no longer offered for sale and subsequently, all Class
B Shares were converted to Retail Shares on a no-load basis. Effective April 1,
1996, the sales load for Retail Shares was terminated. Retail Shares and
Institutional Shares are substantially the same, except that Retail Shares bear
the fees payable under the Combined Plan and also bear the fees payable under
the Processing Plan. In addition to the fees paid pursuant to the Combined Plan
and the Processing 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. The policies are in
conformity with generally accepted accounting principles. The preparation of
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of income and expenses for the
period. Actual amounts could differ from those estimates.
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 Equity Value Fund, the International 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. 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.
103
<PAGE>
- --------------------------------------------------------------------------------
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 the 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 Equity Value Fund, the
International Equity Fund, the Small Capitalization Fund and the Balanced Fund.
The Equity Fund, Equity Value Fund and Balanced Fund declare and pay dividends,
if any, quarterly. The International Equity Fund and Small Capitalization Fund
declare and pay 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 Trust'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. Treasury 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 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.
104
<PAGE>
- --------------------------------------------------------------------------------
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 Combined Plan, the Processing 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.
NOTE 3 -- AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into Investment Advisory Agreements with Barnett, an
Administration Agreement with BISYS 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. For its services, Barnett
is entitled to receive a fee
105
<PAGE>
- --------------------------------------------------------------------------------
based on each Fund's average daily net assets at the following annual rates:
<TABLE>
<S> <C>
Equity Fund......................... 0.60%
Equity Value Fund................... 0.60%
International Equity Fund........... 1.00%
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 six months ended May
31, 1996, Barnett waived fees of $94,514 for 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 $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. There were no fees waived by Barnett for the
Prime Fund or Treasury Fund for the six months ended May 31, 1996.
For the six months ended May 31, 1996, Barnett waived fees of $5,400,
$8,794, $136,280, $22,771 and $73,624 for the Equity Value Fund, International
Equity Fund, Balanced Fund, Short-Term Fixed Income Fund and Managed Bond Fund,
respectively. There were no fees waived by Barnett for the Equity Fund, Small
Capitalization Fund, U.S. Government Securities Fund or Florida Tax-Exempt Fund
for the six months ended May 31, 1996.
As administrator, BISYS assists in supervising the operations of the Funds.
For its services, BISYS is entitled to a fee, accrued daily and payable monthly,
at the effective annual rate of 0.0775% of the first $5 billion of the Trust's
aggregate net assets, 0.07% of the next $2.5 billion, 0.065% of the next $2.5
billion and 0.05% of all assets exceeding $10 billion. In the event the
aggregate average daily net assets falls below $3 billion, the fee will be
increased to 0.08% of the aggregate average daily net assets of the Trust. Prior
to April 1, 1996, Concord Holding Corporation ("Concord")(the prior
administrator), also a wholly owned subsidiary of The BISYS Group, Inc.,
received a fee at the effective annual rate of 0.05% of each variable net asset
value fund's daily net assets; 0.10% of each of the Prime Fund and Treasury
Fund's first $600 million of daily net assets, 0.09% of the next $400 million of
daily net assets, 0.08% of the next $1 billion of daily net assets and 0.07% of
each Fund's daily net assets in excess of $2 billion; and 0.15% of the
Tax-Exempt Fund's daily net assets. For the six months ended May 31, 1996, BISYS
waived fees of $644, $629, $12,771, $2,846 and $11,616 for the Equity Value
Fund, International Equity Fund, Balanced Fund, Short-Term Fixed Income Fund and
Managed Bond Fund, respectively.
Under the Processing Plan with respect to Retail Shares of the Funds,
institutions (including BISYS) that have entered into agreements with the
Distributor ("Service Organizations") agree to provide various shareholder and
administrative support services to the shareholders of Retail Shares. For their
services, Service Organizations are entitled to a fee ("Shareholder Processing
Fee") accrued daily and paid monthly at an annual rate of 0.25% of the
respective average daily net assets of Retail Shares. Prior to April 1, 1996,
the Retail Shares of the variable net asset value funds were charged a
Shareholder and Administrative Services Fee under a Shareholder Plan at an
effective annual rate of 0.15% of the average daily net assets of the Retail
Shares.
Barnett, BISYS 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 BISYS
and excluding fees payable under the Service Plan, the Combined Plan and the
Processing Plan) exceed 0.40% of such Fund's average daily net assets. This
voluntary reimbursement may be terminated at any time. For the six months ended
May 31, 1996, Barnett and BISYS each agreed to reimburse expenses in the amount
of $60,507 to the Prime Fund and $71,013 to the Treasury Fund for expenses in
excess of this limitation. For the six months ended May 31,
106
<PAGE>
- --------------------------------------------------------------------------------
1996, BISYS and the Sub-Adviser reimbursed expenses in the amount of $23,725 for
the Tax-Exempt Fund, pursuant to this voluntary agreement.
Barnett and BISYS 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 BISYS. For the six months
ended May 31, 1996, Barnett and BISYS reimbursed Fund expenses in the following
amounts pursuant to these voluntary limitations:
<TABLE>
<CAPTION>
BARNETT BISYS
--------- ---------
<S> <C> <C>
Equity Fund......................... $ 651 $ 0
Equity Value Fund(a)................ 53,539 0
International Equity Fund(a)........ 55,531 0
Small Capitalization Fund........... 3,699 276
Balanced Fund....................... 14,617 0
Short-Term Fixed Income Fund........ 47,799 0
U.S. Government Securities Fund..... 6,877 776
Managed Bond Fund................... 10,148 0
Florida Tax-Exempt Fund............. 53,920 3,425
</TABLE>
- ---------------
(a) For the period from December 27, 1995 (commencement of operations) through
May 31, 1996.
For the six months ended May 31, 1996, 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..................... $ 612 $ 6,897
Equity Value Fund(a)............ 0 0
International Equity Fund(a).... 0 0
Small Capitalization Fund....... 45 702
Balanced Fund................... 81 1,137
Short-Term Fixed Income Fund.... 0 0
U.S. Government Securities
Fund........................... 55 2,441
Managed Bond Fund............... 19 2,147
Florida Tax-Exempt Fund......... 149 3,409
</TABLE>
- ---------------
(a) For the period from December 27, 1995 (commencement of operations) through
May 31, 1996.
Under the Service Plan, institutions ("Service Organizations") agree to
provide support services to their clients who are beneficial owners of Service
Shares of the money market funds. For these services, the Funds agreed to pay
the Service Organizations an annual fee which may not exceed 0.35% of the
average daily net asset value of each Fund's Service Shares owned by the Service
Organization's clients. These payments are borne solely by Service Shares.
Services are provided by Service Organizations which may include Barnett, BISYS
and their affiliates. For the six months ended May 31, 1996, the Prime Fund,
Treasury Fund and Tax-Exempt Fund incurred expenses of $1,509,734, $997,519 and
$4,891, respectively, pursuant to the Service Plan, substantially all of which
was earned by Barnett and its affiliates.
The Funds have each adopted the Combined Plan. Under the Combined Plan, each
Fund may make payments to the Distributor and Service Organizations for
distribution and shareholder liaison services provided to Retail shareholders.
Under the Combined Plan, payments by each Fund may not exceed an annual rate of
0.25% of the average daily net assets of Retail Shares. Under the former
Distribution Plan for Class B Shares, distribution payments were not permitted
to 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 was to be used to compensate Service
Organizations for maintenance and service to Class B shareholder accounts and
not more than 0.75% was to be paid to the Distributor as reimbursement for
commissions, transaction fees and additional expenses related to promotional and
primary distribution activities. For the six months ended May 31, 1996, the
Prime Fund, Treasury Fund and Tax-Exempt Fund paid fees of $1,051,183, $122,030
and $93,314, respectively pursuant to the Combined Plan.
For the six months ended May 31, 1996, the Funds paid the following amounts
pursuant to the Combined Plan and the former Distribution Plan for Class B
Shares:
<TABLE>
<CAPTION>
RETAIL
SHARES B SHARES
----------- ---------
<S> <C> <C>
Equity Fund...................... $ 31,620 $ 6,670
Equity Value Fund(a)............. 0 0
International Equity Fund(a)..... 0 0
Small Capitalization Fund........ 6,104 7,145
Balanced Fund.................... 3,634 6,867
Short-Term Fixed Income Fund..... 670 366
U.S. Government Securities
Fund............................ 32,462 3,907
Managed Bond Fund................ 1,597 1,601
Florida Tax-Exempt Fund.......... 115,960 26,917
</TABLE>
- ---------------
(a) For the period from December 27, 1995 (commencement of operations) through
May 31, 1996.
107
<PAGE>
- --------------------------------------------------------------------------------
The Trust was informed that the amounts paid to Barnett and BISYS pursuant
to the Combined Plan are as follows:
<TABLE>
<CAPTION>
RETAIL SHARES
----------------------
BARNETT BISYS
--------- -----
<S> <C> <C>
Equity Fund.......................... $ 10,212 $ 0
Equity Value Fund(a)................. 0 0
International Equity Fund(a)......... 0 0
Small Capitalization Fund............ 867 0
Balanced Fund........................ 790 0
Short-Term Fixed Income Fund......... 141 0
U.S. Government Securities Fund...... 5,781 0
Managed Bond Fund.................... 223 0
Florida Tax-Exempt Fund.............. 19,354 0
</TABLE>
<TABLE>
<CAPTION>
B SHARES
----------------------
BARNETT BISYS
----------- ---------
<S> <C> <C>
Equity Fund......................... $ 235 $ 4,828
Equity Value Fund(a)................ 0 0
International Equity Fund(a)........ 0 0
Small Capitalization Fund........... 113 5,203
Balanced Fund....................... 170 5,007
Short-Term Fixed Income Fund........ 0 267
U.S. Government Securities Fund..... 24 2,837
Managed Bond Fund................... 9 1,165
Florida Tax-Exempt Fund............. 228 19,351
</TABLE>
- ---------------
(a) For the period from December 27, 1995 (commencement of operations) through
May 31, 1996.
Certain officers of the Trust are "affiliated persons" (as defined in the
Act) of BISYS 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. For the six months ended May 31, 1996, 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.................................. $ 6,680
Equity Value Fund(a)......................... 125
International Equity Fund(a)................. 125
Small Capitalization Fund.................... 2,795
Balanced Fund................................ 608
Short-Term Fixed Income Fund................. 0
U.S. Government Securities Fund.............. 2,280
Managed Bond Fund............................ 1,394
Florida Tax-Exempt Fund...................... 3,225
Prime Fund................................... 65,614
Treasury Fund................................ 28,258
Tax-Exempt Fund.............................. 6,106
</TABLE>
- ---------------
(a) For the period from December 27, 1995 (commencement of operations) through
May 31, 1996.
NOTE 4 -- SECURITIES TRANSACTIONS
For the six months ended May 31, 1996, 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.............. $110,198,024 $ 97,928,351
Equity Value Fund(a)..... 2,105,432 138,355
International Equity
Fund(a)................. 2,009,193 15,967
Small Capitalization
Fund.................... 165,356,655 145,108,154
Balanced Fund............ 43,750,906 36,306,758
Short-Term Fixed Income
Fund.................... 6,093,099 2,500,000
U.S. Government
Securities Fund......... 15,008,361 57,438,737
Managed Bond Fund........ 36,754,802 33,112,260
Florida Tax-Exempt Fund.. 119,466,027 127,735,839
</TABLE>
- ---------------
(a) For the period from December 27, 1995 (commencement of operations) through
May 31, 1996.
108
<PAGE>
- --------------------------------------------------------------------------------
NOTE 5 -- CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Funds are summarized below:
EQUITY FUND (000 OMITTED):
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MAY 31, 1996
---------------------- YEAR ENDED
NOVEMBER 30, 1995
(UNAUDITED) ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold.................................................................... 324 $ 4,566 374 $ 4,789
Reinvestment of dividends............................................... 137 1,801 2 31
Redeemed................................................................ (169) (2,368) (672) (8,159)
----------- --------- ----------- ---------
Net increase in shares outstanding before conversion...................... 292 3,999 -- --
Shares issued upon conversion from Class B................................ 186 2,552 -- --
----------- --------- ----------- ---------
Net increase (decrease) -- Retail......................................... 478 6,551 (296) (3,339)
----------- --------- ----------- ---------
Class B Shares
Sold.................................................................... 21 286 63 841
Reinvestment of dividends............................................... 13 170 -- --
Redeemed................................................................ (3) (27) (44) (540)
----------- --------- ----------- ---------
Net decrease in shares outstanding before conversion...................... 31 429 -- --
Shares exchanged upon conversion into Retail.............................. (189) (2,552) -- --
----------- --------- ----------- ---------
Net increase (decrease) -- Class B........................................ (158) (2,123) 19 301
----------- --------- ----------- ---------
Institutional Shares
Sold.................................................................... 1,953 27,231 2,006 25,379
Reinvestment of dividends............................................... 1,031 13,619 90 1,175
Redeemed................................................................ (1,391) (19,649) (5,283) (67,969)
----------- --------- ----------- ---------
Net increase (decrease) -- Institutional.................................. 1,593 21,201 (3,187) (41,415)
----------- --------- ----------- ---------
Net increase (decrease) in Fund........................................... 1,913 $ 25,629 (3,464) $ (44,453)
----------- --------- ----------- ---------
----------- --------- ----------- ---------
</TABLE>
EQUITY VALUE FUND (000 OMITTED):
<TABLE>
<CAPTION>
PERIOD ENDED
MAY 31, 1996(A)
------------------------
(UNAUDITED)
SHARES AMOUNT
----------- -----------
<S> <C> <C>
Retail Shares
Sold.......................................................................................... -- $ 1
Reinvestment of dividends..................................................................... -- --
Redeemed...................................................................................... -- --
--- -----------
Net increase -- Retail.......................................................................... -- 1
--- -----------
Institutional Shares
Sold.......................................................................................... 200 2,000
Reinvestment of dividends..................................................................... -- --
Redeemed...................................................................................... -- --
--- -----------
Net increase -- Institutional................................................................... 200 2,000
--- -----------
Net increase in Fund............................................................................ 200 $ 2,001
--- -----------
--- -----------
</TABLE>
- ---------------
(a) For the period from December 27, 1995 (commencement of operations) through
May 31, 1996.
109
<PAGE>
- --------------------------------------------------------------------------------
INTERNATIONAL EQUITY FUND (000 OMITTED):
<TABLE>
<CAPTION>
PERIOD ENDED
MAY 31, 1996(A)
------------------------
(UNAUDITED)
SHARES AMOUNT
----------- -----------
<S> <C> <C>
Retail Shares
Sold.......................................................................................... -- $ 1
Reinvestment of dividends..................................................................... -- --
Redeemed...................................................................................... -- --
--- -----------
Net increase -- Retail.......................................................................... -- 1
--- -----------
Institutional Shares
Sold.......................................................................................... 202 2,015
Reinvestment of dividends..................................................................... -- --
Redeemed...................................................................................... -- --
--- -----------
Net increase -- Institutional................................................................... 202 2,015
--- -----------
Net increase in Fund............................................................................ 202 $ 2,016
--- -----------
--- -----------
</TABLE>
- ---------------
(a) For the period from December 27, 1995 (commencement of operations) through
May 31, 1996.
SMALL CAPITALIZATION FUND (000 OMITTED):
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MAY 31, 1996
---------------------- YEAR ENDED
NOVEMBER 30, 1995
(UNAUDITED) ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold...................................................................... 252 $ 3,331 96 $ 1,111
Reinvestment of dividends................................................. 16 196 -- --
Redeemed.................................................................. (54) (695) (51) (549)
----------- --------- ----- ---------
Net increase in shares outstanding before conversion........................ 214 2,832 -- --
Shares issued upon conversion from Class B.................................. 221 2,593 -- --
----------- --------- ----- ---------
Net increase -- Retail...................................................... 435 5,425 45 562
----------- --------- ----- ---------
Class B Shares
Sold...................................................................... 12 142 61 712
Reinvestment of dividends................................................. 14 164 -- --
Redeemed.................................................................. (4) (46) (39) (428)
----------- --------- ----- ---------
Net decrease in shares outstanding before conversion........................ 22 260 -- --
Shares exchanged upon conversion into Retail................................ (226) (2,593) -- --
----------- --------- ----- ---------
Net increase (decrease) -- Class B.......................................... (204) (2,333) 22 284
----------- --------- ----- ---------
Institutional Shares
Sold...................................................................... 1,619 20,412 2,004 22,569
Reinvestment of dividends................................................. 507 6,170 -- --
Redeemed.................................................................. (504) (6,252) (616) (7,045)
----------- --------- ----- ---------
Net increase -- Institutional............................................... 1,622 20,330 1,388 15,524
----------- --------- ----- ---------
Net increase in Fund........................................................ 1,853 $ 23,422 1,455 $ 16,370
----------- --------- ----- ---------
----------- --------- ----- ---------
</TABLE>
110
<PAGE>
- --------------------------------------------------------------------------------
BALANCED FUND (000 OMITTED):
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MAY 31, 1996
---------------------- YEAR ENDED
NOVEMBER 30, 1995
(UNAUDITED) ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold................................................................... 130 $ 1,564 52 $ 569
Reinvestment of dividends.............................................. 2 26 2 25
Redeemed............................................................... (32) (387) (21) (218)
--- --------- ----------- ---------
Net increase in shares outstanding before conversion..................... 100 1,203 -- --
Shares issued upon conversion from Class B............................... 208 2,460 -- --
--- --------- ----------- ---------
Net increase -- Retail................................................... 308 3,663 33 376
--- --------- ----------- ---------
Class B Shares
Sold................................................................... 29 342 93 1,055
Reinvestment of dividends.............................................. 4 49 4 40
Redeemed............................................................... (16) (193) (26) (293)
--- --------- ----------- ---------
Net increase in shares outstanding before conversion..................... 17 198 -- --
Shares exchanged upon conversion into Retail............................. (211) (2,460) -- --
--- --------- ----------- ---------
Net increase (decrease) -- Class B....................................... (194) (2,262) 71 802
--- --------- ----------- ---------
Instititutional Shares
Sold................................................................... 893 10,645 1,769 19,608
Reinvestment of dividends.............................................. 167 1,961 241 2,594
Redeemed............................................................... (831) (9,841) (1,123) (11,640)
--- --------- ----------- ---------
Net increase -- Institutional............................................ 229 2,765 887 10,562
--- --------- ----------- ---------
Net increase in Fund..................................................... 343 $ 4,166 991 $ 11,740
--- --------- ----------- ---------
--- --------- ----------- ---------
</TABLE>
SHORT-TERM FIXED INCOME FUND (000 OMITTED):
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MAY 31, 1996
---------------------- YEAR ENDED
NOVEMBER 30, 1995
(UNAUDITED) ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold.................................................................... 79 $ 791 26 $ 258
Reinvestment of dividends............................................... 1 8 1 12
Redeemed................................................................ (21) (206) (16) (164)
--- --------- ----------- ---------
Net increase in shares outstanding before conversion...................... 59 593 -- --
Shares issued upon conversion from Class B................................ 6 61 -- --
--- --------- ----------- ---------
Net increase -- Retail.................................................... 65 654 11 106
--- --------- ----------- ---------
Class B Shares
Sold.................................................................... 4 40 14 135
Reinvestment of dividends............................................... -- 2 -- 5
Redeemed................................................................ (14) (136) (7) (72)
--- --------- ----------- ---------
Net decrease in shares outstanding before conversion...................... (10) (94) -- --
Shares exchanged upon conversion into Retail.............................. (6) (61) -- --
--- --------- ----------- ---------
Net increase (decrease) -- Class B........................................ (16) (155) 7 68
--- --------- ----------- ---------
Instititutional Shares
Sold.................................................................... 771 7,786 1,089 10,918
Reinvestment of dividends............................................... 19 195 107 1,069
Redeemed................................................................ (431) (4,326) (2,233) (22,359)
--- --------- ----------- ---------
Net increase (decrease) -- Institutional.................................. 359 3,655 (1,037) (10,372)
--- --------- ----------- ---------
Net increase (decrease) in Fund........................................... 408 $ 4,154 (1,019) $ (10,198)
--- --------- ----------- ---------
--- --------- ----------- ---------
</TABLE>
111
<PAGE>
- --------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES FUND (000 OMITTED):
<TABLE>
<CAPTION>
SIX MONTHS ENDED MAY
31, 1996
---------------------- YEAR ENDED NOVEMBER
30, 1995
(UNAUDITED) ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold.................................................................... 118 $ 1,206 171 $ 1,804
Reinvestment of dividends............................................... 51 530 152 1,543
Redeemed................................................................ (458) (4,695) (908) (9,169)
----------- --------- ----------- ---------
Net decrease in shares outstanding before conversion...................... (289) (2,959) -- --
Shares issued upon conversion from Class B................................ 133 1,352 -- --
----------- --------- ----------- ---------
Net decrease -- Retail (156) (1,607) (585) (5,822)
----------- --------- ----------- ---------
Class B Shares
Sold.................................................................... -- 7 52 527
Reinvestment of dividends............................................... -- 6 3 30
Redeemed................................................................ (5) (54) (47) (425)
----------- --------- ----------- ---------
Net decrease in shares outstanding before conversion...................... (5) (41) -- --
Shares exchanged upon conversion into Retail.............................. (133) (1,352) -- --
----------- --------- ----------- ---------
Net increase (decrease) -- Class B........................................ (138) (1,393) 8 132
----------- --------- ----------- ---------
Instititutional Shares
Sold.................................................................... 749 7,688 915 9,239
Reinvestment of dividends............................................... 92 948 379 3,836
Redeemed................................................................ (4,796) (49,341) (1,218) (12,523)
----------- --------- ----------- ---------
Net increase (decrease) -- Institutional.................................. (3,955) (40,705) 76 552
----------- --------- ----------- ---------
Net decrease in Fund...................................................... (4,249) $ (43,705) (501) $ (5,138)
----------- --------- ----------- ---------
----------- --------- ----------- ---------
</TABLE>
MANAGED BOND FUND (000 OMITTED):
<TABLE>
<CAPTION>
SIX MONTHS ENDED MAY
31, 1996
---------------------- YEAR ENDED NOVEMBER
30, 1995
(UNAUDITED) ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold.................................................................... 69 $ 712 167 $ 1,661
Reinvestment of dividends............................................... 2 19 3 31
Redeemed................................................................ (18) (181) (156) (1,595)
----------- --------- ----------- ---------
Net increase in shares outstanding before conversion...................... 53 550 -- --
Shares issued upon conversion from Class B................................ 50 508 -- --
----------- --------- ----------- ---------
Net increase -- Retail.................................................... 103 1,058 14 97
----------- --------- ----------- ---------
Class B Shares
Sold.................................................................... -- -- 21 220
Reinvestment of dividends............................................... 1 8 2 18
Redeemed................................................................ (13) (135) (9) (89)
----------- --------- ----------- ---------
Net decrease in shares outstanding before conversion...................... (12) (127) -- --
Shares exchanged upon conversion into Retail.............................. (50) (508) -- --
----------- --------- ----------- ---------
Net increase (decrease) -- Class B........................................ (62) (635) 14 149
----------- --------- ----------- ---------
Instititutional Shares
Sold.................................................................... 1,641 16,851 1,642 16,244
Reinvestment of dividends............................................... 203 2,108 371 4,100
Redeemed................................................................ (1,458) (15,074) (2,456) (24,495)
----------- --------- ----------- ---------
Net increase (decrease) -- Institutional.................................. 386 3,885 (443) (4,151)
----------- --------- ----------- ---------
Net increase (decrease) in Fund........................................... 427 $ 4,308 (415) $ (3,905)
----------- --------- ----------- ---------
----------- --------- ----------- ---------
</TABLE>
112
<PAGE>
- --------------------------------------------------------------------------------
FLORIDA TAX-EXEMPT FUND (000 OMITTED):
<TABLE>
<CAPTION>
SIX MONTHS ENDED MAY
31, 1996
---------------------- YEAR ENDED NOVEMBER
30, 1995
(UNAUDITED) ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold.................................................................... 406 $ 4,397 360 $ 4,051
Reinvestment of dividends............................................... 133 1,455 394 4,178
Redeemed................................................................ (1,461) (15,787) (3,367) (35,837)
----------- --------- ----------- ---------
Net decrease in shares outstanding before conversion...................... (922) (9,935) -- --
Shares issued upon conversion from Class B................................ 865 9,313 -- --
----------- --------- ----------- ---------
Net decrease -- Retail.................................................... (57) (622) (2,613) (27,608)
----------- --------- ----------- ---------
Class B Shares
Sold.................................................................... 21 236 367 3,916
Reinvestment of dividends............................................... 6 61 20 210
Redeemed................................................................ (37) (409) (81) (854)
----------- --------- ----------- ---------
Net decrease in shares outstanding before conversion...................... (10) (112) -- --
Shares exchanged upon conversion into Retail.............................. (866) (9,313) -- --
----------- --------- ----------- ---------
Net increase (decrease) -- Class B........................................ (876) (9,425) 306 3,272
----------- --------- ----------- ---------
Instititutional Shares
Sold.................................................................... 397 4,332 792 8,446
Reinvestment of dividends............................................... 10 111 40 430
Redeemed................................................................ (373) (4,127) (739) (7,755)
----------- --------- ----------- ---------
Net increase -- Institutional............................................. 34 316 93 1,121
----------- --------- ----------- ---------
Net decrease in Fund...................................................... (899) $ (9,731) (2,214) $ (23,215)
----------- --------- ----------- ---------
----------- --------- ----------- ---------
</TABLE>
113
<PAGE>
- --------------------------------------------------------------------------------
PRIME FUND (000 OMITTED)
(AT $1.00 PER SHARE):
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
MAY 31, NOVEMBER, 30
1996 1995
----------- ------------
(UNAUDITED)
<S> <C> <C>
Institutional Shares
Shares sold..................................... 1,626,197 2,397,638
Shares issued to shareholders in reinvestment of
dividends and distributions................... -- 1
Shares redeemed................................. (1,443,036) (2,348,560)
----------- ------------
Net increase in Institutional Shares.............. 183,161 49,079
----------- ------------
Service Shares
Shares sold..................................... 1,059,043 2,305,635
Shares issued to shareholders in reinvestment of
dividends and distributions................... 1,598 5,644
Shares redeemed................................. (1,075,477) (2,243,151)
----------- ------------
Net increase (decrease) in Service Shares......... (14,836) 68,128
----------- ------------
Retail Shares
Shares sold..................................... 348,497 465,103
Shares issued to shareholders in reinvestment of
dividends and distributions................... 9,948 15,656
Shares redeemed................................. (262,473) (244,639)
----------- ------------
Net increase in Retail Shares..................... 95,972 236,120
----------- ------------
Total increase in Fund shares..................... 264,297 353,327
----------- ------------
----------- ------------
</TABLE>
TREASURY FUND (000 OMITTED)
(AT $1.00 PER SHARE):
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
MAY 31, NOVEMBER, 30
1996 1994
----------- ------------
(UNAUDITED)
<S> <C> <C>
Institutional Shares
Shares sold..................................... 588,972 778,340
Shares issued to shareholders in reinvestment of
dividends and distributions................... -- --
Shares redeemed................................. (589,220) (825,813)
----------- ------------
Net decrease in Institutional Shares.............. (248) (47,473)
----------- ------------
Service Shares
Shares sold..................................... 897,669 1,705,061
Shares issued to shareholders in reinvestment of
dividends and distributions................... 686 1,364
Shares redeemed................................. (843,952) (1,772,681)
----------- ------------
Net increase (decrease) in Service Shares......... 54,403 (66,256)
----------- ------------
Retail Shares
Shares sold..................................... 141,967 130,324
Shares issued to shareholders in reinvestment of
dividends and distributions................... 1,266 2,002
Shares redeemed................................. (146,650) (115,709)
----------- ------------
Net increase (decrease) in Retail Shares.......... (3,417) 16,617
----------- ------------
Total increase (decrease) in Fund shares.......... 50,738 (97,112)
----------- ------------
----------- ------------
</TABLE>
114
<PAGE>
- --------------------------------------------------------------------------------
TAX-EXEMPT FUND (000 OMITTED)
(AT $1.00 PER SHARE):
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
MAY 31, NOVEMBER 30,
1996 1995
----------- ------------
(UNAUDITED)
<S> <C> <C>
Institutional Shares
Shares sold..................................... 237,079 411,931
Shares issued to shareholders in reinvestment of
dividends and distributions................... -- 458
Shares redeemed................................. (259,833) (418,892)
----------- ------------
Net decrease in Institutional Shares.............. (22,754) (6,503)
----------- ------------
Service Shares
Shares sold..................................... 536 1,051
Shares issued to shareholders in reinvestment of
dividends and distributions................... 5 20
Shares redeemed................................. (518) (2,244)
----------- ------------
Net increase (decrease) in Service Shares......... 23 (1,173)
----------- ------------
Retail Shares
Shares sold..................................... 81,020 91,392
Shares issued to shareholders in reinvestment of
dividends and distributions................... 499 1,149
Shares redeemed................................. (76,292) (92,426)
----------- ------------
Net increase in Retail Shares..................... 5,227 115
----------- ------------
Total decrease in Fund shares..................... (17,504) (7,561)
----------- ------------
----------- ------------
</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 May
31, 1996 (as a percentage of total investments):
<TABLE>
<CAPTION>
% OF
INDUSTRY CLASS PORTFOLIO
- --------------------------------------------- -----------
<S> <C>
Banks -- International....................... 22.7%
Financial Services........................... 15.4
Banks -- Regional............................ 11.4
Brokerage Services........................... 10.5
Repurchase Agreements........................ 9.1
Finance Companies............................ 6.6
Leasing...................................... 4.3
Industrial Goods and Equipment............... 4.2
Banks -- Money Center........................ 3.5
Automobiles.................................. 3.2
U.S. Government Agency Securities............ 3.2
Financial Services -- Diversified............ 2.9
Financial Services -- Mortgage............... 2.2
Computers.................................... 0.8
-----
100.0%
-----
-----
</TABLE>
At May 31, 1996, 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>
Pollution Control & Waste
Management................... 9.3% 17.4%
Health & Medical Facilities... 6.4 16.8
Commercial Paper.............. -- 12.7
Industrial Development
Revenue...................... -- 10.4
General Obligations........... 20.3 8.4
Revenue....................... -- 6.1
Education Facilities.......... -- 3.9
Power Projects................ 11.0 3.9
Tax Revenue Anticipation
Notes........................ 9.9 3.2
Public Facilities............. -- 2.8
Consumer Goods & Services..... -- 2.3
Sewer Projects................ 11.0 2.2
Futures....................... -- 2.1
Pre-Refunded Securities....... -- 2.0
Equipment Leasing............. -- 1.8
Home Building and Land
Development.................. -- 1.1
Housing Developments.......... -- 1.1
Utility Projects.............. 9.3 1.1
Electronics................... -- 0.7
Airport Facilities............ 13.2 --
Turnpike, Road & Bridge
Development.................. 3.9 --
Tax-Exempt Securities......... 4.5 --
Investment Companies.......... 1.2 --
----- -----
100.0% 100.0%
----- -----
----- -----
</TABLE>
115
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED
ENDED ---------------------------------------------------------
MAY 31, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1996(B) 1995 1994 1993 1992
---------------- ------------ ------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF
PERIOD ..................... $ 14.62 $ 10.86 $ 11.82 $ 11.97 $ 10.24
------- ------------ ------------ ------------ ------------
Income (loss) from investment
operations:
Net investment income....... 0.01 0.02 0.08 0.15 0.16
Net realized and unrealized
gains (losses) on
securities................ 1.51 3.76 (0.39) (0.08) 1.73
------- ------------ ------------ ------------ ------------
Total income (loss) from
investment operations..... 1.52 3.78 (0.31) 0.07 1.89
------- ------------ ------------ ------------ ------------
Less dividends and
distributions:
Dividends from net
investment income....... (0.02) (0.02) (0.08) (0.15) (0.16)
Distributions from net
realized gains on
securities.............. (1.29) (0.00) (0.57) (0.07) (0.00)
------- ------------ ------------ ------------ ------------
Total dividends and
distributions............. (1.31) (0.02) (0.65) (0.22) (0.16)
------- ------------ ------------ ------------ ------------
Net change in net asset
value....................... 0.21 3.76 (0.96) (0.15) 1.73
------- ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF
PERIOD...................... $ 14.83 $ 14.62 $ 10.86 $ 11.82 $ 11.97
------- ------------ ------------ ------------ ------------
------- ------------ ------------ ------------ ------------
Total return.................. 11.53%++ 34.82% (2.91%) 0.58% 18.49%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s).................... $29,609 $22,209 $19,705 $138,642 $152,939
Ratio of expenses to average
net assets................ 1.20%+ 1.37% 1.07% 0.86% 0.76%
Ratio of net investment
income to average net
assets.................... 0.06%+ 0.15% 0.36% 1.22% 1.41%
Ratio of expenses to average
net assets*............... 1.21%+ (a) 1.29% 1.21% 1.18%
Ratio of net investment
income to average net
assets*................... 0.05%+ (a) 0.13% 0.87% 0.99%
Portfolio turnover.......... 47% 104% 113% 102% 40%
Average commission rate paid
(c)....................... $0.0517 -- -- -- --
</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.
(b) On March 11, 1996, the Fund terminated its offering of Class B Shares under
the then-current sales load schedule and such shares subsequently converted
to Retail Shares without affecting the net asset value of the Retail Shares.
(c)Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the Fund
for which commissions were charged.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
116
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED PERIOD ENDED
MAY 31, NOVEMBER 30 NOVEMBER 30,
1996(B) 1995 1994*
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
CLASS B SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.............. $ 14.40 $ 10.83 $ 11.92
------------ ------------ ------------
Income (loss) from investment operations:
Net investment income (loss).................... (0.01) (0.12) 0.02
Net realized and unrealized gains (losses) on
securities.................................... 0.38 3.69 (0.94)
------------ ------------ ------------
Total income (loss) from investment operations.... 0.37 3.57 (0.92)
------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income............ (0.01) (0.00) (0.02)
Distributions from net realized gains on
securities.................................... (1.29) (0.00) (0.15)
------------ ------------ ------------
Total dividends and distributions............... (1.30) (0.00) (0.17)
------------ ------------ ------------
Net change in net asset value..................... (0.93) 3.57 (1.09)
------------ ------------ ------------
Conversion to Retail Shares(b).................... (13.47) NA NA
------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD.................... $ -- $ 14.40 $ 10.83
------------ ------------ ------------
------------ ------------ ------------
Total return (excludes redemption charge)......... 2.93%++ 32.96% (7.72%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................ $ -- $ 2,263 $ 1,498
Ratio of expenses to average net assets......... 2.08% 2.61% 2.50%+
Ratio of net investment income (loss) to average
net assets.................................... (0.50%)+ (1.11%) 0.15%+
Ratio of expenses to average net assets**....... 2.08% 3.67% (a)
Ratio of net investment income (loss) to average
net assets**.................................. (0.50%)+ (2.17%) (a)
Portfolio turnover.............................. 47% 104% 113%
Average commission rate paid(c)................. $ 0.0517 -- --
</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.
(a) There were no waivers or reimbursements during the period.
(b) On March 11, 1996, the Fund terminated its offering of Class B Shares under
the then-current sales load schedule and such shares subsequently converted
to Retail Shares.
(c) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
117
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
MAY 31, NOVEMBER 30, NOVEMBER 30,
1996 1995 1994*
----------------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
INSTITUTIONAL SHARES:
Net asset value, beginning of period.... $ 14.63 $ 10.89 $ 11.94
-------- ------------ ------------
Income (loss) from investment
operations:
Net investment income................. 0.04 0.08 0.11
Net realized and unrealized gains
(losses) on securities.............. 1.52 3.74 (0.90)
-------- ------------ ------------
Total income (loss) from investment
operations............................ 1.56 3.82 (0.79)
-------- ------------ ------------
Less dividends and distributions:
Dividends from net investment
income.............................. (0.04) (0.08) (0.11)
Distributions from net realized gains
on securities....................... (1.29) (0.00) (0.15)
-------- ------------ ------------
Total dividends and distributions..... (1.33) (0.08) (0.26)
-------- ------------ ------------
Net change in net asset value........... 0.23 3.74 (1.05)
-------- ------------ ------------
NET ASSET VALUE, END OF PERIOD.......... $ 14.86 $ 14.63 $ 10.89
-------- ------------ ------------
-------- ------------ ------------
Total return............................ 11.82%++ 35.21% (6.62%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)...... $ 200,172 $ 173,824 $ 164,015
Ratio of expenses to average net
assets.............................. 0.82%+ 0.84% 0.79%+
Ratio of net investment income to
average net assets.................. 0.52%+ 0.67% 1.46%+
Portfolio turnover.................... 47% 104% 113%
Average commission rate paid (a)...... $ 0.0517 -- --
</TABLE>
- ---------------
* For the period March 1, 1994 (initial offering date) through November 30,
1994.
(a) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
118
<PAGE>
EMERALD EQUITY VALUE FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD
ENDED
MAY 31,
1996*
-----------
(UNAUDITED)
<S> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD......................................................... $ 10.00
-----------
Income from investment operations:
Net investment income...................................................................... 0.13
Net realized and unrealized gains on securities............................................ 0.81
-----------
Total income from investment operations.................................................... 0.94
-----------
Less dividends and distributions:
Dividends from net investment income....................................................... (0.13)
-----------
Net change in net asset value................................................................ 0.81
-----------
NET ASSET VALUE, END OF PERIOD............................................................... $ 10.81
-----------
-----------
Total return................................................................................. 9.42%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)........................................................... $ 1
Ratio of expenses to average net assets.................................................... 0.00%+
Ratio of net investment income to average net assets....................................... 2.85%+
Ratio of expenses to average net assets**.................................................. 317.36%+
Ratio of net investment loss to average net assets**....................................... (314.51%)+
Portfolio turnover......................................................................... 8%
Average commission rate paid(a)............................................................ $ 0.0877
</TABLE>
- ---------------
* For the period December 27, 1995 (commencement of operations) through May
31, 1996.
** 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)Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
119
<PAGE>
EMERALD EQUITY VALUE FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD
ENDED
MAY 31,
1996*
-----------
(UNAUDITED)
<S> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD............................................................ $ 10.00
-----------
Income from investment operations:
Net investment income......................................................................... 0.13
Net realized and unrealized gains on securities............................................... 0.81
-----------
Total income from investment operations....................................................... 0.94
-----------
Less dividends and distributions:
Dividends from net investment income.......................................................... (0.13)
-----------
Net change in net asset value................................................................... 0.81
-----------
NET ASSET VALUE, END OF PERIOD.................................................................. $ 10.81
-----------
-----------
Total return.................................................................................... 9.42%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s).............................................................. $ 2,162
Ratio of expenses to average net assets....................................................... 0.00%+
Ratio of net investment income to average net assets.......................................... 2.87%+
Ratio of expenses to average net assets**..................................................... 6.46%+
Ratio of net investment loss to average net assets**.......................................... (3.59%)+
Portfolio turnover............................................................................ 8%
Average commission rate paid(a)............................................................... $ 0.0877
</TABLE>
- ---------------
* For the period December 27, 1995 (commencement of operations) through May
31, 1996.
** 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)Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
120
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD
ENDED
MAY 31,
1996*
-----------
(UNAUDITED)
<S> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD............................................................ $ 10.00
-----------
Income from investment operations:
Net investment income......................................................................... 0.08
Net realized and unrealized gains on securities............................................... 0.58
-----------
Total Income from investment operations....................................................... 0.66
-----------
Less dividends and distributions:
Dividends from net investment income.......................................................... (0.01)
-----------
Net change in net asset value................................................................... 0.65
-----------
NET ASSET VALUE, END OF PERIOD.................................................................. $ 10.65
-----------
-----------
Total return.................................................................................... 6.56%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s).............................................................. $ 1
Ratio of expenses to average net assets....................................................... 0.00%+
Ratio of net investment income to average net assets.......................................... 1.82%+
Ratio of expenses to average net assets**..................................................... 328.68%+
Ratio of net investment loss to average net assets**.......................................... (326.86%)+
Portfolio turnover............................................................................ 1%
Average commission rate paid(a)............................................................... $ 0.0902
</TABLE>
- ---------------
* For the period December 27, 1995 (commencement of operations) through May
31, 1996.
** 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)Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
121
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD
ENDED
MAY 31,
1996*
-----------
(UNAUDITED)
<S> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD............................................................ $ 10.00
-----------
Income from investment operations:
Net investment income......................................................................... 0.09
Net realized and unrealized gains on securities............................................... 0.57
-----------
Total income from investment operations....................................................... 0.66
-----------
Less dividends and distributions:
Dividends from net investment income.......................................................... (0.01)
-----------
Net change in net asset value................................................................... 0.65
-----------
NET ASSET VALUE, END OF PERIOD.................................................................. $ 10.65
-----------
-----------
Total return.................................................................................... 6.56%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s).............................................................. $ 2,147
Ratio of expenses to average net assets....................................................... 0.00%+
Ratio of net investment income to average net assets.......................................... 1.86%+
Ratio of expenses to average net assets**..................................................... 7.22%+
Ratio of net investment loss to average net assets**.......................................... (5.36%)+
Portfolio turnover............................................................................ 1%
Average commission rate paid(a)............................................................... $ 0.0902
</TABLE>
- ---------------
* For the period December 27, 1995 (commencement of operations) through May
31, 1996.
** 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)Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
122
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
MAY 31, NOVEMBER 30, NOVEMBER 30,
1996(A) 1995 1994*
---------------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $ 12.77 $ 9.66 $ 10.49
------- ------------ ------------
Income (loss) from investment operations:
Net investment loss...................................................... (0.05) (0.04) (0.04)
Net realized and unrealized gains (losses) on securities................. 2.80 3.15 (0.79)
------- ------------ ------------
Total income (loss) from investment operations........................... 2.75 3.11 (0.83)
------- ------------ ------------
Dividends from net realized gains.......................................... (1.00) (0.00) (0.00)
------- ------------ ------------
Net change in net asset value.............................................. 1.75 3.11 (0.83)
------- ------------ ------------
NET ASSET VALUE, END OF PERIOD............................................. $ 14.52 $ 12.77 $ 9.66
------- ------------ ------------
------- ------------ ------------
Total return............................................................... 23.07%++ 32.19% (7.91%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)......................................... $ 9,343 $ 2,657 $ 1,583
Ratio of expenses to average net assets.................................. 1.40%+ 1.54% 1.54%+
Ratio of net investment loss to average net assets....................... (0.93%)+ (0.81%) (0.67%)+
Ratio of expenses to average net assets**................................ 1.47%+ 2.43% 2.50%+
Ratio of net investment loss to average net assets**..................... (1.00%)+ (1.70%) (1.63%)+
Portfolio turnover....................................................... 147% 229% 118%
Average commission rate paid(b).......................................... $0.0426 -- --
</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.
(a)On March 11, 1996, the Fund terminated its offering of Class B Shares under
the then-current sales load schedule and such shares subsequently converted
to Retail Shares without affecting the net asset value of the Retail Shares.
(b) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
123
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED PERIOD ENDED
MAY 31, NOVEMBER 30, NOVEMBER 30,
1996(A) 1995 1994*
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
CLASS B SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.............................................. $ 12.55 $ 9.58 $ 10.49
------------ ------------ ------------
Income (loss) from investment operations:
Net investment loss............................................................. (0.06) (0.08) (0.08)
Net realized and unrealized gains (losses) on securities........................ (0.00) 3.05 (0.83)
------------ ------------ ------------
Total from income (loss) from investment operations............................. (0.06) 2.97 (0.91)
------------ ------------ ------------
Distributions from net realized gains on securities............................... (1.00) (0.00) (0.00)
------------ ------------ ------------
Net change in net asset value..................................................... (1.06) 2.97 (0.91)
------------ ------------ ------------
Conversion to Retail Shares(a).................................................... (11.49) NA NA
------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD.................................................... $ -- $ 12.55 $ 9.58
------------ ------------ ------------
------------ ------------ ------------
Total return (excludes redemption charge)......................................... (0.76%)++ 31.00% (8.67%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................................................ $ -- $ 2,558 $ 1,737
Ratio of expenses to average net assets......................................... 2.38%+ 2.37% 2.32%+
Ratio of net investment loss to average net assets.............................. (1.81%)+ (1.64%) (1.48%)+
Ratio of expenses to average net assets**....................................... 2.61%+ 3.29% 2.50%+
Ratio of net investment loss to average net assets**............................ (2.04)%+ (2.56)% (1.66)%+
Portfolio turnover.............................................................. 147% 229% 118%
Average commission rate paid (b)................................................ $ 0.0426 -- --
</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.
(a) On March 11, 1996, the Fund terminated its offering of Class B Shares under
the then-current sales load schedule and such shares subsequently converted
to Retail Shares.
(b) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
124
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED PERIOD ENDED
MAY 31, NOVEMBER 30, NOVEMBER 30,
1996 1995 1994*
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.............................................. $ 12.78 $ 9.66 $ 10.00
------------ ------------ ------------
Income (loss) from investment operations:
Net investment loss............................................................. (0.04) (0.03) (0.04)
Net realized and unrealized gains (losses) on securities........................ 2.83 3.15 (0.30)
------------ ------------ ------------
Total income (loss) from investment operations.................................. 2.79 3.12 (0.34)
------------ ------------ ------------
Distributions from net realized gains on securities............................... (1.00) (0.00) (0.00)
------------ ------------ ------------
Net change in net asset value..................................................... 1.79 3.12 (0.34)
------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD.................................................... $ 14.57 $ 12.78 $ 9.66
------------ ------------ ------------
------------ ------------ ------------
Total return...................................................................... 23.38%++ 32.30% (3.40%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................................................ $ 124,559 $ 88,561 $ 53,509
Ratio of expenses to average net assets......................................... 1.36%+ 1.39% 1.29%+
Ratio of net investment loss to average net assets.............................. (0.77%)+ (0.65%) (0.54%)+
Ratio of expenses to average net assets**....................................... (a) 1.42% 1.48%+
Ratio of net investment loss to average net assets**............................ (a) (0.68%) (0.73%)+
Portfolio turnover.............................................................. 147% 229% 118%
Average commission rate paid (b)................................................ $ 0.0426 -- --
</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.
(a) There were no waivers or reimbursements during the period.
(b) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
125
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED PERIOD ENDED
MAY 31, NOVEMBER 30, NOVEMBER 30,
1996(A) 1995 1994*
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.............................................. $ 12.02 $ 9.72 $ 10.00
------------ ------------ ------------
Income (loss) from investment operations:
Net investment income........................................................... 0.15 0.30 0.24
Net realized and unrealized gains (losses) on securities........................ 0.65 2.30 (0.28)
------------ ------------ ------------
Total income (loss) from investment operations.................................. 0.80 2.60 (0.04)
------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income............................................ (0.16) (0.30) (0.22)
Distributions in excess of net investment income................................ (0.00) (0.00) (0.02)
Distributions from net realized gains on securities............................. (0.22) (0.00) (0.00)
------------ ------------ ------------
Total dividends and distributions............................................... (0.38) (0.30) (0.24)
------------ ------------ ------------
Net change in net asset value..................................................... 0.42 2.30 (0.28)
------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD.................................................... $ 12.44 $ 12.02 $ 9.72
------------ ------------ ------------
------------ ------------ ------------
Total return...................................................................... 6.85%++ 27.45% (0.40%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................................................ $ 4,955 $ 1,082 $ 543
Ratio of expenses to average net assets......................................... 0.74%+ 0.72% 0.68%+
Ratio of net investment income to average net assets............................ 1.71%+ 3.14% 3.70%+
Ratio of expenses to average net assets**....................................... 1.09%+ 4.20% 2.50%+
Ratio of net investment income (loss) to average net assets**................... 1.36%+ (0.34%) 1.88%+
Portfolio turnover.............................................................. 48% 87% 33%
Average commission rate paid(b)................................................. $ 0.0470 -- --
</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.
(a) On March 11, 1996, the Fund terminated its offering of Class B Shares under
the then-current sales load schedule and such shares subsequently converted
to Retail Shares without affecting the net asset value of the Retail
Shares.
(b) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
126
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
MAY 31, NOVEMBER 30, NOVEMBER 30,
1996(A) 1995 1994*
---------------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
CLASS B SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $ 11.90 $ 9.63 $ 10.00
------- ------------ ------------
Income (loss) from investment operations:
Net investment income.................................................... 0.08 0.22 0.21
Net realized and unrealized gains (losses) on securities................. (0.01) 2.27 (0.37)
------- ------------ ------------
Total income (loss) from investment operations........................... 0.07 2.49 (0.16)
------- ------------ ------------
Less dividends and distributions:
Dividends from net investment income..................................... (0.07) (0.22) (0.19)
Distributions in excess of net investment income......................... (0.00) (0.00) (0.02)
Distributions from net realized gains on securities...................... (0.22) (0.00) (0.00)
------- ------------ ------------
Total dividends and distributions........................................ (0.29) (0.22) (0.21)
------- ------------ ------------
Net change in net asset value.............................................. (0.22) 2.27 (0.37)
------- ------------ ------------
Conversion to Retail Shares(a)............................................. (11.68) NA NA
------- ------------ ------------
NET ASSET VALUE, END OF PERIOD............................................. $-- $ 11.90 $ 9.63
------- ------------ ------------
------- ------------ ------------
Total return (excludes redemption charge).................................. 0.56%++ 26.48% (1.66%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)......................................... $-- $ 2,303 $ 1,191
Ratio of expenses to average net assets.................................. 1.48%+ 1.46% 1.43%+
Ratio of net investment income to average net assets..................... 2.35%+ 2.40% 3.02%+
Ratio of expenses to average net assets**................................ 2.15%+ 3.74% 2.50%+
Ratio of net investment income to average net assets**................... 1.68%+ 0.12% 1.95%+
Portfolio turnover....................................................... 48% 87% 33%
Average commission rate paid(b).......................................... $0.0470 -- --
</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.
(a) On March 11, 1996, the Fund terminated its offering of Class B Shares under
the then-current sales load schedule and such shares subsequently converted
to Retail Shares.
(b) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
127
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED PERIOD ENDED
MAY 31, NOVEMBER 30 NOVEMBER 30,
1996 1995 1994*
-------------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $ 11.91 $ 9.63 $ 10.00
------- ------------ ------------
Income (loss) from investment operations:
Net investment income.................................................... 0.19 0.33 0.27
Net realized and unrealized gains (losses) on securities................. 0.64 2.28 (0.37)
------- ------------ ------------
Total income (loss) from investment operations........................... 0.83 2.61 (0.10)
------- ------------ ------------
Less dividends and distributions:
Dividends from net investment income..................................... (0.19) (0.33) (0.25)
Distributions in excess of net investment income......................... (0.00) (0.00) (0.02)
Distributions from net realized gains on securities...................... (0.22) (0.00) (0.00)
------- ------------ ------------
Total dividends and distributions........................................ (0.41) (0.33) (0.27)
------- ------------ ------------
Net change in net asset value.............................................. 0.42 2.28 (0.37)
------- ------------ ------------
NET ASSET VALUE, END OF PERIOD............................................. $ 12.33 $ 11.91 $ 9.63
------- ------------ ------------
------- ------------ ------------
Total return............................................................... 7.15%++ 27.99% (1.02%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)......................................... $79,231 $73,830 $51,170
Ratio of expenses to average net assets.................................. 0.53%+ 0.32% 0.28%+
Ratio of net investment income to average net assets..................... 3.19%+ 3.54% 4.11%+
Ratio of expenses to average net assets**................................ 0.93%+ 1.10% 1.25%+
Ratio of net investment income to average net assets**................... 2.79%+ 2.76% 3.14%+
Portfolio turnover....................................................... 48% 87% 33%
Average commission rate paid(a).......................................... $0.0470 -- --
</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.
(a) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
128
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
MAY 31, NOVEMBER 30, NOVEMBER 30,
1996(A) 1995 1994*
---------------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $ 10.14 $ 9.74 $ 10.00
------- ------ ------
Income from investment operations:
Net investment income.................................................... 0.28 0.57 0.32
Net unrealized gains (losses) on securities.............................. (0.20) 0.40 (0.26)
------- ------ ------
Total gains from investment operations................................... 0.08 0.97 0.06
------- ------ ------
Less dividends and distributions:
Dividends from net investment income..................................... (0.28) (0.57) (0.32)
Dividends from net realized gains........................................ (0.03) (0.00) (0.00)
------- ------ ------
Total dividends and distributions.......................................... (0.31) (0.57) (0.32)
------- ------ ------
Net change in net asset value.............................................. (0.23) 0.40 (0.26)
------- ------ ------
NET ASSET VALUE, END OF PERIOD............................................. $ 9.91 $ 10.14 $ 9.74
------- ------ ------
------- ------ ------
Total return............................................................... 0.82%++ 10.25% 0.65%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)......................................... $ 983 $ 343 $ 223
Ratio of expenses to average net assets.................................. 0.74%+ 0.71% 0.67%+
Ratio of net investment income to average net assets..................... 4.81%+ 5.72% 5.20%+
Ratio of expenses to average net assets**................................ 2.43%+ 9.10% 2.50%+
Ratio of net investment income (loss) to average net assets**............ 3.12%+ (2.67%) 3.36%+
Portfolio turnover....................................................... 19% 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.
(a) On March 11, 1996, the Fund terminated its offering of Class B Shares under
the then-current sales load schedule and such shares subsequently converted
to Retail Shares without affecting the net asset value of the Retail
Shares.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
129
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
MAY 31, NOVEMBER 30, NOVEMBER 30,
1996(A) 1995 1994*
---------------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
CLASS B SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $ 10.07 $ 9.69 $ 10.00
------- ------ ------
Income (loss) from investment operations:
Net investment income.................................................... 0.12 0.50 0.28
Net unrealized gains (losses) on securities.............................. (0.10) 0.38 (0.31)
------- ------ ------
Total income (loss) from investment operations............................. 0.02 0.88 (0.03)
------- ------ ------
Dividends from net investment income....................................... (0.12) (0.50) (0.28)
Distributions form net realized gains on securities........................ (0.03) 0.00 0.00
------- ------ ------
Total dividends and distributions.......................................... (0.15) (0.50) (0.28)
------- ------ ------
Net change in net asset value.............................................. (0.13) 0.38 (0.31)
------- ------ ------
Conversion to Retail Shares(a)............................................. (9.94) NA NA
------- ------ ------
NET ASSET VALUE, END OF PERIOD............................................. $-- $ 10.07 $ 9.69
------- ------ ------
------- ------ ------
Total return (excludes redemption charge).................................. 0.26%++ 9.24% (0.35)%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)......................................... $-- $ 156 $ 85
Ratio of expenses to average net assets.................................. 1.48%+ 1.48% 1.43%+
Ratio of net investment income to average net assets..................... 4.98%+ 5.07% 3.47%+
Ratio of expenses to average net assets**................................ 4.78%+ 28.63% 2.50%+
Ratio of net investment income (loss) to average net assets**............ 1.68%+ (22.07%) 2.40%+
Portfolio turnover....................................................... 19% 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.
(a) On March 11, 1996, the Fund terminated its offering of Class B Shares under
the then-current sales load schedule and such shares subsequently converted
to Retail Shares.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
130
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
MAY 31, NOVEMBER 30, NOVEMBER 30,
1996 1995 1994*
---------------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $ 10.15 $ 9.74 $ 10.00
------- ------------ ------------
Income from investment operations:
Net investment income.................................................... 0.30 0.61 0.35
Net unrealized gains (losses) on securities.............................. (0.21) 0.41 (0.26)
------- ------------ ------------
Total income from investment operations.................................. 0.09 1.02 0.09
------- ------------ ------------
Less dividends and distributions:
Dividends from net investment income..................................... (0.30) (0.61) (0.35)
Dividends from net realized gains........................................ (0.03) (0.00) (0.00)
------- ------------ ------------
Total dividends and distributions.......................................... (0.33) (0.61) (0.35)
------- ------------ ------------
Net change in net asset value.............................................. (0.24) 0.41 (0.26)
------- ------------ ------------
NET ASSET VALUE, END OF PERIOD............................................. $ 9.91 $ 10.15 $ 9.74
------- ------------ ------------
------- ------------ ------------
Total return............................................................... 0.91%++ 10.80% 0.90%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)......................................... $17,272 $14,037 $23,566
Ratio of expenses to average net assets.................................. 0.43%+ 0.32% 0.28%+
Ratio of net investment income to average net assets..................... 6.00%+ 6.14% 5.55%+
Ratio of expenses to average net assets**................................ 1.21%+ 1.43% 1.60%+
Ratio of net investment income to average net assets**................... 5.22%+ 5.03% 4.24%+
Portfolio turnover....................................................... 19% 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.
131
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
SIX MONTHS --------------------------------------------------
ENDED MAY 31, NOVEMBER NOVEMBER NOVEMBER NOVEMBER
1996(B) 30, 1995 30, 1994 30, 1993 30, 1992
------------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF
PERIOD.......................... $ 10.39 $ 9.72 $ 10.79 $ 10.52 $ 10.46
------------- ----------- ----------- ----------- -----------
Income (loss) from investment
operations:
Net investment income.......... 0.32 0.64 0.58 0.66 0.77
Net realized and unrealized
gains (losses) on
securities................... (0.38) 0.67 (0.94) 0.41 0.12
------------- ----------- ----------- ----------- -----------
Total income (loss) from
investment operations........ (0.06) 1.31 (0.36) 1.07 0.89
------------- ----------- ----------- ----------- -----------
Less dividends and distributions:
Dividends from net investment
income....................... (0.30) (0.64) (0.58) (0.66) (0.77)
Distributions in excess of net
investment income............ (0.00) (0.00) (0.01) (0.00) (0.00)
Distributions from net realized
gains on securities.......... (0.00) (0.00) (0.10) (0.14) (0.06)
Distributions in excess of net
realized gains............... (0.00) (0.00) (0.02) 0.00 (0.00)
------------- ----------- ----------- ----------- -----------
Total dividends and
distributions................ (0.30) (0.64) (0.71) (0.80) (0.83)
------------- ----------- ----------- ----------- -----------
Net change in net asset value.... (0.36) 0.67 (1.07) 0.27 0.06
------------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD... $ 10.03 $ 10.39 $ 9.72 $ 10.79 $ 10.52
------------- ----------- ----------- ----------- -----------
------------- ----------- ----------- ----------- -----------
Total return..................... (0.64%)++ 13.85% (3.45%) 10.40% 8.79%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s)....................... $ 24,429 $ 26,912 $ 30,855 $ 145,328 $ 94,006
Ratio of expenses to average
net assets................... 1.10%+ 1.27% 0.98% 0.64% 0.28%
Ratio of net investment income
to average net assets........ 6.00%+ 7.02% 5.68% 5.91% 7.18%
Ratio of expenses to average
net assets*.................. 1.12%+ (a) 1.09% 1.06% 0.99%
Ratio of net investment income
to average net assets*....... 5.98%+ (a) 5.57% 5.49% 6.42%
Portfolio turnover............. 20% 89% 133% 72% 50%
</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.
(b) On March 11, 1996, the Fund terminated its offering of Class B Shares under
the then-current sales load schedule and such shares subsequently converted
to Retail Shares without affecting the net asset value of the Retail Shares.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
132
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
MAY 31, NOVEMBER 30, NOVEMBER 30,
1996(A) 1995 1994*
---------------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
CLASS B SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $ 10.38 $ 9.72 $ 10.48
------- ------------ ------------
Income (loss) from investment operations:
Net investment income.................................................... 0.15 0.60 0.39
Net realized and unrealized gains (losses) on securities................. (0.23) 0.66 (0.75)
------- ------------ ------------
Total income (loss) from investment operations........................... (0.08) 1.26 (0.36)
------- ------------ ------------
Less dividends and distributions:
Dividends from net investment income..................................... (0.14) (0.60) (0.39)
Distributions in excess of net investment income......................... (0.00) (0.00) (0.01)
------- ------------ ------------
Total dividends and distributions........................................ (0.14) (0.60) (0.40)
------- ------------ ------------
Net change in net asset value............................................ (0.22) 0.66 (0.76)
------- ------------ ------------
Conversion to Retail Shares(a)........................................... (10.16) NA NA
------- ------------ ------------
Net asset value, end of period........................................... $-- $ 10.38 $ 9.72
------- ------------ ------------
------- ------------ ------------
Total return (excludes redemption charge)................................ (0.79%)++ 13.29% (3.52%)++
Ratios/supplemental data:
Net assets, end of period (000s)......................................... $-- $ 1,422 $ 1,255
Ratio of expenses to average net assets.................................. 1.58%+ 1.74% 1.55%+
Ratio of net investment income to average net assets..................... 5.84%+ 6.72% 4.85%+
Ratio of expenses to average net assets**................................ 2.21%+ 3.97% 2.50%+
Ratio of net investment income to average net assets**................... 5.21%+ 4.49% 3.90%+
Portfolio turnover....................................................... 20% 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.
(a) On March 11, 1996, the Fund terminated its offering of Class B Shares under
the then-current sales load schedule and such shares subsequently converted
to Retail Shares.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
133
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
MAY 31, NOVEMBER 30, NOVEMBER 30,
1996 1995 1994*
---------------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $ 10.36 $ 9.71 $ 10.47
------- ------------ ------------
Income (loss) from investment operations:
Net investment income.................................................... 0.35 0.68 0.46
Net realized and unrealized gains (losses) on securities................. (0.38) 0.65 (0.75)
------- ------------ ------------
Total income (loss) from investment operations........................... (0.03) 1.33 (0.29)
------- ------------ ------------
Less dividends and distributions:
Dividends from net investment income..................................... (0.32) (0.68) (0.46)
Distributions in excess of net investment income......................... (0.00) (0.00) (0.01)
------- ------------ ------------
Total dividends and distributions........................................ (0.32) (0.68) (0.47)
------- ------------ ------------
Net change in net asset value............................................ (0.35) 0.65 (0.76)
------- ------------ ------------
Net asset value, end of period........................................... $ 10.01 $ 10.36 $ 9.71
------- ------------ ------------
------- ------------ ------------
Total return............................................................. (0.34%)++ 14.10% (2.83%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)......................................... $32,588 $74,753 $69,314
Ratio of expenses to average net assets.................................. 0.71%+ 0.83% 0.68%+
Ratio of net investment income to average net assets..................... 6.62%+ 7.46% 5.90%+
Ratio of expenses to average net assets**................................ 0.72%+ (a) 0.69%+
Ratio of net investment income to average net assets**................... 6.61%+ (a) 5.90%+
Portfolio turnover....................................................... 20% 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.
(a) There were no waivers or reimbursements during the period.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
134
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
MAY 31, NOVEMBER 30, NOVEMBER 30,
1996(A) 1995 1994*
---------------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $ 10.59 $ 9.54 $ 10.00
------ ------ ------
Income (loss) from investment operations:
Net investment income.................................................... 0.31 0.66 0.43
Net realized and unrealized gains (losses) on securities................. (0.45) 1.05 (0.46)
------ ------ ------
Total income (loss) from investment operations........................... (0.14) 1.71 (0.03)
------ ------ ------
Less dividends and distributions:
Dividends from net investment income..................................... (0.31) (0.66) (0.41)
Distributions in excess of net investment income......................... (0.10) (0.00) (0.02)
------ ------ ------
Total dividends and distributions........................................ (0.41) (0.66) (0.43)
------ ------ ------
Net change in net asset value.............................................. (0.55) 1.05 (0.46)
------ ------ ------
NET ASSET VALUE, END OF PERIOD............................................. $ 10.04 $ 10.59 $ 9.54
------ ------ ------
------ ------ ------
Total return............................................................... (1.41%)++ 18.47% (0.35%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)......................................... $ 1,810 $ 820 $ 609
Ratio of expenses to average net assets.................................. 0.71%+ 0.71% 0.65%+
Ratio of net investment income to average net assets..................... 4.81%+ 6.49% 6.29%+
Ratio of expenses to average net assets**................................ 1.30%+ 3.17% 2.50%+
Ratio of net investment income to average net assets**................... 4.22%+ 4.03% 4.44%+
Portfolio turnover....................................................... 50% 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.
(a) On March 11, 1996, the Fund terminated its offering of Class B Shares under
the then-current sales load schedule and such shares subsequently converted
to Retail Shares without affecting the net asset value of the Retail Shares.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
135
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
MAY 31, NOVEMBER 30, NOVEMBER 30,
1996(A) 1995 1994*
---------------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
CLASS B SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $ 10.53 $ 9.53 $ 10.00
------- ------------ ------------
Income (loss) from investment operations:
Net investment income.................................................... 0.14 0.58 0.38
Net realized and unrealized gains (losses) on securities................. (0.29) 1.00 (0.47)
------- ------------ ------------
Total income (loss) from investment operations........................... (0.15) 1.58 (0.09)
------- ------------ ------------
Less dividends and distributions:
Dividends from net investment income..................................... (0.14) (0.58) (0.36)
Distributions in excess of net investment income......................... (0.10) (0.00) (0.02)
------- ------------ ------------
Total dividends and distributions........................................ (0.24) (0.58) (0.38)
------- ------------ ------------
Net change in net asset value.............................................. (0.39) 1.00 (0.47)
------- ------------ ------------
Conversion to Retail Shares(a)............................................. (10.14) NA NA
------- ------------ ------------
NET ASSET VALUE, END OF PERIOD............................................. $-- $ 10.53 $ 9.53
------- ------------ ------------
------- ------------ ------------
Total return (excludes redemption charge).................................. (1.52%)++ 17.06% (0.93%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)......................................... $-- $ 655 $ 455
Ratio of expenses to average net assets.................................. 1.48%+ 1.45% 1.34%+
Ratio of net investment income to average net assets..................... 5.36%+ 5.75% 5.44%+
Ratio of expenses to average net assets**................................ 2.38%+ 6.47% 2.50%+
Ratio of net investment income to average net assets**................... 4.46%+ 0.73% 4.28%+
Portfolio turnover....................................................... 50% 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.
(a) On March 11, 1996, the Fund terminated its offering of Class B Shares under
the then-current sales load schedule and such shares subsequently converted
to Retail Shares.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
136
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
MAY 31, NOVEMBER 30, NOVEMBER 30,
1996 1995 1994*
---------------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $ 10.55 $ 9.55 $ 10.00
------- ------------ ------------
Income (loss) from investment operations:
Net investment income.................................................... 0.33 0.70 0.45
Net realized and unrealized gains (losses) on securities................. (0.46) 1.00 (0.45)
------- ------------ ------------
Total income (loss) from investment operations........................... (0.13) 1.70 0.00
------- ------------ ------------
Less dividends and distributions:
Dividends from net investment income..................................... (0.33) (0.70) (0.43)
Distributions in excess of net investment income......................... (0.10) (0.00) (0.02)
------- ------------ ------------
Total dividends and distributions........................................ (0.43) (0.70) (0.45)
------- ------------ ------------
Net change in net asset value.............................................. (0.56) 1.00 (0.45)
------- ------------ ------------
NET ASSET VALUE, END OF PERIOD............................................. $ 9.99 $ 10.55 $ 9.55
------- ------------ ------------
------- ------------ ------------
Total return............................................................... (1.33%)++ 18.36% (0.01%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)......................................... $69,097 $68,923 $66,588
Ratio of expenses to average net assets.................................. 0.45%+ 0.31% 0.27%+
Ratio of net investment income to average net assets..................... 6.41%+ 6.95% 6.83%+
Ratio of expenses to average net assets**................................ 0.72%+ 0.83% 0.86%+
Ratio of net investment income to average net assets**................... 6.14%+ 6.43% 6.25%+
Portfolio turnover....................................................... 50% 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.
137
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
SIX MONTHS --------------------------------------------------
ENDED NOVEMBER
MAY 31, NOVEMBER NOVEMBER NOVEMBER 30,
1995(B) 30, 1995 30, 1994 30, 1993 1992
------------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF
PERIOD........................... $ 11.09 $ 9.87 $ 11.33 $ 10.55 $ 10.14
------------- ----------- ----------- ----------- -----------
Income (loss) from investment
operations:
Net investment income............ 0.27 0.54 0.53 0.61 0.68
Net realized and unrealized gains
(losses) on securities......... (0.53) 1.22 (1.37) 0.78 0.45
------------- ----------- ----------- ----------- -----------
Total income (loss) from
investment operations.......... (0.26) 1.76 (0.84) 1.39 1.13
------------- ----------- ----------- ----------- -----------
Less dividends and distributions:
Dividends from net investment
income......................... (0.27) (0.54) (0.53) (0.61) (0.68)
Distributions from net realized
gains on securities............ (0.00) (0.00) (0.09) (0.00) (0.04)
------------- ----------- ----------- ----------- -----------
Total dividends and
distributions.................. (0.27) (0.54) (0.62) (0.61) (0.72)
------------- ----------- ----------- ----------- -----------
Net change in net asset value...... (0.53) 1.22 (1.46) 0.78 0.41
------------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD..... $ 10.56 $ 11.09 $ 9.87 $ 11.33 $ 10.55
------------- ----------- ----------- ----------- -----------
------------- ----------- ----------- ----------- -----------
Total return..................... (2.43%)++ 18.17% (7.75%) 13.37% 11.51%
Ratios/supplemental data:
Net assets, end of period
(000s)......................... $ 88,929 $ 94,017 $ 109,426 $ 207,764 $ 106,946
Ratio of expenses to average net
assets........................... 0.96%+ 1.07% 0.96% 0.65% 0.25%
Ratio of net investment income to
average net assets............. 4.64%+ 5.08% 4.96% 5.32% 6.39%
Ratio of expenses to average net
assets**....................... 1.06%+ (a) 1.04% 1.00% 1.21%
Ratio of net investment income to
average net assets**........... 4.54%+ (a) 4.88% 4.97% 5.43%
Portfolio turnover................. 92% 89% 89% 48% 105%
</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.
(a) There were no waivers or reimbursements during the period.
(b) On March 11, 1996, the Fund terminated its offering of Class B Shares under
the then-current sales load schedule and such shares subsequently converted
to Retail Shares without affecting the net asset value of the Retail Shares.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
138
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
MAY 31, NOVEMBER 30, NOVEMBER 30,
1996(A) 1995 1994*
---------------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
CLASS B SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $ 11.07 $ 9.87 $ 11.06
------ ------ ------
Income (loss) from investment operations:
Net investment income.................................................... 0.12 0.50 0.36
Net realized and unrealized gains (losses) on securities................. (0.32) 1.20 (1.18)
------ ------ ------
Total income (loss) from investment operations........................... (0.20) 1.70 (0.82)
------ ------ ------
Less dividends and distributions:
Dividends from net investment income..................................... (0.12) (0.50) (0.36)
Distributions from net realized gains on securities...................... (0.00) (0.00) (0.01)
------ ------ ------
Total dividends and distributions........................................ (0.12) (0.50) (0.37)
------ ------ ------
Net change in net asset value.............................................. (0.32) 1.20 (1.19)
------ ------ ------
Conversion to Retail Shares(a)............................................. (10.75) NA NA
------ ------ ------
NET ASSET VALUE, END OF PERIOD............................................. $-- $ 11.07 $ 9.87
------ ------ ------
------ ------ ------
Total return (excludes redemption charge).................................. (1.83%)++ 17.48% (7.56%)++
Ratios/supplemental data:
Net assets, end of period (000s)......................................... $-- $ 9,699 $ 5,621
Ratio of expenses to average net assets.................................. 1.47%+ 1.48% 1.36%+
Ratio of net investment income to average net assets..................... 4.32%+ 4.57% 4.30%+
Ratio of expenses to average net assets**................................ 1.85%+ 2.11% 2.29%+
Ratio of net investment income to average net assets**................... 3.94%+ 3.94% 3.37%+
Portfolio turnover....................................................... 92% 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.
(a) On March 11, 1996, the Fund terminated its offering of Class B Shares under
the then-current sales load schedule and such shares subsequently converted
to Retail Shares.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
139
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
MAY 31, NOVEMBER 30, NOVEMBER 30,
1996 1995 1994*
---------------- ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
INSTITUTIONAL CLASS SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $ 11.09 $ 9.87 $ 11.07
------- ------------ ------------
Income (loss) from investment operations:
Net investment income.................................................... 0.29 0.57 0.42
Net realized and unrealized gains (losses) on securities................. (0.52) 1.22 (1.19)
------- ------------ ------------
Total income (loss) from investment operations........................... (0.23) 1.79 (0.77)
------- ------------ ------------
Less dividends and distributions:
Dividends from net investment income..................................... (0.29) (0.57) (0.42)
Distributions from net realized gains on securities...................... (0.00) (0.00) (0.01)
------- ------------ ------------
Total dividends and distributions........................................ (0.29) (0.57) (0.43)
------- ------------ ------------
Net change in net asset value.............................................. (0.52) 1.22 (1.20)
------- ------------ ------------
NET ASSET VALUE, END OF PERIOD............................................. $ 10.57 $ 11.09 $ 9.87
------- ------------ ------------
------- ------------ ------------
Total return............................................................... (2.17%)++ 18.55% (7.07%)++
Ratios/supplemental data:
Net assets, end of period (000s)......................................... $32,733 $33,979 $29,309
Ratio of expenses to average net assets.................................. 0.68%+ 0.74% 0.71%+
Ratio of net investment income to average net assets..................... 5.34%+ 5.39% 5.34%+
Ratio of expenses to average net assets**................................ 0.69%+ (a) 0.71%+
Ratio of net investment income to average net assets**................... 5.33%+ (a) 5.33%+
Portfolio turnover....................................................... 92% 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.
(a) There were no waivers or reimbursements during the period.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
140
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED
ENDED --------------------------------------------------
MAY 31, NOVEMBER NOVEMBER NOVEMBER NOVEMBER
1996 30, 1995 30, 1994 30, 1993 30, 1992
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF
PERIOD........................... $ 1.0002 $ 1.0000 $ 0.9999 $ 1.0001 $ 1.0000
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net Investment Income............ 0.0262 0.0566 0.0390 0.0316 0.0407
Net realized gains (losses) on
securities..................... 0.0000 0.0002 (0.0028) (0.0001) 0.0001
----------- ----------- ----------- ----------- -----------
Total income from investment
operations..................... 0.0262 0.0568 0.0362 0.0315 0.0408
----------- ----------- ----------- ----------- -----------
Less dividends and distributions:
Dividends from net Investment
Income......................... (0.0262) (0.0566) (0.0390) (0.0316) (0.0407)
Distributions from net realized
gains on securities............ (0.0002) (0.0000) (0.0000) (0.0001) (0.0000)
----------- ----------- ----------- ----------- -----------
Total dividends and
distributions.................. (0.0264) (0.0566) (0.0390) (0.0317) (0.0407)
----------- ----------- ----------- ----------- -----------
Voluntary capital contribution..... 0.0000 0.0000 0.0029 0.0000 0.0000
----------- ----------- ----------- ----------- -----------
Net change in net asset value...... (0.0002) 0.0002 0.0001 (0.0002) 0.0001
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD..... $ 1.0000 $ 1.0002 $ 1.0000 $ 0.9999 $ 1.0001
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total return....................... 2.67%++ 5.81% 3.97% 3.21% 4.14%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s)......................... $ 645,795 $ 462,726 $ 413,541 $ 510,683 $1,947,016
Ratio of expenses to average net
assets......................... 0.38%+ 0.37% 0.37% 0.35% 0.37%
Ratio of net investment income to
average net assets............. 5.23%+ 5.66% 3.92% 3.21% 3.84%
Ratio of expenses to average net
assets*........................ 0.38%+ 0.39% (a) (a) (a)
Ratio of net investment income to
average net assets*............ 5.23%+ 5.64% (a) (a) (a)
</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.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
141
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
SIX MONTHS --------------------------------------------------
ENDED MAY NOVEMBER NOVEMBER NOVEMBER NOVEMBER
31, 1996 30, 1995 30, 1994 30, 1993 30, 1992
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
SERVICE SHARES:
NET ASSET VALUE, BEGINNING OF
PERIOD........................... $ 1.0002 $ 1.0000 $ 0.9999 $ 1.0001 $ 1.0000
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income............ 0.0245 0.0536 0.0355 0.0281 0.0371
Net realized gains (losses) on
securities..................... 0.0000 0.0002 (0.0028) (0.0001) 0.0001
----------- ----------- ----------- ----------- -----------
Total income from investment
operations..................... 0.0245 0.0538 0.0327 0.0280 0.0372
----------- ----------- ----------- ----------- -----------
Less dividends and distributions:
Dividends from net investment
income......................... (0.0245) (0.0536) (0.0355) (0.0281) (0.0371)
Distributions from net realized
gains on securities............ (0.0002) (0.0000) (0.0000) (0.0001) (0.0000)
----------- ----------- ----------- ----------- -----------
Total dividends and
distributions.................. (0.0247) (0.0536) (0.0355) (0.0282) (0.0371)
----------- ----------- ----------- ----------- -----------
Voluntary capital contribution..... 0.0000 0.0000 0.0029 0.0000 0.0000
----------- ----------- ----------- ----------- -----------
Net change in net asset value...... (0.0002) 0.0002 0.0001 (0.0002) 0.0001
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD..... $ 1.0000 $ 1.0002 $ 1.0000 $ 0.9999 $ 1.0001
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total return....................... 2.50%++ 5.49% 3.61% 2.85% 3.78%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s)......................... $ 886,991 $ 902,006 $ 833,667 $ 619,149 $ 548,622
Ratio of expenses to average net
assets......................... 0.72%+ 0.72% 0.72% 0.71% 0.72%
Ratio of net investment income to
average net assets............. 4.90%+ 5.31% 3.59% 2.80% 3.54%
Ratio of expenses to average net
assets*........................ 0.72%+ 0.74% (a) (a) (a)
Ratio of net investment income to
average net assets*............ 4.90%+ 5.29% (a) (a) (a)
</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.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
142
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED
ENDED --------------------------------------------------
MAY 31, NOVEMBER NOVEMBER NOVEMBER NOVEMBER
1996 30, 1995 30, 1994 30, 1993 30, 1992
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF
PERIOD........................... $ 1.0002 $ 1.0000 $ 0.9999 $ 1.0001 $ 1.0000
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income............ 0.0236 0.0515 0.0339 0.0266 0.0356
Net realized gains (losses) on
securities..................... 0.0000 0.0002 (0.0028) (0.0001) 0.0001
----------- ----------- ----------- ----------- -----------
Total income from investment
operations..................... 0.0236 0.0517 0.0311 0.0265 0.0357
----------- ----------- ----------- ----------- -----------
Less dividends and distributions:
Dividends from net investment
income......................... (0.0236) (0.0515) (0.0339) (0.0266) (0.0356)
Distributions from net realized
gains on securities............ (0.0002) (0.0000) (0.0000) (0.0001) (0.0000)
----------- ----------- ----------- ----------- -----------
Total dividends and
distributions.................. (0.0238) (0.0515) (0.0339) (0.0267) (0.0356)
----------- ----------- ----------- ----------- -----------
Voluntary capital contribution..... 0.0000 0.0000 0.0029 0.0000 0.0000
----------- ----------- ----------- ----------- -----------
Net change in net asset value...... (0.0002) 0.0002 0.0001 (0.0002) 0.0001
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD..... $ 1.0000 $ 1.0002 $ 1.0000 $ 0.9999 $ 1.0001
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total return....................... 2.41%++ 5.27% 3.44% 2.70% 3.62%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s)......................... $ 540,812 $ 444,928 $ 208,714 $ 181,155 $ 96,730
Ratio of expenses to average net
assets......................... 0.90%+ 0.90% 0.88% 0.86% 0.87%
Ratio of net investment income to
average net assets............. 4.71%+ 5.13% 3.40% 2.63% 3.33%
Ratio of expenses to average net
assets*........................ 0.92%+ 0.93% (a) (a) (a)
Ratio of net investment income to
average net assets*............ 4.70%+ 5.10% (a) (a) (a)
</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.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
143
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED
ENDED --------------------------------------------------
MAY 31, NOVEMBER NOVEMBER NOVEMBER NOVEMBER
1996 30, 1995 30, 1994 30, 1993 30, 1992
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 0.9996 $ 0.9999 $ 1.0000 $ 1.0000 $ 1.0000
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income................. 0.0249 0.0548 0.0368 0.0291 0.0368
Net realized losses on securities..... (0.0002) (0.0003) (0.0001) 0.0000 0.0000
----------- ----------- ----------- ----------- -----------
Total income from investment
operations.......................... 0.0247 0.0545 0.0367 0.0291 0.0368
----------- ----------- ----------- ----------- -----------
Less dividends and distributions:
Dividends from net investment
income.............................. (0.0249) (0.0548) (0.0368) (0.0291) (0.0368)
----------- ----------- ----------- ----------- -----------
Net change in net asset value........... (0.0002) (0.0003) (0.0001) 0.0000 0.0000
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD.......... $ 0.9994 $ 0.9996 $ 0.9999 $ 1.0000 $ 1.0000
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total return............................ 2.52%++ 5.62% 3.74% 2.95% 3.75%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)...... $ 236,090 $ 236,392 $ 283,920 $ 501,377 $ 452,170
Ratio of expenses to average net
assets.............................. 0.40%+ 0.40% 0.39% 0.40% 0.38%
Ratio of net investment income to
average net assets.................. 4.99%+ 5.49% 3.73% 2.91% 3.74%
Ratio of expenses to average net
assets*............................. 0.41%+ 0.42% (a) (a) (a)
Ratio of net investment income to
average net assets*................. 4.98%+ 5.46% (a) (a) (a)
</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.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
144
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED
ENDED --------------------------------------------------
MAY 31, NOVEMBER NOVEMBER NOVEMBER NOVEMBER
1996 30, 1995 30, 1994 30, 1993 30, 1992
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
SERVICE SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 0.9996 $ 0.9999 $ 1.0000 $ 1.0000 $ 1.0000
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income................. 0.0232 0.0513 0.0331 0.0256 0.0333
Net realized losses on securities..... (0.0002) (0.0003) (0.0001) 0.0000 0.0000
----------- ----------- ----------- ----------- -----------
Total income from investment
operations.......................... 0.0230 0.0510 0.0330 0.0256 0.0333
----------- ----------- ----------- ----------- -----------
Dividends from net investment income.... (0.0232) (0.0513) (0.0331) (0.0256) (0.0333)
----------- ----------- ----------- ----------- -----------
Net change in net asset value........... (0.0002) (0.0003) (0.0001) 0.0000 0.0000
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD.......... $ 0.9994 $ 0.9996 $ 0.9999 $ 1.0000 $ 1.0000
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total return............................ 2.34%++ 5.25% 3.36% 2.59% 3.39%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)...... $ 579,856 $ 525,609 $ 591,991 $ 403,809 $ 372,691
Ratio of expenses to average net
assets.............................. 0.75%+ 0.75% 0.74% 0.75% 0.73%
Ratio of net investment income to
average net assets.................. 4.63%+ 5.13% 3.38% 2.56% 3.30%
Ratio of expenses to average net
assets*............................. 0.76%+ 0.77% (a) (a) (a)
Ratio of net investment income to
average net assets*................. 4.62%+ 5.11% (a) (a) (a)
</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.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
145
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED
ENDED --------------------------------------------------
MAY 31, NOVEMBER NOVEMBER NOVEMBER NOVEMBER
1996 30, 1995 30, 1994 30, 1993 30, 1992
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 0.9996 $ 0.9999 $ 1.0000 $ 1.0000 $ 1.0000
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income................. 0.0224 0.0498 0.0316 0.0241 0.0318
Net realized losses on securities..... (0.0002) (0.0003) (0.0001) 0.0000 0.0000
----------- ----------- ----------- ----------- -----------
Total income from investment
operations.......................... 0.0222 0.0495 0.0315 0.0241 0.0318
----------- ----------- ----------- ----------- -----------
Dividends from net investment income.... (0.0224) (0.0498) (0.0316) (0.0241) (0.0318)
----------- ----------- ----------- ----------- -----------
Net change in net asset value........... (0.0002) (0.0003) (0.0001) 0.0000 0.0000
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD.......... $ 0.9994 $ 0.9996 $ 0.9999 $ 1.0000 $ 1.0000
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total return............................ 2.26%++ 5.10% 3.21% 2.44% 3.23%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)...... $ 45,620 $ 49,047 $ 32,444 $ 21,362 $ 3,762
Ratio of expenses to average net
assets.............................. 0.90%+ 0.90% 0.90% 0.90% 0.88%
Ratio of net investment income to
average net assets.................. 4.49%+ 4.98% 3.13% 2.42% 3.12%
Ratio of expenses to average net
assets*............................. 0.96%+ 1.04% 1.00% (a) (a)
Ratio of net investment income to
average net assets*................. 4.43%+ 4.84% 3.03% (a) (a)
</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.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
146
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED
ENDED --------------------------------------------------
MAY 31, NOVEMBER NOVEMBER NOVEMBER NOVEMBER
1996 30, 1995 30, 1994 30, 1993 30, 1992**
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
INSTITUTIONAL SHARES
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 0.9996 $ 0.9999 $ 0.9999 $ 0.9998 $ 0.9998
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income................. 0.0163 0.0355 0.0242 0.0214 0.0290
Net realized and unrealized gains
(losses) on securities.............. 0.0001 (0.0003) 0.0000 0.0001 0.0000
----------- ----------- ----------- ----------- -----------
Total from investment operations...... 0.0164 0.0352 0.0242 0.0215 0.0290
----------- ----------- ----------- ----------- -----------
Dividends from net investment income.... (0.0163) (0.0355) (0.0242) (0.0214) (0.0290)
----------- ----------- ----------- ----------- -----------
Net change in net asset value........... 0.0001 (0.0003) 0.0000 0.0001 0.0000
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD.......... $ 0.9997 $ 0.9996 $ 0.9999 $ 0.9999 $ 0.9998
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total return............................ 1.64%++ 3.61% 2.45% 2.16% 2.94%
Ratios/supplemental data:
Net assets, end of period (000s)...... $ 133,586 $ 156,353 $ 162,856 $ 147,525 $ 158,692
Ratio of expenses to average net
assets.............................. 0.38%+ 0.40% 0.40% 0.40% 0.40%
Ratio of net investment income to
average net assets.................. 3.25%+ 3.53% 2.42% 2.13% 2.88%
Ratio of expenses to average net
assets*............................. 0.48%+ 0.52% 0.46% 0.56% 0.57%
Ratio of net investment income to
average net assets*................. 3.15%+ 3.41% 2.36% 1.97% 2.71%
</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.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
147
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED
ENDED --------------------------------------------------
MAY 31, NOVEMBER NOVEMBER NOVEMBER NOVEMBER
1996 30, 1995 30, 1994 30, 1993 30, 1992**
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
SERVICE SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 0.9996 $ 0.9999 $ 0.9999 $ 0.9998 $ 0.9998
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income................. 0.0145 0.0319 0.0206 0.0179 0.0255
Net realized and unrealized gains
(losses) on securities.............. 0.0001 (0.0003) 0.0000 0.0001 0.0000
----------- ----------- ----------- ----------- -----------
Total income from investment
operations.......................... 0.0146 0.0316 0.0206 0.0180 0.0255
----------- ----------- ----------- ----------- -----------
Dividends from net investment income.... (0.0145) (0.0319) (0.0206) (0.0179) (0.0255)
----------- ----------- ----------- ----------- -----------
Net change in net asset value........... 0.0001 (0.0003) 0.0000 0.0001 0.0000
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD.......... $ 0.9997 $ 0.9996 $ 0.9999 $ 0.9999 $ 0.9998
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total return............................ 1.46%++ 3.24% 2.08% 1.80% 2.58%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)...... $ 2,877 $ 2,855 $ 4,028 $ 487 $ 111
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.................. 2.90%+ 3.19% 2.17% 1.75% 2.65%
Ratio of expenses to average net
assets*............................. 0.85%+ 1.20% 1.59% 0.92% 0.92%
Ratio of net investment income to
average net assets*................. 2.80%+ 2.74% 1.33% 1.58% 2.48%
</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.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
148
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED
ENDED --------------------------------------------------
MAY 31, NOVEMBER NOVEMBER NOVEMBER NOVEMBER
1996 30, 1995 30, 1994 30, 1993 30, 1992**
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 0.9996 $ 0.9999 $ 0.9999 $ 0.9998 $ 0.9998
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income................. 0.0138 0.0305 0.0192 0.0164 0.0240
Net realized and unrealized gains
(losses) on securities.............. 0.0001 (0.0003) 0.0000 0.0001 0.0000
----------- ----------- ----------- ----------- -----------
Total income from investment
operations.......................... 0.0139 0.0302 0.0192 0.0165 0.0240
----------- ----------- ----------- ----------- -----------
Dividends from net investment income.... (0.0138) (0.0305) (0.0192) (0.0164) (0.0240)
----------- ----------- ----------- ----------- -----------
Net change in net asset value........... 0.0001 (0.0003) 0.0000 0.0001 0.0000
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD.......... $ 0.9997 $ 0.9996 $ 0.9999 $ 0.9999 $ 0.9998
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total return............................ 1.38%++ 3.09% 1.94% 1.65% 2.43%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)...... $ 43,457 $ 38,243 $ 38,123 $ 45,609 $ 16,477
Ratio of expenses to average net
assets.............................. 0.90%+ 0.90% 0.90% 0.90% 0.90%
Ratio of net investment income to
average net assets.................. 2.72%+ 3.04% 1.90% 1.62% 2.21%
Ratio of expenses to average net
assets*............................. 1.00%+ 1.15% 1.02% 1.06% 1.07%
Ratio of net investment income to
average net assets*................. 2.62%+ 2.79% 1.78% 1.46% 2.04%
</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.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
149
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Results of Special Shareholder Meeting (Unaudited)
- --------------------------------------------------------------------------------
On May 29, 1996, a special meeting of the shareholders of Emerald Funds was
held to consider the election of six Trustees and the ratification of the
selection of Price Waterhouse LLP as independent accountant for each Fund of
Emerald Funds.
ELECTION OF TRUSTEES--The shareholders of Emerald Funds were requested to
vote for the election of the following individuals to serve as Trustees of
Emerald Funds. The shareholders of Emerald Funds approved each nominee. The
results of such solicitation are as follows:
<TABLE>
<CAPTION>
NOMINEE IN FAVOR OPPOSED ABSTAIN
- ------------------------ --------------- --------- ------------
<S> <C> <C> <C>
Chesterfield H. Smith 3,183,864,467 451,748 21,214,851
Albert D. Ernest 3,183,942,639 373,575 21,214,851
Raynor E. Bowditch 3,183,907,618 408,597 21,214,851
John G. Grimsley 3,183,932,453 383,761 21,214,851
Mary Doyle 3,183,935,679 380,535 21,214,851
Harvey R. Holding 3,183,898,180 418,034 21,214,851
</TABLE>
RATIFICATION OF INDEPENDENT AUDITORS--The shareholders of Emerald Funds
ratified the appointment of Price Waterhouse LLP as independent accountant for
Emerald Funds for the fiscal year ending November 30, 1996 as follows:
<TABLE>
<CAPTION>
IN FAVOR OPPOSED ABSTAIN
--------------- ------------- ------------
<S> <C> <C> <C>
3,179,623,280 12,798,546 13,077,645
</TABLE>
150
<PAGE>
[This page intentionally left blank]
