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EMERALD FUNDS ANNUAL REPORT
EMERALD
INSTITUTIONAL & SERVICE SHARES
-------------------------------------
NOVEMBER 30, 1996
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[LOGO]
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EMERALD FUNDS 1996 ANNUAL REPORT
EMERALD
INSTITUTIONAL & SERVICE SHARES
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INSTITUTIONAL SHARES INSTITUTIONAL & SERVICE SHARES
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Emerald International Equity Fund Emerald Tax-Exempt Fund
Emerald Small Capitalization Fund Emerald Prime Fund
Emerald Equity Fund Emerald Treasury Fund
Emerald Equity Value Fund
Emerald Balanced Fund
Emerald Florida Tax-Exempt Fund
Emerald Managed Bond Fund
Emerald U.S. Government Securities Fund
Emerald Short-Term Fixed Income Fund
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This report is not authorized for distribution to prospective investors
unless preceded or accompanied by a current prospectus for one of the
Emerald Funds discussed within.
THE EMERALD FUNDS ARE NOT INSURED OR PROTECTED BY THE FDIC OR ANY OTHER
GOVERNMENT AGENCY, ARE NOT DEPOSITS OR OBLIGATIONS OF BARNETT BANK, ARE NOT
GUARANTEED BY THE BANK AND INVOLVE INVESTMENT RISK, INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL.
Investments in the Prime, Treasury and Tax-Exempt Funds are neither insured
nor guaranteed by the U.S. Government, and yields will fluctuate. There
can be no assurance that the Funds will be able to maintain a stable net
asset value of $1.00 per share.
Barnett Capital Advisors, Inc., under a sub-advisory agreement with Barnett
Bank N.A., serves as investment adviser to the Emerald Funds, is paid a fee
for its services and is unaffiliated with Emerald Asset Management, Inc.,
the Funds' distributor.
The service contractors for the Emerald Funds may from time to time
voluntarily waive fees or reimburse Fund expenses, which temporarily
increases the return to investors. These fee waivers and reimbursements
may be discontinued at any time, which would reduce performance results.
The Emerald Funds prospectuses contain more complete information, including
charges and expenses. Please read the prospectus carefully before
investing.
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TABLE OF
CONTENTS
<TABLE>
<S> <C>
ECONOMIC OUTLOOK AND MARKET REVIEW 1
INTERVIEWS WITH YOUR PORTFOLIO MANAGERS
EMERALD EQUITY FUND 3
EMERALD EQUITY VALUE FUND 6
EMERALD INTERNATIONAL EQUITY FUND 9
EMERALD SMALL CAPITALIZATION FUND 12
EMERALD BALANCED FUND 15
EMERALD SHORT-TERM FIXED INCOME FUND 18
EMERALD U.S. GOVERNMENT SECURITIES FUND 21
EMERALD MANAGED BOND FUND 24
EMERALD FLORIDA TAX-EXEMPT FUND 27
EMERALD PRIME, TREASURY & TAX-EXEMPT FUNDS 30
FINANCIAL STATEMENTS
EMERALD EQUITY FUND 32
EMERALD EQUITY VALUE FUND 41
EMERALD INTERNATIONAL EQUITY FUND 49
EMERALD SMALL CAPITALIZATION FUND 56
EMERALD BALANCED FUND 62
EMERALD SHORT-TERM FIXED INCOME FUND 75
EMERALD U.S. GOVERNMENT SECURITIES FUND 81
EMERALD MANAGED BOND FUND 86
EMERALD FLORIDA TAX-EXEMPT FUND 93
EMERALD PRIME FUND 99
EMERALD TREASURY FUND 105
EMERALD TAX-EXEMPT FUND 109
NOTES TO FINANCIAL STATEMENTS 117
FINANCIAL HIGHLIGHTS 134
REPORT OF INDEPENDENT ACCOUNTANTS 168
</TABLE>
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BARNETT CAPITAL ADVISORS'
ECONOMIC OUTLOOK AND MARKET REVIEW
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WHAT IS YOUR OUTLOOK FOR THE ECONOMY IN 1997?
For 1997, Barnett Capital Advisors' expectation is for the economy to grow at a
rate of about 2.5%, similar to 1996. We don't see any evidence of an oncoming
recession, nor do we see any compelling evidence that the economy is on the
verge of running away on the upside. We expect inflation to continue to be about
3%, which is what we've been averaging the last several years. Based on the 3.3%
increase in the consumer price index, 1996 came in a little higher than previous
years, but excluding food and energy, "core" prices were up by only 2.6%. We
believe that inflation continues to be pretty well contained.
BECAUSE UNEMPLOYMENT IS SO LOW, AREN'T YOU CONCERNED ABOUT WAGE INFLATION?
There is certainly the potential for inflationary pressures from the labor
market. But higher wage rates are only inflationary to the extent that increases
in labor costs exceed productivity gains. And there is some anecdotal evidence
that productivity gains have been in fact higher than what has been officially
reported, because productivity in the service sector is difficult to measure. To
the extent that productivity improves as wage rates go up, there's nothing
necessarily inflationary about the current labor market, but we'll have to watch
it very closely. On the other hand, it is also worth noting that the growth in
jobs in the second half has decelerated from the first half of 1996. So things
may be cooling off in the job market.
WHAT IS YOUR OUTLOOK FOR INTEREST RATES?
By the end of 1997, we believe that interest rates are likely to end up somewhat
below where they are now. In the absence of accelerating inflationary pressure
and economic growth, we think that the Federal Reserve is not likely to
aggressively tighten in 1997, although we see little likelihood that they'll
ease. Another positive for interest rates is what appears to be positive
prospects with respect to the budget deficit. The environment is a good one for
deficit reduction legislation. Although the deficit has recently come down, we
believe that absent legislation it will accelerate over the next few years.
We've had an economic expansion that's already longer than average. Employment
gains and, thus, tax collections have helped the budget on the revenue side. And
the relatively low unemployment rates that we've been experiencing have helped
it on the cost side. Last year at this time, we were in the middle of some
fairly meaningful and at times heated debate on the issue of balanced budget
legislation. As those talks unraveled, we believe that it was not a coincidence
that interest rates rose after that. However, the political environment appears
more cordial now.
WHAT IS YOUR OUTLOOK FOR THE BOND MARKET IN 1997?
With long-term Treasuries at 6.75% and short-term rates in the neighborhood at
5.25%, we think that bonds can be the source of some reasonably competitive
returns. The interest-rate environment that we expect causes us to have a
portfolio maturity somewhat longer than average. Finding value is particularly
challenging in this environment because spreads between government securities
and corporate debt securities are very narrow.
WHAT IS YOUR VIEW OF THE STOCK MARKET?
Although we are proceeding with caution, we believe that the outlook for the
stock market continues to be favorable. This is a period similar to the 1960s,
where we had low inflation, moderate economic growth, declining bond yields and
valuation levels similar to now. Indeed, although valuations are rich today,
price/ earnings ratios are actually lower now than they were in the 1960s. We
continue to see growth in corporate profits in 1997, although at a slower rate
than in 1996, when stocks rose despite rising interest rates. Since
1
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we see interest rates falling in 1997, that is certainly a positive environment
for the market. And the U.S. stock market continues to attract tremendous
inflows from throughout the world. Baby boomers need to continue to put money to
work to fund their retirements. Additionally, on a global basis, most foreign
investors continue to be underweighted in U.S. stocks.
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.
2
<PAGE>
INTERVIEW (as of November 30, 1996)
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EMERALD EQUITY FUND
PHOTO Mr. Creighton joined Barnett in 1981 and has worked with
the firm throughout his investment career. He plays an
G. Russell integral role on the equity investment team, and works
Creighton, with highly qualified investment professionals to
C.F.A. integrate our quantitative models with specific security
INVESTMENT MANAGER analysis. Mr. Creighton earned his BBA in Finance from
16 years of Stetson University and his MBA in Finance from the
investment University of North Florida. He holds membership in the
experience Association for Investment Management and Reasearch
(AIMR) and has earned the Chartered Financial Analyst
(CFA) designation from the AIMR.
INVESTMENT GOAL
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>
Consumer Cyclicals 15%
Consumer Staples 7%
Health Care 17%
Finance 12%
Utilities 8%
Technology 20%
Manufacturing 14%
Transportation 1%
Energy 3%
Basic Materials 3%
</TABLE>
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TOP 10 HOLDINGS*
The 10 largest holdings in the portfolio include internationally diversified
companies with household names, such as General Electric, Nike and Gillette.
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
General Electric Co. 2.98% American Home Products 1.86%
......................................................... ..........................................................
Cisco Systems Inc. 2.10% Nike Inc. Cl. B 1.79%
......................................................... ..........................................................
Travelers Group Inc. 2.00% Williams Cos. Inc. 1.67%
......................................................... ..........................................................
Pfizer Inc. 1.93% Gillette Co. 1.64%
......................................................... ..........................................................
Merck & Co. 1.92% Intel Corp. 1.63%
......................................................... ..........................................................
Total 19.52%
......................................................... ..........................................................
</TABLE>
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* The composition of the Fund's holdings is subject to change.
3
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EMERALD EQUITY FUND (as of November 30, 1996)
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HOW DID THE FUND PERFORM DURING THE YEAR?
For the 12-month period ending November 30, 1996, the Fund's total return was
23.33%. In comparison, the Standard & Poors 500 Stock Index rose 27.86%. The
Fund outperformed the average growth fund as tracked by Lipper Analytical
Services Inc.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING THE YEAR?
The Fund had a very strong first half, but it declined during the June/July
stock market correction. In addition, we lost about two and a half percentage
points relative to the S&P 500 Index during October and November largely because
of the "narrowness" of the market advance. The ten largest companies in the S&P
500 accounted for the most significant portion of the index's return.
WHAT AREAS OF THE MARKET WORKED OUT WELL FOR YOU?
The stocks that performed well in the portfolio were of companies in diverse
industries, not certain sectors. Nike, one of our top 10 holdings (1.8% of the
portfolio), was up 97% over 12 months ending November 30, 1996. CompUSA (0.7%),
a computer retailer, was up 142%. Cadence Design (1.3%), a company which designs
software that helps build semiconductors, was up 66%. In the manufacturing area,
General Electric (3.0%) was up almost 60%. Cincinnati Bell (1.5%), a telephone
utility, was up 103%. We try to identify companies that have strong earnings
momentum, rising earnings expectations and reasonable valuations.
DESCRIBE YOUR INVESTMENT APPROACH.
We have a clearly defined investment process and we are very disciplined in how
we implement our strategy. We have a quantitative bias to a lot of our work,
using computer tools that are available to help us narrow down the universe of
attractive stocks. We are able to monitor some 2,000 companies and screen them
for attributes which we have determined provide the most useful information. We
will narrow that list down to about 200 companies that we look at in more
detail. Secondly, we are essentially a growth manager. We are looking for
companies with strong earnings momentum and rising earnings expectations
although we want to make sure that they are reasonably valued. We know that
there will be certain times when growth is out of favor and we will lag behind
the market in that environment, but our goal is to outperform over a market
cycle. The third thing that differentiates us is the manner in which we control
risk. Just as we apply a discipline to identify attractive stocks, we also apply
a discipline in constructing a portfolio. Someone investing in our Fund can have
a high degree of confidence that the portfolio structure will remain the same.
WHAT AREAS ARE ATTRACTIVE TO YOU NOW?
We like finance companies because we think their earnings growth is sustainable.
Lower interest rates will continue to help, and some consolidation in the
banking industry will continue. And productivity enhancements are just beginning
to move into that area. In retailing, people are becoming smarter shoppers, and
competition has become intense. We prefer retailers that focus on the business
market rather than the consumer market, partly because consumer debt is at an
all-time high. Technology continues to remain an attractive area, as well as
manufacturers that are able to make their customers more productive. However, we
employ a "bottom-up" style to investing, which suggests that we do not target
sectors or industries, but rather we select individual companies that fit our
investment criteria.
4
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EMERALD EQUITY FUND (as of November 30, 1996)
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GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES S&P 500 S&P BARRA 500 GROWTH
<S> <C> <C> <C>
11/30/86 10000 10000 10000
12/31/86 9764 9736 9767
6/30/87 11620 12419 12716
12/31/87 9686 10245 10402
6/30/88 10896 11562 11331
12/31/88 10959 11967 11644
6/30/89 12531 13935 13533
12/31/89 14267 15736 15883
6/30/90 14764 16220 16889
12/31/90 14057 15237 15914
6/30/91 15723 17419 18397
12/31/91 18499 19892 22021
6/30/92 17268 19765 20823
12/31/92 19272 21417 23136
6/30/93 19089 22450 22548
12/31/93 20095 23557 23525
6/30/94 18703 22751 22488
12/31/94 18913 23865 24261
6/30/95 22873 28673 29399
12/31/95 25621 32797 33511
6/30/96 28256 36141 37411
11/30/96 31632 41172 42524
</TABLE>
A LONG-TERM PERSPECTIVE
A $10,000 investment made on November 30, 1986, would have grown to $31,632 by
November 30, 1996. In this example, $10,000 invested in the S&P Barra Growth
Index, an unmanaged index of growth stocks, and the S&P 500 Index, an unmanaged
index of large-company stocks, would have had ending values of $42,524 and
$41,172, respectively. The comparison to the S&P 500 and the S&P Barra Growth
Indices is meant to provide you with a general sense of how the Fund is
performing compared to standard benchmarks of the market. These indices do not
reflect any expenses that accompany a real investment such as expenses for Fund
operation, management fees, or the cash reserves necessary to provide daily
liquidity in a mutual fund.
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.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF NOV. 30, 1996*
<S> <C>
INSTITUTIONAL
SHARES
----------
1 Year 23.33%
5 Year 14.21%
10 Year 12.21%
Since Inception 14.06%
</TABLE>
* 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 3/1/94. 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 0.79% 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 for the period from 6/28/91 to 3/1/94 and
of the Fund's Institutional Shares thereafter.
5
<PAGE>
INTERVIEW (as of November 30, 1996)
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EMERALD EQUITY VALUE FUND
PHOTO Mr. LaPrade joined Barnett in 1978 and has worked with
the firm throughout his investment career. He plays an
Martin E. LaPrade, integral role on the equity investment team, and works
C.F.A. with highly qualified investment professionals to
INVESTMENT MANAGER integrate our quantitative models with specific security
16 years of analysis. He received his BS in Accounting from Furman
investment University. Mr. LaPrade holds membership in the
experience Association for Investment Management and Research (AIMR)
and has earned the Chartered Financial Analyst (CFA)
designation from AIMR.
INVESTMENT GOAL
The Fund's investment goal is long-term capital
appreciation with income as a secondary objective through
investments primarily in common and preferred stock and
debt securities convertible into common stock.
The Fund is best suited for investors who seek long-term
capital appreciation and are willing to accept the
relative risks associated with investments in undervalued
stocks.
PORTFOLIO COMPOSITION*
The portfolio seeks to purchase stocks with a price-book value ratio below that
of the median stock in the S&P 500 Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Basic Materials 13%
Energy 15%
Transportation 5%
Manufacturing 8%
Technology 7%
Consumer Cyclicals 8%
Consumer Staples 1%
Finance 28%
Utilities 15%
</TABLE>
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TOP 10 HOLDINGS*
The portfolio's 10 largest holdings include such established companies as Exxon,
Dow Chemical and Citicorp.
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
Exxon Corp. 5.25% Aluminum Company of America 2.25%
......................................................... ..........................................................
Ameritech Corp. 2.97% Panenergy Corp. 2.22%
......................................................... ..........................................................
BankAmerica Corp. 2.86% Citicorp 2.20%
......................................................... ..........................................................
Dow Chemical Co. 2.74% Texaco Inc. 2.00%
......................................................... ..........................................................
Bank of Boston Corp. 2.29% Fed. Nat'l Mtge. Assoc. 1.98%
......................................................... ..........................................................
Total 26.76%
......................................................... ..........................................................
</TABLE>
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* The composition of the Fund's holdings is subject to change.
6
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EMERALD EQUITY VALUE FUND (as of November 30, 1996)
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HOW DID THE FUND PERFORM IN 1996?
For the 11 months ending November 30, 1996, the Fund's total return was 24.93%.
In comparison, the Standard & Poors 500 Index was up 25.53% during the same
period.
HOW WOULD YOU DESCRIBE THE FUND'S INVESTMENT APPROACH?
The purpose of the Fund is to create a pure value portfolio where we focus on
stocks that in the aggregate have low price/earnings multiples, low ratios of
price-to-book value and high dividend yields. Our quantitative process helps us
select stocks within that criteria. We break down the universe of stocks into
economic sectors, and we have devised for each sector a specific set of models
which we think best identify price-performance opportunities. For instance, in
the basic materials area, we would focus more on price-to-book value and similar
ratios. In contrast, in the technology area, we would focus more on earnings
growth and earnings momentum.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING THE YEAR?
Using the S&P Value Index, you would have to say that the value investing style
has slightly underperformed the growth-investing style as a whole. For the
eleven months ending November 30, 1996, the S&P Growth Index was up about 27%,
while the S&P Value Index was up 24%. Typically, value investing lags the
overall market during periods when the Dow Jones Industrial Average and the S&P
500 are setting records. Even with markets at record levels, our approach is
still to be fully invested. Over time, a fully invested philosophy is difficult
to beat.
WHAT INDUSTRIES WORKED PARTICULARLY WELL FOR YOU?
We had a slight overweighting in finance, one of the strongest areas of the
market. Most of the banks, brokerages and insurance companies tend to fall in
the value camp since their price/earnings ratios are lower than average. For
instance Bank of America and Bank of Boston were up 52% and 43%, respectively,
since January 1, 1996. In technology, IBM was up 75% for the year. The stock was
selling at about 10 times earnings as recently as last summer. While mainframe
computers still generate a significant part of their earnings, the market wanted
some comfort that IBM was going to be able to compete in the PC market, and that
has happened. Citicorp is a prime example of the revaluation of the banking
industry. With a worldwide franchise and consistent double-digit earnings
growth, it has been afforded a higher valuation by the market. As a result, the
stock has risen more than 60% this year and should continue to perform well.
WHAT IS YOUR OUTLOOK FOR THE FUND?
As we head into 1997, earnings growth is going to be very dear -- probably in
the single digits. So if stock prices are going to rise, then it has to come
from rising price/earnings multiples rather than earnings growth. Financial
stocks could be prime candidates for rising P/E multiples, as investors conclude
that these companies are not cyclical performers as in the past. Many of the
traditional measures say the stock market is overvalued. If there is a pullback,
a value approach that focuses on attractive valuations should hold up quite
well.
7
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EMERALD EQUITY VALUE FUND (as of November 30, 1996)
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GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES S&P 500 S&P BARRA VALUE
<S> <C> <C> <C>
12/27/95 10000 10000 10000
3/31/96 10741 10544 10639
6/30/96 10972 11020 10857
9/30/96 11282 11357 11143
11/30/96 12493 12553 12402
</TABLE>
A LONG-TERM PERSPECTIVE
A $10,000 investment made at the inception of the Fund would have been worth
$12,493 by November 30, 1996. By comparison, a similar investment in the S&P 500
Index, an unmanaged index of large-company stocks, would have had a value of
$12,553. The S&P Barra Value Index is an unmanaged index of value stocks. In
this example, the S&P Barra Value Index would have had a value of $12,402. The
S&P 500 and the S&P Barra Value Indices do not reflect any expenses that
accompany a real investment such as expenses for Fund operation, management
fees, or the cash reserves necessary to provide daily liquidity in a mutual
fund.
<TABLE>
<CAPTION>
AGGREGATE TOTAL RETURN AS OF NOV. 30, 1996
<S> <C>
INSTITUTIONAL
SHARES
---------
Since Inception (12/27/95) 24.93%
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.
</TABLE>
8
<PAGE>
INTERVIEW (as of November 30, 1996)
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EMERALD INTERNATIONAL EQUITY FUND
PHOTO Mr. Bryant joined Barnett in 1987. He has worked with the
firm throughout his investment career and plays an
Don W. Bryant, integral role on the equity investing team. He received
C.F.A. his undergraduate degree from the University of South
INVESTMENT MANAGER Alabama and his MBA in Finance from the University of
10 years of Georgia. Mr. Bryant holds membership in the Association
investment for Investment Management and Research (AIMR) and the
experience Jacksonville Financial Analysts Society. He has earned
the Chartered Financial Analyst (CFA) designation from
AIMR.
INVESTMENT GOAL
The Fund's investment goal is long-term capital
appreciation through investments primarily in equity
securities of foreign issuers.*
The Fund is best suited for investors who seek capital
appreciation over the long term and are willing to accept
the relative risks associated with foreign investments.
PORTFOLIO COMPOSITION**
The portfolio emphasizes established
companies located in a variety of
different foreign regions that sell below their "true value."
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Latin America 7.0%
United Kingdom 6.0%
Europe 68.0%
Asia 10.0%
Other 9.0%
</TABLE>
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS**
The portfolio's 10 largest holdings include such international companies as
Daimler-Benz, Nestle SA and Fuji Photo Film.
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
Stet Societa Finanziaria Telefonica 5.68% Fuji Photo Film 3.65%
......................................................... ..........................................................
Daimler-Benz AG 4.48% Telefonica de Espana 3.55%
......................................................... ..........................................................
Alcatel Alsthom 4.38% Groupe Danone 3.52%
......................................................... ..........................................................
Nestle SA 4.17% Istituto Mobiliare Italiano 3.31%
......................................................... ..........................................................
Hitachi Ltd. 3.88% Tele Danmark 3.05%
......................................................... ..........................................................
Total 39.67%
......................................................... ..........................................................
</TABLE>
- ---------------
* International investing is subject to certain factors such as currency
exchange rate volatility, possible political, social or economic instability,
foreign taxation and differences in auditing and other financial standards.
** The composition of the Fund's holdings is subject to change.
9
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND (as of November 30, 1996)
- --------------------------------------------------------------------------------
HOW DID THE FUND PERFORM SINCE ITS INCEPTION ON DECEMBER 27, 1995?
For the period ending November 30, 1996, the Fund's total return was 13.47%. In
comparison, the Morgan Stanley Capital International EAFE (Europe, Australia and
Far East) Index rose 7.72%.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING THE YEAR?
International markets -- particularly Japan -- lagged the U.S. stock market for
much of 1996. The Fund is underweighted in Japan, and that was very beneficial
to the Fund's performance. Strong returns came from investments in Europe,
including Italy, France, Spain, the United Kingdom, The Netherlands, Germany and
Austria.
WHAT INDIVIDUAL STOCKS STOOD OUT?
One of our top performing stocks was Stet, the Italian phone company -- the
equivalent of AT&T pre-breakup. It is the telephone monopoly in Italy,
controlling everything from long-distance and wireless services down to
telephone books. The company is in the process of being privatized, although
this is taking longer than we would like. The greater efficiencies associated
with privatization is a theme for a lot of the stocks that we own. Telebras, the
Brazilian telephone company, is the least expensive phone company by just about
any measure. However, due to what we perceive to be significant political and
currency risk associated with investing in Brazil, we are limiting our
commitment to no more than 2% of the portfolio. In the case of Stet, we believe
that we are being well compensated for any perceived risks. Stet is currently
trading at about 13 times earnings and less than 3 times cash flow. To put that
in context, you would pay about 6-8 times cash flow for the Baby Bells in the
U.S., and they don't have nearly as much potential for increasing earnings. Many
times we are buying into somewhat uncertain situations, but we feel that we are
well compensated for that because of the prices that we're paying.
DO YOU FAVOR ANY PARTICULAR INDUSTRIES?
No, we don't, but often if an industry is cheap in one country, it may be cheap
worldwide. Telecommunications happens to be our largest industry commitment at
about 19% of the portfolio. Other significant industries include food, household
products, electronics and basic infrastructure. Many of these companies are
unfairly associated with the slow-growth economies of Europe and Japan by virtue
of their headquarters location and are valued as such, even though a growing and
important portion of their revenues are generated in the much faster-growing
economies in emerging markets and Asia.
HOW WOULD YOU DESCRIBE YOUR STOCK-SELECTION PROCESS?
Our industry analysts drive the investment-decision process. That's unique
because most international equity portfolio managers start with country
selection first. We think it's more important to understand the industry
worldwide to effectively value a business than it is to understand the dynamics
of a particular country. We subscribe to every fundamental financial database
that is available, and our analysts will also travel and visit companies and
attend industry conferences.
WHAT IS YOUR OUTLOOK FOR THE FUND?
The Fund's current focus on Continental Europe reflects no economic or political
bias in favor of that region of the world. It simply shows that we are finding
more bargains there. To be sure, there are some fundamental changes -- such as
privatization and a new focus on enhancing shareholder value -- taking place in
Continental Europe that could accelerate stock-price performance. We believe
that our style of investing provides the investor with significantly less risk
than that of the U.S. stock market. Currently, the price/earnings ratio of our
portfolio is 16. In contrast, the P/E multiple of the S&P 500 is near 20, while
the P/E multiple of the EAFE Index is 26. Investors may want to consider our
Fund if they already have U.S. exposure and are looking for diversification.
10
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND (as of November 30, 1996)
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES MSCI EAFE
<S> <C> <C>
12/27/95 10000 10000
6/30/96 10806 10467
11/30/96 11347 10772
</TABLE>
A LONG-TERM PERSPECTIVE
A $10,000 investment made at the inception of the Fund would have been worth
$11,347 by November 30, 1996. By comparison, a similar investment in the Morgan
Stanley Capital International Europe Australia & Far East Index, which
represents the performance of the major stock markets in those regions, would
have had a value of $10,772. The Morgan Stanley Capital International Europe
Australia & Far East Index does not reflect any expenses that accompany a real
investment such as expenses for Fund operation, management fees, or the cash
reserves necessary to provide daily liquidity in a mutual fund.
<TABLE>
<CAPTION>
AGGREGATE TOTAL RETURN AS OF NOV. 30, 1996
<S> <C>
INSTITUTIONAL
SHARES
---------
Since Inception (12/27/95) 13.47%
</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.
11
<PAGE>
INTERVIEW (as of November 30, 1996)
- --------------------------------------------------------------------------------
EMERALD SMALL CAPITALIZATION FUND
PHOTO Mr. McQuiddy joined Barnett in 1983 and has worked with
the firm throughout his investment career. He plays an
Dean McQuiddy, integral role on the equity investment team, and works
C.F.A. with highly qualified investment professionals to
INVESTMENT MANAGER integrate our quantitative models with specific security
14 years of analysis. He received his BS in Finance from the
investment University of Florida. Mr. McQuiddy holds membership in
experience the Association for Investment Management and Research
(AIMR) and has earned the Chartered Financial Analyst
(CFA) designation from AIMR.
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>
Energy 10%
Manufacturing 10%
Technology 31%
Consumer Cyclicals 36%
Consumer Staples 4%
Health Care 1%
Finance 8%
</TABLE>
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS**
The portfolio's 10 largest holdings include such up-and-coming companies as
Microage, Newfield Exploration and Dynatech.
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
Microage, Inc. 3.07% Dynatech Corp. 2.53%
......................................................... ..........................................................
Hughes Supply, Inc. 2.99% NBTY Inc. 2.47%
......................................................... ..........................................................
Newfield Exploration Co. 2.83% Oregon Metallurgical Corp. 2.47%
......................................................... ..........................................................
Apogee Enterprises, Inc. 2.65% Orbital Sciences Corp. 2.46%
......................................................... ..........................................................
RMI Titanium Co. 2.64% Manitowoc Corp. 2.45%
......................................................... ..........................................................
Total 26.56%
......................................................... ..........................................................
</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.
12
<PAGE>
EMERALD SMALL CAPITALIZATION FUND (as of November 30, 1996)
- --------------------------------------------------------------------------------
HOW DID THE FUND PERFORM DURING THE YEAR?
For the 12-month period ending November 30, 1996, the Fund's total return was
14.49%. In comparison, the Russell 2000 Index rose 16.55% while the Russell 2000
Growth Index was up 11.62%. For the three years ending November 30, 1996, the
Fund returned 15.63% annualized, versus 14% annualized for the Russell 2000 and
13.3% annualized for the Russell 2000 Growth Index. Over the last five years,
the Fund has achieved average annual returns of 19.51%, versus 16.8% for the
Russell 2000 Index and 13.3% for the Russell 2000 Growth Index.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING THE YEAR?
As a group, small stocks outperformed the Dow Jones Industrial Average and the
S&P 500 Index until May. At that time, many small companies were either going
public or making secondary offerings of stock. So there was a tremendous supply.
However, between late May and early July, there was a sharp pullback in the
stock market. When you undergo a sharp correction like the one we had, there is
a flight to the safety and liquidity of the big stocks. People know that they
can sell General Electric tomorrow if they want to do so. As a result, the
market correction disproportionately impacted smaller companies, thus hurting
the Fund's performance for the year.
WHAT AREAS OF THE SMALL-CAP MARKET SEEM ATTRACTIVE NOW?
The energy sector is particularly attractive. Indeed, it is the only industry
with pricing power. The price of oil has risen from $15 to $23 a barrel, which
has spurred production and exploration all over the world. The people that make
the rigs, the helicopters, the drill bits and other equipment have tremendous
price leverage. In retailing, we own companies specializing in discount stores
and restaurants -- goods and services that people will buy regardless of the
economy. Because the consumer is overburdened with debt and we're late in the
economic cycle, we're staying away from the high ticket retailers. We continue
to be attracted to technology because many of these companies are in the early
stages of tremendous growth, and so the portfolio is about 30% invested in this
area.
SINCE THERE ARE THOUSANDS OF STOCKS TO CHOOSE FROM, HOW DO YOU NARROW DOWN YOUR
INVESTMENT UNIVERSE?
It's a very quantitatively-driven process, which is a tremendous time saver and
filter. The traditional stock picker can keep tabs on only 100 to 150 stocks. By
using our proprietary quantitative process, we filter 2,000 stocks down to about
200 that all have the types of attributes that historically have been highly
correlated with superior stock price performance. We target 200 companies that
we believe are going to have above-average sales and earnings growth, strong
profitability measures such as return on equity and strong balance sheets. We
want to catch companies in the very early stages of their growth -- before that
growth is recognized in the marketplace, before the stock is over-owned by
institutions. We want to catch companies that have the ability to surprise on
the upside when earnings are reported. My job is to answer a series of
questions: Why is this company successful? What's their technological or
marketing advantage? Is the success sustainable? We also pay very close
attention to what our portfolio looks like relative to our benchmark. We want to
look like the Russell 2000 in terms of capitalization, industry weightings and
yet be different and unique through individual stock selection.
WHY ARE YOU SO OPTIMISTIC ABOUT THE SMALL-CAP MARKET AND YOUR FUND IN
PARTICULAR?
Overall economic momentum is slowing, and growth is going to be tougher to come
by in large companies. We feel investors will have to look at smaller companies
to find consistent growers, making small- and mid-cap stocks more attractive.
The Fund's price-earnings ratio on 1997 earnings is 17, which is a discount to
the S&P 500 as well as the Russell 2000. Over the next few years, we believe
that the relative attractiveness of smaller growth stocks is a big story. We are
still very early in some of these enabling technologies being used on an
everyday basis by the vast majority of the industrialized world, whether you're
talking about networking, commerce on the Internet or wireless communications.
In addition, there is increasing access to capital. As a result, the time frame
for these enabling technologies to make an impact and to grow quickly into
large-size enterprises has been shortened tremendously. We're very early in the
technology game. The average person still doesn't have a computer, isn't on the
Internet, doesn't have a digital telephone, and so on, resulting in tremendous
opportunity. We believe that the Fund allows shareholders to participate in the
most dynamic parts of the economy.
13
<PAGE>
EMERALD SMALL CAPITALIZATION FUND (as of November 30, 1996)
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES RUSSELL 2000 LIPPER
<S> <C> <C> <C>
12/31/86 10000 10000 10000
6/30/87 11731 12343 12167
12/31/87 9409 9123 9592
6/30/88 11093 11579 11686
12/31/88 10476 11394 11493
6/30/89 11625 13053 13330
12/31/89 11750 13244 14285
6/30/90 12130 13451 15064
12/31/90 10131 10661 12670
6/30/91 12517 13617 15554
12/31/91 15958 15570 19320
6/30/92 14916 15596 17806
12/31/92 19212 18437 21653
6/30/93 20170 19645 22697
12/31/93 23162 21923 25421
6/30/94 20638 20510 23223
12/31/94 22954 21523 25350
6/30/95 26614 24626 29603
12/31/95 30757 27645 33807
6/30/96 33590 30518 38190
11/30/96 33890 31392 39239
</TABLE>
A LONG-TERM PERSPECTIVE
A $10,000 investment made at the inception of the Fund would have been worth
$33,890 by November 30, 1996. By comparison, a similar investment in the Lipper
Small Company Growth Funds Average would have had a value of $39,239. In this
example, $10,000 invested in the Russell 2000 Index, an unmanaged index
comprised of 2,000 domestically traded common stocks of small-capitalization
companies, would have had a value of $31,392. The comparison to the Russell 2000
Index is meant to provide you with a general sense of how the Fund is performing
compared to a standard benchmark of the market. The Russell 2000 Index does not
reflect any expenses that accompany a real investment such as expenses for Fund
operation, management fees, or the cash reserves necessary to provide daily
liquidity in a mutual fund.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF NOV. 30, 1996*
<S> <C>
INSTITUTIONAL
SHARES
---------
1 Year 14.49%
3 Year 15.63%
5 Year 19.51%
Since Inception 13.08%
</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 1.35% 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.
14
<PAGE>
INTERVIEW (as of November 30, 1996)
- --------------------------------------------------------------------------------
EMERALD BALANCED FUND
PHOTO Mr. Creighton joined Barnett in 1981 and has worked with
the firm throughout his investment career. He plays an
G. Russell integral role on the equity investment team, and works
Creighton, with highly qualified investment professionals to
C.F.A. integrate our quantitative models with specific security
INVESTMENT MANAGER analysis. Mr. Creighton earned his BBA in Finance from
16 years of Stetson University and his MBA in Finance from the
investment University of North Florida. He holds membership in the
experience Association for Investment Management and Research (AIMR)
and has earned the Chartered Financial Analyst (CFA)
designation from AIMR.
INVESTMENT GOAL
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 38%
Cash & Cash Equivalents 4%
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. 1.40% U.S. Treasury Bond, 9.25%, 2/15/16 2.72%
......................................................... ..........................................................
Travelers Group, Inc. 1.00% FHLMC Gold, 9/1/10 2.54%
......................................................... ..........................................................
Cicso Systems, Inc. 0.99% U.S. Treasury Notes, 5.88%, 2/15/04 2.07%
......................................................... ..........................................................
Merck & Co. 0.97% U.S. Treasury Notes, 5.63%, 2/15/06 1.51%
......................................................... ..........................................................
Pfizer Inc. 0.91% FNMA, 8.50%, 8/1/11 1.47%
......................................................... ..........................................................
Total Equities 5.27% Total Bonds 10.31%
......................................................... ..........................................................
</TABLE>
* The composition of the Fund's holdings is subject to change.
15
<PAGE>
EMERALD BALANCED FUND (as of November 30, 1996)
- --------------------------------------------------------------------------------
HOW DID THE FUND PERFORM DURING THE YEAR?
For the 12-month period ending November 30, 1996, the Fund's total return was
14.73%. In comparison, the average fund in the balanced fund category as
measured by Lipper Analytical Services Inc. was up 16.42% for the year, while
the Lehman Brothers Aggregate Bond Index was up 6.05% and the Standard & Poors
500 Stock Index was up 27.86%.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING THE YEAR?
The Fund's asset allocation was approximately 60% stocks and 40% bonds for most
of the year. In 1996, the stock market's superior performance compared to bonds
aided the Fund's performance. However, the 20% allocation within the equity
portfolio to small-capitalization stocks hindered returns as small-cap stocks
underperformed large-cap issues.
HOW DO YOU MAKE YOUR ASSET ALLOCATION DECISION?
The asset allocation decision is based on the long-term return potential of
stocks and bonds as well as near-term imbalances in valuation. For example, when
the stock market was going down in June and July, we added to equities. We will
add to equities when stock prices are declining, and we will take profits in
equities when they rise significantly out of line. This is a balanced portfolio
as opposed to a tactical asset allocation portfolio, where market timing is
perceived to add incremental return.
GENERALLY, WHAT IS YOUR OUTLOOK FOR THE FUND?
Within large-capitalization stocks, we are focusing on companies that typically
do well in a slower-growth environment, such as consumer staples, technology and
finance companies. The slower economy should also help smaller companies, which
tend to outperform large companies in such an environment. We don't believe that
the stock market is grossly overvalued based on earnings forecasts and the
current level of interest rates. The bond market came on strong in late 1996, as
investors seemed to like the election results. We intend to maintain our 60/40
mix of stocks and bonds into 1997 unless there is a dramatic shift in investor
sentiment.
16
<PAGE>
EMERALD BALANCED FUND (as of November 30, 1996)
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES S&P 500 LEHMAN LIPPER
<S> <C> <C> <C> <C>
4/11/1994 10000 10000 10000 10000
6/30/1994 9857 10041 9897 9886
12/31/1994 9976 10533 9995 10070
6/30/1995 11628 12655 11139 11492
12/31/1995 12801 14475 11842 12648
6/30/1996 13409 15951 11697 13297
11/30/1996 14536 18171 12385 14537
</TABLE>
A LONG-TERM PERSPECTIVE
A $10,000 investment made at the inception of the Fund would have had a value of
$14,536 by November 30, 1996. By comparison, a similar investment in the Lipper
Balanced Funds Average would have had a value of $14,537. In this example,
$10,000 invested in the S&P 500 Index, an unmanaged index of large-company
stocks, and the Lehman Brothers Aggregate Bond Index, an unmanaged index
comprised of investment-grade corporate debt securities, U.S. Treasury and U.S.
Government agency debt securities with maturities of more than one year, would
have had values of $18,171 and $12,385, respectively. The comparison to the S&P
500 Index and the Lehman Brothers Aggregate Bond Index is meant to provide you
with a general sense of how the Fund is performing compared to standard
benchmarks for the stock and bond markets. These indices do not reflect any
expenses that accompany a real investment such as expenses for Fund operation,
management fees, or the cash reserves necessary to provide daily liquidity in a
mutual fund.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF NOV. 30, 1996
<S> <C>
INSTITUTIONAL
SHARES
---------
1 Year 14.73%
Since Inception (4/11/94) 15.20%
</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.
17
<PAGE>
INTERVIEW (as of November 30, 1996)
- --------------------------------------------------------------------------------
EMERALD SHORT-TERM FIXED INCOME FUND
PHOTO Mr. Greenert joined Barnett in 1985 and has worked with
the firm throughout his investment career. He plays an
Jeffery A. Greenert, integral role as part of the Barnett Capital Advisors,
INVESTMENT MANAGER Inc. fixed income investing team, and works with a highly
12 years of qualified team of fixed income professionals to analyze
investment interest rates, as well as individual fixed income
experience securities. Mr. Greenert received his BS in Finance from
the University of Florida.
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 2.71 years.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
U.S. Government Obligations 42%
Municipal 2%
Corporate Obligations 53%
Cash & Cash Equivalents 3%
</TABLE>
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS**
The top 10 holdings in the portfolio include securities and money-market
instruments issued by Paine Webber and Lehman Brothers.
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
U.S. Treasury Notes, 6.00%, 8/15/99 8.75% Arizona Public Service, 5.75%, 9/15/00 3.07%
......................................................... ..........................................................
U.S. Treasury Notes, 6.13%, 8/31/98 5.59% Lehman Brothers, 8.44%, 3/10/99 2.99%
......................................................... ..........................................................
FNMA, 7.50%, 11/1/09 3.72% Assoc. Corp., 7.88%, 9/30/01 2.95%
......................................................... ..........................................................
Paine Webber, 6.25%, 6/15/98 3.70% Banco Latinoamericano, 7.05%, 7/19/99 2.80%
......................................................... ..........................................................
Citibank Credit Card Master Trust, 2/7/03 3.20% Ford Motor Credit, 5.67%, 2/15/01 2.71%
......................................................... ..........................................................
Total 39.48%
......................................................... ..........................................................
</TABLE>
* Short-term fixed-income funds have a lower degree of market risk than
longer-term corporate or government bond funds. Conversely, bonds and bond
funds with longer maturities may offer higher yields than shorter-term bonds
or fixed-income funds such as this Fund.
** The composition of the Fund's holdings is subject to change.
18
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND (as of November 30, 1996)
- --------------------------------------------------------------------------------
HOW DID THE FUND PERFORM DURING THE YEAR?
For the 12-month period ending November 30, 1996, the Fund's total return was
5.47%. In comparison, the Merrill Lynch Government/Corporate Short-Term Index
rose 5.83%.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING THE YEAR?
The Fund's performance is closely tied to the movement in interest rates. When
interest rates rise, fixed income fund share prices fall and vice versa.
Although the Federal Reserve Board reduced short-term interest rates by 0.25
percentage points in January of 1996, unexpectedly strong economic indicators in
February and March caused yields on short- and intermediate-term Treasury
securities to rise sharply. Between mid-February and mid-April, yields on the
three-year Treasury note rose from 4.95% to 6.25%. During the summer, yields
rose as high as 6.60%, as Wall Street braced itself for a boost in interest
rates from the Federal Reserve Board. When the Fed didn't act, yields eased to
6.30%. Yields have continued to progress downward since late September as
economic data indicated that job growth was, in fact, not robust and that
inflation fears were exaggerated.
WHAT STRATEGIES DID YOU EMPLOY TO INCREASE RETURNS?
During the first half of the year when interest rates were rising, we had a
slightly shorter maturity structure than average, which helped us. In addition,
our use of "puttable" bonds produced higher returns for the portfolio. A
puttable bond gives the holder the option of redeeming the bond early, typically
when interest rates rise. When rates fall, puttable bonds trade less toward
their put date and more toward their longer maturity. For example, since
November 30, 1996 we purchased a bond issued by Sears Roebuck due 11-15-2005,
but with a put on 11-15-2000. It's effectively a four year bond, and it offers a
0.34 percentage point advantage over a comparable U.S. Treasury security. Sears
is an improving retailer within a field in which many of its competitors are
experiencing difficulty. Sears carries an A2 rating by Moody's Investor Service
and an A- by Standard & Poors. The average quality of the Fund is AA.
WHAT IS YOUR OUTLOOK FOR THE FUND?
We expect to see an economy that continues to grow modestly, which suggests that
interest rates and inflation should stay low. The portfolio is structured to
garner a significant portion of the bond market's return, but without the
volatility of longer maturity funds. We plan to maintain a slightly longer
maturity structure than our benchmark. Although its share price may be more
volatile, a longer maturity portfolio should provide a higher yield--and price
appreciation as interest rates fall.
19
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND (as of November 30, 1996)
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES LIPPER MERRILL LYNCH
<S> <C> <C> <C>
11/30/86 10000 10000 10000
12/31/86 10025 10060 10026
6/30/87 10255 10073
12/31/87 10601 10276 10524.69
6/30/88 10973 10686
12/31/88 11248 10854 11194.27
6/30/89 11938 11537
12/31/89 12438 12037 12495.83
6/30/90 12915 12316
12/31/90 13578 12918 13704.55
6/30/91 14208 13376
12/31/91 15257 14589 15489.02
6/30/92 15802 15173
12/31/92 16175 15889 16556.06
6/30/93 16793 16764
12/31/93 17191 17193 17737.01
6/30/94 16994 16345
12/31/94 17172 16191 17639.28
6/30/95 18392 17547
12/31/95 19110 18411 19925.33
6/30/96 19324 18522
11/30/96 20025 19209 20899.68
</TABLE>
A LONG-TERM PERSPECTIVE
A $10,000 investment made on November 30, 1986, would have had a value of
$20,025 by November 30, 1996. By comparison, a similar investment in the Lipper
Short Investment Grade Debt Funds Average would have had a value of $19,209. The
Merrill Lynch Government/Corporate Short-Term Index is an unmanaged index
comprised of short-term investment-grade corporate debt securities, and U.S.
Treasury and U.S. Government agency debt securities. In this example, $10,000
invested in the Merrill Lynch Government/Corporate Short-Term Index would have
had a value of $20,900. The comparison to the Merrill Lynch Government/Corporate
Short-Term Index is meant to provide you with a general sense of how the Fund is
performing compared to a standard benchmark of the market. This index does not
reflect any expenses that accompany a real investment such as expenses for Fund
operation, management fees, or the cash reserves necessary to provide daily
liquidity in a mutual fund.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF NOV. 30, 1996*
<S> <C>
INSTITUTIONAL
SHARES
---------
1 Year 5.47%
5 Year 5.90%
10 Year 7.19%
Since Inception 8.73%
CURRENT SEC 30-DAY YIELD 5.66%
</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 5.65%.
* 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 0.28% 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.
20
<PAGE>
INTERVIEW (as of November 30, 1996)
- --------------------------------------------------------------------------------
EMERALD U.S. GOVERNMENT SECURITIES FUND
PHOTO Mr. Cantor joined Barnett in 1983 and plays a leading
role on the fixed income investing team. Prior to joining
Andrew Cantor, the firm, he worked for Gulf United Corporation, where he
C.F.A. was responsible for economic and interest rate analysis
INVESTMENT MANAGER and the management of approximately $1.1 billion in fixed
23 years of income investments. He received his BS in Mathematics
investment from Florida Atlantic University and his MA in Economics
experience from the University of South Carolina. Mr. Cantor holds
membership in the Association for Investment Management
and Research (AIMR) and the Jacksonville Financial
Analysts Society. He has earned the Chartered Financial
Analyst (CFA) designation from AIMR.
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 8.48
years after adjusting for mortgage prepayments.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
U.S. Government Obligations 98%
Cash Equivalents 2%
</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>
FHLB, 7.20%, 6/14/11 7.12% FHLMC, 9.25%, 6/1/18 3.98%
......................................................... ..........................................................
Tennessee Valley Authority, 5.98%, 4/1/36 6.78% FHLMC, 6.08%, 10/29/08 3.51%
......................................................... ..........................................................
U.S. Treasury Bonds, 12.75%, 11/15/10 6.03% U.S. Treasury Note, 6.25%, 10/31/01 3.39%
......................................................... ..........................................................
FNMA, 8.00%, 8/1/99 5.64% FHLMC 6.50%, 10/1/03 3.33%
......................................................... ..........................................................
GNMA, 8.50%, 4/15/25 4.07% FHLMC, 6.88%, 11/22/06 3.33%
......................................................... ..........................................................
Total 47.18%
......................................................... ..........................................................
</TABLE>
- ---------------
* The composition of the Fund's holdings is subject to change.
21
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND (as of November 30, 1996)
- --------------------------------------------------------------------------------
HOW DID THE FUND PERFORM DURING THE YEAR?
For the 12-month period ending November 30, 1996, the Fund's total return was
5.69%. In comparison, the Lipper Intermediate Government Funds average produced
an average return of 4.77% while the Lehman Brothers Mortgage Index, an
unmanaged index of U.S. Treasuries, government agencies and mortgage-backed
securities, rose 7.23%.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING THE YEAR?
The story of the year is really a story of two markets. The first half of the
year was pretty dismal as interest rates rose steadily. However, interest rates
fell steadily in September, October and November. Since returns on bonds move
inversely to the movement of interest rates, the second half of the year was
clearly a better period for U.S. government bonds.
AS THE ECONOMY SLOWED, HOW DID THE PORTFOLIO CHANGE?
The average maturity of the portfolio as of November 30, 1996 was somewhat
longer than six months ago, and a bit longer than most intermediate-term bond
benchmarks. We made this decision based on our expectation of lower interest
rates, driven by our perception of low and stable inflation rates and sub-normal
growth in the economy over the next year. In fact, in the third calendar quarter
of 1996, the Gross Domestic Product fell to 2.1% from 4% in the second quarter.
The slower growth rate eliminated the expectation that the Federal Reserve Board
would tighten the money supply. As a result, yields on U.S. Treasuries fell
about 0.75 percentage points from May 31 to November 30, 1996. As interest rates
fell, we reduced the proportion of mortgage-backed securities, which tend to
underperform Treasuries in a declining interest rate environment. These
decisions--to lengthen the portfolio and to shift away from mortgage-backed
securities--produced strong returns in the second half of the year.
WHAT IS AN EXAMPLE OF AN INTERESTING SECURITY IN THE U.S. GOVERNMENT SECURITIES
FUND?
One such security is a debt issue of the Tennessee Valley Authority, an
instrumentality of the U.S. Government created in 1933. This particular security
has a final maturity of 2036 but has a "put" in 1998, which gives the holder the
option of redeeming the bond in 1998 or holding it, depending on whatever is
more advantageous given the interest rate environment at the time. This bond
provides considerable downside protection, but if interest rates should fall
significantly, then the security would begin to behave like a long-term bond.
WHAT IS YOUR OUTLOOK FOR THE U.S. TREASURY MARKET?
Over the long term, the appeal of the U.S. Government bond market is solid.
We've got long-term Treasuries yielding 6.5% in a 3% inflation environment which
some argue is really a 2% inflation environment because the CPI may be
overstated. The outlook for interest rates is reasonably friendly, driven by low
and stable inflation rates and economic growth in the 2.5% area. However, we're
not expecting rates to move sharply lower in the months ahead.
22
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND (as of November 30, 1996)
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES LEHMAN LIPPER
<S> <C> <C> <C>
3/1/1994 10000 10000 10000
6/30/1994 9757 9685 9677
12/31/1994 9782 9812 9699
6/30/1995 10708 10863 10617
12/31/1995 11200 11460 11181
6/30/1996 11142 11500 11025
11/30/1996 11718 12137 11615
</TABLE>
A LONG-TERM PERSPECTIVE
A $10,000 investment made at the inception of the Fund would have grown to
$11,718 by November 30, 1996. By comparison, a similar investment in the Lipper
Intermediate Government Funds Average would have had an ending value of $11,615.
In this example, $10,000 invested in the Lehman Brothers Mortgage Index, an
unmanaged index of U.S. Government agency and Treasury securities and agency
mortgage-backed securities, would have had an ending value of $12,137. The
comparison to the Lehman Brothers Mortgage Index is meant to provide you with a
general sense of how the Fund is performing compared to a standard benchmark of
the market. This index does not reflect any expenses that accompany a real
investment such as expenses for Fund operation, management fees, or the cash
reserves necessary to provide daily liquidity in a mutual fund.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF NOV. 30, 1996
<S> <C>
INSTITUTIONAL
SHARES
---------
1 Year 5.69%
Since Inception (3/1/94) 5.92%
CURRENT SEC 30-DAY YIELD 6.33%
</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.
23
<PAGE>
INTERVIEW (as of November 30, 1996)
- --------------------------------------------------------------------------------
EMERALD MANAGED BOND FUND
PHOTO Mr. Cantor joined Barnett in 1983 and plays a leading
role on the fixed income investing team. Prior to joining
Andrew Cantor, the firm, he worked for Gulf United Corporation, where he
C.F.A. was responsible for economic and interest rate analysis
INVESTMENT MANAGER and the management of approximately $1.1 billion in fixed
23 years of income investments. He received his BS in Mathematics
investment from Florida Atlantic University and his MA in Economics
experience from the University of South Carolina. Mr. Cantor holds
membership in the Association for Investment Management
and Research (AIMR) and the Jacksonville Financial
Analysts Society. He has earned the Chartered Financial
Analyst (CFA) designation from AIMR.
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 12.54
years.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Corporate Obligations 39%
Cash & Cash Equivalents 1%
Taxable Municipal Obligations 4%
U.S. Government & Agency Obligations 56%
</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>
U.S. Treasury Note, 7.00%, 7/15/06 7.32% U.S. Treasury Note, 6.25%, 10/31/01 3.95%
......................................................... ..........................................................
Hydro Quebec, 8.05%, 7/7/24 4.39% BHP Finance, 6.42%, 3/1/26 3.57%
......................................................... ..........................................................
FNMA, 7.50%, 11/17/23 4.25% FNMA, 8.00%, 11/17/03 3.09%
......................................................... ..........................................................
MCI, 7.13%, 6/15/27 4.11% FHLMC, 6.95%, 12/15/20 3.08%
......................................................... ..........................................................
Travelers Group, 6.88%, 6/1/25 3.98% FHLMC, 7.58%, 3/27/06 2.98%
......................................................... ..........................................................
Total 40.72%
......................................................... ..........................................................
</TABLE>
* The composition of the Fund's holdings is subject to change.
24
<PAGE>
EMERALD MANAGED BOND FUND (as of November 30, 1996)
- --------------------------------------------------------------------------------
HOW DID THE FUND PERFORM DURING THE YEAR?
For the 12-month period ending November 30, 1996, the Fund's total return was
5.96%. In comparison, the Lehman Brothers Aggregate Bond Index, an unmanaged
index of investment-grade corporate debt and U.S. government securities,
produced a return of 6.05%.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING THE YEAR?
The first half of the year was a difficult period as interest rates rose
steadily. However, interest rates fell in the second half of the year. Since
bond prices rise when interest rates fall, and vice versa, bond prices were
little changed since the first of the year. As a result, returns primarily
consisted of bond coupon payments rather than capital appreciation.
HOW HAS THE PORTFOLIO COMPOSITION CHANGED?
Between May 31 and November 30, 1996, we reduced the proportion of corporate
bonds from 44% to 39% as the yield advantage that corporates enjoyed over
government bonds continued to shrink. Because interest rates are relatively low,
we continue to expect a fairly heavy supply of new corporate issues, which might
put some additional pressure on corporate yields relative to Treasury yields. In
addition, as the economy slows, corporate bond prices tend to fall relative to
governments as investors become more concerned about creditworthiness.
WHAT SECTORS ARE HEAVILY REPRESENTED WITHIN THE CORPORATE BOND PORTION OF THE
PORTFOLIO?
Financial companies represent 13% of the portfolio, since finance companies tend
to be large issuers in the intermediate-term bond market. In addition, there is
evidence that ratings of finance companies tend to be more stable than those of
other companies. If you think of money as the raw product that finance companies
use, their bottom line is much more directly impacted by changes in their cost
of funds, and changes in their cost of funds would rise if there was a decline
in their ratings. In addition to finance companies, about 7% of the portfolio is
invested in international bonds such as Hydro Quebec, which are guaranteed by
Quebec Province, and British Telecom, a AAA-rated telephone company in Great
Britain. Other bonds in the portfolio include issues from Monsanto, Waste
Management Technologies and Bausch & Lomb. We recently purchased bonds issued by
MCI with a final maturity of 6-15-2027 and a put option at 6-15-2003. The put
option allows us to redeem the bonds in seven years, thus providing the
defensive characteristics of an intermediate-term bond. MCI is a solid company
with a strong balance sheet and good earnings prospects. The company, with an A
rating, is being acquired by British Telecom, which has a AAA credit rating, so
the purchase is a favorable development from a credit perspective. The average
credit quality of the corporate securities in the portfolio is AA1.
WHAT IS YOUR OUTLOOK FOR THE FUND?
Because of the surplus supply and the slower economic environment, corporate
bonds may temporarily underperform compared to U.S. Government bonds. Over the
long term, we continue to believe that corporates are an important element of a
fixed income strategy. But we think it is important to maintain a high
credit-quality portfolio. The bond market rally that we saw immediately after
the November elections indicates some comfort with the notion of divided
government -- the Democrats aren't going to get too carried away with spending
because we have a Republican Congress and Congress isn't going to get too
carried away with tax cuts because we've got a Democratic White House. That's
the spin that the financial markets put on the election results, and I think, by
and large, it's a friendly type outcome.
25
<PAGE>
EMERALD MANAGED BOND FUND (as of November 30, 1996)
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES LEHMAN LIPPER
<S> <C> <C> <C>
4/30/87 10000 10000 10000
6/30/87 10076 10098 10024
12/31/87 10332 10393 10197
6/30/88 10788 10911 10700
12/31/88 11047 11213 11057
6/30/89 12069 12243 11999
12/31/89 12623 12842 12450
6/30/90 12950 13204 12700
12/31/90 13732 13990 13246
6/30/91 14330 14615 13910
12/31/91 15988 16229 15575
6/30/92 16466 16669 15998
12/31/92 17260 17431 16788
6/30/93 18523 18634 18213
12/31/93 19087 19130 18809
6/30/94 18351 18390 17756
12/31/94 18496 18572 17868
6/30/95 20701 20697 20026
12/31/95 22058 22003 21453
6/30/96 21790 21734 20912
11/30/96 23071 23013 22242
</TABLE>
A LONG-TERM PERSPECTIVE
A $10,000 investment made at the inception of the Fund would have been worth
$23,071 by November 30, 1996. By comparison, a similar investment in the Lipper
A-Rated Corporate Debt Funds Average would have had a value of $22,242. In this
example, $10,000 invested in the Lehman Brothers Aggregate Bond Index, an
unmanaged index comprised of investment-grade corporate debt securities and U.S.
Treasury and U.S. Government agency debt securities with maturities of more than
one year, would have had a value of $23,013. The comparison to the Lehman
Brothers Aggregate Bond Index is meant to provide you with a general sense of
how the Fund is performing compared to a standard benchmark of the market. This
index does not reflect any expenses that accompany a real investment such as
expenses for Fund operation, management fees, or the cash reserves necessary to
provide daily liquidity in a mutual fund.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF NOV. 30, 1996*
<S> <C>
INSTITUTIONAL
SHARES
---------
1 Year 5.96%
5 Year 8.33%
Since Inception 9.10%
CURRENT SEC 30-DAY YIELD 5.94%
</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.
* 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 0.27% 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.
26
<PAGE>
INTERVIEW (as of November 30, 1996)
- --------------------------------------------------------------------------------
EMERALD FLORIDA TAX-EXEMPT FUND
PHOTO Ms. Moore joined Barnett in 1991 and plays an integral
role on the municipal fixed income investing team. She
Margaret L. Moore, works with a highly qualified team of municipal fixed
INVESTMENT MANAGER income investment professionals to carefully analyze
13 years of interest rates, as well as individual tax-exempt fixed
investment income securities. Prior to joining the firm, she worked
experience for First Florida Bank, N.A., as a fixed income trader.
She received her BS in Finance from Florida State
University and her MBA from the University of North
Florida.
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 15.79 years.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
BBB 22%
Aaa 61%
Aa 16%
A 1%
</TABLE>
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS**
Some of the top Florida municipal bonds included in the portfolio include the
following:
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
Okaloosa Cnty., FL, Gas Dist. Rev., 6.88%, Florida State Dept. Environmental
10/1/19 4.70% Preservation, 5.50%, 7/1/13 4.14%
......................................................... ..........................................................
Collier County, FL, 7.00%, 12/1/19 4.52% Charlotte County, FL, 5.63%, 10/1/16 4.13%
......................................................... ..........................................................
Dade County, FL, 5.75%, 10/1/12 4.21% Miami Beach, FL, 5.38%, 9/1/15 4.09%
......................................................... ..........................................................
Jacksonville, FL, Sales Tax Rev., 5.65%,
10/1/14 4.17% Jacksonville, FL, 5.63%, 11/1/18 4.07%
......................................................... ..........................................................
South Miami Health Facilities, 5.38%,
Orange County, FL, 6.25%, 10/1/16 4.15% 10/1/16 4.06%
......................................................... ..........................................................
Total 42.24%
......................................................... ..........................................................
</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.
27
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND (as of November 30, 1996)
- --------------------------------------------------------------------------------
HOW DID THE FUND PERFORM DURING THE YEAR?
For the 12-month period ending November 30, 1996, the Fund's total return was
5.09%. In comparison, the Lipper Florida Muni-Debt Average -- a composite of
mutual funds which invest in investments issued by the State of Florida and its
municipalities, and territories and political subdivisions which are exempt from
the Florida Intangibles Tax -- rose 4.69%.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING THE YEAR?
The early part of 1996 was particularly difficult for municipal bonds due to the
debate over the flat tax during the presidential primary season. A flat tax
would have removed the tax advantage of municipal bonds. Economic growth was
robust in the second quarter, and that created fears of renewed inflation --
leading to higher interest rates and lower bond prices. Interest rates peaked
during the summer, and there was speculation that the Federal Reserve Board
would raise short-term interest rates to slow the economy. However, by early
October, the economy was slowing without Fed action, and it became clear that
the Fed would not raise rates prior to the presidential election. By the end of
the fiscal year, interest rates had fallen nearly to their year-ago levels. The
results of the election suggested that no substantial changes in the tax law
impacting municipal bonds would be forthcoming. Although the municipal bond
market has generally outperformed U.S. Treasuries, munis are still yielding in
the range of 85% of Treasury securities, which makes munis quite attractive to
investors in high income tax brackets. One reason for the higher yields is the
surplus supply of municipal bond issues. Many bonds issued prior to the Tax
Reform Act of 1986 had ten year call provisions that were implemented in the
summer of 1996. Thus, we're not going to have as many calls and redemptions in
1997, which will effectively increase the net supply of bonds.
GIVEN THE RECENT ENVIRONMENT, WHAT HAS BEEN YOUR PORTFOLIO STRATEGY?
Given our lower interest-rate outlook for 1996, our strategy in the second half
of the year was to purchase lower-coupon bonds, or "discounts." These
"discounts" provided higher price potential when interest rates dropped at the
end of 1996. We also purchased some noncallable premium bonds which react well
when interest rates are falling. Long-term bond prices rise sharply when
interest rates fall. However, bonds that are callable in a few years do not rise
in price as much as noncallable bonds. In addition, if interest rates rise, then
a bond with a higher coupon will not fall in price as much as a bond with a
lower coupon. Another strategy is to keep the credit quality of the portfolio
very high. Quality spreads are very narrow -- that is, a lower quality bond does
not pay enough additional interest to compensate for the additional risk. We
avoid certain types of issues, such as Certificates of Participation, which are
bonds that can be issued without voter approval. Partly due to potential legal
challenges to their tax-exempt status, these bonds may not be as liquid as other
types of securities.
WHAT IS YOUR OUTLOOK FOR THE MUNICIPAL BOND MARKET?
After the Fund's competitive performance during the past few months, partly due
to its longer-than-average duration (sensitivity to interest rates), it may be a
good time to be a bit defensive over the short run. By reducing the duration of
the portfolio somewhat, we would be reducing its sensitivity to interest rates,
which may have fallen more rapidly in recent months than would be sustainable if
the economy becomes stronger. Although there has been some negative news on
Miami's financial position in recent weeks, the state's overall economy remains
strong. In recent years, the economy has changed from a narrow focus on
agriculture and tourism into a broad service economy with significant banking,
insurance and export activity. A diversifying economy, coupled with a steady
migration of retirees into Florida, is likely to keep the municipal bond market
healthy in the years to come.
28
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND (as of November 30, 1996)
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES LIPPER AVERAGE MERRILL LYNCH
<S> <C> <C> <C>
3/1/1994 10000 10000 10000
6/30/1994 9686 9559.57 10153
12/31/1994 9576 9433.93 10134
6/30/1995 10379 10343.95 11098
12/31/1995 11166 11130.72 11976
6/30/1996 10927 10959.01 11935
11/30/1996 11579 11524.8 12564
</TABLE>
A LONG-TERM PERSPECTIVE
A $10,000 investment made at the inception of the Fund would have grown to
$11,579 by November 30, 1996. By comparison, a similar investment in the Lipper
Florida Tax-Exempt Municipal Funds Average would have had an ending value of
$11,525. In this example, $10,000 invested in the Merrill Lynch Municipal Index,
an unmanaged index of municipal bonds, would have had an ending value of
$12,564. The comparison to the Merrill Lynch Municipal Index is meant to provide
you with a general sense of how the Fund is performing compared to a standard
benchmark of the market. This index does not reflect any expenses that accompany
a real investment such as expenses for Fund operation, management fees, or the
cash reserves necessary to provide daily liquidity in a mutual fund.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF NOV. 30, 1996
<S> <C>
INSTITUTIONAL
SHARES
---------
1 Year 5.09%
Since Inception (3/1/94) 5.46%
CURRENT SEC 30-DAY YIELD 4.94%
</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.
29
<PAGE>
INTERVIEW (as of November 30, 1996)
- --------------------------------------------------------------------------------
EMERALD PRIME, TREASURY AND TAX-EXEMPT FUNDS*
PHOTO Ms. Lunsford joined Barnett in 1988 and plays a central
role on the money market investing team. Prior to joining
Jacqueline R. the firm, she worked for First Kentucky Trust Company as
Lunsford, a money market portfolio manager. Ms. Lunsford received
C.F.A. her BS in Finance from the University of Louisville. She
INVESTMENT MANAGER holds membership in the Association for Investment
13 years of Management and Research (AIMR) and the Treasury
investment Management Association, and she has earned the Chartered
experience Financial Analyst (CFA) designation from AIMR.
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.
30
<PAGE>
EMERALD PRIME, TREASURY AND TAX-EXEMPT FUNDS (as of November 30, 1996)
- --------------------------------------------------------------------------------
WHAT FACTORS AFFECTED THE PERFORMANCE OF THE FUNDS?
After rising steadily during the first half of 1996, short-term interest rates
remained in a fairly tight trading range in the second half of the year, with
30-day commercial paper yielding between 5.25% and 5.35%. However, the
short-term market did occasionally experience some short-lived swings in rates,
as sporadic fluctuations in releases of various economic data kept investors
guessing as to what direction the Federal Reserve Board would next push interest
rates. Our slightly shorter average maturity structure allowed us to take
advantage of buying opportunities as they arose.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF NOV. 30, 1996
<S> <C> <C> <C>
PRIME TREASURY TAX-EXEMPT
FUND FUND FUND
--------- --------- ---------
INSTITUTIONAL SHARES
1 Year 5.34% 5.05% 3.29%
5 Year 4.49% 4.22% 2.89%
Since Inception 5.82% 5.51% 3.87%
SERVICE SHARES
1 Year 4.99% 4.72% 2.87%
5 Year 4.14% 3.86% 2.51%
Since Inception 4.77% 4.46% 3.01%
</TABLE>
WHAT FACTORS COULD AFFECT THE FUNDS IN THE MONTHS AHEAD?
Despite speculation to the contrary, the Fed hasn't made a change to the federal
funds rate since January of 1996, when it lowered the rate from 5.50% to 5.25%.
Since recent indicators -- such as weak Christmas sales -- continue to show that
the economy is not overheating, the general consensus now seems to favor no
Federal Reserve Board action through the first quarter of 1997. Although money
market yields are driven by market forces, they tend to track the fed funds
rate. Another factor that could affect interest rates -- and thus the yield on
money market funds -- is the strength or weakness of the stock market. If
investors begin to take profits and drive the equity market down, then the
demand for money market securities would rise, thus causing prices to rise and
money market yields to fall.
<TABLE>
<CAPTION>
SEC 7-DAY YIELDS AS OF NOV. 30, 1996
INSTITUTIONAL SERVICE
SHARES SHARES
------------ ----------
<S> <C> <C>
Prime Fund 5.13% 4.79%
Treasury Fund 5.01% 4.68%
Tax-Exempt Fund 3.37% 2.90%
</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.
31
<PAGE>
[LOGO]
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
LONG-TERM INVESTMENTS -- 98.6%
COMMON STOCKS -- 93.8%
AEROSPACE -- 0.8%
Boeing Co. ................................................................... 21,200 $ 2,106,750
------------
AIRLINES -- 1.2%
AMR Corp.* ................................................................... 33,600 3,066,000
------------
APPAREL -- 0.7%
Tommy Hilfiger Corp.* ........................................................ 31,700 1,711,800
------------
AUTO PARTS -- ORIGINAL EQUIPMENT MANUFACTURERS -- 0.7%
Lear Corp.* .................................................................. 47,700 1,711,238
------------
BIOTECHNOLOGY -- 2.0%
Amgen Inc.* .................................................................. 53,700 3,268,987
Elan Corp., PLC ADR* ......................................................... 55,800 1,660,050
------------
4,929,037
------------
BUILDING MATERIALS -- 0.7%
Home Depot, Inc. ............................................................. 31,598 1,647,046
------------
CLOTHING/SHOES/ACCESSORIES -- 1.0%
Gap, Inc. .................................................................... 80,400 2,582,850
------------
COMPUTER SOFTWARE -- 4.7%
BMC Software* ................................................................ 50,600 2,201,100
Cadence Design Systems, Inc.* ................................................ 83,875 3,344,516
Computer Associates International, Inc. ...................................... 59,975 3,943,356
Microsoft Corp.* ............................................................. 14,300 2,243,312
------------
11,732,284
------------
COMPUTER/VIDEO CHAINS -- 0.7%
CompUSA, Inc.* ............................................................... 37,900 1,705,500
------------
CONSTRUCTION/AGRICULTURE EQUIPMENT -- 1.2%
Caterpillar, Inc. ............................................................ 39,700 3,141,262
------------
CONSUMER SPECIALTIES -- 0.3%
Oakley, Inc.* ................................................................ 58,600 813,075
------------
DEPARTMENT STORES -- 0.9%
Federated Department Stores, Inc.* ........................................... 68,600 2,340,975
------------
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
DISCOUNT CHAINS -- 0.8%
Consolidated Stores Corp.* ................................................... 51,000 $ 1,887,000
------------
DIVERSIFIED ELECTRONICS -- 0.9%
SCI Systems, Inc.* ........................................................... 44,100 2,326,275
------------
DIVERSIFIED MANUFACTURING -- 3.5%
AlliedSignal, Inc. ........................................................... 42,900 3,142,425
Dresser Industries, Inc. ..................................................... 91,500 2,996,625
Tyco International Ltd. ...................................................... 48,900 2,677,275
------------
8,816,325
------------
ELECTRONIC DATA PROCESSING -- PERIPHERALS -- 2.2%
Storage Tech Corp.* .......................................................... 50,100 2,498,738
U.S. Robotics Corp.* ......................................................... 39,100 3,074,238
------------
5,572,976
------------
ELECTRICAL PRODUCTS -- 1.5%
Raychem Corp. ................................................................ 43,900 3,742,475
------------
ELECTRONIC COMPONENTS -- 0.9%
Adaptec, Inc.* ............................................................... 60,800 2,264,800
------------
ELECTRONIC DATA PROCESSORS -- 2.5%
Dell Computer Corp.* ......................................................... 18,100 1,839,413
Gateway 2000, Inc.* .......................................................... 35,900 1,925,138
Sun Microsystems, Inc.* ...................................................... 42,200 2,458,150
------------
6,222,701
------------
ELECTRONICS DISTRIBUTORS -- 0.2%
Tech Data Corp.* ............................................................. 14,000 420,000
------------
ENVIRONMENTAL SERVICES -- 1.8%
Calenergy Co., Inc.* ......................................................... 64,000 1,912,000
U.S.A. Waste Services, Inc.* ................................................. 80,600 2,599,350
------------
4,511,350
------------
FINANCE COMPANIES -- 2.3%
Green Tree Financial Corp. ................................................... 76,100 3,186,688
MBNA Corp. ................................................................... 66,200 2,672,825
------------
5,859,513
------------
FINANCIAL PUBLISHING -- 0.7%
Equifax, Inc. ................................................................ 54,900 1,797,975
------------
FINANCIAL SERVICES -- 2.0%
Travelers Group, Inc. ........................................................ 111,264 5,006,875
------------
FOOD DISTRIBUTORS -- 0.7%
Richfood Holdings, Inc. ...................................................... 62,950 1,636,700
------------
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
HOSPITAL/NURSING MANAGEMENT -- 0.8%
OrNda HealthCorp* ............................................................ 68,400 $ 1,992,150
------------
HOTELS/RESORTS -- 1.6%
HFS, Inc.* ................................................................... 29,700 1,923,075
Marriott International, Inc. ................................................. 37,300 2,079,475
------------
4,002,550
------------
INDUSTRIAL MACHINERY -- 0.9%
Harnischfeger Industries, Inc. ............................................... 51,900 2,303,062
------------
INTEGRATED OIL COMPANIES -- 1.2%
Phillips Petroleum Co. ....................................................... 67,300 3,036,912
------------
INVESTMENT BANKERS -- 0.7%
Paine Webber Group, Inc. ..................................................... 64,600 1,752,275
------------
LIFE INSURANCE -- 1.8%
Conseco, Inc. ................................................................ 30,000 1,676,250
SunAmerica, Inc. ............................................................. 65,200 2,730,250
------------
4,406,500
------------
MAJOR BANKS -- 4.1%
BankAmerica Corp. ............................................................ 38,200 3,934,600
Bankers Trust New York Corp. ................................................. 35,000 3,045,000
NationsBank Corp. ............................................................ 32,400 3,357,450
------------
10,337,050
------------
MAJOR CHEMICALS -- 0.9%
Imperial Chemical Industries ................................................. 41,300 2,137,275
------------
MAJOR PHARMACEUTICALS -- 8.4%
Abbott Laboratories .......................................................... 57,900 3,227,925
American Home Products ....................................................... 72,300 4,645,275
Johnson & Johnson ............................................................ 66,400 3,527,500
Merck & Co. .................................................................. 57,800 4,797,400
Pfizer, Inc. ................................................................. 53,800 4,821,825
------------
21,019,925
------------
MAJOR U.S. TELECOMMUNICATIONS -- 1.7%
Ameritech Corp. .............................................................. 30,600 1,801,575
Sprint Corp. ................................................................. 57,000 2,386,875
------------
4,188,450
------------
MANAGED HEALTH CARE -- 1.3%
Oxford Health Plans* ......................................................... 55,600 3,224,800
------------
MEDICAL ELECTRONICS -- 0.5%
Medtronic, Inc. .............................................................. 20,000 1,322,500
------------
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
MEDICAL/HOSPITALS -- 0.7%
MedPartners/Mullikin, Inc.* .................................................. 73,200 $ 1,665,300
------------
MEDICAL/NURSING SERVICES -- 1.0%
HEALTHSOUTH Corp.* ........................................................... 65,800 2,475,725
------------
MEDICAL SPECIALTIES -- 0.9%
Boston Scientific Corp.* ..................................................... 38,300 2,235,763
------------
MULTI-SECTOR COMPANIES -- 3.0%
General Electric Co. ......................................................... 71,800 7,467,200
------------
OFFICE EQUIPMENT/SUPPLIES -- 0.7%
U.S. Office Products Co.* .................................................... 59,500 1,844,500
------------
OFFICE/PLANT AUTOMATION -- 2.1%
Cisco Systems, Inc.* ......................................................... 77,300 5,246,737
------------
OIL/GAS DISTRIBUTION -- 2.8%
Enron Corp. .................................................................. 63,700 2,914,275
Williams Cos., Inc. .......................................................... 74,400 4,175,700
------------
7,089,975
------------
OIL REFINING/MARKETING -- 1.4%
USX-Marathon Group ........................................................... 154,300 3,529,612
------------
OTHER SPECIALTY STORES -- 1.6%
Borders Group, Inc.* ......................................................... 43,400 1,584,100
Staples, Inc.* ............................................................... 121,200 2,393,700
------------
3,977,800
------------
OTHER TELECOMMUNICATIONS -- 3.1%
Cincinnati Bell, Inc. ........................................................ 62,600 3,732,525
WorldCom, Inc.* .............................................................. 169,700 3,924,313
------------
7,656,838
------------
PACKAGED FOODS -- 1.9%
Dole Foods, Inc. ............................................................. 67,700 2,640,300
Sara Lee Corp. ............................................................... 54,300 2,131,275
------------
4,771,575
------------
PACKAGED GOODS/COSMETICS -- 3.2%
Gillette Co. ................................................................. 55,600 4,100,500
Kimberly-Clark Corp. ......................................................... 40,800 3,988,200
------------
8,088,700
------------
PAPER -- 0.9%
International Paper Co. ...................................................... 55,400 2,354,500
------------
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
PHOTOGRAPHIC PRODUCT -- 1.1%
Eastman Kodak Co. ............................................................ 35,400 $ 2,867,400
------------
RECREATIONAL PRODUCTS -- 0.9%
Callaway Golf Co. ............................................................ 71,900 2,183,962
------------
RESTAURANTS -- 1.0%
Boston Chicken, Inc.* ........................................................ 65,500 2,538,125
------------
SEMICONDUCTORS -- 3.1%
Atmel Corp.* ................................................................. 67,400 2,215,775
C-Cube Microsystems, Inc.* ................................................... 35,000 1,526,875
Intel Corp. .................................................................. 32,100 4,072,687
------------
7,815,337
------------
SHOE MANUFACTURING -- 1.8%
Nike, Inc., Class B .......................................................... 78,800 4,481,750
------------
SOFT DRINKS -- 1.6%
PepsiCo, Inc. ................................................................ 130,600 3,901,675
------------
SPECIALTY CHEMICALS -- 1.1%
Praxair, Inc. ................................................................ 57,800 2,810,525
------------
TELECOMMUNICATION EQUIPMENT -- 1.1%
Andrew Corp.* ................................................................ 27,600 1,597,350
L.M. Ericsson Telephone Co. ADR, Class B ..................................... 34,400 1,062,100
------------
2,659,450
------------
TOTAL COMMON STOCKS (COST $168,651,418)......................................... 234,938,680
------------
UNIT INVESTMENT TRUSTS -- 4.8%
S&P 400 Mid-Cap Depository Receipts, Series I ................................ 116,800 5,960,450
S&P 500 Depository Receipts, Series I ........................................ 79,500 6,035,789
------------
TOTAL UNIT INVESTMENT TRUSTS (COST $10,409,066)................................. 11,996,239
------------
TOTAL LONG-TERM INVESTMENTS (COST $179,060,484)................................. 246,934,919
------------
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
SHORT-TERM INVESTMENTS -- 1.4%
OPEN-END INVESTMENT COMPANIES -- 1.4%
Dreyfus Cash Management Fund ................................................. 1,589,515 $ 1,589,515
Provident Institutional Temporary Cash Fund .................................. 1,864,036 1,864,036
------------
TOTAL SHORT-TERM INVESTMENTS (COST $3,453,551).................................. 3,453,551
------------
TOTAL INVESTMENTS (COST $182,514,035) (A) -- 100.0%............................. 250,388,470
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.0%)................................. (27,398)
------------
NET ASSETS -- 100.0%............................................................ $250,361,072
------------
------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $250,361,072.
(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 in excess of federal income tax reporting of $347,732.
Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation....... $ 68,642,126
Unrealized depreciation....... (1,115,423)
------------
Net unrealized appreciation... $ 67,526,703
------------
------------
* Represents non-income producing security.
ADR -- American Depository Receipt.
PLC -- Public Limited Company.
See Notes to Financial Statements.
37
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $182,514,035)........ $ 250,388,470
Dividends receivable........................................... 233,761
Receivable for capital shares issued........................... 168,162
Prepaid expenses and other assets.............................. 10,365
-------------
Total assets..................................................... 250,800,758
-------------
LIABILITIES:
Dividends payable.............................................. 127,416
Payable for capital shares redeemed............................ 78,358
Accrued expenses and other liabilities:
Investment Advisory fees..................................... 117,747
Administration fees.......................................... 15,458
Shareholder Processing fees (Retail Shares).................. 6,603
Combined Distribution and Service fees (Retail Shares)....... 6,603
Custodian and transfer agent fees............................ 37,687
Audit and legal fees......................................... 24,266
Other liabilities............................................ 25,548
-------------
Total liabilities................................................ 439,686
-------------
NET ASSETS....................................................... $ 250,361,072
-------------
-------------
Net Asset Value, Offering Price and Redemption Price per Share:
Retail Shares:
($33,176,913/2,034,501 shares of beneficial interest issued
and outstanding $0.001 par value, unlimited number of shares
authorized)................................................. $ 16.31
-------------
-------------
Institutional Shares:
($217,184,159/13,276,564 shares of beneficial interest issued
and outstanding $0.001 par value, unlimited number of shares
authorized)................................................. $ 16.36
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par.......................... $ 15,311
Additional paid-in capital..................................... 159,008,104
Distributions in excess of net investment income............... (42,609)
Accumulated net realized gains on investment transactions...... 23,505,831
Net unrealized appreciation of investments..................... 67,874,435
-------------
Net Assets, November 30, 1996.................................... $ 250,361,072
-------------
-------------
</TABLE>
- ------------
See Notes to Financial Statements.
38
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the year ended November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends........................................................... $ 2,708,638
EXPENSES:
Investment Advisory fees............................................ $1,321,335
Administration fees................................................. 152,061
Shareholder Processing fees (Retail Shares)......................... 62,663
Combined Distribution and Service fees (Retail Shares).............. 68,645
Combined Distribution and Service fees (B Shares)................... 6,670
Transfer agent fees and expenses.................................... 77,837
Custodian fees and expenses......................................... 45,952
Legal fees.......................................................... 13,842
Audit fees.......................................................... 25,551
Reports to shareholders (Retail Shares)............................. 10,816
Reports to shareholders (Institutional Shares)...................... 50,915
Amortization of organization costs.................................. 11,148
Registration fees................................................... 29,328
Trustees' fees...................................................... 8,976
Other expenses...................................................... 20,997
----------
1,906,736
Less: Expense reimbursements.......................................... (1,483)
Expenses paid by third parties.................................... (3,157) 1,902,096
---------- ------------
Net Investment Income................................................. 806,542
------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS:
Net realized gains on securities transactions....................... 23,919,476
Net change in unrealized appreciation of investments................ 22,333,435
------------
Net Realized and Unrealized Gains on Investments...................... 46,252,911
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. $ 47,059,453
------------
------------
</TABLE>
- ------------
See Notes to Financial Statements.
39
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
--------------------------
NOVEMBER 30, NOVEMBER 30,
1996 1995
------------ ------------
INCREASE (DECREASE) IN NET ASSETS:
<S> <C> <C>
Operations
Net investment income........................... $ 806,542 $ 1,163,936
Net realized gains on securities transactions... 23,919,476 17,929,629
Net change in unrealized appreciation of
investments................................... 22,333,435 39,601,156
------------ ------------
Net increase in net assets resulting from
operations.................................... 47,059,453 58,694,721
------------ ------------
Dividends to shareholders from net investment
income
Retail Shares................................... -- (29,869)
B Shares........................................ -- --
Institutional Shares............................ (806,542) (1,134,067)
------------ ------------
Total dividends to shareholders from net
investment income............................... (806,542) (1,163,936)
------------ ------------
Dividends to shareholders in excess of net
investment income
Retail Shares................................... (24,107) --
B Shares........................................ (1,075) --
Institutional Shares............................ (17,427) --
------------ ------------
Total dividends to shareholders in excess of net
investment income............................... (42,609) --
------------ ------------
Distributions to shareholders from net realized
gains
Retail Shares................................... (1,985,635) --
B Shares........................................ (212,931) --
Institutional Shares............................ (15,246,479) --
------------ ------------
Total distributions to shareholders from net
realized gains.................................. (17,445,045) --
------------ ------------
Fund Share Transactions
Net proceeds from shares subscribed............. 68,268,294 31,008,809
Net asset value of shares issued to shareholders
in reinvestment of dividends and
distributions................................. 15,964,511 1,205,477
Cost of shares redeemed......................... (60,932,375) (76,668,089)
------------ ------------
Net increase (decrease) in net assets from Fund
share transactions............................ 23,300,430 (44,453,803)
------------ ------------
Total Increase.................................... 52,065,687 13,076,982
NET ASSETS:
Beginning of period............................. 198,295,385 185,218,403
------------ ------------
End of period (including distributions in excess
of net investment income of $42,609 and $0,
respectively)................................. $250,361,072 $198,295,385
------------ ------------
------------ ------------
</TABLE>
- ------------
See Notes to Financial Statements.
40
<PAGE>
EMERALD EQUITY VALUE FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
LONG-TERM INVESTMENTS -- 97.1%
COMMON STOCKS -- 95.2%
AEROSPACE -- 1.6%
Boeing Co. ............................................................................ 500 $ 49,688
Rockwell International Corp.* ......................................................... 200 12,850
------------
62,538
------------
AIR FREIGHT/DELIVERY -- 0.9%
Federal Express Corp.* ................................................................ 800 35,400
------------
AIRLINES -- 1.7%
AMR Corp.* ............................................................................ 400 36,500
Delta Air Lines, Inc. ................................................................. 400 30,100
------------
66,600
------------
ALUMINUM -- 2.8%
Aluminum Company of America ........................................................... 1,400 89,075
Reynolds Metals Co. ................................................................... 400 23,800
------------
112,875
------------
APPAREL -- 0.9%
Russell Corp. ......................................................................... 1,300 37,375
------------
AUTO PARTS - ORIGINAL EQUIPMENT MANUFACTURERS -- 1.0%
TRW, Inc. ............................................................................. 400 38,950
------------
BUILDING PRODUCTS -- 1.0%
Johnson Controls, Inc. ................................................................ 500 38,750
------------
CHEMICALS - PLASTICS -- 0.0%
Allegience Corp. ...................................................................... 60 1,357
------------
CONTAINERS/PACKAGING -- 0.7%
Crown, Cork & Seal Co., Inc. .......................................................... 500 26,500
------------
DEPARTMENT STORES -- 1.6%
Federated Department Stores, Inc.* .................................................... 700 23,887
Fred Meyer, Inc.* ..................................................................... 400 13,400
Sears Roebuck & Co. ................................................................... 500 24,875
------------
62,162
------------
DIVERSIFIED MANUFACTURING -- 0.4%
Olin Corp. ............................................................................ 400 15,950
------------
</TABLE>
41
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
DRUG STORE CHAINS -- 0.8%
Rite Aid Corp. ........................................................................ 800 $ 31,700
------------
ELECTRONIC DATA PROCESSING - PERIPHERALS -- 0.8%
Seagate Technology Inc.* .............................................................. 800 31,600
------------
ELECTRIC UTILITIES - EAST -- 0.5%
DQE, Inc. ............................................................................. 700 20,650
------------
ELECTRIC UTILITIES -- 1.9%
Entergy Corp. ......................................................................... 1,300 35,262
FPL Group, Inc. ....................................................................... 900 41,512
------------
76,774
------------
ELECTRIC UTILITIES - CENTRAL -- 1.5%
Illinova Corp. ........................................................................ 1,000 26,500
Unicom Corp. .......................................................................... 1,300 34,613
------------
61,113
------------
ELECTRONIC DATA PROCESSOR -- 1.6%
International Business Machines Corp. ................................................. 400 63,750
------------
FINANCE COMPANIES -- 5.0%
Capital One Financial Corp. ........................................................... 700 25,288
Countrywide Credit Industries, Inc. ................................................... 1,000 28,875
Federal Home Loan Mortgage Corp. ...................................................... 400 45,700
Federal National Mortgage Assoc. ...................................................... 1,900 78,375
Finova Group, Inc. .................................................................... 300 19,800
------------
198,038
------------
FINANCIAL SERVICES -- 1.6%
Travelers Group, Inc. ................................................................. 1,400 62,998
------------
FLUID CONTROLS -- 0.9%
Parker-Hannifin Corp. ................................................................. 900 36,563
------------
FOOD CHAINS -- 1.7%
Safeway, Inc.* ........................................................................ 1,100 44,687
Vons Cos., Inc.* ...................................................................... 400 21,050
------------
65,737
------------
FOREST PRODUCTS -- 0.6%
Weyerhaeuser Co. ...................................................................... 500 23,000
------------
INDUSTRIAL MACHINERY -- 1.1%
Harnischfeger Industries, Inc. ........................................................ 1,000 44,375
------------
INTEGRATED OIL COMPANIES -- 12.9%
Amoco Corp. ........................................................................... 1,000 77,625
</TABLE>
42
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
INTEGRATED OIL COMPANIES -- (CONTINUED)
Atlantic Richfield Co. ................................................................ 200 $ 27,825
Chevron Corp. ......................................................................... 100 6,700
Exxon Corp. ........................................................................... 2,200 208,175
Mobil Corp. ........................................................................... 500 60,500
Phillips Petroleum Co. ................................................................ 1,100 49,638
Texaco, Inc. .......................................................................... 800 79,300
------------
509,763
------------
INVESTMENT BANKERS -- 1.6%
Salomon, Inc. ......................................................................... 1,400 63,875
------------
LIFE INSURANCE -- 2.0%
Conseco, Inc. ......................................................................... 1,400 78,225
------------
MAJOR BANKS -- 9.2%
BankAmerica Corp. ..................................................................... 1,100 113,300
Chase Manhattan Corp. ................................................................. 700 66,150
Citicorp .............................................................................. 800 87,400
Firstar Corp. ......................................................................... 700 37,362
Mellon Bank Corp. ..................................................................... 400 28,900
NationsBank Corp. ..................................................................... 300 31,087
------------
364,199
------------
MAJOR CHEMICALS -- 2.7%
Dow Chemical Co. ...................................................................... 1,300 108,875
------------
MAJOR PHARMACEUTICAL -- 0.3%
Baxter International, Inc. ............................................................ 300 12,750
------------
MAJOR U.S. TELECOMMUNICATIONS -- 5.3%
Ameritech Corp. ....................................................................... 2,000 117,750
Bell Atlantic Corp. ................................................................... 400 25,150
GTE Corp. ............................................................................. 1,500 67,312
------------
210,212
------------
MARINE TRANSPORTATION -- 1.5%
APL Ltd. .............................................................................. 1,300 31,200
Applied Materials, Inc.* .............................................................. 700 26,687
------------
57,887
------------
MID-SIZE BANKS -- 2.3%
Bank of Boston Corp. .................................................................. 1,300 90,837
------------
MILITARY/GOVERNMENT/TECHNICAL -- 0.5%
Raytheon Co. .......................................................................... 400 20,450
------------
MOTOR VEHICLES -- 2.7%
Chrysler Corp. ........................................................................ 1,400 49,700
Ford Motor Co. ........................................................................ 1,100 36,025
</TABLE>
43
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
MOTOR VEHICLES -- (CONTINUED)
General Motors Corp. .................................................................. 400 $ 23,050
------------
108,775
------------
MULTI-LINE INSURANCE -- 2.5%
Allstate Corp. ........................................................................ 700 42,175
Cigna Corp. ........................................................................... 400 56,550
------------
98,725
------------
MULTI-SECTOR COMPANIES -- 2.3%
American Financial Group, Inc. ........................................................ 1,000 36,000
Loews Corp. ........................................................................... 600 55,650
------------
91,650
------------
NATURAL GAS DISTRIBUTION -- 0.8%
Pacific Enterprises ................................................................... 1,000 30,625
------------
OFFICE EQUIPMENT/SUPPLIES -- 1.6%
Xerox Corp. ........................................................................... 1,300 63,863
------------
OIL & GAS DISTRIBUTION -- 3.9%
Coastal Corp. ......................................................................... 1,400 67,375
Panenergy Corp. ....................................................................... 2,000 88,000
------------
155,375
------------
OIL REFINING/MARKETING -- 1.2%
USX-Marathon Group .................................................................... 2,000 45,750
------------
OTHER METALS/MINERALS -- 0.6%
Cyprus Amax Minerals Co. .............................................................. 1,000 24,750
------------
PACKAGED FOODS -- 0.3%
Dole Foods, Inc. ...................................................................... 300 11,700
------------
PAPER -- 2.6%
International Paper Co. ............................................................... 1,409 59,883
Mead Corp. ............................................................................ 500 29,625
Union Camp Corp. ...................................................................... 300 14,737
------------
104,245
------------
RAILROADS -- 1.0%
Conrail, Inc. ......................................................................... 400 38,900
------------
RESTAURANTS -- 0.4%
Wendy's International, Inc. ........................................................... 700 14,962
------------
SAVINGS & LOAN ASSOCIATIONS -- 1.4%
Golden West Financial Corp. ........................................................... 300 20,250
Great Western Financial Corp. ......................................................... 1,100 34,238
------------
54,488
------------
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
SEMICONDUCTORS -- 1.6%
Cypress Semiconductor Corp.* .......................................................... 1,300 $ 15,925
Motorola, Inc. ........................................................................ 500 27,688
Texas Instruments, Inc. ............................................................... 300 19,125
------------
62,738
------------
SPECIALTY CHEMICALS -- 1.8%
B.F. Goodrich Co. ..................................................................... 1,100 49,363
M.A. Hanna Co. ........................................................................ 1,100 23,238
------------
72,601
------------
SPECIALTY INSURERS -- 0.7%
PMI Group, Inc. ....................................................................... 500 29,000
------------
STEEL/IRON ORE -- 0.4%
USX-United States Steel Group, Inc. ................................................... 500 15,063
------------
TOBACCO -- 0.5%
Philip Morris Cos., Inc. .............................................................. 200 20,625
------------
TOTAL COMMON STOCKS (COST $3,225,724).................................................... 3,775,663
------------
UNIT INVESTMENT TRUSTS -- 1.9%
S&P 500 Depository Receipts, Series I ................................................. 1,000 75,922
------------
TOTAL UNIT INVESTMENT TRUSTS (COST $68,608).............................................. 75,922
------------
TOTAL LONG-TERM INVESTMENTS (COST $3,294,332)............................................ 3,851,585
------------
SHORT-TERM INVESTMENTS -- 4.2%
OPEN-END INVESTMENT COMPANIES -- 4.2%
Provident Institutional Cash Fund ..................................................... 53,002 53,002
Valiant General Money Market Fund ..................................................... 115,043 115,043
------------
TOTAL SHORT-TERM INVESTMENTS (COST $168,045)............................................. 168,045
------------
TOTAL INVESTMENTS (COST $3,462,377) (A) -- 101.3%........................................ 4,019,630
LIABILITIES IN EXCESS OF OTHER ASSETS -- (1.3%):......................................... (51,955)
------------
NET ASSETS -- 100.0%..................................................................... $ 3,967,675
------------
------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $3,967,675.
(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....... $ 580,950
Unrealized depreciation....... (23,697)
------------
Net unrealized appreciation... $ 557,253
------------
------------
* Represents non-income producing security.
See Notes to Financial Statements.
45
<PAGE>
EMERALD EQUITY VALUE FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (cost $3,462,377) .......... $ 4,019,630
Dividends receivable .......................................... 11,276
Unamortized organization costs ................................ 10,179
Prepaid expenses and other assets ............................. 109
-------------
Total assets .................................................... 4,041,194
-------------
LIABILITIES:
Net payable to Investment Adviser ............................. 21,711
Dividends payable ............................................. 25,633
Accrued expenses and other liabilities:
Administration fees ......................................... 32
Shareholder Processing fees (Retail Shares) ................. 5
Combined Distribution and Service fees (Retail Shares) ...... 5
Custodian and transfer agent fees ........................... 10,138
Audit and legal fees ........................................ 5,452
Registration fees ........................................... 6,725
Other liabilities ........................................... 3,818
-------------
Total liabilities ............................................... 73,519
-------------
NET ASSETS ...................................................... $ 3,967,675
-------------
-------------
Net Asset Value, Offering Price and Redemption Price per Share:
Retail Shares:
($22,827/1,873 shares of beneficial interest issued and
outstanding $0.001 par value, unlimited number of shares
authorized) ................................................ $ 12.18
-------------
-------------
Institutional Shares:
($3,944,848/324,005 shares of beneficial interest issued and
outstanding $0.001 par value, unlimited number of shares
authorized) ................................................ $ 12.18
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par ......................... $ 326
Additional paid-in capital .................................... 3,384,474
Undistributed net investment income ........................... 73
Accumulated net realized gains on investment transactions ..... 25,549
Net unrealized appreciation of investments .................... 557,253
-------------
Net Assets, November 30, 1996 ................................... $ 3,967,675
-------------
-------------
</TABLE>
- -------------
See Notes to Financial Statements.
46
<PAGE>
EMERALD EQUITY VALUE FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the period ended November 30, 1996 (a)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends .......................................................... $ 60,999
Interest ........................................................... 5,366
------------
66,365
EXPENSES:
Investment Advisory fees ........................................... $ 13,675
Administration fees ................................................ 684
Shareholder Processing fees (Retail Shares) ........................ 8
Combined Distribution and Service fees (Retail Shares) ............. 8
Transfer agent fees and expenses ................................... 31,403
Custodian fees and expenses ........................................ 15,708
Legal fees ......................................................... 125
Audit fees ......................................................... 7,469
Reports to shareholders (Retail Shares) ............................ 155
Reports to shareholders (Institutional Shares) ..................... 515
Registration fees .................................................. 33,363
Trustees' fees ..................................................... 106
Amortization of organization costs ................................. 6,679
Other expenses ..................................................... 783
-----------
110,681
Less: Fee waivers and expense reimbursements ......................... (110,681) --
----------- ------------
Net Investment Income ................................................ 66,365
------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS:
Net realized gains on securities transactions ...................... 25,549
Net change in unrealized appreciation of investments ............... 557,253
------------
Net Realized and Unrealized Gains on Investments ..................... 582,802
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................. $ 649,167
------------
------------
</TABLE>
- ------------
(a) For the period December 27, 1995 (commencement of operations) through
November 30, 1996.
See Notes to Financial Statements.
47
<PAGE>
EMERALD EQUITY VALUE FUND
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED
NOVEMBER 30 1996(A)
-------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income .................................................................... $ 66,365
Net realized gains on securities transactions ............................................ 25,549
Net change in unrealized appreciation of investments ..................................... 557,253
-------------------
Net increase in net assets resulting from operations ..................................... 649,167
-------------------
Dividends to shareholders from net investment income
Retail Shares ............................................................................ (150)
Institutional Shares ..................................................................... (66,142)
-------------------
Total dividends to shareholders from net investment income ................................. (66,292)
-------------------
Fund Share Transactions
Net proceeds from shares subscribed ...................................................... 5,136,577
Net asset value of shares issued to shareholders in reinvestment of dividends and
distributions .......................................................................... 223
Cost of shares redeemed .................................................................. (1,752,000)
-------------------
Net increase in net assets from Fund share transactions .................................. 3,384,800
-------------------
Total Increase ............................................................................. 3,967,675
NET ASSETS:
Beginning of period ...................................................................... --
-------------------
End of period (including accumulated undistributed net investment income of $73) ......... $ 3,967,675
-------------------
-------------------
</TABLE>
- ------------
(a) For the period December 27, 1995 (commencement of operations) through
November 30, 1996.
See Notes to Financial Statements.
48
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
LONG-TERM INVESTMENTS -- 95.1%
COMMON STOCKS -- 95.1%
ARGENTINA -- 2.2%
OIL & GAS PRODUCTION -- 2.2%
YPF Sociedad Anonima, ADR .................................................... 16,850 $ 391,762
------------
TOTAL ARGENTINA................................................................. 391,762
------------
AUSTRALIA -- 1.0%
DIVERSIFIED OPERATIONS -- 1.0%
Pacific Dunlop Ltd, ADR ...................................................... 20,130 183,686
------------
TOTAL AUSTRALIA................................................................. 183,686
------------
AUSTRIA -- 2.6%
ENGINEERING & CONSTRUCTION -- 1.4%
VA Technologie AG ............................................................ 1,560 245,601
------------
OFFICE EQUIPMENT/SUPPLIES -- 1.2%
Energy Versorf Nied, ADR ..................................................... 7,510 219,251
------------
TOTAL AUSTRIA................................................................... 464,852
------------
BRAZIL -- 1.9%
OTHER TELECOMMUNICATIONS -- 1.9%
Telecommunicacoes Brasileiras, ADR ........................................... 4,350 329,513
------------
TOTAL BRAZIL.................................................................... 329,513
------------
CANADA -- 1.0%
ALCOHOLIC BEVERAGES- 1.0%
Molson Company Ltd, ADR ...................................................... 10,530 172,677
------------
TOTAL CANADA.................................................................... 172,677
------------
DENMARK -- 5.8%
FINANCIAL SERVICES -- 2.7%
Den Danske Bank, ADR ......................................................... 6,310 476,778
------------
OTHER TELECOMMUNICATIONS -- 3.1%
Tele Danmark A/S, ADR ........................................................ 21,548 538,700
------------
TOTAL DENMARK................................................................... 1,015,478
------------
FRANCE -- 14.2%
AUTOMOBILES -- 2.0%
Peugeot Citroen SA -- Sponsored ADR .......................................... 11,700 359,559
------------
COMPUTER SYSTEM DES -- 4.4%
Alcatel Alsthom, ADR ......................................................... 41,733 772,061
------------
FOOD, FLOUR & GRAIN -- 3.5%
Groupe Danone, ADR * ......................................................... 21,060 620,190
------------
INTEGRATED OIL COMPANY -- 2.7%
Elf Aquitane SA, ADR ......................................................... 10,820 474,728
------------
</TABLE>
49
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
FRANCE -- (CONTINUED)
TECHNOLOGY SERVICES -- 1.6%
Assurances Generales de France ............................................... 8,450 $ 276,670
------------
TOTAL FRANCE.................................................................... 2,503,208
------------
GERMANY -- 8.4%
DIVERSIFIED OPERATIONS -- 2.7%
Siemens AG, ADR .............................................................. 10,200 491,715
------------
MOTOR VEHICLES & PASSENGER -- 4.5%
Daimler-Benz AG, ADR ......................................................... 12,033 789,666
------------
UTILITIES -- 1.2%
Berliner Kraft Und Licht ..................................................... 751 206,425
------------
TOTAL GERMANY................................................................... 1,487,806
------------
HONG KONG -- 2.5%
DIVERSIFIED OPERATIONS -- 2.5%
Jardine Matheson, ADR ........................................................ 66,600 439,560
------------
TOTAL HONG KONG................................................................. 439,560
------------
ISRAEL -- 0.2%
DIVERSIFIED ELECTRONICS -- 0.2%
Scitex Corp. ................................................................. 3,100 31,387
------------
TOTAL ISRAEL.................................................................... 31,387
------------
ITALY -- 11.5%
AUTOMOBILES -- 3.3%
Istituto Mobiliare Italiano, SpA, ADR* ....................................... 22,457 583,882
------------
NATURAL GAS DISTRIBUTION -- 2.5%
Italgas ...................................................................... 107,500 447,053
------------
OTHER TELECOMMUNICATIONS -- 5.7%
Stet Societa' Finanziaria Telefonica, SpA, ADR ............................... 23,422 1,001,291
------------
TOTAL ITALY..................................................................... 2,032,226
------------
JAPAN -- 7.5%
DIVERSIFIED ELECTRONICS -- 3.9%
Hitachi Ltd, ADR ............................................................. 7,239 684,990
------------
PHOTOGRAPHIC PRODUCT -- 3.6%
Fuji Photo Film, ADR ......................................................... 20,424 643,356
------------
TOTAL JAPAN..................................................................... 1,328,346
------------
MEXICO -- 2.7%
TELEPHONE INTEGRATED -- 2.7%
Telefonos de Mexico, ADR ..................................................... 15,425 468,534
------------
TOTAL MEXICO.................................................................... 468,534
------------
NETHERLANDS -- 5.8%
BROADCASTING -- 2.6%
Royal PTT Nederland NV, ADR .................................................. 12,150 454,106
------------
CONSUMER SUNDRIES -- 2.8%
Unilever, ADR ................................................................ 2,840 491,675
------------
</TABLE>
50
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
NETHERLANDS -- (CONTINUED)
FINANCIAL SERVICES -- 0.4%
Ing Groep N.V., ADR .......................................................... 2,000 $ 70,046
------------
TOTAL NETHERLANDS............................................................... 1,015,827
------------
SOUTH AFRICA -- 1.5%
OFFICE EQUIPMENT/SUPPLIES -- 1.5%
Iscor Limited, ADR ........................................................... 37,000 270,563
------------
TOTAL SOUTH AFRICA.............................................................. 270,563
------------
SOUTH KOREA -- 0.5%
STEEL/IRON ORE -- 0.5%
Pohang Iron & Steel, ADR ..................................................... 4,700 94,587
------------
TOTAL SOUTH KOREA............................................................... 94,587
------------
SPAIN -- 9.6%
BANKING -- 3.5%
Banco de Valencia ............................................................ 3,000 51,429
Banco Bilbao Vizcaya, ADR .................................................... 7,156 361,378
Corporacion Bancaria de Espana, SA, ADR ...................................... 9,910 195,723
------------
608,530
------------
OIL & GAS PRODUCTION -- 2.5%
Repsol SA, ADR ............................................................... 12,280 449,755
------------
TELEPHONE INTEGRATED -- 3.6%
Telefonica de Espana, ADR .................................................... 9,500 627,000
------------
TOTAL SPAIN..................................................................... 1,685,285
------------
SWEDEN -- 1.6%
PAPER -- 0.3%
Munksoe AB ................................................................... 5,520 50,985
------------
STEEL/IRON ORE -- 1.3%
Svenskt Stal AB, Series A .................................................... 13,760 225,488
------------
TOTAL SWEDEN.................................................................... 276,473
------------
SWITZERLAND -- 8.2%
ELECTRIC INTEGRATED -- 1.5%
ABB AG, ADR * ................................................................ 2,060 257,989
------------
ELECTRICAL PRODUCTS -- 0.6%
Schindler Holding ............................................................ 105 110,376
------------
SPECIALTY FOODS/CANDY -- 4.1%
Nestle SA, ADR ............................................................... 13,530 735,028
------------
TECHNOLOGY SERVICES -- 2.0%
Baloise Holdings ............................................................. 156 348,576
------------
TOTAL SWITZERLAND............................................................... 1,451,969
------------
UNITED KINGDOM -- 6.4%
ALCOHOLIC BEVERAGES -- 1.5%
Guinness PLC, ADR ............................................................ 7,020 262,454
------------
FOOD, FLOUR & GRAIN -- 2.6%
Grand Metropolitan PLC, ADR .................................................. 14,570 464,419
------------
</TABLE>
51
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
UNITED KINGDOM -- (CONTINUED)
GENERIC DRUGS -- 0.3%
Medeva PLC, ADR .............................................................. 2,730 $ 46,751
------------
NATURAL GAS DISTRIBUTION -- 2.0%
British Gas PLC, ADR ......................................................... 9,550 354,544
------------
TOTAL UNITED KINGDOM............................................................ 1,128,168
------------
TOTAL COMMON STOCKS (COST $15,837,989).......................................... 16,771,907
------------
TOTAL LONG-TERM INVESTMENTS..................................................... 16,771,907
------------
</TABLE>
<TABLE>
<CAPTION>
RATE
------
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 10.6%
CASH SWEEP ACCOUNT -- 10.6%
Bank of New York ............................................................. 4.40% 1,872,314 1,872,314
------------
TOTAL SHORT-TERM INVESTMENTS (COST $1,872,314).................................. 1,872,314
------------
TOTAL INVESTMENTS (COST $17,710,303) (A) -- 105.7%.............................. 18,644,221
LIABILITIES IN EXCESS OF OTHER ASSETS (5.7%).................................... (1,001,698)
------------
NET ASSETS -- 100.0%............................................................ $ 17,642,523
------------
------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $17,642,523.
(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....... $ 1,039,158
Unrealized depreciation....... (105,240)
------------
Net unrealized appreciation... $ 933,918
------------
------------
* Represents non-income producing security.
ADR -- American Depository Receipts.
PLC -- Public Limited Company.
At November 30, 1996, the International Equity Fund's open forward currency
contracts were as follows:
<TABLE>
<CAPTION>
DELIVERY CONTRACT CONTRACT CONTRACT MARKET UNREALIZED
CURRENCY DATE PRICE** AMOUNT** VALUE VALUE DEPRECIATION
- ------------------------------------- --------- ----------- ------------ ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Long Contracts:
French Franc ...................... 12/31/96 5.1557 1,018,405 $ 197,530 $ 194,998 $ (2,532)
French Franc ...................... 12/31/96 5.1980 34,202 6,580 6,549 (31)
Italian Lire ...................... 12/6/96 1510.9985 3,154,436 2,088 2,083 (5)
Swiss Franc ....................... 12/2/96 1.2890 28,393 22,027 21,802 (225)
Swiss Franc ....................... 12/4/96 1.2958 11,605 8,956 8,911 (45)
---------- ---------- -----------
Total Long Contracts .............. $ 237,181 $ 234,343 $ (2,838)
---------- ---------- -----------
---------- ---------- -----------
</TABLE>
** Contract price is in local currency.
See Notes to Financial Statements.
52
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (cost $17,710,303).......... $ 18,644,221
Interest and dividends receivable.............................. 23,149
Tax reclaim receivable......................................... 2,706
Unamortized organization costs................................. 10,157
Prepaid expenses and other assets.............................. 1,096
--------------
Total assets..................................................... 18,681,329
--------------
LIABILITIES:
Net payable to Investment Adviser.............................. 17,737
Payable to brokers for investment securities purchased......... 909,272
Dividends payable.............................................. 79,238
Unrealized loss on forward foreign currency exchange
contracts.................................................... 2,838
Accrued expenses and other liabilities:
Shareholder Processing fees (Retail Shares).................. 23
Combined Distribution and Service fees (Retail Shares)....... 23
Custodian and transfer agent fees............................ 15,420
Audit and legal fees......................................... 5,778
Registration fees............................................ 7,293
Other liabilities............................................ 1,184
--------------
Total liabilities................................................ 1,038,806
--------------
NET ASSETS....................................................... $ 17,642,523
--------------
--------------
Net Asset Value, Offering Price and Redemption Price per Share:
Retail Shares:
($114,540/10,149 shares of beneficial interest issued and
outstanding $0.001 par value, unlimited number of shares
authorized)................................................. $ 11.29
--------------
--------------
Institutional Shares:
($17,527,983/1,552,465 shares of beneficial interest issued
and outstanding $0.001 par value, unlimited number of shares
authorized)................................................. $ 11.29
--------------
--------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par.......................... $ 1,563
Additional paid-in capital..................................... 16,561,010
Distributions in excess of net investment income............... (2,556)
Accumulated net realized gains on investment transactions and
foreign currency transactions................................ 149,235
Net unrealized appreciation from investments and translation of
assets and liabilities in foreign currencies................. 933,271
--------------
Net Assets, November 30, 1996.................................... $ 17,642,523
--------------
--------------
</TABLE>
- ------------
See Notes to Financial Statements.
53
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the year ended November 30, 1996 (a)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $3,715)............. $ 54,476
Interest........................................................... 23,368
---------
77,844
EXPENSES:
Investment Advisory fees........................................... $ 38,789
Administration fees................................................ 624
Shareholder Processing fees (Retail Shares)........................ 51
Distribution and Service fees (Retail Shares)...................... 51
Transfer agent fees and expenses................................... 30,228
Custodian fees and expenses........................................ 23,495
Legal fees......................................................... 179
Audit fees......................................................... 7,738
Reports to shareholders (Retail Shares)............................ 174
Reports to shareholders (Institutional Shares)..................... 704
Registration fees.................................................. 34,317
Trustees' fees..................................................... 120
Amortization of organization costs................................. 6,699
Other expenses..................................................... 3,539
---------
146,708
Less: Fee waivers and expense reimbursements......................... (146,708) --
--------- ---------
Net Investment Income................................................ 77,844
---------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized gains on securities transactions...................... 152,939
Net realized losses from foreign currency transactions............. (3,704)
Net change in unrealized appreciation from investments and
translation of assets and liabilities in foreign currencies...... 933,271
---------
Net Realized and Unrealized Gains on Investments..................... 1,082,506
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................. $1,160,350
---------
---------
</TABLE>
- ---------------
(a) For the period December 27, 1995 (commencement of operations) through
November 30, 1996.
See Notes to Financial Statements.
54
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED
NOVEMBER 30,
1996(A)
-------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income...................................................................... $ 77,844
Net realized gains on securities transactions.............................................. 152,939
Net realized losses from foreign currency transactions..................................... (3,704)
Net change in unrealized appreciation from investments and translation of assets and
liabilities in foreign currencies........................................................ 933,271
-------------------
Net increase in net assets resulting from operations....................................... 1,160,350
-------------------
Dividends to shareholders from net investment income
Retail Shares.............................................................................. (413)
Institutional Shares....................................................................... (77,431)
-------------------
Total dividends to shareholders from net investment income................................... (77,844)
-------------------
Dividends to shareholders in excess of net investment income
Retail Shares.............................................................................. (172)
Institutional Shares....................................................................... (2,384)
-------------------
Total dividends to shareholders in excess of net investment income........................... (2,556)
-------------------
Fund Share Transactions
Net proceeds from shares subscribed........................................................ 16,855,102
Cost of shares redeemed.................................................................... (292,529)
-------------------
Net increase in net assets from Fund share transactions.................................... 16,562,573
-------------------
Total Increase............................................................................... 17,642,523
NET ASSETS:
Beginning of period........................................................................ --
-------------------
End of period (including distributions in excess of net investment income of $2,556)....... $ 17,642,523
-------------------
-------------------
</TABLE>
- ---------------
(a) For the period December 27, 1995 (commencement of operations) through
November 30, 1996.
See Notes to Financial Statements.
55
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- -------------
<S> <C> <C>
LONG-TERM INVESTMENTS -- 98.2%
COMMON STOCKS -- 98.2%
AEROSPACE -- 8.0%
AAR Corp. ............................................................................. 94,600 $ 2,826,175
Orbital Sciences Corp.* ............................................................... 187,000 3,623,125
RMI Titanium Co.* ..................................................................... 167,700 3,899,025
Wyman-Gordon Co. ...................................................................... 66,500 1,421,438
-------------
11,769,763
-------------
AUTO PARTS -- 1.3%
Arvin Industries, Inc. ................................................................ 82,300 1,954,625
-------------
AUTOMOTIVE AFTER-MARKET -- 2.7%
Apogee Enterprises, Inc. .............................................................. 88,300 3,907,275
-------------
BUILDING PRODUCTS -- 0.6%
Watsco, Inc. .......................................................................... 37,200 939,300
-------------
CLOTHING/SHOES/ACCESSORIES -- 2.5%
Genesco, Inc.* ........................................................................ 304,000 3,078,000
Pacific Sunwear of California* ........................................................ 24,500 661,500
-------------
3,739,500
-------------
COMPUTER/VIDEO CHAINS -- 3.1%
Microage, Inc.* ....................................................................... 200,000 4,525,000
-------------
CONSTRUCTION/AGRICULTURE EQUIPMENT -- 2.4%
Manitowoc Co., Inc. ................................................................... 82,200 3,606,525
-------------
DEPARTMENT STORES -- 2.2%
Fred Meyer, Inc.* ..................................................................... 95,200 3,189,200
-------------
DISCOUNT CHAINS -- 1.5%
Dollar Tree Stores, Inc.* ............................................................. 56,200 2,149,650
-------------
DIVERSIFIED COMMERCIAL -- 2.8%
Employee Solutions, Inc.* ............................................................. 170,000 3,145,000
Personnel Group of America, Inc. ...................................................... 44,600 1,009,075
-------------
4,154,075
-------------
ELECTRONIC COMPONENTS -- 3.9%
ACT Manufacturing, Inc.* .............................................................. 86,500 2,140,875
Computer Products, Inc.* .............................................................. 176,900 3,560,112
-------------
5,700,987
-------------
ELECTRONICS DISTRIBUTORS -- 3.0%
Inacom Corp. .......................................................................... 53,500 1,658,500
Vanstar Corp.* ........................................................................ 101,400 2,763,150
-------------
4,421,650
-------------
ENVIRONMENTAL SERVICES -- 1.1%
Tetra Technologies, Inc.* ............................................................. 61,000 1,553,594
-------------
ELECTRONIC DATA PROCESSING - PERIPHERALS -- 1.6%
Eltron International, Inc.* ........................................................... 43,400 1,345,400
</TABLE>
56
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- -------------
<S> <C> <C>
ELECTRONIC DATA PROCESSING - PERIPHERALS -- (CONTINUED)
Encad, Inc.* .......................................................................... 26,700 $ 1,001,250
-------------
2,346,650
-------------
ELECTRONIC DATA PROCESSING - SERVICES -- 2.1%
American Management Systems, Inc.* .................................................... 85,700 3,047,706
-------------
FINANCE COMPANIES -- 1.1%
Americredit Corp.* .................................................................... 84,100 1,671,487
-------------
HOME-BUILDING -- 0.6%
Champion Enterprises, Inc.* ........................................................... 42,600 889,275
-------------
HOME FURNISHINGS -- 5.0%
Ethan Allen Interiors, Inc. ........................................................... 47,800 1,589,350
Furniture Brands International, Inc.* ................................................. 219,800 2,720,025
Mohawk Industries, Inc. ............................................................... 88,300 2,102,644
O'Sullivan Industries* ................................................................ 85,300 948,962
-------------
7,360,981
-------------
INVESTMENT MANAGERS -- 1.2%
Eaton Vance Corp. ..................................................................... 40,200 1,728,600
-------------
MANAGED HEALTH CARE -- 1.1%
FPA Medical Management, Inc.* ......................................................... 87,600 1,686,300
-------------
METAL FABRICATION -- 4.4%
Oregon Metallurgical Corp. ............................................................ 102,500 3,638,750
Tower Automotive, Inc.* ............................................................... 90,000 2,891,250
-------------
6,530,000
-------------
MILITARY/GOVERNMENT/TECHNICAL -- 2.2%
Logicon, Inc. ......................................................................... 79,400 3,235,550
-------------
OFFICE/PLANT AUTOMATION -- 1.6%
Xircom, Inc.* ......................................................................... 121,400 2,428,000
-------------
OIL & GAS PRODUCTION -- 7.9%
Newfield Exploration Co.* ............................................................. 83,200 4,170,400
Parker & Parsley Petroleum Co. ........................................................ 81,900 2,702,700
Santa Fe Energy Resources, Inc.* ...................................................... 214,300 3,107,350
Vintage Petroleum, Inc. ............................................................... 51,500 1,725,250
-------------
11,705,700
-------------
OIL FIELD SERVICES/EQUIPMENT -- 1.6%
Pool Energy Services Co.* ............................................................. 46,400 684,400
Seacor Holdings, Inc.* ................................................................ 25,800 1,631,850
-------------
2,316,250
-------------
OTHER COMMERCIAL SERVICES -- 1.1%
Seattle Filmworks, Inc.* .............................................................. 83,400 1,636,725
-------------
PACKAGE GOODS/COSMETICS -- 1.1%
Paragon Trade Brands, Inc.* ........................................................... 58,000 1,609,500
-------------
PRECISION INSTRUMENT -- 3.9%
Dynatech Corp.* ....................................................................... 79,900 3,735,325
Genrad, Inc.* ......................................................................... 90,600 2,004,525
-------------
5,739,850
-------------
</TABLE>
57
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- -------------
<S> <C> <C>
RECREATIONAL PRODUCTS -- 2.4%
Coachmen Industries, Inc. ............................................................. 140,900 $ 3,592,950
-------------
RENTAL/LEASING COMPANIES -- 1.7%
Leasing Solutions, Inc.* .............................................................. 87,600 2,529,450
-------------
RESTAURANTS -- 6.4%
CKE Restaurants, Inc. ................................................................. 111,200 3,405,500
Foodmaker, Inc.* ...................................................................... 304,300 2,776,737
Showbiz Pizza Time, Inc.* ............................................................. 202,900 3,322,488
-------------
9,504,725
-------------
SAVINGS & LOAN ASSOCIATIONS -- 1.8%
Firstfed Financial Corp.* ............................................................. 108,900 2,599,987
-------------
SEMICONDUCTORS -- 1.9%
Chips & Technologies* ................................................................. 49,000 1,032,062
Supertex, Inc.* ....................................................................... 91,100 1,730,900
-------------
2,762,962
-------------
SHOE MANUFACTURING -- 2.2%
Vans, Inc.* ........................................................................... 214,100 3,291,788
-------------
SMALLER BANKS -- 1.0%
Imperial Bancorp* ..................................................................... 67,650 1,522,125
-------------
SPECIALTY FOODS/CANDY -- 2.5%
NBTY, Inc.* ........................................................................... 226,100 3,645,863
-------------
SPECIALTY INSURERS -- 1.3%
First American Financial Corp.* ....................................................... 53,500 1,959,438
-------------
TELECOMMUNICATION EQUIPMENT -- 2.4%
Digital Microwave Corp.* .............................................................. 148,000 3,533,500
-------------
WHOLESALE DISTRIBUTORS -- 3.0%
Hughes Supply, Inc. ................................................................... 102,500 4,407,500
-------------
TOTAL COMMON STOCKS (COST $137,510,488).................................................. 144,894,006
-------------
TOTAL LONG-TERM INVESTMENTS (COST $137,510,488).......................................... 144,894,006
-------------
SHORT-TERM INVESTMENTS -- 4.1%
OPEN-END INVESTMENT COMPANIES -- 4.1%
Dreyfus Cash Management Fund .......................................................... 1,470,878 1,470,878
Provident Institutional Temporary Cash Fund ........................................... 4,547,248 4,547,248
-------------
TOTAL SHORT-TERM INVESTMENTS (COST $6,018,126)........................................... 6,018,126
-------------
TOTAL INVESTMENTS (COST $143,528,614) (A) -- 102.3%...................................... 150,912,132
LIABILITIES IN EXCESS OF OTHER ASSETS -- (2.3%).......................................... (3,413,912)
-------------
NET ASSETS -- 100.0%..................................................................... $ 147,498,220
-------------
-------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $147,498,220.
(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....... $ 11,242,981
Unrealized depreciation....... (3,859,463)
------------
Net unrealized appreciation... $ 7,383,518
------------
------------
* Represents non-income producing security.
See Notes to Financial Statements.
58
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $143,528,614)............................ $ 150,912,132
Dividends receivable............................................................... 65,444
Receivable for capital shares issued............................................... 21,353
Receivable from brokers for investment securities sold............................. 3,744,188
Unamortized organization costs..................................................... 25,929
Prepaid expenses and other assets.................................................. 8,479
-------------
Total assets......................................................................... 154,777,525
-------------
LIABILITIES:
Dividends payable.................................................................. 50
Payable for capital shares redeemed................................................ 36,482
Payable to brokers for investment securities purchased............................. 7,057,038
Accrued expenses and other liabilities:
Investment Advisory fees......................................................... 117,974
Administration fees.............................................................. 9,302
Shareholder Processing fees (Retail Shares)...................................... 1,890
Combined Distribution and Service fees (Retail Shares)........................... 1,890
Custodian and transfer agent fees................................................ 19,196
Audit and legal fees............................................................. 13,343
Other liabilities................................................................ 22,140
-------------
Total liabilities.................................................................... 7,279,305
-------------
NET ASSETS........................................................................... $ 147,498,220
-------------
-------------
Net Asset Value, Offering Price and Redemption Price per Share:
Retail Shares:
($9,490,322/706,882 shares of beneficial interest issued and outstanding $0.001
par value, unlimited number of shares authorized)............................... $ 13.43
-------------
-------------
Institutional Shares:
($138,007,898/10,209,424 shares of beneficial interest issued and outstanding
$0.001 par value, unlimited number of shares authorized)........................ $ 13.52
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par.............................................. $ 10,916
Additional paid-in capital......................................................... 121,172,253
Accumulated net realized gains on investment transactions.......................... 18,931,533
Net unrealized appreciation of investments......................................... 7,383,518
-------------
Net Assets, November 30, 1996........................................................ $ 147,498,220
-------------
-------------
</TABLE>
- ------------
See Notes to Financial Statements.
59
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the year ended November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends....................................... $ 677,952
Interest........................................ 52,278
-----------
730,230
EXPENSES:
Investment Advisory fees........................ $1,187,772
Administration fees............................. 83,350
Shareholder Processing fees (Retail Shares)..... 19,051
Combined Distribution and Service fees (Retail
Shares)....................................... 15,455
Combined Distribution and Service fees (B
Shares)....................................... 7,145
Transfer agent fees and expenses................ 54,638
Custodian fees and expenses..................... 55,282
Legal fees...................................... 6,130
Audit fees...................................... 13,708
Reports to shareholders (Retail Shares)......... 612
Reports to shareholders (Institutional
Shares)....................................... 40,423
Amortization of organization costs.............. 12,444
Registration fees............................... 33,294
Trustees' fees.................................. 4,891
Other expenses.................................. 8,597
----------
1,542,792
Less: Expense reimbursements...................... (24,788)
Expenses paid by third parties................ (12,773) 1,505,231
---------- -----------
Net Investment Loss............................... (775,001)
-----------
REALIZED AND UNREALIZED GAINS (LOSSES) ON
INVESTMENTS:
Net realized gains on securities transactions... 19,900,908
Net change in unrealized appreciation of
investments................................... (4,469,248)
-----------
Net Realized and Unrealized Gains on
Investments..................................... 15,431,660
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS...................................... $14,656,659
-----------
-----------
</TABLE>
- ------------
See Notes to Financial Statements.
60
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
-------------------------
NOVEMBER 30, NOVEMBER
1996 30, 1995
------------ -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment loss............................. $ (775,001) $ (503,034)
Net realized gains on securities transactions... 19,900,908 11,174,347
Net change in unrealized appreciation
(depreciation) of investments................. (4,469,248) 9,904,841
------------ -----------
Net increase in net assets resulting from
operations.................................... 14,656,659 20,576,154
------------ -----------
Distributions to shareholders from net realized
gains
Retail Shares................................... (211,250) --
B Shares........................................ (206,488) --
Institutional Shares............................ (6,891,681) --
------------ -----------
Total distributions to shareholders from net
realized gains.................................. (7,309,419) --
------------ -----------
Fund Share Transactions
Net proceeds from shares subscribed............. 59,893,208 24,392,804
Net asset value of shares issued to shareholders
in reinvestment of dividends and
distributions................................. 6,529,948 --
Cost of shares redeemed......................... (20,047,906) (8,022,428)
------------ -----------
Net increase in net assets from Fund share
transactions.................................. 46,375,250 16,370,376
------------ -----------
Total Increase.................................... 53,722,490 36,946,530
NET ASSETS:
Beginning of period............................. 93,775,730 56,829,200
------------ -----------
End of period................................... $147,498,220 $93,775,730
------------ -----------
------------ -----------
</TABLE>
- ------------
See Notes to Financial Statements.
61
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL
RATINGS MATURITY AMOUNT VALUE
(UNAUDITED) RATE DATE (000) (NOTE 2)
------------------- ---------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C>
LONG-TERM INVESTMENTS -- 96.4%
CORPORATE OBLIGATIONS -- 10.9%
ELECTRIC UTILITIES -- 2.4%
Central Illinois Public Service Co. ............ Aa1/AA+ 8.50% 5/15/22 $ 500 $ 536,418
Northern States Power Co. - Minnesota .......... A1/AA- 5.50 2/1/99 750 744,048
Wisconsin Electric Power Co., Callable 9/1/97 @
105.95 ....................................... Aa2/AA+ 9.13 9/1/24 1,000 1,064,874
------------
2,345,340
------------
ENVIRONMENTAL SERVICES -- 0.9%
WMX Technologies, Inc., Putable 4/30/97 @ 100 .. A1/A+ 6.22 4/30/04 750 817,301
------------
FINANCE COMPANIES -- 0.8%
Associates Corp., N.A., Medium Term Note ....... Aa3/AA- 5.62 3/14/97 750 750,514
------------
FINANCIAL SERVICES -- 1.0%
Bank One Auto Trust 1995, A-4 .................. Aaa/AAA 6.90 4/15/98 1,000 1,008,170
------------
FINANCIAL SERVICES - DIVERSIFIED -- 0.4%
American Express Credit Corp., Debenture ....... Aa3/A+ 8.50 6/15/99 350 369,663
------------
INVESTMENT BANKERS/BROKERS -- 1.1%
Merrill Lynch & Co., Inc. ...................... Aa3/A+ 6.70 8/1/00 1,000 1,017,455
------------
MAJOR BANKS -- 0.6%
Interamerican Development Bank, Debenture,
Putable 9/1/99 @ 100 ......................... Aaa/AAA 8.40 9/1/09 500 590,627
------------
MAJOR U.S. TELECOMMUNICATIONS -- 2.1%
A T & T Corp., Senior Notes, Callable 1/15/02 @
103.21 ....................................... Aa3/AA- 8.13 1/15/22 400 431,122
Chesapeake & Potomac Telephone Co. of Maryland,
Debenture .................................... Aa2/AA 8.00 10/15/29 500 571,066
Pacific Telephone & Telegraph Co., Debenture,
Callable 2/1/97 @ 101.45, Putable 10/15/99 @
100 .......................................... A1/AA- 7.25 2/1/08 50 50,329
NYNEX Capital Funding Co., Variable Rate Medium
Term Note(b) ................................. A3/A- 7.63 10/15/09 875 982,945
------------
2,035,462
------------
MOTOR VEHICLES -- 0.3%
General Motors Acceptance Corp., Medium Term
Note, Putable 6/1/00 @ 100 ................... A3/A- 8.88 6/1/10 250 296,809
------------
MULTI-LINE INSURANCE -- 0.5%
CNA Financial Corp. Senior Note ................ A3/AA- 8.88 3/1/98 500 517,515
------------
</TABLE>
62
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL
RATINGS MATURITY AMOUNT VALUE
(UNAUDITED) RATE DATE (000) (NOTE 2)
------------------- ---------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C>
OIL & GAS -- 0.2%
Texaco Capital Income, Inc., Debenture ......... A1/A+ 8.65% 1/30/98 $ 150 $ 154,795
------------
SOFT DRINKS -- 0.6%
Coca-Cola Enterprises, Inc., Putable 1/4/97 @
100 .......................................... A3/AA- 8.00 1/4/05 500 554,159
------------
TOTAL CORPORATE OBLIGATIONS (COST $10,011,734).... 10,457,810
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 25.6%
FEDERAL HOME LOAN MORTGAGE CORP. -- 4.7%
Federal Home Loan Mortgage Corp., Pool
#M80052 ...................................... Aaa/AAA** 8.50 7/1/98 91 93,589
Federal Home Loan Mortgage Corp., Pool
#M80099 ...................................... Aaa/AAA** 8.00 6/1/99 162 166,495
Federal Home Loan Mortgage Corp., 5 Year
Balloon, Pool #L90152 ........................ Aaa/AAA** 8.00 2/1/00 319 327,197
Federal Home Loan Mortgage Corp., 5 Year
Balloon, Pool #M90384 ........................ Aaa/AAA** 8.50 2/1/00 289 298,031
Federal Home Loan Mortgage Corp., Pool
#E20195 ...................................... Aaa/AAA** 6.20 9/8/08 660 630,515
Federal Home Loan Mortgage Corp., Pool
#288434 ...................................... Aaa/AAA** 8.00 7/1/10 349 358,814
Federal Home Loan Mortgage Corp., Gold Pool
#E20195 ...................................... Aaa/AAA** 7.50 9/1/10 2,389 2,447,202
Federal Home Loan Mortgage Corp., CMO 138-D
PAC .......................................... Aaa/AAA** 8.50 2/15/21 176 180,677
------------
4,502,520
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 8.1%
Federal National Mortgage Association Corp., 7
Year Balloon, Pool #50609 .................... Aaa/AAA** 8.00 6/1/99 194 199,326
Federal National Mortgage Association Corp.,
Medium Term Note ............................. Aaa/AAA** 6.63 4/18/01 500 512,550
Federal National Mortgage Association Corp.,
Medium Term Note, Callable 1/21/97 @ 100 ..... Aaa/AAA** 6.14 1/21/04 1,000 981,658
Federal National Mortgage Association Corp.,
Medium Term Note, Callable 2/18/97 @ 100 ..... Aaa/AAA** 6.48 2/18/04 1,000 992,765
Federal National Mortgage Association Corp. .... Aaa/AAA** 6.35 6/10/05 500 502,081
Federal National Mortgage Association Corp.,
Pool #124975 ................................. Aaa/AAA** 7.50 8/1/08 766 784,896
Federal National Mortgage Association Corp.,
Pool #247516 ................................. Aaa/AAA** 8.50 8/1/11 1,341 1,414,559
Federal National Mortgage Association Corp., CMO
1991-1G PAC .................................. Aaa/AAA** 7.00 1/25/21 1,000 1,007,642
Federal National Mortgage Association Corp.,
Pool #354613 ................................. Aaa/AAA** 7.50 9/1/26 218 221,325
Federal National Mortgage Association Corp.,
Pool #358033 ................................. Aaa/AAA** 7.50 9/1/26 458 464,249
Federal National Mortgage Association Corp.,
Pool #250700 ................................. Aaa/AAA** 8.00 10/1/26 675 695,506
------------
7,776,557
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 1.4%
Government National Mortgage Association Pool
#220063 ...................................... Aaa/AAA** 10.00 2/15/18 8 8,552
</TABLE>
63
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL
RATINGS MATURITY AMOUNT VALUE
(UNAUDITED) RATE DATE (000) (NOTE 2)
------------------- ---------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C>
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION --
(CONTINUED)
Government National Mortgage Association Pool
#432700 ...................................... Aaa/AAA** 7.50% 6/15/26 $ 217 $ 220,267
Government National Mortgage Association Pool
#423836 ...................................... Aaa/AAA** 8.00 8/15/26 217 224,202
Government National Mortgage Association Pool
#430065 ...................................... Aaa/AAA** 7.50 9/15/26 449 455,854
Government National Mortgage Association Pool
#437545 ...................................... Aaa/AAA** 8.00 9/15/26 449 463,356
------------
1,372,231
------------
U.S. TREASURY BONDS -- 4.7%
U.S. Treasury Bond, Callable 8/15/08 @ 100 ..... Aaa/AAA** 12.00 8/15/13 500 734,688
U.S. Treasury Bond ............................. Aaa/AAA** 9.25 2/15/16 2,000 2,620,626
U.S. Treasury Bond ............................. Aaa/AAA** 6.75 8/15/26 1,125 1,174,220
------------
4,529,534
------------
U.S. TREASURY NOTES -- 6.4%
U.S. Treasury Note ............................. Aaa/AAA** 5.88 2/15/04 2,000 1,990,626
U.S. Treasury Note ............................. Aaa/AAA** 5.88 11/15/05 1,000 988,438
U.S. Treasury Note ............................. Aaa/AAA** 5.63 2/15/06 1,500 1,456,407
U.S. Treasury Note ............................. Aaa/AAA** 6.88 5/15/06 500 528,594
U.S. Treasury Note ............................. Aaa/AAA** 7.00 7/15/06 1,125 1,199,180
------------
6,163,245
------------
U.S. TREASURY STRIPS -- 0.3%
U.S. Treasury Strip ............................ Aaa/AAA** 7.59+ 8/15/08 500 241,106
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (COST
$24,025,069).................................... 24,585,193
------------
FOREIGN GOVERNMENT AGENCIES -- 1.2%
Hydro-Quebec, Debenture, Putable 7/7/06 @
100 .......................................... A2/A+ 8.05 7/7/24 1,000 1,130,350
------------
TOTAL FOREIGN GOVERNMENT AGENCIES (COST
$1,051,005)..................................... 1,130,350
------------
MUNICIPAL BOND -- 1.0%
CALIFORNIA -- 1.0%
Los Angeles Airport, Callable 5/15/97 @ 100
(Insured by AMBAC) ........................... Aaa/AAA 5.50 5/15/98 1,000 994,725
------------
TOTAL MUNICIPAL BOND (COST $985,340).............. 994,725
------------
</TABLE>
64
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
COMMON STOCKS -- 53.2%
AEROSPACE -- 1.1%
AAR Corp. ............................................................................. 5,200 $ 155,350
Boeing Co. ............................................................................ 4,100 407,438
Orbital Sciences Corp.* ............................................................... 9,900 191,813
RMI Titanium Co.* ..................................................................... 9,300 216,225
Wyman-Gordon Co. ...................................................................... 3,800 81,225
------------
1,052,051
------------
AIRLINES -- 0.6%
AMR Corp.* ............................................................................ 6,100 556,625
------------
APPAREL -- 0.3%
Tommy Hilfiger Corp.* ................................................................. 5,800 313,200
------------
AUTO PARTS - ORIGINAL EQUIPMENT MANUFACTURER -- 0.4%
Arvin Industries, Inc. ................................................................ 4,900 116,375
Lear Corp.* ........................................................................... 8,600 308,525
------------
424,900
------------
AUTOMOTIVE AFTER-MARKET -- 0.2%
Apogee Enterprises, Inc. .............................................................. 4,600 203,550
------------
BANKS -- 2.1%
BankAmerica Corp. ..................................................................... 7,000 721,000
Bankers Trust New York Corp. .......................................................... 6,400 556,800
Imperial Bancorp* ..................................................................... 4,050 91,125
NationsBank Corp. ..................................................................... 5,900 611,388
------------
1,980,313
------------
BIOTECHNOLOGY -- 0.9%
Amgen, Inc.* .......................................................................... 9,900 602,663
Elan Corp PLC, ADR* ................................................................... 9,300 276,675
------------
879,338
------------
BUILDING MATERIALS CHAINS -- 0.3%
Home Depot, Inc. ...................................................................... 5,766 300,553
------------
BUILDING PRODUCTS -- 0.1%
Watsco, Inc. .......................................................................... 2,100 53,025
------------
CLOTHING/SHOES/ACCESORIES -- 0.8%
Gap, Inc. ............................................................................. 15,500 497,938
Genesco, Inc.* ........................................................................ 18,200 184,275
Pacific Sunwear of California* ........................................................ 1,300 35,100
------------
717,313
------------
COMPUTER SOFTWARE -- 2.4%
BMC Software, Inc.* ................................................................... 9,600 417,600
Cadence Design Systems, Inc.* ......................................................... 15,200 606,100
Computer Associates International, Inc. ............................................... 12,200 802,150
Microsoft Corp.* ...................................................................... 2,800 439,250
------------
2,265,100
------------
COMPUTER/VIDEO CHAINS -- 0.6%
CompUSA, Inc.* ........................................................................ 7,300 328,500
</TABLE>
65
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
COMPUTER/VIDEO CHAINS -- (CONTINUED)
Microage, Inc.* ....................................................................... 11,900 $ 269,238
------------
597,738
------------
CONSTRUCTION/AGRICULTURE EQUIPMENT -- 0.7%
Caterpillar, Inc. ..................................................................... 6,200 490,575
Manitowoc Co., Inc. ................................................................... 4,900 214,988
------------
705,563
------------
CONSUMER SPECIALTIES -- 0.2%
Oakley, Inc.* ......................................................................... 11,300 156,788
------------
DEPARTMENT STORES -- 0.7%
Federated Department Stores, Inc.* .................................................... 13,200 450,450
Fred Meyer, Inc.* ..................................................................... 5,700 190,950
------------
641,400
------------
DISCOUNT CHAINS -- 0.5%
Consolidated Stores Corp.* ............................................................ 9,400 347,800
Dollar Tree Stores, Inc.* ............................................................. 3,000 114,750
------------
462,550
------------
DIVERSIFIED COMMERCIAL -- 0.3%
Employee Solutions, Inc.* ............................................................. 10,200 188,700
Personnel Group of America ............................................................ 2,500 56,563
------------
245,263
------------
DIVERSIFIED ELECTRONIC -- 0.4%
SCI Systems, Inc.* .................................................................... 8,000 422,000
------------
DIVERSIFIED MANUFACTURING -- 1.7%
AlliedSignal, Inc. .................................................................... 8,300 607,975
Dresser Industries, Inc. .............................................................. 17,600 576,400
Tyco International Ltd. ............................................................... 7,800 427,050
------------
1,611,425
------------
ELECTRICAL PRODUCT -- 0.7%
Raychem Corp. ......................................................................... 8,000 682,000
------------
ELECTRONIC DATA PROCESSING - PERIPHERALS -- 1.2%
Eltron International, Inc.* ........................................................... 2,300 71,300
Encad, Inc.* .......................................................................... 1,500 56,250
Storage Tech Corp.* ................................................................... 9,100 453,863
U.S. Robotics Corp.* .................................................................. 7,600 597,550
------------
1,178,963
------------
ELECTRONIC DATA PROCESSING - SERVICES -- 0.2%
American Management Systems, Inc.* .................................................... 4,700 167,144
------------
ELECTRONIC COMPONENTS -- 0.7%
ACT Manufacturing, Inc.* .............................................................. 4,300 106,425
Adaptec, Inc.* ........................................................................ 11,000 409,750
Computer Products, Inc.* .............................................................. 9,100 183,138
------------
699,313
------------
ELECTRONIC DATA PROCESSORS -- 1.2%
Dell Computer Corp.* .................................................................. 3,500 355,688
Gateway 2000, Inc.* ................................................................... 6,500 348,563
</TABLE>
66
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
ELECTRONIC DATA PROCESSORS -- (CONTINUED)
Sun Microsystems, Inc.* ............................................................... 7,700 $ 448,525
------------
1,152,776
------------
ELECTRONICS DISTRIBUTORS -- 0.4%
Inacom Corp. .......................................................................... 3,000 93,000
Tech Data Corp.* ...................................................................... 5,000 150,000
Vanstar Corp.* ........................................................................ 5,500 149,875
------------
392,875
------------
ENVIRONMENTAL SERVICES -- 0.9%
Calenergy, Inc.* ...................................................................... 11,600 346,550
Tetra Technologies, Inc.* ............................................................. 3,500 89,141
USA Waste Services Inc.* .............................................................. 14,600 470,850
------------
906,541
------------
FINANCE COMPANIES -- 1.1%
Americredit Corp.* .................................................................... 4,300 85,462
Green Tree Financial Corp. ............................................................ 12,400 519,250
MBNA Corp. ............................................................................ 11,400 460,275
------------
1,064,987
------------
FINANCIAL PUBLISHING -- 0.4%
Equifax, Inc. ......................................................................... 10,600 347,150
------------
FINANCIAL SERVICES-DIVERSIFIED -- 1.0%
Travelers Group, Inc. ................................................................. 21,399 962,976
------------
FOOD DISTRIBUTIORS -- 0.3%
Richfood Holdings, Inc. ............................................................... 10,050 261,300
------------
HOME BUILDING -- 0.1%
Champion Enterprises, Inc.* ........................................................... 2,400 50,100
------------
HOME FURNISHINGS -- 0.4%
Ethan Allen Interiors, Inc. ........................................................... 2,400 79,800
Furniture Brands International, Inc.* ................................................. 13,600 168,300
Mohawk Industries, Inc.* .............................................................. 5,000 119,062
O'Sullivan Industries Holdings* ....................................................... 4,800 53,400
------------
420,562
------------
HOSPITAL/NURSING MANAGEMENT -- 0.4%
OrNda Healthcorp* ..................................................................... 12,400 361,150
------------
HOTELS/RESORTS -- 0.8%
Marriott International, Inc. .......................................................... 6,800 379,100
HFS, Inc.* ............................................................................ 5,400 349,650
------------
728,750
------------
INDUSTRIAL MACHINERY -- 0.4%
Harnischfeger Industries, Inc. ........................................................ 9,500 421,562
------------
INTEGRATED OIL COMPANIES -- 0.6%
Phillips Petroleum Co. ................................................................ 12,400 559,550
------------
</TABLE>
67
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
INVESTMENT BANKERS -- 0.3%
Paine Webber Group, Inc. .............................................................. 10,000 $ 271,250
------------
INVESTMENT MANAGERS -- 0.1%
Eaton Vance Corp. ..................................................................... 2,300 98,900
------------
LIFE INSURANCE -- 0.9%
Conseco, Inc. ......................................................................... 5,700 318,487
Sunamerica, Inc. ...................................................................... 12,400 519,250
------------
837,737
------------
MAJOR CHEMICALS -- 0.4%
Imperial Chemical Industries PLC, ADR ................................................. 7,900 408,825
------------
MAJOR PHARMACEUTICALS -- 3.9%
Abbott Labs ........................................................................... 10,500 585,375
American Home Products Corp. .......................................................... 11,800 758,150
Johnson & Johnson ..................................................................... 12,100 642,812
Merck & Co., Inc. ..................................................................... 11,200 929,600
Pfizer, Inc. .......................................................................... 9,800 878,325
------------
3,794,262
------------
MAJOR U.S. TELECOMMUNICATIONS -- 0.8%
Ameritech Corp. ....................................................................... 5,600 329,700
Sprint Corp. .......................................................................... 11,000 460,625
------------
790,325
------------
MANAGED HEALTH CARE -- 1.0%
FPA Medical Management, Inc.* ......................................................... 4,500 86,625
Oxford Health Plans, Inc.* ............................................................ 10,200 591,600
MedPartners/Mullikin, Inc.* ........................................................... 14,100 320,775
------------
999,000
------------
MEDICAL ELECTRONICS -- 0.2%
Medtronic, Inc. ....................................................................... 3,600 238,050
------------
MEDICAL/NURSING SERVICES -- 0.5%
HEALTHSOUTH Corp.* .................................................................... 11,900 447,737
------------
MEDICAL SPECIALTIES -- 0.4%
Boston Scientific Corp.* .............................................................. 7,000 408,625
------------
METAL FABRICATION -- 0.4%
Oregon Metallurgical Corp.* ........................................................... 5,600 198,800
Tower Automotive, Inc. ................................................................ 4,600 147,775
------------
346,575
------------
MILITARY/GOVERNMENT/TECHNICAL -- 0.3%
Logicon, Inc. ......................................................................... 4,100 167,075
Parker & Parsley Petroleum Co. ........................................................ 4,400 145,200
------------
312,275
------------
MULTI-SECTOR COMPANIES -- 1.4%
General Electric Co. .................................................................. 13,000 1,352,000
------------
</TABLE>
68
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
OFFICE EQUIPMENT/SUPPLIES -- 0.4%
U.S. Office Products Co.* ............................................................. 11,400 $ 353,400
------------
OFFICE/PLANT AUTOMATION -- 1.1%
Cisco System, Inc.* ................................................................... 14,000 950,250
Xircom, Inc.* ......................................................................... 6,100 122,000
------------
1,072,250
------------
OIL REFINING/MARKETING -- 0.7%
USX-Marathon Group .................................................................... 29,800 681,675
------------
OIL & GAS PRODUCTION -- 0.5%
Newfield Exploration Co.* ............................................................. 4,600 230,575
Santa Fe Energy Resources, Inc.* ...................................................... 11,800 171,100
Vintage Petroleum, Inc. ............................................................... 2,700 90,450
------------
492,125
------------
OILFIELD SERVICES/EQUIPMENT -- 0.1%
Pool Energy Services Co.* ............................................................. 2,700 39,825
Seacor Holdings, Inc.* ................................................................ 1,500 94,875
------------
134,700
------------
OIL & GAS DISTRIBUTION -- 1.3%
Enron Corp. ........................................................................... 11,600 530,700
Williams Co. .......................................................................... 13,500 757,687
------------
1,288,387
------------
OTHER CONSUMER SERVICES -- 0.1%
Seattle Filmworks, Inc.* .............................................................. 4,300 84,387
------------
OTHER SPECIALTY STORES -- 0.7%
Borders Group, Inc.* .................................................................. 6,900 251,850
Staples, Inc.* ........................................................................ 22,075 435,981
------------
687,831
------------
OTHER TELECOMMUNICATIONS -- 1.4%
Cincinnati Bell, Inc. ................................................................. 10,100 602,212
WorldCom, Inc.* ....................................................................... 31,600 730,750
------------
1,332,962
------------
PACKAGE GOODS/COSMETICS -- 1.6%
Gillette Co. .......................................................................... 10,100 744,875
Kimberly-Clark Corp. .................................................................. 7,400 723,350
Paragon Trade Brands, Inc.* ........................................................... 3,000 83,250
------------
1,551,475
------------
PACKAGED FOODS -- 0.9%
Dole Foods, Inc. ...................................................................... 12,300 479,700
Sara Lee .............................................................................. 9,900 388,575
------------
868,275
------------
PAPER -- 0.5%
International Paper Co. ............................................................... 10,600 450,500
------------
PHOTOGRAPHIC PRODUCTS -- 0.6%
Eastman Kodak Co. ..................................................................... 6,800 550,800
------------
</TABLE>
69
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
PRECISION INSTRUMENTS -- 0.3%
Dynatech Corp.* ....................................................................... 4,800 $ 224,400
Genrad, Inc.* ......................................................................... 4,700 103,987
------------
328,387
------------
RECREATIONAL PRODUCTS -- 0.6%
Callaway Golf Co. ..................................................................... 13,400 407,025
Coachmen Industries, Inc. ............................................................. 8,000 204,000
------------
611,025
------------
RENTAL/LEASING COMPANIES -- 0.1%
Leasing Solutions, Inc.* .............................................................. 4,800 138,600
------------
RESTAURANTS -- 1.1%
Boston Chicken, Inc.* ................................................................. 11,900 461,125
CKE Restaurants, Inc. ................................................................. 6,600 202,125
Foodmaker, Inc.* ...................................................................... 17,200 156,950
Showbiz Pizza Time, Inc.* ............................................................. 11,600 189,950
------------
1,010,150
------------
SAVING & LOAN ASSOCIATIONS -- 0.1%
Firstfed Financial Corp.* ............................................................. 5,900 140,862
------------
SEMICONDUCTORS -- 1.7%
Atmel Corp.* .......................................................................... 13,000 427,375
C-Cube Microsystems, Inc.* ............................................................ 6,800 296,650
Chips & Technologies* ................................................................. 2,700 56,869
Intel Corp. ........................................................................... 5,800 735,875
Supertex, Inc.* ....................................................................... 5,200 98,800
------------
1,615,569
------------
SHOE MANUFACTURING -- 1.1%
Nike, Inc., Class B ................................................................... 15,400 875,875
Vans, Inc.* ........................................................................... 11,900 182,963
------------
1,058,838
------------
SOFT DRINKS -- 0.8%
PepsiCo, Inc. ......................................................................... 25,100 749,862
------------
SPECIALTY CHEMICALS -- 0.5%
Praxair, Inc. ......................................................................... 10,500 510,562
------------
SPECIALTY FOODS/CANDIES -- 0.2%
NBTY, Inc.* ........................................................................... 11,700 188,663
------------
SPECIALTY INSURERS -- 0.1%
First American Financial Corp. ........................................................ 3,100 113,537
------------
TELECOMMUNICATION EQUIPMENT -- 0.7%
Andrew Corp.* ......................................................................... 5,000 289,375
Digital Microwave Corp.* .............................................................. 8,100 193,387
L.M. Ericsson Telephone Co. ADR, Class B .............................................. 6,600 203,775
------------
686,537
------------
</TABLE>
70
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
--------- ------------
<S> <C> <C>
WHOLESALE DISTRIBUTORS -- 0.3%
Hughes Supply, Inc. ................................................................... 5,700 $ 245,100
------------
TOTAL COMMON STOCKS (COST $39,308,572)................................................... 51,198,414
------------
UNIT INVESTMENT TRUSTS -- 4.5%
S&P 400 Mid-Cap Depository Receipts, Series I ......................................... 26,000 1,326,813
S&P 500 Depository Receipts, Series I ................................................. 39,500 2,998,914
------------
TOTAL UNIT INVESTMENT TRUSTS (COST $3,541,114)........................................... 4,325,727
------------
TOTAL LONG-TERM INVESTMENTS (COST $78,922,834)........................................... 92,692,219
------------
SHORT-TERM INVESTMENTS -- 3.9%
OPEN-END INVESTMENT COMPANIES -- 3.9%
Dreyfus Cash Management Fund .......................................................... 16,518 16,518
Provident Institutional Temporary Cash Fund ........................................... 3,755,863 3,755,863
------------
TOTAL SHORT-TERM INVESTMENTS (COST $3,772,381)........................................... 3,772,381
------------
TOTAL INVESTMENTS (COST $82,695,215)(A) -- 100.3%........................................ 96,464,600
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.3%).......................................... (270,571)
------------
NET ASSETS -- 100.0%..................................................................... $ 96,194,029
------------
------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $96,194,029
(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 in excess of federal income tax reporting of $28,470.
Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation....... $ 14,185,833
Unrealized depreciation....... (444,918)
------------
Net unrealized appreciation... $ 13,740,915
------------
------------
(b) Steps up to 8.23% on 10/15/99
* Represents non-income producing security.
** Implied Rating.
+ Effective yield at date of purchase.
ADR -- American Depository Receipt.
AMBAC -- AMBAC Indemnity Corporation.
CMO -- Collateralized Mortgage Obligation.
PAC -- Planned Amortization Class.
PLC -- Public Limited Company.
See Notes to Financial Statements
71
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $82,695,215) ........ $ 96,464,600
Interest receivable ........................................... 520,058
Dividends receivable .......................................... 53,061
Receivable for capital shares issued .......................... 27,100
Receivable from brokers for investment securities sold ........ 216,085
Unamortized organization costs ................................ 29,749
Prepaid expenses and other assets ............................. 7,069
-------------
Total assets .................................................... 97,317,722
-------------
LIABILITIES:
Dividends payable ............................................. 625,623
Payable for capital shares redeemed ........................... 2,500
Payable to brokers for investment securities purchased ........ 372,040
Accrued expenses and other liabilities:
Investment Advisory fees .................................... 44,776
Administration fees ......................................... 5,981
Shareholder Processing fees (Retail Shares) ................. 1,126
Combined Distribution and Service fees (Retail Shares) ...... 1,126
Custodian and transfer agent fees ........................... 17,531
Audit and legal fees ........................................ 9,305
Other liabilities ........................................... 43,685
-------------
Total liabilities ............................................... 1,123,693
-------------
NET ASSETS ...................................................... $ 96,194,029
-------------
-------------
Net Asset Value, Offering Price and Redemption Price per Share:
Retail Shares:
($5,592,307/425,405 shares of beneficial interest issued and
outstanding $0.001 par value, unlimited number of shares
authorized) ................................................ $ 13.15
-------------
-------------
Institutional Shares:
($90,601,722/6,955,495 shares of beneficial interest issued
and outstanding $0.001 par value, unlimited number of shares
authorized) ................................................ $ 13.03
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par ......................... $ 7,381
Additional paid-in capital .................................... 77,521,701
Accumulated undistributed net investment income ............... 4,062
Accumulated net realized gains on investment transactions ..... 4,891,500
Net unrealized appreciation of investments .................... 13,769,385
-------------
Net Assets, November 30, 1996 ................................... $ 96,194,029
-------------
-------------
</TABLE>
- ------------
See Notes to Financial Statements.
72
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the year ended November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends .......................................................... $ 600,320
Interest ........................................................... 2,433,041
------------
3,033,361
EXPENSES:
Investment Advisory fees ........................................... $ 497,924
Administration fees ................................................ 57,292
Shareholder Processing fees (Retail Shares) ........................ 10,343
Combined Distribution and Service fees (Retail Shares) ............. 10,046
Combined Distribution and Service fees (B Shares) .................. 6,867
Transfer agent fees and expenses ................................... 44,566
Custodian fees and expenses ........................................ 50,012
Legal fees ......................................................... 660
Audit fees ......................................................... 7,454
Reports to shareholders (Institutional Shares) ..................... 31,690
Amortization of organization costs ................................. 12,511
Registration fees .................................................. 31,979
Trustees' fees ..................................................... 3,569
Other expenses ..................................................... 11,213
-----------
776,126
Less: Fee waivers and expense reimbursements ......................... (177,405) 598,721
----------- ------------
Net Investment Income: ............................................... 2,434,640
------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS:
Net realized gains on securities transactions ...................... 4,997,685
Net change in unrealized appreciation of investments ............... 4,435,765
------------
Net Realized and Unrealized Gains on Investments ..................... 9,433,450
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................. $ 11,868,090
------------
------------
</TABLE>
- ------------
See Notes to Financial Statements.
73
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
------------------------
NOVEMBER NOVEMBER
30, 1996 30, 1995
----------- -----------
INCREASE (DECREASE) IN NET ASSETS:
<S> <C> <C>
Operations
Net investment income .......................................... $ 2,434,640 $ 2,170,814
Net realized gains on securities transactions .................. 4,997,685 2,133,006
Net change in unrealized appreciation of investments ........... 4,435,765 10,437,485
----------- -----------
Net increase in net assets resulting from operations ........... 11,868,090 14,741,305
----------- -----------
Dividends to shareholders from net investment income
Retail Shares .................................................. (99,865) (23,530)
B Shares ....................................................... (13,670) (40,515)
Institutional Shares ........................................... (2,310,316) (2,106,769)
----------- -----------
Total dividends to shareholders from net investment income ....... (2,423,851) (2,170,814)
----------- -----------
Distributions to shareholders from net realized gains
Retail Shares .................................................. (22,583) --
B Shares ....................................................... (45,345) --
Institutional Shares ........................................... (1,363,343) --
----------- -----------
Total distributions to shareholders from net realized gains ...... (1,431,271) --
----------- -----------
Fund Share Transactions
Net proceeds from shares subscribed ............................ 34,090,512 21,231,603
Net asset value of shares issued to shareholders in reinvestment
of dividends ................................................. 3,156,752 2,659,558
Cost of shares redeemed ........................................ (26,281,039) (12,151,179)
----------- -----------
Net increase in net assets from Fund share transactions ........ 10,966,225 11,739,982
----------- -----------
Total Increase ................................................... 18,979,193 24,310,473
Net Assets:
Beginning of period ............................................ 77,214,836 52,904,363
----------- -----------
End of period (including accumulated undistributed net
investment income of $4,062 and $0, respectively)............. $96,194,029 $77,214,836
----------- -----------
----------- -----------
</TABLE>
- -------------
See Notes to Financial Statements.
74
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL
RATINGS MATURITY AMOUNT VALUE
(UNAUDITED) RATE DATE (000) (NOTE 2)
----------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
LONG-TERM INVESTMENTS -- 96.5%
CORPORATE OBLIGATIONS -- 52.8%
BANKS - REGIONAL -- 2.1%
Boatmen's Bancshares, Inc., Corporate Note ............... A3/A- 9.25 % 11/1/01 $ 1,000 $ 1,122,303
------------
CONSTRUCTION/AGRICULTURE EQUIPMENT -- 5.6%
Alco Capital Resources, Inc., Medium Term Note ........... A3/A- 7.33 3/27/98 1,000 1,018,524
Caterpillar Finance Corp., Medium Term Note .............. A2/A 6.84 9/15/99 1,000 1,020,109
PACCAR Financial Corp., Corporate Note ................... A1/AA- 6.31 7/15/98 1,000 1,008,431
------------
3,047,064
------------
DEPARTMENT STORES -- 1.6%
Sears Roebuck Acceptance Corp., Series I, Corporate
Note ................................................... A2/A- 5.67 2/7/01 900 882,920
------------
ELECTRIC UTILITIES -- 10.3%
Arizona Public Service, Corporate Note ................... Baa1/BBB+ 5.75 9/15/00 1,700 1,663,112
Duke Power Company, Corporate Bond ....................... Aa2/AA- 8.00 11/1/99 1,000 1,051,051
Potomac Capital Investment Corp., Medium Term Note ....... Baa1/BBB+ 7.25 7/15/97 750 757,350
Southern California Edison, Series 93-E, Corporate
Note ................................................... A2/A+ 5.45 6/15/98 500 496,544
Southern California Edison, Corporate Note ............... A3/A 5.88 1/15/01 900 888,529
Virginia Electric & Power, Series D, Medium Term Note .... A3/A- 7.91 12/13/01 700 749,084
------------
5,605,670
------------
FINANCE COMPANIES -- 7.9%
Associates Corp., Corporate Note ......................... Aa3/AA- 7.50 5/15/99 1,000 1,034,163
Associates Corp., N.A., Corporate Note ................... Aa3/AA- 7.88 9/30/01 1,500 1,599,352
Lehman Brothers Holdings, Inc., Medium Term Note ......... Baa1/A 8.44 3/10/99 1,550 1,620,406
------------
4,253,921
------------
FINANCIAL SERVICES -- 3.7%
Paine Webber Group, Corporate Note ....................... Baa1/BBB+ 6.25 6/15/98 2,000 2,004,052
------------
FINANCIAL SERVICES ABS CREDIT CARDS -- 5.1%
Chase Manhattan Credit Card Master Trust, 1996-4, Class
A ...................................................... Aaa/AAA 6.73 2/15/03 1,000 1,021,860
Citibank Credit Card Master Trust I, 1996-1, Class A ..... Aaa/AAA 0.00 2/7/03 2,226 1,734,143
------------
2,756,003
------------
INVESTMENT BANKERS -- 4.0%
Donaldson, Lufkin & Jenrette, Medium Term Note, Putable
2/15/01 @ 100 .......................................... Baa1/A- 5.63 2/15/16 500 484,631
Goldman Sachs, Corporate Note** .......................... NR/A+ 6.20 12/15/00 1,000 995,411
Merrill Lynch & Co., Inc., Corporate Note ................ Aa3/A+ 10.38 2/1/99 149 161,892
</TABLE>
75
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL
RATINGS MATURITY AMOUNT VALUE
(UNAUDITED) RATE DATE (000) (NOTE 2)
----------- ------------ ---------- ---------- ------------
INVESTMENT BANKERS -- (CONTINUED)
<S> <C> <C> <C> <C> <C>
Morgan Stanley Group, Inc., Corporate Note ............... A1/A+ 7.50 % 9/1/99 $ 500 $ 517,981
------------
2,159,915
------------
MEDICAL SPECIALTIES -- 1.9%
Bausch & Lomb, Inc., Medium Term Note, Putable 8/31/01 @
100 .................................................... A3/A 6.56 8/12/26 1,000 1,013,939
------------
MOTOR VEHICLES -- 6.9%
Ford Motor Credit Co., Corporate Note .................... A1/A+ 9.38 12/15/97 500 517,631
Ford Motor Credit Co., Medium Term Note .................. A1/A+ 6.11 12/28/01 1,000 990,795
Ford Motor Credit Co., Medium Term Note .................. A1/A+ 5.67 2/15/01 1,500 1,468,405
General Motor Acceptance Corp., Corporate Note ........... A3/A- 7.13 6/1/99 250 256,451
General Motor Acceptance Corp., Corporate Note ........... A3/A- 7.50 5/23/00 500 521,622
------------
3,754,904
------------
NON U.S. BANKS -- 2.8%
Banco Latinoamericano, Medium Term Note** ................ Baa2/BBB 7.05 7/19/99 1,500 1,518,450
------------
RENTAL/LEASING -- 0.9%
International Lease Finance Corp., Series G, Corporate
Note ................................................... A1/A+ 7.00 8/15/98 500 509,833
------------
TOTAL CORPORATE OBLIGATIONS (COST $28,352,419).............. 28,628,974
------------
TAXABLE MUNICIPAL BOND -- 1.8%
CALIFORNIA -- 1.8%
Los Angeles Airport, U.S. Taxable Municipal Bonds,
Callable 5/15/97 @ 100 (Insured by AMBAC) .............. Aaa/AAA 5.50 5/15/98 1,000 994,725
------------
TOTAL TAXABLE MUNICIPAL BOND (COST $984,754)................ 994,725
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 23.8%
FEDERAL HOME LOAN BANK -- 2.8%
Federal Home Loan Bank, Callable 12/26/96 @ 100 .......... Aaa/AAA*** 6.32 12/26/00 500 499,376
Federal Home Loan Bank, Callable 7/2/97 @ 100 ............ Aaa/AAA*** 7.41 7/2/01 1,000 1,008,825
------------
1,508,201
------------
FEDERAL HOME LOAN MORTGAGE CORP. -- 9.7%
Federal Home Loan Mortgage Corp., 5 Year Balloon, Pool
#M13297 ................................................ Aaa/AAA*** 7.00 4/1/97 841 845,955
Federal Home Loan Mortgage Corp., 5 Year Balloon, Pool
#M13323 ................................................ Aaa/AAA*** 7.00 4/1/97 670 673,515
Federal Home Loan Mortgage Corp., Pool #M90178 ........... Aaa/AAA*** 5.50 4/1/98 871 867,276
Federal Home Loan Mortgage Corp., Pool #G50051, CMO ...... Aaa/AAA*** 5.50 12/1/98 899 895,138
Federal Home Loan Mortgage Corp., 5 Year Balloon, Pool
#G50160 ................................................ Aaa/AAA*** 5.50 4/1/99 967 962,699
Federal Home Loan Mortgage Corp., Pool #L74041 ........... Aaa/AAA*** 7.50 9/1/01 996 1,017,958
------------
5,262,541
------------
FEDERAL NATIONAL MORTGAGE ASSOC. -- 11.3%
Federal National Mortgage Assoc., Variable Rate Note* .... Aaa/AAA*** 5.61 4/15/97 500 500,310
</TABLE>
76
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL
RATINGS MATURITY AMOUNT VALUE
(UNAUDITED) RATE DATE (000) (NOTE 2)
----------- ------------ ---------- ---------- ------------
FEDERAL NATIONAL MORTGAGE ASSOC. -- (CONTINUED)
<S> <C> <C> <C> <C> <C>
Federal National Mortgage Assoc., 7 Year Balloon, Pool
#303016 ................................................ Aaa/AAA*** 6.00 % 6/1/01 $ 1,162 $ 1,157,226
Federal National Mortgage Assoc., Pool #250645 ........... Aaa/AAA*** 7.00 8/1/03 991 1,002,724
Federal National Mortgage Assoc., Pool #334092 ........... Aaa/AAA*** 6.00 5/1/04 1,442 1,430,646
Federal National Mortgage Assoc., Pool #356820 ........... Aaa/AAA*** 7.50 11/1/09 1,969 2,017,103
------------
6,108,009
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (COST
$12,760,325).............................................. 12,878,751
------------
U.S. GOVERNMENT OBLIGATIONS -- 18.1%
U.S. Treasury Notes ...................................... Aaa/AAA*** 6.25 7/31/98 1,000 1,011,251
U.S. Treasury Notes ...................................... Aaa/AAA*** 6.13 8/31/98 3,000 3,028,128
U.S. Treasury Notes ...................................... Aaa/AAA*** 6.00 8/15/99 4,700 4,738,192
U.S. Treasury Notes ...................................... Aaa/AAA*** 6.88 3/31/00 1,000 1,034,063
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(COST $9,727,293)......................................... 9,811,634
------------
TOTAL LONG-TERM INVESTMENTS (COST $51,824,791).............. 52,314,084
------------
<CAPTION>
SHARES
----------
<S> <C> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 2.6%
OPEN-END INVESTMENT COMPANIES -- 2.6%
Provident Cash Management Fund ........................... 1,401,874 1,401,874
------------
TOTAL SHORT-TERM INVESTMENTS (COST $1,401,874).............. 1,401,874
------------
TOTAL INVESTMENTS (COST $53,226,665) (A) -- 99.1%........... 53,715,958
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.9%............... 468,694
------------
NET ASSETS -- 100.0%........................................ $ 54,184,652
------------
------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $54,184,652.
(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....... $ 525,425
Unrealized depreciation....... (36,132)
----------
Net unrealized appreciation... $ 489,293
----------
----------
* Variable rate security. Rate listed is rate in effect at November 30, 1996.
Maturity date reflects the next rate change date.
** Represents a 144a security which is restricted as to resale to institutional
investors.
*** Implied rating.
AMBAC -- AMBAC Indemnity Corporation.
CMO -- Collateralized Mortgage Obligation.
NR -- No Moody's rating available.
See Notes to Financial Statements.
77
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $53,226,665) ........ $ 53,715,958
Interest receivable ........................................... 737,351
Unamortized organization costs ................................ 29,713
Prepaid expenses and other assets ............................. 6,024
-------------
Total assets .................................................... 54,489,046
-------------
LIABILITIES:
Dividends payable ............................................. 258,517
Accrued expenses and other liabilities:
Investment Advisory fees .................................... 13,424
Administration fees ......................................... 3,374
Shareholder Processing fees (Retail Shares) ................. 202
Combined Distribution and Service fees (Retail Shares) ...... 202
Custodian and transfer agent fees ........................... 6,265
Audit and legal fees ........................................ 9,135
Other liabilities ........................................... 13,275
-------------
Total liabilities ............................................... 304,394
-------------
NET ASSETS ...................................................... $ 54,184,652
-------------
-------------
Net Asset Value, Offering Price and Redemption Price per Share:
Retail Shares:
($985,043/97,811 shares of beneficial interest issued and
outstanding $0.001 par value, unlimited number of shares
authorized) ................................................ $ 10.07
-------------
-------------
Institutional Shares:
($53,199,609/5,282,359 shares of beneficial interest issued
and outstanding $0.001 par value, unlimited number of shares
authorized) ................................................ $ 10.07
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par ......................... $ 5,380
Additional paid-in capital .................................... 53,629,160
Accumulated net realized gains on investment transactions ..... 60,819
Net unrealized appreciation of investments .................... 489,293
-------------
Net Assets, November 30, 1996 ................................... $ 54,184,652
-------------
-------------
</TABLE>
- ------------
See Notes to Financial Statements.
78
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the year ended November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends ............................................................ $ 70,484
Interest ............................................................. 1,449,947
------------
1,520,431
EXPENSES:
Investment Advisory fees ........................................... $ 95,921
Administration fees ................................................ 17,019
Shareholder Processing fees (Retail Shares) ........................ 1,914
Combined Distribution and Service fees (Retail Shares) ............. 1,980
Combined Distribution and Service fees (B Shares) .................. 366
Transfer agent fees and expenses ................................... 39,396
Custodian fees and expenses ........................................ 7,997
Audit fees ......................................................... 8,174
Reports to shareholders (Institutional Shares) ..................... 10,325
Amortization of organization costs ................................. 12,565
Registration fees .................................................. 29,507
Trustees' fees ..................................................... 1,037
Other expenses ..................................................... 4,393
-----------
230,594
Less: Fee waivers and expense reimbursements ......................... (97,115)
Expenses paid by third parties ................................... (2,432) 131,047
----------- ------------
Net Investment Income ................................................ 1,389,384
------------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS:
Net realized gains on securities transactions 57,368
Net change in unrealized appreciation of investments ............... 238,110
------------
Net Realized and Unrealized Gains on Investments ..................... 295,478
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................. $ 1,684,862
------------
------------
</TABLE>
- ------------
See Notes to Financial Statements.
79
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
-------------------------
NOVEMBER NOVEMBER
30, 1996 30, 1995
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income ..................... $ 1,389,384 $ 1,289,182
Net realized gains on securities
transactions ............................ 57,368 51,616
Net change in unrealized appreciation of
investments ............................. 238,110 806,674
----------- -----------
Net increase in net assets resulting from
operations .............................. 1,684,862 2,147,472
----------- -----------
Dividends to shareholders from net investment
income
Retail Shares ............................. (42,845) (15,632)
B Shares .................................. (2,024) (4,862)
Institutional Shares ...................... (1,344,515) (1,268,688)
----------- -----------
Total dividends to shareholders from net
investment income ......................... (1,389,384) (1,289,182)
----------- -----------
Distributions to shareholders from net
realized gains
Retail Shares ............................. (983) --
B Shares .................................. (531) --
Institutional Shares ...................... (46,651) --
----------- -----------
Total distributions to shareholders from net
realized gains ............................ (48,165) --
----------- -----------
Fund Share Transactions
Net proceeds from shares subscribed ....... 47,095,330 11,311,423
Net asset value of shares issued to
shareholders in reinvestment of
dividends ............................... 444,481 1,086,235
Cost of shares redeemed ................... (8,137,532) (22,595,293)
----------- -----------
Net increase (decrease) in net assets from
Fund share transactions ................. 39,402,279 (10,197,635)
----------- -----------
Total Increase (Decrease) ................... 39,649,592 (9,339,345)
NET ASSETS:
Beginning of period ....................... 14,535,060 23,874,405
----------- -----------
End of period ............................. $54,184,652 $14,535,060
----------- -----------
----------- -----------
</TABLE>
- ------------
See Notes to Financial Statements.
80
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY PRINCIPAL VALUE
RATE DATE AMOUNT (NOTE 2)
------------ ---------- ---------- ------------
<S> <C> <C> <C> <C>
LONG-TERM INVESTMENTS -- 98.0%
U.S GOVERNMENT AGENCY OBLIGATIONS -- 84.1%
FEDERAL HOME LOAN BANK -- 8.8%
Federal Home Loan Bank, Callable 9/5/97 @ 100 ............ 7.00 % 9/5/01 $1,000,000 $ 1,016,806
Federal Home Loan Bank ................................... 7.20 6/14/11 4,000,000 4,280,336
------------
5,297,142
------------
FEDERAL HOME LOAN MORTGAGE CORP. -- 33.3%
Federal Home Loan Mortgage Corp., Callable 1/16/97 @
100 .................................................... 8.20 1/16/98 1,500,000 1,502,223
Federal Home Loan Mortgage Corp., 5 Year Balloon, Gold ... 7.00 2/1/98 277,245 280,610
Federal Home Loan Mortgage Corp., 5 Year Balloon, Pool
#M17443 ................................................ 7.00 3/1/98 245,177 248,154
Federal Home Loan Mortgage Corp., 7 Year Balloon, Gold
Pool #M80156 ........................................... 6.50 3/1/00 356,471 359,790
Federal Home Loan Mortgage Corp., 7 Year Balloon, Pool
#M80332 ................................................ 7.50 8/1/01 1,503,497 1,545,369
Federal Home Loan Mortgage Corp., Gold Pool #200053 ...... 8.50 9/1/01 1,524,646 1,574,105
Federal Home Loan Mortgage Corp., 7 Year Balloon, Gold
Pool #M80358 ........................................... 9.00 2/1/02 857,171 889,375
Federal Home Loan Mortgage Corp., Pool #N96694 ........... 7.00 7/1/03 1,013,839 1,027,556
Federal Home Loan Mortgage Corp., 7 Year Balloon, Gold
Pool #FGN97107 ......................................... 6.50 10/1/03 1,998,358 2,001,036
Federal Home Loan Mortgage Corp., Debenture, Callable
2/2/00 @ 100 ........................................... 8.53 2/2/05 1,000,000 1,065,047
Federal Home Loan Mortgage Corp., Debenture, Callable
11/22/01 @ 100 ......................................... 6.88 11/22/06 2,000,000 2,000,000
Federal Home Loan Mortgage Corp., Debenture, Callable
10/29/98 @ 100 ......................................... 6.08 10/29/08 2,200,000 2,112,488
Federal Home Loan Mortgage Corp., Gold Pool #D90560 ...... 5.50 12/1/13 364,158 346,526
Federal Home Loan Mortgage Corp., CMO PAC 1212-CA ........ 6.50 7/15/16 1,774,106 1,779,251
Federal Home Loan Mortgage Corp., Gold Pool #306558 ...... 9.25 6/1/18 2,268,093 2,392,928
Federal Home Loan Mortgage Corp., Pool #308392 ........... 10.00 9/1/18 108,873 118,715
Federal Home Loan Mortgage Corp., CMO 1508-MA ............ 6.31 5/15/23 787,179 749,786
------------
19,992,959
------------
FEDERAL NATIONAL MORTGAGE ASSOC. -- 16.4%
Federal National Mortgage Assoc., Pool #108471 ........... 9.00 11/1/97 137,621 139,293
Federal National Mortgage Assoc., 7 Year Balloon, Pool
#50394 ................................................. 8.50 1/1/98 119,821 122,760
Federal National Mortgage Assoc., 7 Year Balloon, Pool
#124418 ................................................ 8.00 8/1/99 3,303,560 3,387,173
Federal National Mortgage Assoc., Pool #303478 ........... 8.50 11/1/01 1,127,589 1,155,249
Federal National Mortgage Assoc., Pool #250645 ........... 7.00 8/1/03 1,079,051 1,091,967
Federal National Mortgage Assoc., Callable 10/1/99 @
100 .................................................... 7.18 10/1/03 1,500,000 1,541,872
Federal National Mortgage Assoc., Medium Term Note ....... 6.72 8/1/05 1,000,000 1,028,139
Federal National Mortgage Assoc., Pool #70056 ............ 9.00 12/1/16 354,185 374,600
Federal National Mortgage Assoc., CMO, Series 1993-54,
Class VB ............................................... 7.00 2/25/04 1,000,000 1,023,882
------------
9,864,935
------------
GOVERNMENT NATIONAL MORTGAGE ASSOC. -- 11.9%
Government National Mortgage Assoc., Pool #145690 ........ 11.00 3/15/01 31,952 34,420
Government National Mortgage Assoc., Pool #265082 ........ 9.50 3/15/04 141,489 150,631
Government National Mortgage Assoc., Pool #270156 ........ 9.50 4/15/04 136,902 145,747
Government National Mortgage Assoc., Pool #044868 ........ 13.00 1/15/11 9,315 10,854
</TABLE>
81
<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 #040767 ........ 13.00 % 2/15/11 $ 36,203 $ 42,185
Government National Mortgage Assoc., Pool #045234 ........ 13.00 2/15/11 16,306 19,000
Government National Mortgage Assoc., Pool #045855 ........ 13.00 4/15/11 28,113 32,758
Government National Mortgage Assoc., Pool #253768 ........ 9.00 6/15/18 51,800 55,804
Government National Mortgage Assoc., Pool #254348 ........ 10.00 10/15/18 22,883 25,261
Government National Mortgage Assoc., Pool #315147 ........ 8.00 3/15/22 1,480,654 1,535,334
Government National Mortgage Assoc., Pool #339902 ........ 8.00 2/15/23 1,344,477 1,392,757
Government National Mortgage Assoc., Pool #392713 ........ 8.00 11/15/24 1,224,632 1,268,008
Government National Mortgage Assoc., Pool #395392 ........ 8.50 4/15/25 2,340,280 2,448,003
------------
7,160,762
------------
OTHER -- 13.7%
Export Funding Trust, Callable 11/15/99 @ 106.16 ......... 8.21 12/29/06 1,831,742 1,999,896
Tennessee Valley Authority, Callable 9/15/99 @ 100 ....... 8.62 11/15/29 1,500,000 1,648,599
Tennessee Valley Authority, Callable 9/15/99 @100 ........ 8.25 9/15/34 500,000 515,219
Tennessee Valley Authority, Putable 4/1/98 @ 100 ......... 5.98 4/1/36 4,000,000 4,077,607
------------
8,241,321
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (COST
$48,905,796).............................................. 50,557,119
------------
U.S. GOVERNMENT OBLIGATIONS -- 13.9%
U.S. TREASURY BONDS/NOTE -- 11.5%
U.S. Treasury Bond, Callable 11/15/05 @ 100 .............. 12.75 11/15/10 2,500,000 3,624,220
U.S. Treasury Bond ....................................... 8.13 8/15/21 1,000,000 1,201,251
U.S. Treasury Note ....................................... 6.25 10/31/01 2,000,000 2,035,002
------------
6,860,473
------------
U.S. TREASURY STRIPS -- 2.4%
U.S. Treasury Strip ...................................... 5.93 + 11/15/05 2,500,000 1,452,245
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS (COST $8,160,632)......... 8,312,718
------------
TOTAL LONG-TERM INVESTMENTS (COST $57,066,428).............. 58,869,837
------------
<CAPTION>
SHARES
----------
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 1.5%
OPEN-END INVESTMENT COMPANIES -- 1.5%
Dreyfus Cash Management Fund ............................. 682,801 682,801
Provident Institutional Trust Money Market Fund .......... 237,951 237,951
------------
TOTAL SHORT-TERM INVESTMENTS (COST $920,752)................ 920,752
------------
TOTAL INVESTMENTS (COST $57,987,180) (A) -- 99.5%........... 59,790,589
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.5%............... 309,237
------------
NET ASSETS -- 100.0%........................................ $ 60,099,826
------------
------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $60,099,826.
(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....... $ 1,874,561
Unrealized depreciation....... (71,152)
------------
Net unrealized appreciation... $ 1,803,409
------------
------------
+ Effective yield at date of issuance.
CMO -- Collateralized Mortgage Obligation.
PAC -- Planned Amortization Class.
See Notes to Financial Statements.
82
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $57,987,180)......... $ 59,790,589
Interest receivable............................................ 651,302
Receivable for capital shares issued........................... 2,237
Receivable from brokers for investment securities sold......... 37,795
Prepaid expenses and other assets.............................. 4,263
-------------
Total assets..................................................... 60,486,186
-------------
LIABILITIES:
Dividends payable.............................................. 313,944
Payable for capital shares redeemed............................ 9,111
Accrued expenses and other liabilities:
Investment Advisory fees..................................... 19,087
Administration fees.......................................... 3,763
Shareholder Processing fees (Retail Shares).................. 4,657
Combined Distribution and Service fees (Retail Shares)....... 4,657
Custodian and transfer agent fees............................ 12,228
Audit and legal fees......................................... 8,506
Other liabilities............................................ 10,407
-------------
Total liabilities................................................ 386,360
-------------
NET ASSETS....................................................... $ 60,099,826
-------------
-------------
Net Asset Value, Offering Price and Redemption Price per Share:
Retail Shares:
($22,631,329/2,197,169 shares of beneficial interest issued
and outstanding $0.001 par value, unlimited number of shares
authorized)................................................. $ 10.30
-------------
-------------
Institutional Shares:
($37,468,497/3,647,459 shares of beneficial interest issued
and outstanding $0.001 par value, unlimited number of shares
authorized)................................................. $ 10.27
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par.......................... $ 5,845
Additional paid-in capital..................................... 61,935,268
Distributions in excess of net investment income............... (7,547)
Accumulated net realized losses on investment transactions..... (3,637,149)
Net unrealized appreciation of investments..................... 1,803,409
-------------
Net Assets, November 30, 1996.................................... $ 60,099,826
-------------
-------------
</TABLE>
- ------------
See Notes to Financial Statements.
83
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the year ended November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends ........................................... $ 69,482
Interest ............................................ 4,712,582
-----------
4,782,064
EXPENSES:
Investment Advisory fees ............................ $ 270,222
Administration fees ................................. 66,634
Shareholder Processing fees (Retail Shares) ......... 28,849
Combined Distribution and Service fees (Retail
Shares) ........................................... 61,311
Combined Distribution and Service fees (B Shares) ... 3,907
Transfer agent fees and expenses .................... 40,637
Custodian fees and expenses ......................... 22,556
Legal fees .......................................... 2,280
Audit fees .......................................... 8,380
Reports to shareholders (Retail Shares) ............. 7,438
Reports to shareholders (Institutional Shares) ...... 14,660
Amortization of organization costs .................. 11,447
Registration fees ................................... 31,524
Trustees' fees ...................................... 3,525
Other expenses ...................................... 9,459
-----------
582,829
Less: Expense reimbursements .......................... (14,052) 568,777
----------- -----------
Net Investment Income ................................. 4,213,287
-----------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized gains on securities transactions ....... 664,448
Net change in unrealized appreciation of
investments ....................................... (1,517,543)
-----------
Net Realized and Unrealized Losses on Investments ..... (853,095)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS .......................................... $ 3,360,192
-----------
-----------
</TABLE>
- ------------
See Notes to Financial Statements.
84
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
------------------------
NOVEMBER NOVEMBER
30, 1996 30, 1995
----------- -----------
INCREASE (DECREASE) IN NET ASSETS:
<S> <C> <C>
Operations
Net investment income ......................................... $ 4,213,287 $ 6,633,314
Net realized gains (losses) on securities transactions ........ 664,448 (96,694)
Net change in unrealized appreciation (depreciation) of
investments ................................................. (1,517,543) 6,904,058
----------- -----------
Net increase in net assets resulting from operations .......... 3,360,192 13,440,678
----------- -----------
Dividends to shareholders from net investment income
Retail Shares ................................................. (1,466,587) (1,785,749)
B Shares ...................................................... (21,601) (80,467)
Institutional Shares .......................................... (2,726,113) (4,773,631)
----------- -----------
Total dividends to shareholders from net investment income ...... (4,214,301) (6,639,847)
----------- -----------
Fund Share Transactions
Net proceeds from shares subscribed ........................... 19,998,532 11,569,600
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions ................. 2,641,946 5,409,402
Cost of shares redeemed ....................................... (64,773,650) (22,116,958)
----------- -----------
Net decrease in net assets from Fund share transactions ....... (42,133,172) (5,137,956)
----------- -----------
Total Increase (Decrease) ....................................... (42,987,281) 1,662,875
NET ASSETS:
Beginning of period ........................................... 103,087,107 101,424,232
----------- -----------
End of period (including distributions in excess of net
investment income of $7,547 and $6,533, respectively) ....... $60,099,826 $103,087,107
----------- -----------
----------- -----------
</TABLE>
- ------------
See Notes to Financial Statements.
85
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL
RATINGS MATURITY AMOUNT VALUE
(UNAUDITED) RATE DATE (000) (NOTE 2)
------------- ------ --------- -------- ------------
<S> <C> <C> <C> <C> <C>
LONG-TERM INVESTMENTS -- 98.1%
CORPORATE OBLIGATIONS -- 34.2%
CONSTRUCTION/AGRICULTURE EQUIPMENT -- 2.8%
Caterpillar, Inc., Putable 5/12/97 @ 100 ........................... A2/A 8.95% 5/12/00 $ 2,000 $ 2,167,078
------------
ELECTRIC UTILITIES - CENTRAL -- 1.4%
Central Illinois Public Service Co., Callable 5/15/97 @ 106.37 ..... Aa1/AA+ 8.50 5/15/22 1,000 1,072,836
------------
ELECTRIC UTILITIES - EAST -- 3.7%
Citizens Utilities Co., Putable 10/1/01 @ 100....................... Aa3/AA+ 7.68 10/1/34 1,750 1,984,554
Citizens Utilities Co., Putable 8/15/03 @ 100....................... Aa3/AA+ 6.80 8/15/26 825 858,561
------------
2,843,115
------------
ENVIRONMENTAL SERVICES -- 1.3%
WMX Technologies, Inc., Putable 5/15/00 @ 100....................... A1/A+ 6.65 5/15/05 1,000 1,023,668
------------
FINANCIAL SERVICES -- 4.0%
Travelers Group, Inc., Putable 6/1/05 @ 100......................... A1/A+ 6.88 6/1/25 3,000 3,074,475
------------
INSURANCE - PROPERTY & CASUALTY -- 2.8%
General Re Corp., Series A.......................................... Aa1/AAA 9.00 9/12/09 1,800 2,137,050
------------
INVESTMENT BANKERS -- 1.3%
Merrill Lynch Corp., Medium Term Note,
Series B (b)...................................................... Aa3/A+ 7.25 6/14/04 1,000 1,008,853
------------
MAJOR CHEMICALS -- 0.7%
Monsanto Co. -- ESOP Debenture...................................... A1/A 8.13 12/15/06 500 550,096
------------
MAJOR U.S. TELECOMMUNICATIONS -- 1.7%
General Telephone of Northwest, Series BB,
Callable 4/15/97 @ 103.26......................................... A1/A+ 8.75 4/15/16 1,305 1,354,303
------------
MEDICAL SPECIALTIES -- 2.6%
Bausch & Lomb, Medium Term Note,
Putable 8/13/01 @ 100............................................. A3/A 6.56 8/12/26 2,000 2,027,878
------------
MOTOR VEHICLES -- 1.3%
Ford Motor Credit Co................................................ A1/A+ 6.65 8/7/00 1,000 1,015,199
------------
OTHER METALS/MINERALS -- 3.6%
BHP Finance USA Ltd., Putable 3/1/03 @ 100.......................... A2/A 6.42 3/1/26 2,750 2,753,844
------------
</TABLE>
86
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL
RATINGS MATURITY AMOUNT VALUE
(UNAUDITED) RATE DATE (000) (NOTE 2)
------------- ------ --------- -------- ------------
<S> <C> <C> <C> <C> <C>
OTHER TELECOMMUNICATIONS -- 7.0%
British Telecommunications Finance Yankee Bond, Callable 2/15/99 @
104.74............................................................ Aaa/AAA 9.63% 2/15/19 $ 2,000 $ 2,223,872
MCI Communications, Putable 6/15/03 @ 100........................... A2/A 7.13 6/15/27 3,000 3,170,127
------------
5,393,999
------------
TOTAL CORPORATE OBLIGATIONS (COST $25,950,003)........................ 26,422,394
------------
FOREIGN GOVERNMENT AGENCIES -- 4.4%
Hydro-Quebec, Debenture, Putable 7/7/06 @ 100....................... A2/A+ 8.05 7/7/24 3,000 3,391,050
------------
TOTAL FOREIGN GOVERNMENT AGENCIES
(COST $3,202,305)................................................... 3,391,050
------------
TAXABLE MUNICIPAL BONDS -- 3.5%
CALIFORNIA -- 2.8%
Los Angeles Airport, Callable 5/15/97 @ 100
(Insured by AMBAC)................................................ Aaa/AAA 5.50 5/15/98 500 497,362
Los Angeles County, Pension Obligation,
Series A (Insured by MBIA)........................................ Aaa/AAA 8.30 6/30/02 1,500 1,637,836
------------
2,135,198
------------
FLORIDA -- 0.7%
Miami Beach, Pension Funding Project,
Callable 9/1/05 @ 102 (Insured by AMBAC).......................... Aaa/AAA 8.55 9/1/15 500 554,786
------------
TOTAL TAXABLE MUNICIPAL BONDS (COST $2,562,164)....................... 2,689,984
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 38.0%
FEDERAL HOME LOAN BANK -- 2.8%
Federal Home Loan Bank.............................................. Aaa/AAA* 7.20 6/14/11 2,000 2,140,168
------------
FEDERAL HOME LOAN MORTGAGE CORP. -- 16.5%
Federal Home Loan Mortgage Corp., CMO,
Series 1166, Class B.............................................. Aaa/AAA* 8.00 11/15/98 1,734 1,769,301
Federal Home Loan Mortgage Corp.,
Pool # L90152..................................................... Aaa/AAA* 8.00 2/1/00 1,595 1,635,986
Federal Home Loan Mortgage Corp.,
Pool # 200032..................................................... Aaa/AAA* 9.00 4/1/01 2 1,959
Federal Home Loan Mortgage Corp.,
Pool # 200040..................................................... Aaa/AAA* 9.00 6/1/01 4 4,104
Federal Home Loan Mortgage Corp., Gold #FGN97107, 7 Year Balloon,
CMO............................................................... Aaa/AAA* 6.50 10/1/03 999 1,000,518
Federal Home Loan Mortgage Corp.,
Pool # 380070..................................................... Aaa/AAA* 9.00 1/1/05 136 142,397
Federal Home Loan Mortgage Corp..................................... Aaa/AAA* 6.64 3/13/06 2,000 1,996,196
Federal Home Loan Mortgage Corp..................................... Aaa/AAA* 7.58 3/27/06 2,300 2,300,000
Federal Home Loan Mortgage Corp., CMO,
Series 1212, Class CA............................................. Aaa/AAA* 6.50 7/15/16 591 593,083
Federal Home Loan Mortgage Corp., Series 25, Class F................ Aaa/AAA* 9.50 12/15/18 28 27,912
Federal Home Loan Mortgage Corp., CMO,
Series 1141, Class F.............................................. Aaa/AAA* 8.50 10/15/20 864 891,029
Federal Home Loan Mortgage Corp., CMO,
Series 1163, Class I.............................................. Aaa/AAA* 6.95 12/15/20 2,350 2,378,259
------------
12,740,744
------------
</TABLE>
87
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL
RATINGS MATURITY AMOUNT VALUE
(UNAUDITED) RATE DATE (000) (NOTE 2)
------------- ------ --------- -------- ------------
<S> <C> <C> <C> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOC. -- 12.1%
Federal National Mortgage Association,
Pool # 50609, 7 year Balloon Participation Certificate............ Aaa/AAA* 8.00% 6/1/99 $ 259 $ 265,768
Federal National Mortgage Association, Pool
# 304786, 7 Year Balloon Participation Certificate................ Aaa/AAA* 8.50 2/1/02 402 415,669
Federal National Mortgage Association, CMO,
Series G94-6, Class VB............................................ Aaa/AAA* 8.00 11/17/03 2,280 2,389,448
Federal National Mortgage Association,
Pool # 124975..................................................... Aaa/AAA* 7.50 8/1/08 766 784,895
Federal National Mortgage Association, CMO,
Series G94-7, Class A............................................. Aaa/AAA* 7.50 11/17/23 3,207 3,280,397
Federal National Mortgage Association,
Pool # 354613..................................................... Aaa/AAA* 7.50 9/1/26 472 478,773
Federal National Mortgage Association,
Pool # 358033..................................................... Aaa/AAA* 7.50 9/1/26 621 629,333
Federal National Mortgage Association,
Pool # 250700..................................................... Aaa/AAA* 8.00 10/1/26 1,092 1,124,594
------------
9,368,877
------------
GOVERNMENT NATIONAL MORTGAGE ASSOC. -- 4.0%
Government National Mortgage Association,
Pool# 133357...................................................... Aaa/AAA* 11.00 7/15/00 16 17,188
Government National Mortgage Association, Pool# 140135.............. Aaa/AAA* 11.00 11/15/00 37 39,819
Government National Mortgage Association, Pool# 44586............... Aaa/AAA* 13.00 1/15/11 4 5,055
Government National Mortgage Association, Pool# 44783............... Aaa/AAA* 13.00 1/15/11 40 46,414
Government National Mortgage Association, Pool# 045097.............. Aaa/AAA* 13.00 1/15/11 26 30,581
Government National Mortgage Association, Pool# 45753............... Aaa/AAA* 13.00 2/15/11 25 29,346
Government National Mortgage Association, Pool# 207980.............. Aaa/AAA* 8.00 5/15/17 15 15,380
Government National Mortgage Association, Pool# 200919.............. Aaa/AAA* 8.00 5/15/17 378 395,495
Government National Mortgage Association, Pool# 202853.............. Aaa/AAA* 9.00 7/15/17 263 283,236
Government National Mortgage Association, Pool# 432701.............. Aaa/AAA* 7.50 6/15/26 468 475,576
Government National Mortgage Association, Pool# 423836.............. Aaa/AAA* 8.00 8/15/26 469 484,072
Government National Mortgage Association, Pool# 430065.............. Aaa/AAA* 7.50 9/15/26 609 618,515
Government National Mortgage Association, Pool# 437545.............. Aaa/AAA* 8.00 9/15/26 609 628,695
------------
3,069,372
------------
TENNESSEE VALLEY AUTHORITY -- 2.6%
Tennessee Valley Authority, Putable 4/1/98 @ 100.................... Aaa/AAA* 5.98 4/1/36 2,000 2,038,804
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $28,844,553).................................................. 29,357,965
------------
</TABLE>
88
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL
RATINGS MATURITY AMOUNT VALUE
(UNAUDITED) RATE DATE (000) (NOTE 2)
------------- ------ --------- -------- ------------
<S> <C> <C> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS -- 18.0%
U.S. TREASURY BONDS/NOTES -- 13.1%
U.S. Treasury Bonds................................................. Aaa/AAA* 6.00% 2/15/26 $ 1,500 $ 1,416,564
U.S. Treasury Notes................................................. Aaa/AAA* 6.25 10/31/01 3,000 3,052,503
U.S. Treasury Notes................................................. Aaa/AAA* 7.00 7/15/06 5,300 5,649,471
------------
10,118,538
------------
U.S. TREASURY STRIPS -- 4.9%
U.S. Treasury Strips................................................ Aaa/AAA* 6.81+ 2/15/04 1,400 913,209
U.S. Treasury Strips................................................ Aaa/AAA* 6.92+ 5/15/09 2,500 1,143,607
U.S. Treasury Strips................................................ Aaa/AAA* 7.73+ 5/15/13 5,000 1,726,090
------------
3,782,906
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS (COST $13,390,910).................. 13,901,444
------------
TOTAL LONG-TERM INVESTMENTS (COST $73,949,935)........................ 75,762,837
------------
<CAPTION>
SHARES
--------
<S> <C> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 1.1%
OPEN-END INVESTMENT COMPANIES -- 1.1%
Provident Institutional Temporary Cash Fund......................... 822,065 822,065
------------
TOTAL SHORT-TERM INVESTMENTS (COST $822,065).......................... 822,065
------------
TOTAL INVESTMENTS (COST $74,772,000) (A) -- 99.2%..................... 76,584,902
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.8%......................... 630,707
------------
NET ASSETS -- 100.0%.................................................. $ 77,215,609
------------
------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $77,215,609.
(a) 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....... $ 1,989,066
Unrealized depreciation....... $ (176,164)
------------
Net unrealized appreciation... $ 1,812,902
------------
------------
(b) Callable 6/14/97 @ 100 at option of this issuer or interest rate will
step-up to 10.00%.
* Implied rating.
+ Effective yield at date of purchase.
<TABLE>
<S> <C> <C>
AMBAC AMBAC Indemnity Corporation.
CMO Collateralized Mortgage Obligation.
ESOP Employee Stock Ownership Plan.
MBIA Municipal Bond Insurance
Association.
</TABLE>
See Notes to Financial Statements.
89
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $74,772,000) ............................ $ 76,584,902
Interest receivable ............................................................... 1,157,339
Unamortized organization costs .................................................... 29,987
Prepaid expenses and other assets ................................................. 7,038
-------------
Total assets ........................................................................ 77,779,266
-------------
LIABILITIES:
Dividends payable ................................................................. 384,017
Payable for capital shares redeemed ............................................... 75,000
Accrued expenses and other liabilities:
Investment Advisory fees ........................................................ 22,409
Administration fees ............................................................. 4,814
Shareholder Processing fees (Retail Shares) ..................................... 731
Custodian and transfer agent fees ............................................... 8,886
Reports to shareholders fees .................................................... 37,542
Audit and legal fees ............................................................ 7,499
Other liabilities ............................................................... 22,759
-------------
Total liabilities ................................................................... 563,657
-------------
NET ASSETS .......................................................................... $ 77,215,609
-------------
-------------
Net Asset Value, Offering Price and Redemption Price per Share:
Retail Shares:
($1,696,898/162,938 shares of beneficial interest issued and outstanding $0.001
par value, unlimited number of shares authorized) .............................. $ 10.41
-------------
-------------
Institutional Shares:
($75,518,711/7,284,823 shares of beneficial interest issued and outstanding
$0.001 par value, unlimited number of shares authorized) ....................... $ 10.37
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par ............................................. $ 7,448
Additional paid-in capital ........................................................ 74,827,118
Accumulated net realized gains on investment transactions ......................... 568,141
Net unrealized appreciation of investments ........................................ 1,812,902
-------------
Net Assets, November 30, 1996 ....................................................... $ 77,215,609
-------------
-------------
</TABLE>
- ------------
See Notes to Financial Statements.
90
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the year ended November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends........................................................... $ 82,066
Interest............................................................ 4,772,502
----------
4,854,568
EXPENSES:
Investment Advisory fees............................................ $ 282,877
Administration fees................................................. 48,400
Shareholder Processing fees (Retail Shares)......................... 4,182
Combined Distribution and Service fees (Retail Shares).............. 3,565
Combined Distribution and Service fees (B Shares)................... 1,601
Transfer agent fees and expenses.................................... 38,070
Custodian fees and expenses......................................... 15,650
Legal fees.......................................................... 3,812
Audit fees.......................................................... 8,011
Reports to shareholders (Institutional Shares)...................... 33,793
Amortization of organization costs.................................. 12,810
Registration fees................................................... 28,692
Trustees' fees...................................................... 3,122
Other expenses...................................................... 10,727
---------
495,312
Less: Fee waivers and expense reimbursements.......................... (102,489) 392,823
--------- ----------
Net Investment Income................................................. 4,461,745
----------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized gains on securities transactions....................... 759,127
Net change in unrealized appreciation of investments................ (969,641)
----------
Net Realized and Unrealized Losses on Investments..................... (210,514)
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. $4,251,231
----------
----------
</TABLE>
- ------------
See Notes to Financial Statements.
91
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
----------------------------
NOVEMBER 30, NOVEMBER 30,
1996 1995
-------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income .......................... $ 4,461,745 $ 4,620,649
Net realized gains on securities
transactions ................................. 759,127 1,689,008
Net change in unrealized appreciation
(depreciation) of investments ................ (969,641) 4,960,847
-------------- ------------
Net increase in net assets resulting from
operations ................................... 4,251,231 11,270,504
-------------- ------------
Dividends to shareholders from net investment
income
Retail Shares .................................. (92,633) (65,731)
B Shares ....................................... (8,459) (83,217)
Institutional Shares ........................... (4,360,653) (4,471,701)
-------------- ------------
Total dividends to shareholders from net
investment income .............................. (4,461,745) (4,620,649)
-------------- ------------
Distributions to shareholders from net realized
gains
Retail Shares .................................. (13,911) --
B Shares ....................................... (5,665) --
Institutional Shares ........................... (815,999) --
-------------- ------------
Total distributions to shareholders from net
realized gains ................................. (835,575) --
-------------- ------------
Fund Share Transactions
Net proceeds from shares subscribed ............ 31,995,319 18,125,128
Net asset value of shares issued to shareholders
in reinvestment of dividends ................. 4,243,441 4,149,790
Cost of shares redeemed ........................ (28,374,995) (26,178,656)
-------------- ------------
Net increase (decrease) in net assets from Fund
share transactions ........................... 7,863,765 (3,903,738)
-------------- ------------
Total Increase ................................... 6,817,676 2,746,117
NET ASSETS:
Beginning of period ............................ 70,397,933 67,651,816
-------------- ------------
End of period .................................. $ 77,215,609 $ 70,397,933
-------------- ------------
-------------- ------------
</TABLE>
- ------------
See Notes to Financial Statements.
92
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL
RATINGS MATURITY AMOUNT VALUE
(UNAUDITED) RATE DATE (000) (NOTE 2)
---------------- --------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C>
LONG-TERM INVESTMENTS -- 97.6%
MUNICIPAL BONDS -- 97.6%
FLORIDA -- 86.7%
Brevard County Health Care Facility Authority
Revenue, Holmes Regional, Callable 10/1/06 @
101 (Insured by MBIA) ........................ Aaa/AAA 5.63% 10/1/14 $ 4,500 $ 4,587,435
Charlotte County, Utility Revenue, Callable
10/1/06 @ 102 (Insured by FGIC) .............. Aaa/AAA 5.63 10/1/16 5,000 5,046,950
Collier County, Health Facilities Authority
Revenue, Callable 12/1/04 @ 102 .............. A-+/BBB+ 6.25 12/1/07 700 739,431
Collier County, Health Facilities Authority
Revenue, Callable 12/1/04 @ 102 .............. A-+/BBB+ 6.38 12/1/08 700 741,398
Collier County, Health Facilities Authority
Revenue, Callable 12/1/04 @ 102 .............. A-+/BBB+ 7.00 12/1/19 5,175 5,527,987
Dade County, Aviation Revenue, Callable 10/1/06
@ 102, 10/1/08 @ 100 (Insured by MBIA)
(AMT) ........................................ Aaa/AAA 5.75 10/1/12 5,000 5,155,600
Dade County, Resource Recovery Facility Revenue,
Callable 10/1/06 @ 102 (Insured by AMBAC)
(AMT) ........................................ Aaa/AAA 5.50 10/1/13 3,750 3,729,337
Escambia County, Pollution Control Revenue
Refunding, Gulf Power Project, Callable 3/1/97
@ 102 ........................................ A1/A+ 6.75 3/1/22 1,250 1,278,350
Florida Board of Education, Capital Outlay 1995
Series, Callable 6/1/05 @ 101, 6/1/06 @
100 .......................................... Aa/AA 5.50 6/1/13 2,500 2,528,575
Florida State Board of Education, Capital
Outlay, Callable 6/1/06 @ 101 ................ Aa/AA 5.00 6/1/18 3,000 2,853,900
Florida State Department of Environmental
Preservation, Callable 7/1/06 @ 101 (Insured
by MBIA) ..................................... Aaa/AAA 5.50 7/1/13 5,000 5,065,800
Florida State Power Agency, Callable 10/1/02 @
102 (Insured by FGIC) ........................ Aaa/AAA 5.25 10/1/21 5,000 4,854,450
Gainesville Utility System Revenue,
Non-callable, Series B ....................... Aa/AA 6.50 10/1/11 3,000 3,438,270
Jacksonville Electric Authority Revenue, St
John's River, Issue 2, Series II, Callable
10/1/04 @ 101 ................................ Aa1/AA 5.38 10/1/15 4,900 4,888,093
Jacksonville Port Authority, Callable 11/1/06 @
102 (Insured by MBIA) (AMT) .................. Aaa/AAA 5.63 11/1/18 5,000 4,981,050
Jacksonville, Sales Tax Revenue, River City
Project, Callable 10/1/05 @ 101 (Insured by
FGIC) ........................................ Aaa/AAA 5.38 10/1/18 5,000 4,961,500
Jacksonville Sales Tax Revenue, Renaissance
Project, Callable 10/1/05 @ 101 (Insured by
FGIC) ........................................ Aaa/AAA 5.65 10/1/14 5,000 5,105,900
Martin County Industrial Development Authority
Revenue, Indiantown Cogeneration PJ-A,
Callable 12/15/04 @ 102 (AMT) ................ Baa3/BBB- 7.88% 12/15/25 $ 2,500 $ 2,883,950
Martin County Industrial Development Authority
Revenue, Indiantown Cogeneration PJ-B,
Callable 12/15/04 @ 102 (AMT) ................ Baa3/BBB- 8.05 12/15/25 2,500 2,862,700
</TABLE>
93
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL
RATINGS MATURITY AMOUNT VALUE
(UNAUDITED) RATE DATE (000) (NOTE 2)
---------------- --------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS -- (CONTINUED)
Miami Beach Water & Sewer Revenue, Callable
9/1/05 @ 102 (Insured by FSA) ................ Aaa/AAA 5.38% 9/1/15 $ 5,000 $ 4,999,550
Okaloosa County Gas Distribution Tax Revenue,
Callable 10/1/04 @ 102,(Insured by MBIA) ..... Aaa/AAA 6.88 10/1/19 5,000 5,745,000
Orange County Health Facility Authority Revenue,
Orlando Regional Health, Series A,
Non-callable (Insured by MBIA) ............... Aaa/AAA 6.25 10/1/16 4,520 5,075,598
Orlando Utility Commission, Water & Electric
Revenue Refunding, Sub -- Series D, Non-
callable ..................................... Aa/AA- 6.75 10/1/17 3,000 3,576,420
South Broward Hospital District Revenue,
Callable 5/1/06 @ 102 (Insured by MBIA) ...... Aaa/AAA 5.25 5/1/21 3,050 2,986,164
South Miami Health Facilities, Callable 10/1/05
@ 102 (Insured by MBIA) ...................... Aaa/AAA 5.38 10/1/16 5,000 4,963,450
Sunrise Lakes, Phase 4 Recreation District
Revenue, Unlimited General Obligation Bonds,
Series A, Callable 8/1/05 @ 102 .............. BBB-+/BBB- 6.75 8/1/24 2,500 2,708,500
Tallahassee Utility Revenue Bonds, Pre-Refunded
10/1/99 @ 102 ................................ AAA/AA- 6.90 10/1/99 2,000 2,186,120
Tampa Sports Authority Sales Tax, Tampa Bay
Arena, Non-callable (Insured by MBIA) ........ Aaa/AAA 5.75 10/1/15 2,500 2,665,250
-------------
106,136,728
-------------
GUAM -- 10.0%
Guam Airport Authority, General Revenue Bonds,
Series B, Callable 10/1/03 @ 102 (AMT) ....... NR/BBB 6.40 10/1/05 2,435 2,542,384
Guam Airport Authority, General Revenue Bonds,
Series 1993 A , Callable 10/1/03 @ 102 ....... NR/BBB 6.38 10/1/10 3,820 3,941,896
Guam Government, Series A, Callable 3/1/99 @
100 .......................................... NR/BBB 5.75 9/1/04 2,500 2,522,325
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 3,193,740
-------------
12,200,345
-------------
PUERTO RICO -- 0.9%
Puerto Rico Industrial Tourist EDL Medical &
Environmental Control Facility Financing
Authority, Hospital Revenue Bond 1995, Auxilio
Mutuo Obligation Group, Series A, Callable
1/1/05 @ 102 (Insured by MBIA)................ Aaa/AAA 6.25 7/1/16 1,000 1,079,530
-------------
TOTAL MUNICIPAL BONDS (COST $112,299,172)......... 119,416,603
-------------
TOTAL LONG-TERM INVESTMENTS (COST $112,299,172)... 119,416,603
-------------
</TABLE>
94
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- -------------
SHORT-TERM INVESTMENTS -- 1.1%
<S> <C> <C> <C> <C> <C>
OPEN-END INVESTMENT COMPANIES -- 1.1%
Dreyfus Municipal Cash Management Plus Fund .... 1,275,242 $ 1,275,242
Provident Institutional Municipal Fund ......... 24,643 24,643
-------------
TOTAL SHORT-TERM INVESTMENTS (COST $1,299,885).... 1,299,885
-------------
TOTAL INVESTMENTS (COST $113,599,057) (a) --
98.7%........................................... 120,716,488
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.3%..... 1,610,436
-------------
NET ASSETS -- 100.0%.............................. $ 122,326,924
-------------
-------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $122,326,924.
+ 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) 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....... $ 7,117,431
Unrealized depreciation....... --
------------
Net unrealized appreciation... $ 7,117,431
------------
------------
See Notes to Financial Statements.
95
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $113,599,057) ....... $ 120,716,488
Interest receivable ........................................... 1,697,191
Receivable for capital shares issued .......................... 497,198
Prepaid expenses and other assets ............................. 6,614
-------------
Total assets .................................................... 122,917,491
-------------
LIABILITIES:
Dividends payable ............................................. 474,016
Payable for capital shares redeemed ........................... 26,380
Accrued expenses and other liabilities:
Investment Advisory fees .................................... 13,691
Administration fees ......................................... 7,595
Shareholder Processing fees (Retail Shares) ................. 17,419
Combined Distribution and Service fees (Retail Shares) ...... 17,419
Custodian and transfer agent fees ........................... 10,647
Audit and legal fees ........................................ 13,687
Other liabilities ........................................... 9,713
-------------
Total liabilities ............................................... 590,567
-------------
NET ASSETS ...................................................... $ 122,326,924
-------------
-------------
Net Asset Value, Offering Price and Redemption Price per Share:
Retail Shares:
($87,451,778/7,909,345 shares of beneficial interest issued
and outstanding $0.001 par value, unlimited number of shares
authorized) ................................................ $ 11.06
-------------
-------------
Institutional Shares:
($34,875,146/3,150,818 shares of beneficial interest issued
and outstanding $0.001 par value, unlimited number of shares
authorized) ................................................ $ 11.07
-------------
-------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par ......................... $ 11,060
Additional paid-in capital .................................... 119,264,497
Distributions in excess of net investment income .............. (57,867)
Accumulated net realized losses on investment transactions .... (4,008,197)
Net unrealized appreciation of investments .................... 7,117,431
-------------
Net Assets, November 30, 1996 ................................... $ 122,326,924
-------------
-------------
</TABLE>
- ------------
See Notes to Financial Statements.
96
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the year ended November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends .......................................................... $ 34,718
Interest ........................................................... 7,262,599
------------
7,297,317
EXPENSES:
Investment Advisory fees ........................................... $ 500,722
Administration fees ................................................ 84,756
Shareholder Processing fees (Retail Shares) ........................ 195,393
Combined Distribution and Service fees (Retail Shares) ............. 222,038
Combined Distribution and Service fees (B Shares) .................. 26,917
Transfer agent fees and expenses ................................... 57,865
Custodian fees and expenses ........................................ 27,009
Legal fees ......................................................... 4,493
Audit fees ......................................................... 13,187
Reports to shareholders (Retail Shares) ............................ 35,324
Reports to shareholders (Institutional Shares) ..................... 15,497
Amortization of organization costs ................................. 10,295
Registration fees .................................................. 31,944
Trustees' fees ..................................................... 5,551
Insurance expense .................................................. 4,157
Other expenses ..................................................... 11,009
-----------
1,246,157
Less: Expense reimbursements ......................................... (139,620)
Expenses paid by third parties ................................... (2,707) 1,103,830
----------- ------------
Net Investment Income................................................. 6,193,487
------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Net realized gains on securities transactions ...................... 676,108
Net change in unrealized appreciation of investments ............... (1,493,725)
------------
Net Realized and Unrealized Losses on Investments .................. (817,617)
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................. $ 5,375,870
------------
------------
</TABLE>
- ------------
See Notes to Financial Statements.
97
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
-------------------------
NOVEMBER NOVEMBER 30,
30, 1996 1995
----------- ------------
INCREASE (DECREASE) IN NET ASSETS:
<S> <C> <C>
Operations
Net investment income ........................................ $ 6,193,487 $ 7,151,582
Net realized gains on securities transactions ................ 676,108 2,033,503
Net change in unrealized appreciation (depreciation) of
investments ................................................ (1,493,725) 14,521,163
----------- ------------
Net increase in net assets resulting from operations ......... 5,375,870 23,706,248
----------- ------------
Dividends to shareholders from net investment income
Retail Shares ................................................ (4,335,296) (5,123,622)
B Shares ..................................................... (117,234) (349,572)
Institutional Shares ......................................... (1,740,957) (1,678,388)
----------- ------------
Total dividends to shareholders from net investment income ..... (6,193,487) (7,151,582)
----------- ------------
Fund Share Transactions
Net proceeds from shares subscribed .......................... 29,782,670 16,413,128
Net asset value of shares issued to shareholders in
reinvestment of dividends .................................. 3,516,351 4,818,028
Cost of shares redeemed ...................................... (47,849,944) (44,445,874)
----------- ------------
Net decrease in net assets from Fund share transactions ...... (14,550,923) (23,214,718)
----------- ------------
Total Decrease ................................................. (15,368,540) (6,660,052)
NET ASSETS:
Beginning of period .......................................... 137,695,464 144,355,516
----------- ------------
End of period (including (distributions in excess of net
investment income) accumulated undistributed net investment
income of ($57,867) and $269,978, respectively) ............ $122,326,924 $137,695,464
----------- ------------
----------- ------------
</TABLE>
- ------------
See Notes to Financial Statements.
98
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL AMORTIZED
RATINGS MATURITY AMOUNT COST
(UNAUDITED) RATE DATE (000) (NOTE 2)
--------------- --------- --------- --------- --------------
<S> <C> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 99.9%
BANK NOTES -- 9.4%
DOMESTIC -- 8.1%
Boatmen's Credit Card Bank-Variable Rate Bank
Note* .......................................... P-1/A-1 5.61% 12/3/96 $ 25,000 $ 25,000,000
Boatmen's First National Bank of Kansas City-
Variable Rate Bank Note* ....................... P-1/A-1 5.58 12/2/96 38,000 38,000,000
Key Bank New York-Floating Rate Bank Note* ....... P-1/A-1 5.26 12/2/96 75,000 74,985,118
MBNA America Bank-Variable Rate Bank Note* ....... P-1/F-1+*** 5.38 12/16/96 35,000 35,000,000
--------------
172,985,118
--------------
FOREIGN -- 1.3%
Abbey National Treasury Bank Note ................ P-1/A-1+ 5.05 3/3/97 28,000 27,982,662
--------------
TOTAL BANK NOTES (AMORTIZED COST $200,967,780)...... 200,967,780
--------------
BANKERS ACCEPTANCE -- 1.4%
Dai-Ichi Kangyo Bank Ltd., Los Angeles Branch .... P-1/A-1 5.30 12/20/96 30,000 29,916,083
--------------
TOTAL BANKERS ACCEPTANCE (AMORTIZED COST
$29,916,083)...................................... 29,916,083
--------------
DOMESTIC CERTIFICATE OF DEPOSIT -- 1.9%
Bankers Trust Variable Rate Medium Term Note* .... P-1/A-1+ 5.43 12/3/96 40,000 39,971,859
--------------
TOTAL DOMESTIC CERTIFICATES OF DEPOSIT (AMORTIZED
COST $39,971,859)................................. 39,971,859
--------------
EURO CERTIFICATES OF DEPOSIT -- 1.6%
Sanwa Bank, Ltd., London Branch .................. P-1/A-1 5.47 12/2/96 35,000 35,000,010
--------------
TOTAL EURO CERTIFICATES OF DEPOSIT (AMORTIZED COST
$35,000,010)...................................... 35,000,010
--------------
YANKEE CERTIFICATES OF DEPOSIT -- 14.6%
Bank of Tokyo Mitsubishi Bank, Ltd., New York
Branch ......................................... P-1/A-1 5.54 12/27/96 25,000 25,003,007
Dai-Ichi Kangyo Bank, Ltd., New York Branch ...... P-1/A-1 5.55 12/3/96 26,000 26,000,244
Fuji Bank, Ltd., New York Branch ................. P-1/A-1 5.36 12/2/96 35,000 35,000,010
Fuji Bank, Ltd., New York Branch ................. P-1/A-1 5.36 12/18/96 35,000 35,000,165
Hong Kong Shanghai Bank, New York Branch ......... P-1/A-1 5.24 3/3/97 38,000 38,000,000
Sanwa Bank, Ltd., New York Branch ................ P-1/A-1 5.38 12/9/96 25,000 25,000,055
Sanwa Bank, Ltd., New York Branch ................ P-1/A-1 5.49 1/21/97 35,000 35,000,982
Sumitomo Bank, Ltd., New York Branch ............. P-1/A-1 5.37 12/27/96 35,000 35,000,000
Sumitomo Bank, Ltd., New York Branch ............. P-1/A-1 5.37 12/30/96 30,000 30,000,000
Sumitomo Bank, Ltd., New York Branch ............. P-1/A-1 5.37 12/31/96 30,000 30,000,000
--------------
TOTAL YANKEE CERTIFICATES OF DEPOSIT (AMORTIZED COST
$314,004,463)..................................... 314,004,463
--------------
COMMERCIAL PAPER -- 26.2%
DOMESTIC -- 21.3%
ABN AMRO North America Finance ................... P-1/A-1+ 5.22 12/4/96 35,000 34,984,775
Atlantic Asset Securitization Corp. (b) .......... P-1/A-1 5.33 12/17/96 50,000 49,881,556
Bankers Trust Company ............................ P-1/A-1+ 5.28 12/30/96 40,000 39,829,867
Bankers Trust Company ............................ P-1/A-1+ 5.47 12/31/96 20,000 19,908,833
Countrywide Funding Corp. ........................ F-1/A-1 5.28 12/11/96 25,000 24,963,333
</TABLE>
99
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL AMORTIZED
RATINGS MATURITY AMOUNT COST
(UNAUDITED) RATE DATE (000) (NOTE 2)
--------------- --------- --------- --------- --------------
<S> <C> <C> <C> <C> <C>
COMMERCIAL PAPER -- (CONTINUED)
Domestic -- (continued)
Dakota Finance Corp. (c) ......................... P-1/A-1+ 5.28% 12/16/96 $ 40,000 $ 39,912,000
Dynamic Funding Corp. ............................ P-1/D-1*** 5.33 12/3/96 20,000 19,994,078
Dynamic Funding Corp. ............................ P-1/D-1*** 5.37 12/4/96 30,000 29,986,575
Dynamic Funding Corp. ............................ P-1/D-1*** 5.35 12/12/96 41,163 41,095,710
Mitsubishi Motors Credit of America, Inc. (LC Bank
of Tokyo Mitsubishi Bank Ltd.) ................. P-1/A-1 5.41 1/14/97 16,000 15,894,204
Sanwa Business Credit, Inc. ...................... P-1/D-1*** 5.32 12/17/96 35,000 34,917,244
Sanwa Business Credit, Inc. ...................... P-1/D-1*** 5.32 12/23/96 25,000 24,918,722
Shimizu International Finance USA (b) ............ P-1/A-1 5.33 12/12/96 31,000 30,949,513
Sigma Finance, Inc. (c) .......................... P-1/A-1+ 5.47 12/5/96 50,000 49,969,611
--------------
457,206,021
--------------
FOREIGN -- 4.9%
Bradford & Bingley Building Society .............. P-1/A-1 5.51 12/3/96 20,000 19,993,878
National Bank of Canada .......................... P-1/A-1 5.46 12/27/96 51,400 51,197,313
Yorkshire Building Society ....................... P-1/A-1 5.32 12/31/96 33,000 32,853,700
--------------
104,044,891
--------------
TOTAL COMMERCIAL PAPER (AMORTIZED COST
$561,250,912)..................................... 561,250,912
--------------
CORPORATE OBLIGATIONS -- 26.6%
ABT 1996-A/Household Credit Card Master Trust -
Variable Rate Medium Term Note* (c) ............ P-1/A-1+ 5.53 12/16/96 35,000 35,000,000
Beta Finance, Inc. - Convertible Variable Rate
Medium Term Note* (c) .......................... P-1/A-1+ 5.66 12/2/96 25,000 25,000,000
C.S. First Boston Corp., - Extendible Variable
Rate Medium Term Note* (b) ..................... P-1/A-1 5.72 1/16/97 35,000 35,000,000
C.S. First Boston Corp., - Extendible Variable
Rate Medium Term Note* (b) ..................... P-1/A-1 5.72 1/16/97 15,000 15,000,000
Credit Suisse Financial Products/SPARCs 1996 -
Variable Rate Medium Term Note* (c) ............ P-1/F-1+*** 5.54 12/3/96 35,000 35,000,000
General Motors Acceptance Corp. Note ............. P-1/D-1*** 5.25 12/6/96 13,000 12,999,756
Goldman Sachs & Co. Variable Rate Promissory Note*
(b) ............................................ P-1/A-1+ 5.38 12/26/96 25,000 25,000,000
MBNA/ABSIT Series 1996 - Variable Rate Medium Term
Note* (c) ...................................... P-1/A-1+ 5.38 12/16/96 40,000 40,000,000
Merrill Lynch & Co., Series B, Convertible Medium
Term Note ...................................... P-1/A-1+ 6.00 5/12/97 31,000 31,000,000
Morgan Stanley, Variable Rate Medium Term
Note* .......................................... P-1/A-1+ 5.71 12/15/96 50,000 50,000,000
Natwest Financial/NATs Series R-13A2 - Variable
Rate Medium Term Note* ......................... P-1/A-1+ 5.57 12/16/96 35,000 35,000,000
SMM Trust 1996 B - Variable Rate Medium Term Note*
(c) ............................................ P-1/A-1+ 5.48 12/4/96 30,000 30,000,000
Steers 1995-1st USA Bank - Variable Rate Medium
Term Note* (c) ................................. P-1/A-1+ 5.39 12/10/96 30,000 30,000,000
Steers/1st USA Bank - Variable Rate Medium Term
Note* (c) ...................................... P-1/A-1+ 5.38 12/16/96 50,000 50,000,000
Steers/Merrill Lynch - Variable Rate Medium Term
Note* (c) ...................................... P-1/F-1+ 5.42 12/18/96 65,000 65,000,000
</TABLE>
100
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL AMORTIZED
RATINGS MATURITY AMOUNT COST
(UNAUDITED) RATE DATE (000) (NOTE 2)
--------------- --------- --------- --------- --------------
<S> <C> <C> <C> <C> <C>
CORPORATE OBLIGATIONS -- (CONTINUED)
TMG Financial/TIERs Series 1996A - Extendible
Variable Rate Medium Term Note* (c) ............ P-1/A-1+ 5.41% 12/16/96 $ 57,000 $ 57,000,000
--------------
TOTAL CORPORATE OBLIGATIONS (AMORTIZED COST
$570,999,756)..................................... 570,999,756
--------------
MASTER NOTE -- 2.3%
Lehman Brothers plc, Foreign Master Note (b) ..... D-1***/A-1 5.48% 12/4/96 $ 50,000 $ 50,000,000
--------------
TOTAL MASTER NOTE (AMORTIZED COST $50,000,000)...... 50,000,000
--------------
TIME DEPOSITS -- 4.3%
Bank of Tokyo Mitsubishi Bank Ltd. - London
Branch ......................................... P-1/A-1 5.44 1/31/97 25,000 25,000,000
Bank of Tokyo Mitsubishi Bank Ltd. - Grand Cayman
Branch ......................................... P-1/A-1 5.38 12/9/96 25,000 25,000,000
South Trust Bank - Grand Cayman Branch, Variable
Rate Time Deposit* ............................. P-1/A-1 5.56 12/30/96 42,000 42,000,000
--------------
TOTAL TIME DEPOSITS (AMORTIZED COST $92,000,000).... 92,000,000
--------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 2.1%
Federal Home Loan Bank, Medium Term Note ......... Aaa/AAA** 5.31 3/14/97 35,000 35,000,000
Federal National Mortgage Assoc., Variable Rate
Medium Term Note* .............................. Aaa/AAA** 7.21 2/12/97 10,000 10,030,864
--------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (AMORTIZED
COST $45,030,864)................................. 45,030,864
--------------
TOTAL INVESTMENTS IN SECURITIES (AMORTIZED COST
$1,939,141,727)................................... 1,939,141,727
--------------
REPURCHASE AGREEMENTS -- 9.5%
C.S. First Boston Corp., dated 11/29/96 with a
maturity value of $102,080,841 (Collateralized
by $175,770,517 Federal National Mortgage
Assoc., 7.00% - 8.50%, 8/1/21 - 11/1/26, market
value - $105,441,538) .......................... 5.79 12/2/96 102,032 102,031,611
Fuji Securities, Inc., dated 11/29/96, with a
maturity value of $102,080,671 (Collateralized
by $160,650,000 various U.S. Government Agency
securities, 0.00% - 10.63%, 7/15/97 - 1/15/30,
market value - $104,073,210) ................... 5.77 12/2/96 102,032 102,031,611
--------------
TOTAL REPURCHASE AGREEMENTS (AMORTIZED COST
$204,063,222)..................................... 204,063,222
--------------
TOTAL INVESTMENTS (AMORTIZED COST $2,143,204,949)
(A) -- 99.9%...................................... 2,143,204,949
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.1%....... 1,123,660
--------------
NET ASSETS -- 100.0%................................ $2,144,328,609
--------------
--------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $2,144,328,609.
(a) Cost for federal income tax and financial reporting purposes are the same.
(b) Represents a restricted security.
(c) 144a security which is restricted as to resale to institutional investors.
* Variable rate security. Rate represents rate in effect at November 30, 1996.
Maturity date reflects the next rate change date.
** Implied rating.
*** Duff Phelps or Fitch Investors ratings.
LC -- Letter of Credit.
NR -- No rating available.
See Notes to Financial Statements.
101
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities (amortized cost $1,939,141,727) ..... $ 1,939,141,727
Repurchase agreements (amortized cost $204,063,222) ........... 204,063,222
Interest receivable ........................................... 10,927,428
Prepaid expenses and other assets ............................. 66,312
---------------
Total assets .................................................... 2,154,198,689
---------------
LIABILITIES:
Dividends payable ............................................. 8,422,656
Accrued Expenses and other liabilities:
Investment Advisory fees .................................... 374,847
Administration fees ......................................... 135,390
Shareholder Processing and Services fees (Service Shares) ... 114,074
Shareholder Processing fees (Retail Shares) ................. 281,207
Combined Distribution and Service fees (Retail Shares) ...... 114,073
Custodian and transfer agent fees ........................... 262,567
Audit fees .................................................. 114,202
Other liabilities ........................................... 51,064
---------------
Total liabilities ............................................... 9,870,080
---------------
NET ASSETS ...................................................... $ 2,144,328,609
---------------
---------------
Shares Outstanding ($0.001 par value, unlimited number of shares
authorized):
Institutional Shares .......................................... 598,009,591
Service Shares ................................................ 989,228,491
Retail Shares ................................................. 557,094,468
---------------
Total Shares Outstanding ........................................ 2,144,332,550
---------------
---------------
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 ......................... $ 2,144,333
Additional paid-in capital .................................... 2,142,188,217
Accumulated net realized losses on investment transactions .... (3,941)
---------------
Net Assets, November 30, 1996 ................................... $ 2,144,328,609
---------------
---------------
</TABLE>
- ------------
See Notes to Financial Statements.
102
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the year ended November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest ............................................................. $113,756,349
EXPENSES:
Investment Advisory fees ........................................... $ 5,099,884
Administration fees ................................................ 2,071,918
Shareholder Processing and Services fees (Service Shares) .......... 3,099,982
Shareholder Processing fees (Retail Shares) ........................ 906,317
Combined Distribution and Service fees (Retail Shares) ............. 1,724,906
Transfer agent fees and expenses ................................... 310,561
Custodian fees and expenses ........................................ 263,177
Legal fees ......................................................... 142,815
Audit fees ......................................................... 220,480
Reports to shareholders (Institutional Shares) ..................... 49,821
Reports to shareholders (Service Shares) ........................... 36,081
Reports to shareholders (Retail Shares) ............................ 328,502
Registration fees .................................................. 102,094
Trustees' fees ..................................................... 78,498
Insurance expense .................................................. 55,235
Other expenses ..................................................... 108,715
-----------
14,598,986
Less: Waivers and expense reimbursements.............................. (1,053,584)
Expenses paid by third parties.................................... (4,296) 13,541,106
----------- ------------
Net Investment Income ................................................ 100,215,243
REALIZED GAINS ON INVESTMENTS:
Net realized gains on securities transactions ...................... 4,995
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................. $100,220,238
------------
------------
</TABLE>
- ------------
See Notes to Financial Statements.
103
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
------------------------------------
NOVEMBER 30, NOVEMBER 30,
1996 1995
----------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income .................................................... $ 100,215,243 $ 86,983,774
Net realized gains on securities transactions ............................ 4,995 410,900
----------------- -----------------
Net increase in net assets resulting from operations ..................... 100,220,238 87,394,674
----------------- -----------------
Dividends to shareholders from net investment income
Institutional Shares ..................................................... (32,620,075) (28,634,317)
Service Shares ........................................................... (43,011,011) (42,688,668)
Retail Shares ............................................................ (24,584,157) (15,660,789)
----------------- -----------------
Total dividends to shareholders from net investment income ................. (100,215,243) (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 ...................................... 4,863,805,197 5,168,375,553
Net asset value of shares issued to shareholders in reinvestment of
dividends and distributions ............................................ 25,859,087 21,301,269
Cost of shares redeemed .................................................. (4,554,641,484) (4,836,350,261)
----------------- -----------------
Net increase in net assets from Fund share transactions .................. 335,022,800 353,326,561
----------------- -----------------
Total Increase ............................................................. 334,668,920 353,737,461
NET ASSETS:
Beginning of period ...................................................... 1,809,659,689 1,455,922,228
----------------- -----------------
End of period ............................................................ $ 2,144,328,609 $ 1,809,659,689
----------------- -----------------
----------------- -----------------
</TABLE>
- ------------
See Notes to Financial Statements.
104
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
MATURITY AMOUNT COST
RATE DATE (000) (NOTE 2)
--------- --------- --------- -------------
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS -- 104.8%
U.S. GOVERNMENT OBLIGATIONS -- 44.1%
U.S. TREASURY NOTES -- 44.1%
U.S. Treasury Note* .............................................. 7.25% 11/30/96** $ 75,000 $ 75,003,689
U.S. Treasury Note ............................................... 7.50 1/31/97 125,000 125,392,128
U.S. Treasury Note ............................................... 4.75 2/15/97 100,000 99,842,943
U.S. Treasury Note ............................................... 6.75 2/27/97 15,000 15,040,492
U.S. Treasury Note ............................................... 6.50 4/30/97 50,000 50,164,412
U.S. Treasury Note ............................................... 6.13 5/31/97 50,000 50,168,095
-------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(AMORTIZED COST $415,611,759)..................................... 415,611,759
-------------
REPURCHASE AGREEMENTS -- 60.7%
C.S. First Boston Corp., dated 10/3/96 with a maturity value of
$50,815,781 (Collateralized by $49,860,000 U.S. Treasury Notes,
6.25%, 6/30/98, market value - $51,621,823)*** ................. 5.25 12/2/96 50,375 50,375,000
C.S. First Boston Corp., dated 11/29/96 with a maturity value of
$67,856,256 (Collateralized by $68,325,000 U.S. Treasury Notes,
5.63% - 6.88%, 2/28/97 - 10/31/97, market value -
$69,517,668) ................................................... 5.68 12/2/96 67,824 67,824,153
Goldman Sachs, dated 11/29/96 with a maturity value of $35,016,187
(Collateralized by $33,017,000 U.S. Treasury Notes, 7.75%,
1/31/00, market value $35,700,039) ............................. 5.55 12/2/96 35,000 35,000,000
J.P. Morgan Securities, dated 11/27/96 with a maturity value of
$150,111,979 (Collateralized by $152,235,350 Government
National Mortgage Assoc., 6.00% - 10.50%, 12/15/20 - 11/15/26,
market value $153,008,934) ..................................... 5.38 12/2/96 150,000 150,000,000
Merrill Lynch Securities, Inc., dated 11/29/96 with a maturity
value of $33,840,007 (Collateralized by $118,077,000 U.S.
Treasury Strips, 2/15/15 - 8/15/15, market value
$34,501,322) ................................................... 5.63 12/2/96 33,824 33,824,152
Morgan Stanley & Co., dated 11/29/96 with a maturity value of
$150,071,250 (Collateralized by $185,038,089 Government
National Mortgage Assoc., 6.00% - 8.50%, 1/1/00 - 7/20/26,
market value - $154,524,505) ................................... 5.70 12/2/96 150,000 150,000,000
Sanwa BGK Securities, dated 11/27/96 with a maturity value of
$43,032,250 (Collateralized by $43,350,000 U.S. Treasury Notes,
4.75%, 2/15/97, market value - $43,860,833) .................... 5.40 12/2/96 43,000 43,000,000
Smith Barney, dated 11/27/96 with a maturity value of $43,032,190
(Collateralized by $43,361,000 U.S. Treasury Bonds, 6.50%,
11/15/26, market value - $43,860,029) .......................... 5.39 12/2/96 43,000 43,000,000
-------------
TOTAL REPURCHASE AGREEMENTS (AMORTIZED COST $573,023,305)........... 573,023,305
-------------
TOTAL INVESTMENTS (AMORTIZED COST $988,635,064) (A) -- 104.8%....... 988,635,064
LIABILITIES IN EXCESS OF OTHER ASSETS -- (4.8%)..................... (45,047,146)
-------------
NET ASSETS -- 100.0%................................................ $ 943,587,918
-------------
-------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $943,587,918.
(a) Cost for federal income tax and financial reporting purposes are the same.
* A portion of this security served as collateral to a reverse repurchase
agreement at November 30, 1996.
** Security matured on a weekend. Actual cash settlement date was 12/2/96.
*** Represents investment of cash collateral received from reverse repurchase
agreement.
See Notes to Financial Statements.
105
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities (amortized cost $415,611,759) .............................. $415,611,759
Repurchase agreements (amortized cost $573,023,305) .................................. 573,023,305
Interest receivable .................................................................. 10,001,335
Prepaid expenses and other assets .................................................... 34,563
-----------
Total assets ........................................................................... 998,670,962
-----------
LIABILITIES:
Dividends payable .................................................................... 3,605,872
Interest payable ..................................................................... 421,051
Payable for reverse repurchase agreement ............................................. 50,375,000
Accrued expenses and other liabilities:
Investment Advisory fees ........................................................... 181,289
Administration fees ................................................................ 58,313
Shareholder Processing and Services fees (Service Shares) .......................... 187,212
Shareholder Processing fees (Retail Shares) ........................................ 8,626
Combined Distribution and Service fees (Retail Shares) ............................. 8,626
Custodian and transfer agent fees .................................................. 115,075
Audit and legal fees ............................................................... 90,663
Other liabilities .................................................................. 31,317
-----------
Total liabilities ...................................................................... 55,083,044
-----------
NET ASSETS ............................................................................. $943,587,918
-----------
-----------
Shares Outstanding ($0.001 par value, unlimited number of shares authorized):
Institutional Shares ................................................................. 218,164,830
Service Shares ....................................................................... 682,983,738
Retail Shares ........................................................................ 42,967,451
-----------
Total Shares Outstanding ........................................................... 944,116,019
-----------
-----------
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 ................................................ $ 944,116
Additional paid-in capital ........................................................... 943,171,903
Accumulated net realized losses on investment transactions ........................... (528,101)
-----------
Net Assets, November 30, 1996 .......................................................... $943,587,918
-----------
-----------
</TABLE>
- -------------
See Notes to Financial Statements.
106
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the year ended November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest ........................................................... $ 48,405,154
EXPENSES:
Investment Advisory fees ........................................... $ 2,219,730
Administration fees ................................................ 772,967
Shareholder Processing and Services fees (Service Shares) .......... 2,071,921
Shareholder Processing fees (Retail Shares) ........................ 71,235
Combined Distribution and Service fees (Retail Shares) ............. 173,529
Transfer agent fees and expenses ................................... 146,304
Custodian fees and expenses ........................................ 124,276
Legal fees ......................................................... 61,867
Audit fees ......................................................... 97,211
Reports to shareholders (Institutional Shares) ..................... 21,507
Reports to shareholders (Service Shares) ........................... 26,441
Reports to shareholders (Retail Shares) ............................ 16,762
Trustees' fees ..................................................... 35,131
Registration fees .................................................. 26,793
Insurance expense .................................................. 26,843
Interest expense ................................................... 725,664
Other expenses ..................................................... 90,300
-----------
6,708,481
Less: Waivers and expense reimbursements ............................. (140,338) 6,568,143
----------- ------------
Net Investment Income ................................................ 41,837,011
REALIZED LOSSES ON INVESTMENTS:
Net realized losses on securities transactions ..................... (220,299)
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................. $ 41,616,712
------------
------------
</TABLE>
- ------------
See Notes to Financial Statements.
107
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------
NOVEMBER 30, NOVEMBER 30,
1996 1995
--------------- --------------
INCREASE (DECREASE) IN NET ASSETS:
<S> <C> <C>
Operations
Net investment income......................... $ 41,837,011 $ 42,840,635
Net realized losses on securities
transactions................................ (220,299) (195,517)
--------------- --------------
Net increase in net assets resulting from
operations.................................. 41,616,712 42,645,118
--------------- --------------
Dividends to shareholders from net investment
income
Institutional Shares.......................... (12,557,469) (13,077,345)
Service Shares................................ (27,088,342) (27,761,370)
Retail Shares................................. (2,191,200) (2,001,920)
--------------- --------------
Total dividends to shareholders from net
investment income............................... (41,837,011) (42,840,635)
--------------- --------------
Fund Share Transactions (at $1.00 per Share)
Net proceeds from shares subscribed........... 2,552,820,891 2,613,725,098
Net asset value of shares issued to
shareholders in reinvestment of dividends... 3,479,765 3,365,762
Cost of shares redeemed....................... (2,423,540,264) (2,714,202,606)
--------------- --------------
Net increase (decrease) in net assets from
Fund share transactions..................... 132,760,392 (97,111,746)
--------------- --------------
Total Increase (Decrease)....................... 132,540,093 (97,307,263)
NET ASSETS:
Beginning of period........................... 811,047,825 908,355,088
--------------- --------------
End of period................................. $ 943,587,918 $ 811,047,825
--------------- --------------
--------------- --------------
</TABLE>
- ------------
See Notes to Financial Statements.
108
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL AMORTIZED
RATINGS+ MATURITY AMOUNT COST
(UNAUDITED) RATE DATE (000) (NOTE 2)
--------------- --------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
MUNICIPAL SECURITIES -- 99.8%
ALABAMA -- 0.3%
Homewood Industrial Development Board, Revenue Bonds,
Keebler Co. Project (LC Bank of Nova Scotia)* ..... NR/NR 3.60% 12/9/96 $ 560 $ 560,000
-------------
NR/NR
CALIFORNIA -- 1.9%
California State, Revenue Anticipation Note ......... MIG1/NR 4.50 6/30/97 3,700 3,710,901
-------------
SP-1+/NR
COLORADO -- 1.0%
Pitkin County Industrial Development Revenue, Aspen
Skiing Co. Project, Series B (AMT) (LC First
National Bank Of Chicago)* ........................ NR/NR 4.15 12/2/96 1,900 1,900,000
-------------
A-1+/AA-
DISTRICT OF COLUMBIA -- 3.0%
Washington D.C. General Obligations, General Fund
Recovery, Series B-2 (LC Westdeutsche
Landesbank)* ...................................... VMIG1/Aa1 4.10 12/2/96 4,700 4,700,000
A-1+/AA+
Washington D.C. General Obligations, General Fund
Recovery, Series B-3 (LC Landesbank Hessen-
Thuringen)* ....................................... VMIG1/Aaa 4.10 12/2/96 1,100 1,100,000
-------------
A-1+/AAA
5,800,000
-------------
FLORIDA -- 4.5%
City of Jacksonville Pollution Control Revenue
Refunding Bonds,
Florida Power & Light Co. Project ................. VMIG1/Aa3 3.55 2/21/97 4,000 4,000,000
A-1+/AA-
St. Lucie Pollution Control Revenue Refunding Bonds,
Florida Power & Light Co. Project * ............... VMIG1/Aa3 4.10 12/2/96 4,800 4,800,000
-------------
A-1+/AA-
8,800,000
-------------
GEORGIA -- 3.3%
Burke County, Georgia Development Authority,
Pollution Control Revenue Bonds, Georgia Power Co.,
2nd Series* ....................................... VMIG1/A1 4.10 12/2/96 3,400 3,400,000
A-1/A+
Rockdale County Hospital Authority Revenue
Anticipation Certificates (LC Trust County Bank,
Atlanta) .......................................... VMIG1/Aa3 3.55 12/9/96 3,125 3,125,000
-------------
NR/NR
6,525,000
-------------
</TABLE>
109
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL AMORTIZED
RATINGS+ MATURITY AMOUNT COST
(UNAUDITED) RATE DATE (000) (NOTE 2)
--------------- --------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
ILLINOIS -- 14.8%
Chicago O'Hare International Airport Revenue Bonds,
(American Airlines), Series B (LC Westdeutsche
Landesbank)* ...................................... P-1/Aa2 4.10% 12/2/96 $ 3,400 $ 3,400,000
NR/NR
Illinois Development Financing Authority Revenue
Bonds, Chicago Symphony Orchestra Program (LC Bank
of America, Illinois)* ............................ VMIG1/Aa3 3.55 12/9/96 7,400 7,400,000
A-1+/AA-
Illinois Development Financing Authority, Economic
Development Revenue Bonds, Addison 450 LP Project
(AMT) (LC American National Bank & Trust,
Chicago)* ......................................... NR/Aa3 3.70 12/9/96 1,500 1,500,000
NR/NR
Illinois Education Facilities Authority Revenue
Bonds, Field Museum National History (LC Northern
Trust)* ........................................... VMIG1/Aa3 3.55 12/9/96 2,300 2,300,000
NR/NR
Illinois Educational Facilities Authority Revenue
Bonds, Cultural Pooled Financing Program* ......... VMIG1/Aa3 3.60 12/4/96 2,800 2,800,000
NR/NR
Illinois Health Facility Authority Revenue Bonds,
Healthcorp Affiliates Central ......DuPage Hospital
Association (LC Rabobank Nederland)* VMIG1/Aaa 4.10 12/2/96 3,000 3,000,000
NR/NR
Illinois Health Facility Authority Revenue Bonds,
University of Chicago Project,
Mandatory Put 1/30/97* ............................ VMIG1/Aaa 3.75 1/30/97 8,500 8,500,000
-------------
A-1+/AA
28,900,000
-------------
INDIANA -- 3.8%
Evansville Industrial Development Revenue Bonds,
Keebler Co. Project (LC Bank of Nova Scotia)* ..... NR/NR 3.60 12/9/96 505 505,000
NR/NR
Gary Environmental Improvement Revenue Bonds, U.S.
Steel Corp. Project (LC Bank of Nova Scotia)* ..... P-1/Aa3 3.60 12/16/96 1,000 1,000,000
A-1+/AA-
Indiana Hospital Equipment Financing Authority
Revenue Bonds* .................................... VMIG1/Aaa 3.65 12/9/96 2,200 2,200,000
A-1/AAA
Indiana State Development Finance, Mid America
Project (AMT) (LC Union Bank of Switzerland)* ..... NR/NR 3.80 12/4/96 3,800 3,800,000
-------------
A-1+/AAA
7,505,000
-------------
KANSAS -- 1.5%
City of Burlington, Pollution Control Revenue,
Revenue Bonds, Kansas City Power and Light (LC
Societe Generale, Illinois) ....................... P-1/Aa2 3.65 12/11/96 3,000 3,000,000
-------------
NR/NR
</TABLE>
110
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL AMORTIZED
RATINGS+ MATURITY AMOUNT COST
(UNAUDITED) RATE DATE (000) (NOTE 2)
--------------- --------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
LOUISIANA -- 7.0%
Louisiana Public Facilities Authority Hospital
Revenue Bonds, Willis-Knighton Medical Center
Project (AMBAC Insured) SBPA -- Mellon Bank* ...... VMIG1/Aaa 3.50% 12/2/96 $ 8,500 $ 8,500,000
A-1/AAA
Plaquemines Port Harbor & Terminal Dist. Marine
Terminal Facilities Rev. Ref. Electric Coal
Transfer Corp., Commercial Paper .................. P-1/A1 3.70 12/5/96 5,275 5,275,000
-------------
A-1+/AA-
13,775,000
-------------
MICHIGAN -- 4.6%
Michigan State Hospital Financing Authority Revenue
Bonds, Mount Clemens Hospital (LC Comerica
Bank)* ............................................ VMIG1/A1 3.65 12/9/96 6,900 6,900,000
NR/NR
Michigan State Housing Development Authority Revenue
Bonds, Rental Housing, Series C Revenue (LC Credit
Suisse, N.Y.)* .................................... NR/NR 3.65 12/9/96 2,050 2,050,000
-------------
A-1+/AA+
8,950,000
-------------
MINNESOTA -- 1.6%
Becker Pollution Control Revenue Bonds, Northern
States Power Co., Series 1993A .................... P-1/A2 3.60 3/12/97 3,200 3,200,000
-------------
A-1+/A+
MISSISSIPPI -- 3.8%
Clairborne PRC, Southern Miss. Electric Power,
Guaranteed by National Rural Utilities CFC ........ VMIG1/Aa3 3.60 3/10/97 4,400 4,400,000
A-1+/AA-
Mississippi Business Finance Corp., Series 1996,
Mississippi College Project,
(LC NationsBank)* ................................. NR/NR 3.55 12/9/96 3,000 3,000,000
-------------
A-1/A+
7,400,000
-------------
MONTANA -- 2.8%
Forsythe Pollution Control Revenue Bonds, Portland
General Electric Co. (AMT) (LC Banque National de
Paris) * .......................................... VMIG1/Aa3 4.10 12/2/96 2,100 2,100,000
NR/NR
Forsythe Pollution Control Revenue Bonds, Pacificorp
Project (LC Industrial Bank Japan Ltd.)* .......... P-1/A1 4.40 12/2/96 3,400 3,400,000
-------------
A-1/A
5,500,000
-------------
NEVADA -- 7.2%
Clark County Pollution Control Revenue Bonds, Nevada
Power Co. Project, Series D (LC Societe
Generale)* ........................................ NR/NR 3.65 12/9/96 10,400 10,400,000
A-1+/AA-
</TABLE>
111
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL AMORTIZED
RATINGS+ MATURITY AMOUNT COST
(UNAUDITED) RATE DATE (000) (NOTE 2)
--------------- --------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
NEVADA -- (CONTINUED)
Washoe Water Facility Revenue Bonds, Sierra Pacific
Power Co. Project (AMT) (LC Union Bank of
Switzerland)* ..................................... P-1/Aaa 4.25% 12/2/96 $ 3,700 $ 3,700,000
-------------
A-1+/AAA
14,100,000
-------------
NEW YORK -- 2.6%
New York City Municipal Water Financing Authority
Commercial Paper .................................. P-1/NR 3.60 4/7/97 5,000 5,000,000
-------------
A-1/NR
NORTH CAROLINA -- 4.0%
Union County Industrial Facilities and Pollution
Control Financing Authority, Industrial Development
Revenue Bonds (LC Morgan Guaranty Trust)* ......... VMIG1/Aa1 3.45 12/9/96 7,900 7,900,000
-------------
NR/NR
OHIO -- 0.5%
Summit County Industrial Development Revenue Bonds,
Keebler Co. Project (LC Bank of Nova Scotia)* ..... NR/NR 3.60 12/9/96 995 995,000
-------------
NR/NR
PENNSYLVANIA -- 5.5%
Delaware County Industrial Development Authority
Pollution Control Revenue Bonds, Series 1988A (FGIC
Insured) .......................................... VMIG1/AAA 3.55 12/9/96 3,900 3,900,000
A-1+/AAA
Montgomery County Industrial Development Authority
Commercial Paper .................................. P-1/NR 3.60 3/7/97 6,900 6,900,000
-------------
A-1+/NR
10,800,000
-------------
SOUTH CAROLINA -- 2.3%
South Carolina Public Service Authority Commercial
Paper ............................................. P-1/NR 3.65 12/12/96 4,420 4,420,000
-------------
A-1+/NR
SOUTH DAKOTA -- 2.7%
Lawrence County, Pollution Control Revenue Bonds,
Homestake Mining Co. (LC Bank of Nova Scotia)* .... P-1/Aa3 3.35 12/9/96 5,300 5,300,000
-------------
A-1+/AA-
TENNESSEE -- 2.6%
Sullivan County Industrial Development Board Revenue
Bonds, Modern Forge Co. Project, Series 90 (AMT)
(LC Northern Trust)* .............................. NR/NR 3.75 12/9/96 5,000 5,000,000
-------------
A-1+/AA-
</TABLE>
112
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL AMORTIZED
RATINGS+ MATURITY AMOUNT COST
(UNAUDITED) RATE DATE (000) (NOTE 2)
--------------- --------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
TEXAS -- 12.4%
Brazos River Authority Pollution Control Revenue
Bonds, Texas Utilities Electric Co. (AMT) (LC
Morgan Guaranty Trust)* ........................... VMIG1/Aa1 4.25% 12/2/96 $ 1,400 $ 1,400,000
A-1+/AAA
City of San Antonio Commercial Paper ................ P-1/NR 3.55 12/12/96 4,400 4,400,000
A-1/NR
Dallas Area Rapid Transit Commercial Paper .......... P-1/NR 3.70 12/13/96 5,700 5,700,000
A-1+/NR
Gulf Coast Industrial Development Authority Revenue,
CITGO Petroleum Corp. Project (AMT) (LC Wachovia
Bank, Atlanta)* ................................... VMIG1/Aa2 4.30 12/2/96 3,500 3,500,000
A-1+/AA+
Harris County Texas Health Facilities, Series A, St.
Luke's Episcopal Hospital Project* ................ NR/NR 4.10 12/13/96 2,700 2,700,000
A-1+/AA
Houston Texas General Obligation, Series E, Putable
4/1/97 @ 100 ...................................... VMIG1/Aa 3.90 4/1/97 1,200 1,200,000
A-1+/AA-
Port Arthur Navigation District, Star Enterprises
Project (AMT) (LC Swiss Bank)* .................... NR/NR 3.75 12/9/96 1,400 1,400,000
A-1+/AA+
Texas State, Tax And Revenue Anticipation Note ...... MIG1/NR 4.75 8/29/97 4,000 4,023,407
-------------
SP-1+/NR
24,323,407
-------------
VIRGINIA -- 2.5%
Louisa County, Industrial Development Authority,
Pooled Finance Program (LC NationsBank)* .......... NR/NR 3.55 12/9/96 4,930 4,930,000
-------------
A-1/A+
WISCONSIN -- 3.6%
City of Oak Creek Pollution Control Revenue Bonds,
Wisconsin Electric Power Co. Project* ............. P-1/Aa3 3.65 12/18/96 2,000 2,000,000
NR/AA
Pleasant Prairie Pollution Control Revenue Bonds,
Wisconsin Electric Power Co. Project* ............. P-1/Aa3 3.50 12/9/96 5,000 5,000,000
-------------
A-1+/AA
7,000,000
-------------
TOTAL MUNICIPAL SECURITIES (AMORTIZED COST
$195,294,308) (A) -- 99.8%........................... 195,294,308
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.2%.......... 303,838
-------------
NET ASSETS -- 100.0%................................... $ 195,598,146
-------------
-------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $195,598,146.
(a) Cost for federal income tax and financial reporting purposes are the same.
* Variable rate security. Rate listed is rate in effect at November 30, 1996.
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 rating 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.
NR -- Not rated.
SBPA -- Standby Bond Purchase Agreement.
See Notes to Financial Statements.
113
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities (amortized cost $195,294,308) ....... $ 195,294,308
Cash .......................................................... 74,534
Interest receivable ........................................... 872,062
Prepaid expenses and other assets ............................. 20,441
-------------
Total assets .................................................... 196,261,345
-------------
LIABILITIES:
Dividends payable ............................................. 540,783
Accrued expenses and other liabilities:
Investment Advisory fees .................................... 25,659
Administration fees ......................................... 13,463
Shareholder Processing and Services fees (Service Shares) ... 9,583
Combined Distribution and Service fees (Retail Shares) ...... 7,223
Custodian and transfer agent fees ........................... 25,822
Audit and legal fees ........................................ 21,324
Other liabilities ........................................... 19,342
-------------
Total liabilities ............................................... 663,199
-------------
NET ASSETS ...................................................... $ 195,598,146
-------------
-------------
Shares Outstanding ($0.001 par value, unlimited number of
shares authorized):
Institutional Shares........................................... 145,630,684
Service Shares................................................. 2,861,862
Retail Shares.................................................. 47,157,289
-------------
Total Shares Outstanding..................................... 195,649,835
-------------
-------------
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 ......................... $ 195,650
Additional paid-in capital .................................... 195,454,187
Accumulated net realized losses on investment transactions .... (51,691)
-------------
Net Assets, November 30, 1996 ................................... $ 195,598,146
-------------
-------------
</TABLE>
- ------------
See Notes to Financial Statements.
114
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the year ended November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest..................................... $ 6,964,003
EXPENSES:
Investment Advisory fees................... $ 487,656
Administration fees........................ 197,123
Shareholder Processing and Services fees
(Service Shares)......................... 9,856
Shareholder Processing fees (Retail
Shares).................................. 73,869
Combined Distribution and Service fees
(Retail Shares).......................... 147,695
Transfer agent fees and expenses........... 58,287
Custodian fees and expenses................ 46,873
Reports to shareholders (Institutional
Shares).................................. 9,674
Reports to shareholders (Service Shares)... 4,128
Reports to shareholders (Retail Shares).... 14,584
Legal fees................................. 9,312
Audit fees................................. 20,698
Registration fees.......................... 22,743
Trustees' fees............................. 8,338
Insurance expense.......................... 6,262
Other expenses............................. 9,202
-----------
1,126,300
Less: Fee waivers and expense
reimbursements............................. (221,772)
Expenses paid by third parties........... (1,137) 903,391
----------- -----------
Net Investment Income ....................... 6,060,612
REALIZED LOSSES ON INVESTMENTS:
Net realized losses on securities
transactions............................. (20,046)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................. $ 6,040,566
-----------
-----------
</TABLE>
- ------------
See Notes to Financial Statements.
115
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
----------------------------
NOVEMBER 30, NOVEMBER 30,
1996 1995
------------- ------------
INCREASE (DECREASE) IN NET ASSETS:
<S> <C> <C>
Operations
Net investment income .......................... $ 6,060,612 $ 6,967,330
Net realized losses on securities
transactions ................................. (20,046) (903)
------------- ------------
Net increase in net assets resulting from
operations ................................... 6,040,566 6,966,427
------------- ------------
Dividends to shareholders from net investment
income
Institutional Shares ........................... (4,780,788) (5,722,875)
Service Shares ................................. (80,005) (95,436)
Retail Shares .................................. (1,199,819) (1,149,019)
------------- ------------
Total dividends to shareholders from net
investment income .............................. (6,060,612) (6,967,330)
------------- ------------
Fund Share Transactions (at $1.00 per share)
Net proceeds from shares subscribed ............ 531,124,979 504,374,576
Net asset value of shares issued to shareholders
in reinvestment of dividends ................. 1,110,214 1,626,585
Cost of shares redeemed ........................ (534,061,352) (513,562,638)
------------- ------------
Net decrease in net assets from Fund share
transactions ................................. (1,826,159) (7,561,477)
------------- ------------
Total Decrease ................................... (1,846,205) (7,562,380)
NET ASSETS:
Beginning of period ............................ 197,444,351 205,006,731
------------- ------------
End of period .................................. $ 195,598,146 $197,444,351
------------- ------------
------------- ------------
</TABLE>
- ------------
See Notes to Financial Statements.
116
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
NOTE 1 -- GENERAL
Emerald Funds (the "Trust") was organized as a Massachusetts business trust on
March 15, 1988. The Trust is registered under the Investment Company Act of
1940, as amended (the "1940 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 year
ended November 30, 1996 (the "Funds"), with the exception of Prime Advantage
Institutional Fund and Treasury Advantage Institutional Fund (formerly known as
Prime Trust Fund and Treasury Trust Fund, respectively), for which separate
financial statements have been prepared. The Tax-Exempt Trust Fund has not yet
commenced operations.
The investment objectives of the Funds are as follows:
<TABLE>
<S> <C>
Equity Fund - To seek long-term capital appreciation by investing primarily
in common stocks.
Equity Value Fund - To seek long-term capital appreciation. The Fund seeks to
achieve its investment objective by investing primarily in
common stock, preferred stock and debt obligations
convertible into common stock that the investment adviser
believes to be undervalued.
International Equity Fund - To seek long-term capital appreciation. The Fund seeks to
achieve its investment objective by investing primarily in
equity securities of foreign issuers.
Small Capitalization Fund - 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 stocks.
Balanced Fund - 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 equivalents.
Short-Term Fixed Income Fund - To seek positive current income with relative stability of
principal by investing in investment grade securities and
high quality money market instruments.
U.S. Government Securities To seek consistently positive income by investing principally
Fund - in U.S. Government securities and repurchase agreements
collateralized by such securities.
Managed Bond Fund - To seek a high level of current income and, secondarily,
capital appreciation. The Fund pursues its objective by
investing in investment grade securities and high quality
money market instruments.
Florida Tax-Exempt Fund - To seek to provide high tax-free income and current
liquidity. In seeking to attain its objective, the Fund
invests its assets primarily in Florida municipal obligations
that are rated investment grade or above by one or more
nationally recognized statistical rating organizations at the
time of purchase.
</TABLE>
117
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Prime and Treasury Funds - 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.
Tax-Exempt Fund - 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 subdivisions ("municipal
obligations").
</TABLE>
Effective June 29, 1996, Barnett Capital Advisors, Inc. ("Barnett"), a
wholly owned subsidiary of Barnett Banks, Inc., became the Funds' investment
adviser. Prior to June 29, 1996, Barnett Banks Trust Company, N.A. served as the
Funds' investment adviser. Rodney Square Management Corporation ("Rodney
Square"), a subsidiary of Wilmington Trust Company, serves as the Tax-Exempt
Fund's investment sub-adviser. Effective August 19, 1996, Brandes Investment
Partners, L.P. ("Brandes") became the International Equity Fund's sub-adviser.
Effective April 1, 1996, BISYS Fund Services Limited Partnership d/b/a BISYS
Fund Services, Inc. ("BISYS") became the Funds' Administrator. Effective May 20,
1996 and June 1, 1996, respectively, BISYS also became the Funds' Transfer Agent
and Fund Accountant. Prior to such dates, Concord Holding Corporation, a wholly
owned subsidiary of BISYS, served as administrator to the Trust, another fund
accountant provided fund accounting services to the Trust and another transfer
agent provided transfer agency services to the Trust. 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.
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 1940 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 money market
fund also bears the expenses associated with the printing of their shareholder
reports applicable to the particular class of shares.
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 of shares also bears the expenses associated
with the printing of their shareholder reports.
118
<PAGE>
- --------------------------------------------------------------------------------
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 NASDAQ
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 their 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 valued at amortized cost.
The Florida Tax-Exempt Fund values portfolio securities each business day
through the use of an independent pricing service approved by the Board of
Trustees. When, in the judgment of the pricing service, quoted bid prices for
portfolio securities are readily available and are representative of the bid
side of the market, these investments are valued at the mean between quoted bid
prices (as obtained by the pricing service from dealers in such securities) and
asked prices (as calculated by the pricing service based upon its evaluation of
the market for such securities). Other investments are carried at fair value as
determined by the pricing service, through the use of electronic data processing
techniques and matrix systems. Restricted securities for which market quotations
are not readily available, if any, are valued at fair value using methods
approved by the Board of Trustees. Securities with maturities of 60 days or less
are 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.
119
<PAGE>
- --------------------------------------------------------------------------------
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
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)Reverse Repurchase Agreements:
Each of the Funds (except the Florida Tax-Exempt Fund and Tax-Exempt Fund) may
enter into reverse repurchase agreements. Under such an agreement, a Fund sells
portfolio securities and then agrees to buy them back later at an agreed-upon
time and price. When a Fund enters into a reverse repurchase agreement, it will
place in a separate custodial account, either liquid assets or high grade debt
securities that have a value equal to or more than the price the Fund must pay
when it buys back the securities, and the account will be continuously monitored
to make sure the appropriate value is maintained. Reverse repurchase agreements
involve the possible risk that the value of portfolio securities a Fund
relinquishes may decline below the price a Fund must pay when the transaction
closes. Interest paid by a Fund in a reverse repurchase agreement is considered
a reduction of the Fund's income. Reverse repurchase agreements are considered
to be borrowings by a Fund under the 1940 Act. At November 30, 1996, the
Treasury Fund had a reverse repurchase agreement in the amount of $50,375,000
which was collateralized by a U.S. Treasury Note of the same amount.
F)Lending Securities:
If the Prime Fund or the Treasury Fund lends its securities, each 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. Each Fund continues to receive
interest on the securities loaned and may simultaneously earn interest on the
collateral held. Each 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 each Fund may be
delayed or limited.
G)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, which are charged directly to the class of shares
incurring such expenses) and realized and unrealized gains and losses on
investments of a Fund are allocated to each class of shares based upon their
relative net asset
120
<PAGE>
- --------------------------------------------------------------------------------
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.
H)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, 1996, the following Funds had the following capital loss
carryovers (amounts are approximate):
<TABLE>
<CAPTION>
EXPIRATION
AMOUNT DATE
---------- -----------
<S> <C> <C>
U.S. Government Securities
Fund.......................... $ 269,154 2003
3,499,359 2002
----------
$3,768,513
----------
----------
Florida Tax-Exempt Fund........ $4,008,197 2002
----------
----------
Treasury Fund.................. $ 220,300 2004
195,517 2003
70,799 2002
40,894 2001
4,829 2000
----------
$ 532,339
----------
----------
Tax-Exempt Fund................ $ 20,046 2004
903 2003
3,430 2002
1,015 2001
2,875 2000
14,779 1998
8,643 1997
----------
$ 51,691
----------
----------
</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.
I)Foreign Currency Translation:
The books and records of the International Equity Fund are maintained in U.S.
dollars. Foreign currency amounts are translated into U.S. dollars on the
following basis:
(i) market value of investment securities, other assets and liabilities
at the current rate of exchange at the end of the period; and
(ii) purchases and sales of investment securities, income and expenses
at the relevant rates of exchange prevailing on the respective dates of such
transactions.
Securities denominated in currencies other than U.S. dollars are subject to
changes in value due to fluctuations in foreign exchange.
The International Equity Fund does not generally isolate the effect of
fluctuations in foreign exchange rates from the effect of fluctuations in the
market prices of securities. The Fund reports certain foreign currency related
transactions as components of realized gains for financial reporting purposes,
whereas such components are treated as ordinary income for federal tax purposes.
Foreign security and currency transactions may involve certain
considerations and risks not typically associated with those of domestic origin
as a result of, among other factors, the level of governmental supervision and
regulation of foreign securities markets and the possibilities of political or
economic instability.
J)Forward Foreign Exchange Contracts:
The International Equity Fund may enter into forward foreign exchange contracts
("forward") which is an agreement between two parties to buy and sell a currency
at a set price on a future date. The market value of the forward fluctuates with
changes in currency exchange rates. The forward is marked-to-market daily and
the change in market value is recorded by the International Equity Fund as
unrealized appreciation or depreciation. When the forward is closed, the
International Equity Fund records a gain or loss equal to the difference between
the value
121
<PAGE>
- --------------------------------------------------------------------------------
at the time it was opened and the value at the time it was closed. The
International Equity Fund could be exposed to risk if a counterparty is unable
to meet the terms of a forward or if the value of the currency changes
unfavorably.
K)Other:
The Funds maintain a cash balance with their custodian and receive a reduction
of their custody fees and expenses for the amount of interest earned on such
uninvested cash balances. For financial reporting purposes for the year ended
November 30, 1996, custodian fees and expenses and expenses paid by third
parties were increased by the following amounts for the following funds:
<TABLE>
<S> <C>
Equity Fund................................ $ 3,157
Small Capitalization Fund.................. 12,773
Short-Term Fixed Income Fund............... 2,432
Florida Tax-Exempt Fund.................... 2,707
Prime Fund................................. 4,296
Tax-Exempt Fund............................ 1,137
</TABLE>
There was no effect on net investment income. The Funds could have invested
such cash amounts in an income-producing asset if they had not agreed to a
reduction of fees or expenses under the expense offset arrangement with their
custodian.
NOTE 3 -- AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into Investment Advisory Agreements with Barnett, an
Administration Agreement and Transfer Agent Agreement with BISYS and a
Distribution Agreement with the Distributor. In addition, Barnett has entered
into a sub-advisory agreement with Rodney Square with respect to the Tax-Exempt
Fund and Brandes with respect to the International Equity Fund. BISYS' fees for
serving as Fund Accountant to the Funds are included as part of the
Administration fee. The Funds pay BISYS' out-of-pocket accounting expenses.
As investment adviser, Barnett manages the investments of each Fund, except
the Tax-Exempt Fund and International Equity Fund, and is responsible for all
purchases and sales of each Fund's portfolio securities (except those of the
Tax-Exempt Fund and the International Equity Fund). Rodney Square and Brandes
have similar responsibilities for the Tax-Exempt Fund and International Equity
Fund, respectively, subject to the general supervision of both the Board of
Trustees and Barnett. For its services, Barnett is entitled to receive a fee
based on each Fund's average daily net assets at the following annual rates:
<TABLE>
<S> <C>
Equity Fund.................................. 0.60%
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 Rodney Square a sub-advisory fee at an annual rate
of 0.15% of average daily net assets of the Tax-Exempt Fund. Barnett has also
agreed to waive a portion of its fee from the Tax-Exempt Fund equal to 0.10% of
the average daily net assets of the Fund. For the year ended November 30, 1996,
Barnett waived fees of $195,132 for the Tax-Exempt Fund. Barnett has agreed to
pay Brandes a sub-advisory fee at an annual rate of 0.50% of the average daily
net assets of the International Equity Fund.
Barnett has voluntarily agreed to limit the fees it receives from the Prime
Fund and the Treasury Fund to the following annual rates: 0.25% of each Fund's
first $600 million of average daily net assets, 0.23% of the next $400 million
of each Fund's average daily net assets, 0.21% of the next $1 billion of each of
the Fund's average daily net assets and 0.19% of each Fund's average daily net
assets in excess of $2 billion. For the year ended November 30, 1996, Barnett
waived fees of $873,297 and $54,862 for the Prime Fund and the Treasury Fund,
respectively. For the year ended November 30, 1996, Barnett waived fees of
$7,340, $38,789, $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 and
Florida Tax-Exempt Fund.
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
122
<PAGE>
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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 year ended November 30, 1996, Concord 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.
For its services as Transfer Agent, BISYS received fees in the following
amounts for the period from May 20, 1996 through November 30, 1996:
<TABLE>
<S> <C>
Equity Fund............................... $ 21,557
Equity Value Fund......................... 432
International Equity Fund................. 636
Small Capitalization Fund................. 12,249
Balanced Fund............................. 4,882
Short-Term Fixed Income Fund.............. 1,460
U.S. Government Securities Fund........... 693
Managed Bond Fund......................... 857
Florida Tax-Exempt Fund................... 551
Prime Fund................................ 238,718
Treasury Fund............................. 92,694
Tax-Exempt Fund........................... 21,673
</TABLE>
Under the Processing Plan with respect to Retail Shares of the Funds,
institutions (including BISYS) that have entered into agreements with the Trust
("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, Concord (for the period from December 1, 1995 through March 31,
1996) and Rodney Square 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, Rodney Square and Concord and
excluding fees payable under the Service Plan, the Combined Plan and the
Processing Plan) exceeded 0.40% of such Fund's average daily net assets. This
voluntary reimbursement was terminated by BISYS upon becoming Administrator on
April 1, 1996 and may be terminated at any time by Barnett or Rodney Square. For
the year ended November 30, 1996, Barnett and Concord (for the period from
December 1, 1995 through March 31, 1996) agreed to reimburse expenses totaling
$180,287 to the Prime Fund and $85,476 to the Treasury Fund for expenses in
excess of this limitation. For the year ended November 30, 1996, Concord (for
the period from December 1, 1995 through March 31, 1996) and Rodney Square
reimbursed expenses totaling $26,640 for the Tax-Exempt Fund, pursuant to this
voluntary agreement.
Barnett, Concord (for the period from December 1, 1995 through March 31,
1996) and BISYS (for the period from April 1, 1996 through November 30, 1996)
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 Barnett, BISYS and Concord. For the year ended November 30,
1996, Barnett, BISYS and Concord reimbursed Fund expenses in the following
amounts pursuant to these voluntary limitations:
<TABLE>
<CAPTION>
BARNETT BISYS CONCORD
--------- --------- ---------
<S> <C> <C> <C>
Equity Fund................... $ 1,112 $ 371 $ --
Equity Value Fund(a).......... 102,697 -- --
International Equity Fund(a) 107,290 -- --
Small Capitalization Fund..... 20,574 4,214 --
Balanced Fund................. 28,354 -- --
Short-Term Fixed Income Fund.. 71,498 -- --
U.S. Government Securities
Fund......................... 9,415 2,200 2,437
Managed Bond Fund............. 17,249 -- --
Florida Tax-Exempt Fund....... 93,545 35,798 10,277
</TABLE>
- ---------------
(a) For the period from December 27, 1995 (commencement of operations) through
November 30, 1996.
123
<PAGE>
- --------------------------------------------------------------------------------
For the period from December 1, 1995 through March 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)............ -- --
International Equity Fund(a).... -- --
Small Capitalization Fund....... 45 702
Balanced Fund................... 81 1,137
Short-Term Fixed Income Fund.... -- --
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
March 31, 1996.
Under the Service Plan, institutions ("Service Organizations"), including
Barnett, BISYS and their affiliates, 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 agree to pay the Service Organizations an annual
fee of 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. For the year ended November 30, 1996, the Prime Fund, Treasury
Fund and Tax-Exempt Fund incurred expenses of $3,099,982, 2,071,921 and $9,856,
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 year ended November 30, 1996, the Funds incurred the following
amounts pursuant to the Combined Plan and the former Distribution Plan for Class
B Shares:
<TABLE>
<CAPTION>
RETAIL B
SHARES SHARES
--------- ---------
<S> <C> <C>
Equity Fund....................... $ 68,645 $ 6,670
Equity Value Fund(a).............. 8 --
International Equity Fund(a)...... 51 --
Small Capitalization Fund......... 15,455 7,145
Balanced Fund..................... 10,046 6,867
Short-Term Fixed Income Fund...... 1,980 366
U.S. Government Securities Fund... 61,311 3,907
Managed Bond Fund................. 3,565 1,601
Florida Tax-Exempt Fund........... 222,038 26,917
</TABLE>
- ---------------
(a) For the period from December 27, 1995 (commencement of operations) through
November 30, 1996.
Under the prior Distribution Plan for Retail Shares of the money market
funds (formerly Investor Shares), payments made to the Distributor were not
permitted to exceed 0.25% on an annual basis. In addition, under the prior
Shareholder Plan, Investor Shares made payments to the Administrator at an
annual rate of 0.25% of the average daily net asset value of the Investor Shares
of the money market funds. For the year ended November 30, 1996, the Prime Fund,
Treasury Fund and Tax-Exempt Fund incurred fees totaling $1,724,906, $173,529
and $147,695, respectively, under the Combined Plan and former Distribution Plan
and Shareholder Plan.
The Trust was informed that the amounts paid to Barnett and BISYS pursuant
to the Combined
124
<PAGE>
- --------------------------------------------------------------------------------
Plan and the former Distribution Plan and Shareholder Plan are as follows:
<TABLE>
<CAPTION>
RETAIL SHARES
----------------------
BARNETT BISYS
--------- -----
<S> <C> <C>
Equity Fund......................... $ 47,663 $ 389
Equity Value Fund(a)................ 6 1
International Equity Fund(a)........ 49 2
Small Capitalization Fund........... 12,184 89
Balanced Fund....................... 7,177 8
Short-Term Fixed Income Fund........ 1,477 18
U.S. Government Securities Fund..... 31,285 246
Managed Bond Fund................... 2,374 215
Florida Tax-Exempt Fund............. 122,912 340
Prime Fund.......................... 681,779 5
Treasury Fund....................... 52,640 --
Tax-Exempt Fund..................... 55,133 --
</TABLE>
<TABLE>
<CAPTION>
B SHARES
----------------------
BARNETT BISYS
----------- ---------
<S> <C> <C>
Equity Fund......................... $ 235 $ 4,828
Small Capitalization Fund........... 113 5,203
Balanced Fund....................... 170 5,007
Short-Term Fixed Income Fund........ -- 267
U.S. Government Securities Fund..... 24 2,837
Managed Bond Fund................... 8 1,165
Florida Tax-Exempt Fund............. 228 19,351
</TABLE>
- ---------------
(a) For the period from December 27, 1995 (commencement of operations) through
November 30, 1996.
Certain officers of the Trust are "affiliated persons" (as defined in the
1940 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 year ended November 30, 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................................. $ 13,842
Equity Value Fund(a)........................ 125
International Equity Fund(a)................ 179
Small Capitalization Fund................... 6,130
Balanced Fund............................... 660
Short-Term Fixed Income Fund................ --
U.S. Government Securities Fund............. 2,280
Managed Bond Fund........................... 3,812
Florida Tax-Exempt Fund..................... 4,493
Prime Fund.................................. 142,815
Treasury Fund............................... 61,867
Tax-Exempt Fund............................. 9,312
</TABLE>
- ---------------
(a) For the period from December 27, 1995 (commencement of operations) through
November 30, 1996.
NOTE 4 -- SECURITIES TRANSACTIONS
For the year ended November 30, 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.............. $201,163,485 $192,723,529
Equity Value Fund(a)..... 3,690,522 422,210
International Equity
Fund(a)................. 17,860,190 2,022,201
Small Capitalization
Fund.................... 446,635,852 398,951,261
Balanced Fund............ 96,210,505 84,963,734
Short-Term Fixed Income
Fund.................... 71,999,487 31,756,421
U.S. Government
Securities Fund......... 34,403,298 75,022,105
Managed Bond Fund........ 73,696,300 64,595,841
Florida Tax-Exempt Fund.. 187,503,556 204,602,193
</TABLE>
- ---------------
(a) For the period from December 27, 1995 (commencement of operations) through
November 30, 1996.
125
<PAGE>
- --------------------------------------------------------------------------------
NOTE 5 -- CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Funds are summarized below:
EQUITY FUND (000 OMITTED):
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1996 NOVEMBER 30, 1995
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold.................................................................... 598 $ 8,610 374 $ 4,789
Reinvestment of dividends............................................... 137 1,801 2 31
Redeemed................................................................ (406) (5,910) (672) (8,159)
----------- --------- ----------- ---------
Net increase in shares outstanding before conversion...................... 329 4,501 (296) (3,339)
Shares issued upon conversion from Class B................................ 186 2,552 -- --
----------- --------- ----------- ---------
Net increase (decrease) -- Retail......................................... 515 7,053 (296) (3,339)
----------- --------- ----------- ---------
Class B Shares
Sold.................................................................... 21 286 63 841
Reinvestment of dividends............................................... 13 170 -- --
Redeemed................................................................ (3) (27) (44) (540)
----------- --------- ----------- ---------
Net increase in shares outstanding before conversion...................... 31 429 19 301
Shares exchanged upon conversion into Retail.............................. (189) (2,552) -- --
----------- --------- ----------- ---------
Net increase (decrease) -- Class B........................................ (158) (2,123) 19 301
----------- --------- ----------- ---------
Institutional Shares
Sold.................................................................... 3,956 56,820 2,006 25,379
Reinvestment of dividends............................................... 1,057 13,993 90 1,175
Redeemed................................................................ (3,614) (52,443) (5,283) (67,969)
----------- --------- ----------- ---------
Net increase (decrease) -- Institutional.................................. 1,399 18,370 (3,187) (41,415)
----------- --------- ----------- ---------
Net increase (decrease) in Fund........................................... 1,756 $ 23,300 (3,464) $ (44,453)
----------- --------- ----------- ---------
----------- --------- ----------- ---------
</TABLE>
EQUITY VALUE FUND (000 OMITTED):
<TABLE>
<CAPTION>
PERIOD ENDED
NOVEMBER 30, 1996(A)
----------------------
SHARES AMOUNT
----------- ---------
<S> <C> <C>
Retail Shares
Sold.......................................................................................... 2 $ 21
Reinvestment of dividends..................................................................... -- --
Redeemed...................................................................................... -- --
--- ---------
Net increase -- Retail.......................................................................... 2 21
--- ---------
Institutional Shares
Sold.......................................................................................... 473 5,116
Reinvestment of dividends..................................................................... -- --
Redeemed...................................................................................... (149) (1,752)
--- ---------
Net increase -- Institutional................................................................... 324 3,364
--- ---------
Net increase in Fund............................................................................ 326 $ 3,385
--- ---------
--- ---------
</TABLE>
- ---------------
(a) For the period from December 27, 1995 (commencement of operations) through
November 30, 1996.
126
<PAGE>
- --------------------------------------------------------------------------------
INTERNATIONAL EQUITY FUND (000 OMITTED):
<TABLE>
<CAPTION>
PERIOD ENDED
NOVEMBER 30, 1996(A)
----------------------
SHARES AMOUNT
----------- ---------
<S> <C> <C>
Retail Shares
Sold....................................................................................... 10 $ 108
Reinvestment of dividends.................................................................. -- --
Redeemed................................................................................... -- --
----- ---------
Net increase -- Retail....................................................................... 10 108
----- ---------
Institutional Shares
Sold....................................................................................... 1,580 16,747
Reinvestment of dividends.................................................................. -- --
Redeemed................................................................................... (27) (292)
----- ---------
Net increase -- Institutional................................................................ 1,553 16,455
----- ---------
Net increase in Fund......................................................................... 1,563 $ 16,563
----- ---------
----- ---------
</TABLE>
- ---------------
(a) For the period from December 27, 1995 (commencement of operations) through
November 30, 1996.
SMALL CAPITALIZATION FUND (000 OMITTED):
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1996 NOVEMBER 30, 1995
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold..................................................................... 457 $ 6,022 96 $ 1,111
Reinvestment of dividends................................................ 16 196 -- --
Redeemed................................................................. (195) (2,519) (51) (549)
----------- --------- ----- ---------
Net increase in shares outstanding before conversion....................... 278 3,699 45 562
Shares issued upon conversion from Class B................................. 221 2,593 -- --
----------- --------- ----- ---------
Net increase -- Retail..................................................... 499 6,292 45 562
----------- --------- ----- ---------
Class B Shares
Sold..................................................................... 12 142 61 712
Reinvestment of dividends................................................ 14 164 -- --
Redeemed................................................................. (4) (46) (39) (428)
----------- --------- ----- ---------
Net increase in shares outstanding before conversion....................... 22 260 22 284
Shares exchanged upon conversion into Retail............................... (226) (2,593) -- --
----------- --------- ----- ---------
Net increase (decrease) -- Class B......................................... (204) (2,333) 22 284
----------- --------- ----- ---------
Institutional Shares
Sold..................................................................... 3,933 51,136 2,004 22,569
Reinvestment of dividends................................................ 507 6,170 -- --
Redeemed................................................................. (1,158) (14,890) (616) (7,045)
----------- --------- ----- ---------
Net increase -- Institutional.............................................. 3,282 42,416 1,388 15,524
----------- --------- ----- ---------
Net increase in Fund....................................................... 3,577 $ 46,375 1,455 $ 16,370
----------- --------- ----- ---------
----------- --------- ----- ---------
</TABLE>
127
<PAGE>
- --------------------------------------------------------------------------------
BALANCED FUND (000 OMITTED):
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1996 NOVEMBER 30, 1995
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold................................................................... 220 $ 2,687 52 $ 569
Reinvestment of dividends.............................................. 6 70 2 25
Redeemed............................................................... (99) (1,211) (21) (218)
----------- --------- ----------- ---------
Net increase in shares outstanding before conversion..................... 127 1,546 33 376
Shares issued upon conversion from Class B............................... 208 2,460 -- --
----------- --------- ----------- ---------
Net increase -- Retail................................................... 335 4,006 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 71 802
Shares exchanged upon conversion into Retail............................. (211) (2,460) -- --
----------- --------- ----------- ---------
Net increase (decrease) -- Class B....................................... (194) (2,262) 71 802
----------- --------- ----------- ---------
Instititutional Shares
Sold................................................................... 2,360 28,601 1,769 19,608
Reinvestment of dividends.............................................. 256 3,038 241 2,594
Redeemed............................................................... (1,859) (22,417) (1,123) (11,640)
----------- --------- ----------- ---------
Net increase -- Institutional............................................ 757 9,222 887 10,562
----------- --------- ----------- ---------
Net increase in Fund..................................................... 898 $ 10,966 991 $ 11,740
----------- --------- ----------- ---------
----------- --------- ----------- ---------
</TABLE>
SHORT-TERM FIXED INCOME FUND (000 OMITTED):
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1996 NOVEMBER 30, 1995
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold................................................................... 105 $ 1,045 26 $ 258
Reinvestment of dividends.............................................. 3 25 1 12
Redeemed............................................................... (50) (493) (16) (164)
----- --------- ----------- ---------
Net increase in shares outstanding before conversion..................... 58 577 11 106
Shares issued upon conversion from Class B............................... 6 61 -- --
----- --------- ----------- ---------
Net increase -- Retail................................................... 64 638 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) 7 68
Shares exchanged upon conversion into Retail............................. (6) (61) -- --
----- --------- ----------- ---------
Net increase (decrease) -- Class B....................................... (16) (155) 7 68
----- --------- ----------- ---------
Instititutional Shares
Sold................................................................... 4,602 45,950 1,089 10,918
Reinvestment of dividends.............................................. 42 417 107 1,069
Redeemed............................................................... (745) (7,448) (2,233) (22,359)
----- --------- ----------- ---------
Net increase (decrease) -- Institutional................................. 3,899 38,919 (1,037) (10,372)
----- --------- ----------- ---------
Net increase (decrease) in Fund.......................................... 3,947 $ 39,402 (1,019) $ (10,198)
----- --------- ----------- ---------
----- --------- ----------- ---------
</TABLE>
128
<PAGE>
- --------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES FUND (000 OMITTED):
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
NOVEMBER 30, 1996 NOVEMBER 30, 1995
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold.................................................................... 244 $ 2,520 171 $ 1,804
Reinvestment of dividends............................................... 115 1,188 152 1,543
Redeemed................................................................ (886) (9,066) (908) (9,169)
----------- --------- ----------- ---------
Net decrease in shares outstanding before conversion...................... (527) (5,358) (585) (5,822)
Shares issued upon conversion from Class B................................ 133 1,352 -- --
----------- --------- ----------- ---------
Net decrease -- Retail.................................................... (394) (4,006) (585) (5,822)
----------- --------- ----------- ---------
Class B Shares
Sold.................................................................... -- 7 52 527
Reinvestment of dividends............................................... -- 6 3 30
Redeemed................................................................ (4) (54) (47) (425)
----------- --------- ----------- ---------
Net decrease in shares outstanding before conversion...................... (4) (41) 8 132
Shares exchanged upon conversion into Retail.............................. (133) (1,352) -- --
----------- --------- ----------- ---------
Net increase (decrease) -- Class B........................................ (137) (1,393) 8 132
----------- --------- ----------- ---------
Instititutional Shares
Sold.................................................................... 1,581 16,120 915 9,239
Reinvestment of dividends............................................... 142 1,448 379 3,836
Redeemed................................................................ (5,289) (54,302) (1,218) (12,523)
----------- --------- ----------- ---------
Net increase (decrease) -- Institutional.................................. (3,566) (36,734) 76 552
----------- --------- ----------- ---------
Net decrease in Fund...................................................... (4,097) $ (42,133) (501) $ (5,138)
----------- --------- ----------- ---------
----------- --------- ----------- ---------
</TABLE>
MANAGED BOND FUND (000 OMITTED):
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED NOVEMBER
NOVEMBER 30, 1996 30, 1995
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold.................................................................... 115 $ 1,178 167 $ 1,661
Reinvestment of dividends............................................... 6 56 3 32
Redeemed................................................................ (85) (861) (156) (1,595)
----------- --------- ----------- ---------
Net increase in shares outstanding before conversion...................... 36 373 14 98
Shares issued upon conversion from Class B................................ 50 508 -- --
----------- --------- ----------- ---------
Net increase -- Retail.................................................... 86 881 14 98
----------- --------- ----------- ---------
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) 14 149
Shares exchanged upon conversion into Retail.............................. (50) (508) -- --
----------- --------- ----------- ---------
Net increase (decrease) -- Class B........................................ (62) (635) 14 149
----------- --------- ----------- ---------
Instititutional Shares
Sold.................................................................... 2,969 30,310 1,642 16,244
Reinvestment of dividends............................................... 409 4,179 371 4,100
Redeemed................................................................ (2,626) (26,871) (2,456) (24,495)
----------- --------- ----------- ---------
Net increase (decrease) -- Institutional.................................. 752 7,618 (443) (4,151)
----------- --------- ----------- ---------
Net increase (decrease) in Fund........................................... 776 $ 7,864 (415) $ (3,904)
----------- --------- ----------- ---------
----------- --------- ----------- ---------
</TABLE>
129
<PAGE>
- --------------------------------------------------------------------------------
FLORIDA TAX-EXEMPT FUND (000 OMITTED):
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER YEAR ENDED NOVEMBER
30, 1996 30, 1995
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold.................................................................... 1,014 $ 10,992 360 $ 4,051
Reinvestment of dividends............................................... 296 3,199 394 4,178
Redeemed................................................................ (2,743) (29,530) (3,367) (35,837)
----------- --------- ----------- ---------
Net decrease in shares outstanding before conversion...................... (1,433) (15,339) (2,613) (27,608)
Shares issued upon conversion from Class B................................ 865 9,313 -- --
----------- --------- ----------- ---------
Net decrease -- Retail.................................................... (568) (6,026) (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) 306 3,272
Shares exchanged upon conversion into Retail.............................. (866) (9,313) -- --
----------- --------- ----------- ---------
Net increase (decrease) -- Class B........................................ (876) (9,425) 306 3,272
----------- --------- ----------- ---------
Instititutional Shares
Sold.................................................................... 855 9,242 792 8,446
Reinvestment of dividends............................................... 23 256 40 430
Redeemed................................................................ (791) (8,598) (739) (7,755)
----------- --------- ----------- ---------
Net increase -- Institutional............................................. 87 900 93 1,121
----------- --------- ----------- ---------
Net decrease in Fund...................................................... (1,357) $ (14,551) (2,214) $ (23,215)
----------- --------- ----------- ---------
----------- --------- ----------- ---------
</TABLE>
130
<PAGE>
- --------------------------------------------------------------------------------
PRIME FUND (000 OMITTED)
(AT $1.00 PER SHARE):
<TABLE>
<CAPTION>
YEAR ENDED
NOVEMBER YEAR ENDED
30, NOVEMBER 30,
1996 1995
----------- ------------
Institutional Shares
<S> <C> <C>
Shares sold..................................... 2,479,220 2,397,638
Shares issued to shareholders in reinvestment of
dividends and distributions................... -- 1
Shares redeemed................................. (2,343,846) (2,348,560)
----------- ------------
Net increase in Institutional Shares.............. 135,374 49,079
----------- ------------
Service Shares
Shares sold..................................... 1,878,670 2,305,635
Shares issued to shareholders in reinvestment of
dividends and distributions................... 3,294 5,644
Shares redeemed................................. (1,794,568) (2,243,151)
----------- ------------
Net increase in Service Shares.................... 87,396 68,128
----------- ------------
Retail Shares
Shares sold..................................... 505,915 465,103
Shares issued to shareholders in reinvestment of
dividends and distributions................... 22,566 15,656
Shares redeemed................................. (416,228) (244,639)
----------- ------------
Net increase in Retail Shares..................... 112,253 236,120
----------- ------------
Total increase in Fund shares..................... 335,023 353,327
----------- ------------
----------- ------------
</TABLE>
TREASURY FUND (000 OMITTED)
(AT $1.00 PER SHARE):
<TABLE>
<CAPTION>
YEAR ENDED
NOVEMBER YEAR ENDED
30, NOVEMBER 30,
1996 1995
----------- ------------
Institutional Shares
<S> <C> <C>
Shares sold..................................... 882,693 778,340
Shares issued to shareholders in reinvestment of
dividends and distributions................... -- --
Shares redeemed................................. (901,010) (825,813)
----------- ------------
Net decrease in Institutional Shares.............. (18,317) (47,473)
----------- ------------
Service Shares
Shares sold..................................... 1,506,655 1,705,061
Shares issued to shareholders in reinvestment of
dividends and distributions................... 1,251 1,364
Shares redeemed................................. (1,350,730) (1,772,681)
----------- ------------
Net increase (decrease) in Service Shares......... 157,176 (66,256)
----------- ------------
Retail Shares
Shares sold..................................... 163,474 130,324
Shares issued to shareholders in reinvestment of
dividends and distributions................... 2,229 2,002
Shares redeemed................................. (171,801) (115,709)
----------- ------------
Net increase (decrease) in Retail Shares.......... (6,098) 16,617
----------- ------------
Total increase (decrease) in Fund shares.......... 132,761 (97,112)
----------- ------------
----------- ------------
</TABLE>
131
<PAGE>
- --------------------------------------------------------------------------------
TAX-EXEMPT FUND (000 OMITTED)
(AT $1.00 PER SHARE):
<TABLE>
<CAPTION>
YEAR ENDED
NOVEMBER YEAR ENDED
30, NOVEMBER 30,
1996 1995
----------- ------------
Institutional Shares
<S> <C> <C>
Shares sold..................................... 393,508 411,931
Shares issued to shareholders in reinvestment of
dividends and distributions................... -- 458
Shares redeemed................................. (404,255) (418,892)
----------- ------------
Net decrease in Institutional Shares.............. (10,747) (6,503)
----------- ------------
Service Shares
Shares sold..................................... 536 1,051
Shares issued to shareholders in reinvestment of
dividends and distributions................... 14 20
Shares redeemed................................. (543) (2,244)
----------- ------------
Net increase (decrease) in Service Shares......... 7 (1,173)
----------- ------------
Retail Shares
Shares sold..................................... 137,081 91,392
Shares issued to shareholders in reinvestment of
dividends and distributions................... 1,096 1,149
Shares redeemed................................. (129,263) (92,426)
----------- ------------
Net increase in Retail Shares..................... 8,914 115
----------- ------------
Total decrease in Fund shares..................... (1,826) (7,561)
----------- ------------
----------- ------------
</TABLE>
NOTE 6 -- CONCENTRATION OF CREDIT RISK
The Prime Fund and Tax-Exempt Fund invest substantially all of their assets in
diversified portfolios of high quality U.S. dollar denominated money market
instruments as disclosed in the Portfolio of Investments by security type or, in
the case of the Tax-Exempt Fund, by state of issuer. The Florida Tax-Exempt Fund
invests substantially all of its assets in a non-diversified portfolio of
tax-exempt debt obligations primarily consisting of securities issued by the
State of Florida, its municipalities, counties, and other taxing districts. The
issuers' abilities to meet their obligations may be affected by domestic and
foreign or, in the case of the Florida Tax-Exempt Fund, Florida economic,
regional and political developments.
The Prime Fund had the following concentrations by industry sector at
November 30, 1996 (as a percentage of total investments):
<TABLE>
<CAPTION>
INDUSTRY CLASS % OF PORTFOLIO
- ---------------------------------------- ---------------
<S> <C>
Banks -- International.................. 23.7%
Financial Services...................... 23.4
Investment Bankers...................... 9.6
Repurchase Agreements................... 9.5
Banks -- Regional....................... 8.9
Financial Services -- Diversified....... 6.2
Banks -- Money Center................... 4.7
Financial Services -- Mortgage.......... 3.6
Banking & Finance....................... 2.8
Leasing and Rental...................... 2.8
U.S. Government Agency Securities....... 2.1
Engineering & Construction.............. 1.4
Automobiles............................. 1.3
-----
100.0%
-----
-----
</TABLE>
At November 30, 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>
Health & Medical Facilities... 21.3% 16.8%
Power Projects................ 15.5 --
Utility Projects.............. 14.8 7.3
General Obligations........... 11.0 3.6
Airport Facilities............ 9.6 4.4
Public Facilities and
Improvements................. 8.3 2.3
Sensitive Land Acquisition.... 4.2 --
Water and Sewer............... 4.1 6.7
Port and Water Development.... 4.1 --
Resource Recovery
Facilities................... 3.1 --
Pre-Refunded Securities....... 1.8 --
Investment Companies.......... 1.1 --
Pollution Control & Waste
Management................... 1.1 24.8
Industrial Development
Revenue...................... -- 15.4
Education Facilities.......... -- 7.9
Tax Revenue Anticipation
Notes........................ -- 2.1
Equipment Financing........... -- 1.1
Solid Waste Disposal.......... -- 1.8
Transit Projects.............. -- 2.9
Housing Developments.......... -- 1.1
Revenue....................... -- 1.8
----- -----
100.0% 100.0%
----- -----
----- -----
</TABLE>
132
<PAGE>
- --------------------------------------------------------------------------------
NOTE 7 -- FEDERAL INCOME TAX INFORMATION (UNAUDITED)
During the year ended November 30, 1996, the following Funds declared tax-exempt
income distributions in the following amounts:
<TABLE>
<S> <C>
Florida Tax-Exempt Fund................... $5,885,034
Tax-Exempt Fund........................... 5,999,358
</TABLE>
During the year ended November 30, 1996, the following Funds declared
long-term capital distributions in the following amounts:
<TABLE>
<S> <C>
Equity Fund.............................. $12,210,478
Small Capitalization Fund................ 4,921,614
Balanced Fund............................ 929,949
Short-Term Fixed Income Fund............. 34,084
Managed Bond Fund........................ 661,236
Prime Fund............................... 358,875
</TABLE>
For the taxable year ended November 30, 1996, the following percentages of
income dividends paid by the following Funds qualify for the dividends received
deduction available to corporations:
<TABLE>
<CAPTION>
QUALIFIED
DIVIDEND INCOME
-----------------
<S> <C>
Equity Fund........................... 100.0%
Equity Value Fund..................... 63.1
International Equity Fund............. 33.7
Balanced Fund......................... 13.0
</TABLE>
133
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
------------------------------------------------------------------------
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1996(B)(D) 1995 1994 1993 1992
------------ ------------ ------------ ------------ ------------
RETAIL SHARES:
<S> <C> <C> <C> <C> <C>
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................ 3.01 3.76 (0.39) (0.08) 1.73
------------ ------------ ------------ ------------ ------------
Total income (loss) from
investment operations....... 3.00 3.78 (0.31) 0.07 1.89
------------ ------------ ------------ ------------ ------------
Less dividends and
distributions:
Dividends from net
investment income......... (0.00) (0.02) (0.08) (0.15) (0.16)
Distributions in excess of
net investment income..... (0.02) (0.00) (0.00) (0.00) (0.00)
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....................... 1.69 3.76 (0.96) (0.15) 1.73
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF
PERIOD...................... $ 16.31 $ 14.62 $ 10.86 $ 11.82 $ 11.97
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total return.................. 22.66% 34.82% (2.91%) 0.58% 18.49%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s).................... $33,177 $22,209 $ 19,705 $138,642 $152,939
Ratio of expenses to average
net assets................ 1.27% 1.37% 1.07% 0.86% 0.76%
Ratio of net investment
income to average net
assets.................... (0.08%) 0.15% 0.36% 1.22% 1.41%
Ratio of expenses to average
net assets*............... 1.28% (a) 1.29% 1.21% 1.18%
Ratio of net investment
income to average net
assets*................... (0.09%) (a) 0.13% 0.87% 0.99%
Portfolio turnover.......... 89% 104% 113% 102% 40%
Average commission rate
paid(c)................... $0.0518 -- -- -- --
</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 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 portfolio shares purchased and sold
by the Fund for which commissions were charged. Disclosure is not required
for prior periods.
(d) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
See Notes to Financial Statements.
134
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30 NOVEMBER 30,
1996(B) 1995 1994*
------------ ------------ ------------
CLASS B SHARES:
<S> <C> <C> <C>
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............ (0.00) (0.00) (0.02)
Distributions in excess of net investment
income........................................ (0.01) (0.00) (0.00)
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% (0.50%)+
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 converted to Retail
Shares.
(c) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of portfolio shares purchased and sold
by the Fund for which commissions were charged. Disclosure is not required
for prior periods.
+ Annualized.
++ Unannualized.
NA - Not applicable.
See Notes to Financial Statements.
135
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1996(C) 1995 1994*
------------ ------------ ------------
INSTITUTIONAL SHARES:
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 14.63 $ 10.89 $ 11.94
------------ ------------ ------------
Income (loss) from investment
operations:
Net investment income................. 0.06 0.08 0.11
Net realized and unrealized gains
(losses) on securities.............. 3.02 3.74 (0.90)
------------ ------------ ------------
Total income (loss) from investment
operations............................ 3.08 3.82 (0.79)
------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment
income.............................. (0.06) (0.08) (0.11)
Distributions from net realized gains
on securities....................... (1.29) (0.00) (0.15)
------------ ------------ ------------
Total dividends and distributions..... (1.35) (0.08) (0.26)
------------ ------------ ------------
Net change in net asset value........... 1.73 3.74 (1.05)
------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD.......... $ 16.36 $ 14.63 $ 10.89
------------ ------------ ------------
------------ ------------ ------------
Total return............................ 23.33% 35.21% (6.62%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)...... $ 217,184 $ 173,824 $ 164,015
Ratio of expenses to average net
assets.............................. 0.79% 0.84% 0.79%+
Ratio of net investment income to
average net assets.................. 0.43% 0.67% 1.46%+
Ratio of expenses to average net
assets** ........................... 0.79% (a) (a)
Ratio of net investment income to
average net assets** ............... 0.43% (a) (a)
Portfolio turnover.................... 89% 104% 113%
Average commission rate paid(b)....... $ 0.0518 -- --
</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) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of portfolio shares purchased and sold
by the Fund for which commissions were charged. Disclosure is not required
for prior periods.
(c) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
136
<PAGE>
EMERALD EQUITY VALUE FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED
NOVEMBER 30,
1996* (B)
------------
<S> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD......................................................... $ 10.00
------------
Income from investment operations:
Net investment income...................................................................... 0.27
Net realized and unrealized gains on securities............................................ 2.18
------------
Total income from investment operations.................................................... 2.45
------------
Less dividends and distributions:
Dividends from net investment income....................................................... (0.27)
------------
Net change in net asset value................................................................ 2.18
------------
NET ASSET VALUE, END OF PERIOD............................................................... $ 12.18
------------
------------
Total return................................................................................. 24.84%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)........................................................... $ 23
Ratio of expenses to average net assets.................................................... 0.00%+
Ratio of net investment income to average net assets....................................... 3.01%+
Ratio of expenses to average net assets**.................................................. 277.68%+
Ratio of net investment loss to average net assets**....................................... (274.67%)+
Portfolio turnover......................................................................... 19%
Average commission rate paid (a)........................................................... $ 0.0791
</TABLE>
- ---------------
* For the period December 27, 1995 (commencement of operations) through
November 30, 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 portfolio shares purchased and sold
by the Fund for which commissions were charged.
(b) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
137
<PAGE>
EMERALD EQUITY VALUE FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED
NOVEMBER 30
1996* (B)
------------
<S> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD........................................................... $ 10.00
------------
Income from investment operations:
Net investment income........................................................................ 0.28
Net realized and unrealized gains on securities.............................................. 2.18
------------
Total income from investment operations...................................................... 2.46
------------
Less dividends and distributions:
Dividends from net investment income......................................................... (0.28)
------------
Net change in net asset value.................................................................. 2.18
------------
NET ASSET VALUE, END OF PERIOD................................................................. $ 12.18
------------
------------
Total return................................................................................... 24.93%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)............................................................. $ 3,945
Ratio of expenses to average net assets...................................................... 0.00%+
Ratio of net investment income to average net assets......................................... 2.89%+
Ratio of expenses to average net assets**.................................................... 4.37%+
Ratio of net investment loss to average net assets**......................................... (1.48%)+
Portfolio turnover........................................................................... 19%
Average commission rate paid (a)............................................................. $ 0.0791
</TABLE>
- ---------------
* For the period December 27, 1995 (commencement of operations) through
November 30, 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 portfolio shares purchased and sold
by the Fund for which commissions were charged.
(b) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
138
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED
NOVEMBER 30,
1996*(B)
------------
<S> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD........................................................... $ 10.00
------------
Income from investment operations:
Net investment income........................................................................ 0.04
Net realized and unrealized gains on securities.............................................. 1.31
------------
Total income from investment operations...................................................... 1.35
------------
Less dividends and distributions:
Dividends from net investment income......................................................... (0.04)
Distributions in excess of net investment income............................................. (0.02)
------------
Total dividends and distributions............................................................ (0.06)
------------
Net change in net asset value.................................................................. 1.29
------------
NET ASSET VALUE, END OF PERIOD................................................................. $ 11.29
------------
------------
Total return................................................................................... 13.54%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)............................................................. $ 115
Ratio of expenses to average net assets...................................................... 0.00%+
Ratio of net investment income to average net assets......................................... 1.83%+
Ratio of expenses to average net assets**.................................................... 57.40%+
Ratio of net investment loss to average net assets**......................................... (55.57%)+
Portfolio turnover........................................................................... 50%
Average commission rate paid(a).............................................................. $ 0.0463
</TABLE>
- ---------------
* For the period December 27, 1995 (commencement of operations) through
November 30, 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 portfolio shares purchased and sold
by the Fund for which commissions were charged.
(b) Effective August 19, 1996, Brandes Investment Partners, L.P. became the
Fund's Investment Sub-Adviser.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
139
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED
NOVEMBER 30,
1996*(B)
------------
<S> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD........................................................... $ 10.00
------------
Income from investment operations:
Net investment income........................................................................ 0.06
Net realized and unrealized gains on securities.............................................. 1.29
------------
Total income from investment operations...................................................... 1.35
------------
Dividends from net investment income......................................................... (0.06)
------------
Net change in net asset value.................................................................. 1.29
------------
NET ASSET VALUE, END OF PERIOD................................................................. $ 11.29
------------
------------
Total return................................................................................... 13.47%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)............................................................. $ 17,528
Ratio of expenses to average net assets...................................................... 0.00%+
Ratio of net investment income to average net assets......................................... 1.99%+
Ratio of expenses to average net assets**.................................................... 3.46%+
Ratio of net investment loss to average net assets**......................................... (1.47%)+
Portfolio turnover........................................................................... 50%
Average commission rate paid(a).............................................................. $ 0.0463
</TABLE>
- ---------------
* For the period December 27, 1995 (commencement of operations) through
November 30, 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 portfolio shares purchased and sold
by the Fund for which commissions were charged.
(b) Effective August 19, 1996, Brandes Investment Partners, L.P. became the
Fund's Investment Sub-Adviser.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
140
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1996 (A) (C) 1995 1994*
---------------- ------------ ------------
RETAIL SHARES:
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $ 12.77 $ 9.66 $ 10.49
------- ------ ------
Income (loss) from investment operations:
Net investment loss...................................................... (0.11) (0.04) (0.04)
Net realized and unrealized gains (losses) on securities................. 1.77 3.15 (0.79)
------- ------ ------
Total income (loss) from investment operations........................... 1.66 3.11 (0.83)
------- ------ ------
Distributions from net realized gains on securities........................ (1.00) (0.00) (0.00)
------- ------ ------
Net change in net asset value.............................................. 0.66 3.11 (0.83)
------- ------ ------
NET ASSET VALUE, END OF PERIOD............................................. $ 13.43 $ 12.77 $ 9.66
------- ------ ------
------- ------ ------
Total return............................................................... 13.83% 32.19% (7.91%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)......................................... $ 9,490 $ 2,657 $ 1,583
Ratio of expenses to average net assets.................................. 1.59% 1.54% 1.54%+
Ratio of net investment loss to average net assets....................... (1.02%) (0.81%) (0.67%)+
Ratio of expenses to average net assets**................................ 1.70% 2.43% 2.50%+
Ratio of net investment loss to average net assets**..................... (1.13%) (1.70%) (1.63%)+
Portfolio turnover....................................................... 356% 229% 118%
Average commission rate paid(b).......................................... $0.0420 -- --
</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 portfolio shares purchased and sold
by the Fund for which commissions were charged. Disclosure is not required
for prior periods.
(c) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
141
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1996 (A) 1995 1994*
---------------- ------------ ------------
CLASS B SHARES:
<S> <C> <C> <C>
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 converted to Retail
Shares.
(b) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of portfolio shares purchased and sold
by the Fund for which commissions were charged. Disclosure is not required
for prior periods.
+ Annualized.
++ Unannualized.
NA - Not applicable.
See Notes to Financial Statements.
142
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1996 (B) 1995 1994*
---------------- ------------ ------------
INSTITUTIONAL SHARES:
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.............................................. $ 12.78 $ 9.66 $ 10.00
-------- ------------ ------------
Income (loss) from investment operations:
Net investment loss............................................................. (0.07) (0.03) (0.04)
Net realized and unrealized gains (losses) on securities........................ 1.81 3.15 (0.30)
-------- ------------ ------------
Total income (loss) from investment operations.................................. 1.74 3.12 (0.34)
-------- ------------ ------------
Distributions from net realized gains on securities............................... (1.00) (0.00) (0.00)
-------- ------------ ------------
Net change in net asset value..................................................... 0.74 3.12 (0.34)
-------- ------------ ------------
NET ASSET VALUE, END OF PERIOD.................................................... $ 13.52 $ 12.78 $ 9.66
-------- ------------ ------------
-------- ------------ ------------
Total return...................................................................... 14.49% 32.30% (3.40%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................................................ $138,008 $88,561 $53,509
Ratio of expenses to average net assets......................................... 1.22% 1.39% 1.29%+
Ratio of net investment loss to average net assets.............................. (0.60%) (0.65%) (0.54%)+
Ratio of expenses to average net assets**....................................... 1.24% 1.42% 1.48%+
Ratio of net investment loss to average net assets**............................ (0.62%) (0.68%) (0.73%)+
Portfolio turnover.............................................................. 356% 229% 118%
Average commission rate paid(a)................................................. $0.0420 -- --
</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) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of portfolio shares purchased and sold
by the Fund for which commissions were charged. Disclosure is not required
for prior periods.
(b) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
143
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1996(A)(C) 1995 1994*
------------ ------------ ------------
RETAIL SHARES:
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.............................................. $ 12.02 $ 9.72 $ 10.00
------------ ------------ ------------
Income (loss) from investment operations:
Net investment income........................................................... 0.30 0.30 0.24
Net realized and unrealized gains (losses) on securities........................ 1.36 2.30 (0.28)
------------ ------------ ------------
Total income (loss) from investment operations.................................. 1.66 2.60 (0.04)
------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income............................................ (0.31) (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............................................... (0.53) (0.30) (0.24)
------------ ------------ ------------
Net change in net asset value..................................................... 1.13 2.30 (0.28)
------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD.................................................... $ 13.15 $ 12.02 $ 9.72
------------ ------------ ------------
------------ ------------ ------------
Total return...................................................................... 14.23% 27.45% (0.40%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................................................ $ 5,592 $ 1,082 $ 543
Ratio of expenses to average net assets......................................... 1.06% 0.72% 0.68%+
Ratio of net investment income to average net assets............................ 2.02% 3.14% 3.70%+
Ratio of expenses to average net assets**....................................... 1.35% 4.20% 2.50%+
Ratio of net investment income (loss) to average net assets**................... 1.73% (0.34)% 1.88%+
Portfolio turnover.............................................................. 106% 87% 33%
Average commission rate paid(b)................................................. $ 0.0466 -- --
</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 portfolio shares purchased and sold
by the Fund for which commissions were charged. Disclosure is not required
for prior periods.
(c) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
144
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1996(A) 1995 1994*
------------ ------------ ------------
CLASS B SHARES:
<S> <C> <C> <C>
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 portfolio shares purchased and sold
by the Fund for which commissions were charged. Disclosure is not required
for prior periods.
+ Annualized.
++ Unannualized.
NA - Not applicable.
See Notes to Financial Statements.
145
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1996(B) 1995 1994*
------------ ------------ ------------
INSTITUTIONAL SHARES:
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $ 11.91 $ 9.63 $ 10.00
------------ ------------ ------------
Income (loss) from investment operations:
Net investment income.................................................... 0.35 0.33 0.27
Net realized and unrealized gains (losses) on securities................. 1.34 2.28 (0.37)
------------ ------------ ------------
Total income (loss) from investment operations........................... 1.69 2.61 (0.10)
------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income..................................... (0.35) (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........................................ (0.57) (0.33) (0.27)
------------ ------------ ------------
Net change in net asset value.............................................. 1.12 2.28 (0.37)
------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD............................................. $ 13.03 $ 11.91 $ 9.63
------------ ------------ ------------
------------ ------------ ------------
Total return............................................................... 14.73% 27.99% (1.02%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)......................................... $90,602 $73,830 $51,170
Ratio of expenses to average net assets.................................. 0.69% 0.32% 0.28%+
Ratio of net investment income to average net assets..................... 2.96% 3.54% 4.11%+
Ratio of expenses to average net assets**................................ 0.90% 1.10% 1.25%+
Ratio of net investment income to average net assets**................... 2.75% 2.76% 3.14%+
Portfolio turnover....................................................... 106% 87% 33%
Average commission rate paid(a).......................................... $0.0466 -- --
</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 portfolio shares purchased and sold
by the Fund for which commissions were charged. Disclosure is not required
for prior periods.
(b) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
146
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1996(A)(B) 1995 1994*
-------------- ------------ ------------
<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.................................................... 0.55 0.57 0.32
Net realized and unrealized gains (losses) on securities................. (0.04) 0.40 (0.26)
------ ------ ------
Total gains from investment operations................................... 0.51 0.97 0.06
------ ------ ------
Less dividends and distributions:
Dividends from net investment income..................................... (0.55) (0.57) (0.32)
Distributions from net realized gains on securities...................... (0.03) (0.00) (0.00)
------ ------ ------
Total dividends and distributions........................................ (0.58) (0.57) (0.32)
------ ------ ------
Net change in net asset value.............................................. (0.07) 0.40 (0.26)
------ ------ ------
NET ASSET VALUE, END OF PERIOD............................................. $ 10.07 $ 10.14 $ 9.74
------ ------ ------
------ ------ ------
Total return............................................................... 5.23% 10.25% 0.65%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)......................................... $ 985 $ 343 $ 223
Ratio of expenses to average net assets.................................. 0.80% 0.71% 0.67%+
Ratio of net investment income to average net assets..................... 5.17% 5.72% 5.20%+
Ratio of expenses to average net assets**................................ 2.33% 9.10% 2.50%+
Ratio of net investment income (loss) to average net
assets**............................................................... 3.64% (2.67%) 3.36%+
Portfolio turnover....................................................... 138% 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.
(b) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
147
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1996(A) 1995 1994*
-------------- ------------ ------------
<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 realized and unrealized gains (losses) on securities................. (0.10) 0.38 (0.31)
------ ------ ------
Total income (loss) from investment operations........................... 0.02 0.88 (0.03)
------ ------ ------
Less dividends and distributions:
Dividends from net investment income..................................... (0.12) (0.50) (0.28)
Distributions from 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 converted to Retail
Shares.
+ Annualized.
++ Unannualized.
NA - Not applicable.
See Notes to Financial Statements.
148
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1996(A) 1995 1994*
-------------- ------------ ------------
<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.................................................... 0.58 0.61 0.35
Net realized and unrealized gains (losses) on securities................. (0.05) 0.41 (0.26)
------- ------------ ------------
Total income from investment operations.................................. 0.53 1.02 0.09
------- ------------ ------------
Less dividends and distributions:
Dividends from net investment income..................................... (0.58) (0.61) (0.35)
Distributions from net realized gains on securities...................... (0.03) (0.00) (0.00)
------- ------------ ------------
Total dividends and distributions........................................ (0.61) (0.61) (0.35)
------- ------------ ------------
Net change in net asset value.............................................. (0.08) 0.41 (0.26)
------- ------------ ------------
NET ASSET VALUE, END OF PERIOD............................................. $ 10.07 $ 10.15 $ 9.74
------- ------------ ------------
------- ------------ ------------
Total return............................................................... 5.47% 10.80% 0.90%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)......................................... $53,200 $14,037 $23,566
Ratio of expenses to average net assets.................................. 0.53% 0.32% 0.28%+
Ratio of net investment income to average net assets..................... 5.79% 6.14% 5.55%+
Ratio of expenses to average net assets**................................ 0.90% 1.43% 1.60%+
Ratio of net investment income to average net assets**................... 5.42% 5.03% 4.24%+
Portfolio turnover....................................................... 138% 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) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
149
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------------------------------------
NOVEMBER
30, NOVEMBER NOVEMBER NOVEMBER NOVEMBER
1996(B)(C) 30, 1995 30, 1994 30, 1993 30, 1992
----------- ----------- ----------- ----------- -----------
RETAIL SHARES:
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD............................. $ 10.39 $ 9.72 $ 10.79 $ 10.52 $ 10.46
----------- ----------- ----------- ----------- -----------
Income (loss) from investment
operations:
Net investment income............. 0.61 0.64 0.58 0.66 0.77
Net realized and unrealized gains
(losses) on securities.......... (0.09) 0.67 (0.94) 0.41 0.12
----------- ----------- ----------- ----------- -----------
Total income (loss) from
investment operations........... 0.52 1.31 (0.36) 1.07 0.89
----------- ----------- ----------- ----------- -----------
Less dividends and distributions:
Dividends from net investment
income.......................... (0.61) (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................... (0.61) (0.64) (0.71) (0.80) (0.83)
----------- ----------- ----------- ----------- -----------
Net change in net asset value....... (0.09) 0.67 (1.07) 0.27 0.06
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD...... $ 10.30 $ 10.39 $ 9.72 $ 10.79 $ 10.52
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total return........................ 5.24% 13.85% (3.45%) 10.40% 8.79%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s).......................... $ 22,631 $ 26,912 $ 30,855 $ 145,328 $ 94,006
Ratio of expenses to average net
assets.......................... 1.09% 1.27% 0.98% 0.64% 0.28%
Ratio of net investment income to
average net assets.............. 5.88% 7.02% 5.68% 5.91% 7.18%
Ratio of expenses to average net
assets*......................... 1.14% (a) 1.09% 1.06% 0.99%
Ratio of net investment income to
average net assets*............. 5.83% (a) 5.57% 5.49% 6.42%
Portfolio turnover................ 53% 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 converted to Retail
Shares without affecting the net asset value of the Retail Shares.
(c) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
See Notes to Financial Statements.
150
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1996(A) 1995 1994*
---------------- ------------ ------------
CLASS B SHARES:
<S> <C> <C> <C>
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.
NA - Not applicable.
See Notes to Financial Statements.
151
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1996(B) 1995 1994*
---------------- ------------ ------------
INSTITUTIONAL SHARES:
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $ 10.36 $ 9.71 $ 10.47
------- ------------ ------------
Income (loss) from investment operations:
Net investment income.................................................... 0.65 0.68 0.46
Net realized and unrealized gains (losses) on securities................. (0.09) 0.65 (0.75)
------- ------------ ------------
Total income (loss) from investment operations........................... 0.56 1.33 (0.29)
------- ------------ ------------
Less dividends and distributions:
Dividends from net investment income..................................... (0.65) (0.68) (0.46)
Distributions in excess of net investment income......................... (0.00) (0.00) (0.01)
------- ------------ ------------
Total dividends and distributions........................................ (0.65) (0.68) (0.47)
------- ------------ ------------
Net change in net asset value.............................................. (0.09) 0.65 (0.76)
------- ------------ ------------
NET ASSET VALUE, END OF PERIOD............................................. $ 10.27 $ 10.36 $ 9.71
------- ------------ ------------
------- ------------ ------------
Total return............................................................... 5.69% 14.10% (2.83%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)......................................... $37,468 $74,753 $69,314
Ratio of expenses to average net assets.................................. 0.69% 0.83% 0.68%+
Ratio of net investment income to average net
assets................................................................. 6.39% 7.46% 5.90%+
Ratio of expenses to average net assets**................................ 0.69 (a) 0.69%+
Ratio of net investment income to average net
assets**............................................................... 6.39 (a) 5.90%+
Portfolio turnover....................................................... 53% 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.
(b) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
152
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1996(A)(B) 1995 1994*
-------------- ------------ ------------
<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.................................................... 0.61 0.66 0.43
Net realized and unrealized gains (losses) on securities................. (0.06) 1.05 (0.46)
------ ------ ------
Total income (loss) from investment operations........................... 0.55 1.71 (0.03)
------ ------ ------
Less dividends and distributions:
Dividends from net investment income..................................... (0.61) (0.66) (0.41)
Distributions in excess of net investment income......................... (0.00) (0.00) (0.02)
Distributions from net realized gains on securities...................... (0.12) (0.00) (0.00)
------ ------ ------
Total dividends and distributions........................................ (0.73) (0.66) (0.43)
------ ------ ------
Net change in net asset value.............................................. (0.18) 1.05 (0.46)
------ ------ ------
NET ASSET VALUE, END OF PERIOD............................................. $ 10.41 $ 10.59 $ 9.54
------ ------ ------
------ ------ ------
Total return............................................................... 5.51% 18.47% (0.35%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)......................................... $ 1,697 $ 820 $ 609
Ratio of expenses to average net assets.................................. 0.91% 0.71% 0.65%+
Ratio of net investment income to average net assets..................... 5.35% 6.49% 6.29%+
Ratio of expenses to average net assets**................................ 1.59% 3.17% 2.50%+
Ratio of net investment income to average net assets**................... 4.67% 4.03% 4.44%+
Portfolio turnover....................................................... 97% 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.
(b) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
153
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1996(A) 1995 1994*
------------ ------------ ------------
<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).................................. (1.51%)++ 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.
NA - Not applicable.
See Notes to Financial Statements.
154
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1996(A) 1995 1994*
-------------- ------------ ------------
<S> <C> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $ 10.55 $ 9.55 $ 10.00
------- ------------ ------------
Income from investment operations:
Net investment income.................................................... 0.65 0.70 0.45
Net realized and unrealized gains (losses) on securities................. (0.06) 1.00 (0.45)
------- ------------ ------------
Total income from investment operations.................................. 0.59 1.70 0.00
------- ------------ ------------
Less dividends and distributions:
Dividends from net investment income..................................... (0.65) (0.70) (0.43)
Distributions in excess of net investment income......................... (0.12) (0.00) (0.02)
------- ------------ ------------
Total dividends and distributions........................................ (0.77) (0.70) (0.45)
------- ------------ ------------
Net change in net asset value.............................................. (0.18) 1.00 (0.45)
------- ------------ ------------
NET ASSET VALUE, END OF PERIOD............................................. $ 10.37 $ 10.55 $ 9.55
------- ------------ ------------
------- ------------ ------------
Total return............................................................... 5.96% 18.36% (0.01%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)......................................... $75,519 $68,923 $66,588
Ratio of expenses to average net assets.................................. 0.55% 0.31% 0.27%+
Ratio of net investment income to average net assets..................... 6.32% 6.95% 6.83%+
Ratio of expenses to average net assets**................................ 0.67% 0.83% 0.86%+
Ratio of net investment income to average net assets**................... 6.20% 6.43% 6.25%+
Portfolio turnover....................................................... 97% 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) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
155
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------------------------------------
NOVEMBER
30, NOVEMBER NOVEMBER NOVEMBER NOVEMBER
1996(B)(C) 30, 1995 30, 1994 30, 1993 30, 1992
----------- ----------- ----------- ----------- -----------
RETAIL SHARES:
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD.............................. $ 11.09 $ 9.87 $ 11.33 $ 10.55 $ 10.14
----------- ----------- ----------- ----------- -----------
Income (loss) from investment
operations:
Net investment income............... 0.53 0.54 0.53 0.61 0.68
Net realized and unrealized gains
(losses) on securities............ (0.03) 1.22 (1.37) 0.78 0.45
----------- ----------- ----------- ----------- -----------
Total income (loss) from investment
operations........................ 0.50 1.76 (0.84) 1.39 1.13
----------- ----------- ----------- ----------- -----------
Less dividends and distributions:
Dividends from net investment
income............................ (0.53) (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... (0.53) (0.54) (0.62) (0.61) (0.72)
----------- ----------- ----------- ----------- -----------
Net change in net asset value......... (0.03) 1.22 (1.46) 0.78 0.41
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD........ $ 11.06 $ 11.09 $ 9.87 $ 11.33 $ 10.55
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total return.......................... 4.69% 18.17% (7.75%) 13.37% 11.51%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s).... $ 87,452 $ 94,017 $ 109,426 $ 207,764 $ 106,946
Ratio of expenses to average net
assets............................ 0.92% 1.07% 0.96% 0.65% 0.25%
Ratio of net investment income to
average net assets................ 4.73% 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*............... 4.59% (a) 4.88% 4.97% 5.43%
Portfolio turnover.................. 152% 89% 89% 48% 105%
</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) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
See Notes to Financial Statements.
156
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1996(A) 1995 1994*
---------------- ------------ ------------
CLASS B SHARES:
<S> <C> <C> <C>
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).................................. (1.82%)++ 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.
NA - Not applicable.
See Notes to Financial Statements.
157
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1996(B) 1995 1994*
---------------- ------------ ------------
INSTITUTIONAL CLASS SHARES:
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD....................................... $ 11.09 $ 9.87 $ 11.07
------- ------------ ------------
Income (loss) from investment operations:
Net investment income.................................................... 0.56 0.57 0.42
Net realized and unrealized gains (losses) on securities................. (0.02) 1.22 (1.19)
------- ------------ ------------
Total income (loss) from investment operations........................... 0.54 1.79 (0.77)
------- ------------ ------------
Less dividends and distributions:
Dividends from net investment income..................................... (0.56) (0.57) (0.42)
Distributions from net realized gains on securities...................... (0.00) (0.00) (0.01)
------- ------------ ------------
Total dividends and distributions........................................ (0.56) (0.57) (0.43)
------- ------------ ------------
Net change in net asset value.............................................. (0.02) 1.22 (1.20)
------- ------------ ------------
NET ASSET VALUE, END OF PERIOD............................................. $ 11.07 $ 11.09 $ 9.87
------- ------------ ------------
------- ------------ ------------
Total return............................................................... 5.09% 18.55% (7.07%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)......................................... $34,875 $33,979 $29,309
Ratio of expenses to average net assets.................................. 0.69% 0.74% 0.71%+
Ratio of net investment income to average net assets..................... 5.17% 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**................... 5.17% (a) 5.33%+
Portfolio turnover....................................................... 152% 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.
(b) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
+ Annualized.
++ Unannualized.
See Notes to Financial Statements.
158
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------------------------------------
NOVEMBER NOVEMBER NOVEMBER NOVEMBER NOVEMBER
30, 1996(B) 30, 1995 30, 1994 30, 1993 30, 1992
----------- ----------- ----------- ----------- -----------
INSTITUTIONAL SHARES:
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD............................. $ 1.0002 $ 1.0000 $ 0.9999 $ 1.0001 $ 1.0000
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income.............. 0.0519 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....................... 0.0519 0.0568 0.0362 0.0315 0.0408
----------- ----------- ----------- ----------- -----------
Less dividends and distributions:
Dividends from net investment
income........................... (0.0519) (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.................... (0.0521) (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......................... 5.34% 5.81% 3.97% 3.21% 4.14%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)... $ 598,009 $ 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............... 5.19% 5.66% 3.92% 3.21% 3.84%
Ratio of expenses to average net
assets*.......................... 0.42% 0.39% (a) (a) (a)
Ratio of net investment income to
average net assets*.............. 5.15% 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.
(b) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
See Notes to Financial Statements.
159
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------------------------------------
NOVEMBER
30, NOVEMBER NOVEMBER NOVEMBER NOVEMBER
1996(B) 30, 1995 30, 1994 30, 1993 30, 1992
----------- ----------- ----------- ----------- -----------
SERVICE SHARES:
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD............................. $ 1.0002 $ 1.0000 $ 0.9999 $ 1.0001 $ 1.0000
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income.............. 0.0486 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....................... 0.0486 0.0538 0.0327 0.0280 0.0372
----------- ----------- ----------- ----------- -----------
Less dividends and distributions:
Dividends from net investment
income........................... (0.0486) (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.................... (0.0488) (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......................... 4.99% 5.49% 3.61% 2.85% 3.78%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)... $ 989,227 $ 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............... 4.86% 5.31% 3.59% 2.80% 3.54%
Ratio of expenses to average net
assets*.......................... 0.77% 0.74% (a) (a) (a)
Ratio of net investment income to
average net assets*.............. 4.81% 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.
(b) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
See Notes to Financial Statements.
160
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------------------------------------
NOVEMBER NOVEMBER NOVEMBER NOVEMBER NOVEMBER
30, 1996(B) 30, 1995 30, 1994 30, 1993 30, 1992
----------- ----------- ----------- ----------- -----------
RETAIL SHARES:
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD............................. $ 1.0002 $ 1.0000 $ 0.9999 $ 1.0001 $ 1.0000
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income.............. 0.0469 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....................... 0.0469 0.0517 0.0311 0.0265 0.0357
----------- ----------- ----------- ----------- -----------
Less dividends and distributions:
Dividends from net investment
income........................... (0.0469) (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.................... (0.0471) (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......................... 4.81% 5.27% 3.44% 2.70% 3.62%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)... $ 557,093 $ 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............... 4.67% 5.13% 3.40% 2.63% 3.33%
Ratio of expenses to average net
assets*.......................... 0.98% 0.93% (a) (a) (a)
Ratio of net investment income to
average net assets*.............. 4.59% 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.
(b) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
See Notes to Financial Statements.
161
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------------------------------------
NOVEMBER NOVEMBER NOVEMBER NOVEMBER NOVEMBER
30, 30, 30, 30, 30,
1996(B) 1995 1994 1993 1992
----------- ----------- ----------- ----------- -----------
INSTITUTIONAL SHARES:
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD... $ 0.9996 $ 0.9999 $ 1.0000 $ 1.0000 $ 1.0000
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income................ 0.0494 0.0548 0.0368 0.0291 0.0368
Net realized losses on securities.... (0.0003) (0.0003) (0.0001) 0.0000 0.0000
----------- ----------- ----------- ----------- -----------
Total income from investment
operations......................... 0.0491 0.0545 0.0367 0.0291 0.0368
----------- ----------- ----------- ----------- -----------
Dividends from net investment income... (0.0494) (0.0548) (0.0368) (0.0291) (0.0368)
----------- ----------- ----------- ----------- -----------
Net change in net asset value.......... (0.0003) (0.0003) (0.0001) 0.0000 0.0000
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD......... $ 0.9993 $ 0.9996 $ 0.9999 $ 1.0000 $ 1.0000
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total return........................... 5.05% 5.62% 3.74% 2.95% 3.75%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)..... $ 218,020 $ 236,392 $ 283,920 $ 501,377 $ 452,170
Ratio of operating expenses to
average net assets................. 0.40% 0.40% 0.39% 0.40% 0.38%
Ratio of interest expense to average
net assets......................... 0.07%(c) 0.00% 0.00% 0.00% 0.00%
----------- ----------- ----------- ----------- -----------
Ratio of total expenses to average
net assets......................... 0.47% 0.40% 0.39% 0.40% 0.38%
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Ratio of net investment income to
average net assets................. 4.97% 5.49% 3.73% 2.91% 3.74%
Ratio of operating expenses to
average net assets*................ 0.42% 0.42% (a) (a) (a)
Ratio of interest expense to average
net assets......................... 0.07%(c) 0.00% (a) (a) (a)
----------- ----------- ----------- ----------- -----------
Ratio of total expenses to average
net assets*........................ 0.49% 0.42% (a) (a) (a)
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Ratio of net investment income to
average net assets*................ 4.95% 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, reimbursements or interest expenses during the
period.
(b) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
(c) Represents interest expense on reverse repurchase agreement.
See Notes to Financial Statements.
162
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------------------------------------
NOVEMBER NOVEMBER NOVEMBER NOVEMBER NOVEMBER
30, 30, 30, 30, 30,
1996(B) 1995 1994 1993 1992
----------- ----------- ----------- ----------- -----------
SERVICE SHARES:
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD... $ 0.9996 $ 0.9999 $ 1.0000 $ 1.0000 $ 1.0000
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income................ 0.0463 0.0513 0.0331 0.0256 0.0333
Net realized losses on securities.... (0.0001) (0.0003) (0.0001) 0.0000 0.0000
----------- ----------- ----------- ----------- -----------
Total income from investment
operations......................... 0.0462 0.0510 0.0330 0.0256 0.0333
----------- ----------- ----------- ----------- -----------
Dividends from net investment income... (0.0463) (0.0513) (0.0331) (0.0256) (0.0333)
----------- ----------- ----------- ----------- -----------
Net change in net asset value.......... (0.0001) (0.0003) (0.0001) 0.0000 0.0000
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD......... $ 0.9995 $ 0.9996 $ 0.9999 $ 1.0000 $ 1.0000
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total return........................... 4.72% 5.25% 3.36% 2.59% 3.39%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)..... $ 682,628 $ 525,609 $ 591,991 $ 403,809 $ 372,691
Ratio of operating expenses to
average net assets................. 0.75% 0.75% 0.74% 0.75% 0.73%
Ratio of interest expense to average
net assets......................... 0.07%(c) 0.00% 0.00% 0.00% 0.00%
----------- ----------- ----------- ----------- -----------
Ratio of total expenses to average
net assets......................... 0.82% 0.75% 0.74% 0.75% 0.73%
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Ratio of net investment income to
average net assets................. 4.62% 5.13% 3.38% 2.56% 3.30%
Ratio of operating expenses to
average net assets*................ 0.77% 0.77% (a) (a) (a)
Ratio of interest expense to average
net assets......................... 0.07%(c) 0.00% (a) (a) (a)
----------- ----------- ----------- ----------- -----------
Ratio of total expenses to average
net assets*........................ 0.84% 0.77% (a) (a) (a)
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Ratio of net investment income to
average net assets*................ 4.60% 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, reimbursements or interest expenses during the
period.
(b) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
(c) Represents interest expense on reverse repurchase agreement.
See Notes to Financial Statements.
163
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------------------------------------
NOVEMBER NOVEMBER NOVEMBER NOVEMBER NOVEMBER
30, 30, 30, 30, 30,
1996(B) 1995 1994 1993 1992
----------- ----------- ----------- ----------- -----------
RETAIL SHARES:
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD... $ 0.9996 $ 0.9999 $ 1.0000 $ 1.0000 $ 1.0000
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income................ 0.0447 0.0498 0.0316 0.0241 0.0318
Net realized losses on securities.... (0.0003) (0.0003) (0.0001) 0.0000 0.0000
----------- ----------- ----------- ----------- -----------
Total income from investment
operations......................... 0.0444 0.0495 0.0315 0.0241 0.0318
----------- ----------- ----------- ----------- -----------
Dividends from net investment income... (0.0447) (0.0498) (0.0316) (0.0241) (0.0318)
----------- ----------- ----------- ----------- -----------
Net change in net asset value.......... (0.0003) (0.0003) (0.0001) 0.0000 0.0000
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD......... $ 0.9993 $ 0.9996 $ 0.9999 $ 1.0000 $ 1.0000
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total return........................... 4.56% 5.10% 3.21% 2.44% 3.23%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)..... $ 42,939 $ 49,047 $ 32,444 $ 21,362 $ 3,762
Ratio of operating expenses to
average net assets................. 0.90% 0.90% 0.90% 0.90% 0.88%
Ratio of interest expense to average
net assets......................... 0.07%(c) 0.00% 0.00% 0.00% 0.00%
----------- ----------- ----------- ----------- -----------
Ratio of total expenses to average
net assets......................... 0.97% 0.90% 0.90% 0.90% 0.88%
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Ratio of net investment income to
average net assets................. 4.48% 4.98% 3.13% 2.42% 3.12%
Ratio of operating expenses to
average net assets*................ 0.95% 1.04% 1.00% (a) (a)
Ratio of interest expense to average
net assets......................... 0.07%(c) 0.00% 0.00% (a) (a)
----------- ----------- ----------- ----------- -----------
Ratio of total expenses to average
net assets*........................ 1.02% 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, reimbursements or interest expenses during the
period.
(b) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
(c) Represents interest expense on reverse repurchase agreement.
See Notes to Financial Statements.
164
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------------------------------------
NOVEMBER NOVEMBER NOVEMBER NOVEMBER NOVEMBER
30, 1996 30, 1995 30, 1994 30, 1993 30, 1992**
----------- ----------- ----------- ----------- -----------
INSTITUTIONAL SHARES:
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD...... $ 0.9996 $ 0.9999 $ 0.9999 $ 0.9998 $ 0.9998
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income................... 0.0324 0.0355 0.0242 0.0214 0.0290
Net realized gains (losses) on
securities............................ 0.0000 (0.0003) 0.0000 0.0001 0.0000
----------- ----------- ----------- ----------- -----------
Total income from investment
operations............................ 0.0324 0.0352 0.0242 0.0215 0.0290
----------- ----------- ----------- ----------- -----------
Dividends from net investment income...... (0.0324) (0.0355) (0.0242) (0.0214) (0.0290)
----------- ----------- ----------- ----------- -----------
Net change in net asset value............. 0.0000 (0.0003) 0.0000 0.0001 0.0000
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD............ $ 0.9996 $ 0.9996 $ 0.9999 $ 0.9999 $ 0.9998
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total return.............................. 3.29% 3.61% 2.45% 2.16% 2.94%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)........ $ 145,592 $ 156,353 $ 162,856 $ 147,525 $ 158,692
Ratio of expenses to average net
assets................................ 0.34% 0.40% 0.40% 0.40% 0.40%
Ratio of net investment income to
average net assets.................... 3.23% 3.53% 2.42% 2.13% 2.88%
Ratio of expenses to average net
assets*............................... 0.45% 0.52% 0.46% 0.56% 0.57%
Ratio of net investment income to
average net assets*................... 3.12% 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.
See Notes to Financial Statements.
165
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------------------------------------
NOVEMBER NOVEMBER NOVEMBER NOVEMBER NOVEMBER
30, 1996 30, 1995 30, 1994 30, 1993 30, 1992**
----------- ----------- ----------- ----------- -----------
SERVICE SHARES:
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD...... $ 0.9996 $ 0.9999 $ 0.9999 $ 0.9998 $ 0.9998
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income................... 0.0283 0.0319 0.0206 0.0179 0.0255
Net realized gains (losses) on
securities............................ 0.0000 (0.0003) 0.0000 0.0001 0.0000
----------- ----------- ----------- ----------- -----------
Total income from investment
operations............................ 0.0283 0.0316 0.0206 0.0180 0.0255
----------- ----------- ----------- ----------- -----------
Dividends from net investment income...... (0.0283) (0.0319) (0.0206) (0.0179) (0.0255)
----------- ----------- ----------- ----------- -----------
Net change in net asset value............. 0.0000 (0.0003) 0.0000 0.0001 0.0000
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD............ $ 0.9996 $ 0.9996 $ 0.9999 $ 0.9999 $ 0.9998
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total return.............................. 2.87% 3.24% 2.08% 1.80% 2.58%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)........ $ 2,861 $ 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.................... 2.83% 3.19% 2.17% 1.75% 2.65%
Ratio of expenses to average net
assets*............................... 1.03% 1.20% 1.59% 0.92% 0.92%
Ratio of net investment income to
average net assets*................... 2.55% 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.
See Notes to Financial Statements.
166
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------------------------------------
NOVEMBER
30, NOVEMBER NOVEMBER NOVEMBER NOVEMBER
1996 30, 1995 30, 1994 30, 1993 30, 1992**
----------- ----------- ----------- ----------- -----------
RETAIL SHARES:
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD...... $ 0.9996 $ 0.9999 $ 0.9999 $ 0.9998 $ 0.9998
----------- ----------- ----------- ----------- -----------
Income from investment operations:
Net investment income................... 0.0273 0.0305 0.0192 0.0164 0.0240
Net realized gains (losses) on
securities............................ 0.0000 (0.0003) 0.0000 0.0001 0.0000
----------- ----------- ----------- ----------- -----------
Total income from investment
operations............................ 0.0273 0.0302 0.0192 0.0165 0.0240
----------- ----------- ----------- ----------- -----------
Dividends from net investment income...... (0.0273) (0.0305) (0.0192) (0.0164) (0.0240)
----------- ----------- ----------- ----------- -----------
Net change in net asset value............. 0.0000 (0.0003) 0.0000 0.0001 0.0000
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD............ $ 0.9996 $ 0.9996 $ 0.9999 $ 0.9999 $ 0.9998
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total return.............................. 2.76% 3.09% 1.94% 1.65% 2.43%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)........ $ 47,145 $ 38,243 $ 38,123 $ 45,609 $ 16,477
Ratio of expenses to average net
assets................................ 0.85% 0.90% 0.90% 0.90% 0.90%
Ratio of net investment income to
average net assets.................... 2.71% 3.04% 1.90% 1.62% 2.21%
Ratio of expenses to average net
assets*............................... 0.99% 1.15% 1.02% 1.06% 1.07%
Ratio of net investment income to
average net assets*................... 2.57% 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.
See Notes to Financial Statements.
167
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees
and Shareholders of
Emerald Funds
In our opinion, the accompanying statements of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Emerald Equity Fund, Emerald
Florida Tax-Exempt Fund, Emerald U.S. Government Securities Fund, Emerald Small
Capitalization Fund, Emerald Balanced Fund, Emerald Managed Bond Fund, Emerald
Short-Term Fixed Income Fund, Emerald Prime Fund, Emerald Treasury Fund, Emerald
Tax-Exempt Fund, Emerald International Equity Fund and Emerald Equity Value
Fund, twelve of the portfolios constituting the Emerald Funds, (hereafter
referred to as the "Funds") at November 30, 1996, the results of each of their
operations, the changes in each of their net assets and the financial highlights
for each of the periods presented, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Funds' management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at November 30, 1996 by correspondence with the
custodians and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above.
PRICE WATERHOUSE LLP
New York, New York
January 22, 1997
168
<PAGE>
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<PAGE>
END-0132
EMINSAN 97
