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EMERALD FUNDS SEMI-ANNUAL REPORT
EMERALD
INSTITUTIONAL & SERVICE SHARES
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May 31, 1997
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[PHOTO]
[PHOTO]
[PHOTO]
[LOGO]
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<PAGE>
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.
7/97
<PAGE>
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 13
EMERALD BALANCED FUND 17
EMERALD SHORT-TERM FIXED INCOME FUND 20
EMERALD U.S. GOVERNMENT SECURITIES FUND 24
EMERALD MANAGED BOND FUND 27
EMERALD FLORIDA TAX-EXEMPT FUND 31
EMERALD PRIME, TREASURY & TAX-EXEMPT FUNDS 34
PORTFOLIOS OF INVESTMENTS
EMERALD EQUITY FUND 36
EMERALD EQUITY VALUE FUND 42
EMERALD INTERNATIONAL EQUITY FUND 47
EMERALD SMALL CAPITALIZATION FUND 52
EMERALD BALANCED FUND 56
EMERALD SHORT-TERM FIXED INCOME FUND 67
EMERALD U.S. GOVERNMENT SECURITIES FUND 71
EMERALD MANAGED BOND FUND 74
EMERALD FLORIDA TAX-EXEMPT FUND 78
EMERALD PRIME FUND 81
EMERALD TREASURY FUND 84
EMERALD TAX-EXEMPT FUND 85
STATEMENTS OF ASSETS AND LIABILITIES 90-92
STATEMENTS OF OPERATIONS 93-95
STATEMENTS OF CHANGES IN NET ASSETS 96-101
NOTES TO FINANCIAL STATEMENTS 102
FINANCIAL HIGHLIGHTS 117
</TABLE>
<PAGE>
INTERVIEW (as of May 31, 1997)
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EMERALD PRIME ADVANTAGE INSTITUTIONAL AND TREASURY ADVANTAGE INSTITUTIONAL
FUNDS*
Jacqueline R. Lunsford,
INVESTMENT MANAGER
19 years of
investment experience
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. Each Fund seeks its objective by investing in:
PRIME ADVANTAGE INSTITUTIONAL FUND
A broad range of U.S. Government, bank and corporate short-term money-market
obligations.
TREASURY ADVANTAGE INSTITUTIONAL 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.
WHAT FACTORS AFFECTED THE PERFORMANCE OF THE MONEY MARKET FUNDS?
Mixed economic indicators and the uncertainty of when and if the Federal Reserve
Board would push interest rates higher kept short-term rates fairly stable
during much of the period. When the Fed raised rates 0.25% on March 25, 1997,
investors initially believed that the move would be just one of several. Since
the average maturities of the Funds were fairly short at the end of March, they
were able to extend their maturities and quickly take advantage of the rate
increase. The Fed chose not to increase rates a second time at its May meeting,
and it is now felt that they will take no further action over the summer months.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
EMERALD PRIME EMERALD TREASURY
INSTITUTIONAL INSTITUTIONAL
ADVANTAGE FUND ADVANTAGE FUND
<S> <C> <C>
QUARTER ENDING
6/30/97 1.38% 1.31%
6 MONTH PERIOD ENDING
5/31/97 2.72% 2.61%
12 MONTH PERIOD ENDING
11/30/96 5.29% 5.13%
11/30/95 5.76% 5.65%
11/30/94 3.83% 3.73%
11/30/93 3.31% 2.96%
11/30/92 4.00% 3.73%
</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.
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* Investments in the Emerald Prime Advantage Institutional and Treasury
Advantage Institutional 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.
3
<PAGE>
EMERALD PRIME ADVANTAGE INSTITUTIONAL AND TREASURY ADVANTAGE INSTITUTIONAL FUNDS
(as of May 31, 1997)
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WHAT FACTORS COULD AFFECT THE FUNDS IN THE MONTHS AHEAD?
The main factor affecting the Funds, of course, will be the direction of
interest rates. Currently, the continuing strength of the economy has not
precipitated a commensurate increase in inflation, and the Fed seems inclined to
just watch the situation for now. Any indications of inflation pressures would
most likely cause the Fed to push rates higher later in the year. Our strategy
will continue to keep maturities shorter than average, since yields on longer
maturities are not significantly higher -- and in some cases are actually lower
- -- than yields on shorter maturity securities.
Persistently large cash balances held by money market managers industry-wide,
combined with low issuance, continues to contribute to the low interest-rate
environment. This is especially true in the Treasury market, where a decrease in
the government's Treasury bill issuance has caused those rates to decline
sharply over the past few months. In the absence of Fed action, it is likely
that rates paid on short-term instruments will actually decline rather than
remain stable due to these supply/demand factors.
<TABLE>
<CAPTION>
SEC 7-DAY YIELDS AS OF MAY 31, 1997
<S> <C>
Prime Advantage Institutional Fund 5.51%
Treasury Advantage Institutional Fund 5.21%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
During the periods indicated, fee waivers and/or reimbursements were in effect.
Without these waivers and/or reimbursements, performance would have been lower.
Had these waivers or reimbursements not been in effect, the SEC 7-day yield
would have been 5.47% for the Prime Advantage Institutional Fund and 5.16% for
the Treasury Advantage Institutional Fund.
4
<PAGE>
BARNETT CAPITAL ADVISORS'
ECONOMIC OUTLOOK AND MARKET REVIEW
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THE ECONOMY: SURPRISING STRENGTH
The economy has been surprisingly strong in recent months, with Gross Domestic
Product (GDP) growing at an annual rate of 3.8% in the fourth quarter of 1996
and then accelerating further to 5.8% in the first quarter of 1997. Although the
economy slowed in the second quarter of 1997, the expansion, now in its seventh
year, continues.
Even though this economic expansion has shown surprising resiliency, it is
shorter thus far than the one immediately preceding it. The expansion
immediately before this one took place in the 1980s and lasted nearly eight
years.
In addition, the 1980's expansion was nearly twice as strong as the current one
to date. In constant dollar terms, the total economic growth of that expansion,
which began in late 1982, was 34%. In contrast, the total growth thus far in
this expansion is 17%.* In terms of cumulative growth, the current expansion may
continue to grow for quite a while.
INFLATION: ACTUALLY FALLING DESPITE LOW UNEMPLOYMENT
Typically, as economic expansions persist, inflation pressures build. So far,
there has been no evidence of inflation in this expansion. In fact, for the 12
months ending May 31, the rate of inflation as measured by the Consumer Price
Index of 2.2% was actually less than the average rate of inflation thus far in
the expansion. Yet, unemployment, around 5.0% at present, is nearly the lowest
it has been since 1973.
Why is inflation so low despite low unemployment? Lower rates of unemployment
are compatible with low inflation if workers are more productive. To be sure,
some of the strongest economic sectors, such as technology, have been those
where price pressures have been absent. Productivity also explains why corporate
profits continue to advance at a rate much faster than overall economic growth.
In fact, rather than viewing growth as a cause of higher inflation, the current
environment may be thought of as one where lower inflation helps stimulate
growth.
INTEREST RATES: A DECLINE BODES WELL FOR BONDS
Beginning December 1, the yield on the benchmark 30-year U.S. Treasury bond rose
from 6.35% to 7.20% in mid-April, easing to 6.90% by May 31. On March 25, 1997,
the Federal Reserve Board raised short-term rates from 5.25% to 5.50%. Although
investors were wary of another Fed rate hike in May, it did not materialize. At
the time of the Fed decision, economic growth showed signs of moderating, and
inflation remained dormant.
One reason that long-term rates have stayed relatively high and the bond market
hasn't performed well is because of the traditional thinking that if the economy
is doing well, then inflation must be around the corner. This argument has been
made for quite some time, but it hasn't come to fruition.
Our outlook is fairly positive for long-term interest rates and the bond market.
First, we expect that economic growth will be slower than what we've seen in the
past few quarters. Second, we believe that inflation will remain in the 2.5% to
3% range. We see no inflation in the pipeline at the producer price level or
even at the raw materials level. As a result, we expect long-term interest rates
to decline between now and the end of 1997.
- ------------
*Source: Federal Reserve Board of St. Louis
1
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FEDERAL BUDGET DEFICIT SHRINKS
The third reason that we see interest rates declining is the shrinking budget
deficit. For the fiscal year ending September 30, 1997, the budget deficit is
expected to be about $70 billion. It wasn't long ago that we were faced with
$300 billion deficits. As a percentage of GDP, the budget deficit is now below
1%. One of the byproducts of this prolonged economic expansion is increased tax
revenue as well as lower spending and financing requirements.
THE STOCK MARKET: RECORDS CONTINUE TO FALL
After suffering a 10 percent pullback in late March/early April, the stock
market bounced back quickly to reach record territory by the end of May. The
reasons for the rebound: a slowing economy, falling long-term interest rates,
dormant inflation and the Fed's decision not to raise short-term interest rates
a second time.
BIG COMPANIES CONTINUE TO LEAD
Since 1994, large-capitalization stocks have outperformed small and midcap
stocks. The largest 25 companies in The Standard & Poors 500 Index continue to
trade at a 20% premium to the market average. A number of factors have benefited
these large multinational companies. First, tremendous inflows into the stock
market have favored the most liquid stocks. Second, these large multinational
companies have been able to maintain strong profit growth rates because of their
success at slashing costs.
From this point forward, however, the larger companies are forecasted to have
slower profit growth. At some point, investors will turn to smaller companies to
achieve double-digit profit growth.
A CAUTIOUS APPROACH
Over the short term, we have concerns about the stock market. In terms of
valuation measures such as price-to-earnings, price-to-book value and dividend
yield, the stock market is in record territory. Corporate profit growth is
decelerating. Given these factors, we should be prepared for more volatility.
2
<PAGE>
INTERVIEW (as of May 31, 1997)
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PHOTO
G. Russell
Creighton,
CFA
INVESTMENT MANAGER
17 years of
investment
experience
EMERALD EQUITY FUND
Mr. Creighton joined Barnett in 1981 and has worked with the firm throughout his
investment career. He plays an integral role on the equity investment team and
works with highly qualified investment professionals to integrate our
quantitative models with specific security analysis. Mr. Creighton earned his
BBA in Finance from Stetson University and his MBA in Finance from the
University of North Florida. He holds membership in the Association for
Investment Management and Research (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 investors seeking capital appreciation over the
long-term, wanting to diversify their investment portfolios with a common stock
alternative and those willing to assume the risk associated with equity
investments.
PORTFOLIO COMPOSITION*
The portfolio is diversified across a variety of industries
and holds stocks of companies that we believe will prosper.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Basic Materials 2.5%
Utilities 7.4%
Energy 4.5%
Transportation 1.4%
Manufacturing 11.6%
Technology 19.8%
Consumer Cyclicals 13.7%
Consumer Staples 10.4%
Health Care 16.6%
Finance 12.1%
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3
<PAGE>
EMERALD EQUITY FUND (as of May 31, 1997)
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<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF MAY 31, 1997*
INSTITUTIONAL
SHARES
---------------
<S> <C>
Quarter ended 6/30/97 14.95%
1 Year 18.94%
5 Year 13.82%
10 Year 11.81%
Since Inception 14.12%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND
NAV WILL FLUCTUATE, SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THE ORIGINAL COST.
During the periods indicated, fee waivers and/or expense reimbursements were in
effect. Without these waivers and/or reimbursements, performance would have been
lower.
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- ---------------
* 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 was 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.
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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, Intel and Pfizer.
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
General Electric Co. 3.07% USX-Marathon Group 1.77%
......................................................... .........................................................
Intel Corp. 2.41% Pfizer, Inc. 1.76%
......................................................... .........................................................
Cisco Systems, Inc. 2.02% BankAmerica Corp. 1.72%
......................................................... .........................................................
Merck & Co. Inc. 1.94% WorldCom Inc. 1.72%
......................................................... .........................................................
Eli Lilly & Co. Inc. 1.83% ConAgra, Inc. 1.61%
......................................................... .........................................................
Total 19.85%
......................................................... .........................................................
</TABLE>
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* The composition of the Fund's holdings is subject to change.
4
<PAGE>
EMERALD EQUITY FUND (as of May 31, 1997)
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HOW HAS THE FUND PERFORMED?
During this semi-annual period, and for the 12 months ended May 31, 1997, we
came close to matching our benchmark, although we fell short of the broad market
index. Our objective is to own a broad array of common stocks with strong
earnings momentum, rising earnings expectations and attractive long-term growth
rates. These stocks range from mid-to large-capitalization companies.
For the six-month period ended May 31, 1997, the Fund's total return was 7.85%.
In comparison, the Growth Fund Index as tracked by Lipper Analytical Services
was up 9.13%, while the Standard & Poors 500 Index, an unmanaged index generally
representative of the U.S. stock market, rose 13.16%.
For the year ended May 31, 1997, the Fund's total return was 18.94%. In
comparison, the Lipper Growth Fund Index was up 19.87%, while the S&P 500 rose
29.44%.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING THE PERIOD?
Clearly, what's hurt us relative to the index has been the narrowness of the
market. Investors have been willing to pay a significant premium for large-
capitalization, highly liquid multinational companies. Over the past year, the
largest 100 companies in the S&P 500 have outperformed the remaining 400
companies in the S&P 500 by about 18 percentage points. On a market
capitalization weighted basis, those 100 companies represent more than 60% of
the S&P 500. Given this large representation and dramatic outperformance, any
underweighting is significant. The average stock in our portfolio has a market
capitalization of about $33 billion. In contrast, the S&P 500's average market
cap is $48 billion.
WHAT AREAS OF THE MARKET WORKED OUT WELL FOR YOU?
The financial sector performed particularly well. Such stocks were attractively
valued compared to the market, selling at 10 to 14 times earnings in an
environment where the market is selling at 20 times earnings. Stocks such as
Bank of America (1.72% of the Fund's net assets), Nationsbank (1.37%) and
Travelers Group (1.43%) were up sharply during the six-month period. This
performance is particularly strong considering that interest rates generally
rose during the period. Rising interest rates usually depress banking stocks in
particular, since loan demand typically slows in such a period.
The largest semiconductor stocks such as Intel (2.41%) and Texas Instruments
(0.69%) have done very well over the past six months. Computer software did
well, with Microsoft (1.37%) leading the charge. The biggest winner in the
portfolio was Dell Computer (0.65%), which more than doubled. Dell was able to
exceed analysts' expectations for earnings growth. We were also overweighted in
pharmaceutical companies such as American Home Products (1.35%), Eli Lilly
(1.83%), Merck (1.94%) and Pfizer (1.76%), and they performed very well.
WHAT AREA OF THE MARKET WAS DISAPPOINTING?
The apparel/footwear stocks have all been going through a substantial
correction. Nike (1.54%) shares fell sharply when the company announced that it
would not meet analyst expectations for earnings growth. Weakness in this
industry leader precipitated a decline in the entire group. For instance, Tommy
Hilfiger (0.54%) fell sharply, even though the company didn't miss its earnings
targets.
WHAT IS YOUR CURRENT STRATEGY?
The portfolio has added energy holdings, which are more defensive. We have added
consumer staples, where we were underweighted, such as Procter & Gamble. We're
still significantly weighted in technology, health care and financial services
stocks. Our strategy continues to identify companies growing faster than the
market, that have positive earnings momentum, where analysts are revising their
estimates upward, and that are trading at a reasonable price/earnings multiple.
5
<PAGE>
INTERVIEW (as of May 31, 1997)
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PHOTO
Don W. Bryant,
CFA
INVESTMENT MANAGER
11 years of
investment
experience
PHOTO
Martin E. LaPrade,
CFA
INVESTMENT MANAGER
17 years of
investment
experience
EMERALD EQUITY
VALUE FUND
Mr. Bryant joined Barnett in 1987. He has worked with the firm throughout his
investment career and plays an integral role on the equity investing team. He
received his undergraduate degree from the University of South Alabama and his
MBA in Finance from the University of Georgia. Mr. Bryant 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.
Mr. LaPrade joined Barnett in 1978 and has worked with the firm throughout his
investment career. He plays an integral role on the equity investment team and
works with highly qualified investment professionals to integrate our
quantitative models with specific security analysis. He received his BS in
Accounting from Furman University. Mr. LaPrade holds membership in 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 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.
6
<PAGE>
EMERALD EQUITY VALUE FUND (as of May 31, 1997)
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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
Basic Materials 14.1%
Utilities 15.3%
Energy 16.7%
Transportation 3.3%
Manufacturing 7.6%
Technology 6.8%
Consumer Cyclicals 11.7%
Consumer Staples 1.6%
Finance 22.9%
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<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF MAY 31, 1997
INSTITUTIONAL
SHARES
---------------
<S> <C>
Quarter ended 6/30/97 14.07%
1 Year 29.26%
Since Inception (12/27/95) 27.43%
</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/or expense reimbursements were in
effect. Without these waivers and/or reimbursements, performance would have been
lower.
- --------------------------------------------------------------------------------
7
<PAGE>
EMERALD EQUITY VALUE FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
The portfolio's 10 largest holdings include such established companies as Exxon,
Dow Chemical and Travelers.
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
Exxon Corp. 3.87% Travelers Group, Inc. 2.02%
.......................................................... ..........................................................
Ameritech Corp. 2.23% Amoco Corp. 1.86%
.......................................................... ..........................................................
Coastal Corp. 2.18% Dow Chemical Co. 1.73%
.......................................................... ..........................................................
BankAmerica Corp. 2.10% Xerox Corp. 1.73%
.......................................................... ..........................................................
Aluminum Company of America 2.09% Mobil Corp. 1.72%
.......................................................... ..........................................................
Total 21.53%
.......................................................... ..........................................................
</TABLE>
- ---------------
* The composition of the Fund's holdings is subject to change.
8
<PAGE>
EMERALD EQUITY VALUE FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
HOW HAS THE FUND PERFORMED?
For the six-month period ended May 31, 1997, the Fund's total return was 13.21%.
In comparison, the S&P Barra Value Index, an unmanaged index of value-oriented
securities, rose 10.37%, while the S&P 500 Index was up 13.16%.
For the year ended May 31, 1997, the Fund's total return was 29.26%. In
comparison, the S&P Barra Value Index rose 25.47%, while the S&P 500 Index was
up 29.44%.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
The portfolio is significantly weighted in finance -- banks, insurance companies
and brokerage firms. Those are stocks with lower price/earnings ratios, lower
price/book value ratios, and, yet they possess good earnings growth. Finance
companies used to be considered "cyclical," in that their fortunes depended on
the economic cycle. However, many of them have diversified their businesses in
such a way that they're not as sensitive to the economic cycles as they have
been in the past. As a result, the market has rewarded these stocks with better
valuations.
Finance has been one of the strongest areas of the market for the past six
months. Winners in the portfolio include Lehman Brothers (1.22% of the
portfolio's net assets) in the brokerage industry, Cigna (1.48%) and Allstate
(1.18%) in insurance, and Bank of America (2.10%) and Mellon (0.74%) in the
banking industry.
We were underweighted in technology, but many of the technology stocks that we
have owned have done very well, such as Applied Materials (0.68%), a
semiconductor stock that offered good value, IBM (1.64%) and Compaq Computer
(0.82%).
WHICH INVESTMENT STYLE DID BETTER DURING THE PAST SIX MONTHS -- GROWTH OR VALUE?
As an investment style, growth outperformed value during the past six months.
The S&P growth index was up 15.9%, while the value index was up 10.4%. However,
the advantage of growth may be overstated. The S&P growth number may actually be
a size effect rather than a style effect, as many of the largest stocks are
growth stocks. Excluding size, value and growth were very close.
WHAT IS YOUR CURRENT STRATEGY?
Our strategy is to focus on the most attractive valuations in every sector of
the market. Though absolute value varies through a market cycle, we are always
able to find relative value. We continue to believe that value investing is
attractive, particularly in this environment of higher stock valuations.
9
<PAGE>
INTERVIEW (as of May 31, 1997)
- --------------------------------------------------------------------------------
PHOTO
Jeffrey A. Busby,
CFA
MANAGING PARTNER OF
OPERATIONS, SENIOR
PORTFOLIO
MANAGER/ANALYST
AT BRANDES
INVESTMENT
PARTNERS,
SUB-ADVISER FOR
THE EMERALD
INTERNATIONAL
EQUITY FUND.
PHOTO
Don W. Bryant,
CFA
INVESTMENT MANAGER
11 years of
investment
experience
EMERALD INTERNATIONAL EQUITY FUND
Mr. Busby, one of five managing partners at Brandes, (Sub-adviser to the Emerald
International Equity Fund), is responsible for overseeing the firm's operations
and trading functions. As a senior member of the Investment Committee, he
contributes to the investment process through his fundamental research on
companies worldwide as well as through his computer screening of fundamental
data. Before joining Brandes, Jeff worked as an analyst at a financial
institution and as a registered representative. Jeff received his BS in Chemical
Engineering in 1983 from Northwestern University and his MBA in Finance in 1988
from the University of California at Berkeley. He is a member of both the
Association for Investment Management and Research (AIMR) and of the Financial
Analysts Society of San Diego.
Mr. Bryant joined Barnett in 1987. He has worked with the firm throughout his
investment career and plays an integral role on the equity investment team. He
received his undergraduate degree from the University of South Alabama and his
MBA in Finance from the University of Georgia. Don 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 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.
9
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION**
The portfolio emphasizes established companies located in a
variety of foreign regions that sell below their "true
value."
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Latin America 4%
United Kingdom 9%
Europe 57%
Asia 14%
Other 16%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF MAY 31, 1997
INSTITUTIONAL
SHARES
---------------
<S> <C>
Quarter ended 6/30/97 13.25%
1 Year 21.56%
Since Inception (12/27/95) 19.84%
</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/or expense reimbursements were in
effect. Without these waivers and/or reimbursements, performance would have been
lower.
- --------------------------------------------------------------------------------
10
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
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>
Daimler-Benz AG 5.04% Tele Danmark 3.71%
.......................................................... ..........................................................
Stet Societa Finanziaria Telefonica 4.84% Hitachi Ltd. 3.68%
.......................................................... ..........................................................
Alcatel Alsthom 4.58% Fuji Photo Film 3.45%
.......................................................... ..........................................................
Nestle S.A. 4.56% Telefonica de Espana 3.42%
.......................................................... ..........................................................
Groupe Danone 3.88% Telefonos de Mexico 3.13%
.......................................................... ..........................................................
Total 40.29%
.......................................................... ..........................................................
</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.
11
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
HOW HAS THE FUND PERFORMED?
The objective of this portfolio is to achieve long-term capital appreciation by
investing in non-U.S. stocks. Investing in foreign stocks is a good way to
diversify an overall investment portfolio, because the performance of these
companies is typically independent of the U.S. stock market. During this semi-
annual period and for the twelve months ended May 31, the performance was nearly
triple the performance of the benchmark. We accomplished this performance by a
rigorous adherence to our "bottom-up" investment style that searches for
undervalued companies throughout the world.
For the six months ended May 31, 1997, the Fund's total return was 14.16%. In
comparison, the Morgan Stanley Capital International EAFE Index (EAFE), an
unmanaged index of primarily large-capitalization stocks issued by companies in
Europe, Australia and the Far East, rose 4.19%.
For the 12 months ended May 31, 1997, the Fund's total return was 21.56%. In
comparison, the EAFE Index rose 7.86%
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING THE PERIOD?
A big portion of our outperformance can be attributed to our continued
underweighting in Japan, where the market was up only about 5%. In addition, we
are overweighted in Europe, where we have more than 68% of the Fund's net
assets. The European markets were quite strong during that period of time. What
sounds commonplace in the United States -- corporate restructuring -- is a new
concept for European companies. The whole notion of enhancing shareholder value
was something that companies did not discuss as recently as five years ago. That
is changing pretty dramatically. These companies are addressing some tough
issues such as the role of labor, although it is extremely difficult,
particularly in France and Germany. But companies currently competing in a
global arena can't survive solely by selling to their home markets and must
begin to act more competitively.
FROM A PERFORMANCE STANDPOINT, DID A PARTICULAR COUNTRY IN
EUROPE STAND OUT?
Spain was our top performer, where we increased our holdings to 5% of the Fund's
total market value during the period. However, our investment strategy is to
evaluate stocks from a bottom-up perspective. The fact that our portfolio is
structured toward a country or industry is solely a function of our bottom-up
security selection. We have about 50 stocks in the portfolio and those are
purchased because they're the best issues we can find throughout the world.
WHAT WERE SOME STRONG PERFORMING STOCKS DURING THE PERIOD?
The top performing issue was Telebras (2.61% of the Fund's net assets), which
increased 60% in value, due to market appreciation through the end of May 1997.
Telebras is the Brazilian telephone monopoly, and it's an issue that has been
trading at a very attractive multiple to cash flow. When we first started buying
it, it was trading at less than two times cash flow. In contrast, the U.S. "baby
Bells" sell at about six to eight times cash flow. Latin American issues were up
strongly during this period of time, because they had been weak for several
years following the peso devaluation. Telebras reported very strong earnings,
outpacing expectations. Another company that outpaced expectations was Alcatel
(4.58%), a French telecommunications equipment and basic infrastructure company.
Alcatel is the worldwide leader in telecommunications switching equipment, but
the company was selling at a much lower valuation than its competitors.
WHAT WAS A WEAK PERFORMER?
The weakest stock in the portfolio has been Peugeot (2.37%), the French
automaker. The company is trading at less than 3 times cash flow and 50% of book
value, so the market is valuing this company as if it were not a going concern.
The company's stock is even selling at a discount to liquidation value, making
it the kind of
12
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
company that value-style managers such as us would find attractive. There's a
negative perception of the company because earnings have been weak for the past
several years. The value style tends to be contrarian, which is why we often go
into areas where there is bad news, and it takes time for that bad news to work
itself out. Our time horizon is three to five years.
WHAT IS YOUR OUTLOOK FOR THE PORTFOLIO?
The portfolio is trading at a substantial discount to EAFE, and the stocks in
the portfolio have less debt. As a result, we have more attractive issues from a
fundamental valuation perspective while taking half the financial risk. In
addition, the portfolio has a higher dividend yield, helping to make it a
classic value portfolio. Given our value investment style, which examines the
relative value of companies as they are today, we don't really do forecasts.
We're simply looking to find the best opportunities we can worldwide and those
issues tend to outperform if you give them time.
13
<PAGE>
INTERVIEW (as of May 31, 1997)
- --------------------------------------------------------------------------------
PHOTO
Martin E. LaPrade,
CFA
INVESTMENT MANAGER
17 years of
investment
experience
PHOTO
Dean McQuiddy,
CFA
INVESTMENT MANAGER
15 years of
investment
experience
EMERALD SMALL
CAPITALIZATION FUND
Mr. LaPrade joined Barnett in 1978 and has worked with the firm throughout his
investment career. He plays an integral role on the equity investment team and
works with highly qualified investment professionals to integrate our
quantitative models with specific security analysis. He received his BS in
Accounting from Furman University. Mr. LaPrade holds membership in the
Association for Investment Management and Research (AIMR) and has earned the
Chartered Financial Analyst (CFA) designation from AIMR.
Mr. McQuiddy joined Barnett in 1983 and has worked with the firm throughout his
investment career. He plays an integral role on the equity investment team and
works with highly qualified investment professionals to integrate our
quantitative models with specific security analysis. He received his BS in
Finance from the University of Florida. Mr. McQuiddy holds membership in 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 risks of an investment in smaller companies.
- ---------------
* 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.
13
<PAGE>
EMERALD SMALL CAPITALIZATION FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
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
Basic Materials 0.7%
Utilities 3.9%
Energy 5.7%
Transportation 2.7%
Manufacturing 11.2%
Technology 17.1%
Consumer Cyclicals 33.7%
Consumer Staples 9.9%
Finance 15.1%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF MAY 31, 1997*
INSTITUTIONAL
SHARES
-------------
<S> <C> <C>
Quarter ended 6/30/97 19.98%
1 Year -13.67%
5 Year 15.16%
10 year 10.36%
Since Inception 11.65%
</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/or expense reimbursements were in
effect. Without these waivers and/or 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 was 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>
EMERALD SMALL CAPITALIZATION FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS**
The portfolio's 10 largest holdings include such up-and-coming companies as
Pacific Sunwear, Furniture Brands International and Data General.
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
Genesco, Inc. 2.73% NBTY, Inc. 2.57%
.......................................................... ..........................................................
Pacific Sunwear of California 2.71% O'Sullivan Industries 2.54%
.......................................................... ..........................................................
Reliance Group Holdings 2.67% Dean Foods Co. 2.46%
.......................................................... ..........................................................
Furniture Brands International, Inc. 2.59% Foodmaker, Inc. 2.40%
.......................................................... ..........................................................
Smithfield Foods, Inc. 2.58% Data General 2.17%
.......................................................... ..........................................................
Total 25.42%
.......................................................... ..........................................................
</TABLE>
- ---------------
** The composition of the Fund's holdings is subject to change.
15
<PAGE>
EMERALD SMALL CAPITALIZATION FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
HOW HAS THE FUND PERFORMED?
For the six-month period ended May 31, 1997, the Fund's total return was -6.96%.
In comparison, the Russell 2000 Growth Index, an unmanaged index of small-cap
growth stocks, returned 3.68%. For the year ended May 31, 1997, the Fund's total
return was -13.67%, while the Russell 2000 Growth Index returned -5.33%.
For the year ended May 31, 1996, the Fund's total return was 50.46%. In
comparison, the Russell 2000 Growth Index returned 44.60% during that year.
For the five years ended May 31, 1997, the Fund produced an average annual
return of 15.16%, while the Russell 2000 Growth Index was up an average of
12.89%.
WHAT FACTORS AFFECTED YOUR PERFORMANCE DURING THE SIX-MONTH PERIOD?
Our stock investments focused on companies with above average growth potential
and high earnings expectations. These factors and attributes of stocks have been
very well correlated with long-term performance over many years. However, stocks
with negative earnings growth rates, negative earnings momentum and negative
changes in earnings estimates performed better during this time. Small-cap
growth stocks had a very difficult period.
CAN YOU OFFER SOME PERSPECTIVE ON THESE RESULTS?
Since 1987, there have been four quarters other than this year where the
absolute return was worse than -5%. The average gain the next four quarters
after those quarters averaged 36%, so it's a cyclical phenomena that
small-capitalization stocks go through. We've already started to see some of
that bounceback from the low on April 28. Small-cap stocks are volatile. But our
total return in this Fund for the year ending May 1996 was 50%, so fluctuations
can be very positive as well.
WHERE WERE THE BRIGHT SPOTS?
Consumer cyclicals as a whole have helped us, and that would incorporate
retailers. For instance, Pacific Sunwear (2.71% of the Fund's net assets) was a
successful stock. Ethan Allen Interiors (0.91%) and Furniture Brands
International (2.59%) also benefited from the strength of consumer confidence.
In the restaurant sector, the portfolio benefited from CKE Restaurants (1.54%),
which owns Carl's Jr. on the West Coast, Foodmaker (2.40%), which owns Jack In
The Box, and Showbiz Pizza Time (2.08%), owner of Chuck E. Cheese, a restaurant
focusing on pizza parties for children.
Energy is another area that has done well for us. Rising oil prices, as well as
the demand for oil exploration, has boosted the profitability of oil and gas
producers. The oil service companies have helped us in the last six months, one
of the few pockets of strength in the market.
WHAT IS YOUR OUTLOOK?
We believe that as overall economic momentum slows, the larger cap stocks will
find it more difficult to increase their earnings at a double-digit rate. After
this nine-month correction, the valuations of this sector relative to large-cap
stocks are as cheap as they've been in seven years.
16
<PAGE>
INTERVIEW (as of May 31, 1997)
- --------------------------------------------------------------------------------
PHOTO
G. Russell
Creighton,
CFA
INVESTMENT MANAGER
17 years of
investment
experience
PHOTO
Andrew Cantor,
CFA
INVESTMENT MANAGER
23 years of
investment
experience
EMERALD BALANCED FUND
Mr. Creighton joined Barnett in 1981 and has worked with the firm throughout his
investment career. He plays an integral role on the equity investment team, and
works with highly qualified investment professionals to integrate our
quantitative models with specific security analysis. Mr. Creighton earned his
BBA in Finance from Stetson University and his MBA in Finance from the
University of North Florida. He holds membership in the Association for
Investment Management and Research (AIMR) and has earned the Chartered Financial
Analyst (CFA) designation from the AIMR.
Mr. Cantor joined Barnett in 1983 and plays a leading role on the fixed-income
investing team. Prior to joining the firm, he worked for Gulf United
Corporation, where he was responsible for economic and interest rate analysis
and the management of approximately $1.1 billion in fixed-income investments. He
received his BS in Mathematics from Florida Atlantic University and his MA in
Economics from the University of South Carolina. Mr. Cantor holds membership in
the Association for Investment Management and Research (AIMR) and he is
President of the Jacksonville, Florida Financial Analysts Society. He has earned
the Chartered Financial Analyst (CFA) designation from AIMR.
INVESTMENT GOAL
The Fund's investment goal is to seek attractive investment returns 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.
17
<PAGE>
EMERALD BALANCED FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
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
Bonds 38%
Cash & Cash Equivalents 7%
Stocks 55%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF MAY 31, 1997
INSTITUTIONAL
SHARES
---------------
<S> <C>
Quarter ended 6/30/97 9.87%
1 Year 10.68%
Since Inception (4/11/94) 13.83%
</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/or expense reimbursements were in
effect. Without these waivers and/or reimbursements, performance would have been
lower.
- --------------------------------------------------------------------------------
18
<PAGE>
EMERALD BALANCED FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
TOP 5 EQUITY AND BOND HOLDINGS*
The Balanced Fund's top equity holdings mirror those of the Equity Fund, and the
bond holdings include securities such as FHLMC and U.S. Treasury Notes.
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
EQUITIES NET ASSETS BONDS NET ASSETS
<S> <C> <C> <C>
General Electric Co. 1.64% U.S. Treasury Bond, 9.25%, 2/15/16 2.65%
.......................................................... ..........................................................
Intel Corp. 1.33% FHLMC Gold, 7.50%, 9/1/10 2.46%
.......................................................... ..........................................................
Merck & Co., Inc. 1.08% U.S. Treasury Notes, 7.25%, 8/15/04 2.22%
.......................................................... ..........................................................
Cisco Systems Inc. 1.07% U.S. Treasury Notes, 7.00%, 7/15/06 2.13%
.......................................................... ..........................................................
Eli Lilly & Co. 1.01% U.S. Treasury Bonds, 6.75%, 8/15/26 1.64%
.......................................................... ..........................................................
Total Equities 6.13% Total Bonds 11.10%
.......................................................... ..........................................................
</TABLE>
- ---------------
* The composition of the Fund's holdings is subject to change.
19
<PAGE>
EMERALD BALANCED FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
HOW HAS THE FUND PERFORMED?
The portfolio's objective is to produce an attractive investment return through
a combination of capital appreciation and current income. We do this by
assessing the relative returns and risks of stocks versus the relative returns
and risks of bonds.
For the six-month period ending May 31, 1997, the Fund's total return was 3.36%.
In comparison, the Balanced Fund Index as measured by Lipper Analytical Services
Inc. was up 6.37%, while the Lehman Brothers Aggregate Bond Index was up 0.95%,
and the Standard & Poors 500 Stock Index rose 13.16%. The S&P 500 Index and the
Lehman Brothers Aggregate Bond Index are unmanaged indices generally
representative of the U.S. stock market and the Government/ Corporate bond
market, respectively.
For the year ending May 31, 1997, the Fund's total return was 10.68%. In
comparison, the Balanced Fund Index as measured by Lipper was up 17.05%, while
the Lehman Brothers index was up 8.32%, and the S&P 500 index rose 29.44%.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING THE PERIOD?
During the past six to twelve months, the stock market has vastly outperformed
the bond market, although stocks often appeared richly valued compared to bonds.
Through this period, we continued to allocate 60% of the portfolio to stocks.
While our allocation to stocks helped during this period, our weighting in
smaller stocks did not help. We have strategically reduced our weighting in
smaller stocks to result in a less volatile equity portfolio that focuses more
on large- and mid-capitalization stocks. Currently, the Balanced Fund is
essentially a mixture of our large-capitalization equity and managed bond
portfolios.
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 falling in mid-March through mid-April, stocks became
more attractive in relation to bonds. Over time, we expect to maintain a
relatively stable allocation to equities with a target of 60%.
WHAT IS YOUR OUTLOOK?
Even at these lofty levels, we continue to find stocks attractive. Corporate
profits continue to grow at a healthy pace, and inflation remains low. The
demand for stocks continues to be fueled by baby boomers saving for retirement.
However, for stocks to advance significantly from this point, interest rates
would have to come down. Falling interest rates would benefit stocks and bonds
as well. Because of the relative attractiveness and risk of stocks and bonds, we
will likely keep the allocation at 60/40 stocks/bonds for the rest of calendar
year 1997.
20
<PAGE>
INTERVIEW (as of May 31, 1997)
- --------------------------------------------------------------------------------
PHOTO
David A. Furfine
INVESTMENT MANAGER
13 years of
investment
experience
PHOTO
Jeffery A. Greenert,
INVESTMENT MANAGER
12 years of
investment
experience
EMERALD SHORT-TERM FIXED INCOME FUND
Mr. Furfine joined the Adviser in 1996 from Barnett Mortgage Company. Prior to
joining Barnett Mortgage Company in 1995, Mr. Furfine managed the hedging and
trading desk for Prudential Home Mortgage. He received his BS in Economics from
the Wharton School at the University of Pennsylvania. Mr. Furfine has 13 years
of investment experience.
Mr. Greenert joined Barnett in 1985 and has worked with the firm throughout his
investment career. He plays an integral role as part of the Barnett Capital
Advisors, Inc. fixed-income investing team and works with a highly qualified
team of fixed-income professionals to analyze interest rates, as well as
individual fixed-income 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
is available from a money market fund and less principal volatility than
normally is associated with a long-term fund.*
- ---------------
* 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.
20
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION**
The portfolio focuses on short-term corporate and government
bonds typically offering higher yields than money-market
instruments in return for some fluctuations in share price.
Currently, the portfolio's average maturity is 2.36 years.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
U.S. Government Obligations 38%
Corporate Obligations 60%
Cash & Cash Equivalents 2%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF MAY 31, 1997*
INSTITUTIONAL
SHARES
---------------
<S> <C>
Quarter Ended 6/30/97 2.15%
1 Year 6.25%
5 Year 5.43%
10 Year 7.19%
Since Inception 8.57%
CURRENT SEC 30-DAY YIELD 5.76%
</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 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 was 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
21
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
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.
22
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
23
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
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>
Tennessee Valley Authority, 5.98%, 4/1/36, Lehman Brothers Holdings, 7.38%, 5/15/07,
putable 4/1/98 @ 100 4.32% putable 5/15/00 @ 100 2.82%
.......................................................... ..........................................................
Toyota Motor Credit, 5.88%, 6/26/98 3.91% Paine Webber Group, 6.25%, 6/15/98 2.77%
.......................................................... ..........................................................
Harris Corp., 6.65%, 8/1/06, putable 8/1/01
@ 100 3.44% U.S. Treasury Notes, 5.63%, 11/30/98 2.75%
.......................................................... ..........................................................
Banco Latinoamericano, Series 144A, 7.05%,
7/19/99 3.12% FNMA, 7.50%, 11/1/09 2.45%
.......................................................... ..........................................................
Province of Quebec, 7.05%, 7/15/02 2.84% U.S. Treasury Bill, 4/2/98 2.38%
.......................................................... ..........................................................
Total 30.80%
.......................................................... ..........................................................
</TABLE>
-----------------
** The composition of the Fund's holdings is subject to change.
24
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
HOW HAS THE FUND PERFORMED?
Our objective is to achieve current income and stable principal values through
investments in short-term investment-grade securities as well as high-quality
money market instruments. During the six-month period, the portfolio continued
to produce strong income, providing a total six-month distribution of $0.293 per
share, although the portfolio's net asset value declined slightly. In a period
of rising interest rates, fixed-income funds decline in value -- and vice versa.
In a period of falling interest rates, fixed-income funds increase in value.
Interest rates rose over the six-month period by nearly 60 basis points as
measured by the two-year U.S. Treasury Note. Because of rising interest rates,
which depress bond prices, total returns on fixed-income portfolios were low.
The Fund's total return was in line with our benchmark comparison. For the
six-month period ending May 31, 1997, the Fund's total return was 1.65%. In
comparison, the Merrill Lynch Government/Corporate Short-Term Index, an
unmanaged index of short-term government and corporate bonds, returned 1.82%.
For the year ended May 31, 1997, the Fund's total return was 6.25%. In
comparison, the Merrill Lynch short-term index returned 6.93%.
WHAT STRATEGIES AFFECTED THE FUND'S PERFORMANCE?
The Merrill Lynch 1-5 year Government/Corporate Short-Term Index has a duration
(sensitivity to interest rates) of 2.25 years. At the beginning of the six-month
period, the duration of our portfolio was slightly longer than the Index, a
disadvantage in a period of rising interest rates. Portfolios with longer
durations are more sensitive to interest-rate movements. Since interest rates
generally rose during the period, our Fund's net asset value initially fell more
than the benchmark.
On the other hand, our use of high-coupon short-term mortgage-backed securities
was advantageous. Mortgage-backed securities offer higher yields than comparable
U.S. government bonds. In a period of rising interest rates, mortgage-backed
securities do not "prepay." That is, homeowners tend not to refinance their
homes when interest rates rise. As a result, the portfolio was able to enjoy the
higher yields of these securities for a longer than expected period of time.
We also looked for opportunities in the corporate bond market. For example,
brokerage industry debt benefited from the recent trend in which major banks
have acquired brokerage firms. Paine Webber, Lehman and Donaldson, Lufkin &
Jenrette are widely viewed as likely acquisition candidates by strong banks.
Rating agencies would likely upgrade the credit quality of brokerage firm debt
if the firm were acquired by a major bank, and the market has started to
incorporate this possibility into the value of these securities. Currently, the
credit quality of the portfolio as a whole is AA.
WHAT IS YOUR OUTLOOK?
We expect interest rates to ease somewhat in the long run. However, the risk
exists that in the months immediately ahead, the Federal Reserve may raise rates
to preempt any future inflation. Therefore, it will be beneficial to keep
duration at or near the benchmark while utilizing our credit analysis and
mortgage expertise to add incremental value through security selection.
25
<PAGE>
INTERVIEW (as of May 31, 1997)
- --------------------------------------------------------------------------------
PHOTO
Andrew Cantor,
CFA
INVESTMENT MANAGER
24 years of
investment
experience
PHOTO
Jeffery A. Greenert,
INVESTMENT MANAGER
12 years of
investment
experience
EMERALD U.S
GOVERNMENT SECURITIES
FUND
Mr. Cantor joined Barnett in 1983 and plays a leading role on the fixed-income
investing team. Prior to joining the firm, he worked for Gulf United
Corporation, where he was responsible for economic and interest rate analysis
and the management of approximately $1.1 billion in fixed-income investments. He
received his BS in Mathematics from Florida Atlantic University and his MA in
Economics from the University of South Carolina. Mr. Cantor holds membership in
the Association for Investment Management and Research (AIMR), and he is
President of the Jacksonville, Florida, Financial Analysts Society. He has
earned the Chartered Financial Analyst (CFA) designation from AIMR.
Mr. Greenert joined Barnett in 1985 and has worked with the firm throughout his
investment career. He plays an integral role as part of the Barnett Capital
Advisors, Inc. fixed-income investing team and works with a highly qualified
team of fixed-income professionals to analyze interest rates, as well as
individual fixed-income securities. Mr. Greenert received his BS in Finance from
the University of Florida.
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, those who may receive 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.
24
<PAGE>
EMERALD U.S GOVERNMENT SECURITIES FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION*
The portfolio is composed 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
5.94 years after adjusting for mortgage prepayments.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
U.S. Government Obligations 98%
Cash Equivalents 2%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF MAY 31, 1997
INSTITUTIONAL
SHARES
---------------
<S> <C>
Quarter ended 6/30/97 3.02%
1 Year 7.06%
Since Inception (3/1/94) 5.30%
CURRENT SEC 30-DAY YIELD 6.32%
</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.
- --------------------------------------------------------------------------------
25
<PAGE>
EMERALD U.S GOVERNMENT SECURITIES FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
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>
Tennessee Valley Authority, 5.98%, due
4/1/36, putable 4/1/98 @ 100 7.68% U.S. Treasury Note, 6.38%, 9/30/01 4.56%
.......................................................... ..........................................................
FHLMC, 7.44%, 9/20/06 7.67% FHLMC, 3.50%, 6/15/07 3.77%
.......................................................... ..........................................................
FHLB, 7.20%, 6/14/11 6.19% FHLMC, 9.25%, 6/1/18 3.39%
.......................................................... ..........................................................
U.S. Treasury Bonds, 12.75%, 11/15/10 5.27% FHLMC, 6.08%, 10/29/08 3.10%
.......................................................... ..........................................................
FNMA, 8.00%, 8/1/99 4.59% FHLMC, 6.50%, 10/01/03 2.99%
.......................................................... ..........................................................
Total 49.21%
.......................................................... ..........................................................
</TABLE>
- ---------------
* The composition of the Fund's holdings is subject to change.
26
<PAGE>
EMERALD U.S GOVERNMENT SECURITIES FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
HOW HAS THE FUND PERFORMED?
In a period of rising interest rates, bond prices fall and total returns on most
government bond funds are low. For the six-month period ending May 31, 1997, the
Fund's total return was 0.95%, slightly ahead of our benchmark as defined by
Lipper Analytical Services, Inc. In comparison, the Lehman Brothers Mutual Fund
Government Mortgage Index, an unmanaged index of U.S. Treasuries, government
agencies and mortgage-backed securities, rose 1.08%. For this period, we have
chosen to use the Lehman Brothers Mutual Fund Government Mortgage Index because
we believe it more closely parallels the Fund and is a more appropriate
benchmark than indices used previously.
It is important to note that investors had the ability to receive strong current
income, collecting a total six-month distribution of $0.325 per share. This is
consistent with the Fund's investment goal of seeking steady income from U.S.
government securities.
For the year ended May 31, 1997, the Fund's total return was 7.06%. In
comparison, the Lehman Brothers index rose 8.21%.
WHAT FACTORS AFFECTED YOUR PERFORMANCE?
Net asset value will fluctuate inversely to changes in interest rates. During
the past six months, the yield on the 30-year U.S. Treasury bond rose from 6.35%
on November 30, 1996, to 6.90% on May 31, 1997. In a period of rising interest
rates, bond prices decline.
However, between mid-April, when Treasury yields peaked at 7.20%, and May 31,
when the yield was 6.90%, the bond market rallied and the net asset value of the
Fund increased.
Early in the period, the portfolio's duration (sensitivity to interest rates)
was slightly longer than the index, which hurt performance. However, later in
the period, a longer duration was a favorable factor.
In addition, our decision to overweight the portfolio with mortgage-backed
securities was helpful to performance. Mortgage-backed securities pay a higher
yield than government bonds, and the prepayment risk was minimal in a generally
rising interest-rate environment. When interest rates peaked last spring, we
shifted into "discount" mortgage securities that would be more advantageous in a
falling interest-rate environment.
WHAT IS YOUR OUTLOOK AND STRATEGY?
Although the Federal Reserve Board may raise short-term interest rates to slow
the economy, our expectation remains that longer-term interest rates will ease
down in the second half of the year. As a result, we expect to lengthen duration
somewhat during the months ahead. In addition, we continue to emphasize discount
mortgages, which offer slightly lower yields but are less likely to be prepaid
due to falling interest rates.
27
<PAGE>
INTERVIEW (as of May 31, 1997)
- --------------------------------------------------------------------------------
PHOTO
Andrew Cantor,
CFA
INVESTMENT MANAGER
24 years of
investment
experience
EMERALD MANAGED
BOND FUND
Mr. Cantor joined Barnett in 1983 and plays a leading role on the fixed-income
investing team. Prior to joining the firm, he worked for Gulf United
Corporation, where he was responsible for economic and interest rate analysis
and the management of approximately $1.1 billion in fixed-income investments. He
received his BS in Mathematics from Florida Atlantic University and his MA in
Economics from the University of South Carolina. Mr. Cantor holds membership in
the Association for Investment Management and Research (AIMR), and he is
President of the Jacksonville, Florida 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 can accept fluctuations in price and yield.
27
<PAGE>
EMERALD MANAGED BOND FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION*
The portfolio emphasizes quality corporate bonds. These
investment-grade securities offer a high degree of
diversification as well as the opportunity for strong yields
to investors. Currently, the portfolio's average maturity is
10.16 years.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
U.S. Government & Agency Obligations 50%
Corporate Obligations 42%
Foreign Government Agency 4%
Taxable Municipal Obligations 3%
Cash & Cash Equivalents 1%
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF MAY 31, 1997*
INSTITUTIONAL
SHARES
---------------
<S> <C> <C>
Quarter ended 6/30/97 3.43%
1 Year 7.77%
5 Year 7.40%
10 Year 8.84%
Since Inception 8.67%
CURRENT SEC 30-DAY YIELD 6.26%
</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 was 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")
28
<PAGE>
EMERALD MANAGED BOND FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
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.
29
<PAGE>
EMERALD MANAGED BOND FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
30
<PAGE>
EMERALD MANAGED BOND FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
With the largest industry segment of the portfolio being finance, some of our
top holdings include the following:
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
Tennessee Valley Authority, 5.98%, 4/1/36,
putable 4/1/98 @ 100 4.74% FNMA, 6.50%, 1/18/22 3.43%
......................................................... ..........................................................
General Electrical Capital Corp., 8.30%,
9/20/09 4.02% FNMA, 7.50%, 11/17/23 3.33%
......................................................... ..........................................................
Hydro-Quebec, 8.05%, 7/7/24 3.78% BHP Finance USA, 6.42%, 3/1/26 3.15%
......................................................... ..........................................................
Southtrust Bank, 7.74%, 5/15/25 3.68% Associates Corp., 7.95%, 2/15/10 3.02%
......................................................... ..........................................................
Coca-Cola Enterprises, 6.70%, 10/15/36 3.52% FNMA, 8.00%, 11/17/03 2.78%
......................................................... ..........................................................
Total 35.45%
......................................................... ..........................................................
</TABLE>
- ---------------
* The composition of the Fund's holdings is subject to change.
31
<PAGE>
EMERALD MANAGED BOND FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
HOW HAS THE FUND PERFORMED?
In a period of rising interest rates, bond prices fall and total returns on most
bond funds are low. For the six-month period ending May 31, 1997, the Fund's
total return was 0.36%. 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 0.95%.
It is important to note that investors had the ability to receive strong current
income, collecting a total six-month distribution of $0.412 per share. This is
consistent with the Fund's investment goal, which is to seek a high level of
current income from a mixture of U.S. government bonds and investment-grade
corporate bonds.
For the year ending May 31, 1997, the Fund's total return was 7.77%. In
comparison, the Lehman Brothers index produced a return of 8.32%.
WHAT FACTORS AFFECTED YOUR PERFORMANCE?
The yield on the 30-year U.S. Treasury bond rose from 6.35% on November 30,
1996, to 6.90% on May 31, 1997. In a period of rising interest rates, bond
prices decline. However, between mid-April, when Treasury yields peaked at
7.20%, and May 31, when yields fell to 6.90%, the bond market rallied.
Early in the period, the portfolio's duration (sensitivity to interest rates)
was slightly longer than the index, which hurt
performance relative to the Lehman Brothers index.
A positive factor earlier in the year was the portfolio's exposure to putable
securities. These securities have optional redemption features, allowing the
investor to redeem them at par. In a period of rising interest rates, these
bonds are less price sensitive.
HOW HAS THE PORTFOLIO COMPOSITION CHANGED DURING THE PAST SIX MONTHS?
The proportion of the portfolio dedicated to corporate bonds has increased from
34.2% of net assets to 42.0%. The corporate bond market has remained strong for
most of the period. The strength of the economy and the surging stock market are
positive factors for corporate bonds. A strong economy is a boon to the credit
quality of the bond. In addition, a strong stock market reduces the need for
corporations to issue new debt, constricting the supply of bonds and thus
boosting bond prices.
Finance companies continue to be the top industry in the portfolio. Finance
companies have more incentive to maintain their high credit ratings because
their raw material is money. A high rating directly affects what their raw
material costs them. The finance companies in the portfolio are of very high
quality and include General Electric Credit (4.02% of net assets), British
Telecom Finance (2.56%) and two Merrill Lynch securities (2.35%). All corporate
holdings are rated A or higher; the overall quality of the portfolio is AA. We
find that there is very little yield to be gained by owning lower quality
credits.
WHAT IS YOUR STRATEGY FOR THE MANAGED BOND FUND?
One of our strategies is to purchase corporate bonds that have the potential to
be upgraded. For example, we owned bonds issued by MCI (2.56%), the
telecommunications company. Because MCI was purchased by British Telecom, a
AAA-rated credit, we were able to achieve some price appreciation, due to its
upgraded credit quality. As another example, we added a position in Harris Corp.
(1.17%), an electronics manufacturer, early in 1997. At the time, the bonds were
"split-rated," which means one rating agency rated them A, and another rated
them BBB. We purchased them, recognizing their strength in the industry and
improving credit condition, and subsequently they were upgraded. At the same
time, we are very sensitive to the issue of "event" risk, a common reason for a
company's debt to be downgraded. If the company gets involved in a merger that
has a negative impact on their balance sheet, then that can be a reason for a
company to be downgraded. Fortunately, we've been able to avoid those
situations.
WHAT IS YOUR OUTLOOK?
We expect modest declines in long-term interest rates, and thus, a friendly
environment for this portfolio. The return over the past year of just under 8%
is fairly consistent with what the bond market has done over the past five
years. While that's low relative to the stock market, remember that fixed income
is much less volatile and risky than stocks. If interest rates behave the way we
expect, then there could be some capital appreciation in the portfolio to go
along with income.
32
<PAGE>
INTERVIEW (as of May 31, 1997)
- --------------------------------------------------------------------------------
PHOTO
Margaret L. Moore,
INVESTMENT MANAGER
14 years of
investment
experience
PHOTO
Douglas K. Byrne,
INVESTMENT MANAGER
30 years of
investment
experience
EMERALD FLORIDA
TAX-EXEMPT FUND
Ms. Moore joined Barnett in 1991 and plays an integral role on the municipal
fixed-income investing team. She works with a highly qualified team of municipal
fixed-income investment professionals to carefully analyze interest rates as
well as individual tax-exempt fixed-income securities. Prior to joining the
firm, she worked 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.
Mr. Byrne joined Barnett in 1987 and plays an integral role as part of the
Barnett Capital Advisors, Inc. fixed-income investment team. Prior to joining
the firm, he worked for First City National Bank and the Teacher's Retirement
System of Texas, where he was the Deputy Director of Fixed Income. Mr. Byrne
received his BS and MBA in Finance from Pacific Western University.
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.
- ---------------
* Investors may be subject to the federal alternative minimum tax and to
certain state and local taxes.
31
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
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 the varying
conditions in the economy. Ratings in the chart are assigned by Moody's Investor
Services. Currently, the portfolio's average maturity is 15.20 years.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Cash 3%
Aaa 59%
Aa 15%
A= 1%
BBB 22%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF MAY 31, 1997
INSTITUTIONAL
SHARES
---------------
<S> <C>
Quarter ended 6/30/97 3.73%
1 Year 8.60%
Since Inception (3/1/94) 4.96%
CURRENT SEC 30-DAY YIELD 5.08%
</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.
- --------------------------------------------------------------------------------
32
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
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>
Palm Beach Co., FL, 6.00%, 10/1/10 5.68% Polk Co, FL, 5.85%, 12/1/30 4.42%
.......................................................... ..........................................................
Okaloosa Cnty., Fl, Gas Dist. Rev., 6.88%,
10/1/19 4.91% Orange County, FL, 6.25%, 10/1/16 4.37%
.......................................................... ..........................................................
Collier County, FL, 7.00%, 12/1/19 4.89% Jacksonville, FL, 5.38%, 11/1/18 4.28%
.......................................................... ..........................................................
Dade County, FL, 5.75%, 10/1/12 4.48% Puerto Rico Commonwealth, 6.50%, 7/1/15 4.18%
.......................................................... ..........................................................
Jacksonville, FL, Sales Tax Rev., 5.65%, South Miami Health Facilities, 5.38%,
10/1/14 4.46% 10/1/16 3.43%
.......................................................... ..........................................................
Total 45.10%
.......................................................... ..........................................................
</TABLE>
- ---------------
* Investors maybe 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.
33
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND (as of May 31, 1997)
- --------------------------------------------------------------------------------
HOW HAS THE FUND PERFORMED?
In a period of rising interest rates, bond prices fall, and total returns on
most municipal bond funds are low. Nevertheless, we are pleased that we were
able to out-perform our benchmark for the six-month and twelve-month periods.
For the six-month period ending May 31, 1997, the Fund's total return was 1.09%.
In comparison, the Lipper Florida Muni-Debt Average rose 0.85%. For the year
ending May 31, 1997, the Fund's total return was 8.60%. In comparison, the
Lipper Florida Muni-Debt Average rose 6.92%. The Lipper Florida Muni-Debt
Average is a composite of mutual funds that invest in securities issued by the
State of Florida and its municipalities, territories and political subdivisions,
which are exempt from the Florida Intangibles Tax.
It is important to note that investors had the ability to
receive strong current tax-free
income, collecting a total
six-month distribution of $0.277 per share. This is consistent with the Fund's
investment goal of seeking high tax-free income from investing primarily in debt
obligations of the State of Florida or other municipalities within the state.
WHAT FACTORS AFFECTED YOUR PERFORMANCE?
Like all fixed-income funds, municipal bond total returns were negatively
impacted by rising interest rates over the six-month period. The Fund's duration
was slightly longer than average, which produced modest underperformance early
in the six-month period.
Due to rising demand and short supply, municipal bonds outperformed U.S.
Treasury bonds during the past six months. Indeed, munis are trading at their
richest levels to Treasuries in two years. Municipal bond yields are roughly 79%
of U.S. Treasuries. The yield ratio of 85% or above, for municipals versus
Treasuries, is generally considered attractive.
WHY IS THE DEMAND FOR MUNICIPAL BONDS SO STRONG?
As municipal bond yields reached 6% during the period, the demand from insurance
companies and the retail public increased. 6% is a psychological yield level for
individual investors, who equate a 6% tax-free return to a nearly 10% taxable
return for those in the highest tax bracket of 39.6%. While demand is strong,
the supply of bonds is down nearly 5% from last year.
HOW WOULD YOU DESCRIBE THE FLORIDA ECONOMY?
Our economy has done very well, with a record year in tourism continuing to fuel
employment. The real estate market has firmed as retirees are able to sell their
homes in other parts of the country for higher prices. The state has lower
unemployment and higher household income than the nation as a whole. Recently,
the State of Florida received an increase in its credit rating to a AA+, the
second highest possible.
WHAT IS YOUR CURRENT STRATEGY?
Our strategy is to buy noncallable premium bonds, which provide higher income
and less risk in an interest-rate environment moving in a narrow range. Sector
selection depends as much on availability as it does on strategy.
We have recently been purchasing hospital issues, which offer an additional
quarter percent of yield compared to AAA bonds. However, that yield spread has
recently narrowed to about a tenth of a percent. As a result, our current
strategy is to upgrade credit quality, searching for general obligation bonds or
essential service revenues such as water/sewer bonds. If the municipal bond
market declines, then higher quality names will hold up best.
34
<PAGE>
INTERVIEW (as of May 31, 1997)
- --------------------------------------------------------------------------------
PHOTO
Jacqueline R.
Lunsford,
CFA
PORTFOLIO MANAGER
19 years of
investment
experience
EMERALD PRIME,
TREASURY AND
TAX-EXEMPT FUNDS*
Ms. Lunsford joined Barnett in 1988 and plays a central role on the money market
investing team. Prior to joining the firm, she worked for First Kentucky Trust
Company as a money market portfolio manager. Ms. Lunsford received her BS in
Finance from the University of Louisville. She holds membership in the
Association for Investment Management and Research (AIMR) and the Treasury
Management Association, and she has earned the Chartered 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.
34
<PAGE>
EMERALD PRIME, TREASURY AND TAX-EXEMPT FUNDS (as of May 31, 1997)
- --------------------------------------------------------------------------------
WHAT FACTORS AFFECTED THE PERFORMANCE OF THE MONEY MARKET FUNDS?
Mixed economic indicators and the uncertainty of when and if the Federal Reserve
Board would push interest rates higher kept short-term rates fairly stable
during much of the period. When the Fed raised rates 0.25% on March 25, 1997,
investors initially believed that the move would be just one of several. Since
the average maturities of the funds were fairly short at the end of March, the
Funds were able to extend their maturities and quickly take advantage of the
rate increase. The Fed chose not to increase rates a second time at its May
meeting, and it is now felt that they will take no further action over the
summer months.
WHAT FACTORS COULD AFFECT THE FUNDS IN THE MONTHS AHEAD?
The main factor affecting the Funds, of course, will be the direction of
interest rates. Currently, the continuing strength of the economy has not
precipitated a commensurate increase in inflation, and the Fed seems inclined to
just watch the situation for now. Any indications of inflation pressures would
most likely cause the Fed to push rates higher later in the year. Our strategy
will continue to keep maturities shorter than average, since yields on longer
maturities are not significantly higher -- and in some cases are actually lower
- -- than yields on shorter maturity securities.
Persistently large cash balances held by money market managers industry-wide,
combined with low issuance, continues to contribute to the low interest-rate
environment. This is especially true in the Treasury market, where a decrease in
the government's Treasury bill issuance has caused those rates to decline
sharply over the past few months. In the absence of Fed action, it is likely
that rates paid on short-term instruments will actually decline rather than
remain stable due to these supply/demand factors.
<TABLE>
<CAPTION>
SEC 7-DAY YIELDS AS OF MAY 31, 1997
INSTITUTIONAL SERVICE
SHARES SHARES
<S> <C> <C>
Prime Fund 5.33% 4.99%
Treasury Fund 4.99% 4.64%
Tax-Exempt Fund 3.56% 3.11%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
During the periods indicated, fee waivers and/or expense reimbursements were in
effect. Without these waivers and/or reimbursements, performance would have been
lower. Had these waivers or reimbursements not been in effect, the SEC 7-day
yields for Institutional shares would have been 5.30% for the Prime Fund, 4.98%
for the Treasury Fund and 3.46% for the Tax-Exempt Fund. For Service shares, the
SEC 7-day yields would have been 4.96% for the Prime Fund, 4.63% for the
Treasury Fund and 1.36% for the Tax Exempt Fund.
35
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
May 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
COMMON STOCKS -- 95.0%
AIRLINES -- 1.3%
AMR Corp. (b) ................................................................ 33,600 $ 3,339,000
------------
APPAREL -- 1.4%
Fruit of the Loom, Inc. (b) .................................................. 61,800 2,155,275
Tommy Hilfiger Corp. (b) ..................................................... 31,700 1,410,650
------------
3,565,925
------------
AUTO PARTS -- ORIGINAL EQUIPMENT MANUFACTURERS -- 1.0%
Lear Corp. (b) ............................................................... 65,000 2,486,250
------------
BIOTECHNOLOGY -- 2.1%
Amgen, Inc. .................................................................. 53,700 3,591,188
Elan Corp., PLC ADR (b) ...................................................... 45,900 1,870,425
------------
5,461,613
------------
BUILDING PRODUCTS -- 1.3%
American Standard Cos., Inc. (b) ............................................. 69,700 3,493,713
------------
COMPUTER SOFTWARE -- 4.8%
BMC Software, Inc. (b) ....................................................... 50,600 2,738,725
Cadence Design Systems, Inc. (b) ............................................. 56,875 1,891,094
Computer Associates International, Inc. ...................................... 53,075 2,905,856
McAfee Associates, Inc. (b) .................................................. 20,400 1,342,575
Microsoft Corp. (b) .......................................................... 28,600 3,546,399
------------
12,424,649
------------
COMPUTER/VIDEO CHAINS -- 1.0%
CompUSA, Inc. (b) ............................................................ 108,500 2,522,625
------------
CONSTRUCTION/AGRICULTURAL EQUIPMENT -- 0.9%
Caterpillar, Inc. ............................................................ 24,900 2,430,863
------------
CONTRACT DRILLING -- 1.3%
Helmerich & Payne, Inc. ...................................................... 58,200 3,266,475
------------
DEPARTMENT STORES -- 0.8%
Federated Department Stores, Inc. (b) ........................................ 52,700 1,949,900
------------
DISCOUNT CHAINS -- 0.7%
Consolidated Stores Corp. (b) ................................................ 47,000 1,797,750
------------
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
DIVERSIFIED ELECTRONICS -- 1.2%
SCI Systems, Inc. (b) ........................................................ 47,700 $ 3,100,500
------------
DIVERSIFIED MANUFACTURING -- 1.2%
Tyco International Ltd. ...................................................... 48,900 3,105,150
------------
ELECTRICAL PRODUCTS -- 1.0%
Raychem Corp. ................................................................ 35,900 2,661,088
------------
ELECTRONIC COMPONENTS -- 1.4%
Adaptec, Inc. (b) ............................................................ 60,800 2,234,400
Read-Rite Corp. (b) .......................................................... 67,400 1,406,975
------------
3,641,375
------------
ELECTRONIC DATA PROCESSING -- 0.8%
Compaq Computer Corp. (b) .................................................... 19,800 2,143,350
------------
ELECTRONIC DATA PROCESSING -- PERIPHERALS -- 0.8%
Seagate Technology, Inc. (b) ................................................. 54,000 2,193,750
------------
ELECTRONIC DATA PROCESSORS -- 2.2%
Dell Computer Corp. (b) ...................................................... 14,900 1,676,250
Gateway 2000, Inc. (b) ....................................................... 35,900 2,382,863
Sun Microsystems, Inc. (b) ................................................... 54,700 1,764,075
------------
5,823,188
------------
ELECTRONIC PRODUCTION EQUIPMENT -- 0.6%
Novellus Systems, Inc. (b) ................................................... 19,800 1,621,125
------------
ELECTRONICS DISTRIBUTORS -- 0.8%
Tech Data Corp. (b) .......................................................... 71,500 2,118,188
------------
ENVIRONMENTAL SERVICES -- 1.9%
Calenergy Co., Inc. (b) ...................................................... 64,000 2,640,000
USA Waste Services, Inc. (b) ................................................. 62,500 2,265,625
------------
4,905,625
------------
FINANCE COMPANIES -- 2.4%
Green Tree Financial Corp. ................................................... 101,500 3,552,500
MBNA Corp. ................................................................... 82,100 2,781,138
------------
6,333,638
------------
FINANCIAL SERVICES -- DIVERSIFIED -- 1.4%
Travelers Group, Inc. ........................................................ 67,566 3,707,684
------------
FOOD CHAINS -- 1.2%
Safeway, Inc. (b) ............................................................ 67,000 3,015,000
------------
</TABLE>
37
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
HOSPITAL/NURSING MANAGEMENT -- 1.0%
Tenet Healthcare Corp. (b) ................................................... 92,340 $ 2,539,350
------------
HOTELS & RESORTS -- 1.2%
HFS, Inc. (b) ................................................................ 55,600 2,995,450
------------
INTEGRATED OIL COMPANIES -- 1.2%
British Petroleum Co. PLC, ADR ............................................... 21,600 3,129,300
------------
LIFE INSURANCE -- 2.7%
Conseco, Inc. ................................................................ 80,600 3,224,000
SunAmerica, Inc. ............................................................. 77,400 3,657,150
------------
6,881,150
------------
MAJOR BANKS -- 4.6%
BankAmerica Corp. ............................................................ 38,200 4,464,624
Chase Manhattan Corp. ........................................................ 40,300 3,808,350
NationsBank Corp. ............................................................ 60,300 3,550,163
------------
11,823,137
------------
MAJOR CHEMICALS -- 0.5%
Imperial Chemical Industries PLC, ADR ........................................ 25,400 1,384,300
------------
MAJOR PHARMACEUTICALS -- 8.6%
American Home Products Corp. ................................................. 46,000 3,507,500
Dura Pharmaceuticals, Inc. (b) ............................................... 48,100 1,911,975
Eli Lilly & Co. .............................................................. 51,100 4,752,299
Johnson & Johnson ............................................................ 43,300 2,592,588
Merck & Co., Inc. ............................................................ 56,000 5,032,999
Pfizer, Inc. ................................................................. 44,300 4,557,363
------------
22,354,724
------------
MAJOR U.S. TELECOMMUNICATIONS -- 1.4%
Ameritech Corp. .............................................................. 57,100 3,740,050
------------
MANAGED HEALTH CARE -- 1.5%
Oxford Health Plans, Inc. (b) ................................................ 55,600 3,919,800
------------
MEAT, POULTRY & FISH -- 1.6%
ConAgra, Inc. ................................................................ 69,600 4,184,700
------------
MEDICAL SPECIALTIES -- 0.8%
Boston Scientific Corp. (b) .................................................. 38,300 2,044,263
------------
MEDICAL/HOSPITALS -- 0.6%
MedPartners, Inc. (b) ........................................................ 82,200 1,561,800
------------
</TABLE>
38
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
MEDICAL/NURSING SERVICES -- 1.2%
HEALTHSOUTH Corp. (b) ........................................................ 131,600 $ 3,010,350
------------
MOVIES & ENTERTAINMENT -- 1.6%
Walt Disney Co. .............................................................. 50,800 4,159,250
------------
MULTI-SECTOR COMPANIES -- 3.1%
General Electric Co. ......................................................... 132,000 7,969,500
------------
NEWSPAPERS -- 1.2%
New York Times Co., Class A .................................................. 65,900 3,035,519
------------
OFFICE/PLANT AUTOMATION -- 2.8%
Ascend Communications, Inc. (b) .............................................. 36,700 2,046,025
Cisco Systems, Inc. (b) ...................................................... 77,300 5,237,075
------------
7,283,100
------------
OIL REFINING/MARKETING -- 1.8%
USX-Marathon Group ........................................................... 154,300 4,590,425
------------
OIL/GAS DISTRIBUTION -- 2.2%
Columbia Gas System, Inc. .................................................... 38,200 2,459,125
Williams Cos., Inc. .......................................................... 72,300 3,190,238
------------
5,649,363
------------
OTHER SPECIALTY STORES -- 1.6%
Borders Group, Inc. (b) ...................................................... 86,800 1,887,900
Staples, Inc. (b) ............................................................ 106,900 2,351,800
------------
4,239,700
------------
OTHER TELECOMMUNICATIONS -- 3.5%
Cincinnati Bell, Inc. ........................................................ 56,200 3,456,300
Qualcomm, Inc. (b) ........................................................... 23,600 1,138,700
WorldCom, Inc. (b) ........................................................... 150,400 4,455,599
------------
9,050,599
------------
PACKAGED FOODS -- 0.8%
Dole Foods, Inc. ............................................................. 46,300 1,967,750
------------
PACKAGED GOODS/COSMETICS -- 3.5%
Gillette Co. ................................................................. 38,000 3,377,249
Kimberly-Clark Corp. ......................................................... 57,100 2,862,137
Procter & Gamble Co. ......................................................... 20,700 2,854,013
------------
9,093,399
------------
PAPER -- 1.1%
International Paper Co. ...................................................... 59,100 2,836,800
------------
</TABLE>
39
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
POLLUTION CONTROL EQUIPMENT -- 0.7%
U.S. Filter Corp. (b) ........................................................ 58,700 $ 1,849,050
------------
RECREATIONAL PRODUCTS -- 0.7%
Callaway Golf Co. ............................................................ 58,700 1,893,075
------------
SEMICONDUCTORS -- 3.7%
Atmel Corp. (b) .............................................................. 58,800 1,690,500
Intel Corp. .................................................................. 41,200 6,241,799
Texas Instruments, Inc. ...................................................... 19,900 1,788,513
------------
9,720,812
------------
SHOE MANUFACTURING -- 1.5%
Nike, Inc., Class B .......................................................... 69,900 3,984,300
------------
SOFT DRINKS -- 2.4%
Panamerican Beverages, Inc. Class A .......................................... 72,000 2,088,000
PepsiCo, Inc. ................................................................ 109,900 4,038,825
------------
6,126,825
------------
SPECIALTY CHEMICALS -- 0.7%
Praxair, Inc. ................................................................ 35,900 1,889,238
------------
SPECIALTY FOODS/CANDY -- 0.6%
Interstate Bakeries Corp. .................................................... 31,100 1,671,625
------------
TOBACCO -- 1.1%
Philip Morris Cos., Inc. ..................................................... 63,900 2,811,600
------------
TOTAL COMMON STOCKS (COST $175,665,260)......................................... 246,498,728
------------
UNIT INVESTMENT TRUSTS -- 4.1%
S&P 400 Mid-Cap Depository Receipts, Series I ................................ 108,800 5,912,600
S&P 500 Depository Receipts, Series I ........................................ 55,000 4,681,875
------------
TOTAL UNIT INVESTMENT TRUSTS (COST $8,732,987).................................. 10,594,475
------------
</TABLE>
40
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
CASH SWEEP ACCOUNT -- 0.8%
Bank of New York (cost $2,065,091) ........................................... 2,065,091 $ 2,065,091
------------
TOTAL INVESTMENTS (COST $186,463,338)(a) -- 99.9%............................... 259,158,294
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.1%................................... 361,921
------------
TOTAL NET ASSETS -- 100.0%...................................................... $259,520,215
------------
------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $259,520,215.
(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....... $ 75,224,344
Unrealized depreciation....... (2,529,388)
------------
Net unrealized appreciation... $ 72,694,956
------------
------------
(b) Represents non-income producing security.
ADR -- American Depository Receipt.
PLC -- Public Limited Company.
See Notes to Financial Statements.
41
<PAGE>
EMERALD EQUITY VALUE FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
May 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
COMMON STOCKS -- 85.6%
AEROSPACE -- 0.8%
Boeing Co. ................................................................... 808 $ 85,042
------------
AIRLINES -- 2.5%
AMR Corp. (b) ................................................................ 1,400 139,125
Delta Air Lines, Inc. ........................................................ 1,300 121,875
------------
261,000
------------
ALUMINUM -- 2.5%
Aluminum Company of America .................................................. 3,000 220,875
Reynolds Metals Co. .......................................................... 600 40,725
------------
261,600
------------
APPAREL -- 1.8%
Russell Corp. ................................................................ 2,200 67,375
VF Corp. ..................................................................... 1,600 125,000
------------
192,375
------------
AUTO PARTS -- ORIGINAL EQUIPMENT MANUFACTURERS -- 0.8%
TRW, Inc. .................................................................... 1,600 85,600
------------
CONSTRUCTION/AGRICULTURAL EQUIPMENT -- 2.0%
Agco Corp. ................................................................... 2,200 70,125
Caterpillar, Inc. ............................................................ 1,400 136,675
------------
206,800
------------
CONTAINERS & PACKAGING -- 1.5%
Crown, Cork & Seal Co., Inc. ................................................. 2,700 157,275
------------
CONTRACT DRILLING -- 1.2%
Helmerich & Payne, Inc. ...................................................... 2,200 123,475
------------
DEPARTMENT STORES -- 2.6%
Federated Department Stores, Inc. (b) ........................................ 3,200 118,400
Sears, Roebuck & Co. ......................................................... 3,200 157,200
------------
275,600
------------
DIVERSIFIED ELECTRONICS -- 0.7%
SCI Systems, Inc. (b) ........................................................ 1,100 71,500
------------
DIVERSIFIED MANUFACTURING -- 0.2%
Olin Corp. ................................................................... 600 24,600
</TABLE>
42
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
DIVERSIFIED MANUFACTURING -- 0.2% (CONTINUED)
Primex Technologies, Inc. .................................................... 40 $ 930
------------
25,530
------------
DRUG STORE CHAINS -- 0.4%
Rite Aid Corp. ............................................................... 1,000 46,500
------------
ELECTRIC UTILITIES: CENTRAL -- 0.5%
Illinova Corp. ............................................................... 2,200 48,125
------------
ELECTRIC UTILITIES: EAST -- 1.6%
DQE, Inc. .................................................................... 2,700 75,938
New York State Electric & Gas Corp. .......................................... 4,200 91,350
------------
167,288
------------
ELECTRIC UTILITIES: SOUTH -- 2.2%
Dominion Resources, Inc. ..................................................... 2,100 72,713
Entergy Corp. ................................................................ 2,700 71,213
FPL Group, Inc. .............................................................. 1,900 88,349
------------
232,275
------------
ELECTRONIC DATA PROCESSING -- 2.5%
Compaq Computer Corp. (b) .................................................... 800 86,600
International Business Machines Corp. ........................................ 2,000 173,000
------------
259,600
------------
ELECTRONIC DATA PROCESSING -- PERIPHERALS -- 0.6%
Seagate Technology, Inc. (b) ................................................. 1,600 65,000
------------
FINANCE COMPANIES -- 2.7%
Countrywide Credit Industries, Inc. .......................................... 1,700 45,688
Federal Home Loan Mortgage Corp. ............................................. 2,700 89,100
Federal National Mortgage Assoc. ............................................. 2,600 113,425
Finova Group, Inc. ........................................................... 500 37,250
------------
285,463
------------
FINANCIAL SERVICES -- DIVERSIFIED -- 3.0%
Travelers Group, Inc. ........................................................ 3,900 214,013
Travelers Property Casualty Corp. Class A .................................... 2,600 100,100
------------
314,113
------------
FLUID CONTROLS -- 0.7%
Parker-Hannifin Corp. ........................................................ 1,400 73,675
------------
FOREST PRODUCTS -- 0.4%
Weyerhaeuser Co. ............................................................. 900 44,888
------------
INTEGRATED OIL COMPANIES -- 11.6%
Amoco Corp. .................................................................. 2,200 196,625
</TABLE>
43
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
INTEGRATED OIL COMPANIES -- 11.6% (CONTINUED)
Atlantic Richfield Co. ....................................................... 600 $ 87,300
Chevron Corp. ................................................................ 1,400 98,000
Exxon Corp. .................................................................. 6,900 408,824
Mobil Corp. .................................................................. 1,300 181,838
Phillips Petroleum Co. ....................................................... 2,200 93,500
Texaco, Inc. ................................................................. 1,600 174,600
------------
1,240,687
------------
INVESTMENT BANKERS/BROKERS/SERVICES -- 2.0%
Lehman Brothers Holdings, Inc. ............................................... 3,200 129,200
Salomon, Inc. ................................................................ 1,600 85,800
------------
215,000
------------
MAJOR BANKS -- 6.6%
BankAmerica Corp. ............................................................ 1,900 222,062
Chase Manhattan Corp. ........................................................ 1,300 122,850
Citicorp ..................................................................... 1,300 148,687
First Union Corp. ............................................................ 900 77,288
Mellon Bank Corp. ............................................................ 900 78,750
NationsBank Corp. ............................................................ 800 47,100
------------
696,737
------------
MAJOR CHEMICALS -- 1.7%
Dow Chemical Co. ............................................................. 2,200 183,425
------------
MAJOR U.S. TELECOMMUNICATIONS -- 5.3%
Ameritech Corp. .............................................................. 3,600 235,799
AT&T Corp. ................................................................... 2,200 81,125
Bell Atlantic Corp. .......................................................... 1,400 98,000
GTE Corp. .................................................................... 3,200 141,200
------------
556,124
------------
MARINE TRANSPORTATION -- 1.1%
APL Ltd. ..................................................................... 1,500 45,375
Applied Materials, Inc. (b) .................................................. 1,100 71,775
------------
117,150
------------
MID-SIZE BANKS -- 1.1%
Bank of Boston Corp. ......................................................... 1,600 116,800
------------
MOTOR VEHICLES -- 3.7%
Chrysler Corp. ............................................................... 3,200 101,600
Ford Motor Co. ............................................................... 3,400 127,500
General Motors Corp. ......................................................... 2,900 166,024
------------
395,124
------------
MULTI-SECTOR COMPANIES -- 1.6%
American Financial Group, Inc. ............................................... 1,600 60,800
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
MULTI-SECTOR COMPANIES -- 1.6% (CONTINUED)
Loews Corp. .................................................................. 1,100 $ 106,975
------------
167,775
------------
MULTI-LINE INSURANCE -- 2.7%
Allstate Corp. ............................................................... 1,700 125,163
Cigna Corp. .................................................................. 900 156,375
------------
281,538
------------
NATURAL GAS DISTRIBUTION -- 0.7%
Pacific Enterprises .......................................................... 2,200 72,050
------------
NEWSPAPERS -- 1.1%
Knight-Ridder, Inc. .......................................................... 2,700 116,438
------------
OFFICE EQUIPMENT/SUPPLIES -- 1.7%
Xerox Corp. .................................................................. 2,700 182,925
------------
OIL & GAS DISTRIBUTION -- 3.2%
Coastal Corp. ................................................................ 4,600 230,574
Panenergy Corp. .............................................................. 2,300 107,525
------------
338,099
------------
OIL REFINING/MARKETING -- 1.0%
USX-Marathon Group ........................................................... 3,400 101,150
------------
OTHER METALS/MINERALS -- 0.5%
Cyprus Amax Minerals Co. ..................................................... 2,200 53,625
------------
PACKAGED FOODS -- 0.2%
Dole Foods, Inc. ............................................................. 500 21,250
------------
PAPER -- 2.3%
International Paper Co. ...................................................... 3,409 163,632
Mead Corp. ................................................................... 900 57,375
Union Camp Corp. ............................................................. 500 26,250
------------
247,257
------------
SAVINGS & LOAN ASSOCIATIONS -- 1.4%
Golden West Financial Corp. .................................................. 1,100 74,525
Great Western Financial Corp. ................................................ 1,600 77,600
------------
152,125
------------
SEMICONDUCTORS -- 1.0%
Motorola, Inc. ............................................................... 1,600 106,200
------------
SPECIALTY CHEMICALS -- 1.5%
B.F. Goodrich Co. ............................................................ 2,400 103,200
</TABLE>
45
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
SPECIALTY CHEMICALS -- 1.5% (CONTINUED)
M.A. Hanna Co. ............................................................... 2,400 $ 55,500
------------
158,700
------------
SPECIALTY INSURERS -- 0.5%
PMI Group, Inc. .............................................................. 900 49,388
------------
STEEL/IRON ORE -- 0.8%
USX-United States Steel Group, Inc. .......................................... 2,700 87,075
------------
TOBACCO -- 1.1%
Philip Morris Cos., Inc. ..................................................... 2,700 118,800
------------
TOTAL COMMON STOCKS (COST $7,892,669)........................................... 9,058,166
------------
UNIT INVESTMENT TRUSTS -- 3.5%
S&P 500 Depository Receipts, Series I (cost $337,328) ........................ 4,300 366,038
------------
CASH SWEEP ACCOUNT -- 10.6%
Bank of New York (cost $1,115,560) ........................................... 1,115,560 1,115,560
------------
TOTAL INVESTMENTS (COST $9,345,557)(a) -- 99.7%................................. 10,539,764
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.3%................................... 32,474
------------
TOTAL NET ASSETS -- 100.0%...................................................... $ 10,572,238
------------
------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $10,572,238.
(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....... $ 1,135,923
Unrealized depreciation....... (58,284)
------------
Net unrealized appreciation... $ 1,194,207
------------
------------
(b) Represents non-income producing security.
See Notes to Financial Statements.
46
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
May 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- -------------
<S> <C> <C>
COMMON STOCKS -- 95.1%
ARGENTINA -- 2.0%
ENERGY SOURCES -- 2.0%
YPF Sociedad Anonima, Class D, ADR ........................................... 26,150 $ 784,500
-------------
TOTAL ARGENTINA................................................................. 784,500
-------------
AUSTRALIA -- 1.5%
MULTI-INDUSTRY -- 1.5%
Pacific Dunlop Ltd., ADR ..................................................... 49,330 561,129
-------------
TOTAL AUSTRALIA................................................................. 561,129
-------------
AUSTRIA -- 1.0%
UTILITIES -- ELETRICAL AND GAS -- 1.0%
EVN Energie-Versorgung Nied., ADR ............................................ 13,460 372,710
-------------
TOTAL AUSTRIA................................................................... 372,710
-------------
BRAZIL -- 4.4%
TELECOMMUNICATIONS -- 2.6%
Telebras, Preferred Shares, ADR .............................................. 7,300 1,002,838
-------------
UTILITIES -- ELETRICAL AND GAS -- 1.8%
Electrobras, ADR ............................................................. 29,550 700,515
-------------
TOTAL BRAZIL.................................................................... 1,703,353
-------------
CANADA -- 0.6%
BEVERAGES AND TOBACCO -- 0.6%
Molson Co. Ltd., Class A, ORD ................................................ 14,130 243,296
-------------
TOTAL CANADA.................................................................... 243,296
-------------
DENMARK -- 6.3%
BANKING -- 2.6%
Den Danske Bank, Unsponsored ADR ............................................. 10,410 992,087
-------------
TELECOMMUNICATIONS -- 3.7%
Tele Danmark AS, Class B, ADR ................................................ 57,450 1,421,887
-------------
TOTAL DENMARK................................................................... 2,413,974
-------------
</TABLE>
47
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- -------------
<S> <C> <C>
FRANCE -- 15.7%
AUTOMOBILES -- 2.4%
PSA Peugeot Citroen, ADR ..................................................... 36,300 $ 907,500
-------------
BANKING -- 0.9%
Societe Generale, ADR ........................................................ 15,000 333,767
-------------
ELECTRICAL AND ELECTRONICS -- 4.5%
Alcatel Alsthom, ADR ......................................................... 77,200 1,756,299
-------------
ENERGY SOURCES -- 2.4%
Elf Aquitane, ADR ............................................................ 17,800 927,825
-------------
FOOD AND HOUSEHOLD PRODUCTS -- 3.9%
Groupe Danone, ADR ........................................................... 49,400 1,490,190
-------------
INSURANCE -- 1.6%
Assurances Generales de France ............................................... 20,000 609,217
-------------
TOTAL FRANCE.................................................................... 6,024,798
-------------
GERMANY -- 8.5%
AUTOMOBILES -- 5.1%
Daimler-Benz, ADR ............................................................ 24,430 1,933,024
-------------
ELECTRICAL AND ELECTRONICS -- 2.9%
Siemens AG, Unsponsored ADR .................................................. 19,900 1,123,950
-------------
UTILITIES -- ELECTRICAL AND GAS -- 0.5%
Berliner Kraft-und Licht ..................................................... 8,800 208,963
-------------
TOTAL GERMANY................................................................... 3,265,937
-------------
ISRAEL -- 0.1%
DATA PROCESSING AND REPRODUCTION -- 0.1%
Scitex Corp., Ltd. ........................................................... 3,100 27,900
-------------
TOTAL ISRAEL.................................................................... 27,900
-------------
ITALY -- 9.8%
BANKING -- 2.8%
Istituto Mobiliare Italiano, SPA, ADR ........................................ 39,957 1,073,844
-------------
INSURANCE -- 1.0%
Istit. Nazionale Assic., ADR ................................................. 26,000 373,750
-------------
</TABLE>
48
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- -------------
<S> <C> <C>
TELECOMMUNICATIONS -- 4.9%
Stet Societa' Finanziaria Telefonica, ADR .................................... 36,310 $ 1,856,349
-------------
UTILITIES -- ELECTRICAL AND GAS -- 1.1%
Italgas-Sta It per il Gas pA, ORD ............................................ 142,200 438,334
-------------
TOTAL ITALY..................................................................... 3,742,277
-------------
JAPAN -- 9.9%
ELECTRICAL AND ELECTRONICS -- 3.6%
Hitachi Ltd., ADR ............................................................ 13,000 1,410,500
-------------
INSURANCE -- 2.8%
Tokio Marine & Fire Insurance Co., ADR ....................................... 18,100 1,076,950
-------------
RECREATION, OTHER CONSUMER GOODS -- 3.5%
Fuji Photo Film, Ltd., Unsponsored ADR ....................................... 34,300 1,324,838
-------------
TOTAL JAPAN..................................................................... 3,812,288
-------------
MEXICO -- 3.1%
TELECOMMUNICATIONS -- 3.1%
Telefonos de Mexico, Class L, ADR ............................................ 27,025 1,199,234
-------------
TOTAL MEXICO.................................................................... 1,199,234
-------------
NETHERLANDS -- 2.5%
INSURANCE -- 0.4%
ING Groep N.V., ADR .......................................................... 3,380 149,556
-------------
TELECOMMUNICATIONS -- 2.1%
KPN -- Konin. PTT Nederland, ADR ............................................. 22,490 798,395
-------------
TOTAL NETHERLANDS............................................................... 947,951
-------------
SINGAPORE -- 2.6%
MULTI-INDUSTRY -- 2.6%
Jardine Matheson Holdings Ltd., ADR .......................................... 148,900 1,012,520
-------------
TOTAL SINGAPORE................................................................. 1,012,520
-------------
SOUTH AFRICA -- 2.5%
METALS/STEEL -- 1.6%
Iscor, Ltd., ADR ............................................................. 89,100 604,098
-------------
MISC. MATERIALS AND COMMODITIES -- 0.9%
De Beers Cons. Mines, Unsponsored ADR ........................................ 10,000 352,500
-------------
TOTAL SOUTH AFRICA.............................................................. 956,598
-------------
</TABLE>
49
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- -------------
<S> <C> <C>
SOUTH KOREA -- 0.9%
METALS/STEEL -- 0.7%
Pohang Iron & Steel Co. Inc., ADR ............................................ 9,080 $ 263,320
-------------
UTILITIES -- ELETRICAL AND GAS -- 0.2%
Korea Electric Power Corp., ADR .............................................. 5,000 90,625
-------------
TOTAL SOUTH KOREA............................................................... 353,945
-------------
SPAIN -- 5.0%
BANKING -- 1.5%
Corp. Bancaria de Espana (Argentaria), ADR ................................... 23,400 587,925
-------------
TELECOMMUNICATIONS -- 3.5%
Telefonica de Espana S.A., ADR ............................................... 15,020 1,312,373
-------------
TOTAL SPAIN..................................................................... 1,900,298
-------------
SWITZERLAND -- 7.7%
ELECTRICAL AND ELECTRONICS -- 1.0%
ABB AG, ADR .................................................................. 2,830 388,491
-------------
FOOD AND HOUSEHOLD PRODUCTS -- 4.6%
Nestle S.A., Registered ADR .................................................. 28,100 1,747,969
-------------
INSURANCE -- 1.7%
Baloise Holding Ltd., Reg ORD ................................................ 305 670,510
-------------
MACHINERY AND ENGINEERING -- 0.4%
Schindler Holding AG, Participating Certificates, ORD ........................ 119 153,516
-------------
TOTAL SWITZERLAND............................................................... 2,960,486
-------------
UNITED KINGDOM -- 11.0%
BEVERAGES AND TOBACCO -- 4.3%
B.A.T. Industries PLC, ADR ................................................... 41,800 768,075
Guinness PLC, ADR ............................................................ 18,170 845,708
-------------
1,613,783
-------------
CHEMICALS -- 2.3%
Imperial Chemical, ADR ....................................................... 16,300 888,350
-------------
FOOD AND HOUSEHOLD PRODUCTS -- 2.5%
Grand Metropolitan PLC, ADR .................................................. 25,670 959,416
-------------
</TABLE>
50
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- -------------
<S> <C> <C>
MULTI-INDUSTRY -- 1.9%
BTR PLC, ADR ................................................................. 57,040 $ 740,938
-------------
TOTAL UNITED KINGDOM............................................................ 4,202,487
-------------
TOTAL COMMON STOCKS (COST $32,522,275).......................................... 36,485,681
-------------
CASH SWEEP ACCOUNT -- 4.8%
Bank of New York (cost $1,827,602) ........................................... 1,827,602 1,827,602
-------------
TOTAL INVESTMENTS (COST $34,349,877)(a) -- 99.9%................................ 38,313,283
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.1%................................... 53,851
-------------
TOTAL NET ASSETS -- 100.0%...................................................... $ 38,367,134
-------------
-------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $38,367,134.
(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....... $ 4,616,130
Unrealized depreciation....... (652,798)
------------
Net unrealized appreciation... $ 3,963,302
------------
------------
ADR -- American Depository Receipts.
ORD -- Ordinary.
PLC -- Public Limited Company.
At May 31, 1997, 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.................................... 6/30/97 5.7405 482,339 $ 84,024 $ 83,718 $ (306)
--------- --------- -----
Total Long Contracts............................ $ 84,024 $ 83,718 $ (306)
--------- --------- -----
--------- --------- -----
</TABLE>
** Contract price is in local currency.
See Notes to Financial Statements.
51
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
May 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- --------------
<S> <C> <C>
COMMON STOCKS -- 93.8%
ADVERTISING -- 1.8%
Valassis Communications, Inc. (b) .................................................. 91,400 $ 2,536,350
--------------
AEROSPACE -- 1.6%
Wyman-Gordon Co. (b) ............................................................... 97,200 2,211,300
--------------
APPAREL -- 1.8%
Tultex (b) ......................................................................... 395,100 2,518,763
--------------
AUTO PARTS -- 1.9%
Borg-Warner Automotive, Inc. ....................................................... 54,900 2,676,375
--------------
AUTO PARTS -- ORIGINAL EQUIPMENT MANUFACTURERS -- 1.4%
Mascotech, Inc. .................................................................... 88,500 1,980,188
--------------
CATALOG & SPECIALTY DISTRIBUTION -- 1.1%
Lands End (b) ...................................................................... 50,900 1,533,363
--------------
CLOTHING/SHOES/ACCESSORIES -- 7.1%
Genesco, Inc. (b) .................................................................. 278,100 3,823,874
Pacific Sunwear of California (b) .................................................. 103,400 3,799,950
Ross Stores, Inc. .................................................................. 78,200 2,199,375
--------------
9,823,199
--------------
COMPUTER SOFTWARE -- 1.2%
Symantec Corp. (b) ................................................................. 91,900 1,751,844
--------------
CONTRACT DRILLING -- 5.2%
Cliffs Drilling Co. (b) ............................................................ 29,600 2,068,300
Falcon Drilling Company, Inc. (b) .................................................. 56,000 2,569,000
Marine Drilling Co., Inc. (b) ...................................................... 132,900 2,674,612
--------------
7,311,912
--------------
DISCOUNT CHAINS -- 1.2%
Tuesday Morning Corp. (b) .......................................................... 63,900 1,709,325
--------------
DIVERSIFIED MANUFACTURING -- 1.9%
Coltec Industries .................................................................. 134,600 2,641,525
--------------
</TABLE>
52
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- --------------
<S> <C> <C>
DRUG STORE CHAINS -- 0.6%
Arbor Drug ......................................................................... 42,350 $ 831,119
--------------
ELECTRICAL PRODUCTS -- 1.9%
Kuhlman Corp. ...................................................................... 43,000 1,187,875
Magnetek, Inc. (b) ................................................................. 88,100 1,541,750
--------------
2,729,625
--------------
ELECTRONIC COMPONENTS -- 5.9%
ACT Manufacturing, Inc. (b) ........................................................ 73,500 2,071,781
Hutchinson Tech (b) ................................................................ 88,300 2,428,250
Innovex, Inc. ...................................................................... 33,400 935,200
Smart Modular Technologies (b) ..................................................... 85,500 2,885,624
--------------
8,320,855
--------------
ELECTRONIC DATA PROCESSING -- 2.2%
Data General (b) ................................................................... 142,500 3,045,938
--------------
ELECTRONIC DATA PROCESSING -- PERIPHERALS -- 0.5%
Microtouch Systems ................................................................. 25,200 636,300
--------------
ELECTRONIC PRODUCTION EQUIPMENT -- 1.2%
Jabil Circuit, Inc. (b) ............................................................ 29,400 1,721,738
--------------
FINANCE COMPANIES -- 2.4%
Americredit Corp. (b) .............................................................. 108,400 2,032,500
Firstplus Financial Group (b) ...................................................... 54,800 1,397,400
--------------
3,429,900
--------------
HOME FURNISHINGS -- 6.0%
Ethan Allen Interiors, Inc. ........................................................ 24,500 1,280,125
Furniture Brands International, Inc. (b) ........................................... 232,400 3,631,249
O'Sullivan Industries Holdings, Inc. (b) ........................................... 228,400 3,568,750
--------------
8,480,124
--------------
INVESTMENT MANAGERS -- 0.9%
Eaton Vance Corp. .................................................................. 52,800 1,300,200
--------------
MEAT, POULTRY & FISH -- 2.6%
Smithfield Foods, Inc. (b) ......................................................... 65,900 3,616,263
--------------
METAL FABRICATION -- 0.8%
Tower Automotive, Inc. (b) ......................................................... 26,800 1,061,950
--------------
MOVIES & ENTERTAINMENT -- 1.8%
Hollywood Entertainment Corp. (b) .................................................. 122,900 2,473,363
</TABLE>
53
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- --------------
<S> <C> <C>
MOVIES & ENTERTAINMENT -- 1.8% (CONTINUED)
Score Board, Inc. .................................................................. 672 $ 756
--------------
2,474,119
--------------
MULTI-LINE INSURANCE -- 2.7%
Reliance Group Holdings ............................................................ 305,500 3,742,375
--------------
OFFICE EQUIPMENT & SUPPLIES -- 1.9%
Interface, Inc. .................................................................... 114,300 2,657,475
--------------
OFFICE/PLANT AUTOMATION -- 0.7%
Applied Magnetics Corp ............................................................. 37,600 935,300
--------------
OILFIELD SERVICES & EQUIPMENT -- 0.5%
Pride Petroleum Services, Inc. (b) ................................................. 32,800 729,800
--------------
OTHER TELECOMMUNICATIONS -- 3.7%
Tel-Save Holdings, Inc. (b) ........................................................ 145,900 2,261,450
U.S. Long Distance (b) ............................................................. 192,100 2,977,550
--------------
5,239,000
--------------
PACKAGED FOODS -- 2.5%
Dean Foods Co. ..................................................................... 90,900 3,454,200
--------------
PRINTING & FORMS -- 1.5%
Mail-Well (b) ...................................................................... 65,800 2,122,050
--------------
PROPERTY -- CASUALTY INSURERS -- 1.5%
Everest Reinsurance Holdings ....................................................... 60,600 2,060,400
--------------
RECREATIONAL PRODUCTS & TOYS -- 1.2%
Action Performance Cos., Inc. (b) .................................................. 70,300 1,691,594
--------------
RESTAURANTS -- 6.0%
CKE Restaurants, Inc. .............................................................. 90,700 2,165,463
Foodmaker, Inc. (b) ................................................................ 240,300 3,364,199
Showbiz Pizza Time, Inc. (b) ....................................................... 129,900 2,922,750
--------------
8,452,412
--------------
SAVINGS & LOAN ASSOCIATIONS -- 6.3%
Albank Financial Corp .............................................................. 57,700 2,214,238
Astoria Financial Corp. ............................................................ 5,400 222,750
Firstfed Financial Corp. (b) ....................................................... 78,100 2,128,225
Glendale Federal Bank (b) .......................................................... 81,600 2,080,800
St. Paul Bancorp, Inc. ............................................................. 71,000 2,254,249
--------------
8,900,262
--------------
</TABLE>
54
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- --------------
<S> <C> <C>
SMALLER BANKS -- 1.2%
Imperial Bancorp (b) ............................................................... 69,235 $ 1,722,221
--------------
SPECIALTY FOODS/CANDY -- 4.1%
Flowers Industries, Inc. ........................................................... 97,700 1,721,963
Morningstar Group, Inc. (b) ........................................................ 16,500 433,125
NBTY, Inc. (b) ..................................................................... 153,700 3,611,950
--------------
5,767,038
--------------
STEEL/IRON ORE -- 1.1%
National Steel Corp. -- Class B (b) ................................................ 114,600 1,547,100
--------------
TELECOMMUNICATION EQUIPMENT -- 1.9%
Digital Microwave Corp. (b) ........................................................ 86,500 2,681,500
--------------
TRUCKING -- 4.0%
CNF Transportation, Inc. ........................................................... 91,200 2,941,200
Yellow Corp. (b) ................................................................... 136,700 2,614,388
--------------
5,555,588
--------------
TOTAL COMMON STOCKS (COST $115,152,984)............................................... 131,600,590
--------------
CASH SWEEP ACCOUNT -- 5.7%
Bank of New York (cost $8,017,765) ................................................. 8,017,765 8,017,765
--------------
TOTAL INVESTMENTS (COST $123,170,749)(a) -- 99.5%..................................... 139,618,355
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.5%......................................... 707,200
--------------
TOTAL NET ASSETS -- 100.0%............................................................ $ 140,325,555
--------------
--------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $140,325,555.
(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....... $ 19,192,649
Unrealized depreciation....... (2,745,044)
------------
Net unrealized appreciation... $ 16,447,605
------------
------------
(b) Represents non-income producing security.
See Notes to Financial Statements.
55
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
May 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
COMMON STOCKS -- 54.3%
AIRLINES -- 0.7%
AMR Corp. (b) ................................................................ 6,300 $ 626,063
------------
APPAREL -- 0.8%
Fruit of the Loom, Inc. (b) .................................................. 11,900 415,012
Tommy Hilfiger Corp. (b) ..................................................... 5,800 258,100
Tultex (b) ................................................................... 18,300 116,663
------------
789,775
------------
AUTO PARTS -- ORIGINAL EQUIPMENT MANUFACTURERS -- 0.6%
Lear Corp. (b) ............................................................... 12,900 493,425
Mascotech, Inc. .............................................................. 2,200 49,225
------------
542,650
------------
BIOTECHNOLOGY -- 1.1%
Amgen, Inc. .................................................................. 9,900 662,063
Elan Corp., PLC ADR (b) ...................................................... 8,200 334,150
------------
996,213
------------
BUILDING PRODUCTS -- 0.8%
American Standard Cos., Inc. (b) ............................................. 14,000 701,750
------------
CATALOG & SPECIALTY DISTRIBUTION -- 0.0%
Lands End (b) ................................................................ 1,400 42,175
------------
CLOTHING/SHOES/ACCESSORIES -- 0.2%
Genesco, Inc. (b) ............................................................ 5,700 78,375
Pacific Sunwear of California (b) ............................................ 2,400 88,200
Ross Stores, Inc. ............................................................ 2,200 61,875
------------
228,450
------------
COMPUTER SOFTWARE -- 2.7%
BMC Software, Inc. (b) ....................................................... 9,600 519,600
Cadence Design Systems, Inc. (b) ............................................. 10,900 362,425
Computer Associates International, Inc. ...................................... 10,200 558,450
McAfee Associates, Inc. (b) .................................................. 4,100 269,831
Microsoft Corp. (b) .......................................................... 5,600 694,399
------------
2,404,705
------------
COMPUTER/VIDEO CHAINS -- 0.5%
CompUSA, Inc. (b) ............................................................ 21,900 509,175
------------
</TABLE>
56
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
CONSTRUCTION/AGRICULTURAL EQUIPMENT -- 0.5%
Caterpillar, Inc. ............................................................ 4,800 $ 468,600
------------
CONTRACT DRILLING -- 0.7%
Helmerich & Payne, Inc. ...................................................... 12,200 684,725
------------
DEPARTMENT STORES -- 0.4%
Federated Department Stores, Inc. (b) ........................................ 10,100 373,700
------------
DISCOUNT CHAINS -- 0.4%
Consolidated Stores Corp. (b) ................................................ 9,300 355,725
Tuesday Morning Corp. (b) .................................................... 1,800 48,150
------------
403,875
------------
DIVERSIFIED ELECTRONICS -- 0.6%
SCI Systems, Inc. (b) ........................................................ 9,200 598,000
------------
DIVERSIFIED MANUFACTURING -- 0.8%
Coltec Industries ............................................................ 7,300 143,263
Tyco International Ltd. ...................................................... 9,200 584,200
------------
727,463
------------
DRUG STORE CHAINS -- 0.0%
Arbor Drug ................................................................... 1,800 35,325
------------
ELECTRICAL PRODUCTS -- 0.6%
Magnetek, Inc. (b) ........................................................... 2,900 50,750
Raychem Corp. ................................................................ 6,700 496,638
------------
547,388
------------
ELECTRONIC COMPONENTS -- 0.8%
ACT Manufacturing, Inc. (b) .................................................. 2,700 76,106
Adaptec, Inc. (b) ............................................................ 11,600 426,300
Read-Rite Corp. (b) .......................................................... 13,600 283,900
------------
786,306
------------
ELECTRONIC DATA PROCESSING -- 0.5%
Compaq Computer Corp. (b) .................................................... 4,000 433,000
Data General (b) ............................................................. 2,800 59,850
------------
492,850
------------
ELECTRONIC DATA PROCESSING -- PERIPHERALS -- 0.5%
Microtouch Systems ........................................................... 600 15,150
Seagate Technology, Inc. (b) ................................................. 10,800 438,750
------------
453,900
------------
ELECTRONIC DATA PROCESSORS -- 1.2%
Dell Computer Corp. (b) ...................................................... 3,000 337,500
Gateway 2000, Inc. (b) ....................................................... 6,800 451,350
</TABLE>
57
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
ELECTRONIC DATA PROCESSORS -- 1.2% (CONTINUED)
Sun Microsystems, Inc. (b) ................................................... 10,900 $ 351,525
------------
1,140,375
------------
ELECTRONIC PRODUCTION EQUIPMENT -- 0.3%
Novellus Systems, Inc. (b) ................................................... 3,800 311,125
------------
ELECTRONICS DISTRIBUTORS -- 0.4%
Tech Data Corp. (b) .......................................................... 14,100 417,713
------------
ENVIRONMENTAL SERVICES -- 1.0%
Calenergy Co., Inc. (b) ...................................................... 12,400 511,500
USA Waste Services, Inc. (b) ................................................. 12,000 435,000
------------
946,500
------------
FINANCE COMPANIES -- 1.4%
Americredit Corp. (b) ........................................................ 3,100 58,125
Green Tree Financial Corp. ................................................... 20,300 710,500
MBNA Corp. ................................................................... 15,800 535,225
------------
1,303,850
------------
FINANCIAL SERVICES -- DIVERSIFIED -- 0.8%
Travelers Group, Inc. ........................................................ 13,700 751,788
------------
FOOD CHAINS -- 0.7%
Safeway, Inc. (b) ............................................................ 13,500 607,500
------------
HOME FURNISHINGS -- 0.4%
Furniture Brands International, Inc. ......................................... 13,000 203,125
O'Sullivan Industries Holdings, Inc. (b) ..................................... 12,800 200,000
------------
403,125
------------
HOSPITAL/NURSING MANAGEMENT -- 0.5%
Tenet Healthcare Corp. (b) ................................................... 17,740 487,850
------------
HOTELS & RESORTS -- 0.6%
HFS, Inc. (b) ................................................................ 11,200 603,400
------------
INTEGRATED OIL COMPANIES -- 0.7%
British Petroleum Co. PLC, ADR ............................................... 4,300 622,963
------------
INVESTMENT MANAGERS -- 0.1%
Eaton Vance Corp. ............................................................ 2,200 54,175
------------
LIFE INSURANCE -- 1.4%
Conseco, Inc. ................................................................ 15,500 620,000
</TABLE>
58
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
LIFE INSURANCE -- 1.4% (CONTINUED)
SunAmerica, Inc. ............................................................. 14,700 $ 694,575
------------
1,314,575
------------
MAJOR BANKS -- 2.6%
BankAmerica Corp. ............................................................ 7,400 864,874
Chase Manhattan Corp. ........................................................ 8,000 756,000
NationsBank Corp. ............................................................ 11,600 682,950
------------
2,303,824
------------
MAJOR CHEMICALS -- 0.3%
Imperial Chemical Industries PLC, ADR ........................................ 4,900 267,050
------------
MAJOR PHARMACEUTICALS -- 4.7%
American Home Products Corp. ................................................. 7,700 587,125
Dura Pharmaceuticals, Inc. (b) ............................................... 9,500 377,625
Eli Lilly & Co. .............................................................. 10,100 939,300
Johnson & Johnson ............................................................ 8,500 508,938
Merck & Co., Inc. ............................................................ 11,200 1,006,599
Pfizer, Inc. ................................................................. 8,800 905,300
------------
4,324,887
------------
MAJOR U.S. TELECOMMUNICATIONS -- 0.8%
Ameritech Corp. .............................................................. 10,900 713,950
------------
MANAGED HEALTH CARE -- 1.1%
MedPartners, Inc. (b) ........................................................ 15,700 298,300
Oxford Health Plans, Inc. (b) ................................................ 10,700 754,350
------------
1,052,650
------------
MEAT, POULTRY & FISH -- 1.0%
ConAgra, Inc. ................................................................ 13,300 799,662
Smithfield Foods, Inc. (b) ................................................... 2,500 137,188
------------
936,850
------------
MEDICAL SPECIALTIES -- 0.4%
Boston Scientific Corp. (b) .................................................. 7,000 373,625
------------
MEDICAL/NURSING SERVICES -- 0.6%
HEALTHSOUTH Corp. (b) ........................................................ 23,800 544,425
------------
METAL FABRICATION -- 0.0%
Tower Automotive, Inc. (b) ................................................... 1,000 39,625
------------
MOVIES & ENTERTAINMENT -- 0.9%
Hollywood Entertainment Corp. (b) ............................................ 2,500 50,313
Walt Disney Co. .............................................................. 9,800 802,375
------------
852,688
------------
</TABLE>
59
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
MULTI-SECTOR COMPANIES -- 1.6%
General Electric Co. ......................................................... 25,400 $ 1,533,525
------------
NEWSPAPERS -- 0.7%
New York Times Co., Class A .................................................. 13,200 608,025
------------
OFFICE/PLANT AUTOMATION -- 1.6%
Ascend Communications, Inc. (b) .............................................. 8,400 468,300
Cisco Systems, Inc. (b) ...................................................... 14,700 995,925
------------
1,464,225
------------
OIL REFINING/MARKETING -- 0.9%
USX-Marathon Group ........................................................... 29,800 886,550
------------
OIL/GAS DISTRIBUTION -- 1.2%
Columbia Gas System, Inc. .................................................... 8,000 515,000
Williams Cos., Inc. .......................................................... 14,650 646,431
------------
1,161,431
------------
OTHER SPECIALTY STORES -- 0.9%
Borders Group, Inc. (b) ...................................................... 16,900 367,575
Staples, Inc. (b) ............................................................ 21,175 465,850
------------
833,425
------------
OTHER TELECOMMUNICATIONS -- 1.9%
Cincinnati Bell, Inc. ........................................................ 10,100 621,150
Qualcomm, Inc. (b) ........................................................... 4,700 226,775
WorldCom, Inc. (b) ........................................................... 29,800 882,824
------------
1,730,749
------------
PACKAGED FOODS -- 0.5%
Dean Foods Co. ............................................................... 1,700 64,600
Dole Foods, Inc. ............................................................. 9,400 399,500
------------
464,100
------------
PACKAGED GOODS/COSMETICS -- 2.0%
Gillette Co. ................................................................. 8,400 746,549
Kimberly-Clark Corp. ......................................................... 12,000 601,500
Procter & Gamble Co. ......................................................... 4,000 551,500
------------
1,899,549
------------
PAPER -- 0.6%
International Paper Co. ...................................................... 11,300 542,400
------------
POLLUTION CONTROL EQUIPMENT -- 0.4%
U.S. Filter Corp. (b) ........................................................ 11,900 374,850
------------
RECREATIONAL PRODUCTS -- 0.4%
Callaway Golf Co. ............................................................ 11,800 380,550
------------
</TABLE>
60
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
RECREATIONAL PRODUCTS & TOYS -- 0.1%
Action Performance Cos., Inc. (b) ............................................ 2,600 $ 62,563
------------
RESTAURANTS -- 0.1%
CKE Restaurants, Inc. ........................................................ 5,100 121,763
Showbiz Pizza Time, Inc. (b) ................................................. 300 6,750
------------
128,513
------------
SAVINGS & LOAN ASSOCIATIONS -- 0.2%
Firstfed Financial Corp. (b) ................................................. 4,400 119,900
St. Paul Bancorp, Inc. ....................................................... 2,300 73,025
------------
192,925
------------
SEMICONDUCTORS -- 2.1%
Atmel Corp. (b) .............................................................. 11,400 327,750
Intel Corp. .................................................................. 8,200 1,242,299
Texas Instruments, Inc. ...................................................... 3,900 350,513
------------
1,920,562
------------
SHOE MANUFACTURING -- 0.9%
Nike, Inc., Class B .......................................................... 14,000 798,000
------------
SMALLER BANKS -- 0.1%
Imperial Bancorp (b) ......................................................... 2,195 54,601
------------
SOFT DRINKS -- 1.3%
Panamerican Beverages, Inc. Class A .......................................... 14,400 417,600
PepsiCo, Inc. ................................................................ 21,800 801,150
------------
1,218,750
------------
SPECIALTY CHEMICALS -- 0.4%
Praxair, Inc. ................................................................ 7,200 378,900
------------
SPECIALTY FOODS/CANDY -- 0.6%
Flowers Industries, Inc. ..................................................... 2,250 39,656
Interstate Bakeries Corp. .................................................... 6,300 338,625
NBTY, Inc. (b) ............................................................... 7,800 183,300
------------
561,581
------------
TELECOMMUNICATION EQUIPMENT -- 0.1%
Digital Microwave Corp. (b) .................................................. 3,200 99,200
------------
TOBACCO -- 0.6%
Philip Morris Cos., Inc. ..................................................... 12,300 541,200
------------
TOTAL COMMON STOCKS (COST $37,224,759).......................................... 50,623,775
------------
</TABLE>
61
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 2)
---------- ------------
<S> <C> <C>
UNIT INVESTMENT TRUSTS -- 4.2%
S&P 400 Mid-Cap Depository Receipts, Series I ................................ 26,000 $ 1,412,938
S&P 500 Depository Receipts, Series I ........................................ 29,700 2,528,212
------------
TOTAL UNIT INVESTMENT TRUSTS (COST $3,084,410).................................. 3,941,150
------------
</TABLE>
<TABLE>
<CAPTION>
MOODY'S/S&P MATURITY PRINCIPAL
RATINGS RATE DATE AMOUNT
---------------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C>
CORPORATE OBLIGATIONS -- 12.5%
ELECTRIC UTILITIES -- 1.9%
Northern States Power Co. -- Minnesota ........ A1/Aa- 5.50% 2/1/99 $ 750,000 739,421
Wisconsin Electric Power Co.,
Callable 9/1/97 @ 105.95 .................... Aa2/AA+ 9.13 9/1/24 1,000,000 1,064,955
-------------
1,804,376
-------------
ELECTRIC UTILITIES -- CENTRAL -- 0.6%
Central Illinois Public Service Co., Callable
5/15/98 @ 105.95 ............................ Aa1/AA- 8.50 5/15/22 500,000 522,302
-------------
ELECTRIC UTILITIES -- EAST -- 1.2%
Citizens Utilities Co., Putable 8/15/03 @
100 ......................................... Aa3/AA+ 6.80 8/15/26 1,150,000 1,161,393
-------------
ELECTRICAL PRODUCTS -- 0.6%
General Electric Capital Corp., Putable 9/20/98
@ 100 ....................................... Aaa/AAA 8.30 9/20/09 500,000 551,612
-------------
FINANCE COMPANIES -- 0.5%
Ford Motor Credit, Medium Term Note ........... A1/A+ 6.80 4/23/01 500,000 498,649
-------------
FINANCIAL SERVICES -- 0.4%
Bank One Auto Trust 1995, A-4 ................. Aaa/AAA 6.90 4/15/98 342,104 343,137
-------------
FINANCIAL SERVICES -- DIVERSIFIED -- 1.6%
Travelers Commercial Credit ................... A1/A+ 6.63 6/1/02 1,500,000 1,481,574
-------------
FINANCIAL SERVICES -- DIVERSIFIED -- 0.4%
American Express Credit Corp., Debenture ...... Aa3/A+ 8.50 6/15/99 350,000 362,835
-------------
INVESTMENT BANKERS/BROKERS -- 1.1%
Merrill Lynch & Co., Inc. ..................... Aa3/AA- 6.70 8/1/00 1,000,000 999,237
-------------
</TABLE>
62
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P MATURITY PRINCIPAL VALUE
RATINGS RATE DATE AMOUNT (NOTE 2)
---------------- ---------- --------- ------------ -------------
<S> <C> <C> <C> <C> <C>
MAJOR BANKS -- 0.6%
Interamerican Development Bank, Debenture,
Putable 9/1/99 @ 100 ........................ Aaa/AAA 8.40% 9/1/09 $ 500,000 $ 560,524
-------------
MAJOR U.S. TELECOMMUNICATIONS -- 2.0%
A T & T Corp., Senior Notes, Callable 1/15/02 @
103.21 ...................................... Aa3/AA- 8.13 1/15/22 400,000 404,633
Chesapeake & Potomac Telephone Co. of Maryland,
Debenture ................................... Aa2/AA 8.00 10/15/29 500,000 534,668
NYNEX Capital Funding Co., Variable Rate Medium
Term Note (b) ............................... A2/A+ 7.63 10/15/09 875,000 937,374
Pacific Telephone & Telegraph Co., Debenture,
Callable 2/1/97 @ 101.45, Putable 10/15/99 @
100 ......................................... A1/AA- 7.25 2/1/08 50,000 49,149
-------------
1,925,824
-------------
MOTOR VEHICLES -- 0.3%
General Motors Acceptance Corp., Medium Term
Note, Putable 6/1/00 @ 100 .................. A3/A- 8.88 6/1/10 250,000 284,044
-------------
MULTI-LINE INSURANCE -- 0.5%
CNA Financial Corp. Senior Note ............... A3/A- 8.88 3/1/98 500,000 510,481
-------------
OIL & GAS -- 0.2%
Texaco Capital Income, Inc., Debenture ........ A1/A+ 8.65 1/30/98 150,000 152,647
-------------
SOFT DRINKS -- 0.6%
Coca-Cola Enterprises, Inc., Putable 1/4/97 @
100 ......................................... A3/AA- 8.00 1/4/05 500,000 532,008
-------------
TOTAL CORPORATE OBLIGATIONS (COST $11,578,408)... 11,690,643
-------------
FOREIGN GOVERNMENT AGENCIES -- 1.1%
Hydro-Quebec, Debenture, Putable 7/7/06 @ 100
(cost $1,049,121) ........................... A2/A+ 8.05 7/7/24 1,000,000 1,071,870
-------------
TAXABLE MUNICIPAL BONDS -- 1.1%
CALIFORNIA -- 1.1%
Los Angeles Airport (Insured by AMBAC) (cost
$990,209) ................................... Aaa/AAA 5.50 5/15/98 1,000,000 994,830
-------------
</TABLE>
63
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P MATURITY PRINCIPAL VALUE
RATINGS RATE DATE AMOUNT (NOTE 2)
---------------- ---------- --------- ------------ -------------
<S> <C> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 13.4%
FEDERAL HOME LOAN MORTGAGE
CORP. -- 4.4%
Federal Home Loan Mortgage Corp., 5 Year
Balloon, Pool #M90384 ....................... Aaa/AAA** 8.50% 2/1/00 $ 249,613 $ 254,742
Federal Home Loan Mortgage Corp., CMO 138-D
PAC ......................................... Aaa/AAA** 8.50 2/15/21 150,829 154,082
Federal Home Loan Mortgage Corp., Gold Pool
#D68937 ..................................... Aaa/AAA** 6.00 3/1/26 330,153 305,328
Federal Home Loan Mortgage Corp., Gold Pool
#E20195 ..................................... Aaa/AAA** 7.50 9/1/10 2,269,812 2,299,684
Federal Home Loan Mortgage Corp., Pool
#288434 ..................................... Aaa/AAA** 8.00 7/1/10 260,948 266,556
Federal Home Loan Mortgage Corp., Pool
#E20195 ..................................... Aaa/AAA** 6.20 9/8/08 660,000 614,015
Federal Home Loan Mortgage Corp., Pool
#M80052 ..................................... Aaa/AAA** 8.50 7/1/98 80,105 81,717
Federal Home Loan Mortgage Corp., Pool
#M80099 ..................................... Aaa/AAA** 8.00 6/1/99 141,638 144,894
-------------
4,121,018
-------------
FEDERAL NATIONAL MORTGAGE ASSOC. -- 7.3%
Federal National Mortgage Association Corp. ... Aaa/AAA** 6.35 6/10/05 500,000 483,094
Federal National Mortgage Association Corp.,
Pool #247516 ................................ Aaa/AAA** 8.50 8/1/11 1,256,235 1,316,711
Federal National Mortgage Association Corp.,
CMO 1991-1G PAC ............................. Aaa/AAA** 7.00 1/25/21 895,970 885,260
Federal National Mortgage Association Corp.,
Medium Term Note, Callable 1/21/97 @ 100 .... Aaa/AAA** 6.14 1/21/04 1,000,000 962,110
Federal National Mortgage Association Corp.,
Medium Term Note, Callable 2/18/97 @ 100 .... Aaa/AAA** 6.48 2/18/04 1,000,000 974,352
Federal National Mortgage Association Corp.,
Pool #124975 ................................ Aaa/AAA** 7.50 8/1/08 701,012 711,506
Federal National Mortgage Association Corp.,
Pool #250700 ................................ Aaa/AAA** 8.00 10/1/26 651,079 663,000
Federal National Mortgage Association Corp.,
Pool #354613 ................................ Aaa/AAA** 7.50 9/1/26 216,262 215,838
Federal National Mortgage Association Corp.,
Pool #358033 ................................ Aaa/AAA** 7.50 9/1/26 453,415 452,526
Federal National Mortgage Association Corp.,
Pool #50609, 7 Year Balloon, Participation
Certificate ................................. Aaa/AAA** 8.00 6/1/99 174,495 178,093
-------------
6,842,490
-------------
</TABLE>
64
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P MATURITY PRINCIPAL VALUE
RATINGS RATE DATE AMOUNT (NOTE 2)
---------------- ---------- --------- ------------ -------------
<S> <C> <C> <C> <C> <C>
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION -- 1.4%
Government National Mortgage Association, Pool
#220063 ..................................... Aaa/AAA** 10.00% 2/15/18 $ 7,695 $ 8,410
Government National Mortgage Association, Pool
#423836 ..................................... Aaa/AAA** 8.00 8/26/26 212,616 216,892
Government National Mortgage Association, Pool
#430065 ..................................... Aaa/AAA** 7.50 9/15/26 446,461 445,228
Government National Mortgage Association, Pool
#432700 ..................................... Aaa/AAA** 7.50 6/15/26 215,178 214,584
Government National Mortgage Association, Pool
#437545 ..................................... Aaa/AAA** 8.00 9/15/26 445,631 454,593
-------------
1,339,707
-------------
U.S. TREASURY STRIPS -- 0.3%
U.S. Treasury Strip ........................... Aaa/AAA** N/A 8/15/08 500,000 234,322
-------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (COST
$12,379,879) 12,537,537
-------------
U.S. GOVERNMENT OBLIGATIONS -- 10.4%
U.S. TREASURY BONDS -- 5.1%
U.S. Treasury Bond ............................ Aaa/AAA** 9.25 2/15/16 2,000,000 2,470,002
U.S. Treasury Bond ............................ Aaa/AAA** 6.75 8/15/26 1,575,000 1,533,165
U.S. Treasury Bond, Callable 8/15/08 @ 100 .... Aaa/AAA** 12.00 8/15/13 500,000 698,594
-------------
4,701,761
-------------
U.S. TREASURY NOTES -- 5.3%
U.S. Treasury Notes ........................... Aaa/AAA** 7.25 8/15/04 2,000,000 2,071,252
U.S. Treasury Note ............................ Aaa/AAA** 5.88 11/15/05 1,000,000 948,751
U.S. Treasury Notes ........................... Aaa/AAA** 7.00 7/15/06 1,945,000 1,985,724
-------------
5,005,727
-------------
TOTAL U.S. GOVERNMENT OBLIGATIONS (COST
$9,883,080).................................... 9,707,488
-------------
</TABLE>
65
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 2)
------------ -------------
<S> <C> <C> <C> <C> <C>
CASH SWEEP ACCOUNT -- 2.6%
Bank of New York (cost $2,422,049) ............ $ 2,422,049 $ 2,422,049
-------------
TOTAL INVESTMENTS (COST $78,611,915)(a) --
99.6%.......................................... 92,989,342
OTHER ASSETS IN EXCESS OF LIABILITIES 0.4%....... 353,755
-------------
TOTAL NET ASSETS -- 100.0%....................... $ 93,343,097
-------------
-------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $93,343,097.
(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....... $ 15,232,028
Unrealized depreciation....... (854,601)
------------
Net unrealized appreciation... $ 14,377,427
------------
------------
(b) Variable rate security. Rate presented reflects interest rate in effect May
31, 1997.
(c) Callable on and anytime after 5/15/97 @100.
* Represents non-income producing security.
** Implied Rating.
ADR -- American Depository Receipt.
AMBAC -- AMBAC Indemnity Corporation.
CMO -- Collateralized Mortgage Obligation.
N/A -- Not Applicable.
PAC -- Planned Amortization Class.
PLC -- Public Limited Company.
See Notes to Financial Statements
66
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
May 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S/S&P MATURITY PRINCIPAL VALUE
RATINGS RATE DATE AMOUNT (NOTE 2)
----------- ------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
CORPORATE OBLIGATIONS -- 62.7%
BANKS -- REGIONAL -- 2.4%
Boatmen's Bancshares, Inc., Corporate Note ............... A2/A 9.25% 11/1/01 $ 1,000,000 $ 1,087,403
Southtrust Bank, Alabama, Putable 2/6/01 @ 100 ........... A1/A 5.58 2/6/06 700,000 671,707
------------
1,759,110
------------
COMPUTER SOFTWARE -- 1.4%
IBM, Corporate Bond ...................................... A1/A 6.38 11/1/97 1,000,000 1,002,345
------------
CONSTRUCTION/AGRICULTURAL EQUIPMENT -- 6.2%
Alco Capital Resources, Inc., Medium Term
Note ................................................... A3/A- 7.33 3/27/98 1,000,000 1,010,366
Caterpillar Finance Corp., Medium Term
Note ................................................... A2/A+ 6.84 9/15/99 1,000,000 1,005,566
John Deere Capital, Corporate Note ....................... A2/A 6.00 2/1/99 1,500,000 1,491,945
PACCAR Financial Corp., Corporate Note ................... A1/AA- 6.31 7/15/98 1,000,000 1,001,948
------------
4,509,825
------------
DEPARTMENT STORES -- 3.4%
Sears Roebuck Acceptance Corp.,
Medium Term Note, Series I, Putable
11/15/00 @ 100 ......................................... A2/A- 6.15 11/15/05 1,000,000 982,165
Sears Roebuck Acceptance Corp.,
Medium Term Note, Series I, Putable
11/15/00 @ 100 ......................................... A2/A- 6.11 11/15/05 1,500,000 1,473,879
------------
2,456,044
------------
DIVERSIFIED ELECTRONIC PRODUCTS -- 3.4%
Harris Corp., Corporate Note, Putable 8/1/01 @ 100 ....... A3/A- 6.65 8/1/06 2,500,000 2,487,202
------------
ELECTRIC UTILITIES -- 9.8%
Arizona Public Service, Corporate Note ................... Baa1/BBB 5.75 9/15/00 1,700,000 1,638,539
Carolina Power and Light, Corporate Note ................. A2/A 6.13 2/1/00 1,345,000 1,327,040
Duke Power Co., Corporate Bond ........................... Aa2/AA- 8.00 11/1/99 1,000,000 1,029,423
Potomac Capital Investment Corp., Medium Term Note ....... 7.25 7/15/97 750,000 751,013
Southern California Edison, Corporate Note ............... A3/A 5.88 1/15/01 900,000 873,124
Southern California Edison, Series 93-E, Corporate
Note ................................................... A2/A+ 5.45 6/15/98 750,000 743,608
Virginia Electric & Power, Series D, Medium Term Note .... A3/A- 7.91 12/13/01 700,000 727,399
------------
7,090,146
------------
FINANCE COMPANIES -- 3.6%
Associates Corp., Corporate Note ......................... Aa3/AA- 7.50 5/15/99 1,000,000 1,017,713
Associates Corp., N.A., Corporate Note ................... Aa3/AA- 7.88 9/30/01 1,500,000 1,556,238
------------
2,573,951
------------
</TABLE>
67
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P MATURITY PRINCIPAL VALUE
RATINGS RATE DATE AMOUNT (NOTE 2)
----------- ------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
FINANCIAL SERVICES -- 2.8%
Paine Webber Group, Corporate Note ....................... Baa1/BBB+ 6.25% 6/15/98 $ 2,000,000 $ 1,997,690
------------
FINANCIAL SERVICES -- DIVERSIFIED -- 1.4%
Transamerica Finance Corp., Corporate Bond ............... A2/A+ 6.38 11/15/01 1,000,000 977,898
------------
FOREIGN GOVERNMENT ISSUES -- 2.8%
Province of Quebec, Corporate Note ....................... A2/A- 7.50 7/15/02 2,000,000 2,049,040
------------
INVESTMENT BANKERS -- 6.4%
Donaldson, Lufkin & Jenrette, Medium Term Note, Putable
2/15/01 @ 100 .......................................... Baa1/A- 5.63 2/15/16 1,000,000 954,240
Goldman Sachs, Corporate Note** .......................... A1/A- 6.20 12/15/00 1,000,000 975,626
Lehman Brothers Holdings, Corporate Bond, putable 5/15/00
@ 100 .................................................. Baa1/A 7.38 5/15/07 2,000,000 2,037,218
Merrill Lynch & Co., Inc., Corporate Note ................ Aa3/AA- 10.38 2/1/99 149,000 158,171
Morgan Stanley Group, Inc., Corporate Note ............... A1/A- 7.50 9/1/99 500,000 509,792
------------
4,635,047
------------
MEDICAL SPECIALTIES -- 1.4%
Bausch & Lomb, Medium Term Note, Putable 8/31/01 @ 100 ... A3/A- 6.56 8/12/26 1,000,000 988,244
------------
MOTOR VEHICLES -- 11.2%
Ford Motor Credit Co., Corporate Note .................... A1/A+ 9.38 12/15/97 500,000 509,343
Ford Motor Credit Co., Medium Term Note .................. A1/A+ 5.67 2/15/01 1,500,000 1,442,695
Ford Motor Credit Co., Meduim Term Note .................. A1/A+ 6.11 12/28/01 1,000,000 967,517
General Motor Acceptance Corp., Corporate
Note ................................................... A3/A- 7.13 6/1/99 250,000 252,827
General Motor Acceptance Corp., Corporate
Note ................................................... A3/A- 7.50 5/23/00 500,000 510,768
General Motor Acceptance Corporation* .................... A3/A- 5.98 7/29/97 1,500,000 1,498,621
Toyota Motor Credit, Medium Term Note .................... NR 5.88 6/26/98 2,830,000 2,823,265
------------
8,005,036
------------
NON U.S. BANKS -- 3.1%
Banco Latinoamericano, Medium Term Note** ................ Baa2/BBB 7.05 7/19/99 2,250,000 2,252,250
------------
OTHER METALS/MINERALS -- 1.3%
BHP Finance USA Ltd., Putable 3/1/03 @ 100 ............... A2/A 6.42 3/1/26 1,000,000 973,281
------------
RENTAL/LEASING COMPANIES -- 1.4%
AT&T Capital Corp., Medium Term Note ..................... Baa3/BBB 7.80 2/10/98 1,000,000 1,011,723
------------
RENTAL/LEASING -- 0.7%
International Lease Finance Corp., Series G, Corporate
Note ................................................... A1/A- 7.00 8/15/98 500,000 504,243
------------
TOTAL CORPORATE OBLIGATIONS (COST $45,421,770).............. 45,273,075
------------
</TABLE>
68
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P MATURITY PRINCIPAL VALUE
RATINGS RATE DATE AMOUNT (NOTE 2)
----------- ------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
TAXABLE MUNICIPAL BONDS -- 1.4%
CALIFORNIA -- 1.4%
Los Angeles Airport (Insured by AMBAC) (cost $988,325) ... Aaa/AAA 5.50% 5/15/98 $ 1,000,000 $ 994,830
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 22.4%
FEDERAL HOME LOAN BANK -- 2.1%
Federal Home Loan Bank ................................... Aaa/AAA*** 6.32 12/26/00 500,000 494,191
Federal Home Loan Bank,
Callable 7/2/97 @ 100 .................................. Aaa/AAA*** 7.41 7/2/01 1,000,000 1,000,443
------------
1,494,634
------------
FEDERAL HOME LOAN MORTGAGE CORP. -- 5.7%
Federal Home Loan Mortgage Corp. --
Gold Pool #M90157 ...................................... Aaa/AAA*** 5.50 12/1/97 675,667 675,505
Federal Home Loan Mortgage Corp., CMO,
Pool #G50051 ........................................... Aaa/AAA*** 5.50 12/1/98 818,428 814,679
Federal Home Loan Mortgage Corp.,
Pool #G50160, 5 Year Balloon ........................... Aaa/AAA*** 5.50 4/1/99 879,227 875,200
Federal Home Loan Mortgage Corp.,
Pool #L74041 ........................................... Aaa/AAA*** 7.50 9/1/01 960,397 974,775
Federal Home Loan Mortgage Corp.,
Pool #M90178 ........................................... Aaa/AAA*** 5.50 4/1/98 811,008 807,293
------------
4,147,452
------------
FEDERAL NATIONAL MORTGAGE ASSOC. -- 10.3%
Federal National Mortgage Assoc.* ........................ Aaa/AAA*** 5.61 10/15/97 500,000 500,310
Federal National Mortgage Assoc., G93-6, Class B,
Non-callable ........................................... Aaa/AAA*** 6.00 1/25/16 468,118 467,383
Federal National Mortgage Assoc.,
Pool #250645 ........................................... Aaa/AAA*** 7.00 8/1/03 964,214 967,386
Federal National Mortgage Assoc.,
Pool #303016, 7 Year Balloon ........................... Aaa/AAA*** 6.00 6/1/01 1,085,327 1,067,440
Federal National Mortgage Assoc.,
Pool #334092 ........................................... Aaa/AAA*** 6.00 5/1/04 1,276,554 1,256,078
Federal National Mortgage Assoc.,
Pool #356820 ........................................... Aaa/AAA*** 7.50 11/1/09 1,744,939 1,771,428
Federal National Mortgage Assoc., REMIC 1997-16, Class Va,
Non-callable ........................................... Aaa/AAA*** 7.00 6/18/01 1,369,854 1,377,752
------------
7,407,777
------------
TENNESSEE VALLEY AUTHORITY -- 4.3%
Tennessee Valley Authority, Putable 4/1/98 @ 100 ......... Aaa/AAA*** 5.98 4/1/36 3,100,000 3,122,251
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (COST
$16,121,637).............................................. 16,172,114
------------
</TABLE>
69
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P MATURITY PRINCIPAL VALUE
RATINGS RATE DATE AMOUNT (NOTE 2)
----------- ------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS -- 10.5%
U.S. TREASURY BILLS -- 5.7%
U.S. Treasury Bill ....................................... Aaa/AAA*** N/A 9/25/97 $ 1,325,000 $ 1,303,879
U.S. Treasury Bill ....................................... Aaa/AAA*** N/A 10/9/97 1,100,000 1,080,173
U.S. Treasury Bill ....................................... Aaa/AAA*** N/A 4/2/98 1,800,000 1,718,529
------------
4,102,581
------------
U.S. TREASURY NOTES -- 4.8%
U.S. Treasury Notes ...................................... Aaa/AAA*** 5.63% 11/30/98 2,000,000 1,988,126
U.S. Treasury Notes ...................................... Aaa/AAA*** 5.88 2/15/00 1,500,000 1,483,126
------------
3,471,252
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(COST $7,576,430)......................................... 7,573,833
------------
<CAPTION>
SHARES
-----------
<S> <C> <C> <C> <C> <C>
CASH SWEEP ACCOUNT -- 2.0%
Bank of New York (cost $1,470,019) ....................... 1,470,019 1,470,019
------------
TOTAL INVESTMENTS (COST $71,578,181)(a) -- 99.0%............ 71,483,871
OTHER ASSETS IN EXCESS OF LIABILITIES 1.0%.................. 722,951
------------
TOTAL NET ASSETS -- 100.0%.................................. $ 72,206,822
------------
------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $72,206,822.
(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....... $ 189,158
Unrealized depreciation....... (283,468)
----------
Net unrealized depreciation... $ (94,310)
----------
----------
(b) Security is callable on and anytime after 5/15/97 @100.
* Variable rate security. Rate listed is rate in effect at May 31, 1997.
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 rating available.
N.A. -- North America
N/A -- Not applicable.
See Notes to Financial Statements.
70
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
May 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S/S&P MATURITY PRINCIPAL VALUE
RATINGS RATE DATE AMOUNT (NOTE 2)
----------- ------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 82.6%
FEDERAL FARM CREDIT -- 1.5%
Federal Farm Credit, Medium Term Note, Callable 7/23/97 @
100..................................................... Aaa/AAA* 6.86% 7/23/99 $ 1,000,000 $ 999,783
------------
FEDERAL HOME LOAN BANK -- 7.7%
Federal Home Loan Bank.................................... Aaa/AAA* 7.20 6/14/11 4,000,000 4,059,319
Federal Home Loan Bank, Callable 9/5/97 @ 100............. Aaa/AAA* 7.00 9/5/01 1,000,000 999,544
------------
5,058,863
------------
FEDERAL HOME LOAN MORTGAGE CORP. -- 37.2%
Federal Home Loan Mortgage Corp., Callable 9/20/01 @
100..................................................... Aaa/AAA* 3.50 6/15/07 3,000,000 2,469,629
Federal Home Loan Mortgage Corp., Debenture, Callable
10/29/98 @ 100.......................................... Aaa/AAA* 6.08 10/29/08 2,200,000 2,029,185
Federal Home Loan Mortgage Corp., Debenture, Callable
11/22/01 @ 100.......................................... Aaa/AAA* 6.88 11/22/06 2,000,000 1,946,386
Federal Home Loan Mortgage Corp., Debenture, Callable
2/2/00 @ 100............................................ Aaa/AAA* 8.53 2/2/05 1,000,000 1,040,268
Federal Home Loan Mortgage Corp.,
Gold Pool #E56405....................................... Aaa/AAA* 6.50 1/1/09 956,397 942,596
Federal Home Loan Mortgage Corp.,
Gold Pool #200053....................................... Aaa/AAA* 8.50 9/1/01 1,317,422 1,351,544
Federal Home Loan Mortgage Corp.,
Gold Pool #306558....................................... Aaa/AAA* 9.25 6/1/18 2,094,655 2,221,696
Federal Home Loan Mortgage Corp.,
Gold Pool #D90560....................................... Aaa/AAA* 5.50 12/1/13 357,062 331,379
Federal Home Loan Mortgage Corp.,
Gold Pool #E58516....................................... Aaa/AAA* 5.50 4/1/09 1,676,305 1,592,372
Federal Home Loan Mortgage Corp.,
Gold Pool #FGN97107, 7 Year Balloon, CMO................ Aaa/AAA* 6.50 10/1/03 1,985,995 1,962,977
Federal Home Loan Mortgage Corp.,
Gold Pool #M80156, 7 Year Balloon....................... Aaa/AAA* 6.50 3/1/00 339,600 338,700
Federal Home Loan Mortgage Corp.,
Gold Pool #M80358, 7 Year Balloon....................... Aaa/AAA* 9.00 2/1/02 680,061 702,252
Federal Home Loan Mortgage Corp.,
Pool #308392............................................ Aaa/AAA* 10.00 9/1/18 99,045 107,611
Federal Home Loan Mortgage Corp.,
Pool #N96694............................................ Aaa/AAA* 7.00 7/1/03 1,007,602 1,011,068
Federal Home Loan Mortgage Corp., Series 1212, Class CA... Aaa/AAA* 6.50 7/15/16 1,222,013 1,224,261
Federal Home Loan Mortgage Corp., Series 1388 Class H..... Aaa/AAA* 7.44 9/20/06 5,000,000 5,027,349
------------
24,299,273
------------
</TABLE>
71
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P MATURITY PRINCIPAL VALUE
RATINGS RATE DATE AMOUNT (NOTE 2)
----------- ------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOC. -- 18.0%
Federal National Mortgage Assoc., Callable 10/1/99 @
100..................................................... Aaa/AAA* 7.18% 10/1/03 $ 1,500,000 $ 1,502,676
Federal National Mortgage Assoc., CMO, Series 1993-54,
Class VB................................................ Aaa/AAA* 7.00 2/25/04 1,000,000 1,003,284
Federal National Mortgage Assoc., Medium Term Note........ Aaa/AAA* 6.72 8/1/05 1,000,000 993,742
Federal National Mortgage Assoc., Pool #108471............ 9.00 11/1/97 136,882 137,939
Federal National Mortgage Assoc., Pool #124418, 7 Year
Balloon................................................. Aaa/AAA* 8.00 8/1/99 2,950,404 3,011,241
Federal National Mortgage Assoc., Pool #190806, 7 Year
Balloon................................................. Aaa/AAA* 6.00 5/1/01 756,019 740,036
Federal National Mortgage Assoc., Pool #250076............ Aaa/AAA* 6.50 7/1/09 1,122,273 1,101,915
Federal National Mortgage Assoc., Pool #285708............ Aaa/AAA* 6.50 6/1/09 979,280 961,516
Federal National Mortgage Assoc., Pool #303478............ Aaa/AAA* 8.50 11/1/01 941,573 959,774
Federal National Mortgage Assoc., Pool #50394, 7 Year
Balloon................................................. Aaa/AAA* 8.50 1/1/98 90,471 92,219
Federal National Mortgage Assoc., Pool #50974............. Aaa/AAA* 6.50 1/1/09 1,017,986 1,001,138
Federal National Mortgage Assoc., Pool #70056............. Aaa/AAA* 9.00 12/1/16 306,407 321,026
------------
11,826,506
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 4.5%
Government National Mortgage Assoc., Pool #040767......... Aaa/AAA* 13.00 2/15/11 35,761 42,075
Government National Mortgage Assoc., Pool #044868......... Aaa/AAA* 13.00 1/15/11 9,130 10,742
Government National Mortgage Assoc., Pool #045234......... Aaa/AAA* 13.00 2/15/11 13,276 15,620
Government National Mortgage Assoc., Pool #045855......... Aaa/AAA* 13.00 4/15/11 27,731 32,628
Government National Mortgage Assoc., Pool #145690......... Aaa/AAA* 11.00 3/15/01 28,748 30,784
Government National Mortgage Assoc., Pool #253768......... Aaa/AAA* 9.00 6/15/18 51,353 54,925
Government National Mortgage Assoc., Pool #254348......... Aaa/AAA* 10.00 10/15/18 22,768 24,883
Government National Mortgage Assoc., Pool #265082......... Aaa/AAA* 9.50 3/15/04 104,066 109,496
Government National Mortgage Assoc., Pool #270156......... Aaa/AAA* 9.50 4/15/04 118,216 124,383
Government National Mortgage Assoc., Pool #339902......... Aaa/AAA* 8.00 2/15/23 1,260,365 1,291,331
Government National Mortgage Assoc., Pool #392713......... Aaa/AAA* 8.00 11/15/24 1,218,677 1,245,561
------------
2,982,428
------------
OTHER -- 2.8%
Export Funding Trust...................................... NR/NR 8.21 12/29/06 1,775,102 1,863,272
------------
</TABLE>
72
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P MATURITY PRINCIPAL VALUE
RATINGS RATE DATE AMOUNT (NOTE 2)
----------- ------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
TENNESSEE VALLEY AUTHORITY -- 10.9%
Tennessee Valley Authority, Callable 11/15/99 @ 106.161... Aaa/AAA* 8.63% 11/15/29 $ 1,500,000 $ 1,597,852
Tennessee Valley Authority, Callable 9/15/99 @ 100........ Aaa/AAA* 8.25 9/15/34 500,000 506,748
Tennessee Valley Authority, Putable 4/1/98 @ 100.......... Aaa/AAA* 5.98 4/1/36 5,000,000 5,035,890
------------
7,140,490
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (COST
$53,551,678).............................................. 54,170,615
------------
U.S. GOVERNMENT OBLIGATIONS -- 15.2%
U.S. TREASURY BONDS/NOTES -- 15.2%
U.S. Treasury Bond, Callable 11/15/05 @ 100............... Aaa/AAA* 12.75 11/15/10 2,500,000 3,453,907
U.S. Treasury Note........................................ Aaa/AAA* 6.50 8/31/01 1,000,000 1,000,626
U.S. Treasury Note........................................ Aaa/AAA* 6.38 9/30/01 3,000,000 2,985,939
U.S. Treasury Note........................................ Aaa/AAA* 6.25 10/31/01 1,000,000 990,626
U.S. Treasury Note........................................ Aaa/AAA* 7.00 7/15/06 1,500,000 1,531,407
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS (COST $10,090,701)........ 9,962,505
------------
<CAPTION>
SHARES
-----------
<S> <C> <C> <C> <C> <C>
CASH SWEEP ACCOUNT -- 1.7%
Bank of New York (cost $1,103,433)........................ 1,103,433 1,103,433
------------
TOTAL INVESTMENTS (COST $64,745,812)(a) -- 99.5%............ 65,236,553
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.5%............... 316,230
------------
TOTAL NET ASSETS -- 100.0%.................................. $ 65,552,783
------------
------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $65,552,783.
(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....... $ 796,175
Unrealized depreciation....... (305,434)
------------
Net unrealized appreciation... $ 490,741
------------
------------
* Implied rating.
CMO -- Collateralized Mortgage Obligation.
NR -- Not rated.
73
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
May 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S/S&P MATURITY PRINCIPAL VALUE
RATINGS RATE DATE AMOUNT (NOTE 2)
------------- ------ --------- -------- ------------
<S> <C> <C> <C> <C> <C>
CORPORATE OBLIGATIONS -- 41.5%
BANKS -- REGIONAL -- 3.7%
Southtrust Bank Georgia, Medium Term Note, Putable 5/15/05 @ 100 ... A3/NR 7.74% 5/15/25 $3,000,000 $ 3,125,982
------------
CONSTRUCTION/AGRICULTURAL EQUIPMENT -- 2.5%
Caterpillar, Inc., Putable 5/12/98 @ 100 ........................... A2/A- 8.95 5/12/00 2,000,000 2,119,074
------------
DEPARTMENT STORES -- 1.7%
Sears Roebuck, Medium Term Note .................................... A2/A- 7.94 2/6/98 1,400,000 1,418,067
------------
DIVERSIFIED ELECTRONIC PRODUCTS -- 1.2%
Harris Corp., Corporate Note, Putable 8/1/01 @ 100 ................. A3/A- 6.65 8/1/06 1,000,000 994,881
------------
ELECTRIC UTILITIES -- CENTRAL -- 1.2%
Central Illinois Public Service Co., Callable 5/15/98 @ 105.95 ..... Aa1/AA+ 8.50 5/15/22 1,000,000 1,044,604
------------
ELECTRIC UTILITIES -- EAST -- 3.1%
Citizens Utilities Co., Putable 10/1/01 @ 100 ...................... Aa3/AA+ 7.68 10/1/34 1,750,000 1,827,597
Citizens Utilities Co., Putable 8/15/03 @ 100 ...................... Aa3/AA+ 6.80 8/15/26 825,000 833,173
------------
2,660,770
------------
ELECTRICAL PRODUCTS -- 4.0%
General Electric Capital Corp., Putable 9/20/98 @ 100 .............. Aaa/AAA 8.30 9/20/09 3,100,000 3,419,997
------------
FINANCIAL SERVICES -- 1.2%
Merril Lynch & Co., Series B, Floating Rate Medium Term Note** ..... Aa3/AA- 5.91 1/23/01 1,000,000 1,000,000
------------
FINANCIAL SERVICES -- DIVERSIFIED -- 4.5%
Associates Corp. N.A., Putable 2/16/98 @ 100 ....................... Aa3/AA- 7.95 2/15/10 265,000 283,370
Associates Corp. N.A., Putable 3/3/98 @ 100 ........................ Aa3/AA- 7.95 2/15/10 2,400,000 2,566,367
Transamerica Finance Corp., Corporate Bond ......................... A2/A+ 6.38 11/15/01 1,000,000 977,898
------------
3,827,635
------------
INSURANCE -- PROPERTY & CASUALTY -- 2.4%
General Re Corp., Series A ......................................... Aa1/AAA 9.00 9/12/09 1,800,000 2,033,510
------------
INVESTMENT BANKERS -- 1.2%
Merrill Lynch Corp., Medium Term Note, Series B(b) ................. Aa3/AA- 7.25 6/14/04 1,000,000 1,000,393
------------
INVESTMENT BANKERS/BROKERS/SERVICES -- 1.1%
Morgan Stanley Group ............................................... A1/A+ 6.88 3/1/07 1,000,000 972,067
------------
</TABLE>
74
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P MATURITY PRINCIPAL VALUE
RATINGS RATE DATE AMOUNT (NOTE 2)
------------- ------ --------- -------- ------------
<S> <C> <C> <C> <C> <C>
MAJOR CHEMICALS -- 0.6%
Monsanto Co. -- ESOP Debenture ..................................... A1/A 8.13% 12/15/06 $500,000 $ 527,544
------------
MAJOR U.S. TELECOMMUNICATIONS -- 1.6%
General Telephone of Northwest, Series BB, Callable 4/15/98 @
102.90 ........................................................... A1/AA- 8.75 4/15/16 1,305,000 1,349,643
------------
MEDICAL SPECIALTIES -- 2.3%
Bausch & Lomb, Medium Term Note, Putable 8/31/01 @ 100 ............. A3/A- 6.56 8/12/26 2,000,000 1,976,488
------------
OTHER METALS/MINERALS -- 3.1%
BHP Finance USA Ltd., Putable 3/1/03 @ 100 ......................... A2/A 6.42 3/1/26 2,750,000 2,676,523
------------
OTHER TELECOMMUNICATIONS -- 2.6%
British Telecommunications Finance Yankee Bond, Callable 2/15/99 @
104.74 ........................................................... Aa1/AAA 9.63 2/15/19 2,000,000 2,178,110
------------
SOFT DRINKS -- 3.5%
Coca-Cola Enterprises, Putable 10/15/03 @ 100 ...................... A3/AA- 6.70 10/15/36 3,000,000 2,988,957
------------
TOTAL CORPORATE OBLIGATIONS (COST $35,523,582)........................ 35,314,245
------------
FOREIGN GOVERNMENT AGENCIES -- 3.8%
Hydro-Quebec, Debenture, Putable 7/7/06 @ 100 (cost $3,191,929) .... A2/A+ 8.05 7/7/24 3,000,000 3,215,610
------------
TAXABLE MUNICIPAL BONDS -- 3.1%
CALIFORNIA -- 2.5%
Los Angeles Airport (Insured by AMBAC) ............................. Aaa/AAA 5.50 5/15/98 500,000 497,415
Los Angeles County, Pension Obligation, Series A (Insured by
MBIA) ............................................................ Aaa/AAA 8.30 6/30/02 1,500,000 1,592,568
------------
2,089,983
------------
FLORIDA -- 0.6%
Miami Beach, Pension Funding Project, Callable 9/1/05 @102 (Insured
by AMBAC) ........................................................ Aaa/AAA 8.55 9/1/15 500,000 532,216
------------
TOTAL TAXABLE MUNICIPAL BONDS (COST $2,557,631)....................... 2,622,199
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 32.9%
FEDERAL HOME LOAN BANK -- 2.4%
Federal Home Loan Bank ............................................. Aaa/AAA* 7.20 6/14/11 2,000,000 2,029,660
------------
FEDERAL HOME LOAN MORTGAGE CORP. -- 3.7%
Federal Home Loan Mortgage Corp., CMO, Series 1141, Class F* ....... Aaa/AAA* 8.50 10/15/20 743,239 760,834
Federal Home Loan Mortgage Corp., Gold Pool #D68937 ................ Aaa/AAA* 6.00 3/1/26 943,294 872,367
Federal Home Loan Mortgage Corp., Gold Pool #FGN97107, 7 Year
Balloon, CMO ..................................................... Aaa/AAA* 6.50 10/1/03 992,997 981,489
Federal Home Loan Mortgage Corp., Pool #200032 ..................... Aaa/AAA* 9.00 4/1/01 1,547 1,600
</TABLE>
75
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P MATURITY PRINCIPAL VALUE
RATINGS RATE DATE AMOUNT (NOTE 2)
------------- ------ --------- -------- ------------
<S> <C> <C> <C> <C> <C>
FEDERAL HOME LOAN MORTGAGE CORP. -- 3.7% (CONTINUED)
Federal Home Loan Mortgage Corp., Pool #200040 ..................... Aaa/AAA* 9.00% 6/1/01 $ 3,383 $ 3,497
Federal Home Loan Mortgage Corp., Pool #380070 ..................... Aaa/AAA* 9.00 1/1/05 122,419 127,264
Federal Home Loan Mortgage Corp., Series 1212, Class CA ............ Aaa/AAA* 6.50 7/15/16 407,338 408,087
------------
3,155,138
------------
FEDERAL NATIONAL MORTGAGE ASSOC. -- 14.5%
Federal National Mortgage Association Corp., Pool #124975 .......... Aaa/AAA* 7.50 8/1/08 701,012 711,506
Federal National Mortgage Association Corp., Pool #250700 .......... Aaa/AAA* 8.00 10/1/26 1,052,757 1,072,033
Federal National Mortgage Association Corp., Pool #354613 .......... Aaa/AAA* 7.50 9/1/26 466,929 466,014
Federal National Mortgage Association Corp., Pool #358033 .......... Aaa/AAA* 7.50 9/1/26 615,206 614,000
Federal National Mortgage Association Corp., Pool #50609, 7 Year
Balloon, Participation Certificate ............................... Aaa/AAA* 8.00 6/1/99 232,661 237,458
Federal National Mortgage Association, CMO, Series G94-6, Class
VB ............................................................... Aaa/AAA* 8.00 11/17/03 2,280,467 2,362,981
Federal National Mortgage Association, CMO, Series G94-7, Class
A ................................................................ Aaa/AAA* 7.50 11/17/23 2,795,841 2,829,997
Federal National Mortgage Association, Pool #304786, 7 Year Balloon,
Participation Certificate ........................................ Aaa/AAA* 8.50 2/1/02 311,386 321,173
Federal National Mortgage Association, Pool #190129 ................ Aaa/AAA* 6.00 11/1/23 840,430 779,187
Federal National Mortgage Association, Series 1997-19, Class PC .... Aaa/AAA* 6.50 1/18/22 3,000,000 2,918,854
------------
12,313,203
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 7.6%
Government National Mortgage Association, Pool #423836 ............. Aaa/AAA* 8.00 8/15/26 459,057 468,289
Government National Mortgage Association, Pool #430065 ............. Aaa/AAA* 7.50 9/15/26 605,770 604,098
Government National Mortgage Association, Pool #432700 ............. Aaa/AAA* 7.50 6/15/26 464,589 463,307
Government National Mortgage Association, Pool #437545 ............. Aaa/AAA* 8.00 9/15/26 604,644 616,804
Government National Mortgage Association, Pool #447573 ............. Aaa/AAA* 7.50 5/15/27 2,000,000 1,994,179
Government National Mortgage Association, Pool #440021 ............. Aaa/AAA* 7.50 1/15/27 1,509,036 1,504,645
Government National Mortgage Association, Pool #045097 ............. Aaa/AAA* 13.00 1/15/11 25,765 30,314
Government National Mortgage Association, Pool #133357 ............. Aaa/AAA* 11.00 7/15/00 14,028 14,877
Government National Mortgage Association, Pool #140135 ............. Aaa/AAA* 11.00 11/15/00 25,986 27,559
</TABLE>
76
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P MATURITY PRINCIPAL VALUE
RATINGS RATE DATE AMOUNT (NOTE 2)
------------- ------ --------- -------- ------------
<S> <C> <C> <C> <C> <C>
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 7.6% (CONTINUED)
Government National Mortgage Association, Pool #200919 ............. Aaa/AAA* 8.00% 5/15/17 $355,244 $ 367,503
Government National Mortgage Association, Pool #202853 ............. Aaa/AAA* 9.00 7/15/17 260,227 278,126
Government National Mortgage Association, Pool #207980 ............. Aaa/AAA* 8.00 5/15/17 13,838 14,315
Government National Mortgage Association, Pool #44586 .............. Aaa/AAA* 13.00 1/15/11 4,282 5,038
Government National Mortgage Association, Pool #44783 .............. Aaa/AAA* 13.00 1/15/11 22,242 26,169
Government National Mortgage Association, Pool #45753 .............. Aaa/AAA* 13.00 2/15/11 23,153 27,242
------------
6,442,465
------------
TENNESSEE VALLEY AUTHORITY -- 4.7%
Tennessee Valley Authority, Putable 4/1/98 @ 100 ................... Aaa/AAA* 5.98 4/1/36 4,000,000 4,028,712
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $27,728,048).................................................. 27,969,178
------------
U.S. GOVERNMENT OBLIGATIONS -- 16.4%
U.S. TREASURY BONDS/NOTES -- 16.4%
U.S. Treasury Bonds ................................................ Aaa/AAA* 7.88 2/15/21 3,500,000 3,844,533
U.S. Treasury Bonds ................................................ Aaa/AAA* 6.00 2/15/26 1,500,000 1,320,469
U.S. Treasury Notes ................................................ Aaa/AAA* 6.38 4/30/99 1,500,000 1,505,625
U.S. Treasury Notes ................................................ Aaa/AAA* 6.13 12/31/01 3,000,000 2,956,878
U.S. Treasury Notes ................................................ Aaa/AAA* 7.00 7/15/06 4,220,000 4,308,358
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(COST $13,964,348).................................................. 13,935,863
------------
<CAPTION>
SHARES
--------
<S> <C> <C> <C> <C> <C>
CASH SWEEP ACCOUNT -- 1.4%
Bank of New York (cost $1,180,881) ................................. 1,180,881 1,180,881
------------
TOTAL INVESTMENTS (COST $84,146,419)(a) -- 99.1%...................... 84,237,976
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.9%......................... 750,833
------------
TOTAL NET ASSETS -- 100.0%............................................ $ 84,988,809
------------
------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $84,988,809.
(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....... $ 619,452
Unrealized depreciation....... (527,895)
------------
Net Unrealized appreciation... $ 91,557
------------
------------
(b) Callable 6/14/97 @100 at option of this issuer or interest rate will
step-up to 10.00%.
* Implied rating.
** Variable rate security. Rate presented represents rate in effect at May 31,
1997.
AMBAC -- AMBAC Indemnity Corporation.
CMO -- Collateralized Mortgage Obligation.
MBIA -- Municipal Bond Insurance Association.
See Notes to Financial Statements.
77
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
May 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S/S&P MATURITY PRINCIPAL VALUE
RATINGS RATE DATE AMOUNT (NOTE 2)
---------------- --------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS -- 98.5%
FLORIDA -- 81.8%
Brevard County, Health Care Facility Authority
Revenue, Holmes Regional, Callable 10/1/06 @ 101
(Insured by MBIA)............................... Aaa/AAA 5.63% 10/1/14 $2,550,000 $ 2,577,668
Charlotte County, Utility Revenue, Callable
10/1/06 @ 102 (Insured by FGIC)................. Aaa/AAA 5.63 10/1/16 2,250,000 2,261,048
Collier County, Health Facilities Authority
Revenue, Callable 12/1/04 @ 102................. A-*/BBB+ 6.25 12/1/07 700,000 741,111
Collier County, Health Facilities Authority
Revenue, Callable 12/1/04 @ 102................. A-*/BBB+ 6.38 12/1/08 700,000 742,735
Collier County, Health Facilities Authority
Revenue, Callable 12/1/04 @ 102................. A-*/BBB+ 7.00 12/1/19 5,175,000 5,541,028
Dade County, Aviation Revenue, Callable 10/1/06 @
102, 10/1/08 @ 100 (Insured by MBIA) (AMT)...... Aaa/AAA 5.75 10/1/12 5,000,000 5,082,900
Dade County, Industrial Development Authority
Revenue, Dolphins Stadium Project, Series B (LC
Societe Generale)**............................. AA-/A-1+ 3.85 1/1/16 2,200,000 2,200,000
Dade County, Resource Recovery Facility Revenue,
Callable 10/1/06 @ 102 (Insured by AMBAC)
(AMT)........................................... Aaa/AAA 5.50 10/1/13 2,000,000 1,982,820
Escambia County, Pollution Control Revenue
Refunding, Gulf Power Project, Callable 3/1/97 @
102............................................. A1/A+ 6.75 3/1/22 1,250,000 1,276,050
Florida State Board of Education, Capital Outlay,
Callable 6/1/06 @ 101........................... Aa2/AA+ 5.25 6/1/16 2,500,000 2,434,075
Florida State Board of Education, Capital Outlay,
Callable 6/1/06 @ 101........................... A2/AA+ 5.00 6/1/18 3,000,000 2,819,850
Florida State Power Agency, Callable 10/1/02 @ 102
(Insured by FGIC)............................... Aaa/AAA 5.25 10/1/21 1,500,000 1,414,440
Florida State Turnpike Authority Revenue, Callable
7/1/03 @ 101 (Insured by FGIC).................. Aaa/AAA 5.00 7/1/15 3,000,000 2,837,580
Gainesville, Utility System Revenue, Series B,
Non-callable.................................... Aa/AA 6.50 10/1/11 3,000,000 3,395,340
Jacksonville, Sales Tax Revenue, Renaissance
Project, Callable 10/1/05 @ 101 (Insured by
FGIC)........................................... Aaa/AAA 5.65 10/1/14 5,000,000 5,059,250
Jacksonville, Sales Tax Revenue, River City
Project, Callable 10/1/05 @ 101 (Insured by
FGIC)........................................... Aaa/AAA 5.38 10/1/18 5,000,000 4,857,500
Martin County, Industrial Development Authority
Revenue, Indiantown Cogeneration PJ-A, Callable
12/15/04 @ 102 (AMT)............................ Baa3/BBB- 7.88 12/15/25 2,500,000 2,825,475
Martin County, Industrial Development Authority
Revenue, Indiantown Cogeneration PJ-B, Callable
12/15/04 @ 102 (AMT)............................ Baa3/BBB- 8.05 12/15/25 2,500,000 2,851,775
Miami Beach, Water & Sewer Revenue, Callable
9/1/05 @ 102 (Insured by FSA)................... Aaa/AAA 5.38 9/1/15 2,250,000 2,236,860
North Broward, Hospital District Revenue, Callable
1/15/07 @ 101 (Insured by MBIA)................. Aaa/AAA 5.25 1/15/17 2,000,000 1,918,300
Okaloosa County, Gas Distribution Tax Revenue,
Callable 10/1/04 @ 102 (Insured by MBIA)........ Aaa/AAA 6.88 10/1/19 5,000,000 5,562,199
</TABLE>
78
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P MATURITY PRINCIPAL VALUE
RATINGS RATE DATE AMOUNT (NOTE 2)
---------------- --------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS -- 98.5% (CONTINUED)
Orange County, Health Facility Authority Revenue,
Orlando Regional Health, Series A, Non-callable
(Insured by MBIA)............................... Aaa/AAA 6.25% 10/1/16 $4,520,000 $ 4,957,039
Orlando Utility Commission, Water &Electric
Revenue Refunding, Sub-Series D, Non-callable... Aa/AA- 6.75 10/1/17 3,000,000 3,502,050
Palm Beach County, Solid Waste Authority Revenue,
mandatory redemption in full on 7/1/10, (Insured
by AMBAC)....................................... Aaa/AAA 6.00 10/1/10 6,000,000 6,442,079
Pensacola Airport Revenue, callable 10/1/07 @ 102,
(insured by MBIA) (AMT)......................... Aaa/AAA 5.63 10/1/14 2,000,000 1,994,340
Polk County, Industrial Development Authority,
Solid Waste Disposal Facility Revenue, Callable
12/1/06 @ 102, (AMT)............................ Aa2/AA 5.85 12/1/30 5,000,000 5,010,350
South Miami Health Facilities, Callable 10/1/05 @
102 (Insured by MBIA)........................... Aaa/AAA 5.38 10/1/16 4,000,000 3,891,880
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 2,500,000 2,703,225
Tallahassee Utility Revenue Bonds, Pre-Refunded
10/1/99 @ 102................................... Aaa/AA- 6.90 10/1/99 1,000,000 1,075,810
Tampa Sports Authority Sales Tax, Tampa Bay Arena,
Non-callable (Insured by MBIA).................. Aaa/AAA 5.75 10/1/15 2,500,000 2,593,425
------------
92,788,202
------------
GUAM -- 10.7%
Guam Airport Authority, Revenue Bonds, Series 1993
A, Callable 10/1/03 @ 102....................... NR/BBB 6.38 10/1/10 3,820,000 3,913,743
Guam Airport Authority, Revenue Bonds, Series B,
Callable 10/1/03 @ 102 (AMT).................... NR/BBB 6.40 10/1/05 2,435,000 2,503,521
Guam Government, Series A, Callable 3/1/99 @ 100.. NR/BBB 5.75 9/1/04 2,500,000 2,515,050
Guam Power Authority, Revenue Bonds, Series A,
Callable 10/1/04 @ 102, 10/1/06 @ 100........... NR/BBB 6.75 10/1/24 3,000,000 3,159,840
------------
12,092,154
------------
PUERTO RICO -- 6.0%
Puerto Rico Commonwealth, Non-callable, (Insured
by MBIA)........................................ Aaa/AAA 6.50 7/1/15 4,190,000 4,735,915
Puerto Rico, Electric Power Authority Power
Revenue Series AA, callable 7/1/07 @ 101.50,
(Insured by MBIA)............................... Aaa/AAA 5.25 7/1/17 1,000,000 971,550
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 1,000,000 1,057,910
------------
6,765,375
------------
TOTAL MUNICIPAL BONDS (COST $106,887,808)........... 111,645,731
------------
</TABLE>
79
<PAGE>
<TABLE>
<CAPTION>
VALUE)
PRINCIPAL (NOTE 2
AMOUNT --------------
----------
<S> <C> <C> <C> <C> <C>
OPEN-END INVESTMENT COMPANIES -- 0.6%
Dreyfus Municipal Cash Management Plus Fund....... $ 690,954 $ 690,954
Provident Institutional Municipal Fund............ 1 1
Valiant Tax-Free Money Market Fund................ 1 1
------------
TOTAL OPEN-END INVESTMENT COMPANIES (COST
$690,956)......................................... 690,956
------------
TOTAL INVESTMENTS (COST $107,578,764)(a) -- 99.1%... 112,336,687
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.9%....... 1,037,436
------------
TOTAL NET ASSETS -- 100.0%.......................... $113,374,123
------------
------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $113,374,123.
(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....... $ 4,819,210
Unrealized depreciation....... (61,287)
------------
Net unrealized appreciation... $ 4,757,923
------------
------------
* Fitch Investors rating.
** Variable rate security. Rate presented represents rate in effect at May 31,
1997.
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.
LC -- Letter of Credit.
MBIA -- Municipal Bond Insurance Association.
NR -- No Moody's rating available.
See Notes to Financial Statements.
80
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
May 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMORTIZED
MOODY'S/S&P MATURITY PRINCIPAL COST
RATINGS RATE DATE AMOUNT (NOTE 2)
--------------- --------- --------- ------------ --------------
<S> <C> <C> <C> <C> <C>
BANK NOTES -- 15.4%
DOMESTIC -- 13.5%
Bank of New York, Bank Note.................... P-1/A-1 5.80% 3/3/98 $ 44,000,000 $ 43,984,124
Bankers Trust Company -- Variable Rate Medium
Term Note*................................... P-1/A-1+ 5.63 6/3/97 40,000,000 39,987,914
Boatmans First National Bank Of Kansas City --
Variable Rate Bank Note*..................... P-1/A-1 5.69 6/2/97 38,000,000 38,000,000
J.P. Morgan Securities, Bank Note.............. P-1/A-1+ 0.00 4/1/98 40,000,000 38,124,611
MBNA America Bank -- Variable Rate Bank Note... P-1/F-1+** 5.68 6/13/97 50,000,000 50,000,001
Morgan Stanley -- Variable Rate Bank Note*..... P-1/A-1+ 5.76 8/18/97 37,000,000 37,000,000
Northern Trust, Bank Note...................... P-1/A-1+ 5.75 3/4/98 45,000,000 44,967,334
--------------
292,063,984
--------------
FOREIGN -- 1.9%
Berliner Handels-Und Frankfurter Bank, Floating
Rate Bank Note*.............................. P-1/A-1+ 5.70 6/2/97 40,000,000 39,998,250
--------------
TOTAL BANK NOTES (AMORTIZED COST $332,062,234)... 332,062,234
--------------
CERTIFICATES OF DEPOSIT -- DOMESTIC -- 12.8%
Bank Of America, San Francisco Branch.......... P-1/A-1 5.50 6/20/97 25,000,000 25,000,000
Fifth Third Bank............................... P-1/A-1+ 5.40 6/9/97 40,000,000 39,999,430
Old Kent Bank, Grand Rapids.................... P-1/A-1 5.60 6/3/97 25,000,000 25,000,000
Old Kent Bank, Grand Rapids.................... P-1/A-1 5.62 7/7/97 35,000,000 35,000,000
Regions Bank................................... P-1/A-1+ 5.65 9/17/97 40,000,000 40,000,000
South Trust Bank -- Variable Rate*............. P-1/A-1 5.65 6/2/97 75,000,000 74,980,792
Union Bank of California....................... P-1/A-1 5.55 7/16/97 35,000,000 35,000,000
--------------
TOTAL CERTIFICATES OF DEPOSIT -- DOMESTIC
(AMORTIZED COST $274,980,222).................. 274,980,222
--------------
CERTIFICATES OF DEPOSIT --
EURO -- 1.6%
Australia & New Zealand Bank, London Branch
(amortized cost $35,000,460)................. P-1/A-1 5.62 6/25/97 35,000,000 35,000,460
--------------
CERTIFICATES OF DEPOSIT -- YANKEE -- 6.7%
Abbey National Treasury plc, New York
Branch*...................................... P-1/A-1+ 5.65 6/2/97 50,000,000 49,978,916
Bank of Nova Scotia, New York Branch........... P-1/A-1+ 5.45 6/17/97 25,000,000 25,000,000
Canadian Imperial Bank of Commerce, New York
Branch....................................... P-1/A-1+ 5.66 7/7/97 35,000,000 35,000,347
National Bank of Canada, New York Branch....... P-1/A-1 5.48 6/12/97 35,000,000 35,000,000
--------------
TOTAL CERTIFICATES OF DEPOSIT -- YANKEE
(AMORTIZED COST $144,979,263).................. 144,979,263
--------------
</TABLE>
81
<PAGE>
<TABLE>
<CAPTION>
AMORTIZED
MOODY'S/S&P MATURITY PRINCIPAL COST
RATINGS RATE DATE AMOUNT (NOTE 2)
--------------- --------- --------- ------------ --------------
<S> <C> <C> <C> <C> <C>
COMMERCIAL PAPER -- 26.4%
DOMESTIC -- 19.4%
Aetna Services Inc............................. P-1/A-1 5.57% 6/5/97 $ 20,000,000 $ 19,987,622
American Home Products......................... P-1/D-1** 5.60 6/23/97 39,150,000 39,016,020
Banker's Trust Company......................... P-1/A-1+ 5.43 10/6/97 50,000,000 49,042,209
Chrysler Financial Corp........................ D-1**/A-1 5.58 6/16/97 30,000,000 29,930,250
Chrysler Financial Corp........................ D-1**/A-1 5.72 7/22/97 30,000,000 29,756,900
Chrysler Financial Corp........................ D-1**/A-1 5.60 7/29/97 35,000,000 34,684,222
Countrywide Funding Corp....................... F-1**/A-1 5.57 7/17/97 35,000,000 34,750,897
Daewoo International (America) Corp.
(LC Credit Suisse Bank)...................... P-1/A-1+ 5.60 6/19/97 25,000,000 24,930,000
Mitsubishi Motors Credit of America, Inc.
(LC Bank of Tokyo Mitsubishi Bank, Ltd.)..... P-1/A-1 5.60 6/12/97 13,100,000 13,077,584
Mitsubishi Motors Credit of America, Inc.
(LC Bank of Tokyo Mitsubishi Bank, Ltd.)..... P-1/A-1 5.60 6/10/97 31,000,000 30,956,600
Orix America Inc............................... P-1/A-1 5.67 7/7/97 25,500,000 25,355,415
Sanwa Business Credit, Inc..................... D-1**/A-1 5.56 6/4/97 12,500,000 12,494,115
Sanwa Business Credit, Inc..................... D-1**/A-1 5.60 6/26/97 35,000,000 34,863,889
Sanwa Business Credit, Inc..................... D-1**/A-1 5.56 7/11/97 37,000,000 36,767,722
--------------
415,613,445
--------------
FOREIGN -- 7.0%
Akzo Nobel NV.................................. P-1/A-1 5.64 7/24/97 26,000,000 25,784,113
Bradford & Bingley Building Society............ P-1/A-1 5.33 8/7/97 25,000,000 24,752,007
Bradford & Bingley Building Society............ P-1/A-1 5.45 8/11/97 25,000,000 24,731,285
Lehman Brothers plc............................ D-1**/A-1 5.67 7/14/97 35,000,000 34,762,963
Nacional Financiera SNC (LC Societe Generale
Bank)........................................ P-1/A-1+ 5.71 7/22/97 40,000,000 39,676,433
--------------
149,706,801
--------------
TOTAL COMMERCIAL PAPER (AMORTIZED COST
$565,320,246).................................. 565,320,246
--------------
CORPORATE OBLIGATIONS -- 19.8%
Beta Finance, Inc. -- Convertible Variable Rate
Medium Term Note*(c)......................... P-1/A-1+ 5.66 6/2/97 25,000,000 25,000,000
C.S. First Boston Corp., -- Extendable Variable
Rate Medium Term Note*(d).................... P-1/A-1 5.69 6/18/97 35,000,000 35,000,000
C.S. First Boston Corp., -- Extendable Variable
Rate Medium Term Note*(d).................... P-1/A-1 5.69 6/18/97 15,000,000 15,000,000
Dean Witter -- Variable Rate Medium Term
Note*........................................ P-1/A-1 6.02 6/18/97 10,000,000 10,007,159
Dean Witter Discover -- Variable Rate Medium
Term Note*................................... P-1/A-1 5.79 6/18/97 42,000,000 42,036,658
General Motors Acceptance Corp. -- Variable
Rate Medium Term Note........................ P-1/D-1** 5.42 6/6/97 40,000,000 39,999,455
Goldman Sachs & Co.,-- Variable Rate Promissory
Note*........................................ P-1/A-1+ 5.69 6/9/97 50,000,000 50,000,000
Merrill Lynch & Co., -- Variable Rate Medium
Term Note*................................... P-1/A-1+ 5.65 6/16/97 65,000,000 65,000,001
Morgan Stanley -- Variable Rate Medium Term
Note*........................................ P-1/A-1+ 5.54 8/18/97 50,000,000 50,000,000
Sigma Finance, Inc., -- Medium Term Note(c).... P-1/A-1+ 5.80 3/3/98 43,000,000 43,000,000
</TABLE>
82
<PAGE>
<TABLE>
<CAPTION>
AMORTIZED
MOODY'S/S&P MATURITY PRINCIPAL COST
RATINGS RATE DATE AMOUNT (NOTE 2)
--------------- --------- --------- ------------ --------------
<S> <C> <C> <C> <C> <C>
CORPORATE OBLIGATIONS -- 19.8%
(CONTINUED)
SMM Trust 1996-B -- Variable Rate Medium Term
Note*(c)..................................... P-1/A-1+ 5.74% 6/4/97 $ 30,000,000 $ 30,000,000
U.S. Leasing Capital Corp. -- Variable Rate
Medium Term Note............................. P-1/A-1 5.88 7/28/97 20,000,000 20,004,144
--------------
TOTAL CORPORATE OBLIGATIONS (AMORTIZED COST
$425,047,417).................................. 425,047,417
--------------
MASTER NOTES -- 2.3%
Lehman Brothers plc, Master Note (amortized
cost $50,000,000)............................ D-1**/A-1 5.77 6/6/97 50,000,000 50,000,000
--------------
TIME DEPOSITS -- 3.3%
American Express Central Bank, Grand Cayman
Branch....................................... P-1/A-1 5.59 6/5/97 25,000,000 25,000,000
Bank of Scotland, Grand Cayman Branch.......... P-1/A-1+ 5.63 6/30/97 20,000,000 20,000,000
South Trust Bank, Grand Cayman Branch.......... P-1/A-1 5.75 8/18/97 25,000,000 25,000,000
--------------
TOTAL TIME DEPOSITS (AMORTIZED COST
$70,000,000)................................... 70,000,000
--------------
REPURCHASE AGREEMENTS -- 11.7%
C.S. First Boston Corp., dated 5/30/97 with a
maturity value of $88,548,366 (Collateralized
by $108,496,453 Federal National Mortgage
Association, 5.00% -- 10.00%, various
maturities, market value -- $90,755,987)..... 5.62 6/2/97 88,506,915 88,506,915
Fuji Securities, Inc., dated 5/30/97, with a
maturity value of $88,548,366 (Collateralized
by $105,861,000 U.S. Treasury Securities,
0.00% -- 13.75%, 10/31/97 -- 1/15/30, market
value -- $90,278,003)........................ 5.62 6/2/97 88,506,915 88,506,915
Salomon Brothers, Inc., dated 5/30/97, with a
maturity value of $75,035,187 (Collateralized
by $116,483,898 Federal National Mortgage
Corp., 5.50% -- 9.00%, 5/1/00 -- 5/1/27,
market value -- $76,806,873)................. 5.63 6/2/97 75,000,000 75,000,000
--------------
TOTAL REPURCHASE AGREEMENTS (AMORTIZED COST
$252,013,830).................................. 252,013,830
--------------
TOTAL INVESTMENTS (AMORTIZED COST
$2,149,403,672)(a) -- 100.0%................... 2,149,403,672
LIABILITIES IN EXCESS OF OTHER ASSETS --
(0.0%)......................................... (126,493)
--------------
TOTAL NET ASSETS -- 100.0%....................... $2,149,277,179
--------------
--------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $2,149,277,179.
(a) Cost for federal income tax and financial reporting purposes are the same.
(b) 144a security which is restricted as to resale to institutional investors.
(c) Security is restricted.
* Variable rate security. Rate presented represents rate in effect at May 31,
1997. Maturity date reflects the next rate change date.
** Duff Phelps or Fitch Investors ratings.
LC -- Letter of Credit.
plc -- Public Limited Company.
See Notes to Financial Statements.
83
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
May 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMORTIZED
MOODY'S/S&P MATURITY PRINCIPAL COST
RATINGS RATE DATE AMOUNT (NOTE 2)
----------- ---------- --------- ------------- --------------
<S> <C> <C> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS -- 61.9%
U.S. TREASURY NOTES -- 56.7%
U.S. Treasury Note**.............................. Aaa/AAA* 6.13% 5/31/97 $ 200,000,000 $ 200,003,843
U.S. Treasury Note................................ Aaa/AAA* 5.63 6/30/97 100,000,000 100,026,935
U.S. Treasury Note................................ Aaa/AAA* 5.88 7/31/97 30,000,000 30,030,847
U.S. Treasury Note................................ Aaa/AAA* 6.50 8/15/97 25,000,000 25,047,392
U.S. Treasury Note***............................. Aaa/AAA* 6.00 8/31/97 90,000,000 90,085,890
U.S. Treasury Note................................ Aaa/AAA* 5.75 9/30/97 40,000,000 40,026,337
U.S. Treasury Note****............................ Aaa/AAA* 5.38 11/30/97 50,000,000 49,924,976
--------------
535,146,220
--------------
U.S. TREASURY STRIPS -- 5.2%
U.S. Treasury Strips.............................. Aaa/AAA* N/A 11/15/97 50,000,000 48,750,276
--------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(AMORTIZED COST $583,896,496)..................... 583,896,496
--------------
REPURCHASE AGREEMENTS -- 45.7%
C.S. First Boston Corp., dated 5/30/97 with a
maturity value of $88,263,427 (Collateralized by
$89,752,000 U.S. Treasury Notes, 5.88% - 6.13%,
1/31/99 - 12/31/01, market value -
$90,405,172)................................... 5.53 6/2/97 88,222,771 88,222,771
Merrill Lynch Securities, Inc., dated 5/30/97 with
a maturity value of $81,186,444 (Collateralized
by $145,152,588 Government National Mortgage
Assoc., 6.00% - 11.50%, various maturity dates,
market value - $81,601,834)..................... 5.62 9/2/97 80,000,000 80,000,000
Prudential Bache, dated 5/30/97 with a maturity
value of $175,081,083 (Collateralized by
$187,140,309 U.S. Treasury Notes and Government
National Mortgage Assoc., 5.63% - 10.50%, 1/1/00
- 7/16/24, market value - $178,500,336)......... 5.56 6/2/97 175,000,000 175,000,000
Smith Barney, dated 5/30/97 with a maturity value
of $88,263,573 (Collateralized by $90,127,000
U.S. Treasury securities, 0.00% - 6.25%, 9/11/97
- 8/31/00, market value - $89,987,690).......... 5.55 6/2/97 88,222,770 88,222,770
--------------
TOTAL REPURCHASE AGREEMENTS (AMORTIZED COST
$431,445,541)..................................... 431,445,541
--------------
TOTAL INVESTMENTS (AMORTIZED COST $1,015,342,037)(a)
-- 107.6%......................................... 1,015,342,037
--------------
LIABILITIES IN EXCESS OF OTHER ASSETS -- 7.6%....... (71,427,992)
--------------
TOTAL NET ASSETS -- 100.0%.......................... $ 943,914,045
--------------
--------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $943,914,045.
N/A -- Not applicable.
* Implied rating.
** Security matured on a weekend. Actual cash settlement was 6/2/97.
*** Security matured on a weekend. Actual cash settlement will be 9/1/97.
**** Security matured on a weekend. Actual cash settlement will be 12/1/97.
See Notes to Financial Statements.
84
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
May 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMORTIZED
MOODY'S/S&P MATURITY PRINCIPAL COST
RATINGS RATE DATE AMOUNTS (NOTE 2)
--------------- --------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C>
MUNICIPAL SECURITIES -- 99.7%
ALABAMA -- 0.3%
Homewood Industrial Development Board, Revenue
Bonds, Keebler Co. Project (LC Bank of Nova
Scotia)* ....................................... NR/NR 4.00% 6/4/97 $ 560,000 $ 560,000
-------------
ALASKA -- 2.4%
Valdez Marine Terminal Revenue, ARCO Transnational
Alaska, Inc.,
(LC Atlantic Richfield Co.), Commercial
Paper* ......................................... VMIG1/A-1 3.45 6/13/97 4,100,000 4,100,000
-------------
ARIZONA -- 3.8%
Salt River Project Agricultural Improvement &
Power District* ................................ P-1/A-1+ 3.45 6/12/97 3,000,000 3,000,000
Salt River Project Agricultural Improvement &
Power District* ................................ P-1/A-1+ 3.45 6/13/97 3,600,000 3,600,000
-------------
6,600,000
-------------
ARKANSAS -- 2.9%
Arkansas State Development Financial Authority
Industrial Facilities Revenue, Potatch Corp.
Project (AMT) (LC Credit Suisse)* .............. NR/A-1+ 4.00 6/4/97 5,050,000 5,050,000
-------------
CALIFORNIA -- 2.1%
California State Revenue Anticipation Note, Series
A* ............................................. MIG1/Sp1 4.50 6/30/97 3,700,000 3,701,498
-------------
FLORIDA -- 3.6%
Jacksonville Electric Authority, Series D-1* ..... P-1/A-1+ 3.80 8/11/97 2,300,000 2,300,000
St. Lucie County, Pollution Control, Florida Power
& Light Co. Project, Series 1994 B* ............ VMIG1/A-1+ 3.65 6/11/97 3,900,000 3,900,000
-------------
6,200,000
-------------
GEORGIA -- 7.2%
Burke County, Development Authority Pollution
Control, Revenue Bonds, Oglethorpe Power Corp.,
Class A (Insured by AMBAC)* .................... Aaa/AAA** 3.60 12/1/97 1,400,000 1,400,000
Floyd County, Development Authority Environmental
Improvement, Revenue Bonds, Georgia Kraft Co.
Project (LC Banque Nationale Paris)*, VRN,
12/1/15 ........................................ P-1/NR 4.10 6/2/97 3,200,000 3,200,000
</TABLE>
85
<PAGE>
<TABLE>
<CAPTION>
AMORTIZED
MOODY'S/S&P MATURITY PRINCIPAL COST
RATINGS RATE DATE AMOUNTS (NOTE 2)
--------------- --------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C>
GEORGIA -- 7.2% (CONTINUED)
Gwinnett County Development Authority, Variable
Revenue Bonds, Wesleyan School Project (LC
Suntrust Bank)* ................................ Aa3/NR** 3.95% 6/4/97 $1,000,000 $ 1,000,000
Monroe County Development Authority, Pollution
Control Revenue Bond, Georgia Power Co., Plant
Scherer Project, 1st Series* ................... VMIG1/A-1 4.20 6/2/97 3,700,000 3,700,000
Rockdale County, Hospital Authority Revenue (LC
Trust County Bank)* ............................ VMIG1/NR 3.95 6/4/97 3,125,000 3,125,000
-------------
12,425,000
-------------
ILLINOIS -- 13.7%
Chicago O'Hare International Airport Revenue,
American Airlines, Inc., Series B (LC Royal Bank
of Canada)* .................................... P-1/NR 4.05 6/2/97 1,200,000 1,200,000
Illinios Health Facility Authority, Suburban West
Hospital Medical Center, Series 1991 (LC First
National Bank -- Chicago)* ..................... VMIG1/NR 3.90 6/2/97 4,200,000 4,200,000
Illinois Development Finance Authority, Addison
450 LP Project (LC American National Bank &
Trust)* ........................................ Aa3/NR** 4.00 6/4/97 1,400,000 1,400,000
Illinois Educational Facilities Authority Revenue
Bonds, DePaul University, Series CP-1 (LC
Northern Trust)* ............................... VMIG1/A-1+ 3.90 6/4/97 4,000,000 4,000,000
Illinois Educational Facilities Authority Revenue
Bonds, Field Museum National History (LC
Northern Trust, Chicago)* ...................... VMIG1/NR 3.90 6/4/97 2,300,000 2,300,000
Illinois Health Facilities Authority Revenue
Bonds, University of Chicago Project* .......... VMIG1/A-1+ 3.55 7/2/97 6,500,000 6,500,000
Illinois Health Facilities Authority Revenue,
Gottlieb Health, Inc. (LC Harris Trust & Savings
Bank)* ......................................... VMIG1/NR 3.90 6/4/97 1,000,000 1,000,000
Illinois Health Facilities Authority Revenue,
Northwestern Memorial Hospital* ................ VMIG1/NR 4.00 6/2/97 200,000 200,000
Illinois Student Assistance, Series A (LC First
National Bank -- Chicago)* ..................... VMIG1/NR 4.00 6/4/97 3,000,000 3,000,000
-------------
23,800,000
-------------
INDIANA -- 12.2%
City of Whiting, Sewage and Solid Waste, AMOCO Oil
Co. Project* ................................... VMIG1/NR 4.25 6/2/97 6,000,000 6,000,000
Evansville Industrial Development Revenue Bonds,
Keebler Co. Project (LC Bank of Nova Scotia)* .. NR/NR 4.00 6/4/97 505,000 505,000
Gary Environmental Improvement Revenue, U.S. Steel
Corp. Project (LC Bank of Nova Scotia)* ........ P-1/A-1+ 3.85 6/16/97 1,000,000 1,000,000
Indiana Educational Facilities Revenue Bonds,
University of Notre Dame, Dular Project* ....... VMIG1/NR 3.80 6/4/97 4,800,000 4,800,000
Indiana Health Facilities, Financing Authority
Revenue (LC Comerica Bank)* .................... VMIG1/NR 4.00 6/4/97 1,000,000 1,000,000
</TABLE>
86
<PAGE>
<TABLE>
<CAPTION>
AMORTIZED
MOODY'S/S&P MATURITY PRINCIPAL COST
RATINGS RATE DATE AMOUNTS (NOTE 2)
--------------- --------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C>
INDIANA -- 12.2% (CONTINUED)
Indiana Hospital Revenue Bonds, Series A, (Insured
by MBIA)* ...................................... VMIG1/A-1 4.00% 6/4/97 $4,100,000 $ 4,100,000
Indiana State Development Finance Authority,
Mid-America Project (LC Union Bank of
Switzerland)* .................................. NR/A-1+ 4.10 6/4/97 3,800,000 3,800,000
-------------
21,205,000
-------------
KANSAS -- 1.5%
Wamego Kansas Pollution Control, Utilicorp United,
Inc. Project (LC Suisse 1st Bostne)* ........... P-1/A-1+ 3.90 6/4/97 2,600,000 2,600,000
-------------
LOUISIANA -- 3.0%
Plaquemines Port Harbor & Terminal Dist. Marine
Terminal Facilities Rev. Ref. Electric Coal
Transfer Corp., Commercial Paper* .............. P-1/A-1+ 3.85 6/11/97 5,275,000 5,275,000
-------------
MICHIGAN -- 1.7%
Michigan State Housing Development Authority
Revenue Bonds, Rental Housing, Series C Revenue
(LC Credit Suisse)* ............................ NR/A-1+ 3.90 6/4/97 2,050,000 2,050,000
Monroe County, Economic Development Corp. Limited
Obligation, Detriot Edison, Series CC (LC
Barclays Bank)* ................................ P-1/NR 4.00 6/2/97 900,000 900,000
-------------
2,950,000
-------------
MINNESOTA -- 2.7%
Becker Pollution Control Revenue Bonds, Northern
States Power Co., Series 1993A* ................ P-1/A-1+ 3.75 8/15/97 4,600,000 4,600,000
-------------
MISSISSIPPI -- 1.7%
Mississippi Business Finance Corp., Series 1996,
Mississippi College Project, (LC
Nationsbank)* .................................. NR/A-1+ 3.95 9/1/06 3,000,000 3,000,000
-------------
MONTANA -- 1.7%
Forsythe Pollution Control Revenue Bonds, Portland
General Electric Co. (AMT) (LC Banque Nationale
Paris)* ........................................ VMIG1/NR 4.05 6/2/97 2,900,000 2,900,000
-------------
NEW YORK -- 3.6%
New York City Municipal Water Financial Authority
Commercial, (LC Canadian Imperial Bank of
Commerce)* ..................................... P-1/A-1+ 3.70 7/31/97 4,800,000 4,800,000
New York City Municipal Water Financial
Authority* ..................................... P-1/A-1+ 3.80 7/31/97 1,500,000 1,500,000
-------------
6,300,000
-------------
</TABLE>
87
<PAGE>
<TABLE>
<CAPTION>
AMORTIZED
MOODY'S/S&P MATURITY PRINCIPAL COST
RATINGS RATE DATE AMOUNTS (NOTE 2)
--------------- --------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C>
NORTH CAROLINA -- 2.3%
North Carolina Eastern Municipal Power Agency
Power Systems Revenue, Series B, (LC Union Bank
of Switzerland) (LC Morgan Guaranty Trust)* .... NR/A-1+ 3.85% 8/21/97 $4,025,000 $ 4,025,000
-------------
NORTH DAKOTA -- 0.6%
Grand Forks Hospital Facilities Revenue Bond,
United Hospital Obligations Group Project, (LC
Lasalle National Bank)* ........................ VMIG1/NR 4.10 6/2/97 1,100,000 1,100,000
-------------
OHIO -- 0.6%
Summit County Revenue Bond (LC Bank of Nova
Scotia)* ....................................... NR/NR 4.00 3/1/05 995,000 995,000
-------------
PENNSYLVANIA -- 0.6%
Allegheny County Hospital Development Authority,
Health Center Development, Series B (LC PNC Bank
N.A.)* ......................................... NR/A-1+ 3.45 6/11/97 1,000,000 1,000,000
-------------
SOUTH DAKOTA -- 3.1%
Lawrence County, Pollution Control Revenue Bonds,
Homestake (LC Bank of Nova Scotia)* ............ P-1/A-1+ 3.90 6/4/97 5,300,000 5,300,000
-------------
TENNESSEE -- 2.9%
Sullivan County Industrial Development Board
Revenue Bonds, Modern Forge Co. Project, Series
90 (AMT) (LC Northern Trust)* .................. NR/A-1+ 4.15 7/1/10 5,000,000 5,000,000
-------------
TEXAS -- 15.7%
Angelina & Neches River Authority, Industrial
Development Corp., Temple Inland Project, Series
C (LC Credit Suisse)* .......................... P-1/NR 4.00 6/2/97 600,000 600,000
Brazos River Authority Pollution Control Revenue
Bonds, Texas Utilities Electric Co., Series
1996-A (Insured by AMBAC)* ..................... VMIG1/NR 4.25 6/2/97 500,000 500,000
Brazos River, Harbor Navigation District* ........ P-1/A-1 3.80 8/12/97 3,500,000 3,500,000
Brazos River, Harbor Navigation District, Dow
Chemical Co.* .................................. P-1/A-1 3.85 8/14/97 1,700,000 1,700,000
City of San Antonio, Water System* ............... P-1/A-1 3.45 6/12/97 4,000,000 4,000,000
Harris County Health Facilities, Series B, St.
Lukes Episcopal Hospital Project* .............. NR/A-1+ 4.05 6/2/97 2,200,000 2,200,000
Harris County Industrial Development Corp.,
Pollution Control Revenue Bonds, Exxon Corp.
Series 1984 A* ................................. NR/A-1+ 4.00 6/2/97 2,500,000 2,500,000
Harris County, Health Facilities Development Corp.
Hospital Revenue Bonds, Memorial Hospital
System, (LC Societe General)* .................. VMIG1/NR 3.45 6/2/97 6,600,000 6,600,000
</TABLE>
88
<PAGE>
<TABLE>
<CAPTION>
AMORTIZED
MOODY'S/S&P MATURITY PRINCIPAL COST
RATINGS RATE DATE AMOUNTS (NOTE 2)
--------------- --------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C>
TEXAS -- 15.7% (CONTINUED)
Port Authur Navigation District, Star Enterprises
Project (AMT) (LC Swiss Bank)* ................. NR/A-1+ 3.95% 6/4/97 $1,400,000 $ 1,400,000
Texas State, Tax and Revenue Anticipation Note ... MIG1/Sp1+ 4.75 8/29/97 4,000,000 4,007,687
-------------
27,007,687
-------------
UTAH -- 1.7%
Intermountain Power Agency, Power Supply Revenue
Bonds, (LC Bank of America), Series 1985E ...... Aa3/AA- 3.75 7/16/97 2,900,000 2,900,000
-------------
VIRGINIA -- 2.8%
Louisa County, Industrial Development Authority,
(LC NationsBank)* .............................. NR/A+ 3.95 1/1/20 4,930,000 4,930,000
-------------
WASHINGTON -- 3.6%
King County, Sewer Revenue Bonds, Series A* ...... Aa1/NR 3.80 9/16/97 4,500,000 4,500,000
Washington State Health Care Facility Authority
Revenue, Fred Hutchinson Cancer Research Center
(LC Morgan Guaranty Trust)* .................... Aaa/NR 4.10 6/2/97 1,700,000 1,700,000
-------------
6,200,000
-------------
WYOMING -- 1.7%
Gillette, Campbell City, Pollution Control
Revenue, Pacificorp Project, Series 1988 (LC
Deutsche Bank)* ................................ Aa1/AAA 3.80 8/11/97 3,000,000 3,000,000
-------------
TOTAL MUNICIPAL SECURITIES (AMORTIZED COST
$172,724,186)(A) -- 99.7%......................... 172,724,186
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.3% 485,333
-------------
TOTAL NET ASSETS -- 100.0%.......................... $ 173,209,519
-------------
-------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $173,209,519.
(a) Cost for federal income tax and financial reporting purposes are the same.
* Variable rate security. Rate presented represents rate in effect at May 31,
1997. Maturity date reflects the next rate change date.
** Represents long-term ratings.
AMBAC -- AMBAC Indemnity Corporation.
AMT -- Interest on securities subject to Federal Alternative Minimum Tax.
FGIC -- Financial Guaranty Insurance Corporation.
LC -- Letter of Credit.
NR -- Not rated.
See Notes to Financial Statements.
89
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities
May 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY INTERNATIONAL SMALL
EQUITY VALUE EQUITY CAPITALIZATION
FUND FUND FUND FUND
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, at value
(cost $186,463,338, $9,345,557, $34,349,877
and $123,170,749) ...................................... $ 259,158,294 $ 10,539,764 $ 38,313,284 $ 139,618,355
Interest and dividends receivable ........................ 250,426 28,668 159,184 52,360
Receivable for capital shares issued ..................... 29,020 1,878 21,990 250
Receivable for investment securities sold ................ 2,177,519 87,887 -- 2,541,925
Tax reclaim receivable ................................... -- -- 43,651 --
Deferred organization costs .............................. -- 8,905 8,883 19,741
Prepaid expenses and other assets ........................ 16,703 -- 462 16,927
------------- ------------- ------------- -------------
Total assets ............................................... 261,631,962 10,667,102 38,547,454 142,249,558
------------- ------------- ------------- -------------
LIABILITIES:
Dividends payable ........................................ 31,338 35,116 -- --
Payable for capital shares redeemed ...................... 71,712 -- -- 2,890
Payable for investment securities purchased .............. 1,778,008 -- 83,718 1,752,630
Unrealized loss on forward foreign currency exchange
contracts .............................................. -- -- 306 --
Accrued expenses and other liabilities:
Investment Advisory fees ............................... 129,383 2,895 30,274 114,379
Administration fees .................................... 2,203 88 327 1,188
Shareholder Processing fees (Retail Shares) ............ 8,387 111 534 1,953
Combined Distribution and Service fees (Retail
Shares) .............................................. 8,387 111 534 1,953
Custodian and transfer agent fees ...................... 43,481 7,106 22,438 22,958
Audit and legal fees ................................... 13,557 5,957 5,725 7,272
Other liabilities ...................................... 25,291 43,480 36,464 18,780
------------- ------------- ------------- -------------
Total liabilities .......................................... 2,111,747 94,864 180,320 1,924,003
------------- ------------- ------------- -------------
NET ASSETS ................................................. $ 259,520,215 $ 10,572,238 $ 38,367,134 $ 140,325,555
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
NET ASSETS:
Retail Shares ............................................ $ 41,597,233 $ 608,843 $ 1,786,314 $ 10,421,135
Institutional Shares ..................................... 217,922,982 9,963,395 36,580,820 129,904,420
------------- ------------- ------------- -------------
Total ...................................................... $ 259,520,215 $ 10,572,238 $ 38,367,134 $ 140,325,555
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
OUTSTANDING SHARES OF BENEFICIAL INTEREST:
Retail Shares ............................................ 2,641,160 44,860 139,453 965,323
Institutional Shares ..................................... 13,754,657 733,598 2,843,934 11,909,044
------------- ------------- ------------- -------------
Total ...................................................... 16,395,817 778,458 2,983,387 12,874,367
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER
SHARE:
Retail Shares ............................................ $ 15.75 $ 13.57 $ 12.81 $ 10.80
Institutional Shares ..................................... 15.84 13.58 12.86 10.91
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par .................... $ 16,396 $ 778 $ 2,983 $ 12,874
Additional paid-in capital ............................... 173,576,445 9,230,907 33,413,411 143,046,070
Accumulated undistributed net investment income (loss) ... 103,613 28 234,666 (484,302)
Accumulated net realized gains (losses) on investment
transactions ........................................... 13,128,805 146,318 752,742 (18,696,692)
Net unrealized appreciation of investments ............... 72,694,956 1,194,207 3,963,332 16,447,605
------------- ------------- ------------- -------------
Net Assets, May 31, 1997 ................................... $ 259,520,215 $ 10,572,238 $ 38,367,134 $ 140,325,555
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
- ------------
See Notes to Financial Statements.
90
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities
May 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S.
SHORT-TERM GOVERNMENT MANAGED
BALANCED FIXED INCOME SECURITIES BOND
FUND FUND FUND FUND
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, at value (cost $78,611,915,
$71,578,180, $64,745,812 and $84,146,419).............. $ 92,989,342 $ 71,483,871 $ 65,236,553 $ 84,237,976
Interest and dividends receivable......................... 656,750 1,087,969 746,884 1,257,677
Receivable for capital shares issued...................... 36,500 -- 1,000 17,000
Receivable for investment securities sold................. 725,806 -- -- --
Unamortized organization costs............................ 23,485 23,484 -- 23,617
Prepaid expenses and other assets......................... 5,017 10,888 5,757 3,967
-------------- -------------- -------------- --------------
Total assets................................................ 94,436,900 72,606,212 65,990,194 85,540,237
-------------- -------------- -------------- --------------
LIABILITIES:
Dividends payable......................................... 598,196 346,349 341,018 436,650
Payable for capital shares redeemed....................... 2,822 400 38,801 10,875
Payable for investment securities purchased............... 380,456 -- -- --
Accrued expenses and other liabilities:
Investment Advisory fees................................ 48,548 22,213 20,049 24,396
Administration fees..................................... 803 612 555 714
Shareholder Processing fees (Retail Shares)............. 2,840 350 9,070 772
Combined Distribution and Service fees (Retail Shares).. 1,506 350 4,641 24
Custodian and transfer agent fees....................... 26,122 8,594 12,626 17,306
Audit and legal fees.................................... 7,377 5,764 5,877 5,698
Other liabilities....................................... 25,133 14,758 4,774 44,993
-------------- -------------- -------------- --------------
Total liabilities........................................... 1,093,803 399,390 437,411 541,428
-------------- -------------- -------------- --------------
NET ASSETS.................................................. $ 93,343,097 $ 72,206,822 $ 65,552,783 $ 84,998,809
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
NET ASSETS:
Retail Shares............................................. $ 7,228,639 $ 1,619,455 $ 21,558,946 $ 1,914,801
Institutional Shares...................................... 86,114,458 70,587,367 43,993,837 83,084,008
-------------- -------------- -------------- --------------
Total....................................................... $ 93,343,097 $ 72,206,822 $ 65,552,783 $ 84,998,809
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
OUTSTANDING SHARES OF BENEFICIAL INTEREST:
Retail Shares............................................. 570,299 163,055 2,140,738 190,783
Institutional Shares...................................... 6,852,348 7,104,965 4,380,612 8,316,854
-------------- -------------- -------------- --------------
Total....................................................... 7,422,647 7,268,020 6,521,350 8,507,637
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER
SHARE:
Retail Shares............................................... $ 12.68 $ 9.93 $ 10.07 $ 10.04
Institutional Shares........................................ 12.57 9.94 10.04 9.99
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par..................... $ 7,423 $ 7,268 $ 6,521 $ 8,508
Additional paid-in capital................................ 77,793,583 72,450,472 68,756,743 85,493,107
Accumulated undistributed (distributions in excess of) net
investment income....................................... 47,240 -- (6,535) --
Accumulated net realized gains (losses) on investment
transactions............................................ 1,117,424 (156,608) (3,694,687) (594,363)
Net unrealized appreciation (depreciation) of
investments............................................. 14,377,427 (94,310) 490,741 91,557
-------------- -------------- -------------- --------------
Net Assets, May 31, 1997.................................... $ 93,343,097 $ 72,206,822 $ 65,552,783 $ 84,998,809
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
</TABLE>
- ------------
See Notes to Financial Statements.
91
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities
May 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FLORIDA
TAX-EXEMPT PRIME TREASURY TAX-EXEMPT
FUND FUND FUND FUND
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, at value (cost $107,578,764 and
amortized cost $1,897,389,842, $583,896,496 and
$172,724,186).......................................... $ 112,336,687 $1,897,389,842 $ 583,896,496 $ 172,724,186
Repurchase agreements (cost $0 and amortized cost
$252,013,830, $431,445,541 and $0)..................... -- 252,013,830 431,445,541 --
Cash...................................................... -- -- -- 2,436
Interest and dividends receivable......................... 1,695,685 10,655,101 12,799,771 1,059,056
Receivable for capital shares issued...................... 38,820 -- -- --
Prepaid expenses and other assets......................... 26,239 122,150 64,271 21,854
-------------- -------------- -------------- --------------
Total assets................................................ 114,097,431 2,160,180,923 1,028,206,079 173,807,532
-------------- -------------- -------------- --------------
LIABILITIES:
Dividends payable......................................... 465,705 9,470,059 3,698,672 491,544
Payable for capital shares redeemed....................... 160,114 -- -- --
Payable for investment securities purchased............... -- -- 80,000,000 --
Accrued expenses and other liabilities:
Investment Advisory fees................................ 8,669 374,081 179,507 --
Sub-Advisory fees....................................... -- -- -- 19,923
Administration fees..................................... 961 18,273 7,893 1,472
Shareholder Processing and Services fees (Service
Shares)............................................... -- 289,924 154,229 --
Shareholder Processing fees (Retail Shares)............. 16,630 123,192 29,462 21,660
Combined Distribution and Service fees (Retail
Shares)............................................... 16,630 123,192 13,708 9,893
Custodian and transfer agent fees....................... 2,411 318,178 140,320 36,915
Audit and legal fees.................................... 7,347 66,294 50,601 10,713
Other liabilities....................................... 44,841 120,551 17,642 5,893
-------------- -------------- -------------- --------------
Total liabilities........................................... 723,308 10,903,744 84,292,034 598,013
-------------- -------------- -------------- --------------
NET ASSETS.................................................. $ 113,374,123 $2,149,277,179 $ 943,914,045 $ 173,209,519
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
NET ASSETS:
Retail Shares............................................. $ 78,040,817 $ 572,128,690 $ 65,734,243 $ 58,515,489
Institutional Shares...................................... 35,333,306 610,954,588 347,500,208 114,030,727
Service Shares............................................ N/A 966,193,901 530,679,594 663,303
-------------- -------------- -------------- --------------
Total....................................................... $ 113,374,123 $2,149,277,179 $ 943,914,045 $ 173,209,519
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
OUTSTANDING SHARES OF BENEFICIAL INTEREST:
Retail Shares............................................. 7,159,596 572,137,815 65,769,677 58,527,974
Institutional Shares...................................... 3,237,998 610,964,645 347,666,794 114,069,105
Service Shares............................................ N/A 966,209,121 531,098,476 664,130
-------------- -------------- -------------- --------------
Total....................................................... 10,397,594 2,149,311,581 944,534,947 173,261,209
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER
SHARE:
Retail Shares............................................. $ 10.90 $ 1.00 $ 1.00 $ 1.00
Institutional Shares...................................... 10.91 1.00 1.00 1.00
Service Shares............................................ N/A 1.00 1.00 1.00
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par..................... $ 10,398 $ 2,149,312 $ 944,535 $ 173,261
Additional paid-in capital................................ 112,096,326 2,147,162,268 943,590,412 173,087,949
Distributions in excess of net investment income.......... (57,867) -- -- --
Accumulated net realized losses on investment
transactions............................................ (3,432,657) (34,401) (620,902) (51,691)
Net unrealized appreciation of investments................ 4,757,923 -- -- --
-------------- -------------- -------------- --------------
Net Assets, May 31, 1997.................................... $ 113,374,123 $2,149,277,179 $ 943,914,045 $ 173,209,519
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
</TABLE>
- ------------
N/A -- Not Applicable.
See Notes to Financial Statements.
92
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Statements of Operations
For the six months ended May 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY INTERNATIONAL SMALL
EQUITY VALUE EQUITY CAPITALIZATION
FUND FUND FUND FUND
------------ ------------ ------------- ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ...................................... $ 1,317,028 $ 68,809 $ 417,684 $ 257,493
Interest ....................................... 52,392 11,300 44,628 89,890
Foreign withholding taxes ...................... -- -- (45,892) --
------------ ------------ ------------- ------------
Total investment income .......................... 1,369,420 80,109 416,420 347,383
------------ ------------ ------------- ------------
EXPENSES:
Investment Advisory fees ....................... 741,003 17,514 138,037 681,998
Administration fees ............................ 95,713 1,514 10,700 52,855
Shareholder Processing fees (Retail Shares) .... 44,156 161 911 10,582
Combined Distribution and Service fees (Retail
Shares) ...................................... 44,156 161 911 10,582
Transfer agent fees and expenses ............... 24,747 301 2,827 16,420
Custodian fees and expenses .................... 18,658 4,159 9,129 16,516
Legal fees ..................................... 6,390 179 708 3,461
Audit fees ..................................... 4,649 751 964 3,022
Reports to shareholders (Retail Shares) ........ 12,605 3 174 1,009
Reports to shareholders (Institutional
Shares) ...................................... 11,234 260 1,443 7,009
Amortization of organization costs ............. 30 1,274 1,274 6,188
Registration fees .............................. 2,293 503 209 5,462
Trustees' fees ................................. 6,498 223 529 3,633
Other expenses ................................. 24,391 7,990 15,356 14,683
------------ ------------ ------------- ------------
Gross Expenses ................................... 1,036,523 34,993 183,172 833,420
Less: Expense reimbursements ..................... (129) (17,015) (3,974) (1,311)
Expenses paid by third parties ............... (2,456) (79) -- (424)
------------ ------------ ------------- ------------
Net Expenses ..................................... 1,033,938 17,899 179,198 831,685
------------ ------------ ------------- ------------
Net Investment Income (Loss) ..................... 335,482 62,210 237,222 (484,302)
------------ ------------ ------------- ------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON
INVESTMENTS:
Net realized gains (losses) on securities
transactions ................................. 13,608,470 146,358 651,089 (18,726,898)
Net realized gains (losses) from foreign
currency transactions ........................ -- -- (4,884) --
Net change in unrealized
appreciation/depreciation of investments ..... 4,820,521 636,954 3,030,061 9,064,087
------------ ------------ ------------- ------------
Net Realized and Unrealized Gains (Losses) on
Investments .................................. 18,428,991 783,312 3,676,266 (9,662,811)
------------ ------------ ------------- ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ................................ $ 18,764,473 $ 845,522 $3,913,488 $(10,147,113)
------------ ------------ ------------- ------------
------------ ------------ ------------- ------------
</TABLE>
- ------------
See Notes to Financial Statements.
93
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Statements of Operations
For the six months ended May 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S.
SHORT-TERM GOVERNMENT MANAGED
BALANCED FIXED INCOME SECURITIES BOND
FUND FUND FUND FUND
------------ ------------- ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends....................................... $ 292,820 $ 19,597 $ 22,245 $ 19,915
Interest........................................ 1,364,017 2,025,694 2,198,384 2,740,393
------------ ------------- ------------ ------------
Total Investment Income........................... 1,656,837 2,045,291 2,220,629 2,760,308
------------ ------------- ------------ ------------
EXPENSES:
Investment Advisory fees........................ 284,205 129,706 126,027 160,042
Administration fees............................. 36,710 25,126 24,418 31,008
Shareholder Processing fees (Retail Shares)..... 7,822 1,751 27,444 2,283
Combined Distribution and Service fees
(Retail Shares)............................... 7,822 1,751 27,444 2,283
Transfer agent fees and expenses................ 10,581 6,673 6,304 8,268
Custodian fees and expenses..................... 23,113 5,618 7,534 5,398
Legal fees...................................... 602 732 1,280 1,970
Audit fees...................................... 1,806 1,397 1,359 787
Reports to shareholders (Retail Shares)......... 812 196 6,143 4,819
Reports to shareholders (Institutional
Shares)....................................... 4,640 3,057 1,790 2,116
Amortization of organization costs.............. 6,264 6,229 1,185 6,370
Registration fees............................... 1,325 4,773 86 846
Trustees' fees.................................. 757 1,477 1,594 2,031
Other expenses.................................. 11,909 16,219 15,759 14,011
------------ ------------- ------------ ------------
Gross Expenses.................................... 398,368 204,705 248,367 242,232
Less: Expense reimbursements...................... (640) (7,625) (5,859) (7,864)
Expenses paid by third parties ............... (59) (175) (3) (133)
------------ ------------- ------------ ------------
Net Expenses...................................... 397,669 196,905 242,505 234,235
------------ ------------- ------------ ------------
Net Investment Income............................. 1,259,168 1,848,386 1,978,124 2,526,073
------------ ------------- ------------ ------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON
INVESTMENTS:
Net realized gains (losses) on securities
transactions.................................. 1,242,272 (161,570) (57,538) (426,189)
Net change in unrealized
appreciation/depreciation of investments...... 608,042 (583,603) (1,312,668) (1,721,345)
------------ ------------- ------------ ------------
Net Realized and Unrealized Gains (Losses) on
Investments..................................... 1,850,314 (745,173) (1,370,206) (2,147,534)
------------ ------------- ------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS...................................... $ 3,109,482 $1,103,213 $ 607,918 $ 378,539
------------ ------------- ------------ ------------
------------ ------------- ------------ ------------
</TABLE>
- ------------
See Notes to Financial Statements.
94
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Statements of Operations
For the six months ended May 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FLORIDA
TAX-EXEMPT PRIME U.S. TREASURY TAX-EXEMPT
FUND FUND FUND FUND
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ...................................... $ 34,862 -- -- --
Interest ....................................... 3,257,877 $ 60,658,761 $ 26,838,087 $ 2,913,135
------------- ------------- ------------- -------------
Total investment income .......................... 3,292,739 60,658,761 26,838,087 2,913,135
------------- ------------- ------------- -------------
EXPENSES:
Investment Advisory fees ....................... 230,925 2,745,076 1,220,470 203,468
Administration fees ............................ 44,742 850,626 378,340 63,044
Shareholder Processing and Services fees
(Service Shares) ............................. -- 1,785,522 1,015,101 2,143
Shareholder Processing fees (Retail Shares) .... 101,329 700,555 97,676 63,820
Combined Distribution and Service fees (Retail
Shares) ...................................... 101,329 700,555 97,676 63,820
Transfer agent fees and expenses ............... 22,232 247,747 111,553 19,635
Custodian fees and expenses .................... 6,557 101,739 49,685 10,139
Legal fees ..................................... 2,406 71,172 22,628 4,073
Audit fees ..................................... 1,645 71,411 17,506 2,238
Reports to shareholders (Retail Shares) ........ 30,046 208,196 23,616 18,123
Reports to shareholders (Institutional
Shares) ...................................... 1,251 34,164 11,852 3,276
Reports to shareholders (Service Shares) ....... -- 28,686 16,312 3
Registration fees .............................. -- 35,323 17,528 988
Trustees' fees ................................. 3,323 56,626 23,747 4,575
Interest expenses .............................. -- -- 629,601 --
Other expenses ................................. 17,136 90,673 61,600 28,772
------------- ------------- ------------- -------------
Gross Expenses ................................... 562,921 7,728,071 3,794,891 488,117
Less: Expense reimbursements ..................... (96,628) (91,656) (18,795) (5,496)
Fee waivers .................................. -- (301,519) (40,780) (81,449)
Expenses paid by third parties ............... (178) (10,268) (2,524) (940)
------------- ------------- ------------- -------------
Net Expenses ..................................... 466,115 7,324,628 3,732,792 400,232
------------- ------------- ------------- -------------
Net Investment Income ............................ 2,826,624 53,334,133 23,105,295 2,512,903
------------- ------------- ------------- -------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON
INVESTMENTS:
Net realized gains (losses) on securities
transactions ................................. 575,540 (30,460) (92,801) --
Net change in unrealized
appreciation/depreciation of investments ..... (2,359,508) -- -- --
------------- ------------- ------------- -------------
Net Realized and Unrealized Gains (Losses) on
Investments .................................. (1,783,968) (30,461) (92,801) --
------------- ------------- ------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS ..................................... $ 1,042,656 $ 53,303,672 $ 23,012,494 $ 2,512,903
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
- ------------
See Notes to Financial Statements.
95
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY FUND EQUITY VALUE FUND
----------------------------- -----------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED PERIOD ENDED
MAY 31, 1997 NOVEMBER 30, MAY 31, 1997 NOVEMBER 30,
(UNAUDITED) 1996 (UNAUDITED) 1996(a)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income........................... $ 335,482 $ 806,542 $ 62,210 $ 66,365
Net realized gains (losses) on securities
transactions.................................. 13,608,470 23,919,476 146,358 25,549
Net change in unrealized
appreciation/depreciation of investments...... 4,820,521 22,333,435 636,954 557,253
------------- ------------- ------------- -------------
Net increase in net assets resulting from
operations.................................... 18,764,473 47,059,453 845,522 649,167
------------- ------------- ------------- -------------
Dividends to shareholders from net investment
income
Retail Shares................................... (111) -- (2,214) (150)
Institutional Shares............................ (189,149) (806,542) (60,041) (66,142)
------------- ------------- ------------- -------------
Total dividends to shareholders from net
investment income............................... (189,260) (806,542) (62,255) (66,292)
------------- ------------- ------------- -------------
Distributions to shareholders in excess of net
investment income
Retail Shares................................... -- (24,107) -- --
B Shares(b)..................................... -- (1,075) -- --
Institutional Shares............................ -- (17,427) -- --
------------- ------------- ------------- -------------
Total distributions to shareholders in excess of
net investment income........................... -- (42,609) -- --
------------- ------------- ------------- -------------
Distributions to shareholders from net realized
gains
Retail Shares................................... (3,210,483) (1,985,635) (145) --
B Shares(b)..................................... -- (212,931) -- --
Institutional Shares............................ (20,775,013) (15,246,479) (25,444) --
------------- ------------- ------------- -------------
Total distributions to shareholders from net
realized gains.................................. (23,985,496) (17,445,045) (25,589) --
------------- ------------- ------------- -------------
Total dividends and distributions to
shareholders.................................... (24,174,756) (18,294,196) (87,844) (66,292)
------------- ------------- ------------- -------------
Fund Share Transactions
Net proceeds from shares subscribed............. 28,820,733 68,268,294 6,922,709 5,136,577
Net asset value of shares issued to shareholders
in reinvestment of dividends and
distributions................................. 21,163,291 15,964,511 24,426 223
Cost of shares redeemed......................... (35,414,598) (60,932,375) (1,100,250) (1,752,000)
------------- ------------- ------------- -------------
Net increase in net assets from Fund share
transactions.................................. 14,569,426 23,300,430 5,846,885 3,384,800
------------- ------------- ------------- -------------
Total Increase.................................... 9,159,143 52,065,687 6,604,563 3,967,675
NET ASSETS:
Beginning of period............................. 250,361,072 198,295,385 3,967,675 --
------------- ------------- ------------- -------------
End of period................................... $ 259,520,215 $ 250,361,072 $ 10,572,238 $ 3,967,675
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
- ---------------
(a) For the period from December 27, 1995 (commencement of operations) through
November 30, 1996.
(b) Effective March 11, 1996, Class B Shares were no longer offered for sale and
subsequently, all Class B Shares were converted to Retail Shares.
See Notes to Financial Statements.
96
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND SMALL CAPITALIZATION FUND
----------------------------- -----------------------------
SIX MONTHS SIX MONTHS
ENDED PERIOD ENDED ENDED YEAR ENDED
MAY 31, 1997 NOVEMBER 30, MAY 31, 1997 NOVEMBER 30,
(UNAUDITED) 1996(a) (UNAUDITED) 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income (loss).......................... $ 237,222 $ 77,844 $ (484,302) $ (775,001)
Net realized gains (losses) on securities
transactions........................................ 651,089 152,939 (18,726,898) 19,900,908
Net realized gains (losses) from foreign currency
transactions........................................ (4,884) (3,704) -- --
Net change in unrealized appreciation/depreciation
from investments and translation of assets and
liabilities in foreign currencies................... 3,030,061 933,271 9,064,087 (4,469,248)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets resulting from
operations.......................................... 3,913,488 1,160,350 (10,147,113) 14,656,659
------------- ------------- ------------- -------------
Dividends to shareholders from net
investment income
Retail Shares......................................... -- (413) -- --
B Shares(b)........................................... -- -- -- --
Institutional Shares.................................. -- (77,431) -- --
------------- ------------- ------------- -------------
Total dividends to shareholders from net
investment income..................................... -- (77,844) -- --
------------- ------------- ------------- -------------
Distributions to shareholders in excess of net
investment income
Retail Shares......................................... -- (172) -- --
Institutional Shares.................................. -- (2,384) -- --
------------- ------------- ------------- -------------
Total distributions to shareholders in excess of net
investment income..................................... -- (2,556) -- --
------------- ------------- ------------- -------------
Distributions to shareholders from net
realized gains
Retail Shares......................................... (263) -- (1,133,947) (211,250)
B Shares(b)........................................... -- -- -- (206,488)
Institutional Shares.................................. (42,435) -- (17,767,380) (6,891,681)
------------- ------------- ------------- -------------
Total distributions to shareholders from net realized
gains................................................. (42,698) -- (18,901,327) (7,309,419)
------------- ------------- ------------- -------------
Total dividends and distributions to shareholders....... (42,698) (80,400) (18,901,327) (7,309,419)
------------- ------------- ------------- -------------
Fund Share Transactions
Net proceeds from shares subscribed................... 21,363,256 16,855,102 38,468,738 59,893,208
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions......... 24,521 -- 15,142,141 6,529,948
Cost of shares redeemed............................... (4,533,956) (292,529) (31,735,104) (20,047,906)
------------- ------------- ------------- -------------
Net increase in net assets from Fund share
transactions........................................ 16,853,821 16,562,573 21,875,775 46,375,250
------------- ------------- ------------- -------------
Total Increase (Decrease)............................... 20,724,611 17,642,523 (7,172,665) 53,722,490
NET ASSETS:
Beginning of period................................... 17,642,523 -- 147,498,220 93,775,730
------------- ------------- ------------- -------------
End of period......................................... $ 38,367,134 $ 17,642,523 $ 140,325,555 $ 147,498,220
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
- ---------------
(a) For the period December 27, 1995 (commencement of operations) through
November 30, 1996.
(b) Effective March 11, 1996, Class B Shares were no longer offered for sale and
subsequently, all Class B Shares were converted to Retail Shares.
See Notes to Financial Statements.
97
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCED FUND SHORT-TERM FIXED INCOME FUND
----------------------------- -----------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
MAY 31, 1997 NOVEMBER 30, MAY 31, 1997 NOVEMBER 30,
(UNAUDITED) 1996 (UNAUDITED) 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income.................................. $ 1,259,168 $ 2,434,640 $ 1,848,386 $ 1,389,384
Net realized gains (losses) on securities
transactions......................................... 1,242,272 4,997,685 (161,570) 57,368
Net change in unrealized appreciation/depreciation of
investments.......................................... 608,042 4,435,765 (583,603) 238,110
------------- ------------- ------------- -------------
Net increase in net assets resulting from operations... 3,109,482 11,868,090 1,103,213 1,684,862
------------- ------------- ------------- -------------
Dividends to shareholders from net
investment income
Retail Shares.......................................... (76,781) (99,865) (37,501) (42,845)
B Shares(a)............................................ -- (13,670) -- (2,024)
Institutional Shares................................... (1,139,209) (2,310,316) (1,810,884) (1,344,515)
------------- ------------- ------------- -------------
Total dividends to shareholders from net investment
income................................................. (1,215,990) (2,423,851) (1,848,385) (1,389,384)
------------- ------------- ------------- -------------
Distributions to shareholders from net
realized gains
Retail Shares.......................................... (299,130) (22,583) (962) (983)
B Shares(a)............................................ -- (45,345) -- (531)
Institutional Shares................................... (4,717,219) (1,363,343) (54,895) (46,651)
------------- ------------- ------------- -------------
Total distributions to shareholders from net realized
gains.................................................. (5,016,349) (1,431,271) (55,857) (48,165)
------------- ------------- ------------- -------------
Total dividends and distributions to shareholders........ (6,232,339) (3,855,122) (1,904,242) (1,437,549)
------------- ------------- ------------- -------------
Fund Share Transactions
Net proceeds from shares subscribed.................... 9,877,720 34,090,512 30,035,850 47,095,330
Net asset value of shares issued to shareholders
in reinvestment of dividends and
distributions........................................ 6,035,250 3,156,752 285,806 444,481
Cost of shares redeemed................................ (15,641,046) (26,281,039) (11,498,457) (8,137,532)
------------- ------------- ------------- -------------
Net increase in net assets from Fund share
transactions......................................... 271,924 10,966,225 18,823,199 39,402,279
------------- ------------- ------------- -------------
Total Increase (Decrease)................................ (2,850,933) 18,979,193 18,022,170 39,649,592
NET ASSETS:
Beginning of period.................................... 96,194,029 77,214,836 54,184,652 14,535,060
------------- ------------- ------------- -------------
End of period.......................................... $ 93,343,096 $ 96,194,029 $ 72,206,822 $ 54,184,652
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
- ---------------
(a) Effective March 11, 1996, Class B Shares were no longer offered for sale and
subsequently, all Class B Shares were converted to Retail Shares.
See Notes to Financial Statements.
98
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT
SECURITIES FUND MANAGED BOND FUND
------------------------------- -------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
MAY 31, 1997 NOVEMBER 30, MAY 31, 1997 NOVEMBER 30,
(UNAUDITED) 1996 (UNAUDITED) 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income ............................... $ 1,978,124 $ 4,213,287 $ 2,526,073 $ 4,461,745
Net realized gains (losses) on securities
transactions ...................................... (57,538) 664,448 (426,189) 759,127
Net change in unrealized
appreciation/depreciation of investments .......... (1,312,668) (1,517,543) (1,721,345) (969,641)
-------------- -------------- -------------- --------------
Net increase in net assets resulting from
operations ........................................ 607,918 3,360,192 378,539 4,251,231
-------------- -------------- -------------- --------------
Dividends to shareholders from net investment income
Retail Shares ....................................... (652,300) (1,466,587) (53,005) (92,633)
B Shares(a) ......................................... -- (21,601) -- (8,459)
Institutional Shares ................................ (1,324,812) (2,726,113) (2,473,068) (4,360,653)
-------------- -------------- -------------- --------------
Total dividends to shareholders from net investment
income .............................................. (1,977,112) (4,214,301) (2,526,073) (4,461,745)
-------------- -------------- -------------- --------------
Distributions to shareholders from net realized gains
Retail Shares ....................................... -- -- (15,604) (13,911)
B Shares(a) ......................................... -- -- -- (5,665)
Institutional Shares ................................ -- -- (720,711) (815,999)
-------------- -------------- -------------- --------------
Total distributions to shareholders from net realized
gains................................................ -- -- (736,315) (835,575)
-------------- -------------- -------------- --------------
Total dividends and distributions to shareholders ..... (1,977,112) (4,214,301) (3,262,388) (5,297,320)
-------------- -------------- -------------- --------------
Fund Share Transactions
Net proceeds from shares subscribed ................. 13,312,002 19,998,532 18,157,487 31,995,319
Net asset value of shares issued to
shareholders in reinvestment of
dividends and distributions ....................... 1,194,032 2,641,946 2,684,010 4,243,441
Cost of shares redeemed ............................. (7,683,883) (64,773,650) (10,174,448) (28,374,995)
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets from Fund share
transactions ...................................... 6,822,151 (42,133,172) 10,667,049 7,863,765
-------------- -------------- -------------- --------------
Total Increase (Decrease) ............................. 5,452,957 (42,987,281) 7,783,200 6,817,676
NET ASSETS:
Beginning of period ................................. 60,099,826 103,087,107 77,215,609 70,397,933
-------------- -------------- -------------- --------------
End of period ....................................... $ 65,552,783 $ 60,099,826 $ 84,998,809 $ 77,215,609
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
</TABLE>
- ------------
(a) Effective March 11, 1996, Class B Shares were no longer offered for sale and
subsequently, all Class B Shares were converted to Retail Shares.
See Notes to Financial Statements.
99
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FLORIDA TAX-EXEMPT FUND PRIME FUND
--------------------------------- ---------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
MAY 31, 1997 NOVEMBER 30, MAY 31, 1997 NOVEMBER 30,
(UNAUDITED) 1996 (UNAUDITED) 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income.......................... $ 2,826,624 $ 6,193,487 $ 53,337,133 $ 100,215,243
Net realized gains (losses) on securities
transactions ................................ 575,540 676,108 (30,460) 4,995
Net change in unrealized appreciation/
depreciation of investments ................. (2,359,508) (1,493,725) -- --
--------------- --------------- --------------- ---------------
Net increase in net assets resulting from
operations .................................. 1,042,656 5,375,870 53,306,673 100,220,238
--------------- --------------- --------------- ---------------
Dividends to shareholders from net investment
income
Institutional Shares .......................... (879,757) (1,740,957) (15,875,769) (32,620,075)
Service Shares ................................ -- -- (24,499,146) (43,011,011)
Retail Shares ................................. (1,946,867) (4,335,296) (12,962,218) (24,584,157)
B Shares(a) ................................... -- (117,234) -- --
--------------- --------------- --------------- ---------------
Total dividends to shareholders from net
investment income ............................. (2,826,624) (6,193,487) (53,337,133) (100,215,243)
--------------- --------------- --------------- ---------------
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)
--------------- --------------- --------------- ---------------
Total dividends and distributions to
shareholders .................................. (2,826,624) (6,193,487) (53,337,133) (100,574,118)
--------------- --------------- --------------- ---------------
Fund Share Transactions
Net proceeds from shares subscribed ........... 12,501,399 29,782,670 2,746,513,607 4,863,805,197
Net asset value of shares issued to
shareholders in reinvestment of dividends and
distributions ............................... 1,745,971 3,516,351 14,131,347 25,859,087
Cost of shares redeemed ....................... (21,416,203) (47,849,944) (2,755,665,924) (4,554,641,484)
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets from Fund
share transactions .......................... (7,168,833) (14,550,923) 4,979,030 335,022,800
--------------- --------------- --------------- ---------------
Total Increase (Decrease) ....................... (8,952,801) (15,368,540) 4,948,570 334,668,920
NET ASSETS:
Beginning of period ........................... 122,326,924 137,695,464 2,144,328,609 1,809,659,689
--------------- --------------- --------------- ---------------
End of period ................................. $ 113,374,123 $ 122,326,924 $ 2,149,277,179 $ 2,144,328,609
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
</TABLE>
- ------------
(a) Effective March 11, 1996, Class B Shares were no longer offered for sale and
subsequently, all Class B Shares were converted to Retail Shares.
See Notes to Financial Statements.
100
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY FUND TAX-EXEMPT FUND
------------------------------- ---------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
MAY 31, 1997 NOVEMBER 30, MAY 31, 1997 NOVEMBER 30,
(UNAUDITED) 1996 (UNAUDITED) 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income ....................... $ 23,105,295 $ 41,837,011 $ 2,512,903 $ 6,060,612
Net realized gains (losses) on securities
transactions .............................. (92,801) (220,299) -- (20,046)
-------------- -------------- -------------- --------------
Net increase in net assets resulting from
operations ................................ 23,012,494 41,616,712 2,512,903 6,040,566
-------------- -------------- -------------- --------------
Dividends to shareholders from net investment
income
Institutional Shares ........................ (7,924,467) (12,557,469) (1,805,338) (4,780,788)
Service Shares .............................. (13,437,467) (27,088,342) (17,433) (80,005)
Retail Shares ............................... (1,743,361) (2,191,200) (690,132) (1,199,819)
-------------- -------------- -------------- --------------
Total dividends to shareholders from net
investment income ........................... (23,105,295) (41,837,011) (2,512,903) (6,060,612)
-------------- -------------- -------------- --------------
Fund Share Transactions
Net proceeds from shares subscribed ......... 1,996,502,207 2,552,820,891 248,632,918 531,124,979
Net asset value of shares issued to
shareholders in reinvestment of dividends
and distributions ......................... 2,165,744 3,479,765 653,992 1,110,214
Cost of shares redeemed ..................... (1,998,249,023) (2,423,540,264) (271,675,536) (534,061,352)
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets from
Fund share transactions ................... 418,928 132,760,392 (22,388,626) (1,826,159)
-------------- -------------- -------------- --------------
Total Increase (Decrease) ..................... 326,127 132,540,093 (22,388,626) (1,846,205)
NET ASSETS:
Beginning of period ......................... 943,587,918 811,047,825 195,598,146 197,444,351
-------------- -------------- -------------- --------------
End of period ............................... $ 943,914,045 $ 943,587,918 $ 173,209,520 $ 195,598,146
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
</TABLE>
- ------------
See Notes to Financial Statements.
101
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
NOTE 1 -- GENERAL
Emerald Funds (the "Trust") was organized as a Massachusetts business trust on
March 15, 1988. The Trust is registered under the Investment Company Act of
1940, as amended (the "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 six
months ended May 31, 1997 (the "Funds"), with the exception of Prime Advantage
Institutional Fund and Treasury Advantage Institutional Fund, 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:
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 FUND -- To seek consistently positive income by
investing principally 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.
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").
Barnett Capital Advisors, Inc. ("Barnett"), a wholly owned subsidiary of
Barnett Banks, Inc., serves as the Funds' investment adviser. Rodney Square
Management Corporation ("Rodney
102
<PAGE>
- --------------------------------------------------------------------------------
Square"), a subsidiary of Wilmington Trust Company, serves as the Tax-Exempt
Fund's investment sub-adviser. Brandes Investment Partners, L.P. ("Brandes")
serves as the International Equity Fund's sub-adviser.
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services, Inc.
("BISYS") serves as the Funds' Administrator. BISYS also serves as the Funds'
Transfer Agent and Fund Accountant. 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. 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. 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 of each variable net asset value
fund also bears the expenses associated with the printing of their shareholder
reports.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements. The policies are in
conformity with generally accepted accounting principles. The preparation of
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of income and expenses for the
period. Actual amounts could differ from those estimates.
A) Security Valuation:
The money market funds each value portfolio securities at amortized cost, which
approximates market value. The amortized cost method involves valuing a security
at cost on the date of purchase and thereafter assuming a constant amortization
to maturity of the difference between the principal amount due at maturity and
initial cost. In addition, the money market funds may not (a) purchase any
instrument with a remaining maturity greater than thirteen months unless such
instrument is subject to a demand feature, or (b) maintain a dollar-weighted
average maturity which exceeds 90 days.
The Equity Fund, the Equity Value Fund, the International Equity Fund, the
Small Capitalization Fund, the Balanced Fund, the Short-Term Fixed Income Fund,
the U.S. Government Securities Fund and the Managed Bond Fund value portfolio
securities (other than debt securities with remaining maturities of 60 days or
less) at the last reported sales price on the securities exchange on which such
securities are primarily traded or at the last sales price on the NASDAQ
National Securities Market. Securities not listed on an exchange or the 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
103
<PAGE>
- --------------------------------------------------------------------------------
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.
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.
104
<PAGE>
- --------------------------------------------------------------------------------
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 liquid 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.
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 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.
105
<PAGE>
- --------------------------------------------------------------------------------
At November 30, 1996, the following Funds had the following capital loss
carryovers:
<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 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 six months
ended May 31, 1997, custodian fees and expenses and expenses paid by
106
<PAGE>
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third parties were increased by the following amounts for the following Funds:
<TABLE>
<S> <C>
Equity Fund........................ $ 2,456
Equity Value Fund.................. 79
International Equity Fund.......... --
Small Capitalization Fund.......... 424
Balanced Fund...................... 59
Short-Term Fixed Income Fund....... 175
U.S. Government Securities Fund.... 3
Managed Bond Fund.................. 133
Florida Tax-Exempt Fund............ 178
Prime Fund......................... 10,268
Treasury Fund...................... 2,524
Tax-Exempt Fund.................... 940
</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 with 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 six months ended May 31, 1997,
Barnett waived fees of $81,449 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
Fund's average daily net assets and 0.19% of each Fund's average daily net
assets in excess of $2 billion. For the six months ended May 31, 1997, Barnett
waived $301,519 and $40,780 for the Prime Fund and Treasury Fund, respectively.
As administrator, BISYS assists in supervising the operations of the Funds.
For its services, BISYS is entitled to a fee, accrued daily and payable monthly,
at the effective annual rate of 0.0775% of the first $5 billion of the Trust's
aggregate net assets, 0.07% of the next $2.5 billion, 0.065% of the next $2.5
billion and 0.05% of all assets exceeding $10 billion. In the event the
aggregate average daily net assets falls below $3 billion, the fee will be
increased to 0.08% of the aggregate average daily net assets of the Trust.
107
<PAGE>
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For its services as Transfer Agent, BISYS received fees in the following
amounts for the six months ended May 31, 1997:
<TABLE>
<S> <C>
Equity Fund....................... $ 24,747
Equity Value Fund................. --
International Equity Fund......... 2,827
Small Capitalization Fund......... 16,420
Balanced Fund..................... 10,581
Short-Term Fixed Income Fund...... 6,673
U.S. Government Securities Fund... 6,304
Managed Bond Fund................. 8,268
Florida Tax-Exempt Fund........... 22,232
Prime Fund........................ 247,747
Treasury Fund..................... 111,553
Tax-Exempt Fund................... 19,635
</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 holders 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. For the six months ended
May 31, 1997, the Funds (Retail Shares) incurred the following expenses with
regards to the Processing Plan:
<TABLE>
<S> <C>
Equity Fund....................... $ 44,156
Equity Value Fund................. 161
International Equity Fund......... 911
Small Capitalization Fund......... 10,582
Balanced Fund..................... 7,822
Short-Term Fixed Income Fund...... 1,751
U.S. Government Securities Fund... 27,444
Managed Bond Fund................. 2,283
Florida Tax-Exempt Fund........... 101,329
Prime Fund........................ 700,555
Treasury Fund..................... 97,676
Tax-Exempt Fund................... 63,820
</TABLE>
Barnett 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 and Rodney Square 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 may be terminated at any time by Barnett or Rodney Square. For the
six months ended May 31, 1997, Barnett agreed to reimburse expenses totaling
$91,656 to the Prime Fund and $18,795 to the Treasury Fund for expenses in
excess of this limitation. For the six months ended May 31, 1997, Rodney Square
reimbursed expenses totaling $5,496 for the Tax-Exempt Fund, pursuant to this
voluntary agreement.
Barnett has 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. For the six months ended May 31, 1997,
Barnett reimbursed Fund expenses in the following amounts pursuant to these
voluntary limitations:
<TABLE>
<S> <C>
Equity Fund........................ $ 129
Equity Value Fund.................. 17,015
International Equity Fund.......... 3,974
Small Capitalization Fund.......... 1,311
Balanced Fund...................... 640
Short-Term Fixed Income Fund....... 7,625
U.S. Government Securities Fund.... 5,859
Managed Bond Fund.................. 7,864
Florida Tax-Exempt Fund............ 96,628
</TABLE>
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 six months ended May 31, 1997, the Prime Fund, Treasury
Fund and Tax-Exempt Fund incurred expenses of $1,785,522, $1,015,101 and $2,143,
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
108
<PAGE>
- --------------------------------------------------------------------------------
Combined Plan, payments by each Fund may not exceed an annual rate of 0.25% of
the average daily net assets of Retail Shares. The Funds incurred the following
amounts pursuant to the Combined Plan for the six months ended May 31, 1997:
<TABLE>
<S> <C>
Equity Fund....................... $ 44,156
Equity Value Fund................. 161
International Equity Fund......... 911
Small Capitalization Fund......... 10,582
Balanced Fund..................... 7,822
Short-Term Fixed Income Fund...... 1,751
U.S. Government Securities Fund... 27,444
Managed Bond Fund................. 2,283
Florida Tax-Exempt Fund........... 101,329
Prime Fund........................ 700,555
Treasury Fund..................... 97,676
Tax-Exempt Fund................... 63,820
</TABLE>
Certain officers of the Trust are "affiliated persons" (as defined in the
1940 Act) of BISYS or the Distributor. Effective March 1, 1997, each Trustee is
entitled to receive an annual fee of $15,000, plus $2,000 for each regular and
special meeting attended, for services relating to all of the portfolios
constituting the Trust. Prior to March 1, 1997, each Trustee was entitled to
receive an annual fee of $14,000, plus a meeting fee of $1,500 per meeting. For
the six months ended May 31, 1997, the Funds incurred the following legal
expenses of a law firm, a partner of which serves as Secretary to the Trust:
<TABLE>
<S> <C>
Equity Fund........................ $ 6,390
Equity Value Fund.................. 179
International Equity Fund.......... 708
Small Capitalization Fund.......... 3,461
Balanced Fund...................... 602
Short-Term Fixed Income Fund....... 732
U.S. Government Securities Fund.... 1,280
Managed Bond Fund.................. 1,970
Florida Tax-Exempt Fund............ 2,406
Prime Fund......................... 71,172
Treasury Fund...................... 22,628
Tax-Exempt Fund.................... 4,073
</TABLE>
NOTE 4 -- SECURITIES TRANSACTIONS
For the six months ended May 31, 1997, 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.............. $ 85,151,241 $ 91,705,122
Equity Value Fund........ 7,495,059 644,934
International Equity
Fund.................... 18,150,946 5,598,643
Small Capitalization
Fund.................... 138,305,770 141,556,203
Balanced Fund............ 30,325,863 37,849,987
Short-Term Fixed Income
Fund.................... 46,586,529 35,610,651
U.S. Government
Securities Fund......... 27,809,666 22,216,628
Managed Bond Fund........ 45,202,501 35,809,506
Florida Tax-Exempt Fund.. 42,187,180 49,869,148
</TABLE>
109
<PAGE>
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NOTE 5 -- CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Funds are summarized below:
EQUITY FUND (000 OMITTED):
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MAY 31, 1997 YEAR ENDED
(UNAUDITED) NOVEMBER 30, 1996
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold.................................................................. 696 $ 10,535 598 $ 8,610
Reinvestment of dividends............................................. 195 2,707 137 1,801
Redeemed.............................................................. (284) (4,266) (406) (5,910)
----------- --------- ----------- ---------
Net increase in shares outstanding before conversion.................... 607 8,976 329 4,501
Shares issued upon conversion from Class B*............................. -- -- 186 2,552
----------- --------- ----------- ---------
Net increase -- Retail.................................................. 607 8,976 515 7,053
----------- --------- ----------- ---------
Class B Shares*
Sold.................................................................. -- -- 21 286
Reinvestment of dividends............................................. -- -- 13 170
Redeemed.............................................................. -- -- (3) (27)
----------- --------- ----------- ---------
Net increase in shares outstanding before conversion.................... -- -- 31 429
Shares exchanged upon conversion into Retail............................ -- -- (189) (2,552)
----------- --------- ----------- ---------
Net decrease -- Class B*................................................ -- -- (158) (2,123)
----------- --------- ----------- ---------
Institutional Shares
Sold.................................................................. 1,216 18,285 3,956 56,820
Reinvestment of dividends............................................. 1,321 18,457 1,057 13,993
Redeemed.............................................................. (2,059) (31,149) (3,614) (52,443)
----------- --------- ----------- ---------
Net increase -- Institutional........................................... 478 5,593 1,399 18,370
----------- --------- ----------- ---------
Net increase in Fund.................................................... 1,085 $ 14,569 1,756 $ 23,300
----------- --------- ----------- ---------
----------- --------- ----------- ---------
</TABLE>
EQUITY VALUE FUND (000 OMITTED):
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
MAY 31, 1997 NOVEMBER 30, 1996(A)
(UNAUDITED)
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold.................................................................... 47 $ 607 2 $ 21
Reinvestment of dividends............................................... -- -- -- --
Redeemed................................................................ (4) (51) -- --
--- --------- --- ---------
Net increase -- Retail.................................................... 43 556 2 21
--- --------- --- ---------
Institutional Shares
Sold.................................................................... 491 6,316 473 5,116
Reinvestment of dividends............................................... 2 24 -- --
Redeemed................................................................ (84) (1,049) (149) (1,752)
--- --------- --- ---------
Net increase -- Institutional............................................. 409 5,291 324 3,364
--- --------- --- ---------
Net increase in Fund...................................................... 452 $ 5,847 326 $ 3,385
--- --------- --- ---------
--- --------- --- ---------
</TABLE>
- ---------------
* Effective March 11, 1996, Class B Shares were no longer offered for sale and
subsequently, all Class B Shares were converted to Retail Shares.
(a) For the period from December 27, 1995 (commencement of operations) through
November 30, 1996.
110
<PAGE>
- --------------------------------------------------------------------------------
INTERNATIONAL EQUITY FUND (000 OMITTED):
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
MAY 31, 1997 NOVEMBER 30, 1996(A)
(UNAUDITED)
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold................................................................... 139 $ 1,676 10 $ 108
Reinvestment of dividends.............................................. -- 1 -- --
Redeemed............................................................... (10) (118) -- --
----- --------- ----- ---------
Net increase -- Retail................................................... 129 1,559 10 108
----- --------- ----- ---------
Institutional Shares
Sold................................................................... 1,660 19,687 1,580 16,747
Reinvestment of dividends.............................................. 2 24 -- --
Redeemed............................................................... (371) (4,416) (27) (292)
----- --------- ----- ---------
Net increase -- Institutional............................................ 1,291 15,295 1,553 16,455
----- --------- ----- ---------
Net increase in Fund..................................................... 1,420 $ 16,854 1,563 $ 16,563
----- --------- ----- ---------
----- --------- ----- ---------
</TABLE>
SMALL CAPITALIZATION FUND (000 OMITTED):
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MAY 31, 1997 YEAR ENDED
(UNAUDITED) NOVEMBER 30, 1996
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold.................................................................. 1,382 $ 14,932 457 $ 6,022
Reinvestment of dividends............................................. 87 979 16 196
Redeemed.............................................................. (1,211) (13,330) (195) (2,519)
----------- --------- ----------- ---------
Net increase in shares outstanding before conversion.................... 258 2,581 278 3,699
Shares issued upon conversion from Class B*............................. -- -- 221 2,593
----------- --------- ----------- ---------
Net increase -- Retail.................................................. 258 2,581 499 6,292
----------- --------- ----------- ---------
Class B Shares*
Sold.................................................................. -- -- 12 142
Reinvestment of dividends............................................. -- -- 14 164
Redeemed.............................................................. -- -- (4) (46)
----------- --------- ----------- ---------
Net increase in shares outstanding before conversion.................... -- -- 22 260
Shares exchanged upon conversion into Retail............................ -- -- (226) (2,593)
----------- --------- ----------- ---------
Net decrease -- Class B*................................................ -- -- (204) (2,333)
----------- --------- ----------- ---------
Institutional Shares
Sold.................................................................. 2,125 23,537 3,933 51,136
Reinvestment of dividends............................................. 1,247 14,163 507 6,170
Redeemed.............................................................. (1,672) (18,405) (1,158) (14,890)
----------- --------- ----------- ---------
Net increase -- Institutional........................................... 1,700 19,295 3,282 42,416
----------- --------- ----------- ---------
Net increase in Fund.................................................... 1,958 $ 21,876 3,577 $ 46,375
----------- --------- ----------- ---------
----------- --------- ----------- ---------
</TABLE>
- ---------------
* Effective March 11, 1996, Class B Shares were no longer offered for sale and
subsequently, all Class B Shares were converted to Retail Shares.
(a) For the period from December 27, 1995 (commencement of operations) through
November 30, 1996.
111
<PAGE>
- --------------------------------------------------------------------------------
BALANCED FUND (000 OMITTED):
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MAY 31, 1997 YEAR ENDED
(UNAUDITED) NOVEMBER 30, 1996
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold.................................................................. 178 $ 2,217 220 $ 2,687
Reinvestment of dividends............................................. 25 297 6 70
Redeemed.............................................................. (58) (709) (99) (1,211)
----------- --------- ----------- ---------
Net increase in shares outstanding before conversion.................... 145 1,805 127 1,546
Shares issued upon conversion from Class B*............................. -- -- 208 2,460
----------- --------- ----------- ---------
Net increase -- Retail.................................................. 145 1,805 335 4,006
----------- --------- ----------- ---------
Class B Shares*
Sold.................................................................. -- -- 29 342
Reinvestment of dividends............................................. -- -- 4 49
Redeemed.............................................................. -- -- (16) (193)
----------- --------- ----------- ---------
Net increase in shares outstanding before conversion.................... -- -- 17 198
Shares exchanged upon conversion into Retail............................ -- -- (211) (2,460)
----------- --------- ----------- ---------
Net decrease -- Class B*................................................ -- -- (194) (2,262)
----------- --------- ----------- ---------
Instititutional Shares
Sold.................................................................. 626 7,660 2,360 28,601
Reinvestment of dividends............................................. 478 5,738 256 3,038
Redeemed.............................................................. (1,207) (14,931) (1,859) (22,417)
----------- --------- ----------- ---------
Net increase (decrease) -- Institutional................................ (103) (1,533) 757 9,222
----------- --------- ----------- ---------
Net increase in Fund.................................................... 42 $ 272 898 $ 10,966
----------- --------- ----------- ---------
----------- --------- ----------- ---------
</TABLE>
SHORT-TERM FIXED INCOME FUND (000 OMITTED):
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MAY 31, 1997 YEAR ENDED
(UNAUDITED) NOVEMBER 30, 1996
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold................................................................... 135 $ 1,346 105 $ 1,045
Reinvestment of dividends.............................................. 2 21 3 25
Redeemed............................................................... (72) (716) (50) (493)
----------- --------- ----- ---------
Net increase in shares outstanding before conversion..................... 65 651 58 577
Shares issued upon conversion from Class B*.............................. -- -- 6 61
----------- --------- ----- ---------
Net increase -- Retail................................................... 65 651 64 638
----------- --------- ----- ---------
Class B Shares*
Sold................................................................... -- -- 4 40
Reinvestment of dividends.............................................. -- -- -- 2
Redeemed............................................................... -- -- (14) (136)
----------- --------- ----- ---------
Net decrease in shares outstanding before conversion..................... -- -- (10) (94)
Shares exchanged upon conversion into Retail............................. -- -- (6) (61)
----------- --------- ----- ---------
Net decrease -- Class B*................................................. -- -- (16) (155)
----------- --------- ----- ---------
Instititutional Shares
Sold................................................................... 2,877 28,690 4,602 45,950
Reinvestment of dividends.............................................. 27 264 42 417
Redeemed............................................................... (1,081) (10,782) (745) (7,448)
----------- --------- ----- ---------
Net increase -- Institutional............................................ 1,823 18,172 3,899 38,919
----------- --------- ----- ---------
Net increase in Fund..................................................... 1,888 $ 18,823 3,947 $ 39,402
----------- --------- ----- ---------
----------- --------- ----- ---------
</TABLE>
- ---------------
* Effective March 11, 1996, Class B Shares were no longer offered for sale and
subsequently, all Class B Shares were converted to Retail Shares.
112
<PAGE>
- --------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES FUND (000 OMITTED):
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MAY 31, 1997 YEAR ENDED
(UNAUDITED) NOVEMBER 30, 1996
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold................................................................... 304 $ 3,070 244 $ 2,520
Reinvestment of dividends.............................................. 58 584 115 1,188
Redeemed............................................................... (419) (4,231) (886) (9,066)
----- --------- ----------- ---------
Net decrease in shares outstanding before conversion..................... (57) (577) (527) (5,358)
Shares issued upon conversion from Class B*.............................. -- -- 133 1,352
----- --------- ----------- ---------
Net decrease -- Retail................................................... (57) (577) (394) (4,006)
----- --------- ----------- ---------
Class B Shares*
Sold................................................................... -- -- -- 7
Reinvestment of dividends.............................................. -- -- -- 6
Redeemed............................................................... -- -- (4) (54)
----- --------- ----------- ---------
Net decrease in shares outstanding before conversion..................... -- -- (4) (41)
Shares exchanged upon conversion into Retail............................. -- -- (133) (1,352)
----- --------- ----------- ---------
Net decrease -- Class B*................................................. -- -- (137) (1,393)
----- --------- ----------- ---------
Instititutional Shares
Sold................................................................... 1,015 10,242 1,581 16,120
Reinvestment of dividends.............................................. 61 610 142 1,448
Redeemed............................................................... (342) (3,453) (5,289) (54,302)
----- --------- ----------- ---------
Net increase (decrease) -- Institutional................................. 734 7,399 (3,566) (36,734)
----- --------- ----------- ---------
Net increase (decrease) in Fund.......................................... 677 $ 6,822 (4,097) $ (42,133)
----- --------- ----------- ---------
----- --------- ----------- ---------
</TABLE>
MANAGED BOND FUND (000 OMITTED):
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MAY 31, 1997 YEAR ENDED
(UNAUDITED) NOVEMBER 30, 1996
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold................................................................... 61 $ 621 115 $ 1,178
Reinvestment of dividends.............................................. 4 38 6 56
Redeemed............................................................... (37) (376) (85) (861)
----- --------- ----------- ---------
Net increase in shares outstanding before conversion..................... 28 283 36 373
Shares issued upon conversion from Class B*.............................. -- -- 50 508
----- --------- ----------- ---------
Net increase -- Retail................................................... 28 283 86 881
----- --------- ----------- ---------
Class B Shares*
Sold................................................................... -- -- -- --
Reinvestment of dividends.............................................. -- -- 1 8
Redeemed............................................................... -- -- (13) (135)
----- --------- ----------- ---------
Net decrease in shares outstanding before conversion..................... -- -- (12) (127)
Shares exchanged upon conversion into Retail............................. -- -- (50) (508)
----- --------- ----------- ---------
Net decrease -- Class B*................................................. -- -- (62) (635)
----- --------- ----------- ---------
Instititutional Shares
Sold................................................................... 1,744 17,537 2,969 30,310
Reinvestment of dividends.............................................. 263 2,646 409 4,179
Redeemed............................................................... (975) (9,799) (2,626) (26,871)
----- --------- ----------- ---------
Net increase -- Institutional............................................ 1,032 10,384 752 7,618
----- --------- ----------- ---------
Net increase in Fund..................................................... 1,060 $ 10,667 776 $ 7,864
----- --------- ----------- ---------
----- --------- ----------- ---------
</TABLE>
- ---------------
* Effective March 11, 1996, Class B Shares were no longer offered for sale and
subsequently, all Class B Shares were converted to Retail Shares.
113
<PAGE>
- --------------------------------------------------------------------------------
FLORIDA TAX-EXEMPT FUND (000 OMITTED):
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MAY 31, 1997 YEAR ENDED
(UNAUDITED) NOVEMBER 30, 1996
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold.................................................................. 667 $ 7,248 1,014 $ 10,992
Reinvestment of dividends............................................. 147 1,596 296 3,199
Redeemed.............................................................. (1,564) (16,963) (2,743) (29,530)
----------- --------- ----------- ---------
Net decrease in shares outstanding before conversion.................... (750) (8,119) (1,433) (15,339)
Shares issued upon conversion from Class B*............................. -- -- 865 9,313
----------- --------- ----------- ---------
Net decrease -- Retail.................................................. (750) (8,119) (568) (6,026)
----------- --------- ----------- ---------
Class B Shares*
Sold.................................................................. -- -- 21 236
Reinvestment of dividends............................................. -- -- 6 61
Redeemed.............................................................. -- -- (37) (409)
----------- --------- ----------- ---------
Net decrease in shares outstanding before conversion.................... -- -- (10) (112)
Shares exchanged upon conversion into Retail............................ -- -- (866) (9,313)
----------- --------- ----------- ---------
Net decrease -- Class B*................................................ -- -- (876) (9,425)
----------- --------- ----------- ---------
Instititutional Shares
Sold.................................................................. 483 5,253 855 9,242
Reinvestment of dividends............................................. 14 150 23 256
Redeemed.............................................................. (409) (4,453) (791) (8,598)
----------- --------- ----------- ---------
Net increase -- Institutional........................................... 88 950 87 900
----------- --------- ----------- ---------
Net decrease in Fund.................................................... (662) $ (7,169) (1,357) $ (14,551)
----------- --------- ----------- ---------
----------- --------- ----------- ---------
</TABLE>
- ---------------
* Effective March 11, 1996, Class B Shares were no longer offered for sale and
subsequently, all Class B Shares were converted to Retail Shares.
114
<PAGE>
- --------------------------------------------------------------------------------
PRIME FUND (000 OMITTED)
(AT $1.00 PER SHARE):
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
MAY 31, YEAR ENDED
1997 NOVEMBER 30,
(UNAUDITED) 1996
----------- ------------
Institutional Shares
<S> <C> <C>
Shares sold..................................... 1,155,671 2,479,220
Shares issued to shareholders in reinvestment of
dividends and distributions................... 28 --
Shares redeemed................................. (1,142,744) (2,343,846)
----------- ------------
Net increase in Institutional Shares.............. 12,955 135,374
----------- ------------
Service Shares
Shares sold..................................... 1,214,929 1,878,670
Shares issued to shareholders in reinvestment of
dividends and distributions................... 1,473 3,294
Shares redeemed................................. (1,239,421) (1,794,568)
----------- ------------
Net increase (decrease) in Service Shares......... (23,019) 87,396
----------- ------------
Retail Shares
Shares sold..................................... 375,914 505,915
Shares issued to shareholders in reinvestment of
dividends and distributions................... 12,630 22,566
Shares redeemed................................. (373,501) (416,228)
----------- ------------
Net increase in Retail Shares..................... 15,043 112,253
----------- ------------
Total increase in Fund shares..................... 4,979 335,023
----------- ------------
----------- ------------
</TABLE>
TREASURY FUND (000 OMITTED)
(AT $1.00 PER SHARE):
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
MAY 31, YEAR ENDED
1997 NOVEMBER 30,
(UNAUDITED) 1996
----------- ------------
Institutional Shares
<S> <C> <C>
Shares sold..................................... 665,818 882,693
Shares issued to shareholders in reinvestment of
dividends and distributions................... -- --
Shares redeemed................................. (536,316) (901,010)
----------- ------------
Net increase (decrease) in Institutional Shares... 129,502 (18,317)
----------- ------------
Service Shares
Shares sold..................................... 1,015,486 1,506,655
Shares issued to shareholders in reinvestment of
dividends and distributions................... 511 1,251
Shares redeemed................................. (1,167,882) 1,350,730
----------- ------------
Net increase (decrease) in Service Shares......... (151,885) 157,176
----------- ------------
Retail Shares
Shares sold..................................... 315,198 163,474
Shares issued to shareholders in reinvestment of
dividends and distributions................... 1,655 2,229
Shares redeemed................................. (294,051) (171,801)
----------- ------------
Net increase (decrease) in Retail Shares.......... 22,802 (6,098)
----------- ------------
Total increase in Fund shares..................... 419 132,761
----------- ------------
----------- ------------
</TABLE>
115
<PAGE>
- --------------------------------------------------------------------------------
TAX-EXEMPT FUND (000 OMITTED)
(AT $1.00 PER SHARE):
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
MAY 31, YEAR ENDED
1997 NOVEMBER 30,
(UNAUDITED) 1996
----------- ------------
Institutional Shares
<S> <C> <C>
Shares sold..................................... 150,840 393,508
Shares issued to shareholders in reinvestment of
dividends and distributions................... -- --
Shares redeemed................................. (182,402) (404,255)
----------- ------------
Net decrease in Institutional Shares.............. (31,562) (10,747)
----------- ------------
Service Shares
Shares sold..................................... 532 536
Shares issued to shareholders in reinvestment of
dividends and distributions................... 7 14
Shares redeemed................................. (2,737) (543)
----------- ------------
Net increase (decrease) in Service Shares......... (2,198) 7
----------- ------------
Retail Shares
Shares sold..................................... 97,261 137,081
Shares issued to shareholders in reinvestment of
dividends and distributions................... 647 1,096
Shares redeemed................................. (86,537) (129,263)
----------- ------------
Net increase in Retail Shares..................... 11,371 8,914
----------- ------------
Total decrease in Fund shares..................... (22,389) (1,826)
----------- ------------
----------- ------------
</TABLE>
NOTE 6 -- CONCENTRATION OF CREDIT RISK
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 Florida economic, regional and political developments.
116
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED
ENDED -------------------------------------------------------------
MAY 31, 1997 NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1996(b)(d) 1995 1994 1993
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD............... $ 16.31 $ 14.62 $ 10.86 $ 11.82 $ 11.97
------------- ------------- ------------- ------------- -------------
Income (loss) from investment operations:
Net investment income............................ 0.02 (0.01) 0.02 0.08 0.15
Net realized and unrealized gains (losses)
on securities.................................. 0.99 3.01 3.76 (0.39) (0.08)
------------- ------------- ------------- ------------- -------------
Total income (loss) from investment operations... 1.01 3.00 3.78 (0.31) 0.07
------------- ------------- ------------- ------------- -------------
Less dividends and distributions:
Dividends from net investment income............. -- -- (0.02) (0.08) (0.15)
In excess of net investment income............... -- (0.02) -- -- --
Distributions from net realized gains
on securities.................................. (1.57) (1.29) -- (0.57) (0.07)
------------- ------------- ------------- ------------- -------------
Total dividends and distributions................ (1.57) (1.31) (0.02) (0.65) (0.22)
------------- ------------- ------------- ------------- -------------
Net change in net asset value...................... (0.56) 1.69 3.76 (0.96) (0.15)
------------- ------------- ------------- ------------- -------------
NET ASSET VALUE, END OF PERIOD..................... $ 15.75 $ 16.31 $ 14.62 $ 10.86 $ 11.82
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Total return....................................... 7.52%++ 22.66% 34.82% (2.91%) 0.58%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................. $ 41,597 $ 33,177 $ 22,209 $ 19,705 $ 138,642
Ratio of expenses to average net assets.......... 1.33%+ 1.27% 1.37% 1.07% 0.86%
Ratio of net investment income to
average net assets............................. 0.23%+ (0.08%) 0.15% 0.36% 1.22%
Ratio of expenses to average net assets*......... 1.33%+ 1.28% (a) 1.29% 1.21%
Ratio of net investment income to
average net assets*............................ 0.23%+ (0.09%) (a) 0.13% 0.87%
Portfolio turnover............................... 35% 89% 104% 113% 102%
Average commission rate paid (c)................. $ 0.0544 $ 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.
+ Annualized
++ Not annualized
See Notes to Financial Statements.
117
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
MAY 31, 1997 NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1996(c) 1995 1994*
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD..................... $ 16.36 $ 14.63 $ 10.89 $ 11.94
------------- ------------- ------------- -------------
Income (loss) from investment operations:
Net investment income.................................. 0.02 0.06 0.08 0.11
Net realized and unrealized gains (losses) on
securities........................................... 1.04 3.02 3.74 (0.90)
------------- ------------- ------------- -------------
Total income (loss) from investment operations......... 1.06 3.08 3.82 (0.79)
------------- ------------- ------------- -------------
Less dividends and distributions:
Dividends from net investment income................... (0.01) (0.06) (0.08) (0.11)
Distributions from net realized gains on securities.... (1.57) (1.29) -- (0.15)
------------- ------------- ------------- -------------
Total dividends and distributions...................... (1.58) (1.35) (0.08) (0.26)
------------- ------------- ------------- -------------
Net change in net asset value............................ (0.52) 1.73 3.74 (1.05)
------------- ------------- ------------- -------------
NET ASSET VALUE, END OF PERIOD........................... $ 15.84 $ 16.36 $ 14.63 $ 10.89
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Total return............................................. 7.85%++ 23.33% 35.21% (6.62%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)....................... $ 217,923 $ 217,184 $ 173,824 $ 164,015
Ratio of expenses to average net assets**.............. 0.75%+ 0.79% 0.84% 0.79%+
Ratio of net investment income to average net
assets**............................................. 0.35%+ 0.43% 0.67% 1.46%+
Ratio of expenses to average net assets**.............. (a) 0.79% (a) (a)
Ratio of net investment income (loss) to average net
assets**............................................. (a) 0.43% (a) (a)
Portfolio turnover..................................... 35% 89% 104% 113%
Average commission rate paid (b)....................... $ 0.0544 $ 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.
++ Not annualized.
See Notes to Financial Statements.
118
<PAGE>
EMERALD EQUITY VALUE FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD ENDED
MAY 31, 1997 NOVEMBER 30,
(UNAUDITED) 1996*(b)
------------ ------------
<S> <C> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD................................... $ 12.18 $ 10.00
------------ ------------
Income from investment operations:
Net investment income................................................ 0.09 0.27
Net realized and unrealized gains on securities...................... 1.49 2.18
------------ ------------
Total income from investment operations.............................. 1.58 2.45
------------ ------------
Less dividends and distributions:
Dividends from net investment income................................. (0.11) (0.27)
Distributions from net realized gains on securities.................. (0.08) --
------------ ------------
Total dividends and distributions.................................... (0.19) (0.27)
------------ ------------
Net change in net asset value.......................................... 1.39 2.18
------------ ------------
NET ASSET VALUE, END OF PERIOD......................................... $ 13.57 $ 12.18
------------ ------------
------------ ------------
Total return........................................................... 13.13%++ 24.84%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)..................................... $ 609 $ 23
Ratio of expenses to average net assets.............................. 1.24%+ 0.00%+
Ratio of net investment income to average net assets................. 1.94%+ 3.01%+
Ratio of expenses to average net assets**............................ 7.15%+ 277.68%+
Ratio of net investment loss to average net assets**................. (3.97%)+ (274.67%)+
Portfolio turnover................................................... 12% 19%
Average commission rate paid (a)..................................... $ 0.0303 $ 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.
++ Not annualized.
See Notes to Financial Statements.
119
<PAGE>
EMERALD EQUITY VALUE FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD ENDED
MAY 31, 1997 NOVEMBER 30,
(UNAUDITED) 1996*(b)
------------ ------------
<S> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD................................... $ 12.18 $ 10.00
------------ ------------
Income from investment operations:
Net investment income................................................ 0.11 0.28
Net realized and unrealized gains on securities...................... 1.48 2.18
------------ ------------
Total income from investment operations.............................. 1.59 2.46
------------ ------------
Less dividends and distributions:
Dividends from net investment income................................. (0.11) (0.28)
Distributions from net realized gains on securities.................. (0.08) --
------------ ------------
Total dividends and distributions.................................... (0.19) (0.28)
------------ ------------
Net change in net asset value.......................................... 1.40 2.18
------------ ------------
NET ASSET VALUE, END OF PERIOD......................................... $ 13.58 $ 12.18
------------ ------------
------------ ------------
Total return........................................................... 13.21%++ 24.93%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)..................................... $ 9,963 $ 3,945
Ratio of expenses to average net assets.............................. 0.60%+ 0.00%+
Ratio of net investment income to average net assets................. 2.13%+ 2.89%+
Ratio of expenses to average net assets**............................ 1.06%+ 4.37%+
Ratio of net investment loss to average net assets**................. 1.67%+ (1.48%)+
Portfolio turnover................................................... 12% 19%
Average commission rate paid (a)..................................... $ 0.0303 $ 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.
++ Not annualized.
See Notes to Financial Statements.
120
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS PERIOD
ENDED ENDED
MAY 31, 1997 NOVEMBER 30,
(UNAUDITED) 1996*(b)
------------- -------------
<S> <C> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD......................................... $ 11.29 $ 10.00
------------- -------------
Income from investment operations:
Net investment income...................................................... 0.06 0.04
Net realized and unrealized gains on securities............................ 1.48 1.31
------------- -------------
Total Income from investment operations.................................... 1.54 1.35
------------- -------------
Less dividends and distributions:
Dividends from net investment income....................................... -- (0.04)
Distributions from net realized gains on securities........................ (0.02) (0.02)
------------- -------------
Total dividends and distributions.......................................... (0.02) (0.06)
------------- -------------
Net change in net asset value................................................ 1.52 1.29
------------- -------------
NET ASSET VALUE, END OF PERIOD............................................... $ 12.81 $ 11.29
------------- -------------
------------- -------------
Total return................................................................. 13.71%++ 13.54%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)........................................... $ 1,786 $ 115
Ratio of expenses to average net assets.................................... 1.90%+ 0.00%+
Ratio of net investment income to average net assets....................... 2.04%+ 1.83%+
Ratio of expenses to average net assets**.................................. 2.93%+ 57.40%+
Ratio of net investment loss to average net assets**....................... 1.01%+ (55.57%)+
Portfolio turnover......................................................... 22% 50%
Average commission rate paid (a)........................................... $ 0.0401 $ 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.
++ Not annualized.
See Notes to Financial Statements.
121
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS PERIOD
ENDED ENDED
MAY 31, 1997 NOVEMBER 30,
(UNAUDITED) 1996*(b)
------------- -------------
<S> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD........................................ $ 11.29 $ 10.00
------------- -------------
Income from investment operations:
Net investment income..................................................... 0.08 0.06
Net realized and unrealized gains on securities........................... 1.51 1.29
------------- -------------
Total income from investment operations................................... 1.59 1.35
------------- -------------
Less dividends and distributions:
Dividends from net realized gains on securities........................... (0.02) (0.06)
------------- -------------
Net change in net asset value............................................... 1.57 1.29
------------- -------------
NET ASSET VALUE, END OF PERIOD.............................................. $ 12.86 $ 11.29
------------- -------------
------------- -------------
Total return................................................................ 14.16%++ 13.47%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s).......................................... $ 36,581 $ 17,528
Ratio of expenses to average net assets................................... 1.28%+ 0.00%+
Ratio of net investment income to average net assets...................... 1.67%+ 1.99%+
Ratio of expenses to average net assets**................................. 1.28%+ 3.46%+
Ratio of net investment loss to average net assets**...................... 1.67%+ (1.47%)+
Portfolio turnover........................................................ 22% 50%
Average commission rate paid (a).......................................... $ 0.0401 $ 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.
++ Not annualized.
See Notes to Financial Statements.
122
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
MAY 31, YEAR ENDED YEAR ENDED PERIOD ENDED
1997 NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1996(a)(c) 1995 1994*
---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD...................................... $ 13.43 $ 12.77 $ 9.66 $ 10.49
---------- ------------ ------------ ------------
Income (loss) from investment operations:
Net investment loss..................................................... (0.06) (0.11) (0.04) (0.04)
Net realized and unrealized gains (losses) on securities................ (0.83) 1.77 3.15 (0.79)
---------- ------------ ------------ ------------
Total income (loss) from investment operations.......................... (0.89) 1.66 3.11 (0.83)
---------- ------------ ------------ ------------
Distributions from net realized gains on securities....................... (1.74) (1.00) -- --
---------- ------------ ------------ ------------
Net change in net asset value............................................. (2.63) 0.66 3.11 (0.83)
---------- ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD............................................ $ 10.80 $ 13.43 $ 12.77 $ 9.66
---------- ------------ ------------ ------------
---------- ------------ ------------ ------------
Total return.............................................................. 7.19%++ 13.83% 32.19% (7.91%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)........................................ $10,421 $ 9,490 $ 2,657 $ 1,583
Ratio of expenses to average net assets................................. 1.75%+ 1.59% 1.54% 1.54%+
Ratio of net investment loss to average net assets...................... (1.26%)+ (1.02%) (0.81%) (0.67%)+
Ratio of expenses to average net assets**............................... 1.72%+ 1.70% 2.43% 2.50%+
Ratio of net investment loss to average net assets**.................... (1.29%)+ (1.13%) (1.70%) (1.63%)+
Portfolio turnover...................................................... 104% 356% 229% 118%
Average commission rate paid (b)........................................ $0.0440 $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.
++ Not annualized.
See Notes to Financial Statements.
123
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
MAY 31, YEAR ENDED YEAR ENDED PERIOD ENDED
1997 NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1996(b) 1995 1994*
---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD...................................... $ 13.52 $ 12.78 $ 9.66 $ 10.00
---------- ------------ ------------ ------------
Income (loss) from investment operations:
Net investment loss..................................................... (0.04) (0.07) (0.03) (0.04)
Net realized and unrealized gains (losses) on securities................ (0.83) 1.81 3.15 (0.30)
---------- ------------ ------------ ------------
Total income (loss) from investment operations.......................... (0.87) 1.74 3.12 (0.34)
---------- ------------ ------------ ------------
Distributions from net realized gains on securities....................... (1.74) (1.00) -- --
---------- ------------ ------------ ------------
Net change in net asset value............................................. (2.61) 0.74 3.12 (0.34)
---------- ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD............................................ $ 10.91 $ 13.52 $ 12.78 $ 9.66
---------- ------------ ------------ ------------
---------- ------------ ------------ ------------
Total return.............................................................. (6.96%)++ 14.49% 32.30% (3.40%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)........................................ $129,904 $138,008 $88,561 $53,509
Ratio of expenses to average net assets................................. 1.18%+ 1.22% 1.39% 1.29%+
Ratio of net investment loss to average net assets...................... (0.69%)+ (0.60%) (0.65%) (0.54%)+
Ratio of expenses to average net assets**............................... 1.18%+ 1.24% 1.42% 1.48%+
Ratio of net investment loss to average net assets**.................... (0.69%)+ (0.62%) (0.68%) (0.73%)+
Portfolio turnover...................................................... 104% 356% 229% 118%
Average commission rate paid (a)........................................ $0.0440 $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.
++ Not annualized.
See Notes to Financial Statements.
124
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
MAY 31, YEAR ENDED YEAR ENDED PERIOD ENDED
1997 NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1996(a)(c) 1995 1994*
----------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD ..................... $ 13.15 $ 12.02 $ 9.72 $ 10.00
----------- ------------- ------ ------
Income (loss) from investment operations:
Net investment income .................................. 0.12 0.30 0.30 0.24
Net realized and unrealized gains (losses) on
securities ........................................... 0.23 1.36 2.30 (0.28)
----------- ------------- ------ ------
Total income (loss) from investment operations ......... 0.35 1.66 2.60 (0.04)
----------- ------------- ------ ------
Less dividends and distributions:
Dividends from net investment income ................... (0.14) (0.31) (0.30) (0.22)
Distributions in excess of net investment income ....... -- -- -- (0.02)
Distributions from net realized gains on securities .... (0.69) (0.22) -- --
----------- ------------- ------ ------
Total dividends and distributions ...................... (0.83) (0.53) (0.30) (0.24)
----------- ------------- ------ ------
Net change in net asset value ............................ (0.48) 1.13 2.30 (0.28)
----------- ------------- ------ ------
NET ASSET VALUE, END OF PERIOD ........................... $ 12.67 $ 13.15 $ 12.02 $ 9.72
----------- ------------- ------ ------
----------- ------------- ------ ------
Total return ............................................. 3.02%++ 14.23% 27.45% (0.40%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) ....................... $ 7,229 $ 5,592 $ 1,082 $ 543
Ratio of expenses to average net assets ................ 1.35%+ 1.06% 0.72% 0.68%+
Ratio of net investment income to average net assets ... 2.14%+ 2.02% 3.14% 3.70%+
Ratio of expenses to average net assets** .............. 1.37%+ 1.35% 4.20% 2.50%+
Ratio of net investment income (loss) to average net
assets** ............................................. 2.12%+ 1.73% (0.34%) 1.88%+
Portfolio turnover ..................................... 34% 106% 87% 33%
Average commission rate paid (b) ....................... $ 0.0499 $ 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.
++ Not annualized.
See Notes to Financial Statements.
125
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
MAY 31, 1997 NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1996(b) 1995 1994*
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD ................... $ 13.03 $ 11.91 $ 9.63 $ 10.00
------------- ------------- ------------- -------------
Income (loss) from investment operations:
Net investment income ................................ 0.17 0.35 0.33 0.27
Net realized and unrealized gains (losses) on
securities ......................................... 0.22 1.34 2.28 (0.37)
------------- ------------- ------------- -------------
Total income (loss) from investment operations ....... 0.39 1.69 2.61 (0.10)
------------- ------------- ------------- -------------
Less dividends and distributions:
Dividends from net investment income ................. (0.16) (0.35) (0.33) (0.25)
Distributions in excess of net investment income ..... -- -- -- (0.02)
Distributions from net realized gains on
securities ......................................... (0.69) (0.22) -- --
------------- ------------- ------------- -------------
Total dividends and distributions .................... (0.85) (0.57) (0.33) (0.27)
------------- ------------- ------------- -------------
Net change in net asset value .......................... (0.46) 1.12 2.28 (0.37)
------------- ------------- ------------- -------------
NET ASSET VALUE, END OF PERIOD ......................... $ 12.57 $ 13.03 $ 11.91 $ 9.63
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Total return ........................................... 3.36%++ 14.73% 27.99% (1.02%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) ..................... $ 86,114 $ 90,602 $ 73,830 $ 51,170
Ratio of expenses to average net assets .............. 0.80%+ 0.69% 0.32% 0.28%+
Ratio of net investment income to average net
assets ............................................. 2.69%+ 2.96% 3.54% 4.11%+
Ratio of expenses to average net assets** ............ 0.80%+ 0.90% 1.10% 1.25%+
Ratio of net investment income to average net
assets** ........................................... 2.69%+ 2.75% 2.76% 3.14%+
Portfolio turnover ................................... 34% 106% 87% 33%
Average commission rate paid (a) ..................... $ 0.0499 $ 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.
++ Not annualized.
See Notes to Financial Statements.
126
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
MAY 31, 1997 NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1996(a)(b) 1995 1994*
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.................. $ 10.07 $ 10.14 $ 9.74 $ 10.00
------ ------ ------ ------
Income from investment operations:
Net investment income............................... 0.27 0.55 0.57 0.32
Net realized and unrealized gains (losses) on
securities........................................ (0.13) (0.04) 0.40 (0.26)
------ ------ ------ ------
Total gains from investment operations.............. 0.14 0.51 0.97 0.06
------ ------ ------ ------
Less dividends and distributions:
Dividends from net investment income................ (0.27) (0.55) (0.57) (0.32)
Distributions from net realized gains on
securities........................................ (0.01) (0.03) -- --
------ ------ ------ ------
Total dividends and distributions................... (0.28) (0.58) (0.57) (0.32)
------ ------ ------ ------
Net change in net asset value......................... (0.14) (0.07) 0.40 (0.26)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD........................ $ 9.93 $ 10.07 $ 10.14 $ 9.74
------ ------ ------ ------
------ ------ ------ ------
Total return.......................................... 1.39%++ 5.23% 10.25% 0.65%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s).................... $ 1,619 $ 985 $ 343 $ 223
Ratio of expenses to average net assets............. 0.91%+ 0.80% 0.71% 0.67%+
Ratio of net investment income to average net
assets............................................ 5.34%+ 5.17% 5.72% 5.20%+
Ratio of expenses to average net assets**........... 1.38%+ 2.33% 9.10% 2.50%+
Ratio of net investment income (loss) to average net
assets**.......................................... 4.87%+ 3.64% (2.67%) 3.36%+
Portfolio turnover.................................. 59% 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.
++ Not annualized.
See Notes to Financial Statements.
127
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
MAY 31, 1997 NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1996(a) 1995 1994*
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.................. $ 10.07 $ 10.15 $ 9.74 $ 10.00
------------- ------------- ------------- -------------
Income from investment operations:
Net investment income............................... 0.28 0.58 0.61 0.35
Net unrealized gains (losses) on securities......... (0.12) (0.05) 0.41 (0.26)
------------- ------------- ------------- -------------
Total income from investment operations............. 0.16 0.53 1.02 0.09
------------- ------------- ------------- -------------
Less dividends and distributions:
Dividends from net investment income................ (0.28) (0.58) (0.61) (0.35)
Distributions from net realized gains on
securities........................................ (0.01) (0.03) -- --
------------- ------------- ------------- -------------
Total dividends and distributions................... (0.29) (0.61) (0.61) (0.35)
------------- ------------- ------------- -------------
Net change in net asset value......................... (0.13) (0.08) 0.41 (0.26)
------------- ------------- ------------- -------------
NET ASSET VALUE, END OF PERIOD........................ $ 9.94 $ 10.07 $ 10.15 $ 9.74
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Total return.......................................... 1.65%++ 5.47% 10.80% 0.90%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s).................... $ 70,587 $ 53,200 $ 14,037 $ 23,566
Ratio of expenses to average net assets............. 0.60%+ 0.53% 0.32% 0.28%+
Ratio of net investment income to average net
assets............................................ 5.69%+ 5.79% 6.14% 5.55%+
Ratio of expenses to average net assets**........... 0.61%+ 0.90% 1.43% 1.60%+
Ratio of net investment income to average net
assets**.......................................... 5.68%+ 5.42% 5.03% 4.24%+
Portfolio turnover.................................. 59% 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.
++ Not annualized.
See Notes to Financial Statements.
128
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED
ENDED ---------------------------------------------------------
MAY 31, 1997 NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1996(b)(c) 1995 1994 1993
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD......... $ 10.30 $ 10.39 $ 9.72 $ 10.79 $ 10.52
------------ ------------ ------------ ------------ ------------
Income (loss) from investment operations:
Net investment income...................... 0.30 0.61 0.64 0.58 0.66
Net realized and unrealized gains (losses)
on securities............................ (0.23) (0.09) 0.67 (0.94) 0.41
------------ ------------ ------------ ------------ ------------
Total income (loss) from investment
operations............................... 0.07 0.52 1.31 (0.36) 1.07
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income....... (0.30) (0.61) (0.64) (0.58) (0.66)
Distributions in excess of net investment
income................................... -- -- -- (0.01) --
Distributions from net realized gains on
securities............................... -- -- -- (0.10) (0.14)
Distributions in excess of net realized
gains.................................... -- -- -- (0.02) --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions.......... (0.30) (0.61) (0.64) (0.71) (0.80)
------------ ------------ ------------ ------------ ------------
Net change in net asset value................ (0.23) (0.09) 0.67 (1.07) 0.27
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD............... $ 10.07 $ 10.30 $ 10.39 $ 9.72 $ 10.79
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total return................................. 0.71%++ 5.24% 13.85% (3.45%) 10.40%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)........... $ 21,559 $ 22,631 $ 26,912 $ 30,855 $ 145,328
Ratio of expenses to average net assets.... 1.10%+ 1.09% 1.27% 0.98% 0.64%
Ratio of net investment income to average
net assets............................... 5.93%+ 5.88% 7.02% 5.68% 5.91%
Ratio of expenses to average net assets*... 1.15%+ 1.14% (a) 1.09% 1.06%
Ratio of net investment income to average
net assets*.............................. 5.88%+ 5.83% (a) 5.57% 5.49%
Portfolio turnover......................... 36% 53% 89% 133% 72%
</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.
+ Annualized.
++ Not annualized.
See Notes to Financial Statements.
129
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
MAY 31, 1997 NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1996(b) 1995 1994*
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.................... $ 10.27 $ 10.36 $ 9.71 $ 10.47
------------ ------------ ------------ ------------
Income (loss) from investment operations:
Net investment income................................. 0.32 0.65 0.68 0.46
Net realized and unrealized gains (losses) on
securities.......................................... (0.23) (0.09) 0.65 (0.75)
------------ ------------ ------------ ------------
Total income (loss) from investment operations........ 0.09 0.56 1.33 (0.29)
------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income.................. (0.32) (0.65) (0.68) (0.46)
Distributions in excess of net investment income...... -- -- -- (0.01)
------------ ------------ ------------ ------------
Total dividends and distributions..................... (0.32) (0.65) (0.68) (0.47)
------------ ------------ ------------ ------------
Net change in net asset value........................... (0.23) (0.09) 0.65 (0.76)
------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD.......................... $ 10.04 $ 10.27 $ 10.36 $ 9.71
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Total return............................................ 0.95%++ 5.69% 14.10% (2.83%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)...................... $ 43,994 $ 37,468 $ 74,753 $ 69,314
Ratio of expenses to average net assets............... 0.59%+ 0.69% 0.83% 0.68%+
Ratio of net investment income to average net
assets.............................................. 6.44%+ 6.39% 7.46% 5.90%+
Ratio of expenses to average net assets**............. 0.59%+ 0.69% (a) 0.69%+
Ratio of net investment income to average net
assets**............................................ 6.44%+ 6.39% (a) 5.90%+
Portfolio turnover.................................... 36% 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.
++ Not annualized.
See Notes to Financial Statements.
130
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
MAY 31, 1997 NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1996(a)(b) 1995 1994*
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD............................ $ 10.41 $ 10.59 $ 9.54 $ 10.00
------ ------ ------ ------
Income (loss) from investment operations:
Net investment income......................................... 0.29 0.61 0.66 0.43
Net realized and unrealized gains (losses) on securities...... (0.27) (0.06) 1.05 (0.46)
------ ------ ------ ------
Total income (loss) from investment operations................ 0.02 0.55 1.71 (0.03)
------ ------ ------ ------
Less dividends and distributions:
Dividends from net investment income.......................... (0.29) (0.61) (0.66) (0.41)
Distributions in excess of net investment income.............. -- -- -- (0.02)
Distributions from net realized gains on securities........... (0.10) (0.12) -- --
------ ------ ------ ------
Total dividends and distributions............................. (0.39) (0.73) (0.66) (0.43)
------ ------ ------ ------
Net change in net asset value................................... (0.37) (0.18) 1.05 (0.46)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD.................................. $ 10.04 $ 10.41 $ 10.59 $ 9.54
------ ------ ------ ------
------ ------ ------ ------
Total return.................................................... 0.21%++ 5.51% 18.47% (0.35%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s).............................. $ 1,915 $ 1,697 $ 820 $ 609
Ratio of expenses to average net assets....................... 1.10%+ 0.91% 0.71% 0.65%+
Ratio of net investment income to average net assets.......... 5.79%+ 5.35% 6.49% 6.29%+
Ratio of expenses to average net assets**..................... 1.96%+ 1.59% 3.17% 2.50%+
Ratio of net investment income to average net assets**........ 4.93%+ 4.67% 4.03% 4.44%+
Portfolio turnover............................................ 46% 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.
++ Not annualized.
See Notes to Financial Statements.
131
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
MAY 31, 1997 NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1996(a) 1995 1994*
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD............................ $ 10.37 $ 10.55 $ 9.55 $ 10.00
------------- ------------- ------------- -------------
Income from investment operations:
Net investment income......................................... 0.32 0.65 0.70 0.45
Net realized and unrealized gains (losses) on securities...... (0.28) (0.06) 1.00 (0.45)
------------- ------------- ------------- -------------
Total income from investment operations....................... 0.04 0.59 1.70 --
------------- ------------- ------------- -------------
Less dividends and distributions:
Dividends from net investment income.......................... (0.32) (0.65) (0.70) (0.43)
Distributions in excess of net investment income.............. (0.10) (0.12) -- (0.02)
------------- ------------- ------------- -------------
Total dividends and distributions............................. (0.42) (0.77) (0.70) (0.45)
------------- ------------- ------------- -------------
Net change in net asset value................................... (0.38) (0.18) 1.00 (0.45)
------------- ------------- ------------- -------------
NET ASSET VALUE, END OF PERIOD.................................. $ 9.99 $ 10.37 $ 10.55 $ 9.55
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Total return.................................................... 0.36%++ 5.96% 18.36% (0.01%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s).............................. $ 83,084 $ 75,519 $ 68,923 $ 66,588
Ratio of expenses to average net assets....................... 0.57%+ 0.54% 0.31% 0.27%+
Ratio of net investment income to average net assets.......... 6.31%+ 6.32% 6.95% 6.83%+
Ratio of expenses to average net assets**..................... 0.57%+ 0.67% 0.83% 0.86%+
Ratio of net investment income to average net assets**........ 6.31%+ 6.20% 6.43% 6.25%+
Portfolio turnover............................................ 46% 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.
++ Not annualized.
See Notes to Financial Statements.
132
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED
ENDED ---------------------------------------------------------
MAY 31, 1997 NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1996(b)(c) 1995 1994 1993
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD............... $ 11.06 $ 11.09 $ 9.87 $ 11.33 $ 10.55
------------ ------------ ------------ ------------ ------------
Income (loss) from investment operations:
Net investment income............................ 0.26 0.53 0.54 0.53 0.61
Net realized and unrealized gains (losses) on
securities..................................... (0.16) (0.03) 1.22 (1.37) 0.78
------------ ------------ ------------ ------------ ------------
Total income (loss) from investment operations... 0.10 0.50 1.76 (0.84) 1.39
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income............. (0.26) (0.53) (0.54) (0.53) (0.61)
Distributions from net realized gains on
securities..................................... -- -- -- (0.09) --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions................ (0.26) (0.53) (0.54) (0.62) (0.61)
------------ ------------ ------------ ------------ ------------
Net change in net asset value...................... (0.16) (0.03) 1.22 (1.46) 0.78
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD..................... $ 10.90 $ 11.06 $ 11.09 $ 9.87 $ 11.33
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total return....................................... 0.93%++ 4.69% 18.17% (7.75%) 13.37%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................. $ 78,041 $ 87,452 $ 94,017 $ 109,426 $ 207,764
Ratio of expenses to average net assets.......... 0.90%+ 0.92% 1.07% 0.96% 0.65%
Ratio of net investment income to average net
assets......................................... 4.79%+ 4.73% 5.08% 4.96% 5.32%
Ratio of expenses to average net assets*......... 1.14%+ 1.06% (a) 1.04% 1.00%
Ratio of net investment income to average net
assets*........................................ 4.55%+ 4.59% (a) 4.88% 4.97%
Portfolio turnover............................... 37% 152% 89% 89% 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.
(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.
+ Annualized.
++ Not annualized.
See Notes to Financial Statements.
133
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
MAY 31, 1997 NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1996(b) 1995 1994*
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.................. $ 11.07 $ 11.09 $ 9.87 $ 11.07
------------ ------------ ------------ ------------
Income (loss) from investment operations:
Net investment income............................... 0.28 0.56 0.57 0.42
Net realized and unrealized gains (losses) on
securities........................................ (0.16) (0.02) 1.22 (1.19)
------------ ------------ ------------ ------------
Total income (loss) from investment operations...... 0.12 0.54 1.79 (0.77)
------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income................ (0.28) (0.56) (0.57) (0.42)
Distributions from net realized gains on
securities........................................ -- -- -- (0.01)
------------ ------------ ------------ ------------
Total dividends and distributions................... (0.28) (0.56) (0.57) (0.43)
------------ ------------ ------------ ------------
Net change in net asset value......................... (0.16) (0.02) 1.22 (1.20)
------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD........................ $ 10.91 $ 11.07 $ 11.09 $ 9.87
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Total return.......................................... 1.09%++ 5.09% 18.55% (7.07%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s).................... $ 35,333 $ 34,875 $ 33,979 $ 29,309
Ratio of expenses to average net assets............. 0.58%+ 0.69% 0.74% 0.71%+
Ratio of net investment income to average net
assets............................................ 5.10%+ 5.17% 5.39% 5.34%+
Ratio of expenses to average net assets**........... 0.58%+ 0.69% (a) 0.71%+
Ratio of net investment income to average net
assets**.......................................... 5.10%+ 5.17% (a) 5.33%+
Portfolio turnover.................................. 37% 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.
++ Not annualized.
See Notes to Financial Statements.
134
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED
ENDED -------------------------------------------------------------
MAY 31, 1997 NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1996(b) 1995 1994 1993
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD............ $ 1.0000 $ 1.0002 $ 1.0000 $ 0.9999 $ 1.0001
------------- ------------- ------------- ------------- -------------
Income from investment operations:
Net investment income ........................ 0.0257 0.0519 0.0566 0.0390 0.0316
Net realized gains (losses) on securities .... -- -- 0.0002 (0.0028) (0.0001)
------------- ------------- ------------- ------------- -------------
Total income from investment operations ...... 0.0257 0.0519 0.0568 0.0362 0.0315
------------- ------------- ------------- ------------- -------------
Less dividends and distributions:
Dividends from net investment income ......... (0.0257) (0.0519) (0.0566) (0.0390) (0.0316)
Distributions from net realized gains on
securities ................................. -- (0.0002) -- -- (0.0001)
------------- ------------- ------------- ------------- -------------
Total dividends and distributions ............ (0.0257) (0.0521) (0.0566) (0.0390) (0.0317)
------------- ------------- ------------- ------------- -------------
Voluntary capital contribution ................. -- -- -- 0.0029 --
------------- ------------- ------------- ------------- -------------
Net change in net asset value .................. -- (0.0002) 0.0002 0.0001 (0.0002)
------------- ------------- ------------- ------------- -------------
NET ASSET VALUE, END OF PERIOD ................. $ 1.0000 $ 1.0000 $ 1.0002 $ 1.0000 $ 0.9999
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Total return ................................... 2.60%++ 5.34% 5.81% 3.97% 3.21%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) ............. $ 610,955 $ 598,009 $ 462,726 $ 413,541 $ 510,683
Ratio of expenses to average net assets ...... 0.37%+ 0.38% 0.37% 0.37% 0.35%
Ratio of net investment income to average net
assets ..................................... 5.14%+ 5.19% 5.66% 3.92% 3.21%
Ratio of expenses to average net assets* ..... 0.40%+ 0.42% 0.39% (a) (a)
Ratio of net investment income to average net
assets* .................................... 5.11%+ 5.15% 5.64% (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.
+ Annualized.
++ Not annualized.
See Notes to Financial Statements.
135
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED
ENDED -------------------------------------------------------------
MAY 31, 1997 NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1996(b) 1995 1994 1993
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
SERVICE SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD ........... $ 1.0000 $ 1.0002 $ 1.0000 $ 0.9999 $ 1.0001
------------- ------------- ------------- ------------- -------------
Income from investment operations:
Net investment income ........................ 0.0240 0.0486 0.0536 0.0355 0.0281
Net realized gains (losses) on securities .... -- -- 0.0002 (0.0028) (0.0001)
------------- ------------- ------------- ------------- -------------
Total income from investment operations ...... 0.0240 0.0486 0.0538 0.0327 0.0280
------------- ------------- ------------- ------------- -------------
Less dividends and distributions:
Dividends from net investment income ......... (0.0240) (0.0486) (0.0536) (0.0355) (0.0281)
Distributions from net realized gains on
securities ................................. -- (0.0002) -- -- (0.0001)
------------- ------------- ------------- ------------- -------------
Total dividends and distributions ............ (0.0240) (0.0488) (0.0536) (0.0355) (0.0282)
------------- ------------- ------------- ------------- -------------
Voluntary capital contribution ................. -- -- -- 0.0029 --
------------- ------------- ------------- ------------- -------------
Net change in net asset value .................. -- (0.0002) 0.0002 0.0001 (0.0002)
------------- ------------- ------------- ------------- -------------
NET ASSET VALUE, END OF PERIOD ................. $ 1.0000 $ 1.0000 $ 1.0002 $ 1.0000 $ 0.9999
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Total return.................................... 2.42%++ 4.99% 5.49% 3.61% 2.85%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) ............. $ 966,194 $ 989,227 $ 902,006 $ 833,667 $ 619,149
Ratio of expenses to average net assets ...... 0.71%+ 0.72% 0.72% 0.72% 0.71%
Ratio of net investment income to average net
assets ..................................... 4.80%+ 4.86% 5.31% 3.59% 2.80%
Ratio of expenses to average net assets* ..... 0.74%+ 0.77% 0.74% (a) (a)
Ratio of net investment income to average net
assets* .................................... 4.77%+ 4.81% 5.29% (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.
+ Annualized.
++ Not annualized.
See Notes to Financial Statements.
136
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED
ENDED -------------------------------------------------------------
MAY 31, 1997 NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1996(b) 1995 1994 1993
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD ........... $ 1.0000 $ 1.0002 $ 1.0000 $ 0.9999 $ 1.0001
------------- ------------- ------------- ------------- -------------
Income from investment operations:
Net investment income ........................ 0.0231 0.0469 0.0515 0.0339 0.0266
Net realized gains (losses) on securities .... -- -- 0.0002 (0.0028) (0.0001)
------------- ------------- ------------- ------------- -------------
Total income from investment operations ...... 0.0231 0.0469 0.0517 0.0311 0.0265
------------- ------------- ------------- ------------- -------------
Less dividends and distributions:
Dividends from net investment income ......... (0.0231) (0.0469) (0.0515) (0.0339) (0.0266)
Distributions from net realized gains on
securities ................................. -- (0.0002) -- -- (0.0001)
------------- ------------- ------------- ------------- -------------
Total dividends and distributions ............ (0.0231) (0.0471) (0.0515) (0.0339) (0.0267)
------------- ------------- ------------- ------------- -------------
Voluntary capital contribution ................. -- -- -- 0.0029 --
------------- ------------- ------------- ------------- -------------
Net change in net asset value .................. -- (0.0002) 0.0002 0.0001 (0.0002)
------------- ------------- ------------- ------------- -------------
NET ASSET VALUE, END OF PERIOD ................. $ 1.0000 $ 1.0000 $ 1.0002 $ 1.0000 $ 0.9999
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Total return ................................... 2.33%++ 4.81% 5.27% 3.44% 2.70%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) ............. $ 572,129 $ 557,093 $ 444,928 $ 208,714 $ 181,155
Ratio of expenses to average net assets ...... 0.90%+ 0.90% 0.90% 0.88% 0.86%
Ratio of net investment income to average net
assets ..................................... 4.61%+ 4.67% 5.13% 3.40% 2.63%
Ratio of expenses to average net assets*...... 0.96%+ 0.98% 0.93% (a) (a)
Ratio of net investment income to average net
assets*..................................... 4.55%+ 4.59% 5.10% (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.
+ Annualized.
++ Not annualized.
See Notes to Financial Statements.
137
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEARS ENDED
MAY 31, ---------------------------------------------------------------
1997 NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1996(b) 1995 1994 1993
----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF
PERIOD...................... $ 0.9993 $ 0.9996 $ 0.9999 $ 1.0000 $ 1.0000
----------- ------------ ------------ ------------ ------------
Income from investment
operations:
Net investment income....... 0.0248 0.0494 0.0548 0.0368 0.0291
Net realized gains (losses)
on securities............. 0.0002 (0.0003) (0.0003) (0.0001) --
----------- ------------ ------------ ------------ ------------
Total income from investment
operations................ 0.0250 0.0491 0.0545 0.0367 0.0291
----------- ------------ ------------ ------------ ------------
Dividends from net investment
income...................... (0.0248) (0.0494) (0.0548) (0.0368) (0.0291)
----------- ------------ ------------ ------------ ------------
Net change in net asset
value....................... 0.0002 (0.0003) (0.0003) (0.0001) --
----------- ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF
PERIOD...................... $ 0.9995 $ 0.9993 $ 0.9996 $ 0.9999 $ 1.0000
----------- ------------ ------------ ------------ ------------
----------- ------------ ------------ ------------ ------------
Total return.................. 2.51%++ 5.05% 5.62% 3.74% 2.95%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s).................... $ 347,500 $ 218,020 $ 236,392 $ 283,920 $ 501,377
Ratio of expenses to average
net assets................ 0.39%+ 0.40% 0.40% 0.39% 0.40%
Ratio of interest expense to
average net assets........ 0.13%(c)+ 0.07%(c) -- -- --
----------- ------------ ------------ ------------ ------------
Ratio of total expenses to
average net assets........ 0.52%+ 0.47% 0.40% -- --
----------- ------------ ------------ ------------ ------------
----------- ------------ ------------ ------------ ------------
Ratio of net investment
income to average net
assets.................... 5.10%+ 4.97% 5.49% 3.73% 2.91%
Ratio of expenses to average
net assets*............... 0.41%+ 0.42% 0.42% (a) (a)
Ratio of interest expense to
average net assets........ 0.13%(c)+ 0.07%(c) -- (a) (a)
----------- ------------ ------------ ------------ ------------
0.54%+ 0.49% 0.42% (a) (a)
----------- ------------ ------------ ------------ ------------
----------- ------------ ------------ ------------ ------------
Ratio of net investment
income to average net
assets*................... 5.09%+ 4.95% 5.46% (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.
(c) Represents interest expense on reverse repurchase agreement.
+ Annualized
++ Not annualized
See Notes to Financial Statements.
138
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEARS ENDED
MAY 31, ---------------------------------------------------------------
1997 NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1996(b) 1995 1994 1993
----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
SERVICE SHARES:
NET ASSET VALUE, BEGINNING OF
PERIOD...................... $ 0.9995 $ 0.9996 $ 0.9999 $ 1.0000 $ 1.0000
----------- ------------ ------------ ------------ ------------
Income from investment
operations:
Net investment income....... 0.0231 0.0463 0.0513 0.0331 0.0256
Net realized losses on
securities................ (0.0003) (0.0001) (0.0003) (0.0001) --
----------- ------------ ------------ ------------ ------------
Total income from investment
operations................ 0.0228 0.0462 0.0510 0.0330 0.0256
----------- ------------ ------------ ------------ ------------
Dividends from net investment
income...................... (0.0231) (0.0463) (0.0513) (0.0331) (0.0256)
----------- ------------ ------------ ------------ ------------
Net change in net asset
value....................... (0.0003) (0.0001) (0.0003) (0.0001) --
----------- ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF
PERIOD...................... $ 0.9992 $ 0.9995 $ 0.9996 $ 0.9999 $ 1.0000
----------- ------------ ------------ ------------ ------------
----------- ------------ ------------ ------------ ------------
Total return.................. 2.33%++ 4.72% 5.25% 3.36% 2.59%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s).................... $ 530,680 $ 682,628 $ 525,609 $ 591,991 $ 403,809
Ratio of expenses to average
net assets................ 0.73%+ 0.75% 0.75% 0.74% 0.75%
Ratio of interest expense to
average net assets........ 0.13%(c)+ 0.07%(c) -- -- --
----------- ------------ ------------ ------------ ------------
Ratio of total expenses to
average net assets........ 0.86%+ 0.82% 0.75% -- --
----------- ------------ ------------ ------------ ------------
----------- ------------ ------------ ------------ ------------
Ratio of net investment
income to average net
assets.................... 4.75%+ 4.62% 5.13% 3.38% 2.56%
Ratio of expenses to average
net assets*............... 0.74%+ 0.77% 0.77% (a) (a)
Ratio of interest expense to
average net assets........ 0.13%(c)+ 0.07%(c) -- (a) (a)
----------- ------------ ------------ ------------ ------------
Ratio of total expenses to
average net assets........ 0.87%+ 0.84% 0.77% (a) (a)
----------- ------------ ------------ ------------ ------------
----------- ------------ ------------ ------------ ------------
Ratio of net investment
income to average net
assets*................... 4.74%+ 4.62% 5.11% (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.
(c) Represents interest expense on reverse repurchase agreement.
+ Annualized
++ Not annualized
See Notes to Financial Statements.
139
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEARS ENDED
MAY 31, ---------------------------------------------------------------
1997 NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1996(b) 1995 1994 1993
----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF
PERIOD...................... $ 0.9993 $ 0.9996 $ 0.9999 $ 1.0000 $ 1.0000
----------- ------------ ------------ ------------ ------------
Income from investment
operations:
Net investment income....... 0.0223 0.0447 0.0498 0.0316 0.0241
Net realized losses on
securities................ 0.0002 (0.0003) (0.0003) (0.0001) --
----------- ------------ ------------ ------------ ------------
Total income from investment
operations.................. 0.0225 0.0444 0.0495 0.0315 0.0241
----------- ------------ ------------ ------------ ------------
Dividends from net
investment income......... (0.0223) (0.0447) (0.0498) (0.0316) (0.0241)
----------- ------------ ------------ ------------ ------------
Net change in net asset
value..................... 0.0002 (0.0003) (0.0003) (0.0001) --
----------- ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF
PERIOD...................... $ 0.9995 $ 0.9993 $ 0.9996 $ 0.9999 $ 1.0000
----------- ------------ ------------ ------------ ------------
----------- ------------ ------------ ------------ ------------
Total return.................. 2.25%++ 4.56% 5.10% 3.21% 2.44%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s).................... $ 65,734 $ 42,939 $ 49,047 $ 32,444 $ 21,362
Ratio of expenses to average
net assets................ 0.89%+ 0.90% 0.90% 0.90% 0.90%
Ratio of interest expense to
average net assets........ 0.13%(c)+ 0.07%(c) -- -- --
----------- ------------ ------------ ------------ ------------
Ratio of total expenses to
average net assets........ 1.02%+ 0.97% 0.90% -- --
----------- ------------ ------------ ------------ ------------
----------- ------------ ------------ ------------ ------------
Ratio of net investment
income to average net
assets.................... 4.58%+ 4.48% 4.98% 3.13% 2.42%
Ratio of expenses to average
net assets*............... 0.95%+ 0.95% 1.04% 1.00% (a)
Ratio of interest expense to
average net assets........ 0.13%(c)+ 0.07%(c) -- --
----------- ------------ ------------ ------------ ------------
Ratio of total expenses to
average net assets........ 1.08%+ 1.02% 1.04% 1.00% (a)
----------- ------------ ------------ ------------ ------------
----------- ------------ ------------ ------------ ------------
Ratio of net investment
income to average net
assets*................... 4.52%+ 4.43% 4.84% 3.03% (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.
(c) Represents interest expense on reverse repurchase agreement.
+ Annualized
++ Not annualized
See Notes to Financial Statements.
140
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED
ENDED ------------------------------------------------------
MAY 31, 1997 NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1996 1995 1994 1993
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD............ $ 0.9996 $ 0.9996 $ 0.9999 $ 0.9999 $ 0.9998
------------ ------------ ------------ ------------ ------------
Income from investment operations:
Net investment income......................... 0.0161 0.0324 0.0355 0.0242 0.0214
Net realized gains (losses) on securities..... 0.0001 -- (0.0003) -- 0.0001
------------ ------------ ------------ ------------ ------------
Total income from investment operations....... 0.0162 0.0324 0.0352 0.0242 0.0215
------------ ------------ ------------ ------------ ------------
Dividends from net investment income............ (0.0161) (0.0324) (0.0355) (0.0242) (0.0214)
------------ ------------ ------------ ------------ ------------
Net change in net asset value................... 0.0001 -- (0.0003) -- 0.0001
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD.................. $ 0.9997 $ 0.9996 $ 0.9996 $ 0.9999 $ 0.9999
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total return.................................... 1.64%++ 3.29% 3.61% 2.45% 2.16%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s).............. $ 114,031 $ 145,592 $ 156,353 $ 162,856 $ 147,525
Ratio of expenses to average net assets....... 0.31%+ 0.34% 0.40% 0.40% 0.40%
Ratio of net investment income to average net
assets...................................... 3.26%+ 3.23% 3.53% 2.42% 2.13%
Ratio of expenses to average net assets*...... 0.41%+ 0.45% 0.52% 0.46% 0.56%
Ratio of net investment income to average net
assets*..................................... 3.16%+ 3.12% 3.41% 2.36% 1.97%
</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.
+ Annualized.
++ Not annualized.
See Notes to Financial Statements.
141
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED
ENDED ------------------------------------------------------
MAY 31, 1997 NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1996 1995 1994 1993
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
SERVICE SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD............ $ 0.9996 $ 0.9996 $ 0.9999 $ 0.9999 $ 0.9998
------------ ------------ ------------ ------------ ------------
Income from investment operations:
Net investment income......................... 0.0141 0.0283 0.0319 0.0206 0.0179
Net realized gains (losses) on securities..... (0.0008) -- (0.0003) -- 0.0001
------------ ------------ ------------ ------------ ------------
Total income from investment operations....... 0.0133 0.0283 0.0316 0.0206 0.0180
------------ ------------ ------------ ------------ ------------
Dividends from net investment income............ (0.0141) (0.0283) (0.0319) (0.0206) (0.0179)
------------ ------------ ------------ ------------ ------------
Net change in net asset value................... (0.0008) -- (0.0003) -- 0.0001
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD.................. $ 0.9988 $ 0.9996 $ 0.9996 $ 0.9999 $ 0.9999
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total return.................................... 1.42%++ 2.87% 3.24% 2.08% 1.80%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s).............. $ 663 $ 2,861 $ 2,855 $ 4,028 $ 487
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...................................... 2.81%+ 2.83% 3.19% 2.17% 1.75%
Ratio of expenses to average net assets*...... 1.68%+ 1.03% 1.20% 1.59% 0.92%
Ratio of net investment income to average net
assets*..................................... 1.88%+ 2.55% 2.74% 1.33% 1.58%
</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.
+ Annualized.
++ Not annualized.
See Notes to Financial Statements.
142
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED
ENDED ------------------------------------------------------
MAY 31, 1997 NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
(UNAUDITED) 1996 1995 1994 1993
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD............ $ 0.9996 $ 0.9996 $ 0.9999 $ 0.9999 $ 0.9998
------------ ------------ ------------ ------------ ------------
Income from investment operations:
Net investment income......................... 0.0134 0.0273 0.0305 0.0192 0.0164
Net realized gains (losses) on securities..... 0.0002 -- (0.0003) -- 0.0001
------------ ------------ ------------ ------------ ------------
Total income from investment operations....... 0.0136 0.0273 0.0302 0.0192 0.0165
------------ ------------ ------------ ------------ ------------
Dividends from net investment income............ (0.0134) (0.0273) (0.0305) (0.0192) (0.0164)
------------ ------------ ------------ ------------ ------------
Net change in net asset value................... 0.0002 -- (0.0003) -- 0.0001
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD.................. $ 0.9998 $ 0.9996 $ 0.9996 $ 0.9999 $ 0.9999
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total return.................................... 1.35%++ 2.76% 3.09% 1.94% 1.65%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s).............. $ 58,515 $ 47,145 $ 38,243 $ 38,123 $ 45,609
Ratio of expenses to average net assets....... 0.88%+ 0.85% 0.90% 0.90% 0.90%
Ratio of net investment income to average net
assets...................................... 2.70%+ 2.71% 3.04% 1.90% 1.62%
Ratio of expenses to average net assets*...... 0.98%+ 0.99% 1.15% 1.02% 1.06%
Ratio of net investment income to average net
assets*..................................... 2.60%+ 2.57% 2.79% 1.78% 1.46%
</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.
+ Annualized.
++ Not annualized.
See Notes to Financial Statements.
143
<PAGE>
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<PAGE>
(This page has been left blank intentionally.)
<PAGE>
EMD-0209
Inst. 5/97 SEMI
