<PAGE>
EMERALD FUNDS ANNUAL REPORT
EMERALD
INSTITUTIONAL & SERVICE SHARES
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November 30, 1997
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[LOGO]
<PAGE>
EMERALD FUNDS 1997 ANNUAL REPORT
EMERALD
INSTITUTIONAL & SERVICE SHARES
Emerald Equity Fund
Emerald Equity Value Fund
Emerald International Equity Fund
Emerald Small Capitalization Fund
Emerald Balanced Fund
Emerald Short-Term Fixed Income Fund
Emerald U.S. Government Securities Fund
Emerald Managed Bond Fund
Emerald Florida Tax-Exempt Fund
Emerald Prime, Treasury & Tax-Exempt Funds
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. 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 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.
<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 7
EMERALD INTERNATIONAL EQUITY FUND 11
EMERALD SMALL CAPITALIZATION FUND 15
EMERALD BALANCED FUND 19
EMERALD SHORT-TERM FIXED INCOME FUND 23
EMERALD U.S. GOVERNMENT SECURITIES FUND 27
EMERALD MANAGED BOND FUND 32
EMERALD FLORIDA TAX-EXEMPT FUND 36
EMERALD PRIME, TREASURY & TAX-EXEMPT FUNDS 40
SCHEDULES OF PORTFOLIO INVESTMENTS
EMERALD EQUITY FUND 43
EMERALD EQUITY VALUE FUND 48
EMERALD INTERNATIONAL EQUITY FUND 53
EMERALD SMALL CAPITALIZATION FUND 57
EMERALD BALANCED FUND 61
EMERALD SHORT-TERM FIXED INCOME FUND 70
EMERALD U.S. GOVERNMENT SECURITIES FUND 73
EMERALD MANAGED BOND FUND 76
EMERALD FLORIDA TAX-EXEMPT FUND 80
EMERALD PRIME FUND 83
EMERALD TREASURY FUND 86
EMERALD TAX-EXEMPT FUND 87
STATEMENTS OF ASSETS AND LIABILITIES 91
STATEMENTS OF OPERATIONS 94
STATEMENTS OF CHANGES IN NET ASSETS 97
NOTES TO FINANCIAL STATEMENTS 103
FINANCIAL HIGHLIGHTS 119
INDEPENDENT AUDITOR'S REPORT 146
</TABLE>
<PAGE>
BARNETT CAPITAL ADVISORS'
ECONOMIC OUTLOOK AND MARKET REVIEW
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THE ECONOMY: HARDLY MISSING A BEAT
We've had an economy that's been remarkably strong on all fronts, with the
exception, perhaps, of government spending. It's become something of a cliche
this year, but in an economic sense, we've been experiencing "the best of all
worlds" right now. We have an economy running on just about all cylinders:
Consumers are spending; the corporate sector is investing; and the federal
deficit is nearly balanced. And all this is being achieved with inflation
running at just about 2%.
Gross Domestic Product (GDP), the most common measure of the economy's strength,
grew 4% for the 12 months ended November 30, 1997. Most recently, GDP growth for
the third quarter of 1997 was an annualized rate of 3.5%. While this pace was
somewhat lower than the first quarter's blistering 5.8% rate, it still
underscores continued, solid growth.
Looking into 1998, we could be at a crossroads. Certainly, the extreme events
that recently occurred in Southeast Asia -- which reflected a spreading
throughout the region of problems that had been contained in Japan for the last
several years -- have caused interest rates to come down dramatically. But along
with the implications of our strong dollar, the Asian situation has kept the
Federal Reserve Board (Fed) on the sidelines; the Fed has been reluctant to
raise interest rates, for fear of adversely impacting global markets. This
series of events could actually help pump up the U.S. economy going into next
year.
INFLATION: WAGE PRESSURES CHECKED BY PRODUCTIVITY GAINS
Inflation has been more tame than might be expected, given the continued strong
job growth and the extended expansion of the economy. Through November, the rate
of inflation as measured by the Consumer Price Index was just 2.1% -- despite
the fact that unemployment had dropped to 4.6%, its lowest level in nearly 25
years. The hero in this story is rising productivity, spawned by capital
investments made by American industries in recent years and by the rising impact
of technology. Through the third quarter of 1997, the nation's "output
percentage" grew at an annualized rate of 4.4%. This means that the same number
of workers, working the same number of hours, produced 4.4% more in goods and
services.
Higher productivity can offset factors that might otherwise fuel rising
inflation. In theory, companies could afford to pay workers 4.4% more in wages
and benefits without having to raise prices. This is a lesson that the markets
have had to learn: While wages are going up faster than the rate of inflation,
productivity is growing at least as fast as wages. And this eliminates, or at
least delays, the threat of rising inflation coming from rising wages.
The globalization of productivity, and a global economy nourished by free trade
agreements such as NAFTA, also has helped the economy grow. This isn't great
news for American workers -- because so many goods can now be made more cheaply
overseas -- but it helps companies grow profits.
INTEREST RATES AND BONDS: A WILD, BUT ULTIMATELY POSITIVE, RIDE
Over the last 12 months, the yield on the benchmark 30-year U.S. Treasury bond
fell approximately 60 basis points (0.60%) -- a significant drop and one that
helped fuel strong, year-to-year gains in both the bond and stock markets.
However, the road to lower interest rates was not free of potholes. Beginning
December 1, 1996, the long bond rose from 6.35% to 7.20% in mid-April, spurred
at least partially by the Fed's decision to raise short-term rates 25 basis
points (0.25%) in March. With interest rates climbing,
bond prices sank, and stocks followed suit.
But the situation reversed itself in the spring, and long-term rates began a
steady, substantial decline, resting at 6.13% at the end of November. This
positive move drove bond prices higher and established an underpinning for
renewed strength in the stock market.
1
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STOCKS: HIGH, HIGHER, HIGHEST
Stocks provided equity investors with another outstanding year, with most of the
major indices posting gains that were much higher than historical norms. To be
sure, volatility was the rule throughout the last 12 months. In early spring,
the Dow Jones Industrial Average lost nearly 10% of its value, while the Nasdaq
Average dropped 14%. Then, regaining its upward momentum, the market drove to a
record high of 8259 on August 6. However, just 11 weeks later, the Dow suffered
its largest single-day point loss in history, plunging 554 points on October 27.
But, as we write this report in early December, the Dow has recaptured almost
all of its recent losses and is standing within 2% of its August high.
Stocks were propelled by lower interest rates and the simple willingness of
investors to keep investing. Equity growth has come partly as the result of a
self-fulfilling prophecy: The fact that the stock market has gone up has created
a new awareness among potential investors -- especially baby boomers who are in
their peak earning years and who feel they must begin saving for retirement --
and they've started to put their money into stocks.
Another factor helping the market is that investors' risk tolerance levels are
substantially higher than they were in years past. With the emergence of 401(k)s
- -- and the way that the market has recovered so quickly from recent downturns --
investors have become a little more sanguine about risk.
THE ROAD AHEAD: ROOM FOR GROWTH
Moving forward, we're going to pay very close attention to the level of the
stock market, and to the shape of the interest-rate yield curve -- to how steep
or flat it is -- which can guide us in our bond selection. At this stage, we
feel there's still a little more room for growth left in the stock market, and
we remain moderately positive about stocks.
2
<PAGE>
INTERVIEW (as of November 30, 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 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
<TABLE>
<S> <C>
Consumer Cyclicals 13%
Consumer Staples 13%
Health Care 17%
Finance 11%
Utilities 8%
Technology 17%
Manufacturing 13%
Transportation 1%
Energy 7%
</TABLE>
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TOP 10 HOLDINGS*
The 10 largest holdings in the portfolio include internationally diversified
companies with household names, such as General Electric and Travelers.
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
General Electric Co. 3.20% Conagra, Inc. 1.77%
......................................................... ..........................................................
Bristol Myers Squibb Co. 2.21% General Nutrition Co. 1.72%
......................................................... ..........................................................
Pfizer, Inc. 1.88% Worldcom, Inc. 1.70%
......................................................... ..........................................................
USX-Marathon Group 1.87% Eli Lilly and Co. 1.69%
......................................................... ..........................................................
Travelers Group, Inc. 1.81% SunAmerica 1.66%
......................................................... ..........................................................
Total 19.51%
......................................................... ..........................................................
</TABLE>
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* The composition of the Fund's holdings is subject to change.
3
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EMERALD EQUITY FUND (as of November 30, 1997)
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GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P BARRA
<S> <C> <C> <C> <C>
S&P 500 Growth Lipper Institutional Shares
11/30/87 $10,000 $10,000 $10,000 $ 10,000
12/31/87 $10,815 $10,645 $10,998 $ 10,406
6/88 $12,119 $11,818 $12,332 $ 11,250
12/88 $12,543 $12,144 $12,406 $ 11,315
6/89 $14,605 $14,114 $14,515 $ 12,938
12/89 $16,493 $16,564 $15,814 $ 14,724
6/90 $17,001 $17,614 $16,429 $ 15,244
12/90 $15,970 $16,597 $14,958 $ 14,513
6/91 $18,257 $19,187 $17,284 $ 16,234
12/91 $20,848 $22,966 $20,392 $ 19,100
6/92 $20,716 $21,716 $19,675 $ 17,829
12/92 $22,447 $24,129 $21,949 $ 19,898
6/93 $23,530 $23,516 $22,934 $ 19,709
12/93 $24,690 $24,535 $24,577 $ 20,747
6/94 $23,845 $23,453 $23,321 $ 19,311
12/94 $25,013 $25,302 $24,191 $ 19,528
6/95 $30,052 $30,660 $28,716 $ 23,615
12/95 $34,375 $34,949 $32,090 $ 26,453
6/96 $37,879 $39,017 $34,645 $ 29,173
12/96 $42,306 $43,325 $37,699 $ 31,858
6/97 $51,007 $53,963 $43,505 $ 36,289
11/30/97 $55,467 $58,424 $47,482 $ 40,366
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS AS OF NOV. 30, 1997*
INSTITUTIONAL
SHARES
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<S> <C>
1 Year 23.60%
5 Year 15.18%
10 Year 16.02%
Since Inception 14.57%
</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 performance of the Emerald Equity Fund is measured against the Lipper Growth
Funds Average, an equally weighted benchmark composed of mutual funds, each of
which normally invests in companies whose long-term earnings are expected to
grow significantly faster than the earnings of the stocks represented in the
major unmanaged stock indexes, the S&P 500 Index, an unmanaged index generally
representative of the U.S. stock market and the S&P Barra Growth Index, an
unmanaged index generally representative of growth stocks. The S&P 500 Index and
the S&P Barra Growth Index do not reflect the deduction of expenses associated
with a mutual fund, such as investment management and fund accounting fees. The
Fund's performance reflects the deduction of fees for these value-added
services.
----------------
* 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 6/28/91. On that date, the assets of the
Commingled Fund were transferred to the Fund in connection with its
commencement of operations. The Commingled Fund was operated using
substantially the same investment objective, policies and techniques as the
Fund. During that time, the Commingled Fund was not registered under the
Investment Company Act of 1940 (the "1940 Act") and therefore was not
subject to certain investment restrictions that are imposed under the 1940
Act. If the Commingled Fund had been registered under the 1940 Act, the
Commingled Fund's performance may have been adversely affected. Because the
Commingled Fund did not charge any expenses, its performance has been
adjusted to reflect the Fund's estimated expenses at the time of its
inception, which were 0.79% 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.
4
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EMERALD EQUITY FUND (as of November 30, 1997)
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HOW DID THE FUND PERFORM?
For the 12 months ended November 30, 1997, the Fund's total return was 23.60%.
In comparison, the average growth funds as tracked by Lipper Analytical
Services, Inc. was up 23.56%, while the Standard & Poor's (S&P) 500 Index, an
unmanaged index generally representative of the U.S. stock market, rose 28.51%
and the S&P Barra Growth Index, an unmanaged index generally representative of
growth stocks, rose 31.61%. Given that, for most of the year, investors drove up
the prices of large-cap stocks that seemed overvalued by our measures -- and
mostly ignored the type of undervalued, mid-cap stocks that we favor -- it's
notable that the Fund managed to keep pace with the Lipper benchmark.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING THE PERIOD?
The year began with a great deal of pessimism in the market. We had two
back-to-back years in which we saw annualized returns of more than 20%. With the
thought that it would be almost unprecedented to have a third straight year of
such outstanding returns, most investment strategists were talking about flat to
possibly negative returns in the stock market. As a result, we saw a "flight to
quality," a focus on large, blue-chip stocks -- companies such as Coca-Cola,
Intel, Microsoft and Procter & Gamble. For the first six months of the year,
these high-quality, large-
capitalization, multinational companies led the stock market's charge. They were
bid up to levels that were almost breathtaking, trading at price-to-earnings
(P/E) ratios that were very high on a historical basis. The Fund was
underweighted in this sector, which dampened our performance.
In the middle of the year, we saw a return to more rational behavior, in that
the market began to perceive that the growth rates of the large-cap companies
were not sustainable enough to justify the level of P/E multiples that existed.
That situation, coupled with a rising dollar, put some of the companies'
earnings growth at risk (such companies rely on international trade for a
significant part of their earnings). As a result, we saw a massive rotation out
of these large-cap stocks and into our kind of mid-cap stocks -- where the
growth rates actually were better and the valuations were considerably less
risky. On a performance basis, we made up a lot of ground on the market during
this two- to three-month period, riding mostly on the strength of our technology
holdings and on the overall market rotation into the types of stocks in our
portfolio.
Then came the crisis in Asia. What took place in the Far East dramatically
changed the landscape of the financial markets. For one thing, any exposure that
individual companies had to Far East economies brutalized their stocks, and many
of the technology names in our portfolio had a large exposure to Asia. As a
result, we saw a pretty healthy sell-off of many of our technology holdings in
October and November.
WHAT AREAS IN THE MARKET WORKED OUT WELL FOR YOU?
We had a lot of success in the capital goods area. Caterpillar (0.85% of the
Fund's net assets) performed well early in the year. Lear Corp. (0.98%), which
manufactures automobile parts, has benefited from the move by many large
companies to outsource work on individual components, and the stock did very
well for us. In the technology sector, we owned Dell Computer (since sold)
during a period when the stock was up more than 200% for the year. We actually
made a timely sale out of Dell and into Compaq Computer (1.48%), and it has
since appreciated more than 40%. SCI Systems (1.06%), which is up just under
100%, is another outsourcing story. SCI produces built-to-order computer boxes
for customers such as Hewlett-Packard and Apple Computer; it also manufactures
medical devices and telephone equipment, such as handsets.
Other areas of strength were in the consumer cyclical names. A lot of the
retailers have done very well for us -- including Staples (1.50%), Consolidated
Stores (1.54%) and Home Depot (1.21%). In health care -- an area in which we
were overweighted -- the drug stocks have all been very strong, led primarily by
Pfizer (1.88%), Eli Lilly (1.69%) and a smaller cap, biotech concern, Elan Corp.
(1.09%). We're also excited about the financial sector. We're underweighted in
financial stocks -- because it's a
5
<PAGE>
EMERALD EQUITY FUND (as of November 30, 1997)
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small component of the growth index -- but we did have fairly sizable exposure
in Travelers Group (1.81%). We've also done very well with BankAmerica (1.47%).
WHAT STOCKS DIDN'T WORK OUT FOR YOU?
Unfortunately, we owned a fairly substantial stake in Oxford Health Plans. After
careful review, we decided it was best to eliminate our position -- a move that
has since proven to be constructive, as the stock has continued its downward
slide.
WHAT IS YOUR CURRENT STRATEGY?
We've reduced some of our overweighting in technology by taking profits on some
of the gains we realized this past year. Generally, we continue to basically be
bottom-up stock pickers, looking for companies where earnings are being revised
upward, where the prospects for growth within a company and its industry sector
are greater than for the overall market, and where valuations are equal to, or
below, the market's valuations. Right now, most of those kinds of stocks are in
the mid-cap area of the market. We believe that, over time, investors in these
stocks will be rewarded.
6
<PAGE>
INTERVIEW (as of November 30, 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 investment 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.
7
<PAGE>
EMERALD EQUITY VALUE FUND (as of November 30, 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
<TABLE>
<S> <C>
Basic Materials 15%
Energy 13%
Transportation 8%
Manufacturing 7%
Technology 5%
Consumer Cyclicals 7%
Consumer Staples 1%
Finance 28%
Utilities 16%
</TABLE>
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TOP 10 HOLDINGS*
The portfolio's 10 largest holdings include such established companies as IBM,
Exxon and Ameritech.
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
Travelers Group, Inc. 2.92% Federated Dept. Stores 1.88%
......................................................... ..........................................................
IBM 2.66% Ameritech Corp. 1.87%
......................................................... ..........................................................
Exxon Corp. 2.52% Allstate Financial 1.74%
......................................................... ..........................................................
BankAmerica Corp. 2.00% Mobil Corp. 1.68%
......................................................... ..........................................................
BellSouth Corp. 1.99% GTE Corp. 1.66%
......................................................... ..........................................................
Total 20.92%
......................................................... ..........................................................
</TABLE>
- ---------------
* The composition of the Fund's holdings is subject to change.
8
<PAGE>
EMERALD EQUITY VALUE FUND (as of November 30, 1997)
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GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P BARRA
<S> <C> <C> <C>
S&P 500 Value Institutional shares
12/27/95 $10,000 $10,000 $ 10,000
3/96 $10,544 $10,639 $ 10,741
6/96 $11,020 $10,857 $ 10,972
9/96 $11,357 $11,143 $ 11,282
12/96 $12,307 $12,199 $ 12,480
3/97 $12,638 $12,415 $ 12,809
6/97 $14,842 $14,211 $ 14,612
9/97 $16,253 $15,682 $ 16,092
11/30/97 $16,132 $15,512 $ 15,984
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS AS OF NOV. 30, 1997
INSTITUTIONAL
SHARES
---------
<S> <C>
1 Year 27.95%
Since Inception (12/27/95) 27.48%
</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 performance of the Emerald Equity Value Fund is measured against the S&P 500
Index, an unmanaged index generally representative of the U.S. stock market and
the S&P Barra Value Index, an unmanaged index generally representative of value-
oriented securities. These indices do not reflect the deduction of expenses
associated with a mutual fund, such as investment management and fund accounting
fees. The Fund's performance reflects the deduction of fees for these
value-added services.
9
<PAGE>
EMERALD EQUITY VALUE FUND (as of November 30, 1997)
- --------------------------------------------------------------------------------
HOW DID THE FUND PERFORM?
For the 12 months ended November 30, 1997, the Fund's total return was 27.95%.
In comparison, the S&P Barra Value Index, an unmanaged index of value-oriented
securities, rose 25.08%, while the S&P 500 Index was up 28.51%.
When you look at which styles have worked and which haven't worked for the
market as a whole over the last 12 months, our performance is pretty remarkable.
In terms of investment style -- growth stocks versus value stocks -- growth has
done better. Also stocks with low price-to-earnings (P/E) ratios and high
dividend yields have underperformed the market the last 12 months. Our Fund is
value driven and has an above-market dividend yield and a P/E ratio around 75%
of the market's multiple. These factors should have worked against us, yet we
had a strong year.
WHAT AREAS IN THE MARKET WORKED IN YOUR FAVOR?
A large portion of the Fund's return came from the financial stocks in our
portfolio. We were overweighted in that sector, which significantly outperformed
the market. One particularly good performer was Salomon Brothers, which
benefited from the proposed buyout by Travelers (which we also own).
We also were overweighted in energy, and that helped us. One of our good energy
performers was USX-Marathon (1.17% of the Fund's net assets), which explores
for, refines and transports oil. In other sectors, we did well with
Parker-Hannifin (1.53%), a producer of fluid, pressure and motion controls, and
with Rite Aid (1.59%), a drug retailer that produced strong, comparable-store
sales. Another winner was Xerox (1.18%), which benefited from good earnings
growth in the office equipment and supply business.
WHAT SECTORS DIDN'T WORK OUT?
Our holdings in basic materials -- which include paper and chemical stocks --
and electric utilities have significantly underperformed the market over the
last 12 months. We were somewhat overweighted in these sectors, which hurt
performance.
DURING PERIODS OF MARKET VOLATILITY, HOW CAN INVESTORS BENEFIT FROM HOLDING
SHARES IN THIS FUND?
The surprise this past year hasn't necessarily been the volatility, but the
resilience with which stock prices have snapped back from every temporary
sell-off. Still, stocks don't go up all the time. From the standpoint of
investing in the Equity Value Fund, we've put together what most people would
call a defensive portfolio -- as indicated by the Fund's lower than average P/E
and price-to-book ratios, and its higher than average dividend yield. It's a
high quality portfolio. If you look at the areas in which we're overweighted --
such as energy and utilities -- these are sectors that typically do better than
the market as a whole when stock prices turn down for a prolonged period of
time.
HOW ARE YOU POSITIONING THE FUND FOR THE NEXT 12 MONTHS?
We continue to like the financial stocks, for two reasons. First, we believe the
economy will continue to grow modestly, which would help this sector. Second, we
see interest rates remaining stable or trending lower. So, we're maintaining our
overweighting in the financial sector. We're also looking hard for opportunities
in the consumer staples and health-care areas. Overall, we look at relative
value, so that, even in a strong market, we can find stocks that look relatively
attractive when compared to either the market as a whole or to their respective
sectors.
10
<PAGE>
INTERVIEW (as of November 30, 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, Mr. Busby 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. 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.
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.
- ---------------
* International investing involves increased risk and volatility.
11
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND (as of November 30, 1997)
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION**
The portfolio emphasizes established
companies located in a variety of
different foreign regions that sell below
their "true value."
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Latin America 9%
United Kingdom 13%
Europe 59%
Asia 11%
Other 8%
</TABLE>
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS**
The portfolio's 10 largest holdings include such international companies as
Nestle, Daimler-Benz, and Groupe Danone.
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
Nestle SA 5.18% Alcatel Alsthom 3.99%
......................................................... ..........................................................
Daimler-Benz AG 4.54% Instituto Mobiliare Italiano 3.45%
......................................................... ..........................................................
Groupe Danone 4.40% Den Danske Bank 3.31%
......................................................... ..........................................................
Telecom Italia 4.39% AGF Assurance 3.21%
......................................................... ..........................................................
Tele Danmark 4.34% BTR PLC 3.13%
......................................................... ..........................................................
Total 39.94%
......................................................... ..........................................................
</TABLE>
- ---------------
** The composition of the Fund's holdings is subject to change.
12
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND (as of November 30, 1997)
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INSTITUTIONAL
MSCI EAFE SHARES
<S> <C> <C>
12/27/95 $10,000 $10,000
3/96 $10,210 $10,806
6/96 $10,467 $13,362
12/96 $10,620 $11,473
3/97 $10,453 $12,168
6/97 $11,811 $13,780
11/30/97 $10,729 $13,362
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS AS OF NOV. 30, 1997
INSTITUTIONAL
SHARES
---------
<S> <C>
1 Year 17.75%
Since Inception (12/27/95) 16.19%
</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 performance of the Emerald International Equity Fund is measured against the
Morgan Stanley Capital International Europe, Australia and Far East (EAFE)
Index, an unmanaged index of primarily large-capitalization stocks issued in
Europe, Australia and the Far East. This index does not reflect the deduction of
expenses associated with a mutual fund, such as investment management and fund
accounting fees. The Fund's performance reflects the deduction of fees for these
value-added services.
13
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND (as of November 30, 1997)
- --------------------------------------------------------------------------------
HOW DID THE FUND PERFORM?
For the 12 months ended November 30, 1997, the Fund's total return was 17.75%.
In comparison, the Morgan Stanley Capital International Europe, Australia and
Far East (EAFE) Index, an unmanaged index of primarily large-capitalization
stocks issued by companies in Europe, Australia and the Far East, declined
0.40%. In recent months, international markets fell substantially. The decline
was led by Asian markets, then spread to Latin America and to the developed
markets in the United States and Europe. However, relative to our benchmark, the
Fund had a very strong year, even in the face of this widespread volatility.
WHAT FACTORS CONTRIBUTED TO THE FUND'S OUTSTANDING RETURNS?
A lot of our outperformance had to do with the fact that we were pretty heavily
committed to Europe and had a relatively small weighting in Asia. During the
last year, European markets generally did very well, while Asian stocks took a
beating. Our bottom-up value style led us to find more bargains in Europe this
past year than in Japan and the rest of Asia. That strategy of looking for value
protected us from the weakness in the Far East. Unlike many other international
money managers, whose strategies are driven by specific allocations to
particular regions or countries, our allocations come directly from our
bottom-up selection of individual securities. Instead of placing bets on regions
or countries, we sit down and say, "Let's buy the least expensive, best-valued
stocks we can find, without any bias about where they're located, what industry
they operate in or whether they're in developed or emerging markets."
WHAT DOES YOUR VALUE-DRIVEN PERSPECTIVE TELL YOU ABOUT THE UPHEAVAL IN THE FAR
EAST?
Right now, we're looking with great excitement at a number of Asian stocks
because they've gotten so cheap, relative to what we think they're worth. Let's
face it, the markets are manic-depressive: They get, in turn, overly euphoric
and overly pessimistic. Right now, the consensus view on Asia is overly
pessimistic. As for the common notion that markets are efficient, you only have
to look at the last month to know that they are far from efficient. But such
volatility, which always will be the nature of financial markets, offers
opportunity.
WHICH STOCKS WERE WINNERS FOR THE FUND THIS PAST YEAR?
We had a couple of French stocks that did very well. One of them, Alcatel (3.99%
of the Fund's net assets), was up almost 40%. There had been a lot of
uncertainty surrounding the company, which specializes in electrical
infrastructure, such as telephone switching equipment. When Alcatel posted
better-than-expected results, which we anticipated, the stock went up. Another
French stock that outperformed was Assurances Generales de France, or AGF
(3.21%), a French insurance company, which has announced that a couple of larger
companies are battling to take it over. The stock was up close to 60% on that
news.
We also were pleased with Baloise Holding, Ltd. (2.16%), a Swiss insurance
company, which rose close to 70% on the year. Previously, there had been a lack
of investor interest in the company, but the stock began climbing when Baloise
began producing good earnings numbers. That stock is also a takeover candidate.
WHAT IS YOUR OUTLOOK FOR THE COMING YEAR?
As a team, we don't focus on trying to predict what's going to happen in the
short term; that would be pure speculation. However, we can say that over the
next three to five years, we expect the stocks in our portfolio to do very well.
We're particularly excited by some of the opportunities created by the recent
crisis in Asia.
We are optimists. Our basic assumption is we expect that investing in good
businesses will provide solid returns in the long run. Investors who are
successful in the markets generally are people who buy and hold stocks, and
don't fret much about short-term gyrations.
14
<PAGE>
INTERVIEW (as of November 30, 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.
15
<PAGE>
EMERALD SMALL CAPITALIZATION FUND (as of November 30, 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
<TABLE>
<S> <C>
Energy 4%
Manufacturing 11%
Technology 23%
Consumer Cyclicals 21%
Consumer Staples 14%
Health Care 12%
Finance 15%
</TABLE>
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS**
The portfolio's 10 largest holdings include such up-and-coming companies as
Allied Waste Industries, Symantec Corp. and Suiza Foods Corp.
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
Canandaigua Wine Co. 2.86% Whole Foods Market, Inc. 2.60%
......................................................... ..........................................................
Allied Waste Industries 2.78% Rexall Sundown, Inc. 2.54%
......................................................... ..........................................................
Golden State Bancorp 2.75% Valassis Comm., Inc. 2.36%
......................................................... ..........................................................
Symantec Corp. 2.67% CN Coltec Industries 2.23%
......................................................... ..........................................................
Suiza Foods Corp. 2.61% Americredit Corp. 2.23%
......................................................... ..........................................................
Total 25.63%
......................................................... ..........................................................
</TABLE>
- ---------------
** The composition of the Fund's holdings is subject to change.
16
<PAGE>
EMERALD SMALL CAPITALIZATION FUND (as of November 30, 1997)
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
RUSSELL 2000 LIPPER INSTITUTIONAL SHARES
<S> <C> <C> <C>
11/30/87 $10,000 $10,000 $10,000
12/87 $10,805 $11,059 $9,404
6/88 $13,720 $13,460 $11,095
12/88 $13,508 $13,184 $10,469
6/89 $15,477 $15,315 $11,628
12/89 $15,705 $16,448 $11,743
6/90 $15,935 $17,491 $12,137
12/90 $12,646 $14,734 $10,122
6/91 $16,146 $18,211 $12,508
12/91 $18,469 $22,515 $15,959
6/92 $18,494 $20,758 $14,917
12/92 $21,869 $25,320 $19,202
6/93 $23,304 $26,447 $20,174
12/93 $25,998 $29,703 $23,162
6/94 $24,316 $27,229 $20,638
12/94 $25,524 $29,776 $22,954
6/95 $29,206 $34,711 $26,614
12/95 $32,786 $39,870 $30,757
6/96 $36,183 $45,122 $33,590
12/96 $38,194 $46,125 $34,045
6/97 $42,091 $49,531 $34,363
11/30/97 $45,932 $53,872 $37,513
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS AS OF NOV. 30, 1997*
INSTITUTIONAL
SHARES
---------
<S> <C>
1 Year 10.69%
5 Year 15.48%
10 Year 15.97%
Since Inception 12.86%
</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 performance of the Emerald Small Capitalization Fund is measured against the
Lipper Small Company Growth Funds Average, an equally weighted benchmark
composed of mutual funds, each of which normally invests in companies whose
long-term earnings are expected to grow significantly faster than the earnings
of the stocks represented in the major unmanaged stock indexes and the Russell
2000 Growth Index, an unmanaged index of small-cap growth stocks. The Russell
2000 Growth Index does not reflect the deduction of expenses associated with a
mutual fund, such as investment management and fund accounting fees. The Fund's
performance reflects the deduction of fees for these value-added services.
- ---------------
* 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.
17
<PAGE>
EMERALD SMALL CAPITALIZATION FUND (as of November 30, 1997)
- --------------------------------------------------------------------------------
HOW DID THE FUND PERFORM?
For the 12 months ended November 30, 1997, the Fund's total return was 10.69%.
In comparison, the Russell 2000 Growth Index, an unmanaged index of small-cap
growth stocks, rose 14.99%, while the average small company growth funds, as
tracked by Lipper Analytical Services, Inc., rose 14.29%.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE DURING THE PERIOD?
While we had a solid year overall, we did see some big divergences between
large- and small-capitalization stocks, so that, over the year, large caps
significantly outperformed the type of smaller stocks we have in our portfolio.
The biggest divergence that impacted us, within the small-cap arena, was that
growth stocks significantly underperformed value stocks. This affected our
performance, as we have a growth-oriented emphasis. So, we've had a relatively
challenging time when compared to small-cap stocks in general.
Further, during the last couple of months of our fiscal year, the situation in
Asia was a drag on performance. The Far East crisis made investors nervous, and
they put more of a premium on the liquidity offered by larger stocks; that hurt
the small stocks in our portfolio somewhat.
ARE THESE FACTORS LIKELY TO CONTINUE?
Hopefully, we've seen the end of a cycle in which large-cap stocks have greatly
outperformed small caps. Since the end of the first quarter of 1997, small-cap
stocks have done a lot better. From the lows for small-caps that we saw in March
and April, we were up very strongly through the end of summer. We think the
smaller cap names that we hold are due for a prolonged period of outperformance.
Among all the funds in the Emerald family, this is the fund that most requires a
long-term perspective, because the short-term volatility is greater than that of
the overall market.
WHAT AREAS IN THE MARKET WORKED WELL FOR YOU?
The finance and energy sectors were the two most consistent performers for us.
Finance stocks benefited from lower interest rates. Investors also afforded
these stocks' higher valuations as they began to realize that a lot of these
companies' earnings wouldn't be as cyclical as they had been in the past.
Imperial Bancorp (1.82% of the Fund's net assets) and Golden State Bancorp
(2.75%) produced outstanding returns. In the energy area, we benefited from
drillers and oil service stocks; as a group, this sector delivered tremendous
earnings growth over the last year. Cliffs Drilling (2.09%) and Halter Marine
(1.58%) led our energy holdings.
WHAT IS YOUR OUTLOOK?
We're very positive about the prospects for the small-cap sector over the next
six to 12 months. Looking at the valuations and fundamentals of the stocks in
our portfolio, we believe that it's still early in the growth cycle for
small-cap stocks. There are a number of reasons why we think small caps are
attractive, relative to the broader market. First, growth rates -- people invest
in small caps in the expectation of finding companies in the early stages of
their growth, in very dynamic industries. Looking forward, we believe the stocks
in our portfolio could increase their earnings 25% to 30% a year. At the same
time, the average price/earnings (P/E) ratio of our stocks is only about 19
times next year's earnings. With expected earnings growth exceeding P/E, this is
an attractive situation for investors, one in which they don't have to pay a
premium for such growth.
Second, the turmoil going on in Southeast Asia should work to the advantage of
small caps. The dollar has been very strong relative to Asian currencies, which
can hurt the large multinational blue-chips that have had such a long run. But
most of the companies we're buying generate the majority of their sales and
earnings in the United States, not abroad. This situation should favor small
caps.
Third, the capital gains tax cut recently signed into law also should benefit
small caps. Historically, any time there has been a cut in capital gains taxes,
that has helped small-cap investors, because most of their total return comes
from price appreciation. This is another plus for the small-cap sector.
Finally, we may see a repeat of what occurred during the 1994 crisis in Mexico.
At that time, investment money flows throughout the world rotated into the
aggressive portion of the U.S. stock market. During periods of market turmoil,
it's quite natural for aggressive investors -- who often turn to global markets
for potentially high returns -- to take a fresh look at smaller, growth-oriented
companies in the United States. And that's the sector this Fund is in right now.
18
<PAGE>
INTERVIEW (as of November 30, 1997)
- --------------------------------------------------------------------------------
PHOTO
G. Russell
Creighton,
CFA
INVESTMENT MANAGER
17 years of
investment
experience
PHOTO
Andrew Cantor,
CFA
INVESTMENT MANAGER
24 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 AIMR.
Mr. Cantor joined Barnett in 1983 and plays a leading role on the fixed-income
investment 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.
19
<PAGE>
EMERALD BALANCED FUND (as of November 30, 1997)
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION*
The Fund's adviser seeks to
determine relative values
among stocks, bonds and cash
equivalents and weights the
portfolio accordingly.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Bonds 38%
Cash & Cash Equivalents 2%
Stocks 60%
</TABLE>
- --------------------------------------------------------------------------------
TOP 5 EQUITY AND BOND HOLDINGS*
The Balanced Fund's top equity holdings mirror those of the Equity Fund, and on
the bond side, we include such traditional holdings as FHLMC, FNMA and U.S.
Treasury Bonds.
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
EQUITIES NET ASSETS BONDS NET ASSETS
<S> <C> <C> <C>
General Electric Co. 1.85% FHLMC Gold, 7.50%, 9/1/10 2.55%
......................................................... ..........................................................
Bristol Myers Squibb Co. 1.39% Travelers Commercial Credit, 6.63%, 6/1/15 1.78%
......................................................... ..........................................................
Pfizer, Inc. 1.15% FNMA, 8.50%, 8/1/11 1.41%
......................................................... ..........................................................
USX-Marathon Group 1.15% Citizens, 6.80%, 8/15/26 1.41%
......................................................... ..........................................................
Travelers Group, Inc. 1.13% U.S. Treasury Bond, 6.75%, 8/15/26 1.37%
......................................................... ..........................................................
Total Equities 6.67% Total Bonds 8.52%
......................................................... ..........................................................
</TABLE>
- ---------------
* The composition of the Fund's holdings is subject to change.
20
<PAGE>
EMERALD BALANCED FUND (as of November 30, 1997)
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500 LEHMAN LIPPER INSTITUTIONAL SHARES
<S> <C> <C> <C> <C>
4/11/94 $10,000 $10,000 $10,000 $ 10,000
6/94 $10,041 $9,897 $9,981 $ 9,857
12/94 $10,533 $9,995 $10,070 $ 9,976
6/95 $12,655 $11,139 $11,492 $ 11,628
12/95 $14,475 $11,842 $12,648 $ 12,801
6/96 $15,951 $11,697 $13,297 $ 13,409
12/96 $17,814 $12,270 $14,406 $ 14,295
6/97 $21,483 $12,650 $16,019 $ 15,383
11/30/97 $23,352 $13,320 $16,986 $ 16,711
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS AS OF NOV. 30, 1997
INSTITUTIONAL
SHARES
---------
<S> <C>
1 Year 14.96%
3 Year 19.07%
Since Inception (4/11/94) 15.13%
</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 performance of the Emerald Balanced Fund is measured against the Lipper
Balanced Funds Average, an equally weighted benchmark composed of mutual funds,
each of which normally invests in companies whose long-term earnings are
expected to grow significantly faster than the earnings of the stocks
represented in the major unmanaged stock indexes, the S&P 500 Index, an
unmanaged index generally representative of the U.S. stock market and the Lehman
Brothers Aggregate Bond Index, an unmanaged index generally representative of
the Government/Corporate bond market. The S&P 500 Index and the Lehman Brothers
Aggregate Bond Index do not reflect the deduction of expenses associated with a
mutual fund, such as investment management and fund accounting fees. The Fund's
performance reflects the deduction of fees for these value-added services.
21
<PAGE>
EMERALD BALANCED FUND (as of November 30, 1997)
- --------------------------------------------------------------------------------
HOW DID THE FUND PERFORM?
For the 12 months ended November 30, 1997, the Fund's total return was 14.96%.
In comparison, the average balanced funds as tracked by Lipper Analytical
Services, Inc. was up 16.85%, while the Lehman Brothers Aggregate Bond Index
rose 7.55%, and the S&P 500 Index gained 28.51%. The Lehman Brothers Aggregate
Bond Index and the S&P 500 Index are unmanaged indices generally representative
of the government/corporate bond market and the U.S. stock market, respectively.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
During the last year, stocks widely outperformed bonds. Nonetheless, bonds
enjoyed a solid year, relative to their historical performance and the "real
return" (total return minus the rate of inflation) they provided investors. As a
result, we believe the Fund achieved its primary objective: to produce an
attractive investment return through a combination of capital appreciation and
current income.
What distinguishes the Fund is the asset allocation strategy we employ. Our
objective is to consistently have approximately 60% of the portfolio invested in
stocks and 40% invested in bonds. Barring a significantly negative outlook for
the stock market, we're going to maintain that 60-40 distribution, and as new
shareholder money flows into the Fund, we will allocate it accordingly. The
Balanced Fund remains, essentially, a mixture of our mid- to large-
capitalization equity and managed bond portfolios.
WHAT IMPACT DID THE INTEREST-RATE ENVIRONMENT HAVE ON THE STOCKS AND BONDS IN
THE FUND?
Clearly, the reason one can justify the stock market at its current,
high-valuation multiple is that we have very low inflation. And as a result of
very low inflation, we have low interest rates. Some people believe rates can
move down even further. Typically, "real" interest rates should be about 3% to
3.5% above inflation, so with inflation running at 2%, that would put the
30-year Treasury Bond at 5% to 5.5%. We're just over 6% right now, so one could
argue that interest rates right now are higher than they should be, given
inflation. We really believe the reason stocks are so attractive is the current,
low interest-rate environment.
The Fed has been very diligent in trying to maintain a stable economy and low
inflation. As long as the Fed can continue to do that -- using their primary
tool, regulating interest rates -- we think the climate will remain positive for
the financial markets.
ARE THERE ANY EVENTS ON THE HORIZON THAT COULD UPSET THIS SCENARIO?
A number of concerns potentially threaten the U.S. economy. Corporate earnings
are beginning to slow down. We feel that investors can't continue to bid up the
prices of large-cap stocks such as Coca-Cola and Procter & Gamble, which are
trading at such inflated multiples. But this situation could be good for the
Fund, as the market could eventually begin to pay a premium for companies that
have the potential to grow faster than the market. And these are the stocks we
hold in our portfolio. So, while larger stocks might suffer from earnings
disappointments -- and the Asian crisis clearly will lower growth rates next
year for many U.S. companies -- the Fund is positioned to take advantage of the
situation.
WHAT IS YOUR OUTLOOK FOR BONDS?
Near term, we're a little bit cautious, mainly because interest rates have
recently come down so quickly. Longer term, we're fairly positive. And with our
significant exposure in the corporate sector, which we view to be an attractive
area in the coming year, we're generally bullish about bonds.
22
<PAGE>
INTERVIEW (as of November 30, 1997)
- --------------------------------------------------------------------------------
PHOTO
David A. Furfine
INVESTMENT MANAGER
13 years of
investment
experience
PHOTO
Jeffery A. Greenert,
INVESTMENT MANAGER
13 years of
investment
experience
EMERALD SHORT-TERM FIXED INCOME FUND
Mr. Furfine joined Barnett 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 investment 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.
23
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND (as of November 30, 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 2.87
years.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
U.S. Government Obligations 31%
Taxable Municipal Obligations 1%
Corporate Obligations 66%
Cash & Cash Equivalents 2%
</TABLE>
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS**
The top 10 holdings in the portfolio include securities and money-market
instruments issued by American Express and Black & Decker.
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
Associated Corp., 5.78%, 2/21/98*** 4.07% Black & Decker, 6.63%, 11/15/00 3.09%
......................................................... ..........................................................
BankAmerica, 6.33%, 1/15/98*** 4.04% FNMA, 6.77%, 5/18/00 3.08%
......................................................... ..........................................................
GMAC, 5.91%, 1/29/98*** 3.58% Harris Corp., 6.65%, 8/1/06 3.07%
......................................................... ..........................................................
American Express Master Trust, 6.60%,
7/15/99 3.48% U.S. Treasury Notes, 5.88%, 8/31/99 3.07%
......................................................... ..........................................................
FNMA, 4.00%, 6/25/18 3.25% U.S. Treasury Notes, 5.88%, 7/31/99 3.07%
......................................................... ..........................................................
Total 33.80%
......................................................... ..........................................................
</TABLE>
- ---------------
** The composition of the Fund's holdings is subject to change.
*** Variable rate security. Rate represents rate in effect at November 30, 1997.
Maturity date reflects the next rate change date.
24
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND (as of November 30, 1997)
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LIPPER INSTITUTIONAL SHARES MERRILL LYNCH
<S> <C> <C> <C>
11/30/87 $10,000 $10,000 $10,000
12/31/87 $10,070 $10,063 $10,091
6/88 $10,467 $10,393 $10,492
12/88 $10,780 $10,645 $10,733
6/89 $11,433 $11,274 $11,469
12/89 $11,908 $11,714 $11,981
6/90 $12,296 $12,138 $12,393
12/90 $12,819 $12,736 $13,140
6/91 $13,448 $13,302 $13,704
12/91 $14,391 $14,261 $14,851
6/92 $14,815 $14,733 $15,326
12/92 $15,254 $15,063 $15,874
6/93 $15,896 $15,598 $16,631
12/93 $16,300 $15,943 $17,007
6/94 $16,102 $15,720 $16,785
12/94 $16,187 $15,853 $16,914
6/95 $17,136 $16,930 $18,276
12/95 $17,840 $17,486 $19,106
6/96 $18,034 $17,739 $19,247
12/96 $18,712 $18,315 $19,988
6/97 $19,249 $18,752 $20,565
11/30/97 $19,781 $19,893 $21,261
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS AS OF NOV. 30, 1997*
INSTITUTIONAL
SHARES
---------
<S> <C>
1 Year 5.31%
5 Year 5.58%
10 Year 7.19%
Since Inception 8.54%
CURRENT SEC 30-DAY YIELD 5.60%
</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 did not
impact the 30-day yield.
- --------------------------------------------------------------------------------
The performance of the Emerald Short-Term Fixed Income Fund is measured against
the Lipper Short Investment Grade Debt Funds Average, an equally weighted
benchmark composed of mutual funds, each of which normally invests in companies
whose long-term earnings are expected to grow significantly faster than the
earnings of the bonds represented in the major unmanaged bond indexes and the
Merrill Lynch Government/Corporate Short-Term Index, an unmanaged index of
short-term government and corporate bonds. The Merrill Lynch
Government/Corporate Short-Term Index does not reflect the deduction of expenses
associated with a mutual fund, such as investment management and fund accounting
fees. The Fund's performance reflects the deduction of fees for these
value-added services.
- ---------------
* 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 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.
25
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND (as of November 30, 1997)
- --------------------------------------------------------------------------------
HOW DID THE FUND PERFORM?
For the 12 months ended November 30, 1997, the Fund's total return was 5.31%. In
comparison, the Merrill Lynch Government/Corporate Short-Term Index, an
unmanaged index of short-term government and corporate bonds, rose 7.47%, while
the average short investment grade debt funds, as tracked by Lipper Analytical
Services, Inc., rose 5.46%. It is important to note that investors had the
opportunity to receive relatively high current income, collecting a total
12-month distribution of $0.5786 per share. We had a solid year, consistent with
our objective of providing positive current income while preserving principal.
WHAT IS YOUR PERSPECTIVE ON INTEREST RATES?
We're taking a somewhat contrarian view from the market's belief that the Fed
will be easing interest rates. With the two-year U.S. Treasury Note yielding in
the neighborhood of 5.70% (as of November 30, 1997) and the Fed Funds rate set
at 5.50%, we have a historically narrow spread between the two. What that says
to us is that the market believes the next move by the Federal Reserve might be
to ease. However, with the economic statistics we've seen -- such as the most
recent unemployment report showing unemployment to be near 25-year lows -- we're
starting to see some signs of wage pressures. And we still have fairly modest
growth in the Gross Domestic Product. All this data could lead the Fed to be
raising interest rates, not lowering them.
But then there are the problems in Asia. With the financial turmoil and "flight
to quality" we've seen in recent months, and the need to provide efficient
capital markets on a global basis, the Fed has its hands tied. At the same time,
the turmoil in the Far East is helping the Fed slow down growth in the United
States -- which might make it easier for them not to tighten credit. But not
tightening is different from easing.
HAS THE RECENT DROP IN INTEREST RATES HELPED THE FUND?
A drop in rates always helps, but it hasn't had much of an impact on the type of
short-term securities we hold. It's interesting to note that while interest
rates have fallen over the last year, there has been a marked difference between
the rate drop for long-term bonds and the drop for short-term securities. For
the 12 months ended November 30, 1997, interest rates on the 30-year U.S.
Treasury bond fell 60 basis points, or 0.60% -- a fairly significant drop. In
contrast, rates for two-year notes, which characterize many of the securities in
our portfolio, fell just 15 basis points (0.15%).
WHAT HAS BEEN YOUR APPROACH TOWARD BALANCING U.S. GOVERNMENT OBLIGATIONS AND
CORPORATE OBLIGATIONS IN YOUR PORTFOLIO?
As of November 30, 1997, 31% of the Fund was invested in U.S. Government
securities and 66% in corporates. We've continued to overweight the corporates.
With a short-term fund, each basis point of yield is significant. By buying a
corporate bond, you can gain 30-50 basis points over a government security of
comparable maturity. Even though the corporate bond comes with some amount of
credit exposure, we rely on our credit experience and on the analytical work we
do to feel confident about the bonds we purchase. Currently, the credit quality
of the portfolio as a whole is AA.
We also invest in mortgage-backed securities, but we limit the types of
mortgages we own. Our intent is to reduce the impact of a prepayment change that
can result when mortgage rates fall.
WHAT IS YOUR OUTLOOK?
Looking forward, we believe interest rates will remain in a fairly narrow band.
The shrinking budget deficit and the economy's non-existent inflation are
reasons to be optimistic for the long term. But we're not as optimistic about
the next three to six months. To protect our shareholders, we've shortened our
duration and maintained a high-quality portfolio, and we continue to look for
selective opportunities.
26
<PAGE>
INTERVIEW (as of November 30, 1997)
- --------------------------------------------------------------------------------
PHOTO
Andrew Cantor,
CFA
INVESTMENT MANAGER
24 years of
investment
experience
PHOTO
Jeffery A. Greenert,
INVESTMENT MANAGER
13 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
investment 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 investment 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. The Fund is also well suited for
IRA investors.
27
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND (as of November 30, 1997)
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION*
The portfolio is comprised principally of U.S. Government securities, including
direct obligations and agency securities. The portfolio emphasizes U.S.
Government agency mortgage-backed securities. Currently, the portfolio's average
maturity is 5.17 years after adjusting for mortgage prepayments.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
U.S. Government Obligations 99%
Cash Equivalents 1%
</TABLE>
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
Some of the top U.S. Government securities included in the portfolio are FNMA
and FHLMC.
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
FHLMC, 7.44%, 9/20/06 7.30% FNMA, 8.00%, 8/1/99 3.61%
......................................................... ..........................................................
U.S. Treasury Note, 7.00%, 7/15/06 6.78% FARMER MAC, 7.08%, 3/25/02 3.55%
......................................................... ..........................................................
U.S. Treasury Bond, 12.75%, 11/15/10 5.00% FHLMC, 5.78%, 10/22/03 3.42%
......................................................... ..........................................................
FHLMC, 3.50%, 6/15/07 3.63% FHLMC 6.20%, 9/8/08 3.24%
......................................................... ..........................................................
FNMA, 7.00%, 2/18/27 3.62% FNMA, 7.55%, 6/10/04 3.22%
......................................................... ..........................................................
Total 43.37%
......................................................... ..........................................................
</TABLE>
- ---------------
* The composition of the Fund's holdings is subject to change.
28
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND (as of November 30, 1997)
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LIPPER INSTITUTIONAL SHARES LEHMAN LEHMAN MORTGAGE
<S> <C> <C> <C> <C>
3/1/94 $10,000 $10,000 $10,000 $10,000
6/94 $9,868 $9,757 $9,940 $9,653
12/94 $9,886 $9,782 $10,010 $9,748
6/95 $10,841 $10,708 $10,971 $10,864
12/95 $11,425 $11,200 $11,545 $11,550
6/96 $11,288 $11,142 $11,521 $11,408
12/96 $11,758 $11,645 $12,012 $11,967
6/97 $12,068 $11,950 $12,352 $12,339
11/97 $12,344 $12,464 $12,855 $13,099
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS AS OF NOV. 30, 1997
INSTITUTIONAL
SHARES
---------
<S> <C>
1 Year 6.37%
3 Year 8.65%
Since Inception (3/1/94) 6.04%
CURRENT SEC 30-DAY YIELD 5.90%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND
NAV WILL FLUCTUATE, SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THE ORIGINAL COST.
During the periods indicated, fee waivers and/or expense reimbursements did not
impact the 30-day yield.
- --------------------------------------------------------------------------------
The performance of the Emerald U.S. Government Securities Fund is measured
against the Lipper Intermediate Government Funds Average, an equally weighted
benchmark composed of mutual funds, each of which normally invests in companies
whose long-term earnings are expected to grow significantly faster than the
earnings of the bonds represented in the major unmanaged bond indexes, the
Lehman Brothers Mortgage Index, an unmanaged index of U.S. Government agency and
Treasury securities and agency mortgage-backed securities and the Lehman
Brothers Intermediate Government/Corporate Bond Index, an unmanaged index
considered to be representative of the performance of government and corporate
bonds with maturities of less than ten years. The Lehman Brothers Intermediate
Government/Corporate Bond Index and the Lehman Brothers Mortgage Index do not
reflect the deduction of expenses associated with a mutual fund, such as
investment management and fund accounting fees. The Fund's performance reflects
the deduction of fees for these value-added services.
The U.S. Government Securities Fund is now being compared to the Lehman Brothers
Intermediate Government/Corporate Bond Index, rather than the Lehman Brothers
Mortgage Index, because the new benchmark is believed to be more representative
of the securities included in the U.S. Government Securities Fund's portfolio.
29
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND (as of November 30, 1997)
- --------------------------------------------------------------------------------
HOW DID THE FUND PERFORM?
For the 12 months ended November 30, 1997, the Fund's total return was 6.37%. In
comparison, the Lehman Brothers Intermediate Government/Corporate Bond Index, an
unmanaged index considered to be representative of the performance of government
and corporate bonds with maturities of less than 10 years, rose 6.85% and the
Lehman Brothers Mortgage Index, an unmanaged index of U.S. Government agency and
Treasury securities and agency mortgage-backed securities, rose 7.93%. Meanwhile
the average intermediate government funds, as tracked by Lipper Analytical
Services, Inc., rose 6.28%. On balance, we had a good year. Of course, compared
to the equity markets, the numbers aren't as spectacular. But certainly compared
to what occurred in 1996, bond funds in general, and ours in particular,
produced satisfactory returns.
It is important to note that investors had the opportunity to receive relatively
high current income, collecting a total 12-month distribution of $0.6377 per
share. This is consistent with the Fund's investment goal of seeking steady
income from U.S. Government securities.
WHAT FACTORS AFFECTED YOUR PERFORMANCE?
The year started out a little shaky for the entire bond market. Fixed-income
investors were concerned at the time about what appeared to be an excessive rate
of economic growth, and there followed the usual knee-jerk reaction: If the
economy is growing, can rising inflation, and tightening by the Federal Reserve
(Fed), be far behind? As a result, interest rates rose early in the year, and
bond prices fell. (Bond prices move inversely to interest rates.)
In due time, the environment for bonds became a lot friendlier. While the
economy continued to grow, the story of the year was how benign inflation proved
to be. It was especially benign when you consider that we're more than seven
years into the current economic expansion, a point where inflation rates usually
are accelerating. But if anything, inflation DECELERATED in 1997. And coupled
with that is the progress we've seen with the federal budget deficit, which for
fiscal 1997 came in at just over $20 billion -- which is nearly in balance.
The Fed, which raised rates slightly in March, has since stayed on the sidelines
and left rates unchanged. We've had a stable Fed, good inflation numbers, good
numbers on the fiscal policy side -- all of which was more than enough to offset
fears of economic acceleration. As a result, we saw interest rates trend lower
since the end of April -- from a high of roughly 7.20% on the 30-year Treasury
bond down to about 6.10%. All of these factors produced a favorable environment
for bonds for the final seven months of our fiscal year.
HOW DID YOU POSITION THE PORTFOLIO'S MATURITY?
It was a market in which the longer the maturity of your portfolio, the better
your results. We extended our maturity early in 1997, and we maintained a
longer-than-average duration+ for most of the year. While that strategy
obviously hurt us at the beginning of the year, when interest rates were rising,
it helped us when interest rates began to fall.
We began paring back the duration of our portfolio just slightly during the
third quarter of 1997, but we still maintained a duration that was longer than
that of our benchmarks. This reflected our view -- and this is an opinion we
still hold -- that intermediate- and longer term rates potentially have further
downward movement.
DID YOU FIND MORTGAGE-BACKED SECURITIES ATTRACTIVE?
Early in the year, we added to our position in mortgage-backed securities, to
beef up the Fund's yield a bit. But holding mortgages can be frustrating in a
climate of falling interest rates, because people can, and do, refinance their
mortgages at lower rates. For an investor in these securities, just as you think
you have an attractive yield locked up for a period of time, you get your money
back in a declining-rate environment. From that standpoint, mortgage-backed
securities have lagged the broader bond market in recent months.
Another strategy we used, back in the summer, was to seriously
30
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND (as of November 30, 1997)
- --------------------------------------------------------------------------------
look at discounted agency bonds. Even though they had "call" features (the
issuers had the discretion to redeem the bonds before they matured), the bonds
were priced at a significant discount. When interest rates fell, these
securities rose in value for us, because they had been sold at a discount.
WHAT IS YOUR OUTLOOK?
Our outlook for intermediate-and longer term interest rates for the next year or
so continues to be positive. We believe there is a case to be made for rates to
fall even further from where they are now. The inflation rate we're seeing here
is in the 2% to 2.5% range; the last time we had a prolonged period of inflation
rates this low, interest rates were in fact lower than where they are now. And
the spread that exists now between interest rates and inflation rates actually
is fairly wide by historical standards. So, we believe the inflation picture is
consistent with a scenario in which interest rates would continue to fall.
Looking at other factors, the budget deficit situation will remain favorable for
the time being, and on the economic front, it's our expectation that growth will
moderate somewhat in 1998. The weakness in Asia is certainly going to dampen
export growth. While there's no recession on the radar screen, we do anticipate
somewhat weaker growth. All these factors, if they develop this way, will help
intermediate-and longer term bonds.
Having said that, we have to acknowledge that we've come an awfully long way in
the last six to nine months. To a certain extent, the rally we saw in the bond
market during November could have been the result of a so-called "flight to
quality" in response to troubles in Asia. It's very likely that when the
situation in Asia stabilizes or begins to improve, we could see a temporary
pullback in the bond market and see interest rates move up temporarily in the
near term.
----------------
+ "Duration" is a mathematical calculation of the average life of a bond that
takes into account all sources of cash flow. Duration measures how an
interest rate change affects the price of a bond or portfolio of bonds.
31
<PAGE>
INTERVIEW (as of November 30, 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
investment 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.
32
<PAGE>
EMERALD MANAGED BOND FUND (as of November 30, 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 11.83
years.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Corporate Obligations 55%
Cash & Cash Equivalents 1%
Taxable Municipal Obligations 1%
U.S. Government & Agency Obligations 43%
</TABLE>
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS*
With the largest industry segment of the portfolio being finance, some of our
top holdings include the following:
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
First Union, 6.92%, 12/15/36 3.01% Chase, 6.22%, 2/1/98 ** 2.84%
......................................................... ..........................................................
IBM Corp., 6.22%, 8/1/27 2.97% FNMA, 7.00%, 5/10/01 2.72%
......................................................... ..........................................................
FNMA, 6.50%, 1/18/22 2.96% Associates Corp., 7.95%, 2/15/10 2.66%
......................................................... ..........................................................
Potomac Electric, 6.25%, 10/15/07 2.95% Hutchinson, 6.99%, 8/1/37 2.54%
......................................................... ..........................................................
U.S. Treasury Note, 7.00%, 7/15/06 2.88% Conagra, Inc., 6.70%, 8/1/27 2.52%
......................................................... ..........................................................
Total 28.05%
......................................................... ..........................................................
</TABLE>
- ---------------
* The composition of the Fund's holdings is subject to change.
** Variable rate security. Rate represents rate in effect at November 30, 1997.
Maturity date reflects the next rate change date.
33
<PAGE>
EMERALD MANAGED BOND FUND (as of November 30, 1997)
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INSTITUTIONAL
LEHMAN LIPPER SHARES
<S> <C> <C> <C>
11/30/87 $10,000 $10,000 $10,000
12/31/87 $10,136 $10,134 $10,332
6/88 $10,641 $10,640 $10,780
12/88 $10,936 $10,994 $11,056
6/89 $11,941 $11,942 $12,067
12/89 $12,524 $12,398 $12,619
6/90 $12,879 $12,633 $12,950
12/90 $13,647 $13,225 $13,723
6/91 $14,257 $13,867 $14,330
12/91 $15,831 $15,549 $15,985
6/92 $16,259 $15,950 $16,464
12/92 $17,002 $16,761 $17,255
6/93 $18,175 $18,169 $18,524
12/93 $18,660 $18,767 $19,094
6/94 $17,938 $17,763 $18,351
12/94 $18,116 $17,865 $18,496
6/95 $20,189 $20,016 $20,701
12/95 $21,462 $21,398 $22,058
6/96 $21,202 $20,904 $21,790
12/96 $22,242 $21,960 $22,826
6/97 $22,930 $22,587 $23,435
11/30/97 $24,146 $23,823 $24,599
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS AS OF NOV. 30, 1997*
INSTITUTIONAL
SHARES
---------
<S> <C>
1 Year 6.63%
5 Year 7.64%
10 Year 9.21%
Since Inception 8.87%
CURRENT SEC 30-DAY YIELD 5.96%
</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 did not
impact the 30-day yield.
- --------------------------------------------------------------------------------
The performance of the Emerald Managed Bond Fund is measured against the Lipper
A-Rated Corporate Debt Funds Average, an equally weighted benchmark composed of
mutual funds, each of which normally invests in companies whose long-term
earnings are expected to grow significantly faster than the earnings of the
bonds represented in the major unmanaged bond indexes and the Lehman Brothers
Aggregate Bond Index, an unmanaged index of investment-grade corporate debt and
U.S. Government securities. The Lehman Brothers Aggregate Bond Index does not
reflect the deduction of expenses associated with a mutual fund, such as
investment management and fund accounting fees. The Fund's performance reflects
the deduction of fees for these value-added services.
- ---------------
* 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") 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.
34
<PAGE>
EMERALD MANAGED BOND FUND (as of November 30, 1997)
- --------------------------------------------------------------------------------
HOW DID THE FUND PERFORM?
For the 12 months ended November 30, 1997, the Fund's total return was 6.63%. In
comparison, the Lehman Brothers Aggregate Bond Index, an unmanaged index of
investment-grade corporate debt and U.S. Government securities, rose 7.55% and
the average A-rated corporate debt funds, as tracked by Lipper Analytical
Services, Inc., rose 7.09%.
It is important to note that investors had the opportunity to receive relatively
high current income, collecting a total 12-month distribution of $0.6221 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 securities.
WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
Through most of the year, our portfolio was helped by its longer duration
(versus the Lehman Index). However, the positive effects of the overall decline
in interest rates during the last couple of months was felt mostly by U.S.
Treasury bonds. For that reason, nongovernment securities -- such as corporate
bonds -- lagged government bonds to some degree as investors pursued a "flight
to quality" strategy. Because we had a fairly significant weighting in corporate
debt obligations, rather than in government securities, our overall Fund
performance was adversely affected somewhat in recent months.
HOW HAS THE PORTFOLIO COMPOSITION CHANGED DURING THE LAST 12 MONTHS?
During the last year, we've steadily raised our exposure to corporate securities
- -- from 34% of the portfolio at the end of November 1996, to 42% at the end of
May 1997, and finally to 55% as of November 30, 1997. We did this for
essentially two reasons. First, the overall health of the economy was such that
creditworthiness was good in the corporate sector. Second, we found in the
corporate sector certain types of bond structures that weren't generally
available in the government sector. For example, it's mostly in the corporate
sector that we can find "putable bonds"; these are securities that grow in value
when interest rates decline, and whose downside price move is limited when rates
spike up. Typically, we invest roughly 25% of the Fund in putable securities,
and virtually all of those are corporate bonds.
WITHIN THE CORPORATE SECTOR, WHAT OTHER TYPES OF DEBT DID YOU FAVOR?
We remained heavily invested in the debt of finance companies. Most are "captive
finance" companies, such as General Electric Capital Corp. (2.09% of the Fund's
net assets). These are companies who are wholly owned by, and whose existence is
primarily to finance the sales activities of, their parent companies. These
finance subsidiaries are very profitable. The fact that these finance companies
are owned by larger, well-capitalized corporations gives some comfort to the
investor who is buying such debt.
Also, as attractive yields became available, we increased our weighting in the
international sector. (Our foreign exposure is fairly diversified, with our
heaviest weighting in Canada.) That sector has lagged in recent months as yields
continued to rise, though we see this as an opportunity for enhanced returns
going forward.
Over 95% of our corporate holding are rated A or higher; the overall credit
quality of the portfolio is AA.
WHAT IS YOUR OUTLOOK FOR THE NEXT SIX TO 12 MONTHS?
With yield spreads between government and corporate securities having widened
over the last couple of months to what we perceive to be very attractive levels,
it's our view going forward that our significant exposure to corporate debt
securities could be a source of added return during the next year.
35
<PAGE>
INTERVIEW (as of November 30, 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 investment 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.
36
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND (as of November 30, 1997)
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION**
By design, the portfolio focuses on holding bonds in the four highest 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 reduce risk during this challenging
period in the economy. Ratings in the chart are assigned by Moody's Investor
Services. Currently, the portfolio's average maturity is 12.74 years.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
BBB 25%
AAA 64%
AA 11%
</TABLE>
- --------------------------------------------------------------------------------
TOP 10 HOLDINGS**
Some of the top Florida municipal bonds included in the portfolio include the
following:
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF
NET ASSETS NET ASSETS
<S> <C> <C> <C>
Palm Beach, FL, Solid Waste Rev., 6.00%, Jacksonville, FL, Sales Tax Rev., 5.38%,
10/1/10 5.60% 10/1/18 4.19%
......................................................... ..........................................................
Okaloosa County, FL, Gas Dist. Rev., 6.88%, South Miami Health Facilities, 5.38%,
10/1/19 4.86% 10/1/16 3.38%
......................................................... ..........................................................
Collier County, FL, Health Facs Rev., 7.00%,
12/1/19 4.75% Orlando, FL, Utilities Rev., 6.75%, 10/1/17 3.02%
......................................................... ..........................................................
Jacksonville, FL, Sales Tax Rev., 5.65%,
10/1/14 4.36% Gainesville, FL, 6.50%, 10/1/11 2.91%
......................................................... ..........................................................
Orange County, FL, Health Facs. Rev., 6.25%,
10/1/16 4.31% Florida Housing, 5.75%, 7/1/14 2.58%
......................................................... ..........................................................
Total 39.96%
......................................................... ..........................................................
</TABLE>
- ---------------
** The composition of the Fund's holdings is subject to change.
37
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND (as of November 30, 1997)
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
Hypothetical -- Past performance is not a guarantee of future results.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LIPPER INSTITUTIONAL SHARES MERRILL LYNCH
<S> <C> <C> <C>
3/1/94 $10,000. $10,000. $10,000.
6/94 $9,639. $9,686. $9,973.
12/94 $9,542. $9,576. $9,954.
6/95 $10,446. $10,379. $10,855.
12/95 $11,193. $11,166. $11,704.
6/96 $11,021. $10,927. $11,664.
12/96 $11,513. $11,503. $12,235.
6/97 $11,798. $11,829. $12,659.
11/97 $12,252. $12,396. $13,331.
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS AS OF NOV. 30, 1997
INSTITUTIONAL
SHARES
---------
<S> <C>
1 Year 7.06%
3 Year 10.08%
Since Inception (3/1/94) 5.88%
CURRENT SEC 30-DAY YIELD 4.71%
</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 did not
impact the 30-day yield.
- --------------------------------------------------------------------------------
The performance of the Emerald Florida Tax-Exempt Fund is measured against the
Lipper Florida Municipal Debt Funds Average, an equally weighted benchmark
composed of mutual funds, each of which normally invests in companies whose
long-term earnings are expected to grow significantly faster than the earnings
of the bonds represented in the major unmanaged bond indexes and the Merrill
Lynch Municipal Index, an unmanaged index generally representative of the
municipal bond market. The Merrill Lynch Municipal Index does not reflect the
deduction of expenses associated with a mutual fund, such as investment
management and fund accounting fees. The Fund's performance reflects the
deduction of fees for these value-added services.
38
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND (as of November 30, 1997)
- --------------------------------------------------------------------------------
HOW DID THE FUND PERFORM?
For the 12 months ended November 30, 1997, the Fund's total return was 7.06%. In
comparison, the Merrill Lynch Municipal Index rose 8.57%, while the average
Florida municipal debt funds, as tracked by Lipper Analytical Services, Inc.,
rose 5.91%. The Lipper Florida Muni-Debt Index 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. We are very pleased with the Fund's total return. In the
municipal-bond market, where the difference between great and mediocre
performance can be measured in increments of 20 or 30 basis points (0.20% -
0.30%), beating the Fund's Lipper benchmark by 69 basis points is impressive.
It is important to note that investors had the opportunity to receive strong,
current, tax-free income, collecting a total 12-month distribution of $0.5550
per share. This is consistent with the Fund's investment goal of seeking high,
tax-free income from investing primarily in the debt obligations of the State of
Florida or municipalities within the state.
WHAT FACTORS AFFECTED YOUR PERFORMANCE?
We've benefited from keeping our portfolio's duration+ longer than average. Even
during periods of volatility, we stayed long. We believe in remaining
disciplined, in taking a longer term outlook, even when interest rates are
moving against us in the short term. The Asian crisis, while it spurred some
investors to "seek quality" in securities such as U.S. Treasury bonds, had no
material effect on our Fund. In the municipal bond market, events unfurl more
slowly.
But despite brief upward spikes, over the last 12 months interest rates
declined, and these lower interest rates helped our performance. We had
positioned the fund to buy bonds with more "performing-oriented" structures.
This type of security, such as non-callable premiums and discounts, increased in
price (value) as interest rates declined. The reasoning behind our strategy was
that inflation was stable, and our analysis led us to believe that it would stay
low. Benign inflation has been the major force behind a solid performance for
the bond market in general, and for our Fund in particular.
Another factor that helped the Fund was the compression of quality spreads --
the difference in yields between AAA-and BBB-rated bonds. Roughly 25% of our
portfolio is invested in BBB securities. As interest rates have dropped, these
BBB bonds have increased in value in two ways. First, lower interest rates drove
the prices, or value, of these bonds higher. And second, the bonds' relative
value went up even more, because they were worth more than AAA bonds. This
strategy is called "relative value trading," and it served us well during the
last year.
WERE THERE ANY FACTORS THAT HURT YOUR PERFORMANCE?
One of the major reasons for the Fund's underperformance, relative to
Treasuries, over the last couple of months is that there has been a lot of
supply in the marketplace, which dampened the price of the bonds in our
portfolio. With greater supply, you have lower rates, which leads to
refinancings -- which forces us to reinvest money in bonds with lower coupon
rates. But we believe that, going forward, we're going to see supply start to
drop off.
HOW HAS THE FLORIDA ECONOMY IMPACTED THE MUNI-BOND MARKET?
The Florida economy has been excellent. This is a service-based economy, but it
continues to diversify in a healthy manner. In the muni-bond market, Florida
paper always trades very well; there's a lot of demand for it and a great deal
of liquidity. In April, the State of Florida's credit rating was upgraded to
AA+, the second highest rating possible. We don't foresee anything happening in
the near future that would compromise the state's credit rating.
WHAT IS YOUR CURRENT STRATEGY?
We've positioned the portfolio to be a little longer than average in duration.
We're not at all bearish at the moment, which is why we're longer than the
index. We continue to look for values that we feel can enhance the Fund's
performance, consistent with our generally positive outlook for stable or
declining interest rates.
- ---------------
+ "Duration" is a mathematical calculation of the average life of a bond that
takes into account all sources of cash flow. Duration measures how an interest
rate change affects the price of a bond or portfolio of bonds.
39
<PAGE>
INTERVIEW (as of November 30, 1997)
- --------------------------------------------------------------------------------
PHOTO
Jacqueline R.
Lunsford,
CFA
PORTFOLIO MANAGER
20 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
investment team. Prior to joining Barnett, 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 by the full faith and credit of 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.
40
<PAGE>
EMERALD PRIME, TREASURY AND TAX-EXEMPT FUNDS (as of November 30, 1997)
- --------------------------------------------------------------------------------
WHAT FACTORS AFFECTED THE PERFORMANCE OF THE MONEY MARKET FUNDS?
Interest rate movements were not a significant factor this past year. The Fed
raised interest rates just once, at the end of March, and then by only 25 basis
points (0.25%). Although fluctuations in economic indicators and the resulting
perception of impending rate changes did have some impact on market prices from
time to time, for most of the year short-term rates traded in a very narrow
range of plus or minus10 basis points (0.10%). Since the short-term yield curve
has been very flat over the past few months, the greatest challenge has been to
find, and then to take advantage of, any undervalued maturity or issuer sectors
we could find.
Another significant factor has been a continuing supply/demand problem in the
short-term markets, which has kept prices somewhat higher due to the lack of
supply. In addition, past issuers of short-term products are now cash-rich
themselves, which means that they are no longer issuers of securities, but
purchasers, and therefore direct competitors with the investors who used to
purchase their products. This has resulted in too much cash chasing too few
investments.
HOW DO YOU TAKE ADVANTAGE OF INTEREST-RATE MOVES TO GENERATE HIGHER YIELDS FOR
SHAREHOLDERS?
Except to modestly position the average maturities of the Funds in advance of an
anticipated Fed movement, we tend not to make market-timing calls with the
Funds. Instead, we find that continually watching the market and taking
advantage of any undervalued maturity or issuer sectors is one of the best
methods of capturing higher
yields -- and thereby achieving good, steady, overall performance for our
shareholders.
WHAT IS YOUR OUTLOOK FOR THE NEXT SIX TO 12 MONTHS, AND HOW WILL YOU POSITION
THE FUNDS?
We do not expect the Fed to make any changes to interest rates in the near
future due to the problems in the international markets. The economy continues
to perform well, with the greatest pressure currently coming from the labor
sector, which recently posted the lowest unemployment numbers since the early
1970s. However inflation continues to run very low, so we feel that the Fed will
continue their watchful stance. Therefore, we feel that short-term rates will
remain close to current levels throughout much of the first quarter.
41
<PAGE>
EMERALD PRIME, TREASURY AND TAX-EXEMPT FUNDS (as of November 30, 1997)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS AS OF NOV. 30, 1997
PRIME TREASURY TAX-EXEMPT
FUND FUND FUND
--------- --------- ---------
<S> <C> <C> <C>
INSTITUTIONAL SHARES
1 Year 5.39% 5.16% 3.41%
5 Year 4.74% 4.50% 2.98%
Since Inception
(12/7/88) 5.77% 5.47% 3.81%
SERVICE SHARES
1 Year 5.03% 4.80% 2.98%
5 Year 4.39% 4.14% 2.59%
Since Inception
(5/1/90) 4.81% 4.50% 3.01%
</TABLE>
<TABLE>
<CAPTION>
SEC 7-DAY YIELDS AS OF NOV. 30, 1997
INSTITUTIONAL SERVICE
SHARES SHARES
--------- ---------
<S> <C> <C> <C>
Prime Fund 5.30% 4.96%
Treasury Fund 5.08% 4.73%
Tax-Exempt Fund 3.51% 3.23%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
During the periods indicated, fee waivers and/or expense reimbursements were in
effect, although they did not impact the SEC 7-day yields.
42
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
November 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<S> <C> <C>
COMMON STOCKS (95.9%)
AIRLINES (1.4%)
AMR Corp. (b) ................................................................ 33,600 $ 4,071,900
------------
APPAREL (1.1%)
Tommy Hilfiger Corp. (b) ..................................................... 76,400 2,998,700
------------
AUTO PARTS -- ORIGINAL EQUIPMENT MANUFACTURERS (1.0%)
Lear Corp. (b) ............................................................... 59,300 2,775,981
------------
BIOTECHNOLOGY (1.1%)
Elan Corp., PLC ADR (b) ...................................................... 58,100 3,064,775
------------
BUILDING MATERIALS CHAINS (1.2%)
Home Depot, Inc. ............................................................. 61,200 3,423,375
------------
COMPUTER SOFTWARE (4.8%)
Cadence Design Systems, Inc. (b) ............................................. 89,350 2,256,088
Citrix Systems, Inc. (b) ..................................................... 20,700 1,482,638
Computer Associates International, Inc. ...................................... 70,612 3,676,262
McAfee Associates, Inc. (b) .................................................. 67,000 3,065,250
Microsoft Corp. (b) .......................................................... 21,800 3,084,699
------------
13,564,937
------------
COMPUTER/VIDEO CHAINS (1.1%)
CompUSA, Inc. (b) ............................................................ 86,800 3,173,625
------------
CONSTRUCTION/AGRICULTURAL EQUIPMENT (0.8%)
Caterpillar, Inc. ............................................................ 49,800 2,387,288
------------
CONSUMER SPECIALTIES (0.3%)
Blyth Industries, Inc. (b) ................................................... 33,200 852,825
------------
CONTRACT DRILLING (1.4%)
Helmerich & Paine, Inc. ...................................................... 50,900 3,871,581
------------
DISCOUNT CHAINS (1.5%)
Consolidated Stores Corp. (b) ................................................ 89,550 4,354,369
------------
DIVERSIFIED COMMERCIAL SERVICES (1.2%)
Accustaff, Inc. (b) .......................................................... 112,800 3,334,650
------------
</TABLE>
43
<PAGE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<S> <C> <C>
DIVERSIFIED ELECTRONICS (1.1%)
SCI Systems, Inc. (b) ........................................................ 65,300 $ 2,991,556
------------
DIVERSIFIED MANUFACTURING (1.0%)
Minnesota Mining & Manufacturing Co. ......................................... 29,000 2,825,688
------------
ELECTRONIC COMPONENTS (2.1%)
Adaptec, Inc. (b) ............................................................ 47,700 2,361,150
Philips Electronics .......................................................... 55,100 3,691,700
------------
6,052,850
------------
ELECTRONIC DATA PROCESSING (3.1%)
Compaq Computer Corp. (b) .................................................... 66,850 4,173,946
Iomega Corp. (b) ............................................................. 97,100 3,192,162
Quantum Corp. (b) ............................................................ 52,300 1,392,488
------------
8,758,596
------------
ELECTRONIC PRODUCTION EQUIPMENT (0.6%)
Teradyne, Inc. (b) ........................................................... 52,600 1,725,938
------------
ELECTRONICS DISTRIBUTORS (0.8%)
Tech Data Corp. (b) .......................................................... 55,600 2,244,850
------------
ENTERTAINMENT (0.7%)
Gtech Holdings Corp. (b) ..................................................... 65,700 2,114,719
------------
ENVIRONMENTAL SERVICES (1.7%)
Calenergy Co., Inc. (b) ...................................................... 79,400 2,640,050
USA Waste Services, Inc. (b) ................................................. 62,500 2,066,406
------------
4,706,456
------------
FINANCE COMPANIES (1.1%)
Green Tree Financial Corp. ................................................... 101,500 3,108,438
------------
FINANCIAL SERVICES -- DIVERSIFIED (1.8%)
Travelers Group, Inc. ........................................................ 101,349 5,118,125
------------
FOOD CHAINS (1.4%)
Safeway, Inc. (b) ............................................................ 67,000 4,070,250
------------
HOSPITAL/NURSING MANAGEMENT (1.3%)
Tenet Healthcare Corp. (b) ................................................... 114,440 3,626,318
------------
HOTELS & RESORTS (1.4%)
HFS, Inc. (b) ................................................................ 55,600 3,815,550
------------
INTEGRATED OIL COMPANIES (1.6%)
British Petroleum Co. PLC ADR (b) ............................................ 55,358 4,594,714
------------
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<S> <C> <C>
INVESTMENT BANKERS/BROKERS/SERVICES (1.2%)
Morgan Stanley Dean Witter, Discover & Co. ................................... 63,400 $ 3,443,413
------------
LIFE INSURANCE (2.8%)
Conseco, Inc. ................................................................ 69,500 3,236,094
SunAmerica, Inc. ............................................................. 116,100 4,702,050
------------
7,938,144
------------
MAJOR BANKS (2.4%)
BankAmerica Corp. ............................................................ 56,800 4,146,400
Chase Manhattan Corp. ........................................................ 24,700 2,683,038
------------
6,829,438
------------
MAJOR CHEMICALS (1.0%)
Imperial Chemical Industries PLC ADR ......................................... 47,200 2,805,450
------------
MAJOR PHARMACEUTICALS (6.3%)
Dura Pharmaceuticals, Inc. (b) ............................................... 74,600 3,273,075
Eli Lilly & Co. .............................................................. 75,800 4,780,137
Merck & Co., Inc. ............................................................ 46,700 4,416,069
Pfizer, Inc. ................................................................. 73,000 5,310,749
------------
17,780,030
------------
MANAGED HEALTH CARE (1.1%)
MedPartners, Inc. (b) ........................................................ 121,800 3,014,550
------------
MANUFACTURING (1.3%)
Tyco International Ltd. ...................................................... 90,800 3,563,900
------------
MEAT, POULTRY & FISH (1.8%)
ConAgra, Inc. ................................................................ 139,200 5,002,500
------------
MEDICAL SPECIALTIES (5.2%)
Baxter International, Inc. ................................................... 53,400 2,703,375
Boston Scientific Corp. (b) .................................................. 51,500 2,327,156
Bristol Myers Squibb Co. ..................................................... 66,800 6,254,149
Warner Lambert Co. ........................................................... 24,200 3,384,975
------------
14,669,655
------------
MEDICAL/NURSING SERVICES (1.2%)
HEALTHSOUTH Corp. (b) ........................................................ 131,600 3,454,500
------------
MULTI-LINE INSURANCE (1.2%)
Allstate Corp. ............................................................... 40,600 3,486,525
------------
MULTI-SECTOR COMPANIES (3.2%)
General Electric Co. ......................................................... 122,600 9,041,749
------------
</TABLE>
45
<PAGE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<S> <C> <C>
NEWSPAPERS (1.4%)
New York Times Co., Class A .................................................. 65,900 $ 3,912,813
------------
OFFICE EQUIPMENT/SUPPLIES (1.1%)
U.S. Office Products Co. (b) ................................................. 159,300 3,166,088
------------
OFFICE/PLANT AUTOMATION (1.6%)
Cisco Systems, Inc. (b) ...................................................... 52,300 4,510,875
------------
OIL REFINING/MARKETING (1.9%)
USX-Marathon Group ........................................................... 154,300 5,284,775
------------
OIL/GAS DISTRIBUTION (1.4%)
Columbia Gas System, Inc. (b) ................................................ 52,700 3,833,925
------------
OTHER SPECIALTY STORES (1.5%)
Staples, Inc. (b) ............................................................ 150,500 4,242,219
------------
OTHER TELECOMMUNICATIONS (3.1%)
LCI International, Inc. (b) .................................................. 142,500 3,927,656
WorldCom, Inc. (b) ........................................................... 150,400 4,812,799
------------
8,740,455
------------
PACKAGED FOODS (2.5%)
Dean Foods Co. ............................................................... 76,600 4,069,375
Sara Lee Corp. ............................................................... 56,400 2,982,150
------------
7,051,525
------------
PACKAGED GOODS/COSMETICS (0.8%)
Gillette Co. ................................................................. 24,800 2,289,350
------------
PAPER (0.8%)
International Paper Co. ...................................................... 46,500 2,205,844
------------
RECREATIONAL PRODUCTS (0.7%)
Callaway Golf Co. ............................................................ 61,400 1,957,125
------------
RECREATIONAL PRODUCTS & TOYS (1.6%)
Mattel, Inc. ................................................................. 111,600 4,470,975
------------
SEMICONDUCTORS (2.6%)
Intel Corp. .................................................................. 44,400 3,446,550
National Semiconductor Corp. (b) ............................................. 80,900 2,679,813
Texas Instruments, Inc. ...................................................... 26,800 1,319,900
------------
7,446,263
------------
SOFT DRINKS (2.4%)
Panamerican Beverages, Inc. Class A .......................................... 68,600 2,349,550
</TABLE>
46
<PAGE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<S> <C> <C>
SOFT DRINKS (2.4%) (CONTINUED)
PepsiCo, Inc. ................................................................ 122,400 $ 4,513,500
------------
6,863,050
------------
SPECIALTY FOODS/CANDY (1.4%)
Interstate Bakeries Corp. .................................................... 112,800 3,898,650
------------
SPECIALTY RETAILER (2.9%)
Dial Corp. ................................................................... 168,900 3,272,438
General Nutrition Companies (GNC) (b) ........................................ 142,200 4,852,575
------------
8,125,013
------------
STEEL/IRON ORE (0.8%)
USX-United States Steel Group, Inc. .......................................... 71,200 2,229,450
------------
TELECOMMUNICATION EQUIPMENT (2.1%)
ADC Telecommunications, Inc. (b) ............................................. 60,600 2,253,563
Bay Networks, Inc. (b) ....................................................... 74,100 2,227,631
Lucent Technologies .......................................................... 16,600 1,330,075
------------
5,811,269
------------
TOTAL COMMON STOCKS (COST $201,996,700)......................................... 270,697,572
------------
CASH SWEEP ACCOUNT (0.6%)
Bank of New York ............................................................. 1,774,342 1,774,342
------------
TOTAL CASH SWEEP ACCOUNT (COST $1,774,342)...................................... 1,774,342
------------
UNIT INVESTMENT TRUSTS (3.5%)
S&P 400 Mid-Cap Depository Receipts, Series I ................................ 85,300 5,380,564
S&P 500 Depository Receipts, Series I ........................................ 47,500 4,546,641
------------
TOTAL UNIT INVESTMENT TRUSTS (COST $7,770,100).................................. 9,927,205
------------
TOTAL (COST $211,541,142) (A) -- 100.0%......................................... $282,399,119
------------
------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $282,419,916.
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting in excess of federal income tax reporting of $226,021.
Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation....... $ 75,523,082
Unrealized depreciation....... (4,891,126)
------------
Net unrealized appreciation... $ 70,631,956
------------
------------
(b) Represents non-income producing security.
ADR -- American Depository Receipt.
PLC -- Public Limited Company.
See Notes to Financial Statements.
47
<PAGE>
EMERALD EQUITY VALUE FUND
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
November 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<S> <C> <C>
COMMON STOCKS (94.4%)
AEROSPACE (0.9%)
Boeing Co. ................................................................... 3,916 $ 208,038
------------
AIRLINES (2.9%)
AMR Corp. (b) ................................................................ 2,700 327,206
Delta Air Lines, Inc. ........................................................ 2,800 312,025
------------
639,231
------------
ALUMINUM (1.2%)
Aluminum Company of America .................................................. 3,900 262,275
------------
APPAREL (1.5%)
VF Corp. ..................................................................... 7,000 323,313
------------
AUTO PARTS -- ORIGINAL EQUIPMENT MANUFACTURERS (1.5%)
TRW, Inc. .................................................................... 5,900 334,825
------------
CONSTRUCTION/AGRICULTURAL EQUIPMENT (2.2%)
Agco Corp. ................................................................... 5,100 139,613
Caterpillar, Inc. ............................................................ 7,100 340,356
------------
479,969
------------
CONTAINERS & PACKAGING (1.1%)
Crown, Cork & Seal Co., Inc. ................................................. 5,200 253,825
------------
CONTRACT DRILLING (0.4%)
Helmerich & Paine, Inc. ...................................................... 1,200 91,275
------------
DEPARTMENT STORES (2.8%)
Federated Department Stores, Inc. (b) ........................................ 9,200 419,175
Sears, Roebuck & Co. ......................................................... 4,600 210,738
------------
629,913
------------
DIVERSIFIED ELECTRONICS (1.4%)
SCI Systems, Inc. (b) ........................................................ 7,000 320,688
------------
DIVERSIFIED MANUFACTURING (0.7%)
Olin Corp. ................................................................... 3,100 153,450
------------
DRUG STORE CHAINS (1.6%)
Rite Aid Corp. ............................................................... 5,400 355,050
------------
</TABLE>
48
<PAGE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<S> <C> <C>
ELECTRIC UTILITIES: CENTRAL (0.3%)
Illinova Corp. ............................................................... 3,000 $ 72,563
------------
ELECTRIC UTILITIES: EAST (1.8%)
DQE, Inc. .................................................................... 8,000 265,500
New York State Electric & Gas Corp. .......................................... 4,300 132,225
------------
397,725
------------
ELECTRIC UTILITIES: SOUTH (2.2%)
Dominion Resources Inc. ...................................................... 2,900 112,738
Entergy Corp. ................................................................ 5,100 132,600
FPL Group, Inc. .............................................................. 4,400 246,125
------------
491,463
------------
ELECTRONIC DATA PROCESSING (3.6%)
Compaq Computer Corp. (b) .................................................... 3,400 212,287
International Business Machines Corp. ........................................ 5,400 591,637
------------
803,924
------------
ELECTRONIC DATA PROCESSING -- PERIPHERALS (0.5%)
Seagate Technology, Inc. (b) ................................................. 4,700 106,631
------------
ELECTRONIC DATA PROCESSORS (1.3%)
Sun Microsystems, Inc. (b) ................................................... 7,900 284,400
------------
FINANCE COMPANIES (3.3%)
Countrywide Credit Industries, Inc. .......................................... 6,000 245,625
Federal National Mortgage Assoc. ............................................. 6,200 327,437
Finova Group, Inc. ........................................................... 3,300 155,513
------------
728,575
------------
FINANCIAL SERVICES -- DIVERSIFIED (4.3%)
Travelers Group, Inc. ........................................................ 12,879 650,389
Travelers Property Casualty Corp. Class A .................................... 7,500 298,125
------------
948,514
------------
FINANCIAL SERVICES -- DIVERSIFIED (0.3%)
Fleet Financial Group, Inc. .................................................. 1,000 66,063
------------
FLUID CONTROLS (1.5%)
Parker-Hannifin Corp. ........................................................ 7,650 340,425
------------
FOREST PRODUCTS (0.5%)
Weyerhaeuser Co. ............................................................. 2,300 121,469
------------
HEALTH & MEDICAL FACILITIES (1.5%)
Becton Dickenson & Co. (BDX) ................................................. 6,400 330,000
------------
</TABLE>
49
<PAGE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<S> <C> <C>
INDUSTRIAL MACHINERY (1.1%)
Ingersoll-Rand Company ....................................................... 6,200 $ 253,425
------------
INTEGRATED OIL COMPANIES (9.7%)
Amoco Corp. .................................................................. 2,500 225,000
Atlantic Richfield Co. ....................................................... 1,700 138,550
Chevron Corp. ................................................................ 2,500 200,469
Exxon Corp. .................................................................. 9,200 561,199
Mobil Corp. .................................................................. 5,200 374,075
Phillips Petroleum Co. ....................................................... 6,500 314,844
Texaco, Inc. ................................................................. 5,900 333,350
------------
2,147,487
------------
INVESTMENT BANKERS/BROKERS/SERVICES (1.0%)
Lehman Brothers Holdings, Inc. ............................................... 4,500 227,531
------------
MAJOR BANKS (6.6%)
BankAmerica Corp. ............................................................ 6,100 445,299
Chase Manhattan Corp. ........................................................ 2,000 217,250
Citicorp ..................................................................... 900 107,944
First Union Corp. ............................................................ 6,800 331,500
Mellon Bank Corp. ............................................................ 3,200 181,400
NationsBank Corp. ............................................................ 2,700 162,169
------------
1,445,562
------------
MAJOR CHEMICALS (1.5%)
Dow Chemical Co. ............................................................. 3,300 325,875
------------
MAJOR PHARMACEUTICALS (1.4%)
American Home Products Corp. ................................................. 4,400 307,450
------------
MAJOR U.S. TELECOMMUNICATIONS (6.0%)
Ameritech Corp. .............................................................. 5,400 416,137
AT&T Corp. ................................................................... 4,300 240,263
Bell Atlantic Corp. .......................................................... 3,600 321,300
GTE Corp. .................................................................... 7,300 369,105
------------
1,346,805
------------
MID-SIZE BANKS (0.5%)
Bank of Boston Corp. ......................................................... 1,200 106,950
------------
MOTOR VEHICLES (3.6%)
Chrysler Corp. ............................................................... 6,600 226,463
Ford Motor Co. ............................................................... 7,700 331,099
General Motors Corp. ......................................................... 4,000 244,000
------------
801,562
------------
MULTI-SECTOR COMPANIES (1.2%)
Loews Corp. .................................................................. 2,600 275,925
------------
</TABLE>
50
<PAGE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<S> <C> <C>
MULTI-LINE INSURANCE (4.4%)
Allstate Corp. ............................................................... 4,500 $ 386,437
Cigna Corp. .................................................................. 2,000 334,499
Old Republic Intl Corp ....................................................... 7,400 266,863
------------
987,799
------------
NATURAL GAS DISTRIBUTION (0.5%)
Pacific Enterprises .......................................................... 3,000 106,125
------------
NEWSPAPERS (1.3%)
Knight-Ridder, Inc. .......................................................... 5,800 290,725
------------
OFFICE EQUIPMENT/SUPPLIES (1.2%)
Xerox Corp. .................................................................. 3,400 264,138
------------
OIL & GAS DISTRIBUTION (1.6%)
Coastal Corp. ................................................................ 6,200 363,088
------------
OIL REFINING/MARKETING (1.2%)
USX-Marathon Group ........................................................... 7,600 260,300
------------
OTHER TELECOMMUNICATIONS (2.0%)
Bell South ................................................................... 8,100 443,475
------------
PAPER (2.1%)
International Paper Co. ...................................................... 4,109 194,920
Mead Corp. ................................................................... 2,200 142,038
Union Camp Corp. ............................................................. 2,100 126,131
------------
463,089
------------
SAVINGS & LOAN ASSOCIATIONS (2.1%)
Golden West Financial Corp. .................................................. 3,000 268,875
Washington Mutual, Inc. ...................................................... 2,940 203,228
------------
472,103
------------
SEMICONDUCTORS (1.6%)
Applied Materials, Inc. (b) .................................................. 3,400 112,200
Motorola, Inc. ............................................................... 4,000 251,500
------------
363,700
------------
SPECIALTY CHEMICALS (1.5%)
B.F. Goodrich Co. ............................................................ 4,100 182,450
M.A. Hanna Co. ............................................................... 5,900 145,656
------------
328,106
------------
SPECIALTY INSURERS (0.5%)
PMI Group, Inc. .............................................................. 1,800 117,000
------------
</TABLE>
51
<PAGE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<S> <C> <C>
STEEL/IRON ORE (1.1%)
USX-United States Steel Group, Inc. .......................................... 7,900 $ 247,369
------------
TOBACCO (1.4%)
Philip Morris Cos., Inc. ..................................................... 7,300 317,550
------------
TOTAL COMMON STOCKS (COST $18,699,286).......................................... 21,006,743
------------
CASH SWEEP ACCOUNT (2.3%)
Bank of New York ............................................................. 517,042 517,042
------------
TOTAL CASH SWEEP ACCOUNT (COST $517,042)........................................ 517,042
------------
UNIT INVESTMENT TRUSTS (3.5%)
S&P 500 Depository Receipts, Series I ........................................ 8,100 775,322
------------
TOTAL UNIT INVESTMENT TRUSTS (COST $720,406).................................... 775,322
------------
TOTAL (COST $19,936,734) (a) -- 100.2%.......................................... $ 22,299,107
------------
------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $22,264,894.
(a) The cost for financial reporting purposes is substantially the same for
federal income tax purposes and differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation....... $ 2,800,050
Unrealized depreciation....... (437,677)
------------
Net unrealized appreciation... $ 2,362,373
------------
------------
(b) Represents non-income producing security.
See Notes to Financial Statements.
52
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
November 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<S> <C> <C>
COMMON STOCKS (96.4%)
ARGENTINA (2.3%)
ENERGY SOURCES (2.3%)
YPF Sociedad Anonima, Class D, ADR ........................................... 40,150 $ 1,347,534
------------
AUSTRIA (1.1%)
UTILITIES -- ELECTRICAL AND GAS (1.1%)
EVN Energie-Versorgung Nied., ADR ............................................ 24,860 640,819
------------
BRAZIL (4.6%)
SOFT DRINKS (0.6%)
Compania Cervejaria Brahma ................................................... 25,000 332,813
------------
TELECOMMUNICATIONS (1.3%)
Telebras, Preferred Shares, ADR .............................................. 7,300 761,938
------------
UTILITIES -- ELETRICAL AND GAS (2.7%)
Electrobras, ADR ............................................................. 69,450 1,621,476
------------
2,716,227
------------
DENMARK (7.6%)
BANKING (3.3%)
Den Danske Bank, Unsponsored ADR ............................................. 16,310 1,936,018
------------
TELECOMMUNICATIONS (4.3%)
Tele Danmark AS, Class B, ADR ................................................ 84,950 2,537,881
------------
4,473,899
------------
FRANCE (17.9%)
AUTOMOBILES (2.3%)
PSA Peugeot Citroen, ADR ..................................................... 47,300 1,336,036
------------
BANKING (2.3%)
Cie Financiere De Paribus SA ................................................. 10,500 758,577
Societe Generale, ADR ........................................................ 21,600 567,853
------------
1,326,430
------------
ELECTRICAL AND ELECTRONICS (4.0%)
Alcatel Alsthom, ADR ......................................................... 94,400 2,336,400
------------
ENERGY SOURCES (1.7%)
Elf Aquitane, ADR ............................................................ 17,800 1,019,050
------------
</TABLE>
53
<PAGE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<S> <C> <C>
FOOD AND HOUSEHOLD PRODUCTS (4.4%)
Groupe Danone, ADR ........................................................... 80,500 $ 2,575,999
------------
INSURANCE (3.2%)
Assurances Generales de France, ORD .......................................... 33,000 1,878,211
------------
10,472,126
------------
GERMANY (4.5%)
AUTOMOBILES (4.5%)
Daimler-Benz, ADR ............................................................ 37,630 2,657,619
------------
ISRAEL (0.1%)
DATA PROCESSING AND REPRODUCTION (0.1%)
Scitex Corp., Ltd. ........................................................... 3,100 38,363
------------
ITALY (11.7%)
BANKING (5.3%)
Banca Commerciale Italiana ................................................... 367,000 1,051,271
Istituto Mobiliare Italiano, SPA, ADR ........................................ 65,057 2,020,833
------------
3,072,104
------------
INSURANCE (2.0%)
Istit. Nazionale Assic., ADR ................................................. 66,200 1,150,225
------------
TELECOMMUNICATIONS (4.4%)
Telecom Intalia SPA, ADR ..................................................... 41,410 2,572,596
------------
6,794,925
------------
JAPAN (7.0%)
ELECTRICAL AND ELECTRONICS (3.1%)
Hitachi Ltd., ADR ............................................................ 24,900 1,788,131
------------
FINANCIAL SERVICES (0.9%)
Daiwa Securities -- Unsponsored ADR .......................................... 14,500 505,582
Yamaichi Secs, Ltd. Japanese ORD ............................................. 499,000 7,820
------------
513,402
------------
INSURANCE (2.5%)
Tokio Marine & Fire Insurance Co., ADR ....................................... 30,800 1,466,850
------------
OIL & GAS PRODUCTION (0.5%)
Nippon Oil Co. Ltd. .......................................................... 90,000 313,810
------------
4,082,193
------------
MEXICO (2.5%)
TELECOMMUNICATIONS (2.5%)
Telefonos de Mexico, Class L, ADR ............................................ 29,425 1,456,538
------------
</TABLE>
54
<PAGE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<S> <C> <C>
NETHERLANDS (4.6%)
INSURANCE (2.3%)
ING Groep N.V., ADR .......................................................... 33,580 $ 1,368,385
------------
TELECOMMUNICATIONS (2.3%)
Konin. PTT Nederland, ADR .................................................... 33,290 1,342,003
------------
2,710,388
------------
PORTUGAL (1.9%)
ELECTRICAL PRODUCTS (1.9%)
Esc Electricidade De Port (b) ................................................ 60,000 1,084,401
------------
SINGAPORE (3.4%)
BANKING (1.2%)
Develop Bank Singapore -- Sp, ADR ............................................ 18,800 700,300
------------
MULTI-INDUSTRY (2.2%)
Jardine Matheson Holdings Ltd., ADR .......................................... 240,200 1,273,060
------------
1,973,360
------------
SOUTH AFRICA (2.6%)
METALS/STEEL (1.0%)
Iscor, Ltd., ADR ............................................................. 131,700 574,897
------------
MISCELLANEOUS MATERIALS AND COMMODITIES (1.6%)
De Beers Cons. Mines, Unsponsored ADR ........................................ 45,000 939,375
------------
1,514,272
------------
SOUTH KOREA (0.7%)
UTILITIES -- ELETRICAL AND GAS (0.7%)
Korea Electric Power Corp., ADR .............................................. 44,000 398,750
------------
SPAIN (3.4%)
BANKING (1.2%)
Corp. Bancaria de Espana (Argentaria), ADR ................................... 23,400 707,850
------------
TELECOMMUNICATIONS (2.2%)
Telefonica de Espana S.A., ADR ............................................... 15,020 1,299,230
------------
2,007,080
------------
SWITZERLAND (7.3%)
FOOD AND HOUSEHOLD PRODUCTS (5.1%)
Nestle S.A., Registered ADR .................................................. 41,200 3,031,435
------------
TECHNOLOGY SERVICES (2.2%)
Sfr Baloise Holdings (b) ..................................................... 710 1,264,933
------------
4,296,368
------------
</TABLE>
55
<PAGE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<S> <C> <C>
UNITED KINGDOM (13.2%)
BEVERAGES AND TOBACCO (5.6%)
B.A.T. Industries PLC, ADR ................................................... 83,200 $ 1,513,200
Guinness PLC, ADR ............................................................ 40,270 1,823,386
------------
3,336,586
------------
CHEMICALS (1.9%)
Imperial Chemical, ADR ....................................................... 18,400 1,093,650
------------
MISCELLANEOUS MATERIALS AND COMMODITIES (1.1%)
Tate & Lyle PLC-Sponsored ADR ................................................ 20,000 634,158
------------
MULTI-INDUSTRY (3.1%)
BTR PLC, ADR ................................................................. 132,440 1,831,937
------------
TEXTILES (1.5%)
Coats Viyella ................................................................ 166,140 852,331
------------
7,748,662
------------
TOTAL COMMON STOCKS (COST $52,922,574).......................................... 56,413,524
------------
SHORT-TERM INVESTMENTS (5.5%)
CASH SWEEP ACCOUNT (5.5%)
Bank of New York ............................................................. 3,223,153 3,223,153
------------
TOTAL CASH SWEEP ACCOUNT (COST $3,223,153)...................................... 3,223,153
------------
TOTAL (COST $56,145,727) (A) -- 101.7%.......................................... $ 59,636,677
------------
------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $58,536,622.
(a) The cost for financial reporting purposes is substantially the same for
federal income tax purposes and differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation....... $ 7,409,160
Unrealized depreciation....... (3,918,210)
------------
Net unrealized appreciation... $ 3,490,950
------------
------------
(b) Represents non-income producing security.
ADR -- American Depository Receipt.
ORD -- Ordinary.
PLC -- Public Limited Company.
At November 30, 1997, the International Equity Fund's open forward currency
contracts were as follows:
<TABLE>
<CAPTION>
UNREALIZED
DELIVERY CONTRACT CONTRACT CONTRACT MARKET APPRECIATION
CURRENCY DATE PRICE** AMOUNT** VALUE VALUE (DEPRECIATION)
- ---------------------------------------- --------- --------- ------------ --------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Short Contracts:
Italian Lire.......................... 12/01/97 1704.8696 (933,885,487) ($547,775) ($540,427) $ 7,348
Long Contracts:
Italian Lire.......................... 12/05/97 1729.1763 204,066,134 118,013 118,090 77
------------ --------- --------- ------
Total................................. (729,819,353) ($429,762) ($422,337) $ 7,425
------------ --------- --------- ------
------------ --------- --------- ------
</TABLE>
- ---------------
** In local currency.
See Notes to Financial Statements.
56
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
November 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL
AMOUNT MARKET VALUE
------------ --------------
<S> <C> <C>
COMMON STOCKS (91.0%)
ADVERTISING (2.4%)
Valassis Communications, Inc. (b) ................................................. 139,000 $ 4,178,688
--------------
AEROSPACE (1.8%)
BE Aerospace, Inc. (b) ............................................................ 98,300 3,108,738
--------------
APPAREL (0.7%)
Dress Barn (b) .................................................................... 46,600 1,199,950
--------------
AUTO PARTS -- ORIGINAL EQUIPMENT MANUFACTURERS (0.8%)
Lo-Jack Corp. (b) ................................................................. 101,500 1,408,313
--------------
BEVERAGES (2.9%)
Canandaigua Wine Co., Class A (b) ................................................. 105,900 5,069,963
--------------
BUILDING PRODUCTS (1.4%)
Centex Corp. ...................................................................... 39,000 2,471,625
--------------
CLOTHING/SHOES/ACCESSORIES (1.7%)
Pacific Sunwear of California (b) ................................................. 90,900 2,965,613
--------------
COMPUTER SOFTWARE (6.8%)
Computer Horizon Corp. (b) ........................................................ 54,300 1,791,900
Hyperion Software Corp. (b) ....................................................... 64,500 2,779,547
Symantec Corp. (b) ................................................................ 188,900 4,722,499
Systems & Computer Technology Corp. (b) ........................................... 61,100 2,856,425
--------------
12,150,371
--------------
CONSUMER SPECIALTIES (1.1%)
Helen of Troy Limited (b) ......................................................... 135,600 1,932,300
--------------
CONTRACT DRILLING (4.1%)
Cliffs Drilling Co. (b) ........................................................... 66,800 3,707,399
Falcon Drilling Co., Inc. (b) ..................................................... 83,000 2,676,750
Parker Drilling Co. (b) ........................................................... 63,400 836,088
--------------
7,220,237
--------------
DISCOUNT CHAINS (1.0%)
Tuesday Morning Corp. (b) ......................................................... 70,950 1,764,881
--------------
</TABLE>
57
<PAGE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL
AMOUNT MARKET VALUE
------------ --------------
<S> <C> <C>
DIVERSIFIED COMMERCIAL SERVICES (2.1%)
Analysts International ............................................................ 57,900 $ 2,757,488
Source Services Corp. (b) ......................................................... 43,350 904,931
--------------
3,662,419
--------------
DIVERSIFIED MANUFACTURING (2.2%)
Coltec Industries (b) ............................................................. 169,800 3,958,463
--------------
ELECTRONIC COMPONENTS (1.1%)
Encore Wire Corp. (b) ............................................................. 15,900 546,563
Smart Modular Technologies (b) .................................................... 22,600 1,401,200
--------------
1,947,763
--------------
ELECTRONICS DISTRIBUTORS (1.7%)
Windmere Durable Holdings ......................................................... 123,800 2,986,675
--------------
ENVIRONMENTAL SERVICES (2.8%)
Allied Waste Industries (b) ....................................................... 225,200 4,926,250
--------------
FINANCE COMPANIES (2.9%)
Americredit Corp. (b) ............................................................. 143,100 3,953,137
Firstplus Financial Group (b) ..................................................... 30,400 1,159,000
--------------
5,112,137
--------------
FOOD DISTRIBUTORS (6.8%)
Earthgrains Co. ................................................................... 70,100 3,031,825
Suiza Foods Corp. (b) ............................................................. 79,560 4,629,397
Whole Foods Market, Inc. (b) ...................................................... 100,500 4,610,437
--------------
12,271,659
--------------
HEALTH & MEDICAL FACILITIES (1.7%)
Nova Care (b) ..................................................................... 247,000 3,056,625
--------------
HOME BUILDING (2.1%)
Kaufman & Broad Home Corp. ........................................................ 168,900 3,663,019
--------------
HOSPITAL EQUIPMENT FINANCING (1.7%)
Medquist, Inc. (b) ................................................................ 115,800 3,010,800
--------------
INDUSTRIAL MACHINERY (1.6%)
Halter Marine Group, Inc. (b) ..................................................... 100,350 2,797,256
--------------
MAJOR PHARMACEUTICALS (4.6%)
Agouron Pharmaceuticals, Inc. (b) ................................................. 36,400 1,396,850
Alpharma, Inc., Class A ........................................................... 104,200 2,383,575
Rexall Sundown, Inc. (b) .......................................................... 189,400 4,498,249
--------------
8,278,674
--------------
</TABLE>
58
<PAGE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL
AMOUNT MARKET VALUE
------------ --------------
<S> <C> <C>
MANAGED HEALTH CARE (1.2%)
Datascope (b) ..................................................................... 81,800 $ 2,091,013
--------------
MARINE TRANSPORTATION (1.4%)
Hvide Marine, Inc., Class A (b) ................................................... 88,000 2,491,500
--------------
MEDICAL SPECIALTIES (2.7%)
Gulf South Medical Supply, Inc. (b) ............................................... 78,900 2,574,112
Healthdyne Technologies, Inc. (b) ................................................. 103,000 1,976,313
Medical Resources, Inc. (b) ....................................................... 19,000 172,188
--------------
4,722,613
--------------
MOTOR VEHICLES (3.3%)
Federal Mogul Corp. ............................................................... 57,400 2,360,575
Wabash National Corp. ............................................................. 123,800 3,505,087
--------------
5,865,662
--------------
MOVIES & ENTERTAINMENT (0.0%)
Score Board, Inc. (b) ............................................................. 672 756
--------------
MULTI-LINE INSURANCE (1.2%)
Reliance Group Holdings ........................................................... 160,300 2,043,825
--------------
OFFICE EQUIPMENT & SUPPLIES (1.8%)
Interface, Inc. ................................................................... 103,500 3,105,000
--------------
OIL REFINING & MARKETING (0.7%)
Newpark Resources, Inc. (b) ....................................................... 62,200 1,240,113
--------------
OILFIELD SERVICES & EQUIPMENT (1.0%)
Key Energy Group, Inc. (b) ........................................................ 76,400 1,857,475
--------------
OTHER COMMERCIAL SERVICES (1.1%)
Prepaid Legal Services (b) ........................................................ 65,800 1,862,963
--------------
PROPERTY -- CASUALTY INSURERS (1.9%)
Everest Reinsurance Holdings ...................................................... 53,900 2,044,831
Lennar Corp. ...................................................................... 67,000 1,398,625
--------------
3,443,456
--------------
SAVINGS & LOAN ASSOCIATIONS (7.5%)
Albank Financial Corp. ............................................................ 37,900 1,752,875
Bank United Corp., Class A ........................................................ 45,900 1,927,800
Firstfed Financial Corp. (b) ...................................................... 62,300 2,273,950
Golden State Bancorp (b) .......................................................... 146,200 4,870,287
St. Paul Bancorp, Inc. ............................................................ 106,500 2,609,250
--------------
13,434,162
--------------
</TABLE>
59
<PAGE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL
AMOUNT MARKET VALUE
------------ --------------
<S> <C> <C>
SEMICONDUCTORS (0.6%)
Adflex Solutions, Inc. (b) ........................................................ 56,800 $ 1,095,175
--------------
SMALLER BANKS (1.8%)
Imperial Bancorp (b) .............................................................. 69,235 3,232,409
--------------
SOLID WASTE DISPOSAL (1.2%)
American Disposal Services (b) .................................................... 59,100 2,105,438
--------------
SPECIALTY RETAILER (3.5%)
Fingerhut Companies, Inc. ......................................................... 159,600 3,311,699
General Nutrition Companies (GNC) (b) ............................................. 82,500 2,815,313
--------------
6,127,012
--------------
TELECOMMUNICATION EQUIPMENT (0.5%)
Digital Microwave Corp. (b) ....................................................... 61,000 960,750
--------------
TRUCKING (3.6%)
Consolidated Freightways Corp. (b) ................................................ 173,100 2,704,687
Yellow Corp. (b) .................................................................. 136,700 3,605,462
--------------
6,310,149
--------------
TOTAL COMMON STOCKS (COST $140,643,839).............................................. 161,131,890
--------------
CASH SWEEP ACCOUNT (9.1%)
Bank of New York .................................................................. 16,203,578 16,203,578
--------------
TOTAL CASH SWEEP ACCOUNT (COST $16,203,578).......................................... 16,203,578
--------------
TOTAL (COST $156,847,417) (a) -- 100.1%.............................................. $ 177,335,468
--------------
--------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of 177,158,655.
(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....... $ 25,152,437
Unrealized depreciation....... (4,664,386)
------------
Net unrealized appreciation... $ 20,488,051
------------
------------
(b) Represents non-income producing security.
See Notes to Financial Statements.
60
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
November 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT MARKET VALUE
------------ -------------
<S> <C> <C> <C>
COMMON STOCKS (59.6%)
AIRLINES (0.9%)
AMR Corp. (b) ................................................................... 6,300 $ 763,481
-------------
APPAREL (0.7%)
Tommy Hilfiger Corp. (b) ........................................................ 14,300 561,275
-------------
AUTO PARTS -- ORIGINAL EQUIPMENT MANUFACTURERS (0.6%)
Lear Corp. (b) .................................................................. 11,000 514,938
-------------
BIOTECHNOLOGY (0.8%)
Elan Corp., PLC ADR (b) ......................................................... 12,300 648,825
-------------
BUILDING MATERIALS CHAINS (0.8%)
Home Depot, Inc. ................................................................ 11,500 643,281
-------------
COMPUTER SOFTWARE (3.0%)
Cadence Design Systems, Inc. (b) ................................................ 16,600 419,150
Citrix Systems, Inc. (b) ........................................................ 3,800 272,175
Computer Associates International, Inc. ......................................... 13,050 679,415
McAfee Associates, Inc. (b) ..................................................... 12,300 562,725
Microsoft Corp. (b) ............................................................. 4,100 580,150
-------------
2,513,615
-------------
COMPUTER/VIDEO CHAINS (0.7%)
CompUSA, Inc. (b) ............................................................... 16,300 595,969
-------------
CONSTRUCTION/AGRICULTURAL EQUIPMENT (0.5%)
Caterpillar, Inc. ............................................................... 9,300 445,819
-------------
CONSUMER SPECIALTIES (0.2%)
Blyth Industries, Inc. (b) ...................................................... 6,100 156,694
-------------
CONTRACT DRILLING (0.8%)
Helmerich & Paine, Inc. ......................................................... 8,500 646,531
-------------
DISCOUNT CHAINS (1.0%)
Consolidated Stores Corp. (b) ................................................... 16,825 818,116
Tuesday Morning Corp. (b) ....................................................... 1,350 33,581
-------------
851,697
-------------
</TABLE>
61
<PAGE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT MARKET VALUE
------------ -------------
<S> <C> <C> <C>
DIVERSIFIED COMMERCIAL SERVICES (0.7%)
Accustaff, Inc. (b) ............................................................. 21,200 $ 626,725
-------------
DIVERSIFIED ELECTRONICS (0.7%)
SCI Systems, Inc. (b) ........................................................... 12,500 572,656
-------------
DIVERSIFIED MANUFACTURING (0.8%)
Coltec Industries (b) ........................................................... 7,300 170,181
Minnesota Mining & Manufacturing Co. ............................................ 5,300 516,419
-------------
686,600
-------------
ELECTRONIC COMPONENTS (1.3%)
Adaptec, Inc. (b) ............................................................... 8,800 435,600
Philips Electronics ............................................................. 10,300 690,100
-------------
1,125,700
-------------
ELECTRONIC DATA PROCESSING (1.9%)
Compaq Computer Corp. (b) ....................................................... 12,300 767,980
Iomega Corp. (b) ................................................................ 18,100 595,038
Quantum Corp. (b) ............................................................... 9,600 255,600
-------------
1,618,618
-------------
ELECTRONIC PRODUCTION EQUIPMENT (0.4%)
Teradyne, Inc. (b) .............................................................. 9,600 315,000
-------------
ELECTRONICS DISTRIBUTORS (0.5%)
Tech Data Corp. (b) ............................................................. 10,500 423,938
-------------
ENTERTAINMENT (0.5%)
Gtech Holdings Corp. (b) ........................................................ 12,200 392,688
-------------
ENVIRONMENTAL SERVICES (1.0%)
Calenergy Co., Inc. (b) ......................................................... 14,700 488,775
USA Waste Services, Inc. (b) .................................................... 11,700 386,831
-------------
875,606
-------------
FINANCE COMPANIES (0.8%)
Americredit Corp. (b) ........................................................... 3,100 85,638
Green Tree Financial Corp. ...................................................... 19,100 584,937
-------------
670,575
-------------
FINANCIAL SERVICES -- DIVERSIFIED (1.1%)
Travelers Group, Inc. ........................................................... 19,050 962,025
-------------
FOOD CHAINS (0.9%)
Safeway, Inc. (b) ............................................................... 12,600 765,450
-------------
HOSPITAL/NURSING MANAGEMENT (0.8%)
Tenet Healthcare Corp. (b) ...................................................... 21,240 673,043
-------------
</TABLE>
62
<PAGE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT MARKET VALUE
------------ -------------
<S> <C> <C> <C>
HOTELS & RESORTS (0.8%)
HFS, Inc. (b) ................................................................... 10,400 $ 713,700
-------------
INTEGRATED OIL COMPANIES (1.0%)
British Petroleum Co. PLC ADR (b) ............................................... 10,371 860,793
-------------
INVESTMENT BANKERS/BROKERS/SERVICES (0.7%)
Morgan Stanley Dean Witter, Discover & Co. ...................................... 11,700 635,456
-------------
LIFE INSURANCE (1.7%)
Conseco, Inc. ................................................................... 13,000 605,313
SunAmerica, Inc. ................................................................ 21,750 880,875
-------------
1,486,188
-------------
MAJOR BANKS (1.5%)
BankAmerica Corp. ............................................................... 10,500 766,500
Chase Manhattan Corp. ........................................................... 4,600 499,675
-------------
1,266,175
-------------
MAJOR CHEMICALS (0.6%)
Imperial Chemical Industries PLC ADR ............................................ 8,700 517,106
-------------
MAJOR PHARMACEUTICALS (3.8%)
Dura Pharmaceuticals, Inc. (b) .................................................. 13,700 601,088
Eli Lilly & Co. ................................................................. 14,100 889,180
Merck & Co., Inc. ............................................................... 8,600 813,238
Pfizer, Inc. .................................................................... 13,500 982,124
-------------
3,285,630
-------------
MANAGED HEALTH CARE (0.5%)
MedPartners, Inc. (b) ........................................................... 17,600 435,600
-------------
MANUFACTURING (0.8%)
Tyco International Ltd. ......................................................... 16,800 659,400
-------------
MEAT, POULTRY & FISH (1.1%)
ConAgra, Inc. ................................................................... 26,200 941,563
-------------
MEDICAL SPECIALTIES (3.2%)
Baxter International, Inc. ...................................................... 9,900 501,188
Boston Scientific Corp. (b) ..................................................... 9,500 429,281
Bristol Myers Squibb Co. ........................................................ 12,600 1,179,674
Warner Lambert Co. .............................................................. 4,400 615,450
-------------
2,725,593
-------------
MEDICAL/HOSPITALS (0.2%)
MedPartners, Inc. (b) ........................................................... 5,300 131,175
-------------
</TABLE>
63
<PAGE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT MARKET VALUE
------------ -------------
<S> <C> <C> <C>
MEDICAL/NURSING SERVICES (0.7%)
HEALTHSOUTH Corp. (b) ........................................................... 23,800 $ 624,750
-------------
MULTI-LINE INSURANCE (0.7%)
Allstate Corp. .................................................................. 7,400 635,475
-------------
MULTI-SECTOR COMPANIES (1.9%)
General Electric Co. ............................................................ 21,400 1,578,249
-------------
NEWSPAPERS (0.9%)
New York Times Co., Class A ..................................................... 12,400 736,250
-------------
OFFICE EQUIPMENT/SUPPLIES (0.7%)
U.S. Office Products Co. (b) .................................................... 29,850 593,269
-------------
OFFICE/PLANT AUTOMATION (1.0%)
Cisco Systems, Inc. (b) ......................................................... 9,700 836,625
-------------
OIL REFINING/MARKETING (1.1%)
USX-Marathon Group .............................................................. 28,500 976,125
-------------
OIL/GAS DISTRIBUTION (0.9%)
Columbia Gas System, Inc.(b) .................................................... 10,400 756,600
-------------
OTHER SPECIALTY STORES (0.9%)
Staples, Inc. (b) ............................................................... 27,875 785,727
-------------
OTHER TELECOMMUNICATIONS (1.9%)
Lci International, Inc. (b) ..................................................... 26,200 722,138
WorldCom, Inc. (b) .............................................................. 28,200 902,399
-------------
1,624,537
-------------
PACKAGED FOODS (1.5%)
Dean Foods Co. .................................................................. 14,200 754,375
Sara Lee Corp. .................................................................. 10,500 555,188
-------------
1,309,563
-------------
PACKAGED GOODS/COSMETICS (0.5%)
Gillette Co. .................................................................... 4,700 433,869
-------------
PAPER (0.5%)
International Paper Co. ......................................................... 8,500 403,219
-------------
RECREATIONAL PRODUCTS (0.4%)
Callaway Golf Co. ............................................................... 11,400 363,375
-------------
</TABLE>
64
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P SHARES OR
RATINGS PRINCIPAL
(UNAUDITED) AMOUNT MARKET VALUE
----------- ------------ --------------
<S> <C> <C> <C>
RECREATIONAL PRODUCTS & TOYS (1.0%)
Mattel, Inc. .................................................... 21,000 $ 841,313
--------------
SAVINGS & LOAN ASSOCIATIONS (0.1%)
St. Paul Bancorp, Inc. .......................................... 3,450 84,525
--------------
SEMICONDUCTORS (1.6%)
Intel Corp. ..................................................... 8,200 636,525
National Semiconductor Corp. (b) ................................ 14,800 490,250
Texas Instruments, Inc. ......................................... 5,000 246,250
--------------
1,373,025
--------------
SMALLER BANKS (0.1%)
Imperial Bancorp (b) ............................................ 2,195 102,479
--------------
SOFT DRINKS (1.5%)
Panamerican Beverages, Inc. Class A ............................. 12,600 431,550
PepsiCo, Inc. ................................................... 23,000 848,125
--------------
1,279,675
--------------
SPECIALTY FOODS/CANDY (0.9%)
Interstate Bakeries Corp. ....................................... 21,200 732,725
--------------
SPECIALTY RETAILER (1.8%)
Dial Corp. ...................................................... 31,300 606,438
General Nutrition Companies (GNC) (b) ........................... 26,700 911,137
--------------
1,517,575
--------------
STEEL/IRON ORE (0.4%)
USX-United States Steel Group, Inc. ............................. 11,200 350,700
--------------
TELECOMMUNICATION EQUIPMENT (1.3%)
ADC Telecommunications, Inc. (b) ................................ 11,500 427,656
Bay Networks Inc (b) ............................................ 13,700 411,856
Lucent Technologies ............................................. 3,100 248,388
--------------
1,087,900
--------------
TOTAL COMMON STOCKS (COST $38,445,269)............................. 50,736,678
--------------
CORPORATE OBLIGATIONS (18.4%)
BANKS -- REGIONAL (1.2%)
Bankamerica Capital, 6.33%*, 1/15/98 ............................ Aa3/A- $ 1,000,000 988,362
--------------
ELECTRIC UTILITIES (2.1%)
Northern States Power Co., Minnesota, 5.50%, 2/1/99 ............. Aa3/AA- 750,000 745,383
Wisconsin Electric Power Co., 9.13%, 9/1/24 ..................... Aa2/AA+ 1,000,000 1,061,209
--------------
1,806,592
--------------
</TABLE>
65
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P SHARES OR
RATINGS PRINCIPAL
(UNAUDITED) AMOUNT MARKET VALUE
----------- ------------ --------------
<S> <C> <C> <C>
ELECTRIC UTILITIES -- CENTRAL (0.6%)
Central Illinois Public Service Co., Callable 5/15/98 @ 105.95,
8.50%, 5/15/22 ................................................ Aa1/AA+ $ 500,000 $ 532,441
--------------
ELECTRIC UTILITIES -- EAST (1.4%)
Citizens Utilities Co., Putable 8/15/03 @ 100, 6.80%, 8/15/26 ... Aa3/AA+ 1,150,000 1,197,661
--------------
ELECTRICAL PRODUCTS (0.7%)
General Electric Capital Corp., Putable 9/20/98 @ 100, 8.30%,
9/20/09 ....................................................... Aaa/AAA 500,000 575,067
--------------
FINANCE COMPANIES (0.6%)
Ford Motor Credit Co., Medium Term Note, 6.80%, 4/23/01 ......... A1/A 500,000 508,136
--------------
FINANCIAL SERVICES (2.3%)
Hutchison Whampo, Putable 8/1/09 @ 100, 6.99%, 8/1/37 ........... A3/A+ 1,000,000 954,441
Norwest Financial Inc, 7.25%, 3/15/00 ........................... Aa3/AA- 1,000,000 1,022,892
--------------
1,977,333
--------------
FINANCIAL SERVICES -- DIVERSIFIED (2.2%)
American Express Credit Corp., Debenture, 8.50%, 6/15/99 ........ Aa3/A+ 350,000 361,229
Travelers Commercial Credit, Putable 6/1/02 @ 100, 6.63%,
6/1/15 ........................................................ A1/A+ 1,500,000 1,511,834
--------------
1,873,063
--------------
INVESTMENT BANKERS/BROKERS (1.2%)
Merrill Lynch & Co., Inc., 6.70%, 8/1/00 ........................ Aa3/AA- 1,000,000 1,012,128
--------------
MAJOR BANKS (0.7%)
Interamerican Development Bank, Debenture, Putable 9/1/99 @ 100,
8.40%, 9/1/09 ................................................. Aaa/AAA 500,000 589,060
--------------
MAJOR U.S. TELECOMMUNICATIONS (2.5%)
A T & T Corp., Senior Notes, Callable 1/15/02 @ 103.21, 8.13%,
1/15/22 ....................................................... Aa3/AA- 400,000 427,805
Chesapeake & Potomac Telephone Co. of Maryland, Debenture, 8.00%,
10/15/29 ...................................................... Aa2/AA 500,000 588,821
NYNEX Capital Funding Co., Variable Rate Medium Term Note, 7.63%,
10/15/09 ...................................................... A2/A+ 875,000 995,158
Pacific Telephone & Telegraph Co., Debenture, Putable 10/15/99 @
100, 7.25%, 2/1/08 ............................................ A1/AA- 50,000 50,806
--------------
2,062,590
--------------
MOTOR VEHICLES (0.3%)
General Motors Acceptance Corp., Medium Term Note, Putable 6/1/00
@ 100, 8.88%, 6/1/10 .......................................... A3/A- 250,000 297,651
--------------
</TABLE>
66
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P SHARES OR
RATINGS PRINCIPAL
(UNAUDITED) AMOUNT MARKET VALUE
----------- ------------ --------------
<S> <C> <C> <C>
MULTI-LINE INSURANCE (0.6%)
CNA Financial Corp., Senior Note, 8.88%, 3/1/98 ................. A3/A- $ 500,000 $ 503,607
--------------
OIL & GAS (0.2%)
Texaco Capital Income, Inc., Debenture, 8.65%, 1/30/98 .......... A1/A+ 150,000 150,649
--------------
SOFT DRINKS (0.6%)
Coca-Cola Enterprises, Inc., 8.00%, 1/4/05 ...................... A3/A+ 500,000 553,354
--------------
SPECIALTY RETAILER (1.2%)
Safeco Capital Trust I, 8.07%, 7/15/37 .......................... NR/A 1,000,000 1,020,621
--------------
TOTAL CORPORATE OBLIGATIONS (COST $15,235,754)..................... 15,648,315
--------------
TAXABLE MUNICIPAL BONDS (1.2%)
CALIFORNIA (1.2%)
Los Angeles Airport, (Insured by AMBAC), 5.50%, 5/15/98 ......... Aaa/AAA** 1,000,000 999,181
--------------
TOTAL TAXABLE MUNICIPAL BONDS (COST $995,155)...................... 999,181
--------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (13.8%)
FEDERAL HOME LOAN MORTGAGE CORP. (4.7%)
Federal Home Loan Mortgage Corp., CMO 138-D PAC, 8.50%,
2/15/21 ....................................................... Aaa/AAA** 124,361 127,002
Federal Home Loan Mortgage Corp., Gold #D68937, 6.00%, 3/1/26 ... Aaa/AAA** 312,552 300,353
Federal Home Loan Mortgage Corp., Gold Pool #E20195, 7.50%,
9/1/10 ........................................................ Aaa/AAA** 2,118,784 2,173,385
Federal Home Loan Mortgage Corp., Pool #288434, 8.00%, 7/1/10 ... Aaa/AAA** 228,296 233,979
Federal Home Loan Mortgage Corp., Pool #E20195, 6.20%, 9/8/08 ... Aaa/NR** 660,000 640,626
Federal Home Loan Mortgage Corp., Pool #M80052, 8.50%, 7/1/98 ... Aaa/AAA** 73,300 74,396
Federal Home Loan Mortgage Corp., Pool #M80099, 8.00%, 6/1/99 ... Aaa/AAA** 120,872 123,662
Federal Home Loan Mortgage Corp., Pool #M90384, 8.50%, 2/1/00 ... Aaa/AAA** 319,111 326,703
--------------
4,000,106
--------------
FEDERAL NATIONAL MORTGAGE ASSOC. (7.7%)
Federal National Mortgage Assoc., 7.00%, 5/1/27 ................. Aaa/AAA** 657,051 659,613
Federal National Mortgage Assoc., Pool #124975, 7.50%, 8/1/08 ... Aaa/AAA** 642,654 659,106
Federal National Mortgage Assoc., Pool #354613, 7.50%, 9/1/26 ... Aaa/AAA** 209,131 213,623
Federal National Mortgage Assoc., Pool #358033, 7.50%, 9/1/26 ... Aaa/AAA** 439,334 448,771
Federal National Mortgage Assoc., Pool #50609, Participation
Certificate, 8.00%, 6/1/99 .................................... Aaa/AAA** 153,906 157,147
Federal National Mortgage Association., 6.35%, 6/10/05 .......... Aaa/NR** 500,000 505,743
</TABLE>
67
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P SHARES OR
RATINGS PRINCIPAL
(UNAUDITED) AMOUNT MARKET VALUE
----------- ------------ --------------
<S> <C> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOC. (7.7%) (CONTINUED)
Federal National Mortgage Association, Pool #247516, 8.50%,
8/1/11 ........................................................ Aaa/AAA** $ 1,134,121 $ 1,201,692
Federal National Mortgage Association, CMO 1991-1G PAC, 7.00%,
1/25/21 ....................................................... Aaa/AAA** 790,730 786,676
Federal National Mortgage Association, Medium Term Note, 6.14%,
1/21/04 ....................................................... Aaa/NR** 1,000,000 982,213
Federal National Mortgage Association, Medium Term Note, 6.48%,
2/18/04 ....................................................... Aaa/NR** 1,000,000 991,151
--------------
6,605,735
--------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (1.1%)
Government National Mortgage Assoc., Pool #445647, 7.50%,
6/15/27 ....................................................... Aaa/AAA** 219,111 223,736
Government National Mortgage Assoc., Pool #430065, 7.50%,
9/15/26 ....................................................... Aaa/AAA** 444,122 453,618
Government National Mortgage Assoc., Pool #432700, 7.50%,
6/15/26 ....................................................... Aaa/AAA** 207,371 211,804
Government National Mortgage Assoc., Pool #220063, 10.00%,
2/15/18 ....................................................... Aaa/AAA** 7,642 8,398
--------------
897,556
--------------
U.S. TREASURY STRIPS (0.3%)
U.S. Treasury Strip, 8/15/08 .................................... Aaa/AAA** 500,000 263,589
--------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (COST $11,407,507)........ 11,766,986
--------------
U.S. GOVERNMENT OBLIGATIONS (4.6%)
U.S. TREASURY BONDS (3.5%)
U.S. Treasury Bonds, 9.25%, 2/15/16 ............................. Aaa/AAA** 500,000 670,157
U.S. Treasury Bonds, 6.75%, 8/15/26 ............................. Aaa/AAA** 1,075,000 1,165,703
U.S. Treasury Bonds, Callable 8/15/08 @ 100, 12.00%, 8/15/13 .... Aaa/AAA** 500,000 730,626
U.S. Treasury Bonds, 5.75%, 11/15/00 ............................ Aaa/AAA** 425,000 424,336
--------------
2,990,822
--------------
U.S. TREASURY NOTES (1.1%)
U.S. Treasury Notes, 7.00%, 7/15/06 ............................. Aaa/NR** 200,000 214,250
U.S. Treasury Notes, 5.75%, 10/31/02 ............................ Aaa/AAA** 750,000 746,485
--------------
960,735
--------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(COST $3,780,544)................................................. 3,951,557
--------------
CASH SWEEP ACCOUNT (1.0%)
Bank of New York ................................................ 871,766 871,766
--------------
TOTAL CASH SWEEP ACCOUNT (COST $871,766)........................... 871,766
--------------
</TABLE>
68
<PAGE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT MARKET VALUE
--------- -------------
<S> <C> <C>
UNIT INVESTMENT TRUSTS (1.4%)
S&P 400 Mid-Cap Depository Receipts, Series I ........................................ 14,900 $ 939,864
S&P 500 Depository Receipts, Series I ................................................ 2,500 239,297
-------------
TOTAL UNIT INVESTMENT TRUSTS (COST $922,433)............................................ 1,179,161
-------------
TOTAL (COST $71,658,428) (a) -- 100.0% ................................................. $ 85,153,644
-------------
-------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $85,160,041.
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting in excess of federal income tax reporting of $10,079.
Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation....... $ 14,402,879
Unrealized depreciation....... (917,742)
------------
Net unrealized appreciation... $ 13,485,137
------------
------------
(b) Represents non-income producing security.
* Represents variable rate security. Rate presented reflects interest rate in
effect on November 30, 1997.
** Implied Rating.
ADR -- American Depository Receipt.
AMBAC -- AMBAC Indemnity Corporation.
CMO -- Collateralized Mortgage Obligation.
NA -- Not Applicable.
PAC -- Planned Amortization Class.
PLC -- Public Limited Company.
See Notes to Financial Statements
69
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
November 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S/S&P
RATINGS PRINCIPAL
(UNAUDITED) AMOUNT MARKET VALUE
----------- ------------ -------------
<S> <C> <C> <C>
CORPORATE OBLIGATIONS (65.1%)
BANKS -- REGIONAL (4.7%)
BankAmerica Capital BAC, 6.33%*, 1/15/98 ............................ Aa3/A- $ 4,000,000 $ 3,953,448
Southtrust Bank, Alabama, Putable 2/6/01 @ 100, 5.58%, 2/6/06 ....... A1/A 700,000 682,889
-------------
4,636,337
-------------
COMPUTER SOFTWARE (2.0%)
IBM Corp, Corporate Bond, 6.04%, 8/7/00 ............................. A1/A 2,000,000 1,998,060
-------------
CONSTRUCTION/AGRICULTURAL EQUIPMENT (2.6%)
Caterpillar Finance Corp., Medium Term Note, 6.84%, 9/15/99 ......... A2/A+ 1,000,000 1,011,033
John Deere Capital Corp., Medium Term Note, 6.00%, 2/1/99 ........... A2/A 1,500,000 1,500,176
-------------
2,511,209
-------------
DEPARTMENT STORES (2.6%)
Sears Roebuck Acceptance Corp., Medium Term Note, Series I, Putable
11/15/00 @ 100, 6.15%, 11/15/05 ................................... A2/A- 1,000,000 1,006,491
Sears Roebuck Acceptance Corp., Medium Term Note, Series I, Putable
11/15/00 @ 100, 6.11%, 11/15/05 ................................... A2/A- 1,500,000 1,510,145
-------------
2,516,636
-------------
DIVERSIFIED ELECTRONIC PRODUCTS (3.1%)
Harris Corp., Corporate Note, Putable 8/1/01 @ 100, 6.65%, 8/1/06 ... A3/A- 2,950,000 3,007,035
-------------
ELECTRIC UTILITIES (5.5%)
Arizona Public Service, Corporate Note, 5.75%, 9/15/00 .............. Baa1/BBB 1,700,000 1,672,220
Carolina Power & Light, Corporate Note, 6.13%, 2/1/00 ............... A2/A 1,345,000 1,344,161
Southern California Edison, Corporate Note, 5.88%, 1/15/01 .......... A3/A 900,000 892,244
Southern California Edison, Series 93-E, Corporate Note, 5.45%,
6/15/98 ........................................................... A2/A+ 750,000 747,862
Virginia Electric & Power, Series D, Medium Term Note, 7.91%,
12/13/01 .......................................................... A3/A- 700,000 739,019
-------------
5,395,506
-------------
ELECTRICAL PRODUCTS (3.1%)
Black & Decker, 6.63%, 11/15/2000 ................................... Baa2/BBB- 3,000,000 3,024,333
-------------
FINANCE COMPANIES (7.0%)
Associates Corp., 5.78%*, 2/21/98 ................................... Aa3/AA- 4,000,000 3,987,600
Chase Capital II, 6.25%*, 2/1/98 .................................... Aa3/BBB+ 3,000,000 2,878,017
-------------
6,865,617
-------------
FINANCIAL SERVICES (9.2%)
American Express Master Trust 92, Corporate Bond, 6.60%, 7/15/99 .... Aaa/AAA 3,380,000 3,407,850
Commercial Credit, 10.00%, 05/01/99 ................................. A1/A+ 1,000,000 1,050,151
Paine Webber Group, Corporate Note, 6.25%, 6/15/98 .................. Baa1/BBB+ 2,000,000 2,000,816
Residential Accredit Loans, Inc., 6.75%, 9/25/27 .................... NR/AAA 2,500,000 2,489,050
-------------
8,947,867
-------------
FINANCIAL SERVICES -- DIVERSIFIED (1.0%)
TransAmerica Finance Corp., Corporate Bond, 6.38%, 11/15/01 ......... A3/A+ 1,000,000 1,000,668
-------------
</TABLE>
70
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P
RATINGS PRINCIPAL
(UNAUDITED) AMOUNT MARKET VALUE
----------- ------------ -------------
<S> <C> <C> <C>
FOREIGN GOVERNMENT ISSUES (4.1%)
Croatia Government National, 7.00%, 2/27/02 ......................... Baa3/BBB- $ 2,000,000 $ 1,905,000
Province of Quebec, Corporate Note, 7.50%, 7/15/02 .................. A2/A+ 2,000,000 2,086,440
-------------
3,991,440
-------------
INVESTMENT BANKERS (4.9%)
Donaldson, Lufkin & Jenrette, Medium Term Note, Putable 2/15/01 @
100, 5.63%, 2/15/16 ............................................... Baa1/A- 1,000,000 985,477
Goldman Sachs, Corporate Note 144a**, 6.20%, 12/15/00 ............... A1/A+ 1,000,000 991,559
Lehman Brothers Holdings, Corporate Bond, Putable 5/15/00 @ 100,
7.38%, 5/15/07 .................................................... Baa1/A 2,000,000 2,132,204
Merrill Lynch & Co., Inc., Corporate Note, 10.38%, 2/1/99 ........... Aa3/AA- 149,000 156,063
Morgan Stanley Group, Inc., Corporate Note, 7.50%, 9/1/99 ........... A1/A+ 500,000 510,890
-------------
4,776,193
-------------
MOTOR VEHICLES (7.2%)
Ford Motor Credit Co., Medium Term Note, 5.67%, 2/15/01 ............. A1/A 1,500,000 1,475,856
Ford Motor Credit Co., Medium Term Note, 6.11%, 12/28/01 ............ A1/A 1,000,000 991,613
General Motors Acceptance Corp., Corporate Bond, 5.63%, 2/25/00 ..... A3/A- 1,000,000 986,536
General Motors Acceptance Corp., 5.91%*, 1/29/98 .................... A3/A- 3,500,000 3,505,772
-------------
6,959,777
-------------
NON U.S. BANKS (2.3%)
Banco Latinoamericano, Medium Term Note**, 7.05%, 7/19/99 ........... Baa2/BBB 2,250,000 2,261,025
-------------
PACKAGED GOODS/COSMETICS (1.8%)
Federal Express, Corporate Note, 9.88%, 4/1/02 ...................... Baa2/BBB 1,586,000 1,789,547
-------------
RAILROADS (3.0%)
Mass Transit Railway, 6.00% 10/1/00 ................................. A3/A+ 3,000,000 2,934,351
-------------
RENTAL / LEASING COMPANIES (1.0%)
AT&T Capital Corp., Medium Term Note, 7.80%, 2/10/98 ................ Baa3/BBB 1,000,000 1,003,477
-------------
TOTAL CORPORATE OBLIGATIONS (COST $63,376,023)......................... 63,619,078
-------------
TAXABLE MUNICIPAL BONDS (1.0%)
CALIFORNIA (1.0%)
Los Angeles Airport, (Insured by AMBAC), 5.50%, 5/15/98 ............. Aaa/AAA 1,000,000 999,181
-------------
TOTAL TAXABLE MUNICIPAL BONDS (COST $991,968).......................... 999,181
-------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (18.4%)
FEDERAL HOME LOAN BANK (0.5%)
Federal Home Loan Bank, 6.32%, 12/26/00 ............................. Aaa/NR*** 500,000 498,978
-------------
FEDERAL HOME LOAN MORTGAGE CORP. (2.2%)
Federal Home Loan Mortgage Corp., 5.50%, 7/1/2001 ................... Aaa/AAA*** 1,291,002 1,271,921
Federal Home Loan Mortgage Corp., Pool #L74041, 7.50%, 9/1/01 ....... Aaa/AAA*** 843,695 860,383
-------------
2,132,304
-------------
</TABLE>
71
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P
RATINGS PRINCIPAL
(UNAUDITED) AMOUNT MARKET VALUE
----------- ------------ -------------
<S> <C> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOC. (15.7%)
Federal National Mortgage Assoc., REMIC, 7.00%, 7/25/00 ............. Aaa/AAA*** $ 1,950,000 $ 1,967,507
Federal National Mortgage Assoc., Pool #303016, 6.00%, 6/1/01 ....... Aaa/AAA*** 2,306,325 2,292,417
Federal National Mortgage Assoc., REMIC 1997-16, Class VA, 7.00%,
6/18/01 ........................................................... Aaa/AAA*** 1,219,676 1,234,184
Federal National Mortgage Assoc., Pool #334092, 6.00%, 5/1/04 ....... Aaa/AAA*** 1,095,430 1,087,313
Federal National Mortgage Assoc., 6.50%, 8/1/2004 ................... Aaa/AAA*** 992,113 993,640
Federal National Mortgage Assoc., Pool #356820, 7.50%, 11/1/09 ...... Aaa/AAA*** 1,571,338 1,609,160
Federal National Mortgage Assoc., REMIC, 4.00% 6/25/18 .............. Aaa/AAA*** 3,380,000 3,183,453
Federal National Mortgage Assoc., Medium Term Note, Callable 5/18/98
@ 100, 6.77%, 5/18/00 ............................................. Aaa/NR*** 3,000,000 3,010,485
-------------
15,378,159
-------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $17,937,546)................................................... 18,009,441
-------------
U.S. GOVERNMENT OBLIGATIONS (9.7%)
U.S. TREASURY NOTES (9.7%)
U.S. Treasury Notes, 5.75%, 10/31/02 ................................ Aaa/AAA*** 2,000,000 1,990,626
U.S. Treasury Notes, 5.88%, 7/31/99 ................................. Aaa/AAA*** 3,000,000 3,002,814
U.S. Treasury Notes, 5.88%, 8/31/99 ................................. Aaa/AAA*** 3,000,000 3,003,753
U.S. Treasury Notes, 5.88%, 2/15/00 ................................. Aaa/AAA*** 2,500,000 2,503,128
-------------
TOTAL U.S. GOVERNMENT OBLIGATIONS (COST $10,483,049)................... 10,500,321
-------------
U.S. TREASURY BILLS (2.7%)
U.S. Treasury Bills, N/A, 10/15/98 .................................. Aaa/AAA*** 2,750,000 2,625,626
-------------
TOTAL U.S. TREASURY BILLS (COST $2,626,208)............................ 2,625,626
-------------
CASH SWEEP ACCOUNT (1.3%)
Bank of New York .................................................... 1,314,038 1,314,038
-------------
TOTAL CASH SWEEP ACCOUNT (COST $1,314,038)............................. 1,314,038
-------------
TOTAL (COST $96,728,832) (A) -- 99.2%.................................. $ 97,067,685
-------------
-------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $97,899,229.
(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....... $ 526,113
Unrealized depreciation....... (187,260)
------------
Net unrealized appreciation... $ 338,853
------------
------------
* Variable rate security. Rate listed is rate in effect on November 30, 1997.
Maturity date reflects the next rate change date.
** Represents Rule 144A security which is restricted as to resale to
institutional investors.
*** Implied rating.
AMBAC -- AMBAC Indemnity Corporation.
N/A -- Not applicable.
NR -- No rating available.
REMIC -- Real Estate Mortgage Investment Conduit.
See Notes to Financial Statements.
72
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
November 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL MARKET
RATINGS (UNAUDITED)* AMOUNT VALUE
---------------------- ----------- ------------
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS (84.7%)
FEDERAL HOME LOAN MORTGAGE CORP. (38.2%)
Federal Home Loan Mortgage Corp., 5.78%, 10/22/03......... Aaa/NR $ 2,500,000 $ 2,433,085
Federal Home Loan Mortgage Corp., 7.29%, 1/27/04.......... Aaa/NR 2,000,000 2,000,910
Federal Home Loan Mortgage Corp., Debenture, Callable
10/29/98
@ 100, 6.08%, 10/29/08.................................. Aaa/NR 2,200,000 2,122,318
Federal Home Loan Mortgage Corp., Debenture, Callable
11/22/01
@ 100, 6.88%, 11/22/06.................................. Aaa/NR 2,000,000 2,023,416
Federal Home Loan Mortgage Corp., Gold Pool #200053,
8.50%, 9/1/01........................................... Aaa/AAA 1,091,930 1,118,759
Federal Home Loan Mortgage Corp., Gold Pool #306558,
9.25%, 6/1/18........................................... Aaa/AAA 1,907,736 2,019,186
Federal Home Loan Mortgage Corp., Gold Pool #D90560,
5.50%, 12/1/13.......................................... Aaa/AAA 349,515 335,643
Federal Home Loan Mortgage Corp., Gold Pool #E56405,
6.50%, 1/1/09........................................... Aaa/AAA 891,021 892,313
Federal Home Loan Mortgage Corp., Gold Pool #E58516,
5.50%, 4/1/09........................................... Aaa/AAA 1,601,382 1,552,044
Federal Home Loan Mortgage Corp., Gold Pool #M80156,
6.50%, 3/1/00........................................... Aaa/AAA 308,605 310,111
Federal Home Loan Mortgage Corp., Gold Pool #M80358,
9.00%, 2/1/02........................................... Aaa/AAA 622,486 646,507
Federal Home Loan Mortgage Corp., Pool #308392, 10.00%,
9/1/18.................................................. Aaa/AAA 89,432 97,677
Federal Home Loan Mortgage Corp., Pool #E20195, 6.20%,
9/8/08.................................................. Aaa/NR 2,375,000 2,305,284
Federal Home Loan Mortgage Corp., Pool #N96694, 7.00%,
7/1/03.................................................. Aaa/AAA 1,000,606 1,015,755
Federal Home Loan Mortgage Corp., Series 1212, Class CA,
REMIC, 6.50%, 7/15/16................................... Aaa/AAA 493,834 493,878
Federal Home Loan Mortgage Corp., Series 1388 Class H,
7.44%, 9/20/06.......................................... Aaa/NR 5,000,000 5,190,630
Federal Home Loan Mortgage Corp., Series 1388, REMIC,
Callable 9/20/01 @ 100, 3.50%, 6/15/07.................. Aaa/AAA 3,000,000 2,582,490
------------
27,140,006
------------
FEDERAL NATIONAL MORTGAGE ASSOC. (32.7%)
Federal National Mortgage Assoc., 5.97%, 9/3/03........... Aaa/NR 1,500,000 1,462,434
Federal National Mortgage Assoc., 5.93%, 9/26/03.......... Aaa/NR 1,000,000 977,579
Federal National Mortgage Assoc., Callable 10/1/99 @ 100,
7.18%, 10/1/03.......................................... Aaa/NR 1,500,000 1,520,517
Federal National Mortgage Assoc., CMO, Series 1993-54,
Class VB, 7.00%, 2/25/04................................ Aaa/AAA 999,505 1,016,141
Federal National Mortgage Assoc., Principal Strip, 7.55%,
6/10/04**............................................... Aaa/AAA 2,500,000 2,290,523
Federal National Mortgage Assoc., Medium Term Note, 6.31%,
3/14/01................................................. Aaa/NR 2,000,000 1,994,172
Federal National Mortgage Assoc., Medium Term Note, 6.72%,
8/1/05.................................................. Aaa/NR 1,000,000 1,036,116
Federal National Mortgage Assoc., Medium Term Note, 6.96%,
9/5/12.................................................. Aaa/NR 2,000,000 2,075,324
Federal National Mortgage Assoc., Pool #124418, 8.00%,
8/1/99.................................................. Aaa/AAA 2,511,062 2,563,945
Federal National Mortgage Assoc., Pool #190806, 6.00%,
8/1/99.................................................. Aaa/AAA 682,388 676,970
Federal National Mortgage Assoc., Pool #250076, 6.50%,
7/1/09.................................................. Aaa/AAA 1,075,650 1,077,070
Federal National Mortgage Assoc., Pool #285708, 6.50%,
6/1/09.................................................. Aaa/AAA 948,519 949,771
</TABLE>
73
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL MARKET
RATINGS (UNAUDITED)* AMOUNT VALUE
---------------------- ----------- ------------
<S> <C> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOC. (32.7%) (CONTINUED)
Federal National Mortgage Assoc., Pool #303478, 8.50%,
11/1/01................................................. Aaa/AAA $ 746,253 $ 756,574
Federal National Mortgage Assoc., Pool #50394, 8.50%,
1/1/98.................................................. Aaa/AAA 69,012 69,966
Federal National Mortgage Assoc., Pool #50974, 6.50%,
1/1/09.................................................. Aaa/AAA 941,720 943,151
Federal National Mortgage Assoc., Pool #70056, 9.00%,
12/1/16................................................. Aaa/AAA 268,900 282,799
Federal National Mortgage Assoc., REMIC, Series 1997-55,
Class B, 7.00%, 2/18/27................................. Aaa/AAA 2,549,302 2,571,862
Federal National Mortgage Assoc., Series Medium Term Note,
6.21%, 11/7/2007........................................ Aaa/NR 1,000,000 1,002,731
------------
23,267,645
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (2.2%)
Government National Mortgage Assoc., Pool #040767, 13.00%,
2/15/11................................................. Aaa/AAA 35,288 41,760
Government National Mortgage Assoc., Pool #044868, 13.00%,
1/15/01................................................. Aaa/AAA 8,935 10,574
Government National Mortgage Assoc., Pool #045234, 13.00%,
2/5/11.................................................. Aaa/AAA 12,992 15,374
Government National Mortgage Assoc., Pool #045855, 13.00%,
4/15/11................................................. Aaa/AAA 26,100 30,887
Government National Mortgage Assoc., Pool #145690, 11.00%,
3/15/01................................................. Aaa/AAA 25,356 27,059
Government National Mortgage Assoc., Pool #253768, 9.00%,
6/15/18................................................. Aaa/AAA 50,924 55,148
Government National Mortgage Assoc., Pool #254348, 10.00%,
10/15/18................................................ Aaa/AAA 22,599 24,836
Government National Mortgage Assoc., Pool #265082, 9.50%,
3/15/04................................................. Aaa/AAA 90,798 95,546
Government National Mortgage Assoc., Pool #270156, 9.50%,
4/15/04................................................. Aaa/AAA 109,845 115,590
Government National Mortgage Assoc., Pool #339902, 8.00%,
2/15/23................................................. Aaa/AAA 1,088,896 1,132,158
------------
1,548,932
------------
OTHER (8.6%)
Export Funding Trust, Callable 11/15/99 @ 106.16, 8.21%,
12/29/06................................................ Aaa/AAA 1,716,138 1,846,256
Federal Agricultural Mortgage Corp., Callable 3/25/98 @
100, 7.08%, 3/25/02..................................... Aaa/AAA 2,500,000 2,524,212
Navy Federal Credit Union, 7.00%, 6/1/04.................. Aaa/AAA 1,735,927 1,758,303
------------
6,128,771
------------
TENNESSEE VALLEY AUTHORITY (3.0%)
Tennessee Valley Authority, Callable 11/15/99 @ 106.161,
8.63%, 11/15/29......................................... Aaa/AAA 1,500,000 1,618,707
Tennessee Valley Authority, Callable 9/15/99 @ 100, 8.25%,
9/15/34................................................. Aaa/NR 500,000 512,031
------------
2,130,738
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (COST
$58,907,570).............................................. 60,216,092
------------
</TABLE>
74
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL MARKET
RATINGS (UNAUDITED)* AMOUNT VALUE
---------------------- ----------- ------------
<S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS (14.6%)
U.S. TREASURY BONDS/NOTES (14.6%)
U.S. Treasury Bonds, 5.75%, 11/15/00...................... Aaa/AAA $ 1,000,000 $ 998,438
U.S. Treasury Bonds, 6.00%, 2/15/26....................... Aaa/AAA 1,000,000 982,188
U.S. Treasury Bonds, Callable 11/15/05 @ 100, 12.75%,
11/15/10................................................ Aaa/AAA 2,500,000 3,551,565
U.S. Treasury Notes, 7.00%, 7/15/06....................... Aaa/NR 4,500,000 4,820,630
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS (COST $10,240,659)........ 10,352,821
------------
CASH SWEEP ACCOUNT (0.3%)
Bank of New York.......................................... 203,461 203,461
------------
TOTAL CASH SWEEP ACCOUNT (COST $203,461).................... 203,461
------------
TOTAL (COST $69,351,690)(A) -- 99.6%........................ $ 70,772,374
------------
------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $71,083,782.
(a) Cost for financial reporting purposes is substantially the same for federal
income tax purposes and differs from value by net unrealized appreciation of
securities as follows:
Unrealized appreciation....... $ 1,473,301
Unrealized depreciation....... (52,617)
------------
Net unrealized appreciation... $ 1,420,684
------------
------------
* Implied rating.
** Interest rate is 0.00% until June of 1999.
CMO -- Collateralized Mortgage Obligation.
NR -- No rating available.
REMIC -- Real Estate Mortgage Investment Conduit.
See Notes to Financial Statements.
75
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
November 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S/S&P
RATINGS PRINCIPAL
(UNAUDITED) AMOUNT MARKET VALUE
------------------ ---------- -------------
<S> <C> <C> <C>
CORPORATE OBLIGATIONS (54.8%)
BANKS -- MID-SIZE (3.0%)
First Union National Bank, NC, Corporate Bond, 6.92%, 12/15/36 .... A2/A $2,900,000 $ 3,053,106
-------------
BEVERAGES (0.5%)
Anheuser Busch Cos., Inc., Corporate Bond, 7.13%, 7/1/17 .......... A1/A+ 500,000 510,598
-------------
COMPUTER SOFTWARE (3.0%)
IBM Corp., Corporate Bond, 6.22%, 8/1/27, Putable 8/1/04 @ 100 .... A1/A 3,000,000 3,011,028
-------------
DIVERSIFIED ELECTRONIC PRODUCTS (1.0%)
Harris Corp., Corporate Note, Putable 8/1/01 @ 100, 6.65%,
8/1/06 .......................................................... A3/A- 1,000,000 1,019,334
-------------
ELECTRIC UTILITIES -- CENTRAL (1.1%)
Central Illinois Public Service Co., Callable 5/15/98 @ 105.95,
8.50%, 5/15/22 .................................................. Aa1/AA+ 1,000,000 1,064,882
-------------
ELECTRIC UTILITIES -- EAST (2.8%)
Citizens Utilities Co., Putable 10/1/01 @ 100, 7.68%, 10/1/34 ..... Aa3/AA+ 1,750,000 2,026,294
Citizens Utilities Co., Putable 8/15/03 @ 100, 6.80%, 8/15/26 ..... Aa3/AA+ 825,000 859,191
-------------
2,885,485
-------------
ELECTRICAL PRODUCTS (5.1%)
General Electric Capital Corp., Corporate Bond, 7.50%, 6/15/09 .... Aaa/AAA 675,000 740,108
General Electric Capital Corp., Putable 9/20/98 @ 100, 8.30%,
9/20/09 ......................................................... Aaa/AAA 1,200,000 1,380,161
Potomac Electric Power Co., Corporate Bond, 6.25%, 10/15/07 ....... A1/A 3,000,000 2,986,643
-------------
5,106,912
-------------
ENTERTAINMENT (2.0%)
Times Mirror Co., Corporate Bond, 6.61%, 9/15/27 .................. A2/A+ 2,000,000 2,036,858
-------------
FINANCE COMPANIES (2.8%)
Chase Capital II, 6.22%*, 2/1/98 .................................. Aa3/BBB+ 3,000,000 2,878,017
-------------
FINANCIAL SERVICES (4.1%)
Hutchison Whampo, Putable 8/1/09 @ 100, 6.99%, 8/1/37 ............. A3/A+ 2,700,000 2,576,990
Norwest Financial Inc, 7.25%, 3/15/00 ............................. Aa3/AA- 1,500,000 1,534,340
-------------
4,111,330
-------------
FINANCIAL SERVICES -- DIVERSIFIED (4.9%)
Associates Corp. N.A., Putable 2/16/98 @ 100, 7.95%, 2/15/10 ...... Aa3/AA- 265,000 297,464
Associates Corp. N.A., Putable 3/3/98 @ 100, 7.95%, 2/15/10 ....... Aa3/AA- 2,400,000 2,694,009
Associates Corp. N.A., 6.50%, 10/15/02 ............................ Aa3/AA- 1,000,000 1,003,561
TransAmerica Finance Corp., Corporate Bond, 6.38%, 11/15/01 ....... A3/A+ 1,000,000 1,000,668
-------------
4,995,702
-------------
INDUSTRIAL MACHINERY (1.8%)
Caterpillar Tractor, Corporate Bond, 6.00%, 5/1/07 ................ A2/A+ 1,900,000 1,814,808
-------------
</TABLE>
76
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P
RATINGS PRINCIPAL
(UNAUDITED) AMOUNT MARKET VALUE
------------------ ---------- -------------
<S> <C> <C> <C>
INDUSTRIAL SERVICES (4.5%)
ConAgra, Incrate Bond, 6.70%, 8/1/27, Putable 8/1/09 @ 100 ........ Baa1/BBB+ $2,500,000 $ 2,550,388
Laidlaw, Inc., 6.65%, 10/1/04 ..................................... Baa2/BBB+ 2,000,000 2,012,812
-------------
4,563,200
-------------
INSURANCE -- PROPERTY & CASUALTY (2.1%)
General Re Corp., Series A, 9.00%, 9/12/09 ........................ Aa1/AAA 1,800,000 2,145,290
-------------
INVESTMENT BANKERS/BROKERS/SERVICES (2.0%)
Lehman Brothers Holdings, Corporate Bond, 6.89%, 10/10/00 ......... Baa1/A 2,000,000 2,020,132
-------------
MAJOR CHEMICALS (0.5%)
Monsanto Co., Debenture, 8.13%, 12/15/06 .......................... A1/A 500,000 544,139
-------------
MAJOR U.S. TELECOMMUNICATIONS (1.3%)
General Telephone of Northwest, Series BB, Callable 4/15/98 @
102.90, 8.75%, 4/15/16 .......................................... A1/A+ 1,305,000 1,349,313
-------------
MEDICAL SPECIALTIES (1.0%)
Bausch & Lomb, Medium Term Note, Putable 8/31/01 @ 100, 6.56%,
8/12/26 ......................................................... A3/A- 1,000,000 1,022,339
-------------
MULTI -- SECTOR COMPANIES (1.0%)
Sears Roebuck Acceptance Global Bond, 7.00%, 6/15/07 .............. A2/A- 1,000,000 1,032,225
-------------
OIL & GAS (2.1%)
Amoco Canada, 7.25%, 12/1/02 ...................................... Aa1/AAA 2,000,000 2,086,800
-------------
OIL & GAS DISTRIBUTION (1.5%)
Northern Illinois Gas, Corporate Bond, 7.38%, 10/15/27 ............ Aa1/AA 1,500,000 1,526,139
-------------
OTHER TELECOMMUNICATIONS (5.7%)
British Telecommunications Finance, Yankee Bond, Callable 2/15/99 @
104.74, 9.63%, 2/15/19 .......................................... Aa1/AAA 2,000,000 2,170,925
Southwest Bell, Corporate Bond, 6.38%, 11/15/07 ................... Aa3/AA 1,500,000 1,486,313
Southwestern Bell, Corporate Bond, 6.63%, 7/15/07 ................. Aa3/AA 2,000,000 2,021,396
-------------
5,678,634
-------------
SPECIALTY RETAILER (1.0%)
Safeco Capital Trust I, 8.07%, 7/15/37 ............................ NR/A 1,000,000 1,020,621
-------------
TOTAL CORPORATE OBLIGATIONS (COST $54,720,635)....................... 55,476,892
-------------
MEDIUM TERM NOTES (2.1%)
Citicorp, Senior Notes, Callable 11/01/99 @ 8.63%, 11/1/04 ........ Aa3/A+ 2,000,000 2,082,720
-------------
TOTAL MEDIUM TERM NOTES (COST $2,079,214)............................ 2,082,720
-------------
TAXABLE MUNICIPAL BONDS (1.0%)
CALIFORNIA (0.5%)
Los Angeles Airport, (Insured by AMBAC), 5.50%, 5/15/98 ........... Aaa/AAA 500,000 499,591
-------------
</TABLE>
77
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P
RATINGS PRINCIPAL
(UNAUDITED) AMOUNT MARKET VALUE
------------------ ---------- -------------
<S> <C> <C> <C>
FLORIDA (0.5%)
Miami Beach, Pension Funding Project, Callable 9/1/05 @ 102
(Insured by AMBAC), 8.55%, 9/1/15 ............................... Aaa/AAA $ 500,000 $ 561,524
-------------
TOTAL TAXABLE MUNICIPAL BONDS (COST $994,737)........................ 1,061,115
-------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (34.3%)
FEDERAL HOME LOAN MORTGAGE CORP. (4.7%)
Federal Home Loan Mortgage Corp., 7.29%, 1/27/04 .................. Aaa/NR** 2,000,000 2,000,910
Federal Home Loan Mortgage Corp., CMO, Series 1141, Class F, REMIC,
8.50%, 10/15/20 ................................................. Aaa/AAA** 611,914 625,497
Federal Home Loan Mortgage Corp., Debenture, Callable 10/29/98 @
100, 6.08%, 10/29/08 ............................................ Aaa/NR** 1,000,000 964,690
Federal Home Loan Mortgage Corp., Gold #D68937, 6.00%, 3/1/26 ..... Aaa/AAA** 893,006 858,152
Federal Home Loan Mortgage Corp., Pool #200032, 9.00%, 4/1/01 ..... Aaa/AAA** 1,232 1,270
Federal Home Loan Mortgage Corp., Pool #200040, 9.00%, 6/1/01 ..... Aaa/AAA** 2,799 2,888
Federal Home Loan Mortgage Corp., Pool #380070, 9.00%, 1/1/05 ..... Aaa/AAA** 105,925 110,241
Federal Home Loan Mortgage Corp., Series 1212, Class CA, REMIC,
6.50%, 7/15/16 .................................................. Aaa/AAA** 164,611 164,626
-------------
4,728,274
-------------
FEDERAL NATIONAL MORTGAGE ASSOC. (23.9%)
Federal National Mortgage Assoc., 5.93%, 9/26/03 .................. Aaa/NR** 1,000,000 977,579
Federal National Mortgage Assoc., 7.00%, 6/1/04 ................... Aaa/AAA** 1,979,121 2,004,631
Federal National Mortgage Assoc., 6.00%, 1/1/26 ................... Aaa/AAA** 1,171,802 1,126,066
Federal National Mortgage Assoc., 7.00%, 5/1/27 ................... Aaa/AAA** 988,046 991,899
Federal National Mortgage Assoc., Pool #124975, 7.50%, 8/1/08 ..... Aaa/AAA** 642,654 659,106
Federal National Mortgage Assoc., Pool #354613, 7.50%, 9/1/26 ..... Aaa/AAA** 451,532 461,231
Federal National Mortgage Assoc., Pool #358033, 7.50%, 9/1/26 ..... Aaa/AAA** 596,101 608,905
Federal National Mortgage Assoc., Pool #50609, Participation
Certificate, 8.00%, 6/1/99 ...................................... Aaa/AAA** 205,208 209,530
Federal National Mortgage Assoc., CMO, Series G94-6, Class VB,
REMIC, 8.00%, 11/17/03 .......................................... Aaa/AAA** 2,280,467 2,390,535
Federal National Mortgage Assoc., CMO, Series G94-7, Class A,
REMIC, 7.50%, 11/17/23 .......................................... Aaa/AAA** 2,397,992 2,437,005
Federal National Mortgage Assoc., Principal Strip, 7.00%, 5/10/01
(b) ............................................................. Aaa/AAA** 3,000,000 2,754,649
Federal National Mortgage Assoc., Principal Strip, 7.55%, 6/10/04
(c) ............................................................. Aaa/AAA** 2,500,000 2,290,523
Federal National Mortgage Assoc., Medium Term Note, 6.31%,
3/14/01 ......................................................... Aaa/NR** 2,000,000 1,994,172
Federal National Mortgage Assoc., Pool #304786, Participation
Certificate, 8.50%, 2/1/02 ...................................... Aaa/AAA** 246,564 255,891
Federal National Mortgage Assoc., REMIC, Series 1997-55, Class B,
7.00%, 2/18/27 .................................................. Aaa/AAA** 2,085,792 2,104,252
Federal National Mortgage Assoc., Series 1997-19, Class PC, 6.50%,
1/18/22 ......................................................... Aaa/AAA** 3,000,000 3,002,097
-------------
24,268,071
-------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (5.7%)
Government National Mortgage Assoc, Pool #200919, 8.00%,
5/15/17 ......................................................... Aaa/AAA** 324,436 340,609
Government National Mortgage Assoc., Pool #445647, 7.50%,
6/15/27 ......................................................... Aaa/AAA** 473,080 483,067
Government National Mortgage Assoc., Pool #430065, 7.50%,
9/15/26 ......................................................... Aaa/AAA** 602,597 615,481
Government National Mortgage Assoc., Pool #432700, 7.50%,
6/15/26 ......................................................... Aaa/AAA** 447,733 457,305
Government National Mortgage Assoc., Pool #447573, 7.50%,
5/15/27 ......................................................... Aaa/AAA** 1,984,083 2,025,966
</TABLE>
78
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P
RATINGS PRINCIPAL MARKET VALUE
(UNAUDITED) AMOUNT -
------------------ ----------
<S> <C> <C> <C>
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (5.7%) (CONTINUED)
Government National Mortgage Assoc., Pool #440021, 7.50%,
1/15/27 ......................................................... Aaa/AAA** $1,488,047 $ 1,519,459
Government National Mortgage Assoc., Pool #045097, 13.00%,
1/15/11 ......................................................... Aaa/AAA** 25,195 29,816
Government National Mortgage Assoc., Pool #133357, 11.00%,
7/15/00 ......................................................... Aaa/AAA** 11,807 12,448
Government National Mortgage Assoc., Pool #140135, 11.00%,
11/15/00 ........................................................ Aaa/AAA** 22,821 24,060
Government National Mortgage Assoc., Pool #202853, 9.00%,
7/15/17 ......................................................... Aaa/AAA** 199,159 215,879
Government National Mortgage Assoc., Pool #207980, 8.00%,
5/15/17 ......................................................... Aaa/AAA** 12,736 13,371
Government National Mortgage Assoc., Pool #44586, 13.00%,
1/15/11 ......................................................... Aaa/AAA** 3,566 4,220
Government National Mortgage Assoc., Pool #44783, 13.00%,
1/15/11 ......................................................... Aaa/AAA** 19,824 23,460
Government National Mortgage Assoc., Pool #45753, 13.00%,
2/15/11 ......................................................... Aaa/AAA** 21,955 25,982
-------------
5,791,123
-------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (COST $34,178,075).......... 34,787,468
-------------
U.S. GOVERNMENT OBLIGATIONS (6.3%)
U.S. TREASURY BONDS/NOTES (6.3%)
U.S. Treasury Bond, 5.75%, 11/15/00 ............................... Aaa/AAA** 550,000 549,141
U.S. Treasury Bond, 6.00%, 2/15/26 ................................ Aaa/AAA** 1,500,000 1,473,282
U.S. Treasury Note, 5.75%, 10/31/02 ............................... Aaa/AAA** 1,500,000 1,492,970
U.S. Treasury Note, 7.00%, 7/15/06 ................................ Aaa/NR** 2,720,000 2,913,802
-------------
TOTAL U.S. GOVERNMENT OBLIGATIONS (COST $6,186,823).................. 6,429,195
-------------
CASH SWEEP ACCOUNT (0.7%)
Bank of New York .................................................. 742,111 742,111
-------------
TOTAL CASH SWEEP ACCOUNT (COST $742,111)............................. 742,111
-------------
TOTAL (COST $98,901,595) (A) -- 99.2%................................ $ 100,579,501
-------------
-------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $101,345,848.
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting in excess of federal income tax reporting of $58,587.
Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation....... $ 1,888,392
Unrealized depreciation....... (269,073)
------------
Net unrealized appreciation... $ 1,619,319
------------
------------
(b) Interest rate is 0.00% until May of 1999.
(c) Interest rate is 0.00% until June of 1999.
* Variable rate security. Rate presented reflects interest rate in effect on
November 30, 1997. Maturity date reflects the next rate change date.
** Implied rating.
AMBAC -- AMBAC Indemnity Corporation.
CMO -- Collateralized Mortgage Obligation.
NR -- Not Rated.
REMIC -- Real Estate Mortgage Investment Conduit.
See Notes to Financial Statements.
79
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
November 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S/S&P SHARES OR
RATINGS PRINCIPAL
(UNAUDITED) AMOUNT MARKET VALUE
------------------ ---------- -------------
<S> <C> <C> <C>
MUNICIPAL BONDS (93.6%)
FLORIDA (75.6%)
Brevard County, Health Care Facility Authority Revenue, Holmes
Regional, Callable 10/1/06 @ 101 (Insured by MBIA), 5.63%,
10/1/14 ....................................................... Aaa/AAA $2,550,000 $ 2,656,412
Charlotte County, Utility Revenue, Callable 10/1/06 @ 102
(Insured by FGIC), 5.63%, 10/1/16 ............................. Aaa/AAA 2,250,000 2,339,663
Collier County, Health Facilities Authority Revenue, The Moor-
ings, Inc. Project, Callable 12/1/04 @ 102, 6.25%, 12/1/07 .... NR/BBB+ 700,000 758,282
Collier County, Health Facilities Authority Revenue, The Moor-
ings, Callable 12/1/04 @ 102, 6.38%, 12/1/08 .................. NR/BBB+ 700,000 760,361
Collier County, Health Facilities Authority Revenue, The Moor-
ings, Callable 12/1/04 @ 102, 7.00%, 12/1/19 .................. NR/BBB+ 5,175,000 5,673,456
Dade County, Aviation Revenue, Callable 10/1/06 @ 102 (Insured by
MBIA) (AMT), 5.75%, 10/1/12 ................................... Aaa/AAA 2,500,000 2,633,850
Florida Housing Financial Agency, Callable 7/1/07 @ 102 (Insured
by MBIA), 5.75%, 7/1/14 ....................................... Aaa/AAA 3,000,000 3,084,210
Florida State Board of Education, Capital Outlay, Callable 6/1/06
@ 101, 5.25%, 6/1/16 .......................................... Aa2/AA+ 2,500,000 2,516,725
Florida State Board of Education, Capital Outlay, Callable 6/1/06
@ 101, 5.00%, 6/1/18 .......................................... Aa2/AA+ 3,000,000 2,921,160
Florida State Power Agency, Callable 10/1/02 @ 102 (Insured by
FGIC), 5.25%, 10/1/21 ......................................... Aaa/AAA 1,500,000 1,475,850
Gainesville, Utility System Revenue, Non-callable, Series B,
6.50%, 10/1/11 ................................................ Aa/AA 3,000,000 3,481,410
Hillsborough County Aviation Authority Revenue, Callable 10/1/06
@ 101 (Insured by AMBAC) 5.13%, 10/1/17* ...................... Aaa/AAA 2,000,000 1,974,360
Jacksonville Electric Authority, Callable 10/1/02 @ 101 (Insured
by FGIC) 5.40%, 10/1/15 ....................................... Aaa/AAA 2,000,000 2,028,620
Jacksonville, Sales Tax Revenue, River City Renaissance Project,
Callable 10/1/05 @ 101 (Insured by FGIC), 5.65%, 10/1/14 ...... Aaa/AAA 5,000,000 5,211,450
Jacksonville, Sales Tax Revenue, River City Project, Callable
10/1/05 @ 101 (Insured by FGIC), 5.38%, 10/1/18 ............... Aaa/AAA 5,000,000 5,001,350
Leon County Capital Improvement Revenue, Callable 10/1/07 @ 101
(Insured by AMBAC) 5.25%, 10/1/17 ............................. Aaa/AAA 2,430,000 2,444,750
Martin County, Industrial Development Authority Revenue, Indi-
antown Cogeneration Project B, Callable 12/15/04 @ 102 (AMT),
8.05%, 12/15/25 ............................................... Baa3/BBB- 2,500,000 2,934,425
Martin County, Industrial Development Authority Revenue, Indi-
antown Cogeneration Project A, Callable 12/15/04 @ 102 (AMT),
7.88%, 12/15/25 ............................................... Baa3/BBB- 2,500,000 2,910,100
Miami Beach, Water & Sewer Revenue, Callable 9/1/05 @ 102
(Insured by FSA) 5.38%, 9/1/15 ................................ Aaa/AAA 2,620,000 2,670,592
North Broward, Hospital District Revenue, Callable 1/15/07 @ 101
(Insured by MBIA), 5.25%, 1/15/17 ............................. Aaa/AAA 2,000,000 1,992,700
Okaloosa County, Gas Distribution Tax Revenue, Prerefunded
10/1/04 @ 102 (Insured by MBIA) 6.88%, 10/1/19 ................ Aaa/AAA 5,000,000 5,802,999
Orange County, Health Facility Authority Revenue, Orlando
Regional Health, Non-callable, Series A, (Insured by MBIA),
6.25%, 10/1/16 ................................................ Aaa/AAA 4,520,000 5,143,037
</TABLE>
80
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P SHARES OR
RATINGS PRINCIPAL
(UNAUDITED) AMOUNT MARKET VALUE
------------------ ---------- -------------
<S> <C> <C> <C>
FLORIDA (75.6%) (CONTINUED)
Orlando Utility Commission, Water & Electric Revenue Refunding,
Non-callable, Sub-Series D, 6.75%, 10/1/17 .................... Aa/AA- $3,000,000 $ 3,612,990
Palm Beach County, Solid Waste Authority Revenue, Non-callable,
(Insured by AMBAC) 6.00%, 10/1/10 ............................. Aaa/AAA 6,000,000 6,689,879
Pensacola Airport Revenue, Callable 10/1/07 @ 102, (Insured by
MBIA) (AMT), 5.63%, 10/1/14 ................................... Aaa/AAA 2,000,000 2,068,940
South Miami Health Facilities, Callable 10/1/05 @ 102, (Insured
by MBIA) 5.38%, 10/1/16 ....................................... Aaa/AAA 4,000,000 4,034,680
Sunrise Lakes, Phase 4 Recreation District Revenue, Unlimited
General Obligation Bonds,, Series A, Callable 8/1/05 @ 102,
6.75%, 8/1/24 ................................................. NR/BBB- 2,500,000 2,766,075
Tampa Sports Authority Revenue, Insured by MBIA, Callable 1/1/07
@ 101, 5.25%, 1/1/17 .......................................... Aaa/AAA 2,000,000 2,011,600
Tampa Sports Authority, Sales Tax Revenue, Tampa Bay Arena,
Non-callable, (Insured by MBIA) 5.75%, 10/1/15 ................ Aaa/AAA 2,500,000 2,714,800
-------------
90,314,726
-------------
GUAM (10.5%)
Guam Airport Authority, General Revenue Bonds, Series B, Callable
10/1/03 @ 102 (AMT), 6.40%, 10/1/05 ........................... NR/BBB 2,435,000 2,615,190
Guam Airport Authority, General Revenue Bonds, Series 1993 A,
Callable 10/1/03 @ 102, 6.38%, 10/1/10 ........................ NR/BBB 3,820,000 4,095,919
Guam Government, Series A, Callable 3/1/99 @ 100, 5.75%,
9/1/04 ........................................................ NR/BBB 2,500,000 2,528,450
Guam Power Authority, General Revenue Bonds, Series A, Callable
10/1/04 @ 102, 6.75%, 10/1/24 ................................. NR/BBB 3,000,000 3,268,710
-------------
12,508,269
-------------
PUERTO RICO (7.5%)
Puerto Rico Commonwealth Infrastructure Finance, Callable 1/1/08
@ 101, 5.00%, 7/1/16* ......................................... Aaa/AAA 2,000,000 1,976,060
Puerto Rico Commonwealth, Non-callable, (Insured by MBIA) 6.50%,
7/1/15 ........................................................ Aaa/AAA 4,190,000 4,916,756
Puerto Rico, Electric Power Authority Revenue, Series AA,
Callable 7/1/07 @ 101.50, (Insured by MBIA) 5.25%, 7/1/17 ..... Aaa/AAA 1,000,000 1,005,990
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) 6.25%, 7/1/16 ........................ Aaa/AAA 1,000,000 1,085,400
-------------
................................................................ 8,984,206
-------------
TOTAL MUNICIPAL BONDS (COST $103,708,196).......................... 111,807,201
-------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (2.5%)
Federal Home Loan Bank, Callable 9/4/98 @ 100, 6.81%, 9/4/02 .... Aaa/NR 3,000,000 3,000,000
-------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (COST $3,000,000)......... 3,000,000
-------------
</TABLE>
81
<PAGE>
<TABLE>
<CAPTION>
SHARES OR MARKET
PRINCIPAL AMOUNT VALUE
------------------ ----------
<S> <C> <C> <C>
OPEN-END INVESTMENT COMPANIES (5.7%)
Dreyfus Municipal Cash Management Plus Fund ........................................ 5,044,322 $ 5,044,322
Provident Institutional Municipal Fund ............................................. 1 1
Valiant Tax-Free Money Market Fund ................................................. 1,813,692 1,813,692
-------------
TOTAL OPEN-END INVESTMENT COMPANIES (COST $6,858,015)................................. 6,858,015
-------------
TOTAL (COST $113,566,211) (A) -- 101.8%............................................... $ 121,665,216
-------------
-------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $119,464,025.
(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....... $ 8,099,005
Unrealized depreciation....... --
------------
Net unrealized appreciation... $ 8,099,005
------------
------------
* When issued security as of November 30, 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.
MBIA -- Municipal Bond Insurance Association.
NR -- Not Rated.
See Notes to Financial Statements.
82
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
November 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S/S&P
RATINGS PRINCIPAL
(UNAUDITED) AMOUNT AMORTIZED COST
----------------- ----------- --------------
<S> <C> <C> <C>
BANK NOTES (17.4%)
DOMESTIC (13.4%)
1st USA Bank, Variable Rate Bank Note, 5.74%, 12/17/97* ...... P-1/A-1+ $50,000,000 $ 50,019,084
Amex Centurian, Variable Rate Bank Note, 5.71%, 12/11/97* .... P-1/A-1 22,000,000 22,018,361
Bank of New York, Bank Note, 5.80%, 3/3/98 ................... P-1/A-1+ 44,000,000 43,994,689
Compass Bank, Floating Rate Bank Note, 5.64%, 12/1/97* ....... P-1/TBW1** 39,000,000 38,987,014
J.P. Morgan Corp., Bank Note, 5.90%, 4/1/98 .................. P-1/A-1+ 40,000,000 39,253,546
Morgan Stanley Group, Variable Rate Bank Note, 5.83%,
2/18/98* ................................................... P-1/A-1+ 37,000,000 37,000,000
Northern Trust Co., Bank Note, 5.75%, 3/4/98 ................. P-1/A-1+ 45,000,000 44,988,993
PNC Bank NA., Floating Rate Bank Note, 5.60%, 12/1/97* ....... P-1/A-1 33,000,000 32,983,150
--------------
309,244,837
--------------
FOREIGN (4.0%)
Abbey National plc, Variable Rate Bank Note, 5.57%,
12/15/97* .................................................. P-1/A-1+ 52,000,000 51,978,107
Berliner Handels-Und Frankfurter Bank, Floating Rate Bank
Note, 5.70%, 12/1/97* ...................................... P-1/A-1+ 40,000,000 39,999,251
--------------
91,977,358
--------------
TOTAL BANK NOTES (COST $401,222,195)............................ 401,222,195
--------------
CERTIFICATES OF DEPOSIT -- DOMESTIC (13.8%)
Amex Centurian Bank, 5.54%, 12/1/97 .......................... P-1/A-1 35,000,000 35,000,000
Compass Bank, 5.56%, 12/29/97 ................................ P-1/TBW1** 50,000,000 50,000,000
CS First Boston, Variable Rate CD, 5.89%,12/02/97* ........... P-1/A-1 46,000,000 46,000,000
Old Kent Bank, Floating Rate CD, Grand Rapids, 5.65%,
12/1/97* ................................................... P-1/A-1 25,000,000 25,000,000
Regions Bank, 5.60%, 12/17/97 ................................ P-1/A-1+ 46,000,000 46,000,000
South Trust Bank, Floating Rate CD, 5.65%, 12/1/97* .......... P-1/A-1 75,000,000 74,991,774
Union Bank of California, 5.57%, 12/18/97 .................... P-1/A-1 40,000,000 40,000,000
--------------
TOTAL CERTIFICATES OF DEPOSIT -- DOMESTIC
(COST $316,991,774)........................................... 316,991,774
--------------
CERTIFICATES OF DEPOSIT -- YANKEE (15.4%)
Abbey National Treasury plc, New York Branch, Floating Rate
Yankee CD, 5.65%, 12/1/97* ................................. P-1/A-1+ 50,000,000 49,991,049
Bank of Scotland, New York Branch, 5.55%, 12/30/97 ........... P-1/A-1+ 11,000,000 11,000,000
Banque Paribas, New York Branch, 5.59%, 12/18/97 ............. P-1/A-1 35,000,000 35,000,000
Bayerishce Hypo-Bank, New York Branch, 5.60%, 12/18/97 ....... P-1/A-1+ 35,000,000 35,000,000
Canadian Imperial Bank, New York Branch, 5.58%, 12/31/97 ..... P-1/A-1+ 89,000,000 89,001,054
Deutsche Bank AG, New York Branch, 5.57%, 12/22/97 ........... P-1/A-1+ 35,000,000 34,999,596
Deutsche Bank AG, New York Branch, 5.57%, 12/31/97 ........... P-1/A-1+ 30,000,000 29,999,992
Deutsche Bank AG, New York Branch, 5.57%, 12/31/97 ........... P-1/A-1+ 35,000,000 34,999,323
Royal Bank of Canada, New York Branch, 5.58%, 12/11/97 ....... P-1/A-1+ 10,000,000 9,999,345
Society Generale Bank, New York Branch, 5.61%, 12/3/97 ....... P-1/A-1+ 25,000,000 25,000,013
--------------
TOTAL CERTIFICATES OF DEPOSIT -- YANKEE
(COST $354,990,372)........................................... 354,990,372
--------------
COMMERCIAL PAPER (20.3%)
DOMESTIC (17.3%)
American Honda Finance Corp., 5.57%, 12/9/97 ................. P-1/F-1** 25,000,000 24,969,056
Barton Capital Corp. (b), (c), 5.52%, 12/4/97 ................ P-1/A-1+ 30,000,000 29,986,200
BTM Capital Corp. (b), (c), 5.59%, 12/11/97 .................. P-1/A-1 12,000,000 11,981,367
Countrywide Funding Corp., 5.55%, 12/1/97 .................... F-1**/A-1 30,000,000 30,000,000
Dakota Finance (b), 5.52%, 12/10/97 .......................... P-1/A-1+ 25,000,000 24,965,500
</TABLE>
83
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P
RATINGS PRINCIPAL
(UNAUDITED) AMOUNT AMORTIZED COST
----------------- ----------- --------------
<S> <C> <C> <C>
DOMESTIC (17.3%) (CONTINUED)
Dakota Finance (b), (c), 5.53%, 12/16/97 ..................... P-1/A-1+ $30,000,000 $ 29,930,875
Dakota Finance (b), 5.54%, 12/19/97 .......................... P-1/A-1+ 35,000,000 34,903,050
Deer Park Refining LP (b), (c), 5.65%, 12/9/97 ............... P-1/A-1 13,000,000 13,000,000
Deer Park Refining LP (b), (c), 5.66%, 12/19/97 .............. P-1/A-1 10,000,000 10,000,000
Galicia Funding Corp. (b), (c), 5.53%, 12/2/97 ............... P-1/A-1+ 18,800,000 18,797,112
Galicia Funding Corp. (b), (c), 5.53%, 12/4/97 ............... P-1/A-1+ 12,465,000 12,459,256
Internationale Nederlanden (US) Funding Group, 5.57%,
12/5/97 .................................................... P-1/A-1+ 30,000,000 29,981,433
Sanwa Business Credit, Inc., 5.62%, 12/12/97 ................. P-1/D-1** 40,000,000 39,931,310
Sanwa Business Credit, Inc., 5.56%, 12/16/97 ................. P-1/D-1** 25,000,000 24,942,083
Sanwa Business Credit, Inc., 5.72%, 12/23/97 ................. P-1/D-1** 30,000,000 29,895,133
Transamerica Finance Corp., 5.53%, 12/3/97 ................... P-1/A-1 30,000,000 29,990,783
--------------
395,733,158
--------------
FOREIGN (3.0%)
Alliance & Leicester Building Society, 5.53%, 12/2/97 ........ P-1/A-1+ 25,000,000 24,996,160
Alliance & Leicester Building Society, 5.60%, 12/10/97 ....... P-1/A-1 25,000,000 24,965,000
Pearson, Inc., 5.58%, 12/10/97 ............................... P-1/A-1 19,400,000 19,372,937
--------------
69,334,097
--------------
TOTAL COMMERCIAL PAPER (COST $465,067,255)...................... 465,067,255
--------------
MASTER NOTES -- FOREIGN (2.2%)
Lehman Brothers plc, Foreign Master Note (b), 5.70%,
12/3/97 .................................................... F-1**/A-1 50,000,000 50,000,000
--------------
TOTAL MASTER NOTES -- FOREIGN (COST $50,000,000)................ 50,000,000
--------------
MEDIUM TERM NOTES (23.7%)
ABSIT, Series 1997-A, Variable Rate Medium Term Note (b),
5.74%, 12/15/97* ........................................... F-1**/A-1 45,000,000 45,003,265
C.S. First Boston Corp., Variable Rate Extendable Medium Term
Note (b), (c), 5.82%, 12/22/97* ............................ P-1/A-1 35,000,000 35,000,000
C.S. First Boston Corp., Variable Rate Extendable Medium Term
Note (b), (c), 5.82%, 12/22/97* ............................ P-1/A-1 15,000,000 15,000,000
CTN Trust, Series 1, Variable Rate Medium Term Note (b),
5.99%, 12/2/97* ............................................ P-1/A-1 41,000,000 41,107,284
Dean Witter Discover, Variable Rate Medium Term Note, 5.77%,
12/17/97* .................................................. P-1/A-1 42,000,000 42,009,388
Ford Motor Credit Co., 7.13%, 12/1/97 ........................ P-1/A-1 15,812,000 15,812,000
Goldman Sachs, Variable Rate Promissory Note (b), 5.66%,
12/01/97* .................................................. P-1/A-1+ 50,000,000 50,000,000
Household Credit Card Master Trust 1995-1A Variable Rate Note
(b), 5.69%, 12/15/97* ...................................... P-1/A-1+ 46,000,000 46,000,000
Merrill Lynch & Co., Variable Rate Medium Term Note, 5.64%,
12/26/97* .................................................. P-1/A-1+ 30,000,000 30,000,000
Merrill Lynch & Co., Variable Rate Medium Term Note, 5.88%,
12/02/97* .................................................. P-1/A-1+ 65,000,000 65,000,000
Morgan Stanley Group, Variable Rate Medium Term Note, 5.82%,
12/15/97* .................................................. P-1/A-1+ 50,000,000 50,000,000
Sigma Finance, Inc., Medium Term Note (b), 5.80%, 3/3/98 ..... P-1/A-1+ 43,000,000 43,000,000
Sigma Finance, Inc. Variable Rate Medium Term Note (b), 5.90%,
12/2/97* ................................................... P-1/A-1+ 40,000,000 40,000,000
USL Capital Corp., Variable Rate Medium Term Note, 5.84%,
12/18/97* .................................................. P-1/A-1 30,000,000 30,002,656
--------------
TOTAL MEDIUM TERM NOTES -- (COST $547,934,593).................. 547,934,593
--------------
</TABLE>
84
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT AMORTIZED COST
----------- --------------
<S> <C> <C>
REPURCHASE AGREEMENTS (7.0%)
Fuji Securities Tri Party Repurchase Agreement, dated 11/28/97 with a maturity
value of $80,338,948 (Collateralized by $223,336,000 various U.S. Treasury
Securities, 0.00% -- 6.75%, 8/15/98 -- 4/15/28, market value of $81,906,695),
5.78%, 12/1/97.................................................................. $80,300,270 $ 80,300,270
Salomon Brothers Tri Party Repurchase Agreement, dated 11/28/97 with a maturity
value of $80,338,948 (Collateralized by $122,024,705 various U.S. Treasury
Securities, 5.50% -- 10.00%, 11/1/99 -- 11/1/27, market value of $81,931,666),
5.73%, 12/1/97.................................................................. 80,300,270 80,300,270
--------------
TOTAL REPURCHASE AGREEMENTS (COST $160,600,540)..................................... 160,600,540
--------------
TOTAL (COST $2,296,806,729)(A) -- 99.8%............................................. $2,296,806,729
--------------
--------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $2,301,838,795.
(a) Cost for federal income tax and financial reporting purposes are the same.
(b) Rule 144A, Section 4(2) or other security which is restricted as to resale
to institutional investors.
(c) This security has been determined to be illiquid.
* Variable rate security. Rate represents rate in effect at November 30, 1997.
Maturity date reflects the next rate change date.
** Duff Phelps, Fitch Investors or Thomson Bank Watch ratings.
See Notes to Financial Statements.
85
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
November 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S/S&P
RATINGS PRINCIPAL AMORTIZED
(UNAUDITED) AMOUNT COST
------------------ ------------ -------------
<S> <C> <C> <C>
U.S. TREASURY BILLS (6.2%)
U.S. Treasury Bill, 5.20%, 1/22/98 ............................. Aaa/AAA $ 50,000,000 $ 49,624,806
-------------
TOTAL U.S. TREASURY BILLS (COST $49,624,806)...................... 49,624,806
-------------
U.S. TREASURY NOTES (31.4%)
U.S. Treasury Notes, 7.88%, 1/15/98 ............................ Aaa/AAA 50,000,000 50,145,782
U.S. Treasury Notes, 5.00%, 1/31/98 ............................ Aaa/AAA 50,000,000 49,957,201
U.S. Treasury Notes, 7.25%, 2/15/98 ............................ Aaa/AAA 50,000,000 50,162,134
U.S. Treasury Notes, 6.13%, 3/31/98 ............................ Aaa/AAA 50,000,000 50,120,425
U.S. Treasury Notes, 5.88%, 4/30/98 ............................ Aaa/AAA 50,000,000 50,087,404
-------------
TOTAL U.S. TREASURY NOTES (COST $250,472,946)..................... 250,472,946
-------------
U.S. TREASURY STRIPS (7.4%)
U.S. Treasury Strips, 2/15/98 .................................. Aaa/AAA 60,000,000 59,317,656
-------------
TOTAL U.S. TREASURY STRIPS (COST $59,317,656)..................... 59,317,656
-------------
REPURCHASE AGREEMENTS (54.8%)
First Boston, dated 10/6/97 with a maturity value of $76,704,133
(Collateralized by $73,101,000 various U.S. Treasury Notes,
7.50% - 8.50%, 2/15/00 - 8/15/01, with a market value of
$78,338,298), 5.38%, 12/1/97 ................................. 76,418,625 76,418,625
Goldman Sachs, dated 11/25/97 with a maturity value of
$35,032,083 (Collateralized by $38,750,000 Government Na-
tional Mortgage Assoc., 6.50%-7.00%, 7/20/26-10/20/26, with a
market value of $36,071,727), 5.50%, 12/1/97 ................. 35,000,000 35,000,000
J P Morgan, dated 11/25/97 with a maturity value of $125,115,208
(Collateralized by, $353,702,000 various U.S. Treasury Strips,
4/15/99 - 4/15/30, with a market value of $127,500,724),
5.53%, 12/1/97 ............................................... 125,000,000 125,000,000
Morgan Stanley, dated 11/28/97 with a maturity value of
$80,916,624 .....(Collateralized by, $81,630,893 U.S. Treasury
Notes, 9.00%-13.88%, 12/26/97-11/15/18, with a market value of
$82,496,253), 5.70%, 12/1/97 80,878,207 80,878,207
Prudential Bache, dated 11/25/97 with a maturity value of
$35,032,083 (Collateralized by, $40,531,195 Government Na-
tional Mortgage Assoc., 6.00% - 9.00%, 1/1/00 - 11/20/27, with
a market value of $35,702,862), 5.50%, 12/1/97 ............... 35,000,000 35,000,000
Smith Barney, dated 11/28/97 with a maturity value of
$85,040,375 (Collateralized by, $83,355,000 U.S. Treasury
Securities, 6.13%-12.00%, 6/30/98 - 11/15/27, with a market
value of $86,700,850), 5.70%, 12/1/97 ........................ 85,000,000 85,000,000
-------------
TOTAL REPURCHASE AGREEMENTS (COST $437,296,832)................... 437,296,832
-------------
TOTAL (COST $796,712,240)(A) -- 99.8%............................. $ 796,712,240
-------------
-------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $798,057,945.
(a) Cost for Federal income tax and financial reporting purposes are the same.
See Notes to Financial Statements.
86
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
November 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S/S&P
RATINGS PRINCIPAL AMORITIZED
(UNAUDITED) AMOUNT COST
----------------- ---------- -------------
<S> <C> <C> <C>
MUNICIPAL BONDS (99.7%)
ALABAMA (0.7%)
Homewood Industrial Development Board, Revenue Bonds, Keebler Co.
Project (LC Bank of Nova Scotia), 3.95%, 12/3/97* .............. NR/NR $ 560,000 $ 560,000
Phenix County, Industrial Development Board, Environmental
Improvement Revenue, Georgia Kraft Project, (LC Deutsche Bank
AG), 3.80%, 12/1/97* ........................................... P-1/NR 700,000 700,000
-------------
1,260,000
-------------
ALASKA (2.8%)
Anchorage Higher Education Revenue, Series 1993, Alaska Pacific
University (LC Bank of America NW, N.A.), 3.90%, 12/3/97* ...... NR/A-1+ 5,340,000 5,340,000
-------------
ARKANSAS (2.7%)
Arkansas State Development Financial Authority, Industrial
Facilities Revenue, Potlatch Corp. Project (AMT) (LC Credit
Suisse), 3.90%, 12/3/97* ....................................... NR/A-1+ 5,050,000 5,050,000
-------------
CALIFORNIA (2.6%)
California State Revenue Anticipation Notes, 4.50%, 6/30/98 ...... MIG1/SP1+ 2,000,000 2,007,277
Los Angeles County Tax & Revenue Anticipation Notes, Series A,
G.O. Unlimited, 4.50%, 6/30/98 ................................. MIG1/SP1+ 3,000,000 3,010,828
-------------
5,018,105
-------------
DELAWARE (3.5%)
Delaware State Economic Development Authority, Industrial Devel-
opment Revenue Bonds, Delaware Clean Power Project, Series
1997B, (AMT) (LC Canadian Imperial Bank), 3.90%, 12/3/97* ...... NR/A-1+ 6,700,000 6,700,000
-------------
FLORIDA (4.6%)
St. Lucie Pollution Control Revenue, Refunding Bonds, Florida
Power & Light Co. Project, Series 1994A, 3.80%, 2/13/98 ........ VMIG1/A-1+ 5,000,000 5,000,000
St. Lucie Pollution Control Revenue, Refunding Bonds, Florida
Power & Light Project, Series 1994B, 3.70%, 12/9/97* ........... VMIG1/A-1+ 3,800,000 3,800,000
-------------
8,800,000
-------------
GEORGIA (9.3%)
Burke County Development Authority, Pollution Control Revenue
Bonds, Georgia Power Co., 3.95%, 12/1/97* ...................... VMIG1/NR 1,100,000 1,100,000
Burke County Development Authority, Pollution Control Revenue
Bonds, Oglethorpe Power Corp., Class A (Insured by AMBAC),
3.60%, 12/1/97 ................................................. Aaa/AAA 1,400,000 1,400,000
Columbus Housing Authority Revenue Bonds, Columbus State
University Foundation, Inc. Project, Series 1997, 3.95%,
12/3/97* ....................................................... Aa3/NR 1,300,000 1,300,000
Gwinnett County Development Authority, Variable Revenue Bonds,
Wesleyan School Project (LC SunTrust Bank), 3.95%, 12/3/97* .... Aa3/NR 1,000,000 1,000,000
Monroe County Development Authority, Pollution Control Revenue
Bond, Georgia Power Co., Plant Scherer Project, 1st Series,
3.95%, 12/1/97* ................................................ VMIG1/A-1 4,100,000 4,100,000
Municipal Gas Authority of Georgia, Series D, (LC: Wachovia),
3.80%, 2/9/98 .................................................. NR/A-1+ 4,000,000 4,000,000
Municipal Gas Authority of Georgia, Series D, (LC: Wachovia),
3.80%, 2/25/98 ................................................. NR/A-1+ 1,700,000 1,700,000
</TABLE>
87
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P
RATINGS PRINCIPAL AMORITIZED
(UNAUDITED) AMOUNT COST
----------------- ---------- -------------
<S> <C> <C> <C>
GEORGIA (9.3%) (CONTINUED)
Rockdale County, Hospital Authority Revenue Anticipation Certifi-
cates (LC SunTrust Bank), 3.95%, 12/3/97* ...................... VMIG1/NR $3,025,000 $ 3,025,000
-------------
17,625,000
-------------
ILLINOIS (14.2%)
Chicago O'Hare International Airport Revenue, American Airlines,
Inc., Series B (LC Royal Bank of Canada), 3.85%, 12/1/97* ...... P-1/NR 1,200,000 1,200,000
Illinois Development Finance Authority, Addison 450 LP Project (LC
American National Bank & Trust), 4.00%, 12/3/97* ............... Aa3/NR 1,400,000 1,400,000
Illinois Education Authority Revenue Notes TECP, Pooled Finance
Project, (LC Northern Trust), 3.75%, 2/26/98 ................... NR/A-1+ 2,310,000 2,310,000
Illinois Educational Facilities Authority Revenue Bonds, DePaul
University, Series CP-1 (LC Northern Trust), 3.85%, 12/3/97* ... VMIG1/A-1+ 4,000,000 4,000,000
Illinois Educational Facilities Authority, (Cultural Pooled
Finance Programs) (LC First National Bank of Chicago), 3.90%,
12/3/97* ....................................................... VMIG1/NR 4,800,000 4,800,000
Illinois Health Facilities Authority Revenue Bonds, Gottlieb
Health, Inc. (LC Harris Trust & Savings Bank), 3.85%,
12/3/97* ....................................................... VMIG1/NR 1,000,000 1,000,000
Illinois Health Facilities Authority Revenue Bonds, University of
Chicago Project, Series 1985A, 3.75%, 5/27/98* ................. VMIG1/A-1+ 7,300,000 7,300,000
Oak Forest Revenue Bond, Homewood Pool -- South Suburban Majors &
Mgrs. Assoc. Program, (LC First National Bank of Chicago),
3.85%, 12/3/97* ................................................ VMIG1/NR 5,000,000 5,000,000
-------------
27,010,000
-------------
INDIANA (10.9%)
City of Mt. Vernon Pollution Control & Solid Waste, Revenue Bonds,
General Electric Co. Projects, Series 1989A, 3.75%, 12/19/97 ... P-1/A-1+ 3,200,000 3,200,000
City of Whiting, Sewage & Solid Waste Disposal, AMOCO Oil Co.
Project, 4.10%, 12/1/97* ....................................... VMIG1/AAA 6,000,000 6,000,000
Evansville Industrial Development Revenue Bonds, Keebler Co.
Project (LC Bank of Nova Scotia), 3.95%, 12/3/97* .............. NR/NR 505,000 505,000
Gary Environmental Improvement Revenue, U.S. Steel Corp. Project
(LC Bank of Nova Scotia), 3.95%, 7/15/02* ...................... P-1/A-1+ 1,000,000 1,000,000
Indiana Health Facilities Finance Authority Revenue, (Capital
Access Designated Pool) (LC Comerica Bank), 3.90%, 12/3/97* .... NR/A-1 4,200,000 4,200,000
Indiana Hospital Equipment Finance Authority, Revenue Bonds,
Series A, (Insured by MBIA) Standby Bond Purchase Org Reinvest
w/ NBD Bank, 3.90%, 12/3/97* ................................... VMIG1/A-1 2,200,000 2,200,000
Indiana State Development Finance Authority, Mid-America Project,
(LC ABN-AMRO), 4.00%, 12/3/97* ................................. NR/A-1+ 3,500,000 3,500,000
-------------
20,605,000
-------------
KENTUCKY (3.7%)
Jefferson County Pollution Control Revenue, Pollution Control
Revenue Bonds, Louisville Gas & Electric Co. Project, Series A,
3.80%, 3/10/98 ................................................. VMIG1/A-1+ 6,950,000 6,950,000
-------------
LOUISIANA (2.8%)
Plaquemines Port Harbor & Terminal Dist., Marine Terminal
Facilities Revenue Ref. Electric Coal Transfer Corp., 3.75%,
12/9/97 ........................................................ P-1/A-1+ 5,275,000 5,275,000
-------------
MARYLAND (9.2%)
Anne Arundel Co. General Obligation, 3.80%, 2/6/98 ............... P-1/A-1+ 6,300,000 6,300,000
Maryland State Industrial Development Financing Authority, Eco-
nomic Development, (General Binding Corp. Project), 3.95%,
12/3/97* ....................................................... NR/A-1+ 2,150,000 2,150,000
Montgomery Co. Consolidated, 3.80%, 12/16/97 ..................... P-1/A-1+ 4,000,000 4,000,000
Montgomery Co. Consolidated, 3.80%, 2/6/98 ....................... P-1/A-1+ 3,000,000 3,000,000
</TABLE>
88
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P
RATINGS PRINCIPAL AMORITIZED
(UNAUDITED) AMOUNT COST
----------------- ---------- -------------
<S> <C> <C> <C>
MARYLAND (9.2%) (CONTINUED)
Montgomery Co. Consolidated, 3.80%, 2/17/98 ...................... P-1/A-1+ $2,000,000 $ 2,000,000
-------------
17,450,000
-------------
MICHIGAN (1.6%)
Michigan Strategic Fund Ltd. Obligation Revenue Refunding Bonds
(Detroit Edison Co. Project) (LC Barclays Bank), 3.85%,
12/1/97* ....................................................... P-1/A-1+ 3,100,000 3,100,000
-------------
MINNESOTA (1.6%)
Rochester Health Care Facilities Revenue Bonds, (Mayo Founda-
tion/May Medical Center), 3.80%, 2/13/98 ....................... NR/A-1+ 3,000,000 3,000,000
-------------
MISSISSIPPI (0.5%)
Mississippi Hospital Equipment Facilities Authority Revenue, Mis-
sissippi Baptist Medical Center (LC Rabo Bank), 3.85%,
12/3/97 ........................................................ VMIG1/NR 1,000,000 1,000,000
-------------
MONTANA (0.7%)
Forsythe Pollution Control Revenue Bonds, Portland General
Electric Co. (AMT) (LC Banque Nationale Paris), 3.90%,
12/1/97* ....................................................... VMIG1/NR 1,400,000 1,400,000
-------------
NEW YORK (2.6%)
New York City Municipal Water Finance Authority, Series 1 Lot A,
(LC CIBC), 3.80%, 3/11/98 ...................................... P-1/A-1+ 5,000,000 5,000,000
-------------
NORTH CAROLINA (1.1%)
North Carolina Eastern Municipal Power Agency, (LC CIBC), 3.75%,
12/1/97 ........................................................ P-1/A-1+ 2,100,000 2,100,000
-------------
OHIO (0.5%)
Summit County Industrial Revenue, Revenue Bonds, Keebler Co.
Project (LC Bank of Nova Scotia), 3.95%, 12/3/97* .............. NR/NR 995,000 995,000
-------------
PENNSYLVANIA (1.9%)
Montgomery Co., Industrial Development Authority, Pollution
Control Revenue Refunding Bonds, PECO Energy Project, Series
1994A, 3.80%, 1/22/98 .......................................... P-1/A-1+ 2,560,000 2,560,000
Philadelphia Tax & Revenue Anticipation Notes, Series A, 4.50%,
6/30/98 ........................................................ MIG1/SP1+ 1,000,000 1,002,778
-------------
3,562,778
-------------
TENNESSEE (2.6%)
Sullivan County Industrial Development Board Revenue Bonds, Modern
Forge Co. Project, Series 90 (AMT) (LC Northern Trust), 4.05%,
12/3/97* ....................................................... NR/A-1+ 5,000,000 5,000,000
-------------
TEXAS (15.5%)
Angelina & Neches River Authority, Industrial Development Corp.,
Temple Inland Project, Series 1984 C (LC Credit Suisse), 3.85%,
12/1/97* ....................................................... P-1/NR 1,700,000 1,700,000
Austin Combined Utility Systems, 3.80%, 12/10/97 ................. P-1/A-1+ 5,550,000 5,550,000
Brazos River Authority Pollution Control Revenue Bonds, Texas
Utilities Electric Co., Series 1996-A (Insured by AMBAC), 4.10%,
12/1/97* ....................................................... VMIG1/A-1+ 500,000 500,000
Brazos River Harbor Navigation District Revenue, Dow Chemical Co.
Project, Series 1992 A, (AMT), 4.15%, 12/1/97* ................. P-1/A-1 2,000,000 2,000,000
</TABLE>
89
<PAGE>
<TABLE>
<CAPTION>
MOODY'S/S&P
RATINGS PRINCIPAL AMORITIZED
(UNAUDITED) AMOUNT COST
----------------- ---------- -------------
<S> <C> <C> <C>
TEXAS (15.5%) (CONTINUED)
Houston City General Obligation Notes, Series A, 3.80%,
3/16/98 ........................................................ P-1/A-1+ $5,000,000 $ 5,000,000
Lower Neches Valley Authority Adjustable Rate Bond, Chevron USA
Inc. Project, Optional Put On 2/17/98, 3.75%, 2/17/98* ......... P-1/A-1+ 1,000,000 1,000,000
San Antonio Electric & Gas, Series A, 3.80%, 12/15/97 ............ P-1/A-1+ 6,400,000 6,400,000
Texas State Tax & Revenue Anticipation Note, Series A, 4.75%,
8/31/98 ........................................................ MIG1/SP1+ 5,000,000 5,032,730
Texas State Tax & Revenue Anticipation, Series 1997B, 3.70%,
2/10/98 ........................................................ P-1/A-1+ 2,000,000 2,000,000
-------------
29,182,730
-------------
UTAH (1.6%)
Salt Lake City Flex, IHC Health Services Inc., Series 1990, Class
B, 3.80%, 2/9/98 ............................................... VMIG1/A-1+ 3,000,000 3,000,000
-------------
VIRGINIA (1.7%)
Virginia Commonwealth General Obligation, Series 1997, 3.80%,
3/20/98 ........................................................ P-1/A-1+ 3,200,000 3,200,000
-------------
WYOMING (0.8%)
Lincoln County Pollution Control Revenue, Revenue Flex Pacific
Corp. Project, (LC Union Bank of Switzerland), 3.85%, 12/1/97 .. VMIG1/AAA 1,500,000 1,500,000
-------------
TOTAL MUNICIPAL BONDS (COST $189,123,613)........................... 189,123,613
-------------
TOTAL (COST $189,123,613)(A) -- 99.7%............................... $ 189,123,613
-------------
-------------
</TABLE>
- ---------------
Percentages indicated are based on net assets of $189,614,231.
(a) Cost for federal income tax and financial reporting purposes are the same.
* Variable rate security. Rate listed is rate in effect at November 30, 1997.
Maturity date reflects the next rate change date.
AMBAC -- AMBAC Indemnity Corporation.
AMT -- Interest on securities subject to Federal Alternative Minimum Tax.
FGIC -- Financial Guaranty Insurance Corp.
GO -- General Obligation.
LC -- Letter of Credit.
MBIA -- Municipal Bond Insurance Association.
NR -- Not rated.
See Notes to Financial Statements.
90
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities
November 30, 1997
- --------------------------------------------------------------------------------
<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 $211,541,142, $19,936,734, $56,145,727
and $156,847,417, respectively)......................... $ 282,399,119 $ 22,299,107 $ 59,636,677 $ 177,335,468
Interest and dividends receivable......................... 273,369 54,449 98,468 58,890
Receivable for capital shares issued...................... 6,058 32,366 -- 253
Receivable for investment securities sold................. -- -- 540,427 --
Tax reclaim receivable.................................... -- -- 36,841 --
Net receivable for open foreign currency contracts........ -- -- 7,425 --
Unamortized organizational costs.......................... -- 7,624 7,735 13,519
Prepaid expenses and other assets......................... 6,906 786 19,081 10,569
------------- ------------- ------------- -------------
Total assets................................................ 282,685,452 22,394,332 60,346,654 177,418,699
------------- ------------- ------------- -------------
LIABILITIES:
Dividends payable......................................... 15,474 63,058 412,756 --
Payable for capital shares redeemed....................... 33,979 -- 12,217 68,463
Payable for investment securities purchased............... -- -- 1,273,859 --
Accrued expenses and other liabilities:
Investment advisory fees................................ 139,498 10,472 47,724 147,877
Administration fees..................................... 2,997 235 623 1,879
Shareholder processing fees (Retail Shares)............. 9,972 759 1,044 3,045
Combined distribution and service fees (Retail
Shares)............................................... 9,972 759 1,044 3,045
Custodian and transfer agent fees....................... 8,227 1,218 14,716 10,991
Audit and legal fees.................................... 13,582 5,417 6,105 8,089
Reports to shareholders................................. 27,620 1,509 4,752 15,343
Registration and filing fees............................ 1,520 5,589 3,741 1,000
Other liabilities....................................... 2,695 40,422 31,451 312
------------- ------------- ------------- -------------
Total liabilities........................................... 265,536 129,438 1,810,032 260,044
------------- ------------- ------------- -------------
NET ASSETS.................................................. $ 282,419,916 $ 22,264,894 $ 58,536,622 $ 177,158,655
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
NET ASSETS:
Retail Shares............................................. $ 48,442,554 $ 4,100,737 $ 4,259,331 $ 14,062,510
Institutional Shares...................................... 233,977,362 18,164,157 54,277,291 163,096,145
------------- ------------- ------------- -------------
Total....................................................... $ 282,419,916 $ 22,264,894 $ 58,536,622 $ 177,158,655
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
OUTSTANDING SHARES OF BENEFICIAL INTEREST:
Retail Shares............................................. 2,692,460 269,391 324,510 1,096,636
Institutional Shares...................................... 12,894,783 1,190,578 4,122,281 12,566,576
------------- ------------- ------------- -------------
Total....................................................... 15,587,243 1,459,969 4,446,791 13,663,212
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER
SHARE:
Retail Shares............................................. $ 17.99 $ 15.22 $ 13.13 $ 12.82
Institutional Shares...................................... 18.15 15.26 13.17 12.98
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par ($0.001)............ $ 15,587 $ 1,460 $ 4,447 $ 13,663
Additional paid-in capital................................ 158,906,386 19,399,141 53,478,645 152,834,559
Accumulated undistributed (distributions in excess of) net
investment income....................................... (7,273) (1,287) (85,465) --
Accumulated net realized gains (losses) on investment
transactions and foreign currency transactions.......... 52,647,239 503,207 1,649,284 3,822,382
Net unrealized appreciation (depreciation) from
investments and translation of assets and liabilities in
foreign currencies...................................... 70,857,977 2,362,373 3,489,711 20,488,051
------------- ------------- ------------- -------------
Net Assets, November 30, 1997............................... $ 282,419,916 $ 22,264,894 $ 58,536,622 $ 177,158,655
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
- ------------
See Notes to Financial Statements.
91
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities
November 30, 1997
- --------------------------------------------------------------------------------
<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 $71,658,428,
$96,728,832, $69,351,690 and $98,901,595,
respectively)........................................... $ 85,153,644 $ 97,067,685 $ 70,772,374 $ 100,579,501
Interest and dividends receivable......................... 553,047 1,121,337 719,822 1,331,812
Receivable for capital shares issued...................... 17,500 188,079 7,500 --
Unamortized organizational costs.......................... 17,129 17,128 -- 17,212
Prepaid expenses and other assets......................... 2,672 3,671 3,086 5,470
-------------- -------------- -------------- --------------
Total assets................................................ 85,743,992 98,397,900 71,502,782 101,933,995
-------------- -------------- -------------- --------------
LIABILITIES:
Dividends payable......................................... 491,051 439,224 352,655 501,016
Payable for capital shares redeemed....................... 14,484 1,101 9,861 --
Accrued expenses and other liabilities:
Investment advisory fees................................ 42,308 31,835 23,570 33,347
Administration fees..................................... 906 1,037 758 1,076
Shareholder processing fees (Retail Shares)............. 1,717 863 4,483 458
Combined distribution and service fees (Retail Shares).. 1,717 863 4,483 458
Custodian and transfer agent fees....................... 11,057 3,430 4,190 4,454
Audit and legal fees.................................... 6,490 6,046 6,078 6,165
Reports to shareholders................................. 9,887 9,206 7,828 37,364
Registration and filing fees............................ 1,529 4,239 1,201 3,214
Other liabilities....................................... 2,805 827 3,893 595
-------------- -------------- -------------- --------------
Total liabilities........................................... 583,951 498,671 419,000 588,147
-------------- -------------- -------------- --------------
NET ASSETS.................................................. $ 85,160,041 $ 97,899,229 $ 71,083,782 $ 101,345,848
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
NET ASSETS:
Retail Shares............................................. $ 8,291,845 $ 4,452,311 $ 21,614,817 $ 2,278,409
Institutional Shares...................................... 76,868,196 93,446,918 49,468,965 99,067,439
-------------- -------------- -------------- --------------
Total....................................................... $ 85,160,041 $ 97,899,229 $ 71,083,782 $ 101,345,848
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
OUTSTANDING SHARES OF BENEFICIAL INTEREST:
Retail Shares............................................. 595,508 445,111 2,100,708 220,220
Institutional Shares...................................... 5,564,606 9,339,203 4,821,199 9,619,825
-------------- -------------- -------------- --------------
Total....................................................... 6,160,114 9,784,314 6,921,907 9,840,045
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER
SHARE:
Retail Shares............................................... $ 13.92 $ 10.00 $ 10.29 $ 10.35
Institutional Shares........................................ 13.81 10.01 10.26 10.30
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par ($0.001)............ $ 6,160 $ 9,784 $ 6,922 $ 9,840
Additional paid-in capital................................ 60,646,248 97,670,718 73,074,854 99,129,735
Accumulated undistributed (distributions in excess of) net
investment income....................................... 5,797 30,258 (146,808) (84,946)
Accumulated net realized gains (losses) on investment
transactions............................................ 11,006,620 (150,384) (3,271,870) 613,313
Net unrealized appreciation (depreciation) from
investments............................................. 13,495,216 338,853 1,420,684 1,677,906
-------------- -------------- -------------- --------------
Net Assets, November 30, 1997............................... $ 85,160,041 $ 97,899,229 $ 71,083,782 $ 101,345,848
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
</TABLE>
- ------------
See Notes to Financial Statements.
92
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities
November 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FLORIDA
TAX-EXEMPT PRIME TREASURY TAX-EXEMPT
FUND FUND FUND FUND
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Investment in securities, at value (cost $113,566,211
and amortized cost $2,136,206,189, $359,415,410 and
$189,123,613, respectively)............................ $ 121,665,216 $2,136,206,189 $ 359,415,410 $ 189,123,613
Repurchase agreements (cost $0 and amortized cost
$160,600,540, $437,296,830 and $0, respectively)....... -- 160,600,540 437,296,830 --
Cash...................................................... -- -- -- 138,163
Interest and dividends receivable......................... 1,735,947 16,023,361 5,049,845 963,429
Receivable for capital shares issued...................... 679,862 -- -- --
Receivable for securities on loan......................... -- -- 77,005,106 --
Prepaid expenses and other assets......................... 66,720 55,668 49,947 14,766
-------------- -------------- -------------- --------------
Total assets................................................ 124,147,745 2,312,885,758 878,817,138 190,239,971
-------------- -------------- -------------- --------------
LIABILITIES:
Dividends payable......................................... 454,200 9,578,031 3,257,393 526,724
Payable for capital shares redeemed....................... 183,107 -- -- --
Payable for investment securities purchased............... 3,897,900 -- -- --
Payable for collateral from securities on loan............ -- -- 76,418,625 --
Accrued expenses and other liabilities:
Investment advisory fees................................ 38,870 422,896 164,455 --
Sub-Advisory fees....................................... -- -- -- 23,639
Administration fees..................................... 1,266 24,460 8,484 2,008
Shareholder processing and services fees (Service
Shares)............................................... -- 330,532 132,226 --
Shareholder processing fees (Retail Shares)............. 16,349 123,653 11,639 9,420
Combined distribution and service fees (Retail
Shares)............................................... 16,349 123,653 11,639 21,187
Custodian and transfer agent fees....................... 4,031 106,942 41,124 11,905
Audit and legal fees.................................... 9,301 92,136 36,862 7,866
Reports to shareholders................................. 41,442 238,276 62,511 19,933
Registration and filing fees............................ 12,080 3,457 83 2,398
Interest payable on collateral from securities on
loan.................................................. -- -- 597,933 --
Other liabilities....................................... 8,825 2,927 16,219 660
-------------- -------------- -------------- --------------
Total liabilities........................................... 4,683,720 11,046,963 80,759,193 625,740
-------------- -------------- -------------- --------------
NET ASSETS.................................................. $ 119,464,025 $2,301,838,795 $ 798,057,945 $ 189,614,231
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
NET ASSETS:
Retail Shares............................................. $ 80,399,223 $ 592,247,709 $ 58,716,503 $ 59,172,862
Institutional Shares...................................... 39,064,802 581,142,127 290,575,858 129,886,489
Service Shares............................................ NA 1,128,448,959 448,765,584 554,880
-------------- -------------- -------------- --------------
Total....................................................... $ 119,464,025 $2,301,838,795 $ 798,057,945 $ 189,614,231
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
OUTSTANDING SHARES OF BENEFICIAL INTEREST:
Retail Shares............................................. 7,143,927 592,258,101 58,751,937 59,185,380
Institutional Shares...................................... 3,467,292 581,152,243 290,742,444 129,924,939
Service Shares............................................ NA 1,128,464,311 449,184,467 555,707
-------------- -------------- -------------- --------------
Total....................................................... 10,611,219 2,301,874,655 798,678,848 189,666,026
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER
SHARE:
Retail Shares............................................. $ 11.25 $ 1.00 $ 1.00 $ 1.00
Institutional Shares...................................... 11.27 1.00 1.00 1.00
Service Shares............................................ NA 1.00 1.00 1.00
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par ($0.001)............ $ 10,611 $ 2,301,875 $ 798,679 $ 189,666
Additional paid-in capital................................ 114,497,690 2,299,571,586 797,880,168 189,467,719
Accumulated undistributed (distributions in excess of) net
investment income....................................... (57,867) (3,942) 4,289 (106)
Accumulated net realized gains (losses) on investment
transactions............................................ (3,085,414) (30,724) (625,191) (43,048)
Net unrealized appreciation (depreciation) from
investments............................................. 8,099,005 -- -- --
-------------- -------------- -------------- --------------
Net Assets, November 30, 1997............................... $ 119,464,025 $2,301,838,795 $ 798,057,945 $ 189,614,231
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
</TABLE>
- ------------
NA -- Not applicable.
See Notes to Financial Statements.
93
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Statements of Operations
For the year ended November 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY INTERNATIONAL SMALL
EQUITY VALUE EQUITY CAPITALIZATION
FUND FUND FUND FUND
------------ ------------ ------------- ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ...................................... $ 2,505,394 $ 261,132 $ 913,577 $ 780,596
Interest ....................................... 11,984 479 -- --
Foreign withholding taxes ...................... -- -- (76,820) --
------------ ------------ ------------- ------------
Total investment income .......................... 2,517,378 261,611 836,757 780,596
------------ ------------ ------------- ------------
EXPENSES:
Investment advisory fees ....................... 1,598,533 67,285 400,141 1,549,153
Administration fees ............................ 206,476 7,943 31,013 120,060
Shareholder processing fees (Retail Shares) .... 103,711 2,789 5,110 27,714
Combined distribution and service fees (Retail
Shares) ...................................... 103,711 2,789 5,110 27,714
Transfer agent fees and expenses ............... 53,239 -- 8,063 38,270
Custodian fees and expenses .................... 32,218 11,757 2,973 31,931
Legal fees ..................................... 13,619 896 2,637 7,134
Audit fees ..................................... 5,048 880 2,863 4,536
Reports to shareholders (Retail Shares) ........ 27,422 344 1,881 2,713
Reports to shareholders (Institutional
Shares) ...................................... 36,365 2,351 8,415 22,854
Amortization of organization costs ............. -- 2,555 2,422 12,410
Registration and filing fees ................... 28,643 10,147 7,789 32,070
Trustees' fees ................................. 13,868 458 1,782 8,058
Insurance expense .............................. 6,442 110 69 21
Other expenses ................................. 16,975 7,615 17,856 9,068
------------ ------------ ------------- ------------
Gross Expenses ................................... 2,246,270 117,919 498,124 1,893,706
Less: Expense waivers and/or reimbursements ...... (129) (21,316) (4,304) (1,321)
Expenses paid by third parties ............... (776) (81) (12) (458)
------------ ------------ ------------- ------------
Net Expenses ..................................... 2,245,365 96,522 493,808 1,891,927
------------ ------------ ------------- ------------
Net Investment Income (Loss) ..................... 272,013 165,089 342,949 (1,111,331)
------------ ------------ ------------- ------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON
INVESTMENTS:
Net realized gains (losses) on securities
transactions ................................. 53,127,398 503,246 1,541,113 4,933,513
Net realized gains (losses) from foreign
security transactions ........................ -- -- (11,468) --
Net change in unrealized appreciation
(depreciation) of investments ................ 2,983,542 1,805,120 2,556,440 13,104,533
------------ ------------ ------------- ------------
Net realized and unrealized gains (losses) on
investments .................................. 56,110,940 2,308,366 4,086,085 18,038,046
------------ ------------ ------------- ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ................................ $ 56,382,953 $ 2,473,455 $4,429,034 $ 16,926,715
------------ ------------ ------------- ------------
------------ ------------ ------------- ------------
</TABLE>
See Notes to Financial Statements.
94
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Statements of Operations
For the year ended November 30, 1997
- --------------------------------------------------------------------------------
<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....................................... $ 593,774 $ 59,051 $ 71,757 $ 75,153
Interest........................................ 2,540,841 4,647,456 4,489,007 5,758,692
------------ ------------- ------------ ------------
Total Investment Income........................... 3,134,615 4,706,507 4,560,764 5,833,845
------------ ------------- ------------ ------------
EXPENSES:
Investment advisory fees........................ 560,612 299,547 265,439 347,005
Administration fees............................. 72,413 58,033 51,429 67,233
Shareholder processing fees (Retail Shares)..... 17,992 4,928 54,946 4,836
Combined distribution and service fees (Retail
Shares)....................................... 17,992 4,928 54,946 4,849
Transfer agent fees and expenses................ 21,211 16,163 13,419 18,406
Custodian fees and expenses..................... 30,348 12,108 13,876 9,187
Legal fees...................................... 904 1,855 2,698 3,988
Audit fees...................................... 3,338 3,064 2,441 1,912
Reports to shareholders (Retail Shares)......... 1,606 553 13,369 16,096
Reports to shareholders (Institutional
Shares)....................................... 11,597 14,352 8,461 39
Amortization of organization costs.............. 12,620 12,585 -- 12,775
Registration and filing fees.................... 17,555 19,622 18,378 20,250
Trustees' fees.................................. 1,334 2,847 3,314 3,661
Insurance expense............................... 1,352 671 1,606 1,983
Other expenses.................................. 6,084 18,119 9,953 6,021
------------ ------------- ------------ ------------
Gross Expenses.................................... 776,958 469,375 514,275 518,241
Less: Expense reimbursements...................... (641) (8,106) (8,291) (17,638)
Expenses paid by third parties................ (266) (213) (188) (246)
------------ ------------- ------------ ------------
Net Expenses...................................... 776,051 461,056 505,796 500,357
------------ ------------- ------------ ------------
Net Investment Income............................. 2,358,564 4,245,451 4,054,968 5,333,488
------------ ------------- ------------ ------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON
INVESTMENTS:
Net realized gains (losses) on securities
transactions.................................. 11,083,990 (126,627) 476,128 696,540
Net change in unrealized appreciation
(depreciation) of investments................. (274,169) (150,440) (382,725) (134,996)
------------ ------------- ------------ ------------
Net realized and unrealized gains (losses) on
investments................................... 10,809,821 (277,067) 93,403 561,544
------------ ------------- ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS................................. $ 13,168,385 $3,968,384 $ 4,148,371 $ 5,895,032
------------ ------------- ------------ ------------
------------ ------------- ------------ ------------
</TABLE>
See Notes to Financial Statements.
95
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Statements of Operations
For the year ended November 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FLORIDA
TAX-EXEMPT PRIME TREASURY TAX-EXEMPT
FUND FUND FUND FUND
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends....................................... $ 102,821 $ -- $ -- $ --
Interest........................................ 6,437,005 125,537,558 51,505,306 6,413,406
------------- ------------- ------------- -------------
Total Investment Income........................... 6,539,826 125,537,558 51,505,306 6,413,406
------------- ------------- ------------- -------------
EXPENSES:
Investment advisory fees........................ 464,431 5,563,480 2,311,626 437,054
Administration fees............................. 89,984 1,724,349 716,897 135,487
Shareholder processing and services fees
(Service Shares).............................. -- 3,677,418 1,877,378 3,122
Shareholder processing fees (Retail Shares)..... 199,924 1,436,753 173,510 140,188
Combined distribution and service fees (Retail
Shares)....................................... 199,924 1,436,753 173,510 140,188
Transfer agent fees and expenses................ 26,371 525,637 219,389 43,513
Custodian fees and expenses..................... 16,264 192,802 91,451 13,011
Legal fees...................................... 4,651 130,632 41,337 7,408
Audit fees...................................... 4,632 101,171 9,912 945
Reports to shareholders (Retail Shares)......... 49,552 394,767 45,970 37,063
Reports to shareholders (Institutional
Shares)....................................... 5,953 119,728 55,879 21,689
Reports to shareholders (Service Shares)........ -- 157,853 67,298 2,000
Registration and filing fees.................... 18,351 107,869 68,480 32,752
Trustees' fees.................................. 6,735 113,584 45,218 9,522
Interest expense................................ -- -- 1,227,534 --
Insurance expense............................... 3,314 57,718 24,500 5,179
Other expenses.................................. 10,419 77,691 62,951 12,462
------------- ------------- ------------- -------------
Gross Expenses.................................... 1,100,505 15,818,205 7,212,840 1,041,583
Less: Expense reimbursements...................... (150,286) (91,828) (37,391) (8,234)
Fee waivers................................... -- (616,920) (65,598) (174,823)
Expenses paid by third parties................ (326) (7,197) (2,718) (541)
------------- ------------- ------------- -------------
Net Expenses...................................... 949,893 15,102,260 7,107,133 857,985
------------- ------------- ------------- -------------
Net Investment Income............................. 5,589,933 110,435,298 44,398,173 5,555,421
------------- ------------- ------------- -------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON
INVESTMENTS:
Net realized gains (losses) on securities
transactions.................................. 922,783 (30,724) (92,801) --
Net change in unrealized appreciation
(depreciation) of investments................. 981,574 -- -- --
------------- ------------- ------------- -------------
Net realized and unrealized gains (losses) on
investments................................... 1,904,357 (30,724) (92,801) --
------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS................................. $ 7,494,290 $ 110,404,574 $ 44,305,372 $ 5,555,421
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
See Notes to Financial Statements.
96
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY FUND
----------------------------- EQUITY VALUE FUND
-----------------------------
YEARS ENDED YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 1996 1997 1996 (A)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income........................... $ 272,013 $ 806,542 $ 165,089 $ 66,365
Net realized gains (losses) on securities
transactions.................................. 53,127,398 23,919,476 503,246 25,549
Net change in unrealized appreciation
(depreciation) of investments................. 2,983,542 22,333,435 1,805,120 557,253
------------- ------------- ------------- -------------
Net increase (decrease) in net assets resulting
from operations............................... 56,382,953 47,059,453 2,473,455 649,167
------------- ------------- ------------- -------------
Dividends to shareholders from net investment
income:
Retail Shares................................... (111) -- (8,762) (150)
Institutional Shares............................ (237,061) (806,542) (153,023) (66,142)
------------- ------------- ------------- -------------
Total dividends to shareholders from net
investment income............................... (237,172) (806,542) (161,785) (66,292)
------------- ------------- ------------- -------------
Distributions to shareholders in excess of net
investment income:
Retail Shares................................... -- (24,107) (4,664) --
B Shares (b).................................... -- (1,075) -- --
Institutional Shares............................ -- (17,427) -- --
------------- ------------- ------------- -------------
Total distributions to shareholders in excess of
net investment income........................... -- (42,609) (4,664) --
------------- ------------- ------------- -------------
Distributions to shareholders from net realized
gains:
Retail Shares................................... (3,210,483) (1,985,635) (145) --
B Shares (b).................................... -- (212,931) -- --
Institutional Shares............................ (20,775,012) (15,246,479) (25,443) --
------------- ------------- ------------- -------------
Total distributions to shareholders from net
realized gains.................................. (23,985,495) (17,445,045) (25,588) --
------------- ------------- ------------- -------------
Total dividends and distributions to
shareholders.................................... (24,222,667) (18,294,196) (192,037) (66,292)
------------- ------------- ------------- -------------
Fund Share Transactions:
Net proceeds from shares subscribed............. 52,626,885 68,268,294 18,926,635 5,136,577
Net asset value of shares issued to shareholders
in reinvestment of dividends and
distributions................................. 21,218,008 15,964,511 56,541 223
Cost of shares redeemed......................... (73,946,335) (60,932,375) (2,967,375) (1,752,000)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets from Fund
share transactions............................ (101,442) 23,300,430 16,015,801 3,384,800
------------- ------------- ------------- -------------
Total Increase.................................... 32,058,844 52,065,687 18,297,219 3,967,675
NET ASSETS:
Beginning of period............................. 250,361,072 198,295,385 3,967,675 --
------------- ------------- ------------- -------------
End of period $ 282,419,916 $ 250,361,072 $ 22,264,894 $ 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 are no longer being 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>
SMALL CAPITALIZATION FUND
INTERNATIONAL EQUITY FUND -----------------------------
-----------------------------
YEAR ENDED PERIOD ENDED YEARS ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 1996 (A) 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income (loss).................... $ 342,949 $ 77,844 $ (1,111,331) $ (775,001)
Net realized gains (losses) on securities
transactions.................................. 1,541,113 152,939 4,933,513 19,900,908
Net realized gains (losses) from foreign
currency transactions......................... (11,468) (3,704) -- --
Net change in unrealized appreciation
(depreciation) from investments and
translation of assets and liabilities in
foreign currencies............................ 2,556,440 933,271 13,104,533 (4,469,248)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets resulting
from operations............................... 4,429,034 1,160,350 16,926,715 14,656,659
------------- ------------- ------------- -------------
Dividends to shareholders from net investment
income:
Retail Shares................................... (5,024) (413) -- (211,250)
B Shares (b).................................... -- -- -- (206,488)
Institutional Shares............................ (335,369) (77,431) -- (6,891,681)
------------- ------------- ------------- -------------
Total dividends to shareholders from net
investment income............................... (340,393) (77,844) -- (7,309,419)
------------- ------------- ------------- -------------
Distributions to shareholders in excess of net
investment income:
Retail Shares................................... (15,291) (172) -- --
Institutional Shares............................ (57,072) (2,384) -- --
------------- ------------- ------------- -------------
Total distributions to shareholders in excess of
net investment income........................... (72,363) (2,556) -- --
------------- ------------- ------------- -------------
Distributions to shareholders from net realized
gains:
Retail Shares................................... (263) -- (1,124,602) --
Institutional Shares............................ (42,435) -- (17,767,379) --
------------- ------------- ------------- -------------
Total distributions to shareholders from net
realized gains.................................. (42,698) -- (18,891,981) --
------------- ------------- ------------- -------------
Total dividends and distributions to
shareholders.................................... (455,454) (80,400) (18,891,981) (7,309,419)
------------- ------------- ------------- -------------
Fund Share Transactions:
Net proceeds from shares subscribed............. 46,361,463 16,855,102 85,505,607 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......................... (9,465,465) (292,529) (69,022,047) (20,047,906)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets from Fund
share transactions............................ 36,920,519 16,562,573 31,625,701 46,375,250
------------- ------------- ------------- -------------
Total Increase (Decrease)......................... 40,894,099 17,642,523 29,660,435 53,722,490
NET ASSETS:
Beginning of period............................. 17,642,523 -- 147,498,220 93,775,730
------------- ------------- ------------- -------------
End of period $ 58,536,622 $ 17,642,523 $ 177,158,655 $ 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 are no longer being 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>
BALANCED FUND SHORT-TERM FIXED INCOME FUND
----------------------------- -----------------------------
YEARS ENDED YEARS ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 1996 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income........................... $ 2,358,564 $ 2,434,640 $ 4,245,451 $ 1,389,384
Net realized gains (losses) on securities
transactions.................................. 11,083,990 4,997,685 (126,627) 57,368
Net change in unrealized appreciation
(depreciation) of investments................. (274,169) 4,435,765 (150,440) 238,110
------------- ------------- ------------- -------------
Net increase (decrease) in net assets resulting
from operations............................... 13,168,385 11,868,090 3,968,384 1,684,862
------------- ------------- ------------- -------------
Dividends to shareholders from net investment
income:
Retail Shares................................... (118,834) (99,865) (102,142) (42,845)
B Shares (a).................................... -- (13,670) -- (2,024)
Institutional Shares............................ (2,131,004) (2,310,316) (4,143,309) (1,344,515)
------------- ------------- ------------- -------------
Total dividends to shareholders from net
investment income............................... (2,249,838) (2,423,851) (4,245,451) (1,389,384)
------------- ------------- ------------- -------------
Dividends to shareholders in excess of net
investment income:
Retail Shares................................. (41,783) -- -- --
------------- ------------- ------------- -------------
Distributions to shareholders from net realized
gains:
Retail Shares................................... (299,129) (22,583) -- (983)
B Shares (a).................................... -- (45,345) -- (531)
Institutional Shares............................ (4,717,219) (1,363,343) -- (46,651)
------------- ------------- ------------- -------------
Total distributions to shareholders from net
realized gains.................................. (5,016,348) (1,431,271) -- (48,165)
------------- ------------- ------------- -------------
Distributions to shareholders in excess of net
realized gains:
Retail Shares................................. -- -- (962) --
Institutional Shares.......................... -- -- (54,895) --
------------- ------------- ------------- -------------
Total distributions to shareholders in excess of
net realized gains.............................. -- -- (55,857) --
------------- ------------- ------------- -------------
Total dividends and distributions to
shareholders.................................... (7,307,969) (3,855,122) (4,301,308) (1,437,549)
------------- ------------- ------------- -------------
Fund Share Transactions:
Net proceeds from shares subscribed............. 16,683,278 34,090,512 65,721,236 47,095,330
Net asset value of shares issued to shareholders
in reinvestment of dividends and
distributions................................. 7,178,530 3,156,752 632,181 444,481
Cost of shares redeemed......................... (40,756,212) (26,281,039) (22,305,916) (8,137,532)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets from Fund
share transactions............................ (16,894,404) 10,966,225 44,047,501 39,402,279
------------- ------------- ------------- -------------
Total Increase (Decrease)......................... (11,033,988) 18,979,193 43,714,577 39,649,592
NET ASSETS:
Beginning of period............................. 96,194,029 77,214,836 54,184,652 14,535,060
------------- ------------- ------------- -------------
End of period................................... $ 85,160,041 $ 96,194,029 $ 97,899,229 $ 54,184,652
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
- ---------------
(a) Effective March 11, 1996, Class B Shares are no longer being 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>
U.S. GOVERNMENT SECURITIES
FUND MANAGED BOND FUND
----------------------------- -----------------------------
YEARS ENDED YEARS ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 1996 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income........................... $ 4,054,968 $ 4,213,287 $ 5,333,488 $ 4,461,745
Net realized gains (losses) on securities
transactions.................................. 476,128 664,448 696,540 759,127
Net change in unrealized appreciation
(depreciation) of investments................. (382,725) (1,517,543) (134,996) (969,641)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets resulting
from operations............................... 4,148,371 3,360,192 5,895,032 4,251,231
------------- ------------- ------------- -------------
Dividends to shareholders from net investment
income:
Retail Shares................................... (1,268,314) (1,466,587) (109,350) (92,633)
B Shares (a).................................... -- (21,601) -- (8,459)
Institutional Shares............................ (2,785,641) (2,726,113) (5,224,138) (4,360,653)
------------- ------------- ------------- -------------
Total dividends to shareholders from net
investment income............................... (4,053,955) (4,214,301) (5,333,488) (4,461,745)
------------- ------------- ------------- -------------
Distributions to shareholders from net realized
gains:
Retail Shares................................... -- -- (15,604) (13,911)
B Shares (a).................................... -- -- -- (5,665)
Institutional Shares............................ -- -- (720,710) (815,999)
------------- ------------- ------------- -------------
Total distributions to shareholders from net
realized gains.................................. -- -- (736,314) (835,575)
------------- ------------- ------------- -------------
Total dividends and distributions to
shareholders.................................... (4,053,955) (4,214,301) (6,069,802) (5,297,320)
------------- ------------- ------------- -------------
Fund Share Transactions:
Net proceeds from shares subscribed............. 24,596,320 19,998,532 41,537,808 31,995,319
Net asset value of shares issued to shareholders
in reinvestment of dividends and
distributions................................. 2,246,971 2,641,946 4,789,959 4,243,441
Cost of shares redeemed......................... (15,953,751) (64,773,650) (22,022,758) (28,374,995)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets from Fund
share transactions............................ 10,889,540 (42,133,172) 24,305,009 7,863,765
------------- ------------- ------------- -------------
Total Increase (Decrease)......................... 10,983,956 (42,987,281) 24,130,239 6,817,676
NET ASSETS:
Beginning of period............................. 60,099,826 103,087,107 77,215,609 70,397,933
------------- ------------- ------------- -------------
End of period................................... $ 71,083,782 $ 60,099,826 $ 101,345,848 $ 77,215,609
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
- ---------------
(a) Effective March 11, 1996, Class B Shares are no longer being 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>
FLORIDA TAX-EXEMPT FUND PRIME FUND
----------------------------- -----------------------------
YEARS ENDED YEARS ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 1996 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income........................... $ 5,589,933 $ 6,193,487 $ 110,435,298 $ 100,215,243
Net realized gains (losses) on securities
transactions.................................. 922,783 676,108 (30,724) 4,995
Net change in unrealized appreciation
(depreciation) of investments................. 981,574 (1,493,725) -- --
------------- ------------- ------------- -------------
Net increase (decrease) in net assets resulting
from operations............................... 7,494,290 5,375,870 110,404,574 100,220,238
------------- ------------- ------------- -------------
Dividends to shareholders from net investment
income:
Institutional Shares............................ (1,824,040) (1,740,957) (31,550,719) (32,620,075)
Service Shares.................................. -- -- (51,668,464) (43,011,011)
Retail Shares................................... (3,765,893) (4,335,296) (27,216,115) (24,584,157)
B Shares (a).................................... -- (117,234) -- --
------------- ------------- ------------- -------------
Total dividends to shareholders from net
investment income............................... (5,589,933) (6,193,487) (110,435,298) (100,215,243)
------------- ------------- ------------- -------------
Total distributions to shareholders from net
realized gains.................................. -- -- -- (358,875)
------------- ------------- ------------- -------------
Total dividends and distributions to
shareholders.................................... (5,589,933) (6,193,487) (110,435,298) (100,574,118)
------------- ------------- ------------- -------------
Fund Share Transactions:
Net proceeds from shares subscribed............. 33,039,551 29,782,670 5,089,704,001 4,863,805,197
Net asset value of shares issued to shareholders
in reinvestment of dividends and
distributions................................. 3,381,513 3,516,351 30,150,186 25,859,087
Cost of shares redeemed......................... (41,188,320) (47,849,944) (4,962,313,277) (4,554,641,484)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets from Fund
share transactions............................ (4,767,256) (14,550,923) 157,540,910 335,022,800
------------- ------------- ------------- -------------
Total Increase (Decrease)......................... (2,862,899) (15,368,540) 157,510,186 334,668,920
NET ASSETS:
Beginning of period............................. 122,326,924 137,695,464 2,144,328,609 1,809,659,689
------------- ------------- ------------- -------------
End of period................................... $ 119,464,025 $ 122,326,924 $2,301,838,795 $2,144,328,609
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
- ---------------
(a) Effective March 11, 1996, Class B Shares are no longer being offered for
sale and subsequently, all Class B Shares were converted to Retail Shares.
See Notes to Financial Statements.
101
<PAGE>
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- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY FUND TAX-EXEMPT FUND
----------------------------- -----------------------------
YEARS ENDED YEARS ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 1996 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income........................... $ 44,398,173 $ 41,837,011 $ 5,555,421 $ 6,060,612
Net realized gains (losses) on securities
transactions.................................. (92,801) (220,299) -- (20,046)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets resulting
from operations............................... 44,305,372 41,616,712 5,555,421 6,040,566
------------- ------------- ------------- -------------
Dividends to shareholders from net investment
income:
Retail Shares................................... (3,132,106) (2,191,200) (1,573,889) (1,199,819)
Service Shares.................................. (25,166,084) (27,088,342) (25,978) (80,005)
Institutional Shares............................ (16,099,983) (12,557,469) (3,955,660) (4,780,788)
------------- ------------- ------------- -------------
Total dividends to shareholders from net
investment income............................... (44,398,173) (41,837,011) (5,555,527) (6,060,612)
------------- ------------- ------------- -------------
Fund Share Transactions:
Net proceeds from shares subscribed............. 2,714,241,081 2,552,820,891 424,332,777 531,124,979
Net asset value of shares issued to shareholders
in reinvestment of dividends and
distributions................................. 4,086,263 3,479,765 1,550,699 1,110,214
Cost of shares redeemed......................... (2,863,764,516) (2,423,540,264) (431,867,285) (534,061,352)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets from Fund
share transactions............................ (145,437,172) 132,760,392 (5,983,809) (1,826,159)
------------- ------------- ------------- -------------
Total Increase (Decrease)......................... (145,529,973) 132,540,093 (5,983,915) (1,846,205)
NET ASSETS:
Beginning of period............................. 943,587,918 811,047,825 195,598,146 197,444,351
------------- ------------- ------------- -------------
End of period................................... $ 798,057,945 $ 943,587,918 $ 189,614,231 $ 195,598,146
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
See Notes to Financial Statements.
102
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
NOTE 1 -- GENERAL
Emerald Funds (the "Trust") was organized as a Massachusetts business trust on
March 15, 1988. The Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end, management investment
company. The Trust operates as a series company currently comprising fourteen
portfolios. The accompanying financial statements and notes relate to all of the
portfolios of the Trust that conducted investment operations during the year
ended November 30, 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 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 Square"), a subsidiary of Wilmington Trust
Company, serves as the Tax-Exempt Fund's 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 ("BISYS")
serves as the Funds' Administrator. BISYS Fund Services, Inc. serves as
103
<PAGE>
- --------------------------------------------------------------------------------
the Funds' transfer agent and fund accountant. Emerald Asset Management, Inc.
(the "Distributor") serves as the distributor of the Funds' shares. BISYS and
BISYS Fund Services, Inc. are each 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 registration fees
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. 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 registration fees applicable to
the particular class of shares.
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.
The Equity Fund, the Equity Value Fund, the International Equity Fund, the
Small Capitalization Fund, the Balanced Fund, the Short-Term Fixed Income Fund,
the U.S. Government Securities Fund and the Managed Bond Fund value portfolio
securities (other than debt securities with remaining maturities of 60 days or
less) at the last reported sales price on the securities exchange on which such
securities are primarily traded or at the last sales price on the NASDAQ
National Securities Market. Securities not listed on an exchange or the NASDAQ
National Securities Market or securities for which there were no transactions
are valued at the mean between the current quoted bid and asked prices on the
date of valuation. Bid price is used when no asked price is available. The Funds
may also use an independent pricing service, approved by the Board of Trustees,
to value certain of their securities. Such prices reflect market values which
may be established through the use of electronic data processing techniques and
matrix systems. Unit investment trusts are valued at the published unit value
per share. 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
104
<PAGE>
- --------------------------------------------------------------------------------
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. Investment companies are valued at the published net asset value
per share. 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 when applicable, 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.
As of November 30, 1997, the following reclassifications have been made to
increase (decrease) such amounts with offsetting adjustments made to paid in
capital:
<TABLE>
<CAPTION>
ACCUMULATED
UNDISTRIBUTED ACCUMULATED NET
NET REALIZED GAIN
INVESTMENT (LOSS)
INCOME ON INVESTMENTS
------------- -----------------
<S> <C> <C>
Equity Fund......... 495 (495)
International Equity
Fund............... (13,102) 13,102
Small Capitalization
Fund............... 1,111,331 (1,150,683)
Balanced Fund....... (65,208) 47,478
Short-Term Fixed
Income Fund........ 30,258 (28,719)
U.S. Government
Securities Fund.... (140,274) (110,849)
Managed Bond Fund... (84,946) 84,946
Prime Fund.......... (3,942) 3,941
Treasury Fund....... 4,289 (4,289)
Tax-Exempt Fund..... -- 8,643
</TABLE>
D) Repurchase Agreements:
The Trust's custodian and other banks acting in a sub-custodian capacity, take
possession of the collateral pledged for investments in repurchase agreements.
The underlying collateral is valued daily on a mark-to-market basis to determine
that the value, including accrued interest, exceeds the repurchase price. In the
event of the seller's default of the obligation to repurchase, the Funds have
the right to liquidate the collateral and apply the proceeds in satisfaction of
the obligation. Under certain circumstances, in the event of default or
bankruptcy by the other party to the agreement, realization and/or retention of
the collateral may be subject to legal proceedings.
E) Reverse Repurchase Agreements:
Each of the Funds (except the Florida Tax-Exempt Fund and Tax-Exempt Fund) may
enter into reverse
105
<PAGE>
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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.
F) Lending Securities:
If the Funds, except for the Florida Tax-Exempt Fund and the Tax-Exempt Fund,
lend 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. As of
November 30, 1997, the Treasury Fund had securities on loan of $77,005,106,
which were fully collateralized.
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 portfolio's net assets.
The investment income and expenses of a Fund (other than expenses incurred
under the Service Plan, the Combined Plan, the Processing Plan, and certain
other 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.
106
<PAGE>
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At November 30, 1997, the following Funds had the following capital loss
carryovers:
<TABLE>
<CAPTION>
EXPIRATION
AMOUNT DATE
------------ ---------
<S> <C> <C>
Prime Fund.............................. $ 30,724 2005
------------
------------
Treasury Fund........................... $ 4,880 2000
40,894 2001
70,799 2002
195,517 2003
220,300 2004
92,801 2005
------------
$ 625,191
------------
------------
Tax-Exempt Fund......................... $ 14,779 1998
2,875 2000
1,015 2001
3,430 2002
903 2003
20,046 2004
------------
$ 43,048
------------
------------
Short-Term Fixed Income Fund............ $ 150,384 2005
------------
------------
U.S. Government Securities Fund......... $ 3,002,716 2002
269,154 2003
------------
$ 3,271,870
------------
------------
Florida Tax-Exempt Fund................. $ 3,085,414 2002
------------
------------
</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 Funds 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 rates.
The Funds do not generally isolate the effect of fluctuations in foreign
exchange rates from the effect of fluctuations in the market prices of
securities. The Funds report 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 currency and 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
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<PAGE>
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expenses for the amount of interest earned on such uninvested cash balances. For
financial reporting purposes for the year ended November 30, 1997, custodian
fees and expenses and expenses paid by third parties were increased by the
following amounts for the following funds:
<TABLE>
<S> <C>
Equity Fund......................... $ 776
Equity Value Fund................... 81
International Equity Fund........... 12
Small Capitalization Fund........... 458
Balanced Fund....................... 266
Short-Term Fixed Income Fund........ 213
U.S. Government Securities Fund..... 188
Managed Bond Fund................... 246
Florida Tax-Exempt Fund............. 326
Prime Fund.......................... 7,197
Treasury Fund....................... 2,718
Tax-Exempt Fund..................... 541
</TABLE>
There was no effect on net investment income. The Funds could have invested
such cash amounts in income-producing assets 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 with BISYS, a Transfer Agency Agreement with BISYS Fund
Services, Inc. and a Distribution Agreement with the Distributor. In addition,
Barnett has entered into sub-advisory agreements 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 year ended November 30, 1997,
Barnett waived fees of $174,823 for the Tax-Exempt Fund, and $5,790 for the
Equity Value 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 year ended November 30, 1997, Barnett
waived $616,920 and $65,598 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 fall below $3 billion, the fee will be
increased to 0.08% of the aggregate average daily net assets of the Trust.
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<PAGE>
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For its services as transfer agent, BISYS Fund Services, Inc. earned fees in
the following amounts for the year ended November 30, 1997:
<TABLE>
<S> <C>
Equity Fund....................... $ 53,239
Equity Value Fund................. --
International Equity Fund......... 8,063
Small Capitalization Fund......... 38,270
Balanced Fund..................... 21,211
Short-Term Fixed Income Fund...... 16,163
U.S. Government Securities Fund... 13,419
Managed Bond Fund................. 18,406
Florida Tax-Exempt Fund........... 26,371
Prime Fund........................ 525,637
Treasury Fund..................... 219,389
Tax-Exempt Fund................... 43,513
</TABLE>
Under the Processing Plan with respect to Retail Shares of the Funds,
institutions (including BISYS) that have entered into agreements with the Trust
("Service Organizations") agree to provide various shareholder and
administrative support services to the shareholders of Retail Shares. For their
services, Service Organizations are entitled to a fee ("Shareholder Processing
Fee") accrued daily and paid monthly at an annual rate of 0.25% of the
respective average daily net assets of Retail Shares. For the year ended
November 30, 1997, the Funds (Retail Shares) incurred the following expenses
with regards to the Processing Plan:
<TABLE>
<S> <C>
Equity Fund..................... $ 103,711
Equity Value Fund............... 2,789
International Equity Fund....... 5,110
Small Capitalization Fund....... 27,714
Balanced Fund................... 17,992
Short-Term Fixed Income Fund.... 4,928
U.S. Government Securities
Fund........................... 54,946
Managed Bond Fund............... 4,836
Florida Tax-Exempt Fund......... 199,924
Prime Fund...................... 1,436,753
Treasury Fund................... 173,510
Tax-Exempt Fund................. 140,188
</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)
exceed a predetermined level determined from time to time by Barnett. This
voluntary reimbursement may be terminated at any time by Barnett or Rodney
Square. For the year ended November 30, 1997, Barnett agreed to reimburse
expenses totaling $91,828 to the Prime Fund and $37,391 to the Treasury Fund for
expenses in excess of this limitation. For the year ended November 30, 1997,
Rodney Square agreed to reimburse expenses totaling $8,234 to the Tax-Exempt
Fund for expenses in excess of this limitation.
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 year ended November 30, 1997,
Barnett reimbursed Fund expenses in the following amounts pursuant to these
voluntary limitations:
<TABLE>
<S> <C>
Equity Fund....................... $ 129
Equity Value Fund................. 15,526
International Equity Fund......... 4,304
Small Capitalization Fund......... 1,321
Balanced Fund..................... 641
Short-Term Fixed Income Fund...... 8,106
U.S. Government Securities Fund... 8,291
Managed Bond Fund................. 17,638
Florida Tax-Exempt Fund........... 150,286
</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 year ended November 30, 1997, the Prime Fund, Treasury
Fund and Tax-Exempt Fund incurred expenses of $3,677,418 $1,877,378 and $3,122,
respectively, pursuant to the Service Plan, substantially all of which was
earned by Barnett and its affiliates.
The Funds have each adopted the Combined Plan. Under the Combined Plan, each
Fund may make payments to the Distributor and Service Organizations for
distribution and shareholder liaison services provided to Retail shareholders.
Under the Combined Plan, payments by each Fund may not exceed an annual rate of
0.25% of the average daily net asset value of the Fund's Retail Shares. The
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<PAGE>
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Funds incurred the following amounts pursuant to the Combined Plan for the year
ended November 30, 1997 are as follows:
<TABLE>
<S> <C>
Equity Fund..................... $ 103,711
Equity Value Fund............... 2,789
International Equity Fund....... 5,110
Small Capitalization Fund....... 27,714
Balanced Fund................... 17,992
Short-Term Fixed Income Fund.... 4,928
U.S. Government Securities
Fund........................... 54,946
Managed Bond Fund............... 4,849
Florida Tax-Exempt Fund......... 199,924
Prime Fund...................... 1,436,753
Treasury Fund................... 173,510
Tax-Exempt Fund................. 140,188
</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 of
the Trust is entitled to receive an annual fee of $15,000 plus $2,000 for each
regular or special meeting attended, for services relating to all of the
portfolios of the Trust. The Chairman of the Board of Trustees and the President
of the Trust are each entitled to receive an additional annual fee of $5,000 for
their services in these capacities. 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 year ended November 30, 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....................... $ 13,619
Equity Value Fund................. 896
International Equity Fund......... 2,637
Small Capitalization Fund......... 7,134
Balanced Fund..................... 904
Short-Term Fixed Income Fund...... 1,855
U.S. Government Securities Fund... 2,698
Managed Bond Fund................. 3,988
Florida Tax-Exempt Fund........... 4,651
Prime Fund........................ 130,632
Treasury Fund..................... 41,337
Tax-Exempt Fund................... 7,408
</TABLE>
NOTE 4 -- SECURITIES TRANSACTIONS
For the year ended November 30, 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.............. $220,848,092 $230,794,089
Equity Value Fund........ 17,702,067 2,079,901
International Equity
Fund.................... 44,042,922 11,081,432
Small Capitalization
Fund.................... 297,680,800 299,298,851
Balanced Fund............ 62,647,805 84,457,337
Short-Term Fixed Income
Fund.................... 115,663,468 83,540,617
U.S. Government
Securities Fund......... 59,835,652 48,279,292
Managed Bond Fund........ 126,447,817 102,879,172
Florida Tax-Exempt Fund.. 67,956,530 74,475,085
</TABLE>
110
<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>
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1996
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold.................................................................. 1,173 $ 19,021 598 $ 8,610
Reinvestment of dividends............................................. 195 2,707 137 1,801
Redeemed.............................................................. (710) (11,827) (406) (5,910)
----------- --------- ----------- ---------
Net increase in shares outstanding before conversion.................... 658 9,901 329 4,501
Shares issued upon conversion from Class B*............................. -- -- 186 2,552
----------- --------- ----------- ---------
Net increase -- Retail.................................................. 658 9,901 515 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.................................................................. 2,086 33,606 3,956 56,820
Reinvestment of dividends............................................. 1,324 18,511 1,057 13,993
Redeemed.............................................................. (3,792) (62,119) (3,614) (52,443)
----------- --------- ----------- ---------
Net increase -- Institutional........................................... (382) (10,002) 1,399 18,370
----------- --------- ----------- ---------
Net increase in Fund.................................................... 276 $ (101) 1,756 $ 23,300
----------- --------- ----------- ---------
----------- --------- ----------- ---------
</TABLE>
EQUITY VALUE FUND (000 OMITTED):
<TABLE>
<CAPTION>
PERIOD ENDED
YEAR ENDED NOVEMBER 30, 1996 (A)
NOVEMBER 30, 1997
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold.................................................................... 309 $ 4,514 2 $ 21
Reinvestment of dividends............................................... -- 5 -- --
Redeemed................................................................ (42) (614) -- --
----- --------- --- ---------
Net increase -- Retail.................................................... 267 3,905 2 21
----- --------- --- ---------
Institutional Shares
Sold.................................................................... 1,035 14,413 473 5,116
Reinvestment of dividends............................................... 4 51 -- --
Redeemed................................................................ (173) (2,353) (149) (1,752)
----- --------- --- ---------
Net increase -- Institutional............................................. 866 12,111 324 3,364
----- --------- --- ---------
Net increase in Fund...................................................... 1,133 $ 16,016 326 $ 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.
111
<PAGE>
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INTERNATIONAL EQUITY FUND (000 OMITTED):
<TABLE>
<CAPTION>
PERIOD ENDED
YEAR ENDED NOVEMBER 30, 1996 (A)
NOVEMBER 30, 1997
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold................................................................... 370 $ 4,813 10 $ 108
Reinvestment of dividends.............................................. 1 -- --
----
Redeemed............................................................... (55) (740) -- --
----- --------- ----- ---------
Net increase -- Retail................................................... 315 4,074 10 108
----- --------- ----- ---------
Institutional Shares
Sold................................................................... 3,256 41,549 1,580 16,747
Reinvestment of dividends.............................................. 2 24 -- --
Redeemed............................................................... (688) (8,726) (27) (292)
----- --------- ----- ---------
Net increase -- Institutional............................................ 2,570 32,847 1,553 16,455
----- --------- ----- ---------
Net increase in Fund..................................................... 2,885 $ 36,921 1,563 $ 16,563
----- --------- ----- ---------
----- --------- ----- ---------
</TABLE>
SMALL CAPITALIZATION FUND (000 OMITTED):
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1996
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold.................................................................. 3,219 $ 38,628 457 $ 6,022
Reinvestment of dividends............................................. 87 980 16 196
Redeemed.............................................................. (2,916) (35,458) (195) (2,519)
----------- --------- ----------- ---------
Net increase in shares outstanding before conversion.................... 390 4,150 278 3,699
Shares issued upon conversion from Class B*............................. -- -- 221 2,593
----------- --------- ----------- ---------
Net increase -- Retail.................................................. 390 4,150 499 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.................................................................. 3,936 46,878 3,933 51,136
Reinvestment of dividends............................................. 1,247 14,162 507 6,170
Redeemed.............................................................. (2,826) (33,564) (1,158) (14,890)
----------- --------- ----------- ---------
Net increase -- Institutional........................................... 2,357 27,476 3,282 42,416
----------- --------- ----------- ---------
Net increase in Fund.................................................... 2,747 $ 31,626 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.
112
<PAGE>
- --------------------------------------------------------------------------------
BALANCED FUND (000 OMITTED):
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1996
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold.................................................................. 343 $ 4,510 220 $ 2,687
Reinvestment of dividends............................................. 30 367 6 70
Redeemed.............................................................. (203) (2,731) (99) (1,211)
----------- --------- ----------- ---------
Net increase in shares outstanding before conversion.................... 170 2,146 127 1,546
Shares issued upon conversion from Class B*............................. -- -- 208 2,460
----------- --------- ----------- ---------
Net increase -- Retail.................................................. 170 2,146 335 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.................................................................. 956 12,173 2,360 28,601
Reinvestment of dividends............................................. 560 6,812 256 3,038
Redeemed.............................................................. (2,907) (38,025) (1,859) (22,417)
----------- --------- ----------- ---------
Net increase (decrease) -- Institutional................................ (1,391) (19,040) 757 9,222
----------- --------- ----------- ---------
Net increase in Fund.................................................... (1,221) $ (16,894) 898 $ 10,966
----------- --------- ----------- ---------
----------- --------- ----------- ---------
</TABLE>
SHORT-TERM FIXED INCOME FUND (000 OMITTED):
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1996
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold................................................................... 589 $ 5,897 105 $ 1,045
Reinvestment of dividends.............................................. 5 53 3 25
Redeemed............................................................... (247) (2,468) (50) (493)
----------- --------- ----- ---------
Net increase in shares outstanding before conversion..................... 347 3,482 58 577
Shares issued upon conversion from Class B*.............................. -- -- 6 61
----------- --------- ----- ---------
Net increase -- Retail................................................... 347 3,482 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................................................................... 5,983 59,824 4,602 45,950
Reinvestment of dividends.............................................. 58 579 42 417
Redeemed............................................................... (1,984) (19,837) (745) (7,448)
----------- --------- ----- ---------
Net increase -- Institutional............................................ 4,057 40,566 3,899 38,919
----------- --------- ----- ---------
Net increase in Fund..................................................... 4,404 $ 44,048 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.
113
<PAGE>
- --------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES FUND (000 OMITTED):
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1996
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold.................................................................. 571 $ 5,795 244 $ 2,520
Reinvestment of dividends............................................. 105 1,064 115 1,188
Redeemed.............................................................. (772) (7,851) (886) (9,066)
----------- --------- ----------- ---------
Net decrease in shares outstanding before conversion.................... (96) (992) (527) (5,358)
Shares issued upon conversion from Class B*............................. -- -- 133 1,352
----------- --------- ----------- ---------
Net decrease -- Retail.................................................. (96) (992) (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.................................................................. 1,855 18,801 1,581 16,120
Reinvestment of dividends............................................. 117 1,183 142 1,448
Redeemed.............................................................. (798) (8,102) (5,289) (54,302)
----------- --------- ----------- ---------
Net increase (decrease) -- Institutional................................ 1,174 11,882 (3,566) (36,734)
----------- --------- ----------- ---------
Net increase (decrease) in Fund......................................... 1,078 $ 10,890 (4,097) $ (42,133)
----------- --------- ----------- ---------
----------- --------- ----------- ---------
</TABLE>
MANAGED BOND FUND (000 OMITTED):
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1996
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold.................................................................. 177 $ 1,805 115 $ 1,178
Reinvestment of dividends............................................. 7 70 6 56
Redeemed.............................................................. (127) (1,289) (85) (861)
----------- --------- ----------- ---------
Net increase in shares outstanding before conversion.................... 57 586 36 373
Shares issued upon conversion from Class B*............................. -- -- 50 508
----------- --------- ----------- ---------
Net increase -- Retail.................................................. 57 586 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.................................................................. 3,918 39,733 2,969 30,310
Reinvestment of dividends............................................. 466 4,720 409 4,179
Redeemed.............................................................. (2,049) (20,734) (2,626) (26,871)
----------- --------- ----------- ---------
Net increase -- Institutional........................................... 2,335 23,719 752 7,618
----------- --------- ----------- ---------
Net increase in Fund.................................................... 2,392 $ 24,305 776 $ 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.
114
<PAGE>
- --------------------------------------------------------------------------------
FLORIDA TAX-EXEMPT FUND (000 OMITTED):
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1996
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Retail Shares
Sold.................................................................. 1,838 $ 20,316 1,014 $ 10,992
Reinvestment of dividends............................................. 281 3,093 296 3,199
Redeemed.............................................................. (2,885) (31,667) (2,743) (29,530)
----------- --------- ----------- ---------
Net decrease in shares outstanding before conversion.................... (766) (8,258) (1,433) (15,339)
Shares issued upon conversion from Class B*............................. -- -- 865 9,313
----------- --------- ----------- ---------
Net decrease -- Retail.................................................. (766) (8,258) (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)
----------- --------- ----------- ---------
Institutional Shares
Sold.................................................................. 1,155 12,724 855 9,242
Reinvestment of dividends............................................. 26 289 23 256
Redeemed.............................................................. (865) (9,522) (791) (8,598)
----------- --------- ----------- ---------
Net increase -- Institutional........................................... 316 3,491 87 900
----------- --------- ----------- ---------
Net decrease in Fund.................................................... (450) $ (4,767) (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.
115
<PAGE>
- --------------------------------------------------------------------------------
PRIME FUND (000 OMITTED)
(AT $1.00 PER SHARE):
<TABLE>
<CAPTION>
YEAR ENDED
----------------------
1997 1996
---------- ----------
<S> <C> <C>
Institutional Shares
Shares sold................. 2,292,340 2,479,220
Shares issued to
shareholders in
reinvestment of dividends
and distributions......... 126 --
Shares redeemed............. (2,309,323) (2,343,846)
---------- ----------
Net increase in Institutional
Shares....................... (16,857) 135,374
---------- ----------
Service Shares
Shares sold................. 2,187,552 1,878,670
Shares issued to
shareholders in
reinvestment of dividends
and distributions......... 3,112 3,294
Shares redeemed............. (2,051,428) (1,794,568)
---------- ----------
Net increase (decrease) in
Service Shares............... 139,236 87,396
---------- ----------
Retail Shares
Shares sold................. 609,812 505,915
Shares issued to
shareholders in
reinvestment of dividends
and distributions......... 26,912 22,566
Shares redeemed............. (601,562) (416,228)
---------- ----------
Net increase in Retail
Shares....................... 35,162 112,253
---------- ----------
Total increase in Fund........ 157,541 335,023
---------- ----------
---------- ----------
</TABLE>
TREASURY FUND (000 OMITTED)
(AT $1.00 PER SHARE):
<TABLE>
<CAPTION>
YEAR ENDED
----------------------
1997 1996
---------- ----------
<S> <C> <C>
Institutional Shares
Shares sold................. 1,028,365 882,693
Shares issued to
shareholders in
reinvestment of dividends
and distributions......... -- --
Shares redeemed............. (955,788) (901,010)
---------- ----------
Net increase (decrease) in
Institutional Shares......... 72,577 (18,317)
---------- ----------
Service Shares
Shares sold................. 1,323,624 1,506,655
Shares issued to
shareholders in
reinvestment of dividends
and distributions......... 1,013 1,251
Shares redeemed............. (1,558,435) (1,350,730)
---------- ----------
Net increase (decrease) in
Service Shares............... (233,798) 157,176
---------- ----------
Retail Shares
Shares sold................. 362,252 163,474
Shares issued to
shareholders in
reinvestment of dividends
and distributions......... 3,073 2,229
Shares redeemed............. (349,541) (171,801)
---------- ----------
Net increase (decrease) in
Retail Shares................ 15,784 (6,098)
---------- ----------
Total increase (decrease) in
Fund......................... (145,437) 132,761
---------- ----------
---------- ----------
</TABLE>
116
<PAGE>
- --------------------------------------------------------------------------------
TAX-EXEMPT FUND (000 OMITTED)
(AT $1.00 PER SHARE):
<TABLE>
<CAPTION>
YEAR ENDED
--------------------
1997 1996
--------- ---------
<S> <C> <C>
Institutional Shares
Shares sold................... 272,037 393,508
Shares issued to shareholders
in reinvestment of dividends
and distributions........... -- --
Shares redeemed............... (287,743) (404,255)
--------- ---------
Net decrease in Institutional
Shares......................... (15,706) (10,747)
--------- ---------
Service Shares
Shares sold................... 532 536
Shares issued to shareholders
in reinvestment of dividends
and distributions........... 15 14
Shares redeemed............... (2,854) (543)
--------- ---------
Net increase (decrease) in
Service Shares................. (2,307) 7
--------- ---------
Retail Shares
Shares sold................... 151,763 137,081
Shares issued to shareholders
in reinvestment of dividends
and distributions........... 1,536 1,096
Shares redeemed............... (141,270) (129,263)
--------- ---------
Net increase in Retail Shares... 12,029 8,914
--------- ---------
Total decrease in Fund.......... (5,984) (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.
The Florida Tax-Exempt Fund and the Tax-Exempt Fund had the following
concentrations by industry sector at November 30, 1997: (as a percentage of
total net assets)
<TABLE>
<CAPTION>
FLORIDA
TAX-EXEMPT
FUND
-------------
<S> <C>
Airport................................... 10.78%
Sports Conventions & Exhibitions.......... 1.62
Education................................. 2.03
General Obligations....................... 12.76
Health & Medical Facilities............... 17.80
Housing Development....................... 2.48
Power Projects............................ 8.53
Public Improvements....................... 11.79
Resource Recovery Facilities.............. 5.39
Utility Projects.......................... 14.72
Water & Sewer............................. 2.15
U.S. Government Agency.................... 2.42
Mutual Funds.............................. 5.52
-----
97.99%
-----
-----
</TABLE>
<TABLE>
<CAPTION>
TAX-EXEMPT
FUND
-------------
<S> <C>
Economic Development...................... 0.74%
Education................................. 9.17
General Obligation........................ 12.88
Industrial Machinery/Components........... 0.53
Electrical Products....................... 1.68
Environmental Services.................... 0.37
Managed Health Care....................... 0.53
Hospital/Nursing Management............... 0.53
Combined Utilities........................ 2.92
Electric Utilities........................ 3.62
Natural Gas Distribution.................. 3.00
Water Supply.............................. 2.63
Airport................................... 0.63
Health & Medical Facilities............... 9.21
Housing Development....................... 0.68
Hospital Equipment Financing.............. 1.16
Industrial Development.................... 11.75
Pollution Control & Water Management...... 12.04
Port & Waterway Development............... 2.77
Power Projects............................ 4.63
Bond Anticipation Notes................... 1.05
Revenue Anticipation Notes................ 1.06
Solid Waste Disposal...................... 4.05
Tax Anticipation Notes.................... 5.81
Utility Projects.......................... 4.15
Water Projects............................ 1.84
-----
99.43%
-----
-----
</TABLE>
NOTE 7 -- FEDERAL INCOME TAX INFORMATION (UNAUDITED)
During the year ended November 30, 1997, the following funds declared tax-exempt
income distributions in the following amounts:
<TABLE>
<S> <C>
Florida Tax-Exempt Fund................ $ 5,601,688
Tax-Exempt Fund........................ 5,569,586
</TABLE>
During the year ended November 30, 1997, the following funds declared
long-term capital distributions in the following amounts:
<TABLE>
<S> <C>
Equity Fund............................ $ 23,985,496
Small Capitalization Fund.............. 2,145,099
Balanced Fund.......................... 3,860,648
Short-Term Fixed Income Fund........... 55,862
Managed Bond Fund...................... 431,921
</TABLE>
For the taxable year ended November 30, 1997, the following percentages of
income dividends paid
117
<PAGE>
- --------------------------------------------------------------------------------
by the following funds qualify for the dividends received deduction available to
corporations:
<TABLE>
<CAPTION>
QUALIFIED
DIVIDEND INCOME
---------------
<S> <C>
Equity Fund.......................... 16.56%
Equity Value Fund.................... 31.58%
Balanced Fund........................ 5.27%
</TABLE>
NOTE 8 -- SUBSEQUENT EVENTS
On January 9, 1998, Barnett Banks, Inc. was merged into a subsidiary of
NationsBank Corporation ("NationsBank"). As a result of the merger, Barnett
became a wholly-owned subsidiary of NationsBank.
The Board of Trustees of the Trust is considering the proposed reorganization of
the Trust with Nations Fund Trust, Nations Fund, Inc. and Nations Institutional
Reserves (collectively, "Nations Funds"), three investment companies that are
part of the Nations Family of Funds. If approved by the Board of Trustees, it is
expected that the proposed reorganization will be submitted to a vote of
shareholders of the Trust on or before May 9, 1998. If the reorganization is
approved by shareholders, and certain other conditions are satisfied, the assets
and liabilities of each of the Trust's portfolios, including the Funds, will be
transferred to similar funds in the Nations Funds family, and the shareholders
of the Trust's portfolios, including the shareholders of the Funds, will become
shareholders of Nations Funds.
118
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
-----------------------------------------------------------------------------
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 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 (loss)..................... (0.05) (0.01) 0.02 0.08 0.15
Net realized and unrealized gains (losses)
on securities.................................. 3.30 3.01 3.76 (0.39) (0.08)
------------- ------------- ------------- ------------- -------------
Total income (loss) from investment operations... 3.25 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...................... 1.68 1.69 3.76 (0.96) (0.15)
------------- ------------- ------------- ------------- -------------
NET ASSET VALUE, END OF PERIOD..................... $ 17.99 $ 16.31 $ 14.62 $ 10.86 $ 11.82
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Total return....................................... 22.81% 22.66% 34.82% (2.91%) 0.58%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................. $ 48,443 $ 33,177 $ 22,209 $ 19,705 $ 138,642
Ratio of expenses to average net assets.......... 1.32% 1.27% 1.37% 1.07% 0.86%
Ratio of net investment income (loss) to average
net assets..................................... (0.39%) (0.08%) 0.15% 0.36% 1.22%
Ratio of expenses to average net assets*......... 1.32% 1.28% (a) 1.29% 1.21%
Ratio of net investment income (loss) to average
net assets*.................................... (0.39%) (0.09%) (a) 0.13% 0.87%
Portfolio turnover............................... 84% 89% 104% 113% 102%
Average commission rate paid (c)................. $ 0.0511 $ 0.0518 -- -- --
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced, reimbursed and/or
paid by third party. 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 equity
transactions divided by total number of portfolio shares purchased and sold
by the Fund for which commissions were charged. Disclosure is not required
for periods prior to fiscal year 1996.
(d) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
See Notes to Financial Statements.
119
<PAGE>
EMERALD EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------------------- PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 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.................................. 0.04 0.06 0.08 0.11
Net realized and unrealized gains (losses) on
securities........................................... 3.34 3.02 3.74 (0.90)
------------- ------------- ------------- -------------
Total income (loss) from investment operations......... 3.38 3.08 3.82 (0.79)
------------- ------------- ------------- -------------
Less dividends and distributions:
Dividends from net investment income................... (0.02) (0.06) (0.08) (0.11)
Distributions from net realized gains on securities.... (1.57) (1.29) -- (0.15)
------------- ------------- ------------- -------------
Total dividends and distributions...................... (1.59) (1.35) (0.08) (0.26)
------------- ------------- ------------- -------------
Net change in net asset value............................ 1.79 1.73 3.74 (1.05)
------------- ------------- ------------- -------------
NET ASSET VALUE, END OF PERIOD........................... $ 18.15 $ 16.36 $ 14.63 $ 10.89
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Total return............................................. 23.60% 23.33% 35.21% (6.62%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)....................... $ 233,977 $ 217,184 $ 173,824 $ 164,015
Ratio of expenses to average net assets................ 0.76% 0.79% 0.84% 0.79%
Ratio of net investment income to average net assets... 0.19% 0.43% 0.67% 1.46%+
Ratio of expenses to average net assets**.............. 0.76% 0.79% (a) (a)
Ratio of net investment income to average net
assets**............................................. 0.19% 0.43% (a) (a)
Portfolio turnover..................................... 84% 89% 104% 113%
Average commission rate paid (b)....................... $ 0.0511 $ 0.0518 -- --
</TABLE>
- ---------------
* For the period March 1, 1994 (initial offering date) through November 30,
1994.
** During the period, certain fees were voluntarily reduced, reimbursed and/or
paid by third party. 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 equity
transactions divided by total number of portfolio shares purchased and sold
by the Fund for which commissions were charged. Disclosure is not required
for periods prior to fiscal year 1996.
(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.
120
<PAGE>
EMERALD EQUITY VALUE FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1997 1996*(b)
---------------- ------------
<S> <C> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.............................. $ 12.18 $ 10.00
------- ------------
Income from investment operations:
Net investment income........................................... 0.11 0.27
Net realized and unrealized gains on securities................. 3.18 2.18
------- ------------
Total income from investment operations......................... 3.29 2.45
------- ------------
Less dividends and distributions:
Dividends from net investment income............................ (0.11) (0.27)
Distributions in excess of net investment income................ (0.06) --
Distributions from net realized gains on securities............. (0.08) --
------- ------------
Total dividends and distributions............................... (0.25) (0.27)
------- ------------
Net change in net asset value..................................... 3.04 2.18
------- ------------
NET ASSET VALUE, END OF PERIOD.................................... $ 15.22 $ 12.18
------- ------------
------- ------------
Total return...................................................... 27.37% 24.84%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................................ $ 4,101 $ 23
Ratio of expenses to average net assets......................... 1.54% 0.00%+
Ratio of net investment income to average net assets............ 0.79% 3.01%+
Ratio of expenses to average net assets**....................... 2.10% 277.68%+
Ratio of net investment income (loss) to average net assets**... 0.23% (274.67%)+
Portfolio turnover.............................................. 20% 19%
Average commission rate paid (a)................................ $ 0.0300 $ 0.0791
</TABLE>
- ---------------
* For the period December 27, 1995 (commencement of operations) through
November 30, 1996.
** During the period, certain fees were voluntarily reduced, reimbursed and/or
paid by third party. 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 equity
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.
121
<PAGE>
EMERALD EQUITY VALUE FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1997 1996*(b)
---------------- ------------
<S> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.............................. $ 12.18 $ 10.00
------- ------------
Income from investment operations:
Net investment income........................................... 0.20 0.28
Net realized and unrealized gains on securities................. 3.16 2.18
------- ------------
Total income from investment operations......................... 3.36 2.46
------- ------------
Less dividends and distributions:
Dividends from net investment income............................ (0.20) (0.28)
Distributions from net realized gains on securities............. (0.08) --
------- ------------
Total dividends and distributions............................... (0.28) (0.28)
------- ------------
Net change in net asset value..................................... 3.08 2.18
------- ------------
NET ASSET VALUE, END OF PERIOD.................................... $ 15.26 $ 12.18
------- ------------
------- ------------
Total return...................................................... 27.95% 24.93%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)................................ $ 18,164 $ 3,945
Ratio of expenses to average net assets......................... 0.79% 0.00%+
Ratio of net investment income to average net assets............ 1.55% 2.89%+
Ratio of expenses to average net assets**....................... 0.93% 4.37%+
Ratio of net investment income (loss) to average net assets**... 1.41% (1.48%)+
Portfolio turnover.............................................. 20% 19%
Average commission rate paid (a)................................ $ 0.0300 $ 0.0791
</TABLE>
- ---------------
* For the period December 27, 1995 (commencement of operations) through
November 30, 1996.
** During the period, certain fees were voluntarily reduced, reimbursed and/or
paid by third party.
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 equity
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.
122
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
NOVEMBER 30, NOVEMBER 30,
1997 1996*(b)
------------- -------------
<S> <C> <C>
RETAIL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD......................................... $ 11.29 $ 10.00
------------- -------------
Income from investment operations:
Net investment income...................................................... 0.01 0.04
Net realized and unrealized gains on securities............................ 1.91 1.31
------------- -------------
Total Income from investment operations.................................... 1.92 1.35
------------- -------------
Less dividends and distributions:
Dividends from net investment income....................................... (0.01) (0.04)
Dividends in excess of net investment income............................... (0.05) --
Distributions from net realized gains on securities........................ (0.02) (0.02)
------------- -------------
Total dividends and distributions.......................................... (0.08) (0.06)
------------- -------------
Net change in net asset value................................................ 1.84 1.29
------------- -------------
NET ASSET VALUE, END OF PERIOD............................................... $ 13.13 $ 11.29
------------- -------------
------------- -------------
Total return................................................................. 17.11% 13.54%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)........................................... $ 4,259 $ 115
Ratio of expenses to average net assets.................................... 1.73% 0.00%+
Ratio of net investment income to average net assets....................... 0.26% 1.83%+
Ratio of expenses to average net assets**.................................. 1.93% 57.40%+
Ratio of net investment income (loss) to average net assets**.............. 0.06% (55.57%)+
Portfolio turnover......................................................... 29% 50%
Average commission rate paid (a)........................................... $ 0.0410 $ 0.0463
</TABLE>
- ---------------
* For the period December 27, 1995 (commencement of operations) through
November 30, 1996.
** During the period, certain fees were voluntarily reduced, reimbursed and/or
paid by third party. 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 equity
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.
123
<PAGE>
EMERALD INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
NOVEMBER 30, NOVEMBER 30,
1997 1996*(b)
------------- -------------
<S> <C> <C>
INSTITUTIONAL SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD................................... $ 11.29 $ 10.00
------------- -------------
Income from investment operations:
Net investment income................................................ 0.09 0.06
Net realized and unrealized gains on securities...................... 1.91 1.29
------------- -------------
Total income from investment operations.............................. 2.00 1.35
------------- -------------
Less dividends and distributions:
Dividends from net investment income................................. (0.09) (0.06)
Distributions in excess of net investment income..................... (0.01) --
Distributions from net realized gains on securities.................. (0.02) --
------------- -------------
Total dividends and distributions.................................... (0.12) (0.06)
------------- -------------
Net change in net asset value.......................................... 1.88 1.29
------------- -------------
NET ASSET VALUE, END OF PERIOD......................................... $ 13.17 $ 11.29
------------- -------------
------------- -------------
Total return........................................................... 17.75% 13.47%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)..................................... $ 54,277 $ 17,528
Ratio of expenses to average net assets.............................. 1.21% 0.00%+
Ratio of net investment income to average net assets................. 0.89% 1.99%+
Ratio of expenses to average net assets**............................ 1.21% 3.46%+
Ratio of net investment income (loss) to average net assets**........ 0.89% (1.47%)+
Portfolio turnover................................................... 29% 50%
Average commission rate paid (a)..................................... $ 0.0410 $ 0.0463
</TABLE>
- ---------------
* For the period December 27, 1995 (commencement of operations) through
November 30, 1996.
** During the period, certain fees were voluntarily reduced, reimbursed and/or
paid by third party. 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 equity
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.
124
<PAGE>
EMERALD SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------------- PERIOD ENDED
NOVEMBER NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
30, 1997 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..................................................... (0.12) (0.11) (0.04) (0.04)
Net realized and unrealized gains (losses) on securities................ 1.25 1.77 3.15 (0.79)
---------- ------------ ------------ ------------
Total income (loss) from investment operations.......................... 1.13 1.66 3.11 (0.83)
---------- ------------ ------------ ------------
Distributions from net realized gains on securities....................... (1.74) (1.00) -- --
---------- ------------ ------------ ------------
Net change in net asset value............................................. (0.61) 0.66 3.11 (0.83)
---------- ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD............................................ $ 12.82 $ 13.43 $ 12.77 $ 9.66
---------- ------------ ------------ ------------
---------- ------------ ------------ ------------
Total return.............................................................. 10.17% 13.83% 32.19% (7.91%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)........................................ $14,063 $ 9,490 $ 2,657 $ 1,583
Ratio of expenses to average net assets................................. 1.72% 1.59% 1.54% 1.54%+
Ratio of net investment loss to average net assets...................... (1.22%) (1.02%) (0.81%) (0.67%)+
Ratio of expenses to average net assets**............................... 1.73% 1.70% 2.43% 2.50%+
Ratio of net investment loss to average net assets**.................... (1.23%) (1.13%) (1.70%) (1.63%)+
Portfolio turnover...................................................... 203% 356% 229% 118%
Average commission rate paid (b)........................................ $0.0444 $0.0420 -- --
</TABLE>
- ---------------
* For the period March 1, 1994 (initial offering date) through November 30,
1994.
** During the period, certain fees were voluntarily reduced, reimbursed and/or
paid by third party.
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 equity
transactions divided by total number of portfolio shares purchased and sold
by the Fund for which commissions were charged. Disclosure is not required
for periods prior to fiscal year 1996.
(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 SMALL CAPITALIZATION FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
---------------------------------------- PERIOD ENDED
NOVEMBER NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
30, 1997 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..................................................... (0.08) (0.07) (0.03) (0.04)
Net realized and unrealized gains (losses) on securities................ 1.28 1.81 3.15 (0.30)
---------- ------------ ------------ ------------
Total income (loss) from investment operations.......................... 1.20 1.74 3.12 (0.34)
---------- ------------ ------------ ------------
Distributions from net realized gains on securities....................... (1.74) (1.00) -- --
---------- ------------ ------------ ------------
Net change in net asset value............................................. (0.54) 0.74 3.12 (0.34)
---------- ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD............................................ $ 12.98 $ 13.52 $ 12.78 $ 9.66
---------- ------------ ------------ ------------
---------- ------------ ------------ ------------
Total return.............................................................. 10.69% 14.49% 32.30% (3.40%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)........................................ $163,096 $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...................... (0.68%) (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**.................... (0.68%) (0.62%) (0.68%) (0.73%)+
Portfolio turnover...................................................... 203% 356% 229% 118%
Average commission rate paid (a)........................................ $0.0444 $0.0420 -- --
</TABLE>
- ---------------
* For the period January 4, 1994 (commencement of operations) through November
30, 1994.
** During the period, certain fees were voluntarily reduced, reimbursed and/or
paid by third party.
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 equity
transactions divided by total number of portfolio shares purchased and sold
by the Fund for which commissions were charged. Disclosure is not required
for periods prior to fiscal year 1996.
(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 BALANCED FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
----------------------------------------------- PERIOD ENDED
NOVEMBER NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
30, 1997 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 .................................. 0.26 0.30 0.30 0.24
Net realized and unrealized gains (losses) on
securities ........................................... 1.49 1.36 2.30 (0.28)
----------- ------------- ------ ------
Total income (loss) from investment operations ......... 1.75 1.66 2.60 (0.04)
----------- ------------- ------ ------
Less dividends and distributions:
Dividends from net investment income ................... (0.26) (0.31) (0.30) (0.22)
Distributions in excess of net investment income ....... (0.03) -- -- (0.02)
Distributions from net realized gains on securities .... (0.69) (0.22) -- --
----------- ------------- ------ ------
Total dividends and distributions ...................... (0.98) (0.53) (0.30) (0.24)
----------- ------------- ------ ------
Net change in net asset value ............................ 0.77 1.13 2.30 (0.28)
----------- ------------- ------ ------
NET ASSET VALUE, END OF PERIOD ........................... $ 13.92 $ 13.15 $ 12.02 $ 9.72
----------- ------------- ------ ------
----------- ------------- ------ ------
Total return ............................................. 14.36% 14.23% 27.45% (0.40%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) ....................... $ 8,292 $ 5,592 $ 1,082 $ 543
Ratio of expenses to average net assets ................ 1.31% 1.06% 0.72% 0.68%+
Ratio of net investment income to average net assets ... 2.02% 2.02% 3.14% 3.70%+
Ratio of expenses to average net assets** .............. 1.32% 1.35% 4.20% 2.50%+
Ratio of net investment income (loss) to average net
assets** ............................................. 2.01% 1.73% (0.34%) 1.88%+
Portfolio turnover ..................................... 70% 106% 87% 33%
Average commission rate paid (b) ....................... $ 0.0519 $ 0.0466 -- --
</TABLE>
- ---------------
* For the period April 11, 1994 (commencement of operations) through November
30, 1994.
** During the period, certain fees were voluntarily reduced, reimbursed and/or
paid by third party. 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 equity
transactions divided by total number of portfolio shares purchased and sold
by the Fund for which commissions were charged. Disclosure is not required
for periods prior to fiscal year 1996.
(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.
127
<PAGE>
EMERALD BALANCED FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
------------------------------------------------- PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 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 ................................ 0.34 0.35 0.33 0.27
Net realized and unrealized gains (losses) on
securities ......................................... 1.46 1.34 2.28 (0.37)
------------- ------------- ------------- -------------
Total income (loss) from investment operations ....... 1.80 1.69 2.61 (0.10)
------------- ------------- ------------- -------------
Less dividends and distributions:
Dividends from net investment income ................. (0.33) (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 .................... (1.02) (0.57) (0.33) (0.27)
------------- ------------- ------------- -------------
Net change in net asset value .......................... 0.78 1.12 2.28 (0.37)
------------- ------------- ------------- -------------
NET ASSET VALUE, END OF PERIOD ......................... $ 13.81 $ 13.03 $ 11.91 $ 9.63
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Total return ........................................... 14.96% 14.73% 27.99% (1.02%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) ..................... $ 76,868 $ 90,602 $ 73,830 $ 51,170
Ratio of expenses to average net assets .............. 0.79% 0.69% 0.32% 0.28%+
Ratio of net investment income to average net
assets ............................................. 2.56% 2.96% 3.54% 4.11%+
Ratio of expenses to average net assets** ............ 0.79% 0.90% 1.10% 1.25%+
Ratio of net investment income to average net
assets** ........................................... 2.56% 2.75% 2.76% 3.14%+
Portfolio turnover ................................... 70% 106% 87% 33%
Average commission rate paid (a) ..................... $ 0.0519 $ 0.0466 -- --
</TABLE>
- ---------------
* For the period April 11, 1994 (commencement of operations) through November
30, 1994.
** During the period, certain fees were voluntarily reduced, reimbursed and/or
paid by third party. 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 equity
transactions divided by total number of portfolio shares purchased and sold
by the Fund for which commissions were charged. Disclosure is not required
for periods prior to fiscal year 1996.
(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.
128
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------------------- PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 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.......................... 0.54 0.55 0.57 0.32
Net realized and unrealized gains (losses) on
securities................................... (0.06) (0.04) 0.40 (0.26)
------ ------ ------ ------
Total gains from investment operations......... 0.48 0.51 0.97 0.06
------ ------ ------ ------
Less dividends and distributions:
Dividends from net investment income........... (0.54) (0.55) (0.57) (0.32)
Distributions from net realized gains on
securities................................... (0.01) (0.03) -- --
------ ------ ------ ------
Total dividends and distributions.............. (0.55) (0.58) (0.57) (0.32)
------ ------ ------ ------
Net change in net asset value.................... (0.07) (0.07) 0.40 (0.26)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD................... $ 10.00 $ 10.07 $ 10.14 $ 9.74
------ ------ ------ ------
------ ------ ------ ------
Total return..................................... 4.78% 5.23% 10.25% 0.65%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)............... $ 4,452 $ 985 $ 343 $ 223
Ratio of expenses to average net assets........ 1.03% 0.80% 0.71% 0.67%+
Ratio of net investment income to average net
assets....................................... 5.19% 5.17% 5.72% 5.20%+
Ratio of expenses to average net assets**...... 1.22% 2.33% 9.10% 2.50%+
Ratio of net investment income (loss) to
average net assets**......................... 5.00% 3.64% (2.67%) 3.36%+
Portfolio turnover............................. 123% 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, reimbursed and/or
paid by third party.
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.
129
<PAGE>
EMERALD SHORT-TERM FIXED INCOME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------------------- PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 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.......................... 0.57 0.58 0.61 0.35
Net realized and unrealized gains (losses) on
securities................................... (0.05) (0.05) 0.41 (0.26)
------------- ------------- ------------- -------------
Total income from investment operations........ 0.52 0.53 1.02 0.09
------------- ------------- ------------- -------------
Less dividends and distributions:
Dividends from net investment income........... (0.57) (0.58) (0.61) (0.35)
Distributions from net realized gains on
securities................................... (0.01) (0.03) -- --
------------- ------------- ------------- -------------
Total dividends and distributions.............. (0.58) (0.61) (0.61) (0.35)
------------- ------------- ------------- -------------
Net change in net asset value.................... (0.06) (0.08) 0.41 (0.26)
------------- ------------- ------------- -------------
NET ASSET VALUE, END OF PERIOD................... $ 10.01 $ 10.07 $ 10.15 $ 9.74
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Total return..................................... 5.31% 5.47% 10.80% 0.90%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)............... $ 93,447 $ 53,200 $ 14,037 $ 23,566
Ratio of expenses to average net assets........ 0.61% 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**..................................... 5.69% 5.42% 5.03% 4.24%+
Portfolio turnover............................. 123% 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, reimbursed and/or
paid by third party.
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.
130
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
------------------------------------------------------------------------
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 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...................... 0.59 0.61 0.64 0.58 0.66
Net realized and unrealized gains (losses)
on securities............................ (0.01) (0.09) 0.67 (0.94) 0.41
------------ ------------ ------------ ------------ ------------
Total income (loss) from investment
operations............................... 0.58 0.52 1.31 (0.36) 1.07
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income....... (0.59) (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.......... (0.59) (0.61) (0.64) (0.71) (0.80)
------------ ------------ ------------ ------------ ------------
Net change in net asset value................ (0.01) (0.09) 0.67 (1.07) 0.27
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD............... $ 10.29 $ 10.30 $ 10.39 $ 9.72 $ 10.79
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total return................................. 5.82% 5.24% 13.85% (3.45%) 10.40%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)........... $ 21,615 $ 22,631 $ 26,912 $ 30,855 $ 145,328
Ratio of expenses to average net assets.... 1.11% 1.09% 1.27% 0.98% 0.64%
Ratio of net investment income to average
net assets............................... 5.77% 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*.............................. 5.73% 5.83% (a) 5.57% 5.49%
Portfolio turnover......................... 75% 53% 89% 133% 72%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced, reimbursed and/or
paid by third party. If such voluntary fee reductions and/or reimbursements
had not occurred, the ratios would have been as indicated.
(a) There were no waivers or reimbursements during the period.
(b) On March 11, 1996, the Fund terminated its offering of Class B Shares under
the then-current sales load schedule and such shares converted to Retail
Shares without affecting the net asset value of the Retail Shares.
(c) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
See Notes to Financial Statements.
131
<PAGE>
EMERALD U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
------------------------------------------ PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 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................................. 0.64 0.65 0.68 0.46
Net realized and unrealized gains (losses) on
securities.......................................... (0.01) (0.09) 0.65 (0.75)
------------ ------------ ------------ ------------
Total income (loss) from investment operations........ 0.63 0.56 1.33 (0.29)
------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income.................. (0.64) (0.65) (0.68) (0.46)
Distributions in excess of net investment income...... -- -- -- (0.01)
------------ ------------ ------------ ------------
Total dividends and distributions..................... (0.64) (0.65) (0.68) (0.47)
------------ ------------ ------------ ------------
Net change in net asset value........................... (0.01) (0.09) 0.65 (0.76)
------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD.......................... $ 10.26 $ 10.27 $ 10.36 $ 9.71
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Total return............................................ 6.37% 5.69% 14.10% (2.83%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s)...................... $ 49,469 $ 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.............................................. 6.28% 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**............................................ 6.28% 6.39% (a) 5.90%+
Portfolio turnover.................................... 75% 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, reimbursed and/or
paid by third party. 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.
132
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------------------- PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 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......................................... 0.57 0.61 0.66 0.43
Net realized and unrealized gains (losses) on securities...... 0.04 (0.06) 1.05 (0.46)
------ ------ ------ ------
Total income (loss) from investment operations................ 0.61 0.55 1.71 (0.03)
------ ------ ------ ------
Less dividends and distributions:
Dividends from net investment income.......................... (0.57) (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............................. (0.67) (0.73) (0.66) (0.43)
------ ------ ------ ------
Net change in net asset value................................... (0.06) (0.18) 1.05 (0.46)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD.................................. $ 10.35 $ 10.41 $ 10.59 $ 9.54
------ ------ ------ ------
------ ------ ------ ------
Total return.................................................... 6.16% 5.51% 18.47% (0.35%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s).............................. $ 2,278 $ 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.......... 5.64% 5.35% 6.49% 6.29%+
Ratio of expenses to average net assets**..................... 2.01% 1.59% 3.17% 2.50%+
Ratio of net investment income to average net assets**........ 4.73% 4.67% 4.03% 4.44%+
Portfolio turnover............................................ 120% 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, reimbursed and/or
paid by third party.
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.
133
<PAGE>
EMERALD MANAGED BOND FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------------------- PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 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......................................... 0.62 0.65 0.70 0.45
Net realized and unrealized gains (losses) on securities...... 0.03 (0.06) 1.00 (0.45)
------------- ------------- ------------- -------------
Total income from investment operations....................... 0.65 0.59 1.70 --
------------- ------------- ------------- -------------
Less dividends and distributions:
Dividends from net investment income.......................... (0.62) (0.65) (0.70) (0.43)
Distributions in excess of net investment income.............. (0.10) (0.12) -- (0.02)
------------- ------------- ------------- -------------
Total dividends and distributions............................. (0.72) (0.77) (0.70) (0.45)
------------- ------------- ------------- -------------
Net change in net asset value................................... (0.07) (0.18) 1.00 (0.45)
------------- ------------- ------------- -------------
NET ASSET VALUE, END OF PERIOD.................................. $ 10.30 $ 10.37 $ 10.55 $ 9.55
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Total return.................................................... 6.63% 5.96% 18.36% (0.01%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s).............................. $ 99,067 $ 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.......... 6.16% 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**........ 6.16% 6.20% 6.43% 6.25%+
Portfolio turnover............................................ 120% 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, reimbursed and/or
paid by third party.
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.
134
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
------------------------------------------------------------------------
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 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............................. 0.52 0.53 0.54 0.53 0.61
Net realized and unrealized gains (losses) on
securities...................................... 0.19 (0.03) 1.22 (1.37) 0.78
------------ ------------ ------------ ------------ ------------
Total income (loss) from investment operations.... 0.71 0.50 1.76 (0.84) 1.39
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income.............. (0.52) (0.53) (0.54) (0.53) (0.61)
Distributions from net realized gains on
securities...................................... -- -- -- (0.09) --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions................. (0.52) (0.53) (0.54) (0.62) (0.61)
------------ ------------ ------------ ------------ ------------
Net change in net asset value....................... 0.19 (0.03) 1.22 (1.46) 0.78
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD...................... $ 11.25 $ 11.06 $ 11.09 $ 9.87 $ 11.33
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total return........................................ 6.60% 4.69% 18.17% (7.75%) 13.37%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s).................. $ 80,399 $ 87,452 $ 94,017 $ 109,426 $ 207,764
Ratio of expenses to average net assets........... 0.93% 0.92% 1.07% 0.96% 0.65%
Ratio of net investment income to average net
assets.......................................... 4.71% 4.73% 5.08% 4.96% 5.32%
Ratio of expenses to average net assets*.......... 1.11% 1.06% (a) 1.04% 1.00%
Ratio of net investment income to average net
assets*......................................... 4.53% 4.59% (a) 4.88% 4.97%
Portfolio turnover................................ 59% 152% 89% 89% 48%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced, reimbursed and/or
paid by third party. If such voluntary fee reductions and/or reimbursements
had not occurred, the ratios would have been as indicated.
(a) There were no waivers or reimbursements during the period.
(b) On March 11, 1996, the Fund terminated its offering of Class B Shares under
the then-current sales load schedule and such shares subsequently converted
to Retail Shares without affecting the net asset value of the Retail
Shares.
(c) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
See Notes to Financial Statements.
135
<PAGE>
EMERALD FLORIDA TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
------------------------------------------ PERIOD ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 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............................... 0.56 0.56 0.57 0.42
Net realized and unrealized gains (losses) on
securities........................................ 0.20 (0.02) 1.22 (1.19)
------------ ------------ ------------ ------------
Total income (loss) from investment operations...... 0.76 0.54 1.79 (0.77)
------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income................ (0.56) (0.56) (0.57) (0.42)
Distributions from net realized gains on
securities........................................ -- -- -- (0.01)
------------ ------------ ------------ ------------
Total dividends and distributions................... (0.56) (0.56) (0.57) (0.43)
------------ ------------ ------------ ------------
Net change in net asset value......................... 0.20 (0.02) 1.22 (1.20)
------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD........................ $ 11.27 $ 11.07 $ 11.09 $ 9.87
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Total return.......................................... 7.06% 5.09% 18.55% (7.07%)++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s).................... $ 39,065 $ 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............................................ 5.05% 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**.......................................... 5.05% 5.17% (a) 5.33%+
Portfolio turnover.................................. 59% 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, reimbursed and/or
paid by third party. 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>
YEARS ENDED
-----------------------------------------------------------------------------
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 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 ........................ 0.0473 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 ...... 0.0473 0.0469 0.0517 0.0311 0.0265
------------- ------------- ------------- ------------- -------------
Less dividends and distributions:
Dividends from net investment income ......... (0.0473) (0.0469) (0.0515) (0.0339) (0.0266)
Distributions from net realized gains on
securities ................................. -- (0.0002) -- -- (0.0001)
------------- ------------- ------------- ------------- -------------
Total dividends and distributions ............ (0.0473) (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 ................................... 4.84% 4.81% 5.27% 3.44% 2.70%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) ............. $ 592,248 $ 557,093 $ 444,928 $ 208,714 $ 181,155
Ratio of expenses to average net assets ...... 0.91% 0.90% 0.90% 0.88% 0.86%
Ratio of net investment income to average net
assets ..................................... 4.73% 4.67% 5.13% 3.40% 2.63%
Ratio of expenses to average net assets*...... 0.95% 0.98% 0.93% (a) (a)
Ratio of net investment income to average net
assets*..................................... 4.69% 4.59% 5.10% (a) (a)
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced, reimbursed and/or
paid by third party. If such voluntary fee reductions and/or reimbursements
had not occurred, the ratios would have been as indicated.
(a) There were no waivers or reimbursements during the period.
(b) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
See Notes to Financial Statements.
137
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
-----------------------------------------------------------------------------
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 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 ........................ 0.0526 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 ...... 0.0526 0.0519 0.0568 0.0362 0.0315
------------- ------------- ------------- ------------- -------------
Less dividends and distributions:
Dividends from net investment income ......... (0.0526) (0.0519) (0.0566) (0.0390) (0.0316)
Distributions from net realized gains on
securities ................................. -- (0.0002) -- -- (0.0001)
------------- ------------- ------------- ------------- -------------
Total dividends and distributions ............ (0.0526) (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 ................................... 5.39% 5.34% 5.81% 3.97% 3.21%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) ............. $ 581,142 $ 598,009 $ 462,726 $ 413,541 $ 510,683
Ratio of expenses to average net assets ...... 0.38% 0.38% 0.37% 0.37% 0.35%
Ratio of net investment income to average net
assets ..................................... 5.26% 5.19% 5.66% 3.92% 3.21%
Ratio of expenses to average net assets* ..... 0.41% 0.42% 0.39% (a) (a)
Ratio of net investment income to average net
assets* .................................... 5.23% 5.15% 5.64% (a) (a)
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced, reimbursed and/or
paid by third party. If such voluntary fee reductions and/or reimbursements
had not occurred, the ratios would have been as indicated.
(a) There were no waivers or reimbursements during the period.
(b) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
See Notes to Financial Statements.
138
<PAGE>
EMERALD PRIME FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
-----------------------------------------------------------------------------
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 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 ........................ 0.0492 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 ...... 0.0492 0.0486 0.0538 0.0327 0.0280
------------- ------------- ------------- ------------- -------------
Less dividends and distributions:
Dividends from net investment income ......... (0.0492) (0.0486) (0.0536) (0.0355) (0.0281)
Distributions from net realized gains on
securities ................................. -- (0.0002) -- -- (0.0001)
------------- ------------- ------------- ------------- -------------
Total dividends and distributions ............ (0.0492) (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.................................... 5.03% 4.99% 5.49% 3.61% 2.85%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) ............. $ 1,128,449 $ 989,227 $ 902,006 $ 833,667 $ 619,149
Ratio of expenses to average net assets ...... 0.72% 0.72% 0.72% 0.72% 0.71%
Ratio of net investment income to average net
assets ..................................... 4.92% 4.86% 5.31% 3.59% 2.80%
Ratio of expenses to average net assets* ..... 0.75% 0.77% 0.74% (a) (a)
Ratio of net investment income to average net
assets* .................................... 4.89% 4.81% 5.29% (a) (a)
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced, reimbursed and/or
paid by third party. If such voluntary fee reductions and/or reimbursements
had not occurred, the ratios would have been as indicated.
(a) There were no waivers or reimbursements during the period.
(b) Effective June 29, 1996, Barnett Capital Advisors, Inc., a wholly owned
subsidiary of Barnett Banks, Inc., became the Fund's Investment Adviser.
See Notes to Financial Statements.
139
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------------------------------------------
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 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....... 0.0452 0.0447 0.0498 0.0316 0.0241
Net realized gains (losses)
on securities............. 0.0001 (0.0003) (0.0003) (0.0001) --
------------ ------------ ------------ ------------ ------------
Total income from investment
operations.................. 0.0453 0.0444 0.0495 0.0315 0.0241
------------ ------------ ------------ ------------ ------------
Dividends from net investment
income...................... (0.0452) (0.0447) (0.0498) (0.0316) (0.0241)
------------ ------------ ------------ ------------ ------------
Net change in net asset
value....................... 0.0001 (0.0003) (0.0003) (0.0001) --
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF
PERIOD...................... $ 0.9994 $ 0.9993 $ 0.9996 $ 0.9999 $ 1.0000
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total return.................. 4.62% 4.56% 5.10% 3.21% 2.44%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s).................... $ 58,717 $ 42,939 $ 49,047 $ 32,444 $ 21,362
Ratio of expenses to average
net assets................ 0.91% 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........ 1.04% 0.97% 0.90% 0.90% 0.90%
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Ratio of net investment
income to average net
assets.................... 4.51% 4.48% 4.98% 3.13% 2.42%
Ratio of expenses to average
net assets*............... 0.96% 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*....... 1.09% 1.02% 1.04% 1.00% (a)
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Ratio of net investment
income to average net
assets*................... 4.46% 4.43% 4.84% 3.03% (a)
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced, reimbursed and/or
paid by third party.
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.
See Notes to Financial Statements.
140
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
-------------------------------------------------------------------------------
NOVEMBER
30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 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....... 0.0504 0.0494 0.0548 0.0368 0.0291
Net realized gains (losses)
on securities............. 0.0001 (0.0003) (0.0003) (0.0001) --
----------- ------------ ------------ ------------ ------------
Total income from investment
operations................ 0.0505 0.0491 0.0545 0.0367 0.0291
----------- ------------ ------------ ------------ ------------
Dividends from net investment
income...................... (0.0504) (0.0494) (0.0548) (0.0368) (0.0291)
----------- ------------ ------------ ------------ ------------
Net change in net asset
value....................... 0.0001 (0.0003) (0.0003) (0.0001) --
----------- ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF
PERIOD...................... $ 0.9994 $ 0.9993 $ 0.9996 $ 0.9999 $ 1.0000
----------- ------------ ------------ ------------ ------------
----------- ------------ ------------ ------------ ------------
Total return.................. 5.16% 5.05% 5.62% 3.74% 2.95%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s).................... $ 290,576 $ 218,020 $ 236,392 $ 283,920 $ 501,377
Ratio of expenses to average
net assets................ 0.40% 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........ 0.53% 0.47% 0.40% 0.39% 0.40%
----------- ------------ ------------ ------------ ------------
----------- ------------ ------------ ------------ ------------
Ratio of net investment
income to average net
assets.................... 5.04% 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) -- -- --
----------- ------------ ------------ ------------ ------------
Ratio of total expenses to
average net assets*....... 0.54% 0.49% 0.42% (a) (a)
----------- ------------ ------------ ------------ ------------
----------- ------------ ------------ ------------ ------------
Ratio of net investment
income to average net
assets*................... 5.03% 4.95% 5.46% (a) (a)
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced, reimbursed and/or
paid by third party.
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.
See Notes to Financial Statements.
141
<PAGE>
EMERALD TREASURY FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
-------------------------------------------------------------------------------
NOVEMBER
30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 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....... 0.0470 0.0463 0.0513 0.0331 0.0256
Net realized losses on
securities................ (0.0004) (0.0001) (0.0003) (0.0001) --
----------- ------------ ------------ ------------ ------------
Total income from investment
operations................ 0.0466 0.0462 0.0510 0.0330 0.0256
----------- ------------ ------------ ------------ ------------
Dividends from net investment
income...................... (0.0470) (0.0463) (0.0513) (0.0331) (0.0256)
----------- ------------ ------------ ------------ ------------
Net change in net asset
value....................... (0.0004) (0.0001) (0.0003) (0.0001) --
----------- ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF
PERIOD...................... $ 0.9991 $ 0.9995 $ 0.9996 $ 0.9999 $ 1.0000
----------- ------------ ------------ ------------ ------------
----------- ------------ ------------ ------------ ------------
Total return.................. 4.80% 4.72% 5.25% 3.36% 2.59%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s).................... $ 448,766 $ 682,628 $ 525,609 $ 591,991 $ 403,809
Ratio of expenses to average
net assets................ 0.74% 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........ 0.87% 0.82% 0.75% 0.74% 0.75%
----------- ------------ ------------ ------------ ------------
----------- ------------ ------------ ------------ ------------
Ratio of net investment
income to average net
assets.................... 4.69% 4.62% 5.13% 3.38% 2.56%
Ratio of expenses to average
net assets*............... 0.75% 0.77% 0.77% (a) (a)
Ratio of interest expense to
average net assets........ 0.13%(c) 0.07%(c) -- -- --
----------- ------------ ------------ ------------ ------------
Ratio of total expenses to
average net assets*....... 0.88% 0.84% 0.77% (a) (a)
----------- ------------ ------------ ------------ ------------
----------- ------------ ------------ ------------ ------------
Ratio of net investment
income to average net
assets*................... 4.68% 4.62% 5.11% (a) (a)
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced, reimbursed and/or
paid by third party.
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.
See Notes to Financial Statements.
142
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------------------------------------------
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 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......................... 0.0282 0.0273 0.0305 0.0192 0.0164
Net realized gains (losses) on securities..... -- -- (0.0003) -- 0.0001
------------ ------------ ------------ ------------ ------------
Total income from investment operations....... 0.0282 0.0273 0.0302 0.0192 0.0165
------------ ------------ ------------ ------------ ------------
Dividends from net investment income............ (0.0280) (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.................................... 2.83% 2.76% 3.09% 1.94% 1.65%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s).............. $ 59,173 $ 47,145 $ 38,243 $ 38,123 $ 45,609
Ratio of expenses to average net assets....... 0.87% 0.85% 0.90% 0.90% 0.90%
Ratio of net investment income to average net
assets...................................... 2.81% 2.71% 3.04% 1.90% 1.62%
Ratio of expenses to average net assets*...... 0.97% 0.99% 1.15% 1.02% 1.06%
Ratio of net investment income to average net
assets*..................................... 2.71% 2.57% 2.79% 1.78% 1.46%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced, reimbursed and/or
paid by third party. If such voluntary fee reductions and/or reimbursements
had not occurred, the ratios would have been as indicated.
See Notes to Financial Statements.
143
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------------------------------------------
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 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......................... 0.0336 0.0324 0.0355 0.0242 0.0214
Net realized gains (losses) on securities..... -- -- (0.0003) -- 0.0001
------------ ------------ ------------ ------------ ------------
Total income from investment operations....... 0.0336 0.0324 0.0352 0.0242 0.0215
------------ ------------ ------------ ------------ ------------
Dividends from net investment income............ (0.0335) (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.................................... 3.41% 3.29% 3.61% 2.45% 2.16%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s).............. $ 129,886 $ 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...................................... 3.36% 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*..................................... 3.26% 3.12% 3.41% 2.36% 1.97%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced, reimbursed and/or
paid by third party. If such voluntary fee reductions and/or reimbursements
had not occurred, the ratios would have been as indicated.
See Notes to Financial Statements.
144
<PAGE>
EMERALD TAX-EXEMPT FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------------------------------------------
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 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......................... 0.0283 0.0283 0.0319 0.0206 0.0179
Net realized gains (losses) on securities..... -- -- (0.0003) -- 0.0001
------------ ------------ ------------ ------------ ------------
Total income from investment operations....... 0.0283 0.0283 0.0316 0.0206 0.0180
------------ ------------ ------------ ------------ ------------
Dividends from net investment income............ (0.0294) (0.0283) (0.0319) (0.0206) (0.0179)
------------ ------------ ------------ ------------ ------------
Net change in net asset value................... (0.0011) -- (0.0003) -- 0.0001
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD.................. $ 0.9985 $ 0.9996 $ 0.9996 $ 0.9999 $ 0.9999
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total return.................................... 2.98% 2.87% 3.24% 2.08% 1.80%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s).............. $ 555 $ 2,861 $ 2,855 $ 4,028 $ 487
Ratio of expenses to average net assets....... 0.73% 0.75% 0.75% 0.75% 0.75%
Ratio of net investment income to average net
assets...................................... 2.89% 2.83% 3.19% 2.17% 1.75%
Ratio of expenses to average net assets*...... 1.71% 1.03% 1.20% 1.59% 0.92%
Ratio of net investment income to average net
assets*..................................... 1.91% 2.55% 2.74% 1.33% 1.58%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced, reimbursed and/or
paid by third party. If such voluntary fee reductions and/or reimbursements
had not occurred, the ratios would have been as indicated.
See Notes to Financial Statements.
145
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Shareholders and
Board of Trustees of the
Emerald Funds:
We have audited the accompanying statements of assets and liabilities of Emerald
Funds -- 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, Florida Tax-Exempt Fund, Prime
Fund, Treasury Fund and Tax-Exempt Fund (the Funds), including the schedules of
portfolio investments, as of November 30, 1997, and the related statements of
operations, statements of changes in net assets and the financial highlights for
the year then ended. These financial statements and the financial highlights are
the responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit. The accompanying statements of changes in net assets for the period ended
November 30, 1996 and the financial highlights for the periods ended November
30, 1996, and prior periods as indicated herein, were audited by other auditors
whose report thereon dated January 22, 1997 expressed an unqualified opinion on
those statements and financial highlights.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included verification of securities owned as of November 30, 1997, by
confirmation with the custodian and brokers and other appropriate audit
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe our audit provides a reasonable
basis for our opinion.
In our opinion, the 1997 financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Emerald Funds at November 30, 1997, and the results of their operations, the
changes in their net assets and the financial highlights for the year then
ended, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Columbus, Ohio
January 21, 1998
146
<PAGE>
EMD-1197
Inst. 11/97 ANN
