SEMI-ANNUAL REPORT
FEBRUARY 28, 1999
[LOGO] HIBERNIA
------ FUNDS
- -------------------------------------------------------------------------------
Hibernia Capital Appreciation Fund
Class A Shares
Class B Shares
Hibernia Louisiana Municipal Income Fund
Hibernia Mid Cap Equity Fund
Class A Shares
Class B Shares
Hibernia Total Return Bond Fund
Hibernia U.S. Government Income Fund
Hibernia Cash Reserve Fund
Class A Shares
Class B Shares
Hibernia U.S. Treasury Money Market Fund
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
PRESIDENT'S MESSAGE.......................................................... 1
- --------------------------------------------------------------------------------
INVESTMENT REVIEWS........................................................... 2
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS..................................................... 9
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIOS OF INVESTMENTS........................................... 28
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES......................................... 30
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS..................................................... 32
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS.......................................... 34
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS......................................................... 36
- --------------------------------------------------------------------------------
COMBINED NOTES TO FINANCIAL STATEMENTS....................................... 38
- --------------------------------------------------------------------------------
- - SHARES OF THE HIBERNIA FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF HIBERNIA
NATIONAL BANK OR ITS AFFILIATES, ARE NOT ENDORSED OR GUARANTEED BY HIBERNIA
NATIONAL BANK OR ITS AFFILIATES, AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENTAL
AGENCY.
- - INVESTMENT IN THE SHARES OF THE HIBERNIA FUNDS INVOLVES INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
- - HIBERNIA CASH RESERVE FUND AND HIBERNIA U.S. TREASURY MONEY MARKET FUND
ATTEMPT TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE; THERE CAN BE NO
ASSURANCE THAT THESE FUNDS WILL BE ABLE TO DO SO. AN INVESTMENT IN THE FUNDS IS
NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
- - PAST PERFORMANCE IS NO INDICATION OF FUTURE RESULTS.
- - THIS REPORT IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY WHEN
PRECEDED OR ACCOMPANIED BY THE FUNDS' PROSPECTUS WHICH CONTAINS FACTS CONCERNING
THEIR OBJECTIVES AND POLICIES, MANAGEMENT FEES, EXPENSES AND OTHER INFORMATION.
<PAGE>
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for the Hibernia
Funds. The Report covers the activity of the Hibernia Funds over the six-month
period from September 1, 1998 through February 28, 1999. It includes an
interview with each fund's portfolio manager, as well as a complete list of
portfolio holdings and financial statements for each fund.
The highlights for each fund over the six-month reporting period are as follows:
- In a period of continued stock gains and volatility, HIBERNIA CAPITAL
APPRECIATION FUND produced an extremely strong total return. For Class A
Shares, the total return was 30.44%.* Contributing to the total return were
dividends of $0.02 per share and capital gains of $2.79 per share, and a 16%
increase in net asset value. For Class B Shares, the total return was
29.98%.* Contributing to the total return of Class B Shares were capital
gains of $2.79 per share and a 16% increase in net asset value. At the end
of the reporting period, net assets totaled $358 million.
- Designed for tax-sensitive Louisiana residents, HIBERNIA LOUISIANA MUNICIPAL
INCOME FUND paid double tax-free dividends of $0.27 per share and capital
gains of $0.08 per share.** Its net asset value decreased slightly from
$11.47 on the first day of the period to $11.38 on the last day of the
period. The fund's total return was 2.29%.* At the end of the reporting
period, net assets totaled $98 million.
- The newest addition to the Hibernia Funds family, HIBERNIA MID CAP EQUITY
FUND, produced an extremely strong total return in a favorable, yet
volatile, environment for mid-cap stocks. For Class A Shares, the total
return was 27.27%,* while Class B Shares produced a total return of 26.94%.
A significant increase in net asset value accounted for much of these
returns. At the end of the reporting period, net assets totaled $18 million.
- The diversified portfolio of HIBERNIA TOTAL RETURN BOND FUND paid dividends
of $0.28 per share and capital gains totaling $0.03 per share, while its net
asset value decreased from $10.27 at the beginning of the reporting period
to $10.05 at the end of the reporting period. As a result, the fund produced
a total return of 0.84%.* At the end of the reporting period, net assets
totaled $79 million.
- HIBERNIA U.S. GOVERNMENT INCOME FUND paid dividends totaling $0.28 per
share, while its net asset value decreased from $10.33 to $10.13. As a
result, the fund produced a total return of 0.79%.* At the end of the reporting
period net assets totaled $84 million.
- HIBERNIA CASH RESERVE FUND, a portfolio of high quality money market
securities, paid dividends of $0.02 per share for both Class A Shares and
Class B Shares. At the end of the reporting period, net assets totaled $157
million.
- - HIBERNIA U.S. TREASURY MONEY MARKET FUND, a portfolio of U.S. Treasury money
market securities, paid dividends of $0.02 per share. At the end of the
reporting period, net assets totaled $224 million.
Thank you for putting your money to work in one or more key financial market
through the professional management and diversification of the Hibernia Funds.
We are committed to providing you with the highest level of service as we keep
you up-to-date on your investment progress.
Sincerely,
LOGO
Edward C. Gonzales
President
April 15, 1999
* Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so an
investor's shares, when redeemed, may be worth more or less than their
original cost. Total returns quoted above are based on net asset value and do
not reflect the maximum sales charges. Total returns based on the maximum
sales charge for the six-month reporting period are as follows: Hibernia
Capital Appreciation Fund Class A Shares, 24.55%; Hibernia Capital
Appreciation Fund Class B Shares, 24.48%; Hibernia Louisiana Municipal Income
Fund, (0.74%); Hibernia Mid Cap Equity Fund Class A Shares, 21.60%; Hibernia
Mid-Cap Equity Fund Class B Shares, 21.44%; Hibernia Total Return Bond Fund,
(2.20%); and Hibernia U.S. Government Income Fund, (2.24%).
** Income may be subject to the federal alternative minimum tax.
<PAGE>
INVESTMENT REVIEWS
HIBERNIA CAPITAL APPRECIATION FUND
Q
What are your comments on the strong yet highly volatile stock market
during the first half of the Fund's fiscal year?
A
The market continued to be propelled by earnings growth in large
capitalization stocks and liquidity from individuals and retirement type
plans. Low inflation remains a key factor.
Q
It was an extremely strong period for Hibernia Capital Appreciation Fund.
What was the Fund's total return over the six-month reporting period ended
February 28, 1999?
A
Total return from Hibernia Capital Appreciation Fund for the 6 months ended
February 28, 1999, was 30.44% for Class A Shares and 29.98% for Class B
Shares.*
Q
America's "Goldilocks" economy--not too weak, not too strong--keeps
chugging along and propelling the Dow to new highs. Do you expect more
modest gains from the market through 1999?
A
We expect further gains in the market during 1999. Perhaps on the order of
10%-12% on the Dow yield over year.
* Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. The total return quoted above is based on net asset value and
does not reflect the maximum sales charge. The total return based on the
maximum sales charge for the six-month reporting period is 24.55% for Class A
Shares and 24.48% for Class B Shares.
<PAGE>
HIBERNIA LOUISIANA MUNICIPAL INCOME FUND
Q
Municipal bond yields in general have been at historically high levels
relative to yields on U.S. Treasury securities. What is your overview of
the municipal bond market over the six-month reporting period?
A
Municipal Bond prices drifted slightly lower during the six-month reporting
period ended February 28, 1999. The modest decline, however, was better
than the much larger decline experienced in the taxable bond arena. Even
with the good performance of tax exempt bonds relative to taxable bonds
during the period, municipal securities remain very cheap to U.S. Treasury
securities and offer excellent value.
Q
How did Hibernia Louisiana Municipal Income Fund perform on a total return
basis?
A
The Hibernia Louisiana Municipal Income Fund performed well despite the
lackluster market environment. For the six-month reporting period ended
February 28, 1999, the Fund experienced a total return* of 2.29%.**
Q
What is your outlook for the municipal bond market through 1999?
A
The prospects for the municipal bond market are bright. Yields are
attractive on both an absolute basis and relative to taxable bond yields.
The robust domestic economy should continue to generate both strong demand
and supply of tax exempt securities.
* Income may be subject to the federal alternative minimum tax.
** Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. The total return quoted above is based on net asset value and
does not reflect the maximum sales charge. The total return based on the
maximum sales charge for the six-month reporting period is (0.74%).
<PAGE>
HIBERNIA MID-CAP EQUITY FUND
Q
Hibernia Mid Cap Equity Fund, the newest addition to the Hibernia Funds,
invests in a diversified portfolio of mid-cap stocks with capitalizations
of between $500 million and $10 billion. How did mid-cap stocks fare during
the reporting period versus the broad market?
A
Mid-cap stocks were outperformed by the broad market by 2 1/2% during the
reporting period.
Q
It was a relatively strong period for the Fund. What was its total return
over the six-month reporting period ended February 28, 1999?
A
The total return for Hibernia Mid Cap Equity Fund for the six-month
reporting period ended February 28, 1999, was 27.27% for Class A Shares and
26.94% for Class B Shares.*
Q
The Fund's portfolio focuses on solid, high quality stocks with strong
potential for consistent earnings growth. What is your outlook for mid-cap
earnings growth through the balance of 1999? Do you expect more modest
performance?
A
Mid-cap growth should be moderate for the full year of 1999, after a robust
first quarter.
* Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. The total return quoted above is based on net asset value and
does not reflect the maximum sales charge. The total return based on the
maximum sales charge for the six-month reporting period is 21.60% for Class A
Shares and 21.44% for Class B Shares.
<PAGE>
HIBERNIA TOTAL RETURN BOND FUND
Q
What are your comments on the relatively weak environment for bonds during
the first half of the Fund's fiscal year?
A
The pendulum of investor sentiment swung toward concern over the robust
domestic economy and the risk of higher inflation during the six months
ended February 28, 1999. The strong performance of the Treasury bond
markets during the summer months of 1998 had left the markets extended and
vulnerable to the surprisingly strong economic data.
Q
On a total return basis, how did Hibernia Total Return Bond Fund compare to
its benchmark, the Salomon Brothers Broad Investment-Grade Bond Index?*
A
The Fund generated a total return of 0.84%** during the six-month reporting
period ended February 28, 1999. The Salomon Brothers Broad Investment-Grade
Bond Index returned 1.72% during the same period.
Q
What is your outlook for 1999, and how have you structured the portfolio to
respond?
A
The recent rise in interest rates overall and the increase in yield spreads
of corporate bonds over treasuries has created new opportunities. The
balance of 1999 should produce a stable rate environment as the domestic
economy begins to slow. Given this we are increasing the average maturity
of the Fund and are adding higher yielding corporate bonds to the
portfolio.
* Salomon Brothers Broad Investment-Grade Bond Index is an unmanaged index
designed to provide the investment-grade bond manager with an all-inclusive
universe of institutionally traded U.S. Treasury, agency, mortgage and
corporate securities which can be used as a benchmark. Investments cannot be
make in an index.
** Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. The total return quoted above is based on net asset value and
does not reflect the maximum sales charge. The total return based on the
maximum sales charge for the six-month reporting period is (2.20%).
<PAGE>
HIBERNIA U.S. GOVERNMENT INCOME FUND
Q
What is your review of the relatively weak environment for bonds during the
first half of the Fund's fiscal year?
A
The renewed vigor of the U.S. economy heavily reduced the prospect of
further Federal Reserve Board rate cuts and drove bond yields higher.
Additionally, international economic turmoil subsided which lessened the
flight to quality we had seen last summer.
Q
How did Hibernia U.S. Government Income Fund perform during the reporting
period?
A
The total return for the Fund for the six-month reporting period ended
February 28, 1999, was 0.79%, based on net asset value.* The net asset
value price decline was 1.97%. As of February 28, 1999, the Fund's 30-day
SEC yield was 5.25%, based on offering price.
Q
What is your outlook for bonds through 1999, and how have you structured
the Fund's portfolio among mortgage-backed securities, Treasuries and
agencies?
A
We believe bonds will remain relatively volatile, but that we are still in
a secular bull market and that rates will eventually decline somewhat from
current levels. At the end of the reporting period, the Fund was invested
31% in Treasuries, 39% in agency obligations, 19% in mortgage-backed
securities, 6% in high grade corporate obligations (including asset-backed
securities) and 5% in cash.
* Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. The total return quoted above is based on net asset value and
does not reflect the maximum sales charge. The total return based on the
maximum sales charge for the six-month reporting period is (2.24%).
<PAGE>
HIBERNIA CASH RESERVE FUND
Q
What is your overview of the interest rate environment during the first
half of the Fund's fiscal year, which saw a series of interest rate
"easings," or cuts, by the Federal Reserve Board (the "Fed")?
A
The Fed cut short-term rates three times in the fall. Each reduction was
1/4 of a point, which brought the Fed Funds target rate from 5.50% to
4.75%. These events caused a significant reduction in other short-term
rates in the types of securities in which the Hibernia Cash Reserve Fund
invests, thus reducing the yield on the Fund. In the latter part of the
period covered by this Report, rates moved up slightly as the prospect of
further rate cuts in the near future diminished.
Q
As a result, where did the seven-day net yield of Hibernia Cash Reserve
Fund stand at the beginning and end of the reporting period?
A
The seven-day net yield for the Fund's Class A Shares for September 1,
1998, was 4.72%. Class B Shares were not in existence until September 4,
1998. However, for February 28, 1999, the seven-day net yields for the
Fund's Class A Shares and Class B Shares were 3.94% and 3.19%,
respectively.
Q
What was your strategy in terms of the Fund's portfolio mix and average
maturity during the reporting period?
A
Our portfolio strategy was equally weighted among the following factors:
relative attractiveness of overnight repurchase agreements, availability of
prime commercial paper and our own view of Fed action and timing.
Q
What is your outlook for rates for the rest of 1999?
A
We believe the Fed will remain on hold for at least for the next six months
and short-term rates will probably move in a generally sideways direction.
* Performance quoted represents past performance and is not indicative of
future results. Yield will vary. Yields quoted for money market funds most
closely reflect the fund's current earnings.
<PAGE>
HIBERNIA U.S. TREASURY MONEY MARKET FUND
Q
What is your review of the short-term U.S. Treasury market, which saw
yields decline considerably amid a "flight to quality" in the midst of
volatile foreign and U.S. stock markets, and a series of "easings," or rate
cuts, by the Federal Reserve Board (the "Fed")?
A
The short-term U.S. Treasury yields declined amid three 25 basis point rate
cuts by the Fed before rising again due to the lessened prospect of further
rate cuts. The average three-month T-Bill rate was 4.46% during the
reporting period, which was only 35 basis points less than the rate at the
beginning of the reporting period.
Q
As a result, where did the seven-day net yield of Hibernia U.S. Treasury
Money Market Fund stand at the beginning and end of the reporting period?
A
The seven-day net yield for the Fund was 4.78% and 4.03% for September 1,
1998 and February 28, 1999, respectively.*
Q
How have you structured the Fund's portfolio in terms of holdings and
average maturity?
A
A typical mix would be 45%/55% overnight repurchase agreements and Treasury
securities with an average maturity in the 30-40 day range.
Q
Do you expect the Fed to leave monetary policy unchanged in the coming
months?
A
Yes, we believe the Fed is "on hold" for the next six months as benign
inflation and moderate economic growth continue in the U.S. economy.
* Performance quoted represents past performance and is not indicative of
future results. Yields will vary. Yields quoted for money market funds most
closely reflect the fund's current earnings.
<PAGE>
PORTFOLIO OF INVESTMENTS
HIBERNIA FUNDS
February 28, 1999 (unaudited)
CAPITAL APPRECIATION FUND
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
COMMON STOCKS--97.9%
Commercial Services--2.2%
29,000 McGraw-Hill Cos., Inc. $ 3,173,687
15,500 Omnicom Group, Inc. 1,026,875
130,000 Sysco Corp. 3,672,500
------------
Total 7,873,062
------------
Consumer Durables--0.9%
57,430 Ford Motor Co. 3,406,317
------------
Consumer Non-Durables--8.5%
41,300 Clorox Co. 4,886,306
25,700 Coca Cola Enterprises, Inc. 796,700
78,800 Coca-Cola Co. 5,038,275
80,200 ConAgra, Inc. 2,416,025
105,000 PepsiCo, Inc. 3,950,625
105,900 Philip Morris Cos., Inc. 4,143,337
50,000 Procter & Gamble Co. 4,475,000
28,000 Quaker Oats Co. 1,529,500
29,800 Unilever N.V., ADR 2,158,638
19,700 V.F. Corp. 948,063
------------
Total 30,342,469
------------
Consumer Services--4.1%
46,300 (1)King World Productions,
Inc. 1,224,056
36,700 McDonald's Corp. 3,119,500
79,600 Time Warner, Inc. 5,134,200
57,600 (1)Viacom, Inc., Class B 5,090,400
------------
Total 14,568,156
------------
Electronic Technology--12.9%
65,980 (1)Cisco Systems, Inc. 6,453,669
107,000 (1)Dell Computer Corp. 8,573,375
66,900 (1)EMC Corp. Mass 6,848,887
80,500 Intel Corp. 9,654,969
10,800 International Business
Machines Corp. 1,836,000
52,200 (1)Sun Microsystems, Inc. 5,079,713
62,100 United Technologies Corp. 7,692,638
------------
Total 46,139,251
------------
Energy Minerals--5.6%
23,200 Atlantic Richfield Co. 1,267,300
73,385 British Petroleum Co. PLC,
ADR 6,237,725
89,150 Exxon Corp. 5,934,047
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
37,800 Mobil Corp. $ 3,144,487
38,700 Royal Dutch Petroleum Co.,
ADR 1,697,963
18,600 Texaco, Inc. 866,063
44,800 USX Corp. 926,800
------------
Total 20,074,385
------------
Finance--14.1%
65,500 Allstate Corp. 2,456,250
58,200 AMBAC 3,259,200
57,000 Bank of New York Co., Inc. 1,991,437
76,100 Chase Manhattan Corp. 6,059,463
33,250 Citigroup, Inc. 1,953,438
55,400 Equitable Cos., Inc. 3,742,963
96,300 First Union Corp. 5,133,994
24,000 Firstar Corp. 2,010,000
151,650 Fleet Financial Group, Inc. 6,511,472
39,500 Lehman Brothers Holdings,
Inc. 2,093,500
70,800 National City Corp. 4,947,150
17,650 Progressive Corp., OH 2,268,025
60,000 Providian Financial Corp. 6,127,500
47,500 Wells Fargo Co. 1,745,625
------------
Total 50,300,017
------------
Health Technology--12.9%
89,400 Abbott Laboratories 4,151,513
39,200 (1)Amgen, Inc. 4,895,100
17,400 (1)Biogen, Inc. 1,672,575
95,550 Biomet, Inc. 3,505,491
1,500 Bristol-Myers Squibb Co. 188,906
34,800 Guidant Corp. 1,983,600
35,900 Johnson & Johnson 3,064,962
50,100 Lilly (Eli) & Co. 4,743,844
77,200 Merck & Co., Inc. 6,311,100
22,400 Pfizer, Inc. 2,955,400
163,800 Schering Plough Corp. 9,162,563
49,400 Warner-Lambert Co. 3,411,687
------------
Total 46,046,741
------------
Industrial Services--0.5%
40,700 Schlumberger Ltd. 1,976,494
------------
Non-Energy Minerals--1.3%
66,000 Alcoa, Inc. 2,673,000
13,700 Vulcan Materials Co. 1,846,075
------------
Total 4,519,075
------------
</TABLE>
(See Notes to Portfolios of Investments)
<PAGE>
CAPITAL APPRECIATION FUND (continued)
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
COMMON STOCKS--(cont'd)
Process Industries--1.4%
59,775 Ball Corp. $ 2,503,078
149,200 Solutia, Inc. 2,657,625
------------
Total 5,160,703
------------
Producer Manufacturing--5.8%
15,700 Emerson Electric Co. 901,769
127,300 General Electric Co. 12,769,781
52,900 Ingersoll-Rand Co. 2,512,750
59,800 Tyco International Ltd. 4,451,362
------------
Total 20,635,662
------------
Retail Trade--6.9%
47,475 Gap (The), Inc. 3,071,039
52,350 Home Depot, Inc. 3,124,641
30,600 Lowe's Cos., Inc. 1,814,962
69,550 (1)Safeway, Inc. 4,016,512
203,600 TJX Cos., Inc. 5,815,325
80,400 Wal-Mart Stores, Inc. 6,944,550
------------
Total 24,787,029
------------
Technology Services--9.2%
17,000 (1)America Online, Inc. 1,511,937
50,500 (1)Compuware Corp. 2,824,844
30,400 General Motors Corp. 2,509,900
86,200 Lucent Technologies, Inc. 8,754,687
103,100 (1)Microsoft Corp. 15,477,887
34,200 (1)Oracle Corp. 1,910,925
------------
Total 32,990,180
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
Transportation--0.9%
70,200 Burlington Northern Santa Fe $ 2,325,375
14,100 (1)UAL Corp. 842,475
------------
Total 3,167,850
------------
Utilities--10.7%
59,000 AT&T Corp. 4,845,375
47,500 Ameritech Corp. 3,105,312
67,600 Bell Atlantic Corp. 3,882,775
139,000 BellSouth Corp. 6,428,750
44,000 Coastal Corp. 1,408,000
65,800 DTE Energy Co. 2,599,100
179,700 Edison International 4,582,350
79,700 GTE Corp. 5,170,537
116,800 SBC Communications, Inc. 6,175,800
------------
Total 38,197,999
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST
$210,992,706) 350,185,390
------------
REPURCHASE AGREEMENT(2)--2.0%
$7,158,000 State Street Corp., 4.61%,
dated 2/25/1999, due
3/1/1999 (at amortized cost) 7,158,000
------------
TOTAL INVESTMENTS (IDENTIFIED
COST $218,150,706) $357,343,390
============
</TABLE>
(See Notes to Portfolios of Investments)
<PAGE>
LOUISIANA MUNICIPAL INCOME FUND
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING(4) VALUE
<C> <S> <C> <C>
LONG-TERM
MUNICIPALS(3)--
96.4%
Colorado--0.5%
$ 445,000 Colorado Health
Facilities
Authority, Revenue
Bonds, 7.125% (Rose
Medical Center
Project), 9/1/2008 AAA $ 509,351
-----------
Florida--0.8%
655,000 Florida State Board
of Education
Administration, GO
UT Refunding Bonds,
6.10%, 6/1/2000 AAA 662,925
145,000 Florida State Board
of Education
Administration, GO
UT Refunding Bonds,
6.10%, 6/1/2000 AA+ 147,510
-----------
Total 810,435
-----------
Louisiana--94.4%
500,000 Alexandria, LA
Utilities Revenue,
Revenue Bonds, 5.25%
(FGIC INS)/
(Original Issue
Yield: 5.70%),
5/1/2010 AAA 529,970
1,000,000 Baton Rouge, LA,
Refunding Revenue
Bonds, 5.00% (FGIC
INS), 8/1/2009 AAA 1,057,020
1,000,000 Bossier City, LA,
Revenue Bonds, 5.00%
(FGIC INS),
12/1/2019 AAA 996,720
500,000 Bossier City, LA,
Revenue Refunding
Bonds, 5.20% (FGIC
INS)/(Original Issue
Yield: 5.35%),
11/1/2014 AAA 515,460
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING(4) VALUE
<C> <S> <C> <C>
$ 250,000 East Ascension
Parish, LA Drainage
District No. 1,
Revenue Refunding
Bonds, 5.45% (FGIC
INS)/ (Original
Issue Yield: 5.60%),
12/1/2009 AAA $ 268,022
1,500,000 East Baton Rouge
Parish, LA,
Refunding Revenue
Bonds, 5.40% (FGIC
INS)/(Original Issue
Yield: 5.85%),
2/1/2018 AAA 1,554,360
1,250,000 East Baton Rouge
Parish, LA, Sales &
Use Tax Revenue
Bonds (Series ST),
5.90% (FGIC INS),
2/1/2017 AAA 1,336,275
930,000 East Baton Rouge
Parish, LA, Sales &
Use Tax Revenue
Bonds (Series ST-A),
4.80% (FGIC INS)/
(Original Issue
Yield: 5.15%),
2/1/2011 AAA 947,707
500,000 East Baton Rouge
Parish, LA, Sales &
Use Tax Revenue
Bonds (Series ST),
5.20% (FSA INS)/
(Original Issue
Yield: 5.65%),
2/1/2017 AAA 509,695
180,000 East Baton Rouge, LA
Mortgage Finance
Authority, Revenue
Bonds, 7.625% (GNMA
COL), 8/1/2008 Aaa 187,123
300,000 East Baton Rouge, LA
Mortgage Finance
Authority, Revenue
Refunding Bonds,
4.80% (GNMA COL),
10/1/2004 Aaa 307,530
</TABLE>
(See Notes to Portfolios of Investments)
<PAGE>
LOUISIANA MUNICIPAL INCOME FUND
(continued)
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING(4) VALUE
<C> <S> <C> <C>
LONG-TERM
MUNICIPALS(3)--
(cont'd)
$ 540,000 East Baton Rouge, LA
Mortgage Finance
Authority, SFM
Purchasing Revenue
Bonds (Series B),
5.40% (FNMA COL),
10/1/2025 Aaa $ 546,842
1,315,000 East Baton Rouge, LA
Mortgage Finance
Authority, SFM
Revenue Refunding
Bonds (Series B),
7.40% (GNMA COL),
8/1/2012 Aaa 1,370,335
425,000 East Baton Rouge, LA
Mortgage Finance
Authority, SFM
Revenue Refunding
Bonds (Series C),
7.00%, 4/1/2032 Aaa 447,593
1,000,000 Ernest N Morial-New
Orleans, LA Exhibit
Hall Authority,
Special Tax
Refunding Bonds
(Series C), 5.50%
(MBIA INS)/
(Original Issue
Yield: 5.58%),
7/15/2018 AAA 1,040,450
1,200,000 Ernest N Morial-New
Orleans, LA Exhibit
Hall Authority,
Special Tax
Refunding Bonds
(Series C), 5.60%
(MBIA INS)/
(Original Issue
Yield: 5.65%),
7/15/2025 AAA 1,257,552
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING(4) VALUE
<C> <S> <C> <C>
$1,450,000 Greater New Orleans
Expressway
Commission, LA,
Revenue Refunding
Bonds, 6.00%
(Louisiana
Expresssway)/ (MBIA
INS)/ (Original
Issue Yield: 6.55%),
11/1/2016 AAA $ 1,577,223
1,000,000 Jefferson Parish LA
Hospital Service
District No. 2,
Refunding Revenue
Bonds, 5.75% (MBIA
INS)/ (Original
Issue Yield: 6.05%),
7/1/2016 AAA 1,048,320
2,000,000 Jefferson Parish, LA
Home Mortgage
Authority, Refunding
Revenue Bond (Series
A), 6.15% (FNMA &
GNMA COLs), 6/1/2028 AAA 2,200,300
500,000 Jefferson Parish, LA
Home Mortgage
Authority, Revenue
Bonds, 5.85% (FNMA
and GNMA LOCs),
12/1/2028 AAA 523,965
1,000,000 Jefferson Parish, LA
School Board, GO UT
Bonds, 5.10% (FSA
INS)/(Original Issue
Yield: 5.10%),
3/1/2010 AAA 607,290
200,000 Jefferson Parish, LA
School Board,
Revenue Bonds, 5.00%
(AMBAC INS),
2/1/2008 AAA 210,816
</TABLE>
(See Notes to Portfolios of Investments)
<PAGE>
LOUISIANA MUNICIPAL INCOME FUND
(continued)
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING(4) VALUE
<C> <S> <C> <C>
LONG-TERM
MUNICIPALS(3)--
(cont'd)
$ 155,000 Jefferson, LA Housing
Development Corp.,
Multifamily Revenue
Refunding Bonds
(Series A), 7.375%
(Concordia Project)/
(FNMA COL)/
(Original Issue
Yield: 7.544%),
8/1/2005 AAA $ 166,137
1,000,000 Lafayette Parish, LA
School Board,
Revenue Bonds, 4.60%
(FGIC INS), 4/1/2014 AAA 976,240
1,000,000 Lafayette Parish, LA
School Board,
Revenue Bonds, 4.60%
(FGIC INS), 4/1/2018 AAA 947,690
2,000,000 Lafayette Parish, LA School Board, Revenue Bonds, 4.60% (FGIC
INS)/ (Original Issue Yield: 5.05%),
4/1/2017 AAA 1,903,320
500,000 Lafayette, LA Public
Power Authority,
Refunding Revenue
Bonds, 5.50% (AMBAC
INS), 11/1/2010 AAA 531,670
500,000 Lafayette, LA Public
Power Authority,
Refunding Revenue
Bonds, 5.50% (AMBAC
INS), 11/1/2011 AAA 531,670
260,000 Lafayette, LA Public
Power Authority,
Refunding Revenue
Bonds, 5.50% (AMBAC
INS), 11/1/2012 AAA 276,468
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING(4) VALUE
<C> <S> <C> <C>
$ 250,000 Lafayette, LA, Public
Improvement Sales
Tax Revenue Bonds,
5.50% (FGIC INS)/
(Original Issue
Yield: 5.60%),
3/1/2009 AAA $ 264,737
1,650,000 Louisiana HFA,
Multifamily Housing
Revenue Refunding
Bonds (Series A),
6.10% (Woodward
Wright Apartments
Project)/ (GNMA
COL), 12/20/2018 Aaa 1,728,392
350,000 Louisiana HFA,
Multifamily Housing
Revenue Refunding
Bonds, 5.85%
(Woodward Wright
Apartments Project)/
(GNMA COL),
12/20/2008 Aaa 368,008
1,000,000 Louisiana HFA,
Multifamily Housing
Revenue Refunding
Bonds, 6.20%
(Woodward Wright
Apartments Project)/
(GNMA COL),
6/20/2028 Aaa 1,047,350
1,000,000 Louisiana HFA,
Revenue Bond, 7.10%
(Villa Maria
Retirement Center)/
(GNMA COL),
1/20/2035 AAA 1,079,680
510,000 Louisiana HFA, SFM
Revenue Bonds
(Series A-2), 6.55%,
12/1/2026 Aaa 546,383
</TABLE>
(See Notes to Portfolios of Investments)
<PAGE>
LOUISIANA MUNICIPAL INCOME FUND
(continued)
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING(4) VALUE
<C> <S> <C> <C>
LONG-TERM
MUNICIPALS(3)--
(cont'd)
$ 500,000 Louisiana PFA,
Hospital Revenue
Bonds, 5.70%
(Woman's Hospital
Foundation)/ (FGIC
INS)/(Original Issue
Yield: 5.80%),
10/1/2008 AAA $ 539,885
500,000 Louisiana PFA,
Hospital Revenue
Refunding Bonds,
6.40% (Lafayette
General Medical
Center Project)/
(FSA INS)/(Original
Issue Yield: 6.53%),
10/1/2012 AAA 554,450
2,045,000 Louisiana PFA,
Multifamily Housing
Revenue Bonds
(Series A), 7.50%
(FHLMC COL),
6/1/2021 AAA 2,210,338
500,000 Louisiana PFA,
Refunding Revenue Bonds, 5.75% (Alton Ochsner Medical
Foundation)/ (MBIA INS)/ (Original Issue Yield:
6.636%), 5/15/2011 AAA 528,240
1,000,000 Louisiana PFA,
Revenue Bond, 5.25%
(Xavier University
of LA Project)/(MBIA
INS LOC), 9/1/2027 AAA 1,010,860
750,000 Louisiana PFA,
Revenue Bond, 6.00%
(General Health,
Inc.)/(MBIA INS)/
(Original Issue
Yield: 6.15%),
11/1/2012 AAA 815,805
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING(4) VALUE
<C> <S> <C> <C>
$ 500,000 Louisiana PFA,
Revenue Bonds, 5.10%
(Tulane University,
LA)/ (MBIA INS)/
(Original Issue
Yield: 5.27%),
11/15/2021 AAA $ 495,645
275,000 Louisiana PFA,
Revenue Bonds,
5.875% (Our Lady of
Lourdes Regional
Medical Center)/
(MBIA INS)/
(Original Issue
Yield: 5.95%),
2/1/2002 AAA 291,789
425,000 Louisiana PFA,
Revenue Bonds, 6.00%
(Our Lady of Lourdes
Regional Medical
Center)/ (MBIA INS)/
(Original Issue
Yield: 6.05%),
2/1/2003 AAA 459,391
1,890,000 Louisiana PFA,
Revenue Refunding
Bonds (Series A),
6.75% (Bethany Home
Project)/ (FHA LOC),
8/1/2025 AAA 2,024,833
350,000 Louisiana PFA,
Revenue Refunding Bonds (Series B), 6.50% (Alton Ochsner
Medical Foundation)/ (MBIA INS)/(Original Issue Yield:
6.743%), 5/15/2022 AAA 380,933
1,000,000 Louisiana PFA,
Revenue Refunding
Bonds, 5.45% (AMBAC
INS)/ (Original
Issue Yield: 5.45%),
2/1/2013 Aaa 1,051,600
</TABLE>
(See Notes to Portfolios of Investments)
<PAGE>
LOUISIANA MUNICIPAL INCOME FUND
(continued)
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING(4) VALUE
<C> <S> <C> <C>
LONG-TERM
MUNICIPALS(3)--
(cont'd)
$ 830,000 Louisiana PFA,
Revenue Refunding
Bonds, 6.20%
(Student Loans GTD),
3/1/2001 Aaa $ 862,627
750,000 Louisiana PFA,
Revenue Refunding
Bonds, 7.70%
(Jefferson Parish
Eastbank)/ (FGIC
INS)/(Original Issue
Yield: 7.747%),
8/1/2010 AAA 775,372
385,000 Louisiana PFA,
Student Loan
Refunding Revenue
Bonds (Series A-2),
6.75% (Student Loans
GTD), 9/1/2006 Aaa 408,897
315,000 Louisiana PFA,
Student Opportunity
Loans Revenue Bonds
(Series A), 6.80%
(FSA INS), 1/1/2006 AAA 339,687
310,000 Louisiana PFA,
Student Opportunity
Loans Revenue Bonds
(Series A), 6.85%
(FSA INS COL),
1/1/2009 AAA 334,444
215,000 Louisiana Public
Facilities Authority
Hospital Revenue,
Refunding Revenue
Bonds, 5.00%
(Louisiana Health
System Corporate
Project)/(FSA INS
LOC)/(Original Issue
Yield: 5.10%),
10/1/2013 AAA 217,731
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING(4) VALUE
<C> <S> <C> <C>
$1,000,000 Louisiana Public
Facilities Authority
Hospital Revenue,
Revenue Bond, 5.00%
(Franciscan
Missionaries of Our
Lady Health System)/
(MBIA INS)/(Original
Issue Yield: 5.00%),
7/1/2019 AAA $ 978,070
3,000,000 Louisiana Stadium and
Expo District,
(Series B) Revenue
Refunding Bonds,
5.00% (FGIC INS
LOC)/(Original Issue
Yield: 5.09%),
7/1/2026 AAA 2,932,020
500,000 Louisiana Stadium and
Expo District, Hotel
Occupancy Tax and
Stadium Revenue
Refunding Bonds
(Series A), 6.00%
(FGIC INS), 7/1/2016 AAA 559,245
2,155,000 Louisiana Stadium and
Expo District, Hotel
Occupancy Tax and
Revenue Refunding
Bonds (Series A),
6.00% (FGIC
INS)/(Original Issue
Yield: 6.10%),
7/1/2024 AAA 2,414,807
3,500,000 Louisiana Stadium and
Expo District,
Revenue Bonds, 5.75%
(FGIC INS)/
(Original Issue
Yield: 5.85%),
7/1/2026 AAA 3,741,570
</TABLE>
(See Notes to Portfolios of Investments)
<PAGE>
LOUISIANA MUNICIPAL INCOME FUND
(continued)
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING(4) VALUE
<C> <S> <C> <C>
LONG-TERM
MUNICIPALS(3)--
(cont'd)
$5,000,000 Louisiana State
University and
Agricultural and
Mechanical College,
Revenue Bonds, 5.50%
(MBIA INS)/
(Original Issue
Yield: 5.80%),
7/1/2026 AAA $ 5,205,350
1,565,000 Louisiana State
University and
Agricultural and
Mechanical College,
Revenue Bonds, 5.75%
(FGIC INS)/
(Original Issue
Yield: 6.043%),
7/1/2014 AAA 1,697,602
1,250,000 Louisiana State
University and
Agricultural and
Mechanical College,
University & College
Improvement Revenue
Refunding Bonds,
5.00% (University of
New Orleans
Project)/ (AMBAC INS
LOC), 10/1/2030 AAA 1,217,975
1,000,000 Louisiana State, GO
UT Bonds (Series B),
5.00% (FSA INS)/
(Original Issue
Yield: 5.17%),
4/15/2018 AAA 995,670
220,000 Louisiana State, GO
UT Refunding Bonds,
5.375% (MBIA INS)/
(Original Issue
Yield: 5.50%),
8/1/2005 AAA 237,191
775,000 Louisiana State, GO
UT, 5.125% (FGIC
INS)/(Original Issue
Yield: 5.30%),
4/15/2009 AAA 824,096
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING(4) VALUE
<C> <S> <C> <C>
$ 250,000 Louisiana State, GO
UT, 6.30% (MBIA
INS)/ (Original
Issue Yield: 6.35%),
5/1/2004 AAA $ 274,362
400,000 Louisiana State, Gas
and Fuel Tax Revenue
Bonds (Series A),
7.25% (FGIC
INS)/(Original Issue
Yield: 7.45%),
11/15/2004 AAA 419,396
250,000 Monroe, LA School
District, Special
School District, GO
UT Bonds, 5.35%
(FGIC INS)/(Original
Issue Yield: 5.75%),
3/1/2009 AAA 263,170
525,000 Monroe-Brentwood, LA
Housing Development
Corp., Multifamily
Housing Mortgage
Revenue Refunding
Bonds, 6.50% (FNMA
COL), 2/1/2010 Aaa 541,942
1,020,000 Monroe-Brentwood, LA
Housing Development
Corp., Multifamily
Housing Mortgage
Revenue Refunding
Bonds, 6.70% (FNMA
COL), 8/1/2021 Aaa 1,048,835
2,000,000 New Orleans, LA
Audubon Park, GO LT
Bonds, 6.00% (FGIC
INS)/(Original Issue
Yield: 6.25%),
10/1/2013 AAA 2,188,640
1,250,000 New Orleans, LA Home
Mortgage Authority,
SFM Revenue Bonds
(Series A), 6.65%
(GNMA COL), 9/1/2008 Aaa 1,319,213
</TABLE>
(See Notes to Portfolios of Investments)
<PAGE>
LOUISIANA MUNICIPAL INCOME FUND
(continued)
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING(4) VALUE
<C> <S> <C> <C>
LONG-TERM
MUNICIPALS(3)--
(cont'd)
$ 100,000 New Orleans, LA Home
Mortgage Authority,
SFM Revenue Bonds,
5.35% (FNMA & GNMA
COLs), 12/1/2020 Aaa $ 102,818
1,000,000 New Orleans, LA Home
Mortgage Authority,
Special Obligation
Revenue Bonds, 6.25%
(United States
Treasury
COL)/(Original Issue
Yield: 6.517%),
1/15/2011 AAA 1,157,920
215,000 New Orleans, LA
Housing Development
Corp., Multifamily
Housing Refunding
Revenue Bonds,
7.375% (FNMA COL)/
(Original Issue
Yield: 7.544%),
8/1/2005 AAA 231,209
780,000 New Orleans, LA
Housing Development
Corp., Multifamily
Housing Revenue
Bonds, 7.375%
(Southwood
Patio)/(FNMA COL)/
(Original Issue
Yield: 7.544%),
8/1/2005 AAA 834,717
1,900,000 New Orleans, LA, GO
Refunding Bond,
6.20% (AMBAC INS)/
(Original Issue
Yield: 6.30%),
10/1/2021 AAA 2,114,491
4,750,000 New Orleans, LA, GO
UT Capital
Appreciation Bonds
(AMBAC INS)/
(Original Issue
Yield: 7.10%),
9/1/2013 AAA 2,362,650
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING(4) VALUE
<C> <S> <C> <C>
$ 980,000 New Orleans, LA, GO
UT Refunding Bonds,
5.875% (AMBAC INS)/
(Original Issue
Yield: 6.00%),
10/1/2011 AAA $ 1,081,734
6,000 New Orleans, LA, GO
UT Refunding Bonds,
7.30% (AMBAC INS)/
(Original Issue
Yield: 7.35%),
12/1/2001 AAA 6,608
2,000,000 New Orleans, LA,
Refunding Revenue
Bonds (Series B),
5.00% (FSA INS)/
(Original Issue
Yield: 5.10%),
12/1/2012 AAA 2,052,700
500,000 Orleans Parish, LA
Parishwide School
District, GO UT,
5.125% (MBIA INS)/
(Original Issue
Yield: 5.35%),
9/1/2021 Aaa 500,280
750,000 Orleans Parish, LA
School Board,
Revenue Refunding
Bonds, 6.00% (MBIA
INS), 12/1/2006 AAA 843,090
1,000,000 Orleans, LA Levee District, Refunding Revenue Bonds (Series A),
5.95% (FSA INS)/(Original Issue Yield:
6.039%), 11/1/2014 AAA 1,098,640
1,000,000 Regional
Transportation
Authority, Sales Tax
Revenue Bonds, 6.50%
(FGIC INS)/
(Original Issue
Yield: 6.673%),
12/1/2008 AAA 1,093,420
750,000 Shreveport, LA,
Revenue Bonds
(Series A), 5.375%
(FSA INS), 1/1/2028 AAA 757,935
</TABLE>
(See Notes to Portfolios of Investments)
<PAGE>
LOUISIANA MUNICIPAL INCOME FUND
(continued)
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING(4) VALUE
<C> <S> <C> <C>
LONG-TERM
MUNICIPALS(3)--
(cont'd)
$ 500,000 Shreveport, LA,
Revenue Bonds
(Series B), 5.375%
(FSA INS), 1/1/2024 AAA $ 505,290
750,000 Shreveport, LA, Water & Sewer, Revenue Bonds (Series A), 5.95%
(FGIC INS
LOC), 12/1/2014 AAA 824,483
535,000 St. Charles Parish
School Board, School
Improvement Revenue
Bonds, 4.75% (AMBAC
INS LOC), 2/1/2018 AAA 518,415
1,485,000 St. Charles Parish,
LA Consolidated
Waterworks and
Wastewater District
No. 1, Utility
Revenue Refunding
Bonds, 7.15% (MBIA
INS), 7/1/2016 AAA 1,627,738
1,000,000 St. Charles Parish,
LA Public
Improvement, UT GO
Refunding Bonds
(Series ST-96),
5.25% (MBIA INS)/
(Original Issue
Yield: 5.45%),
12/1/2009 AAA 1,060,860
500,000 St. Charles Parish,
LA, Environmental
Improvement Revenue
Bonds, 5.95% (LA
Power & Light
Co.)/(FSA
INS)/(Original Issue
Yield: 5.986%),
12/1/2023 AAA 527,665
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING(4) VALUE
<C> <S> <C> <C>
$1,000,000 St. Charles Parish,
LA, Solid Waste
Disposal Revenue
Bonds, 7.00% (LA
Power & Light Co.)/
(AMBAC INS)/
(Original Issue
Yield: 7.04%),
12/1/2022 AAA $ 1,116,350
400,000 St. Tammany Parish,
LA Hospital Service
District No. 2,
Hospital Revenue
Refunding Bonds,
6.125% (Connie Lee
INS)/(Original Issue
Yield: 6.315%),
10/1/2011 AAA 443,316
1,000,000 St. Tammany Parish,
LA Hospital Service
District No. 2,
Revenue Bonds, 6.25%
(Connie Lee
LOC)/(Original Issue
Yield: 6.40%),
10/1/2014 AAA 1,115,780
500,000 St. Tammany Parish,
LA Wide School
District No. 12, GO
UT Bonds, 5.375%
(FSA INS), 3/1/2013 AAA 526,215
500,000 State Colleges &
Universities, LA,
Revenue Bonds, 5.65%
(University of
Southwestern, LA)/
(MBIA INS), 9/1/2026 AAA 530,735
-----------
Total 92,605,053
-----------
</TABLE>
(See Notes to Portfolios of Investments)
<PAGE>
LOUISIANA MUNICIPAL INCOME FUND MID CAP EQUITY FUND
(continued)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT CREDIT
OR SHARES RATING(4) VALUE
<C> <S> <C> <C>
LONG-TERM
MUNICIPALS(3)--
(cont'd)
Puerto Rico--0.7%
$ 600,000 Puerto Rico Municipal
Finance Agency,
Revenue Bonds
(Series A), 6.00%
(FSA INS)/(Original
Issue Yield: 6.30%),
7/1/2014 AAA $ 660,690
-----------
TOTAL LONG-TERM
MUNICIPALS
(IDENTIFIED COST
$88,249,610) 94,585,529
-----------
MUTUAL FUND--2.9%
2,797,695 Dreyfus Tax Exempt
Cash Management (at
net asset value) 2,797,695
-----------
TOTAL INVESTMENTS
(IDENTIFIED COST
$91,047,305) $97,383,224
===========
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
COMMON STOCKS--93.2%
Commercial Services--5.0%
9,100 (1)ACNielsen Corp. $ 236,600
1,750 Cintas Corp. 123,812
500 McGraw-Hill Cos., Inc. 54,719
4,000 Paychex, Inc. 169,500
3,907 (1)Robert Half International,
Inc. 140,652
3,795 (1)U.S. Foodservice, Inc. 176,230
------------
Total 901,513
------------
Consumer Durables--3.0%
3,600 Centex Corp. 132,525
4,750 Harley Davidson, Inc. 274,609
2,500 Maytag Corp. 140,156
------------
Total 547,290
------------
Consumer Non-Durables--4.5%
980 Church and Dwight, Inc. 40,915
1,100 Coors Adolph Co., Class B 65,519
3,625 Dial Corp. 105,805
4,740 Hormel Foods Corp. 170,640
4,360 IBP, Inc. 98,100
7,070 (1)Jones Apparel Group, Inc. 197,518
2,475 (1)Ralcorp Holdings, Inc. 44,086
1,260 (1)Tommy Hilfiger Corp. 87,019
------------
Total 809,602
------------
Consumer Services--3.4%
2,700 (1)Papa Johns International,
Inc. 116,775
2,100 (1)Pixar, Inc. 86,362
10,780 Ruby Tuesday, Inc. 200,778
3,000 (1)Scholastic Corp. 147,750
1,700 TCA Cable TV, Inc. 75,013
------------
Total 626,678
------------
Electronic Technology--12.6%
1,000 (1)Altera Corp. 48,625
5,600 (1) Cadence Design Systems,
Inc. 134,750
1,150 (1)Comverse Technology, Inc. 82,512
5,220 (1)Dell Computer Corp. 418,253
5,700 (1)Jabil Circuit, Inc. 185,963
2,600 (1)Lattice Semiconductor
Corp. 103,675
6,400 Linear Technology Corp. 280,400
2,100 (1)Litton Industries, Inc. 117,863
3,180 Rockwell International Corp. 141,311
4,400 Sundstrand Corp. 297,825
2,200 Symbol Technologies, Inc. 116,600
5,100 (1)Xilinx, Inc. 355,725
------------
Total 2,283,502
------------
</TABLE>
(See Notes to Portfolios of Investments)
<PAGE>
MID CAP EQUITY FUND (continued)
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
COMMON STOCKS--(cont'd)
Energy Minerals--1.0%
2,300 Ashland, Inc. $ 102,350
1,800 Tosco Corp. 37,237
2,350 Valero Energy Corp. 41,272
------------
Total 180,859
------------
Finance--13.8%
1,270 AMBAC 71,120
3,100 Aflac, Inc. 136,787
2,527 American International Group,
Inc. 287,866
8,442 Amsouth Bancorporation 396,774
1,425 City National Corp. 45,956
8,700 Dime Bancorp, Inc. 215,325
3,125 Finova Group, Inc. 158,789
8,200 First Tennessee National
Corp. 312,112
6,200 North Fork Bancorp, Inc. 136,400
7,980 Old Kent Financial Corp. 350,123
1,875 Old Republic International
Corp. 35,273
5,100 PaineWebber Group, Inc. 190,613
2,300 Ryder Systems, Inc. 62,100
1,695 XL Capital Ltd 103,819
------------
Total 2,503,057
------------
Health Services--3.7%
2,125 Bergen Brunswig Corp., Class
A 51,930
3,486 Cardinal Health, Inc. 251,646
3,875 Omnicare, Inc. 92,758
3,700 (1)PacifiCare Health Systems,
Inc., Class B 267,325
------------
Total 663,659
------------
Health Technology--6.4%
3,885 Allergan, Inc. 316,627
5,380 (1)Biogen, Inc. 517,153
1,250 (1)Elan Corp. PLC, ADR 95,859
1,600 (1)Genzyme Corp. 72,000
3,360 (1)Watson Pharmaceuticals,
Inc. 162,330
------------
Total 1,163,969
------------
Industrial Services--0.5%
1,300 (1)BJ Services Co. 18,281
3,720 Transocean Offshore, Inc. 76,725
------------
Total 95,006
------------
Non-Energy Minerals--1.5%
1,600 Cleveland Cliffs, Inc. 59,300
1,250 U.S.G. Corp. 62,656
1,160 Vulcan Materials Co. 156,310
------------
Total 278,266
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
Process Industries--3.7%
3,300 Air Products & Chemicals,
Inc. $ 106,012
6,490 Albemarle Corp. 153,326
3,300 Ball Corp. 138,188
4,995 Cabot Corp. 125,812
2,930 Fort James Corp. 87,534
3,150 Solutia, Inc. 56,109
------------
Total 666,981
------------
Producer Manufacturing--7.0%
5,160 (1)American Power Conversion
Corp. 185,115
3,500 Arvin Industries, Inc. 126,875
3,450 Cummins Engine Co., Inc. 141,450
2,500 Danaher Corp. 120,625
2,100 Ingersoll-Rand Co. 99,750
3,225 (1)Lexmark Intl. Group, Class
A 332,780
3,360 Trinity Industries, Inc. 110,670
6,300 (1)U.S. Filter Corp. 154,744
------------
Total 1,272,009
------------
Retail Trade--6.6%
1,375 (1)Abercrombie & Fitch Co.,
Class A 104,500
3,980 (1)Bed Bath & Beyond, Inc. 117,161
4,050 (1)Best Buy Co., Inc. 375,637
950 Claire's Stores, Inc. 20,959
2,025 Gap (The), Inc. 130,992
4,500 Ross Stores, Inc. 205,875
1,000 (1)Safeway, Inc. 57,750
3,230 Tiffany & Co. 184,716
------------
Total 1,197,590
------------
Technology Services--6.2%
3,070 (1)Citrix Systems, Inc. 236,774
2,415 (1)Network Associates, Inc. 113,505
10,350 (1)Rational Software Corp. 307,266
4,000 (1)Siebel Systems, Inc. 176,000
6,300 (1)Synopsys, Inc. 291,375
------------
Total 1,124,920
------------
Transportation--1.4%
2,800 CNF Transportation, Inc. 118,300
1,130 (1) UAL Corp. 67,517
2,300 USFreightways Corp. 73,313
------------
Total 259,130
------------
</TABLE>
(See Notes to Portfolios of Investments)
<PAGE>
MID CAP EQUITY FUND (continued)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
COMMON STOCKS--(cont'd)
Utilities--12.9%
4,950 BEC Energy $ 180,366
3,634 Bell Atlantic Corp. 208,728
4,927 Century Telephone
Enterprises, Inc. 304,242
3,500 Coastal Corp. 112,000
7,160 Conectiv, Inc. 151,702
3,350 DQE, Inc. 127,928
7,850 Energy East Corp. 420,956
5,355 Montana Power Co. 325,986
7,050 NIPSCO Industries, Inc. 182,859
3,330 New England Electric System 162,129
8,970 Questar Corp. 160,339
------------
Total 2,337,235
------------
TOTAL COMMON STOCKS
(IDENTIFIED COST
$15,679,110) 16,911,266
------------
REPURCHASE AGREEMENT(2)--6.4%
$1,164,000 State Street Corp., 4.61%,
dated 2/25/1999, due
3/1/1999
(at amortized cost) 1,164,000
------------
TOTAL INVESTMENTS (IDENTIFIED
COST $16,843,110) $ 18,075,266
============
</TABLE>
TOTAL RETURN BOND FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
CORPORATE BONDS/ ASSET BACKED
SECURITIES--29.9%
Automobile--1.3%
$1,000,000 Ford Capital BV, Deb.,
10.125%, 11/15/2000 $ 1,069,400
------------
Banking--2.0%
1,500,000 Swiss Bank Corp. New York,
Sub. Note, 7.25%, 9/1/2006 1,583,025
------------
Consumer Durables--2.7%
2,000,000 Ford Motor Co., Note, 7.25%,
10/1/2008 2,141,340
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
Consumer Non-Durables--1.8%
$1,500,000 Nabisco, Inc., Note, 6.375%,
2/1/2035 $ 1,441,695
------------
Electronic Technology--0.6%
500,000 International Business
Machines Corp., Sr. Note,
5.25%, 12/1/2003 486,930
------------
Finance--6.4%
1,250,000 American Express Co., Sr.
Unsub., 6.75%, 6/23/2004 1,272,550
750,000 American General Finance
Corp., Note, 8.00%,
2/15/2000 765,855
1,000,000 BankAmerica Corp., Sub. Note,
7.50%, 10/15/2002 1,047,730
1,000,000 General Electric Capital
Corp., Medium Term Note,
Series A, 6.15%, 11/5/2001 1,012,510
1,000,000 Lehman Brothers, Inc., Bond,
6.50%, 4/15/2008 956,710
------------
Total 5,055,355
------------
Finance-Insurance--2.6%
2,000,000 Old Republic International
Corp., Deb., 7.00%,
6/15/2007 2,054,940
------------
Process Industries--2.5%
1,000,000 Du Pont (E.I.) de Nemours &
Co., Note, 6.50%, 9/1/2002 1,021,570
1,000,000 Lubrizol Corp., 5.875%,
12/1/2008 961,860
------------
Total 1,983,430
------------
Retail Trade--4.1%
3,000,000 Dayton-Hudson Corp., Note,
7.50%, 7/15/2006 3,243,750
------------
Technology Services--1.2%
1,000,000 First Data Corp., Note,
5.80%, 12/15/2008 966,920
------------
</TABLE>
(See Notes to Portfolios of Investments)
<PAGE>
TOTAL RETURN BOND FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
CORPORATE BONDS/
ASSET BACKED
SECURITIES--(cont'd)
Utilities--4.7%
$1,500,000 Enron Corp., Note, 6.40%,
7/15/2006 $ 1,470,780
2,000,000 K N Energy, Inc., Deb.,
9.625%, 8/1/2021 2,248,640
------------
Total 3,719,420
------------
TOTAL CORPORATE BONDS/ASSET
BACKED SECURITIES
(IDENTIFIED COST
$23,370,366) 23,746,205
------------
GOVERNMENT AGENCIES--20.3%
Federal Home Loan Bank--0.8%
550,000 7.01%, 6/14/2006 588,990
------------
Federal National Mortgage
Association(5)--0.0%
6,205 Pool 1804, 11.00%, 4/1/2011 6,708
2,386 Pool 34138, 11.00%, 4/1/2010 2,672
4,388 Pool 76204, 11.00%, 6/1/2019 4,941
11,722 Pool 85131, 11.00%, 5/1/2017 13,198
------------
Total 27,519
------------
Government National Mortgage
Association 15-Year(5)--1.0%
766,237 Pool 420153, 7.00%, 9/15/2010 786,350
------------
Government National Mortgage
Association
30-Year(5)--18.5%
40,895 Pool 147875, 10.00%,
3/15/2016 44,907
110,565 Pool 168511, 8.00%, 7/15/2016 116,508
100,093 Pool 174673, 8.00%, 8/15/2016 105,379
42,874 Pool 177145, 8.00%, 1/15/2017 45,178
5,543 Pool 188080, 8.00%, 9/15/2018 5,841
80,097 Pool 212047, 8.00%, 5/15/2017 84,327
64,432 Pool 212660, 8.00%, 4/15/2017 67,835
154,098 Pool 216950, 8.00%, 6/15/2017 162,381
110,448 Pool 217533, 8.00%, 5/15/2017 116,384
31,383 Pool 225725, 10.00%,
9/15/2020 34,384
75,118 Pool 227430, 9.00%, 8/15/2019 80,517
47,538 Pool 253449, 10.00%,
10/15/2018 52,173
85,782 Pool 278300, 10.00%,
7/15/2019 93,985
56,986 Pool 279619, 10.00%,
9/15/2019 62,470
30,559 Pool 279629, 9.00%,
10/15/2019 32,755
46,328 Pool 283261, 9.00%,
11/15/2019 49,715
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
$ 98,293 Pool 287853, 9.00%, 4/15/2020 $ 105,358
15,934 Pool 288052, 10.00%,
7/15/2020 17,458
7,510 Pool 288570, 10.00%,
8/15/2020 8,219
18,289 Pool 288967, 9.00%, 4/15/2020 19,649
65,815 Pool 288994, 9.00%, 5/15/2020 70,546
41,688 Pool 289082, 9.00%, 4/15/2020 44,736
42,049 Pool 291100, 9.00%, 5/15/2020 45,071
43,983 Pool 292364, 10.00%,
9/15/2020 48,189
14,956 Pool 296315, 10.00%,
9/15/2020 16,386
340,180 Pool 302101, 7.00%, 6/15/2024 345,072
344,925 Pool 345031, 7.00%,
10/15/2023 349,885
383,888 Pool 345090, 7.00%,
11/15/2023 389,408
187,936 Pool 360772, 7.00%, 2/15/2024 190,638
369,089 Pool 382074, 7.00%, 9/15/2025 374,278
113,729 Pool 404653, 7.00%, 9/15/2025 115,293
358,547 Pool 408884, 7.00%, 9/15/2025 363,477
565,457 Pool 410108, 7.00%, 9/15/2025 573,407
257,890 Pool 410786, 7.00%, 9/15/2025 261,436
684,971 Pool 415427, 7.50%, 8/15/2025 705,096
409,370 Pool 415865, 7.00%, 9/15/2025 414,999
1,105,569 Pool 418781, 7.00%, 9/15/2025 1,120,770
1,134,937 Pool 420157, 7.00%,
10/15/2025 1,150,542
2,345,000 Pool 453533, 7.50%, 1/15/1999 2,397,528
4,393,073 Pool 780717, 7.00%, 2/15/2028 4,453,477
------------
Total 14,735,657
------------
TOTAL GOVERNMENT AGENCIES
(IDENTIFIED COST
$15,872,384) 16,138,516
------------
MUNICIPALS--6.7%
1,175,000 Liberal, KS, GO UT (Series
2), 6.50% Bonds (FSA INS),
12/1/2010 1,138,305
2,000,000 New Orleans, LA Aviation
Board, Revenue Bonds, 7.10%
Bonds (AMBAC INS), 10/1/2027 2,031,340
1,480,000 New Orleans, LA, Refunding
Revenue Bonds, 6.00% Bonds
(FSA INS), 12/1/2000 1,485,624
360,000 Vail, CO Sales Tax Revenue,
Refunding Revenue Bonds,
6.00% Bonds (MBIA LOC),
12/1/2006 352,544
350,000 Vail, CO Sales Tax Revenue,
Refunding Revenue Bonds,
6.05% Bonds (MBIA LOC),
12/1/2007 339,787
------------
TOTAL MUNICIPALS (IDENTIFIED
COST $5,350,180) 5,347,600
------------
</TABLE>
(See Notes to Portfolios of Investments)
<PAGE>
TOTAL RETURN BOND FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
TREASURY SECURITIES--39.0%
U.S. Treasury Bonds--27.9%
$5,000,000 United States Treasury Bond,
6.00%, 2/15/2026 $ 5,150,450
1,500,000 United States Treasury Bond,
6.125%, 11/15/2027 1,574,925
1,000,000 United States Treasury Bond,
7.50%, 11/15/2016 1,182,320
11,500,000 United States Treasury Bond,
7.50%, 5/15/2002 12,247,040
1,300,000 United States Treasury Bond,
12.50%, 8/15/2014 1,994,018
------------
Total 22,148,753
------------
U.S. Treasury Notes--11.1%
3,850,000 United States Treasury Note,
6.625%, 4/30/2002 4,001,344
3,600,000 United States Treasury Note,
7.125%, 2/29/2000 3,672,972
1,150,000 United States Treasury Note,
7.875%, 11/15/1999 1,173,587
------------
Total 8,847,903
------------
TOTAL TREASURY SECURITIES
(IDENTIFIED COST
$30,887,477) 30,996,656
------------
REPURCHASE AGREEMENT(2)--2.6%
2,063,000 State Street Corp., 4.61%,
dated 2/25/1999, due
3/1/1999 (at amortized cost) 2,063,000
------------
TOTAL INVESTMENTS (IDENTIFIED
COST $77,543,407) $ 78,291,977
============
</TABLE>
U.S. GOVERNMENT INCOME FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
LONG-TERM OBLIGATIONS--95.1%
Asset-Backed Securities--3.9%
$1,250,000 American Express Credit
Account Master Trust 1996-1,
Class A, 6.800%, 12/15/2003 $ 1,278,625
125,000 Discover Card Master Trust I
1993-2, Class A, 5.400%,
11/16/2001 125,138
469,574 Premier Auto Trust 1995-4,
Class A4, 6.575%, 10/6/2000 472,067
1,400,000 Sears Credit Account Master
Trust 1995-2, Class A,
8.100%, 6/15/2004 1,437,646
------------
Total 3,313,476
------------
Corporate Bonds--1.1%
1,000,000 J.P. Morgan & Co., Inc.,
6.000%, 1/15/2009 962,230
------------
Corporate Notes--1.2%
1,000,000 General Electric Capital
Corp., 6.150%, 11/5/2001 1,012,510
------------
Federal Home Loan Bank--10.1%
2,000,000 5.980%, 6/18/2008 2,006,080
3,000,000 6.050%, 1/27/2006 2,950,170
2,000,000 6.300%, 2/3/2009 1,956,400
850,000 7.010%, 6/14/2006 910,257
205,000 7.555%, 2/27/2002 216,716
500,000 8.450%, 7/26/1999 506,950
------------
Total 8,546,573
------------
Federal Home Loan Mortgage
Corporation PC(5)--11.8%
1,500,000 5.825%, 2/9/2006 1,502,010
2,000,000 6.125%, 7/14/2003 1,995,480
1,000,000 6.148%, 9/23/2008 975,380
2,000,000 6.320%, 4/29/2003 2,003,400
2,000,000 6.750%, 12/30/2013 1,980,548
1,500,000 7.055%, 8/2/2001 1,511,325
------------
Total 9,968,143
------------
Federal Home Loan Mortgage
Corporation REMIC(5)--7.7%
287,863 6.000%, 10/15/2004, REMIC
(Series 1524-E) 287,581
1,000,000 6.500%, 10/17/2020, REMIC
(Series 1998-PB) 983,120
3,074,000 7.000%, 11/15/2005, REMIC
(Series 1435-HC) 3,119,003
</TABLE>
(See Notes to Portfolios of Investments)
<PAGE>
U.S. GOVERNMENT INCOME FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
LONG-TERM
OBLIGATIONS--(cont'd)
$ 740,960 7.500%, 2/15/2003, REMIC
(Series 1289-PR) $ 753,993
1,000,000 7.500%, 9/15/2021, REMIC
(Series 1348-PN) 1,014,370
185,096 9.000%, 6/15/2020, REMIC
(Series 1015-E) 185,979
133,129 9.500%, 1/15/2005, REMIC
(Series 24-B) 137,321
------------
Total 6,481,367
------------
Federal Home Loan Mortgage
Corporation 15
Years(5)--0.3%
65,856 9.000%, 8/1/2001 68,181
97,420 9.250%, 6/1/2002 99,872
25,523 9.500%, 10/1/2001 26,248
41,259 9.500%, 10/1/2004 43,091
50,352 9.500%, 12/1/2001 52,587
------------
Total 289,979
------------
Federal Home Loan Mortgage
Corporation 30
Years(5)--0.9%
44,584 10.000%, 5/1/2014 48,332
159,764 10.000%, 6/1/2018 173,194
3,608 10.000%, 6/1/2020 3,911
34,628 10.000%, 6/1/2020 37,539
27,828 10.000%, 8/1/2019 30,167
265,963 8.750%, 2/1/2017 282,335
49,055 9.000%, 1/1/2017 52,136
5,702 9.000%, 10/1/2016 6,074
10,897 9.000%, 5/1/2018 11,582
41,468 9.000%, 6/1/2016 44,176
1,135 9.000%, 9/1/2016 1,206
28,791 9.500%, 10/1/2019 30,671
------------
Total 721,323
------------
Federal National Mortgage
Association(5)--16.3%
1,500,000 5.460%, 11/3/2003 1,454,580
1,000,000 5.480%, 11/16/2001 993,970
1,000,000 5.750%, 6/15/2005 1,003,020
1,000,000 5.830%, 10/16/2000 1,007,500
1,000,000 6.000%, 5/15/2008 1,012,190
2,500,000 6.170%, 8/4/2003 2,491,625
1,000,000 6.350%, 8/25/2005 999,540
465,000 6.460%, 6/29/2012 485,381
1,000,000 6.560%, 11/26/2007 1,009,820
500,000 6.710%, 7/24/2001 514,480
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
$1,750,000 7.150%, 1/29/2007 $ 1,787,800
1,000,000 7.280%, 5/23/2007 1,028,070
------------
Total 13,787,976
------------
Federal National Mortgage
Association REMIC(5)--1.9%
461,430 6.500%, 5/25/2023, REMIC
(Series 1993-252-M) 458,205
1,000,000 7.500%, 3/25/2021, REMIC
(Series 1992-117-K) 1,002,850
105,879 9.400%, 7/25/2003, REMIC
(Series 1988-18-B) 109,218
------------
Total 1,570,273
------------
Federal National Mortgage
Association 15
Years(5)--0.9%
709,039 7.000%, 8/1/2012 722,780
24,731 10.750%, 1/1/2001 26,316
------------
Total 749,096
------------
Federal National Mortgage
Association 30
Years(5)--0.3%
127,645 8.500%, 2/1/2011 135,544
73,987 9.500%, 8/1/2020 79,143
------------
Total 214,687
------------
Government National Mortgage
Association 15
Years(5)--0.4%
64,428 7.000%, 11/15/2009 66,099
287,004 7.000%, 9/15/2010 294,538
------------
Total 360,637
------------
Government National Mortgage
Association 30
Years(5)--7.7%
525,715 7.500%, 10/15/2022 541,161
948,513 7.500%, 3/15/2026 976,381
1,225,993 8.000%, 1/15/2022 1,283,075
1,106,825 8.000%, 4/15/2022 1,157,673
1,159,642 8.000%, 8/15/2022 1,212,916
557,421 8.000%, 11/15/2022 580,939
226,056 8.500%, 2/20/2025 239,479
222,468 9.000%, 2/15/2020 238,319
76,562 9.500%, 6/15/2020 82,687
40,736 9.500%, 7/15/2020 43,995
71,421 9.500%, 7/15/2020 77,202
45,404 9.500%, 7/15/2020 49,037
------------
Total 6,482,864
------------
</TABLE>
(See Notes to Portfolios of Investments)
<PAGE>
U.S. GOVERNMENT INCOME FUND (continued)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
LONG-TERM
OBLIGATIONS--(cont'd)
U.S. Treasury Bonds--14.4%
$1,000,000 United States Treasury Bond,
10.750%, 2/15/2003 $ 1,190,220
2,000,000 United States Treasury Bond,
6.000%, 2/15/2026 2,060,180
1,200,000 United States Treasury Bond,
6.250%, 8/15/2023 1,267,944
1,000,000 United States Treasury Bond,
6.875%, 8/15/2025 1,144,800
1,500,000 United States Treasury Bond,
7.250%, 5/15/2016 1,730,595
2,600,000 United States Treasury Bond,
7.250%, 8/15/2022 3,063,450
500,000 United States Treasury Bond,
7.875%, 2/15/2021 624,875
300,000 United States Treasury Bond,
8.500%, 2/15/2020 395,832
500,000 United States Treasury Bond,
8.750%, 5/15/2020 675,785
------------
Total 12,153,681
------------
U.S. Treasury Notes--16.2%
2,000,000 United States Treasury Note,
5.250%, 1/31/2001 2,003,920
500,000 United States Treasury Note,
5.625%, 2/15/2006 506,565
750,000 United States Treasury Note,
5.625%, 4/30/2000 754,733
1,700,000 United States Treasury Note,
5.875%, 11/30/2001 1,729,257
1,000,000 United States Treasury Note,
6.125%, 8/15/2007 1,046,680
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
$1,500,000 United States Treasury Note,
6.250%, 2/15/2007 $ 1,579,245
1,000,000 United States Treasury Note,
6.250%, 8/31/2002 1,030,320
32,000 United States Treasury Note,
6.375%, 7/15/1999 32,203
250,000 United States Treasury Note,
6.500%, 10/15/2006 266,510
1,000,000 United States Treasury Note,
6.500%, 5/15/2005 1,058,690
500,000 United States Treasury Note,
6.500%, 5/31/2002 518,180
500,000 United States Treasury Note,
6.750%, 4/30/2000 509,415
500,000 United States Treasury Note,
6.875%, 7/31/1999 504,255
1,000,000 United States Treasury Note,
7.000%, 7/15/2006 1,094,470
1,000,000 United States Treasury Note,
7.750%, 12/31/1999 1,022,913
------------
Total 13,657,356
------------
TOTAL LONG-TERM OBLIGATIONS
(IDENTIFIED COST
$79,613,196) 80,272,171
------------
REPURCHASE AGREEMENT(2)--4.5%
3,770,000 State Street Corp., 4.610%,
dated 2/25/1999, due
3/1/1999 (at amortized cost) 3,770,000
------------
TOTAL INVESTMENTS (IDENTIFIED
COST $83,383,196) $ 84,042,171
============
</TABLE>
(See Notes to Portfolios of Investments)
<PAGE>
CASH RESERVE FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
BANKERS ACCEPTANCE--3.2%
Finance--3.2%
$5,000,000 First Union Corp., 4.879%,
4/5/1999 $ 4,976,569
------------
COMMERCIAL PAPER(6)--58.2%
Consumer Non-Durables--9.5%
5,000,000 Anheuser-Busch Cos., Inc.,
4.717%, 3/4/1999 4,998,042
5,000,000 Colgate-Palmolive Co.,
4.929%, 3/29/1999 4,981,061
5,000,000 Heinz (H.J.) Co., 4.795%-
4.840%, 3/31/1999-4/26/1999 4,969,667
------------
Total 14,948,770
------------
Finance--20.2%
5,000,000 American General Finance
Corp., 4.858%, 5/4/1999 4,957,422
5,000,000 CIESCO, L.P., 4.847%,
4/9/1999 4,974,000
5,000,000 Falcon Asset Securitization
Corp., 4.869%, 4/20/1999 4,966,597
5,000,000 Ford Motor Credit Corp.,
4.847%, 4/15/1999 4,970,000
5,000,000 General Motors Acceptance
Corp., 4.837%, 5/3/1999 4,958,263
2,000,000 USAA Capital Corp., 4.857%,
5/6/1999 1,982,363
5,000,000 Wells Fargo & Co., 4.864%,
4/7/1999 4,975,282
------------
Total 31,783,927
------------
Finance--Commercial--9.4%
5,000,000 CIT Group, Inc., 4.849%,
5/6/1999 4,956,183
5,000,000 Deere (John) Capital Corp.,
4.832%, 5/5/1999 4,956,938
5,000,000 General Electric Capital
Corp., 4.859%, 6/7/1999 4,935,075
------------
Total 14,848,196
------------
Finance--Retail--6.4%
5,000,000 Beta Finance, Inc., 4.892%,
3/17/1999 4,989,222
5,000,000 Commercial Credit Co.,
4.867%, 3/11/1999 4,993,292
------------
Total 9,982,514
------------
Health Technology--3.2%
5,000,000 Abbott Laboratories, 4.768%,
3/5/1999 4,997,361
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
Process Industries--3.2%
$5,000,000 Du Pont (E.I.) de Nemours &
Co., 4.823%, 4/19/1999 $ 4,967,469
------------
Utilities--6.3%
5,000,000 BellSouth Telecommunications,
Inc., 4.818%, 3/18/1999 4,988,667
5,000,000 South Carolina Electric and
Gas, 4.825%-4.833%,
3/5/1999-3/11/1999 4,995,086
------------
Total 9,983,753
------------
TOTAL COMMERCIAL PAPER 91,511,990
------------
GOVERNMENT AGENCIES--11.7%
Finance--11.7%
8,405,000 (7)Federal Home Loan Bank
Discount Note, 4.770%,
3/19/1999 8,384,954
10,000,000 (7)Federal Home Loan Mortgage
Corp., 4.720%, 3/16/1999 9,980,333
------------
TOTAL GOVERNMENT AGENCIES 18,365,287
------------
TIME DEPOSIT--6.4%
Finance--6.4%
5,000,000 ABN AMRO Bank N.V.,
Amsterdam, 4.875%, 4/5/1999 5,000,000
5,000,000 Societe Generale, Paris,
5.120%, 3/16/1999 5,000,000
------------
TOTAL TIME DEPOSITS 10,000,000
------------
REPURCHASE
AGREEMENTS(2)--26.7%
15,000,000 Lehman Brothers, Inc.,
4.610%, dated 2/25/1999, due
3/1/1999 15,000,000
27,034,000 State Street Corp., 4.610%,
dated 2/25/1999, due
3/1/1999 27,034,000
------------
TOTAL REPURCHASE AGREEMENTS 42,034,000
------------
TOTAL INVESTMENTS (AT
AMORTIZED COST) $166,887,846
============
</TABLE>
(See Notes to Portfolios of Investments)
<PAGE>
U.S. TREASURY MONEY MARKET FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
U.S. TREASURY BILLS(7)--37.7%
$5,000,000 4.500%, 3/11/1999 $ 4,993,958
5,000,000 4.180%, 3/25/1999 4,985,667
5,000,000 4.470%, 4/1/1999 4,980,711
10,000,000 4.510%, 4/15/1999 9,944,937
15,000,000 4.690%, 4/22/1999 14,902,898
5,000,000 4.530%, 4/29/1999 4,964,272
5,000,000 4.470%, 5/6/1999 4,960,217
5,000,000 4.470%, 5/13/1999 4,956,707
15,000,000 4.490%, 5/27/1999 14,840,258
10,000,000 4.320%, 6/17/1999 9,870,550
5,000,000 6.000%, 6/30/1999 5,028,321
------------
TOTAL U.S. TREASURY BILLS 84,428,496
------------
U.S. TREASURY NOTES--17.9%
10,000,000 6.250%, 3/31/1999 10,014,266
15,000,000 6.375%, 4/30/1999 15,042,558
5,000,000 6.500%, 4/30/1999 5,017,916
5,000,000 6.750%, 6/30/1999 5,034,701
5,000,000 7.000%, 4/15/1999 5,016,779
------------
TOTAL U.S. TREASURY NOTES 40,126,220
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
REPURCHASE
AGREEMENTS(2)--42.5%
$5,000,000 Lehman Brothers, Inc.,
4.610%, dated 5,000,000
2/25/1999, due 3/1/1999 $ 5,000,000
50,000,000 Merrill Lynch, Pierce, Fenner
and Smith, 4.650%, dated
2/25/1999, due 3/1/1999 50,000,000
40,183,000 State Street Corp., 4.610%,
dated 2/25/1999, due
3/1/1999 40,183,000
------------
TOTAL REPURCHASE AGREEMENTS 95,183,000
------------
TOTAL INVESTMENTS (AT
AMORTIZED COST) $219,737,716
============
</TABLE>
(See Notes to Portfolios of Investments)
<PAGE>
NOTES TO PORTFOLIOS OF INVESTMENTS
HIBERNIA FUNDS
February 28, 1999 (unaudited)
(1) Non-income producing security.
(2) The repurchase agreements are fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.
(3) At February 28, 1999, 11.8% of the total investments at market value were
subject to alternative minimum tax.
(4) Please refer to the Appendix of the Statement of Additional Information for
an explanation of the credit ratings.
(5) Because of monthly principal payments, the average lives of certain
government securities are less than the indicated periods.
(6) Rate shown represents yield to maturity.
(7) These issues show the rate of discount at the time of purchase.
The following acronyms are used throughout this portfolio:
<TABLE>
<S> <C>
ADR -- American Depositary Receipt AMBAC -- American Municipal Bond Assurance
Corporation COL -- Collateralized FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Administration FHLMC -- Federal Home Loan Mortgage
Corporation FNMA -- Federal National Mortgage Association FSA -- Financial
Security Assurance GNMA -- Government National Mortgage Association GO --
General Obligation GTD -- Guaranty HFA -- Housing Finance Authority INS --
Insured LOC(s) -- Letter of Credit(s) LT -- Limited Tax MBIA -- Municipal Bond
Investors Assurance PC -- Participation Certificate PFA -- Public Facility
Authority REMIC -- Real Estate Mortgage Investment Conduit SFM -- Single Family
Mortgage UT -- Unlimited Tax </TABLE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
FOR FEDERAL TAX PURPOSES
---------------------------------------------------------------------------------------------------------------
NET GROSS GROSS
COST OF UNREALIZED UNREALIZED UNREALIZED
HIBERNIA FUNDS INVESTMENTS APPRECIATION APPRECIATION DEPRECIATION TOTAL NET ASSETS*
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Capital Appreciation Fund $218,150,706 $139,192,684 $145,036,140 $5,843,456 $357,839,969
Louisiana Municipal Income Fund 91,047,305 6,335,919 6,381,821 45,902 98,068,683
Mid-Cap Equity Fund 16,843,110 1,232,156 2,261,644 1,029,488 18,147,923
Total Return Bond Fund 77,543,407 748,570 1,246,997 498,427 79,469,151
U.S. Government Income Fund 83,383,196 658,975 1,139,361 480,386 84,415,791
Cash Reserve Fund 166,887,846 -- -- -- 157,198,047
U.S. Treasury Money Market Fund 219,737,716 -- -- -- 223,927,317
</TABLE>
* The categories of investments are shown as a percentage of net assets at
February 28, 1999.
(See Notes which are an integral part of the Financial Statements)
<PAGE>
(This page intentionally left blank)
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
HIBERNIA FUNDS
February 28, 1999 (unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
CAPITAL
APPRECIATION LOUISIANA MUNICIPAL
FUND INCOME FUND
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Investments in repurchase agreements $ 7,158,000 $ --
Investments in securities 350,185,390 97,383,224
------------ -----------
Total investments in securities, at value 357,343,390 97,383,224
Cash 140,472 172,029
Income receivable 427,716 1,263,296
------------ -----------
Total assets 357,911,578 98,818,549
------------ -----------
LIABILITIES:
Payable for investments purchased -- 518,948
Income distribution payable -- 193,724
Payable to Bank -- --
Accrued expenses 71,609 37,194
------------ -----------
Total liabilities 71,609 749,866
------------ -----------
NET ASSETS CONSIST OF:
Paid in capital 204,500,542 91,525,259
Net unrealized appreciation of investments 139,192,684 6,335,919
Accumulated net realized gain (loss) on investments 14,227,922 282,764
Undistributed net investment income (Distributions in
excess of net investment income) (81,179) (75,259)
------------ -----------
Total Net Assets $357,839,969 $98,068,683
------------ -----------
NET ASSETS: $342,497,781(1) $98,068,683
------------ -----------
$ 15,342,188(2) --
------------ -----------
SHARES OUTSTANDING 13,932,304(1) 8,616,235
630,767(2) --
------------ -----------
Total Shares Outstanding 14,563,071 8,616,235
============ ===========
NET ASSET VALUE PER SHARE $24.58(1) $11.38
------------ -----------
$24.32(2) --
------------ -----------
OFFERING PRICE PER SHARE* $25.74(1)**** $11.73***
------------ -----------
$24.32(2) --
------------ -----------
REDEMPTION PROCEEDS PER SHARE** $24.58(1) $11.38
------------ -----------
$22.98(2)***** --
------------ -----------
Investments, at identified cost $218,150,706 $91,047,305
============ ===========
Investments, at tax cost $218,150,706 $91,047,305
============ ===========
- ------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents Class A Shares of Capital Appreciation Fund.
(2) Represents Class B Shares of Capital Appreciation Fund.
(3) Represents Class A Shares of Mid Cap Equity Fund.
(4) Represents Class B Shares of Mid Cap Equity Fund.
(5) Represents Class A Shares of Cash Reserve Fund.
(6) Represents Class B Shares of Cash Reserve Fund.
* See "What Shares Cost" in the Prospectus.
** See "Redeeming Shares" in the Prospectus.
*** Computation of Offering Price: 100/97 of net asset value.
**** Computation of Offering Price: 100/95.50 of net asset value.
***** Computation of Redemption Proceeds: 94.50/100 of net asset value.
(See Notes which are an integral part of the Financial Statements)
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
MID CAP TOTAL RETURN U.S. GOVERNMENT CASH RESERVE U.S. TREASURY
EQUITY FUND BOND FUND INCOME FUND FUND MONEY MARKET FUND
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 1,164,000 $ 2,063,000 $ 3,770,000 $ 42,034,000 $ 95,183,000
16,911,266 76,228,977 80,272,171 124,853,846 124,554,716
----------- ----------- ----------- ------------ ------------
18,075,266 78,291,977 84,042,171 166,887,846 219,737,716
70,551 137,728 -- -- 4,055,318
14,318 1,179,158 832,011 133,437 975,623
----------- ----------- ----------- ------------ ------------
18,160,135 79,608,863 84,874,182 167,021,283 224,768,657
----------- ----------- ----------- ------------ ------------
-- -- -- 8,384,954 --
-- 119,247 274,870 504,056 769,771
-- -- 157,182 872,955 --
12,212 20,465 26,339 61,271 71,569
----------- ----------- ----------- ------------ ------------
12,212 139,712 458,391 9,823,236 841,340
----------- ----------- ----------- ------------ ------------
17,542,836 78,633,648 86,963,942 157,198,047 223,927,317
1,232,156 748,570 658,975 -- --
(591,119) 36,898 (3,260,610) -- --
)
(35,950 50,035 53,484 -- --
----------- ----------- ----------- ------------ ------------
$18,147,923 $79,469,151 $84,415,791 $157,198,047 $223,927,317
----------- ----------- ----------- ------------ ------------
$16,848,725(3) $79,469,151 $84,415,791 $157,004,861(5) $223,927,317
----------- ----------- ----------- ------------ ------------
$ 1,299,198(4) -- -- $ 193,186(6) --
----------- ----------- ----------- ------------ ------------
1,626,536(3) 7,906,242 8,330,621 157,004,861(5) 223,927,317
125,846(4) -- -- 193,186(6) --
----------- ----------- ----------- ------------ ------------
1,752,382 7,906,242 8,330,621 157,198,047 223,927,317
=========== =========== =========== ============ ============
$10.36(3) $10.05 $10.13 $1.00(5) $1.00
----------- ----------- ----------- ------------ ------------
$10.32(4) -- $1.00(6) --
----------- ----------- ----------- ------------ ------------
$10.85(3)**** $10.36*** $10.44*** $1.00(5) $1.00
----------- ----------- ----------- ------------ ------------
$10.32(4) -- -- $1.00(6) --
----------- ----------- ----------- ------------ ------------
$10.36(3) $10.05 $10.13 $1.00(5) $1.00
----------- ----------- ----------- ------------ ------------
$9.75(4)***** -- -- $0.95(6)***** --
----------- ----------- ----------- ------------ ------------
$16,843,110 $77,543,407 $83,383,196 $166,887,846 $219,737,716
=========== =========== =========== ============ ============
$16,843,110 $77,543,407 $83,383,196 $166,887,846 $219,737,716
=========== =========== =========== ============ ============
-------------------------------------------------------------------------------------------------------------------
</TABLE>
31
<PAGE>
STATEMENTS OF OPERATIONS
HIBERNIA FUNDS
Six Months Ended February 28, 1999
(unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
CAPITAL LOUISIANA
APPRECIATION MUNICIPAL
FUND INCOME FUND
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 2,110,286 $ --
Interest 99,168 2,607,360
----------- ----------
Total income 2,209,454 2,607,360
----------- ----------
EXPENSES:
Investment advisory fee 1,235,351 218,816
Administrative personnel and services fee 184,597 54,580
Custodian fees 33,766 12,156
Transfer and dividend disbursing agent fees and expenses 50,606 16,035
Directors'/Trustees' fees 5,209 1,933
Auditing fees 7,461 7,935
Legal fees 3,163 2,976
Portfolio accounting fees 47,800 28,830
Distribution services fee 444,637(1) 80,327
Shareholder services fee 16,426(4) --
Share registration costs 10,171 7,492
Printing and postage 2,280 4,216
Insurance premiums 1,452 1,408
Miscellaneous 4,624 2,331
----------- ----------
Total expenses 2,047,543 439,035
----------- ----------
Waivers and reimbursements--
Waiver of investment advisory fee -- (87,097)
Waiver of administrative personnel and services fees -- --
Waiver of distribution services fee -- (32,131)
----------- ----------
Total waivers and reimbursements -- (119,228)
----------- ----------
Net expenses 2,047,543 319,807
----------- ----------
Net investment income (loss) 161,911 2,287,553
----------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments 14,582,476 294,299
Net change in unrealized appreciation (depreciation) of
investments 71,117,738 (369,370)
----------- ----------
Net realized and unrealized gain (loss) on investments 85,700,214 (75,071)
----------- ----------
Change in net assets resulting from operations $85,862,125 $2,212,482
=========== ==========
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents distribution services fee of $395,358 and $49,279, for Class A
Shares and Class B Shares, respectively, of Capital Appreciation Fund.
(2) Represents distribution services fee of $19,505 and $3,760, for Class A
Shares and Class B Shares, respectively, of Mid Cap Equity Fund.
(3) Represents distribution services fee of $209,438 and $557 for Class A
Shares and Class B Shares, respectively, of Cash Reserve Fund.
(4) Represents shareholder services fee for Class B Shares.
(See Notes which are an integral part of the Financial Statements)
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
MID CAP TOTAL RETURN U.S. GOVERNMENT CASH RESERVE U.S. TREASURY
EQUITY FUND BOND FUND INCOME FUND FUND MONEY MARKET FUND
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 88,163 $ -- $ -- $ -- $ --
25,859 2,588,844 2,594,946 4,365,849 5,596,673
---------- ---------- ---------- ---------- ----------
114,022 2,588,844 2,594,946 4,365,849 5,596,673
---------- ---------- ---------- ---------- ----------
62,275 273,582 186,282 335,397 461,489
24,795 43,870 46,463 94,016 129,138
7,439 9,771 10,349 19,249 26,920
41,851 18,967 17,247 33,999 31,236
1,240 1,616 1,191 3,920 3,242
5,951 7,841 7,588 7,580 7,692
2,405 2,824 2,976 2,552 3,618
29,009 22,039 22,173 25,805 25,983
23,265(2) 97,708 68,487 209,995(3) --
1,253(4) -- -- 186(4) --
19,741 4,144 7,144 11,148 7,707
3,472 3,910 4,463 4,695 3,231
1,191 1,301 1,289 1,555 1,543
3,853 3,412 2,331 6,518 2,085
---------- ---------- ---------- ---------- ----------
227,740 490,985 377,983 756,615 703,884
---------- ---------- ---------- ---------- ----------
(62,275) (117,249) (65,930) -- --
(15,493) -- -- -- --
-- -- (27,395) -- --
---------- ---------- ---------- ---------- ----------
(77,768) (117,249) (93,325) -- --
---------- ---------- ---------- ---------- ----------
149,972 373,736 284,658 756,615 703,884
---------- ---------- ---------- ---------- ----------
(35,950) 2,215,108 2,310,288 3,609,234 4,892,789
---------- ---------- ---------- ---------- ----------
(591,119) 53,129 103,809 -- --
4,363,490 (1,584,532) (1,773,287) -- --
---------- ---------- ---------- ---------- ----------
3,772,371 (1,531,403) (1,669,478) -- --
---------- ---------- ---------- ---------- ----------
$3,736,421 $ 683,705 $ 640,810 $3,609,234 $4,892,789
========== ========== ========== ========== ==========
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
HIBERNIA FUNDS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
CAPITAL LOUISIANA MUNICIPAL MID CAP
APPRECIATION FUND INCOME FUND EQUITY FUND
- ---------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR ENDED PERIOD
FEBRUARY 28, ENDED FEBRUARY 28, ENDED FEBRUARY 28, ENDED
1999 AUGUST 31, 1999 AUGUST 31, 1999 AUGUST 31,
(UNAUDITED) 1998 (UNAUDITED) 1998 (UNAUDITED) 1998(1)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income (loss) $ 161,911 $ 967,708 $ 2,287,553 $ 4,938,685 $ (35,950) $ (10,642)
Net realized gain (loss) on
investments 14,582,476 41,697,078 294,299 860,440 (591,119) --
Net change in unrealized
appreciation/ (depreciation) 71,117,738 (27,300,391) (369,370) 2,003,434 4,363,490 (3,131,334)
------------ ------------ ----------- ------------ ----------- -----------
Change in net assets resulting
from operations 85,862,125 15,364,395 2,212,482 7,802,559 3,736,421 (3,141,976)
------------ ------------ ----------- ------------ ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment
income (265,360)(2) (935,011)(4) (2,337,657) (4,957,912) -- --
Distributions in excess of net
investment income -- -- -- (25,155) -- --
Distributions from net realized
gain on investments (37,206,090)(3) (30,675,973)(5) (641,368) (460,469) -- --
------------ ------------ ----------- ------------ ----------- -----------
Change in net assets from
distributions to shareholders (37,471,450) (31,610,984) (2,979,025) (5,443,536) -- --
------------ ------------ ----------- ------------ ----------- -----------
SHARE TRANSACTIONS:
Proceeds from sale of shares 20,446,238 53,381,213 3,897,183 8,710,403 2,016,391 1,511,366
Proceeds from shares issued in
connection with the acquisition
of the Common Trust Funds -- -- -- -- -- 15,919,383
Net asset value of shares issued to
shareholders in payment of
distributions declared 30,098,133 25,095,605 1,344,560 1,854,181 -- --
Cost of shares redeemed (31,712,566) (59,287,266) (5,117,775) (15,653,812) (1,593,266) (300,396)
------------ ------------ ----------- ------------ ----------- -----------
Change in net assets from share
transactions 18,831,805 19,189,552 123,968 (5,089,228) 423,125 17,130,353
------------ ------------ ----------- ------------ ----------- -----------
Change in net assets 67,222,480 2,942,963 (642,575) (2,730,205) 4,159,546 13,988,377
------------ ------------ ----------- ------------ ----------- -----------
NET ASSETS:
Beginning of period 290,617,489 287,674,526 98,711,258 101,441,463 13,988,377 --
------------ ------------ ----------- ------------ ----------- -----------
End of period $357,839,969 $290,617,489 $98,068,683 $ 98,711,258 $18,147,923 $13,988,377
============ ============ =========== ============ =========== ===========
Undistributed net investment income
(Distributions in excess of net
investment income) included in net
assets at end of period $ (81,179) $ 22,270 $ (75,259) $ (25,155) $ (35,950) --
============ ============ =========== ============ =========== ===========
Net gain (loss) as computed for
federal tax purposes $ 14,582,476 $ 41,643,171 $ 294,299 $ 860,440 $ (591,119) --
============ ============ =========== ============ =========== ===========
- -------------------------------------------------------------------------------------
</TABLE>
(1) For the period from July 13, 1998 (start of performance) to August 31, 1998.
(2) Represents income distributions of $265,179 and $181 for Class A Shares and
Class B Shares, respectively.
(3) Represents gain distributions of $35,732,303 and $1,473,787 for Class A
Shares and Class B Shares, respectively.
(4) Represents income distributions for Class A Shares only. (5) Represents gain
distributions of $30,066,368 and $609,605 for Class A
Shares and Class B Shares, respectively.
(6) Represents income distributions of $3,606,583 and $2,651 for Class A Shares
and Class B Shares, respectively.
(See Notes which are an integral part of the Financial Statements)
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
TOTAL RETURN U.S. GOVERNMENT U.S. TREASURY
BOND FUND INCOME FUND CASH RESERVE FUND MONEY MARKET FUND
- ------------------------------------------------------------------------------------------------------------------
SIX MONTHS SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR
FEBRUARY 28, ENDED FEBRUARY 28, ENDED FEBRUARY 28, ENDED FEBRUARY 28, ENDED
1999 AUGUST 31, 1999 AUGUST 31, 1999 AUGUST 31, 1999 AUGUST 31,
(UNAUDITED) 1998 (UNAUDITED) 1998 (UNAUDITED) 1998 (UNAUDITED) 1998
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$2,215,108 $4,304,953 $2,310,288 $3,848,099 $ 3,609,234 $ 7,760,553 $ 4,892,789 $ 8,578,035
53,129 588,562 103,809 528,099 -- -- -- --
(1,584,532) 1,899,586 (1,773,287) 1,756,003 -- -- -- --
- ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------
683,705 6,793,101 640,810 6,132,201 3,609,234 7,760,553 4,892,789 8,578,035
- ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------
(2,154,592) (4,306,667) (2,283,256) (3,791,842) (3,609,234)(6) (7,760,553) (4,892,789) (8,578,035)
-- (10,481) -- -- -- -- -- --
(197,305) (472,991) -- -- -- -- -- --
- ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------
(2,351,897) (4,790,139) (2,283,256) (3,791,842) (3,609,234) (7,760,553) (4,892,789) (8,578,035)
- ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------
5,176,387 19,472,193 9,659,283 30,733,443 266,479,411 506,085,291 450,545,728 858,263,159
-- -- -- -- -- -- -- --
1,635,437 3,439,628 671,452 665,703 775,587 1,897,589 1,672,590 2,936,491
(5,631,757) (16,824,326) (7,807,699) (9,642,177) (259,276,300) (509,140,899) (403,423,921) (840,690,877)
- ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------
1,180,067 6,087,495 2,523,036 21,756,969 7,978,698 (1,158,019) 48,794,397 20,508,773
- ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------
(488,125) 8,090,457 880,590 24,097,328 7,978,698 (1,158,019) 48,794,397 20,508,773
- ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------
79,957,276 71,866,819 83,535,201 59,437,873 149,219,349 150,377,368 175,132,920 154,624,147
- ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------
$79,469,151 $79,957,276 $84,415,791 $83,535,201 $157,198,047 $149,219,349 $223,927,317 $175,132,920
=========== =========== =========== =========== ============ ============ ============ ============
$ 50,035 $ (10,481) $ 53,484 $ 26,452 -- -- -- --
=========== =========== =========== =========== ============ ============ ============ ============
$ 53,129 $ 588,562 $ 103,809 $ 243,423 -- -- -- --
=========== =========== =========== =========== ============ ============ ============ ============
</TABLE>
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<CAPTION>
NET REALIZED DISTRIBUTIONS DISTRIBUTIONS
NET ASSET NET AND DISTRIBUTIONS FROM NET IN EXCESS OF
VALUE, INVESTMENT UNREALIZED TOTAL FROM FROM NET REALIZED NET
YEAR ENDED BEGINNING INCOME GAIN/(LOSS) ON INVESTMENT INVESTMENT GAIN ON INVESTMENT
AUGUST 31, OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME INVESTMENTS INCOME
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CAPITAL APPRECIATION FUND--CLASS A SHARES
1994 $14.60 0.23 0.36 0.59 (025) (1.13) --
1995 $13.81 0.22 2.54 2.76 (0.21) (0.27) --
1996 $16.09 0.19 2.62 2.81 (0.19) (0.84) --
1997 $17.87 0.15 6.51 6.66 (0.16) (1.99) --
1998 $22.38 0.08 1.09 1.17 (0.07) (2.34) --
1999(1) $21.14 0.02 6.23 6.25 (0.02) (2.79) --
CAPITAL APPRECIATION FUND--CLASS B SHARES
1997(2) $18.90 (0.01)(4) 3.48 3.47 -- -- (0.05)(3)
1998 $22.32 (0.06) 1.07 1.01 -- (2.34) --
1999(1) $20.99 (0.05) 6.17 6.12 -- (2.79) --
LOUISIANA MUNICIPAL INCOME FUND
1994 $11.60 0.59 (0.68) (0.09) (0.59) (0.10) --
1995 $10.82 0.59 0.24 0.83 (0.58) (0.08) --
1996 $10.99 0.60 (0.05) 0.55 (0.60) -- --
1997 $10.94 0.57 0.28 0.85 (0.58) -- --
1998 $11.21 0.56 0.32 0.88 (0.57) (0.05) (0.00)(3)(9)
1999(1) $11.47 0.26 -- 0.26 (0.27) (0.08) --
MID CAP EQUITY FUND--CLASS A SHARES
1998(8) $10.00 (0.01) (1.85) (1.86) -- -- --
1999(1) $ 8.14 (0.02) 2.24 2.22 -- -- --
MID CAP EQUITY FUND--CLASS B SHARES
1998(8) $10.00 (0.01) (1.86) (1.87) -- -- --
1999(1) $ 8.13 (0.05) 2.24 2.19 -- -- --
TOTAL RETURN BOND FUND
1994 $10.49 0.57 (0.83) (0.26) (0.57) (0.02) --
1995 $ 9.64 0.56 0.39 0.95 (0.54) -- --
1996 $10.05 0.56 (0.27) 0.29 (0.57) -- --
1997 $ 9.77 0.60 0.23 0.83 (0.61) -- --
1998 $ 9.99 0.58 0.35 0.93 (0.58) (0.07) (0.00)(3)(9)
1999(1) $10.27 0.28 (0.19) 0.09 (0.28) (0.03) --
U.S. GOVERNMENT INCOME FUND
1994 $10.85 0.69 (0.89) (0.20) (0.69) (0.04) --
1995 $ 9.92 0.71 0.20 0.91 (0.69) -- --
1996 $10.14 0.67 (0.30) 0.37 (0.69) -- --
1997 $ 9.82 0.62 0.18 0.80 (0.64) -- --
1998 $ 9.98 0.61 0.34 0.95 (0.60) -- --
1999(1) $10.33 0.28 (0.20) 0.08 (0.28) -- --
CASH RESERVE FUND--CLASS A
1994 $ 1.00 0.03 -- 0.03 (0.03) -- --
1995 $ 1.00 0.05 -- 0.05 (0.05) -- --
1996 $ 1.00 0.05 -- 0.05 (0.05) -- --
1997 $ 1.00 0.05 -- 0.05 (0.05) -- --
1998 $ 1.00 0.05 -- 0.05 (0.05) -- --
1999(1) $ 1.00 0.02 -- 0.02 (0.02) -- --
CASH RESERVE FUND--CLASS B
1999(10) $ 1.00 0.02 -- 0.02 (0.02) -- --
U.S. TREASURY MONEY MARKET FUND
1994 $ 1.00 0.03 -- 0.03 (0.03) -- --
1995 $ 1.00 0.05 -- 0.05 (0.05) -- --
1996 $ 1.00 0.05 -- 0.05 (0.05) -- --
1997 $ 1.00 0.05 -- 0.05 (0.05) -- --
1998 $ 1.00 0.05 -- 0.05 (0.05) -- --
1999(1) $ 1.00 0.02 -- 0.02 (0.02) -- --
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Six months ended February 28, 1999 (unaudited)
(2) Reflects operations for the period from December 2, 1996 (date of initial
public offering) to August 31, 1997.
(3) These distributions in excess of net investment income were a result of
certain book and tax timing differences. These distributions do not
represent a return of capital for federal tax purposes.
(4) Per share information presented is based on the monthly average number of
shares outstanding divided by the net operating loss due to large
fluctuations in the number of shares outstanding during the period.
(5) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
----------------------------------
NET
NET ASSET INVESTMENT NET ASSETS, PORTFOLIO
TOTAL VALUE, TOTAL INCOME EXPENSE END OF PERIOD TURNOVER
DISTRIBUTIONS END OF PERIOD RETURN (5) EXPENSES (LOSS) WAIVER (7) (000 OMITTED) RATE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
(1.38) $13.81 4.27% 1.09% 1.67% -- $139,081 118%
(0.48) $16.09 20.71% 1.25% 1.46% -- $144,476 69%
(1.03) $17.87 18.03% 1.24% 1.08% -- $169,648 69%
(2.15) $22.38 39.56% 1.24% 0.72% -- $283,040 62%
(2.41) $21.14 5.12% 1.21% 0.32% -- $279,778 62%
(2.81) $24.58 30.44% 1.21%(6) 0.13%(6) -- $342,498 18%
(0.05) $22.32 18.40% 1.99%(6) (0.09%)(6) -- $ 4,635 62%
(2.34) $20.99 4.36% 1.96% (0.44%) -- $ 10,840 62%
(2.79) $24.32 29.98% 1.96%(6) (0.62%)(6) -- $ 15,342 18%
(0.69) $10.82 (0.76%) 0.71% 5.24% 0.08% $ 79,698 33%
(0.66) $10.99 8.20% 0.77% 5.54% 0.08% $ 67,600 22%
(0.60) $10.94 5.04% 0.74% 5.37% 0.08% $ 65,717 17%
(0.58) $11.21 8.31% 0.69% 5.19% 0.08% $101,441 17%
(0.62) $11.47 8.04% 0.66% 4.94% 0.08% $ 98,711 24%
(0.35) $11.38 2.29% 0.66%(6) 4.70%(6) 0.25%(6) $ 98,069 7%
-- $ 8.14 (18.60%) 1.89%(6) (0.48%)(6) 0.20%(6) $ 13,422 1%
-- $10.36 27.27% 1.76%(6) (0.39%)(6) 0.90%(6) $ 16,849 55%
-- $ 8.13 (18.70%) 2.76%(6) (1.22%)(6) 0.17%(6) $ 567 1%
-- $10.32 26.94% 2.51%(6) (1.14%)(6) 0.90%(6) $ 1,299 55%
(0.59) $ 9.64 (2.46%) 1.21% 5.62% -- $ 72,088 96%
(0.54) $10.05 10.19% 1.30% 5.71% -- $ 69,455 91%
(0.57) $ 9.77 2.90% 1.29% 5.57% -- $ 71,188 38%
(0.61) $ 9.99 8.71% 1.29% 6.00% -- $ 71,867 65%
(0.65) $10.27 9.51% 1.08% 5.66% 0.17% $ 79,957 31%
(0.31) $10.05 0.84% 0.96%(6) 5.67%(6) 0.30%(6) $ 79,469 12%
(0.73) $ 9.92 (1.67%) 0.74% 6.68% 0.06% $ 67,051 26%
(0.69) $10.14 9.60% 0.82% 7.02% 0.06% $ 42,593 5%
(0.69) $ 9.82 3.72% 0.87% 6.64% 0.06% $ 37,544 27%
(0.64) $ 9.98 8.39% 0.88% 6.31% 0.06% $ 59,438 72%
(0.60) $10.33 9.74% 0.73% 5.98% 0.06% $ 83,535 44%
(0.28) $10.13 0.79% 0.69%(6) 5.58%(6) 0.23%(6) $ 84,416 16%
(0.03) $ 1.00 2.73% 0.91% 2.71% -- $183,922 --
(0.05) $ 1.00 4.97% 0.86% 4.87% -- $191,242 --
(0.05) $ 1.00 4.79% 0.87% 4.69% -- $168,344 --
(0.05) $ 1.00 4.70% 0.89% 4.59% -- $150,377 --
(0.05) $ 1.00 4.82% 0.89% 4.72% -- $149,219 --
(0.02) $ 1.00 2.15% 0.90%(6) 4.31%(6) -- $157,005 --
(0.02) $ 1.00 1.70% 1.65%(6) 3.56%(6) -- $ 193 --
(0.03) $ 1.00 2.85% 0.66% 2.85% 0.23% $ 45,022 --
(0.05) $ 1.00 5.15% 0.46% 5.15% 0.22% $116,489 --
(0.05) $ 1.00 5.08% 0.44% 4.95% 0.22% $136,068 --
(0.05) $ 1.00 4.92% 0.50% 4.81% 0.14% $154,624 --
(0.05) $ 1.00 4.89% 0.63% 4.78% -- $175,133 --
(0.02) $ 1.00 2.13% 0.61%(6) 4.24%(6) -- $223,927 --
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(6) Computed on an annualized basis.
(7) This voluntary expense decrease is reflected in both the expense and net
investment income ratios.
(8) Reflects operations for the period from July 13, 1998 (date of initial
public offering) to August 31, 1998.
(9) Amount is less than $0.01 per share.
(10) Reflects operations for the period from September 4, 1998 (date of initial
public offering) to February 28, 1999.
(See Notes which are an integral part of the Financial Statements)
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
HIBERNIA FUNDS
February 28, 1999 (unaudited)
(1) ORGANIZATION
Hibernia Funds (formerly, Tower Mutual Funds) (the "Trust") is registered
under the Investment Company Act of 1940, as amended (the "Act"), as an
open-end management investment company. The Trust consists of seven portfolios
(individually referred to as the "Fund", or collectively as the "Funds") which
are presented herein:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME DIVERSIFICATION INVESTMENT OBJECTIVE
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Hibernia Capital Appreciation Fund diversified provide growth of capital and income.
(formerly, Tower Capital Appreciation Fund)
("Capital Appreciation Fund")
------------------------------------------------------------------------------------------------------------------
Hibernia Louisiana Municipal Income Fund non-diversified provide current
income which is generally (formerly, Tower Louisiana Municipal Income
exempt from federal income tax and personal Fund) income taxes imposed by
the state of ("Louisiana Municipal Income Fund") Louisiana.
------------------------------------------------------------------------------------------------------------------
Hibernia Mid Cap Equity Fund diversified total return.
(formerly, Tower Mid Cap Equity Fund)
("Mid Cap Equity Fund")
------------------------------------------------------------------------------------------------------------------
Hibernia Total Return Bond Fund diversified maximize total return.
(formerly, Tower Total Return Bond Fund)
("Total Return Bond Fund")
------------------------------------------------------------------------------------------------------------------
Hibernia U.S. Government Income Fund diversified provide current income.
(formerly, Tower U.S. Government Income
Fund) ("U.S. Government Income Fund")
------------------------------------------------------------------------------------------------------------------
Hibernia Cash Reserve Fund diversified provide current income consistent
with (formerly, Tower Cash Reserve Fund) stability of principal.
("Cash Reserve Fund")
------------------------------------------------------------------------------------------------------------------
Hibernia U.S. Treasury Money Market Fund diversified provide current income
consistent with (formerly, Tower U.S. Treasury Money Market stability of
principal and liquidity.
Fund)
("U.S. Treasury Money Market Fund")
------------------------------------------------------------------------------------------------------------------
</TABLE>
The assets of each portfolio are segregated and a shareholder's interest is
limited to the portfolio in which shares are held.
On July 13, 1998, Mid Cap Equity Fund acquired a portfolio of a collective
trust fund managed by the adviser ("Acquired Fund"). The acquisition was
accomplished by a tax-free exchange of 1,591,938 shares of Mid Cap Equity Fund
(valued at $15,919,383) for the 277,944 shares of the Acquired Fund
outstanding on July 13, 1998. The Acquired Fund's net assets of $15,919,383,
which consisted of Paid in Capital, at the date were combined with those of
Mid Cap Equity Fund. The aggregate net assets of Mid Cap Equity Fund and the
Acquired Fund immediately before the acquisition were $0 and $15,919,383,
respectively.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
<PAGE>
INVESTMENT VALUATIONS--Municipal bonds are valued by an independent
pricing service, taking into consideration yield, liquidity, risk, credit
quality, coupon, maturity, type of issue, and any other factors or market
data the pricing service deems relevant. U.S. government securities,
listed corporate bonds, and other fixed income and asset-backed securities
are generally valued at the mean of the latest bid and asked price as
furnished by an independent pricing service. Listed equity securities are
valued at the last sale price reported on a national securities exchange.
Cash Reserve and U. S. Treasury Money Market Funds use the amortized cost
method to value portfolio securities in accordance with Rule 2a-7 under
the Act. For Capital Appreciation Fund, Louisiana Municipal Income Fund,
Total Return Bond Fund, and U.S. Government Income Fund, short-term
securities are valued at the prices provided by an independent pricing
service. However, short-term securities purchased with remaining
maturities of 60 days or less may be valued at amortized cost, which
approximates fair market value. Investments in other open-end regulated
investment companies are valued at net asset value.
REPURCHASE AGREEMENTS--It is the policy of the Funds to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Funds to monitor, on a daily basis, the market value of each
repurchase agreement's collateral to ensure that the value of collateral
at least equals the repurchase price to be paid under the repurchase
agreement transaction.
The Funds will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are
deemed by the Funds' adviser to be creditworthy pursuant to the guidelines
and/or standards reviewed or established by the Board of Trustees (the
"Trustees").
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and
expenses are accrued daily. Bond premium and discount, if applicable, are
amortized as required by the Internal Revenue Code, as amended (the
"Code"). Distributions to shareholders are recorded on the ex-dividend
date.
FEDERAL TAXES--It is the Funds' policy to comply with the provisions of
the Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of their income. Accordingly, no
provisions for federal tax are necessary.
At August 31, 1998, U.S. Government Income Fund, for federal tax purposes,
had a capital loss carryforward, as noted below, which will reduce the
Fund's taxable income arising from future net realized gain on
investments, if any, to the extent permitted by the Code, and thus will
reduce the amount of the distributions to shareholders which would
otherwise be necessary to relieve the Fund of any liability for federal
tax. Pursuant to the Code, such capital loss carryforward will expire as
follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
EXPIRATION YEAR
------------------------------------------------------------------------------------------------------------------
TOTAL TAX LOSS
FUND 2003 2004 2005 CARRYFORWARD
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government Income Fund $1,511,953 $1,298,006 $553,828 $3,363,787
------------------------------------------------------------------------------------------------------------------
</TABLE>
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Funds may engage in
when-issued or delayed delivery transactions. The Funds record when-issued
securities on the trade date and maintain security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on
the settlement date.
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
<PAGE>
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in shares were as follows:
EQUITY AND INCOME FUNDS
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
CAPITAL APPRECIATION FUND
------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 1999 AUGUST 31, 1998
------------------------------------------------------------------------------------------------------------------
CLASS A SHARES SHARES DOLLARS SHARES DOLLARS
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 759,089 $ 18,103,508 1,944,199 $ 45,967,030
Shares issued to shareholders in payment of
distributions declared 1,241,674 28,632,787 1,143,415 24,488,265
Shares redeemed (1,305,029) (30,611,482) (2,499,674) (58,552,238)
---------- ------------ ---------- ------------
Net change resulting from Class A Share transactions 695,734 $ 16,124,813 587,940 $ 11,903,057
========== ============ ========== ============
------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 1999 AUGUST 31, 1998
------------------------------------------------------------------------------------------------------------------
CLASS B SHARES SHARES DOLLARS SHARES DOLLARS
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 98,681 $ 2,342,730 311,166 $ 7,414,183
Shares issued to shareholders in payment of
distributions declared 64,099 1,465,346 28,474 607,340
Shares redeemed (48,487) (1,101,084) (30,789) (735,028)
---------- ------------ ---------- ------------
Net change resulting from Class B Share transactions 114,293 $ 2,706,992 308,851 $ 7,286,495
========== ============ ========== ============
Net change resulting from fund share transactions 810,027 $ 18,831,805 896,791 $ 19,189,552
========== ============ ========== ============
------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
MID CAP EQUITY FUND
------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED PERIOD ENDED
FEBRUARY 28, 1999 AUGUST 31, 1998*
------------------------------------------------------------------------------------------------------------------
CLASS A SHARES SHARES DOLLARS SHARES DOLLARS
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 136,503 $ 1,373,544 88,819 $ 836,513
Shares issued in connection with the Acquisition of the
Common Trust Funds -- -- 1,591,938 15,919,383
Shares redeemed (158,707) (1,494,650) (32,017) (300,346)
---------- ------------ ---------- ------------
Net change resulting from Class A Share transactions (22,204) $ (121,106) 1,648,740 $ 16,455,550
========== ============ ========== ============
------------------------------------------------------------------------------------------------------------------
</TABLE>
* For the period from July 13, 1998 (date of initial public offering) to
August 31, 1998.
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
MID CAP EQUITY FUND
------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED PERIOD ENDED
FEBRUARY 28, 1999 AUGUST 31, 1998*
------------------------------------------------------------------------------------------------------------------
CLASS B SHARES SHARES DOLLARS SHARES DOLLARS
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 65,739 $ 642,847 69,657 $ 674,853
Shares redeemed (9,545) (98,616) (5) (50)
---------- ------------ ---------- ------------
Net change resulting from Class B Share transactions 56,194 $ 544,231 69,652 $ 674,803
========== ============ ========== ============
Net change resulting from fund share transaction 33,990 $ 423,125 1,718,392 $ 17,130,353
========== ============ ========== ============
------------------------------------------------------------------------------------------------------------------
</TABLE>
* For the period from July 13, 1998 (date of initial public offering) to
August 31, 1998.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
LOUISIANA MUNICIPAL U.S. GOVERNMENT
INCOME FUND TOTAL RETURN BOND FUND INCOME FUND
------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
FEBRUARY 28, AUGUST 31, FEBRUARY 28, AUGUST 31, FEBRUARY 28, AUGUST 31,
1999 1998 1999 1998 1999 1998
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 339,952 767,090 504,360 1,917,601 933,279 3,009,055
Shares issued to
shareholders in payment of
distributions declared 117,776 163,782 159,909 340,357 65,120 65,543
Shares redeemed (445,562) (1,379,228) (545,544) (1,660,779) (753,007) (947,489)
-------- ---------- -------- ---------- -------- ---------
Net change resulting from
fund share transaction 12,166 (448,356) 118,725 597,179 245,392 2,127,109
======== ========== ======== ========== ======== =========
------------------------------------------------------------------------------------------------------------------
</TABLE>
MONEY MARKET FUNDS
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
U.S. TREASURY
CASH RESERVE FUND MONEY MARKET FUND
------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
FEBRUARY 28, AUGUST 31, FEBRUARY 28, AUGUST 31,
CLASS A SHARES 1999 1998 1999 1998
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 266,277,025 506,085,291 450,545,728 858,263,159
Shares issued to shareholders in payment of
distributions declared 773,412 1,897,589 1,672,590 2,936,491
Shares redeemed (259,264,925) (509,140,899) (403,423,921) (840,690,877)
------------ ------------ ------------ ------------
Net change resulting from Class A Share
transactions 7,785,512 (1,158,019) 48,794,397 20,508,773
============ ============ ============ ============
------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
U.S. TREASURY
CASH RESERVE FUND MONEY MARKET FUND
------------------------------------------------------------------------------------------------------------------
PERIOD YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
FEBRUARY 28, AUGUST 31, FEBRUARY 28, AUGUST 31,
CLASS B SHARES 1999 1998 1999 1998
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 202,386 -- -- --
Shares issued to shareholders in payment of
distributions declared 2,175 -- -- --
Shares redeemed (11,375) -- -- --
------------ ------------ ------------ ------------
Net change resulting from Class B Share
transactions 193,186 -- -- --
============ ============ ============ ============
Net change resulting from fund share transactions 7,978,698 (1,158,019) 48,794,397 20,508,773
============ ============ ============ ============
------------------------------------------------------------------------------------------------------------------
</TABLE>
*For the period from September 4, 1998 (date of initial public investment) to
February 28, 1999.
(4) INVESTMENT ADVISORY FEE AND OTHER
TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Hibernia National Bank, the Funds' investment adviser
(the "Adviser") receives for its services an annual investment advisory fee
based on a percentage of each Fund's average daily net assets (see below).
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
ANNUAL
FUND RATE
--------------------------------------------------------------------------------------
<S> <C>
Capital Appreciation Fund 0.75%
Louisiana Municipal Income Fund 0.45%
Mid-Cap Equity Fund 0.75%
Total Return Bond Fund 0.70%
U.S. Government Income Fund 0.45%
Cash Reserve Fund 0.40%
U.S. Treasury Money Market Fund 0.40%
--------------------------------------------------------------------------------------
</TABLE>
The Adviser may voluntarily choose to waive any portion of its fee. The
Adviser can modify or terminate this voluntary waiver at any time at its sole
discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the
Funds with certain administrative personnel and services. The fee paid to FAS
is based on the level of average aggregate net assets of the Trust for the
period. FAS may voluntarily choose to waive any portion of its fee. FAS can
modify or terminate this voluntary waiver at any time at its sole discretion.
DISTRIBUTION SERVICES FEE--The Funds have adopted a Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the
Funds will reimburse Federated Securities Corp. ("FSC"), the principal
distributor, from the net assets of the Funds to finance activities intended
to result in the sale of each Fund's shares. The Plan provides that the Funds,
except for Class B Shares of the Capital Appreciation Fund, Class B Shares of
the Mid Cap Equity Fund and Class B Shares of the Cash Reserve Fund, may incur
distribution expenses up to 0.25% of the average daily net assets of the
Funds, annually, to reimburse FSC. Class B Shares of the Capital Appreciation
Fund, Class B Shares of the Mid Cap Equity Fund and Class B Shares of the Cash
Reserve Fund may incur distribution expenses up to 0.75% of the average daily
net assets of the Class B Shares, annually, to reimburse FSC. For the six
months ended February 28, 1999, the U.S. Treasury Money Market Fund did not
incur distribution services fees.
<PAGE>
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services Company ("FSSC"), Class B Shares of
Capital Appreciation Fund, Mid Cap Equity Fund and Cash Reserve Fund will pay
FSSC up to 0.25% of its daily average net assets for the period. The fee paid
to FSSC is used to finance certain services for shareholders and to maintain
shareholder accounts.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated Services
Company ("FServ"), through its subsidiary, FSSC serves as transfer and
dividend disbursing agent for the Funds. The fee paid to FSSC is based on the
size, type, and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Funds' accounting records for
which it receives a fee. The fee is based on the level of each Fund's average
daily net assets for the period, plus out-of-pocket expenses.
CUSTODIAN FEES--Hibernia National Bank is the Funds' custodian for which it
receives a fee. The fee is based on the level of each Fund's average daily net
assets for the period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended February 28, 1999, were as follows:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
FUND PURCHASES SALES
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Capital Appreciation Fund $57,985,524 $78,449,881
Louisiana Municipal Income Fund $6,496,976 $8,497,670
Mid Cap Equity Fund $9,396,313 $8,558,360
Total Return Bond Fund $9,960,139 $9,107,461
U.S. Government Income Fund $16,047,050 $12,711,403
--------------------------------------------------------------------------------------------------------------------
</TABLE>
(6) CONCENTRATION OF CREDIT RISK
Since Louisiana Municipal Income Fund invests a substantial portion of its
assets in issuers located in one state, it will be more susceptible to factors
adversely affecting issuers of that state than would be comparable general
tax-exempt mutual fund. In order to reduce the credit risk associated with
such factors, at February 28, 1999, 94.7% of the securities in the portfolio
of investments were backed by letters of credit or bond insurance of various
financial institutions and financial guaranty assurance agencies. The value of
investments insured by or supported (backed) by a letter of credit from any
one institution or agency did not exceed 30.4% of total investments.
(7) YEAR 2000
Similar to other financial organizations, the Funds could be adversely
affected if the computer systems used by the Funds' service providers do not
properly process and calculate date-related information and data from and
after January 1, 2000. The Funds' Adviser and administrator are taking
measures that they believe are reasonably designed to address the Year 2000
issue with respect to computer systems that they use and to obtain reasonable
assurances that comparable steps are being taken by each of the Funds' other
service providers. At this time, however, there can be no assurance that these
steps will be sufficient to avoid any adverse impact to the Funds.
<PAGE>
<TABLE>
<CAPTION>
HIBERNIA FUNDS
TRUSTEES AND OFFICERS
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<S> <C>
TRUSTEES OFFICERS
EDWARD C. GONZALES EDWARD C. GONZALES
President and Treasurer
ROBERT L. DIBENEDETTO, M.D. JEFFREY W. STERLING
Vice President and Assistant Treasurer
JAMES A. GAYLE, SR. PETER J. GERMAIN
Secretary
J. GORDON REISCHE TIMOTHY S. JOHNSON
Assistant Secretary
</TABLE>
MUTUAL FUNDS ARE NOT BANK DEPOSITS OR OBLIGATIONS, ARE NOT GUARANTEED
BY ANY BANK, AND ARE NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT,
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD,
OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN MUTUAL FUNDS INVOLVES
INVESTMENT RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL. ALTHOUGH MONEY
MARKET FUNDS SEEK TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER
SHARE, THERE IS NO ASSURANCE THAT THEY WILL BE ABLE TO DO SO.
THIS REPORT IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS
ONLY WHEN PRECEDED OR ACCOMPANIED BY THE FUNDS' PROSPECTUS WHICH
CONTAINS FACTS CONCERNING THEIR OBJECTIVES AND POLICIES, MANAGEMENT
FEES, EXPENSES AND OTHER INFORMATION.
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<PAGE>
Federated Investors Corp., Distributor of the funds 007697(4/99)
