SESSIONS GROUP, N-30D, 1997-09-05

SESSIONS GROUP
N-30D, 1997-09-05

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MESSAGE FROM THE INVESTMENT ADVISER 1st Source Monogram Funds
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Dear Investor:

We are pleased to present the first annual report published since the inception
of the mutual fund family in September 1996.

What a time to start a family. As we closed out the fiscal year on June 30, the
financial markets continued to demonstrate extraordinary strength, with the
major indices reaching new highs. Throughout the year, stocks also showed
uncommon resiliency; they rebounded quite smartly from a sharp, but relatively
brief, decline sparked by the Federal Reserve's decision to raise short-term
interest rates in March.

Bonds also turned in a satisfactory performance, though total returns couldn't
match stocks' sizzling numbers. Interest rates followed a pattern of moderate
peaks and valleys--rising through much of 1996, falling toward the end of the
year, jumping again in the first quarter of this year and then easing in
response to an economic slowdown. With inflation low and apparently under
control, real (purchasing power) returns for bonds are reasonable in historical
terms.

However, we do not mean to suggest that the markets, especially equities, were
devoid of spectacular, sometimes gut-wrenching volatility. Witness the last full
week of June. On Monday, June 23, Japanese Prime Minister Ryutaro Hashimoto
briefly raised the possibility that his country might sell U.S. Treasury Bills,
a move that could drive up U.S. interest rates sharply. With investors
frightened by the mere threat of rising U.S. interest rates, the Dow Jones
Industrial Average plummeted more than 192 points--its second largest one-day
point drop. But the following day, the Dow rebounded with a 154-point surge and
ended June with a 19% return for the first six months of 1997.

And, as we write this letter in mid-July, the markets show no sign of becoming
tranquil. On July 16, the Dow closed above 8000 for the first time in history.
Two days later, a warning from Microsoft that its revenue growth could slow
later this year knocked the wind out of stocks, with the Dow dropping 130
points.

FOCUSING ON LONG-TERM RESULTS

What do the events of the last 12 months teach us about investing in stocks and
bonds? Traders who try to time the stock market, guess the direction of interest
rates or divine the mood of the Federal Reserve can find themselves whipsawed by
unpredictable and rapidly changing conditions. On the other hand, investors who
carefully plan and adhere to long-term strategies can look past short-term
gyrations, and make the most of whatever opportunities stocks and bonds afford
them.

As money managers since 1936, 1st Source Bank takes a conservative, carefully
planned approach to investing. Chasing the market peaks and dreading its deep
valleys, has never been a prudent manner for handling client monies. A sound
strategy of professional management and broad diversification has always been
our hallmark. By investing in Diversified Equity, Special Equity Fund, Income
Fund and the Income Equity Fund, you are afforded these tried and true
investment principles.

A COMMENT ABOUT RELATIVE PERFORMANCE AND THE CURRENT MARKET

During the past 15 years, the U.S. has experienced the single greatest bull
market that history has ever shown. Its strength and longevity have amazed even
the most optimistic of the investment world. One of the most remarkable traits
of the recent market run up has been its lack of overall performance breath. The
spectacular performance of the market has been driven by the largest of the
large companies and the bluest of the blue chips. Even in these larger stock
indices, the "few and the blue" have outpaced the broader market. Smaller stocks
have been significantly out performed by their larger brethren in the Dow
Industrials and the S&P 500. In such an era of volatility and realitively narrow
participation, it has become even more important to utilize the fundamentals
that underlie successful money management, such as that found in the Monogram
Family of Mutual Funds. We are proud of the funds' performance, even as we, like

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MESSAGE FROM THE INVESTMENT ADVISER 1st Source Monogram Funds
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most money managers, are frustrated by trailing the indices we compare ourselves
to.

Investment markets are inherently volatile. Of late, this volatility has been
evidenced primarily on the upside. In fact, an entire generation of investors
has yet to experience any true bull market. Professional mutual fund money
managers, who must navigate the erratic flow of cash are challenged to meet the
performance of an index that is always 100% invested. Any such index is always
100% invested, never having to negotiate new investment dollars or a request for
timely cash distributions.

The key benefits to our investment philosophy include understanding the markets
inherent instability, controlling downside risk and managing the cash position
ebbs and flows. An unmanaged index can do none of the above. By your reliance on
our professional money management, you receive an unqualified commitment to
overseeing your money as if it were our own.

INVESTMENT OUTLOOK

This annual report lists the Schedule of Investments for the Funds, financial
highlights and complete financial statements. Also provided are interviews with
each fund manager. In these interviews, the managers discuss factors affecting
investment strategies, individual fund performance, specific securities in their
portfolios and their outlooks for the next six to 12 months. We encourage you to
read this entire report so you can fully understand how your investment in the
Funds is being put to work in the equity and/or fixed-income markets.

While each Fund manager may have a distinct perspective on the economy, as a
group we find ourselves asking many of the same questions we raised in our
semiannual report to you six months ago: Can the stock market continue its
amazing advance? Will stocks and bonds be afforded the unusually hospitable
moderate-growth-with-low-inflation environment they've enjoyed for some time?
Will corporate profits continue to rise robustly, while interest rates remain
low?

The markets are nothing if not full of surprises, but we believe that the
short-term, and especially the long-term, climate for stocks and bonds is
positive. Real economic growth looks to be expanding at a mild 2% rate;
productivity is still up; and there is much economic data suggesting that the
Fed need not raise interest rates anytime soon (though, as we noted earlier,
predicting the Fed's actions can be a foolish enterprise).

We greatly value your investing in the 1st Source Monogram Funds. If you have
any questions about your investment, or would like a prospectus or other
information about any of the Funds, please contact your account representative,
or call the Funds directly at 1-800-766-8938.

Thank you for your continued trust.

Sincerely,

John Seidl, CFA
Ralph Shive, CFA
J. Gregory Turner, CFA

NOTE TO SHAREHOLDERS
PLEASE BE ADVISED OF THE FOLLOWING FACTS ABOUT MUTUAL FUNDS:
- YOUR PRINCIPAL IS AT RISK
- NOT AN OBLIGATION OF 1ST SOURCE BANK
- NO FDIC COVERAGE

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MESSAGE FROM THE INVESTMENT ADVISER 1st Source Monogram Funds
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DIVERSIFIED EQUITY FUND

Q. HOW DID THE FUND PERFORM DURING THE PERIOD?

A. For the period ended June 30, 1997, the Fund's total return was 22.52% (at
NAV).(1) In comparison, the Standard & Poor's 500 Index was up 34.70% during
the same period.

The Diversified Equity Fund is a multi-style, multi-manager portfolio with
three subadvisers representing the sector rotation, value and growth styles.
The following interview is with portfolio managers Anthony Rizza of Columbus
Circle Investors (sector rotation), Robert Marcin of Miller Anderson &
Sherrerd LLP (value) and Bob Takazawa of Loomis Sayles & Company LP (growth).

Q. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?

A. Anthony Rizza, Columbus Circle Investors:
The biggest impact happened to be what stocks we did not own. For example, we
had an underweighting in consumer staples, while the stock market recently
has been focused on big, household names in this sector. Our discipline leads
us to buy stock in good companies that seem to be getting stronger--companies
doing better than Wall Street expected. (But with companies such as Coca-Cola
and Procter & Gamble, their earnings expectations did not change; what
changed was the multiple that investors were willing to pay for those
earnings.) This sort of activity began after the elections last November and
continued into March. Since then, our type of securities has begun to match,
and in many cases exceed, our performance benchmarks.

A. Robert Marcin, Miller Anderson & Sherrerd:
Our valuation restrictions imposed a discipline of buying stocks with low
price-to-earnings (P/E) ratios, while many of the biggest market winners were
stocks with high P/E's. We had poor performance from our health-care
stocks--we couldn't buy high-P/E drug companies, food and tobacco stocks and
energy stocks. On the other hand, we did have good stock selection in the
heavy industry and consumer durables sectors, which were two of our largest
overweightings.

A. Bob Takazawa, Loomis Sayles:
The advance of the S&P 500 was powered by a narrow group of stocks; for the
first six months of 1997, half of the index's return came from just 11
companies. A diversified portfolio such as ours should not own just 11
stocks. At the same time, mid-capitalization stocks, which we buy to create a
diversified, high-growth portfolio, severely under-performed the S&P 500.

Q. WHAT IS YOUR STRATEGY?

A. Anthony Rizza, Columbus Circle Investors:
We try to control the aspects of investing that we are able to control. We
buy stocks that have

(1) The total return with the maximum 5.00% sales charge was 16.23% for the
period.

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MESSAGE FROM THE INVESTMENT ADVISER 1st Source Monogram Funds
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done better than investors expected them to do, and we sell the ones that
have done worse. Since our style is fundamentally based, or bottoms-up, we
tend to not look out six months and then try to determine what our investing
outlook should be. Rather, we look at the day-to-day data that comes out,
where the positive and negative surprises are occurring, and move our money
into the positive areas, while trying to avoid the negative areas.

A. Robert Marcin, Miller Anderson & Sherrerd:
We buy stocks after they've under-performed and have fallen into the two
lowest P/E quintiles, and we sell them after they move up two quintiles. This
requires a lot of fundamental research. We try to buy the best businesses in
the lowest P/E universe that we can find. Our goal is to put together a
portfolio with characteristics that seek to approach the S&P 500's in growth
and profitability at a 30% discount in stock price. We also try to get a lot
of sector diversification. Right now, we have a concentration in cyclical and
financial stocks.

A. Bob Takazawa, Loomis Sayles:
For the next six to 12 months, we are emphasizing the technology,
health-care, energy and consumer cyclical sectors in the market. We're
looking at companies that have 20% to 40% earnings growth potential, because
that is where price-to-earnings multiples are very low in relation to
earnings growth potential in today's stock-market environment. As for selling
stocks, we are fundamentally driven, so we look at the success of a company's
business model relative to its competition. We also look for deterioration of
earnings when deciding whether to sell a stock.

Q. WHAT ARE SOME INTERESTING STOCKS IN YOUR PORTFOLIO?

A. Anthony Rizza, Columbus Circle Investors:
HBO & Co. (2.1% of the Fund),* a producer of information systems used to
manage hospitals, has been one of the strongest performers in our portfolio
recently. Recently, we made a good-sized bet in the wireless
telecommunications industry. Motorola (0.8%)* and Lucent Technologies (0.6%)*
are our largest positions in that sector. Both companies provide
telecommunications equipment. In the most recent quarter, Motorola reported
that earnings were up for the first time in a year and orders were up 27
percent.

A. Robert Marcin, Miller Anderson & Sherrerd:
Ford Motor Co. (0.9% of the Fund)* at around $40 a share. We think the stock
is very cheap on a low P/E basis. They also have about $30 a share in the
value of Associates First Capital and Hertz Rent-a-Car, and they're net cash
on their balance sheet. So you're not paying a lot of money for the
automotive business, which is in the process of a very healthy turnaround. We
also like some insurance companies and banks, such as Chase Manhattan
(0.5%).* It has one of the lowest P/E's among the money-center banks.

A. Bob Takazawa, Loomis Sayles:
One favorite is Baker Hughes (1.1%),* an oil services company. There is a
booming demand for drilling and production equipment and services. Baker
Hughes has pricing power for their products, which include drill bits. We
believe this trend will persist. We also like Texas Instruments (0.3%),*
which reported outstanding quarterly earnings. The company produces digital
signal processors and other semiconductor products. These processors are the
heart of cellular phones, networking products and computer modems, and are
high-margin products. We believe the company can grow 20% to 25% in a
consistent fashion.

Q. WHAT IS YOUR OUTLOOK?

A. Anthony Rizza, Columbus Circle Investors:
We're starting to see that investors are becoming more apt to look toward the
broader market for their investments than they were, say, six months ago,
when they were more focused on the top 50 stocks in the S&P 500. During the
next

* The portfolio's composition is subject to change.

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MESSAGE FROM THE INVESTMENT ADVISER 1st Source Monogram Funds
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three to six months, economists are forecasting that interest rates probably
will remain in the 6.5% to 7% range. By the fourth quarter, economic growth
could be more rapid. A 7% long bond is extremely positive for the equity
environment.

A. Robert Marcin, Miller Anderson & Sherrerd:
We think the stock market as a whole is very risky; we think there's
considerable downside potential. We believe our value portfolio has the
potential to outperform the market significantly in a choppy market or a
market downturn. Stocks have reached valuations never seen in the last 70
years. With valuations this high, we think there's a chance that, at best,
the market could go sideways for a few years and, at worst, have a 20% or 25%
decline. And in that environment, we think our value strategy will pay off.

A. Bob Takazawa, Loomis Sayles:
The interest-rate outlook is for flat to lower yields. We feel the reason
interest rates may decline is not because the economy is going to slow down
dramatically, but rather that the market will accept moderate economic growth
and the continuation of low inflation. We have real bond yields that are
attractive--they need not go higher--and inflation concerns are gradually
receding from the 3% level to the more realistic 2.3% to 2.5% level. We
believe we're moving into a phase where earnings growth probably is going to
be more dominant in the stock-selection process, and not just safe or stable
earnings growth, but high growth.

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MESSAGE FROM THE INVESTMENT ADVISER 1st Source Monogram Funds
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DIVERSIFIED EQUITY

Growth of a $10,000 Investment

6/85 6/86 6/87 6/88 6/89 6/90 6/91
------ ------ ------ ------ ------ ------ ------
Investor 9,494 11,551 12,310 10,949 12,785 15,411 15,949
S&P 500 10,000 13,583 16,991 15,819 19,065 22,191 23,831

6/92 6/93 6/94 6/95 6/96 6/97
------ ------ ------ ------ ------ ------
Investor 17,943 20,886 20,791 25,601 31,139 38,107
S&P 500 27,040 30,714 31,125 39,228 49,445 66,581

Average Annual Total Return(1)
as of 6/30/97

Inception
Date 1 Year 5 Year 10 Year
--------- ------ ------ -------
Investor (No Load) 9/23/96 22.52% 16.26% 11.96%
Investor* 9/23/96 16.23% 15.06% 11.40%

* Reflects 5.00% sales charge

The Fund's performance is compared to the Standard & Poor's 500 Index, which
reflects the performance of the U.S. stock market as a whole. The index is
unmanaged and does not reflect the deduction of fees associated with a mutual
fund, such as investment management and fund accounting fees. The performance of
the 1st Source Monogram Diversified Equity Fund reflects the deduction of fees
for these value-added services. Past performance is not predictive of future
results. The investment return and NAV will fluctuate, so that an investor's
shares, when redeemed may be worth more or less than the original cost.

(1) The quoted performance of the 1st Source Monogram Diversified Equity Fund
includes performance of certain collective trust fund ("Commingled")
accounts advised by 1st Source Bank, for periods dating back to 6/30/85, and
prior to the mutual fund's commencement of operations on 9/23/96, as
adjusted to reflect the expenses associated with the mutual fund. The
Commingled accounts were not registered with the Securities & Exchange
Commission and, therefore, were not subject to the investment restrictions
imposed by law on registered mutual funds. If the Commingled accounts had
been registered, the Commingled accounts' performance may have been
adversely affected.

The total return set forth may reflect the waiver of a portion of the fund's
advisory or administrative fees for certain periods since the inception date. In
such instances, and without waiver of fees, total return would have been lower.

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MESSAGE FROM THE INVESTMENT ADVISER 1st Source Monogram Funds
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SPECIAL EQUITY FUND(2)
J. GREGORY TURNER, CFA

Q. HOW DID THE FUND PERFORM DURING THE PERIOD?

A. For the period ended June 30, 1997, the Fund's total return was -3.27% (at
NAV).(1) In comparison, the Russell 2000 was up 16.33%, while the Standard &
Poor's 500 Index rose 34.70%.

Q. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?

A. The lack of appetite on the part of investors for small-company growth stocks
had a direct impact on our performance during the last year. However, there
was improvement during the last quarter, when the Fund was up 13%.
Small-caps, mid-caps and technology stocks came back strong in mid-April, and
that trend continued through May. We think investors began to realize that
the danger in smaller stocks, which had done poorly in February and March,
had passed. This situation presented us with good buying opportunities, and
we pretty much participated fully in the recovery of these stocks.

Q. WHAT IS YOUR STRATEGY?

A. Our basic strategy is to find companies whose earnings are growing at an
above-average rate and whose stock prices are also rising. In other words, we
like companies whose earnings momentum is ratified by price momentum. We end
up with a lot of younger companies, early in their life cycle, with rapidly
growing earnings. We also have a number of special situations and new
offerings and companies that, while they may not have reportable earnings
yet, can demonstrate significant prospects for new products or procedures.
With our stock market capitalizations primarily ranging from $50 million to
$1.5 billion, we cover most of the small-cap sector and up to the smaller end
of the mid-cap stocks. Right now, we're biased toward the larger end of that
range, because that's where the greatest liquidity lies.

Q. WHAT ARE SOME INTERESTING STOCKS IN YOUR PORTFOLIO?

A. One of our most interesting stories so far in 1997 has been Citrix Systems
(3.6% of the Fund),* a software company that has a strategic licensing
agreement with Microsoft. Just before and during a disagreement with
Microsoft, Citrix saw its stock plunge from approximately $50 a share in
January to less than $10 on February 27. We never sold a share. We kept very
close to the

* The portfolio's composition is subject to change.

(1) The total return with the maximum 5.00% sales charge was -8.10% for the
period.

(2) Small-capital funds typically carry additional risks since smaller companies
generally have a higher risk of failure. Historically, smaller companies'
stocks have experienced a greater degree of market volatility.

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MESSAGE FROM THE INVESTMENT ADVISER 1st Source Monogram Funds
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research analysts who had brought me Citrix in the first place, and when they
convinced us we should have faith in the company's management, we decided to
double the position at about $14 a share. Citrix was able to renegotiate a
very favorable agreement with Microsoft, and we subsequently sold a large
part of my position at prices ranging from $36 to $53 a share. The lesson to
be learned here is that, in order to successfully invest in stocks that have
volatility of this magnitude, you really have to know the fundamentals of a
company and understand what's making the stock price move up or down. Another
stock we've done real well with is Vivus, Inc. (2.6%),* a medical company
with a new treatment for severe male erectile dysfunction. Apparently, this
is a widespread problem, and the treatments available in the past were less
than effective. In the electronics sector, we have a large position in
TriQuint Semiconductor (2.4%),* a producer of gallium arsenide
semiconductors. Electrons can flow through gallium arsenide semiconductors
five times faster than they can through traditional, silicone semiconductors;
this is a plus for communications applications.

Q. WHAT IS YOUR OUTLOOK?

A. We are poised for higher prices for small-cap stocks. We think that maybe the
worst is over. I'm looking for at least another quarter of good performance
from small- and mid-sized companies. The portfolio is positioned in
preparation for that kind of a market. We're a lot more optimistic now than
we were three months ago.

* The portfolio's composition is subject to change.

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MESSAGE FROM THE INVESTMENT ADVISER 1st Source Monogram Funds
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SPECIAL EQUITY

Growth of a $10,000 Investment

11/85 6/86 6/87 6/88 6/89 6/90 6/91
------ ------ ------ ------ ------ ------ ------
Investor 9,506 11,241 12,564 12,798 14,665 18,100 16,814
Russell 2000 10,000 12,496 13,619 12,775 14,402 14,841 15,023

6/92 6/93 6/94 6/95 6/96 6/97
------ ------ ------ ------ ------ ------
Investor 19,301 25,859 25,396 30,588 44,265 42,816
Russell 2000 17,207 21,674 22,629 27,170 33,660 39,156

Average Annual Total Return(1)
as of 6/30/97

Inception
Date 1 Year 5 Year 10 Year
--------- ------ ------ -------
Investor (No Load) 9/20/96 -3.27% 17.27% 13.04%
Investor* 9/20/96 -8.10% 16.11% 12.49%

* Reflects 5.00% sales charge

The Fund's performance is compared to the Russell 2000 Index, which represents
the performance of domestically traded common stocks of small to mid-sized
companies. This index is unmanaged and does not reflect the deduction of fees
associated with a mutual fund, such as investment management and fund accounting
fees. The performance of the 1st Source Monogram Special Equity Fund reflects
the deduction of fees for these value-added services. Past performance is not
predictive of future results. The investment return and NAV will fluctuate, so
that an investor's shares, when redeemed may be worth more or less than the
original cost.

(1) The quoted performance of the 1st Source Monogram Special Equity Fund
includes performance of certain collective trust fund ("Commingled")
accounts advised by 1st Source Bank, for periods dating back to 11/30/85,
and prior to the mutual fund's commencement of operations on 9/20/96, as
adjusted to reflect the expenses associated with the mutual fund. The
Commingled accounts were not registered with the Securities & Exchange
Commission and, therefore, were not subject to the investment restrictions
imposed by law on registered mutual funds. If the Commingled accounts had
been registered, the Commingled accounts' performance may have been
adversely affected.

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MESSAGE FROM THE INVESTMENT ADVISER 1st Source Monogram Funds
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INCOME FUND
JOHN SEIDL, CFA

Q. HOW DID THE FUND PERFORM DURING THE PERIOD?

A. For the period ended June 30, 1997, the Fund's total return was 6.84%(at
NAV)(1). In comparison, the Lehman Brothers Intermediate Government/Corporate
Bond Index was up 7.23%.

Q. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?

A. As we look over the past year, we see a full cycle in interest rates. Rates
fell in the fourth quarter of 1996, increased during the first part of this
year--when there was concern over expanding economic activity and fear that
the Fed might come in with a series of short-term rate increases--and fell
again when economic activity cooled down in the second quarter. Bond
investors worry a lot about inflation and dramatic movements in interest
rates. Absent concerns about inflation, and with a return to stability in the
bond market, we had a nice bond rally the last couple of months.
Consequently, the Fund finished the period ended June 30 relatively strong.

Q. WHAT IS YOUR STRATEGY?

A. In structuring the Fund, we try to preserve principal while achieving a level
of current income that is fairly high for an intermediate-term portfolio. You
can see that strategy at work in our net asset value, which has remained
fairly stable, while we've been able to generate a reasonable level of income
over time. During the past year, we've moved to the area of the bond market
that offers the best return potential, given the level of risk. The spread
that corporate bond yields provide over U.S. Treasury yields is very narrow;
in many places on the yield curve, the yield advantage of A-rated corporate
bonds is only 25 to 35 basis points, and that's not a high enough risk
premium for us to move a lot of money into the corporate sector. We've opted
to stay with quality, such as government and agency issues. They have
provided us with the best risk/return characteristics of the bonds available
in the market today. One of the other strategies we have utilized on a
short-term basis is to purchase "cushion bonds," high-coupon issues with
relatively short maturities, as a defensive measure against the potential for
higher interest rates later in 1997.

Q. WHY SHOULD INVESTORS CONSIDER A BOND FUND, WITH STOCKS PERFORMING SO WELL?

A. Based on the equity performance we've had the last five years, people have
tended to gravitate toward the highest returns available. But if we do
continue moving toward a deflationary environment, with lower levels of
inflation or possibly price declines in some sectors, we would expect to
eventually see fixed-income investments become an attractive, deflationary
hedge. We also expect that, at some point, equity returns will moderate and
perhaps move back to their historical performance levels--which would be
significantly

(1) The total return with the maximum 4.00% sales charge was 2.63% for the
period.

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MESSAGE FROM THE INVESTMENT ADVISER 1st Source Monogram Funds
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lower than they have been recently. Another possible scenario would be for
some event to shake confidence in the market, causing panic and a flight to
safety. Lastly, we could also see a slowdown in the earnings potential of
some of the larger cap stocks that have been leading the market. Any or all
of these situations could result in a reallocation of assets, either into
medium or smaller stocks, or into fixed-income investments. With inflation as
low as it is, the real return on fixed-income investments--total return minus
the rate of inflation--is good.

Q. WHAT IS YOUR OUTLOOK FOR THE ECONOMY?

A. We think we're in a 2% to 3% growth environment for 1997, which could
possibly go a little higher in 1998. Given that scenario, we would expect to
see slightly higher interest rates near the end of this calendar year, and we
would position the portfolio to a more defensive posture. The most pressing
issues right now are pending changes in the tax code--primarily a reduction
in the capital gains tax--which might precipitate an adjustment in the market
outlook for the economy in general or for specific securities.

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MESSAGE FROM THE INVESTMENT ADVISER 1st Source Monogram Funds
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INCOME FUND

Growth of a $10,000 Investment

6/85 6/86 6/87 6/88 6/89 6/90 6/91
------ ------ ------ ------ ------ ------ ------
Investor 9,503 10,929 11,382 11,966 13,087 13,909 15,054
Lehman Brothers
Intermediate
Gov't/Corporate
Bond Index 10,000 11,620 12,268 13,220 14,572 15,711 17,366

6/92 6/93 6/94 6/95 6/96 6/97
------ ------ ------ ------ ------ ------
Investor 17,106 18,855 18,747 20,626 21,361 22,831
Lehman Brothers
Intermediate
Gov't/Corporate
Bond Index 19,651 21,703 21,643 23,886 25,079 26,891

Average Annual Total Return(1)
as of 6/30/97

Inception
Date 1 Year 5 Year 10 Year
--------- ------ ------ -------
Investor (No Load) 9/25/96 6.84% 5.96% 7.21%
Investor* 9/25/96 2.63% 5.08% 6.77%

* Reflects 5.00% sales charge

The Fund's performance is measured against the Lehman Brothers Intermediate
Government/Corporate Bond Index, an unmanaged index considered to be
representative of the performance of government and corporate bonds with
maturities of less than 10 years. The index does not reflect the deduction of
fees associated with a mutual fund, such as investment management and fund
accounting fees. The performance of the 1st Source Monogram Income Fund reflects
the deduction of fees for these value-added services. Past performance is not
predictive of future results. The investment return and NAV will fluctuate, so
that an investor's shares, when redeemed may be worth more or less than the
original cost.

(1) The quoted performance of the 1st Source Monogram Income Fund includes
performance of certain collective trust fund ("Commingled") accounts advised
by 1st Source Bank, for periods dating back to 6/30/85, and prior to the
mutual fund's commencement of operations on 9/24/96, as adjusted to reflect
the expenses associated with the mutual fund. The Commingled accounts were
not registered with the Securities & Exchange Commission and, therefore,
were not subject to the investment restrictions imposed by law on registered
mutual funds. If the Commingled accounts had been registered, the Commingled
accounts' performance may have been adversely affected.

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MESSAGE FROM THE INVESTMENT ADVISER 1st Source Monogram Funds
- --------------------------------------------------------------------------------

INCOME EQUITY FUND
RALPH C. SHIVE, CFA

Q. HOW DID THE FUND PERFORM DURING THE PERIOD?

A. For the ended June 30, 1997, the Fund's total return was 27.42% (at NAV).(1)
In comparison, the Standard & Poor's 500 Index rose 34.70%, and the Lipper
Equity Income Equity Index gained 26.44%.

Q. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?

A. The key was to be fully invested and not to get scared out of a rising market
with higher price-to-earnings ratios. We recognized that this market was a
runaway freight train and that the best course was to stay fully invested and
try to find cheap stocks. The demographics cycle continued to be positive;
the corporate profits cycle continued to be very positive; the inflation
cycle continued to be positive; and the environment for international trade
was good. These were fantastic underpinnings for a bull market. Beyond that,
we had some good luck with takeovers during the last 12 months. They were
primarily in companies that were taken over with pretty big premiums, such as
Tyco Toys (Convertible Preferred), Petrolite and Keystone International. Are
we nervous about the market's high valuations? Yes. Do we think about it all
the time? Yes. But our conclusion was that this is a really big cycle, and we
could still buy securities that are cheap enough and of high enough quality.

Q. WHAT IS YOUR STRATEGY?

A. The objective for the Fund is to create a cash flow well above the S&P 500
yield and to buy inexpensive securities we feel can appreciate in value. That
is, we want to achieve a significant total return for investors and do it in
a manner that has relatively low volatility. As of June 30, our yield was
nearly twice that of the S&P 500's. Along with the low P/E's of many of our
stocks, this higher yield can act as a cushion against volatility. In seeking
these objectives, we emphasize "value" stocks, stocks that we think are cheap
and which often have good yields. In addition, we try to allocate money to
sectors that we think have long-term, positive growth possibilities. We also
use "convertibles," securities that are convertible into shares of common
stocks. In a benign interest-rate environment such as the one we're in now,
the underlying performance of the company issuing the convertible will drive
the security. That's what we're trying to do as a stock picker.

(1) The total return with the maximum 5.00% sales charge was 20.98% for the
period.

- --------------------------------------------------------------------------------

-13-
<PAGE> 14

MESSAGE FROM THE INVESTMENT ADVISER 1st Source Monogram Funds
- --------------------------------------------------------------------------------

Q. WHAT ARE SOME INTERESTING STOCKS IN YOUR PORTFOLIO?

A. We still own some real estate investment trusts (REITs), such as Equity
Residential Property (1.8% of the Fund).* The yields, industry fundamentals
and cash flows are good. We've used REITs more than electric utilities to
increase the yield of the Fund. Another sector we like is aerospace. There we
own Sunstrand Corporation (1.7%)* and Esterline Technology (1.9%),* both of
which are suppliers to the aircraft industry. We're getting our financial
industry exposure through insurance companies and money management firms. The
selling of annuities is a really hot business, which is why we like Lincoln
National (1.5%).* In the money-management area, we bought Kansas City
Southern (2.4%),* which owns Janus Funds, and Alliance Capital Management
(1.5%),* another mutual fund company.

Q. WHAT IS YOUR OUTLOOK?

A. The market's solid long-term fundamentals remain in place. We are in the camp
of those who believe the equity bull market can continue. We're not worried
about the economy, per se. We're generally happy about the trend in the
federal deficit. We're optimistic that during the next recession, long-term
interest rates could reach a new low. We're certainly not going to say we
couldn't have a 10% correction tomorrow, nor are we ruling out the
possibility of a recession at some point. If there were an interest-rate hike
later this year, it would cause some problems for awhile. But for now, we're
just trying to buy inexpensive stocks and manage a low-volatility portfolio.
It remains a stock-pickers' game.

* The portfolio's composition is subject to change.

- --------------------------------------------------------------------------------

-14-
<PAGE> 15

MESSAGE FROM THE INVESTMENT ADVISER 1st Source Monogram Funds
- --------------------------------------------------------------------------------

INCOME EQUITY

Growth of a $10,000 Investment

11/85 6/86 6/87 6/88 6/89 6/90 6/91
------ ------ ------ ------ ------ ------ ------
Investor 9,488 11,911 13,686 13,208 14,778 16,348 16,348
Russell 1000
Value 10,000 12,244 15,022 14,857 17,827 19,022 20,038
Lipper Equity
Income Average 10,386 12,092 14,012 14,053 16,491 17,663 18,865

6/92 6/93 6/94 6/95 6/96 6/97
------ ------ ------ ------ ------ ------
Investor 18,498 22,935 24,710 26,894 33,652 42,857
Russell 1000
Value 23,233 28,332 28,792 34,672 43,212 57,551
Lipper Equity
Income Average 21,815 25,432 26,173 30,596 36,960 46,993

Average Annual Total Return(1)
as of 6/30/97

Inception
Date 1 Year 5 Year 10 Year
--------- ------ ------ -------
Investor (No Load) 9/25/96 27.42% 18.32% 12.09%
Investor* 9/25/96 20.98% 17.07% 11.52%

* Reflects 5.00% sales charge

The Fund's performance is compared to the Russell 1000 Value Index, which
contains Russell 1000 securities with a less-than-average growth orientation.
Securities in this index generally have lower price-to-book and price/earnings
ratios, higher dividends yields and lower forecasted growth values than the
Growth Universe. The index is unmanaged and does not reflect the deduction of
fees associated with a mutual fund, such as investment management and fund
accounting fees. The performance of the 1st Source Income Equity Fund reflects
the deduction of fees for these value-added services. Past performance is not
predictive of future results. The investment return and NAV will fluctuate, so
that an investor's shares, when redeemed may be worth more or less than the
original cost.

The Lipper Equity Income Average consists of 30 equity income funds.

(1) The quoted performance of the 1st Source Monogram Income Equity Fund
includes performance of certain collective trust fund ("Commingled")
accounts advised by 1st Source Bank, for periods dating back to 11/30/85,
and prior to the mutual fund's commencement of operations on 9/25/96, as
adjusted to reflect the expenses associated with the mutual fund. The
Commingled accounts were not registered with the Securities & Exchange
Commission and, therefore, were not subject to the investment restrictions
imposed by law on registered mutual funds. If the Commingled accounts had
been registered, the Commingled accounts' performance may have been
adversely affected. The performance shown reflects the deduction of fees for
value-added services associated with a mutual fund, such as investment
management and fund accounting fees. The performance also reflects
reinvestment of all dividends and capital gains distributions.

- --------------------------------------------------------------------------------

-15-
<PAGE> 16

TABLE OF CONTENTS

Statements of Assets and Liabilities
PAGE 17

Statements of Operations
PAGE 18

Statements of Changes in Net Assets
PAGE 19

Schedules of Portfolio Investments
PAGE 20

Notes to Financial Statements
PAGE 31

Financial Highlights
PAGE 38

Report of Independent Accountants
PAGE 39

-16-
<PAGE> 17

THE SESSIONS GROUP
1ST SOURCE MONOGRAM FUNDS

STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 1997

<TABLE>
<CAPTION>
DIVERSIFIED SPECIAL INCOME
EQUITY EQUITY INCOME EQUITY
FUND FUND FUND FUND
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value (cost $56,066,526; $22,355,918;
$52,284,186; and $29,485,277, respectively)................. $70,087,039 $24,881,284 $52,174,044 $37,599,831
Repurchase agreements (cost $5,116,881; 5,954,715; $1,942,995;
and $1,560,619, respectively)............................... 5,116,881 5,954,715 1,942,995 1,560,619
----------- ----------- ----------- -----------
Total Investments....................................... 75,203,920 30,835,999 54,117,039 39,160,450
Interest and dividends receivable............................. 47,851 4,560 735,682 123,871
Receivable from brokers for investments sold.................. 567,808 -- -- --
Unamortized organization costs................................ 11,757 4,099 9,274 5,889
Prepaid expenses and other assets............................. 300 16 203 419
----------- ----------- ----------- -----------
Total Assets............................................ 75,831,636 30,844,674 54,862,198 39,290,629
----------- ----------- ----------- -----------
LIABILITIES:
Payable to brokers for investments purchased.................. 709,206 271,755 -- --
Options written, at value (premiums received $11,193)......... -- -- -- 33,000
Accrued expenses and other payables:
Investment advisory fees.................................. 66,831 19,612 24,030 25,192
Administration fees....................................... 1,640 657 1,199 856
Custodian fees............................................ 2,156 1,084 1,312 1,058
Accounting fees........................................... 817 513 236 128
Trustees' fees............................................ 989 385 2,120 2,180
Legal fees................................................ 4,247 688 1,064 2,288
Audit fees................................................ 7,481 6,028 6,102 4,781
Printing fees............................................. 25,824 8,793 15,855 13,786
Transfer agent fees....................................... 2,445 252 2,325 1,529
Registration and filing fees.............................. 20,479 10,547 19,427 10,248
Other..................................................... 12 119 -- 34
----------- ----------- ----------- -----------
Total Liabilities....................................... 842,127 320,433 73,670 95,080
----------- ----------- ----------- -----------
NET ASSETS:
Capital....................................................... 54,626,028 29,049,845 55,066,773 28,373,212
Undistributed (distribution in excess of) net investment
income...................................................... (1,421) 3,400 47,620 29,381
Net unrealized appreciation (depreciation) on investments..... 14,020,513 2,525,366 (110,142) 8,092,747
Accumulated undistributed net realized gains (losses) on
investment transactions..................................... 6,344,389 (1,054,370) (215,723) 2,700,209
----------- ----------- ----------- -----------
Net Assets................................................ $74,989,509 $30,524,241 $54,788,528 $39,195,549
=========== =========== =========== ===========
Outstanding units of beneficial interest (shares)............. 6,355,147 3,181,817 5,408,293 3,190,928
=========== =========== =========== ===========
Net asset value -- redemption price per share................. $ 11.80 $ 9.59 $ 10.13 $ 12.28
=========== =========== =========== ===========
Maximum Sales Charge.......................................... 5.00% 5.00% 4.00% 5.00%
=========== =========== =========== ===========
Maximum Offering Price (100%/(100%-Maximum Sales Charge) of
net asset value adjusted to nearest cent) per share......... $ 12.42 $ 10.09 $ 10.55 $ 12.93
=========== =========== =========== ===========
</TABLE>

See notes to financial statements.

-17-
<PAGE> 18

THE SESSIONS GROUP
1ST SOURCE MONOGRAM FUNDS

STATEMENTS OF OPERATIONS
FOR PERIOD ENDED JUNE 30, 1997

<TABLE>
<CAPTION>
DIVERSIFIED SPECIAL INCOME
EQUITY EQUITY INCOME EQUITY
FUND(a) FUND(a) FUND(a) FUND(a)
----------- --------- ---------- ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income............................. $ 52,441 $ 178,759 $2,434,665 $ 164,121
Dividend income............................. 744,988 120,869 149,797 807,825
----------- --------- ---------- ----------
Total Income.............................. 797,429 299,628 2,584,462 971,946
----------- --------- ---------- ----------
EXPENSES:
Investment advisory fees.................... 579,272 166,740 210,181 207,742
Administration fees......................... 105,323 41,685 76,430 51,936
12b-1 fees.................................. 131,653 52,106 95,550 64,713
Custodian fees.............................. 21,575 6,885 4,686 4,169
Accounting fees............................. 23,318 8,178 15,380 9,424
Trustees' fees and expenses................. 5,703 2,070 5,368 5,145
Legal fees.................................. 13,914 6,510 6,433 9,287
Audit fees.................................. 13,101 11,648 11,722 10,401
Printing costs.............................. 32,579 11,501 21,039 18,852
Organization costs.......................... 3,818 1,410 2,895 1,848
Transfer agent fees......................... 28,892 22,347 26,460 23,797
Registration and filing fees................ 22,037 11,794 20,815 11,396
Other....................................... 1,987 804 919 1,529
----------- --------- ---------- ----------
Total expenses.............................. 983,172 343,678 497,878 420,239
Less: expenses voluntarily reduced..... (131,653) (54,277) (95,550) (64,714)
----------- --------- ---------- ----------
Net expenses................................ 851,519 289,401 402,328 355,525
----------- --------- ---------- ----------
Net investment income (loss)................ (54,090) 10,227 2,182,134 616,421
----------- --------- ---------- ----------
REALIZED/UNREALIZED GAINS (LOSSES) ON
INVESTMENTS:
Net realized gains (losses) on investment
transactions.............................. 7,722,828 (253,355) (215,572) 2,858,798
Change in unrealized
appreciation/depreciation on
investments............................... 5,132,388 304,921 790,234 4,364,604
----------- --------- ---------- ----------
Net realized/unrealized gains (losses) on
investments............................... 12,855,216 51,566 574,662 7,223,402
----------- --------- ---------- ----------
Change in net assets resulting from
operations................................ $12,801,126 $ 61,793 $2,756,796 $7,839,823
=========== ========= ========== ==========
</TABLE>

- ---------
(a) Commencement of operations of the Funds began September 23, 1996, September
20, 1996, September 24, 1996, and September 25, 1996, respectively.

See notes to financial statements.

-18-
<PAGE> 19

THE SESSIONS GROUP
1ST SOURCE MONOGRAM FUNDS

STATEMENTS OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
DIVERSIFIED SPECIAL INCOME
EQUITY FUND EQUITY FUND INCOME FUND EQUITY FUND
------------ ------------ ------------ ------------
FOR PERIOD FOR PERIOD FOR PERIOD FOR PERIOD
ENDED ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1997(a) 1997(a) 1997(a) 1997(a)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income(loss)............................. $ (54,090) $ 10,227 $ 2,182,134 $ 616,421
Net realized gains (losses) on investment
transactions.......................................... 7,722,828 (253,355) (215,572) 2,858,798
Net change in unrealized appreciation/depreciation on
investments........................................... 5,132,388 304,921 790,234 4,364,604
------------ ------------ ------------ ------------
Change in net assets resulting from operations............ 12,801,126 61,793 2,756,796 7,839,823
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income.............................. -- (10,227) (2,141,355) (590,716)
In excess of net investment income...................... -- (337) -- --
From net realized gains on investments.................. (1,332,828) -- (158,589)
In excess of net realized gains on investments.......... -- (801,015) --
------------ ------------ ------------ ------------
Change in net assets from shareholder distributions....... (1,332,828) (811,579) (2,141,355) (749,305)
------------ ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued............................. 84,469,233 38,050,281 66,488,773 42,293,659
Dividends reinvested.................................... 1,332,616 811,083 2,132,592 746,329
Cost of shares redeemed................................. (22,280,638) (7,587,337) (14,448,278) (10,934,957)
------------ ------------ ------------ ------------
Change in net assets from capital transactions............ 63,521,211 31,274,027 54,173,087 32,105,031
------------ ------------ ------------ ------------
Change in net assets...................................... 74,989,509 30,524,241 54,788,528 39,195,549
NET ASSETS:
Beginning of period..................................... 0 0 0 0
------------ ------------ ------------ ------------
End of period........................................... $ 74,989,509 $ 30,524,241 $54,788,528 $ 39,195,549
============ ============ ============ ============
SHARE TRANSACTIONS:
Issued.................................................. 8,361,129 3,865,762 6,626,551 4,149,432
Reinvested.............................................. 125,956 83,724 210,754 68,376
Redeemed................................................ (2,131,938) (767,669) (1,429,012) (1,026,880)
------------ ------------ ------------ ------------
Change in shares.......................................... 6,355,147 3,181,817 5,408,293 3,190,928
============ ============ ============ ============
</TABLE>

- ---------
(a) Commencement of operations of the Funds began September 23, 1996, September
20, 1996, September 24, 1996, and September 25, 1996, respectively.

See notes to financial statements.

-19-
<PAGE> 20

THE SESSIONS GROUP
1ST SOURCE MONOGRAM DIVERSIFIED EQUITY FUND

SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1997
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------ ------------
<S> <C> <C>
COMMON STOCKS (92.4%):
Aerospace/Defense--Equipment (1.9%)
22,100 Boeing Co..................... $ 1,172,681
3,500 Raytheon Co................... 178,500
800 Textron, Inc.................. 53,100
------------
1,404,281
------------
Apparel (1.1%)
5,300 Russell Corp.................. 157,013
7,100 Talbots, Inc.................. 241,400
5,300 VF Corp....................... 449,175
------------
847,588
------------
Automotive Parts (1.0%)
4,500 Dana Corp..................... 171,000
3,600 Eaton Corp.................... 314,325
5,000 TRW, Inc...................... 284,063
------------
769,388
------------
Banking (3.2%)
5,500 Bank of New York, Inc......... 239,250
3,900 Chase Manhattan Corp.......... 378,544
2,600 Crestar Financial Corp........ 101,075
6,400 First Union Corp.............. 592,000
4,800 Mellon Bank Corp.............. 216,600
7,400 NationsBank Corp.............. 477,300
2,200 Republic New York Corp........ 236,500
5,100 Signet Banking Corp........... 183,600
------------
2,424,869
------------
Beverages (0.6%)
11,900 Pepsico Inc................... 446,994
------------
Building Materials (0.3%)
5,700 Owens Corning................. 245,813
------------
Chemicals (3.5%)
5,700 Cabot Corp.................... 161,738
1,900 Dow Chemical Co............... 165,538
3,700 E. I. du Pont de Nemours &
Co.......................... 232,638
3,500 FMC Corp.(b).................. 278,031
7,500 Great Lakes Chemical Corp..... 392,813
3,400 IMC Global, Inc............... 119,000
22,500 Monsanto Corp................. 968,905
3,200 Rohm & Haas Co................ 288,200
------------
2,606,863
------------
Commercial Goods & Services (2.0%)
58,950 CUC International, Inc.(b).... 1,521,647
------------

</TABLE>

<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------ ------------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Computer Software (3.7%)
4,500 3COM Corp.(b)................. $ 202,500
7,100 Cisco Systems, Inc.(b)........ 476,588
8,300 Computer Associates
International, Inc.......... 462,206
8,800 McAfee Associates(b).......... 555,500
8,600 Microsoft Corp.(b)............ 1,086,825
------------
2,783,619
------------
Computers (8.3%)
5,500 Compaq Computer Corp.(b)...... 545,875
6,300 Dell Computer Corp.(b)........ 739,856
15,000 EMC Corp(b)................... 585,000
22,900 HBO & Co...................... 1,577,237
6,500 Honeywell, Inc................ 493,188
6,200 Intel Corp.................... 879,237
7,200 International Business
Machines Corp............... 649,350
9,500 Seagate Technology, Inc.(b)... 334,281
1,200 Stratus Computer, Inc.(b)..... 60,000
8,600 Western Digital(b)............ 271,975
------------
6,135,999
------------
Consumer Goods & Services (0.3%)
5,600 Newell........................ 221,900
------------
Diversified Products (1.9%)
12,400 Aeroquip-Vickers Inc.......... 585,900
9,600 General Electric.............. 627,600
8,600 Westinghouse Electric Corp.... 198,875
------------
1,412,375
------------
Electrical Equipment (0.1%)
1,600 Arrow Electronics, Inc.(b).... 85,000
0 Molex Inc.(c)................. 9
------------
85,009
------------
Electronic Components (2.0%)
7,800 LSI Logic Corp.(b)............ 249,600
7,600 Solectron Corp.(b)............ 532,475
4,100 Tektronix, Inc................ 246,000
2,300 Texas Instruments............. 193,344
6,100 Xilinx Incorporated(b)........ 299,281
------------
1,520,700
------------
Engines--Internal Combustion (1.0%)
10,800 Cummins Engine Co., Inc....... 762,075
------------
</TABLE>

Continued

-20-
<PAGE> 21

THE SESSIONS GROUP
1ST SOURCE MONOGRAM DIVERSIFIED EQUITY FUND

SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1997
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------ ------------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Environmental Services (1.0%)
12,900 Browning-Ferris Industries,
Inc......................... $ 428,925
10,300 Waste Management Inc.......... 330,888
------------
759,813
------------
Financial Services (4.5%)
6,600 Associates First Capital
Corp........................ 366,300
6,100 Capital One Financial Corp.... 230,275
2,300 Citicorp...................... 277,294
4,200 Federal National Mortgage
Assoc....................... 183,225
6,800 Merrill Lynch & Co., Inc...... 405,450
15,900 MGIC Investment Corp.......... 762,205
17,000 Schwab, Charles Corp.......... 691,688
7,400 Washington Mutual, Inc........ 442,150
------------
3,358,587
------------
Food & Related (0.8%)
6,200 Archer-Daniels-Midland Co..... 145,700
8,100 IBP, Inc...................... 188,325
6,000 Universal Foods Corp.......... 228,750
------------
562,775
------------
Forest & Paper Products (0.3%)
2,500 Georgia Pacific Corp.......... 213,438
------------
Funeral Services (0.6%)
14,400 Service Corp. International... 473,400
------------
Hospital Supply & Management (0.5%)
4,700 Columbia/HCA Healthcare
Corp........................ 184,769
3,100 Oxford Health Plans,
Inc.(b)..................... 222,425
------------
407,194
------------
Household--General Products (0.4%)
4,800 Premark International, Inc.... 128,400
5,000 Tupperware Corp............... 182,500
------------
310,900
------------
Human Resources (0.5%)
4,800 Manpower Inc.................. 213,600
6,700 Olsten Corp................... 130,231

------------
343,831
------------
</TABLE>

<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------ ------------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Insurance (6.3%)
1,650 AEGON N.V..................... $ 115,603
2,200 Aetna Services, Inc........... 225,225
14,600 Allstate Corp................. 1,065,799
4,800 American General Corp......... 229,200
4,200 American International Group,
Inc......................... 627,375
3,200 Chubb Corp.................... 214,000
4,900 Conseco Inc................... 181,300
7,300 Everest Reinsurance Holdings,
Inc......................... 289,263
11,700 Exel Ltd...................... 617,175
2,200 Hartford Financial Services
Group....................... 182,050
6,500 Old Republic International
Corp........................ 197,031
3,800 Providian Corp................ 122,075
3,400 ReliaStar Financial Corp...... 248,625
4,500 TIG Holdings Inc.............. 140,625
900 Torchmark Corp................ 64,125
2,100 Transatlantic Holdings,
Inc......................... 208,425
------------
4,727,896
------------
Linen Supply & Related Items (0.2%)
2,600 Cintas Corp................... 178,750
------------
Machine Tools & Related Products (0.5%)
9,200 Kennametal, Inc............... 395,600
------------
Machinery & Equipment (2.9%)
9,000 Case Corp..................... 619,875
1,800 Caterpillar, Inc.............. 193,275
7,000 Deere & Co.................... 384,125
8,000 Harnischfeger Industries,
Inc......................... 332,000
4,600 Tecumseh Products Co.,........ 275,425
11,500 Thermo Electron Corp.(b)...... 395,313
------------
2,200,013
------------
Manufacturing (0.4%)
4,500 Parker-Hannifin Corp.......... 273,094
------------
Medical Services & Supplies (1.0%)
28,700 HEALTHSOUTH Corp.(b).......... 715,706
------------
Medical--HMO (0.5%)
8,840 Foundation HealthCorp. A(b)... 267,962
4,900 Maxicare Health Plans,
Inc.(b)..................... 109,638
------------
377,600
------------
</TABLE>

Continued

-21-
<PAGE> 22

THE SESSIONS GROUP
1ST SOURCE MONOGRAM DIVERSIFIED EQUITY FUND

SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1997
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------ ------------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Medical--Instruments/Products (2.9%)
7,300 Beckman Instruments Inc....... $ 352,225
7,700 Boston Scientific Corp.(b).... 473,069
7,600 Guidant Corp.................. 646,000
6,100 Mallinckrodt, Inc............. 231,800
3,600 Medtronic, Inc................ 291,600
9,600 Nellcor Puritan Bennett,
Inc.(b)..................... 174,000
------------
2,168,694
------------
Medical--Wholesale Drug Distribution (0.3%)
3,950 Cardinal Health, Inc.......... 226,138
------------
Motor Vehicles (1.5%)
18,300 Ford Motor Co................. 690,825
7,300 General Motors Corp........... 406,519
------------
1,097,344
------------
Office Supplies & Forms (0.1%)
3,400 Standard Register Co.......... 104,125
------------
Oil & Gas--Domestic (0.4%)
3,300 Amoco Corp.................... 286,894
------------
Oil & Gas--Exploration/Production (2.3%)
16,400 Anadarko Petroleum Corp....... 984,000
15,400 Cross Timbers Oil Co.......... 296,450
5,800 Repsol SA..................... 246,138
5,400 Ultramar Diamond Shamrock
Corp........................ 176,175
------------
1,702,763
------------
Oil--Gas Services (5.4%)
21,200 Baker Hughes, Inc............. 820,175
2,700 El Paso Natural Gas Co........ 148,500
7,900 Halliburton Co................ 626,075
29,100 Rowan Cos., Inc.(b)........... 820,256
9,800 Schlumberger Ltd.............. 1,224,999
14,000 Tosco Corp.................... 419,125
------------
4,059,130
------------
Oil--Integrated Companies (1.7%)
3,800 Atlantic Richfield Co......... 267,900
4,600 British Petroleum Co., Plc.... 344,425
4,500 Phillips Petroleum Co......... 196,875
15,200 USX -- Marathon Group......... 438,900
------------
1,248,100
------------

</TABLE>

<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------ ------------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Pharmaceuticals (6.3%)
4,100 Amgen, Inc.(b)................ 238,313
9,625 Bergen Brunswig Corp. Class
A........................... 268,297
2,700 Bristol-Myers Squibb Co....... 218,700
13,200 Lilly, Eli & Co............... 1,442,924
9,300 Pfizer Inc.................... 1,111,350
11,200 Somatogen, Inc.(b)............ 51,800
11,400 Warner Lambert................ 1,416,449
------------
4,747,833
------------
Pipelines (0.3%)
7,600 MAPCO, Inc.................... 239,400
------------
Railroad (0.4%)
1,800 Burlington Northern Santa
Fe.......................... 161,775
3,100 CSX Corp...................... 172,050
------------
333,825
------------
Restaurants (1.6%)
24,800 Starbucks Corp.(b)............ 965,650
9,200 Wendy's International, Inc.... 238,625
------------
1,204,275
------------
Retail (5.6%)
20,500 Borders Group(b).............. 494,562
5,700 CVS Corporation............... 292,125
5,700 Dillards Inc., Class A........ 197,363
12,600 Home Depot, Inc............... 868,612
6,400 Kohls Corporation(b).......... 338,800
47,200 PETsMART, Inc.(b)............. 542,799
11,500 Price/Costco Inc.(b).......... 378,063
5,800 Safeway, Inc.(b).............. 267,525
17,600 Staples, Inc.(b).............. 409,200
16,400 TJX Cos., Inc................. 432,550
------------
4,221,599
------------
Telecommunications (6.5%)
8,900 America Online(b)............. 495,063
14,750 Andrew Corp.(b)............... 414,844
9,700 Ascend Communications,
Inc.(b)..................... 381,938
7,050 Glenayre Technologies,
Inc.(b)..................... 115,444
6,500 Lucent Technologies, Inc...... 468,406
7,600 Motorola, Inc................. 577,600
17,100 NEXTEL Communications(b)...... 323,831
6,400 QUALCOMM, Inc.(b)............. 325,600
18,100 Tele-Communications,
Inc.(b)..................... 269,238
14,200 Tellabs, Inc.(b).............. 793,424
22,700 WorldCom, Inc.(b)............. 726,399
------------
4,891,787
------------
</TABLE>

Continued

-22-
<PAGE> 23

THE SESSIONS GROUP
1ST SOURCE MONOGRAM DIVERSIFIED EQUITY FUND

SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1997

<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------ ------------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Textile (0.2%)
3,100 Springs Industries, Inc....... $ 163,525
------------
Tires & Rubber Products (0.8%)
9,300 Goodyear Tire & Rubber Co..... 588,806
------------
Tobacco (2.3%)
30,600 Philip Morris Cos., Inc....... 1,357,875
11,300 RJR Nabisco Holdings Corp..... 372,900
------------
1,730,775
------------
Toys (0.4%)
8,000 Toys "R" Us, Inc.(b).......... 280,000
------------
Transportation--Air (0.6%)
2,300 AMR Corp. Del(b).............. 212,750
2,800 UAL Corp.(b).................. 200,375
------------
413,125
------------
Utilities--Electric (1.0%)
4,400 Central Maine Power Co........ 54,450
3,100 CINergy Corp.................. 107,919
4,800 DTE Energy Co................. 132,600
2,611 Duke Energy Corp.............. 125,165
5,600 Entergy Corp.................. 153,300
4,600 GPU, Inc...................... 165,025
------------
738,459
------------
</TABLE>

<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------ ------------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Utilities--Gas & Pipeline (0.5%)
6,700 Sonat, Inc.................... 343,375
------------
Total Common Stocks........... 69,277,689
------------
PREFERRED STOCKS (1.1%)
Forest & Paper Products (0.2%)
4,000 Westvaco Corp................. 125,750
------------
Oil & Gas (0.4%)
8,800 YPF Sociedad Anonima-Spondored
ADR......................... 270,600
------------
Utilities-Telephone (0.5%)
5,600 Nokia Corp-Sponsored ADR...... 413,000
------------
Total Preferred Stocks........ 809,350
------------
REPURCHASE AGREEMENTS (6.8%)
$ 5,116,881 Fifth Third Bank Repurchase
Agreement, 5.07%, 7/1/97
(Collateralized by
$5,220,000 FHLMC Pool
#G10452, 7.00%, 2/1/11,
market value--$5,221,632)... 5,116,881
------------
Total Repurchase Agreements... 5,116,881
------------
Total (Cost--$61,183,407)
(a)......................... $ 75,203,920
============
</TABLE>

- ---------

Percentages indicated are based on net assets of $74,989,509.

(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting in excess of federal income tax reporting of $36,096.
Cost for federal income tax purposes differs from market value by net
unrealized appreciation of securities as follows:

<TABLE>
<S> <C>
Unrealized appreciation.......................... $15,081,166
Unrealized depreciation.......................... (1,096,749)
-----------
Net unrealized appreciation...................... $13,984,417
===========
</TABLE>

(b) Represents non-income producing securities
(c) Amount owned is a fractional share.

See notes to financial statements.

-23-
<PAGE> 24

THE SESSIONS GROUP
1ST SOURCE MONOGRAM SPECIAL EQUITY FUND

SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1997
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------ ------------
<S> <C> <C>
COMMON STOCKS (80.4%)
Aerospace/Defense--Equipment (0.8%)
7,500 AAR Corp...................... $ 242,344
-----------
Air Transportation (3.0%)
11,000 Atlas Air, Inc.(b)............ 379,500
21,000 Southwest Airlines Co......... 543,375
-----------
922,875
-----------
Apparel Manufacturers (1.7%)
16,650 Wolverine World Wide.......... 505,744
-----------
Automotive Parts (1.5%)
11,000 Tower Automotive(b)........... 473,000
-----------
Banking (2.9%)
11,000 Bank United Corp., Class A.... 418,000
29,000 Commonwealth Bancorp, Inc..... 474,875
-----------
892,875
-----------
Beer, Wine & Distilled Beverages (0.6%)
20,000 Boston Beer Co., Inc.(b)...... 197,500
-----------
Commercial Goods & Services (3.3%)
22,000 ABR Information Services,
Inc.,(b).................... 638,000
36,000 Warrentec Corp.(b)............ 373,500
-----------
1,011,500
-----------
Communications Equipment (3.7%)
37,000 CCC Information Services
Group(b).................... 721,500
12,500 Sawtek, Inc.(b)............... 421,875
-----------
1,143,375
-----------
Computer Software (11.4%)
24,800 Citrix Systems, Inc.(b)....... 1,088,099
55,000 Dataware Technologies
Inc.(b)..................... 165,000
11,000 Great Plains Software,
Inc.(b)..................... 297,000
15,100 I2 Technologies Inc(b)........ 468,100
17,000 JDA Software Group Inc,(b).... 580,125
36,000 Microware Systems Corp.(b).... 319,500
17,000 Netscape Communications
Corp.(b).................... 545,063
-----------
3,462,887
-----------
Electronic Components (5.9%)
36,000 S 3, Inc.(b).................. 396,000
60,200 Sonic Solutions, Inc.(b)...... 308,525
21,000 Triquint Semiconductor,
Inc.(b)..................... 721,875
11,750 Vitesse Semiconductor(b)...... 384,078
-----------
1,810,478
-----------

</TABLE>

<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------ ------------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Emerging Technology (0.4%)
19,000 Electric Fuel Corp.(b)........ $ 125,875
-----------
Financial Services (6.6%)
23,000 Aames Financial Corp.......... 425,500
18,000 ITLA Capital Corp(b).......... 292,500
30,000 Long Beach Financial
Corp(b)..................... 262,500
15,000 Mego Mortgage Corp.(b)........ 150,000
22,500 Ocwen Asset Investment
Corp.(b).................... 455,625
7,000 Washington Mutual, Inc........ 418,250
-----------
2,004,375
-----------
Human Resources (1.1%)
21,900 SOS Staffing Services,
Inc.(b)..................... 339,450
-----------
Leisure & Recreational Products (2.1%)
17,600 Cannondale Corp.(b)........... 312,400
18,200 North Face, Inc.(b)........... 332,150
-----------
644,550
-----------
Medical Services & Supplies (10.3%)
9,400 Agouron Pharmaceuticals,
Inc.(b)..................... 760,225
24,000 Columbia Laboratories
Inc.(b)..................... 393,000
28,000 HEALTHSOUTH Corp.(b).......... 698,250
29,000 ICOS Corp.(b)................. 239,250
21,000 Martek Bioscience Corp.(b).... 246,750
33,000 Vivus, Inc.(b)................ 785,812
-----------
3,123,287
-----------
Medical--Biotechnology (0.9%)
18,000 Alkermes(b)................... 261,000
-----------
Medical--Hosp Management Services (2.0%)
34,000 Orthodontic Centers Of
America, Inc.,(b)........... 618,375
-----------
Medical--Hospitals (0.3%)
49,000 Integrated Medical
Resources(b)................ 101,063
-----------
Oil--Field Services (0.8%)
9,700 Pride International,
Inc.(b)..................... 232,800
-----------
Oil--Gas Services (2.4%)
21,600 Newpark Resources(b).......... 729,000
-----------
Pharmaceuticals (1.3%)
18,300 Zonagen(b).................... 400,313
-----------
Publishing (0.7%)
18,500 UOL Publishing(b)............. 226,625
-----------
Real Estate Investment Trust (1.0%)
22,000 Prime Retail.................. 295,625
-----------
</TABLE>

Continued

-24-
<PAGE> 25

THE SESSIONS GROUP
1ST SOURCE MONOGRAM SPECIAL EQUITY FUND

SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1997
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
-----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Retail (2.6%)
11,500 Casey's General Stores........ $ 247,609
30,000 Oakley, Inc.(b)............... 421,875
5,000 Regis Corp.................... 118,125
-----------
787,609
-----------
Savings & Loans (7.6%)
18,000 Dime Community Bancorp,
Inc......................... 360,000
13,300 First Bell Bancorp, Inc....... 222,775
14,000 Home Bancorp of Elgin, Inc.... 231,000
15,000 Life Bancorp Inc.............. 388,125
6,000 Mercantile Bankshares......... 240,000
10,000 Peoples Heritage Bancorp...... 378,750
14,625 St. Paul Bancorp, Inc......... 484,452
-----------
2,305,102
-----------
Telecommunications (2.0%)
7,500 Echostar Communications(b).... 117,188
30,000 Glenayre Technologies,
Inc.(b)..................... 491,250
-----------
608,438
-----------
Textile (1.6%)
30,000 Sport-Haley, Inc.(b).......... 502,500
-----------
Tobacco (1.9%)
20,000 General Cigar Holdings(b)..... 588,750
-----------
Total Common Stocks........... 24,557,315
-----------

</TABLE>

<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------ ------------
<S> <C> <C>
OPTIONS (1.1%)
Multi-Industry (1.1%)
80 Amex Computer Technology
Index....................... $ 201,000
85 Amex Computer Technology
Index....................... 122,188
-----------
Total Options................. 323,188
-----------
WARRANTS (0.0%)
5,000 Alza Corp. (b)................ 781
-----------
Total Warrants................ 781
-----------
REPURCHASE AGREEMENTS (19.5%)
$ 5,954,715 Fifth Third Bank Repurchase
Agreement, 5.07%, 7/1/97
(Collateralized by
$6,072,000 FHLMC Pool
#G10452, 7.00%, 2/1/11,
market value--$6,073,900)... 5,954,715
-----------
Total Repurchase Agreements... 5,954,715
-----------
Total (Cost--$28,310,633)
(a)......................... $30,835,999
===========
</TABLE>

- ---------

Percentages indicated are based on net assets of $30,524,241.

(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting in excess of federal income tax reporting of $56,091.
Cost for federal income tax purposes differs from market value by net
unrealized appreciation of securities as follows:

<TABLE>
<S> <C>
Unrealized appreciation.......................... $ 4,419,447
Unrealized depreciation.......................... (1,950,172)
-----------
Net unrealized appreciation...................... $ 2,469,275
===========
</TABLE>

(b) Represents non-income producing securities.

See notes to financial statements.

-25-
<PAGE> 26

THE SESSIONS GROUP
1ST SOURCE MONOGRAM INCOME FUND

SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1997
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------ ------------
<S> <C> <C>
COLLATERALLIZED MORTGAGE OBLIGATIONS (3.6%)
2,000,000 First Union Residential
Securitization.............. $ 1,983,740
------------
Total Collaterallized Mortgage
Obligations................. 1,983,740
------------
CORPORATE BONDS (31.0%)
Banking (1.8%)
1,000,000 Firstar Corp., 7.15%, 9/1/00,
Callable 9/1/98 @ 100....... 1,004,729
------------
Financial Services (10.0%)
1,000,000 Associates Corp., 6.75%,
7/15/01..................... 1,001,418
1,000,000 Bear Stearns Co.,Inc., 7.63%,
4/15/00..................... 1,024,494
1,250,000 General Electric Capital
Corp., 8.65%, 5/15/09,
Callable 5/15/97 @ 100...... 1,420,187
1,000,000 Salomon, Inc., 7.00%,
1/20/98..................... 1,004,830
1,000,000 Smith Barney Holdings, Inc.,
7.88%, 10/1/99.............. 1,027,239
------------
5,478,168
------------
Industrial Goods & Services (10.1%)
1,000,000 Honeywell, 7.13%, 4/15/08..... 1,006,052
1,500,000 Smithkline Beecham Corp.,
7.50%, 5/1/02............... 1,515,357
2,000,000 Texas Instruments, Inc.,
6.88%, 7/15/00.............. 2,020,187
1,000,000 Union Pacific Resources,
7.00%, 10/15/06............. 999,318
------------
5,540,914
------------
Motor Vehicles (3.7%)
2,000,000 Ford Motor Co., 7.25%,
10/1/08..................... 2,011,120
------------
Paper Products (1.8%)
1,000,000 International Paper Co.,
7.00%, 6/1/01............... 1,006,299
------------
Tobacco (3.6%)
2,000,000 Philip Morris Cos., Inc.,
6.80%, 12/1/03.............. 1,966,470
------------
Total Corporate Bonds 17,007,700
------------
PREFERRED STOCKS (5.5%)
Banking (0.9%)
20,000 Banker's Trust, 8.125%,
2/1/37...................... 506,250
------------
Electrical & Electronic (1.9%)
40,000 Southwestern Public Services,
Series A, 7.85%, 10/21/01,
Callable 10/21/01 @ 25.00... 1,010,000
------------

</TABLE>

<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------ ------------
<S> <C> <C>
PREFERRED STOCKS, CONTINUED:
Financial Services (0.9%)
20,000 Ml Capital Trust, 8.00%,
3/30/07..................... $ 507,500
------------
Food & Related (1.8%)
40,000 McDonald's Corp., 7.50%,
9/30/36, Callable 12/31/01 @
25.00....................... 995,000
------------
Total Preferred Stocks........ 3,018,750
------------
U.S. TREASURY OBLIGATIONS (22.1%)
3,000,000 5.63%, 11/30/98............... 2,985,939
2,000,000 5.88%, 11/15/99............... 1,986,876
2,000,000 6.25%, 5/31/00................ 2,001,250
3,000,000 7.75%, 2/15/01................ 3,138,750
2,000,000 6.50%, 10/15/06............... 1,991,250
------------
Total U.S. Treasury
Obligations................. 12,104,065
------------
U.S. GOVERNMENT AGENCIES (33.0%)
Federal Home Loan Bank (3.7%)
2,000,000 5.88%, 2/26/98................ 2,000,310
------------
Federal Home Loan Mortgage Corporation (12.8%)
1,000,000 8.41%, 12/7/01................ 1,021,960
1,000,000 8.63%, 11/29/04, Callable
11/29/99 @100............... 1,037,552
3,000,000 6.89%, 9/26/05................ 2,979,266
1,000,000 7.00%, 8/15/07................ 996,870
1,000,000 6.50%, 2/15/08................ 973,865
------------
7,009,513
------------
Federal National Mortgage Association (16.5%)
3,000,000 6.25%, 8/12/03................ 2,923,938
2,000,000 6.97%, 4/8/04................. 2,033,282
3,000,000 8.63%, 11/10/04............... 3,103,362
1,000,000 7.02%, 4/10/06................ 989,384
------------
9,049,966
------------
Total U.S. Government
Agencies.................... 18,059,789
------------
REPURCHASE AGREEMENTS (3.5%)
$ 1,942,995 Fifth Third Bank Repurchase
Agreement, 5.07%, 7/1/97
(Collateralized by
$1,982,000 FHLMC Pool
#G10452, 7.00%, 2/1/11,
market value--$1,982,620)... 1,942,995
------------
Total Repurchase Agreements... 1,942,995
------------
Total (Cost--$54,227,181)
(a)......................... $ 54,117,039
============
</TABLE>

Continued

-26-
<PAGE> 27

THE SESSIONS GROUP
1ST SOURCE MONOGRAM INCOME FUND

SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1997

- ---------

Percentages indicated are based on net assets of $54,788,528.

(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized from
financial reporting in excess of federal income tax reporting of $46,563.
Cost for federal income tax purposes differs from market value by net
unrealized depreciation of securities as follows:

<TABLE>
<S> <C>
Unrealized appreciation.......................... $ 261,212
Unrealized depreciation.......................... (417,917)
---------
Net unrealized depreciation...................... $(156,705)
=========
</TABLE>

See notes to financial statements.

-27-
<PAGE> 28

THE SESSIONS GROUP
1ST SOURCE MONOGRAM INCOME EQUITY FUND

SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1997
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------ ------------
<S> <C> <C>
COMMON STOCKS (82.2%)
Aerospace/Defense -- Equipment (4.4%)
11,000 General Motors Corp. -- Class
H........................... $ 635,250
8,000 Raytheon Co................... 408,000
12,500 Sundstrand Corp............... 675,000
------------
1,718,250
------------
Automotive Parts (1.4%)
28,000 Excel Industries, Inc......... 546,000
------------
Banking (1.6%)
18,000 Magna Group, Inc.............. 625,500
------------
Chemicals (4.4%)
10,000 Great Lakes Chemical Corp..... 523,750
25,000 Hanna (M. A.) Co.............. 720,312
11,000 Lubrizol Corp................. 461,313
------------
1,705,375
------------
Communications Equipment (1.3%)
6,000 Harris Corp................... 504,000
------------
Computer Services (1.2%)
11,000 Electronic Data Systems
Corp........................ 451,000
------------
Computers (1.2%)
10,000 Amdahl Corp.(b)............... 87,500
10,000 Sun Microsystems, Inc.(b)..... 372,188
------------
459,688
Construction -- Engineering (2.4%)
10,000 Fluor Corporation............. 551,875
10,000 Foster Wheeler Corp........... 405,000
------------
956,875
------------
Cosmetics & Toiletries (1.4%)
8,000 Avon Products, Inc............ 564,500
------------
Electrical Equipment (4.9%)
12,000 AMP, Inc...................... 501,000
12,400 Emerson Electric Co........... 682,775
21,000 Esterline Technologies,
Corp.(b).................... 748,125
------------
1,931,900
------------
Environmental Services (1.8%)
21,100 Browning-Ferris Industries,
Inc......................... 701,575
------------
Financial Services (2.4%)
20,000 Alliance Capital
Management-LP............... 585,000
10,000 Green Tree Financial Corp..... 356,250
------------
941,250
------------
Food & Related (2.4%)
20,000 Archer-Daniels-Midland Co..... 470,000
10,600 Quaker Oats Co................ 475,675
------------
945,675
------------

</TABLE>

<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------ ------------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Furniture & Furnishings (0.7%)
20,000 Shelby Williams Industries.... $ 272,500
------------
Hospital Supply & Management (0.8%)
18,000 Angelica Corp................. 315,000
------------
Hotels & Motels (0.6%)
12,000 Signature Inns................ 222,000
------------
Insurance (6.5%)
20,000 La Salle RE Holdings.......... 589,999
9,000 Lincoln National Corp......... 579,375
20,000 Sotheby's Holdings Services... 337,500
13,000 Travelers/Aetna Property
Casualty-Class A............ 518,375
22,000 USF&G Corp.................... 528,000
------------
2,553,249
------------
Medical Equipment & Supplies (0.9%)
10,000 Bard (C. R.), Inc............. 363,125
------------
Mining (3.0%)
10,000 Cleveland Cliffs, Inc......... 407,500
11,000 IMC Global Strypes............ 412,500
5,000 Potash Corp. of Saskatchewan,
Inc......................... 375,313
------------
1,195,313
------------
Motor Vehicles (1.4%)
15,000 Ford Motor Co................. 566,250
------------
Office Equipment & Services (0.9%)
10,000 Donnelley R R & Sons Co....... 366,250
------------
Oil -- Integrated Companies (4.5%)
8,000 Atlantic Richfield Co......... 564,000
15,000 Phillips Petroleum Co......... 656,250
19,000 USX -- Marathon Group......... 548,625
------------
1,768,875
------------
Pharmaceuticals (6.3%)
9,000 Abbott Laboratories........... 600,750
8,750 Bergen Brunswig Corp. Class
A........................... 243,906
10,000 Bristol-Myers Squibb Co....... 810,000
8,000 Merck & Co., Inc.............. 828,000
------------
2,482,656
------------
Pipelines (1.2%)
15,000 MAPCO, Inc.................... 472,500
------------
Publishing (3.3%)
17,000 American Greetings Corp....... 631,125
14,000 Tribune Co.................... 672,875
------------
1,304,000
------------
</TABLE>

Continued

-28-
<PAGE> 29

THE SESSIONS GROUP
1ST SOURCE MONOGRAM INCOME EQUITY FUND

SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1997
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------ ------------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Railroad (2.4%)
14,500 Kansas City Southern
Industries, Inc............. $ 935,250
------------
Real Estate Investment Trust (6.4%)
22,000 Burnham Pacific Properties,
Inc......................... 302,500
14,875 Equity Residential Property... 706,562
12,000 Hospitality Properties
Trust....................... 367,500
21,000 Prentiss Properties Trust..... 538,125
24,000 Thornburg Mortgage Asset
Corp........................ 516,000
5,950 Wellsford Real Properties
Trust(b).................... 65,450
------------
2,496,137
------------
Retail (1.3%)
20,000 Long's Drug Stores, Inc....... 523,750
------------
Steel (1.2%)
10,000 Carpenter Technology Corp..... 457,500
------------
Telecommunications (2.8%)
16,500 Andrew Corp.(b)............... 464,063
17,000 US West Communications,
Inc......................... 640,687
------------
1,104,750
------------
Tires & Rubber Products (1.4%)
25,000 Cooper Tire & Rubber Co....... 550,000
------------
Transportation-Misc. (1.3%)
22,200 Sea Containers Class A........ 502,275
------------
Utilities-Electric (3.6%)
13,000 American Electric Power,
Co.......................... 546,000
16,000 Houston Industries, Inc....... 343,000
22,000 Montana Power Co.............. 510,125
------------
1,399,125
------------
Utilities-Telephone (0.9%)
10,000 AT & T Corp................... 350,625
------------
Total Common Stocks........... 32,252,718
------------
PREFERRED STOCKS (3.1%)
Industrials (1.6%)
8,000 Airtouch Communications,
Series B, 6.00%, 8/16/99.... $ 228,000
14,000 Snyder Oil Corp., Callable
3/31/97 @ 25.90............. 353,500
------------
581,500
------------
Merchandising (0.8%)
6,000 K Mart Preferred, 7.75%,
6/15/16, Callable 6/17/99 @
52.71....................... 329,250
------------

</TABLE>

<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- ------------------------------ ------------
<S> <C> <C>
PREFERRED STOCKS, CONTINUED:
Performance Equity-Linked Quarterly (0.7%)
8,000 Morgan Stanley -- Advanced
Micro Devices, 10% PERQS.... 293,000
------------
Total Preferred Stocks........ 1,203,750
------------
CONVERTIBLE BONDS (10.6%)
Electrical & Electronic (1.6%)
500,000 Itron Inc., 6.75%, 3/31/04.... 638,125
------------
Industrial Goods & Services (7.0%)
600,000 General Instrument Corp.,
5.00%, 6/15/00, Callable
6/15/97 @ 102.14............ 684,749
450,000 Integrated Device Technology
5.50%, 6/1/02, Callable
6/2/98 @ 102.75............. 381,938
150,000 IVAX Corp. 6.50%, 11/15/01,
Callable 11/15/97 @
100.93...................... 133,313
450,000 Mascotech 4.50%, 12/15/03,
Callable 12/15/97, @
102.50...................... 408,938
285,000 Oryx Energy Co. 7.50%,
5/15/14, Callable 5/15/98 @
101.50...................... 279,300
400,000 Park Electrochem 5.50%,
3/1/06, Callable 3/1/99 @
102.75...................... 357,000
500,000 Telxon Cvt. 5.75%, 1/1/03,
Callable 1/5/99 @ 103.29.... 455,000
------------
2,700,238
------------
Metals & Mining (0.9%)
400,000 Coeur D'Alene Mines Corp.
6.38%, 1/31/04, Callable
1/31/97 @ 103.64............ 365,000
------------
Restaurants (1.1%)
500,000 Boston Chicken, 7.75%,
5/1/04...................... 440,000
------------
Total Convertible Bonds....... 4,143,363
------------
REPURCHASE AGREEMENTS (4.0%)
1,560,619 Fifth Third Bank Repurchase
Agreement, 5.07%, 7/1/97
(Collateralized by
$1,592,000 FHLMC Pool
#G10452, 7.00%, 2/1/11,
market value --
$1,592,498)................. 1,560,619
------------
Total Repurchase Agreements... 1,560,619
------------
Total (Cost -- $31,045,896)
(a)......................... $ 39,160,450
============
</TABLE>

- ---------

Percentages indicated are based on net assets of $39,195,549.

Continued

-29-
<PAGE> 30

THE SESSIONS GROUP
1ST SOURCE MONOGRAM INCOME EQUITY FUND

SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1997

(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:

<TABLE>
<S> <C>
Unrealized appreciation.......................... $ 8,532,909
Unrealized depreciation.......................... (440,162)
-----------
Net unrealized appreciation...................... $ 8,092,747(c)
===========
</TABLE>

(b) Represents non-income producing securities.

Footnote to Schedule of Investments

(c) The unrealized depreciation was increased $21,807 due to a decrease in
market value of the written covered call option on Electronic Data Services
Corp.

See notes to financial statements.

-30-
<PAGE> 31

THE SESSIONS GROUP
1ST SOURCE MONOGRAM FUNDS

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997

1. ORGANIZATION:

The Sessions Group (the "Group") was organized on April 25, 1988 as an Ohio
business trust, and is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management investment company.
The Group is authorized to issue an unlimited number of shares which are
units of beneficial interest without par value. The Group offers shares of
a number of different series or portfolios including the following series
for which 1st Source Bank serves as investment adviser: the 1st Source
Monogram Diversified Equity Fund, 1st Source Monogram Special Equity Fund,
1st Source Monogram Income Fund, and 1st Source Monogram Income Equity Fund
(collectively, the "Funds" and individually, a "Fund").

The investment objective for each of the Diversified Equity Fund and the
Special Equity Fund is capital appreciation. The investment objectives of
the Income Equity Fund are capital appreciation with current income as a
secondary objective. The investment objectives of the Income Fund are
current income consistent with preservation of capital.

Sales of shares of the Funds may be made by the Groups distributor BISYS
Fund Services Limited Partnership d/b/a BISYS Fund Services to customers of
1st Source Bank and its affiliates, to all accounts of correspondent banks
of 1st Source Bank and to the general public.

2. SIGNIFICANT ACCOUNTING POLICIES:

The following is a summary of significant accounting policies followed by
the Group in the preparation of its financial statements. The policies are
in conformity with generally accepted accounting principles. The
preparation of financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements and the reported amounts of income
and expenses for the period. Actual results could differ from those
estimates.

Securities Valuation:

Investments in common and preferred stocks, corporate bonds, commercial
paper, municipal securities and U.S. Government securities of the
Diversified Equity Fund, the Special Equity Fund, the Income Fund, and the
Income Equity Fund are valued at their market values determined on the
basis of the latest available bid quotation in the principal market
(closing sales prices if the principal market is an exchange or NASDAQ
National Market) in which such securities are normally traded. Investments
in investment companies are valued at their net asset values as reported by
such companies. Other securities for which quotations are not readily
available are valued at their fair value under procedures established by
the Group's Board of Trustees. The differences between the cost and market
values of investments held by the Funds are reflected as either unrealized
appreciation or depreciation.

Continued

-31-
<PAGE> 32

THE SESSIONS GROUP
1ST SOURCE MONOGRAM FUNDS

NOTES TO FINANCIAL STATEMENTS, CONTINUED
JUNE 30, 1997

SECURITY TRANSACTIONS AND RELATED INCOME:

Security transactions are accounted for on the date the security is
purchased or sold (trade date). Interest income is recognized on the
accrual basis and includes, where applicable, the amortization of
premium or discount. Dividend income is recorded on the ex-dividend
date. Gains or losses realized on sales of securities are determined by
comparing the identified cost of the security lot sold with the net
sales proceeds.

REPURCHASE AGREEMENTS:

The Funds may acquire repurchase agreements from financial institutions
such as banks and broker dealers which 1st Source Bank deems
creditworthy under guidelines approved by the Board of Trustees, subject
to the seller's agreement to repurchase such securities at a mutually
agreed-upon date and price. The repurchase price generally equals the
price paid by each Fund plus interest negotiated on the basis of current
short-term rates, which may be more or less than the rate on the
underlying portfolio securities. The seller, under a repurchase
agreement, is required to maintain the value of collateral held pursuant
to the agreement at not less than the repurchase price (including
accrued interest). Securities subject to repurchase agreements are held
by the Funds' custodian or another qualified custodian or in the Federal
Reserve/Treasury book-entry system. Repurchase agreements are considered
to be loans by the Funds under the 1940 Act.

REVERSE REPURCHASE AGREEMENTS:

The Funds may borrow for temporary purposes by entering into reverse
repurchase agreements. Pursuant to such agreements, a Fund would sell
portfolio securities to financial institutions such as banks and
broker-dealers, and agree to repurchase them at a mutually agreed-upon
date and price. At the time a Fund enters into a reverse repurchase
agreement, it places in a segregated custodial account assets having a
value equal to the repurchase price (including accrued interest), and
will continually monitor the account to ensure such equivalent value is
maintained at all times. Reverse repurchase agreements are considered to
be borrowing by the Funds under the 1940 Act.

DERIVATIVES:

A derivative is defined as a financial instrument whose value is derived
from the performance of underlying assets, interest rate and currency
exchange rates, or indices, and include (but are not limited to)
structured debt obligations, interest rate and currency swaps, futures
contracts, options, and forward currency contracts. The Funds may invest
in structured debt obligations for the purpose of mitigating interest
rate risk in the portfolio. Such structured debt obligations have
floating interest rates that reset to various indices, and which reset
at periodic intervals, as disclosed in the accompanying Schedules of
Portfolio Investments. Risks of entering into such transactions include
the potential inability of the dealer to meet their obligations and
unanticipated movements in the value of the security or the underlying
assets or indices. It is possible that the Funds will incur a loss

Continued

-32-
<PAGE> 33

THE SESSIONS GROUP
1ST SOURCE MONOGRAM FUNDS

NOTES TO FINANCIAL STATEMENTS, CONTINUED
JUNE 30, 1997

as a result of their investments in derivative instruments. It is the
Funds' policy, to the extent that there exists no readily available
market for such securities, that the investment will be treated as an
illiquid security for purposes of calculating the Funds' limitation on
investments in illiquid securities as set forth in the Funds' investment
restrictions.

DIVIDENDS TO SHAREHOLDERS:

A dividend for each of the Funds, other than the Special Equity Fund, is
declared monthly at the close of business on the day of declaration and
is paid monthly. A dividend for the Special Equity Fund is declared
quarterly at the close of business on the day of declaration and is paid
quarterly. Distributable net realized capital gains for each fund, if
any, are distributed at least annually. Each such dividend consists of
an amount of accumulated undistributed net investment income of that
Fund as determined necessary or appropriate by the officers of the
Group.

Dividends from net investment income and net realized capital gains are
determined in accordance with Federal income tax regulations which may
differ from generally accepted accounting principles. These differences
are primarily due to differing treatments for net investment losses,
expiring capital loss carry forwards, and deferral of certain losses.

FEDERAL INCOME TAXES:

It is the policy of each of the Funds to qualify as a regulated
investment company by complying with the provisions available to certain
investment companies, as defined in applicable sections of the Internal
Revenue Code, and to make distributions of net investment income and net
realized capital gains sufficient to relieve it from all, or
substantially all, Federal income taxes.

ORGANIZATION COSTS:

All expenses in connection with each Fund's organization and
registration under the 1940 Act and the Securities Act of 1933 were paid
by the Funds. Such expenses are amortized over a period of five years
commencing with the date of the initial public offering.

3. PURCHASES AND SALES OF SECURITIES:

Purchases and sales of securities (excluding short-term securities) for the
period ended June 30, 1997 are as follows (commencement of operations for
the Funds are September 23, 1996, September 20, 1996, September 24, 1996,
and September 25, 1996 respectively):

<TABLE>
<CAPTION>
PURCHASES SALES
----------- -----------
<S> <C> <C>
Diversified Equity Fund........................................ $50,518,479 $48,070,875
Special Equity Fund............................................ 46,947,681 32,849,196
Income Fund.................................................... 61,544,273 53,965,465
Income Equity Fund............................................. 17,433,402 12,475,125
</TABLE>

Continued

-33-
<PAGE> 34

THE SESSIONS GROUP
1ST SOURCE MONOGRAM FUNDS

NOTES TO FINANCIAL STATEMENTS, CONTINUED
JUNE 30, 1997

4. RELATED PARTY TRANSACTIONS:

Investment advisory services are provided to the Funds by 1st Source Bank.
Under the terms of the investment advisory agreement, 1st Source Bank is
entitled to receive fees based on a percentage of the average net assets of
each Fund. 1st Source Bank has agreed that if the aggregate expenses of the
Funds, as defined, for any fiscal year exceed limitations of any state
having jurisdiction over the Funds, 1st Source Bank will reimburse to the
Funds, or otherwise bear, such excess. Such limitation did not affect the
calculation of the investment advisory fees during the period ended June
30, 1997.

BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services
("BISYS"), an Ohio limited partnership, and BISYS Fund Services, Inc.
("BISYS Services") are subsidiaries of The BISYS Group, Inc.

BISYS, with whom certain officers and trustees of the Group are affiliated,
serves the Funds as administrator and distributor. Such officers and
trustees are paid no fees directly by the Funds for serving as officers and
trustees of the Group. Under the terms of the administration agreement,
BISYS's fees are computed daily as a percentage of the average net assets
of each Fund. BISYS Fund Services, Inc. serves the Funds as transfer agent
and mutual fund accountant.

The Group has adopted a Distribution and Shareholder Service Plan in
accordance with Rule 12b-1 under the 1940 Act, pursuant to which each Fund
is authorized to pay or reimburse BISYS, as distributor, a periodic amount,
calculated at an annual rate not to exceed 0.25% of the average net assets
of each Fund. These fees are used by BISYS to pay banks, including 1st
Source Bank, broker dealers and other institutions, or to reimburse BISYS
or its affiliates, for distribution and shareholder services in connection
with the distribution of Fund shares.

The Group has adopted an Administrative Services Plan, pursuant to which
each Fund is authorized to pay compensation to banks and other financial
institutions, which may include 1st Source Bank, its correspondent and
affiliated banks and BISYS, for providing ministerial, record keeping
and/or administrative support services to their customers who are the
beneficial or record owners of a Fund. The compensation which may be paid
under the Administrative Services Plan is a fee computed daily at an annual
rate of up to 0.25% of the average net asset, of each Fund. The Funds have
not implemented such a plan as of June 30, 1997.

BISYS is also entitled to receive commissions on sales of shares of the
Funds. For the period ended June 30, 1997, BISYS received $8,879 from
commissions earned on sales of shares of the Funds, of which $989 was
reallowed to broker/dealers, affiliated with 1st Source Bank.

Continued

-34-
<PAGE> 35

THE SESSIONS GROUP
1ST SOURCE MONOGRAM FUNDS

NOTES TO FINANCIAL STATEMENTS, CONTINUED
JUNE 30, 1997

Fees may be voluntarily reduced to assist the Funds in maintaining
competitive expense ratios. Information regarding these transactions is as
follows for the period ended June 30, 1997:

<TABLE>
<CAPTION>
DIVERSIFIED SPECIAL INCOME
EQUITY EQUITY INCOME EQUITY
FUND FUND FUND FUND
----------- ------- ------- -------
<S> <C> <C> <C> <C>
INVESTMENT ADVISORY FEES:
Annual fee before voluntary fee reductions
(percentage of average net assets)........ 1.10% .80% .55% .80%
ADMINISTRATION FEES:
Annual fee before voluntary fee reductions
(percentage of average net assets)........ .20% .20% .20% .20%
Voluntary fee reductions.................... -- $ 2,171 -- --
12B-1 FEES:
Annual fee before voluntary fee reductions
(percentage of average net assets)........ .25% .25% .25% .25%
Voluntary fee reductions.................... $ 131,653 $52,106 $95,550 $64,714
FUND ACCOUNTING FEES........................ $ 15,798 $ 6,757 $11,464 $ 7,790
TRANSFER AGENT FEES......................... $ 28,892 $22,347 $26,460 $23,797
</TABLE>

5. FEDERAL INCOME TAX INFORMATION (UNAUDITED):

Under current tax law, capital losses realized after October 31 may be
deferred and treated as occuring on the first day of the following fiscal
year. As of June 30, 1997 the Special Equity and Income Funds had deferred
losses of $1,131,589 and $75,294, respectively, which will be treated as
arising on the first day of the fiscal year ending June 30, 1998. At June
30, 1997 the Income Fund has a capital loss carryforward of $93,866 which
is available to offset future capital gains until June 30, 2005.

During the period ended June 30, 1997, the following Funds declared
long-term capital gain distributions in the following amounts:

<TABLE>
<CAPTION>
FUND AMOUNT
---- --------
<S> <C>
Diversified Equity............................................................ $742,374
--------
Special Equity................................................................ $146,202
--------
</TABLE>

Continued

-35-
<PAGE> 36

THE SESSIONS GROUP
1ST SOURCE MONOGRAM FUNDS

NOTES TO FINANCIAL STATEMENTS, CONTINUED
JUNE 30, 1997

The Trust designates the following percentage of distributions eligible for
the dividends received deductions for corporations.

<TABLE>
<CAPTION>
FUND PERCENTAGE
---- ----------
<S> <C>
Diversified Equity......................................... 18.37%
Special Equity............................................. 6.49%
Income Equity.............................................. 28.52%
Income Fund................................................ 3.83%
</TABLE>

6. FINANCIAL INSTRUMENTS:

Investing in financial instruments such as written options involves risk in
excess of the amounts reflected in the Statements of Assets and
Liabilities. The face or contract amounts reflect the extent of the
involvement the Fund have in the particular class of instruments. Risks
associated with these instruments include an imperfect correlation between
the movements in the price of the instruments and the price of the
underlying securities. The Fund enter into these contracts primarily as a
means to hedge against adverse fluctuation in the value of securities.

The following is a summary of written option activity for the period ended
June 30, 1997 by the Income Equity Fund (amounts in thousands):

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNTS
OF CONTRACTS PREMIUMS
------------ ----------
<S> <C> <C>
Balance at beginning of period................................. -- $ --
Option written................................................. 110 11,193
Options closed................................................. -- --
Options exercised.............................................. -- --
--- ----------
Options outstanding at end of period........................... 110 $ 11,193
=== ==========
</TABLE>

<TABLE>
<CAPTION>
SHARES
SUBJECT
TO CONTRACT VALUE
------------ ----------
<S> <C> <C>
Covered Call Options
Options outstanding at end of period consist of:
Electronic Data Systems, $40, August 1997................... 110 $ 33,000
=== ==========
</TABLE>

Continued

-36-
<PAGE> 37

THE SESSIONS GROUP
1ST SOURCE MONOGRAM FUNDS

NOTES TO FINANCIAL STATEMENTS, CONTINUED
JUNE 30, 1997

7. ACQUISITION OF COMMON TRUST FUNDS:

On September 23, 1996, September 20, 1996, September 24, 1996, and
September 25, 1996, the Diversified Equity, Special Equity, Income, and
Income Equity Funds, respectively, acquired all of the assets of the Common
Trust Funds of 1st Source Bank, in a tax-free conversion. The following is
a summary of shares issued, net assets acquired, net asset value per share
and unrealized appreciation (depreciation) as of the respective acquisition
dates:

<TABLE>
<CAPTION>
DIVERSIFIED SPECIAL INCOME
EQUITY EQUITY INCOME EQUITY
FUND FUND FUND FUND
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Shares................................ 6,620,301 2,687,767 4,788,285 3,096,895
Net assets............................ $66,203,008 $26,877,666 $47,882,850 $30,968,953
Net asset value....................... 10.00 10.00 10.00 10.00
Unrealized appreciation
(depreciation)...................... 8,888,125 2,220,445 (900,376) 3,728,143
</TABLE>

Continued

-37-
<PAGE> 38

THE SESSIONS GROUP
1ST SOURCE MONOGRAM FUNDS

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
DIVERSIFIED
EQUITY SPECIAL EQUITY INCOME INCOME EQUITY
---------------- ---------------- ---------------- ----------------
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
ENDED ENDED ENDED ENDED
JUNE 30, 1997(a) JUNE 30, 1997(a) JUNE 30, 1997(a) JUNE 30, 1997(a)
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD....... $ 10.00 $ 10.00 $ 10.00 $ 10.00
-------- -------- -------- --------
INVESTMENT ACTIVITIES
Net investment income.................... (0.01) -- 0.44 0.20
Net realized and unrealized
gains(losses) on investments........... 2.03 (0.10)(d) 0.12 2.32
-------- -------- -------- --------
Total from Investment Activities....... 2.02 (0.10) 0.56 2.52
-------- -------- -------- --------
DISTRIBUTIONS
Net investment income.................... -- -- (0.43) (0.19)
Net realized gains....................... (0.22) -- -- (0.05)
In excess of realized gains.............. -- (0.31) -- --
-------- -------- -------- --------
Total Distributions.................... (0.22) (0.31) (0.43) (0.24)
-------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD............. $ 11.80 $ 9.59 $ 10.13 $ 12.28
-------- -------- -------- --------
Total Return (excludes sales charge)....... 20.42%(b) -1.03%(b) 5.71%(b) 25.58%(b)
RATIOS/SUPPLEMENTAL DATA:
Net Assets, at end of period (000)....... $ 74,990 $ 30,524 $ 54,789 $ 39,196
Ratio of expenses to average net
assets................................. 1.62%(c) 1.39%(c) 1.05%(c) 1.37%(c)
Ratio of net investment income
to average net assets.................. -0.10%(c) 0.05%(c) 5.71%(c) 2.38%(c)
Ratio of expenses to average net
assets*................................ 1.87%(c) 1.65%(c) 1.30%(c) 1.62%(c)
Ratio of net investment income
to average net assets*................. -0.35%(c) -0.21%(c) 5.46%(c) 2.13%(c)
Portfolio Turnover Rate.................. 76.54% 152.81% 118.33% 38.49%
Average Broker Commission Paid........... $ 0.0572(e) $ 0.0941(e) -- $ 0.0988(e)
</TABLE>

- ---------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occured, the ratios would have been as indicated.

(a) Commencement of operations of the Funds began September 23, 1996, September
20, 1996, September 24, 1996, and September 25, 1996 respectively.

(b) Not annualized

(d) The amount shown for a share outstanding throughout the period does not
accord with the change in the aggregate gains and losses in the portfolio of
securities during the period because of the timing of sales and purchases of
Fund shares in relation to fluctuating market values during the period.

(e) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged. Pertains to fund with greater than
10% investments in equity.

See notes to financial statements.

-38-
<PAGE> 39

REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------

To the Shareholders and Trustees of
1st Source Monogram Funds

We have audited the accompanying statements of assets and liabilities of the 1st
Source Monogram Funds (comprising, respectively, the Diversified Equity Fund,
Special Equity Fund, Income Fund and Income Equity Fund), including the
schedules of portfolio investments, as of June 30, 1997, and the related
statements of operations, statements of changes in net assets, and financial
highlights for the period then ended. These financial statements and financial
highlights are the responsibility of 1st Source Monogram Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1997, by correspondence with the custodian and brokers or other auditing
procedures where confirmations from brokers were not received. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective funds comprising the 1st Source Monogram Funds as of June 30,
1997, and the results of their operations, the changes in their net assets and
the financial highlights for the period then ended in conformity with generally
accepted accounting principles.

Coopers & Lybrand L.L.P.

Columbus, Ohio
August 22, 1997

-39-
<PAGE> 40

ANNUAL REPORT

[1st SOURCE MONOGRAM FUNDS(SM) LOGO]

ANNUAL REPORT

JUNE 30, 1997

[1st SOURCE MONOGRAM FUNDS(SM) LOGO]

INVESTMENT ADVISER
1st SOURCE BANK
100 NORTH MICHIGAN STREET
SOUTH BEND, IN 46601

DISTRIBUTOR
BISYS FUND SERVICES
3435 STELZER ROAD
COLUMBUS, OH 43219

FOR ADDITIONAL INFORMATION, CALL:
1-800-766-8938

THIS MATERIAL MUST BE PRECEDED OR
ACCOMPANIED BY A CURRENT PROSPECTUS.

8/97