<PAGE> 1
LETTER FROM THE INVESTMENT ADVISER 1st Source Monogram Funds
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Dear Investor:
We are pleased to present this report for the six months ended September 30,
1999. Over the course of the period, interest rates rose, making the environment
a relatively difficult one -- and yet, one that presented great opportunity for
long-term investors.
A SHORT-LIVED RETURN TO VALUE
As the period opened in early spring, the economy's red-hot growth prompted
concern about inflationary pressures. Interest rates began to edge upward, and
stocks grew considerably more volatile as investors took a very close look at
the valuation of larger cap issues. The word "value" suddenly became more
visible -- and, out of the spotlight for the past several years, mid-cap and
smaller cap value issues suddenly took center stage. The enthusiasm for these
issues was sweet but, unfortunately, short-lived. Within a matter of weeks,
sentiment again focused on the larger cap issues, in general, and larger cap
technology stocks, in particular. Despite their strong fundamentals and
astonishing valuations relative to larger cap issues, value stocks faded back
into the woodwork.
By the end of the summer, however, enthusiasm faded for even the large caps, as
conventional wisdom seemed to indicate that their best days -- and biggest
gains -- were behind them. This, combined with the Federal Reserve Board's (the
Fed) move to increase interest rates, created anxiety and, ultimately, negative
sentiment in the marketplace, and stocks fell back. The situation in the bond
markets was not quite as gloomy. With the feeling that the "shoe had dropped" at
least for the moment, with the Fed's actions, investors' tensions eased a bit,
and bonds staged a comeback. Hedging their bets, however, investors focused on
non-Treasury securities, and Treasuries saw only a few sparks of interest. As a
result, the period overall was a relatively rocky one for many stock and bond
investors.
WHAT IS NEXT?
The question now is, where do we go from here? Obviously, the issue that the
markets are grappling with is the direction of interest rates. With our economy
firing on all cylinders, recent statistics seem to indicate that inflationary
pressures are growing. The Fed has also indicated its willingness to act again
if and when it appears to be necessary. As a result, after a summer of investor
anticipating and then reacting to the Fed's actions, their "interest rate
fretting" is still in full swing.
Of course, if the Fed does take further action, it does not have to make such a
dramatic change that it squeezes the economy into a recession. Clearly, as in
the past, the Fed is aiming for a softer landing. And that, in fact, may be the
result of its actions. The recent increases should cause the economy to slow at
its margins in the coming months. Moreover, to some extent, some of the activity
seen over the past several months may have been due to Y2K concerns. While it
now appears that this may be a non-event, growth numbers may have been distorted
slightly by businesses making preparations over the past two quarters. So, even
without further Fed action, we may see our economy's growth fall back to more
moderate levels in the months ahead.
STOCKS: LOOKING BEYOND THE NIFTY FIFTY
Concerns about interest rates, however, may dominate the market environment for
some time to come -- with earnings sliding to the back burner. As a result, for
value stocks, there may be a longer wait before their strong earnings and solid
fundamentals are recognized. Nonetheless, we believe when the tide does turn,
investors will find there are
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LETTER FROM THE INVESTMENT ADVISER 1st Source Monogram Funds
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many reasonably priced companies whose earnings and business outlooks are very
promising. Moreover, after posting such astounding gains over the past several
years, the fundamental picture for many of the market leaders is not so solid.
In comparison to smaller caps and mid-cap companies whose growth is
accelerating, growth among the large caps is projected to be flat in the months
ahead. As always, however, it is impossible to predict precisely when the tide
will turn. But, given the circumstances, we believe that when it does turn, the
move will be a sustained and powerful one.
BONDS: UNCERTAINTY CREATES VOLATILITY
While we are optimistic about the prospects for bonds over the long-term, the
months ahead could be rocky ones for fixed-income investors.
After several years of benign inflation, many in the marketplace have become
complacent. Yet, recent numbers would seem to indicate that inflationary
pressures are building and this may be more of a factor in the months to come.
Also, emotions play a role in the marketplace -- and while it seems the threat
of any major disruption due to Y2K has diminished considerably, an emotional
subcurrent still runs through the marketplace. In fact, if in the unlikely event
there is a disruption, we would expect to see reactions in both the stock and
bond markets. As a result, until we pass through Y2K, and the direction of both
inflation and interest rates is clearer, we expect the environment in the fixed-
income markets will be a touch on the nervous side.
IN CLOSING. . .
In the pages that follow, you will find interviews with our fund managers
outlining performance over the past year and expectations for the future and
giving, detailed financial information and a schedule of investments for each of
our funds. We urge you to read this material closely.
Finally, we thank you for your continued confidence in us. We look forward to
providing you with superior investment management and to serving your needs now
and in the years ahead. As always, if you have any questions or require any
assistance, please contact your account representative or call the Funds
directly at 1-800-766-8938.
Sincerely,
Ralph C. Shive, CFA
Pascal "Pat" Romano, CFA
Brian A. Bythrow, CFA
NOTICE 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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<PAGE> 3
1st Source Monogram Funds
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INCOME EQUITY FUND
RALPH C. SHIVE, CFA
Q. HOW DID THE FUND PERFORM DURING THE PERIOD?
A. The Fund's total return for the six months ended September 30, 1999, was
3.05% (without sales load).(+) In comparison, the Russell 1000 Value
Index(1) produced a total return of 0.38%, and the Lipper Equity Income
Average(2) produced a total return of 0.02%.
Q. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
A. After sitting on the sidelines throughout much of the past two years,
mid-cap value stocks had a brief moment in the sun in the late spring. Wall
Street decided that international markets were improving; the fundamentals
of our own economy appeared to be strong; and inflation was benign. So, many
of the stocks, particularly some of the cyclicals that had been hammered so
badly in '98, came to the forefront. Manufacturers and chemical companies
also received a flurry of attention. But, it was all short-lived. Before the
summer was over, sentiment shifted back to the large-cap growth stocks, and
enthusiasm for mid-cap and smaller cap stocks wilted.
At the same time, however, interest in those sectors did not vanish
entirely. Throughout the summer, merger, takeover and consolidation activity
in several industries attracted market attention and investors. All in all,
however, it was not enough. Unlike the larger cap growth issues, smaller and
mid-cap stocks just did not have the "zip" or the sheer tonnage apparently
necessary to grab and keep investors' attention.
Q. HOW DID YOU APPLY YOUR INVESTMENT STRATEGY DURING THE PERIOD?
A. When attention shifted to the sector early in the period, we thought that it
might be the beginning of the group's move upward. This was not to
be -- right now. Nonetheless, no market cycle lasts forever, and at some
point, investors' infatuation with the larger cap growth stocks will end.
With this in mind, we did not chase market sentiment, but rather maintained
our focus on value and yield. In comparison to large-cap issues, the values
and yields that the mid-cap sector offered continued to be compelling. In
fact, due to the value that many of these companies now represent -- many in
the range of 8 times earnings versus 27+ for large caps and 100+ for some of
the most popular names like Cisco Systems -- takeover activity was high
during the period. Due to the sheer quality of the portfolio's holdings, it
was not surprising that it benefited.
Q. WHAT IS YOUR MARKET OUTLOOK FOR THE NEXT SIX MONTHS?
A. Given the current uncertainties about the direction of interest rates, the
strength of our economy, Y2K and the high valuations of large-cap growth
stocks, we expect the market to be rather volatile in the months ahead. But
whether or not this will trigger the long-awaited, and now well-deserved,
shift in sentiment to value is impossible to predict. As the evaporation of
interest in the sector in the summer of 1999 demonstrated, the market's
behavior is not always rational. Nonetheless, at some point, we believe
sentiment will shift decisively.
Moreover, when this move does come -- given the sheer quality of the values
available in the mid-cap arena and the fact that many of these stocks have
been in a "stealth bear market" over the past two years and have already
"corrected," -- it may be a sustained and extremely strong one. Having
aggressively capitalized on the environment of the past year, we believe the
portfolio is well positioned for the shift, and we are optimistic about its
long-term prospects.
(+)With the maximum sales load of 5.00%, the Fund's return for the period would
have been -2.11%.
(1)The Russell 1000 Value Index is an unmanaged index that contains 1,000
securities with a less-than-average growth orientation. Securities in this
index generally have lower price-to-book and price/earnings ratios, higher
dividend yields and lower forecasted growth values than the Growth Universe.
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 Fund reflects the deduction of fees for these
value-added services.
(2)The Lipper Equity Income Average consists of funds that seek relatively high
current income and growth of income through investing 60% or more of its
portfolio in equities.
(*)The Fund's portfolio composition is subject to change.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND
NET ASSET VALUE PER SHARE WILL FLUCTUATE, SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST.
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<PAGE> 4
1st Source Monogram Funds
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INCOME FUND
PASCAL "PAT" ROMANO, CFA
Q. HOW DID THE FUND PERFORM DURING THE PERIOD?
A. For the six months ended September 30, 1999, the Fund produced a total
return of -0.07% (without the sales load)(+). In comparison, the Lehman
Brothers Intermediate Government/Corporate Bond Index(1) produced a total
return of 0.52%. Please note, however, this index tracks the performance of
intermediate bonds over a wide quality range. The Fund invests only in
securities rated "A" or better.
Q. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
A. The fixed-income markets took investors on a roller-coaster ride during the
six months ended September 30, 1999. At the period's start, the Fed
tightened short-term interest rates and, even more disconcerting to
investors, indicated its willingness to move again if the economy did not
show clear evidence of slowing. As a result, investors spent much of the
second half of the period on edge, waiting and wondering when or if the Fed
would do more.
As the period drew to a close, however, tensions seem to ease off a bit.
Non-Treasury securities rallied but Treasuries, considered pure interest
rate plays, moved only slightly. Consequently, the period was a relatively
rocky one for fixed-income investors, in general, and for more conservative
investors concentrated in higher quality issues, in particular. For the most
part, returns were negative.
Q. HOW DID YOU APPLY YOUR INVESTMENT STRATEGY DURING THE PERIOD?
A. Given the uncertainty that dominated the environment, we approached the
markets cautiously. Refusing to compromise quality in an effort to "trade
the markets," turnover was minimal. Moreover, given our focus on
high-quality securities, the portfolio was relatively overweighted in
Treasuries. As a result, the portfolio's participation in the brief rally in
the closing weeks of the period was somewhat limited. Due to this, the fund
fell slightly short of its benchmark for the period. But, given the somewhat
difficult environment and emotional undercurrents in the marketplace
pertaining to Y2K, we feel that caution was well warranted.
Q. WHAT IS YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. We are somewhat apprehensive about the markets in the months ahead. Looking
at numbers like total U.S. compensation, a number that includes stock
options as well as some other numbers not included in general wage
statistics, it is clear that wages are rising now. This, coupled with other
recently released numbers, indicates that inflation may, in fact, be more of
a factor than many people realize. Also, emotional Y2K-related subcurrents
are still present in the marketplace. While it appears we will not
experience any major disruptions, no one can absolutely predict that will be
the case -- which adds elements of uncertainty and, in turn, nervousness to
the environment.
Consequently, while we are optimistic about the market's prospects in the
long term, the marketplace may be somewhat volatile in the months ahead. We
continue to maintain our cautious stance and the portfolio's high-quality
standards. Moreover, in recent weeks we have worked to bring the portfolio's
average maturity in line with the industry benchmark for funds of this type.
As a result, at the period's end, the average credit quality of the
portfolio's holdings was (AA), and the average maturity was (4.1) years.
(+)With the maximum sales charge of 4.00%, the Fund's return for the period
would have been -4.10%.
(1)The Lehman Brothers Intermediate Government/Corporate Bond Index is an
unmanaged index considered to be representative of the performance of
government and corporate bonds with maturities of less than ten years. 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 Fund reflects the deduction of fees for these value-added
services.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND
NET ASSET VALUE PER SHARE WILL FLUCTUATE, SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST.
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<PAGE> 5
1st Source Monogram Funds
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SPECIAL EQUITY FUND(+)
BRIAN A. BYTHROW, CFA
Q. HOW DID THE FUND PERFORM DURING THE PERIOD?
A. For the six months ended September 30, 1999, the Fund produced a total
return of -0.33% (without sales load)(++) versus a return of 8.25% over the
same period for the Russell 2000 Index.(1)
Q. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
A. The high valuations of large-cap issues and rising interest rates prompted
investors to take a look at smaller cap stocks. What they found was very
encouraging -- valuations were very attractive and the smaller caps offered
relatively greater fundamental strength and earnings growth than many of the
large-cap stocks. But, unfortunately, what they did not have were well-known
names or "pizzazz," two factors that still counted a great deal in the
environment of the period. As a result, as the market calmed in early
summer, the small caps again receded into the shadows, and the larger issues
rebounded. Nonetheless, the bump last spring helped the performance of the
sector overall for the period. Rather than the type of underperformance the
sector has turned in over the past several years, small caps lagged overall
benchmarks only slightly.
Q. HOW DID YOU APPLY YOUR INVESTMENT STRATEGY DURING THE PERIOD?
A. Throughout the period, the Fund was overweighted in telecommunications,
micro-chip producers, radio and wireless stocks. Those sectors did well in
an environment that favored new technologies. But the Fund did not hold
Internet stocks -- the market's particular favorites in the new technology
arena over the past two years. Moreover, this was also an environment that
treated companies badly that did not meet expectations -- such as missing
their estimates by even a small margin. Small-cap companies, regardless of
any future prospects, were treated particularly hard. It was not unusual to
see a stock's value cut in half for missing its number by one or two cents.
Consequently, while the Fund did hold a number of winners in the new
technology sectors, their performance was not enough to compensate for the
lapse that some of our other holdings presented. As a result, the Fund
lagged its benchmark.
Q. WHAT IS YOUR OUTLOOK FOR SMALL CAPS IN THE SIX MONTHS AHEAD?
A. Clearly, the marketplace is nervous about the direction of interest rates.
Y2K also adds an element of uncertainty -- and one that may prompt investors
to seek the comfort of the best-known and most liquid stocks over the
near-term. After year-end, however, the situation may be considerably
different. Globally, the environment is improving, and stock markets are
rebounding. Even more encouraging is the fact that small-cap markets abroad
are showing strong signs of life. In Japan, for instance, many small caps
are now up almost 200% over the start of the year. Consequently, looking
beyond the immediate future, we believe the prospects for small caps are
very bright. Moreover, at the period's end, approximately 30% of the Fund's
assets were held in cash -- putting the Fund in position to capitalize on
any buying opportunities the short-term, choppy environment creates.(*)
(+)Small-capitalization funds typically carry additional risks since smaller
companies generally have a higher risk of failure. Historically, smaller
companies' stocks have experienced a grater degree of market volatility than
average.
(++)With the maximum sales charge of 5.00%, the Fund's return for period would
have been -5.28%.
(1)The Russell 2000 Index is an unmanaged index that 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 Fund reflects the deduction of fees for these value-added
services.
(*)The Fund's portfolio composition is subject to change.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND
NET ASSET VALUE PER SHARE WILL FLUCTUATE, SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST.
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<PAGE> 6
1st Source Monogram Funds
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DIVERSIFIED EQUITY FUND
The Diversified Equity Fund is a multi-style, multi-manager portfolio with three
subadvisors representing the sector rotation, value and growth styles. The
following interview is with portfolio managers John Truschel of Standish, Ayer &
Wood (blending value and growth), Robert Marcin of Miller Anderson & Sherrerd
LLP (value) and Pam Czekanski of Loomis Sayles & Company LP (growth).
Q. HOW DID THE FUND PERFORM DURING THE PERIOD?
A. For the six months ended September 30, 1999, the Fund's total return was
-1.24% (without sales load).(+) Over the same time period, the S&P 500
Index(1) produced a total return of 0.37%.
Q. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
A. John Truschel, Standish, Ayer & Wood:
Over the course of the period, enthusiasm for "growth at any price" seemed
to diminish a bit. As a result, we saw more interest in stocks offering
investors "growth at a reasonable price" than we have seen in some time. In
this environment, several of the portfolio's holdings did well, among them
were Sun Microsystems (1.88% of the Fund's portfolio), Amgen (0.57%), IBM
(1.52%) and Intel (1.79%). At the same time, sentiment did not shift so
radically that valuation rose to the forefront and value stocks took the
lead. With the exception of a few short weeks in spring, investors favored
growth over the course of the period. Nonetheless, the cracks seem to be
appearing.(*)
A. Robert Marcin, Miller Anderson & Sherrerd:
The period was another disappointing one for the low price to earnings
universe, as the market continued to favor growth. Indeed, with the
exception of a few short weeks of disenchantment in early spring, many
market favorites appeared to be virtually bulletproof throughout the period.
Ironically, however, as their stock prices languished, many low P/E
companies flourished in the economic environment of the period and grew
stronger. Nonetheless, these companies experienced difficulty attracting
attention, as investors continued to "irrationally dismiss" anything that
was not conceptually appealing.
A. Pam Czekanski, Loomis Sayles & Company:
Concerns about inflation and interest rates, however, created a relatively
volatile marketplace during the period. Nonetheless, with only a minor
sputter in the spring, growth stocks in general, and technology stocks in
particular, drove the market. Focused on growth and with sizable positions
in the technology and technology-related sectors, the portfolio benefited
handsomely. The performance of Sun Microsystems was particularly notable.
Over the course of the six months ended September 30, 1999, it gained
approximately 43%. EMC Corp. (0.96%) and PE BioSystems (0.72%) also posted
very strong gains.(*)
Q. HOW DID YOU APPLY YOUR INVESTMENT STRATEGY DURING THE PERIOD?
A. John Truschel, Standish, Ayer & Wood:
Throughout the period, we continued to seek out and invest in companies with
reasonable valuations and solid growth prospects. Because these stocks have
been out of favor for some time now, we found many such opportunities. In
early spring, it looked as though the market would reward our efforts, but
after a brief flurry of interest, investors again focused on the larger cap
issues. Nonetheless, we stood strong and maintained our focus. As the period
drew to a close, the average holding in our portfolio was valued at
approximately 20 times earnings versus the market average of 27 times
earnings and was well-positioned to capitalize on any recognition of the
upside potential of stocks beyond the small circle of market favorites.
(+)With the maximum sales charge of 5.00%, the Fund's return for the period
would have been -6.16%.
(1)The S&P 500 Stock Index is an unmanaged index that generally reflects the
performance of the U.S. stock market as a whole. 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 Fund
reflects the deduction of fees for these value-added services.
(*)The Fund's portfolio composition is subject to change.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND
NET ASSET VALUE PER SHARE WILL FLUCTUATE, SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST.
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<PAGE> 7
1st Source Monogram Funds
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A. Robert Marcin, Miller Anderson & Sherrerd:
Laboring in the shadows of the large-cap growth issues for the better part
of three years now, the low P/E universe offered investors astonishing
values during the period. Throughout, we maintained our focus on seeking out
those companies offering the greatest potential -- those with solid earnings
growth, strong fundamentals and cheap valuations. As a result, as
discouraging as it was not to have these efforts rewarded by the market, we
were heartened by the fact that the portfolio is very well-positioned for
the day the market shifts its sentiments.
A. Pam Czekanski, Loomis Sayles & Company:
Clearly, investor sentiment will broaden beyond a narrow group of technology
issues sooner rather than later. Consequently, with regard to our holdings
that lagged the technology sector, we stood strong and continue to do so.
Moreover, throughout the period, we focused our efforts on seeking out those
companies that will likely deliver in terms of revenue growth and those we
feel are likely to benefit from an improving global economy. Therefore,
positions were established in McDonalds (1.15%) and Proctor & Gamble
(1.27%). Merrill Lynch (0.75%) and American Express (1.02%) were also added
to the portfolio. Not only will these two companies benefit as markets
worldwide recover, both are at the forefront of change in the financial
services industry.(*)
Q. WHAT IS YOUR OUTLOOK FOR THE SIX MONTHS AHEAD?
A. John Truschel, Standish, Ayer & Wood:
At this point, with the average stock selling at approximately 27 times
earnings, the market has assumed nothing but good news. Chief among the type
of good news they expect is low interest rates -- which, as recent events
have shown, is not a sure thing. As a result, the market could be
vulnerable, and it is certain to be volatile in the coming months. Already
priced at reasonable valuations, however, the portfolio's holdings should be
less vulnerable, and less volatile, than the highest flying issues, which
could spark more interest in them in the coming months.
A. Robert Marcin, Miller Anderson & Sherrerd:
To some extent, the market's infatuation with well-known, large-cap stocks
has been due to liquidity concerns moving into Y2K. After we move past this
moment, however, we expect to see a "Millenium Melt-up," as investor
sentiment broadens to include the larger majority of reasonably priced,
high-quality companies. Groups recently hammered, such as banks,
health-care, HMO and consumer durable stocks, should do particularly well on
the rebound. Also, as sentiment moves beyond technology and Internet stocks,
we expect investors to take special note of companies like Liz Claiborne and
Bank One that have been quietly building franchises. While their stocks have
languished, they are now among the leaders in their industries.
A. Pam Czekanski, Loomis Sayles & Company:
We are optimistic about the market's prospects in the year ahead. But, after
four straight years of double-digit gains, we expect the market to post more
moderate gains. Also, given the current valuation gap between growth and
value stocks, renewed interest in value stocks would not be at all
surprising. In short, we believe the environment will be more selective
going forward. With this in mind, we have focused our efforts on finding
companies that can very likely deliver results. Moreover, with competition
growing more intense in industries across the spectrum, we are looking for
companies that will not only be survivors, but have the potential to be the
leaders of their industries as well.
(*)The Fund's portfolio composition is subject to change.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND
NET ASSET VALUE PER SHARE WILL FLUCTUATE, SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST.
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<PAGE> 8
TABLE OF CONTENTS
Statements of Assets and Liabilities
PAGE 9
Statements of Operations
PAGE 10
Statements of Changes in Net Assets
PAGE 12
Schedules of Portfolio Investments
PAGE 14
Notes to Financial Statements
PAGE 26
Financial Highlights
PAGE 30
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<PAGE> 9
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
INCOME DIVERSIFIED SPECIAL
EQUITY EQUITY EQUITY INCOME
FUND FUND FUND FUND
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value (cost $42,484,016;
$68,576,900; $16,140,007; and $64,187,135
respectively)............................... $44,630,486 $73,351,575 $17,973,315 $61,605,679
Repurchase agreements, at cost................ 1,382,458 3,245,054 7,512,985 791,524
----------- ----------- ----------- -----------
Total Investments....................... 46,012,944 76,596,629 25,486,300 62,397,203
Interest and dividends receivable............. 134,663 56,723 22,560 1,236,782
Receivables from brokers for investments
sold........................................ -- 140,312 -- --
Unamortized organization costs................ 5,141 8,751 4,889 7,379
Prepaid expenses and other assets............. 7,068 12,427 4,503 8,846
----------- ----------- ----------- -----------
Total Assets............................ 46,159,816 76,814,842 25,518,252 63,650,210
----------- ----------- ----------- -----------
LIABILITIES:
Payable for investments purchased............. -- 1,009,778 -- --
Variation margin payable...................... -- -- 26,798 --
Accrued expenses and other payables:
Investment advisory fees.................. 31,109 65,150 17,237 28,663
Administration fees....................... 1,005 1,641 556 1,390
Accounting fees........................... 2,618 246 83 613
Other..................................... 22,941 43,396 14,486 31,708
----------- ----------- ----------- -----------
Total Liabilities....................... 57,673 1,120,211 59,160 62,374
----------- ----------- ----------- -----------
Net Assets.............................. $46,102,143 $75,694,631 $25,459,092 $63,587,836
=========== =========== =========== ===========
NET ASSETS:
Capital....................................... $39,056,145 $58,436,721 $25,197,161 $66,938,738
Undistributed (distributions in excess of) net
investment income........................... 12,557 (138,912) (15,228) 19,695
Net unrealized appreciation (depreciation) on
investments................................. 2,146,470 4,774,675 1,833,308 (2,581,456)
Accumulated undistributed net realized gains
(losses) on investment transactions......... 4,886,971 12,622,147 (1,556,149) (789,141)
----------- ----------- ----------- -----------
Net Assets.............................. $46,102,143 $75,694,631 $25,459,092 $63,587,836
=========== =========== =========== ===========
Outstanding units of beneficial interest
(shares).................................... 4,110,189 6,805,526 2,783,218 6,557,251
=========== =========== =========== ===========
Net asset value -- redemption price per
share....................................... $ 11.22 $ 11.12 $ 9.15 $ 9.70
=========== =========== =========== ===========
Maximum Sales Charge.......................... 5.00% 5.00% 5.00% 4.00%
=========== =========== =========== ===========
Maximum Offering Price (NAV/(1-Maximum Sales
Charge) of net asset value adjusted to
nearest cent) per share..................... $ 11.81 $ 11.71 $ 9.63 $ 10.10
=========== =========== =========== ===========
</TABLE>
See notes to financial statements.
-9-
<PAGE> 10
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
INCOME EQUITY FUND DIVERSIFIED EQUITY FUND
------------------- ------------------------
SIX MONTHS SIX MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
1999 1999
------------------- ------------------------
<S> <C> <C>
INVESTMENT INCOME:
Interest income....................................... $ 170,268 $ 52,104
Dividend income....................................... 603,029 384,359
---------- ----------
Total Income..................................... 773,297 436,463
---------- ----------
EXPENSES:
Investment advisory fees.............................. 203,253 411,555
Administration fees................................... 50,813 83,143
12b-1 fees............................................ 63,691 104,213
Transfer agent fees................................... 13,363 14,283
Accounting fees....................................... 12,235 15,121
Custodian fees........................................ 2,978 15,331
Other................................................. 22,902 35,781
---------- ----------
Total Expenses................................... 369,235 679,427
Less: expenses voluntarily reduced............... (63,691) (104,213)
---------- ----------
Net Expenses.......................................... 305,544 575,214
---------- ----------
Net Investment Income (Loss).......................... 467,753 (138,751)
---------- ----------
REALIZED/UNREALIZED GAINS
(LOSSES) ON INVESTMENTS:
Net realized gains (losses) on investment
transactions........................................ 3,995,597 3,767,043
Change in unrealized appreciation/depreciation on
investments......................................... (2,508,735) (4,102,557)
---------- ----------
Net realized/unrealized gains (losses) on
investments......................................... 1,486,862 (335,514)
---------- ----------
Change in net assets resulting from operations........ $1,954,615 $ (474,265)
========== ==========
</TABLE>
See notes to financial statements.
-10-
<PAGE> 11
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
SPECIAL EQUITY FUND INCOME FUND
------------------- -------------------
SIX MONTHS SIX MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
1999 1999
------------------- -------------------
<S> <C> <C>
INVESTMENT INCOME:
Interest income.......................................... $ 107,105 $2,149,237
Dividend income.......................................... 55,170 --
---------- ----------
Total Income........................................ 162,275 2,149,237
---------- ----------
EXPENSES:
Investment advisory fees................................. 113,514 180,539
Administration fees...................................... 28,379 65,651
12b-1 fees............................................... 35,570 82,288
Transfer agent fees...................................... 10,485 8,684
Accounting fees.......................................... 6,424 11,446
Custodian fees........................................... 4,910 4,607
Other.................................................... 13,407 27,947
---------- ----------
Total Expenses...................................... 212,689 381,162
Less: expenses voluntarily reduced.................. (35,570) (82,288)
---------- ----------
Net Expenses............................................. 177,119 298,874
---------- ----------
Net Investment Income (Loss)............................. (14,844) 1,850,363
---------- ----------
REALIZED/UNREALIZED GAINS
(LOSSES) ON INVESTMENTS:
Net realized gains (losses) on investment transactions... (1,009,813) (336,476)
Change in unrealized appreciation/depreciation on
investments............................................ 1,133,897 (1,606,085)
---------- ----------
Net realized/unrealized gains (losses) on investments.... 124,084 (1,942,561)
---------- ----------
Change in net assets resulting from operations........... $ 109,240 $ (92,198)
========== ==========
</TABLE>
See notes to financial statements.
-11-
<PAGE> 12
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INCOME EQUITY FUND DIVERSIFIED EQUITY FUND
---------------------------------------------- -------------------------------------------
SIX MONTHS FOR YEAR SIX MONTHS FOR YEAR
ENDED PERIOD ENDED ENDED ENDED PERIOD ENDED ENDED
SEPTEMBER 30, MARCH 31, JUNE 30, SEPTEMBER 30, MARCH 31, JUNE 30,
1999(b) 1999(a) 1998 1999(b) 1999(a) 1998
---------------- ------------ ------------ ------------- ------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment
income(loss).............. $ 467,753 $ 848,483 $ 1,011,118 $ (138,751) $ (157,786) $ (161,686)
Net realized gains (losses)
on investment
transactions.............. 3,995,597 1,989,853 6,789,017 3,767,043 12,914,962 13,166,299
Net change in unrealized
appreciation/depreciation
on investments............ (2,508,735) (3,021,716) (415,826) (4,102,557) (13,542,991) 8,399,708
------------ ------------ ------------ ------------ ------------ ------------
Change in net assets resulting
from operations............. 1,954,615 (183,380) 7,384,309 (474,265) (785,815) 21,404,321
------------ ------------ ------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment
income.................... (510,990) (859,046) (985,708) -- -- --
From net realized gains on
investments............... -- (5,549,465) (5,026,674) -- (13,464,080) (9,785,732)
------------ ------------ ------------ ------------ ------------ ------------
Change in net assets from
shareholder distributions... (510,990) (6,408,511) (6,012,382) -- (13,464,080) (9,785,732)
------------ ------------ ------------ ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued.................... 6,129,550 15,400,045 16,097,747 7,873,880 19,352,100 20,560,375
Dividends reinvested........ 497,607 6,124,576 5,820,966 -- 13,109,770 9,643,385
Cost of shares redeemed..... (12,871,483) (16,480,278) (10,035,797) (17,066,049) (30,934,128) (18,728,640)
------------ ------------ ------------ ------------ ------------ ------------
Change in net assets from
capital transactions........ (6,244,326) 5,044,343 11,882,916 (9,192,169) 1,527,742 11,475,120
------------ ------------ ------------ ------------ ------------ ------------
Change in net assets.......... (4,800,701) (1,547,548) 13,254,843 (9,666,434) (12,722,153) 23,093,709
NET ASSETS:
Beginning of period......... 50,902,844 52,450,392 39,195,549 85,361,065 98,083,218 74,989,509
------------ ------------ ------------ ------------ ------------ ------------
End of period............... $ 46,102,143 $50,902,844 $ 52,450,392 $ 75,694,631 $85,361,065 $ 98,083,218
============ ============ ============ ============ ============ ============
SHARE TRANSACTIONS:
Issued...................... 509,704 1,327,864 1,270,185 671,710 1,610,936 1,643,723
Reinvested.................. 41,654 572,233 497,282 -- 1,196,147 873,495
Redeemed.................... (1,069,858) (1,435,697) (794,106) (1,445,271) (2,597,527) (1,502,834)
------------ ------------ ------------ ------------ ------------ ------------
Change in shares.............. (518,500) 464,400 973,361 (773,561) 209,556 1,014,384
============ ============ ============ ============ ============ ============
</TABLE>
- ---------------
(a) For the period from July 1, 1998 through March 31, 1999.
(b) For the period from April 1, 1999 through September 30, 1999.
See notes to financial statements.
-12-
<PAGE> 13
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SPECIAL EQUITY FUND INCOME FUND
------------------------------------------ ------------------------------------------
SIX MONTHS SIX MONTHS
ENDED FOR YEAR ENDED FOR YEAR
SEPTEMBER PERIOD ENDED ENDED SEPTEMBER PERIOD ENDED ENDED
30, MARCH 31, JUNE 30, 30, MARCH 31, JUNE 30,
1999(b) 1999(a) 1998 1999(b) 1999(a) 1998
---------- ------------ ------------ ------------ ------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income
(loss).................... $ (14,844) $ 5,119 $ 12,948 $ 1,850,363 $ 2,588,937 $ 3,583,038
Net realized gains (losses)
on investment
transactions.............. (1,009,813) 1,757,252 (796,672) (336,476) 624,093 725,350
Net change in unrealized
appreciation/depreciation
on investments............ 1,133,897 (3,177,218) 1,351,263 (1,606,085) (1,327,173) 461,944
------------ ------------ ------------ ------------ ------------ ------------
Change in net assets resulting
from operations............. 109,240 (1,414,847) 567,539 (92,198) 1,885,857 4,770,332
------------ ------------ ------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment
income.................... (299) (6,474) (15,078) (1,877,357) (2,590,721) (3,582,178)
From tax return of
capital................... -- (31,820) -- -- -- --
From net realized gains on
investments............... -- -- (452,546) -- (1,133,720) --
In excess of net realized
gains on investments...... -- -- -- -- (452,672) --
------------ ------------ ------------ ------------ ------------ ------------
Change in net assets from
shareholder distributions... (299) (38,294) (467,624) (1,877,357) (4,177,113) (3,582,178)
------------ ------------ ------------ ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued.................... 4,440,578 9,738,376 15,510,945 9,265,793 19,281,043 17,944,091
Dividends reinvested........ 294 36,604 450,173 1,849,448 4,012,826 3,466,908
Cost of shares redeemed..... (10,036,353) (12,817,329) (11,144,152) (12,808,388) (19,727,161) (11,412,595)
------------ ------------ ------------ ------------ ------------ ------------
Change in net assets from
capital transactions........ (5,595,481) (3,042,349) 4,816,966 (1,693,147) 3,566,708 9,998,404
------------ ------------ ------------ ------------ ------------ ------------
Change in net assets.......... (5,486,540) (4,495,490) 4,916,881 (3,662,702) 1,275,452 11,186,558
NET ASSETS:
Beginning of period......... 30,945,632 35,441,122 30,524,241 67,250,538 65,975,086 54,788,528
------------ ------------ ------------ ------------ ------------ ------------
End of period............... $ 25,459,092 $ 30,945,632 $ 35,441,122 $ 63,587,836 $ 67,250,538 $ 65,975,086
============ ============ ============ ============ ============ ============
SHARE TRANSACTIONS:
Issued...................... 480,557 1,092,574 1,539,687 940,846 1,868,593 1,739,371
Reinvested.................. 32 4,411 47,382 189,329 392,040 337,542
Redeemed.................... (1,068,084) (1,407,159) (1,087,999) (1,307,689) (1,904,079) (1,106,996)
------------ ------------ ------------ ------------ ------------ ------------
Change in shares.............. (587,495) (310,174) 499,070 (177,514) 356,554 969,917
============ ============ ============ ============ ============ ============
</TABLE>
- ---------------
(a) For the period from July 1, 1998 through March 31, 1999.
(b) For the period from April 1, 1999 through September 30, 1999.
See notes to financial statements.
-13-
<PAGE> 14
THE COVENTRY GROUP
1ST SOURCE MONOGRAM INCOME EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ------------------------------- -----------
<C> <S> <C>
COMMON STOCKS (85.7%):
Automotive (1.2%):
10,000 General Motors Corp. -- Class H
(b).......................... $ 572,500
-----------
Automotive Parts (3.5%):
19,000 Dana Corp. .................... 705,375
31,000 Simpson Industries, Inc. ...... 342,938
21,000 Superior Industries
International................ 588,000
-----------
1,636,313
-----------
Banking (2.8%):
18,000 National City Corp. ........... 480,375
19,434 Union Planters Corp. .......... 791,936
-----------
1,272,311
-----------
Building Materials (1.0%):
9,000 Southdown, Inc. ............... 481,500
-----------
Chemicals (5.5%):
7,000 Dow Chemical Co. .............. 795,374
19,000 Hercules, Inc. ................ 543,875
50,000 M.A. Hanna Co. ................ 568,750
24,000 The Lubrizol Corp. ............ 616,500
-----------
2,524,499
-----------
Communications Equipment (1.1%):
18,000 Harris Corp. .................. 497,250
-----------
Computer Services (3.1%):
27,000 Diebold, Inc. ................. 624,375
15,000 Electronic Data Systems
Corp. ....................... 794,063
-----------
1,418,438
-----------
Computers (2.3%):
11,500 Hewlett-Packard Co. ........... 1,058,000
-----------
Consumer Goods & Services (0.9%):
17,000 American Greetings Corp. ...... 437,750
-----------
Electronic Components (3.8%):
17,000 Dallas Semiconductor Corp. .... 908,437
19,000 Parker-Hannifin Corp. ......... 851,438
-----------
1,759,875
-----------
Energy (1.6%):
27,000 Reliant Energy, Inc. .......... 730,688
-----------
Financial Services (0.7%):
7,000 H & R Block, Inc. ............. 304,063
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Food & Related (3.9%):
16,600 Quaker Oats Co. ............... $ 1,027,125
27,100 Ralston-Ralston Purina Group... 753,719
-----------
1,780,844
-----------
Forest & Paper Products (1.9%):
15,000 Weyerhaeuser Co. .............. 864,375
-----------
Insurance (3.6%):
22,000 Conseco, Inc. ................. 424,875
16,000 Lincoln National Corp. ........ 601,000
22,412 The St. Paul Companies,
Inc. ........................ 616,330
-----------
1,642,205
-----------
Investment Companies (2.3%):
23,000 Conning Corp. ................. 264,500
35,100 Waddell & Reed Financial,
Inc. ........................ 778,781
-----------
1,043,281
-----------
Machinery -- Diversified (5.7%):
60,000 AGCO Corp. .................... 780,000
60,000 Esterline Technologies Corp.
(b).......................... 944,999
19,000 W.W. Grainger, Inc. ........... 913,188
-----------
2,638,187
-----------
Manufacturing (1.6%):
24,000 Trinity Industries, Inc. ...... 741,000
-----------
Medical -- Instruments/Products (0.9%):
14,000 Mckesson HBOC, Inc. ........... 406,000
-----------
Medical -- Wholesale Drug Distribution
(1.1%):
50,000 Bergen Brunswig Corp. Class
A............................ 518,750
-----------
Metals -- Diversified (1.1%):
35,000 Brush Wellman, Inc. ........... 514,063
-----------
Motor Vehicles (1.6%):
15,000 Ford Motor Co. ................ 752,813
-----------
Office Equipment & Services (1.7%):
42,000 A.H. Belo Corp. -- Series A.... 803,250
-----------
Oil -- Integrated Companies (2.5%):
12,000 Phillips Petroleum Co. ........ 585,000
20,000 USX -- Marathon Group Corp. ... 585,000
-----------
1,170,000
-----------
Paint & Related Products (1.5%):
33,000 The Sherwin-Williams Co. ...... 690,938
-----------
</TABLE>
Continued
-14-
<PAGE> 15
THE COVENTRY GROUP
1ST SOURCE MONOGRAM INCOME EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Pharmaceuticals (5.3%):
16,000 Abbott Laboratories............ $ 588,000
16,000 Bristol-Myers Squibb Co. ...... 1,079,999
12,000 Merck & Co., Inc. ............. 777,750
-----------
2,445,749
-----------
Publishing (2.7%):
25,000 Tribune Co. ................... 1,243,750
-----------
Real Estate Investment Trust (4.8%):
53,000 Burnham Pacific Properties,
Inc. ........................ 559,812
40,000 Captec Net Lease Realty,
Inc. ........................ 402,500
12,000 Hospitality Properties Trust... 264,750
31,000 Prentiss Properties Trust...... 687,812
34,000 Thornburg Mortgage Asset
Corp. ....................... 299,625
-----------
2,214,499
-----------
Retail (4.4%):
27,000 Claires Stores, Inc. .......... 447,187
20,000 Dillards, Inc. Class A......... 406,250
35,000 K-Mart Corp. (b)............... 409,063
25,000 Longs Drug Stores, Inc. ....... 746,874
-----------
2,009,374
-----------
Steel (1.4%):
26,800 Carpenter Technology Corp. .... 656,600
-----------
Tires & Rubber Products (1.3%):
33,000 Cooper Tire & Rubber Co. ...... 581,625
-----------
Transportation -- Air (1.5%):
13,000 AMR Corp. Del (b).............. 708,500
-----------
Transportation -- Misc. (1.3%):
29,000 Ryder System, Inc. ............ 590,875
-----------
Utilities -- Electric (4.2%):
19,000 American Electric Power Co. ... 648,375
34,000 Montana Power Co. ............. 1,034,875
10,000 Potomac Electric Power Co. .... 254,375
-----------
1,937,625
-----------
Utilities -- Telephone (1.9%):
15,000 U S WEST, Inc. ................ 855,938
-----------
Total Common Stocks............ 39,503,428
-----------
PREFERRED STOCKS (0.7%):
Electrical & Electronic (0.7%):
11,000 Lernout & Hauspie Capital Trust
I............................ 341,000
-----------
Total Preferred Stocks......... 341,000
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ------------------------------- -----------
<C> <S> <C>
CONVERTIBLE BONDS (10.4%):
Computer Software (1.0%):
500,000 Wind River Systems, 5.0%,
8/1/02, Callable 8/2/00 @
102.00....................... $ 453,750
-----------
Computers (2.3%):
1,000,000 Data General Corp., 6.00%,
5/15/04, Callable 5/18/00
@ 103.43..................... 1,038,750
-----------
Health & Personal Care (1.7%):
800,000 Sunrise Assisted Living, 5.50%,
06/15/02, Callable 6/15/00
@ 102.20..................... 772,000
-----------
Industrial Goods & Services (1.6%):
778,000 Integrated Device Technology,
5.50%, 6/1/02, Callable
6/1/00 @ 100.00.............. 736,183
-----------
Medical -- Wholesale Drug Distribution
(1.4%):
400,000 Fuisz Technologies Ltd., 7.00%,
10/15/04, Callable 10/19/00
@ 104.00..................... 343,000
400,000 Fuisz Technologies Ltd., 7.00%,
10/15/04, Callable 10/19/00
@ 104.00 (c)................. 343,000
-----------
686,000
-----------
Oil & Gas Services (1.3%):
1,000,000 Halter Marine, 4.50%, 9/15/04,
Callable 9/15/00 @ 102.57.... 606,250
-----------
Telecommunications (1.1%):
500,000 Level 3 Communications, Inc.,
6.00%, 9/15/09,.............. 493,125
-----------
Total Convertible Bonds........ 4,786,058
-----------
REPURCHASE AGREEMENT (3.0%):
1,382,458 Fifth Third Bank Repurchase
Agreement, 9/30/99, 4.78%,
matures 10/1/99,
(Collateralized by $1,411,000
FHLM 6.00%, 9/1/13, market
value = $1,411,000).......... 1,382,458
-----------
Total Repurchase Agreement..... 1,382,458
-----------
Total (Cost $43,866,474) (a)... $46,012,944
===========
</TABLE>
Continued
-15-
<PAGE> 16
THE COVENTRY GROUP
1ST SOURCE MONOGRAM INCOME EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
- ---------
Percentages indicated are based on net assets of $46,102,143.
(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......................... $ 7,227,321
Unrealized depreciation......................... (5,080,851)
-----------
Net unrealized appreciation..................... $ 2,146,470
===========
</TABLE>
(b) Represents non-income producing securities.
(c) 144A Security which is restricted as to resale to institutional investors.
See notes to financial statements.
-16-
<PAGE> 17
THE COVENTRY GROUP
1ST SOURCE MONOGRAM DIVERSIFIED EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS (96.0%):
Advertising (1.5%):
14,700 Omnicom Group, Inc. .......... $ 1,164,056
-----------
Apparel (0.5%):
11,400 V.P. Corp. ................... 353,400
-----------
Apparel Manufacturers (1.4%):
16,500 Jones Apparel Group, Inc.
(b)......................... 474,375
8,900 Liz Claiborne, Inc. .......... 275,900
10,200 Tommy Hilfiger Corp. (b)...... 287,513
-----------
1,037,788
-----------
Automotive Parts (0.9%):
6,200 Dana Corp. ................... 230,175
2,300 Eaton Corp. .................. 198,519
4,800 TRW, Inc. .................... 243,775
-----------
672,469
-----------
Banking (4.3%):
16,450 AmSouth Bancorporation........ 385,547
4,400 Bank Of America Corp. ........ 245,025
4,700 Bank One Corp. ............... 163,619
3,100 BankBoston Corp. ............. 134,463
7,500 The Chase Manhattan Corp. .... 565,312
9,200 Cullen/Frost Bankers, Inc. ... 230,000
3,110 First Union Corp. ............ 110,599
10,200 Fleet Financial Group,
Inc. ....................... 373,575
5,800 Keycorp A..................... 149,713
7,700 North Fork Bancorp., Inc. .... 150,150
12,300 PNC Bank Corp. ............... 648,055
3,600 Southtrust Corp. ............. 129,150
-----------
3,285,208
-----------
Building -- Residential/Commercial (0.2%):
5,900 Kaufman & Broad Home Corp. ... 121,688
-----------
Building Materials (0.7%):
4,700 Lafarge Corp. ................ 150,988
6,700 Owens Corning................. 145,306
4,400 Southdown, Inc. .............. 235,400
-----------
531,694
-----------
Chemicals (1.5%):
500 Eastman Chemical Co. ......... 20,000
12,500 Englehard Corp. .............. 227,344
3,600 FMC Corp. (b)................. 173,700
8,900 IMC Global, Inc. ............. 129,606
7,800 Solutia, Inc. ................ 139,425
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Chemicals, continued:
9,900 The Lubrizol Corp. ........... $ 254,306
9,900 W.R. Grace & Co. (b).......... 159,019
-----------
1,103,400
-----------
Communications Equipment (1.3%):
30,600 Concord EFS, Inc. (b) ........ 631,125
9,450 Symbol Technologies, Inc. .... 317,756
-----------
948,881
-----------
Computer Software (3.2%):
6,700 BMC Software, Inc. ........... 479,469
7,200 Computer Associates
International, Inc. ........ 441,000
5,500 Compuware Corp. (b) .......... 143,344
9,000 Microsoft Corp. (b) .......... 815,062
12,200 Oracle Corp. (b) ............. 555,099
-----------
2,433,974
-----------
Computers (10.6%):
5,300 Apple Computer, Inc. (b)...... 335,556
18,400 Dell Computer Corp. (b)....... 769,350
10,300 EMC Corp. (b)................. 735,806
7,100 Hewlett-Packard Co. .......... 653,200
18,400 Intel Corp. .................. 1,367,350
9,600 International Business
Machines Corp. ............. 1,165,200
5,800 Lexmark Intl. Group Inc. --
Class A (b)................. 466,900
13,200 Quantum Corp. DLT and Storage
(b)......................... 185,625
15,500 Sun Microsystems, Inc. (b).... 1,441,500
8,200 Synopsys, Inc. (b)............ 460,481
10,600 Unisys Corp. (b).............. 478,325
-----------
8,059,293
-----------
Construction (0.2%):
5,500 Centex Corp. ................. 162,594
-----------
Containers & Packaging (0.4%):
5,700 Sealed Air Corp. ............. 292,481
-----------
Cosmetics & Toiletries (1.3%):
10,400 Procter & Gamble Co. ......... 975,000
-----------
Data Procesing & Reproduction (0.4%):
7,500 First Data Corp. ............. 329,063
-----------
</TABLE>
Continued
-17-
<PAGE> 18
THE COVENTRY GROUP
1ST SOURCE MONOGRAM DIVERSIFIED EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Defense (1.2%):
6,000 Cordant Technologies, Inc. ... $ 182,625
12,500 United Technologies Corp. .... 741,406
-----------
924,031
-----------
Electrical Equipment (0.2%):
7,100 Arrow Electronics, Inc. (b)... 125,138
-----------
Electronic Components (4.7%):
21,800 American Power Conversion
Corp. (b)................... 414,200
4,000 Avnet, Inc. .................. 168,000
5,950 Parker-Hannifin Corp. ........ 266,634
13,300 Solectron Corp. (b)........... 955,106
18,600 Tandy Corp. .................. 961,387
9,800 Texas Instruments, Inc. ...... 806,050
-----------
3,571,377
-----------
Engines -- Internal Combustion (0.6%):
9,200 Cummins Engine Co., Inc. ..... 458,275
-----------
Federal National Mortgage Association
(0.3%):
4,100 General Dynamics Corp. ....... 255,994
-----------
Financial Services (4.9%):
4,900 Ambac Financial Group Inc. ... 232,138
5,800 American Express.............. 780,824
11,300 AmeriCredit Corp. (b)......... 168,794
18,250 Citigroup, Inc. .............. 802,999
4,000 Countrywide Credit Industries,
Inc. ....................... 129,000
3,800 Fannie Mae.................... 238,213
2,500 Freddie Mac................... 130,000
8,500 Merrill Lynch & Co., Inc. .... 571,094
21,350 Washington Mutual, Inc. ...... 624,487
-----------
3,677,549
-----------
Food & Related (2.3%):
12,900 IBP, Inc. .................... 318,469
12,400 Nabisco Group Holdings........ 186,000
4,500 Quaker Oats Co. .............. 278,438
2,466 RJ Reynolds Tobacco
Holdings.................... 66,582
12,800 SUPERVALU, INC. .............. 279,200
6,200 The Earthgrains Co. .......... 137,175
7,500 U.S. Foodservice.............. 135,000
15,400 Universal Foods Corp. ........ 353,237
-----------
1,754,101
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Foreign Agency (0.1%):
15,400 Stewart Enterprises, Inc. --
Class A..................... $ 93,363
-----------
Forest & Paper Products (0.1%):
1,500 Weyerhaeuser Co. ............. 86,438
-----------
Funeral Services (0.1%):
10,500 Service Corp.
International .............. 110,906
-----------
Household -- Major Appliances (0.3%):
3,000 Whirlpool, Corp. ............. 195,938
-----------
Human Resources (0.2%):
10,300 Interim Services, Inc. ....... 168,663
-----------
Instruments -- Scientific (0.9%):
7,600 PE Corp. Biosystems........... 549,100
2,200 Waters Corp. (b).............. 133,238
-----------
682,338
-----------
Insurance (3.3%):
9,600 ACE Ltd. ..................... 162,600
7,100 Allstate Corp. ............... 177,056
1,600 American General Corp. ....... 101,100
11,500 American International Group,
Inc. ....................... 999,780
1,000 Cigna Corp. .................. 77,750
13,000 Conseco, Inc. ................ 251,063
5,200 Everest Reinsurance Holdings,
Inc......................... 123,825
4,600 Hartford Financial Services
Group....................... 188,025
5,500 ReliaStar Financial Corp. .... 182,875
6,300 The PMI Group, Inc. .......... 257,513
-----------
2,521,587
-----------
Internet Software & Services (0.6%):
4,000 Verisign, Inc. (b) ........... 426,000
-----------
Machinery & Equipment (2.0%):
10,100 Applied Materials, Inc.
(b) ........................ 786,537
3,600 Cooper Industries............. 168,300
7,400 Ingersol-Rand Co. ............ 406,538
3,700 Tecumseh Products Co., Class
A........................... 185,463
-----------
1,546,838
-----------
Manufacturing (3.6%):
3,200 Ball Corp. ................... 141,000
7,500 Danaher Corp. ................ 395,156
6,900 General Electric Co. ......... 818,081
13,000 Tyco International Ltd. ...... 1,342,250
-----------
2,696,487
-----------
</TABLE>
Continued
-18-
<PAGE> 19
THE COVENTRY GROUP
1ST SOURCE MONOGRAM DIVERSIFIED EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Medical -- HMO (0.3%):
5,000 Columbia/HCA Healthcare
Corp. ...................... $ 105,938
10,640 Foundation Health Corp. --
Class A (b)................. 100,415
-----------
206,353
-----------
Medical Services & Supplies (1.9%):
103,200 HEALTHSOUTH Corp. (b)......... 625,650
16,500 Stryker Corp. ................ 843,563
-----------
1,469,213
-----------
Medical -- Biotechnology (0.3%):
3,100 Biogen, Inc. (b).............. 244,319
-----------
Medical -- Health Management Organization (0.3%):
3,200 United Healthcare Corp. ...... 155,800
1,300 Wellpoint Health Networks
(b)......................... 74,100
-----------
229,900
-----------
Medical -- Hospitals (0.6%):
7,800 Health Management Associates,
Inc. -- Class A (b) ........ 57,525
5 Lifepoint Hospitals, Inc.
(b)......................... 43
23,600 Tenet Healthcare Corp. (b) ... 414,475
5 Triad Hospitals, Inc. (b)..... 51
-----------
472,094
-----------
Medical -- Instruments/ Products (2.0%):
4,000 Beckman Coulter, Inc. ........ 180,500
7,200 Biomet, Inc................... 189,450
15,100 Guidant Corp. ................ 809,738
11,400 Sybron International Corp.
(b)......................... 306,375
-----------
1,486,063
-----------
Motor Vehicles (1.6%):
9,100 Ford Motor Co. ............... 456,706
12,500 General Motors Corp. ......... 786,719
-----------
1,243,425
-----------
Multimedia (1.7%):
13,000 CBS Corp. (b)................. 601,250
11,100 Time Warner, Inc. ............ 674,325
-----------
1,275,575
-----------
Networking Software (1.5%):
16,600 Cisco Systems, Inc. (b) ...... 1,138,138
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Office Equipment & Services (0.4%):
1,450 Gannett Co. .................. $ 100,322
4,000 Xerox Corp. .................. 167,750
-----------
268,072
-----------
Oil & Gas (1.7%):
4,300 Ashland, Inc. ................ 144,588
2,300 Chevron Corp. ................ 204,125
5,000 Exxon Corp. .................. 379,688
12,900 The Coastal Corp.............. 528,093
-----------
1,256,494
-----------
Oil & Gas -- Exploration/ Production
(1.2%):
22,300 Anadarko Petroleum Corp. ..... 681,544
8,000 Ultramar Diamond Shamrock
Corp........................ 204,000
-----------
885,544
-----------
Oil & Gas Drilling (0.5%):
10,700 Nabors Industries, Inc. (b)... 267,500
3,500 Transocean Offshore, Inc. .... 107,188
-----------
374,688
-----------
Oil -- Gas Services (1.4%):
28,000 Rowan Cos., Inc. (b).......... 455,000
9,200 Schlumberger Ltd. ............ 573,275
-----------
1,028,275
-----------
Oil -- Integrated Companies (0.9%):
6,300 BP Amoco -- PLC-ADR........... 698,119
-----------
Oil -- Refining & Marketing (0.1%):
2,700 Tosco Corp. .................. 68,175
-----------
Pharmaceuticals (4.2%):
6,800 Abbott Laboratories........... 249,900
4,800 AmeriSource Health Corp.
(b)......................... 113,700
5,400 Amgen, Inc. (b) .............. 440,100
15,000 Bristol-Myers Squibb Co....... 1,012,499
4,400 Eli Lilly & Co................ 281,600
22,100 Schering-Plough Corp. ........ 964,112
3,900 Watson Pharmaceuticals, Inc.
(b)......................... 119,194
-----------
3,181,105
-----------
Pipelines (0.5%):
9,200 El Paso Energy Corp........... 366,275
-----------
Publishing -- Newspaper (0.6%):
8,800 Knight Ridder, Inc............ 482,900
-----------
</TABLE>
Continued
-19-
<PAGE> 20
THE COVENTRY GROUP
1ST SOURCE MONOGRAM DIVERSIFIED EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Railroad (0.1%):
3,300 Burlington Northern Santa Fe
Corp. ...................... $ 90,750
-----------
Real Estate Investment Trust (0.5%):
2,300 General Growth Properties..... 72,450
5,000 Liberty Property Trust........ 113,438
8,400 Prentiss Properties Trust..... 186,375
-----------
372,263
-----------
Restaurants (1.4%):
6,100 Brinker International, Inc.
(b)......................... 165,463
20,400 McDonald's Corp. ............. 877,200
-----------
1,042,663
-----------
Retail (4.7%):
29,900 CVS Corp. .................... 1,220,293
4,900 Dayton Hudson Corp. .......... 294,306
3,000 Dillards, Inc. Class A........ 60,938
5,600 Federated Department Stores,
Inc. (b).................... 244,650
5,300 May Department Stores Co. .... 193,119
8,700 Office Depot, Inc. (b)........ 88,631
12,800 Ross Stores, Inc. ............ 257,600
10,200 Safeway, Inc. (b)............. 388,237
14,200 The Kroger Co. (b)............ 313,288
13,200 TJX Cos., Inc. ............... 370,425
9,800 Toys "R" Us, Inc. (b)......... 147,000
-----------
3,578,487
-----------
Retail Automotive (0.8%):
7 Delphi Automotive Systems..... 112
13,600 Navistar International Corp.
(b)......................... 632,400
-----------
632,512
-----------
Savings & Loans (0.8%):
6,100 Dime Bancorp, Inc. ........... 106,750
3,500 Golden West Financial
Corp. ...................... 343,875
5,600 Webster Financial Corp. ...... 142,800
-----------
593,425
-----------
Steel (0.4%):
6,800 US Freightways Corp. ......... 322,150
-----------
Telecommunication & Satellite (0.2%):
6,400 DSP Communications, Inc.
(b)......................... 121,600
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Telecommunications (5.8%):
15,100 Bell Atlantic Corp. .......... $ 1,016,418
13,500 Centurytel, Inc. ............. 548,438
6,400 Clear Channel Communications,
Inc. (b).................... 511,200
11,200 Comcast Corp. -- Special Class
A (b)....................... 446,600
10,500 Lucent Technologies, Inc. .... 681,187
5,400 Motorola, Inc. ............... 475,200
9,800 Sprint Corp. (PCS Group)
(b)......................... 730,712
-----------
4,409,755
-----------
Textile (0.1%):
3,000 Springs Industries, Inc. ..... 101,813
-----------
Transportation (0.1%):
2,600 CNF Transportation, Inc. ..... 96,850
-----------
Transportation -- Air (1.0%):
7,700 AMR Corp. Del (b)............. 419,650
6,500 Delta Air Lines, Inc. ........ 315,250
-----------
734,900
-----------
Transportation -- Misc. (0.1%):
4,700 Ryder System, Inc. ........... 95,763
-----------
Utilities -- Electric (1.5%):
1,600 Calpine Corp. (b)............. 136,100
1,600 Cinergy Corp. ................ 45,300
8,300 DTE Energy Co. ............... 299,837
1,711 Duke Energy Corp. ............ 94,319
3,800 Entergy Corp. ................ 109,963
3,200 FPL Group, Inc. .............. 161,199
3,100 GPU, Inc. .................... 101,138
2,300 PECO Energy Co. .............. 86,250
3,900 The Southern Co. ............. 100,425
-----------
1,134,531
-----------
Utilities -- Telephone (2.8%):
7,050 AT&T Corp. ................... 306,675
14,800 BellSouth Corp. .............. 665,999
2,900 GTE Corp. .................... 222,938
9,400 MCI Worldcom, Inc. (b)........ 675,624
4,200 U S WEST, Inc. ............... 239,663
-----------
2,110,899
-----------
Waste Disposal (0.2%):
6,700 Waste Management, Inc. ....... 128,975
-----------
Total Common Stocks........... 72,708,075
-----------
</TABLE>
Continued
-20-
<PAGE> 21
THE COVENTRY GROUP
1ST SOURCE MONOGRAM DIVERSIFIED EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
DEPOSITARY RECEIPTS (0.9%):
9,000 S&P 400 Mid-Cap Depositary
Receipt..................... $ 643,500
-----------
Total Depositary Receipts..... 643,500
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
REPURCHASE AGREEMENT (4.3%):
3,245,054 Fifth Third Bank Repurchase
Agreement, 9/30/99, 4.78%,
matures 10/1/99,
(Collateralized by $869,000
FHLMC G10657, 7.50%, 2/1/12,
market value = $881,491;
$2,431,000 FHLM 6.00%,
9/1/13, market value =
$2,431,000)................. $ 3,245,054
-----------
Total Repurchase Agreement.... 3,245,054
-----------
Total (Cost $71,821,954)
(a)......................... $76,596,629
===========
</TABLE>
- ---------
Percentages indicated are based on net assets of $75,694,631.
(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......................... $ 9,931,014
Unrealized depreciation......................... (5,156,339)
-----------
Net unrealized appreciation..................... $ 4,774,675
===========
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements.
-21-
<PAGE> 22
THE COVENTRY GROUP
1ST SOURCE MONOGRAM SPECIAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS (63.1%):
Advertising (1.7%):
6,000 Lamar Advertising Co. (b)..... $ 297,000
10,000 Source Information Mgmt. Co.
(b)......................... 141,875
-----------
438,875
-----------
Aerospace/Defense -- Equipment (0.5%):
7,500 AAR Corp. .................... 135,000
-----------
Audio/Video Products (1.1%):
3,500 Gemstar International Group
Ltd. (b).................... 273,438
-----------
Commercial Goods & Services (1.0%):
10,000 Carey International, Inc.
(b)......................... 250,000
-----------
Computer Graphics (0.5%):
6,000 Nvidia Corp. (b).............. 115,500
-----------
Computer Services (0.7%):
15,000 DA Consulting Group, Inc.
(b)......................... 72,188
7,500 Technology Solutions Co.
(b)......................... 105,937
-----------
178,125
-----------
Computer Software (2.7%):
15,000 CBT Group PLC-ADR (b)......... 369,375
5,000 Micromuse, Inc. (b)........... 321,250
-----------
690,625
-----------
Consulting Services (1.2%):
1,500 Charles River Associates
(b)......................... 41,813
3,000 Corporate Executive Board Co.
(b)......................... 122,250
7,500 J.D. Edwards.................. 155,391
-----------
319,454
-----------
Data Processing Services (0.5%):
15,000 Informix Corp. (b)............ 119,063
-----------
Electronic Components (11.8%):
15,000 Amkor Technology, Inc. (b).... 241,875
7,500 Apex, Inc. (b)................ 140,156
18,000 Artisan Components, Inc.
(b)......................... 155,250
20,000 C. P. Clare Corp. (b)......... 127,500
4,000 Celestica, Inc. (b)........... 197,500
5,000 Flextronics International Ltd.
(b)......................... 290,938
10,000 International Rectifier Corp.
(b)......................... 152,500
5,000 MIPS Technologies, Inc. (b)... 159,063
15,000 MKS Instruments, Inc. (b)..... 333,749
7,500 Sipex Corp. (b)............... 107,344
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Electronic Components, continued:
7,500 Transwitch Corp. (b).......... $ 427,499
5,500 Vitesse Semiconductor (b)..... 469,562
5,000 Xircom, Inc. (b).............. 213,438
-----------
3,016,374
-----------
Environmental Services (1.2%):
20,000 Stericycle, Inc. (b).......... 293,750
-----------
Fiber Optics (1.6%):
30,000 International FiberCom, Inc.
(b)......................... 157,500
10,000 Metromedia Fiber Network, Inc.
(b)......................... 245,000
-----------
402,500
-----------
Financial Services (1.7%):
15,000 Microfinancial, Inc. (b)...... 163,125
6,000 NCO Group, Inc. (b)........... 282,000
-----------
445,125
-----------
Health & Personal Care (0.3%):
10,000 Capital Senior Living Corp.
(b)......................... 75,625
-----------
Healthcare Cost Containment (0.7%):
10,000 Orthodontic Centers of
America, Inc. (b)........... 175,000
-----------
Household -- General Products (1.2%):
28,000 Home Products International,
Inc. (b).................... 297,500
-----------
Investment Companies (0.5%):
10,000 Conning Corp. ................ 115,000
-----------
Manufacturing (2.8%):
20,000 Packaged Ice, Inc. (b)........ 67,500
20,000 Racing Champions Corp. (b).... 113,750
5,000 Terex Corp. .................. 157,500
30,000 US Plastic Lumber Co. (b)..... 371,250
-----------
710,000
-----------
Medical Services & Supplies (0.9%):
15,000 Hanger Orthopedic Group, Inc.
(b)......................... 217,500
-----------
Medical -- Biotechnology (0.3%):
20,000 Serologicals Corp. (b)........ 85,000
-----------
Medical -- Instruments/Products (0.5%):
5,000 Molecular Devices Corp. (b)... 137,500
-----------
</TABLE>
Continued
-22-
<PAGE> 23
THE COVENTRY GROUP
1ST SOURCE MONOGRAM SPECIAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Multimedia (0.9%):
15,000 Canwest Global Comm Corp. .... $ 186,563
2,500 Corus Entertainment, Inc. -- B
SH (b)...................... 40,405
-----------
226,968
-----------
Networking Software (0.8%):
5,000 Concord Communications, Inc.
(b)......................... 198,750
-----------
Oil & Gas (1.9%):
3,500 Apache Corporation............ 151,156
10,000 Midcoast Energy Resources..... 197,500
4,000 Newfield Exploration Co.
(b)......................... 131,750
-----------
480,406
-----------
Oil & Gas -- Exploration/Production (0.6%):
7,500 EOG Resources, Inc. .......... 159,375
-----------
Oil & Gas Drilling (2.4%):
40,000 Key Energy Services, Inc.
(b)......................... 197,500
11,000 Noble Drilling Corp. (b)...... 240,625
7,500 Santa Fe International
Corp. ...................... 161,719
-----------
599,844
-----------
Pharmaceuticals (3.7%):
6,000 Biovail Corp. International
(b)......................... 304,500
10,000 King Pharmaceuticals, Inc.
(b)......................... 350,000
8,000 Medicis Pharmaceutical --
Class A (b)................. 228,000
7,500 Schein Pharmaceutical, Inc.
(b)......................... 70,313
-----------
952,813
-----------
Radio (1.6%):
6,000 Citadel Communications Corp.
(b)......................... 204,750
3,500 Cox Radio, Inc. -- Class A
(b)......................... 208,250
-----------
413,000
-----------
Real Estate (0.5%):
11,000 Catellus Development Corp.
(b)......................... 129,250
-----------
Real Estate Investment Trust (0.7%):
6,000 Alexandria Real Estate
Equities.................... 176,625
-----------
Recreation Centers (0.9%):
7,500 Bally Total Fitness Holding
Corp. (b)................... 229,219
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Retail (4.9%):
7,500 Ames Department Stores, Inc.
(b)......................... $ 239,062
7,500 Family Dollar Stores, Inc. ... 158,438
10,000 Fred's, Inc. ................. 123,125
5,000 Linens 'n Things, Inc. (b).... 168,749
7,500 Micro Warehouse, Inc. (b)..... 90,469
30,000 Noodle Kidoodle, Inc. (b)..... 123,750
20,000 Officemax, Inc. (b)........... 116,250
4,000 The Wet Seal, Inc. -- Class A
(b)......................... 66,250
10,000 Ulimate Electronics, Inc.
(b)......................... 156,250
-----------
1,242,343
-----------
Retail Automotive (0.5%):
9,000 Sonic Automotive, Inc. (b).... 117,000
-----------
Savings & Loans (0.6%):
10,550 ITLA Capital Corp. (b)........ 155,613
-----------
Schools (0.3%):
15,000 Argosy Education Group,
Inc. -- A (b)............... 73,125
-----------
Telecommunication & Satellite (1.9%):
12,000 DSP Communications, Inc.
(b)......................... 228,000
5,000 Gilat Satellite Networks Ltd.
(b)......................... 268,125
-----------
496,125
-----------
Telecommunications (6.0%):
3,500 Ciena Corp. (b)............... 127,750
7,500 IXC Communications, Inc.
(b)......................... 295,781
45,000 P-Com, Inc. (b)............... 315,000
7,500 Powertel, Inc. (b)............ 412,968
7,000 RSL Communications Ltd. --
Class A (b)................. 127,750
4,000 US Cellular Corp. (b)......... 272,000
-----------
1,551,249
-----------
Utilities -- Electric (1.5%):
4,000 Montana Power Co. ............ 121,750
10,000 Potomac Electric Power Co. ... 254,375
-----------
376,125
-----------
Total Common Stocks........... 16,068,784
-----------
DEPOSITARY RECEIPTS (4.8%):
17,000 S & P 400 Mid-Cap Depositary
Receipt..................... 1,215,500
-----------
Total Depositary Receipts..... 1,215,500
-----------
</TABLE>
Continued
-23-
<PAGE> 24
THE COVENTRY GROUP
1ST SOURCE MONOGRAM SPECIAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
WARRANTS (0.0%):
5,000 Alza Corp. (b)................ $ 156
-----------
Total Warrants................ 156
-----------
CORPORATE BONDS (2.1%):
Computer Software (1.5%):
250,000 Aspen Technology, Inc., 5.25%,
6/15/05..................... 161,250
150,000 BEA Systems, Inc., 4.00%,
6/15/05..................... 213,750
-----------
375,000
-----------
Computers (0.6%):
150,000 National Semiconductor, 6.50%,
10/1/02..................... 149,250
-----------
Total Corporate Bonds......... 524,250
-----------
INVESTMENT COMPANIES (0.6%):
Energy (0.6%):
6,000 Amex Energy Select SPDR....... 164,625
-----------
Total Investment Companies.... 164,625
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
REPURCHASE AGREEMENT (29.5%):
7,512,985 Fifth Third Bank Repurchase
Agreement, 9/30/99, 4.78%,
matures 10/1/99,
(Collateralized by
$3,633,000 FHLMC G10657,
7.50%, 2/1/12, market value
= $3,685,224; $3,979,000
FHLM 6.00%, 9/1/13, market
value = $3,979,000)......... $ 7,512,985
-----------
Total Repurchase Agreement.... 7,512,985
-----------
Total (Cost $23,652,992)
(a)......................... $25,486,300
===========
</TABLE>
- ---------
Percentages indicated are based on net assets of $25,459,092.
(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......................... $ 3,295,238
Unrealized depreciation......................... (1,461,930)
-----------
Net unrealized appreciation..................... $ 1,833,308
===========
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements.
-24-
<PAGE> 25
THE COVENTRY GROUP
1ST SOURCE MONOGRAM INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
CORPORATE BONDS (24.9%):
Automotive (4.9%):
3,000,000 Ford Motor Credit, 8.20%,
2/15/02..................... $ 3,104,466
-----------
Financial Services (5.9%):
2,000,000 Associates Corp., 6.75%,
8/1/01...................... 2,015,182
1,800,000 Bear Stearns Co., 6.25%,
7/15/05..................... 1,713,344
-----------
3,728,526
-----------
Industrial Goods & Services (6.5%):
2,000,000 American Home Products, 7.90%,
2/15/05..................... 2,072,888
2,000,000 Procter & Gamble, 8.00%,
11/15/03.................... 2,108,906
-----------
4,181,794
-----------
Oil & Gas Explor Prod & Ser (4.6%):
3,000,000 Atlantic Richfield, 5.55%,
4/15/03..................... 2,913,057
-----------
Utilities -- Electric (3.0%):
2,000,000 Pennsylvania Electric Co.,
5.75%, 4/1/04............... 1,930,836
-----------
Total Corporate Bonds......... 15,858,679
-----------
U.S. TREASURY OBLIGATIONS (60.9%):
7,700,000 7.50%, 11/15/01............... 7,979,125
7,700,000 6.25%, 8/31/02................ 7,801,063
7,700,000 7.25%, 5/15/04................ 8,121,098
7,700,000 6.50%, 5/15/05................ 7,885,285
6,920,000 6.13%, 8/15/07................ 6,928,650
-----------
Total U.S. Treasury
Obligations................. 38,715,221
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
U.S. GOVERNMENT AGENCIES (11.1%):
Fannie Mae (6.4%):
3,000,000 9.05%, 4/10/00................ $ 3,052,425
1,000,000 6.41%, 5/22/00................ 1,004,890
-----------
4,057,315
-----------
Freddie Mac (4.7%):
3,000,000 6.24%, 10/6/04................ 2,974,464
-----------
Total U.S. Government
Agencies.................... 7,031,779
-----------
REPURCHASE AGREEMENT (1.2%):
$ 791,524 Fifth Third Bank Repurchase
Agreement, 3/31/99, 4.40%,
matures 4/1/99,
(Collateralized by $796,000
FHLMC 7.50%, 2/1/12, market
value -- $807,442).......... 791,524
-----------
Total Repurchase Agreement.... 791,524
-----------
Total (Cost $64,978,659)
(a)......................... $62,397,203
===========
</TABLE>
- ---------
Percentages indicated are based on net assets of $63,587,836.
(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......................... $ 0.00
Unrealized depreciation......................... (2,581,456)
-----------
Net unrealized depreciation..................... $(2,581,456)
===========
</TABLE>
See notes to financial statements.
-25-
<PAGE> 26
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
1. ORGANIZATION:
The Coventry Group (the "Group") was organized on January 8, 1992 as a
Massachusetts business trust, and is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a diversified open-end
management investment company. The Group offers shares of a number of
different series, the following series for which 1st Source Bank serves as
investment adviser: the 1st Source Monogram Income Equity Fund, the 1st
Source Monogram Diversified Equity Fund, the 1st Source Monogram Special
Equity Fund, and the 1st Source Monogram Income Fund, (collectively, the
"Funds" and individually, a "Fund"). On October 24, 1998, the 1st Source
Monogram Funds were reorganized and moved from The Sessions Group to The
Coventry Group. In connection with this reorganization, the Funds changed
their fiscal year end to March 31.
The investment objectives of the Income Equity Fund are capital
appreciation with current income as a secondary objective. The investment
objective for each of the Diversified Equity Fund and the Special Equity
Fund is capital appreciation. The investment objective of the Income Fund
is current income consistent with preservation of capital.
The Group is authorized to issue an unlimited number of shares, which are
equal units of beneficial interest with a par value of $0.01 per share.
Sales of Fund shares may be made 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 may 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 Income
Equity Fund, the Diversified Equity Fund, the Special Equity Fund, and the
Income Fund are valued at their market values determined on the basis of
the current available prices 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. Investments in debt securities with remaining maturities of 60
days or less may be valued based upon the amortized cost method.
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
Continued
-26-
<PAGE> 27
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
SEPTEMBER 30, 1999
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 transferred to an account of the Fund at a bank
custodian.
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 rates, futures contracts, options, and forward
currency contracts. Risks of entering into such transactions include the
potential inability of the dealer to meet its 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 as a result of their
investments in derivative instruments. It is the policy of the Funds, 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' limitations 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
generally 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.
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.
These "book/tax" differences are either considered temporary or permanent
in nature. To the extent these differences are permanent in nature, such
amounts are reclassified within the composition of net assets on their
federal tax-basis treatment; temporary differences do not require
reclassifications. Dividends and distributions to shareholders which exceed
net investment income and net realized gains
Continued
-27-
<PAGE> 28
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
SEPTEMBER 30, 1999
for financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of
net realized gains. To the extent they exceed net investment income and net
realized gains for tax purposes, they are reported as distributions of
capital.
FEDERAL INCOME TAXES:
It is the policy of the Funds to continue 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 that Fund.
Such expenses are amortized over a period of five years commencing with the
date of the initial public offering.
EXPENSES:
Expenses that are directly related to one of the Funds are charged directly
to that Fund. Expenses relating to the Funds collectively are prorated to
the Funds on the basis of each Fund's relative net assets. Other expenses
for the Group are prorated to the Funds and any other portfolios of the
Group on the basis of relative net assets.
3. PURCHASES AND SALES OF SECURITIES:
The costs of purchases and proceeds from sales of securities (excluding
short-term securities) for the period ended March 31, 1999 (a) were as
follows:
<TABLE>
<CAPTION>
PURCHASES SALES
----------- -----------
<S> <C> <C>
Income Equity Fund................................ $11,451,304 $17,520,488
Diversified Equity Fund........................... 40,043,828 50,517,871
Special Equity Fund............................... 22,248,370 27,130,104
Income Fund....................................... 25,593,601 29,299,526
</TABLE>
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.
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services
("BISYS"), an Ohio limited partnership, and BISYS Fund Services Ohio, Inc.
("BISYS Ohio") are subsidiaries of The BISYS Group, Inc.
Continued
-28-
<PAGE> 29
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
SEPTEMBER 30, 1999
BISYS, with whom certain officers and trustees of the Group are affiliated,
serves the Funds as distributor. Such officers and trustees are paid no
fees directly by the Funds for serving as officers and trustees of the
Group. BISYS Ohio serves the Funds as administrator, transfer agent and
fund accountant. Under the terms of the administration agreement, BISYS's
fees are computed daily as a percentage of the average net assets of each
Fund.
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 daily net
asset value of each Fund. These fees may be 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 assets of each Fund. As of the date
of this report, no such servicing agreements have been entered into by the
Group with respect to the Funds.
BISYS is also entitled to receive commissions on sales of shares of the
Funds. For the period ended September 30, 1999, BISYS received $398 from
commissions earned on sales of shares of the Funds, of which $328 was
reallowed to broker/dealers affiliated with 1st Source Bank.
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 September 30, 1999:
<TABLE>
<CAPTION>
INCOME DIVERSIFIED SPECIAL
EQUITY EQUITY EQUITY INCOME
FUND FUND FUND FUND
------- ----------- ------- -------
<S> <C> <C> <C> <C>
INVESTMENT ADVISORY:
Annual fee before voluntary fee
reductions (percentage of average
net assets)...................... .80% .99% .80% .55%
ADMINISTRATION FEES:
Annual fee before voluntary fee
reductions (percentage of average
net assets)...................... .20% .20% .20% .20%
12B-1 FEES:
Annual fee before voluntary fee
reductions (percentage of average
net assets)...................... .25% .25% .25% .25%
Voluntary fee reductions........... $63,691 $104,213 $35,570 $82,288
</TABLE>
-29-
<PAGE> 30
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INCOME EQUITY FUND DIVERSIFIED EQUITY FUND
-------------------------------------------------------- ----------------------------
PERIOD ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED
SEPTEMBER 30, MARCH 31, JUNE 30, JUNE 30, SEPTEMBER 30, MARCH 31,
1999(a) 1999(b) 1998 1997(c) 1999(a) 1999(b)
------------- ------------ ---------- ------------ ------------- ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD..... $ 11.00 $ 12.60 $ 12.28 $ 10.00 $ 11.26 $ 13.31
------- ------- ------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income
(loss).............. 0.11 0.20 0.27 0.20 (0.02) (0.02)
Net realized and
unrealized gains
(losses) on
investments......... 0.23 (0.26) 1.79 2.32 (0.12) (0.11)
------- ------- ------- ------- ------- -------
Total from
Investment
Activities........ 0.34 (0.06) 2.06 2.52 (0.14) (0.13)
------- ------- ------- ------- ------- -------
DISTRIBUTIONS
Net investment
income.............. (0.12) (0.20) (0.27) (0.19) -- --
Net realized gains.... 0.00 (1.34) (1.47) (0.05) 0.00 (1.92)
------- ------- ------- ------- ------- -------
Total
Distributions..... (0.12) (1.54) (1.74) (0.24) 0.00 (1.92)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD................ $ 11.22 $ 11.00 $ 12.60 $ 12.28 $ 11.12 $ 11.26
======= ======= ======= ======= ======= =======
Total Return
(excludes sales
charge)........... 3.05%(d) 0.04%(d) 18.15% 25.58%(d) (1.24)%(d) (0.59)%(d)
RATIOS/SUPPLEMENTAL
DATA:
Net Assets, at end of
period (000)........ $46,102 $50,903 $52,450 $39,196 $75,695 $85,361
Ratio of expenses to
average net
assets.............. 1.20%(e) 1.21%(e) 1.21% 1.37%(e) 1.38%(e) 1.43%(e)
Ratio of net
investment income
(loss) to average
net assets.......... 1.84%(e) 2.29%(e) 2.16% 2.38%(e) (0.33)%(e) (0.24)%(e)
Ratio of expenses to
average net
assets*............. 1.45%(e) 1.46%(e) 1.46% 1.62%(e) 1.63%(e) 1.68%(e)
Portfolio Turnover
Rate................ 23.52% 34.41% 70.46% 38.49% 49.93% 107.94%
<CAPTION>
DIVERSIFIED EQUITY FUND
-------------------------
YEAR ENDED PERIOD ENDED
JUNE 30, JUNE 30,
1998 1997(c)
---------- ------------
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD..... $ 11.80 $ 10.00
------- -------
INVESTMENT ACTIVITIES
Net investment income
(loss).............. (0.02) (0.01)
Net realized and
unrealized gains
(losses) on
investments......... 3.00 2.03
------- -------
Total from
Investment
Activities........ 2.98 2.02
------- -------
DISTRIBUTIONS
Net investment
income.............. -- --
Net realized gains.... (1.47) (0.22)
------- -------
Total
Distributions..... (1.47) (0.22)
------- -------
NET ASSET VALUE, END OF
PERIOD................ $ 13.31 $ 11.80
======= =======
Total Return
(excludes sales
charge)........... 27.85% 20.42%(d)
RATIOS/SUPPLEMENTAL
DATA:
Net Assets, at end of
period (000)........ $98,083 $74,990
Ratio of expenses to
average net
assets.............. 1.48% 1.62%(e)
Ratio of net
investment income
(loss) to average
net assets.......... (0.18)% (0.10)%(e)
Ratio of expenses to
average net
assets*............. 1.73% 1.87%(e)
Portfolio Turnover
Rate................ 95.13% 76.54%
</TABLE>
- ---------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) For the period from April 1, 1999 through September 30, 1999.
(b) For the period from July 1, 1998 through March 31, 1999.
(c) Funds commenced operations on September 25, 1996 and September 23, 1996,
respectively.
(d) Not annualized
(e) Annualized
-30-
<PAGE> 31
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SPECIAL EQUITY FUND INCOME FUND
-------------------------------------------------------- -----------------------------------------
PERIOD ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED YEAR ENDED
SEPTEMBER 30, MARCH 31, JUNE 30, JUNE 30, SEPTEMBER 30, MARCH 31, JUNE 30,
1999(a) 1999(b) 1998 1997(c) 1999(a) 1999(b) 1998
------------- ------------ ---------- ------------ ------------- ------------ ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD..... $ 9.18 $ 9.63 $ 9.59 $ 10.00 $ 9.99 $ 10.34 $ 10.13
------- ------- ------- ------- ------- ------- -------
Investment Activities
Net investment
income (loss)....... (0.01) -- -- -- 0.28 0.41 0.60
Net realized and
unrealized gains
(losses) on
investments......... (0.02) (0.44) 0.17 (0.10)(f) (0.29)(f) (0.10) 0.21
------- ------- ------- ------- ------- ------- -------
Total from
Investment
Activities........ (0.03) (0.44) 0.17 (0.10) (0.01) 0.31 0.81
------- ------- ------- ------- ------- ------- -------
DISTRIBUTIONS
Net investment
income.............. -- -- ** ** (0.28) (0.41) (0.60)
From tax return of
capital............. -- (0.01) -- -- -- -- --
Net realized gains.... -- -- (0.13) -- -- (0.18) --
In excess of realized
gains............... -- -- -- (0.31) -- (0.07) --
------- ------- ------- ------- ------- ------- -------
Total
Distributions..... -- (0.01) (0.13) (0.31) (0.28) (0.66) (0.60)
------- ------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD................ $ 9.15 $ 9.18 $ 9.63 $ 9.59 $ 9.70 $ 9.99 $ 10.34
======= ======= ======= ======= ======= ======= =======
Total Return
(excludes sales
charge)........... (0.33)%(d) (4.55)%(d) 1.86% (1.03)%(d) (0.07)%(d) 3.00%(d) 8.24%
RATIOS/SUPPLEMENTAL
DATA:
Net Assets, at end of
period (000)........ $25,459 $30,946 $35,441 $30,524 $63,588 $67,251 $65,975
Ratio of expenses to
average net
assets.............. 1.24%(e) 1.24%(e) 1.27% 1.39%(e) 0.91%(e) 0.92%(e) 0.92%
Ratio of net
investment income
(loss) to average
net assets.......... (0.10)%(e) 0.02%(e) 0.04% 0.05%(e) 5.62%(e) 5.23%(e) 5.90%
Ratio of expenses to
average net
assets*............. 1.49%(e) 1.49%(e) 1.52% 1.65%(e) 1.16%(e) 1.17%(e) 1.17%
Portfolio Turnover
Rate................ 94.49% 247.95% 124.55% 152.81% 41.75% 301.44% 208.32%
<CAPTION>
INCOME FUND
------------
PERIOD ENDED
JUNE 30,
1997(c)
------------
<S> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD..... $ 10.00
-------
Investment Activities
Net investment
income (loss)....... 0.44
Net realized and
unrealized gains
(losses) on
investments......... 0.12
-------
Total from
Investment
Activities........ 0.56
-------
DISTRIBUTIONS
Net investment
income.............. (0.43)
From tax return of
capital............. --
Net realized gains.... --
In excess of realized
gains............... --
-------
Total
Distributions..... (0.43)
-------
NET ASSET VALUE, END OF
PERIOD................ $ 10.13
=======
Total Return
(excludes sales
charge)........... 5.71%(d)
RATIOS/SUPPLEMENTAL
DATA:
Net Assets, at end of
period (000)........ $54,789
Ratio of expenses to
average net
assets.............. 1.05%(e)
Ratio of net
investment income
(loss) to average
net assets.......... 5.71%(e)
Ratio of expenses to
average net
assets*............. 1.30%(e)
Portfolio Turnover
Rate................ 118.33%
</TABLE>
- ---------------
* During the period certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** Amount is less than $0.005
(a) For the period from April 1, 1999 through September 30, 1999.
(b) For the period from July 1, 1998 through March 31, 1999.
(c) Funds commenced operations on September 20, 1996, and September 24, 1996,
respectively.
(d) Not annualized
(e) Annualized
(f) The amount shown, while mathematically determinable by the summation of
amounts computed for as many periods during the year as shares were sold or
repurchased, is also the balancing figure derived from the other figures in
the statement and should be so computed. 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.
-31-
<PAGE> 32
[1ST SOURCE MONOGRAM FUNDS 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.
11/99
[1ST SOURCE MONOGRAM FUNDS LOGO]
SEMI-ANNUAL REPORT
SEMI-ANNUAL REPORT
SEPTEMBER 30, 1999
