PRESIDENT'S MESSAGE
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Dear Shareholder,
As fiscal 1994 began, you may remember, the Fountain Square Funds (the
"Funds") faced an uncertain economic and political climate. As the
Funds' fiscal year ended on July 31, 1994, much of the unpredictability
in the financial marketplace remained. However, we are pleased to report
that our ongoing strategies for consistent, quality growth weathered the
year well. In fact, we believe that our growth style of equity
management and our positioning of quality and maturity for fixed income
securities have put us on solid footing as we enter a new year.
ECONOMIC The economy which had been growing slowly since the first quarter of
SUMMARY 1991, shot forward during the last half of 1993, propelled in part by
positive corporate earnings and dropping unemployment. However, it may
have been too much good news too fast. Fearing that an overheated
economy would stimulate inflation, the Federal Reserve Board (the "Fed")
raised short-term interest rates during both the first and second
quarters of 1994. By the end of July, 1994, the economy had returned to
a more moderate growth rate of just over 3.5%.
However, concerns that rising interest rates could slow economic
activity shook the stock and bond markets during 1994. Even as those
fears subsided, the financial marketplace continued to be volatile amid
speculation that the Fed would once again raise short-term interest
rates to stop the decline in the value of the dollar overseas.
Despite that volatility, economic fundamentals remain strong.
Unemployment is low, the work force is more productive, and corporate
America has refinanced its debt. In addition, we expect further economic
expansion to be fueled by growing incomes, higher employment, and new
levels of exports to recovering economies around the world.
EQUITY The past year proved our focus on growth to be a prudent approach. We
MARKETS continued to be a conservative, long-term investor seeking consistent
patterns of growth. It is a philosophy that works best over time, of
course assuming the economy grows and the companies whose stock we buy
grow along with it. We continue to seek strong companies with solid
fundamentals; competent companies with underlying trends of earnings and
dividend growth as well as a conservative capital structure, a
well-defined market niche and competent management.
Our ideal growth company is one with a global presence, one that has
withstood the test of restructuring and emerged with a new focus on
production efficiencies and improved margins. We are also interested in
companies that are able to take advantage of America's aging population
and those companies specializing in data and information dissemination.
The accelerating economy has already led to an improvement in earnings
expectations for growth stocks. Basic materials, capital goods,
transportation and technology are expected to outperform the market
during the coming year. Those outperforming sectors are currently
overweighted in the Fountain Square Quality Growth, Balanced and Mid Cap
Funds.
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We are especially excited about the potential of the capital goods
industry. There are several fundamental changes underway that should
lead to a sustained improvement in its performance. Orders for capital
goods are strong, with much of that strength coming from U.S. companies
striving to become the low-cost producers in an increasingly competitive
global marketplace. Europe, with its own economic recovery underway,
represents a large market for U.S. capital goods producers; it should
complement already strong export markets in Latin America and the Far
East.
FIXED Rising interest rates caused stock market investors to reevaluate
INCOME companies based on their sensitivity to those higher rates. At the same
time, they also caused the bond market to decline. However, the rise in
rates could result in higher income earned by holders of the U.S.
Government Securities Fund, Quality Bond Fund and Ohio Tax Free Bond
Fund. Nevertheless, because interest rates and bond prices tend to move
in opposite directions, the managers of the fixed-income funds intend to
pursue various strategies that we hope will help preserve the principal
value of these funds. These strategies are discussed in the Portfolio
Highlights that follow. Our expectations are that the rise in interest
rates will help slow economic activity and control inflation. The result
of this could be a positive for bond holders in the long-term.
In the meantime, we will continue to focus on high quality to help
offset volatility. The Quality Bond Fund's performance relative to its
peers improved again during 1994. For the year, the Ohio Tax Free Bond
Fund ranks seven out of 35 Ohio bond funds. Again, its conservative
structure continues to pay off versus its peer group. We are especially
proud of the U.S. Government Securities Fund which has received an "A"
rating from The Wall Street Journal for being ranked in the top 20% of
all intermediate maturity U.S. Treasury, U.S. government and Investment
Grade Corporate Funds for the last one-year period. With respect to
these and other fund rankings given in this report, as noted in the
financial statements, certain expenses and fee waivers contributed
positively to fund performance.
THE FOUNTAIN One of the year's most significant highlights was the introduction of
SQUARE the newest member of the Fountain Square Family of Funds. The new
INTERNATIONAL International Equity Fund invests in a variety of equities in both
EQUITY FUND industrialized and emerging countries. It may be an ideal way to enter
the international marketplace which is becoming a necessary part of a
balanced portfolio.
OUTLOOK As we enter fiscal 1995, we remain optimistic, but cautious, about the
future. We anticipate the Fed and the Clinton Administration will
continue to fight inflation. Even though we expect the market to react
to short-term signals, as long as interest rates remain in check,
prospects for the stock market look promising.
Thank you for choosing the Fountain Square Funds as you pursue your
financial goals.
Sincerely,
J. Christopher Donahue James D. Berghausen, CFA
President Chief Investment Officer
The Fountain Square Funds Fifth Third Bank
September 15, 1994
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FOUNTAIN SQUARE U.S. GOVERNMENT SECURITIES FUND
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For a better understanding of the information on the Fountain Square
U.S. Government Securities Fund (the "Fund"), please remember to read
the President's Message at the beginning of this report before reading
this section.
INVESTMENT OBJECTIVE The Fund's investment objective is to provide a high level of current
income. Capital growth is a secondary objective. The Fund invests in a
portfolio of U.S. government securities and is designed to meet the
needs of conservative investors seeking high-credit quality.
INVESTMENT - For the 12 months ended July 31, 1994, the Fund distributed income of
PERFORMANCE $0.59 per share, which contributed to the Fund's 1 year total return
of 0.11%.
- As interest rates rose, the Fund's net asset value per share declined
from $10.21 to $9.64.
- The Fund's performance, although below our expectations, compares
favorably to its peer group. For the year ended July 31, 1994, the
Fund was ranked 16 out of 63 similar funds, according to Lipper
Analytical Services.
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GROWTH OF $10,000 INVESTED IN FOUNTAIN SQUARE U.S. GOVERNMENT
SECURITIES FUND
The graph below illustrates the hypothetical investment of
$10,000 in the Fountain Square U.S. Government Securities Fund
from November 20, 1992 to July 31, 1994 compared to the Lehman
Brothers Intermediate Government Corporate Index.
GRAPHIC REPRESENTATION "A" OMITTED. SEE APPENDIX.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN
SHARES ARE REDEEMED, THEY MAY BE WORTH MORE OR LESS THAN
ORIGINAL COST.
* Represents a hypothetical investment of $10,000 in the Fund
after deducting the maximum sales charge of 4.50% ($10,000
investment minus $450 sales charge = $9,550). The Fund's
performance assumes the reinvestment of all dividends and
distributions.
The Lehman Brothers Intermediate Government Corporate Index is
not adjusted to reflect sales loads, expenses, or other fees
that the SEC requires to be reflected in the Fund's
performance. The Lehman Brothers Intermediate Government
Corporate Index has been adjusted to reflect reinvestment of
dividends on securities in the index.
PORTFOLIO HIGHLIGHTS
U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO UPDATE (7/31/94)
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GRAPHIC REPRESENTATION "A1" OMITTED. SEE APPENDIX.
PORTFOLIO - We feel short-term interest rates will continue to rise, so we have
MANAGER'S shortened the Fund's average maturity to less than the Lehman Brothers
COMMENTARY Intermediate Government Corporate Index.
AND OUTLOOK - We have structured the portfolio to concentrate in the 0 to two-year,
and five to seven-year maturity ranges. This structure should benefit
shareholders in an environment where short-term interest rates could
rise faster than longer-term interest rates.
- Based on our current economic analysis, we anticipate seeing a rise in
the current yield in the Fund over the next year.
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FOUNTAIN SQUARE QUALITY BOND FUND
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For a better understanding of the information on the Fountain Square
Quality Bond Fund (the "Fund"), please remember to read the President's
Message at the beginning of this report before reading this section.
INVESTMENT OBJECTIVE The Fund's investment objective is to provide a high level of current
income. Capital growth is a secondary objective. The Fund is designed to
meet the needs of investors who require the advantages of a diversified
fixed income portfolio, yet are comfortable with a more aggressive
approach than the U.S. Government Securities Fund. In addition to U.S.
government securities, the Fund may invest in investment grade corporate
bonds.
INVESTMENT - For the 12 months ended July 31, 1994, the Fund distributed income of
PERFORMANCE $0.62 per share, which contributed to the Fund's 1 year total return of
(1.25%).
- As interest rates rose, the Fund's net asset value per share declined
from $10.29 to $9.55.
- For the year ended July 31, 1994, the Fund was ranked 41 out of 61
similar funds, according to Lipper Analytical Services.
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GROWTH OF $10,000 INVESTED IN FOUNTAIN SQUARE QUALITY BOND
FUND
The graph below illustrates the hypothetical investment of
$10,000 in the Fountain Square Quality Bond Fund from November
20, 1992 to July 31, 1994 compared to the Lehman Brothers
Aggregate Bond Index.
GRAPHIC REPRESENTATION "B" OMITTED. SEE APPENDIX.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN
SHARES ARE REDEEMED, THEY MAY BE WORTH MORE OR LESS THAN
ORIGINAL COST.
* Represents a hypothetical investment of $10,000 in the Fund
after deducting the maximum sales charge of 4.50% ($10,000
investment minus $450 sales charge = $9,550). The Fund's
performance assumes the reinvestment of all dividends and
distributions.
The Lehman Brothers Aggregate Bond Index is not adjusted to
reflect sales loads, expenses, or other fees that the SEC
requires to be reflected in the Fund's performance. The Lehman
Brothers Aggregate Bond Index has been adjusted to reflect
reinvestment of dividends on securities in the index.
PORTFOLIO HIGHLIGHTS
QUALITY BOND FUND
PORTFOLIO UPDATE (7/31/94)
GRAPHIC REPRESENTATION "B1" OMITTED. SEE APPENDIX.
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PORTFOLIO MANAGER'S - The Fund's maturity weightings have been repositioned to take
advantage of our expectation that short-term interest rates will rise
faster than longer-term interest rates.
COMMENTARY AND - We shifted the Fund's sector emphasis by reducing exposure to finance
OUTLOOK and international issues and increasing exposure to Treasury securities.
- Our current strategy is to maintain an average duration and maturity
similar to the Lehman Brothers Aggregate Bond Index.
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FOUNTAIN SQUARE QUALITY GROWTH FUND
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For a better understanding of the information on the Fountain Square
Quality Growth Fund (the "Fund"), please remember to read the
President's Message at the beginning of this report before reading this
section.
INVESTMENT OBJECTIVE The Fund's investment objective is to provide growth of capital. Income
is a secondary objective. The Fund invests in a diversified portfolio of
common stocks of high-quality companies.
INVESTMENT - For the 12 months ended July 31, 1994, the Fund's net asset value per
PERFORMANCE share increased from $9.54 to $9.70.
- The Fund distributed income of $0.14 per share, which contributed to
the Fund's 1 year total return of 3.17%.
- The Fund's performance compared favorably to its peer group. For the
year ended July 31, 1994, the Fund was ranked 262 out of 421 similar
funds, according to Lipper Analytical Services.
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GROWTH OF $10,000 INVESTED IN FOUNTAIN SQUARE QUALITY GROWTH
FUND
The graph below illustrates the hypothetical investment of
$10,000 in the Fountain Square Quality Growth Fund from
November 20, 1992 to July 31, 1994 compared to the S&P Barra
Growth Index.
GRAPHIC REPRESENTATION "C" OMITTED. SEE APPENDIX.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN
SHARES ARE REDEEMED, THEY MAY BE WORTH MORE OR LESS THAN
ORIGINAL COST.
* Represents a hypothetical investment of $10,000 in the Fund
after deducting the maximum sales charge of 4.50% ($10,000
investment minus $450 sales charge = $9,550). The Fund's
performance assumes the reinvestment of all dividends and
distributions.
The S&P Barra Growth Index is not adjusted to reflect sales
loads, expenses, or other fees that the SEC requires to be
reflected in the Fund's performance. The S&P Barra Growth
Index has been adjusted to reflect reinvestment of dividends
on securities in the index.
PORTFOLIO HIGHLIGHTS
QUALITY GROWTH FUND
PORTFOLIO UPDATE (7/31/94)
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GRAPHIC REPRESENTATION "C1" OMITTED. SEE APPENDIX.
PORTFOLIO MANAGER'S - While over the short term, stocks may not perform like they did in the
COMMENTARY 1980's and early 1990's, there are still investment opportunities in
AND OUTLOOK companies with improving profits. Those companies that can improve
productivity for their customers, that have already lowered their own
cost structures and that serve export markets will be targeted for the
Fund. Therefore, we are overweighting the capital goods,
transportation and technology sectors, while reducing exposure to the
utility and consumer staples sectors. We have added several
consumer-related companies during the year that have excellent growth
prospects, including Home Depot, Medtronic, Disney and May Department
Stores.
- For the 12 months ended July 31, 1994, the Fund performed slightly
below the benchmark index and average relative to its peer group.
However, in the second half of its fiscal year, it showed solid
improvement by outperforming its peer group.
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FOUNTAIN SQUARE MID CAP FUND
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For a better understanding of the information on the Fountain Square Mid
Cap Fund (the "Fund"), please remember to read the President's Message
at the beginning of this report before reading this section.
INVESTMENT The Fund's investment objective is to provide growth of capital. Income
OBJECTIVE is a secondary objective. The Fund invests primarily in equity
securities of medium-sized companies with a market capitalization
between $100 million and $3 billion.
INVESTMENT - For the 12 months ended July 31, 1994, the Fund's net asset value per
PERFORMANCE share increased from $9.68 to $10.10.
- The Fund distributed income of $0.07 per share, which contributed to
the Fund's 1 year total return of 5.07%.
- For the year ended July 31, 1994, the Fund was ranked 25 out of 63
similar funds, according to Lipper Analytical Services.
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GROWTH OF $10,000 INVESTED IN FOUNTAIN SQUARE MID CAP FUND
The graph below illustrates the hypothetical investment of
$10,000 in the Fountain Square Mid Cap Fund (the "Fund") from
November 20, 1992 to July 31, 1994 compared to the Wilshire
Mid Cap 750 Index (which appeared in last years' report), and
the Standard & Poor's ("S&P") Ratings Group Mid Cap 400 Index.
In future Annual Reports, the Fund intends to use only the S&P
Mid Cap 400 Index. The Fund is making this change because the
S&P Mid Cap 400 Index appears to be a more broadly accepted
index for mid cap equity managers, and because information
about the S&P Mid Cap 400 Index is generally more accessible.
GRAPHIC REPRESENTATION "D" OMITTED. SEE APPENDIX.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN
SHARES ARE REDEEMED, THEY MAY BE WORTH MORE OR LESS THAN
ORIGINAL COST.
* Represents a hypothetical investment of $10,000 in the Fund
after deducting the maximum sales charge of 4.50% ($10,000
investment minus $450 sales charge = $9,550). The Fund's
performance assumes the reinvestment of all dividends and
distributions.
The Wilshire Mid Cap 750 Index and the S&P Mid Cap 400 Index
are not adjusted to reflect sales loads, expenses, or other
fees that the SEC requires to be reflected in the Fund's
performance. The Wilshire Mid Cap 750 Index and the S&P Mid
Cap 400 Index have been adjusted to reflect reinvestment of
dividends on securities in the indices.
PORTFOLIO HIGHLIGHTS
MID CAP FUND
PORTFOLIO UPDATE (7/31/94)
GRAPHIC REPRESENTATION "D1" OMITTED. SEE APPENDIX.
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PORTFOLIO - For the year, the Fund outperformed both its peer group and the S&P
MANAGER'S Midcap 400 Index.
COMMENTARY - Solid performance did not come from any one or two sectors, but rather
AND OUTLOOK from a variety of areas. We invested in companies serving niche
markets with improving profits, including: Loctite, W.W. Grainger,
Comair, Wabash National, Interpublic Group, Newell, Cardinal Health,
Medtronic, Century Telephone, Vishay Intertechnology and First Data.
- During the year, we increased exposure to the technology sector,
emphasizing companies that help other companies lower costs and
improve productivity.
- We expect opportunities will continue to emerge in mid cap companies
in all sectors, and especially on the industrial side of the economy.
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FOUNTAIN SQUARE BALANCED FUND
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For a better understanding of the information on the Fountain Square
Balanced Fund (the "Fund"), please remember to read the President's
Message at the beginning of this report before reading this section.
INVESTMENT The Fund's investment objective is to pursue capital appreciation and
OBJECTIVE income. The Fund emphasizes equity exposure for growth and intermediate
bond exposure for relative stability and current income. Because the
Fund's manager believes that stocks should be stronger performers for
the long-term, the asset allocation of the Fund is currently 70%
equities and 30% fixed income securities.
INVESTMENT - For the 12 months ended July 31, 1994, the Fund's net asset value per
PERFORMANCE share decreased slightly from $9.78 to $9.70.
- The Fund distributed income of $0.28 per share, which contributed to
the Fund's 1 year total return of 2.02%.
- For the year ended July 31, 1994, the Fund was ranked 75 out of 122
similar funds, according to Lipper Analytical Services.
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GROWTH OF $10,000 INVESTED IN FOUNTAIN SQUARE BALANCED FUND
The graph below illustrates the hypothetical investment of
$10,000 in the Fountain Square Balanced Fund from November 20,
1992 to July 31, 1994 compared to the S&P Barra Growth Index
and the Lehman Brothers Aggregate Bond Index.
GRAPHIC REPRESENTATION "E" OMITTED. SEE APPENDIX
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN
SHARES ARE REDEEMED, THEY MAY BE WORTH MORE OR LESS THAN
ORIGINAL COST.
* Represents a hypothetical investment of $10,000 in the Fund
after deducting the maximum sales charge of 4.50% ($10,000
investment minus $450 sales charge = $9,550). The Fund's
performance assumes the reinvestment of all dividends and
distributions.
The S&P Barra Growth Index and Lehman Brothers Aggregate Bond
Index are not adjusted to reflect sales loads, expenses, or
other fees that the SEC requires to be reflected in the Fund's
performance. The S&P Barra Growth Index and the Lehman
Brothers Aggregate Bond Index have been adjusted to reflect
reinvestment of dividends on securities in the indices.
PORTFOLIO HIGHLIGHTS
BALANCED FUND
PORTFOLIO UPDATE (7/31/94)
GRAPHIC REPRESENTATION "E1" OMITTED. SEE APPENDIX.
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PORTFOLIO - The bond sector's maturity weightings have been repositioned to take
MANAGER'S advantage of our expectation that short-term interest rates will rise
COMMENTARY faster than long-term interest rates.
AND OUTLOOK - To take advantage of opportunities for growth, we have increased the
Fund's equity holdings to 70% of the portfolio.
- During the year, we increased exposure in mid cap companies,
especially on the industrial side of the economy.
- As with the Quality Growth and Mid Cap Funds, we believe opportunities
exist in buying stocks of companies that can improve productivity for
their customers, that have already lowered their own cost structures
and that serve export markets.
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FOUNTAIN SQUARE OHIO TAX FREE BOND FUND
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For a better understanding of the information on the Fountain Square
Ohio Tax Free Bond Fund (the "Fund"), please remember to read the
President's Message at the beginning of this report before reading this
section.
INVESTMENT OBJECTIVE The Fund's investment objective is to provide current income which is
free from federal and Ohio state income taxes.* The Fund invests in a
portfolio of investment grade bonds that support municipal projects
throughout the state of Ohio.
INVESTMENT - For the 12 months ended July 31, 1994, the Fund distributed income of
PERFORMANCE $0.39 per share, which contributed to the Fund's 1 year total return
of 1.95%.
- As interest rates rose, the Fund's net asset value per share declined
from $9.95 to $9.75.
- Through July 31, 1994, the Fund was ranked 7 out of 35 similar funds,
according to Lipper Analytical Services.
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GROWTH OF $10,000 INVESTED IN FOUNTAIN SQUARE OHIO TAX FREE
BOND FUND
The graph below illustrates the hypothetical investment of
$10,000 in the Fountain Square Ohio Tax Free Bond Fund from
May 27, 1993 to July 31, 1994 compared to the Lehman Brothers
5 Year Municipal Growth Index.
GRAPHIC REPRESENTATION "F" OMITTED. SEE APPENDIX.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN
SHARES ARE REDEEMED, THEY MAY BE WORTH MORE OR LESS THAN
ORIGINAL COST.
* Income may be subject to the federal alternative minimum
tax.
** Represents a hypothetical investment of $10,000 in the Fund
after deducting the maximum sales charge of 4.50% ($10,000
investment minus $450 sales charge = $9,550). The Fund's
performance assumes the reinvestment of all dividends and
distributions.
The Lehman Brothers 5 Year Municipal Growth Index is not
adjusted to reflect sales loads, expenses, or other fees that
the SEC requires to be reflected in the Fund's performance.
The Lehman Brothers 5 Year Municipal Growth Index has been
adjusted to reflect reinvestment of dividends on securities in
the index.
PORTFOLIO HIGHLIGHTS
OHIO TAX FREE BOND FUND
PORTFOLIO UPDATE (7/31/94)
GRAPHIC REPRESENTATION "F1" OMITTED. SEE APPENDIX.
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PORTFOLIO MANAGER'S - We witnessed a dramatic drop in the new issuance of municipal bonds
COMMENTARY starting in calendar year 1994.
AND OUTLOOK - Due to a rise in federal income taxes, demand is expected to be strong
for municipal issuers.
- The Fund is well-positioned to help protect shareholders' principal
value in a rising interest rate environment with its relatively short
average maturity of 6.3 years.
- As we reinvest principal from maturing issues and invest assets from
new Fund purchases, based on our current economic analysis, we expect
that we will be able to purchase municipal bonds with higher yields
than many of the bonds currently in the Fund, thereby increasing
dividends to Fund shareholders.
- We will continue to take very little credit risk and expect to
maintain an average credit quality of "AA".
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FOUNTAIN SQUARE U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO OF INVESTMENTS
JULY 31, 1994
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<CAPTION>
PRINCIPAL
AMOUNT VALUE
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GOVERNMENT SECURITIES--85.5%
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GOVERNMENT AGENCIES--37.8%
-------------------------------------------------------------------
$ 1,000,000 Federal Farm Credit Bank, Medium-Term Note, 5.90%, 12/7/2000 $ 946,189
-------------------------------------------------------------------
387,000 Federal Farm Credit Bank, 6.56%, 12/23/99 381,500
-------------------------------------------------------------------
500,000 Federal Home Loan Bank, 6.46%, 2/1/2000 484,739
-------------------------------------------------------------------
500,000 Federal Home Loan Mortgage Corp., Debenture, 5.875%,
(Callable 3/14/96 @ 100), 3/15/2000 468,225
-------------------------------------------------------------------
1,000,000 Federal Home Loan Mortgage Corp., 5.90%, (Callable 4/21/97 @ 100),
4/21/2000 939,324
-------------------------------------------------------------------
500,000 Federal Home Loan Mortgage Corp., Debenture, 6.16%,
(Callable 3/29/96 @ 100), 3/29/2000 474,553
-------------------------------------------------------------------
750,000 Federal Home Loan Mortgage Corp., 6.45%, (Callable 10/20/95 @ 100),
10/20/1999 726,722
-------------------------------------------------------------------
750,000 Federal National Mortgage Association, Medium-Term Note, 6.15%,
(Callable 9/21/95), 9/21/1999 726,847
-------------------------------------------------------------------
500,000 Federal National Mortgage Association, Debenture, 6.30%, 12/11/97 493,575
-------------------------------------------------------------------
500,000 Federal National Mortgage Association, Medium-Term Notes, 6.37%,
9/14/99 489,300
-------------------------------------------------------------------
2,800,000 Student Loan Marketing Association, Floating Rate Notes, 4.86%,
3/3/97 2,810,500
-------------------------------------------------------------------
1,050,000 Student Loan Marketing Association, Floating Rate Notes, 4.99%,
8/22/96 1,055,774
-------------------------------------------------------------------
500,000 Tennessee Valley Authority, 6.00%, 1/15/97 496,404
-------------------------------------------------------------------
515,000 Tennessee Valley Authority, 6.25%, (Callable 8/1/95 @ 100),
8/02/1999 496,661
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Total 10,990,313
------------------------------------------------------------------- -----------
U.S. TREASURY BONDS--1.0%
-------------------------------------------------------------------
296,000 8.75%, 8/15/94 296,555
------------------------------------------------------------------- -----------
U.S. TREASURY NOTES--46.7%
-------------------------------------------------------------------
13,752,000 4.625%-9.50%, 9/30/94-1/17/2000 13,600,477
------------------------------------------------------------------- -----------
TOTAL GOVERNMENT SECURITIES (IDENTIFIED COST, $25,816,448) 24,887,345
------------------------------------------------------------------- -----------
</TABLE>
FOUNTAIN SQUARE U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
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<CAPTION>
PRINCIPAL
AMOUNT VALUE
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MORTGAGE-BACKED SECURITIES--12.9%
- ----------------------------------------------------------------------------------
GOVERNMENT AGENCY--12.9%
-------------------------------------------------------------------
$ 750,000 Federal Home Loan Mortgage Corp., REMIC, 5.00%,
(Series 1557-B), 8/17/98 $ 712,972
-------------------------------------------------------------------
1,000,000 Federal Home Loan Mortgage Corp., REMIC, 5.00%,
(Series 1594-C), 7/15/2002 958,289
-------------------------------------------------------------------
750,000 Federal Home Loan Mortgage Corp., REMIC, 5.00%,
(Series 1561-B), 4/15/2003 721,282
-------------------------------------------------------------------
400,000 Federal Home Loan Mortgage Corp., REMIC, 5.50%,
(Series 1536-B), 7/17/2000 390,152
-------------------------------------------------------------------
1,000,000 Federal National Mortgage Association, REMIC, 5.75%,
(Series 1993-192), 1/26/2004 958,639
------------------------------------------------------------------- -----------
TOTAL MORTGAGE-BACKED SECURITIES (IDENTIFIED COST, $3,926,600) 3,741,334
------------------------------------------------------------------- -----------
*REPURCHASE AGREEMENT--0.4%
- ----------------------------------------------------------------------------------
115,000 Harris, Nesbitt, Thomson Securities, Inc., 3.95%, dated 7/29/94,
due 8/1/94 (at amortized cost)/(Note 2B) 115,000
------------------------------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST, $29,858,048) $28,743,679+
------------------------------------------------------------------- -----------
</TABLE>
* Repurchase agreement is fully collateralized by U.S. government and/or agency
obligations based on market prices at the date of the portfolio.
+ The cost of investments for federal tax purposes amounts to $29,858,048. The
net unrealized depreciation of investments on a federal tax basis amounts to
$1,114,369, which is comprised of $2,112 appreciation and $1,116,481
depreciation at July 31, 1994.
The following abbreviation is used in this portfolio:
REMIC-Real Estate Mortgage Investment Conduit
Note: The category of investments are shown as a percentage of net assets
($29,107,169) at July 31, 1994.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE U.S. GOVERNMENT SECURITIES FUND
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investments in securities, at value (Notes 2A and 2B)
(identified and tax cost, $29,858,048) $28,743,679
- --------------------------------------------------------------------------------
Cash 128
- --------------------------------------------------------------------------------
Interest receivable 358,989
- --------------------------------------------------------------------------------
Receivable for Fund shares sold 17,558
- --------------------------------------------------------------------------------
Deferred expenses (Note 2F) 5,634
- -------------------------------------------------------------------------------- -----------
Total assets 29,125,988
- --------------------------------------------------------------------------------
LIABILITIES:
- -----------------------------------------------------------------------
Payable for Fund shares redeemed $8,661
- -----------------------------------------------------------------------
Payable to Administrator (Note 4) 4,247
- -----------------------------------------------------------------------
Accrued expenses 5,911
- ----------------------------------------------------------------------- ------
Total liabilities 18,819
- -------------------------------------------------------------------------------- -----------
NET ASSETS for 3,019,019 shares of beneficial interest outstanding $29,107,169
- -------------------------------------------------------------------------------- -----------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid-in capital $30,704,501
- --------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments (1,114,369)
- --------------------------------------------------------------------------------
Accumulated net realized gain (loss) on investments (525,474)
- --------------------------------------------------------------------------------
Undistributed net investment income 42,511
- -------------------------------------------------------------------------------- -----------
Total Net Assets $29,107,169
- -------------------------------------------------------------------------------- -----------
NET ASSET VALUE and Redemption Proceeds Per Share:
($29,107,169 / 3,019,019 shares of beneficial interest outstanding) $9.64
- -------------------------------------------------------------------------------- -----------
COMPUTATION OF OFFERING PRICE:
- --------------------------------------------------------------------------------
Offering Price Per Share (100/95.5 of $9.64) $10.09*
- -------------------------------------------------------------------------------- -----------
</TABLE>
* See "What Shares Cost" in the prospectus.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE U.S. GOVERNMENT SECURITIES FUND
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -----------------------------------------------------------------------------------
Interest income (Note 2C) $ 1,983,496
- -----------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------
Investment advisory fee* $ 184,118
- --------------------------------------------------------------------
Administrative personnel and services fees* 50,002
- --------------------------------------------------------------------
Custodian fee* 12,000
- --------------------------------------------------------------------
Portfolio accounting, transfer and dividend disbursing agent fees
and expenses* 23,533
- --------------------------------------------------------------------
Legal fees 4,811
- --------------------------------------------------------------------
Auditing fees 13,975
- --------------------------------------------------------------------
Printing and postage 8,776
- --------------------------------------------------------------------
Fund share registration costs 14,407
- --------------------------------------------------------------------
Miscellaneous 766
- -------------------------------------------------------------------- -----------
Total expenses 312,388
- --------------------------------------------------------------------
Deduct--
- --------------------------------------------------------------------
Waiver of investment advisory fee* $45,042
- ----------------------------------------------------------
Waiver of custodian fee* 12,000
- ----------------------------------------------------------
Waiver of administrative personnel and services fees* 4,247 61,289
- ---------------------------------------------------------- ------- -----------
Net expenses 251,099
- ----------------------------------------------------------------------------------- -----------
Net investment income $ 1,732,397
- ----------------------------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- -----------------------------------------------------------------------------------
Net realized gain (loss) on investments (identified cost basis) (425,609)
- --------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of investments (1,359,549)
- -------------------------------------------------------------------- -----------
Net realized and unrealized gain(loss) on investments (1,785,158)
- ----------------------------------------------------------------------------------- -----------
Change in net assets resulting from operations $ (52,761)
- ----------------------------------------------------------------------------------- -----------
</TABLE>
* See Note 4.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE U.S. GOVERNMENT SECURITIES FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
--------------------------
1994 1993*
-----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------------------
Net investment income $ 1,732,397 $ 867,512
- -------------------------------------------------------------------
Net realized gain (loss) on investment transactions ($61,328 and $0
net loss, respectively, as computed for federal income tax
purposes) (Note 2D) (425,609) (38,527)
- -------------------------------------------------------------------
Change in unrealized appreciation (depreciation) of investments (1,359,549) 245,180
- ------------------------------------------------------------------- ----------- -----------
Change in net assets resulting from operations (52,761) 1,074,165
- ------------------------------------------------------------------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)--
- -------------------------------------------------------------------
Dividends to shareholders from net investment income (1,732,397) (650,720)
- -------------------------------------------------------------------
Distributions to shareholders from net realized gain
on investment transactions (61,338) --
- -------------------------------------------------------------------
Distributions to shareholders in excess of net investment income (174,281) --
- ------------------------------------------------------------------- ----------- -----------
Change in net assets from distributions to shareholders (1,968,016) (650,720)
- ------------------------------------------------------------------- ----------- -----------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)
- -------------------------------------------------------------------
Proceeds from sale of shares 19,743,676 34,104,160
- -------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
dividends declared 1,898,774 645,382
- -------------------------------------------------------------------
Cost of shares redeemed (20,117,115) (5,570,376)
- ------------------------------------------------------------------- ----------- -----------
Change in net assets from Fund share transactions 1,525,335 29,179,166
- ------------------------------------------------------------------- ----------- -----------
Change in net assets (495,442) 29,602,611
- -------------------------------------------------------------------
NET ASSETS:
- -------------------------------------------------------------------
Beginning of period 29,602,611 --
- ------------------------------------------------------------------- ----------- -----------
End of period (including undistributed net investment income of
$42,511 and $216,792, respectively) $29,107,169 $29,602,611
- ------------------------------------------------------------------- ----------- -----------
</TABLE>
* For the period from November 20, 1992 (date of initial public investment) to
July 31, 1993.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE U.S. GOVERNMENT SECURITIES FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
----------------------
1994 1993*
-------- -------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.21 $10.00
- --------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------
Net investment income 0.51 0.35
- --------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.49) 0.13
- -------------------------------------------------------------------- ----- ------
Total from investment operations 0.02 0.48
- --------------------------------------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------------------------------------
Dividends to shareholders from net investment income (0.51) (0.27)
- --------------------------------------------------------------------
Distributions to shareholders in excess of net investment income
(a) (0.06) --
- --------------------------------------------------------------------
Distributions to shareholders from net realized gain on
investment transactions (0.02) --
- -------------------------------------------------------------------- ----- ------
Total distributions (0.59) (0.27)
- -------------------------------------------------------------------- ----- ------
NET ASSET VALUE, END OF PERIOD $9.64 $10.21
- -------------------------------------------------------------------- ----- ------
TOTAL RETURN** 0.11% 4.87%
- --------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------------------
Expenses 0.75% 0.74%(c)
- --------------------------------------------------------------------
Net investment income 5.17% 5.36%(c)
- --------------------------------------------------------------------
Expense waiver/reimbursement (b) 0.18% 0.33%(c)
- --------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------
Net assets, end of period (000 omitted) $29,107 $29,603
- --------------------------------------------------------------------
Portfolio turnover rate 55% 23%
- --------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from November 20, 1992 (date of initial
public investment) to July 31, 1993.
** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) These distributions do not represent a return of capital for federal tax
purposes for the fiscal year ended July 31, 1994.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(c) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE QUALITY BOND FUND
PORTFOLIO OF INVESTMENTS
JULY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <C> <S> <C>
CORPORATE BONDS--24.8%
- --------------------------------------------------------------------------------------
BANKING--0.4%
-------------------------------------------------------------------
$ 173,000 Republic Bank of New York, 6.40%, 4/17/95 $ 174,046
------------------------------------------------------------------- -----------
CHEMICAL--2.2%
-------------------------------------------------------------------
1,000,000 duPont (E.I.) deNemours, 8.125%, 3/15/2004 1,036,418
------------------------------------------------------------------- -----------
FINANCE--COMMERCIAL--4.4%
-------------------------------------------------------------------
750,000 GMAC, Floating Rate Note, 4.99%, 5/20/96 748,400
-------------------------------------------------------------------
231,000 General Electric Credit Corp., 8.52%, (Callable 12/15/94 @ 100)/
(Puttable 12/15/94 @ 100), 12/17/2007 233,660
-------------------------------------------------------------------
190,000 General Electric Credit Corp., 8.65%, (Callable 5/1/96 @ 100)/
(Puttable 5/1/96 @ 100), 5/1/2018 197,088
-------------------------------------------------------------------
1,000,000 General Electric Credit Corp., 5.50%, (Callable 10/14/93 @ 100),
11/1/2001 891,347
------------------------------------------------------------------- -----------
Total 2,070,495
------------------------------------------------------------------- -----------
INSURANCE--0.9%
-------------------------------------------------------------------
115,000 Providian Corp., Medium-Term Note, 9.79%, 10/6/97 123,945
-------------------------------------------------------------------
283,000 Metlife Funding, 7.75%, 10/1/96 287,776
------------------------------------------------------------------- -----------
Total 411,721
------------------------------------------------------------------- -----------
INTERNATIONAL--14.4%
-------------------------------------------------------------------
115,000 Deutsche Bank Financial, Medium-Term Note, 9.28%, 5/31/99 124,672
-------------------------------------------------------------------
500,000 Hanson Overseas, 7.375%, 1/15/2003 485,202
-------------------------------------------------------------------
173,000 Helaba Finance, Debenture, 8.00%, 9/16/96 177,325
-------------------------------------------------------------------
600,000 Hydro Quebec, Medium-Term Note, 7.00%, 3/1/2005 558,029
-------------------------------------------------------------------
500,000 Kingdom of Thailand, 8.25%, 3/15/2002 512,952
-------------------------------------------------------------------
750,000 Korean Development Bank, 6.25%, 5/1/2000 690,739
-------------------------------------------------------------------
800,000 Korean Development Bank, 7.90%, 2/1/2002 790,692
-------------------------------------------------------------------
289,000 National Westminster Bancorp, 9.375%, 11/17/2003 318,192
-------------------------------------------------------------------
1,500,000 New Zealand Government, 8.75%, 12/15/2006 1,620,169
-------------------------------------------------------------------
800,000 Pohang Iron & Steel, 7.50%, 8/1/2002 768,322
-------------------------------------------------------------------
500,000 Province of Quebec, 8.80%, 4/15/2003 527,480
-------------------------------------------------------------------
231,000 Victoria Public Finance Authority, 8.45%, 10/1/2001 244,514
------------------------------------------------------------------- -----------
Total 6,818,288
------------------------------------------------------------------- -----------
OIL & GAS--2.3%
-------------------------------------------------------------------
1,000,000 Atlantic Richfield Co., 9.125%, 3/1/2011 1,092,727
------------------------------------------------------------------- -----------
</TABLE>
FOUNTAIN SQUARE QUALITY BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <C> <S> <C>
CORPORATE BONDS--CONTINUED
- --------------------------------------------------------------------------------------
TRANSPORTATION--0.2%
-------------------------------------------------------------------
$ 106,172 CSX Transportation Corp., 8.41%, 3/1/2006 $ 112,814
------------------------------------------------------------------- -----------
TOTAL CORPORATE BONDS (IDENTIFIED COST, $12,316,815) 11,716,509
------------------------------------------------------------------- -----------
MORTGAGE BACKED SECURITIES--14.9%
- --------------------------------------------------------------------------------------
PRIVATE LABEL CMOS--6.7%
-------------------------------------------------------------------
500,000 Bear Stearns Mortgage Securities, Inc., Series 1993-3-A11, 7.75%,
2/27/2023 492,943
-------------------------------------------------------------------
500,000 GE Capital Mortgage Services Corp., Series 1993-1D, 7.60%,
2/25/2022 480,920
-------------------------------------------------------------------
500,000 GE Capital Mortgage Services Corp., Series 1993-2F, 7.00%,
11/26/2007 466,761
-------------------------------------------------------------------
250,000 Prudential Funding Corp., Series 14-F, 8.40%, 3/21/2005 255,620
-------------------------------------------------------------------
500,000 Prudential Home Mortgage Securities Corp., Series 1993-9-A10,
7.05%, 3/25/2008 472,925
-------------------------------------------------------------------
500,000 Prudential Home Mortgage Securities Corp., Series 1993-27, Class
A-3, 7.50%, 7/25/2023 502,667
-------------------------------------------------------------------
500,000 Residential Funding Mortgage Securities Corp., Series 1993-S2-A4,
8.00%, 1/25/2023 501,456
------------------------------------------------------------------- -----------
Total 3,173,292
------------------------------------------------------------------- -----------
GOVERNMENT AGENCY CMOS--8.2%
-------------------------------------------------------------------
500,000 Federal National Mortgage Assoc., Series 1993-44PD, 5.50%,
1/25/2012 477,599
-------------------------------------------------------------------
1,500,000 Federal National Mortgage Assoc., Series 1992-73E, 7.50%, 5/27/2019 1,505,308
-------------------------------------------------------------------
1,000,000 Federal National Mortgage Assoc., Series 1994-89J, 8.00%, 8/25/2008 1,011,250
-------------------------------------------------------------------
782,342 Federal National Mortgage Assoc., Series 1991-140C, 8.50%,
5/25/2020 794,045
-------------------------------------------------------------------
88,904 Federal National Mortgage Assoc., Series 1990-72-B, 9.00%,
7/27/2020 92,634
------------------------------------------------------------------- -----------
Total 3,880,836
------------------------------------------------------------------- -----------
TOTAL MORTGAGE BACKED SECURITIES (IDENTIFIED COST, 7,231,622) 7,054,128
------------------------------------------------------------------- -----------
</TABLE>
FOUNTAIN SQUARE QUALITY BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <C> <S> <C>
GOVERNMENT SECURITIES--46.3%
- --------------------------------------------------------------------------------------
GOVERNMENT AGENCIES--16.6%
-------------------------------------------------------------------
$2,249,569 Federal Home Loan Mortgage Corp., 6.60%-9.50%, 10/1/2002-8/15/2022 $ 2,194,783
-------------------------------------------------------------------
1,500,000 Federal Home Loan Mortgage Corp., 7.81%, (Callable 4/13/99 @ 100),
4/13/2009 1,482,983
-------------------------------------------------------------------
500,000 Federal Home Loan Mortgage Corp., Debenture, 6.16%,
(Callable 3/29/96 @ 100), 3/29/2000 474,553
-------------------------------------------------------------------
957,000 Federal National Mortgage Association, 7.55%-9.00%,
6/10/99-10/11/99 944,357
-------------------------------------------------------------------
750,000 Federal National Mortgage Association, Debenture, 6.20%
(Callable 7/10/98 @ 100), 7/10/2003 675,507
-------------------------------------------------------------------
500,000 Federal National Mortgage Association, Debenture, 7.30%, 10/28/2002 489,360
-------------------------------------------------------------------
1,500,000 Federal National Mortgage Association, Medium Term Note, 8.05%
(Callable 5/20/97 @ 100), 5/20/2004 1,514,874
-------------------------------------------------------------------
83,142 Student Loan Marketing Association, 9.40%, 5/31/2002 93,774
------------------------------------------------------------------- -----------
Total 7,870,191
------------------------------------------------------------------- -----------
TREASURY SECURITIES--29.7%
-------------------------------------------------------------------
10,212,000 United States Treasury Notes, 4.25%-9.50%, 9/30/94-5/17/2004 10,307,705
-------------------------------------------------------------------
3,704,000 United States Treasury Bonds, 7.50%--8.75%, 8/15/94-11/15/2016 3,715,570
------------------------------------------------------------------- -----------
Total 14,023,275
------------------------------------------------------------------- -----------
TOTAL GOVERNMENT SECURITIES (IDENTIFIED COST, $22,044,016) 21,893,466
------------------------------------------------------------------- -----------
*REPURCHASE AGREEMENT--5.1%
- --------------------------------------------------------------------------------------
2,430,000 Harris, Nesbitt, Thomson Securities, Inc., 3.95%, dated 7/29/94,
due
8/1/94 (at amortized cost)/(Note 2B) 2,430,000
------------------------------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST, $44,022,453) $43,094,103+
------------------------------------------------------------------- -----------
</TABLE>
* Repurchase agreement is fully collateralized by U.S. government and/or agency
obligations based on market prices at the date of the portfolio.
+ The cost for federal tax purposes amounts to $44,022,453. The net unrealized
depreciation of investments on a federal tax basis amounts to $928,350, which
is comprised of $197,928 appreciation and $1,126,278 depreciation at July 31,
1994.
Note: The categories of investments are shown as a percentage of net assets
($47,272,039) at July 31, 1994.
The following abbreviation is used in this portfolio:
CMOs--Collateralized Mortgage Obligations
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE QUALITY BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investments in securities, at value (Notes 2A and 2B)
(identified and tax cost, $44,022,453) $43,094,103
- --------------------------------------------------------------------------------
Cash 647
- --------------------------------------------------------------------------------
Receivable for investments sold 3,531,576
- --------------------------------------------------------------------------------
Interest receivable 670,697
- --------------------------------------------------------------------------------
Receivable for Fund shares sold 43,417
- --------------------------------------------------------------------------------
Deferred expenses (Note 2F) 6,943
- -------------------------------------------------------------------------------- -----------
Total assets 47,347,383
- --------------------------------------------------------------------------------
LIABILITIES:
- ----------------------------------------------------------------------
Payable for Fund shares redeemed $48,551
- ----------------------------------------------------------------------
Payable to Administrator (Note 4) 4,663
- ----------------------------------------------------------------------
Accrued expenses 22,130
- ---------------------------------------------------------------------- -------
Total liabilities 75,344
- -------------------------------------------------------------------------------- -----------
NET ASSETS for 4,948,600 shares of beneficial interest outstanding $47,272,039
- -------------------------------------------------------------------------------- -----------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid-in capital $50,319,059
- --------------------------------------------------------------------------------
Net unrealized appreciation(depreciation) of investments (928,350)
- --------------------------------------------------------------------------------
Accumulated net realized gain(loss) on investments (2,178,700)
- --------------------------------------------------------------------------------
Undistributed net investment income 60,030
- -------------------------------------------------------------------------------- -----------
Total Net Assets $47,272,039
- -------------------------------------------------------------------------------- -----------
NET ASSET VALUE, and Redemption Proceeds Per Share:
- --------------------------------------------------------------------------------
($47,272,039/4,948,600 shares of beneficial interest outstanding) $9.55
- -------------------------------------------------------------------------------- -----------
COMPUTATION OF OFFERING PRICE:
- --------------------------------------------------------------------------------
Offering Price Per Share (100/95.5 of $9.55) $10.00*
- -------------------------------------------------------------------------------- -----------
</TABLE>
* See "What Shares Cost" in the prospectus.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE QUALITY BOND FUND
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------
Interest income (Note 2C) $ 2,976,928
- ----------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------
Investment advisory fee* $251,563
- ----------------------------------------------------------------------
Administrative personnel and services fees* 53,076
- ----------------------------------------------------------------------
Custodian fee* 12,000
- ----------------------------------------------------------------------
Portfolio accounting, transfer and dividend disbursing agent fees and
expenses* 27,821
- ----------------------------------------------------------------------
Legal fees 6,875
- ----------------------------------------------------------------------
Auditing fees 13,975
- ----------------------------------------------------------------------
Printing and postage 9,717
- ----------------------------------------------------------------------
Fund share registration costs 16,436
- ----------------------------------------------------------------------
Miscellaneous 1,048
- ---------------------------------------------------------------------- --------
Total expenses 392,511
- ----------------------------------------------------------------------
Deduct--
- ------------------------------------------------------------
Waiver of investment advisory fee* $33,221
- ------------------------------------------------------------
Waiver of custodian fee* 12,000
- ------------------------------------------------------------
Waiver of administrative personnel and services fees* 4,247 49,468
- ------------------------------------------------------------ ------- --------
Net expenses 343,043
- ---------------------------------------------------------------------------------- -----------
Net investment income 2,633,885
- ---------------------------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ----------------------------------------------------------------------------------
Net realized gain(loss) on investments (identified cost basis) (2,092,565)
- ----------------------------------------------------------------------------------
Net change in unrealized appreciation(depreciation) of investments (1,378,385)
- ---------------------------------------------------------------------------------- -----------
Net realized and unrealized gain(loss) on investments (3,470,950)
- ---------------------------------------------------------------------------------- -----------
Change in net assets resulting from operations $ (837,065)
- ---------------------------------------------------------------------------------- -----------
</TABLE>
* See Note 4.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE QUALITY BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
----------------------------
1994 1993*
------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ----------------------------------------------------------------
OPERATIONS--
- ----------------------------------------------------------------
Net investment income $ 2,633,885 $ 1,152,069
- ----------------------------------------------------------------
Net realized gain (loss) on investment transactions ($86,010 and
$66,994 net gains, respectively, as computed for federal tax
purposes) (Note 2D) (2,092,565) 66,994
- ----------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of
investments (1,378,385) 450,034
- ---------------------------------------------------------------- ------------ -----------
Change in net assets resulting from operations (837,065) 1,669,097
- ---------------------------------------------------------------- ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)--
- ----------------------------------------------------------------
Dividends to shareholders from net investment income (2,633,885) (1,028,221)
- ----------------------------------------------------------------
Distributions to shareholders from net realized gain on
investment transactions (153,128) --
- ----------------------------------------------------------------
Distributions in excess of net investment income (63,818) --
- ---------------------------------------------------------------- ------------ -----------
Change in net assets from distributions to shareholders (2,850,831) (1,028,221)
- ---------------------------------------------------------------- ------------ -----------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
- ----------------------------------------------------------------
Proceeds from sale of shares 22,977,402 42,126,363
- ----------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
dividends declared 2,373,604 979,189
- ----------------------------------------------------------------
Cost of shares redeemed (12,353,228) (5,784,271)
- ---------------------------------------------------------------- ------------ -----------
Change in net assets from Fund share transactions 12,997,778 37,321,281
- ---------------------------------------------------------------- ------------ -----------
Change in net assets 9,309,882 37,962,157
- ----------------------------------------------------------------
NET ASSETS:
- ----------------------------------------------------------------
Beginning of period 37,962,157 --
- ---------------------------------------------------------------- ------------ -----------
End of period (including undistributed net investment income of
$60,030 and $123,848, respectively) $ 47,272,039 $37,962,157
- ---------------------------------------------------------------- ------------ -----------
</TABLE>
* For the period from November 20, 1992 (date of initial public investment) to
July 31, 1993.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE QUALITY BOND FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
-----------------------
1994 1993*
------- -------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.29 $10.00
- --------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------
Net investment income 0.57 0.41
- --------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.69) 0.26
- -------------------------------------------------------------------- ------ ------
Total from investment operations (0.12) 0.67
- --------------------------------------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------------------------------------
Dividends to shareholders from net investment income (0.57) (0.38)
- --------------------------------------------------------------------
Distributions to shareholders from net realized gain on
investment transactions (0.03) --
- --------------------------------------------------------------------
Distributions in excess of net investment income (a) (0.02) --
- -------------------------------------------------------------------- ------ ------
Total distributions (0.62) (0.38)
- -------------------------------------------------------------------- ------ ------
NET ASSET VALUE, END OF PERIOD $9.55 $10.29
- -------------------------------------------------------------------- ------ ------
TOTAL RETURN** (1.25%) 6.78%
- --------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------------------
Expenses 0.75% 0.74%(c)
- --------------------------------------------------------------------
Net investment income 5.76% 6.07%(c)
- --------------------------------------------------------------------
Expense waiver/reimbursement(b) 0.11% 0.23%(c)
- --------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------
Net assets, end of period (000 omitted) $47,272 $37,962
- --------------------------------------------------------------------
Portfolio turnover rate 112% 19%
- --------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from November 20, 1992 (date of initial
public investment) to July 31, 1993.
** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) These distributions do not represent a return of capital for federal tax
purposes for the year ended July 31, 1994.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(c) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE QUALITY GROWTH FUND
PORTFOLIO OF INVESTMENTS
JULY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--98.2%
- --------------------------------------------------------------------------------------
AGRICULTURE--0.9%
-------------------------------------------------------------------
20,000 Pioneer Hi-Bred International, Inc. $ 638,750
------------------------------------------------------------------- -----------
AUTOMOBILES--2.0%
-------------------------------------------------------------------
44,000 Ford Motor Co. 1,397,000
------------------------------------------------------------------- -----------
BANKING--7.0%
-------------------------------------------------------------------
85,000 Firstar Corp. 2,943,125
-------------------------------------------------------------------
60,000 Wachovia Corp. 1,957,500
------------------------------------------------------------------- -----------
Total 4,900,625
------------------------------------------------------------------- -----------
BUILDING MATERIALS--5.3%
-------------------------------------------------------------------
42,000 Masco Corp. 1,102,500
-------------------------------------------------------------------
80,000 Sherwin Williams Co. 2,610,000
------------------------------------------------------------------- -----------
Total 3,712,500
------------------------------------------------------------------- -----------
CHEMICALS--7.6%
-------------------------------------------------------------------
70,000 Air Products & Chemicals, Inc. 3,360,000
-------------------------------------------------------------------
110,000 RPM, Inc. 1,925,000
------------------------------------------------------------------- -----------
Total 5,285,000
------------------------------------------------------------------- -----------
COMPUTER SOFTWARE SERVICES--5.3%
-------------------------------------------------------------------
57,000 Automatic Data Processing, Inc. 2,935,500
-------------------------------------------------------------------
14,000 Microsoft Corp. 721,000
------------------------------------------------------------------- -----------
Total 3,656,500
------------------------------------------------------------------- -----------
CONSUMER PRODUCTS--4.7%
-------------------------------------------------------------------
50,000 Newell Co. 2,231,250
-------------------------------------------------------------------
18,000 Procter & Gamble Co. 1,003,500
------------------------------------------------------------------- -----------
Total 3,234,750
------------------------------------------------------------------- -----------
ELECTRICAL EQUIPMENT--11.0%
-------------------------------------------------------------------
46,000 Emerson Electric Co. 2,794,500
-------------------------------------------------------------------
64,000 General Electric Co. 3,224,000
-------------------------------------------------------------------
24,000 W.W. Grainger, Inc. 1,602,000
------------------------------------------------------------------- -----------
Total 7,620,500
------------------------------------------------------------------- -----------
ELECTRONICS--5.4%
-------------------------------------------------------------------
45,000 Intel Corp. 2,666,250
-------------------------------------------------------------------
30,000 Loral Corp. 1,117,500
------------------------------------------------------------------- -----------
Total 3,783,750
------------------------------------------------------------------- -----------
ENTERTAINMENT--1.5%
-------------------------------------------------------------------
25,000 Disney (Walt) Co. (The) 1,062,500
------------------------------------------------------------------- -----------
</TABLE>
FOUNTAIN SQUARE QUALITY GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
HEALTHCARE--5.4%
-------------------------------------------------------------------
20,000 Abbott Laboratories $ 562,500
-------------------------------------------------------------------
21,000 Medtronic, Inc. 1,871,625
-------------------------------------------------------------------
10,000 Schering Plough Corp. 641,250
-------------------------------------------------------------------
15,000 United Healthcare Corp. 682,500
------------------------------------------------------------------- -----------
Total 3,757,875
------------------------------------------------------------------- -----------
INSURANCE--2.7%
-------------------------------------------------------------------
35,000 Cincinnati Financial Corp. 1,863,750
------------------------------------------------------------------- -----------
MANUFACTURING--4.7%
-------------------------------------------------------------------
93,333 Federal Signal Corp. 1,726,667
-------------------------------------------------------------------
38,200 Illinois Tool Works, Inc. 1,532,775
------------------------------------------------------------------- -----------
Total 3,259,442
------------------------------------------------------------------- -----------
MEDIA/PUBLISHING--6.9%
-------------------------------------------------------------------
35,000 Gannett Co., Inc. 1,767,500
-------------------------------------------------------------------
93,000 Interpublic Group Companies, Inc. 3,010,875
------------------------------------------------------------------- -----------
Total 4,778,375
------------------------------------------------------------------- -----------
OFFICE EQUIPMENT--2.9%
-------------------------------------------------------------------
58,000 Pitney Bowes, Inc. 2,044,500
------------------------------------------------------------------- -----------
OIL AND GAS--10.0%
-------------------------------------------------------------------
50,000 Chevron Corp. 2,218,750
-------------------------------------------------------------------
40,000 Exxon Corp. 2,380,000
-------------------------------------------------------------------
28,000 Mobil Corp. 2,348,500
------------------------------------------------------------------- -----------
Total 6,947,250
------------------------------------------------------------------- -----------
RETAILING--5.9%
-------------------------------------------------------------------
50,000 Home Depot, Inc. 2,050,000
-------------------------------------------------------------------
20,000 May Department Stores Co. 792,500
-------------------------------------------------------------------
35,000 Walgreen Co. 1,281,875
------------------------------------------------------------------- -----------
Total 4,124,375
------------------------------------------------------------------- -----------
TELECOMMUNICATIONS--4.8%
-------------------------------------------------------------------
55,000 Alltel Corp. 1,485,000
-------------------------------------------------------------------
15,000 American Telephone & Telegraph Co. 819,375
-------------------------------------------------------------------
24,400 Ameritech Corp. 1,000,400
------------------------------------------------------------------- -----------
Total 3,304,775
------------------------------------------------------------------- -----------
TRANSPORTATION--4.2%
-------------------------------------------------------------------
50,000 Union Pacific Corp. 2,950,000
------------------------------------------------------------------- -----------
TOTAL COMMON STOCKS (IDENTIFIED COST, $66,008,538) 68,322,217
------------------------------------------------------------------- -----------
</TABLE>
FOUNTAIN SQUARE QUALITY GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ------------------------------------------------------------------- -----------
<C> <C> <S> <C>
*REPURCHASE AGREEMENT--1.5%
- --------------------------------------------------------------------------------------
$1,015,000 Harris, Nesbitt, Thomson Securities, Inc., 3.95%, dated 7/29/94,
due 8/1/94 (at amortized cost)/(Note 2B) $ 1,015,000
------------------------------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST, $67,023,538) $69,337,217+
------------------------------------------------------------------- -----------
</TABLE>
+ The cost for federal tax purposes amounts to $67,023,538 at July 31, 1994. The
net unrealized appreciation of investments on a federal tax basis amounts to
$2,313,679, which is comprised of $2,700,631 appreciation and $386,952
depreciation at July 31, 1994.
* Repurchase agreement is fully collateralized by U.S. government and/or agency
obligations based on market prices at the date of the portfolio.
Note: The categories of investments are shown as a percentage of total net
assets ($69,647,913) at July 31, 1994.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE QUALITY GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investments in securities, at value (Notes 2A and 2B)
(identified and tax cost, $67,023,538) $69,337,217
- --------------------------------------------------------------------------------
Cash 278
- --------------------------------------------------------------------------------
Receivable for investments sold 314,464
- --------------------------------------------------------------------------------
Dividends and interest receivable 88,731
- --------------------------------------------------------------------------------
Receivable for Fund shares sold 44,648
- --------------------------------------------------------------------------------
Deferred expenses (Note 2F) 11,999
- -------------------------------------------------------------------------------- -----------
Total assets 69,797,337
- --------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------
Payable for Fund shares redeemed $115,612
- ---------------------------------------------------------------------
Payable to Administrator (Note 4) 6,802
- ---------------------------------------------------------------------
Accrued expenses 27,010
- --------------------------------------------------------------------- --------
Total liabilities 149,424
- -------------------------------------------------------------------------------- -----------
NET ASSETS for 7,183,245 shares of beneficial interest outstanding $69,647,913
- -------------------------------------------------------------------------------- -----------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid-in capital $71,751,767
- --------------------------------------------------------------------------------
Net unrealized appreciation (depreciation)_of investments 2,313,679
- --------------------------------------------------------------------------------
Accumulated net realized gain (loss) on investments (4,456,074)
- --------------------------------------------------------------------------------
Undistributed net investment income 38,541
- -------------------------------------------------------------------------------- -----------
Total Net Assets $69,647,913
- -------------------------------------------------------------------------------- -----------
NET ASSET VALUE and Redemption Proceeds Per Share:
($69,647,913 / 7,183,245 shares of beneficial interest outstanding) $9.70
- -------------------------------------------------------------------------------- -----------
COMPUTATION OF OFFERING PRICE:
- --------------------------------------------------------------------------------
Offering Price Per Share (100/95.5 of $9.70) $10.16*
- -------------------------------------------------------------------------------- -----------
</TABLE>
* See "What Shares Cost" in the prospectus.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE QUALITY GROWTH FUND
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------
Dividend income $ 1,652,399
- ----------------------------------------------------------------------------------
Interest income 87,573
- ---------------------------------------------------------------------------------- -----------
Total investment income (Note 2C) 1,739,972
- ----------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------
Investment advisory fee* $575,044
- ----------------------------------------------------------------------
Administrative personnel and services fees* 82,765
- ----------------------------------------------------------------------
Custodian fee* 12,000
- ----------------------------------------------------------------------
Portfolio accounting, transfer and dividend disbursing agent fees and
expenses* 29,046
- ----------------------------------------------------------------------
Legal fees 8,050
- ----------------------------------------------------------------------
Auditing fees 13,975
- ----------------------------------------------------------------------
Printing and postage 2,476
- ----------------------------------------------------------------------
Fund share registration costs 14,916
- ----------------------------------------------------------------------
Miscellaneous 3,537
- ---------------------------------------------------------------------- --------
Total expenses 741,809
- ----------------------------------------------------------------------
Deduct--
- ----------------------------------------------------------------------
Waiver of investment advisory fee* $10,880
- ------------------------------------------------------------
Waiver of custodian fee* 12,000 22,880
- ------------------------------------------------------------ ------- --------
Net expenses 718,929
- ---------------------------------------------------------------------------------- -----------
Net investment income 1,021,043
- ---------------------------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ----------------------------------------------------------------------------------
Net realized gain (loss) on investments (identified cost basis) (3,267,803)
- ----------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of investments 4,310,114
- ---------------------------------------------------------------------------------- -----------
Net realized and unrealized gain (loss) on investments 1,042,311
- ---------------------------------------------------------------------------------- -----------
Change in net assets resulting from operations $ 2,063,354
- ---------------------------------------------------------------------------------- -----------
</TABLE>
* See Note 4.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE QUALITY GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
----------------------------
1994 1993*
------------ -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ----------------------------------------------------------------
OPERATIONS--
- ----------------------------------------------------------------
Net investment income $ 1,021,043 $ 640,755
- ----------------------------------------------------------------
Net realized loss on investment transactions ($1,768,644 and $0
net loss, respectively, as computed for federal tax purposes)
(Note 2D) (3,267,803) (1,188,271)
- ----------------------------------------------------------------
Change in unrealized appreciation (depreciation) of investments 4,310,114 (1,996,435)
- ---------------------------------------------------------------- ------------ -----------
Change in net assets resulting from operations 2,063,354 (2,543,951)
- ---------------------------------------------------------------- ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)--
- ----------------------------------------------------------------
Dividends to shareholders from net investment income (1,021,043) (569,056)
- ----------------------------------------------------------------
Distributions in excess of net investment income (33,158) --
- ---------------------------------------------------------------- ------------ -----------
Change in net assets from distributions to shareholders (1,054,201) (569,056)
- ---------------------------------------------------------------- ------------ -----------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
- ----------------------------------------------------------------
Proceeds from sale of shares 18,459,017 78,736,882
- ----------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
dividends declared 999,178 559,992
- ----------------------------------------------------------------
Cost of shares redeemed (18,500,148) (8,503,154)
- ---------------------------------------------------------------- ------------ -----------
Change in net assets from Fund share transactions 958,047 70,793,720
- ---------------------------------------------------------------- ------------ -----------
Change in net assets 1,967,200 67,680,713
- ----------------------------------------------------------------
NET ASSETS:
- ----------------------------------------------------------------
Beginning of period 67,680,713 --
- ---------------------------------------------------------------- ------------ -----------
End of period (including undistributed net investment income of
$38,541 and $71,699, respectively) $ 69,647,913 $67,680,713
- ---------------------------------------------------------------- ------------ -----------
</TABLE>
* For the period from November 20, 1992 (date of initial public investment) to
July 31, 1993.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE QUALITY GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
---------------------
1994 1993*
------- -------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $9.54 $10.00
- ----------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------
Net investment income 0.13 0.10
- ----------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.17 (0.47)
- ---------------------------------------------------------------------- ----- ------
Total from investment operations 0.30 (0.37)
- ----------------------------------------------------------------------
LESS DISTRIBUTIONS
- ----------------------------------------------------------------------
Dividends to shareholders from net investment income (0.13) (0.09)
- ----------------------------------------------------------------------
Distributions in excess of net investment income (a) (0.01) --
- ---------------------------------------------------------------------- ----- ------
Total distributions (0.14) (0.09)
- ---------------------------------------------------------------------- ----- ------
NET ASSET VALUE, END OF PERIOD $9.70 $9.54
- ---------------------------------------------------------------------- ----- ------
TOTAL RETURN** 3.17% (3.73%)
- ----------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------------
Expenses 1.00% 0.99%(c)
- ----------------------------------------------------------------------
Net investment income 1.42% 1.47%(c)
- ----------------------------------------------------------------------
Expense waiver/reimbursement (b) 0.03% 0.05%(c)
- ----------------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------------
Net assets, end of period (000 omitted) $69,648 $67,681
- ----------------------------------------------------------------------
Portfolio turnover rate 37% 28%
- ----------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from November 20, 1992 (date of initial
public investment) to July 31, 1993.
** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) These distributions do not represent a return of capital for federal tax
purposes for the year ended July 31, 1994.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(c) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE MID CAP FUND
PORTFOLIO OF INVESTMENTS
JULY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--94.7%
- --------------------------------------------------------------------------------------
BANKING--4.2%
-------------------------------------------------------------------
37,000 Firstar Corp. $ 1,281,125
------------------------------------------------------------------- -----------
BUILDING MATERIALS--1.3%
-------------------------------------------------------------------
4,500 * McWhorter Technologies 75,375
-------------------------------------------------------------------
9,000 Valspar Corp. 306,000
------------------------------------------------------------------- -----------
Total 381,375
------------------------------------------------------------------- -----------
CHEMICALS--10.0%
-------------------------------------------------------------------
26,100 Crompton & Knowles Corp. 437,175
-------------------------------------------------------------------
20,000 Loctite Corp. 877,500
-------------------------------------------------------------------
54,500 RPM, Inc. 953,750
-------------------------------------------------------------------
24,000 Sigma Aldrich Corp. 750,000
------------------------------------------------------------------- -----------
Total 3,018,425
------------------------------------------------------------------- -----------
COMMERCIAL SERVICES--2.8%
-------------------------------------------------------------------
27,000 Cintas Corp. 843,750
------------------------------------------------------------------- -----------
COMPUTER SOFTWARE SERVICES--8.7%
-------------------------------------------------------------------
18,000 * Electronic Arts 256,500
-------------------------------------------------------------------
24,000 First Data Corp. 1,074,000
-------------------------------------------------------------------
42,224 * Fiserv, Inc. 928,928
-------------------------------------------------------------------
11,250 Paychex, Inc. 376,875
------------------------------------------------------------------- -----------
Total 2,636,303
------------------------------------------------------------------- -----------
DISTRIBUTION/WHOLESALE--1.8%
-------------------------------------------------------------------
13,750 Cardinal Health, Inc. 530,020
------------------------------------------------------------------- -----------
ELECTRICAL EQUIPMENT--3.8%
-------------------------------------------------------------------
17,200 W.W. Grainger, Inc. 1,148,100
------------------------------------------------------------------- -----------
ELECTRONICS--7.9%
-------------------------------------------------------------------
22,000 * Adaptec, Inc. 404,250
-------------------------------------------------------------------
27,000 Premier Industrial Corp. 624,375
-------------------------------------------------------------------
32,130 * Vishay Intertechnologies, Inc. 1,353,476
------------------------------------------------------------------- -----------
Total 2,382,101
------------------------------------------------------------------- -----------
FINANCIAL SERVICES--2.4%
-------------------------------------------------------------------
20,000 United Asset Management 715,000
------------------------------------------------------------------- -----------
FOOD-PROCESSING--2.7%
-------------------------------------------------------------------
43,000 McCormick & Co., Inc. 827,750
------------------------------------------------------------------- -----------
HOUSEHOLD PRODUCTS/WARES--2.5%
-------------------------------------------------------------------
17,000 Newell Co. 758,625
------------------------------------------------------------------- -----------
</TABLE>
FOUNTAIN SQUARE MID CAP FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
INSURANCE--10.0%
-------------------------------------------------------------------
22,000 Cincinnati Financial Corp. $ 1,171,500
-------------------------------------------------------------------
27,000 Equitable of Iowa Co. 951,750
-------------------------------------------------------------------
31,500 MGIC Investment Corp. 885,938
------------------------------------------------------------------- -----------
Total 3,009,188
------------------------------------------------------------------- -----------
IRON/STEEL--1.6%
-------------------------------------------------------------------
24,000 Allegheny Ludlum Corp. 489,000
------------------------------------------------------------------- -----------
MANUFACTURING--11.4%
-------------------------------------------------------------------
16,000 Federal Signal Corp. 296,000
-------------------------------------------------------------------
19,000 La-Z-Boy Chair Co. 503,500
-------------------------------------------------------------------
8,000 * Mohawk Industries, Inc. 120,500
-------------------------------------------------------------------
23,400 TriMas Corp. 541,125
-------------------------------------------------------------------
27,750 Wabash National Corp. 999,000
-------------------------------------------------------------------
41,000 Watts Industries, Class A 994,250
------------------------------------------------------------------- -----------
Total 3,454,375
------------------------------------------------------------------- -----------
MEDIA PUBLISHING--3.5%
-------------------------------------------------------------------
33,000 Interpublic Group Companies, Inc. 1,068,375
------------------------------------------------------------------- -----------
MEDICAL SUPPLIES--3.7%
-------------------------------------------------------------------
12,500 Medtronic, Inc. 1,114,062
------------------------------------------------------------------- -----------
OIL-ENERGY--0.2%
-------------------------------------------------------------------
1,850 Questar Corp. 61,512
------------------------------------------------------------------- -----------
PAPER & FOREST PRODUCTS--1.2%
-------------------------------------------------------------------
15,000 Wausau Paper Mills Co. 363,750
------------------------------------------------------------------- -----------
RETAIL-GENERAL--2.7%
-------------------------------------------------------------------
37,031 Dollar General Corp. 805,430
------------------------------------------------------------------- -----------
TRANSPORTATION--2.8%
-------------------------------------------------------------------
36,000 Comair Holdings, Inc. 841,500
------------------------------------------------------------------- -----------
TRUCKING & LEASING--4.6%
-------------------------------------------------------------------
45,500 Arnold Industries, Inc. 847,437
-------------------------------------------------------------------
21,000 Werner Enterprises, Inc. 546,000
------------------------------------------------------------------- -----------
Total 1,393,437
------------------------------------------------------------------- -----------
</TABLE>
FOUNTAIN SQUARE MID CAP FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
OR SHARES VALUE
- ---------- ------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
UTILITIES--4.9%
-------------------------------------------------------------------
28,000 Alltel Corp. $ 756,000
-------------------------------------------------------------------
28,000 Century Telephone Enterprises, Inc. 728,000
------------------------------------------------------------------- -----------
Total 1,484,000
------------------------------------------------------------------- -----------
TOTAL COMMON STOCKS (IDENTIFIED COST, $27,599,606) 28,607,203
------------------------------------------------------------------- -----------
**REPURCHASE AGREEMENT--5.5%
- --------------------------------------------------------------------------------------
$1,658,000 Harris, Nesbitt, Thomson Securities, Inc., 3.95%, dated 7/29/94,
due 8/1/94 (at amortized cost)/(Note 2B) 1,658,000
------------------------------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST, $29,257,606) $30,265,203+
------------------------------------------------------------------- -----------
</TABLE>
* Non-income producing securities.
** Repurchase agreement is fully collateralized by U.S. government and/or agency
obligations based on market prices at the date of the portfolio.
+ The cost for federal tax purposes amounts to $29,257,606 at July 31, 1994.
The net unrealized appreciation of investments on a federal tax basis amounts
to $1,007,597 which is comprised of $2,706,766 appreciation and $1,699,169
depreciation at July 31, 1994.
Note: The categories of investments are shown as a percentage of total net
assets ($30,209,855) at July 31, 1994.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE MID CAP FUND
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investments in securities, at value (Notes 2A and 2B) (identified and
tax cost, $29,257,606) $30,265,203
- --------------------------------------------------------------------------------
Cash 787
- --------------------------------------------------------------------------------
Receivable for Fund shares sold 16,877
- --------------------------------------------------------------------------------
Dividends and interest receivable 13,257
- --------------------------------------------------------------------------------
Deferred expenses (Note 2F) 5,043
- -------------------------------------------------------------------------------- -----------
Total assets 30,301,167
- --------------------------------------------------------------------------------
LIABILITIES:
- ----------------------------------------------------------------------
Payable for investments purchased $59,293
- ----------------------------------------------------------------------
Payable for Fund shares redeemed 6,191
- ----------------------------------------------------------------------
Accrued expenses 25,828
- ---------------------------------------------------------------------- -------
Total liabilities 91,312
- -------------------------------------------------------------------------------- -----------
NET ASSETS for 2,991,865 shares of beneficial interest outstanding $30,209,855
- -------------------------------------------------------------------------------- -----------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid-in capital $30,064,297
- --------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments 1,007,597
- --------------------------------------------------------------------------------
Accumulated net realized gain (loss) on investments (862,039)
- -------------------------------------------------------------------------------- -----------
Total Net Assets $30,209,855
- -------------------------------------------------------------------------------- -----------
NET ASSET VALUE and Redemption Proceeds Per Share:
($30,209,855 / 2,991,865 shares of beneficial interest outstanding) $10.10
- -------------------------------------------------------------------------------- -----------
COMPUTATION OF OFFERING PRICE:
- --------------------------------------------------------------------------------
Offering Price Per Share (100/95.5 of $10.10) $10.58*
- -------------------------------------------------------------------------------- -----------
</TABLE>
* See "What Shares Cost" in the prospectus.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE MID CAP FUND
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -----------------------------------------------------------------------------------
Interest income $ 59,116
- -----------------------------------------------------------------------------------
Dividend income 382,194
- ----------------------------------------------------------------------------------- ----------
Total investment income (Note 2C) 441,310
- -----------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------
Investment advisory fee* $220,198
- -----------------------------------------------------------------------
Administrative personnel and services fees* 50,000
- -----------------------------------------------------------------------
Custodian fee* 12,000
- -----------------------------------------------------------------------
Portfolio accounting, transfer and dividend disbursing agent fees and
expenses* 30,006
- -----------------------------------------------------------------------
Legal fees 5,967
- -----------------------------------------------------------------------
Auditing fees 13,975
- -----------------------------------------------------------------------
Printing and postage 7,818
- -----------------------------------------------------------------------
Fund share registration costs 16,991
- -----------------------------------------------------------------------
Miscellaneous 9,279
- ----------------------------------------------------------------------- --------
Total expenses 366,234
- -----------------------------------------------------------------------
Deduct--
- -----------------------------------------------------------------------
Waiver of investment advisory fee* $74,740
- -------------------------------------------------------------
Waiver of custodian fee* 12,000
- -------------------------------------------------------------
Waiver of administrative personnel and services fees* 4,247 90,987
- ------------------------------------------------------------- ------- --------
Net expenses 275,247
- ----------------------------------------------------------------------------------- ----------
Net investment income 166,063
- ----------------------------------------------------------------------------------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- -----------------------------------------------------------------------------------
Net realized gain (loss) on investments (identified cost basis) (597,566)
- -----------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of investments 1,578,568
- ----------------------------------------------------------------------------------- ----------
Net realized and unrealized gain (loss) on investments 981,002
- ----------------------------------------------------------------------------------- ----------
Change in net assets resulting from operations $1,147,065
- ----------------------------------------------------------------------------------- ----------
</TABLE>
* See Note 4.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE MID CAP FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
---------------------------
1994 1993*
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ----------------------------------------------------------------
OPERATIONS--
- ----------------------------------------------------------------
Net investment income $ 166,063 $ 116,090
- ----------------------------------------------------------------
Net realized loss on investment transactions ($155,006 and $0
net loss, respectively, as computed for federal tax purposes)
(Note 2D) (597,566) (264,473)
- ----------------------------------------------------------------
Change in unrealized appreciation (depreciation) of investments 1,578,568 (570,971)
- ---------------------------------------------------------------- ----------- -----------
Change in net assets resulting from operations 1,147,065 (719,354)
- ---------------------------------------------------------------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)--
- ----------------------------------------------------------------
Dividends to shareholders from net investment income (166,063) (95,992)
- ----------------------------------------------------------------
Distributions in excess of net investment income (20,098) --
- ---------------------------------------------------------------- ----------- -----------
Change in net assets from distributions to shareholders (186,161) (95,992)
- ---------------------------------------------------------------- ----------- -----------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
- ----------------------------------------------------------------
Proceeds from sale of shares 10,943,437 25,919,640
- ----------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
dividends declared 170,509 92,623
- ----------------------------------------------------------------
Cost of shares redeemed (5,884,456) (1,177,456)
- ---------------------------------------------------------------- ----------- -----------
Change in net assets from Fund share transactions 5,229,490 24,834,807
- ---------------------------------------------------------------- ----------- -----------
Change in net assets 6,190,394 24,019,461
- ----------------------------------------------------------------
NET ASSETS:
- ----------------------------------------------------------------
Beginning of period 24,019,461 --
- ---------------------------------------------------------------- ----------- -----------
End of period (including undistributed net investment income of
$0 and $20,098, respectively) $30,209,855 $24,019,461
- ---------------------------------------------------------------- ----------- -----------
</TABLE>
* For the period from November 20, 1992 (date of initial public investment) to
July 31, 1993.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE MID CAP FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
----------------------
1994 1993*
------- -------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $9.68 $10.00
- ---------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------
Net investment income 0.06 0.06
- ---------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.43 (0.33)
- --------------------------------------------------------------------- ------ ------
Total from investment operations 0.49 (0.27)
- ---------------------------------------------------------------------
LESS DISTRIBUTIONS
- ---------------------------------------------------------------------
Dividends to shareholders from net investment income (0.06) (0.05)
- ---------------------------------------------------------------------
Distributions in excess of net investment income (a) (0.01) --
- --------------------------------------------------------------------- ------ ------
Total distributions (0.07) (0.05)
- --------------------------------------------------------------------- ------ ------
NET ASSET VALUE, END OF PERIOD $10.10 $9.68
- --------------------------------------------------------------------- ------ ------
TOTAL RETURN** 5.07% (2.73%)
- ---------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------------------------------------------
Expenses 1.00% 0.99%(b)
- ---------------------------------------------------------------------
Net investment income 0.60% 0.88%(b)
- ---------------------------------------------------------------------
Expense waiver/reimbursement(c) 0.33% 0.40%(b)
- ---------------------------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------------------------
Net assets, end of period (000 omitted) $30,210 $24,019
- ---------------------------------------------------------------------
Portfolio turnover rate 44% 20%
- ---------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from November 20, 1992 (date of initial
public investment) to July 31, 1993.
** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) These distributions did not represent a return of capital for federal tax
purposes for the year ended July 31, 1994.
(b) Computed on an annualized basis.
(c) The voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE BALANCED FUND
PORTFOLIO OF INVESTMENTS
JULY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
COMMON STOCKS--68.6%
- -------------------------------------------------------------------------------------
AGRICULTURE--0.6%
------------------------------------------------------------------
11,000 Pioneer Hi-Bred International, Inc. $ 350,625
------------------------------------------------------------------ -----------
AUTOMOBILES--1.3%
------------------------------------------------------------------
24,000 Ford Motor Co. 762,000
------------------------------------------------------------------ -----------
BANKING--4.3%
------------------------------------------------------------------
40,000 Firstar Corp. 1,385,000
------------------------------------------------------------------
36,000 Wachovia Corp. 1,174,500
------------------------------------------------------------------ -----------
Total 2,559,500
------------------------------------------------------------------ -----------
BUILDING MATERIALS--3.6%
------------------------------------------------------------------
35,000 Masco Corp. 918,750
------------------------------------------------------------------
38,000 Sherwin Williams Co. 1,239,750
------------------------------------------------------------------ -----------
Total 2,158,500
------------------------------------------------------------------ -----------
CHEMICALS--5.2%
------------------------------------------------------------------
43,000 Air Products & Chemicals, Inc. 2,064,000
------------------------------------------------------------------
50,000 RPM, Inc. 875,000
------------------------------------------------------------------
5,000 Sigma-Aldrich Corp. 156,250
------------------------------------------------------------------ -----------
Total 3,095,250
------------------------------------------------------------------ -----------
COMPUTER SOFTWARE SERVICES--4.2%
------------------------------------------------------------------
32,000 Automatic Data Processing, Inc. 1,648,000
------------------------------------------------------------------
20,000 Fiserv Inc. 440,000
------------------------------------------------------------------
8,000 Microsoft Corp. 412,000
------------------------------------------------------------------ -----------
Total 2,500,000
------------------------------------------------------------------ -----------
CONSUMER PRODUCTS--2.9%
------------------------------------------------------------------
25,000 Newell Co. 1,115,625
------------------------------------------------------------------
11,000 Procter & Gamble Co. 613,250
------------------------------------------------------------------ -----------
Total 1,728,875
------------------------------------------------------------------ -----------
ELECTRICAL EQUIPMENT--7.7%
------------------------------------------------------------------
29,000 Emerson Electric Co. 1,761,750
------------------------------------------------------------------
40,000 General Electric Co. 2,015,000
------------------------------------------------------------------
12,000 W.W. Grainger, Inc. 801,000
------------------------------------------------------------------ -----------
Total 4,577,750
------------------------------------------------------------------ -----------
ELECTRONICS--3.8%
------------------------------------------------------------------
31,000 Intel Corp. 1,836,750
------------------------------------------------------------------
11,000 Loral Corp. 409,750
------------------------------------------------------------------ -----------
Total 2,246,500
------------------------------------------------------------------ -----------
</TABLE>
FOUNTAIN SQUARE BALANCED FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- -------------------------------------------------------------------------------------
ENTERTAINMENT--1.2%
------------------------------------------------------------------
16,000 Disney (Walt) Co. (The) $ 680,000
------------------------------------------------------------------ -----------
FINANCE--0.6%
------------------------------------------------------------------
10,000 United Asset Management 357,500
------------------------------------------------------------------ -----------
HEALTH CARE--4.1%
------------------------------------------------------------------
11,000 Abbott Laboratories 309,375
------------------------------------------------------------------
14,000 Medtronic, Inc. 1,247,750
------------------------------------------------------------------
5,000 Schering Plough Corp. 320,625
------------------------------------------------------------------
12,000 United Healthcare Corp. 546,000
------------------------------------------------------------------ -----------
Total 2,423,750
------------------------------------------------------------------ -----------
INSURANCE--1.8%
------------------------------------------------------------------
20,000 Cincinnati Financial Corp. 1,065,000
------------------------------------------------------------------ -----------
MANUFACTURING--5.3%
------------------------------------------------------------------
49,333 Federal Signal Corp. 912,666
------------------------------------------------------------------
26,000 Illinois Tool Works, Inc. 1,043,250
------------------------------------------------------------------
7,700 TriMas Corp. 178,063
------------------------------------------------------------------
15,000 Wabash National Corp. 540,000
------------------------------------------------------------------
20,000 Watts Industries-Class A 485,000
------------------------------------------------------------------ -----------
Total 3,158,979
------------------------------------------------------------------ -----------
MEDIA/PUBLISHING--4.3%
------------------------------------------------------------------
21,000 Gannett Co., Inc. 1,060,500
------------------------------------------------------------------
45,000 Interpublic Group Companies, Inc. 1,456,875
------------------------------------------------------------------ -----------
Total 2,517,375
------------------------------------------------------------------ -----------
OFFICE EQUIPMENT--2.1%
------------------------------------------------------------------
36,000 Pitney Bowes, Inc. 1,269,000
------------------------------------------------------------------ -----------
OIL/GAS--6.3%
------------------------------------------------------------------
22,600 Chevron Corp. 1,002,875
------------------------------------------------------------------
25,000 Exxon Corp. 1,487,500
------------------------------------------------------------------
15,000 Mobil Corp. 1,258,125
------------------------------------------------------------------ -----------
Total 3,748,500
------------------------------------------------------------------ -----------
RETAILING--3.7%
------------------------------------------------------------------
30,000 Home Depot, Inc. 1,230,000
------------------------------------------------------------------
10,000 May Department Stores Co. 396,250
------------------------------------------------------------------
16,000 Walgreen Co. 586,000
------------------------------------------------------------------ -----------
Total 2,212,250
------------------------------------------------------------------ -----------
</TABLE>
FOUNTAIN SQUARE BALANCED FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- -------------------------------------------------------------------------------------
TELECOMMUNICATIONS--2.5%
------------------------------------------------------------------
28,600 Alltel Corp. $ 772,200
------------------------------------------------------------------
7,000 American Telephone & Telegraph Co. 382,375
------------------------------------------------------------------
8,000 Ameritech Corp. 328,000
------------------------------------------------------------------ -----------
Total 1,482,575
------------------------------------------------------------------ -----------
TRANSPORTATION--3.1%
------------------------------------------------------------------
31,000 Union Pacific Corp. 1,829,000
------------------------------------------------------------------ -----------
TOTAL COMMON STOCKS (IDENTIFIED COST, $39,417,500) 40,722,929
------------------------------------------------------------------ -----------
CORPORATE BONDS--9.2%
- -------------------------------------------------------------------------------------
BANKING--0.3%
------------------------------------------------------------------
$ 46,000 Bankers Trust NY Corp., 9.20%, 7/15/99 49,152
------------------------------------------------------------------
139,000 Republic Bank of New York, 6.40%, 4/17/95 139,841
------------------------------------------------------------------ -----------
Total 188,993
------------------------------------------------------------------ -----------
FINANCE-COMMERCIAL--1.0%
------------------------------------------------------------------
250,000 GMAC, Floating Rate Note, 4.99%, 5/20/96 249,467
------------------------------------------------------------------
186,000 General Electric Credit Corp., 8.52%, (Callable 12/15/94 @
100)/(Puttable 12/15/94 @ 100), 12/17/2007 188,141
------------------------------------------------------------------
153,000 General Electric Credit Corp., 8.65%, (Callable 5/1/96 @ 100)/
(Puttable 5/11/96 @ 100), 5/1/2018 158,708
------------------------------------------------------------------ -----------
Total 596,316
------------------------------------------------------------------ -----------
INDUSTRIAL--0.9%
------------------------------------------------------------------
500,000 Grand Metro Investment Corp., 9.00%, 8/15/2011 539,610
------------------------------------------------------------------ -----------
INSURANCE--0.6%
------------------------------------------------------------------
93,000 Capital Holding Corp., 9.79%, 10/6/97 100,233
------------------------------------------------------------------
228,000 Metlife Funding, 7.75%, 10/1/96 231,847
------------------------------------------------------------------ -----------
Total 332,080
------------------------------------------------------------------ -----------
INTERNATIONAL--6.2%
------------------------------------------------------------------
500,000 Bank of Korea, 6.50%, 5/15/2000 480,435
------------------------------------------------------------------
93,000 Deutsche Bank Financial, Medium-Term Note, 9.28%, 5/31/99 100,822
------------------------------------------------------------------
500,000 Hanson Overseas, 7.375%, 1/15/2003 485,202
------------------------------------------------------------------
139,000 Helaba Finance, Debenture, 8.00%, 9/16/96 142,475
------------------------------------------------------------------
500,000 Kingdom of Thailand, 8.25%, 3/15/2002 512,953
------------------------------------------------------------------
232,000 National Westminster Bancorp, 9.375%, 11/17/2003 255,434
------------------------------------------------------------------
500,000 New Zealand Government, 8.75%, 12/15/2006 540,056
------------------------------------------------------------------
500,000 Pohang Iron & Steel, 6.625%, 7/1/2003 444,346
------------------------------------------------------------------
</TABLE>
FOUNTAIN SQUARE BALANCED FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
CORPORATE BONDS--CONTINUED
- -------------------------------------------------------------------------------------
INTERNATIONAL--CONTINUED
------------------------------------------------------------------
$ 500,000 Province of Quebec, 8.80%, 4/15/2003 $ 527,480
------------------------------------------------------------------
186,000 Victoria Public Authority Finance, 8.45%, 10/1/2001 196,881
------------------------------------------------------------------ -----------
Total 3,686,084
------------------------------------------------------------------ -----------
TRANSPORTATION--0.2%
------------------------------------------------------------------
85,861 CSX Transportation Corp., 8.41%, 3/1/2006 91,232
------------------------------------------------------------------ -----------
TOTAL CORPORATE BONDS (IDENTIFIED COST, $5,649,250) 5,434,315
------------------------------------------------------------------ -----------
MORTGAGE BACKED SECURITIES--8.4%
- -------------------------------------------------------------------------------------
GOVERNMENT AGENCY CMOS**--3.9%
------------------------------------------------------------------
1,239,539 Federal Home Loan Mortgage Corp., 6.60%-9.50%, 10/1/2002-8/15/2022 1,208,100
------------------------------------------------------------------
1,115,219 Federal National Mortgage Association, 6.50%-9.00%,
10/11/99-7/27/2020 1,104,619
------------------------------------------------------------------ -----------
Total 2,312,719
------------------------------------------------------------------ -----------
PRIVATE LABEL CMOS**--4.5%
------------------------------------------------------------------
500,000 Bear Stearns Mortgage Securities, Inc., Series 1993-3-A11, 7.75%,
2/27/2023 492,943
------------------------------------------------------------------
500,000 GE Capital Mortgage Services Corp., Series 1993-1D, 7.60%,
2/25/2022 480,920
------------------------------------------------------------------
500,000 GE Capital Mortgage Services Corp., Series 1993-2F, 6.96%,
11/26/2007 466,761
------------------------------------------------------------------
250,000 Prudential Funding Corp., Series 14-F, 8.40%, 3/21/2005 255,620
------------------------------------------------------------------
500,000 Prudential Home Mortgage Securities Corp., Series 1993-9-A10,
7.05%,
3/25/2008 472,925
------------------------------------------------------------------
500,000 Residential Funding Mortgage Securities Corp., Series 1993-S2,
8.00%,
1/25/2023 501,456
------------------------------------------------------------------ -----------
Total 2,670,625
------------------------------------------------------------------ -----------
TOTAL MORTGAGE BACKED SECURITIES (IDENTIFIED COST, $5,209,743) 4,983,344
------------------------------------------------------------------ -----------
GOVERNMENT SECURITIES-4.8%
- -------------------------------------------------------------------------------------
GOVERNMENT AGENCY--0.1%
------------------------------------------------------------------
66,687 Student Loan Marketing Association, 9.40%, 5/31/2002 75,215
------------------------------------------------------------------ -----------
UNITED STATES TREASURY SECURITIES--4.7%
------------------------------------------------------------------
500,000 U.S. Treasury Bond, 7.50%, 11/15/2016 501,563
------------------------------------------------------------------
2,189,000 U.S. Treasury Notes, 6.00%-9.25%, 9/30/94-5/15/2002 2,280,100
------------------------------------------------------------------ -----------
Total 2,781,663
------------------------------------------------------------------ -----------
TOTAL GOVERNMENT SECURITIES (IDENTIFIED COST, $2,905,208) 2,856,878
------------------------------------------------------------------ -----------
</TABLE>
FOUNTAIN SQUARE BALANCED FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
*REPURCHASE AGREEMENT--7.8%
- -------------------------------------------------------------------------------------
$4,608,000 Harris, Nesbitt, Thomson Securities, Inc., 3.95%, dated 7/29/94,
due 8/1/94 (at amortized cost)/(Note 2B) $ 4,608,000
------------------------------------------------------------------ -----------
TOTAL INVESTMENTS (IDENTIFIED COST, $57,789,701) $58,605,466+
------------------------------------------------------------------ -----------
</TABLE>
+ The cost for federal tax purposes amounts to $57,789,701 at July 31, 1994. The
net unrealized appreciation of investments on a federal tax basis amounts to
$815,765, which is comprised of $2,661,910 appreciation and $1,846,145
depreciation at July 31, 1994.
* Repurchase agreement is fully collateralized by U.S. government and/or agency
obligations based on market prices at the date of the portfolio.
** Collateralized Mortgage Obligations.
Note: The categories of investments are shown as a percentage of total net
assets ($59,362,766) at July 31, 1994.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE BALANCED FUND
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investments in securities, at value (Notes 2A and 2B)
(identified and tax cost, $57,789,701) $58,605,466
- --------------------------------------------------------------------------------
Cash 384
- --------------------------------------------------------------------------------
Receivable for investments sold 504,511
- --------------------------------------------------------------------------------
Dividends and interest receivable 272,826
- --------------------------------------------------------------------------------
Receivable for Fund shares sold 46,876
- --------------------------------------------------------------------------------
Deferred expenses (Note 2F) 11,244
- -------------------------------------------------------------------------------- -----------
Total assets 59,441,307
- --------------------------------------------------------------------------------
LIABILITIES:
- ----------------------------------------------------------------------
Payable for Fund shares redeemed $42,695
- ----------------------------------------------------------------------
Payable to Administrator (Note 4) 5,705
- ----------------------------------------------------------------------
Accrued expenses 30,141
- ---------------------------------------------------------------------- -------
Total liabilities 78,541
- -------------------------------------------------------------------------------- -----------
NET ASSETS for 6,121,993 shares of beneficial interest outstanding $59,362,766
- -------------------------------------------------------------------------------- -----------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid-in capital $61,454,479
- --------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments 815,765
- --------------------------------------------------------------------------------
Accumulated net realized gain (loss) on investments (2,967,449)
- --------------------------------------------------------------------------------
Undistributed net investment income 59,971
- -------------------------------------------------------------------------------- -----------
Total Net Assets $59,362,766
- -------------------------------------------------------------------------------- -----------
NET ASSET VALUE and Redemption Proceeds Per Share:
($59,362,766 / 6,121,993 shares of beneficial interest outstanding) $9.70
- -------------------------------------------------------------------------------- -----------
COMPUTATION OF OFFERING PRICE:
- --------------------------------------------------------------------------------
Offering Price Per Share (100/95.5 of $9.70) $10.16*
- -------------------------------------------------------------------------------- -----------
</TABLE>
* See "What Shares Cost" in the prospectus.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE BALANCED FUND
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------
Interest income $ 1,269,922
- ----------------------------------------------------------------------------------
Dividend income 1,013,099
- ---------------------------------------------------------------------------------- -----------
Total investment income (Note 2C) 2,283,021
- ----------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------
Investment advisory fee* $501,193
- ----------------------------------------------------------------------
Administrative personnel and services fees* 72,146
- ----------------------------------------------------------------------
Custodian fee* 12,000
- ----------------------------------------------------------------------
Portfolio accounting, transfer and dividend disbursing agent fees and
expenses* 30,618
- ----------------------------------------------------------------------
Legal fees 6,029
- ----------------------------------------------------------------------
Auditing fees 13,975
- ----------------------------------------------------------------------
Printing and postage 5,851
- ----------------------------------------------------------------------
Fund share registration costs 13,051
- ----------------------------------------------------------------------
Miscellaneous 9,486
- ---------------------------------------------------------------------- --------
Total expenses 664,349
- ----------------------------------------------------------------------
Deduct--
- ----------------------------------------------------------------------
Waiver of investment advisory fee* $25,861
- ------------------------------------------------------------
Waiver of custodian fee* 12,000 37,861
- ------------------------------------------------------------ ------- --------
Net expenses 626,488
- ---------------------------------------------------------------------------------- -----------
Net investment income 1,656,533
- ---------------------------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ----------------------------------------------------------------------------------
Net realized gain (loss) on investments (identified cost basis) (2,310,618)
- ----------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments 1,737,583
- ---------------------------------------------------------------------------------- -----------
Net realized and unrealized gain (loss) on investments (573,035)
- ---------------------------------------------------------------------------------- -----------
Change in net assets resulting from operations $ 1,083,498
- ---------------------------------------------------------------------------------- -----------
</TABLE>
* See Note 4.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE BALANCED FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
---------------------------
1994 1993*
------------ -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------------------
Net investment income $ 1,656,533 $ 1,093,825
- ------------------------------------------------------------------
Net realized gain (loss) on investment transactions ($976,092 and
$0 net loss, respectively, as computed for federal tax purposes)
(Note 2D) (2,310,618) (656,831)
- ------------------------------------------------------------------
Change in unrealized appreciation (depreciation) of investments 1,737,583 (921,818)
- ------------------------------------------------------------------ ------------ -----------
Change in net assets resulting from operations 1,083,498 (484,824)
- ------------------------------------------------------------------ ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)--
- ------------------------------------------------------------------
Dividends to shareholders from net investment income (1,656,533) (913,552)
- ------------------------------------------------------------------
Distribution in excess of net investment income (120,302) --
- ------------------------------------------------------------------ ------------ -----------
Change in net assets from distributions to shareholders (1,776,835) (913,552)
- ------------------------------------------------------------------ ------------ -----------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
- ------------------------------------------------------------------
Proceeds from sale of shares 18,128,975 67,656,356
- ------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
dividend declared 1,735,648 904,990
- ------------------------------------------------------------------
Cost of shares redeemed (19,976,817) (6,994,673)
- ------------------------------------------------------------------ ------------ -----------
Change in net assets from Fund share transactions (112,194) 61,566,673
- ------------------------------------------------------------------ ------------ -----------
Change in net assets (805,531) 60,168,297
- ------------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------------
Beginning of period 60,168,297 --
- ------------------------------------------------------------------ ------------ -----------
End of period (including undistributed net investment income of
$59,971 and $180,273, respectively) $ 59,362,766 $60,168,297
- ------------------------------------------------------------------ ------------ -----------
</TABLE>
* For the period from November 20, 1992 (date of initial public investment) to
July 31, 1993.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE BALANCED FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
----------------------
1994 1993*
------- -------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $9.78 $10.00
- ---------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------
Net investment income 0.26 0.20
- ---------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.06) (0.25)
- --------------------------------------------------------------------- ----- ------
Total from investment operations 0.20 (0.05)
- ---------------------------------------------------------------------
LESS DISTRIBUTIONS
- ---------------------------------------------------------------------
Dividends to shareholders from net investment income (0.26) (0.17)
- ---------------------------------------------------------------------
Distributions in excess of net investment income (a) (0.02) --
- --------------------------------------------------------------------- ----- ------
Total distributions (0.28) (0.17)
- --------------------------------------------------------------------- ----- ------
NET ASSET VALUE, END OF PERIOD $9.70 $9.78
- --------------------------------------------------------------------- ----- ------
TOTAL RETURN** 2.02% (0.51%)
- ---------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------------------------------------------
Expenses 1.00% 1.00%(c)
- ---------------------------------------------------------------------
Net investment income 2.64% 3.04%(c)
- ---------------------------------------------------------------------
Expense waiver/reimbursement (b) 0.06% 0.08%(c)
- ---------------------------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------------------------
Net assets, end of period (000 omitted) $59,363 $60,168
- ---------------------------------------------------------------------
Portfolio turnover rate 53% 30%
- ---------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from November 20, 1992 (date of initial
public investment) to July 31, 1993.
** Based on net asset value, which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) These distributions do not represent a return of capital for federal tax
purposes for the year ended July 31, 1994.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(c) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE OHIO TAX FREE BOND FUND
PORTFOLIO OF INVESTMENTS
JULY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ----------- ------------------------------------------------------- ------------ -----------
<C> <S> <C> <C>
MUNICIPAL SECURITIES--94.1%
- ---------------------------------------------------------------------
OHIO--94.1%
-------------------------------------------------------
$ 600,000 Akron, OH, LT GO Bonds, (FSA Insured), 4.00%, 12/1/2000 Aaa $ 562,122
-------------------------------------------------------
500,000 Akron, OH, LT GO Bonds, (MBIA Insured), 5.60%,
(Callable 12/1/2004 @ 102), 12/1/2006 AAA 502,610
-------------------------------------------------------
100,000 Bedford, OH, City School District, (Series 1993),
4.70%, 12/1/99 A 98,098
-------------------------------------------------------
100,000 Bedford, OH, City School District, 5.50%,
(Callable 12/1/2003 @ 101), 12/1/2006 A 97,803
-------------------------------------------------------
100,000 Cincinnati, OH, UT GO Bonds, 4.50%, 12/1/97 Aa 100,703
-------------------------------------------------------
200,000 Cincinnati, OH, UT GO Bonds, 4.50%, 12/1/98 Aa 199,754
-------------------------------------------------------
50,000 Cincinnati, OH, UT GO Bonds, 4.50%, 12/1/2003 Aa 46,405
-------------------------------------------------------
500,000 Cincinnati, OH, UT GO Bonds, 4.60%, 12/1/2004 Aa 462,975
-------------------------------------------------------
200,000 Cincinnati, OH, City School District, RANs, 5.60%,
6/16/97 A+ 204,834
-------------------------------------------------------
200,000 Clermont County, OH, Refunding UT GO Bonds, Building &
Road Improvements, (AMBAC Insured), 4.90%, 9/3/2001 Aaa 198,574
-------------------------------------------------------
165,000 Clermont County, OH, Hospital Facilities Revenue Bonds,
(Series A)/(Mercy Health System)/(MBIA Insured), 4.85%,
1/3/2000 Aaa 163,291
-------------------------------------------------------
100,000 Clermont County, OH, Waterworks Refunding Revenue
Bonds, (Series 1993)/(AMBAC Insured), 3.70%, 12/2/96 Aaa 98,914
-------------------------------------------------------
50,000 Clermont County, OH, Waterworks Refunding Revenue Bond,
(AMBAC Insured), 4.70%, 12/1/2000 Aaa 48,910
-------------------------------------------------------
500,000 Clermont County, OH, LT GO Bonds, (Court House
Project)/(AMBAC Insured), 4.30%, 12/1/98 AAA 492,200
-------------------------------------------------------
250,000 Clermont County, OH, Sewer System, Refunding Revenue
Bonds, (AMBAC Insured), 4.30%, 12/3/2001 Aaa 234,077
-------------------------------------------------------
400,000 Clermont County, OH, Sewer System, Refunding Revenue
Bonds, (AMBAC Insured), 4.60%, (Callable 12/1/2003 @
102), 10/1/2004 Aaa 365,364
-------------------------------------------------------
100,000 Cleveland, OH, LT GO Refunding Bonds,
(AMBAC Insured), 4.80%, 9/3/2001 Aaa 98,113
-------------------------------------------------------
500,000 Cleveland, OH, LT GO Refunding Bonds, 4.90%, 9/2/2002 Aaa 490,170
-------------------------------------------------------
100,000 Columbus, OH, LT GO Bonds, (Series A), 3.30%, 7/3/95 Aa1 99,664
-------------------------------------------------------
300,000 Columbus, OH, UT GO Bonds, (Series D), 4.55%, 9/15/99 Aa1 296,073
-------------------------------------------------------
200,000 Columbus, OH, (FGIC Insured), 4.00%, 12/2/96 Aaa 199,592
-------------------------------------------------------
100,000 Columbus, OH, Refunding Sewer Revenue Bonds,
5.40%, 6/1/98 A1 102,743
-------------------------------------------------------
</TABLE>
FOUNTAIN SQUARE OHIO TAX FREE BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ----------- ------------------------------------------------------- ------------ -----------
<C> <S> <C> <C>
MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
OHIO--CONTINUED
-------------------------------------------------------
$ 100,000 Columbus, OH, Water System Refunding Revenue Bonds,
5.05%, 11/1/95 A1 $ 101,548
-------------------------------------------------------
500,000 Columbus, OH, Water System Refunding Revenue Bonds,
5.75%, 11/1/2000 A1 523,710
-------------------------------------------------------
500,000 Columbus, OH, City School District, UT GO Bonds,
Refunding Revenue Bonds, (FGIC Insured), 4.45%, 12/1/98 Aaa 495,500
-------------------------------------------------------
500,000 Columbus, OH, Refunding LT GO Bonds, 5.15%, (Callable
9/15/2003 @ 102), 9/15/2004 Aa1 493,375
-------------------------------------------------------
50,000 Cuyahoga County, OH, Refunding Revenue Bonds, (Series
A), 4.75%, 10/1/2003 Aa 47,400
-------------------------------------------------------
50,000 Cuyahoga County, OH, LT GO Bonds, 3.40%, 5/15/95 Aa 49,951
-------------------------------------------------------
500,000 Cuyahoga County, OH, UT GO Bonds, 4.50%, 10/2/2000 Aa 483,995
-------------------------------------------------------
150,000 Dublin, OH, City School District, UT GO Bonds,
(AMBAC Insured), 5.25%, 12/1/2000 Aaa 152,739
-------------------------------------------------------
100,000 Dublin, OH, City School District, UT GO Bonds,
Refunding Revenue Bonds, (AMBAC Insured), 4.80%,
12/2/2002 Aaa 96,920
-------------------------------------------------------
150,000 Dublin, OH, City School District, Refunding UT GO
Bonds, (FGIC Insured), 5.95%, 12/2/2002 Aaa 157,418
-------------------------------------------------------
245,000 Franklin County, OH, LT GO Bonds, Refunding Revenue
Bonds, 4.95%, (Callable 12/1/2003 @ 102), 12/1/2004 Aaa 237,086
-------------------------------------------------------
250,000 Hamilton County, OH, LT GO Bonds,
(Court House Project), 4.60%, 12/1/2003 Aa 233,545
-------------------------------------------------------
500,000 Hamilton County, OH, Electric System, Refunding Revenue
Bonds, (Series A)/(FGIC Insured), 4.75%, 10/15/97 Aaa 505,005
-------------------------------------------------------
350,000 Hamilton County, OH, Hospital Facilities Revenue,
(Children's Hospital Project)/(MBIA Insured), 4.50%,
5/17/99 Aaa 342,743
-------------------------------------------------------
500,000 Hamilton County, OH, Sewer System, Refunding Revenue &
Improvement Bonds, (FGIC Insured), 3.90%, 12/2/96 Aaa 497,325
-------------------------------------------------------
200,000 Hamilton County, OH, City School District, Energy
Conservation Notes, 4.60%, 9/1/2000 A- 194,506
-------------------------------------------------------
250,000 Hamilton County, OH, Refunding LT GO Bonds,
(Court House Project), 4.90%, (Callable 12/1/2002 @ 102
and 12/1/2004 @ 100), 12/1/2006 Aa 233,270
-------------------------------------------------------
500,000 Hamilton County, OH, LT GO Bonds, 5.00%, 12/2/2002 Aa 494,595
-------------------------------------------------------
200,000 Hilliard, OH, School District, Refunding UT GO Bonds,
(FGIC Insured), 5.50%, 12/1/97 Aaa 206,748
-------------------------------------------------------
500,000 Kettering, OH, Refunding UT GO Bonds, 4.30%, 12/1/98 Aa 490,090
-------------------------------------------------------
200,000 Kettering, OH, Refunding LT GO Bonds, 4.50%, 12/1/99 Aa 194,894
-------------------------------------------------------
200,000 Kettering, OH, Refunding UT GO Bonds, 4.90%, 12/2/2002 Aa 194,648
-------------------------------------------------------
</TABLE>
FOUNTAIN SQUARE OHIO TAX FREE BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ----------- ------------------------------------------------------- ------------ -----------
<C> <S> <C> <C>
MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
OHIO--CONTINUED
-------------------------------------------------------
$ 110,000 Marysville, OH, UT GO Bonds, (AMBAC Insured), 3.70%,
12/2/96 Aaa $ 109,120
-------------------------------------------------------
80,000 Marysville, OH, UT GO Bonds, (AMBAC Insured), 4.30%,
12/1/99 Aaa 77,487
-------------------------------------------------------
100,000 Miami University, OH, General Receipts Bonds, 2.90%,
12/1/94 A+ 99,766
-------------------------------------------------------
100,000 Montgomery County, OH, Sewer Revenue Bonds, (Greater
Moraine-Beaver Creek), 4.90%, 9/3/2001 Aaa 98,993
-------------------------------------------------------
100,000 Montgomery County, OH, Water Revenue Bonds, (Greater
Moraine-Beaver Creek)/(AMBAC Insured), 4.75%,
11/15/2001 AAA 98,002
-------------------------------------------------------
100,000 Ohio State, UT GO Bonds, 5.10%, 8/1/96 AA 101,925
-------------------------------------------------------
500,000 Ohio State, Refunding UT GO Bonds, 5.15%, 9/3/2001 Aa 505,000
-------------------------------------------------------
100,000 Ohio State Highway, UT GO Bonds, (Series R), 4.70%,
5/15/97 Aa 100,984
-------------------------------------------------------
350,000 Ohio State Air Quality Development Authority, (Buckeye
Power, Inc.), 4.70%, 8/1/2000 A1 341,422
-------------------------------------------------------
450,000 Ohio State Air Quality Development Authority, Refunding
Revenue Bonds, (Buckeye Power, Inc.), 4.90%, 8/1/2002 A1 436,662
-------------------------------------------------------
200,000 Ohio State Building Authority, (Ohio Arts Center
Project)/ (Series A), 4.65%, 10/1/99 A 196,830
-------------------------------------------------------
200,000 Ohio State Building Authority, (State Correctional
Facilities Project)/(Series A), 5.30%, 10/2/2000 A 203,032
-------------------------------------------------------
250,000 Ohio State Building Authority, (State Correctional
Facilities Project), 4.10%, 10/2/95 A 250,810
-------------------------------------------------------
300,000 Ohio State Building Authority, Refunding Revenue Bonds,
(Correctional Facilities Project)/(Series A), 4.40%,
10/1/96 A 301,587
-------------------------------------------------------
100,000 Ohio State Higher Educational Facilities, Revenue
Bonds, (Oberlin College Project), 4.50%, 10/1/99 AA 97,784
-------------------------------------------------------
500,000 Ohio State Higher Educational Facilities, (University &
College Improvements Project), 4.625%, 12/1/2000 A1 484,610
-------------------------------------------------------
100,000 Ohio State Facilities, Refunding Bonds, Higher
Educational Facilities, (Series 11-A)/(AMBAC Insured),
4.60%, 6/1/99 Aaa 97,873
-------------------------------------------------------
100,000 Ohio State Public Common Facilities, Higher Educational
Facilities, (Series 11-A), 5.50%, 12/1/99 A 102,075
-------------------------------------------------------
300,000 Ohio State Public Common Facilities, Higher Educational
Facilities, 4.625%, 12/1/98 A1 297,714
-------------------------------------------------------
200,000 Ohio State Public Common Facilities, Mental Health
Facilities, (Series 11-A), 6.30%, (Callable 12/1/2000 @
102), 12/2/2002 Aaa 216,202
-------------------------------------------------------
</TABLE>
FOUNTAIN SQUARE OHIO TAX FREE BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT OR S&P* VALUE
- ----------- ------------------------------------------------------- ------------ -----------
<C> <S> <C> <C>
MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
OHIO--CONTINUED
-------------------------------------------------------
$ 400,000 Ohio State Public Common Facilities, Mental Health
Facilities, (Series 11-B), 4.25%, 6/3/2002 A1 $ 360,888
-------------------------------------------------------
500,000 Ohio State Public Common Facilities, Park & Recreation
Revenue Bonds, (Series 11-A), 4.50%, 12/1/95 A 502,360
-------------------------------------------------------
500,000 Ohio State Public Common Facilities, Refunding Revenue
Bonds, (Mental Health Facilities Project)/(FSA
Insured), 4.30%, 6/2/2003 Aaa 449,630
-------------------------------------------------------
475,000 Ohio State University, General Receipts Bonds,
(Series A-1 & A-2), 4.85%, 12/1/98 A1 476,074
-------------------------------------------------------
500,000 Ohio State University, General Receipts Bonds,
Refunding Revenue Bonds, (FGIC Insured), 4.70%,
(Callable 12/1/2003 @ 102), 12/1/2005 Aaa 461,770
-------------------------------------------------------
300,000 Ohio State University, General Receipts Bonds, 5.75%,
(Callable 12/1/2003 @ 102), 12/3/2007 A 298,866
-------------------------------------------------------
100,000 Ohio State Water Development Authority, Revenue
Refunding Bonds, (Safe Water Project)/(MBIA Insured),
5.00%, 12/1/99 Aaa 100,691
-------------------------------------------------------
500,000 Ohio State Water Development Authority, Revenue
Refunding Bonds, (MBIA Insured), 4.95%, 12/1/98 Aaa 507,960
-------------------------------------------------------
500,000 Ohio State Water Development Authority, Revenue Bonds,
(Pollution Control Loan Fund State Matching Project)/
(MBIA Insured), 4.35%, 6/1/2000 Aaa 479,770
-------------------------------------------------------
250,000 Pickerington, OH, Local School District, UT GO Bonds,
(FGIC Insured), 4.60%, 12/1/2003 Aaa 232,853
-------------------------------------------------------
750,000 Pickerington, OH, Local School District, (AMBAC
Insured), 5.55%, 12/3/2007 Aaa 747,840
-------------------------------------------------------
500,000 Solon, OH, City School District, Refunding UT GO Bonds,
(AMBAC Insured), 4.50%, 12/1/2003 Aaa 456,975
-------------------------------------------------------
150,000 Stark County, OH, Refunding LT GO Bonds,
(AMBAC Insured), 4.75%, 11/15/99 Aaa 148,468
-------------------------------------------------------
500,000 University of Cincinnati, OH, General Receipts Bonds,
3.60%, 6/2/97 A1 487,200
-------------------------------------------------------
500,000 University of Cincinnati, OH, General Receipts
Refunding Revenue Bonds, 4.55%, 6/3/2002 A1 469,740
-------------------------------------------------------
100,000 University of Cincinnati, OH, Certificates of
Participation, (MBIA Insured), 6.40%, 12/1/2003 Aaa 108,415
-------------------------------------------------------
150,000 Warren County, OH, Sewer System, Revenue Bonds, (FGIC
Insured), 4.90%, 12/2/2002 Aaa 146,976
-------------------------------------------------------
</TABLE>
FOUNTAIN SQUARE OHIO TAX FREE BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
PRINCIPAL RATING:
AMOUNT MOODY'S
OR SHARES OR S&P* VALUE
- ----------- ------------------------------------------------------- ------------ -----------
<C> <S> <C> <C>
MUNICIPAL SECURITIES--CONTINUED
- ---------------------------------------------------------------------
OHIO--CONTINUED
-------------------------------------------------------
$ 200,000 Warren County, OH, Sewer System, Revenue
Refunding Bonds, (Series 1993)/(FGIC Insured), 5.10%,
(Callable 12/1/2003 @ 102), 12/1/2004 Aaa $ 195,742
------------------------------------------------------- -----------
TOTAL MUNICIPAL SECURITIES (IDENTIFIED COST,
$23,187,364) 22,440,096
------------------------------------------------------- -----------
REGULATED INVESTMENT COMPANIES--4.3%
- ---------------------------------------------------------------------
1,023,097 Midwest Ohio Tax-Free Money Market Fund
(at net asset value)/(Note 2A) NR 1,023,097
------------------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST, $24,210,461) $23,463,193+
------------------------------------------------------- -----------
</TABLE>
* Please refer to the Appendix of the Statement of Additional information for an
explanation of the credit ratings. Current credit ratings are unaudited.
+ The cost of investments for federal tax purposes amounts to $24,210,461. The
net unrealized depreciation of investments on a federal tax basis amounts to
$747,268 which is comprised of $2,923 appreciation and $750,191 depreciation
at July 31, 1994.
Note: The categories of investments are shown as a percentage of net assets
($23,854,485) at
July 31, 1994.
The following abbreviations are used in this portfolio:
<TABLE>
<S> <C>
AMBAC -- American Municipal Bond Assurance Corporation
FGIC -- Financial Guaranty Insurance Company
FSA -- Financial Security Assurance
GO -- General Obligation
LT -- Limited Tax
MBIA -- Municipal Bond Investors Assurance
RANs -- Revenue Anticipation Notes
UT -- Unlimited Tax
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE OHIO TAX FREE BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investments in securities, at value (Note 2A)
(identified and tax cost, $24,210,461) $23,463,193
- --------------------------------------------------------------------------------
Interest receivable 247,110
- --------------------------------------------------------------------------------
Receivable for Fund shares sold 187,391
- --------------------------------------------------------------------------------
Deferred expenses (Note 2F) 5,431
- -------------------------------------------------------------------------------- -----------
Total assets 23,903,125
- --------------------------------------------------------------------------------
LIABILITIES:
- ----------------------------------------------------------------------
Payable for Fund shares redeemed $33,214
- ----------------------------------------------------------------------
Accrued expenses 15,426
- ---------------------------------------------------------------------- -------
Total liabilities 48,640
- -------------------------------------------------------------------------------- -----------
NET ASSETS for 2,447,826 shares of beneficial interest outstanding $23,854,485
- -------------------------------------------------------------------------------- -----------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid-in capital $24,610,317
- --------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments (747,268)
- --------------------------------------------------------------------------------
Accumulated net realized gain (loss) on investments (32,680)
- --------------------------------------------------------------------------------
Undistributed net investment income 24,116
- -------------------------------------------------------------------------------- -----------
Total Net Assets $23,854,485
- -------------------------------------------------------------------------------- -----------
NET ASSET VALUE, and Redemption Proceeds Per Share:
($23,854,485 / 2,447,826 shares of beneficial interest outstanding) $9.75
- -------------------------------------------------------------------------------- -----------
COMPUTATION OF OFFERING PRICE:
- --------------------------------------------------------------------------------
Offering Price Per Share (100/95.5 of $9.75) $10.21*
- -------------------------------------------------------------------------------- -----------
</TABLE>
* See "What Shares Cost" in the prospectus.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE OHIO TAX FREE BOND FUND
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ------------------------------------------------------------------------------------
Interest income (Note 2C) $ 831,264
- ------------------------------------------------------------------------------------
EXPENSES:
- ------------------------------------------------------------------------
Investment advisory fee* $109,659
- ------------------------------------------------------------------------
Administrative personnel and services fees* 50,002
- ------------------------------------------------------------------------
Custodian fee* 12,000
- ------------------------------------------------------------------------
Portfolio accounting, transfer and dividend disbursing agent fees and
expenses* 34,514
- ------------------------------------------------------------------------
Legal fees 8,358
- ------------------------------------------------------------------------
Auditing fees 12,400
- ------------------------------------------------------------------------
Printing and postage 9,300
- ------------------------------------------------------------------------
Fund share registration costs 19,287
- ------------------------------------------------------------------------
Miscellaneous 8,696
- ------------------------------------------------------------------------ --------
Total expenses 264,216
- ------------------------------------------------------------------------
Deduct--
- -------------------------------------------------------------
Waiver of investment advisory fee* $ 7,912
- -------------------------------------------------------------
Waiver of custodian fee* 12,000
- -------------------------------------------------------------
Reimbursement of other operating expenses by Adviser* 244,304 264,216
- ------------------------------------------------------------- -------- --------
Net expenses 0
- ------------------------------------------------------------------------------------ ---------
Net investment income 831,264
- ------------------------------------------------------------------------------------ ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ------------------------------------------------------------------------------------
Net realized gain (loss) on investments (identified cost basis) (32,680)
- ------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of investments (701,051)
- ------------------------------------------------------------------------------------ ---------
Net realized and unrealized gain (loss) on investments (733,731)
- ------------------------------------------------------------------------------------ ---------
Change in net assets resulting from operations $ 97,533
- ------------------------------------------------------------------------------------ ---------
</TABLE>
* See Note 4.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE OHIO TAX FREE BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
--------------------------
1994 1993*
----------- ----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------------------
Net investment income $ 831,264 $ 27,796
- ------------------------------------------------------------------
Net realized gain (loss) on investment transactions ($0 and $0 ,
respectively, as computed for federal tax purposes) (Note 2D) (32,680) --
- ------------------------------------------------------------------
Change in unrealized appreciation (depreciation) of investments (701,051) (46,217)
- ------------------------------------------------------------------ ----------- ----------
Change in net assets resulting from operations 97,533 (18,421)
- ------------------------------------------------------------------ ----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)--
- ------------------------------------------------------------------
Dividends to shareholders from net investment income (808,177) (26,767)
- ------------------------------------------------------------------ ----------- ----------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
- ------------------------------------------------------------------
Proceeds from sale of shares 23,031,779 8,596,164
- ------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
dividends declared 476,904 11,526
- ------------------------------------------------------------------
Cost of shares redeemed (7,106,691) (399,365)
- ------------------------------------------------------------------ ----------- ----------
Change in net assets from Fund share transactions 16,401,992 8,208,325
- ------------------------------------------------------------------ ----------- ----------
Change in net assets 15,691,348 8,163,137
- ------------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------------
Beginning of period 8,163,137 --
- ------------------------------------------------------------------ ----------- ----------
End of period (including undistributed net investment income of
$24,116 and $1,029, respectively) $23,854,485 $8,163,137
- ------------------------------------------------------------------ ----------- ----------
</TABLE>
* For the period from May 27, 1993 (date of initial public investment) to July
31, 1993.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE OHIO TAX FREE BOND FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
---------------------
1994 1993*
----- ------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $9.95 $10.00
- ---------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------
Net investment income 0.40 0.05
- ---------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.21) (0.05)
- --------------------------------------------------------------------- ----- ------
Total from investment operations 0.19 0.00
- ---------------------------------------------------------------------
LESS DISTRIBUTIONS
- ---------------------------------------------------------------------
Dividends to shareholders from net investment income (0.39) (0.05)
- --------------------------------------------------------------------- ----- ------
NET ASSET VALUE, END OF PERIOD $9.75 $ 9.95
- --------------------------------------------------------------------- ----- ------
TOTAL RETURN** 1.95% (0.01%)
- ---------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------------------------------------------
Expenses 0.00% 0.00%
- ---------------------------------------------------------------------
Net investment income 4.18% 3.53%(b)
- ---------------------------------------------------------------------
Expense waiver/reimbursement(a) 1.33% 2.21%(b)
- ---------------------------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------------------------
Net assets, end of period (000 omitted) $23,854 $8,163
- ---------------------------------------------------------------------
Portfolio turnover rate 94% 31%
- ---------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from May 27, 1993 (date of initial public
investment) to July 31, 1993.
** Based on net asset value, which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
FOUNTAIN SQUARE FUNDS
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1994
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Fountain Square Funds (the "Trust") is registered under the Investment Company
Act of 1940, as amended (the "Act"), as an open-end, management investment
company. The Trust consists of nine portfolios (individually referred to as the
"Fund", or collectively as the "Funds"). Fountain Square Commercial Paper Fund
and Fountain Square Government Cash Reserves Fund are offered in 2 classes of
shares: Trust Shares and Investment Shares. The assets of each portfolio are
segregated and a shareholder's interest is limited to the portfolio in which
shares are held. The financial statements included herein are only those of
Fountain Square U.S. Government Securities Fund ("Government Securities Fund"),
Fountain Square Quality Bond Fund ("Quality Bond Fund"), Fountain Square Quality
Growth Fund ("Quality Growth Fund"), Fountain Square Mid Cap Fund ("Mid Cap
Fund"), Fountain Square Balanced Fund ("Balanced Fund"), and Fountain Square
Ohio Tax Free Bond Fund ("Ohio Tax Free Fund"). The financial statements of the
other Fountain Square Funds are presented separately.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
policies are in conformity with generally accepted accounting principles.
<TABLE>
<S> <C>
A. INVESTMENT VALUATIONS--Municipal bonds are valued by an independent pricing service
taking into consideration yield, liquidity, risk, credit, quality, coupon, maturity, type
of issue, and any other factors or market data it deems relevant in determining
valuations for normal institutional size trading units of debt securities. The
independent pricing service does not rely exclusively on quoted prices.
Listed equity securities, corporate bonds and other fixed income securities and asset
backed securities are valued at the last sale price reported on national securities
exchanges. U.S. government obligations are generally valued at the mean between the
over-the-counter bid and asked prices as furnished by an independent pricing service.
Unlisted securities and bonds are generally valued at the price provided by an
independent pricing service. Short-term securities with remaining maturities of sixty
days or less may be stated at amortized cost, which approximates value. Investments in
other regulated investment companies are valued at net asset value.
B. REPURCHASE AGREEMENTS--It is the policy of the Funds to require the custodian bank to
take possession, to have legally segregated in the Federal Reserve Book Entry System or
to have segregated within the custodian bank's vault, all securities held as collateral
in support of repurchase agreement investments. Additionally, procedures have been
established by the Funds to monitor, on a daily basis, the market value of each
repurchase agreement's underlying collateral to ensure that the value of collateral at
least equals the principal amount of the repurchase agreement, including accrued
interest.
The Funds will only enter into repurchase agreements with banks and other recognized
financial institutions, such as broker/dealers, which are deemed by the Trust's adviser
to be creditworthy pursuant to guidelines established by the Board of Trustees (the
"Trustees"). Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Funds could receive less than the
repurchase price on the sale of collateral securities.
C. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Interest income and expenses are
accrued daily. Bond premium and discount, if applicable, are amortized as required by the
Internal Revenue Code, as amended (the "Code").
</TABLE>
FOUNTAIN SQUARE FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Distributions are determined in accordance with income tax regulations which may differ
from generally accepted accounting principles. These distributions do not represent a
return of capital for federal income tax purposes.
D. FEDERAL TAXES--It is each Fund's policy to comply with the provisions of the Code
applicable to regulated investment companies and to distribute to shareholders each year
substantially all of their taxable or tax-exempt income. Accordingly, no provisions for
federal tax are necessary. Additionally, net capital losses in the Quality Bond Fund,
Ohio Tax Free Fund, Government Securities Fund, Quality Growth Fund, Mid Cap Fund and
Balanced Fund of $2,178,575, $32,680, $525,464, $2,687,430 $707,033 and $1,991,356,
respectively, attributable to security transactions incurred after October 31, 1993 are
treated as arising on the first day (August 1, 1994) of each Fund's next taxable year.
At July 31, 1994, the Quality Growth Fund and Mid Cap Fund, for federal tax purposes, had
capital loss carryforwards of $1,768,644 and $155,006, respectively, which will reduce
each Fund's taxable income arising from future net realized gain on investments, if any,
to the extent permitted by the Code, and thus will reduce the amount of the distributions
to shareholders which would otherwise be necessary to relieve the Funds of any liability
for federal tax. Pursuant to the Code, such capital loss carryforwards will expire in
2002.
E. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Funds may engage in when-issued or
delayed delivery transactions. The Funds record when-issued securities on the trade date
and maintain security positions such that sufficient liquid assets will be available to
make payment for the securities purchased. Securities purchased on a when-issued or
delayed delivery basis are marked to market daily and begin earning interest on the
settlement date.
F. DEFERRED EXPENSES--The costs incurred by each Fund with respect to registration of their
shares in their first fiscal year, excluding the initial expense of registering the
shares, have been deferred and are being amortized using the straight-line method over a
period of five years from each Fund's commencement date.
G. RECLASSIFICATION--During the year ended July 31, 1994, the Trust adopted Statement of
Position (SOP) 93-2, Determination, Disclosure, and Financial Statement Presentation of
Income, Capital Gain, and Return of Capital Distributions by Investment Companies.
Accordingly, permanent book and tax differences have been reclassified to
paid-in-capital. Mid Cap Fund reclassified $4,114 from undistributed net investment
income to paid-in-capital in accordance with SOP 93-2. Net investment income, net
realized gains, and net assets were not affected by this change.
H. OTHER--Investment transactions are accounted for on the trade date.
</TABLE>
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
GOVERNMENT SECURITIES
FUND QUALITY BOND FUND QUALITY GROWTH FUND
YEAR ENDED JULY 31, YEAR ENDED JULY 31, YEAR ENDED JULY 31,
----------------------- ----------------------- -----------------------
1994 1993* 1994 1993* 1994 1993*
---------- --------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 1,949,249 3,370,562 2,283,996 4,159,012 1,891,046 7,893,573
- --------------------------------------
Shares issued to shareholders in
payment of dividends declared 190,255 63,527 237,976 95,879 102,901 56,938
- --------------------------------------
Shares redeemed (2,020,499) (534,075) (1,262,911) (565,352) (1,903,905) (857,308)
- -------------------------------------- --------- -------- --------- -------- --------- --------
Net change resulting from Fund share
transactions 119,005 2,900,014 1,259,061 3,689,539 90,042 7,093,203
- -------------------------------------- --------- -------- --------- -------- --------- --------
</TABLE>
* For the period from November 20, 1992 (date of initial public investment) to
July 31, 1993.
FOUNTAIN SQUARE FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MID CAP FUND BALANCED FUND OHIO TAX FREE FUND
YEAR ENDED JULY 31, YEAR ENDED JULY 31, YEAR ENDED JULY 31,
----------------------- ----------------------- ---------------------
1994 1993* 1994 1993* 1994 1993+
---------- --------- ---------- --------- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 1,078,069 2,588,794 1,835,511 6,758,544 2,299,130 859,185
- ---------------------------------------
Shares issued to shareholders in
payment of dividends declared 17,329 9,391 176,988 90,807 48,131 1,154
- ---------------------------------------
Shares redeemed (584,160) (117,558) (2,045,267) (694,590) (719,852) (39,922)
- --------------------------------------- --------- -------- --------- -------- --------- ------
Net change resulting from Fund share
transactions 511,238 2,480,627 (32,768) 6,154,761 1,627,409 820,417
- --------------------------------------- --------- -------- --------- -------- --------- ------
</TABLE>
* For the period from November 20, 1992 (date of initial public investment) to
July 31, 1993.
+ For the period from May 27, 1993 (date of initial public investment) to July
31, 1993.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Fifth Third Bank, the Trust's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee based on
a percentage of each Fund's average daily net assets (see below).
<TABLE>
<CAPTION>
FUND ANNUAL RATE
- ------------------------------ -----------
<S> <C>
Government Securities Fund.... 0.55%
Quality Bond Fund............. 0.55%
Quality Growth Fund........... 0.80%
Mid Cap Fund.................. 0.80%
Balanced Fund................. 0.80%
Ohio Tax Free Fund............ 0.55%
</TABLE>
The Adviser may voluntarily choose to waive a portion of its fee or reimburse
certain operating expenses of each Fund. The Adviser can modify or terminate
this voluntary waiver and reimbursement at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides each Fund
with certain administrative personnel and services. The FAS fee is based on the
level of average aggregate net assets of the Trust for the period. FAS may
voluntarily choose to waive a portion of its fee.
TRANSFER AND DIVIDEND DISBURSING AGENT, ACCOUNTING AND CUSTODY FEES--Fifth Third
Bank serves as transfer and dividend disbursing agent for the Funds. Fifth Third
Bank has sub-contracted the execution of the transfer and dividend disbursing
agent functions to a non-affiliated entity. The fee is based on the level of the
Fund's average net assets for the period, plus out-of-pocket expenses.
Fifth Third Bank maintains the Fund's accounting records. Fifth Third Bank has
sub-contracted the execution of the accounting services function to a
non-affiliated entity. The fee is based on the level of the Fund's average net
assets for the period, plus out-of-pocket expenses.
Fifth Third Bank is the Funds' custodian. The fee is based on the level of the
Fund's average net assets for the period. All other charges, such as trades and
wires, are based on similar size and types of Funds. Fifth Third Bank
voluntarily chose to waive all fees for custody services for each of the Funds.
Fifth Third Bank can modify or terminate this voluntary waiver at any time at
its sole discretion.
FOUNTAIN SQUARE FUNDS
- --------------------------------------------------------------------------------
ORGANIZATIONAL EXPENSES--Organizational expenses were borne initially by FAS.
The Funds have agreed to reimburse FAS for the organizational expenses during
the five year period following the date the Trust's portfolio first became
effective.
<TABLE>
<CAPTION>
EXPENSES OF AMOUNT REIMBURSED
ORGANIZING THE TO FAS FOR THE
FUNDS YEAR ENDED JULY 31, 1994
--------------- ------------------------
<S> <C> <C>
Government Securities Fund...... $14,730 $1,964
Quality Bond Fund............... 15,070 2,009
Quality Growth Fund............. 14,730 1,964
Mid Cap Fund.................... 14,739 1,965
Balanced Fund................... 15,604 2,081
Ohio Tax Free Fund.............. 20,665 2,066
</TABLE>
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
fiscal year ended July 31, 1994, were as follows:
<TABLE>
<CAPTION>
GOVERNMENT QUALITY QUALITY
SECURITIES BOND GROWTH MID CAP BALANCED OHIO TAX
FUND FUND FUND FUND FUND FREE FUND
- --------------------------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
PURCHASES $19,525,554 $55,729,733 $27,402,609 $17,872,317 $31,883,323 $34,411,894
- --------------------------- ---------- ----------- ----------- ----------- ----------- -----------
SALES $17,325,806 $47,381,976 $25,795,816 $11,418,574 $34,236,889 $18,157,109
- --------------------------- ---------- ----------- ----------- ----------- ----------- -----------
</TABLE>
(6) CONCENTRATION OF CREDIT RISK
Since the Ohio Tax Free Fund invests a substantial portion of its assets in
issuers located in Ohio, it will be more susceptible to factors adversely
affecting issuers in Ohio than would be a comparable general tax-exempt mutual
fund. In order to reduce the credit risk associated with such factors, at July
31, 1994, 42% of the securities in the portfolio of investments are backed by
letters of credit or bond insurance of various financial institutions and
financial guaranty assurance agencies. The aggregate percentages by financial
institutions and agencies ranged from 4.3% to 15.0% of total investments.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
To the Board of Trustees and Shareholders of
FOUNTAIN SQUARE FUNDS:
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Fountain Square Funds: (comprising,
respectively, Fountain Square U.S. Government Securities Fund, Fountain Square
Quality Bond Fund, Fountain Square Quality Growth Fund, Fountain Square Mid Cap
Fund, Fountain Square Balanced Fund and Fountain Square Ohio Tax Free Bond Fund)
as of July 31, 1994, and the related statements of operations for the year then
ended, the statements of changes in net assets and financial highlights for the
periods presented therein. These financial statements and financial highlights
are the responsibility of the Trust's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of July
31, 1994, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios of the Fountain Square Funds, as identified above,
at July 31, 1994, the results of their operations, for the year then ended, and
the changes in their net assets and financial highlights for the periods
presented therein, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
September 2, 1994
<TABLE>
<S> <C>
TRUSTEES OFFICERS
- ---------------------------------------------------------------------------------------------
Lee A. Carter J. Christopher Donahue
Edward Burke Carey President and Treasurer
J. Christopher Donahue Margaret P. Tessaro
Albert E. Harris Vice President and Assistant Treasurer
Jay S. Neuman
Secretary
Gail Cagney
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are NOT INSURED OR GUARANTEED BY THE FDIC, the Federal Reserve Board,
or any other government agency. Investment in mutual funds involves risk,
including possible loss of principal.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Funds' prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
APPENDIX
A. The graphic representation here displayed consists of a
legend in the top left indicating the components of the
corresponding line graph. The Fountain Square U.S.
Government Securities Fund (the "Fund") is represented by a
solid line. The Lehman Brothers Intermediate Government
Corporate Index is represented by a dotted line. The line
graph is a visual representation of a comparison of change
in value of a hypothetical $10,000 purchase in the Fund and
the Lehman Brothers Intermediate Government Corporate Index.
The "y" axis reflects the cost of the investment. The "x"
axis reflects computation periods from the Fund's start of
business, November 20, 1992, through July 31, 1994. The
right margin reflects the ending value of the hypothetical
investment in the Fund as compared to the Lehman Brothers
Intermediate Government Corporate Index; the ending values
are $10,027 and $10,835, respectively. There is also a
legend directly below the graphic representation which
indicates the Average Annual Total Return for the period
ended July 31, 1994, beginning with the inception date of
the Fund (November 20, 1994), the inception date of the Fund
(November 20, 1994 - cumulative) and the one-year period;
the Average Annual Total Returns are 0.17%, 0.28%, and -
4.38%, respectively.
A1. The graphic representation here displayed consists of a
single pie chart in the upper center of the page which shows
the Bond Sector Allocation (displayed in percentages) of the
Fountain Square U.S. Government Securities Fund as of July
31, 1994. The pie chart is made up of four different pieces
labeled as follows (going clockwise from 12:00 noon):
Agencies 36%, Treasuries 50%, Money Markets 1% and Mortgages
13%. There is also a listing of Maturity Weightings
directly below the pie chart. The listing is divided into
four groups labeled as follows (going from top to bottom):
Less than 1 year 26%, 1 - 3 years 19%, 3 - 5 years 22% and 5
- - 10 years 33% with an overall average maturity of 3.1
years.
B. The graphic representation here displayed consists of a
legend in the top left indicating the components of the
corresponding line graph. The Fountain Square Quality Bond
Fund (the "Fund") is represented by a solid line. The
Lehman Brothers Aggregate Bond Index is represented by a
dotted line. The line graph is a visual representation of a
comparison of change in value of a hypothetical $10,000
purchase in the Fund and the Lehman Brothers Aggregate Bond
Index. The "y" axis reflects the cost of the investment.
The "x" axis reflects computation periods from the Fund's
start of business, November 20, 1992, through July 31, 1994.
The right margin reflects the ending value of the
hypothetical investment in the Fund as compared to the
Lehman Brothers Aggregate Bond Index; the ending values are
$10,071 and $11,544, respectively. There is also a legend
directly below the graphic representation which indicates
the Average Annual Total Return for the period ended July
31, 1994, beginning with the inception date of the Fund
(November 20, 1994), the inception date of the Fund
(November 20, 1994 - cumulative) and the one-year period;
the Average Annual Total Returns are 0.43%, 0.71%, and -
5.65%, respectively.
B1. The graphic representation here displayed consists of a
single pie chart in the upper center of the page which shows
the Bond Sector Allocation (displayed in percentages) of the
Fountain Square Quality Bond Fund as of July 31, 1994. The
pie chart is made up of six different pieces labeled as
follows (going clockwise from 12:00 noon): U.S. Government
Treasuries 39%, U.S. Government Agencies 7%, Mortgage Backed
24%, Corporate Bonds 12%, International Bonds 13% and Money
Markets 5%. There is also a listing of Maturity Weightings
directly below the pie chart. The listing is divided into
six groups labeled as follows (going from top to bottom):
Less than 1 year 8%, 1 - 3 years 18%, 3 - 5 years 13%, 5 -
10 years 31%, 10 - 20 years 11% and 20+ years 19% with an
overall average maturity of 9.2 years and an overall average
quality of AAA.
C. The graphic representation here displayed consists of a
legend in the top left indicating the components of the
corresponding line graph. The Fountain Square Quality
Growth Fund (the "Fund") is represented by a solid line.
The S&P Barra Growth Index is represented by a dotted line.
The line graph is a visual representation of a comparison of
change in value of a hypothetical $10,000 purchase in the
Fund and the S&P Barra Growth Index. The "y" axis reflects
the cost of the investment. The "x" axis reflects
computation periods from the Fund's start of business,
November 20, 1992, through July 31, 1994. The right margin
reflects the ending value of the hypothetical investment in
the Fund as compared to the S&P Barra Growth Index; the
ending values are $9,485 and $10,095, respectively. There
is also a legend directly below the graphic representation
which indicates the Average Annual Total Return for the
period ended July 31, 1994, beginning with the inception
date of the Fund (November 20, 1994), the inception date of
the Fund (November 20, 1994 - cumulative) and the one-year
period; the Average Annual Total Returns are -3.06%, -5.14%,
and -1.48%, respectively.
C1. The graphic representation here displayed consists of a
single pie chart in the upper center of the page which shows
the Industry Weightings (displayed in percentages) of the
Fountain Square Quality Growth Fund as of July 31, 1994.
The pie chart is made up of nine different pieces labeled as
follows (going clockwise from 12:00 noon): Utilities 4%,
Technology 15%, Energy 10%, Consumer Staples 13%, Consumer
Cyclicals 15%, Transportation 4%, Capital Goods 21%, Basic
Materials 8% and Interest Sensitive 10%.
D. The graphic representation here displayed consists of a
legend in the top left indicating the components of the
corresponding line graph. The Fountain Square Mid Cap Fund
(the "Fund") is represented by a solid line. The S&P Mid
Cap 400 Index is represented by a broken line. The Wilshire
Mid Cap 750 Index is represented by a dotted line. The line
graph is a visual representation of a comparison of change
in value of a hypothetical $10,000 purchase in the Fund, the
S&P Mid Cap 400 Index and the Wilshire Mid Cap 750 Index.
The "y" axis reflects the cost of the investment. The "x"
axis reflects computation periods from the Fund's start of
business, November 20, 1992, through July 31, 1994. The
right margin reflects the ending value of the hypothetical
investment in the Fund as compared to the S&P Mid Cap 400
Index and the Wilshire Mid Cap 750 Index; the ending values
are $9,760, $11,288, and $11,531, respectively. There is
also a legend directly below the graphic representation
which indicates the Average Annual Total Return for the
period ended July 31, 1994, beginning with the inception
date of the Fund (November 20, 1994), the inception date of
the Fund (November 20, 1994 - cumulative) and the one-year
period; the Average Annual Total Returns are -1.44%, -2.39%,
and 0.30%, respectively.
D1. The graphic representation here displayed consists of a
single pie chart in the upper center of the page which shows
the Industry Weightings (displayed in percentages) of the
Fountain Square Mid Cap Fund as of July 31, 1994. The pie
chart is made up of seven different pieces labeled as
follows (going clockwise from 12:00 noon): Consumer Staples
11%, Technology 15%, Basic Materials 14%, Utilities 5%,
Consumer Cyclicals 12%, Transportation 11% , Interest
Sensitive 18% and Capital Good 14%.
E. The graphic representation here displayed consists of a
legend in the top left indicating the components of the
corresponding line graph. The Fountain Square Balanced Fund
(the "Fund") is represented by a solid line. The S&P Barra
Growth Index is represented by a dotted line. The Lehman
Brothers Aggregate Bond Index is represented by a broken
line. The line graph is a visual representation of a
comparison of change in value of a hypothetical $10,000
purchase in the Fund, the S&P Barra Growth Index and the
Lehman Brothers Aggregate Bond Index. The "y" axis reflects
the cost of the investment. The "x" axis reflects
computation periods from the Fund's start of business,
November 20, 1992, through July 31, 1994. The right margin
reflects the ending value of the hypothetical investment in
the Fund as compared to the S&P Barra Growth Index and the
Lehman Brothers Aggregate Bond Index; the ending values are
$9,693, $10,095, and $11,544, respectively. There is also a
legend directly below the graphic representation which
indicates the Average Annual Total Return for the period
ended July 31, 1994, beginning with the inception date of
the Fund (November 20, 1994), the inception date of the Fund
(November 20, 1994 - cumulative) and the one-year period;
the Average Annual Total Returns are -1.84%, -3.05%, and -
2.56%, respectively.
E1. The graphic representation here displayed consists of a
three pie charts in the upper center of the page which show
the Asset Allocation, Bond Sector Allocation and Equity
Industry Weightings (displayed in percentages) of the
Fountain Square Balanced Fund as of July 31, 1994. The
Asset Allocation pie chart is made up of three different
pieces labeled as follows (going clockwise from 12:00 noon):
Money Market 8%, Stocks 69% and Bonds 23%. The Bond Sector
Allocation pie chart is made up of five different pieces
labeled as follows (going clockwise from 12:00 noon): U.S.
Government Treasuries 24%, U.S. Government Agencies 3%,
Mortgage Backed 34%, Corporate Bonds 10% and International
Bonds 29%. The Equity Industry Weighting pie chart is made
up of nine different pieces labeled as follows: Interest
Sensitive 10%, Energy 9%, Technology 16%, Utilities 3%,
Consumer Staples 12%, Consumer Cyclicals 14%, Transportation
6%, Capital Goods 23% and Basic Material 7%.
F. The graphic representation here displayed consists of a
legend in the top left indicating the components of the
corresponding line graph. The Fountain Square Ohio Tax Free
Fund (the "Fund") is represented by a solid line. The
Lehman Brothers 5 Year Municipal Growth Index is represented
by a dotted line. The line graph is a visual representation
of a comparison of change in value of a hypothetical $10,000
purchase in the Fund and the Lehman Brothers 5 Year
Municipal Growth Index. The "y" axis reflects the cost of
the investment. The "x" axis reflects computation periods
from the Fund's start of business, November 20, 1992,
through July 31, 1994. The right margin reflects the ending
value of the hypothetical investment in the Fund as compared
to the Lehman Brothers 5 Year Municipal Growth Index; the
ending values are $9,735, and $10,434, respectively. There
is also a legend directly below the graphic representation
which indicates the Average Annual Total Return for the
period ended July 31, 1994, beginning with the inception
date of the Fund (November 20, 1994), the inception date of
the Fund (November 20, 1994 - cumulative) and the one-year
period; the Average Annual Total Returns are -2.44%, -2.64%,
and -2.65%, respectively.
F1. The graphic representation here displayed consists of a
single pie chart in the upper center of the page which shows
the Quality Rating Allocation (displayed in percentages) of
the Fountain Square Ohio Tax Free Fund as of July 31, 1994.
The pie chart is made up of four different pieces labeled as
follows (going clockwise from 12:00 noon): A 26%, AA 21%,
AAA 52% and Other 1%. There is also a listing of Maturity
Weightings directly below the pie chart. The listing is
divided into five groups labeled as follows (going from top
to bottom): Less than 1 year 5%, 1 - 3 years 13%, 3 - 5
years 19%, 5 - 10 years 47%, 10 - 15 years 16% with an
overall average maturity of 6.3 years and an overall average
quality of AA2.
