<PAGE>
FOUNTAIN SQUARE (R) FUNDS
--------------------------------
QUALITY GROWTH FUND
--------------------------------
--------------------------------
EQUITY INCOME FUND
--------------------------------
--------------------------------
BALANCED FUND
--------------------------------
--------------------------------
MID CAP FUND
--------------------------------
[PICTURE APPEARS HERE]
--------------------------------
INTERNATIONAL EQUITY FUND
--------------------------------
--------------------------------
BOND FUND FOR INCOME
--------------------------------
--------------------------------
QUALITY BOND FUND
--------------------------------
--------------------------------
U.S. GOVERMENT SECURITY FUND
--------------------------------
--------------------------------
MUNICIPAL BOND FUND
--------------------------------
--------------------------------
OHIO TAX FREE BOND FUND
--------------------------------
Annual Report to Shareholders
July 31, 1997
<PAGE>
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Funds' prospectus, which contains facts
concerning the objectives and policies, management fees, expenses and other
information.
For more complete information on the Fountain Square Funds, including fees,
expenses and sales charges, please call 1-888-799-5353 for a prospectus, which
you should read carefully before you invest or send money. The Fountain Square
Funds are distributed by BISYS Fund Services.
Fifth Third Bank serves as Investment Advisor to the Funds and receives a fee
for its services.
Fountain Square Funds, like all mutual funds:
. are NOT FDIC insured
. have no bank guarantee
. may lose value
<PAGE>
Shareholder's Letter
- --------------------------------------------------------------------------------
Dear Shareholder:
We are pleased to present the Fountain Square Funds' Annual Report to
Shareholders for the year ended July 31, 1997. This letter offers us an
opportunity to review some of the principles that have continued to guide our
investment strategy in recent months and to comment on the market conditions of
the past fiscal year. It also gives us a chance to explain our outlook for the
months ahead, as well as our strategy going forward based on that outlook.
A strong period for stocks and bonds
It's been an extraordinary year in the financial markets, far exceeding even the
most optimistic expectations of a year ago. During the past 12 months, the
Standard & Poor's 500 Index gained 52%. In fact, it's hard to imagine a better
stock-and-bond market than the one we experienced over the past year.
The gains were the result of good news on a number of fronts. First, continued
economic growth, low inflation and low interest rates were all key factors. The
market also was driven by good corporate earnings. Liquidity in the stock market
also played a role, with high levels of cash flowing into mutual funds during
the year. Finally, investor sentiment was strong throughout the period.
Interest rates fell during the 12-month period as well. The yield on the 30-year
Treasury declined from 7% to 6.3% by July 31, 1997. At times during the past
year, investors became concerned about renewed inflationary pressures. For
example, many investors were worried about the potential for upward pressure on
wages. Fortunately, higher inflation never materialized. In addition, the
Federal Reserve Board was diligent in their watch against inflation, raising
short-term interest rates in March to help slow economic growth.
Focus on long-term goals
We are focusing on the long-term implications of the market's spectacular
performance. We emphasize that shareholders should not become overly caught up
in day-to-day news--whether it's good or bad. Instead, our investment philosophy
calls for investing in quality growth companies at attractive valuations. That
approach has worked especially well for us in the past 12 months. During that
period, technology and financial services stocks performed particularly well for
funds.
We maintained our long-term approach to investing in the bond market as well,
avoiding significant bets on the short-term direction of interest rates.
Instead, we added value by shifting assets among sectors of the fixed-income
market to take advantage of opportunities to boost incremental returns.
Looking forward
Clearly, stocks are more expensive than they were even a year ago. However, we
believe that stocks still are not as expensive as they were in October of 1987,
when we experienced a significant temporary market correction. It is our belief
that corporate earnings supported the valuations of stocks over the past year.
But corporate earnings must continue to advance if the stock market is to
deliver further gains.
That said, we discourage investors from trying to "time the market." Many market
timers thought that stocks were overvalued when the Dow Jones Industrial Average
stood at 4000. If they sold their stock investments then, they would have missed
out on the next 4000-point gain. Investors should instead maintain a long-term
perspective on both the stock and bond markets, holding investment portfolios
that suit their goals and risk tolerance without regard to temporary market
fluctuations.
1
<PAGE>
- --------------------------------------------------------------------------------
Our best judgment is that the market can continue to post gains, based on good
economic and market news. We've just completed our sixth consecutive calendar
year of rising corporate earnings for firms whose stocks make up the S&P 500--
unprecedented performance in recent decades--and 1998 may be the seventh year.
As we enter the later stages of this economic expansion, however, the growth of
corporate earnings may slow down. The companies that do best in such a slow-
growth environment are consistent, quality growth companies--exactly the types
of firms in which many of the Fountain Square Funds invest.
We don't expect any significant interest rate changes during the next year. In
fact, we expect yields on long-term bonds to stay within 50 basis points--half a
percentage point--of their current level. We remain optimistic about the
economy's strength, and the Federal Reserve has demonstrated its resolve to
intervene to stifle inflationary pressures.
We would like to thank our shareholders for their continued confidence in us. At
the Fountain Square Funds, we know that a successful investment plan is measured
over the long term, not over three, six or even 12 months.
Sincerely,
/s/ James D. Berghausen
James D. Berghausen, CFA
Chief Investment Officer
Fifth Third Bank
2
<PAGE>
Investment Reviews
- --------------------------------------------------------------------------------
Fountain Square Quality Growth Fund
During the 12 months ended July 31, 1997, the Fund delivered a total return of
54.02% on Investment A Shares (before the deduction of the sales charge). That
compares to a 52.11% return for the Standard & Poor's 500 Index, a 56.50% return
for the Standard & Poor's BARRA Growth Index and a 42.90% return for the Lipper
Growth Funds Average. We are including the Standard & Poor's 500 Index for the
first time as a comparable benchmark, because it is widely used as an industry
standard and is regarded as being representative of the U.S. stock market as a
whole. The stock market benefited from a favorable inflation and interest rate
environment, strong corporate earnings and significant cash flow into equities.
We continued to invest in reasonably valued shares of high-quality companies
with above-average growth in earnings. We increased the Fund's exposure to
technology and financial companies during the period. Its holdings included
shares of firms such as Cisco Systems and Bank of New York.
The Fund's holdings also were heavily weighted in the health-care sector during
the period. Due to a correction in health-care stocks, shares of these companies
were selling at attractive valuations. Going forward, demographic factors bode
well for these firms' product cycles and earnings growth. The Fund's investment
in such companies included shares of Johnson & Johnson and American Home
Products.
We reduced the Fund's exposure to energy, utility and consumer staples
companies. In the utility and energy sectors, we expect sluggish earnings
growth. We also are concerned that shares of many consumer staples companies are
overvalued.
During the coming months, the Fund will continue to hold companies that offer
the best combination of consistent earnings growth and attractive valuations. We
will monitor valuations and the potential for sustainable growth prospects.
As of July 31, 1997, the Fund's top five holdings were Intel (6.8% of net
assets), Oracle (5.1%), First Data Corp. (4.8%), Federal Home Loan Mortgage
Corporation (4.2%) and Praxair (4.0%)./1/
Growth of $10,000 Invested in Fountain Square Quality Growth Fund
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Standard Standard &
Investment Investment & Poors Poors BARRA Lipper Growth
A Shares* C Shares* 500 Index Growth Index Funds Average
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
01/01/83 $9,550 $10,000 $10,000 $10,000 $10,000
07/31/83 $11,396 $11,886 $11,863 $11,594 $11,795
07/31/84 $11,216 $11,654 $11,510 $10,756 $10,463
07/31/85 $15,360 $15,898 $15,241 $13,839 $13,537
07/31/86 $20,090 $20,724 $19,571 $18,048 $16,734
07/31/87 $25,766 $26,482 $27,261 $24,941 $22,026
07/31/88 $22,387 $22,882 $24,057 $20,927 $19,556
07/31/89 $28,468 $28,978 $31,729 $27,893 $24,877
07/31/90 $31,712 $32,167 $33,781 $31,198 $26,323
07/31/91 $37,387 $37,771 $38,082 $36,028 $29,874
07/31/92 $42,928 $43,151 $42,945 $40,453 $33,228
07/31/93 $43,365 $43,560 $46,685 $41,051 $37,222
07/31/94 $44,740 $44,941 $49,090 $43,138 $38,906
07/31/95 $55,122 $55,370 $61,888 $56,393 $48,975
07/31/96 $62,118 $62,294 $72,133 $66,347 $53,820
07/31/97 $95,674 $95,176 $109,721 $103,837 $78,052
</TABLE>
AVERAGE ANNUAL TOTAL RETURN FOR
THE PERIOD ENDED JULY 31, 1997* **
<TABLE>
<CAPTION>
Investment A Investment C
------------ ------------
<S> <C> <C>
1 Year.....................................47.09%............52.79%
5 Year.....................................16.31%............17.14%
10 Year....................................13.49%............13.65%
Start of Performance (1/1/83)..............16.74%............16.70%
</TABLE>
3
<PAGE>
- --------------------------------------------------------------------------------
/1/ The composition of the Fund's portfolio is subject to
change.
Investment C Shares were initially offered April 19, 1996. The performance
figures for Investment C Shares for periods prior to such date represent the
performance for Investment A Shares of the Fund. Investment C Shareholders that
redeem within one year of purchase are subject to a contingent deferred sales
charge of 1.00%. Investment C Shares are also subject to administrative service
fees at a maximum rate of 0.25% of 1% of the average daily net asset value of
Investment C Shares. The maximum sales charge for Investment A Shares is 4.50%.
* Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
The Fund's performance is measured against the Standard & Poor's 500 Index and
the Standard & Poor's BARRA Growth Index, both of which are unmanaged indices
generally representative of the stock market, and the Lipper Growth Funds
Average, representative of the average of the total returns reported by all of
the mutual funds designated by Lipper Analytical Services, Inc. as falling into
this category. The Standard & Poor's 500 Index and the Standard & Poor's BARRA
Growth Index do not reflect the deduction of fees associated with a mutual fund,
such as investment management and fund accounting fees. However, the Lipper
Growth Funds Average and the Fund's performance do reflect the deduction of fees
for these value-added services. Past performance is not indicative of future
results. The investment return and NAV will fluctuate, so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
** The quoted performance of the Quality Growth Fund includes performance of
certain collective trust fund ("Commingled") accounts advised by Fifth Third
Bank, for periods dating back to 1/1/83 and prior to the Quality Growth Fund's
commencement of operations on 11/20/92, as adjusted to reflect the expenses
associated with the Fund. The Commingled accounts were not registered with the
Securities and Exchange Commission and, therefore, were not subject to the
investment restrictions imposed by law on registered mutual funds. If the
Commingled accounts had been registered, the Commingled accounts' performance
may have been adversely affected. The performance shown reflects the deduction
of fees for value-added services associated with a mutual fund, such as
investment management and accounting fees. The performance also reflects
reinvestment of all dividends and capital-gains distributions.
Fountain Square Equity Income Fund
The Fund posted a total return of 42.74%** on Investment A Shares (before the
deduction of the sales charge) during the 12 months ended July 31, 1997,
compared to 39.93% for the Lipper Equity Income Funds Average and 52.11% for the
Standard & Poor's 500 Index.
During the period, the stock market benefited from falling interest rates, low
inflation and continued corporate earnings growth. Financial stocks such as
Norwest Bank Corp. and Mellon Bank Corp. performed especially well for the Fund.
In addition, the Fund remained fully invested during the period.
The Fund's holdings were heavily weighted in the financial, energy and utilities
sectors. We also doubled the Fund's exposure to the health-care sector by
investing in companies such as Pfizer Inc. and Schering-Plough Corp. We limited
our weighting in the technology and consumer cyclicals sectors because of their
limited yield potential.
During the coming months, we believe that corporate earnings will continue to be
strong and inflation is likely to remain low. We don't anticipate making any
major changes in the Fund's sector allocations. Instead, the Fund will continue
to invest in companies that provide stable earnings growth and appealing
dividends at attractive valuations.
As of July 31, 1997, the Fund's top five holdings were Mellon Bank Corp. (5.9%
of net assets), Ameritech (4.8%), Chevron (4.3%), Bank of New York (4.2%) and
RPM (4.2%)./2/
4
<PAGE>
Growth of $10,000 Invested in Fountain Square Equity Income Fund
[LIINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Standard
Investment A Investment C & Poor's Lipper Equity Income
Shares* Shares* 500 Index Funds Average
--------------------------------------------------------------
<S> <C> <C> <C> <C>
01/01/83 $9,531 $10,000 $10,000 $10,000
07/31/83 $11,302 $11,805 $11,863 $11,285
07/31/84 $11,354 $11,783 $11,510 $11,322
07/31/85 $14,948 $15,396 $15,241 $14,585
07/31/86 $20,990 $21,489 $19,571 $17,861
07/31/87 $24,948 $25,343 $27,261 $21,861
07/31/88 $22,448 $22,627 $24,057 $20,734
07/31/89 $28,750 $28,801 $31,729 $25,666
07/31/90 $30,208 $30,045 $33,781 $25,719
07/31/91 $34,740 $34,298 $38,082 $28,383
07/31/92 $39,115 $38,375 $42,945 $32,423
07/31/93 $39,792 $38,715 $46,685 $36,667
07/31/94 $39,896 $38,555 $49,090 $37,957
07/31/95 $45,990 $44,137 $61,888 $44,338
07/31/96 $53,281 $50,745 $72,133 $49,730
07/31/97 $76,026 $71,972 $109,721 $67,855
</TABLE>
AVERAGE ANNUAL TOTAL RETURN FOR
THE PERIOD ENDED JULY 31, 1997* **
<TABLE>
<CAPTION>
Investment A Investment C
<S> <C> <C>
1 Year.....................................36.29%.............41.83%
5 Year.....................................13.18%.............13.40%
10 Year....................................11.26%.............11.00%
Start of Performance (1/1/83)..............14.92%.............14.49%
</TABLE>
/2/ The composition of the Fund's portfolio is subject to change.
Investment C Shareholders that redeem within one year of purchase are subject to
a contingent deferred sales charge of 1.00%. Investment C Shares are also
subject to administrative service fees at a maximum rate of 0.25 of 1% of the
average daily net asset value of Investment C Shares. The maximum sales charge
for Investment A Shares is 4.50%.** Total return quoted reflects all applicable
sales charges and contingent deferred sales charges.
The Fund's performance is measured against the Standard and Poor's 500 Index and
the Lipper Equity Income Funds Average. The Standard and Poor's 500 Index is an
unmanaged index that is generally representative of the U.S. stock market as a
whole. The Lipper Equity Income Funds Average is representative of the average
of the total returns reported by all of the mutual funds designated by Lipper
Analytical Services, Inc. as falling into this category. The Lipper Growth and
Income Funds Average and the Fund's performance reflect the deduction of fees
for these value-added services. However, the performance of the Standard and
Poor's 500 Index does not reflect the deduction of fees associated with a mutual
fund, such as investment management and fund accounting fees. Past performance
is not indicative of future results. The investment return and NAV will
fluctuate, so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
** The quoted performance of the Equity Income Fund includes performance of
certain collective trust fund ("Commingled") accounts advised by Fifth Third
Bank, for periods dating back to 1/1/83 and prior to the Equity Income Fund's
commencement of operations on 1/27/97, as adjusted to reflect the expenses
associated with the Fund. The Commingled accounts were not registered with the
Securities and Exchange Commission and, therefore, were not subject to the
investment restrictions imposed by law on registered mutual funds. If the
Commingled accounts had been registered, the Commingled accounts' performance
may have been adversely affected. The performance shown reflects the deduction
of fees for value-added services associated with a mutual fund, such as
investment management and accounting fees. The performance also reflects
reinvestment of all dividends and capital-gains distributions.
Fountain Square Balanced Fund
The Fund posted a 38.45% total return on Investment A Shares (before the
deduction of the sales charge) during the 12 months ended July 31, 1997. That
compares to a return of 52.11% for the Standard & Poor's 500 Index, 56.50% for
the Standard & Poor's BARRA Growth Index, 10.76% for the Lehman Brothers
Aggregate Bond Index and 29.46% for the Lipper Balanced Funds Average. We are
including the Standard & Poor's 500 Index for the first time as a comparable
benchmark, because it is widely used as an industry standard and is regarded as
being representative of the U.S. stock market as a whole.
5
<PAGE>
- --------------------------------------------------------------------------------
When stocks and bonds appear to offer similar trade-offs between risk and
potential reward, the Fund invests 65% of its assets in stocks, with the rest in
bonds. During the recent period, we maintained that neutral weighting. The
Fund's equity holdings emphasized large, high-quality growth companies and fast-
growing mid-cap companies in a variety of industries. We favored the technology,
health-care and financial sectors because these areas offered the best
combination of attractive valuations and strong growth prospects.
During the period, we increased the Fund's exposure to shares of medium-sized,
high-quality companies that have good growth potential. Valuations of mid-cap
stocks appear to be more attractive than those of large-company stocks at this
time. The Fund started the period with 25% of its equity holdings in mid-caps
and 75% in large-company shares. As of July 31, 1997, that allocation had
changed to 65% in large-cap shares and 35% in mid-cap shares./3/
The Fund's fixed-income holdings included a mix of corporate bonds (7.0% of net
assets), asset-backed securities (1.9%), mortgage-backed securities (3.9%) and
U.S. Government securities (19.1%), with the remainder in cash equivalents
(3.2%)./3/
Going forward, we anticipate that the Fund will maintain a neutral mix of 65%
equities and 35% bonds. A favorable inflation and interest-rate environment
would likely be positive for stocks. Other positive factors for the markets
include favorable cash flows into equities, strong corporate earnings, merger
and acquisition activity, share repurchasing and favorable investor sentiment.
Thus, we will continue to emphasize equities, while keeping a careful eye on
valuations of individual companies.
As of July 31, 1997, the Fund's top five holdings were Intel (4.1% of net
assets), Adaptec (3.2%), First Data Corp. (2.5%), Oracle (2.4%) and Federal Home
Loan Mortgage Corp. (2.2%)./3/
Growth of $10,000 Invested in Fountain Square Balanced Fund
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Investment A Investment C S&P BARRA Lehman Bros. Lipper Balanced
Shares * Shares * S&P 500 Growth Index Aggregate Bond Funds Average
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
01/01/83 $9,550 $10,000 $10,000 $10,000 $10,000 $10,000
07/31/83 $11,000 $11,498 $11,863 $11,594 $10,243 $10,872
07/31/84 $11,550 $12,021 $11,510 $10,756 $11,133 $10,748
07/31/85 $15,750 $16,337 $15,241 $13,839 $13,796 $13,957
07/31/86 $20,700 $21,333 $19,571 $18,048 $16,761 $17,593
07/31/87 $25,300 $25,993 $27,261 $24,941 $17,518 $21,152
07/31/88 $24,350 $24,917 $24,057 $20,927 $18,844 $20,084
07/31/89 $30,600 $31,163 $31,729 $27,893 $21,709 $24,494
07/31/90 $34,450 $34,914 $33,781 $31,198 $23,244 $25,349
07/31/91 $40,700 $41,090 $38,082 $36,028 $25,732 $28,506
07/31/92 $48,050 $48,314 $42,945 $40,453 $29,534 $32,370
07/31/93 $49,747 $49,961 $46,685 $41,051 $32,537 $35,950
07/31/94 $50,754 $50,972 $49,090 $43,138 $32,567 $37,057
07/31/95 $60,587 $60,847 $61,888 $56,393 $35,860 $42,768
07/31/96 $64,539 $64,693 $72,133 $66,347 $37,846 $47,404
07/31/97 $89,356 $88,969 $109,721 $103,837 $41,920 $62,066
</TABLE>
AVERAGE ANNUAL TOTAL RETURN FOR
THE PERIOD ENDED JULY 31, 1997* **
<TABLE>
<CAPTION>
Investment A Investment C
------------ ------------
<S> <C> <C>
1 Year.................................................32.26%........37.52%
5 Year.................................................12.18%........12.99%
10 Year................................................12.92%........13.09%
Start of Performance (1/1/83)..........................16.19%........16.16%
</TABLE>
/3/ The composition of the Fund's portfolio is subject to change.
Investment C Shares were initially offered April 19, 1996. The performance
figures for Investment C Shares for periods prior to such date represent the
performance for Investment A Shares of the Fund. Investment C Shareholders that
redeem within one year of purchase are subject to a contingent deferred sales
charge of 1.00%. Investment C Shares are also subject to administrative service
fees at a maximum rate of 0.25 of 1% of the average daily net asset value of
Investment C Shares. The maximum sales charge for Investment A Shares is 4.50%.
6
<PAGE>
- --------------------------------------------------------------------------------
* Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
The Fund's performance is measured against the Standard & Poor's 500 Index and
the Standard and Poor's BARRA Growth Index, unmanaged indices generally
representative of the stock market; the Lehman Brothers Aggregate Bond Index, an
unmanaged index generally representative of the bond market as a whole; and the
Lipper Balanced Funds Average, representative of the average of the total
returns reported by all of the mutual funds designated by Lipper Analytical
Services, Inc. as falling into this category. The Standard & Poor's 500 Index,
the Standard and Poor's BARRA Growth Index and the Lehman Brothers Aggregate
Bond Index do not reflect the deduction of fees associated with a mutual fund,
such as investment management and fund accounting fees. However, the Lipper
Balanced Funds Average and the Fund's performance do reflect the deduction of
fees for these value-added services. Past performance is not indicative of
future results. The investment return and NAV will fluctuate, so that an
investor's shares, when redeemed, may be worth more or less than their original
cost.
** The quoted performance of the Balanced Fund includes performance of certain
collective trust fund ("Commingled") accounts advised by Fifth Third Bank, for
periods dating back to 1/1/83 and prior to the Balanced Fund's commencement of
operations on 11/20/92, as adjusted to reflect the expenses associated with the
Fund. The Commingled accounts were not registered with the Securities and
Exchange Commission and, therefore, were not subject to the investment
restrictions imposed by law on registered mutual funds. If the Commingled
accounts had been registered, the Commingled accounts' performance may have been
adversely affected. The performance shown reflects the deduction of fees for
value-added services associated with a mutual fund, such as investment
management and accounting fees. The performance also reflects reinvestment of
all dividends and capital-gains distributions.
Fountain Square Mid Cap Fund
The Fund posted a total return of 47.17% on Investment A Shares (before the
deduction of the sales charge) during the 12-month period that ended July 31,
1997. That compares to a 45.38% return for the Standard & Poor's MidCap 400
Index and a 35.01% return for the Lipper MidCap Funds Average. Stock market
conditions favored large-company stocks over mid-cap shares for the period. As a
result, we focused on shares of larger mid-cap companies.
Our strategy has remained consistent. We look for mid-cap companies with
profitable market niches and above-average growth prospects and purchase their
shares when they are neglected by other investors. The Fund's holdings are
overweighted in the technology, health-care, financial and capital goods
sectors. For example, the Fund's investments during the recent period included
shares of Flextronics International, Ballard Medical Products, Cincinnati
Financial Corp. and Federal Signal.
The outlook is favorable for mid-cap stocks, which have underperformed relative
to large company stocks and are thus trading at relatively attractive
valuations. We will continue to take advantage of valuation discrepancies,
buying more shares of companies at the smaller end of the mid-cap spectrum.
As of July 31, 1997, the Fund's top five holdings were Adaptec (6.3% of net
assets), American Bankers Insurance (4.8%), Comair (4.8%), Zebra Technologies
(4.5%) and Cardinal Health, Inc. (4.4%)./4/
7
<PAGE>
Growth of $10,000 Invested in Fountain Square Mid Cap Fund
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Standard
& Poor's
Investment Investment Midcap Lipper MidCap
A Shares* C Shares* 400 Index Funds Average
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
01/01/85 $9,562 $10,000 $10,000 $10,000
07/31/85 $11,313 $11,805 $12,190 $11,669
07/31/86 $14,108 $14,668 $15,854 $14,494
07/31/87 $17,172 $17,659 $19,421 $18,479
07/31/88 $16,599 $16,867 $17,912 $16,306
07/31/89 $20,842 $21,091 $23,819 $20,430
07/31/90 $22,694 $22,843 $25,360 $22,195
07/31/91 $28,216 $28,304 $31,047 $26,626
07/31/92 $31,583 $31,550 $36,443 $29,666
07/31/93 $32,751 $32,670 $42,515 $34,997
07/31/94 $34,410 $34,325 $44,014 $34,731
07/31/95 $43,166 $43,060 $54,794 $47,117
07/31/96 $43,714 $43,537 $59,044 $49,700
07/31/97 $64,328 $63,584 $85,837 $67,074
</TABLE>
AVERAGE ANNUAL TOTAL RETURN FOR
THE PERIOD ENDED JULY 31, 1997* **
<TABLE>
<CAPTION>
Investment A Investment C
------------ ------------
<S> <C> <C>
1 Year..............................................40.58%..........46.05%
5 Year..............................................14.24%..........15.05%
10 Year.............................................13.60%..........13.67%
Start of Performance (1/1/85).......................15.93%..........15.83%
</TABLE>
/4/ The composition of the Fund's portfolio is subject to change.
Investment C Shares were initially offered April 19, 1996. The performance
figures for Investment C Shares for periods prior to such date represent the
performance for Investment A Shares of the Fund. Investment C Shareholders that
redeem within one year of purchase are subject to a contingent deferred sales
charge of 1.00%. Investment C Shares are also subject to administrative service
fees at a maximum rate of 0.25 of 1% of the average daily net asset value of
Investment C Shares. The maximum sales charge for Investment A Shares is 4.50%.
* Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
The Fund's performance is measured against the Standard & Poor's MidCap 400
Index, an unmanaged index generally representative of the mid-cap sector of the
U.S. stock market, and the Lipper MidCap Funds Average, representative of the
average of the total returns reported by all of the mutual funds designated by
Lipper Analytical Services, Inc. as falling into this category. The Standard &
Poor's MidCap 400 Index does not reflect the deduction of fees associated with a
mutual fund, such as investment management and fund accounting fees. However,
the Lipper MidCap Funds Average and the Fund's performance do reflect the
deduction of fees for these value-added services. Past performance is not
indicative of future results. The investment return and NAV will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than their
original cost.
** The quoted performance of the Mid Cap Fund includes performance of certain
collective trust fund ("Commingled") accounts advised by Fifth Third Bank, for
periods dating back to 1/1/85 and prior to the Mid Cap Fund's commencement of
operations on 11/20/92, as adjusted to reflect the expenses associated with the
Fund. The Commingled accounts were not registered with the Securities and
Exchange Commission and, therefore, were not subject to the investment
restrictions imposed by law on registered mutual funds. If the Commingled
accounts had been registered, the Commingled accounts' performance may have been
adversely affected. The performance shown reflects the deduction of fees for
value-added services associated with a mutual fund, such as investment
management and accounting fees. The performance also reflects reinvestment of
all dividends and capital-gains distributions.
Fountain Square International Equity Fund
During the 12-month period ended July 31, 1997, the total return on Investment A
Shares (before the deduction of the sales charge) was 21.78%. That compares to
an 18.12% return for the MSCI EAFE (Europe, Australia and Far East) Index.
In Europe, the focus was on the Economic Monetary Union (EMU). The past twelve
months saw a dramatic turnaround in market perceptions about the possibility of
Europe actually adopting a single
8
<PAGE>
currency. Governments reined in spending, and interest rates fell dramatically,
producing a very friendly climate for financial assets. During this time, we
increased the portfolio's commitment to Europe from 37.8% at the beginning to
52.1% at the end./5/ We were rewarded as MSCI Europe produced a 37.81% return
for the twelve-month period.
The Japanese market experienced a great deal of volatility during the period,
but the net result was a -7.50% return for the year. Japan has been in a bear
market due to an extended period of deflation. In the medium to long term, we
believe that regulatory reforms in the financial services sector, as well as
eventual government deregulation of the economy, will help increase corporate
profitability and lead to internally generated economic growth. We anticipate
that Japanese economic recovery will broaden beyond the manufacturing and export
sectors. However, we are underweighted in Japan at the moment, compared to the
EAFE index, because we believe this will be a slow process. The Japanese market
has the benefit of a low correlation with the U.S. market, so we see a defensive
component to our investment in Japan. Far Eastern investments equaled 35.3% of
the Fund's net assets as of July 31, 1997./5/
In general, we look for undervalued markets and fundamental changes in earnings
growth and investor sentiment. The U.S. market remains expensive relative to the
rest of the world. We view this as an opportunity for outperformance in the
European and Asian markets.
We take a strategic long-term approach to hedging. In the past year, we limited
our currency risks by investing in forward contracts to reduce our exposure to
the Japanese yen and Deutsche mark-bloc currencies. We are currently partially
hedging our exposure to European currencies such as Italian lira and French
francs, and will continue to keep a watchful eye on risks and opportunities
related to currencies.
Growth of $10,000 Invested in Fountain Square International Equity Fund
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION> Morgan Stanley
Capital
Intvestment A Intvestment C International
Shares* Shares* EAFE Index
----------------------------------------------
<S> <C> <C> <C>
08/18/94 $9,551 $10,000 $10,000
07/31/95 $9,389 $9,830 $10,448
07/31/96 $10,258 $10,710 $10,817
07/31/97 $12,492 $12,986 $12,776
</TABLE>
AVERAGE ANNUAL TOTAL RETURN FOR
THE PERIOD ENDED JULY 31, 1997*
<TABLE>
<CAPTION>
Investment A Investment C
------------ ------------
<S> <C> <C>
1 Year.................................16.26%....................21.25%
5 Year...................................NA........................NA
Start of Performance (8/18/94)..........7.82%.....................9.24%
</TABLE>
/5/ The composition of the Fund's portfolio is subject to change.
International investing involves increased risk and volatility.
Investment C Shares were initially offered April 19, 1996. The performance
figures for Investment C Shares for periods prior to such date represent the
performance for Investment A Shares of the Fund. Investment C Shareholders that
redeem within one year of purchase are subject to a contingent deferred sales
charge of 1.00%. Investment C Shares are also subject to administrative service
fees at a maximum rate of 0.25 of 1% of the average daily net asset value of
Investment C Shares. The maximum sales charge for Investment A Shares is 4.50%.
9
<PAGE>
- --------------------------------------------------------------------------------
* Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
The Fund's performance is measured against the Morgan Stanley Capital
International EAFE Index, an unmanaged index generally representative of the
foreign stock market. The Index does not reflect the deduction of fees
associated with a mutual fund, such as investment management and fund accounting
fees. However, the Fund's performance does reflect the deduction of fees for
these value-added services. Past performance is not indicative of future
results. The investment return and NAV will fluctuate, so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Fountain Square Bond Fund For Income
The Fund delivered a total return of 8.03%** on Investment A Shares (before the
deduction of the sales charge) during the 12-month period ended July 31, 1997.
That return reflected an income distribution of $0.37 per share and an increase
in the Fund's net asset value from $12.00 to $12.19. The Fund's benchmark, the
Lehman Brothers Intermediate Government Corporate Index, returned 9.07%, while
the Lipper Short-Intermediate Investment Grade Bond Funds Average, posted a
total return of 8.01% during the period.
Interest rates rose in the first quarter of 1997, due to strong economic growth
and the threat of rising inflation. Rates declined later in the period as
economic growth slowed and inflation remained in check. Some investors are
coming to believe that increases in workers' productivity will allow the economy
to continue to grow at a moderate pace without triggering inflation.
The Fund seeks to provide shareholders with stable current income and therefore
takes a somewhat cautious approach. The average maturity of the Fund stood at
4.5 years at its inception and fell to around 4 years by July 31, 1997. The Fund
maintained a roughly neutral average maturity to its benchmark, as there was not
enough clear evidence about the direction of interest rates, economic growth and
inflation to take a more aggressive stance.
The Fund benefited from its investments in securities that mature in around 10
years or less, which performed better than comparable 30-year issues. We found
opportunities in new securities issued by corporations. These new issues offered
better yields than comparable issues available in the secondary market, which
offered relatively low yield advantages over government issues. Corporate
securities made up 51.5% of the Fund's net assets on July 31, 1997./6/
The Fund's holdings in callable government agency securities also helped boost
its performance. These securities featured attractive yields relative to many
corporate issues, coupled with strong credit quality. The overall credit quality
of the Fund's holdings was high, at AA2./6/
Looking ahead, we expect the economy to grow at a moderate pace and inflation to
remain under control. We will continue to hold roughly half of the Fund's
portfolio in corporate issues, with the remaining half consisting of high-
quality, AAA-rated U.S. Government securities, as well as cash equivalents. We
also will look for opportunities in the mortgage market as selected issues
become attractive. We will not make large bets based on the direction of
interest rates, as such an approach would conflict with the Fund's emphasis on
providing shareholders with stable current income.
10
<PAGE>
Growth of $10,000 Invested in Fountain Square Bond Fund For Income
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Lipper Short Term
Investment Grade
Lehman Brothers Debt Funds Average/
Intermediate Lipper Short-
Government Intermediate
Investment Investmente Corporate Investment Grade
A Shares* C Shares* Index Bond Fund Average
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
01/01/83 $9,556 $10,000 $10,000 $10,000
07/31/83 $9,922 $10,344 $10,329 $10,372
07/31/84 $10,653 $11,021 $11,256 $10,951
07/31/85 $12,924 $13,271 $13,579 $12,786
07/31/86 $15,379 $15,663 $15,943 $15,136
07/31/87 $15,875 $16,053 $16,701 $15,827
07/31/88 $16,945 $17,012 $17,900 $16,652
07/31/89 $19,112 $19,034 $20,178 $18,444
07/31/90 $20,183 $19,963 $21,614 $19,597
07/31/91 $22,167 $21,747 $23,824 $21,358
07/31/92 $25,300 $24,636 $27,193 $24,169
07/31/93 $27,546 $26,642 $29,533 $26,059
07/31/94 $26,554 $25,481 $29,810 $25,874
07/31/95 $29,034 $27,661 $32,439 $27,673
07/31/96 $30,340 $28,687 $34,161 $29,061
07/31/97 $32,784 $30,740 $37,260 $30,929
</TABLE>
AVERAGE ANNUAL TOTAL RETURN FOR
THE PERIOD ENDED JULY 31, 1997* **
<TABLE>
<CAPTION>
Investment A Investment C
------------ ------------
<S> <C> <C>
1 Year............................................3.17%..............7.16%
5 Year............................................4.35%..............4.53%
10 Year...........................................7.02%..............6.71%
Start of Performance (1/1/83).....................8.48%..............8.00%
</TABLE>
/6/ The composition of the Fund's portfolio is subject to change.
Investment C Shareholders that redeem within one year of purchase are subject to
a contingent deferred sales charge of 1.00%. Investment C Shares are also
subject to administrative service fees at a maximum rate of 0.25 of 1% of the
average daily net asset value of Investment C Shares. The maximum sales charge
for Investment A Shares is 4.50%.
* Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
The Fund's performance is measured against the Lehman Brothers Intermediate
Government Corporate Index, an unmanaged index generally representative of the
performance of the bond market as a whole. The Fund's performance is also
measured against the Lipper Short Term Investment Grade Debt Funds Average from
1/1/83 to 7/31/83, prior to the creation of the Lipper Short-Intermediate
Investment Grade Bond Funds Average, against which the performance is measured.
The Lipper averages are representative of the average of the total returns
reported by all of the mutual funds designated by Lipper Analytical Services,
Inc. as falling into the same bond market category. The Lehman Brothers
Intermediate Government Corporate Index does not reflect the deduction of fees
associated with a mutual fund, such as investment management and fund accounting
fees. However, Lipper Short Term Investment Grade Debt Funds Average, the Lipper
Short-Intermediate Investment Grade Bond Funds Average and the Fund's
performance do reflect the deduction of fees for these value-added services.
Past performance is not indicative of future results. The investment return and
NAV will fluctuate, so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
** The quoted performance of the Bond Fund For Income includes performance of
certain collective trust fund ("Commingled") accounts advised by Fifth Third
Bank, for periods dating back to 1/1/83 and prior to the Bond Fund For Income's
commencement of operations on 1/27/97, as adjusted to reflect the expenses
associated with the Fund. The Commingled accounts were not registered with the
Securities and Exchange Commission and, therefore, were not subject to the
investment restrictions imposed by law on registered mutual funds. If the
Commingled accounts had been registered, the Commingled accounts' performance
may have been adversely affected. The performance shown reflects the deduction
of fees for value-added services associated with a mutual fund, such as
investment management and accounting fees. The performance also reflects
reinvestment of all dividends and capital-gains distributions.
Fountain Square Quality Bond Fund
The Fund posted a total return of 9.43% on Investment A Shares (before the
deduction of the sales charge) during the 12 months ended July 31, 1997. That
return reflected an income distribution of
11
<PAGE>
$0.55 per share and an increase in the Fund's net asset value from $9.52 to
$9.85. The Fund's benchmarks, the Lehman Brothers Aggregate Bond Index and the
Lipper Intermediate Investment Grade Debt Funds Average, returned 10.76% and
10.06%, respectively, for the period.
The economy generally grew at a moderate pace during the recent 12 months, while
inflation remained low. The yield on the 30-year Treasury bond fell by
approximately 67 basis points during the period, to 6.35% on July 31, 1997.
However, bond prices fluctuated considerably as investors received mixed signals
about the strength of the economy and inflation and the direction of interest
rates. Economic growth was inconsistent from quarter to quarter, and wage
pressures at times led to concerns about rising inflation. In that environment,
day-to-day bond prices were determined more by investor sentiment than by
fundamental factors.
We kept the Fund's average maturity roughly neutral compared to its benchmark,
to reduce shareholders' risk in this uncertain environment. However, we
occasionally increased the Fund's average maturity to take advantage of
opportunities presented by market volatility. For instance, we increased the
Fund's average maturity in February when interest rates were high, which
benefited the Fund when the market rallied. But such changes in the Fund's
average maturity were relatively minor.
We also sought to reduce shareholders' risk by holding only high-quality issues.
For example, the average credit quality of the Fund's holdings was AAA, with no
holding rated below BBB./7/
We found opportunities in various market sectors. Our investments in callable
government agency securities, in particular, helped boost the Fund's
performance. These securities offered strong credit quality with relatively high
yields compared to corporate securities of similar quality. Our lack of exposure
to mortgage securities dampened the Fund's performance, as those securities did
well during the first half of 1997.
Going forward, we believe that the fundamental factors behind the current
condition of the economy have not changed. We expect the economy to continue to
grow at a moderate rate and inflation to remain low at around 3%. Some investors
argue that the U.S. economy will continue to grow without generating
inflationary pressures because technology has increased workers' productivity.
This is a relatively new notion, and we will watch to see if investors embrace
it. Meanwhile, any signs of rising inflation could trigger a rate increase by
the Federal Reserve Board. Therefore, we will structure the Fund cautiously.
Growth of $10,000 Invested in Fountain Square Quality Bond Fund
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Lehman Brothers Lipper Intermediate
Investment A Investment C Aggregate Investment Grade
Shares* Shares* Bond Index Debt Funds Average
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
01/01/83 $9,542 $10,000 $10,000 $10,000
07/31/83 $9,663 $10,111 $10,243 $10,075
07/31/84 $10,217 $10,645 $11,133 $10,770
07/31/85 $12,530 $12,993 $13,796 $13,061
07/31/86 $14,940 $15,418 $16,761 $15,415
07/31/87 $15,422 $15,851 $17,518 $16,086
07/31/88 $16,241 $16,634 $18,844 $17,213
07/31/89 $18,313 $18,677 $21,709 $19,255
07/31/90 $19,229 $19,525 $23,244 $20,358
07/31/91 $21,012 $21,233 $25,732 $22,297
07/31/92 $23,976 $24,138 $29,534 $25,596
07/31/93 $25,732 $25,873 $32,537 $28,047
07/31/94 $25,410 $25,549 $32,567 $28,067
07/31/95 $27,669 $27,821 $35,860 $30,618
07/31/96 $28,736 $28,854 $37,846 $32,204
07/31/97 $31,446 $31,358 $41,920 $35,590
</TABLE>
AVERAGE ANNUAL TOTAL RETURN FOR
THE PERIOD ENDED JULY 31, 1997* **
<TABLE>
<CAPTION>
Investment A Investment C
------------ ------------
<S> <C> <C>
1 Year........................................4.49%...................8.68%
5 Year........................................4.60%...................5.37%
10 Year.......................................6.89%...................7.06%
Start of Performance (1/1/83).................8.17%...................8.15%
</TABLE>
12
<PAGE>
- --------------------------------------------------------------------------------
/7/ The composition of the Fund's portfolio is subject to change.
Investment C Shares were initially offered April 19, 1996. The performance
figures for Investment C Shares for periods prior to such date represent the
performance for Investment A Shares of the Fund. Investment C Shareholders that
redeem within one year of purchase are subject to a contingent deferred sales
charge of 1.00%. Investment C Shares are also subject to administrative service
fees at a maximum rate of 0.25 of 1% of the average daily net asset value of
Investment C Shares. The maximum sales charge for Investment A Shares is 4.50%.
* Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
The Fund's performance is measured against the Lehman Brothers Aggregate Bond
Index, an unmanaged index generally representative of the performance of the
bond market as a whole, and the Lipper Intermediate Investment Grade Debt Funds
Average, representative of the average of the total returns reported by all of
the mutual funds designated by Lipper Analytical Services, Inc. as falling into
this category. The Lehman Brothers Aggregate Bond Index does not reflect the
deduction of fees associated with a mutual fund, such as investment management
and fund accounting fees. However, the Lipper Intermediate Investment Grade Debt
Funds Average and the Fund's performance do reflect the deduction of fees for
these value-added services. Past performance is not indicative of future
results. The investment return and NAV will fluctuate, so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
** The quoted performance of the Quality Bond Fund includes performance of
certain collective trust fund ("Commingled") accounts advised by Fifth Third
Bank, for periods dating back to 1/1/83 and prior to the Quality Bond Fund's
commencement of operations on 11/20/92, as adjusted to reflect the expenses
associated with the Fund. The Commingled accounts were not registered with the
Securities and Exchange Commission and, therefore, were not subject to the
investment restrictions imposed by law on registered mutual funds. If the
Commingled accounts had been registered, the Commingled accounts' performance
may have been adversely affected. The performance shown reflects the deduction
of fees for value-added services associated with a mutual fund, such as
investment management and accounting fees. The performance also reflects
reinvestment of all dividends and capital-gains distributions.
Fountain Square U.S. Government Securities Fund
During the 12 months that ended July 31, 1997, the Fund, which invests in U.S.
Government securities, distributed income of $0.54 per share for Investment A
Shares. The Fund's net asset value increased from $9.55 to $9.75, providing a
total return of 7.83% on Investment A Shares (before the deduction of the sales
charge). That compares to 8.59% and 7.59% returns for the Fund's benchmarks, the
Lehman Brothers Intermediate Government Bond Index and the Lipper Short-
Intermediate U.S. Government Bond Funds Average, respectively.
Interest rates fell significantly during the period. For example, the yield on a
five-year Treasury note fell from 6.56% at the beginning of the year to 5.90% by
July 31, 1997. Although rates ended the period lower than they began it, there
was considerable volatility in rates and bond prices during the intervening
months.
Interest rates rose during the fourth quarter of 1996 and the first quarter of
1997 on signs of strong economic growth. Investors worried that low unemployment
would translate into rising labor costs and rising prices. Growth reportedly
slowed to around 2% by the second quarter of 1997--a more manageable level--and
bonds rallied.
U.S. Treasury bonds underperformed other U.S. Government securities during the
year. We sold some Treasuries and invested more in mortgage-backed securities
and U.S. agency debt. These securities performed slightly better than Treasuries
during the year and helped increase the Fund's overall yield. However, we still
maintain a significant stake in U.S. Treasuries, which accounted for 56.8% of
the Fund's net assets at the end of the period. That compared to 3.4% of the
Fund's assets in mortgages and 36.5% in government agency issues./8/
The Fund's average maturity began the year at 3.8 years and dropped as low as
3.5 years before finishing the period at 3.9 years. We maintained a relatively
stable average maturity to pursue the Fund's primary objective: stability of
income while trying to maximize total return.
Looking ahead, we anticipate continued volatility in the bond market. Investors
are still questioning whether the tight labor market will fuel inflation.
Another question on investors' minds is how fast
13
<PAGE>
- --------------------------------------------------------------------------------
and how far the members of the Federal Reserve Board will let the economy expand
before they raise interest rates.
In that potentially volatile environment, we will not make large bets on the
short-term direction of interest rates. Over the longer term, however, we still
expect rates to fall. If that occurs, the Fund's stake in mortgages and agency
debt should help maintain a stable flow of income.
Growth of $10,000 Invested in Fountain Square U.S. Government Securities Fund
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Lipper Short-
Lehman Brothers Intermediate
Intermediate U.S. Government
Investment Investment Government Bond Funds
A Shares* C Shares* Bond Index Average
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
01/01/86 $9,546 $10,000 $10,000 $10,000
07/31/86 $10,061 $10,520 $10,882 $10,556
07/31/87 $10,499 $10,905 $11,370 $11,038
07/31/88 $10,968 $11,299 $12,162 $11,815
07/31/89 $11,876 $12,180 $13,701 $13,124
07/31/90 $12,693 $12,964 $14,668 $14,053
07/31/91 $13,767 $14,003 $16,163 $15,391
07/31/92 $14,992 $15,178 $18,393 $17,229
07/31/93 $15,866 $16,047 $19,898 $18,553
07/31/94 $15,885 $16,066 $20,081 $18,593
07/31/95 $17,102 $17,296 $21,764 $19,953
07/31/96 $17,723 $17,899 $22,896 $20,916
07/31/97 $19,111 $19,137 $24,862 $22,590
</TABLE>
AVERAGE ANNUAL TOTAL RETURN FOR
THE PERIOD ENDED JULY 31, 1997* **
<TABLE>
<CAPTION>
Investment A Investment C
------------ ------------
<S> <C> <C>
1 Year..............................................2.98%.................6.92%
5 Year..............................................4.01%.................4.74%
10 Year.............................................5.68%.................5.78%
Start of Performance (1/1/86).......................5.75%.................5.76%
</TABLE>
/8/ The composition of the Fund's portfolio is subject to change.
Investment C Shares were initially offered April 19, 1996. The performance
figures for Investment C Shares for periods prior to such date represent the
performance for Investment A Shares of the Fund. Investment C Shareholders that
redeem within one year of purchase are subject to a contingent deferred sales
charge of 1.00%. Investment C Shares are also subject to administrative service
fees at a maximum rate of 0.25 of 1% of the average daily net asset value of
Investment C Shares. The maximum sales charge for Investment A Shares is 4.50%.
* Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
The Fund's performance is measured against the Lehman Brothers Intermediate
Government Bond Index, an unmanaged index generally representative of
intermediate-term government bonds, and the Lipper Short-Intermediate U.S.
Government Bond Funds Average, representative of the average of the total
returns reported by all of the mutual funds designated by Lipper Analytical
Services, Inc. as falling into this category. The Lehman Brothers Intermediate
Government Bond Index does not reflect the deduction of fees associated with a
mutual fund, such as investment management and fund accounting fees. However,
the Lipper Short-Intermediate U.S. Government Bond Funds Average and the Fund's
performance do reflect the deduction of fees for these value-added services.
Past performance is not indicative of future results. The investment return and
NAV will fluctuate, so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
** The quoted performance of the U.S. Government Securities Fund includes
performance of certain collective trust fund ("Commingled") accounts advised by
Fifth Third Bank, for periods dating back to 1/1/86 and prior to the U.S.
Government Securities Fund's commencement of operations on 11/20/92, as adjusted
to reflect the expenses associated with the Fund. The Commingled accounts were
not registered with the Securities and Exchange Commission and, therefore, were
not subject to the investment restrictions imposed by law on registered mutual
funds. If the Commingled accounts had been registered, the Commingled accounts'
performance may have been adversely affected. The performance shown reflects the
deduction of fees for value-added services associated with a mutual fund, such
as investment management and accounting fees. The performance also reflects
reinvestment of all dividends and capital-gains distributions.
14
<PAGE>
Fountain Square Municipal Bond Fund
The Fund delivered a total return of 7.10%** on Investment A Shares (before the
deduction of the sales charge) during the 12-month period ended July 31, 1997.
That compares to a 8.61% return for the Lehman Brothers 7-Year Municipal Bond
Index and a 7.94% return for the Lipper Intermediate Municipal Debt Funds
Average. The Fund distributed income of $0.28 per share/9/, and its net asset
value increased from $12.00 to $12.33.
Moderate economic growth and low inflation have created a very positive
environment for municipal bonds during the past several months. We typically
avoid states with potential economic problems, because municipal issues from
such states tend to be more risky. But since the end of January, most states and
municipalities enjoyed healthy economies, providing ample investment
opportunities for the Fund.
We took advantage of the strong supply of municipal bonds across the country to
enhance the Fund's call structure by purchasing bonds with longer calls or call
protection. At the same time, we sold bonds with shorter calls. We also improved
the Fund's overall credit quality with our trades, since lower quality issues
did not provide much incremental yield. That brought the Fund's average credit
quality to AA1./10/
The Fund's average maturity stood at 7.8 years at the beginning of February, but
we lengthened it to as long as 8.7 years in early June, just before the bond
market rallied again. During that rally, we brought the Fund's average maturity
back down to 7.7 years on July 31, 1997./10/
The market may be volatile during the coming months as investors react to signs
of stronger economic growth or inflation. We won't make any large interest rate
bets in that environment. Instead, we will make modest changes in our average
maturity or investments in individual securities, reducing risk when we can. We
also will continue to consolidate the Fund's holdings into larger blocks of
bonds with better call protection. Finally, our AA1 credit rating means that if
yields on lower quality investment grade issues become more attractive, we can
invest in some of those issues without threatening the Fund's overall credit
quality.
Growth of $10,000 Invested in Fountain Square Municipal Bond Fund
[LINE GRAPH APPEARS HERE]
<TABLE> Lehman Brothers
<CAPTION> Municipal
Bond Index/ Lipper Intermediate
Investment Investment 7-Year Municipal Municipal Debt
A Shares* C Shares* Bond index Funds Average
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
01/01/83 $9,548 $10,000 $10,000 $10,000
07/31/83 $10,258 $10,697 $10,843 $10,477
07/31/84 $10,753 $11,134 $11,436 $11,128
07/31/85 $12,968 $13,341 $13,733 $12,734
07/31/86 $14,581 $14,870 $16,065 $14,266
07/31/87 $15,333 $15,521 $17,523 $15,272
07/31/88 $15,979 $16,053 $18,754 $16,164
07/31/89 $17,226 $17,182 $21,038 $17,659
07/31/90 $18,172 $17,984 $22,453 $18,802
07/31/91 $19,570 $19,226 $24,368 $20,384
07/31/92 $21,591 $21,054 $27,562 $22,902
07/31/93 $22,731 $22,009 $29,643 $24,778
07/31/94 $23,075 $22,175 $30,437 $25,466
07/31/95 $24,280 $23,165 $32,897 $27,211
07/31/96 $25,312 $23,961 $34,564 $28,738
07/31/97 $27,106 $25,471 $37,541 $31,194
</TABLE>
AVERAGE ANNUAL TOTAL RETURN FOR
THE PERIOD ENDED JULY 31, 1997* **
<TABLE>
<CAPTION>
Investment A Investment C
------------ ------------
<S> <C> <C>
1 Year.................................................2.31%..........6.30%
5 Year.................................................3.70%..........3.88%
10 Year................................................5.37%..........5.08%
Start of Performance (1/1/83)..........................7.07%..........6.62%
</TABLE>
15
<PAGE>
- --------------------------------------------------------------------------------
/9/ Some or all of the income may be subject to the federal alternative minimum
tax and to certain state and local taxes.
/10/ The composition of the Fund's portfolio is subject to change.
Investment C Shareholders that redeem within one year of purchase are subject to
a contingent deferred sales charge of 1.00%. Investment C Shares are also
subject to administrative service fees at a maximum rate of 0.25 of 1% of the
average daily net asset value of Investment C Shares. The maximum sales charge
for Investment A Shares is 4.50%.
* Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
The Fund's performance is measured against the Lehman Brothers Municipal Bond
Index from 1/1/83 to 12/31/89, prior to the creation of the Lehman Brothers 7-
Year Municipal Bond Index, against which the performance is measured. Both
Lehman Brothers indices are unmanaged indices that are generally representative
of municipal bonds with intermediate maturities. The Fund's performance is also
measured against the Lipper Intermediate Municipal Debt Funds Average, which is
representative of the average of the total returns reported by all of the mutual
funds designated by Lipper Analytical Services, Inc. as falling into this
category. The Lehman Brothers Municipal Bond Index and the Lehman Brothers 7-
Year Municipal Bond Index do not reflect the deduction of fees associated with a
mutual fund, such as investment management and fund accounting fees. However,
the Lipper Intermediate Municipal Debt Funds Index and the Fund's performance do
reflect the deduction of fees for these value-added services. Past performance
is not indicative of future results. The investment return and NAV will
fluctuate, so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
** The quoted performance of the Municipal Bond Fund includes performance of
certain collective trust fund ("Commingled") accounts advised by Fifth Third
Bank, for periods dating back to 1/1/83 and prior to the Municipal Bond Fund's
commencement of operations on 1/27/97, as adjusted to reflect the expenses
associated with the Fund. The Commingled accounts were not registered with the
Securities and Exchange Commission and, therefore, were not subject to the
investment restrictions imposed by law on registered mutual funds. If the
Commingled accounts had been registered, the Commingled accounts' performance
may have been adversely affected. The performance shown reflects the deduction
of fees for value-added services associated with a mutual fund, such as
investment management and accounting fees. The performance also reflects
reinvestment of all dividends and capital-gains distributions.
Fountain Square Ohio Tax Free Bond Fund
During the 12 months ended July 31, 1997, the Fund distributed income of $0.43
per share./11/ Its net asset value increased from $10.01 to 10.31, producing a
total return of 7.49% on Investment A shares (before the deduction of the sales
charge). That compares to a 7.25% return for the Lehman Brothers 5-Year
Municipal Bond Index, which has been the Fund's benchmark in the past. Going
forward, we would like to compare the Fund to new benchmarks that more closely
parallel the objectives of the Fund, the Lehman Brothers 7-Year Municipal Bond
Index and the Lipper Intermediate Municipal Debt Fund Average, which returned
8.61% and 7.94%, respectively.
Both the taxable and tax-free bond markets were volatile during the past 12
months, as investors worried about the possibility that a fast-growing economy
and a tight labor market would rekindle inflation. In that environment, the
Fund's average maturity hovered right around 7.1 years during the year. We kept
that average maturity fairly constant in order to pursue the Fund's major goal:
stability of income.
The Fund also maintained a very high average credit rating of AA1. Since lower-
rated securities did not offer significantly higher yields than the highest
quality issues, there was no reason to take on the increased credit risk of
lower quality bonds.
Most of the trades we made during the year were done in order to adjust the
Fund's call structure. That is, we tried to trade bonds that were callable
within a short period of time for bonds with call protection. Such bonds will
provide more stable income for the Fund and the opportunity for better total
returns.
We also sought to consolidate the Fund's holdings, reducing the number of
issuers in the Fund's portfolio. We were able to do so without taking additional
risk, because the size of assets under
16
<PAGE>
- --------------------------------------------------------------------------------
management has grown significantly. For example, a $5,000,000 stake in a single
issuer would represent only 3% of the Fund's portfolio. Moreover, consolidating
the Fund's portfolio makes sense because large blocks are easier to trade than
small ones; thus, we will be able to get better prices when we sell our large
positions.
Recently, for example, we sold a number of lower yielding securities with three-
to five-year calls and replaced them with a $4,000,000 stake in Dublin School
Authority non-callable bonds at a 4.65% yield, due in 2008./12/
During the coming months, we expect Ohio's economy to be strong, with low
unemployment and few potential credit problems for bond issuers. If lower
quality issues begin to offer a greater yield advantage over higher quality
securities, we will be able to take advantage of those higher yields without
threatening the Fund's high AA1 credit rating.
If interest rates continue to fall, municipalities may attempt to pull their
higher yielding securities off the market. The Fund should hold up well if that
occurs, because of the call protection we are building into the portfolio. We
don't expect to make significant changes to the Fund's average maturity. But if
interest rates rise, we may somewhat extend the Fund's average maturity to take
advantage of higher yields available.
Growth of $10,000 Invested in Fountain Square Ohio Tax Free Bond Fund
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Lehman Bros. Lehman Bros. Lipper Intermediate
Investment A Investment C 7-Year Muni.. 5-Year Muni. Municipal Debt
Shares * Shares * Bond F. Avg. Bond F. Avg. Funds Average
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
01/01/87 $9,554 $10,000 $10,000 $10,000 $10,000
07/31/87 $9,378 $9,767 $10,066 $10,066 $9,948
07/31/88 $9,676 $10,000 $10,773 $10,619 $10,527
07/31/89 $10,365 $10,643 $12,085 $11,469 $11,524
07/31/90 $10,932 $11,171 $12,898 $12,270 $12,243
07/31/91 $11,716 $11,929 $13,998 $13,325 $13,220
07/31/92 $13,014 $13,191 $15,833 $14,998 $14,913
07/31/93 $13,512 $13,649 $17,028 $15,987 $16,005
07/31/94 $13,776 $13,915 $17,484 $16,434 $16,371
07/31/95 $14,744 $14,892 $18,898 $17,657 $17,453
07/31/96 $15,382 $15,485 $19,856 $18,461 $18,358
07/31/97 $16,535 $16,544 $21,565 $19,800 $19,912
</TABLE>
AVERAGE ANNUAL TOTAL RETURN FOR
THE PERIOD ENDED JULY 31, 1997* **
<TABLE>
<CAPTION>
Investment A Investment C
------------ ------------
<S> <C> <C>
1 Year................................ 2.67% ......... 6.84%
5 Year................................ 3.95% ......... 4.63%
10 Year............................... 5.34% ......... 5.41%
Start of Performance (1/1/87)......... 4.86% ......... 4.87%
</TABLE>
/11/ Some or all of the income may be subject to the federal alternative minimum
tax and to certain state and local taxes.
/12/ The composition of the Fund's portfolio is subject to change.
Investment C Shares were initially offered April 19, 1996. The performance
figures for Investment C Shares for periods prior to such date represent the
performance for Investment A Shares of the Fund. Investment C Shareholders that
redeem within one year of purchase are subject to a contingent deferred sales
charge of 1.00%. Investment C Shares are also subject to administrative service
fees at a maximum rate of 0.25% of 1% of the average daily net asset value of
Investment C Shares. The maximum sales charge for Investment A Shares is 4.50%.
* Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
The Fund's performance is measured against the Lehman Brothers Municipal Bond
Index from 1/1/87 to 12/31/89, prior to the creation of the Lehman Brothers 5-
Year Municipal Bond Index, and from 1/1/87 to 12/31/87, prior to the creation of
the Lehman Brothers 7-Year Municipal Bond Index, against each of which the
Fund's performance is measured. These three Lehman Brothers indices are
unmanaged indices generally
17
<PAGE>
- --------------------------------------------------------------------------------
representative of the intermediate-term municipal bond market. The Fund's
performance is also measured against the Lipper Intermediate Municipal Debt
Funds Average, which is representative of the average of the total returns
reported by all of the mutual funds designated by Lipper Analytical Services,
Inc. as falling into that category. The Lehman Brothers 5-Year and 7-Year
Municipal Bond Indices do not reflect the deduction of fees associated with a
mutual fund, such as investment management and fund accounting fees. However,
the Lipper Intermediate Municipal Debt Funds Average and the Fund's performance
do reflect the deduction of fees for these value-added services. Past
performance is not indicative of future results. The investment return and NAV
will fluctuate, so that an investor's shares, when redeemed, may be worth more
or less than their original cost.
** The quoted performance of the Ohio Tax Free Bond Fund includes performance of
certain collective trust fund ("Commingled") accounts advised by Fifth Third
Bank, for periods dating back to 1/1/87 and prior to the Ohio Tax Free Bond
Fund's commencement of operations on 5/27/93, as adjusted to reflect the
expenses associated with the Fund. The Commingled accounts were not registered
with the Securities and Exchange Commission and, therefore, were not subject to
the investment restrictions imposed by law on registered mutual funds. If the
Commingled accounts had been registered, the Commingled accounts' performance
may have been adversely affected. The performance shown reflects the deduction
of fees for value-added services associated with a mutual fund, such as
investment management and accounting fees. The performance also reflects
reinvestment of all dividends and capital-gains distributions.
18
<PAGE>
Fountain Square Quality Growth Fund
Schedule of Investments
July 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- ---------- ----------------------------------------------- -----------
Common Stocks--(96.7%)
- ----------------------------------------------------------------
<S> <C> <C>
Banking--(7.7%)
-----------------------------------------------
300,000 Bank of New York Co., Inc. $14,568,750
-----------------------------------------------
80,000 Mellon Bank Corp. 4,035,000
-----------------------------------------------
195,000 Norwest Corp. 12,297,188
----------------------------------------------- -----------
Total 30,900,938
----------------------------------------------- -----------
Beverages--(0.9%)
-----------------------------------------------
95,000 PepsiCo, Inc. 3,639,688
----------------------------------------------- -----------
Business services--(0.9%)
-----------------------------------------------
55,000 Cintas Corp. 3,602,500
----------------------------------------------- -----------
Chemicals--(4.0%)
-----------------------------------------------
290,000 Praxair, Inc. 15,986,250
----------------------------------------------- -----------
Computer Software & Services--(11.3%)
-----------------------------------------------
440,000 First Data Corp. 19,195,000
-----------------------------------------------
41,400 Microsoft Corp.* 5,858,100
-----------------------------------------------
375,000 Oracle Corp.* 20,414,062
----------------------------------------------- -----------
Total 45,467,162
----------------------------------------------- -----------
Computer Systems & Equipment--(6.5%)
-----------------------------------------------
170,000 Cisco Systems* 13,525,625
-----------------------------------------------
92,000 Diebold, Inc. 4,623,000
-----------------------------------------------
115,000 Hewlett-Packard Co. 8,057,188
----------------------------------------------- -----------
Total 26,205,813
----------------------------------------------- -----------
Consumer Products--(6.7%)
-----------------------------------------------
240,000 Crown Cork & Seal Co., Inc. 12,135,000
-----------------------------------------------
300,000 Newell Co. 12,581,250
-----------------------------------------------
14,000 Procter & Gamble Co. 2,129,750
----------------------------------------------- -----------
Total 26,846,000
----------------------------------------------- -----------
Electrical Equipment--(3.6%)
-----------------------------------------------
140,000 Emerson Electric Co. 8,260,000
-----------------------------------------------
90,000 General Electric Co. 6,316,875
----------------------------------------------- -----------
Total 14,576,875
----------------------------------------------- -----------
Electronics--(11.7%)
-----------------------------------------------
315,000 Adaptec, Inc.* 13,269,375
-----------------------------------------------
300,000 Intel Corp. 27,543,749
-----------------------------------------------
165,000 Molex, Inc. 6,424,688
----------------------------------------------- -----------
Total 47,237,812
----------------------------------------------- -----------
</TABLE>
-- Continued --
19
<PAGE>
Fountain Square Quality Growth Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ----------------------------------------------- -----------
Common Stocks--Continued
- ----------------------------------------------------------------
<S> <C> <C>
ENTERTAINMENT & LEISURE--(0.8%)
-----------------------------------------------
42,000 The Walt Disney Co. $ 3,394,125
----------------------------------------------- -----------
FINANCIAL--(5.3%)
-----------------------------------------------
470,000 Federal Home Loan Mortgage Corp. 16,949,375
-----------------------------------------------
90,000 Federal National Mortgage Stock 4,258,125
----------------------------------------------- -----------
Total 21,207,500
----------------------------------------------- -----------
HEALTHCARE--(0.9%)
-----------------------------------------------
42,000 Medtronic, Inc. 3,664,500
----------------------------------------------- -----------
INSURANCE--(5.7%)
-----------------------------------------------
50,000 Allstate Corp. 3,950,000
-----------------------------------------------
88,000 Cincinnati Financial Corp. 7,271,000
-----------------------------------------------
220,000 MGIC Investment Corp. 11,563,750
----------------------------------------------- -----------
Total 22,784,750
----------------------------------------------- -----------
MANUFACTURING--(5.1%)
-----------------------------------------------
420,000 Federal Signal Corp. 10,946,250
-----------------------------------------------
125,000 Illinois Tool Works 6,484,375
-----------------------------------------------
100,000 Zebra Technologies Corp., Class A* 3,118,750
----------------------------------------------- -----------
Total 20,549,375
----------------------------------------------- -----------
MEDIA/PUBLISHING--(3.3%)
-----------------------------------------------
300,000 Interpublic Group of Cos., Inc. 13,425,000
----------------------------------------------- -----------
MEDICAL DISTRIBUTION--(1.0%)
-----------------------------------------------
64,000 Cardinal Health, Inc. 3,984,000
----------------------------------------------- -----------
OIL & GAS--(3.5%)
-----------------------------------------------
45,000 Chevron Corp. 3,560,625
-----------------------------------------------
136,000 Mobil Corp. 10,404,000
----------------------------------------------- -----------
Total 13,964,625
----------------------------------------------- -----------
PHARMACEUTICALS--(12.0%)
-----------------------------------------------
140,000 American Home Products 11,541,250
-----------------------------------------------
270,000 Johnson & Johnson 16,824,374
-----------------------------------------------
130,000 Pfizer, Inc. 7,751,250
-----------------------------------------------
234,000 Schering - Plough Corp. 12,767,625
----------------------------------------------- -----------
Total 48,884,499
----------------------------------------------- -----------
RETAIL--(3.1%)
-----------------------------------------------
247,500 Home Depot, Inc. 12,344,063
----------------------------------------------- -----------
TELECOMMUNICATIONS--(0.8%)
-----------------------------------------------
100,000 Alltel Corp. 3,287,500
----------------------------------------------- -----------
</TABLE>
-- CONTINUED --
20
<PAGE>
Fountain Square Quality Growth Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- ---------- ----------------------------------------------- -----------
Common Stocks--Continued
- ----------------------------------------------------------------
<S> <C> <C>
Transportation--(1.9%)
-----------------------------------------------
280,000 Comair Holdings, Inc. $7,542,500
----------------------------------------------- -----------
Total Common Stocks 389,495,475
----------------------------------------------- -----------
Demand Notes--(0.0%)
- ----------------------------------------------------------------
Miscellaneous--(0.0%)
-----------------------------------------------
803 General Electric Demand Note 803
----------------------------------------------- -----------
Total Demand Notes 803
----------------------------------------------- -----------
Repurchase Agreements--(4.8%)
- ----------------------------------------------------------------
19,460,000 UBS Securities, 5.76%, dated 7/31/97, due
8/1/97, (at amortized cost), collateralized by
U.S. Treasury Bills due 10/23/97 with a value of
$19,849,523. 19,460,000
----------------------------------------------- -----------
Total Repurchase Agreements 19,460,000
----------------------------------------------- -----------
Total Investments (Cost $265,488,151)**--101.5% 408,956,278
----------------------------------------------- -----------
Liabilities in excess of other assets--(1.5)% (6,126,758)
----------------------------------------------- -----------
Total Net Assets--100.0% $402,829,520
=============================================== ===========
</TABLE>
Percentages indicated are based on net assets of $402,829,520.
*Non-income producing security
**The cost of investments for federal tax purposes amounts to $265,488,151. The
net unrealized appreciation of investments on federal tax basis amounts to
$143,468,127, which is composed of $144,245,442 appreciation and $777,315
depreciation at July 31, 1997.
See notes to financial statements.
21
<PAGE>
Fountain Square Equity Income Fund
Schedule of Investments
July 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- ----------- ------------------------------------------------------ -----------
<S> <C> <C>
Common Stocks--(97.0%)
- -------------------------------------------------------------------
Banking--(14.8%)
------------------------------------------------------
105,000 Bank of New York Co., Inc. $5,099,062
------------------------------------------------------
32,000 Firstar Corp. 1,114,000
------------------------------------------------------
140,000 Mellon Bank Corp. 7,061,249
------------------------------------------------------
71,000 Norwest Bank 4,477,438
------------------------------------------------------ -----------
Total 17,751,749
------------------------------------------------------ -----------
Chemicals--(4.2%)
------------------------------------------------------
250,000 RPM, Inc. 5,093,750
------------------------------------------------------ -----------
Electrical Equipment--(5.3%)
------------------------------------------------------
44,000 Emerson Electric Co. 2,596,000
------------------------------------------------------
54,600 General Electric Co. 3,832,238
------------------------------------------------------ -----------
Total 6,428,238
------------------------------------------------------ -----------
Financial Services--(10.5%)
------------------------------------------------------
85,000 A.G. Edwards, Inc. 3,591,250
------------------------------------------------------
96,000 Federal National Mortgage Assoc. 4,542,000
------------------------------------------------------
162,000 United Asset Management Corp. 4,546,125
------------------------------------------------------ -----------
Total 12,679,375
------------------------------------------------------ -----------
Food--(4.1%)
------------------------------------------------------
107,000 H.J. Heinz Co. 4,942,063
------------------------------------------------------ -----------
Insurance--(4.8%)
------------------------------------------------------
85,000 American General Corp. 4,526,250
------------------------------------------------------
15,000 Cincinnati Financial Corp. 1,239,375
------------------------------------------------------ -----------
Total 5,765,625
------------------------------------------------------ -----------
Manufacturing--(4.1%)
------------------------------------------------------
190,000 Federal Signal Corp. 4,951,875
------------------------------------------------------ -----------
Office Equipment & Supplies--(3.1%)
------------------------------------------------------
50,000 Pitney-Bowes, Inc. 3,756,250
------------------------------------------------------ -----------
Oil & Gas--(11.4%)
------------------------------------------------------
42,000 Amoco Corp. 3,948,000
------------------------------------------------------
65,000 Chevron Corp. 5,143,125
------------------------------------------------------
60,000 Mobil Corp. 4,590,000
------------------------------------------------------ -----------
Total 13,681,125
------------------------------------------------------ -----------
</TABLE>
-- Continued --
22
<PAGE>
Fountain Square Equity Income Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- ----------- ------------------------------------------------------ -----------
<S> <C> <C>
Common Stocks--Continued
- -------------------------------------------------------------------
Pharmaceuticals--(7.9%)
------------------------------------------------------
46,000 American Home Products $ 3,792,125
------------------------------------------------------
20,000 Merck & Co., Inc. 2,078,750
------------------------------------------------------
24,000 Pfizer, Inc. 1,431,000
------------------------------------------------------
40,000 Schering - Plough Corp. 2,182,500
------------------------------------------------------ -----------
Total 9,484,375
------------------------------------------------------ -----------
Retail--(2.9%)
------------------------------------------------------
60,000 J.C. Penney Co., Inc. 3,510,000
------------------------------------------------------ -----------
Telecommunications--(11.1%)
------------------------------------------------------
135,000 Alltel Corp. 4,438,125
------------------------------------------------------
86,000 Ameritech Corp. 5,799,625
------------------------------------------------------
42,500 Bell Atlantic Corp. 3,083,906
------------------------------------------------------ -----------
Total 13,321,656
------------------------------------------------------ -----------
Transportation--(4.1%)
------------------------------------------------------
80,000 GATX Corp. 4,925,000
------------------------------------------------------ -----------
Utilities/Electric--(6.8%)
------------------------------------------------------
90,000 Cinergy Corp. 3,026,250
------------------------------------------------------
60,000 Duke Power 3,041,250
------------------------------------------------------
62,000 KU Energy Corp. 2,119,625
------------------------------------------------------ -----------
Total 8,187,125
------------------------------------------------------ -----------
Utilities/Natural Gas--(1.9%)
------------------------------------------------------
110,000 AGL Resources, Inc. 2,303,125
------------------------------------------------------ -----------
Total Common Stock 116,781,331
------------------------------------------------------ -----------
Convertible Bonds--(1.5%)
- -------------------------------------------------------------------
Financial--(1.5%)
------------------------------------------------------
1,000,000 Cincinnati Financial Corp., 5.50%, 5/1/02, (Callable
5/1/98 @ 101) 1,865,000
------------------------------------------------------ -----------
Total Convertible Bonds 1,865,000
------------------------------------------------------ -----------
Repurchase Agreements--(0.8%)
- -------------------------------------------------------------------
952,000 UBS Securities, 5.76%, dated 7/31/97, due 8/1/97
(at amortized cost), collateralized by U.S. Treasury
Bills due 10/23/97 with a value of $973,210. 952,000
------------------------------------------------------ -----------
Total Repurchase Agreements 952,000
------------------------------------------------------ -----------
Total Investments (Cost $79,232,419)*--99.3% 119,598,331
------------------------------------------------------ -----------
Other assets in excess of liabilities--0.7% 817,614
------------------------------------------------------ -----------
Total Net Assets--100.0% $120,415,945
====================================================== ===========
</TABLE>
Percentages indicated are based on net assets of $120,415,945.
*The cost of investments for federal tax purposes amounts to $79,232,419. The
net unrealized appreciation of investments on federal tax basis amounts to
$40,365,912, which is composed of $40,509,753 appreciation and $143,841
depreciation at July 31, 1997.
See notes to financial statements.
23
<PAGE>
Fountain Square Balanced Fund
Schedule of Investments
July 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
--------- -------------------------------------------------- ----------
<S> <C> <C>
Common Stocks--(65.1%)
----------------------------------------------------------------
Banking--(5.6%)
--------------------------------------------------
55,000 Bank of New York Co., Inc. $2,670,937
--------------------------------------------------
25,000 First Tennessee National Corp. 1,300,000
--------------------------------------------------
16,000 Mellon Bank Corp. 807,000
--------------------------------------------------
35,000 Norwest Corp. 2,207,188
-------------------------------------------------- ----------
Total 6,985,125
-------------------------------------------------- ----------
Beverages--(0.6%)
--------------------------------------------------
20,000 PepsiCo, Inc. 766,250
-------------------------------------------------- ----------
Business Services--(0.4%)
--------------------------------------------------
8,000 Cintas Corp. 524,000
-------------------------------------------------- ----------
Chemicals--(2.2%)
--------------------------------------------------
50,000 Praxair, Inc. 2,756,250
-------------------------------------------------- ----------
Computer Software & Services--(7.2%)
--------------------------------------------------
15,000 Electronics for Imaging, Inc. 825,000
--------------------------------------------------
70,000 First Data Corp. 3,053,749
--------------------------------------------------
10,000 Fiserv, Inc.* 480,000
--------------------------------------------------
4,800 Microsoft Corp.* 679,200
--------------------------------------------------
55,000 Oracle Corp.* 2,994,063
--------------------------------------------------
45,000 Reynolds & Reynolds Co., Class A 871,875
-------------------------------------------------- ----------
Total 8,903,887
-------------------------------------------------- ----------
Computer Systems & Equipment--(4.0%)
--------------------------------------------------
35,000 Cisco Systems* 2,784,688
--------------------------------------------------
15,000 Diebold, Inc. 753,750
--------------------------------------------------
20,000 Hewlett-Packard Co. 1,401,250
-------------------------------------------------- ----------
Total 4,939,688
-------------------------------------------------- ----------
Consumer Products--(3.1%)
--------------------------------------------------
38,000 Crown Cork & Seal Co., Inc. 1,921,375
--------------------------------------------------
40,000 Newell Co. 1,677,500
--------------------------------------------------
2,000 Procter & Gamble Co. 304,250
-------------------------------------------------- ----------
Total 3,903,125
-------------------------------------------------- ----------
Electrical Equipment--(2.6%)
--------------------------------------------------
15,000 Belden, Inc. 581,250
--------------------------------------------------
25,000 Emerson Electric Co. 1,475,000
--------------------------------------------------
16,000 General Electric Co. 1,123,000
-------------------------------------------------- ----------
Total 3,179,250
-------------------------------------------------- ----------
</TABLE>
-- Continued --
24
<PAGE>
Fountain Square Balanced Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- ---------- --------------------------------------------------- -----------
Common Stocks--Continued
- ----------------------------------------------------------------
<S> <C> <C>
Electronics--(9.7%)
---------------------------------------------------
95,000 Adaptec, Inc.* $4,001,874
---------------------------------------------------
20,000 Computer Products, Inc.* 537,500
---------------------------------------------------
29,000 Flextronics, International* 909,875
---------------------------------------------------
55,000 Intel Corp. 5,049,687
---------------------------------------------------
20,000 Molex, Inc. 778,750
---------------------------------------------------
27,562 Vishay Intertechnology, Inc.* 737,297
--------------------------------------------------- ----------
Total 12,014,983
--------------------------------------------------- ----------
Entertainment & Leisure--(0.4%)
---------------------------------------------------
6,000 The Walt Disney Co. 484,875
--------------------------------------------------- ----------
Financial--(2.9%)
---------------------------------------------------
77,000 Federal Home Loan Mortgage Corporation 2,776,813
---------------------------------------------------
16,000 Federal National Mortgage Stock 757,000
--------------------------------------------------- ----------
Total 3,533,813
--------------------------------------------------- ----------
General Building Contractors--(0.3%)
---------------------------------------------------
25,000 Clayton Homes Inc. 396,875
--------------------------------------------------- ----------
Healthcare--(0.8%)
---------------------------------------------------
7,000 Medtronic, Inc. 610,750
---------------------------------------------------
10,000 STERIS Corp.* 385,000
--------------------------------------------------- ----------
Total 995,750
--------------------------------------------------- ----------
Insurance--(4.2%)
---------------------------------------------------
10,000 Allstate Corp. 790,000
---------------------------------------------------
25,000 American Bankers Insurance Group, Inc. 1,692,188
---------------------------------------------------
10,000 Cincinnati Financial Corp. 826,250
---------------------------------------------------
36,000 MGIC Investment Corp. 1,892,250
--------------------------------------------------- ----------
Total 5,200,688
--------------------------------------------------- ----------
Manufacturing--(3.3%)
---------------------------------------------------
55,000 Federal Signal Corp. 1,433,438
---------------------------------------------------
18,000 Illinois Tool Works 933,750
---------------------------------------------------
55,000 Zebra Technologies Corp., Class A* 1,715,312
--------------------------------------------------- ----------
Total 4,082,500
--------------------------------------------------- ----------
Media/Publishing--(1.9%)
---------------------------------------------------
52,000 Interpublic Group of Cos., Inc. 2,327,000
--------------------------------------------------- ----------
Medical Distribution--(0.8%)
---------------------------------------------------
15,000 Cardinal Health, Inc. 933,750
--------------------------------------------------- ----------
</TABLE>
-- Continued --
25
<PAGE>
Fountain Square Balanced Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- --------- ---------------------------------------------------- ----------
Common Stocks--Continued
- -----------------------------------------------------------------
<S> <C> <C>
Oil & Gas--(2.4%)
----------------------------------------------------
8,000 Chevron Corp. $ 633,000
----------------------------------------------------
30,000 Mobil Corp. 2,295,000
---------------------------------------------------- ----------
Total 2,928,000
---------------------------------------------------- ----------
Pharmaceuticals--(7.1%)
----------------------------------------------------
30,000 American Home Products 2,473,125
----------------------------------------------------
47,000 Johnson & Johnson 2,928,687
----------------------------------------------------
20,000 Pfizer, Inc. 1,192,500
----------------------------------------------------
40,000 Schering - Plough Corp. 2,182,500
---------------------------------------------------- ----------
Total 8,776,812
---------------------------------------------------- ----------
Retail--(3.3%)
----------------------------------------------------
30,000 Consolidated Stores Corp.* 1,207,500
----------------------------------------------------
15,000 Dollar General 660,000
----------------------------------------------------
45,000 Home Depot, Inc. 2,244,375
---------------------------------------------------- ----------
Total 4,111,875
---------------------------------------------------- ----------
Telecommunications--(0.7%)
----------------------------------------------------
25,000 Century Telephone Enterprises 918,750
---------------------------------------------------- ----------
Transportation--(1.6%)
----------------------------------------------------
75,000 Comair Holdings, Inc. 2,020,313
---------------------------------------------------- ----------
Total Common Stocks 80,683,559
---------------------------------------------------- ----------
Asset Backed Securities--(1.9%)
- -----------------------------------------------------------------
Financial--(1.9%)
----------------------------------------------------
1,500,000 Cityscape, Series 1996-3, 7.15%, 8/25/11 1,535,565
----------------------------------------------------
750,000 GE Capital Management, 6.94%, 3/25/27 761,280
---------------------------------------------------- ----------
Total Asset Backed Securities 2,296,845
---------------------------------------------------- ----------
Corporate Bonds--(7.0%)
- -----------------------------------------------------------------
Financial--(4.5%)
----------------------------------------------------
46,000 Bankers Trust New York Corp., 9.20%, 7/15/99 48,555
----------------------------------------------------
1,500,000 Chrysler Medium Term Note, 6.28%, 6/21/99 1,508,236
----------------------------------------------------
1,500,000 CIT Group Holdings, 6.25%, 3/28/01 1,507,030
----------------------------------------------------
500,000 Ford Motor Credit, Floating Rate
----------------------------------------------------
Note, 11/9/98 (6.33%, 8/8/97)(a) 499,898
----------------------------------------------------
1,000,000 General Motors Acceptance Corp., 6.63%, 10/1/02 1,011,595
----------------------------------------------------
1,000,000 Sears Roebuck, 6.54%, 2/20/03 1,005,827
---------------------------------------------------- ----------
Total 5,581,141
---------------------------------------------------- ----------
Manufacturing--(1.2%)
----------------------------------------------------
500,000 IBP, Inc., 6.13%, 2/1/06 486,731
----------------------------------------------------
1,000,000 Texas Instruments, 6.88%, 7/15/00 1,021,883
---------------------------------------------------- ----------
Total 1,508,614
---------------------------------------------------- ----------
</TABLE>
-- Continued --
26
<PAGE>
Fountain Square Balanced Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- --------- ----------------------------------------------------- ------------
Corporate Bonds--Continued
- -----------------------------------------------------------------
<S> <C> <C>
Transportation--(0.5%)
-----------------------------------------------------
600,000 American President Cos. Ltd., 7.13%, 11/15/03 $ 600,592
-----------------------------------------------------
Utility--(0.8%)
-----------------------------------------------------
1,000,000 Georgia Power, 6.88%, 9/01/02 1,005,426
----------------------------------------------------- ---------
Total Corporate Bonds 8,695,773
----------------------------------------------------- ---------
Mortgage Backed Securities--(3.9%)
- -----------------------------------------------------------------
U.S. Government Agencies--(3.9%)
-----------------------------------------------------
5,959 Federal Home Loan Mortgage Corp., 9.50%, 10/1/02,
Pool #38-0009 6,179
-----------------------------------------------------
12,639 Federal Home Loan Mortgage Corp., 8.00%, 8/1/08,
Pool #27-2525 13,080
-----------------------------------------------------
698,651 Federal National Mortgage Association, 6.00%, 4/1/11,
Dwarf Pool 344185 684,168
-----------------------------------------------------
3,996,093 Government National Mortgage Association, 8.00%,
6/20/27, G2 Pool 2445 4,111,060
----------------------------------------------------- ----------
Total Mortgage Backed Securities 4,814,487
----------------------------------------------------- ----------
U.S. Government Securities--(19.1%)
- -----------------------------------------------------------------
U.S. Government Agencies--(10.4%)
-----------------------------------------------------
3,000,000 Federal Home Loan Bank Coupon Bond, 6.19%, 1/29/01 2,987,813
-----------------------------------------------------
2,000,000 Federal Home Loan Bank Coupon Bond, 6.03%, 9/4/01 1,983,125
-----------------------------------------------------
5,000,000 Federal National Mortgage Association, 7.49%, 5/22/00 5,147,025
-----------------------------------------------------
2,750,000 Federal National Mortgage Association, 6.64%, 7/2/07 2,826,862
----------------------------------------------------- ----------
Total 12,944,825
----------------------------------------------------- ----------
U.S. Treasury Bonds--(4.2%)
-----------------------------------------------------
2,750,000 6.00%, 2/15/26 2,625,392
-----------------------------------------------------
2,500,000 6.50%, 11/15/26 2,555,470
----------------------------------------------------- ----------
Total 5,180,862
----------------------------------------------------- ----------
U.S. Treasury Notes--(4.5%)
-----------------------------------------------------
5,500,000 6.25%, 2/15/07 5,580,781
----------------------------------------------------- ----------
Total U.S. Government Securities 23,706,468
----------------------------------------------------- ----------
Repurchase Agreement--(3.2%)
- -----------------------------------------------------------------
3,922,000 UBS Securities, 5.76%, dated 7/31/97, due 8/1/97
(at amortized cost), collateralized by U.S.
Treasury Bills due 10/23/97 with a value of
$4,001,522. 3,922,000
----------------------------------------------------- ----------
Total Repurchase Agreement 3,922,000
----------------------------------------------------- ----------
Total Investments (Cost $94,965,047)**--100.2% 124,119,132
----------------------------------------------------- -----------
Liabilities in excess of other assets--(0.2)% (198,381)
----------------------------------------------------- ----------
TOTAL NET ASSETS--100.0% $123,920,751
===================================================== ===========
</TABLE>
-- Continued --
27
<PAGE>
Fountain Square Balanced Fund
- --------------------------------------------------------------------------------
Percentages indicated are based on net assets of $123,920,751.
*Non-income producing security
**The cost of investments for federal tax purposes amounts to $94,965,047. The
net unrealized appreciation of investments on federal tax basis amounts to
$29,154,085, which is composed of $29,556,660 appreciation and $402,575
depreciation at July 31, 1997.
(a) Current rate and next reset date shown.
See notes to financial statements.
28
<PAGE>
Fountain Square Mid Cap Fund
Schedule of Investments
July 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- --------- ------------------------------------------------------- -----------
Common Stocks--(96.5%)
- -----------------------------------------------------------------
<C> <S> <C>
Banking--(6.9%)
-------------------------------------------------------
145,000 First Tennessee National Corp. $ 7,540,000
-------------------------------------------------------
100,000 Firstar Corp. 3,481,250
-------------------------------------------------------
52,000 Regions Financial Corp. 1,810,250
------------------------------------------------------- -----------
Total 12,831,500
------------------------------------------------------- -----------
Business Services--(6.4%)
-------------------------------------------------------
70,000 Cintas Corp. 4,585,000
-------------------------------------------------------
105,000 Omnicom Group 7,330,313
------------------------------------------------------- -----------
Total 11,915,313
------------------------------------------------------- -----------
Chemicals--(0.6%)
-------------------------------------------------------
55,000 RPM, Inc. 1,120,625
------------------------------------------------------- -----------
Computer Software & Services--(8.6%)
-------------------------------------------------------
102,000 Electronics for Imaging, Inc. 5,610,000
-------------------------------------------------------
115,000 Fiserv, Inc.* 5,520,000
-------------------------------------------------------
250,000 Reynolds & Reynolds Co., Class A 4,843,750
------------------------------------------------------- -----------
Total 15,973,750
------------------------------------------------------- -----------
Computer Systems & Equipment--(4.4%)
-------------------------------------------------------
163,000 Diebold, Inc. 8,190,750
------------------------------------------------------- -----------
Consumer Products--(1.6%)
-------------------------------------------------------
72,000 Newell Co. 3,019,500
------------------------------------------------------- -----------
Electrical Equipment--(3.1%)
-------------------------------------------------------
148,000 Belden, Inc. 5,735,000
------------------------------------------------------- -----------
Electronics--(18.2%)
-------------------------------------------------------
280,000 Adaptec, Inc.* 11,794,999
-------------------------------------------------------
220,000 Computer Products, Inc.* 5,912,500
-------------------------------------------------------
204,000 Flextronics, International* 6,400,499
-------------------------------------------------------
87,000 Molex, Inc. 3,387,563
-------------------------------------------------------
235,725 Vishay Intertechnology, Inc.* 6,305,644
------------------------------------------------------- -----------
Total 33,801,205
------------------------------------------------------- -----------
General Building Contractors--(0.7%)
-------------------------------------------------------
80,000 Clayton Homes Inc. 1,270,000
------------------------------------------------------- -----------
</TABLE>
-- Continued --
29
<PAGE>
Fountain Square Mid Cap Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- --------- ------------------------------------------------------- -----------
Common Stocks--Continued
- -----------------------------------------------------------------
<C> <S> <C>
Healthcare--(4.2%)
-------------------------------------------------------
290,000 Ballard Medical Products $ 6,144,375
-------------------------------------------------------
45,000 STERIS Corp.* 1,732,500
------------------------------------------------------- -----------
Total 7,876,875
------------------------------------------------------- -----------
Insurance--(12.7%)
-------------------------------------------------------
133,200 American Bankers Insurance Group, Inc. 9,015,974
-------------------------------------------------------
60,000 Cincinnati Financial Corp. 4,957,500
-------------------------------------------------------
115,000 MGIC Investment Corp. 6,044,688
-------------------------------------------------------
75,000 Mutual Risk Management, Limited 3,684,375
------------------------------------------------------- -----------
Total 23,702,537
------------------------------------------------------- -----------
Manufacturing--(8.8%)
-------------------------------------------------------
40,000 Applied Industrial Technologies, Inc. 1,470,000
-------------------------------------------------------
187,000 Federal Signal Corp. 4,873,688
-------------------------------------------------------
50,000 OM Group, Inc. 1,710,590
-------------------------------------------------------
270,000 Zebra Technologies Corp., Class A* 8,420,625
------------------------------------------------------- -----------
Total 16,474,903
------------------------------------------------------- -----------
Medical Distribution--(4.4%)
-------------------------------------------------------
133,000 Cardinal Health, Inc. 8,279,250
------------------------------------------------------- -----------
Natural Gas--(0.9%)
-------------------------------------------------------
40,000 Questar Corp. 1,637,500
------------------------------------------------------- -----------
Retail--(7.1%)
-------------------------------------------------------
135,000 Casey's General Stores 3,054,375
-------------------------------------------------------
135,000 Consolidated Stores Corp.* 5,433,750
-------------------------------------------------------
110,000 Dollar General 4,840,000
------------------------------------------------------- -----------
Total 13,328,125
------------------------------------------------------- -----------
Telecommunications--(2.1%)
-------------------------------------------------------
107,000 Century Telephone Enterprises 3,932,250
------------------------------------------------------- -----------
Transportation--(5.8%)
-------------------------------------------------------
335,000 Comair Holdings, Inc. 9,024,063
-------------------------------------------------------
30,000 GATX Corp. 1,846,875
------------------------------------------------------- -----------
Total 10,870,938
------------------------------------------------------- -----------
Total Common Stocks 179,960,021
------------------------------------------------------- -----------
</TABLE>
-- Continued --
30
<PAGE>
Fountain Square Mid Cap Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- --------- ----------------------------------------------------- ------------
Repurchase Agreements--(5.5%)
- -----------------------------------------------------------------
<C> <S> <C>
10,184,000 UBS Securities, 5.76%, dated 7/31/97, due 8/01/97
(at amortized cost), collateralized by U.S. Treasury
Bills due 10/23/97 with a value of $10,389,136. $ 10,184,000
----------------------------------------------------- ------------
Total Repurchase Agreements 10,184,000
----------------------------------------------------- ------------
Total Investments (Cost $133,520,820)**--102.0% 190,144,021
----------------------------------------------------- ------------
Liabilities in excess of other assets--(2.0)% (3,639,569)
----------------------------------------------------- ------------
TOTAL NET ASSETS--100.0% $186,504,452
===================================================== ============
</TABLE>
Percentages indicated are based on net assets of $186,504,452.
* Non-income producing security
** The cost of investments for federal tax purposes amounts to $133,520,820. The
net unrealized appreciation of investments on federal tax basis amounts to
$56,623,201, which is composed of $57,991,712 appreciation and $1,368,511
depreciation at July 31, 1997.
See notes to financial statements.
31
<PAGE>
Fountain Square International Equity Fund
Schedule of Investments
July 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- ----------- ------------------------------------------------------- ----------
Common Stocks--(89.6%)
- --------------------------------------------------------------------
<S> <C> <C>
Australia--(2.5%)
-------------------------------------------------------
15,800 Amcor, Ltd. $102,063
-------------------------------------------------------
8,600 Australian Gas & Light 53,823
-------------------------------------------------------
23,300 Australian National Industries, Ltd. 27,602
-------------------------------------------------------
30,345 Boral, Ltd. 94,732
-------------------------------------------------------
5,800 Brambles Industries, Ltd. 120,134
-------------------------------------------------------
45,981 Broken Hill Proprietary Co., Ltd. 624,879
-------------------------------------------------------
13,495 Burns Philip & Co., Ltd. 25,137
-------------------------------------------------------
12,276 Coca Cola Amatil, Ltd. 149,086
-------------------------------------------------------
26,211 Coles Myer, Ltd. 135,140
-------------------------------------------------------
15,866 Crown, Ltd.* 25,676
-------------------------------------------------------
26,700 CSR, Ltd. 104,439
-------------------------------------------------------
45,300 Fosters Brewing Group 88,699
-------------------------------------------------------
29,700 General Property Trust Units 58,419
-------------------------------------------------------
15,100 GIO Australia Holdings, Ltd. 46,577
-------------------------------------------------------
29,977 Goodman Fielder Wattie, Ltd. 46,077
-------------------------------------------------------
5,000 Howard Smith, Ltd. 49,547
-------------------------------------------------------
8,100 ICI Australia, Ltd. 81,473
-------------------------------------------------------
6,100 Leighton Holdings 28,360
-------------------------------------------------------
6,482 Lend Lease Corp. 147,203
-------------------------------------------------------
40,259 M.I.M. Holdings, Ltd. 55,792
-------------------------------------------------------
33,701 National Australia Bank, Ltd. 490,637
-------------------------------------------------------
7,034 Newcrest Mining, Ltd. 14,412
-------------------------------------------------------
45,346 News Corp., Ltd. 208,458
-------------------------------------------------------
38,516 Normandy Mining, Ltd. 44,480
-------------------------------------------------------
18,962 North, Ltd. 69,227
-------------------------------------------------------
21,500 Pacific Dunlop, Ltd. 59,270
-------------------------------------------------------
22,800 Pioneer International 82,729
-------------------------------------------------------
5,500 Plutonic Resources, Ltd. 16,309
-------------------------------------------------------
4,749 Renison Goldfields Consolidated, Ltd. 14,684
-------------------------------------------------------
7,800 Rio Tinto, Ltd. 121,327
-------------------------------------------------------
16,312 Santos, Ltd. 78,390
-------------------------------------------------------
3,000 Sons of Gwalia, Ltd. 10,952
-------------------------------------------------------
</TABLE>
-- Continued --
32
<PAGE>
Fountain Square International Equity Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- ----------- ------------------------------------------------------- ----------
Common Stocks--Continued
- --------------------------------------------------------------------
<S> <C> <C>
Australia--Continued
-------------------------------------------------------
15,364 Southcorp. Holdings, Ltd. $55,633
-------------------------------------------------------
7,800 TABCORP Holdings, Ltd. 39,228
-------------------------------------------------------
23,763 Western Mining, Ltd. 137,851
-------------------------------------------------------
29,889 Westfield Trust 62,576
-------------------------------------------------------
1,065 Westfield Trust, New Units 2,230
-------------------------------------------------------
41,100 Westpac Banking Corp., Ltd. 267,729
------------------------------------------------------- ----------
Total 3,840,980
------------------------------------------------------- ----------
France--(7.0%)
-------------------------------------------------------
998 Accor SA 150,204
-------------------------------------------------------
2,687 Air Liquid 427,838
-------------------------------------------------------
3,786 Alcatel Alsthom 494,611
-------------------------------------------------------
3,844 AXA SA 251,467
-------------------------------------------------------
718 Bancaire 89,395
-------------------------------------------------------
5,270 Banque Nationale De Paris 251,054
-------------------------------------------------------
1,650 BIC 136,157
-------------------------------------------------------
715 Bouygues 61,080
-------------------------------------------------------
850 Canal Plus 164,441
-------------------------------------------------------
975 Carrefour SA 658,923
-------------------------------------------------------
2,180 Casino Guichard Perrachon 102,972
-------------------------------------------------------
5 Chargeurs International SA 295
-------------------------------------------------------
10,087 Compagnie UAP SA 268,444
-------------------------------------------------------
2,251 De St. Gobain 322,792
-------------------------------------------------------
750 Eridania Beghin-Say SA 106,702
-------------------------------------------------------
275 Essilor International 77,449
-------------------------------------------------------
95 Eurafrance 39,089
-------------------------------------------------------
2,756 Financiere De Paribas SA 198,050
-------------------------------------------------------
3,113 Generale Des Eaux 393,619
-------------------------------------------------------
1,929 Groupe Danone 304,653
-------------------------------------------------------
1,837 Havas SA 127,530
-------------------------------------------------------
400 Imetal 57,037
-------------------------------------------------------
1,662 L'OREAL 670,974
-------------------------------------------------------
2,399 La Farge-Coppee 168,947
-------------------------------------------------------
2,750 La Gardere Groupe Sca 82,023
-------------------------------------------------------
760 Le Grand SA 153,289
-------------------------------------------------------
</TABLE>
-- Continued --
33
<PAGE>
Fountain Square International Equity Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- ----------- ------------------------------------------------------- ----------
Common Stocks--Continued
- --------------------------------------------------------------------
<S> <C> <C>
France--Continued
-------------------------------------------------------
2,140 Lvmh Moet Vuitton Hennessy Lous $549,472
-------------------------------------------------------
3,225 Lyonnaise Des Eaux SA 352,056
-------------------------------------------------------
3,062 Michelin Class B, Registered 190,717
-------------------------------------------------------
205 Pathe SA 40,652
-------------------------------------------------------
1,700 Pernod Ricard 84,280
-------------------------------------------------------
1,300 Peugeot SA 150,311
-------------------------------------------------------
530 Pinault-Printemps-Redoute SA 240,501
-------------------------------------------------------
495 Promodes 198,880
-------------------------------------------------------
8,456 Rhone Poulenc SA 356,402
-------------------------------------------------------
135 Sagem SA 67,516
-------------------------------------------------------
2,716 Sanofi SA 285,526
-------------------------------------------------------
3,336 Schneider SA 193,453
-------------------------------------------------------
638 Simco-Union SA, Registered 48,114
-------------------------------------------------------
6,450 Societe Elf Aquitane SA 736,401
-------------------------------------------------------
2,444 Societe Generale 322,841
-------------------------------------------------------
175 Sodexho SA 89,273
-------------------------------------------------------
3,076 Thomson CSF 81,663
-------------------------------------------------------
6,038 Total SA, Class B 606,483
-------------------------------------------------------
6,340 Unisor Sacilor SA 126,442
-------------------------------------------------------
1,650 Valeo SA 103,916
------------------------------------------------------- ----------
Total 10,583,934
------------------------------------------------------- ----------
Germany--(8.8%)
-------------------------------------------------------
1,100 Adidas 129,358
-------------------------------------------------------
800 Agiva AG 17,291
-------------------------------------------------------
5,200 Allianz AG 1,334,282
-------------------------------------------------------
100 Aachener Muenchner Beteiligungs AG 101,810
-------------------------------------------------------
13,550 BASF AG 523,037
-------------------------------------------------------
16,600 Bayer AG 709,274
-------------------------------------------------------
6,300 Bayerisch Hypotheken & Wechsek Bank AG 262,048
-------------------------------------------------------
5,950 Bayerische Vereins AG 327,179
-------------------------------------------------------
1,300 Bilfinger & Berger 51,879
-------------------------------------------------------
200 Brau & Brunnen 16,790
-------------------------------------------------------
600 CKAG Konzern AG 59,060
-------------------------------------------------------
1,850 Continental Gummiwerke AG 47,188
-------------------------------------------------------
</TABLE>
-- Continued --
34
<PAGE>
Fountain Square International Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- --------- --------------------------------------------------------- -----------
Common Stocks--Continued
- --------------------------------------------------------------------
<S> <C> <C>
Germany--Continued
------------------------------------------------------------
12,250 Dailmer Benz AG $ 1,040,417
------------------------------------------------------------
2,200 Degussa AG 125,166
------------------------------------------------------------
11,550 Deutsche Bank AG 782,257
------------------------------------------------------------
8,250 Deutsche Lufthansa AG 167,087
------------------------------------------------------------
50,596 Deutsche Telekom 1,198,263
------------------------------------------------------------
10,350 Dresdner Bank AG 475,587
------------------------------------------------------------
1,240 Heidelberger Zement 104,978
------------------------------------------------------------
2,350 Hochtief AG 104,017
------------------------------------------------------------
250 Karstadt AG 96,637
------------------------------------------------------------
1,150 Kloeckner Humboldt Deutz AG* 9,686
------------------------------------------------------------
250 Linde AG 183,067
------------------------------------------------------------
300 Man AG 91,302
------------------------------------------------------------
850 Mannesmann AG 397,057
------------------------------------------------------------
4,250 Merck KGaA 174,002
------------------------------------------------------------
6,096 Metro AG 329,897
------------------------------------------------------------
210 Munchener Ruckversicherungs-Gesellschaft AG 787,173
------------------------------------------------------------
400 Preussag AG 121,518
------------------------------------------------------------
8,100 RWE AG 360,291
------------------------------------------------------------
1,442 SAP AG 339,938
------------------------------------------------------------
1,850 Schering AG 205,269
------------------------------------------------------------
13,100 Siemens AG 913,980
------------------------------------------------------------
100 STRABAG AG* 8,085
------------------------------------------------------------
800 Thyssen AG 181,624
------------------------------------------------------------
11,850 VEBA AG 688,060
------------------------------------------------------------
800 Viag AG 345,608
------------------------------------------------------------
650 Volkswagen AG 498,976
------------------------------------------------------------ --------
Total 13,309,138
------------------------------------------------------------
Great Britain--(15.3%)
------------------------------------------------------------
29,100 Abbey National PLC 399,079
------------------------------------------------------------
14,500 Arjo Wiggins Appleton PLC 38,702
------------------------------------------------------------
10,400 Associated British Foods PLC 90,429
------------------------------------------------------------
64,390 B.A.T. Industries PLC 544,063
------------------------------------------------------------
35,370 Barclays PLC 744,541
------------------------------------------------------------
22,900 Bass PLC 312,740
------------------------------------------------------------
</TABLE>
-- Continued --
35
<PAGE>
Fountain Square International Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- ---------- ------------------------------------------------------ ---------
Common Stocks--Continued
- -------------------------------------------------------------------
<S> <C> <C>
Great Britain--Continued
------------------------------------------------------
91,500 BG PLC $ 373,829
------------------------------------------------------
14,536 BICC Group PLC, Registered 40,227
------------------------------------------------------
26,992 Blue Circle Industries PLC 182,986
------------------------------------------------------
14,569 BOC Group PLC 267,792
------------------------------------------------------
22,900 Boots Co. PLC 290,240
------------------------------------------------------
14,600 BPB Industries PLC 80,210
------------------------------------------------------
10,390 British Aerospace PLC 226,877
------------------------------------------------------
24,974 British Airways PLC 271,542
------------------------------------------------------
119,689 British Petroleum Co. PLC 1,635,542
------------------------------------------------------
33,300 British Sky Broadcasting Group PLC 252,741
------------------------------------------------------
41,600 British Steel PLC 112,909
------------------------------------------------------
120,600 British Telecommunications PLC 842,263
------------------------------------------------------
87,271 BTR PLC 270,807
------------------------------------------------------
6,185 Burmah Castrol PLC 106,698
------------------------------------------------------
51,972 Cable & Wireless PLC 521,688
------------------------------------------------------
22,898 Cadbury Schweppes PLC 221,411
------------------------------------------------------
16,470 Caradon PLC 54,209
------------------------------------------------------
91,500 Centrica PLC* 133,724
------------------------------------------------------
18,719 Coats Viyella PLC 36,170
------------------------------------------------------
14,542 Commercial Union PLC 163,473
------------------------------------------------------
10,400 Courtaulds PLC 53,134
------------------------------------------------------
1,286 De La Rue, LTD. 7,876
------------------------------------------------------
18,687 EMI Group PLC 171,054
------------------------------------------------------
1 Energy Group PLC 11
------------------------------------------------------
60,300 General Electric Co. PLC 348,557
------------------------------------------------------
12,430 GKN PLC 218,196
------------------------------------------------------
66,500 Glaxo Holdings PLC 1,406,362
------------------------------------------------------
14,583 Granada Group PLC 200,231
------------------------------------------------------
45,707 Grand Metropolitan PLC 447,949
------------------------------------------------------
24,900 Great Universal Stores PLC 256,059
------------------------------------------------------
16,652 Guardian Royal Exchange PLC 79,349
------------------------------------------------------
45,700 Guinness PLC 437,777
------------------------------------------------------
12,504 Hanson PLC 63,269
------------------------------------------------------
27,000 Harrison & Crossfield PLC 46,423
------------------------------------------------------
</TABLE>
-- Continued --
36
<PAGE>
Fountain Square International Equity Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- --------- ----------------------------------------------- -----------
Common Stocks--Continued
- ----------------------------------------------------------------
Great Britain--Continued
-----------------------------------------------
<S> <C> <C>
45,744 HSBC Holdings PLC $1,597,740
-----------------------------------------------
18,700 Imperial Chemical Industries PLC 308,509
-----------------------------------------------
24,959 Ladbroke Group PLC 100,337
-----------------------------------------------
16,600 Land Securities PLC 252,797
-----------------------------------------------
16,600 LASMO PLC 75,839
-----------------------------------------------
24,900 Legal & General Group PLC 177,366
-----------------------------------------------
114,300 Lloyds TSB Group PLC 1,264,308
-----------------------------------------------
16,658 Lonrho PLC 32,869
-----------------------------------------------
72,800 Marks & Spencer PLC 702,147
-----------------------------------------------
12,500 MEPC PLC, Registered 100,195
-----------------------------------------------
29,100 National Power PLC 257,793
-----------------------------------------------
16,625 Peninsular & Oriental Steam Navigation Co. 169,058
-----------------------------------------------
31,192 Pilkington PLC 67,422
-----------------------------------------------
41,538 Prudential Corp. PLC 397,228
-----------------------------------------------
18,700 Rank Group PLC 105,643
-----------------------------------------------
12,451 Redland PLC 57,801
-----------------------------------------------
29,100 Reed International PLC 291,626
-----------------------------------------------
35,300 Reuters Holdings PLC 380,349
-----------------------------------------------
12,500 Rexam PLC 50,558
-----------------------------------------------
24,965 Rio Tinto PLC, Registered 404,101
-----------------------------------------------
6,200 RMC Group PLC 100,662
-----------------------------------------------
29,107 Royal & Sun Alliance Insurance Group PLC 239,267
-----------------------------------------------
10,372 Royal Bank of Scotland Group PLC 108,783
-----------------------------------------------
18,687 Safeway PLC 117,657
-----------------------------------------------
33,237 Sainsbury (J) PLC 231,853
-----------------------------------------------
4,200 Schroder PLC 125,514
-----------------------------------------------
20,760 Scottish Power PLC 146,516
-----------------------------------------------
41,600 Sears PLC 42,234
-----------------------------------------------
12,514 Sedgwick Group PLC 24,795
-----------------------------------------------
10,400 Slough Estates PLC 54,751
-----------------------------------------------
51,955 Smithkline Beecham PLC 1,011,983
-----------------------------------------------
10,415 Southern Electric PLC 76,234
-----------------------------------------------
10,428 T.I. Group PLC 92,978
-----------------------------------------------
29,089 Tarmac PLC 54,064
-----------------------------------------------
</TABLE>
-- Continued --
37
<PAGE>
Fountain Square International Equity Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- --------- ----------------------------------------------- -----------
Common Stocks--Continued
- ----------------------------------------------------------------
Great Britain--Continued
-----------------------------------------------
<S> <C> <C>
16,580 Taylor Woodrow PLC $ 47,919
-----------------------------------------------
39,476 Tesco PLC 266,325
-----------------------------------------------
14,543 Thames Water PLC 191,466
-----------------------------------------------
10,400 Thorn PLC 28,696
-----------------------------------------------
14,500 Unilever PLC 420,027
-----------------------------------------------
14,595 United Utilities Group PLC 168,610
-----------------------------------------------
68,639 Vodafone Group PLC 345,619
-----------------------------------------------
18,700 Zeneca Group PLC 618,855
----------------------------------------------- -----------
Total 23,259,633
----------------------------------------------- -----------
Hong Kong--(2.2%)
-----------------------------------------------
8,000 Applied International Holdings, Ltd.* 661
-----------------------------------------------
13,835 Bank of East Asia, Ltd. 57,538
-----------------------------------------------
42,000 Cathay Pacific Airways, Ltd. 82,182
-----------------------------------------------
32,000 Cheung Kong Holdings, Ltd. 355,439
-----------------------------------------------
26,500 China Light & Power Co., Ltd. 151,966
-----------------------------------------------
24,368 Chinese Estates, Ltd. 23,133
-----------------------------------------------
20 Evergo China Holdings, Ltd.* 3
-----------------------------------------------
9,100 Giordano International, Ltd. 5,730
-----------------------------------------------
18,000 Hang Lung Development Co., Ltd. 35,221
-----------------------------------------------
27,700 Hang Seng Bank, Ltd. 404,273
-----------------------------------------------
63,120 Hong Kong & China Gas, Ltd. 136,960
-----------------------------------------------
18,625 Hong Kong & Shanghai Hotel, Ltd. 25,258
-----------------------------------------------
2,800 Hong Kong Aircraft Engineering Co., Ltd. 9,565
-----------------------------------------------
159,885 Hong Kong Telecommunications, Ltd. 416,102
-----------------------------------------------
62,008 Hopewell Holdings, Ltd. 37,841
-----------------------------------------------
48,000 Hutchison Whampoa, Ltd.
----------------------------------------------- 468,064
16,000 Hysan Development, Ltd. 50,939
-----------------------------------------------
5,500 Johnson Electric, Ltd. 16,800
-----------------------------------------------
8,000 Miramar Hotel & Investment, Ltd. 16,222
-----------------------------------------------
22,554 New World Developments Co., Ltd. 162,400
-----------------------------------------------
21,000 Oriental Press Group, Ltd. 8,272
-----------------------------------------------
5,700 Peregrine Investment Holdings, Ltd. 12,589
-----------------------------------------------
23,032 Shangri-La Asia, Ltd. 25,731
-----------------------------------------------
25,048 Shun Tak Holdings, Ltd. 15,124
-----------------------------------------------
</TABLE>
-- Continued --
38
<PAGE>
Fountain Square International Equity Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- --------- ----------------------------------------------- -----------
Common Stocks--Continued
- ----------------------------------------------------------------
Hong Kong--Continued
-----------------------------------------------
<S> <C> <C>
26,000 South China Morning Post, Ltd. $ 26,865
-----------------------------------------------
15,000 Stelux Holdings International 3,274
-----------------------------------------------
32,000 Sun Hung Kai Properties, Ltd. 401,936
-----------------------------------------------
22,500 Swire Pacific, Ltd., Class A 213,593
-----------------------------------------------
6,000 Television Broadcasts, Ltd. 23,093
-----------------------------------------------
31,000 Wharf Holdings, Ltd. 130,526
-----------------------------------------------
2,625 Wing Ling Bank 17,630
-----------------------------------------------
5,000 Winsor Industrial, Ltd. 1,253
----------------------------------------------- -----------
Total 3,336,183
----------------------------------------------- -----------
Indonesia--(0.0%)
-----------------------------------------------
19,000 Mulia Industrindo 27,610
----------------------------------------------- -----------
Italy--(6.1%)
-----------------------------------------------
42,690 Assicurazioni Generali SpA 874,409
-----------------------------------------------
67,100 Banca Commerciale Italiana 153,730
-----------------------------------------------
26,200 Banco Ambrosiano Veneto 149,881
-----------------------------------------------
8,676 Benetton Group SpA 129,771
-----------------------------------------------
7,400 Burgo (Cartiere) SpA 43,778
-----------------------------------------------
114,500 Credito Italiano 228,137
-----------------------------------------------
31,000 Edison SpA 144,122
-----------------------------------------------
368,000 Ente Nazional Indrocarburi SpA 2,153,469
-----------------------------------------------
7,000 Falck, Accia & Ferriere Lombarde 25,238
-----------------------------------------------
170,830 Fiat SpA 564,905
-----------------------------------------------
38,720 Fiat SpA, di risp 67,748
-----------------------------------------------
16,000 Impregilo SpA 11,019
-----------------------------------------------
40,600 Istituto Bancario san Paolo di Torina 312,700
-----------------------------------------------
29,450 Istituto Mobiliare Italiano 284,350
-----------------------------------------------
208,160 Istituto Nazionale delle Assicurazioni 304,848
-----------------------------------------------
11,150 Italcementi SpA 77,414
-----------------------------------------------
7,850 Italcementi SpA, di risp 19,672
-----------------------------------------------
31,300 Italgas SpA 95,905
-----------------------------------------------
22,400 Magneti Marelli SpA 38,005
-----------------------------------------------
55,500 Mediaset SpA 252,449
-----------------------------------------------
23,500 Mediobanca Banca SpA 159,355
-----------------------------------------------
</TABLE>
-- Continued --
39
<PAGE>
Fountain Square International Equity Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- --------- ----------------------------------------------- -----------
Common Stocks--Continued
- ----------------------------------------------------------------
Italy--Continued
-----------------------------------------------
<S> <C> <C>
134,154 Montedison SpA $ 86,254
-----------------------------------------------
46,500 Montedison SpA, di risp 24,369
-----------------------------------------------
107,680 Olivetti Ing & Co. SpA* 40,566
-----------------------------------------------
72,480 Parmalat Finanziaria SpA 101,130
-----------------------------------------------
75,000 Pirelli SpA 203,223
-----------------------------------------------
13,725 RAS Italian 114,902
-----------------------------------------------
12,600 Rinascente 79,956
-----------------------------------------------
1,600 Saffa, Class A* 2,585
-----------------------------------------------
14,300 Sirti SpA 77,935
-----------------------------------------------
34,000 Snia BPD SpA 30,931
-----------------------------------------------
6,700 Societa Asscuriatrice Industrial 60,877
-----------------------------------------------
305,000 Telecom Italia Mobile SpA 1,029,859
-----------------------------------------------
42,152 Telecom Italia SpA 150,680
-----------------------------------------------
165,817 Telecom Italia SpA* 1,055,008
-----------------------------------------------
72,500 TIM, di risp* 125,436
----------------------------------------------- -----------
Total 9,274,616
----------------------------------------------- -----------
Japan--(31.0%)
-----------------------------------------------
2,500 Advantest 232,263
-----------------------------------------------
32,000 Ajinomoto Co., Inc. 308,108
-----------------------------------------------
19,000 Aoki Corp. 12,517
-----------------------------------------------
2,500 Aoyama Trading Co., Ltd. 74,958
-----------------------------------------------
61,000 Asahi Bank, Ltd. 457,500
-----------------------------------------------
19,000 Asahi Breweries, Ltd. 288,851
-----------------------------------------------
57,000 Asahi Chemical Industry Co., Ltd. 310,515
-----------------------------------------------
54,000 Asahi Glass Co., Ltd. 488,007
-----------------------------------------------
110,000 Bank of Tokyo-Mitsubishi, Ltd. 2,043,918
-----------------------------------------------
19,000 Bridgestone Corp. 455,743
-----------------------------------------------
23,000 Canon, Inc. 734,290
-----------------------------------------------
11,000 Casio Computer Co., Ltd. 110,557
-----------------------------------------------
31,000 Chiba Bank 157,095
-----------------------------------------------
19,000 Chugai Pharmaceutical Co., Ltd. 168,497
-----------------------------------------------
22,000 Dai Nippon Printing Co., Ltd. 503,547
-----------------------------------------------
20,000 Daiei, Inc. 152,196
-----------------------------------------------
19,000 Daikin Industries, Ltd. 176,520
-----------------------------------------------
19,000 Daiwa House Industry Co. Ltd. 215,034
-----------------------------------------------
</TABLE>
-- Continued --
40
<PAGE>
Fountain Square International Equity Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- --------- ----------------------------------------------- -----------
Common Stocks--Continued
- ----------------------------------------------------------------
Japan--Continued
-----------------------------------------------
<S> <C> <C>
38,000 Daiwa Securities, Ltd. $ 260,929
-----------------------------------------------
112 East Japan Railway Co. 481,486
-----------------------------------------------
13,000 Ebara Corp. 182,263
-----------------------------------------------
8,100 Fanuc Co., Ltd. 379,003
-----------------------------------------------
66,000 Fuji Bank 858,446
-----------------------------------------------
11,000 Fuji Photo Film Co., Ltd. 462,669
-----------------------------------------------
49,000 Fujitsu, Ltd. 720,101
-----------------------------------------------
14,000 Furukawa Electric Co. 93,530
-----------------------------------------------
26,000 Hankyu Corp. 135,490
-----------------------------------------------
19,000 Hazama Corp. 30,169
-----------------------------------------------
95,000 Hitachi, Ltd. 1,075,168
-----------------------------------------------
25,000 Honda Motor Co., Ltd. 836,148
-----------------------------------------------
60,000 Industrial Bank of Japan 836,148
-----------------------------------------------
12,000 ITO-Yokado Co., Ltd. 684,121
-----------------------------------------------
59,000 Japan Airlines* 257,627
-----------------------------------------------
48,000 Japan Energy Corp. (Nikko Kyodo Co., Ltd.) 107,432
-----------------------------------------------
21,000 Joyo Bank 116,706
-----------------------------------------------
9,000 JUSCO, Ltd. 250,844
-----------------------------------------------
38,000 Kajima Corp. 196,740
-----------------------------------------------
25,300 Kansai Electric Power, Inc. 487,196
-----------------------------------------------
35,000 KAO Corp. 526,182
-----------------------------------------------
30,000 Kawasaki Steel Corp. 85,135
-----------------------------------------------
46,000 Kinki Nippon Railway 262,635
-----------------------------------------------
38,000 Kirin Brewery Co., Ltd. 353,040
-----------------------------------------------
38,000 Komatsu, Ltd. 259,324
-----------------------------------------------
57,000 Kubota Corp. 245,524
-----------------------------------------------
38,000 Kumagai Gumi Co., Ltd. 46,537
-----------------------------------------------
5,700 Kyocera Corp. 491,047
-----------------------------------------------
19,000 Kyowa Hakko Kogyo Co., Ltd. 121,638
-----------------------------------------------
57,000 Marubenii Corp. 237,821
-----------------------------------------------
4,000 Marui Co., Ltd. 67,568
-----------------------------------------------
57,000 Matsushita Electric Industrial Co., Ltd. 1,189,104
-----------------------------------------------
57,000 Mitsubishi Chemical Corp. 148,277
-----------------------------------------------
53,000 Mitsubishi Corp. 568,496
-----------------------------------------------
67,000 Mitsubishi Electric Corp. 367,821
-----------------------------------------------
41,000 Mitsubishi Estate Co., Ltd. 585,219
-----------------------------------------------
</TABLE>
-- Continued --
41
<PAGE>
Fountain Square International Fund
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- ----------- ------------------------------------------- --------
<S> <C> <C>
Common Stocks--Continued
- --------------------------------------------------------
Japan--Continued
-------------------------------------------
104,000 Mitsubishi Heavy Industries, Ltd. $733,446
-------------------------------------------
38,000 Mitsubishi Material Corp. 131,588
-------------------------------------------
34,000 Mitsubishi Trust & Banking Co. 496,790
-------------------------------------------
57,000 Mitsui & Co. 544,003
-------------------------------------------
38,000 Mitsui Engineering & Shipbuilding Co., Ltd.* 68,041
-------------------------------------------
31,000 Mitsui Fudosan 397,973
-------------------------------------------
28,000 Mitsui Trust & Bankings Co. 174,290
-------------------------------------------
20,000 Mitsukoshi, Ltd. 122,973
-------------------------------------------
7,000 Murata Manufacturing Co., Ltd. 329,307
-------------------------------------------
12,000 Mycal Corp. 157,095
-------------------------------------------
33,000 NEC Corp. 479,392
-------------------------------------------
38,000 New Oji Paper Co. 198,986
-------------------------------------------
19,000 NGK Insulators, Ltd. 205,405
-------------------------------------------
23,000 Nippon Denso, Ltd. 569,172
-------------------------------------------
15,000 Nippon Express Co., Ltd. 100,971
-------------------------------------------
19,000 Nippon Fire & Marine Insurance 96,765
-------------------------------------------
111,000 Nippon Kokan 202,500
-------------------------------------------
18,000 Nippon Light Metal Co. 57,010
-------------------------------------------
19,000 Nippon Meat Packers, Inc. 229,476
-------------------------------------------
54,000 Nippon Oil Co., Ltd. 244,459
-------------------------------------------
210,000 Nippon Steel Corp. 588,851
-------------------------------------------
284 Nippon Telegraph & Telephone Corp. 2,878,376
-------------------------------------------
57,000 Nippon Yusen Kabushiki Kaisha 202,677
-------------------------------------------
72,000 Nissan Motors Co., Ltd. 494,392
-------------------------------------------
49,000 Nomura Securities Co., Ltd. 695,270
-------------------------------------------
22,000 Odakyu Electric Railway 120,591
-------------------------------------------
84,000 Osaka Gas Co., Ltd. 202,196
-------------------------------------------
19,000 Penta-Ocean Construction Co., Ltd. 47,660
-------------------------------------------
6,000 Pioneer Electronic Corp. 150,507
-------------------------------------------
2,000 Rohm Co. 261,824
-------------------------------------------
74,000 Sakura Bank 453,125
-------------------------------------------
14,000 Sankyo Co., Ltd. 500,169
-------------------------------------------
57,000 Sanyo Electric Co. 238,784
-------------------------------------------
4,000 Secom Co., Ltd. 292,905
-------------------------------------------
3,700 Sega Enterprise, Ltd. 112,500
-------------------------------------------
19,000 Sekisui House, Ltd. 181,334
-------------------------------------------
</TABLE>
-- Continued --
42
<PAGE>
Fountain Square International Fund
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- ----------- ------------------------------------------- --------
<S> <C> <C>
Common Stocks--Continued
- --------------------------------------------------------
Japan--Continued
----------------------------------
38,000 Sharp Corp. $487,838
----------------------------------
5,000 Shimano, Inc. 124,155
----------------------------------
27,000 Shimizu Construction 139,105
----------------------------------
8,000 Shin-Etsu Chemical Co. 228,378
----------------------------------
8,000 Shiseido Co., Ltd. 133,108
----------------------------------
25,000 Shizuoka Bank 270,270
----------------------------------
38,000 Shon Denko KK 83,767
----------------------------------
8,800 Sony Corp. 877,027
----------------------------------
75,000 Sumitomo Bank, Ltd. 1,203,547
----------------------------------
76,000 Sumitomo Chemical Co., Ltd. 306,824
----------------------------------
38,000 Sumitomo Corp. 333,784
----------------------------------
25,000 Sumitomo Electric Industries 415,963
----------------------------------
8,000 Sumitomo Forestry Co., Ltd. 76,351
----------------------------------
18,000 Sumitomo Metal & Mining 103,834
----------------------------------
68,000 Sumitomo Metal Industries 171,149
----------------------------------
19,000 Sumitomo Osaka Cement Co. 47,660
----------------------------------
38,000 Taisei Construction 153,091
----------------------------------
11,000 Taisho Pharmaceutical Co. 287,078
----------------------------------
23,000 Takeda Chemical Industries 697,381
----------------------------------
38,000 Teijin, Ltd. 163,682
----------------------------------
26,000 Tobu Railway Co., Ltd. 110,236
----------------------------------
13,600 Tohoku Electric Power Co., Inc. 226,284
----------------------------------
58,000 Tokai Bank 543,750
----------------------------------
57,000 Tokyo Marine Fire Insurance Co. 726,942
----------------------------------
35,200 Tokyo Electric Power 662,973
----------------------------------
2,000 Tokyo Electron, Ltd. 123,649
----------------------------------
76,000 Tokyo Gas, Ltd. 188,716
----------------------------------
32,000 Tokyo Corp. 174,324
----------------------------------
26,000 Toppan Printing Co., Ltd. 417,230
----------------------------------
57,000 Toray Industries, Inc. 374,544
----------------------------------
19,300 Toto, Ltd. 237,990
----------------------------------
38,000 Toyobo, Ltd. 86,655
----------------------------------
83,000 Toyota Motor Corp. 2,544,678
----------------------------------
38,000 Ube Industries, Inc. 97,888
----------------------------------
38,000 Yamaichi Securities, Ltd. 83,446
----------------------------------
34,000 Yasuda Trust & Banking 130,659
---------------------------------- ----------
Total 46,892,459
---------------------------------- ----------
</TABLE>
-- Continued --
43
<PAGE>
Fountain Square International Fund
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- ----------- ------------------------------------------- --------
<S> <C> <C>
Common Stocks--Continued
- --------------------------------------------------------
Netherlands--(2.8%)
-------------------------------------------
16,448 ABN Amro Holdings NV $ 387,425
-------------------------------------------
950 Akzo Nobel NV 147,402
-------------------------------------------
8,100 Elsevier NV 142,996
-------------------------------------------
500 Heineken NV 76,903
-------------------------------------------
9,105 ING Groep NV 443,901
-------------------------------------------
1,080 KLM Royal Dutch Airlines NV 38,602
-------------------------------------------
4,773 Koninklijke Ahold NV 138,282
-------------------------------------------
413 Koninklijke Hoogovens NV 25,069
-------------------------------------------
1,300 Koninklijke KNP BT NV 29,929
-------------------------------------------
11,922 Koninklijke Royal PTT Nederland NV 490,133
-------------------------------------------
300 Nedlloyd Groep NV 10,055
-------------------------------------------
4,100 Philips Electronics NV 333,149
-------------------------------------------
26,400 Royal Dutch Petroleum Co. 1,482,458
-------------------------------------------
1,950 Unilever NV CVA 429,133
-------------------------------------------
369 Verenigde Machinefabrieken Stork NV 14,849
-------------------------------------------
867 Wolters Kluwer NV CVA 114,396
------------------------------------------- ---------
Total 4,304,682
------------------------------------------- ---------
Singapore--(1.9%)
-------------------------------------------
26,666 Asia Food & Property* 23,733
-------------------------------------------
31,000 City Development, Ltd. 263,422
-------------------------------------------
4,000 Creative Technology, Ltd.* 84,839
-------------------------------------------
10,000 Cycle & Carriage, Ltd. 87,694
-------------------------------------------
37,000 DBS Land Ltd. 115,199
-------------------------------------------
18,000 Development Bank of Singapore, Ltd. 233,715
-------------------------------------------
12,000 First Capital Corp., Ltd. 27,573
-------------------------------------------
13,000 Fraser & Neave, Ltd. 88,374
-------------------------------------------
8,000 Inchcape Berhad 28,552
-------------------------------------------
27,000 Keppel Corp., Ltd. 115,634
-------------------------------------------
14,000 Natsteel, Ltd. 39,401
-------------------------------------------
37,000 Neptune Orient Lines, Ltd. 30,183
-------------------------------------------
26,960 OCBC - Foreign 271,245
-------------------------------------------
6,000 Overseas Union Enterprises, Ltd. 27,736
-------------------------------------------
2,000 Robinson & Co. 9,721
-------------------------------------------
7,100 Shangri-La Hotel, Ltd. 19,692
-------------------------------------------
35,000 Singapore International Airlines, Ltd. 328,343
-------------------------------------------
8,400 Singapore Press Holdings, Ltd. 159,318
-------------------------------------------
</TABLE>
-- Continued --
44
<PAGE>
Fountain Square International Fund
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- ----------- ------------------------------------------- --------
<S> <C> <C>
Common Stocks--Continued
- --------------------------------------------------------
Singapore--Continued
-------------------------------------------
28,000 Singapore Technologies Industrial Corp. $ 70,427
-------------------------------------------
235,000 Singapore Telecommunications, Ltd. 445,710
-------------------------------------------
14,000 Straits Trading Co., Ltd. 29,313
-------------------------------------------
60,000 United Industries Corp., Ltd. 47,314
-------------------------------------------
31,000 United Overseas Bank, Ltd. 337,181
------------------------------------------- ----------
Total 2,884,319
------------------------------------------- ----------
South Korea--(0.2%)
-------------------------------------------
26,440 Korea Fund Closed-End Mutual Fund 368,507
-------------------------------------------
27 Samsung Electronics Co., Ltd. 1,969
------------------------------------------- ----------
Total 370,476
------------------------------------------- ----------
Spain--(3.7%)
-------------------------------------------
257 Acerinox SA, Registered 46,867
-------------------------------------------
8,284 Acesa Autopista 96,962
-------------------------------------------
400 Alba 46,223
-------------------------------------------
25,200 Banco Bilbao Vizcaya SA, Registered 658,946
-------------------------------------------
6,400 Banco Central Hispanoamericano, SA, Registered 245,559
-------------------------------------------
24,900 Banco Santander SA 696,863
-------------------------------------------
5,000 Corporacion Bancaria de Espana SA 276,640
-------------------------------------------
790 Corporacion Mafre cia International SA 44,270
-------------------------------------------
1,400 Dragados & Construcciones SA 26,813
-------------------------------------------
1,200 Ebro Agricolas, Compania De Alimentacion SA 20,622
-------------------------------------------
550 Empresa Nacional de Celulosas SA 10,232
-------------------------------------------
42,400 Endesa-Empresa Nac Elec. 874,932
-------------------------------------------
4,100 Ercros SA* 3,781
-------------------------------------------
400 Fomento de Construccion & Contrates SA 49,266
-------------------------------------------
5,600 Gas Natural SDG SA 274,448
-------------------------------------------
37,100 Iberdrola SA 412,687
-------------------------------------------
510 Inmobiliaria Metropolitana Vasco Central SA 17,989
-------------------------------------------
200 Portland Valderrivassa SA 15,902
-------------------------------------------
12,200 Repsol SA 489,337
-------------------------------------------
1,611 Sociedade General De Aguas D'Barcelona, SA 61,916
-------------------------------------------
900 Tabacalera Spanish SA, Registered 48,112
-------------------------------------------
36,000 Telefonica De Espana 966,887
-------------------------------------------
7,100 Union Electrica Fenosa SA 56,544
-------------------------------------------
</TABLE>
-- Continued --
45
<PAGE>
Fountain Square International Equity Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- ---------- --------------------------------------------------- -----------
Common Stocks--Continued
- ----------------------------------------------------------------
<S> <C> <C>
---------------------------------------------------
Spain--Continued
---------------------------------------------------
2,700 Uralita SA $26,987
---------------------------------------------------
1,339 Vallehermoso SA 31,689
---------------------------------------------------
600 Viscofan Envolturas Celulosicas 14,122
---------------------------------------------------
371 Zardoya Otis SA 43,063
--------------------------------------------------- -----------
Total 5,557,659
--------------------------------------------------- -----------
Sweden--(3.6%)
---------------------------------------------------
28,500 ABB AB, Series A 381,175
---------------------------------------------------
2,400 AGA AB, Series A 34,661
---------------------------------------------------
4,100 AGA AB, Series B 57,410
---------------------------------------------------
53,066 Astra AB, Series A 952,978
---------------------------------------------------
6,500 Atlas Copco AB, Series A 186,930
---------------------------------------------------
2,600 Electrolux AB, Series B 201,134
---------------------------------------------------
32,500 Ericsson LM, Series B 1,467,280
---------------------------------------------------
1,300 Esselte AB, Series A 29,468
---------------------------------------------------
1,300 Granges AB* 19,264
---------------------------------------------------
7,000 Hennes & Mauritz AB, Series B 294,931
---------------------------------------------------
50 Scancem AB, Series A 1,953
---------------------------------------------------
3,100 Securitas AB, Series B 90,319
---------------------------------------------------
4,000 Skandia Forsakrings AB 162,755
---------------------------------------------------
18,600 Skandinaviska Enskilda Banken, Class A 213,729
---------------------------------------------------
4,400 Skanska AB, Series B 188,977
---------------------------------------------------
4,300 SKF AB, Series B 115,021
---------------------------------------------------
10,800 Stora Kopparbergs Bergslag Aktiebolag, Series A 177,675
---------------------------------------------------
6,700 Svenska Cellulosa AB, Series B 160,708
---------------------------------------------------
7,200 Svenska Handelsbanken, Class A 223,337
---------------------------------------------------
16,600 Swedish Match AB 52,742
---------------------------------------------------
4,700 Trelleborg AB, Series B 76,731
---------------------------------------------------
13,800 Volvo AB, Series B 370,005
--------------------------------------------------- -----------
Total 5,459,183
--------------------------------------------------- -----------
Switzerland--(4.5%)
---------------------------------------------------
160 ABB AB, Bearer 227,389
---------------------------------------------------
310 Adecco SA, Bearer 120,751
---------------------------------------------------
95 Alusuisse-Lonza Holding, Registered 86,385
---------------------------------------------------
3,200 Credit Suisse Group, Registered 431,711
---------------------------------------------------
</TABLE>
-- Continued --
46
<PAGE>
Fountain Square International Equity Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- ---------- --------------------------------------------------- ------------
Common Stocks--Continued
- ----------------------------------------------------------------
<S> <C> <C>
Switzerland--Continued
---------------------------------------------------
15 Georg Fischer AG $ 22,766
---------------------------------------------------
120 Holderbank Financiere Glarus AG 112,134
---------------------------------------------------
660 Nestle SA, Registered 837,591
---------------------------------------------------
1,080 Novartis AG, Registered 1,733,433
---------------------------------------------------
117 Roche Holdings AG, Genuss 1,131,606
---------------------------------------------------
27 Roche Holdings AG 414,609
---------------------------------------------------
55 Sairgroup, Registered* 70,599
---------------------------------------------------
85 SMH Swiss Corp. 48,624
---------------------------------------------------
33 Societe Generale 66,562
---------------------------------------------------
65 Sulzer AG, Registered 49,090
---------------------------------------------------
1,280 Swiss Bank Corp. 346,215
---------------------------------------------------
245 Swiss Reinsurance Co., Registered 356,291
---------------------------------------------------
350 Union Bank of Switzerland, Bearer 389,783
---------------------------------------------------
400 Union Bank of Switzerland, Registered 88,749
---------------------------------------------------
110 Valora Holding AG, Registered 24,915
---------------------------------------------------
795 Zurich Verichrng Gesellschft, Registered 323,863
--------------------------------------------------- -----------
Total 6,883,066
--------------------------------------------------- -----------
Thailand--(0.0%)
---------------------------------------------------
2,100 Castle Peak Holdings PLC 7,774
---------------------------------------------------
8,700 CMIC Finance & Securities Co., Ltd. 1,774
---------------------------------------------------
25,000 Finance One PLC 2,980
---------------------------------------------------
14,500 General Finance & Securities Co., Ltd. 3,594
---------------------------------------------------
4,900 MDX PLC* 1,230
---------------------------------------------------
6,600 Phoenix Pulp & Paper PLC* 4,762
---------------------------------------------------
25,200 TPI Polene PLC, Ltd. 8,302
---------------------------------------------------
9,100 Univest Land Public Co., Ltd.* 428
--------------------------------------------------- -----------
Total 30,844
--------------------------------------------------- -----------
Total Common Stocks 136,014,782
--------------------------------------------------- -----------
Preferred Stocks--(0.4%)
- ----------------------------------------------------------------
Australia--(0.1%)
---------------------------------------------------
35,278 News Corp., Ltd. 136,679
--------------------------------------------------- ------------
Germany--(0.2%)
---------------------------------------------------
5,400 RWE AG 193,743
---------------------------------------------------
1,042 SAP AG 253,584
--------------------------------------------------- ------------
Total 447,327
--------------------------------------------------- ------------
</TABLE>
-- Continued --
47
<PAGE>
Fountain Square International Equity Fund
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- ---------- --------------------------------------------------- ----------
<S> <C> <C>
Preferred Stocks--Continued
- ----------------------------------------------------------------
Italy--(0.1%)
---------------------------------------------------
57,750 Fiat SpA $ 94,437
--------------------------------------------------- ----------
Total Preferred Stocks 678,443
--------------------------------------------------- ----------
Warrants and Rights--(0.0%)
- ----------------------------------------------------------------
France--(0.0%)
---------------------------------------------------
426 Casino Guichard Perrachon* 6,398
---------------------------------------------------
3,255 Cie Generale Des Eaux* 1,945
---------------------------------------------------
8 Sodexho SA* 1,798
--------------------------------------------------- -----------
Total 10,141
--------------------------------------------------- -----------
Hong Kong--(0.0%)
---------------------------------------------------
800 Applied International* 18
---------------------------------------------------
5,625 Hong Kong & Shanghai Hotels* 943
---------------------------------------------------
1,650 Hysan Development Co.* 725
---------------------------------------------------
7,500 Oriental Press Group* 334
---------------------------------------------------
1,220 Peregrine Investment Holdings* 552
---------------------------------------------------
8,000 Stelux Holdings International, Ltd.* 331
--------------------------------------------------- -----------
Total 2,903
--------------------------------------------------- -----------
Italy--(0.0%)
---------------------------------------------------
1,600 Mediobanca/Rinascenter* 292
---------------------------------------------------
2,400 Mediobanca/Rinascenter* 1,741
---------------------------------------------------
1,500 R.A.S. SpA* 4,103
---------------------------------------------------
800 R.A.S. SpA* 1,279
--------------------------------------------------- -----------
Total 7,415
--------------------------------------------------- -----------
Singapore--(0.0%)
---------------------------------------------------
2,000 Asia Food & Property* 741
---------------------------------------------------
6,250 Keppel Corp., Ltd. 5,778
--------------------------------------------------- -----------
Total 6,519
--------------------------------------------------- -----------
Thailand--(0.0%)
---------------------------------------------------
1,290 National Finance & Security* 577
--------------------------------------------------- -----------
Total Warrants and Rights 27,555
--------------------------------------------------- -----------
Convertible Securities--(0.0%)
- ----------------------------------------------------------------
France--(0.0%)
---------------------------------------------------
325 Sanofi, Convertible Bond, 4.00%, 1/1/00 37,034
---------------------------------------------------
277 Simco, Convertible Bond, 3.25%, 1/1/06 23,131
--------------------------------------------------- -----------
Total Convertible Securities 60,165
--------------------------------------------------- -----------
</TABLE>
-- Continued --
48
<PAGE>
Fountain Square International Equity Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- ---------- --------------------------------------------------- ------------
<S> <C> <C>
Corporate Bonds--(0.0%)
- ----------------------------------------------------------------
France--(0.0%)
---------------------------------------------------
426 Casino Guichard, 4.50%, 7/12/01 $200
---------------------------------------------------
40,000 Sodexho S.A., 6.00%, 6/7/04 6,634
--------------------------------------------------- -----------
Total 6,834
--------------------------------------------------- -----------
Italy--(0.0%)
---------------------------------------------------
2,125,000 Mediobanca, 6.00%, 12/31/02 1,257
--------------------------------------------------- -----------
Total Corporate Bonds 8,091
--------------------------------------------------- -----------
Repurchase Agreements--(6.7%)
- ----------------------------------------------------------------
10,172,000 UBS Securities, 5.76%, dated 7/31/97, due 8/1/97
(at amortized cost), collateralized by U.S.
Treasury Bills due 10/23/97 with a value of
$10,173,628. 10,172,000
--------------------------------------------------- -----------
Total Repurchase Agreements 10,172,000
--------------------------------------------------- -----------
Total Investments (Cost $128,192,720)**--96.7% 146,961,036
--------------------------------------------------- -----------
Other assets in excess of liabilities--3.3% 4,977,103
--------------------------------------------------- -----------
Total Net Assets--100.0% $151,938,139
=================================================== ===========
</TABLE>
Percentages indicated are based on net assets of $151,938,139.
*Non-income producing security
**The cost of investments for federal tax purposes amounts to $128,192,720. The
net unrealized appreciation of investments on federal tax basis amounts to
$18,768,316, which is composed of $25,527,420 appreciation and $6,759,104
depreciation at July 31, 1997.
At July 31, 1997, International Equity Fund's investment concentration, by
industry, was as follows:
<TABLE>
<S> <C>
Automotive.........................4.7%
Business & Financial Services.....21.0%
Chemicals..........................4.0%
Consumer Goods & Services.........21.1%
Electronics........................4.0%
Energy.............................6.7%
Health Care........................5.6%
Machinery & Equipment..............3.0%
Metals & Materials.................3.5%
Telecommunications.................8.2%
Transportation.....................2.6%
Utilities..........................3.4%
Other.............................12.2%
</TABLE>
See notes to financial statements.
49
<PAGE>
Fountain Square Bond Fund For Income
Schedule of Investments
July 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- -------------- ------------------------------------------------------------------ -----------
<C> <S> <C>
Asset Backed Securities--(3.2%)
- -----------------------------------------------------------------------------------
Financial--(3.2%)
------------------------------------------------------------------
5,000,000 GE Capital Managment, 6.94%, 3/25/27 $ 5,075,200
------------------------------------------------------------------ -----------
Total Asset Backed Securities 5,075,200
------------------------------------------------------------------ -----------
Corporate Bonds--(48.3%)
- -----------------------------------------------------------------------------------
Banking--(0.7%)
------------------------------------------------------------------
1,000,000 Deutsche Bank Financial, Medium Term Note, 9.28%, 5/31/99 $ 1,055,590
------------------------------------------------------------------ -----------
Chemicals--(3.3%)
------------------------------------------------------------------
5,000,000 Engelhard Corp., 7.00%, 8/1/01 5,124,695
------------------------------------------------------------------ -----------
Financial--(34.6%)
------------------------------------------------------------------
5,000,000 American General Finance Corp., 7.25%, 4/15/00 5,141,389
------------------------------------------------------------------
5,000,000 Bear Stearns, Inc., 7.25%, 10/15/06 5,162,909
------------------------------------------------------------------
5,000,000 Chrysler Corp., Medium Term Note, 6.37%, 6/21/99 5,035,345
------------------------------------------------------------------
5,000,000 CIT Group Holdings, 6.25%, 3/28/01 5,023,434
------------------------------------------------------------------
5,000,000 DLJ, Medium Term Note, 6.38%, 5/26/00 5,020,000
------------------------------------------------------------------
3,000,000 First USA Bank, 5.85%, 2/22/01 2,965,173
------------------------------------------------------------------
3,000,000 Merrill Lynch Notes, 6.55%, 8/01/04 3,015,000
------------------------------------------------------------------
5,000,000 Metropolitan Life, 6.30%, 11/1/03 4,913,664
------------------------------------------------------------------
5,000,000 Morgan Stanley, 6.38%, 8/01/02 5,007,000
------------------------------------------------------------------
5,000,000 Paine Webber Group, 6.68%, 2/10/04 4,996,635
------------------------------------------------------------------
2,500,000 RBSG Capital Corp., 10.13%, 3/1/04 2,944,615
------------------------------------------------------------------
5,000,000 Southern National Corp., 7.05%, 5/23/03 5,132,500
------------------------------------------------------------------ -----------
Total 54,357,664
------------------------------------------------------------------ -----------
Manufacturing--(5.7%)
------------------------------------------------------------------
4,000,000 Archer-Daniels-Midland Co., 6.25%, 5/15/03 3,989,524
------------------------------------------------------------------
5,000,000 Tyco International, Ltd., 6.38%, 1/15/04 4,984,940
------------------------------------------------------------------ ------------
Total 8,974,464
------------------------------------------------------------------ ------------
Telecommunications--(3.3%)
------------------------------------------------------------------
5,000,000 British Telecommunications, Inc., 9.38%, 2/15/99 5,258,355
------------------------------------------------------------------ ------------
Utilities--(0.7%)
------------------------------------------------------------------
1,000,000 Southern New England, 8.00%, 11/20/01 1,065,579
------------------------------------------------------------------ ------------
Total Corporate Bonds 75,836,347
------------------------------------------------------------------ ------------
</TABLE>
-- Continued --
50
<PAGE>
Fountain Square Bond Fund For Income
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- -------------- ------------------------------------------------------------------ -----------
<S> <C> <C>
U.S. Government Securities--(34.8%)
- -----------------------------------------------------------------------------------
U.S. Government Agencies--(17.5%)
------------------------------------------------------------------
5,000,000 Federal Home Loan Bank, 7.87%, 12/15/97 $5,039,335
------------------------------------------------------------------
4,750,000 Federal Home Loan Bank, 6.45%, 9/13/01 4,735,156
------------------------------------------------------------------
3,250,000 Federal Home Loan Bank, 7.31%, 6/16/04 3,457,216
------------------------------------------------------------------
152 Federal Home Loan Mortgage Corp., 7.50%, 2/1/02 155
------------------------------------------------------------------
5,000,000 Federal National Mortgage Assoc., 7.33%, 6/19/07 5,151,650
------------------------------------------------------------------
4,000,000 Federal National Mortgage Assoc., 6.64%, 7/2/07 4,111,800
------------------------------------------------------------------
5,000,000 Federal National Mortgage Assoc., 6.50%, 7/16/07 5,000,000
------------------------------------------------------------------ -----------
Total 27,495,312
------------------------------------------------------------------ -----------
U.S. Treasury Notes--(17.3%)
------------------------------------------------------------------
1,000,000 U.S. Treasury Note, 8.63%, 8/15/97 1,001,250
------------------------------------------------------------------
2,500,000 U.S. Treasury Note, 9.00%, 5/15/98 2,564,845
------------------------------------------------------------------
2,580,000 U.S. Treasury Note, 9.25%, 8/15/98 2,671,913
------------------------------------------------------------------
1,750,000 U.S. Treasury Note, 7.13%, 10/15/98 1,778,985
------------------------------------------------------------------
2,000,000 U.S. Treasury Note, 8.00%, 8/15/99 2,085,626
------------------------------------------------------------------
4,000,000 U.S. Treasury Note, 7.75%, 2/15/01 4,241,252
------------------------------------------------------------------
7,250,000 U.S. Treasury Note, 7.50%, 11/15/01 7,682,738
------------------------------------------------------------------
750,000 U.S. Treasury Note, 6.13%, 12/31/01 756,328
------------------------------------------------------------------
4,200,000 U.S. Treasury Note, 6.88%, 5/15/06 4,429,689
------------------------------------------------------------------ -----------
Total 27,212,626
------------------------------------------------------------------ -----------
Total U.S. Government Securities 54,707,938
------------------------------------------------------------------ -----------
Repurchase Agreement--(14.2%)
- -----------------------------------------------------------------------------------
22,323,000 UBS Securities, 5.76%, dated 7/31/97, due 8/1/97 (at amortized
cost), collateralized by U.S. Treasury Bills due 10/23/97
with a value of $22,774,092. 22,323,000
------------------------------------------------------------------ -----------
Total Repurchase Agreement 22,323,000
------------------------------------------------------------------ -----------
Total Investments (Cost $154,874,300)*--100.5% 157,942,485
------------------------------------------------------------------ -----------
Liabilities in excess of other assets--(0.5)% (828,084)
------------------------------------------------------------------ -----------
Total Net Assets--100.0% $157,114,401
------------------------------------------------------------------ ===========
</TABLE>
Percentages indicated are based on net assets of $157,114,401.
*The cost of investments for federal tax purposes amounts to $154,874,300. The
net unrealized appreciation of investments on federal tax basis amounts to
$3,068,185, which is composed of $3,144,242 appreciation and $76,057
depreciation at July 31, 1997.
See notes to financial statements.
51
<PAGE>
Fountain Square Quality Bond Fund
Schedule of Investments
July 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- --------- ------------------------------------------------------ -----------
Asset Backed Securities--(10.4%)
- -----------------------------------------------------------------
<C> <S> <C>
Financial--(6.4%)
------------------------------------------------------
3,750,000 Cityscape, 7.15%, 8/25/11, Series 1996-3 $3,838,912
------------------------------------------------------
2,000,000 GE Capital Management, 6.94%, 3/25/27 2,030,080
------------------------------------------------------ -----------
Total 5,868,992
------------------------------------------------------ -----------
Private Label CMOs--(4.0%)
------------------------------------------------------
3,500,000 Greentree Financial, 7.70%, 9/15/27, Series 1996-D
A4, REMIC 3,673,842
------------------------------------------------------ -----------
Total Asset Backed Securities 9,542,834
------------------------------------------------------ -----------
Corporate Bonds--(28.0%)
- -----------------------------------------------------------------
Financial--(23.0%)
------------------------------------------------------
4,000,000 Chrysler Corp., 6.28%, 6/21/99 4,021,964
------------------------------------------------------
1,000,000 Ford Motor Credit Corp., Floating Rate Note, 11/9/98,
(6.33%, 8/8/97)(a) 999,796
------------------------------------------------------
2,500,000 GMAC, 6.75%, 2/7/02 2,537,097
------------------------------------------------------
4,000,000 McDonnel Douglas, 6.56%, 12/24/01 4,043,003
------------------------------------------------------
4,000,000 Merrill Lynch Notes, 6.55%, 8/1/04 4,020,000
------------------------------------------------------
2,500,000 Nations Bank, 7.00%, 9/15/01 2,568,367
------------------------------------------------------
3,000,000 Sears Roebuck, 6.54%, 2/20/03 3,017,481
------------------------------------------------------ -----------
Total 21,207,708
------------------------------------------------------ -----------
Manufacturing--(1.6%)
------------------------------------------------------
1,500,000 IBP, Inc., Debenture, 6.13%, 2/1/06 1,460,193
------------------------------------------------------ -----------
Transportation--(3.4%)
------------------------------------------------------
1,600,000 American President, 7.13%, 11/15/03 1,601,579
------------------------------------------------------
1,500,000 Georgia Power, 6.88%, 9/1/02 1,508,139
------------------------------------------------------ -----------
Total 3,109,718
------------------------------------------------------ -----------
Total Corporate Bonds 25,777,619
------------------------------------------------------ -----------
Mortgage Backed Securities--(10.1%)
- -----------------------------------------------------------------
U.S. Government Agencies--(10.1%)
------------------------------------------------------
7,429 Federal Home Loan Mortgage Corp., 9.50%, 10/1/02,
Pool #38-0009, CMO 7,704
------------------------------------------------------
15,866 Federal Home Loan Mortgage Corp., 8.00%, 8/1/08,
Pool #27-2525, CMO 16,420
------------------------------------------------------
8,991,210 Government National Mortgage Assoc., 8.00%, 6/20/27,
G2 Pool #2445 9,249,887
------------------------------------------------------ -----------
Total Mortgage Backed Securities 9,274,011
------------------------------------------------------ -----------
</TABLE>
-Continued-
52
<PAGE>
Fountain Square Quality Bond Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- --------- ---------------------------------------------------- -----------
<C> <S> <C>
U.S. Government Securities--(37.4%)
- -----------------------------------------------------------------
U.S. Government Agencies--(34.4%)
----------------------------------------------------
4,000,000 Federal Home Loan Bank, 6.19%, 1/29/01 $3,983,750
----------------------------------------------------
4,000,000 Federal Home Loan Bank Coupon Bond, 6.03%, 9/4/01 3,966,250
----------------------------------------------------
5,000,000 Federal National Mortgage Association, 6.64%,7/2/07 5,139,750
----------------------------------------------------
17,000,000 U.S. Treasury Bond, 6.25%, 8/15/23 16,755,625
----------------------------------------------------
4,500,000 U.S. Treasury Note, 7.88%, 4/15/98 4,570,313
---------------------------------------------------- -----------
Total U.S. Government Securities 34,415,688
---------------------------------------------------- -----------
Repurchase Agreement--(17.1%)
- -----------------------------------------------------------------
15,771,000 UBS Securities, 5.76%, dated 7/31/97, due 8/1/97 (at
amortized cost), collateralized by U.S. Treasury
Bills due 10/23/97 with a value of $16,090,069. 15,771,000
---------------------------------------------------- -----------
Total Repurchase Agreement 15,771,000
---------------------------------------------------- -----------
Total Investments (Cost $93,133,800)*--103.0% 94,781,152
---------------------------------------------------- -----------
Liabilities in excess of other assets--(3.0)% (2,788,728)
---------------------------------------------------- -----------
Total Net assets--100.0% $91,992,424
==================================================== ===========
</TABLE>
Percentages indicated are based on net assets of $91,992,424.
*The costs of investments for federal tax purposes amounts to $93,133,800. The
net unrealized appreciation of investments on federal tax basis amounts to
$1,647,352, which is composed of $1,682,837 appreciation and $35,485
depreciation at July 31, 1997.
(a) Current rate and next reset date shown.
The following abbreviations are used in this portfolio:
CMO - Collateralized Mortgage Obligation
REMIC - Real Estate Mortgage Investment Conduit
See notes to financial statements.
53
<PAGE>
Fountain Square U.S. Government Securities Fund
Schedule of Investments
July 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- ----------- ------------------------------------------------------ ----------
<S> <C> <C>
U.S. Government Securities--(96.7%)
- --------------------------------------------------------------------------------
Mortgage Backed Securities--(3.4%)
------------------------------------------------------
1,481,657 Federal National Mortgage Association,
6.00%, 6/1/01, Pool #303016 $1,459,433
------------------------------------------------------ -----------
U.S. Government Agencies--(36.5%)
------------------------------------------------------
2,000,000 Federal Home Loan Bank Coupon Bond, 6.00%, 9/1/00 1,993,125
------------------------------------------------------
1,000,000 Federal Home Loan Mortgage Corp., 6.30%, 4/29/99 1,005,317
------------------------------------------------------
1,000,000 Federal Home Loan Mortgage Corp., 6.50%, 6/8/00,
(Callable 6/8/98 @ 100) 1,004,142
------------------------------------------------------
2,613,984 Federal Home Loan Mortgage Corp., 5.00%, 4/1/01 2,529,029
------------------------------------------------------
3,000,000 Federal Home Loan Mortgage Corp., 6.40%, 1/22/02 3,003,269
------------------------------------------------------
500,000 Federal Home Loan Mortgage Corp., 6.70%, 10/9/02,
(Callable 10/9/98 @ 100) 503,203
------------------------------------------------------
1,445,057 Federal Loan Home Mortgage Corp., 7.00%, 9/1/03,
Gold Pool #N96911 1,464,869
------------------------------------------------------
1,000,000 Federal National Mortgage Association,
Variable rate, 4/14/00, (5.95%, 10/14/97) (a) 1,001,658
------------------------------------------------------
3,000,000 Federal National Mortgage Association, 6.47%, 10/10/00 2,999,063
------------------------------------------------------ -----------
Total 15,503,675
------------------------------------------------------ -----------
U.S. Treasury Notes--(56.8%)
------------------------------------------------------
2,500,000 6.25%, 8/31/00 2,529,688
------------------------------------------------------
5,000,000 6.38%, 9/30/01 5,087,499
------------------------------------------------------
3,700,000 7.50%, 11/15/01 3,920,845
------------------------------------------------------
2,500,000 6.25%, 1/31/02 2,533,595
------------------------------------------------------
5,000,000 6.25%, 6/30/02 5,070,315
------------------------------------------------------
5,000,000 5.88%, 2/15/04 4,979,200
------------------------------------------------------ -----------
Total 24,121,142
------------------------------------------------------ -----------
Total U.S. Government Securities 41,084,250
------------------------------------------------------ -----------
</TABLE>
-- Continued --
54
<PAGE>
Fountain Square U.S. Government Securities Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- ----------- ------------------------------------------------------ ----------
<S> <C> <C>
Repurchase Agreements--(2.0%)
- --------------------------------------------------------------------
843,000 UBS Securities, 5.76%, dated 7/31/97, due 8/1/97 (at
amortized cost), collateralized by U.S. Treasury Bills
due 10/23/97 with a value of $864,526. 843,000
------------------------------------------------------ -----------
Total Repurchase Agreements 843,000
------------------------------------------------------ -----------
Total Investments (Cost $41,466,034)*--98.7% 41,927,250
------------------------------------------------------ ----------
Other assets in excess of liabilities--1.3% 562,377
------------------------------------------------------ -----------
Total Net Assets--100.0% $42,489,627
====================================================== ===========
</TABLE>
Percentages indicated are based on net assets of $42,489,627.
*The cost of investments for federal tax purposes amounts to $41,466,034. The
net unrealized appreciation of investments on federal tax basis amounts to
$461,216 which is composed of $472,722 appreciation and $11,506 depreciation at
July 31, 1997.
(a) Current rate and next reset date shown.
See notes to financial statements.
55
<PAGE>
Fountain Square Municipal Bond Fund
Schedule of Investments
July 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- ----------- ------------------------------------------------------ -----------
<S> <C> <C>
Municipal Bonds--(93.9%)
- -------------------------------------------------------------------
Alabama--(3.1%)
------------------------------------------------------
2,000,000 Dothan, GO, 5.25%, 9/1/10, (Callable 9/1/05 @ 102) $2,059,900
------------------------------------------------------
1,000,000 Shelby County Board Of Education, Revenue, 5.50%,
2/1/08, (Callable 2/1/05 @ 102) 1,062,310
------------------------------------------------------ -----------
Total 3,122,210
------------------------------------------------------ -----------
Arizona--(3.1%)
------------------------------------------------------
1,000,000 Phoenix, GO, 5.80%, 7/1/07 (Callable 7/1/05 @ 102) 1,104,740
------------------------------------------------------
2,000,000 Salt River Project Agriculture, Revenue, 4.80%,
1/1/07, Series C 2,044,020
------------------------------------------------------ -----------
Total 3,148,760
------------------------------------------------------ -----------
Connecticut--(2.1%)
------------------------------------------------------
2,000,000 State, GO, 5.70%, 3/15/10, (Callable 3/15/03 @ 102) 2,114,700
------------------------------------------------------ -----------
Delaware--(2.1%)
------------------------------------------------------
1,000,000 State, GO, 5.80%, 8/15/99 1,036,280
------------------------------------------------------
1,000,000 Transportation Authority, Revenue, 5.70%, 7/1/06,
(Callable 7/1/02 @ 102) 1,068,700
------------------------------------------------------ -----------
Total 2,104,980
------------------------------------------------------ -----------
Florida--(6.8%)
------------------------------------------------------
1,625,000 Broward County Water & Sewer, Revenue, 7.00%, 10/1/98
(Prerefunded 10/1/97 @ 102) 1,665,983
------------------------------------------------------
1,000,000 Jacksonville Excise Taxes, Revenue, 5.25%, 10/1/08,
(Callable 10/1/03 @ 101) 1,039,310
------------------------------------------------------
1,000,000 State, GO, 6.20%, 7/1/99, (Callable 7/1/97 @ 101) 1,011,780
------------------------------------------------------
1,000,000 State Board Of Education Capital Outlay, GO, 6.25%,
6/1/99 1,040,590
------------------------------------------------------
1,000,000 State Turnpike Authority, Revenue, 7.45%, 7/1/00,
(Callable 7/1/99 @ 102) 1,080,950
------------------------------------------------------
1,000,000 Volusia County School District, GO, 5.88%, 8/1/00 1,051,940
------------------------------------------------------ -----------
Total 6,890,553
------------------------------------------------------ -----------
Georgia--(2.0%)
------------------------------------------------------
2,000,000 Atlanta Water & Sewer, Revenue, 5.00%, 1/1/09
(Callable 1/1/07 @ 101) 2,036,520
------------------------------------------------------ -----------
Hawaii--(2.1%)
------------------------------------------------------
1,000,000 Honolulu City & County, GO, 5.80%, 3/1/01 1,055,060
------------------------------------------------------
1,000,000 State, GO, 6.90%, 12/1/00 (Prerefunded 12/1/97 @ 102) 1,030,190
------------------------------------------------------ -----------
Total 2,085,250
------------------------------------------------------ -----------
</TABLE>
-- Continued --
56
<PAGE>
Fountain Square Municipal Bond Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- ----------- ------------------------------------------------------ ----------
<S> <C> <C>
Municipal Bonds--Continued
- -------------------------------------------------------------------
Illinois--(13.0%)
1,000,000 Chicago, GO, 5.40%, 1/1/09, (Callable 1/1/04 @ 102) $1,041,800
------------------------------------------------------
1,000,000 Chicago Park, GO, 6.10%, 11/15/05 1,108,140
------------------------------------------------------
1,000,000 Chicago Park, GO, 5.20%, 1/1/09, (Callable 1/1/06
@ 102) 1,032,280
------------------------------------------------------
2,000,000 Chicago, Metro Water Reclamation
District, GO, 5.50%, 12/1/08 2,150,140
------------------------------------------------------
2,000,000 Chicago, O'Hara International Airport, Revenue, 5.63%,
1/1/15, (Callable 1/1/06 @ 102) 2,067,600
------------------------------------------------------
2,000,000 Du Page County, Revenue, 5.60%, 1/1/21 2,113,100
------------------------------------------------------
2,500,000 Lake County, Forest Preservation District, GO, 5.50%,
2/1/09 2,689,949
------------------------------------------------------
1,000,000 State, GO, 5.50%, 8/1/03 1,062,870
------------------------------------------------------ -----------
Total 13,265,879
------------------------------------------------------ -----------
Indiana--(4.5%)
------------------------------------------------------
1,450,000 Bank Board, Revenue, 5.80%, 2/1/08,
(Callable 2/1/05 @ 101) 1,556,271
------------------------------------------------------
1,000,000 Municipal Power Agency Supply,
Revenue, 5.38%, 1/1/03 1,050,430
------------------------------------------------------
1,875,000 Munster School Building Corp., Revenue, 5.70%,
7/15/10, (Callable 1/15/05 @ 101) 1,984,125
------------------------------------------------------ -----------
Total 4,590,826
------------------------------------------------------ -----------
Kansas--(1.3%)
------------------------------------------------------
1,250,000 Douglas County, Union School District, GO, 6.00%,
9/1/09 (Prerefunded 9/1/03 @ 100) 1,341,888
------------------------------------------------------ -----------
Kentucky--(1.0%)
------------------------------------------------------
1,000,000 State Property & Buildings Commission, Revenue, 5.30%,
11/1/07, (Callable 11/1/05 @ 102) 1,058,300
------------------------------------------------------ -----------
Maryland--(1.0%)
------------------------------------------------------
1,000,000 Washington Subern, San District Water System, GO,
5.00%, 6/1/02 1,036,380
------------------------------------------------------ -----------
Michigan--(3.0%)
------------------------------------------------------
1,000,000 Chelsea School District, GO, 5.70%, 5/1/10, (Callable
5/1/05 @ 101) 1,060,530
------------------------------------------------------
2,000,000 Johannesburg-Lewiston Schools, GO, 5.00%, 5/1/16,
(Callable 5/1/05 @ 101), MBIA 1,949,960
------------------------------------------------------ -----------
Total 3,010,490
------------------------------------------------------ -----------
Minnesota--(4.1%)
------------------------------------------------------
2,000,000 Hennepin County, Revenue, 5.75%, 10/1/10, (Callable
10/1/02 @ 102) 2,121,380
------------------------------------------------------
2,000,000 Public Facilities Authority, Water Pollution Control,
Revenue, 4.88%, 3/1/12, (Callable 3/1/06 @ 100) 1,998,880
------------------------------------------------------ -----------
Total 4,120,260
------------------------------------------------------ -----------
</TABLE>
-- Continued --
57
<PAGE>
Fountain Square Municipal Bond Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- ----------- ------------------------------------------------------ -----------
<S> <C> <C>
Municipal Bonds--Continued
- -------------------------------------------------------------------
Nebraska--(0.8%)
------------------------------------------------------
700,000 Lincoln Water Revenue, 6.85%, 11/1/03
(Prerefunded 11/1/00 @ 101) $762,755
------------------------------------------------------ -----------
Nevada--(4.4%)
------------------------------------------------------
1,285,000 Carson City, School District, GO, 5.00%, 4/1/06,
(Callable 4/1/04 @ 101) 1,322,239
------------------------------------------------------
2,000,000 Clark County, School District, GO, 5.80%, 6/15/11,
(Callable 6/15/05 @ 101) 2,124,000
------------------------------------------------------
1,000,000 Washoe County, School District, GO, 7.70%, 8/1/04,
MBIA 1,020,000
------------------------------------------------------ -----------
Total 4,466,239
------------------------------------------------------ -----------
Ohio--(6.0%)
------------------------------------------------------
1,000,000 Columbus, GO, 6.88%, 9/15/05,
(Callable 9/15/01 @ 100) 1,109,740
------------------------------------------------------
1,000,000 Columbus Sewer Improvement No 26-E-U, GO, 6.50%,
9/15/01 1,092,500
------------------------------------------------------
2,000,000 State Natural Resources, Series C, GO, 4.75%, 4/1/09,
(Callable 10/1/07 @ 100) 2,004,680
------------------------------------------------------
1,000,000 State Public Facilities Commissions, Revenue, 6.50%,
6/1/01, (Callable 6/1/99 @ 102) 1,067,640
------------------------------------------------------
750,000 University Of Cincinnati, Series R9, Revenue, 5.60%,
6/1/07, (Callable 6/1/03 @ 100) 789,743
------------------------------------------------------ -----------
Total 6,064,303
------------------------------------------------------ -----------
Oklahoma--(1.0%)
------------------------------------------------------
1,000,000 Woodward, Municipal Authority Sales, Revenue, 5.85%,
11/1/12, (Callable 11/1/03 @ 101.5) 1,060,720
------------------------------------------------------ -----------
Pennsylvania--(5.8%)
------------------------------------------------------
1,750,000 Intergovernmental, Coop Authority, Revenue, 5.50%,
6/15/16, (Callable 6/15/06 @ 100), FGIC 1,784,335
------------------------------------------------------
2,000,000 State, GO, 5.13%, 3/15/04, AMBAC 2,080,080
------------------------------------------------------
2,000,000 State Higher Education Facilities Authority Health
Services, Revenue, 5.10%, 1/1/05 2,073,600
------------------------------------------------------ -----------
Total 5,938,015
------------------------------------------------------ -----------
Texas--(7.0%)
------------------------------------------------------
2,000,000 Houston Hotel Occupancy, Revenue, 5.50%, 7/1/15,
(Callable 7/1/05 @ 101) 2,049,460
------------------------------------------------------
1,000,000 Mesquite, GO, 5.45%, 2/15/10, (Callable 2/15/05 @ 100) 1,036,590
------------------------------------------------------
1,000,000 State, GO, 7.60%, 12/1/97 1,012,710
------------------------------------------------------
1,000,000 State, GO, 7.00%, 10/1/03, (Prerefunded 10/1/99 @ 100) 1,061,810
------------------------------------------------------
</TABLE>
-- Continued --
58
<PAGE>
Fountain Square Municipal Bond Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- ----------- ------------------------------------------------------ -----------
<S> <C> <C>
Municipal Bonds--Continued
- -------------------------------------------------------------------
Texas--Continued
------------------------------------------------------
2,000,000 State, Public Building Authority, Revenue, 5.00%,
8/1/11, (Callable 8/1/07 @ 100) $2,006,240
------------------------------------------------------ -----------
Total 7,166,810
------------------------------------------------------ -----------
Utah--(2.7%)
------------------------------------------------------
1,000,000 Iron County, School District, GO, 5.90%, 1/15/05 1,092,450
------------------------------------------------------
1,530,000 St. George, Water Revenue, 5.60%, 6/1/10,
(Callable 6/1/05 @ 101) 1,614,043
------------------------------------------------------ -----------
Total 2,706,493
------------------------------------------------------ -----------
Virginia--(2.1%)
------------------------------------------------------
1,000,000 State, Public Building Authority, Revenue, 5.70%,
8/1/00 1,045,600
------------------------------------------------------
1,000,000 Virginia Beach, GO, 5.70%, 11/1/07, (Callable 11/1/04
@ 102) 1,088,330
------------------------------------------------------ -----------
Total 2,133,930
------------------------------------------------------ -----------
Washington--(9.3%)
------------------------------------------------------
1,000,000 King County, School District No. 411, GO, 4.70%,
12/1/05, (Callable 12/1/03 @ 101) 1,011,070
------------------------------------------------------
2,000,000 King County, School District No. 411, GO, 6.50%,
12/1/09, (Prerefunded 12/1/02 @ 100) 2,216,599
------------------------------------------------------
2,000,000 Seattle Water System, Revenue, 5.10%, 6/1/04,
(Callable 6/1/03 @ 102) 2,074,560
------------------------------------------------------
1,000,000 Spokane, Regional Solid Waste, Revenue, 5.50%,
12/01/10, (Callable 12/1/05 @ 102) 1,050,610
------------------------------------------------------
1,000,000 State, Public Power Supply System, Revenue, 7.50%,
7/1/03, (Callable 1/1/01 @ 102) 1,111,490
------------------------------------------------------
2,000,000 State, Public Power Supply System, Revenue, 5.60%,
7/1/07 2,118,500
------------------------------------------------------ -----------
Total 9,582,829
------------------------------------------------------ -----------
Wisconsin--(5.6%)
------------------------------------------------------
1,000,000 Milwaukee, GO, 5.30%, 6/15/07, (Prerefunded 6/15/02
@ 100) 1,048,590
------------------------------------------------------
1,000,000 Milwaukee County, GO, 6.00%, 12/1/99, (Prerefunded
12/1/98 @ 100) 1,027,200
------------------------------------------------------
1,500,000 State, Refunding, Series 3, GO, 4.88%, 11/1/05 1,545,615
------------------------------------------------------
2,000,000 State, Series E, GO, 6.80%, 5/1/98 2,045,060
------------------------------------------------------ -----------
Total 5,666,465
------------------------------------------------------ -----------
Total Municipal Bonds 95,475,555
------------------------------------------------------ -----------
</TABLE>
-- Continued --
59
<PAGE>
Fountain Square Municipal Bond Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Security Market
Amount Description Value
- ----------- ------------------------------------------------------ -----------
<S> <C> <C>
Cash Equivalents--(9.6%)
- -------------------------------------------------------------------
Stifs/Money Markets--(9.6%)
------------------------------------------------------
5,088,972 Federated Tax Free Trust 5,088,972
------------------------------------------------------
4,637,877 SEI Institutional Tax Free Fund 4,637,877
------------------------------------------------------ -----------
Total Cash Equivalents 9,726,849
------------------------------------------------------ -----------
Total Investments (Cost $101,678,730)*--103.5% 105,202,404
------------------------------------------------------ -----------
Liabilities in excess of other assets--(3.5)% (3,575,069)
------------------------------------------------------ -----------
Total Net Assets--100.0% $101,627,335
====================================================== ===========
</TABLE>
Percentages indicated are based on net assets of $101,627,335.
*The cost of investments for federal tax purposes amounts to $101,678,730. The
net unrealized appreciation of investments on federal tax basis amounts to
$3,523,674, which is composed of $3,523,674 appreciation and $0 depreciation at
July 31, 1997.
The following abbreviations are used in this portfolio:
AMBAC - American Municipal Bond Assurance Corporation
GO - General Obligation
FGIC - Financial Guaranty Insurance Corporation
MBIA - Municipal Bond Investors Assurance Corporation
See notes to financial statements.
60
<PAGE>
Fountain Square Ohio Tax Free Bond Fund
Schedule of Investments
July 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or Moody's/S&P
Principal Security Ratings Market
Amount Description (Unaudited) Value
- --------- ----------------------------------- ------------- --------------
Municipal Bonds--(91.5%)
- -----------------------------------------------
<C> <S> <C> <C>
Ohio--(91.5%)
-----------------------------------
1,100,000 Akron, Sewer System, Revenue,
5.05%, 12/1/03 Aaa/AAA $1,148,356
-----------------------------------
500,000 Akron, Various Purpose Improvement,
GO, 5.60%, 12/1/06 (Callable
12/1/04 @ 102) Aaa/AAA 542,850
-----------------------------------
1,000,000 Akron, Waterworks System Management,
Revenue, 5.90%, 3/1/09 (Callable
3/1/04 @ 102) Aaa/AAA 1,080,770
-----------------------------------
1,510,000 Bowling Green State University,
Revenue, 5.55%, 6/1/10 (Callable
6/1/06 @ 101) Aaa/AAA 1,596,387
-----------------------------------
1,005,000 Centerville, GO, 6.25%, 12/1/06
(Callable 12/1/04 @ 102) Aaa/AAA 1,135,670
-----------------------------------
2,500,000 Cincinnati, GO, 4.75%, 12/1/99 Aa2/AA+ 2,541,100
-----------------------------------
600,000 Cincinnati, GO, 7.00%, 10/1/00 Aa2/AA+ 652,812
-----------------------------------
2,000,000 Cincinnati, GO, 4.75%, 12/1/02 Aa2/AA+ 2,056,780
-----------------------------------
1,150,000 Cincinnati CSD, Revenue, 5.75%,
6/15/98 NR/A- 1,167,998
-----------------------------------
1,000,000 Cleveland, GO, 5.00%, 9/1/99 Aaa/AAA 1,020,170
-----------------------------------
1,000,000 Cleveland, GO, 6.70%, 7/1/00 Aaa/AAA 1,066,870
-----------------------------------
4,000,000 Cleveland CSD, Revenue, 5.00%,
6/1/01 Aaa/AAA 4,117,680
-----------------------------------
5,000,000 Cleveland CSD, Revenue, 4.80%,
6/1/03 Aaa/AAA 5,117,150
-----------------------------------
3,000,000 Cleveland Water, Revenue, 5.63%,
1/1/13 (Callable 1/1/06 @ 102) Aaa/AAA 3,153,150
-----------------------------------
5,000,000 Cleveland, Public Power, Revenue,
5.25%, 11/15/16 (Callable 11/15/06
@ 102) Aaa/AAA 5,033,500
-----------------------------------
500,000 Cleveland, Waterworks Refunding,
First Mortgage, Series G, Revenue,
5.40%, 1/1/06 Aaa/AAA 531,365
-----------------------------------
1,000,000 Columbus, Library Refunding
Improvement, Revenue, 5.15%,
10/1/99 Aa/NR 1,024,840
-----------------------------------
1,000,000 Columbus, Refunding LT, Series A,
GO, 5.30%, 7/1/09 (Callable 7/1/03
@ 101.5) NR 1,042,200
-----------------------------------
1,000,000 Columbus, Refunding Services,
Series B, GO, 5.45%, 1/1/98 Aaa/AAA 1,007,170
-----------------------------------
1,000,000 Columbus, Service, GO, 6.80%,
9/15/05 (Prerefunded 9/15/01 @ 100) Aaa/AAA 1,097,410
-----------------------------------
1,350,000 Columbus, Service, GO, 5.50%,
5/15/08 (Callable 5/15/04 @ 102) Aaa/AAA 1,443,974
-----------------------------------
</TABLE>
-- Continued --
61
<PAGE>
Fountain Square Ohio Tax Free Bond Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or Moody's/S&P
Principal Security Ratings Market
Amount Description (Unaudited) Value
- --------- ----------------------------------- ------------- --------------
Municipal Bonds--Continued
- -----------------------------------------------
<C> <S> <C> <C>
1,000,000 Columbus, Sewer Improvement, GO,
6.63%, 9/15/03 (Callable 9/15/01
@ 100) NR $1,092,830
-----------------------------------
1,000,000 Columbus, Sewer Improvement No
26-E-U, GO, 6.50%, 9/15/01 Aaa/AAA 1,092,500
-----------------------------------
500,000 Columbus, Water Systems Refunding,
Revenue, 5.75%, 11/1/00 A1/AA- 525,605
-----------------------------------
1,000,000 Columbus, Waterworks Enlargement,
GO, 5.10%, 5/1/01 Aaa/AAA 1,036,480
-----------------------------------
3,435,000 Cuyahoga County, GO, 5.60%, 5/15/13 Aaa/AAA 3,716,636
-----------------------------------
4,000,000 Cuyahoga Hospital, Revenue, 5.63%,
1/15/13 (Callable 1/15/06 @ 102) Aaa/AAA 4,204,880
-----------------------------------
1,500,000 Dayton, Airport Refunding, James M
Cox Dayton International Airport,
Revenue, 5.40%, 12/1/06 (Callable
12/1/05 @ 101) Aaa/AAA 1,602,345
-----------------------------------
1,000,000 Dayton, Water Systems Refunding
Mortgage, Revenue, 6.60%, 12/1/02
(Callable 12/1/97 @ 102) Aaa/AAA 1,031,230
-----------------------------------
1,000,000 Delaware County, Sewer, GO,
5.50%, 12/1/01 A1/AA 1,054,190
-----------------------------------
4,000,000 Dublin School Bonds, 4.65%, 12/1/08
(Callable 12/1/07 @ 101) NR 4,000,000
-----------------------------------
500,000 Erie County, East Erie Sewer, GO,
7.40%, 12/1/14 (Prerefunded 12/1/00
@ 100) NR 550,620
-----------------------------------
1,000,000 Euclid CSD, GO, 5.20%, 12/1/10
(Callable 12/1/05 @ 102) Aaa/AAA 1,028,770
-----------------------------------
1,500,000 Euclid CSD, GO, 5.13%, 12/1/11
(Callable 12/1/05 @ 102) Aaa/AAA 1,525,905
-----------------------------------
500,000 Euclid CSD, Improvement, GO, 6.70%,
12/1/02 (Callable 12/1/01 @ 102) A/NR 559,060
-----------------------------------
1,000,000 Franklin County, GO, 6.80%, 12/1/02
(Prerefunded 12/1/00 @ 102) NR 1,099,400
-----------------------------------
1,555,000 Franklin County, GO, 6.80%, 12/1/11
(Prerefunded 12/1/00 @ 102) NR 1,709,567
-----------------------------------
1,000,000 Franklin County, Hospital Revenue
Refunding, 7.38%, 5/15/05
(Prerefunded 5/15/00 @ 102) Aaa/AAA 1,104,370
-----------------------------------
625,000 Franklin County, Hospital Revenue
Refunding, 6.40%, 11/1/06
(Prerefunded 11/1/01 @ 102) Aa3/NR 689,725
-----------------------------------
</TABLE>
-- Continued --
62
<PAGE>
Fountain Square Ohio Tax Free Bond Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or Moody's/S&P
Principal Security Ratings Market
Amount Description (Unaudited) Value
- ---------- ------------------------------------------------ ----------- ----------
<S> <C> <C> <C>
Municipal Bonds--Continued
- ------------------------------------------------------------
1,030,000 Franklin County, Hospital Revenue Refunding,
6.50%, 5/1/07 (Callable 5/1/02 @ 102) Aa3/NR $1,137,511
------------------------------------------------
1,500,000 Hamilton County, Building Improvement, GO,
5.90%, 12/1/99 Aa/NR 1,564,830
------------------------------------------------
500,000 Hamilton County, Building Improvement, GO,
7.13%, 12/1/02 (Prerefunded 12/1/97 @ 103) Aaa/NR 520,365
------------------------------------------------
1,000,000 Hamilton County, Hospital Facilities, Revenue,
6.10%, 1/1/00 Aa2/NR 1,044,360
------------------------------------------------
1,000,000 Hamilton County, Hospital Facilities, Revenue,
6.50%, 1/1/02 (Callable 1/1/01 @ 100) NR/AAA 1,071,800
------------------------------------------------
500,000 Hamilton County, Hospital Facilities, Revenue,
7.00%, 1/1/09 (Callable 1/1/98 @101) A1/A 510,660
------------------------------------------------
1,000,000 Hamilton County, Sewer System, Revenue, 5.60%,
12/1/08 (Callable 12/1/05 @ 102) Aaa/AAA 1,081,960
------------------------------------------------
1,500,000 Hamilton County, Variable Purpose, GO, 5.00%,
12/1/99 Aa/NR 1,535,040
------------------------------------------------
1,000,000 Hilliard CSD, GO, 5.80%, 12/1/03
(Callable 12/1/01 @102) A1/NR 1,074,880
------------------------------------------------
1,345,000 Hilliard CSD, GO, 5.25%, 12/1/04 Aaa/AAA 1,420,226
------------------------------------------------
500,000 Huron County, GO, 7.00%, 12/1/09
(Prerefunded 12/1/00 @ 100) A/NR 549,535
------------------------------------------------
500,000 Kettering, Refunding, 4.30%, 12/1/98 Aa/NR 502,595
------------------------------------------------
1,000,000 Lakota Local School District, 6.40%, 12/1/01 Aaa/AAA 1,089,570
------------------------------------------------
505,000 Mahoning County, GO, 5.70%, 12/1/07
(Callable 12/1/04 @101) Aaa/AAA 546,960
------------------------------------------------
250,000 Mahoning County, Hospital Facilities, Revenue,
6.80%, 12/1/98 (Callable 12/1/97 @ 101) A1/NR 257,075
------------------------------------------------
1,000,000 Montgomery County, Revenue, 6.50%, 5/15/08
(Callable 5/15/01 @ 102) Aaa/AAA 1,088,700
------------------------------------------------
635,000 Montgomery County, Issue, GO, 7.10%, 9/1/06
(Prerefunded 9/1/00 @ 101.5) NR/AA 698,805
------------------------------------------------
1,750,000 Montgomery County, Refunding, GO, 5.45%, 9/1/10
(Callable 9/1/03 @ 101) Aa/AA 1,810,743
------------------------------------------------
1,750,000 Montgomery County, Solid Waste, Revenue, 5.25%,
11/1/04 Aaa/AAA 1,846,915
------------------------------------------------
</TABLE>
-- Continued --
63
<PAGE>
Fountain Square Ohio Tax Free Bond Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or Moody's/S&P
Principal Security Ratings Market
Amount Description (Unaudited) Value
- ---------- ---------------------------------------------------- ----------- ----------
<S> <C> <C> <C>
Municipal Bonds--Continued
- ----------------------------------------------------------------
3,000,000 Montgomery County, Solid Waste, Revenue, 5.40%,
11/1/08 Aaa/AAA $3,179,070
----------------------------------------------------
1,000,000 Ohio Higher Education, Revenue, 5.15%, 11/1/08
(Callable 11/1/06 @ 101) A1/AA 1,032,160
----------------------------------------------------
2,255,000 Ohio Special Obligation, Revenue, 4.70%, 12/1/00 Aa3/AA- 2,298,747
----------------------------------------------------
1,885,000 Ohio State Air Quality Development Authority,
Revenue, 5.125%, 8/1/05 (Callable 8/1/03 @ 102) A1/AA 1,955,725
----------------------------------------------------
1,250,000 Ohio State Building Authority State Facilities,
Adult Correctional, Series A, Revenue, 5.65%,
10/1/07 (Callable 10/1/04 @ 101) Aaa/AAA 1,344,800
----------------------------------------------------
1,000,000 Ohio State Building Authority State Facilities,
Revenue, 5.40%, 10/1/00 Aa3/AA- 1,039,080
----------------------------------------------------
1,000,000 Ohio State Building Authority State Facilities,
Revenue, 5.40%, 10/1/04 (Callable 10/1/03 @ 102) Aa3/AA- 1,060,460
----------------------------------------------------
1,000,000 Ohio State Building Authority, Revenue, 6.20%,
10/1/07 (Callable 10/1/02 @ 102) Aa3/AA- 1,091,960
----------------------------------------------------
1,000,000 Ohio State Building Correctional, Revenue, 5.75%,
10/1/05 Aa3/AA- 1,089,560
----------------------------------------------------
1,500,000 Ohio State Higher Education, Revenue, 5.00%,
11/1/05 Aaa/AAA 1,557,390
----------------------------------------------------
500,000 Ohio State Higher Educational Commission,
Revenue, 7.30%, 10/1/02 (Callable 10/1/97 @ 102) Aa3/AA- 512,905
----------------------------------------------------
500,000 Ohio State Higher Educational Facilities, Revenue,
6.70%, 5/1/01 (Callable 5/1/00 @ 102) Aaa/AAA 544,715
----------------------------------------------------
1,000,000 Ohio State Higher Educational Facilities,
Series II-B, Revenue, 5.88%, 12/1/98 Aaa/AAA 1,025,450
----------------------------------------------------
500,000 Ohio State Higher Educational Facilities,
Xavier, Revenue, 7.20%, 11/1/99,
(Prerefunded 11/1/98 @ 100) Aaa/AAA 520,305
----------------------------------------------------
5,000,000 Ohio State Highway, GO, 4.80%, 5/15/04 Aa1/AAA 5,139,600
----------------------------------------------------
500,000 Ohio State Public Facilities Commission, Higher
Education Capital Facilities, Series II-A, FSA, CR,
Revenue, 5.50%, 12/1/03 (Callable 12/1/01 @ 102) Aaa/AAA 532,390
----------------------------------------------------
2,000,000 Ohio State Public Facilities Common Higher
Education, Revenue, 5.75%, 11/1/04 Aaa/AAA 2,171,060
----------------------------------------------------
</TABLE>
-- Continued --
64
<PAGE>
Fountain Square Ohio Tax Free Bond Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or Moody's/S&P
Principal Security Ratings Market
Amount Description (Unaudited) Value
- --------- ---------------------------------------- ----------- -----------
<S> <C> <C> <C>
Municipal Bonds--Continued
- ---------------------------------------------------
2,000,000 Ohio State Public Facilities Common
Higher Education, Revenue, 5.75%,
11/1/05 (Callable 11/1/4 @ 100) Aaa/AAA $2,164,600
----------------------------------------
1,000,000 Ohio State Public Facilities Common
Higher Education, Revenue, 5.50%,
12/1/00 Aa3/AA- 1,044,100
----------------------------------------
1,000,000 Ohio State Public Facilities, Revenue,
5.88%, 12/1/06 (Callable 12/1/04 @ 100) Aaa/AAA 1,087,610
----------------------------------------
1,000,000 Ohio State Special Obligations, Revenue,
5.80%, 6/1/03 Aaa/AAA 1,080,880
----------------------------------------
5,000,000 Ohio State Turnpike, Revenue, 5.75%,
2/15/14 Aaa/AAA 5,299,999
----------------------------------------
1,500,000 Ohio State University Refunding,
Revenue, 5.15%, 12/1/00 Aa2/AA- 1,550,415
----------------------------------------
2,000,000 Ohio State University Revenue Refunding
General, Receipts, 5.75%, 12/1/09
(Callable 12/1/02 @ 102) Aa2/AA- 2,131,080
----------------------------------------
5,000,000 Ohio State Water, Revenue, 5.13%,
12/1/08 (Callable 6/1/05 @ 101) Aaa/AAA 5,185,800
----------------------------------------
5,000,000 Ohio State Water Development
Authority, Revenue, 5.30%, 12/1/10
(Callable 6/1/05 @ 101) Aaa/AAA 5,173,950
----------------------------------------
5,000,000 State Of Ohio, GO, 5.10%,
8/1/09 (Callable 8/1/07 @ 101) Aa1/AA+ 5,165,900
----------------------------------------
555,000 Tiffin, GO, 6.60%, 12/1/03
(Callable 12/1/1 @ 102) A/NR 598,817
----------------------------------------
400,000 Toledo, Improvement, GO, 5.05%, 12/1/99 Aaa/AAA 409,784
----------------------------------------
1,015,000 Troy, GO, 5.50%, 12/1/10
(Callable 12/1/5 @ 102) Aa/NR 1,067,212
----------------------------------------
3,000,000 University Of Cincinnati, 5.00%, 6/1/10 Aaa/AAA 3,094,560
----------------------------------------
500,000 University of Cincinnati, 6.30%, 12/1/00 Aaa/AAA 534,555
----------------------------------------
1,000,000 University of Toledo, General Receipt,
Revenue, 5.00%, 6/1/99 Aaa/AAA 1,018,160
----------------------------------------
2,000,000 Wauseon Village School District, GO,
5.45%, 12/1/14 (Callable 6/1/07 @ 101) Aaa/AAA 2,075,160
----------------------------------------
1,000,000 West Geauga, Local School District, GO,
5.55%, 11/1/05 (Callable 11/1/04 @ 101) Aaa/AAA 1,080,210
----------------------------------------
1,000,000 West Geauga, Local School District, GO,
5.65%, 11/1/06 (Callable 11/1/04 @ 102) Aaa/AAA 1,089,560
----------------------------------------
2,000,000 Westlake City School District, GO, 5.05%,
12/1/04 Aa3/NR 2,086,980
----------------------------------------
1,000,000 Westlake, GO, 5.75%, 12/1/07
(Callable 12/1/04 @ 102) Aa1/AA 1,090,390
---------------------------------------- -----------
Total Municipal Bonds 154,679,944
---------------------------------------- -----------
</TABLE>
-- Continued --
65
<PAGE>
Fountain Square Ohio Tax Free Bond Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or Moody's/S&P
Principal Security Ratings Market
Amount Description (Unaudited) Value
- --------- ---------------------------------------- ----------- -----------
<S> <C> <C> <C>
Regulated Investment Companies--(6.8%)
- ----------------------------------------------------
STIFS/Money Markets--(6.8%)
-----------------------------------------
8,364,854 Countrywide Ohio Tax-Free Money Fund $8,364,854
-----------------------------------------
3,150,112 Vangard Ohio Tax Free Money Mkt 3,150,112
----------------------------------------- -----------
Total Regulated Investment Companies 11,514,966
----------------------------------------- -----------
Total Investments (Cost $160,197,626)**
--98.3% 166,194,910
----------------------------------------- -----------
Other assets in excess of liabilities
--1.7% 2,852,656
----------------------------------------- -----------
Total Net Assets--100.0% $169,047,566
----------------------------------------- ===========
</TABLE>
Percentages indicated are based on net assets of $169,047,566.
*Please refer to the Appendix of the Statement of Additional Information for an
explanation of the credit ratings.
**The cost of investments for federal tax purposes amounts to $160,197,626. The
net unrealized appreciation of investments on federal tax basis amounts to
$5,997,284, which is composed of $6,069,199 appreciation and $71,915
depreciation at July 31, 1997.
The following abbreviations are used in this portfolio:
CSD -- City School District
GO -- General Obligation
LT -- Limited Tax
NR -- Not Rated
See notes to financial statements.
66
<PAGE>
Fountain Square Funds
Statements of Assets and Liabilities
July 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Quality Equity International
Growth Income Balanced Mid Cap Equity
Fund Fund Fund Fund Fund
------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
Assets:
- -------------------------------------------
Investments, at value (Cost $246,028,151;
$78,280,419; $91,043,047; $123,336,820;
and $118,020,720, respectively) $389,496,278 $118,646,331 $120,197,132 $179,960,021 $136,789,036
- -------------------------------------------
Repurchase agreements (Cost $19,460,000;
$952,000; $3,922,000; $10,184,000; and
$10,172,000 respectively) 19,460,000 952,000 3,922,000 10,184,000 10,172,000
- ------------------------------------------- ------------ ------------ ------------ ------------ ------------
Total Investments 408,956,278 119,598,331 124,119,132 190,144,021 146,961,036
- -------------------------------------------
Cash -- 699 -- -- 3,200,964
- -------------------------------------------
Foreign currency -- -- -- -- 455,695
- -------------------------------------------
Interest and dividends receivable 313,749 329,002 633,503 46,779 266,251
- -------------------------------------------
Receivable for investments sold 4,544,054 576,781 3,384,112 558,369 21,136
- -------------------------------------------
Receivable for Fund shares sold 393,532 42,106 195,050 9,529 4,642
- -------------------------------------------
Unrealized foreign currency gains -- -- -- -- 1,058,403
- -------------------------------------------
Reclaim Receivable -- -- -- -- 222,537
- -------------------------------------------
Unamortized organizational costs 434 6,704 409 386 19,368
- -------------------------------------------
Prepaid expenses and other assets 801 183 334 284 579
- ------------------------------------------- ------------ ------------ ------------ ------------ ------------
Total Assets 414,208,848 120,553,806 128,332,540 190,759,368 152,210,611
- ------------------------------------------- ------------ ------------ ------------ ------------ ------------
Liabilities:
- -------------------------------------------
Cash Overdraft -- -- -- 5,383 --
- -------------------------------------------
Payable for investments purchased 10,905,793 -- 4,262,116 4,040,848 --
- -------------------------------------------
Payable for Fund shares redeemed 23,970 -- 8,991 9,000 1,162
- -------------------------------------------
Accrued expenses and other payables:
- -------------------------------------------
Investment advisory fees 262,312 79,748 81,734 122,373 128,334
- -------------------------------------------
Administration fees 60,608 8,458 10,711 23,685 23,734
- -------------------------------------------
Distribution Services-Class C 6,666 94 2,785 1,843 118
- -------------------------------------------
Shareholder Administration
Services -- Class C 3,343 47 1,392 921 --
- -------------------------------------------
Accounting and transfer agent fees 12,396 5,474 5,962 6,404 18,341
- -------------------------------------------
Custodian fees 3,356 1,003 1,033 1,554 30,715
- -------------------------------------------
Legal and audit fees 8,328 8,328 8,328 8,328 9,828
- -------------------------------------------
Printing fees 12,406 3,710 3,819 5,745 5,681
- -------------------------------------------
Registration & Filing 38,293 30,318 2,551 18,324 11,046
- -------------------------------------------
Other Payables -- -- -- -- 34,190
- -------------------------------------------
Other 41,857 681 22,367 10,508 9,323
- ------------------------------------------- ------------ ------------ ------------ ------------ ------------
Total Liabilities 11,379,328 137,861 4,411,789 4,254,916 272,472
- ------------------------------------------- ------------ ------------ ------------ ------------ ------------
</TABLE>
-- Continued --
67
<PAGE>
Fountain Square Funds
Statements of Assets and Liabilities, continued
July 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Quality Equity International
Growth Income Balanced Mid Cap Equity
Fund Fund Fund Fund Fund
------------ ----------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Net Assets:
- --------------------------------------------------
Paid-in capital $232,200,778 $ 70,411,699 $ 86,787,689 $118,694,142 $126,127,855
- --------------------------------------------------
Net unrealized appreciation (depreciation)
on investments and foreign currency 143,468,127 40,365,912 29,154,085 56,623,201 19,805,175
- --------------------------------------------------
Accumulated net realized gains (losses)
on investment and foreign currency
transactions 27,164,115 9,529,112 7,724,131 11,405,541 2,481,313
- --------------------------------------------------
Undistributed net investment income (loss) (3,500) 109,222 254,846 (218,432) 3,523,796
- -------------------------------------------------- ------------ ------------ ------------ ------------ ------------
Net Assets $402,829,520 $120,415,945 $123,920,751 $186,504,452 $151,938,139
- -------------------------------------------------- ============ ============ ============ ============ ============
Net Assets
- --------------------------------------------------
Investment A Shares $399,683,400 $120,324,086 $122,765,441 $186,065,755 $151,727,706
- --------------------------------------------------
Investment C Shares 3,146,120 91,859 1,155,310 438,697 210,433
- -------------------------------------------------- ------------ ------------ ------------ ------------ ------------
Total $402,829,520 $120,415,945 $123,920,751 $186,504,452 $151,938,139
- -------------------------------------------------- ============ ============ ============ ============ ============
Outstanding units of beneficial interest (shares)
- --------------------------------------------------
Investment A Shares 20,781,351 8,334,004 8,008,751 10,959,382 12,592,672
- --------------------------------------------------
Investment C Shares 164,014 6,358 75,338 25,987 17,518
- -------------------------------------------------- ------------ ------------ ------------ ------------ ------------
Total 20,945,365 8,340,362 8,084,089 10,985,369 12,610,190
- -------------------------------------------------- ============ ============ ============ ============ ============
Net asset value
- --------------------------------------------------
Redemption price per share-Investment A
Shares $19.23 $14.44 $15.33 $16.98 $12.05
- -------------------------------------------------- ============ ============ ============ ============ ============
Offering price per shares-Investment C Shares* $19.18 $14.45 $15.34 $16.88 $12.01
- -------------------------------------------------- ============ ============ ============ ============ ============
Maximum Sales Charge 4.50% 4.50% 4.50% 4.50% 4.50%
- -------------------------------------------------- ============ ============ ============ ============ ============
Maximum Offering Price
(100%/(100%-Maximum Sales Charge) of
net asset value adjusted to nearest cent)
per share (Investment A Shares) $20.14 $15.12 $16.05 $17.78 $12.62
- -------------------------------------------------- ============ ============ ============ ============ ============
</TABLE>
*Redemption price per share varies by length of time shares are held.
(See Notes which are an integral part of the Financial Statements)
68
<PAGE>
Fountain Square Funds
Statements of Assets and Liabilities, continued
July 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. Ohio
Bond Fund Quality Government Municipal Tax Free
For Bond Securities Bond Bond
Income Fund Fund Fund Fund
------------ ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Assets:
- -----------------------------------------------
Investments, at value (Cost $132,551,300;
$77,362,800; $40,623,034; $101,678,730;
and $160,197,626, respectively) $135,619,485 $ 79,010,152 $41,084,250 $105,202,404 $166,194,910
- -----------------------------------------------
Repurchase agreements (Cost $22,323,000;
$15,771,000; $843,000; $0; and $0,
respectively) 22,323,000 15,771,000 843,000 -- --
- ----------------------------------------------- ------------ ------------ ----------- ------------ ------------
Total Investments 157,942,485 94,781,152 41,927,250 105,202,404 166,194,910
- -----------------------------------------------
Interest receivable 2,310,012 1,240,971 574,687 1,138,190 1,925,552
- -----------------------------------------------
Receivable for investments sold -- 4,016,429 33,004 -- 7,085,470
- -----------------------------------------------
Receivable for Fund shares sold -- 4,802 -- -- 8,500
- -----------------------------------------------
Unamortized organizational costs 8,106 381 338 6,581 4,489
- -----------------------------------------------
Prepaid expenses and other assets 458 890 65 155 257
- ----------------------------------------------- ------------ ------------ ----------- ------------ ------------
Total Assets 160,261,061 100,044,625 42,535,344 106,347,330 175,219,178
- ----------------------------------------------- ------------ ------------ ----------- ------------ ------------
Liabilities:
- -----------------------------------------------
Payable for investments purchased 3,000,000 7,966,250 -- 4,625,615 5,999,350
- -----------------------------------------------
Payable for Fund shares redeemed -- 3,000 -- -- --
- -----------------------------------------------
Accrued expenses and other payables:
- -----------------------------------------------
Investment advisory fees 72,178 42,498 17,122 46,731 78,133
- -----------------------------------------------
Administration fees 11,133 6,555 3,090 7,208 23,416
- -----------------------------------------------
Distribution Services -- Class C 39 1,147 401 125 378
- -----------------------------------------------
Shareholder Administration
Services -- Class C 19 574 201 62 189
- -----------------------------------------------
Accounting and transfer agent fees 5,140 5,619 5,988 5,273 5,386
- -----------------------------------------------
Custodian fees 1,309 767 854 847 1,409
- -----------------------------------------------
Legal and audit fees 8,328 8,328 8,328 8,328 8,328
- -----------------------------------------------
Printing 4,840 2,834 2,009 2,131 5,208
- -----------------------------------------------
Registration & Filing 43,493 3,618 5,980 23,675 40,428
- -----------------------------------------------
Other 181 11,011 1,744 -- 9,387
- ----------------------------------------------- ------------ ------------ ----------- ------------ ------------
Total Liabilities 3,146,660 8,052,201 45,717 4,719,995 6,171,612
- ----------------------------------------------- ------------ ------------ ----------- ------------ ------------
</TABLE>
-- Continued --
69
<PAGE>
Fountain Square Funds
Statements of Assets and Liabilities, continued
July 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. Ohio
Bond Fund Quality Government Municipal Tax Free
For Bond Securities Bond Bond
Income Fund Fund Fund Fund
------------ ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Assets:
- -----------------------------------------------
Paid-in capital $153,820,641 $ 93,149,678 $ 43,696,394 $ 97,519,428 $162,392,477
- -----------------------------------------------
Net unrealized appreciation (depreciation)
on investments 3,068,185 1,647,352 461,216 3,523,674 5,997,284
- -----------------------------------------------
Accumulated net realized gains (losses)
on investment transactions 55,662 (2,867,240) (1,697,152) 514,915 643,669
- -----------------------------------------------
Undistributed net investment income (loss) 169,913 62,634 29,169 69,318 14,136
- ----------------------------------------------- ------------ ------------ ------------ ------------ ------------
Total Net Assets $157,114,401 $ 91,992,424 $ 42,489,627 $101,627,335 $169,047,566
- ----------------------------------------------- ============ ============ ============ ============ ============
Net Assets
- -----------------------------------------------
Investment A Shares $157,108,141 $ 91,788,682 $ 42,414,250 $101,616,126 $168,799,968
- -----------------------------------------------
Investment C Shares 6,260 203,742 75,377 11,209 247,598
- ----------------------------------------------- ------------ ------------ ------------ ------------ ------------
Total $157,114,401 $ 91,992,424 $ 42,489,627 $101,627,335 $169,047,566
- ----------------------------------------------- ============ ============ ============ ============ ============
Outstanding units of beneficial interest
(shares)
- -----------------------------------------------
Investment A Shares 12,884,100 9,315,018 4,351,490 8,239,611 16,365,967
- -----------------------------------------------
Investment C Shares 514 20,668 7,731 909 24,009
- ----------------------------------------------- ------------ ------------ ----------- ------------ ------------
Total 12,884,614 9,335,686 4,359,221 8,240,520 16,389,976
- ----------------------------------------------- ============ ============ =========== ============ ============
Net asset value
- -----------------------------------------------
Redemption price per share-Investment A
Shares $12.19 $9.85 $9.75 $12.33 $10.31
- ----------------------------------------------- ============ ============ =========== ============ ============
Offering price per share-Investment C Shares* $12.18 $9.86 $9.75 $12.33 $10.31
- ----------------------------------------------- ============ ============ =========== ============ ============
Maximum Sales Charge 4.50% 4.50% 4.50% 4.50% 4.50%
- ----------------------------------------------- ============ ============ =========== ============ ============
Maximum Offering Price
(100%/(100%-Maximum Sales Charge) of
net asset value adjusted to nearest cent)
per share (Investment A Shares) $12.76 $10.31 $10.21 $12.91 $10.80
- ----------------------------------------------- ============ ============ =========== ============ ============
</TABLE>
*Redemption price per share varies by length of time shares are held.
(See Notes which are an integral part of the Financial Statements)
70
<PAGE>
Fountain Square Funds
Statements of Operations
For the year ended July 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Quality Equity International
Growth Income Balanced Mid Cap Equity
Fund Fund* Fund Fund Fund
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
- --------------------------------------
Interest income $ 634,368 $ 60,027 $ 2,454,237 $ 263,787 $ 301,331
- --------------------------------------
Dividend income 3,590,710 1,819,623 825,837 1,308,488 2,273,731
- --------------------------------------
Foreign tax withholding -- -- -- -- (170,371)
- -------------------------------------- ------------- ------------- ------------- ------------- -------------
Total Income 4,225,078 1,879,650 3,280,074 1,572,275 2,404,691
- -------------------------------------- ------------- ------------- ------------- ------------- -------------
EXPENSES:
- --------------------------------------
Investment advisory fees 2,328,245 441,829 861,073 1,146,430 1,360,967
- --------------------------------------
Administrative fees 396,610 84,693 141,253 191,888 166,482
- --------------------------------------
Distribution Services-Investment A 1,015,046 194,818 375,377 500,922 476,786
- --------------------------------------
Distribution Services-Investment C 9,620 367 3,756 2,450 531
- --------------------------------------
Shareholder Administration
Services-Investment C 3,191 47 1,252 817 268
- --------------------------------------
Organization expense 4,581 761 4,904 4,632 10,195
- --------------------------------------
Custodian fees 14,666 3,144 10,695 11,053 175,694
- --------------------------------------
Portfolio accounting fees 62,316 20,924 29,889 33,346 65,711
- --------------------------------------
Transfer and dividend disbursing
agent fees and expenses 24,593 6,084 17,569 18,992 41,079
- --------------------------------------
Directors'/Trustees' fees 3,926 1,185 2,265 2,489 667
- --------------------------------------
Audit fees 11,000 9,500 11,000 11,000 12,500
- --------------------------------------
Legal fees 8,417 5,917 8,417 8,417 8,417
- --------------------------------------
Fund share registration costs 49,956 42,656 24,929 19,396 19,981
- --------------------------------------
Printing and postage expense 25,673 8,668 8,731 12,569 11,003
- --------------------------------------
Insurance expense 3,672 -- 2,523 2,026 2,585
- --------------------------------------
Other -- 278 3,876 -- --
- -------------------------------------- ------------- ------------- ------------- ------------- -------------
Total Expenses 3,961,512 820,871 1,507,509 1,966,427 2,352,866
- -------------------------------------- ------------- ------------- ------------- ------------- -------------
Less fees voluntarily reduced (1,044,814) (232,925) (431,441) (529,562) (477,054)
- -------------------------------------- ------------- ------------- ------------- ------------- -------------
Net Expenses 2,916,698 587,946 1,076,068 1,436,865 1,875,812
- -------------------------------------- ------------- ------------- ------------- ------------- -------------
Net Investment Income 1,308,380 1,291,704 2,204,006 135,410 528,879
- -------------------------------------- ------------- ------------- ------------- ------------- -------------
Realized and Unrealized Gains
(Losses) from Investments and
Foreign Currency Transactions:
- --------------------------------------
Net realized gains (losses) from
investments and foreign currency
transactions 29,035,436 9,529,112 8,348,906 12,065,319 9,857,198
- --------------------------------------
Net change in unrealized appreciation
(depreciation) from investments and
translation of assets and liabilities
in foreign securities 94,222,664 10,892,457 24,552,465 40,393,443 16,764,042
- -------------------------------------- ------------- ------------- ------------- ------------- -------------
*Net realized and unrealized gains
(losses) from investments and
foreign currency 123,258,100 20,421,569 32,901,371 52,458,762 26,621,240
- -------------------------------------- ------------- ------------- ------------- ------------- -------------
Change in net assets resulting
from operations $124,566,480 $21,713,273 $35,105,377 $52,594,172 $27,150,119
- -------------------------------------- ============= ============= ============= ============= =============
</TABLE>
*Commencement of operations of the Fund began January 27, 1997.
(See Notes which are an integral part of the Financial Statements)
71
<PAGE>
Fountain Square Funds
Statements of Operations, continued
For the year ended July 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. Ohio
Bond Fund Quality Government Municipal Tax Free
For Bond Securities Bond Bond
Income* Fund Fund Fund* Fund
---------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
- -----------------------------------------------------------
Interest income $5,127,706 $5,677,219 $2,682,857 $2,703,735 $ 7,431,332
- ----------------------------------------------------------- ---------- ---------- ----------- ----------- -----------
Total Income 5,127,706 5,677,219 2,682,857 2,703,735 7,431,332
- ----------------------------------------------------------- ---------- ---------- ----------- ----------- -----------
EXPENSES:
- -----------------------------------------------------------
Investment advisory fees 410,755 483,167 233,799 282,200 813,101
- -----------------------------------------------------------
Administrative fees 114,052 114,352 55,179 77,342 197,989
- -----------------------------------------------------------
Distribution Services-Investment A 261,410 307,146 148,706 179,473 517,679
- -----------------------------------------------------------
Distribution Services-Investment C 146 1,308 511 475 513
- -----------------------------------------------------------
Shareholder Administration Services-
Investment C 19 482 173 62 171
- -----------------------------------------------------------
Organizational expense 921 4,750 4,677 746 5,986
- -----------------------------------------------------------
Custodian 4,437 7,704 3,879 4,122 11,547
- -----------------------------------------------------------
Portfolio accounting fees 20,207 29,859 32,859 20,924 34,639
- -----------------------------------------------------------
Transfer and dividend disbursing
agent fees and expenses 7,210 15,724 14,065 5,684 12,967
- -----------------------------------------------------------
Directors'/Trustees' fees 1,426 2,061 1,485 1,119 2,292
- -----------------------------------------------------------
Audit fees 9,500 11,000 11,000 9,500 11,000
- -----------------------------------------------------------
Legal fees 5,917 8,417 8,417 5,917 8,417
- -----------------------------------------------------------
Fund share registration costs 54,464 18,543 11,311 34,240 27,705
- -----------------------------------------------------------
Printing and postage expense 11,991 6,955 3,462 7,946 13,081
- -----------------------------------------------------------
Insurance expense -- 2,281 845 -- 1,001
- -----------------------------------------------------------
Other 460 -- 340 -- --
- ----------------------------------------------------------- ---------- ---------- ----------- ----------- -----------
Total Expenses 902,915 1,013,749 530,708 629,750 1,658,088
- ----------------------------------------------------------- ---------- ---------- ----------- ----------- -----------
Less fees voluntarily reduced/reimbursed (312,996) (360,142) (211,486) (214,311) (550,474)
- ----------------------------------------------------------- ---------- ---------- ----------- ----------- -----------
Net Expenses 589,919 653,607 319,222 415,439 1,107,614
- ----------------------------------------------------------- ---------- ---------- ----------- ----------- -----------
Net Investment Income 4,537,787 5,023,612 2,363,635 2,288,296 6,323,718
- ----------------------------------------------------------- ---------- ---------- ----------- ----------- -----------
Realized and Unrealized Gains
(Losses) from Investments:
- -----------------------------------------------------------
Net realized gains (losses) from investments 55,662 (492,997) 384,260 514,915 959,916
- -----------------------------------------------------------
Net change in unrealized appreciation
(depreciation) from investments 2,305,299 3,472,557 400,692 2,083,197 4,314,862
- ----------------------------------------------------------- ---------- ---------- ----------- ----------- -----------
Net realized/unrealized gains (losses)
from investments 2,360,961 2,979,560 784,952 2,598,112 5,274,778
- ----------------------------------------------------------- ---------- ---------- ----------- ----------- -----------
Change in net assets resulting
from operations $6,898,748 $8,003,172 $3,148,587 $4,886,408 $11,598,496
- ----------------------------------------------------------- ========== ========== =========== =========== ===========
</TABLE>
*Commencement of operations of the fund began January 27, 1997.
(See Notes which are an integral part of the Financial Statements)
72
<PAGE>
Fountain Square Funds
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Quality Growth Fund
---------------------------------
Year Ended Year Ended
July 31, July 31,
1997 1996
---------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
- ------------------------------------------
Operations--
- ------------------------------------------
Net investment income $ 1,308,380 $ 1,111,553
- ------------------------------------------
Net realized gains (losses) on investment
transactions 29,035,436 7,282,669
- ------------------------------------------
Change in unrealized appreciation
(depreciation) of investments 94,222,664 3,763,504
- ------------------------------------------ --------------- --------------
Change in net assets resulting from
operations 124,566,480 12,157,726
- ------------------------------------------ --------------- --------------
Distributions to Shareholders--
- ------------------------------------------
Dividends to shareholders from net
investment income
- ------------------------------------------
Total -- (1,065,070)
- ------------------------------------------
Class A (1,442,974) --
- ------------------------------------------
Class C -- --
- ------------------------------------------
Distributions in excess of net investment
income
- ------------------------------------------
Class A -- --
- ------------------------------------------
Class C (175) --
- ------------------------------------------
Distributions to shareholders from net
realized gains on investment transactions
- ------------------------------------------
Total -- --
- ------------------------------------------
Class A (7,460,310) --
- ------------------------------------------
Class C (28,501) --
- ------------------------------------------ --------------- --------------
Change in net assets resulting from
distributions to shareholders (8,931,960) (1,065,070)
- ------------------------------------------ --------------- --------------
Fund Share (Principal) Transactions--
- ------------------------------------------
Proceeds from sale of shares 187,617,592** 55,175,326
- ------------------------------------------
Net asset value of shares issued to
shareholders in payment of
dividends declared 6,311,183 864,887
- ------------------------------------------
Cost of shares redeemed (41,622,694) (14,838,411)
- ------------------------------------------ --------------- --------------
Change in net assets from Fund
share transactions 152,306,081 41,201,802
- ------------------------------------------ --------------- --------------
Change in net assets 267,940,601 52,294,458
- ------------------------------------------
Net Assets:
- ------------------------------------------
Beginning of period 134,888,919 82,594,461
- ------------------------------------------ --------------- --------------
End of period $402,829,520 $134,888,919
- ------------------------------------------ --------------- --------------
</TABLE>
* Commencement of operations began January 27, 1997.
** See Note 7.
(See Notes which are an integral part of the Financial Statements)
73
<PAGE>
Fountain Square Funds
Statements of Changes in Net Assets,
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Equity Income Fund
---------------------------
Period Ended
July 31,
1997*
---------------------------
<S> <C>
Increase (Decrease) in Net Assets:
- -------------------------------------------------
Operations--
- -------------------------------------------------
Net investment income $ 1,291,704
- -------------------------------------------------
Net realized gains (losses) on investment
transactions 9,529,112
- -------------------------------------------------
Change in unrealized appreciation (depreciation)
of investments 10,892,457
- ------------------------------------------------- ---------------
Change in net assets resulting from operations 21,713,273
- ------------------------------------------------- ---------------
Distributions to Shareholders--
- -------------------------------------------------
Dividends to shareholders from net
investment income
- -------------------------------------------------
Total --
- -------------------------------------------------
Class A (1,182,123)
- -------------------------------------------------
Class C (359)
- -------------------------------------------------
Distributions in excess of net investment income
- -------------------------------------------------
Class A --
- -------------------------------------------------
Class C --
- -------------------------------------------------
Distributions to shareholders from net realized
gains on investment transactions
- -------------------------------------------------
Total --
- -------------------------------------------------
Class A --
- -------------------------------------------------
Class C --
- ------------------------------------------------- ---------------
Change in net assets resulting from
distributions to shareholders (1,182,482)
- ------------------------------------------------- ---------------
Fund Share (Principal) Transactions--
- -------------------------------------------------
Proceeds from sale of shares 106,178,839**
- -------------------------------------------------
Net asset value of shares issued to
shareholders in payment of
dividends declared 6,820
- -------------------------------------------------
Cost of shares redeemed (6,300,505)
- ------------------------------------------------- ---------------
Change in net assets from Fund
share transactions 99,885,154
- ------------------------------------------------- ---------------
Change in net assets 120,415,945
- -------------------------------------------------
Net Assets:
- -------------------------------------------------
Beginning of period --
- ------------------------------------------------- ---------------
End of period $120,415,945
- ------------------------------------------------- ===============
</TABLE>
* Commencement of operations began January 27, 1997.
** See Note 7.
(See Notes which are an integral part of the Financial Statements)
74
<PAGE>
Fountain Square Funds
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Balanced Fund Mid Cap Fund
----------------------------- -----------------------------
Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31,
1997 1996 1997 1996
----------------------------- -----------------------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets:
- ---------------------------------------------------
Operations--
- ---------------------------------------------------
Net investment income $ 2,204,006 $ 1,828,018 $ 135,410 $ 276,462
- ---------------------------------------------------
Net realized gains (losses) on investment
transactions 8,348,906 5,250,744 12,065,319 6,886,447
- ---------------------------------------------------
Change in unrealized appreciation (depreciation)
of investments 24,552,465 (2,997,492) 40,393,443 (7,269,804)
- --------------------------------------------------- ------------- ------------ ------------- -------------
Change in net assets resulting from operations 35,105,377 4,081,270 52,594,172 (106,895)
- --------------------------------------------------- ------------- ------------ ------------- -------------
Distributions to Shareholders--
- ---------------------------------------------------
Dividends to shareholders from net
investment income
- ---------------------------------------------------
Total -- (1,770,121) -- (318,956)
- ---------------------------------------------------
Class A (2,116,372) -- (136,536) --
- ---------------------------------------------------
Class C (6,021) -- -- --
- ---------------------------------------------------
Distributions in excess of net investment income
- ---------------------------------------------------
Class A -- -- (216,171) --
- ---------------------------------------------------
Class C -- -- -- --
- ---------------------------------------------------
Distributions to shareholders from net realized
gains on investment transactions
- ---------------------------------------------------
Total -- -- -- (426,106)
- ---------------------------------------------------
Class A (3,941,823) -- (6,692,368) --
- ---------------------------------------------------
Class C (11,819) -- (22,049) --
- --------------------------------------------------- ------------- ------------ ------------- -------------
Change in net assets resulting from
distributions to shareholders (6,076,035) (1,770,121) (7,067,124) (745,062)
- --------------------------------------------------- ------------- ------------ ------------- -------------
Fund Share (Principal) Transactions--
- ---------------------------------------------------
Proceeds from sale of shares 27,076,472 45,799,084 84,402,432** 36,279,555
- ---------------------------------------------------
Net asset value of shares issued to shareholders
in payment of dividends declared 5,683,213 1,672,911 5,620,179 605,387
- ---------------------------------------------------
Cost of shares redeemed (30,940,765) (14,785,158) (21,937,233) (10,324,706)
- --------------------------------------------------- ------------- ------------ ------------- -------------
Change in net assets from Fund share transactions 1,818,920 32,686,837 68,085,378 26,560,236
- --------------------------------------------------- ------------- ------------ ------------- -------------
Change in net assets 30,848,262 34,997,986 113,612,426 25,708,279
- ---------------------------------------------------
Net Assets:
- ---------------------------------------------------
Beginning of period 93,072,489 58,074,503 72,892,026 47,183,747
- --------------------------------------------------- ------------- ------------ ------------- -------------
End of period $123,920,751 $93,072,489 $186,504,452 $ 72,892,026
- --------------------------------------------------- ============= ============ ============= =============
<CAPTION>
International Equity Fund
----------------------------
Year Ended Year Ended
July 31, July 31,
1997 1996
----------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
- ---------------------------------------------------
Operations--
- ---------------------------------------------------
Net investment income $ 528,879 $ 107,635
- ---------------------------------------------------
Net realized gains (losses) on investment
transactions 9,857,198 10,543,032
- ---------------------------------------------------
Change in unrealized appreciation (depreciation)
of investments 16,764,042 (2,327,344)
- --------------------------------------------------- ------------ ------------
Change in net assets resulting from operations 27,150,119 8,323,323
- --------------------------------------------------- ------------ ------------
Distributions to Shareholders--
- ---------------------------------------------------
Dividends to shareholders from net
investment income
- ---------------------------------------------------
Total -- --
- ---------------------------------------------------
Class A (8,371,837) --
- ---------------------------------------------------
Class C (3,431) --
- ---------------------------------------------------
Distributions in excess of net investment income
- ---------------------------------------------------
Class A (1,976,558) --
- ---------------------------------------------------
Class C (2,141) --
- ---------------------------------------------------
Distributions to shareholders from net realized
gains on investment transactions
- ---------------------------------------------------
Total -- --
- ---------------------------------------------------
Class A (694,681) --
- ---------------------------------------------------
Class C (396) --
- --------------------------------------------------- ------------ ------------
Change in net assets resulting from
distributions to shareholders (11,049,044) --
- --------------------------------------------------- ------------ ------------
Fund Share (Principal) Transactions--
- ---------------------------------------------------
Proceeds from sale of shares 32,814,823 33,662,776
- ---------------------------------------------------
Net asset value of shares issued to shareholders
in payment of dividends declared 7,089,844 --
- ---------------------------------------------------
Cost of shares redeemed (24,474,153) (8,021,101)
- --------------------------------------------------- ------------ ------------
Change in net assets from Fund share transactions 15,430,514 25,641,675
- --------------------------------------------------- ------------ ------------
Change in net assets 31,531,589 33,964,998
- ---------------------------------------------------
Net Assets:
- ---------------------------------------------------
Beginning of period 120,406,550 86,441,552
- --------------------------------------------------- ------------ ------------
End of period $151,938,139 $120,406,550
- --------------------------------------------------- ============ ============
</TABLE>
*Commencement of operations began January 27, 1997.
**See Note 7.
(See Notes which are an integral part of the Financial Statements)
75
<PAGE>
Fountain Square Funds
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Bond Fund For Income Quality Bond Fund
--------------------------------- ---------------------------------
Period Ended Year Ended Year Ended
July 31, July 31, July 31,
1997* 1997 1996
--------------------------------- ---------------------------------
<S> <C> <C> <C>
Increase (Decrease) in Net Assets:
- -------------------------------------------------
Operations--
- -------------------------------------------------
Net investment income $ 4,537,787 $ 5,023,612 $ 4,238,365
- -------------------------------------------------
Net realized gains (losses) on investment
transactions 55,662 (492,997) 744,080
- -------------------------------------------------
Change in unrealized appreciation
of investments 2,305,299 3,472,557 (2,623,898)
- ------------------------------------------------- -------------- -------------- ---------------
Change in net assets resulting from operations 6,898,748 8,003,172 2,358,547
- ------------------------------------------------- -------------- -------------- ---------------
Distributions to Shareholders--
- -------------------------------------------------
Dividends to shareholders from net
investment income
- -------------------------------------------------
Total -- -- (4,303,667)
- -------------------------------------------------
Class A (4,367,295) (4,925,664) --
- -------------------------------------------------
Class C (417) (9,427) --
- -------------------------------------------------
Distributions in excess of net investment income
- -------------------------------------------------
Class A -- -- --
- -------------------------------------------------
Class C (162) -- --
- -------------------------------------------------
Distributions to shareholders from net realized
gain on investment transactions
- -------------------------------------------------
Class A -- -- --
- -------------------------------------------------
Class C -- -- --
- ------------------------------------------------- -------------- -------------- ---------------
Change in net assets from
distributions to shareholders (4,367,874) (4,935,091) (4,303,667)
- ------------------------------------------------- -------------- -------------- ---------------
Fund Share (Principal) Transactions--
- -------------------------------------------------
Proceeds from sale of shares 161,008,922** 25,472,460 39,431,397
- -------------------------------------------------
Net asset value of shares issued to
shareholders in payment of
dividends declared 31,616 2,847,103 2,812,476
- -------------------------------------------------
Cost of shares redeemed (6,457,011) (22,979,053) (12,482,075)
- ------------------------------------------------- -------------- -------------- ---------------
Change in net assets from Fund
share transactions 154,583,527 5,340,510 29,761,798
- ------------------------------------------------- -------------- -------------- ---------------
Change in net assets 157,114,401 8,408,591 27,816,678
- -------------------------------------------------
Net Assets:
- -------------------------------------------------
Beginning of period -- 83,583,833 55,767,155
- ------------------------------------------------- -------------- -------------- ---------------
End of period $157,114,401 $91,992,424 $83,583,833
- ------------------------------------------------- -------------- -------------- ---------------
</TABLE>
*Commencement of operations of the Fund began January 27, 1997.
**See Note 7.
(See Notes which are an integral part of the Financial Statements)
76
<PAGE>
Fountain Square Funds
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. Government Securities Fund Municipal Bond Fund Ohio Tax Free Bond Fund
---------------------------------- ------------------- ---------------------------
Year Ended Year Ended Period Ended Year Ended Year Ended
July 31, July 31, July 31, July 31, July 31,
1997 1996 1997* 1997 1996
---------------------------------- ------------------- ---------------------------
<S> <C> <C> <C> <C> <C>
Increase (Decrease) in Net Assets:
- -------------------------------------------
Operations--
- -------------------------------------------
Net investment income $ 2,363,635 $ 1,588,713 $ 2,288,296 $ 6,323,718 $ 1,289,676
- -------------------------------------------
Net realized gains (losses) on investment
transactions 384,260 49,340 514,915 959,916 (40,784)
- -------------------------------------------
Change in unrealized appreciation
of investments 400,692 (663,274) 2,083,197 4,314,862 93,485
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
Change in net assets resulting from
operations 3,148,587 974,779 4,886,408 11,598,496 1,342,377
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
Distributions to Shareholders--
- -------------------------------------------
Dividends to shareholders from net
investment income
- -------------------------------------------
Total -- (1,637,316) -- -- (1,310,667)
- -------------------------------------------
Class A (2,321,676) -- (2,217,602) (6,309,126) --
- -------------------------------------------
Class C (3,373) -- (999) (2,374) --
- -------------------------------------------
Distributions in excess of net investment
income
- -------------------------------------------
Class A -- -- -- -- --
- -------------------------------------------
Class C -- -- (377) (185) --
- -------------------------------------------
Distributions to shareholders from net
realized gain on investment transactions
- -------------------------------------------
Class A -- -- -- -- --
- -------------------------------------------
Class C -- -- -- -- --
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
Change in net assets from
distributions to shareholders (2,325,049) (1,637,316) (2,218,978) (6,311,685) (1,310,667)
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
Fund Share (Principal) Transactions--
- -------------------------------------------
Proceeds from sale of shares 25,917,379** 11,833,299 111,498,655* 158,886,252** 14,492,573
- -------------------------------------------
Net asset value of shares issued to
shareholders in payment of
dividends declared 1,239,373 1,353,918 5,290 809,532 674,890
- -------------------------------------------
Cost of shares redeemed (16,293,089) (6,776,306) (12,544,040) (31,436,522) (8,012,250)
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
Change in net assets from Fund
share transactions 10,863,663 6,410,911 98,959,905 128,259,262 7,155,213
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
Change in net assets 11,687,201 5,748,374 101,627,335 133,546,073 7,186,923
- -------------------------------------------
Net Assets:
- -------------------------------------------
Beginning of period 30,802,426 25,054,052 -- 35,501,493 28,314,570
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
End of period $42,489,627 $30,802,426 $101,627,335 $169,047,566 $35,501,493
- ------------------------------------------- ----------- ----------- ----------- ----------- -----------
</TABLE>
*Commencement of operations of the Fund began January 27, 1997.
**See Note 7.
(See Notes which are an integral part of the Financial Statements)
77
<PAGE>
Fountain Square Funds
Notes to Financial Statements
July 31, 1997
- --------------------------------------------------------------------------------
(1) Organization
Fountain Square Funds (the "Trust") is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as an open-end management investment
company. At July 31, 1997, the Trust consisted of thirteen separate investment
portfolios.
The accompanying financial statements relate only to the following Funds:
Portfolio Name
- ---------------------------------------------------------------------------
Fountain Square Quality Growth Fund ("Quality Growth Fund")
Fountain Square Equity Income Fund ("Equity Income Fund")
Fountain Square Balanced Fund ("Balanced Fund")
Fountain Square Mid Cap Fund ("Mid Cap Fund")
Fountain Square International Equity Fund ("International Equity Fund")
Fountain Square Bond Fund For Income ("Bond Fund For Income")
Fountain Square Quality Bond Fund ("Quality Bond Fund")
Fountain Square U.S. Government Securities Fund ("Government Securities Fund")
Fountain Square Municipal Bond Fund ("Municipal Bond Fund")
Fountain Square Ohio Tax Free Bond Fund ("Ohio Tax Free Fund")
The Funds each issue two classes of shares: Investment A Shares and Investment C
Shares. The Investment A Shares are subject to initial sales charges imposed at
the time of purchase, in accordance with the Funds' prospectus. Certain
redemptions of Investment C Shares made within one year of purchase are subject
to contingent deferred sales charges in accordance with the Funds' prospectus.
Each class of shares for each Fund has identical rights and privileges except
with respect to Administrative Services fees paid by Investment C Shares, voting
rights on matters affecting a single class of shares and the exchange privileges
of each class of shares.
(2) Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles. The
preparation of financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of income and expenses
for the period. Actual results could differ from those estimates.
A. Securities Valuations--Investments in equity securities are determined on the
basis of the mean between the latest available bid and asked prices in the
principal market (last sales price on a national securities exchange). For
unlisted securities, value is determine on the basis of the latest bid prices.
Investments in other open-end investment companies are valued at net asset
value. Bonds and other fixed income securities are valued at prices provided by
an independent pricing service. Value of all other securities is determined at
fair value in good faith by the Board of Trustees.
B. Repurchase Agreements--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
78
<PAGE>
Fountain Square Funds
- --------------------------------------------------------------------------------
Advisor to be creditworthy pursuant to guidelines and/or standards reviewed or
established by the Board of Trustees (the "Trustees"). It is the policy of the
Funds to require the custodian or sub-custodian bank to take possession, to have
legally segregated in the Federal Reserve Book Entry System, or to have
segregated within the custodian bank's vault, all securities held as collateral
under repurchase agreement transactions. Additionally, procedures have been
established by the Funds to monitor, on a daily basis, the market value of each
repurchase agreement's collateral to ensure that the value of collateral at
least equals the repurchase price to be paid under the repurchase agreement
transaction. 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. Securities Transactions and Related Income--Securities transactions are
accounted for on the date the security is purchased or sold (trade date).
Interest income is recognized on the accrual basis and includes, where
applicable, the pro rata amortization of premium or discount. Dividend income is
recorded on the ex-dividend date. Gains or losses realized on sales of
securities are determined by comparing the identified cost of the security lot
sold with the net sales proceeds.
D. Foreign Currency Translation--The accounting records of the International
Equity Fund are maintained in U.S. dollars. All assets and liabilities
denominated in foreign currencies are translated into U.S. dollars based on the
rate of exchange of such currencies against the U.S. dollar on the date of
valuation. Purchases and sales of securities, income and expenses are translated
at the rate of exchange quoted on the respective date that such transactions are
recorded. Differences between income and expenses are translated at the rate of
exchange quoted on the respective date that such transactions are recorded.
Differences between income and expense amounts recorded and collected or paid
are adjusted when reported by the custodian bank. The International Equity Fund
does not isolate that portion of the results of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are included
with the net realized and unrealized gains or losses from investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, the difference between the amount of dividends, interest, and
foreign withholding taxes recorded on the International Equity Fund's books, and
the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains and losses arise from changes in the value of
assets and liabilities other than investments in securities at fiscal year end,
resulting from changes in the exchange rate.
E. Forward Commitments--The International Equity Fund may enter into forward
commitments for forward foreign currency exchange contracts which are based upon
financial indices at an exchange rate at a future date. Risks may arise upon
entering into these contracts from the potential inability of counterparties to
meet the terms of their contracts and from unanticipated movements in foreign
exchange rates. The forward foreign currency exchange contracts are adjusted by
the daily exchange rate of the underlying currency and any gains or losses are
recorded for financial statement purposes as unrealized until the contract
settlement date.
At July 31, 1997, the International Equity Fund had outstanding forward foreign
currency exchange contracts as set forth below.
79
<PAGE>
Fountain Square Funds
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Contracts Unrealized
Delivery To Deliver In Exchange Appreciation
Date (Local Currency) For (Depreciation)
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
French Franc
Long Contracts
9/15/97 19,022,986 $ 3,268,071 $ (195,874)
Short Contracts
9/15/97 33,687,993 5,941,445 500,860
10/20/97 7,532,875 1,250,000 30,791
German Deutsche Mark
Long Contracts
8/29/97 6,124,207 3,568,053 (236,860)
Short Contracts
8/29/97 6,124,207 3,579,314 248,121
Italian Lira
Long Contracts
8/18/97 2,233,812,500 1,250,000 (6,043)
Short Contracts
8/1/97 10,798,038 6,038 12
8/4/97 26,964,587 15,025 (17)
8/18/97 5,492,000,000 3,137,031 78,668
10/20/97 1,095,093,750 625,000 17,104
Japanese Yen
Long Contracts
8/25/97 1,283,423,000 11,302,912 (433,339)
Short Contracts
8/25/97 1,283,423,000 11,500,000 630,428
Netherland Guilder
Long Contracts
8/18/97 1,014,269 525,000 (34,768)
Short Contracts
8/18/97 2,956,506 1,558,517 129,532
Spanish Peseta
Short Contracts
9/26/97 214,467,950 1,475,000 94,755
Swiss Franc
Long Contracts
8/18/97 5,675,771 4,002,779 (245,951)
Short Contracts
8/18/97 5,675,771 3,997,021 240,194
Thailand
Long Contracts
8/18/97 14,130,452 486,093 (45,224)
8/19/97 51,137,024 1,751,574 (156,592)
9/16/97 42,389,312 1,376,452 (64,064)
Short Contracts
8/18/97 17,918,360 670,000 110,948
8/19/97 38,729,517 1,334,916 126,930
9/16/97 39,308,800 1,485,806 268,792
----------
Net Unrealized Appreciation of Forward Commitments $1,058,403
==========
</TABLE>
80
<PAGE>
Fountain Square Funds
- --------------------------------------------------------------------------------
F. Foreign Currency Commitments--The International Equity Fund may enter into
foreign currency commitments for the delayed delivery of securities of foreign
currency exchange transactions. Risks may arise upon entering into these
transactions from the potential inability of counterparties to meet the terms of
their commitments and from unanticipated movements in security prices or foreign
exchange rates. The foreign currency transactions are adjusted by the daily
exchange rate of the underlying currency and any gains or losses are recorded
for financial statement purposes as unrealized until the settlement date.
G. Option Contracts--The Quality Growth Fund, Balanced Fund, and International
Equity Fund may write or purchase option contracts. A written option obligates
the Fund to deliver (a call), or to receive (a put), the contract amount of
foreign currency upon exercise by the holder of the option. The value of the
option contract is recorded as a liability, and unrealized gain or loss is
measured by the difference between the current value and the premium received.
The Fund had no written options outstanding at July 31, 1997.
H. 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 valued daily
and begin earning interest on the settlement date.
I. Dividends to Shareholders--Dividends from net investment income are declared
and paid monthly for the Equity Income Fund, the Bond Fund For Income, the
Quality Bond Fund, Government Securities Fund, the Municipal Bond Fund, and the
Ohio Tax Free Fund. Dividends from net investment income are declared and paid
quarterly for the Quality Growth Fund, the Mid Cap Fund and the Balanced Fund.
Dividends from net investment income are declared and paid annually for
International Equity Fund. Distributable net realized gains, if any, are
declared and distributed at least annually.
Dividends from net investment income and from net realized capital gains are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are primarily due to
differing treatments for mortgage-backed securities, foreign currency
transactions, expiring capital loss carryforwards and deferrals of certain
losses.
J. Federal Taxes--It is the Funds' policy to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders each year substantially all of their income.
Accordingly, no provision for federal income tax is necessary. However, federal
taxes may be imposed on the International Equity Fund upon the disposition of
certain investments in passive foreign investment companies. Withholding taxes
on foreign dividends have been provided for in accordance with the International
Equity Fund's understanding of the applicable country's tax rules and rates.
K. 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 their shares, have been deferred and are being amortized
using the straight-line method not to exceed a period of five years from each
Fund's commencement date.
L. During the period ended July 31, 1997 permanent book and tax differences were
reclassified to paid-in capital of the International Equity Fund due to
Statement of Position 93-2. These differences are primarily due to differing
treatments for foreign currency transactions and disposition of certain
investments in passive foreign investments companies. Amounts as of July 31,
1997 have been reclassified to reflect an increase in undistributed net
investment income, paid-in capital and a decrease in net realized gains. Net
investment income, net realized gains, and net assets were not affected by this
change. No other funds were affected by this change.
81
<PAGE>
Fountain Square Funds
- --------------------------------------------------------------------------------
(3) Shares of Beneficial Interest
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
Quality Growth Fund
---------------------------------------------------
Year Ended Year Ended
July 31, 1997 July 31, 1996
----------------------- -----------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Investment A Shares
Sold 12,743,633 $185,256,357 4,293,819 $54,745,108
Reinvestment of dividends 451,069 6,282,507 67,561 864,887
Redeemed (2,633,003) (41,371,155) (1,148,889) (14,836,411)
- ------------------------------- ---------- ------------ ---------- -----------
Net increase (decrease) -
Investment A Shares 10,561,699 150,167,709 3,212,491 40,773,584
- ------------------------------- ---------- ------------ ---------- -----------
Investment C Shares
Sold 145,512 2,361,235 32,107 430,218
Reinvestment of dividends 2,080 28,676 -- --
Redeemed (15,534) (251,539) (151) (2,000)
- ------------------------------- ---------- ------------ ---------- -----------
Net increase (decrease) -
Investment C Shares 132,058 2,138,372 31,956 428,218
- ------------------------------- ---------- ------------ ---------- -----------
Net increase (decrease) in Fund 10,693,757 $152,306,081 3,244,447 $41,201,802
- ------------------------------- ========== ============ ========== ===========
</TABLE>
<TABLE>
<CAPTION>
Equity Income Fund
----------------------
Period Ended
July 31, 1997
----------------------
Shares Amount
------ ------
<S> <C> <C>
Investment A Shares
Sold 8,821,577 $106,096,267
Reinvestment of dividends 484 6,461
Redeemed (488,057) (6,300,505)
- ------------------------------- ---------- ------------
Net increase (decrease) -
Investment A Shares 8,334,004 99,802,223
- ------------------------------- ---------- ------------
Investment C Shares
Sold 6,330 82,572
Reinvestment of dividends 28 359
Redeemed -- --
- ------------------------------- ---------- ------------
Net increase (decrease) -
Investment C Shares 6,358 82,931
- ------------------------------- ---------- ------------
Net increase (decrease) in Fund 8,340,362 $99,885,154
- ------------------------------- ========== ============
</TABLE>
82
<PAGE>
Fountain Square Funds
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Balanced Fund
-------------------------------------------------
Year Ended Year Ended
July 31, 1997 July 31, 1996
--------------------- ---------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Investment A Shares
Sold 1,989,624 $ 26,278,552 3,843,429 $ 45,424,374
Reinvestment of dividends 454,771 5,665,373 141,068 1,672,081
Redeemed (2,333,372) (30,860,103) (1,233,992) (14,683,107)
- --------------------------- ---------- ------------ ---------- ------------
Net increase (decrease) -
Investment A Shares 111,023 1,083,822 2,750,505 32,413,348
- --------------------------- ---------- ------------ ---------- ------------
Investment C Shares
Sold 57,113 797,920 30,723 374,710
Reinvestment of dividends 1,425 17,840 68 830
Redeemed (5,707) (80,662) (8,284) (102,051)
- --------------------------- ---------- ------------ ---------- ------------
Net increase (decrease) -
Investment C Shares 52,831 735,098 22,507 273,489
- --------------------------- ---------- ------------ ---------- ------------
Net increase (decrease)
in Fund 163,854 $ 1,818,920 2,773,012 $ 32,686,837
- --------------------------- ========== ============ ========== ============
<CAPTION>
Mid Cap Fund
-------------------------------------------------
Year Ended Year Ended
July 31, 1997 July 31, 1996
--------------------- ---------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Investment A Shares
Sold 6,315,189 $ 84,164,198 2,746,262 $ 36,026,334
Reinvestment of dividends 438,494 5,598,130 46,895 605,387
Redeemed (1,559,545) (21,785,247) (774,971) (10,324,706)
- --------------------------- ---------- ------------ ---------- ------------
Net increase (decrease) -
Investment A Shares 5,194,138 67,977,081 2,018,186 26,307,015
- --------------------------- ---------- ------------ ---------- ------------
Investment C Shares
Sold 17,037 238,234 18,226 253,221
Reinvestment of dividends 1,737 22,049 -- --
Redeemed (11,013) (151,986) -- --
- --------------------------- ---------- ------------ ---------- ------------
Net increase (decrease) -
Investment C Shares 7,761 108,297 18,226 253,221
- --------------------------- ---------- ------------ ---------- ------------
Net increase (decrease)
in Fund 5,201,899 $ 68,085,378 2,036,412 $ 26,560,236
- --------------------------- ========== ============ ========== ============
<CAPTION>
International Equity Fund
-------------------------------------------------
Year Ended Year Ended
July 31, 1997 July 31, 1996
--------------------- ---------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Investment A Shares
Sold 2,956,166 $ 32,508,734 3,176,488 $ 33,602,757
Reinvestment of dividends 687,514 7,083,876 -- --
Redeemed (2,257,739) (24,295,240) (762,356) (8,021,101)
- --------------------------- ---------- ------------ ---------- ------------
Net increase (decrease) -
Investment A Shares 1,385,941 15,297,370 2,414,132 25,581,656
- --------------------------- ---------- ------------ ---------- ------------
Investment C Shares
Sold 28,683 306,089 5,354 60,019
Reinvestment of dividends 580 5,968 -- --
Redeemed (17,099) (178,913) -- --
- --------------------------- ---------- ------------ ---------- ------------
Net increase (decrease) -
Investment C Shares 12,164 133,144 5,354 60,019
- --------------------------- ---------- ------------ ---------- ------------
Net increase (decrease)
in Fund 1,398,105 $ 15,430,514 2,419,486 $ 25,641,675
- --------------------------- ========== ============ ========== ============
</TABLE>
83
<PAGE>
Fountain Square Funds
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Bond For Income Fund
---------------------
Period Ended
July 31, 1997
---------------------
Shares Amount
------ ------
<S> <C> <C>
Investment A Shares
Sold 13,407,383 $160,901,750
Reinvestment of dividends 2,588 31,037
Redeemed (525,871) (6,355,414)
- --------------------------- ---------- ------------
Net increase (decrease) -
Investment A Shares 12,884,100 154,577,373
- --------------------------- ---------- ------------
Investment C Shares
Sold 8,938 107,172
Reinvestment of dividends 48 579
Redeemed (8,472) (101,597)
- --------------------------- ---------- ------------
Net increase (decrease) -
Investment C Shares 514 6,154
- --------------------------- ---------- ------------
Net increase (decrease)
in Fund 12,884,614 $154,583,527
- --------------------------- ========== ============
<CAPTION>
Quality Bond Fund
-------------------------------------------------
Year Ended Year Ended
July 31, 1997 July 31, 1996
--------------------- ---------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Investment A Shares
Sold 2,642,247 $ 25,418,923 4,008,865 $ 39,270,763
Reinvestment of dividends 294,612 2,837,676 288,326 2,810,484
Redeemed (2,382,151) (22,952,488) (1,276,978) (12,481,439)
- --------------------------- ---------- ------------ ---------- ------------
Net increase (decrease) -
Investment A Shares 554,708 5,304,111 3,020,213 29,599,808
- --------------------------- ---------- ------------ ---------- ------------
Investment C Shares
Sold 5,487 53,536 16,819 160,634
Reinvestment of dividends 978 9,427 209 1,992
Redeemed (2,758) (26,564) (67) (636)
- --------------------------- ---------- ------------ ---------- ------------
Net increase (decrease) -
Investment C Shares 3,707 36,399 16,961 161,990
- --------------------------- ---------- ------------ ---------- ------------
Net increase (decrease)
in Fund 558,415 $ 5,340,510 3,037,174 $ 29,761,798
- --------------------------- ========== ============ ========== ============
<CAPTION>
Government Securities Fund
-------------------------------------------------
Year Ended Year Ended
July 31, 1997 July 31, 1996
--------------------- ---------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Investment A Shares
Sold 2,689,563 $ 25,865,573 1,207,864 $ 11,764,813
Reinvestment of dividends 128,488 1,236,000 139,029 1,353,429
Redeemed (1,685,808) (16,263,648) (693,178) (6,756,433)
- --------------------------- ---------- ------------ ---------- ------------
Net increase (decrease) -
Investment A Shares 1,132,243 10,837,925 653,715 6,361,809
- --------------------------- ---------- ------------ ---------- ------------
Investment C Shares
Sold 5,308 51,806 7,148 68,486
Reinvestment of dividends 350 3,373 51 489
Redeemed (3,045) (29,441) (2,081) (19,873)
- --------------------------- ---------- ------------ ---------- ------------
Net increase (decrease) -
Investment C Shares 2,613 25,738 5,118 49,102
- --------------------------- ---------- ------------ ---------- ------------
Net increase (decrease)
in Fund 1,134,856 $ 10,863,663 658,833 $ 6,410,911
- --------------------------- ========== ============ ========== ============
</TABLE>
84
<PAGE>
Fountain Square Funds
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Municipal Bond Fund
-------------------------
Period Ended
July 31, 1997
-------------------------
Shares Amount
---------- ------------
<S> <C> <C>
Investment A Shares
Sold 9,250,564 $111,100,626
Reinvestment of dividends 322 3,914
Redeemed (1,011,275) (12,155,917)
- -------------------------------- ---------- ------------
Net increase (decrease) -
Investment A Shares 8,239,611 98,948,623
- -------------------------------- ---------- ------------
Investment C Shares
Sold 33,017 398,029
Reinvestment of dividends 115 1,376
Redeemed (32,223) (388,123)
- -------------------------------- ---------- ------------
Net increase (decrease) -
Investment C Shares 909 11,282
- -------------------------------- ---------- ------------
Net increase (decrease) in Fund 8,240,520 $ 98,959,905
- -------------------------------- ========== ============
</TABLE>
<TABLE>
<CAPTION>
Ohio Tax Free Fund
-----------------------------------------------------
Year Ended Year Ended
July 31, 1997 July 31, 1996
------------------------ ----------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Investment A Shares
Sold 15,859,540 $158,671,462 1,434,711 $14,455,027
Reinvestment of dividends 80,121 806,973 67,106 674,604
Redeemed (3,116,779) (31,423,698) (793,921) (8,012,194)
- ------------------------------- ---------- ------------ --------- -----------
Net increase (decrease) -
Investment A Shares 12,822,882 128,054,737 707,896 7,117,437
- ------------------------------- ---------- ------------ --------- -----------
Investment C Shares
Sold 21,215 214,790 3,778 37,546
Reinvestment of dividends 253 2,559 29 286
Redeemed (1,260) (12,824) (6) (56)
- ------------------------------- ---------- ------------ --------- -----------
Net increase (decrease) -
Investment C Shares 20,208 204,525 3,801 37,776
- ------------------------------- ---------- ------------ --------- -----------
Net increase (decrease) in Fund 12,843,090 $128,259,262 711,697 $ 7,155,213
- ------------------------------- ========== ============ ========= ===========
</TABLE>
(4) Investment Advisory Fee and Other Transactions with Affiliates
Investment Advisory Fee--Fifth Third Bank, the Trust's investment advisor (the
"Advisor"), 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>
Quality Growth Fund 0.80%
Equity Income Fund 0.80%
Balanced Fund 0.80%
Mid Cap Fund 0.80%
International Equity Fund 1.00%
Bond Fund For Income 0.55%
Quality Bond Fund 0.55%
Government Securities Fund 0.55%
Municipal Bond Fund 0.55%
Ohio Tax Free Fund 0.55%
</TABLE>
85
<PAGE>
Fountain Square Funds
- --------------------------------------------------------------------------------
The Advisor may voluntarily choose to waive a portion of its fee and reimburse
certain operating expenses of each Fund. The Advisor can modify or terminate
this voluntary waiver and reimbursement at any time at its sole discretion. For
the year ended July 31, 1997, the Advisor waived fees in the following amounts:
<TABLE>
<CAPTION>
Fund Fees Waived
---- -----------
<S> <C>
Quality Growth Fund $ 0
Equity Income Fund 0
Balanced Fund 17,327
Mid Cap Fund 4,161
International Equity Fund 0
Bond Fund For Income 0
Quality Bond Fund 17,650
Government Securities Fund 45,748
Municipal Bond Fund 0
Ohio Tax Free Fund 2,290
</TABLE>
In addition, for the year ended July 31, 1997, the Advisor reimbursed operating
expenses in the amount of $11,621 to the Ohio Tax Free Fund.
Morgan Stanley Asset Management, Inc. is the International Equity Fund's sub-
advisor (the "Sub-Advisor"). The Advisor compensates the Sub-Advisor at the
annual rate of 0.50% of the International Equity Fund's average daily net
assets.
Administrative Fee--Effective December 1, 1995 BISYS Fund Services ("BISYS")
became the Trust's administrator. The administrator generally assists in all
aspects of the Trust's administration and operation including providing the
Funds with certain administrative personnel and services necessary to operate
the Fund. Also effective December 1, 1995, pursuant to a separate agreement with
BISYS, Fifth Third Bank performs sub-administrative services on behalf of the
Funds including providing certain administrative personnel and services
necessary to operate the Funds, for which it receives a fee from BISYS computed
daily as a percentage of the daily net assets of the Funds. Under the terms of
the administration agreement, BISYS' fees are computed daily as a percentage of
the average net assets of the Trust for the period. Administration fees are
computed at 0.10% of first $1 billion of net assets of the Trust, 0.08% of net
assets of the Trust between $1 billion and $2 billion, and 0.07% of more than $2
billion of net assets of the Trust. Effective April 1, 1997 the administration
fees are computed at 0.20% of first $1 billion of net assets of the Trust, 0.18%
of net assets of the Trust between $1 billion and $2 billion, and 0.17% of more
than $2 billion of net assets of the Trust. For the year ended July 31, 1997,
the administrator waived fees in the following amounts:
<TABLE>
<CAPTION>
Fund Fees Waived
---- -----------
<S> <C>
Quality Growth Fund $16,801
Equity Income Fund 36,958
Balanced Fund 30,357
Mid Cap Fund 16,294
International Equity Fund 0
Bond Fund For Income 50,011
Quality Bond Fund 29,728
Government Securities Fund 14,275
Municipal Bond Fund 33,330
Ohio Tax Free Fund 11,017
</TABLE>
Distribution Services Fee--Effective December 1, 1995, BISYS serves as the
Trust's principal distributor (the "Distributor"). Effective April 23, 1996, the
Trust entered into a Distribution Plan with the Distributor with respect to
Investment A Shares and Investment C Shares. This Plan is in accordance with
Rule 12b-1 under the 1940 Act. Under the Distribution Plan, the Funds may pay a
fee to the Distributor in an amount computed at an annual rate of up to 0.35%
for Investment A Shares and up to
86
<PAGE>
Fountain Square Funds
- --------------------------------------------------------------------------------
0.75% for Investment C Shares. The Distributor may voluntarily choose to waive
all or a portion of its fee. The Distributor can modify or terminate this
voluntary waiver at any time at its sole discretion. For the year ended July 31,
1997, the distributor waived fees in the following amounts:
<TABLE>
<CAPTION>
Fund Fees Waived
---- -----------
<S> <C>
Quality Growth Fund $1,015,046
Equity Income Fund 194,818
Balanced Fund 375,377
Mid Cap Fund 500,922
International Equity Fund 476,786
Bond Fund For Income 261,410
Quality Bond Fund 307,146
Government Securities Fund 148,706
Municipal Bond Fund 179,473
Ohio Tax Free Fund 517,679
</TABLE>
Administrative Services Fee--Effective April 23, 1996, the Trust entered into an
Administrative Services Agreement with Fifth Third Bank with respect to
Investment C Shares. Under the Plan, the Funds may make payments up to 0.0025%
of the average daily net asset value of Investment C Shares in exchange for
certain administrative services for shareholders and for the maintenance of
shareholder accounts. For the year ended July 31, 1997, Fifth Third Bank waived
fees in the following amounts:
<TABLE>
<CAPTION>
Fund Fees Waived
---- -----------
<S> <C>
Quality Growth Fund $3,191
Equity Income Fund 47
Balanced Fund 1,252
Mid Cap Fund 817
International Equity Fund 268
Bond Fund For Income 19
Quality Bond Fund 482
Government Securities Fund 173
Municipal Bond Fund 62
Ohio Tax Free Fund 171
</TABLE>
Transfer and Dividend Disbursing Agent, Fund Accounting and Custody Fees--Fifth
Third Bank serves as transfer and dividend disbursing agent for the Funds for
which it receives a fee. Fifth Third Bank sub-contracts the execution of the
transfer and dividend disbursing agent functions to a non-affiliated entity. The
fee is based on the level of each Fund's average net assets for the period, plus
out-of-pocket expenses.
Fifth Third Bank also maintains the Funds' portfolio accounting records for
which it receives a fee except with respect to the International Equity Fund.
The fee is based on the level of each Fund's average net assets for the period,
plus out-of-pocket expenses. BISYS Fund Services provides portfolio accounting
services for the International Equity Fund for a fee based on average net assets
for the period.
Fifth Third Bank is the Funds' custodian (except the International Equity Fund,
for which Morgan Stanley serves as custodian) for which it receives a fee. The
fee is based on the level of each Fund's average net assets for the period, plus
out-of-pocket expenses. For the year ended July 31, 1997, Fifth Third Bank
waived the following custodian fees:
<TABLE>
<CAPTION>
Fund Fees Waived
---- -----------
<S> <C>
Quality Growth Fund $9,776
Equity Income Fund 1,102
Balanced Fund 7,128
Mid Cap Fund 7,368
International Equity Fund 0
Bond Fund For Income 1,556
Quality Bond Fund 5,136
Government Securities Fund 2,584
Municipal Bond Fund 1,446
Ohio Tax Free Fund 7,696
</TABLE>
Certain Officers and Trustees of the Trust are Officers and Trustees of the
above companies.
87
<PAGE>
Fountain Square Funds
- --------------------------------------------------------------------------------
(5) Investment Transactions
Purchases and sales of investments, excluding short-term securities for the year
ended July 31, 1997, were as follows:
<TABLE>
<CAPTION>
Quality Equity Mid International
Growth Income Balanced Cap Equity
Fund Fund Fund Fund Fund
------------ ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
- -----------
Purchases $137,562,473 $14,855,353 $106,866,260 $75,495,591 $82,491,119
- -----------
Sales $105,006,916 $16,869,110 $102,828,869 $71,219,154 $77,563,486
- -----------
<CAPTION>
Bond Fund Quality Government Municipal Ohio
For Bond Securities Bond Tax Free
Income Fund Fund Fund Fund
------------ ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
- -----------
Purchases $109,699,314 $155,213,090 $ 68,525,470 $30,272,563 $69,786,554
- -----------
Sales $101,203,588 $144,840,700 $ 72,982,587 $33,143,066 $81,797,055
- -----------
</TABLE>
(6) Concentration of Credit Risk
The Ohio Tax Free Fund invests a substantial proportion of its assets in debt
obligations issued by the State of Ohio and its political subdivisions, agencies
and public authorities. The Fund is more susceptible to factors adversely
affecting issuers of Ohio municipal securities than a fund that is not
concentrated in these issuers to the same extent.
The International Equity Fund invests in equity and fixed income securities of
non-U.S. issuers. Although the Fund maintains a diversified investment
portfolio, the political or economic developments within a particular country or
region may have an adverse effect on the ability of domiciled issuers to meet
their obligations. Additionally, political or economic developments may have an
effect on the liquidity and volatility of portfolio securities and currency
holdings. The International Equity Fund has a relatively large concentration of
securities invested in companies domiciled in Japan. The Fund may be more
susceptible to the political, social and economic events adversely affecting the
Japanese companies than funds not so concentrated.
(7) Acquisition of Common Trust Funds
On January 27, 1997, the Equity Income Fund, Bond Fund For Income, and Municipal
Bond Fund commenced operations by acquiring all of the assets in a tax-free
exchange of the Fifth Third Bank Equity Fund, Fifth Third Bank Taxable Bond
Fund, and the Fifth Third Bank Tax Free Bond Fund, respectively which were are
all common trust funds maintained by affiliates of Fifth Third Bancorp. The
following is a summary of shares issued, net assets acquired, net asset value
per shares and unrealized appreciation as of the dates acquired:
<TABLE>
<CAPTION>
Equity Municipal
Income Bond Fund Bond
Fund For Income Fund
------------ ------------ ------------
<S> <C> <C> <C>
Shares Issued 8,607,970 11,494,610 8,339,644
Net Assets Acquired $103,295,647 $137,938,291 $100,075,733
Net Asset Value $ 12.00 $ 12.00 $ 12.00
Unrealized Appreciation
Acquired $ 29,473,455 $ 762,886 $ 1,440,477
Net Assets Before
Acquisition $ 0 $ 0 $ 0
</TABLE>
On September 27, 1997, the Quality Growth Fund, Mid Cap Fund, Government
Securities Fund, and Ohio Tax Free Fund acquired all of the assets in a tax-free
exchange of the Fifth Third Bank Equity Fund,
88
<PAGE>
Fountain Square Funds
- --------------------------------------------------------------------------------
Fifth Third Bank Mid Cap Fund, Fifth Third Bank Government Securities Fund and
the Fifth Third Bank Ohio Tax Free Fund, respectively which were all common
trust funds maintained by affiliates of Fifth Third Bancorp. The following is a
summary of shares issued, net assets acquired, net asset value per shares and
unrealized appreciation as of the dates acquired:
<TABLE>
<CAPTION>
Quality Government Ohio
Growth Mid Cap Securities Tax Free
Fund Fund Fund Fund
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
Shares Issued 8,307,224 4,685,876 1,643,960 13,375,705
Net Assets Acquired $115,390,218 $61,446,305 $15,781,925 $133,624,123
Net Asset Value $ 13.89 $ 13.10 $ 9.60 $ 9.99
Unrealized Appreciation Acquired $ 32,538,671 $14,216,710 $ 40,514 $ 1,446,196
Net Assets Before Acquisition $152,798,380 $82,081,264 $32,098,865 $ 36,147,313
</TABLE>
(8) Federal Income Tax Information (Unaudited)
The Trust designates the following eligible distributions for the dividends
received deduction for corporations for the taxable year ended July 31, 1997:
<TABLE>
<CAPTION>
Distributions from
Dividend Dividend Income
Income per Share
------------ ------------------
<S> <C> <C>
Quality Growth Fund
Investment A Shares $3,575,354 $ .086
Investment C Shares 15,351 .004
Equity Income Fund
Investment A Shares 1,819,077 .140
Investment C Shares 755 .095
Balanced Fund
Investment A Shares 822,034 .096
Investment C Shares 6,525 .069
Mid Cap Fund
Investment A Shares 1,305,448 .037
Investment C Shares 3,040 --
</TABLE>
The Trust designates the following exempt-interest dividends for the year ended
July 31, 1997:
<TABLE>
<CAPTION>
Municipal Bond Ohio Tax Free
Fund Fund
-------------- -------------
<S> <C> <C>
Exempt-interest dividends:
Investment A Shares $2,217,602 $6,309,126
Investment C Shares 1,376 2,559
Exempt-interest dividends per share:
Investment A Shares .266 .431
Investment C Shares .221 .359
</TABLE>
For the year ended July 31, 1997, 100% of the exempt-interest income for the
Ohio Tax Free Bond Fund was generated from Ohio municipal securities.
As of July 31, 1997, for federal income purposes, the following Funds have
capital loss carryforwards available to offset future capital gains, if any:
<TABLE>
<CAPTION>
Amount Expires
---------- -------
<S> <C> <C>
Government Securities Fund $1,100,088 2003
948,699 2004
Quality Bond Fund 162,755 2002
</TABLE>
89
<PAGE>
Fountain Square Quality Growth Fund
Financial Highlights - Investment A Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended July 31,
--------------------------------------------
1997 1996 1995 1994 1993*
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $13.16 $11.79 $ 9.70 $ 9.54 $10.00
- ----------------------------------- ------ ------ ------ ------ ------
Income from investment operations
- -----------------------------------
Net investment income (loss) 0.08 0.12 0.14 0.13 0.10
- ----------------------------------- ------ ------ ------ ------ ------
Net realized and unrealized gains
(losses) on investments 6.75 1.37 2.09 0.17 (0.47)
- ----------------------------------- ------ ------ ------ ------ ------
Total from investment operations 6.83 1.49 2.23 0.30 (0.37)
- ----------------------------------- ------ ------ ------ ------ ------
Less distributions
- -----------------------------------
Dividends to shareholders from net
investment income (0.09) (0.12) (0.14) (0.13) (0.09)
- ----------------------------------- ------ ------ ------ ------ ------
Distributions to shareholders from
net realized gains on investment
transactions (0.67) -- -- -- --
- ----------------------------------- ------ ------ ------ ------ ------
Distributions to shareholders in
excess of net investment
income (a) -- -- -- (0.01) --
- ----------------------------------- ------ ------ ------ ------ ------
Total distributions (0.76) (0.12) (0.14) (0.14) (0.09)
- ----------------------------------- ------ ------ ------ ------ ------
Net asset value, end of period $19.23 $13.16 $11.79 $ 9.70 $ 9.54
- ----------------------------------- ====== ====== ====== ====== ======
Total return** 54.02% 12.69% 23.21% 3.17% (3.73%)(d)
- -----------------------------------
Ratios to Average Net Assets
- -----------------------------------
Expenses 1.00% 0.99% 1.00% 1.00% 0.99%(c)
- -----------------------------------
Net investment income (loss) 0.45% 0.98% 1.44% 1.42% 1.47%(c)
- -----------------------------------
Expense waiver/reimbursement (b) 0.36% 0.03% 0.05% 0.03% 0.05%(c)
- -----------------------------------
Supplemental data
- -----------------------------------
Net assets, end of period
(000 omitted) $399,683 $134,469 $82,594 $69,648 $67,681
- -----------------------------------
Portfolio turnover rate (e) 37% 37% 34% 37% 28%
- -----------------------------------
Average commission rate paid (f) $0.0622 $0.0652 -- -- --
- -----------------------------------
</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.
(a) These distributions did 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.
(c) Annualized.
(d) Not annualized.
(e) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(f) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
(See Notes which are an integral part of the Financial Statements)
90
<PAGE>
Fountain Square Quality Growth Fund
Financial Highlights - Investment C Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
Year Period
Ended Ended
July 31, July 31,
1997 1996*
-------- --------
<S> <C> <C>
Net asset value, beginning of period $13.16 $13.37
- ------------------------------------------ -------- --------
Income from investment operations
- ------------------------------------------
Net investment income (loss) (0.03) --
- ------------------------------------------
Net realized and unrealized gains
(losses) on investments 6.72 (0.21)
- ------------------------------------------ -------- --------
Total from investment operations 6.69 (0.21)
- ------------------------------------------ -------- --------
Less distributions
- ------------------------------------------
Dividends to shareholders from net
realized gains on investment
transactions (0.67) --
- ------------------------------------------ -------- --------
Net asset value, end of period $19.18 $13.16
- ------------------------------------------ ======== ========
Total return** 52.79% 12.50%(c)
- ------------------------------------------
Ratios to Average Net Assets
- ------------------------------------------
Expenses 1.75% 1.77%(b)
- ------------------------------------------
Net investment income (loss) (0.32%) 0.26%(b)
- ------------------------------------------
Expense waiver/reimbursement (a) 0.26% 0.06%(b)
- ------------------------------------------
Supplemental data
- ------------------------------------------
Net assets, end of period (000 omitted) $3,146 $420
- ------------------------------------------
Portfolio turnover rate (d) 37% 37%
- ------------------------------------------
Average commission rate paid (e) $0.0622 $0.0652
- ------------------------------------------
</TABLE>
* Reflects operations for the period from April 25, 1996 (date of commencement
of operations) to July 31, 1996.
** Based on net asset value, which does not reflect the contingent deferred
sales charge.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Annualized.
(c) Represents total return for Investment A Shares for the period from
August 1, 1995 to April 24, 1996 plus the total return for the Investment C
Shares for the period from April 25, 1996 to July 31, 1996.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(e) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
(See Notes which are an integral part of the Financial Statements)
91
<PAGE>
Fountain Square Equity Income Fund
Financial Highlights - Investment A Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Period
Ended
July 31,
1997*
--------
<S> <C>
Net asset value, beginning of period $12.00
- ------------------------------------------- --------
Income from investment operations
- -------------------------------------------
Net investment income (loss) 0.15
- ------------------------------------------- --------
Net realized and unrealized gains
(losses) on investments 2.43
- ------------------------------------------- --------
Total from investment operations 2.58
- ------------------------------------------- --------
Less distributions
- -------------------------------------------
Dividends to shareholders from net
investment income (0.14)
- ------------------------------------------- --------
Net asset value, end of period $14.44
- ------------------------------------------- ========
Total return** 21.64%(c)
- -------------------------------------------
Ratios to Average Net Assets
- -------------------------------------------
Expenses 1.06%(b)
- -------------------------------------------
Net investment income (loss) 2.32%(b)
- -------------------------------------------
Expense waiver/reimbursement (a) 0.42%(b)
- -------------------------------------------
Supplemental data
- -------------------------------------------
Net assets, end of period (000 omitted) $120,324
- -------------------------------------------
Portfolio turnover rate (d) 28%(b)
- -------------------------------------------
Average commission rate paid (e) $0.0665
- -------------------------------------------
</TABLE>
* Reflects operations for the period from January 27, 1997 (date of
commencement of operations) to July 31, 1997.
** Based on net asset value, which does not reflect the sales load.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(e) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
(See Notes which are an integral part of the Financial Statements)
92
<PAGE>
Fountain Square Equity Income Fund
Financial Highlights - Investment C Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
Period
Ended
July 31,
1997*
--------
<S> <C>
Net asset value, beginning of period $12.00
- ------------------------------------------- --------
Income from investment operations
- -------------------------------------------
Net investment income (loss) 0.10
- -------------------------------------------
Net realized and unrealized gains
(losses) on investments 2.45
- ------------------------------------------- --------
Total from investment operations 2.55
- ------------------------------------------- --------
Less distributions
- -------------------------------------------
Dividends to shareholders from net
investment income (0.10)
- ------------------------------------------- --------
Net asset value, end of period $14.45
- ------------------------------------------- ========
Total return** 21.30%(c)
- -------------------------------------------
Ratios to Average Net Assets
- -------------------------------------------
Expenses 1.81%(b)
- -------------------------------------------
Net investment income (loss) 1.56%(b)
- -------------------------------------------
Expense waiver/reimbursement (a) 0.26%(b)
- -------------------------------------------
Supplemental data
- -------------------------------------------
Net assets, end of period (000 omitted) $92
- -------------------------------------------
Portfolio turnover rate (d) 28%(b)
- -------------------------------------------
Average commission rate paid (e) $0.0665
- -------------------------------------------
</TABLE>
* Reflects operations for the period from January 27, 1997 (date of
commencement of operations) to July 31, 1997.
** Based on net asset value, which does not reflect the contingent deferred
sales charge.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(e) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
(See Notes which are an integral part of the Financial Statements)
93
<PAGE>
Fountain Square Balanced Fund
Financial Highlights - Investment A Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended July 31,
--------------------------------------------
1997 1996 1995 1994 1993*
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $11.75 $11.28 $ 9.70 $ 9.78 $10.00
- ----------------------------------- ------ ------ ------ ------ ------
Income from investment operations
- -----------------------------------
Net investment income (loss) 0.27 0.27 0.28 0.26 0.20
- -----------------------------------
Net realized and unrealized gains
(losses) on investments 4.06 0.47 1.57 (0.06) (0.25)
- ----------------------------------- ------ ------ ------ ------ ------
Total from investment operations 4.33 0.74 1.85 0.20 (0.05)
- ----------------------------------- ------ ------ ------ ------ ------
Less distributions
- -----------------------------------
Dividends to shareholders from net
investment income (0.26) (0.27) (0.27) (0.26) (0.17)
- -----------------------------------
Distributions to shareholders from
net realized gains on investment
transactions (0.49) -- -- -- --
- -----------------------------------
Distributions to shareholders in
excess of net investment
income (a) -- -- -- (0.02) --
- ----------------------------------- ------ ------ ------ ------ ------
Total distributions (0.75) (0.27) (0.27) (0.28) (0.17)
- ----------------------------------- ------ ------ ------ ------ ------
Net asset value, end of period $15.33 $11.75 $11.28 $9.70 $9.78
- ----------------------------------- ====== ====== ====== ====== ======
Total return** 38.45% 6.52% 19.37% 2.02% (0.51%)(d)
- -----------------------------------
Ratios to Average Net Assets
- -----------------------------------
Expenses 1.00% 1.00% 1.00% 1.00% 1.00%(c)
- -----------------------------------
Net investment income (loss) 2.05% 2.31% 2.73% 2.64% 3.04%(c)
- -----------------------------------
Expense waiver/reimbursement (b) 0.40% 0.06% 0.06% 0.06% 0.08%(c)
- -----------------------------------
Supplemental data
- -----------------------------------
Net assets, end of period
(000 omitted) $122,765 $92,808 $58,075 $59,363 $60,168
- -----------------------------------
Portfolio turnover rate (e) 101% 61% 58% 53% 30%
- -----------------------------------
Average commission rate paid (f) $0.0240 $0.0062 -- -- --
- -----------------------------------
</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.
(a) These distributions did 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.
(c) Annualized.
(d) Not annualized.
(e) Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(f) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
(See Notes which are an integral part of the Financial Statements)
94
<PAGE>
Fountain Square Balanced Fund
Financial Highlights - Investment C Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
Year Period
Ended Ended
July 31, July 31,
1997 1996*
-------- --------
<S> <C> <C>
Net asset value, beginning of period $11.75 $12.13
- ------------------------------------------ -------- --------
Income from investment operations
- ------------------------------------------
Net investment income (loss) 0.16 0.05
- ------------------------------------------
Net realized and unrealized gains
(losses) on investments 4.08 (0.39)
- ------------------------------------------ -------- --------
Total from investment operations 4.24 (0.34)
- ------------------------------------------ -------- --------
Less distributions
- ------------------------------------------
Dividends to shareholders from net
investment income (0.16) (0.04)
- ------------------------------------------
Dividends to shareholders from net
realized gains on investment
transactions (0.49) --
- ------------------------------------------ -------- --------
Total distributions (0.65) (0.04)
- ------------------------------------------ -------- --------
Net asset value, end of period $15.34 $11.75
- ------------------------------------------ ======== ========
Total return** 37.52% 6.32%(c)
- ------------------------------------------
Ratios to Average Net Assets
- ------------------------------------------
Expenses 1.75% 1.78%(b)
- ------------------------------------------
Net investment income (loss) 1.30% 1.60%(b)
- ------------------------------------------
Expense waiver/reimbursement (a) 0.30% 0.07%(b)
- ------------------------------------------
Supplemental data
- ------------------------------------------
Net assets, end of period (000 omitted) $1,155 $264
- ------------------------------------------
Portfolio turnover rate (d) 101% 61%
- ------------------------------------------
Average commission rate paid (e) $0.0240 $0.0062
- ------------------------------------------
</TABLE>
* Reflects operations for the period from April 25, 1996 (date of commencement
of operations) to July 31, 1996.
** Based on net asset value, which does not reflect the contingent deferred
sales charge.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Annualized.
(c) Represents total return for Investment A Shares for the period from August
1, 1995 to April 24, 1996 plus the total return for the Investment C Shares
for the period from April 25, 1996 to July 31, 1996.
(d) Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(e) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
(See Notes which are an integral part of the Financial Statements)
95
<PAGE>
Fountain Square Mid Cap Fund
Financial Highlights - Investment A Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended July 31,
--------------------------------------------
1997 1996 1995 1994 1993*
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $12.60 $12.59 $10.10 $9.68 $10.00
- ---------------------------------- ------ ------ ------ ------ ------
Income from investment operations
- ----------------------------------
Net investment income (loss) 0.02 0.06 0.08 0.06 0.06
- ----------------------------------
Net realized and unrealized gains
(losses) on investments 5.55 0.11 2.48 0.43 (0.33)
- ---------------------------------- ------ ------ ------ ------ ------
Total from investment operations 5.57 0.17 2.56 0.49 (0.27)
- ---------------------------------- ------ ------ ------ ------ ------
Less distributions
- ----------------------------------
Dividends to shareholders from
net investment income (0.02) (0.07) (0.07) (0.07) (0.05)
- ----------------------------------
Dividends to shareholders in
excess of net investment income (0.02) -- -- -- --
- ---------------------------------- ------ ------ ------ ------ ------
Distributions to shareholders
from net realized gains on
investment transactions (1.15) (0.09) -- -- --
- ---------------------------------- ------ ------ ------ ------ ------
Total distributions (1.19) (0.16) (0.07) (0.07) (0.05)
- ---------------------------------- ------ ------ ------ ------ ------
Net asset value, end of period $16.98 $12.60 $12.59 $10.10 $9.68
- ---------------------------------- ====== ====== ====== ====== ======
Total return** 47.17% 1.27% 25.45% 5.07% (2.73%)(c)
- ----------------------------------
Ratios to Average Net Assets
- ----------------------------------
Expenses 1.00% 1.00% 1.00% 1.00% 0.99%(b)
- ----------------------------------
Net investment income (loss) 0.10% 0.42% 0.77% 0.60% 0.88%(b)
- ----------------------------------
Expense waiver/reimbursement (a) 0.37% 0.06% 0.18% 0.33% 0.40%(b)
- ----------------------------------
Supplemental data
- ----------------------------------
Net assets, end of period
(000 omitted) $186,066 $72,663 $47,184 $30,210 $24,019
- ----------------------------------
Portfolio turnover rate (d) 52% 54% 23% 44% 20%
- ----------------------------------
Average commission rate paid (e) $0.0635 $0.0659 -- -- --
- ----------------------------------
</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.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(e) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
(See Notes which are an integral part of the Financial Statements)
96
<PAGE>
Fountain Square Mid Cap Fund
Financial Highlights - Investment C Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
Year Period
Ended Ended
July 31, July 31,
1997 1996*
-------- --------
<S> <C> <C>
Net asset value, beginning of period $12.59 $13.72
- -------------------------------------------- ------- -------
Income from investment operations
- --------------------------------------------
Net investment income (loss) (0.07) (0.01)
- --------------------------------------------
Net realized and unrealized gains
(losses) on investments 5.51 (1.12)
- -------------------------------------------- ------- -------
Total from investment operations 5.44 (1.13)
- -------------------------------------------- ------- -------
Less distributions
- --------------------------------------------
Dividends to shareholders from net
realized gains on investment transactions (1.15) --
- -------------------------------------------- ------- -------
Net asset value, end of period $16.88 $12.59
- -------------------------------------------- ======= =======
Total return** 46.05% 1.11%(c)
- --------------------------------------------
Ratios to Average Net Assets
- --------------------------------------------
Expenses 1.75% 1.78%(b)
- --------------------------------------------
Net investment income (loss) (0.62%) (0.51%)(b)
- --------------------------------------------
Expense waiver/reimbursement (a) 0.27% 0.06%(b)
- --------------------------------------------
Supplemental data
- --------------------------------------------
Net assets, end of period (000 omitted) $439 $229
- --------------------------------------------
Portfolio turnover rate (d) 52% 54%
- --------------------------------------------
Average commission rate paid (e) $0.0635 $0.0659
- --------------------------------------------
</TABLE>
* Reflects operations for the period from April 24, 1996 (date of commencement
of operations) to July 31, 1996.
** Based on net asset value, which does not reflect the contingent deferred
sales charge.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Annualized.
(c) Represents total return for Investment A Shares for the period from
August 1, 1995 to April 23, 1996 plus the total return for the Investment C
Shares for the period from April 24, 1996 to July 31, 1996.
(d) Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(e) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
(See Notes which are an integral part of the Financial Statements)
97
<PAGE>
Fountain Square International Equity Fund
Financial Highlights - Investment A Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended July 31,
-------------------------
1997 1996 1995*
------ ------ ------
<S> <C> <C> <C>
Net asset value, beginning of period $10.74 $9.83 $10.00
- ------------------------------------------ ------ ------ ------
Income from investment operations
- ------------------------------------------
Net investment income (loss) 0.04 0.01 0.05
- ------------------------------------------
Net realized and unrealized gains
(losses) on investments 2.15 0.90 (0.22)
- ------------------------------------------ ------ ------ ------
Total from investment operations 2.19 0.91 (0.17)
- ------------------------------------------ ------ ------ ------
Less distributions
- ------------------------------------------
Dividends to shareholders from net
investment income (0.66) -- --
- ------------------------------------------
Distributions to shareholders in excess
of net investment income (0.16) -- --
- ------------------------------------------
Distributions to shareholders from net
realized gains on investment
transactions (0.06) -- --
- ------------------------------------------ ------ ------ ------
Total distributions (0.88) -- --
- ------------------------------------------ ------ ------ ------
Net asset value, end of period $12.05 $10.74 $9.83
- ------------------------------------------ ====== ====== ======
Total return** 21.78% 9.26% (1.70%)(c)
- ------------------------------------------
Ratios to Average Net Assets
- ------------------------------------------
Expenses 1.38% 1.61% 1.65%(b)
- ------------------------------------------
Net investment income (loss) 0.39% 0.32% 0.62%(b)
- ------------------------------------------
Expense waiver/reimbursement (a) 0.35% 0.05% 0.07%(b)
- ------------------------------------------
Supplemental data
- ------------------------------------------
Net assets, end of period (000 omitted) $151,728 $120,349 $86,442
- ------------------------------------------
Portfolio turnover rate (d) 60% 41% 54%
- ------------------------------------------
Average commission rate paid (e) $0.0028 $0.0010 $ --
- ------------------------------------------
</TABLE>
* Reflects operations for the period from August 19, 1994 (date of initial
public investment) to July 31, 1993.
** Based on net asset value, which does not reflect the sales load.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(e) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
(See Notes which are an integral part of the Financial Statements)
98
<PAGE>
Fountain Square International Equity Fund
Financial Highlights - Investment C Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
Year Period
Ended Ended
July 31, July 31,
1997 1996*
-------- --------
<S> <C> <C>
Net asset value, beginning of period $10.71 $11.21
- ------------------------------------------- -------- --------
Income from investment operations
- -------------------------------------------
Net investment income (loss) (0.02) 0.01
- -------------------------------------------
Net realized and unrealized gains
(losses) on investments 2.16 (0.51)
- ------------------------------------------- -------- --------
Total from investment operations 2.14 (0.50)
- ------------------------------------------- -------- --------
Less distributions
- -------------------------------------------
Dividends to shareholders from net
investment income (0.46) --
- -------------------------------------------
Dividends to shareholders in excess of
net investment income (0.32) --
- -------------------------------------------
Distributions to shareholders from net
realized gains on investment
transactions (0.06) --
- ------------------------------------------- -------- --------
Total distributions (0.84) --
- ------------------------------------------- -------- --------
Net asset value, end of period $12.01 $10.71
- ------------------------------------------- ======== ========
Total return** 21.25% 8.95%(c)
- -------------------------------------------
Ratios to Average Net Assets
- -------------------------------------------
Expenses 2.13% 2.34%(b)
- -------------------------------------------
Net investment income (loss) (0.28%) 0.76%(b)
- -------------------------------------------
Expense waiver/reimbursement (a) 0.25% --
- -------------------------------------------
Supplemental data
- -------------------------------------------
Net assets, end of period (000 omitted) $210 $57
- -------------------------------------------
Portfolio turnover rate (d) 60% 41%
- -------------------------------------------
Average commission rate paid (e) $0.0028 $0.0010
- -------------------------------------------
</TABLE>
* Reflects operations for the period from April 25, 1996 (date of commencement
of operations) to July 31, 1996.
** Based on net asset value, which does not reflect the contingent deferred
sales charge.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Annualized.
(c) Represents total return for Investment A Shares for the period from August
1, 1995 to April 24, 1996 plus the total return for the Investment C Shares
for the period from April 25, 1996 to July 31, 1996.
(d) Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(e) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of shares purchased and sold by the
Fund for which commissions were charged.
(See Notes which are an integral part of the Financial Statements)
99
<PAGE>
Fountain Square Bond For Income Fund
Financial Highlights -- Investment A Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Period
Ended
July 31,
1997*
--------
<S> <C>
Net asset value, beginning of period $12.00
- --------------------------------------------- --------
Income from investment operations
- ---------------------------------------------
Net investment income (loss) 0.37
- ---------------------------------------------
Net realized and unrealized gains (losses)
on investments 0.18
- --------------------------------------------- --------
Total from investment operations 0.55
- --------------------------------------------- --------
Less distributions
- ---------------------------------------------
Dividends to shareholders from net
investment income (0.36)
- --------------------------------------------- --------
Net asset value, end of period $12.19
- --------------------------------------------- --------
Total return** 4.64%(c)
- ---------------------------------------------
Ratios to Average Net Assets
- ---------------------------------------------
Expenses 0.79%(b)
- ---------------------------------------------
Net investment income (loss) 6.08%(b)
- ---------------------------------------------
Expense waiver/reimbursement(a) 0.42%(b)
- ---------------------------------------------
Supplemental data
- ---------------------------------------------
Net assets, end of period (000 omitted) $157,108
- ---------------------------------------------
Portfolio turnover rate(d) 157%(b)
- ---------------------------------------------
</TABLE>
*Reflects operations for the period from January 27, 1997 (date of commencement
of operations) to July 31, 1997.
**Based on net asset value, which does not reflect the sales load.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(See Notes which are an integral part of the Financial Statements)
100
<PAGE>
Fountain Square Bond For Income Fund
Financial Highlights -- Investment C Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Period
Ended
July 31,
1997*
--------
<S> <C>
Net asset value, beginning of period $12.00
- --------------------------------------------- --------
Income from investment operations
- ---------------------------------------------
Net investment income (loss) (0.01)
- ---------------------------------------------
Net realized and unrealized gains (losses)
on investments 0.50
- --------------------------------------------- --------
Total from investment operations 0.49
- --------------------------------------------- --------
Less distributions
- ---------------------------------------------
Dividends to shareholders from net
investment income (0.22)
- --------------------------------------------- --------
Dividends to shareholders in excess of
net investment income (0.09)
- --------------------------------------------- --------
Total distributions (0.31)
- --------------------------------------------- --------
Net asset value, end of period $12.18
- --------------------------------------------- --------
Total return** 4.18%(c)
- ---------------------------------------------
Ratios to Average Net Assets
- ---------------------------------------------
Expenses 1.54%(b)
- ---------------------------------------------
Net investment income (loss) 4.20%(b)
- ---------------------------------------------
Expense waiver/reimbursement(a) 0.26%(b)
- ---------------------------------------------
Supplemental data
- ---------------------------------------------
Net assets, end of period (000 omitted) $6
- ---------------------------------------------
Portfolio turnover rate(d) 157%(b)
- ---------------------------------------------
</TABLE>
*Reflects operations for the period from January 27, 1997 (date of commencement
of operations) to July 31, 1997.
**Based on net asset value, which does not reflect the contingent deferred sales
charge.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(See Notes which are an integral part of the Financial Statements)
101
<PAGE>
Fountain Square Quality Bond Fund
Financial Highlights -- Investment A Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended July 31,
--------------------------------------------------------
1997 1996 1995 1994 1993*
------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.52 $ 9.72 $ 9.55 $10.29 $10.00
- -------------------------------------------------- ------- ------- ------- ------- -------
Income from investment operations
- --------------------------------------------------
Net investment income (loss) 0.55 0.56 0.64 0.57 0.41
- --------------------------------------------------
Net realized and unrealized gains (losses)
on investments 0.32 (0.19) 0.17 (0.69) 0.26
- -------------------------------------------------- ------- ------- ------- ------- -------
Total from investment operations 0.87 0.37 0.81 (0.12) 0.67
- -------------------------------------------------- ------- ------- ------- ------- -------
Less distributions
- --------------------------------------------------
Dividends to shareholders from net
investment income (0.54) (0.57) (0.64) (0.59) (0.38)
- --------------------------------------------------
Distributions to shareholders from net
realized gains on investment transactions -- -- -- (0.03) --
- -------------------------------------------------- ------- ------- ------- ------- -------
Total distributions (0.54) (0.57) (0.64) (0.62) (0.38)
- -------------------------------------------------- ------- ------- ------- ------- -------
Net asset value, end of period $ 9.85 $ 9.52 $ 9.72 $ 9.55 $10.29
- -------------------------------------------------- ======= ======= ======= ======= =======
Total return** 9.43% 3.86% 8.89% (1.25%) 6.78%(c)
- --------------------------------------------------
Ratios to Average Net Assets
- --------------------------------------------------
Expenses 0.75% 0.75% 0.75% 0.75% 0.74%(b)
- --------------------------------------------------
Net investment income (loss) 5.71% 5.80% 6.72% 5.76% 6.07%(b)
- --------------------------------------------------
Expense waiver/reimbursement (a) 0.41% 0.06% 0.09% 0.11% 0.23%(b)
- --------------------------------------------------
Supplemental data
- --------------------------------------------------
Net assets, end of period (000 omitted) $91,789 $83,422 $55,767 $47,272 $37,962
- --------------------------------------------------
Portfolio turnover rate (d) 181% 117% 138% 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.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(See Notes which are an integral part of the Financial Statements)
102
<PAGE>
Fountain Square Quality Bond Fund
Financial Highlights -- Investment C Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
Year Period
Ended Ended
July 31, July 31,
1997 1996*
-------- --------
<S> <C> <C>
Net asset value, beginning of period $ 9.53 $ 9.62
- -------------------------------------------- -------- --------
Income from investment operations
- --------------------------------------------
Net investment income (loss) 0.49 0.14
- --------------------------------------------
Net realized and unrealized gains (losses)
on investments 0.32 (0.08)
- -------------------------------------------- -------- --------
Total from investment operations 0.81 0.06
- -------------------------------------------- -------- --------
Less distributions
- --------------------------------------------
Dividends to shareholders from net
investment income (0.48) (0.15)
- -------------------------------------------- -------- --------
Net asset value, end of period $ 9.86 $ 9.53
- -------------------------------------------- ======== ========
Total return** 8.68% 3.71%(c)
- --------------------------------------------
Ratios to Average Net Assets
- --------------------------------------------
Expenses 1.50% 1.52%(b)
- --------------------------------------------
Net investment income (loss) 4.97% 5.03%(b)
- --------------------------------------------
Expense waiver/reimbursement(a) 0.31% 0.09%(b)
- --------------------------------------------
Supplemental data
- --------------------------------------------
Net assets, end of period (000 omitted) $204 $162
- --------------------------------------------
Portfolio turnover rate(d) 181% 117%
- --------------------------------------------
</TABLE>
*Reflects operations for the period from April 25, 1996 (date of commencement
of operations) to July 31, 1996.
**Based on net asset value, which does not reflect the contingent deferred sales
charge.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Annualized.
(c) Represents total return for Investment A Shares for the period from August
1, 1995 to April 24, 1996 plus the total return for the Investment C Shares
for the period from April 25, 1996 to July 31, 1996.
(d) Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(See Notes which are an integral part of the Financial Statements)
103
<PAGE>
Fountain Square U.S. Government Securities Fund
Financial Highlights -- Investment A Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended July 31,
-------------------------------------------
1997 1996 1995 1994 1993*
------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.55 $9.77 $9.64 $10.21 $10.00
- ------------------------------------- ------- ------- ------- ------- --------
Income from investment operations
- -------------------------------------
Net investment income (loss) 0.54 0.55 0.58 0.51 0.35
- -------------------------------------
Net realized and unrealized gains
(losses) on investments 0.19 (0.20) 0.13 (0.49) 0.13
- ------------------------------------- ------- ------- ------- ------- --------
Total from investment operations 0.73 0.35 0.71 0.02 0.48
- ------------------------------------- ------- ------- ------- ------- --------
Less distributions
- -------------------------------------
Dividends to shareholders from net
investment income (0.53) (0.57) (0.58) (0.57) (0.27)
- -------------------------------------
Distributions to shareholders from
net realized gains on investment
transactions -- -- -- (0.02) --
- ------------------------------------- ------- ------- ------- ------- --------
Total distributions (0.53) (0.57) (0.58) (0.59) (0.27)
- ------------------------------------- ------- ------- ------- ------- --------
Net asset value, end of period $ 9.75 $ 9.55 $ 9.77 $ 9.64 $10.21
- ------------------------------------- ======= ======= ======= ======= ========
Total return** 7.83% 3.63% 7.66% 0.11% 4.87%(c)
- -------------------------------------
Ratios to Average Net Assets
- -------------------------------------
Expenses 0.75% 0.75% 0.75% 0.75% 0.74%(b)
- -------------------------------------
Net investment income (loss) 5.56% 5.67% 5.98% 5.17% 5.36%(b)
- -------------------------------------
Expense waiver/reimbursement (a) 0.50% 0.29% 0.39% 0.18% 0.33%(b)
- -------------------------------------
Supplemental data
- -------------------------------------
Net assets, end of period (000
omitted) $42,414 $30,754 $25,054 $29,107 $29,603
- -------------------------------------
Portfolio turnover rate (d) 169% 103% 115% 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.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(See Notes which are an integral part of the Financial Statements)
104
<PAGE>
Fountain Square U.S. Government Securities Fund
Financial Highlights -- Investment C Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
Year Period
Ended Ended
July 31, July 31,
1997 1996*
-------- --------
<S> <C> <C>
Net asset value, beginning of period $9.56 $9.65
- -------------------------------------------- -------- --------
Income from investment operations
- --------------------------------------------
Net investment income (loss) 0.46 0.16
- --------------------------------------------
Net realized and unrealized gains (losses)
on investments 0.19 (0.10)
- -------------------------------------------- -------- --------
Total from investment operations 0.65 0.06
- -------------------------------------------- -------- --------
Less distributions
- --------------------------------------------
Dividends to shareholders from net
investment income (0.46) (0.15)
- -------------------------------------------- -------- --------
Net asset value, end of period $9.75 $9.56
- -------------------------------------------- ======== ========
Total return** 6.92% 3.48%(c)
- --------------------------------------------
Ratios to Average Net Assets
- --------------------------------------------
Expenses 1.50% 1.52%(b)
- --------------------------------------------
Net investment income (loss) 4.82% 4.80%(b)
- --------------------------------------------
Expense waiver/reimbursement(a) 0.40% 0.37%(b)
- --------------------------------------------
Supplemental data
- --------------------------------------------
Net assets, end of period (000 omitted) $75 $49
- --------------------------------------------
Portfolio turnover rate(d) 169% 103%
- --------------------------------------------
</TABLE>
*Reflects operations for the period from April 24, 1996 (date of commencement
of operations) to July 31, 1996.
**Based on net asset value, which does not reflect the contingent deferred sales
charge.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Annualized.
(c) Represents total return for Investment A Shares for the period from August
1, 1995 to April 23, 1996 plus the total return for the Investment C Shares
for the period from April 24, 1996 to July 31, 1996.
(d) Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(See Notes which are an integral part of the Financial Statements)
105
<PAGE>
Fountain Square Municipal Bond Fund
Financial Highlights -- Investment A Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Period
Ended
July 31,
1997*
--------
<S> <C>
Net asset value, beginning of period $12.00
- -------------------------------------------- --------
Income from investment operations
- --------------------------------------------
Net investment income (loss) 0.28
- --------------------------------------------
Net realized and unrealized gains (losses)
on investments 0.32
- -------------------------------------------- --------
Total from investment operations 0.60
- -------------------------------------------- --------
Less distributions
- --------------------------------------------
Dividends to shareholders from net
investment income (0.27)
- -------------------------------------------- --------
Net asset value, end of period $12.33
- -------------------------------------------- ========
Total return** 5.04%(c)
- --------------------------------------------
Ratios to Average Net Assets
- --------------------------------------------
Expenses 0.81%(b)
- --------------------------------------------
Net investment income (loss) 4.44%(b)
- --------------------------------------------
Expense waiver/reimbursement(a) 0.42%(b)
- --------------------------------------------
Supplemental data
- --------------------------------------------
Net assets, end of period (000 omitted) $101,616
- --------------------------------------------
Portfolio turnover rate(d) 63%(b)
- --------------------------------------------
</TABLE>
*Reflects operations for the period from January 27, 1997 (date of commencement
of operations) to July 31, 1997.
**Based on net asset value, which does not reflect the sales load.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(See Notes which are an integral part of the Financial Statements)
106
<PAGE>
Fountain Square Municipal Bond Fund
Financial Highlights -- Investment C Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Period
Ended
July 31,
1997*
--------
<S> <C>
Net asset value, beginning of period $12.00
- -------------------------------------------- --------
Income from investment operations
- --------------------------------------------
Net investment income (loss) (0.20)
- --------------------------------------------
Net realized and unrealized gains (losses)
on investments 0.75
- -------------------------------------------- --------
Total from investment operations 0.55
- -------------------------------------------- --------
Less distributions
- --------------------------------------------
Dividends to shareholders from net
investment income (0.16)
- --------------------------------------------
Dividends to shareholders in excess of
net investment income (0.06)
- -------------------------------------------- --------
Total distributions (0.22)
- -------------------------------------------- --------
Net asset value, end of period $12.33
- -------------------------------------------- ========
Total return** 4.65%(c)
- --------------------------------------------
Ratios to Average Net Assets
- --------------------------------------------
Expenses 1.56%(b)
- --------------------------------------------
Net investment income (loss) 3.09%(b)
- --------------------------------------------
Expense waiver/reimbursement (a) 0.26%(b)
- --------------------------------------------
Supplemental data
- --------------------------------------------
Net assets, end of period (000 omitted) $11
- --------------------------------------------
Portfolio turnover rate (d) 63%(b)
- --------------------------------------------
</TABLE>
*Reflects operations for the period from January 27, 1997 (date of commencement
of operations) to July 31, 1997.
**Based on net asset value, which does not reflect the contingent deferred sales
charge.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(See Notes which are an integral part of the Financial Statements)
107
<PAGE>
Fountain Square Ohio Tax Free Bond Fund
Financial Highlights -- Investment A Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended July 31,
----------------------------------------------
1997 1996 1995 1994 1993*
------- ------ ------ ------ ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.01 $9.99 $9.75 $9.95 $10.00
- ------------------------------------------ ------- ------ ------ ------ ---------
Income from investment operations
- ------------------------------------------
Net investment income (loss) 0.43 0.40 0.42 0.40 0.05
- ------------------------------------------
Net realized and unrealized gains
(losses) on investments 0.30 0.03 0.24 (0.21) (0.05)
- ------------------------------------------ ------- ------ ------ ------ ---------
Total from investment operations 0.73 0.43 0.66 0.19 --
- ------------------------------------------ ------- ------ ------ ------ ---------
Less distributions
- ------------------------------------------
Dividends to shareholders from net
investment income (0.43) (0.41) (0.42) (0.39) (0.05)
- ------------------------------------------ ------- ------ ------ ------ ---------
Net asset value, end of period $10.31 $10.01 $9.99 $9.75 $9.95
- ------------------------------------------ ======= ====== ====== ====== =========
Total return** 7.49% 4.33% 7.02% 1.95% (0.01%)(c)
- ------------------------------------------
Ratios to Average Net Assets
- ------------------------------------------
Expenses 0.75% 0.74% 0.35% 0.00% 0.00%(b)
- ------------------------------------------
Net investment income (loss) 4.27% 4.01% 4.36% 4.18% 3.53%(b)
- ------------------------------------------
Expense waiver/reimbursement(a) 0.37% 0.32% 0.77% 1.33% 2.21%(b)
- ------------------------------------------
Supplemental data
- ------------------------------------------
Net assets, end of period (000 omitted) $168,800 $35,463 $28,315 $23,854 $8,163
- ------------------------------------------
Portfolio turnover rate(d) 49% 30% 27% 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.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Annualized.
(c) Not annualized.
(d) Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(See Notes which are an integral part of the Financial Statements)
108
<PAGE>
Fountain Square Ohio Tax Free Bond Fund
Financial Highlights -- Investment C Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
Year Period
Ended Ended
July 31, July 31,
1997 1996*
-------- --------
<S> <C> <C>
Net asset value, beginning of period $10.00 $10.02
- ------------------------------------------- -------- --------
Income from investment operations
- -------------------------------------------
Net investment income (loss) 0.36 0.10
- -------------------------------------------
Net realized and unrealized gains (losses)
on investments 0.31 (0.01)
- ------------------------------------------- -------- --------
Total from investment operations 0.67 0.09
- ------------------------------------------- -------- --------
Less distributions
- -------------------------------------------
Dividends to shareholders from net
investment income (0.35) (0.11)
- -------------------------------------------
Dividends to shareholders in excess of
net investment income (0.01) --
- ------------------------------------------- -------- --------
Total distributions (0.36) (0.11)
- ------------------------------------------- -------- --------
Net asset value, end of period $10.31 $10.00
- ------------------------------------------- ======== ========
Total return** 6.84% 3.98%(c)
- -------------------------------------------
Ratios to Average Net Assets
- -------------------------------------------
Expenses 1.50% 1.52%(b)
- -------------------------------------------
Net investment income (loss) 3.51% 3.41%(b)
- -------------------------------------------
Expense waiver/reimbursement(a) 0.27% 0.28%(b)
- -------------------------------------------
Supplemental data
- -------------------------------------------
Net assets, end of period (000 omitted) $248 $38
- -------------------------------------------
Portfolio turnover rate(d) 49% 30%
- -------------------------------------------
</TABLE>
*Reflects operations for the period from April 24, 1996
(date of commencement of operations) to July 31, 1996.
**Based on net asset value, which does not reflect the contingent deferred sales
charge.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Annualized.
(c) Represents total return for Investment A Shares for the period from August
1, 1995 to April 23, 1996 plus the total return for the Investment C Shares
for the period from April 24, 1996 to July 31, 1996.
(d) Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(See Notes which are an integral part of the Financial Statements)
109
<PAGE>
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 schedules of portfolio investments, of Fountain Square Funds (comprising
respectively, Fountain Square Ohio Tax Free Bond Fund, 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, Fountain Square Equity Income Fund, Fountain Square Bond Fund for Income,
Fountain Square Municipal Bond Fund and Fountain Square International Equity
Fund) as of July 31, 1997, and the related statements of operations for the year
then ended, the statements of changes in net assets for each of the two years in
the period then ended of the Fountain Square Ohio Tax Free Bond Fund, 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 International Equity Fund, and for the
period ended July 31, 1997 of the Fountain Square Equity Income Fund, Fountain
Square Bond Fund for Income, Fountain Square Municipal Bond Fund and the
financial highlights for the periods presented herein. These financial
statements and financial highlights are the responsibility of the Fund'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, 1997, by correspondence with the custodians 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 of July 31, 1997,
the results of their operations for the period then ended, the changes in their
net assets and the financial highlights for the periods presented herein, in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Cincinnati, Ohio
September 12, 1997
110
<PAGE>
Fountain Square Government Cash Reserves Fund
Financial Highlights -- Investment Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on
page 25.
<TABLE>
<CAPTION>
Year Ended July 31,
----------------------------------------------------------
1997 1996 1995 1994 1993 1992*
--------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------------------- --------- -------- -------- -------- -------- -------
Investment from investment operations
- ----------------------------------------------------------
Net investment income 0.05 0.05 0.05 0.03 0.03 0.03
- ---------------------------------------------------------- --------- -------- -------- -------- -------- -------
Less distributions
- ----------------------------------------------------------
Dividends to shareholders from net
investment income (0.05) (0.05) (0.05) (0.03) (0.03) (0.03)
- ---------------------------------------------------------- --------- -------- -------- -------- -------- -------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------------------- ========= ======== ======== ======== ======== =======
Total return 5.00% 5.11% 5.22% 3.03% 2.76% 2.61%(c)
- ----------------------------------------------------------
Ratios to Average Net Assets
- ----------------------------------------------------------
Expenses 0.51% 0.51% 0.50% 0.50% 0.50% 0.50%(b)
- ----------------------------------------------------------
Net investment income 4.90% 4.97% 5.17% 2.96% 3.22% 3.68%(b)
- ----------------------------------------------------------
Expense waiver/reimbursement(a) 0.44% 0.42% 0.45% 0.48% 0.50% 0.50%(b)
- ----------------------------------------------------------
Supplemental data
- ----------------------------------------------------------
Net assets, end of period (000 omitted) $110,543 $68,884 $45,726 $11,073 $10,923 $8,726
- ----------------------------------------------------------
</TABLE>
*Reflects operations for the period from November 25, 1991 (date of initial
public investment) to July 31, 1992.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Annualized.
(c) Not annualized.
(See Notes which are an integral part of the Financial Statements)
111
<PAGE>
Fountain Square Government Cash Reserves Fund
Financial Highlights Trust Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on
page 25.
<TABLE>
<CAPTION>
Year Ended July 31,
--------------------------------------------------------------
1997 1996 1995 1994 1993 1992*
--------- --------- --------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------------------- --------- --------- --------- --------- -------- --------
Investment from investment operations
- ----------------------------------------------------------
Net investment income 0.05 0.05 0.05 0.03 0.03 0.04
- ---------------------------------------------------------- --------- --------- --------- --------- -------- --------
Less distributions
- ----------------------------------------------------------
Dividends to shareholders from net
investment income (0.05) (0.05) (0.05) (0.03) (0.03) (0.04)
- ---------------------------------------------------------- --------- --------- --------- --------- -------- --------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------------------- ========= ========= ========= ========= ======== ========
Total return** 5.01% 5.11% 5.22% 3.03% 2.76% 4.19%
- ----------------------------------------------------------
Ratios to Average Net Assets
- ----------------------------------------------------------
Expenses 0.51% 0.50% 0.50% 0.50% 0.50% 0.50%
- ----------------------------------------------------------
Net investment income 4.90% 4.99% 5.17% 3.01% 3.22% 4.14%
- ----------------------------------------------------------
Expense waiver/reimbursement(a) 0.09% 0.07% 0.20% 0.13% 0.15% 0.15%
- ----------------------------------------------------------
Supplemental data
- ----------------------------------------------------------
Net assets, end of period (000 omitted) $162,543 $132,326 $129,603 $106,632 $92,993 $82,888
- ----------------------------------------------------------
</TABLE>
*Reflects operations for the period from November 25, 1991 (date of initial
public investment) to July 31, 1992.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
112
<PAGE>
Fountain Square Government Cash Reserves Fund
Schedule of Investments
July 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Amortized
Amount Security Description Cost
- --------- ------------------------------------------ -----------
U.S. Government Agencies--100.3%
- -----------------------------------------------------------
Federal Farm Credit Bank--27.9%
------------------------------------------
<S> <C> <C>
7,000,000 5.55%, 8/1/97 $ 7,000,000
------------------------------------------
5,000,000 Discount Note, 8/5/97 4,996,933
------------------------------------------
6,000,000 Discount Note, 8/14/97 5,988,701
------------------------------------------
7,000,000 Discount Note, 8/18/97 6,982,976
------------------------------------------
4,000,000 Discount Note, 8/21/97 3,988,000
------------------------------------------
6,000,000 Discount Note, 8/25/97 5,978,160
------------------------------------------
8,000,000 Discount Note, 8/26/97 7,969,666
------------------------------------------
6,000,000 Discount Note, 8/27/97 5,976,340
------------------------------------------
5,880,000 Discount Note, 8/28/97 5,855,833
------------------------------------------
5,800,000 Discount Note, 9/15/97 5,760,633
------------------------------------------
5,000,000 Discount Note, 10/1/97 4,952,471
------------------------------------------
5,000,000 Discount Note, 10/3/97 4,953,100
------------------------------------------
6,000,000 Discount Note, 11/4/97 5,913,867
------------------------------------------ -----------
Total 76,316,680
------------------------------------------ -----------
Federal Home Loan Bank--51.7%
------------------------------------------
11,425,000 Discount Note, 8/6/97 11,416,463
------------------------------------------
8,000,000 Discount Note, 8/7/97 7,992,620
------------------------------------------
10,000,000 Discount Note, 8/8/97 9,989,461
------------------------------------------
7,000,000 Discount Note, 8/28/97 6,971,388
------------------------------------------
5,000,000 Floating Rate Note, 5.49%, 8/28/97** 4,999,802
------------------------------------------
14,000,000 Discount Note, 9/3/97 13,929,178
------------------------------------------
6,000,000 Discount Note, 9/12/97 5,961,150
------------------------------------------
6,000,000 Discount Note, 9/18/97 5,956,600
------------------------------------------
6,000,000 Discount Note, 9/25/97 5,948,758
------------------------------------------
8,000,000 Discount Note, 9/26/97 7,932,551
------------------------------------------
</TABLE>
113
<PAGE>
Fountain Square Government Cash Reserves Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Amortized
Amount Security Description Cost
- --------- ------------------------------------------ -----------
U.S. Government Agencies--Continued
- ------------------------------------------
<S> <C> <C>
13,700,000 Discount Note, 9/30/97 13,576,473
------------------------------------------
8,000,000 Discount Note, 10/6/97 7,921,240
------------------------------------------
8,000,000 Discount Note, 10/8/97 7,918,929
------------------------------------------
8,000,000 Discount Note, 10/10/97 7,916,778
------------------------------------------
13,000,000 Discount Note, 10/24/97 12,837,472
------------------------------------------
4,000,000 Discount Note, 10/29/97 3,946,798
------------------------------------------
6,000,000 Discount Note, 12/31/97 5,861,680
------------------------------------------ -----------
Total 141,077,341
------------------------------------------ -----------
Student Loan Marketing Association--11.6%
------------------------------------------
5,000,000 Floating Rate Note, 5.44%, 8/21/97** 5,000,000
------------------------------------------
8,000,000 Discount Note, 9/22/97 7,886,678
------------------------------------------
18,900,000 Master Note, 5.46%, 7/1/00* 18,900,000
------------------------------------------ -----------
Total 31,786,678
------------------------------------------ -----------
Tennesse Valley Authority--9.1%
------------------------------------------
8,000,000 Discount Note, 8/22/97 7,974,567
------------------------------------------
10,000,000 Discount Note, 9/11/97 9,938,158
------------------------------------------
7,000,000 Discount Note, 10/2/97 6,915,895
------------------------------------------ -----------
Total 24,828,620
------------------------------------------ -----------
Total U.S. Government Agencies 274,009,319
------------------------------------------ -----------
Total Investments (Amortized Cost
$274,009,319) ***--100.3% 274,009,319
------------------------------------------ -----------
Liabilities in excess of other assets--0.3% (887,939)
------------------------------------------ -----------
Total Net Assets--100.0% $273,121,380
========================================== ===========
</TABLE>
Percentages indicated are based on net assets of $273,121,380.
*Current rate shown.
**Current rate and next demand date shown.
***Also represents cost for federal tax purposes.
114
<PAGE>
Fountain Square Government Cash Reserves Fund
Statement of Assets and Liabilities
July 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
- -----------------------------------------------------------
Investments, at value (Amortized cost $274,009,319) $274,009,319
- ----------------------------------------------------------- ------------
Cash 9,732
- -----------------------------------------------------------
Interest receivable 408,000
- -----------------------------------------------------------
Prepaid expenses and other assets 416
- ----------------------------------------------------------- ------------
Total Assets 274,427,467
- ----------------------------------------------------------- ------------
Liabilities:
- -----------------------------------------------------------
Dividends payable 1,140,549
- -----------------------------------------------------------
Accrued expenses and other payables:
- -----------------------------------------------------------
Investment advisory fees 81,879
- -----------------------------------------------------------
Administration fees 19,297
- -----------------------------------------------------------
Accounting and transfer agent fees 8,010
- -----------------------------------------------------------
Custodian fees 2,276
- -----------------------------------------------------------
Legal and audit fees 8,328
- -----------------------------------------------------------
Printing 17,302
- -----------------------------------------------------------
Registration & Filing 22,303
- -----------------------------------------------------------
Other 6,143
- ----------------------------------------------------------- ------------
Total Liabilities 1,306,087
- ----------------------------------------------------------- ------------
Net Assets:
- -----------------------------------------------------------
Paid-in capital 273,120,811
- -----------------------------------------------------------
Accumulated net realized gains (losses) on investment
transactions 569
- ----------------------------------------------------------- ------------
Net Assets $273,121,380
- ----------------------------------------------------------- ============
Net Assets
- -----------------------------------------------------------
Trust Shares $162,542,701
- -----------------------------------------------------------
Investment Shares 110,578,679
- ----------------------------------------------------------- ------------
Total $273,121,380
- ----------------------------------------------------------- ============
Outstanding units of beneficial interest (shares)
Trust Shares 162,542,539
- -----------------------------------------------------------
Investment Shares 110,578,267
- ----------------------------------------------------------- ------------
Total 273,120,806
- ----------------------------------------------------------- ============
Net asset value
- -----------------------------------------------------------
Offering and redemption price per share-Trust Shares $1.00
- ----------------------------------------------------------- ============
Offering and redemption price per share-Investment Shares $1.00
- ----------------------------------------------------------- ============
</TABLE>
(See Notes which are an integral part of the Financial Statements)
115
<PAGE>
Fountain Square Government Cash Reserves Fund
Statement of Operations
For the year ended July 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment Income:
- -----------------------------------------------------------
Interest income $13,334,084
- ----------------------------------------------------------- -----------
Total Income 13,334,084
- ----------------------------------------------------------- -----------
Expenses:
- -----------------------------------------------------------
Investment advisory fees $ 985,974
- -----------------------------------------------------------
Administrative fees 301,449
- -----------------------------------------------------------
Distributions fees-Investment Shares 338,716
- -----------------------------------------------------------
Portfolio accounting fees 53,808
- -----------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 16,150
- -----------------------------------------------------------
Trustees' fees 3,753
- -----------------------------------------------------------
Audit fees 11,000
- -----------------------------------------------------------
Custodian 14,714
- -----------------------------------------------------------
Legal fees 8,417
- -----------------------------------------------------------
Fund share registration costs 41,612
- -----------------------------------------------------------
Printing and postage expense 30,447
- -----------------------------------------------------------
Insurance expense 5,517
- -----------------------------------------------------------
Other 1,195
- ----------------------------------------------------------- -----------
Total Expenses 1,812,752
- ----------------------------------------------------------- -----------
Less expenses voluntarily reduced (558,240)
- ----------------------------------------------------------- -----------
Net Expenses 1,254,512
- ----------------------------------------------------------- -----------
Net Investment Income 12,079,572
- ----------------------------------------------------------- -----------
Realized Gains (Losses) from Investments:
- -----------------------------------------------------------
Net realized gains (losses) from investment transactions 569
- ----------------------------------------------------------- -----------
Change in net assets resulting
from operations $12,080,141
- ----------------------------------------------------------- ===========
</TABLE>
(See Notes which are an integral part of the Financial Statements)
116
<PAGE>
Fountain Square Government Cash Reserves Fund
Statements of Changes in Net Assets
For the year ended July 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
1997 1996
------------- -------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
- ------------------------------------------------
Operations--
- ------------------------------------------------
Net investment income $ 12,079,572 $ 9,453,339
- ------------------------------------------------
Net realized gains (losses) on investment
transactions 569 --
- ------------------------------------------------ ------------- -------------
Change in net assets resulting from
operations 12,080,141 9,453,339
- ------------------------------------------------ ------------- -------------
Distributions to Shareholders--
- ------------------------------------------------
Dividends to shareholders from net investment
income:
- ------------------------------------------------
Trust Shares (7,338,297) (6,408,695)
- ------------------------------------------------
Investment Shares (4,741,275) (3,044,644)
- ------------------------------------------------ ------------- -------------
Change in net assets from distributions to
shareholders (12,079,572) (9,453,339)
- ------------------------------------------------ ------------- -------------
Fund Share (Principal) Transactions--
- ------------------------------------------------
Proceeds from sale of shares 390,115,033 295,250,564
- ------------------------------------------------
Cost of shares redeemed (318,164,002) (269,409,604)
- ------------------------------------------------ ------------- -------------
Change in net assets from Fund share
transactions 71,951,031 25,840,960
- ------------------------------------------------ ------------- -------------
Change in net assets 71,951,600 25,840,960
- ------------------------------------------------
Net Assets:
- ------------------------------------------------
Beginning of period 201,169,780 175,328,820
- ------------------------------------------------ ------------- -------------
End of period $ 273,121,380 $ 201,169,780
- ------------------------------------------------ ============= ==============
</TABLE>
(See Notes which are an integral part of the Financial Statements)
117
<PAGE>
Fountain Square Government Cash Reserves Fund
Notes to Financial Statements
July 31, 1997
- --------------------------------------------------------------------------------
(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. At July 31, 1997, the Trust consisted of thirteen separate investment
portfolios. The accompanying financial statements and notes relate only to the
Government Cash Reserves Fund (the "Fund").
The investment objective of the Fund is to achieve high current income
consistent with stability of principal and liquidity. The Fund pursues its
investment objective by investing in a portfolio of short-term U.S. government
securities maturing in 13 months or less.
The Fund offers two classes of shares: Trust Shares and Investment Shares. Each
class of shares has identical rights and privileges except with respect to
distribution (12b-1) fees paid by the Investment Shares, voting rights on
matters affecting a single class of shares and the exchange privileges of each
class of shares.
(2) Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles. The
preparation of financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of income and expenses
for the period. Actual results could differ from those estimates.
A. Securities Valuations--Investments of the Fund are valued at either amortized
cost, which approximates market value, or at original cost, which combined
with accrued interest approximates market value. Under the amortized cost
method, discount or premium is amortized on a constant basis to the maturity
of the security. Short-term securities with remaining maturities of sixty
days or less at the time of purchase may be valued at amortized cost, which
approximates fair market value. In addition, the Fund may not (a) purchase
any instruments with a remaining maturity greater than thirteen months unless
such instrument is subject to a demand feature, or (b) maintain a dollar-
weighted average maturity which exceeds 90 days.
B. Repurchase Agreements--The Fund will only enter into repurchase agreements
with banks and other recognized financial institutions, such as
broker/dealers, which are deemed by the Trust's Advisor to be creditworthy
pursuant to guidelines and/or standards reviewed or established by the Board
of Trustees (the "Trustees"). It is the policy of the Fund to require the
custodian or sub-custodian bank to take possession, to have legally
segregated in the Federal Reserve Book Entry System, or to have segregated
within the custodian bank's vault, all securities held as collateral under
repurchase agreement transactions. Additionally, procedures have been
established by the Fund to monitor, on a daily basis, the market value of
each repurchase agreement's collateral to ensure that the value of collateral
at least equals the repurchase price to be paid under the repurchase
118
<PAGE>
agreement transaction. Risks may arise from the potential inability of
counterparties to honor the terms of the repurchase agreement. Accordingly,
the Fund could receive less than the repurchase price on the sale of
collateral securities.
C. Securities Transactions and Related Income--Securities transactions are
accounted for on the date the security is purchased or sold (trade date).
Interest income is recognized on the accrual basis and includes, where
applicable, the pro rata amortization of premium or discount. Dividend income
is recorded on the ex-dividend date. Gains or losses realized on sales of
securities are determined by comparing the identified cost of the security
lot sold with the net sales proceeds.
D. When-Issued and Delayed Delivery Transactions--The Fund may engage in when-
issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains 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 valued daily and begin earning interest on the settlement date.
E. Dividends to Shareholders--Dividends from net investment income are declared
daily and paid monthly and distributable net realized gains, if any, are
declared and distributed at least annually. Dividends from net investment
income and from net realized capital gains are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
expiring capital loss carryforwards and deferrals of certain losses.
F. Federal Taxes--It is the Fund's policy to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders each year substantially all of their income.
Accordingly, no provision for federal income tax is necessary.
(3) Shares of Beneficial Interest
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
Trust Shares Year Year
Ended Ended
7/31/97 7/31/96
------- -------
<S> <C> <C>
Shares sold 263,396,399 189,014,068
- --------------------------------------------------------------------------------
Shares redeemed (233,179,851) (186,291,291)
- --------------------------------------------------------------------------------
Net change resulting from
Fund share transactions 30,216,548 2,722,777
- --------------------------------------------------------------------------------
<CAPTION>
Investment Shares Year Year
Ended Ended
7/31/97 7/31/96
------- -------
<S> <C> <C>
Shares sold 126,718,634 106,236,496
- --------------------------------------------------------------------------------
Shares redeemed (84,984,156) (83,118,313)
- --------------------------------------------------------------------------------
Net change resulting from
Fund share transactions 41,734,478 23,118,183
- --------------------------------------------------------------------------------
</TABLE>
119
<PAGE>
(4) Investment Advisory Fee and Other Transactions with Affiliates
Investment Advisory Fee--Fifth Third Bank, the Trust's investment Advisor (the
"Advisor"), receives for its services an annual investment advisory fee of
0.40%, which based on a percentage of the Fund's average daily net assets.
The Advisor may voluntarily choose to waive a portion of its fee and reimburse
certain operating expenses of the Fund. The Advisor can modify or terminate this
voluntary waiver and reimbursement at any time at its sole discretion. For the
year ended July 31, 1997, the Advisor waived $135,083 in advisory fees.
Administrative Fee--Effective December 1, 1995 BISYS Fund Services ("BISYS")
became the Trust's administrator. The administrator generally assists in all
aspects of the Trust's administration and operation including providing the Fund
with certain administrative personnel and services necessary to operate the
Fund. Also effective December 1, 1995, pursuant to a separate agreement with
BISYS, Fifth Third Bank performs sub-administrative services on behalf of the
Fund including providing certain administrative personnel and services necessary
to operate the Fund, for which it receives a fee from BISYS computed daily as a
percentage of the daily net assets of the Fund. Under the terms of the
administration agreement, fees payable to BISYS are computed daily as a
percentage of the average net assets of the Trust for the period. Administration
fees are computed at 0.10% of first $1 billion of net assets of the Trust, 0.08%
of net assets of the Trust between $1 billion and $2 billion, and 0.07% of more
than $2 billion of net assets of the Trust. Effective April 1, 1997, the
administration fees are computed at 0.20% of first $1 billion of net assets of
the Trust, 0.18% of net assets of the Trust between $1 billion and $2 billion,
and 0.17% of more than $2 billion of net assets of the Trust. For the year ended
July 31, 1997, the administrator waived $84,441 in administration fees.
Distribution Services Fee--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Effective December 1, 1995 BISYS serves as
the Trust's principal distributor. Under the terms of the Plan, the Fund will
compensate the principal distributor from the net assets of the Fund's
Investment Shares to finance activities intended to result in the sales of the
Fund's Investment Shares. The Plan provides that the Fund may incur distribution
expenses up to 0.35% of the average daily net assets of the Investment Shares,
annually, to compensate the distributor. The distributor may voluntarily choose
to waive all or a portion of its fee. The distributor can modify or terminate
this voluntary waiver at any time at its sole discretion. For the year ended
July 31, 1997, the distributor waived $338,716 in distribution fees.
Transfer and Dividend Disbursing Agent, Accounting and Custody Fees--Fifth Third
Bank serves as transfer and dividend disbursing agent for the Funds for which it
receives a fee. Fifth Third Bank sub-contracts the execution of the transfer and
dividend disbursing agent functions to a non-affiliated entity. The fee is based
on the level of each Fund's average net assets for the period, plus out-of-
pocket expenses. For the year ended July 31, 1997, Fifth Third Bank received
transfer agent fees of $4,932.
Fifth Third Bank is the Funds' custodian & accountant for which it receives a
fee. The fee is based on the level of each Fund's average net assets for the
period, plus out-of-pocket expenses. Fifth Third Bank received fees $14,714 and
$53,808 for custodian and fund accounting services, respectively.
Certain Officers and Trustees of the Trust are Officers and Trustees of the
above companies.
120
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
- --------------------------------------------------------------------------------
To the Board of Trustees and Shareholders of
FOUNTAIN SQUARE FUNDS:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Fountain Square Government Cash Reserves Fund
(one of the portfolios comprising Fountain Square Funds), as of July 31, 1997,
and the related statement of operations for the year then ended, and statement
of changes in net assets and financial highlights for the periods presented
therein. These financial statements and financial highlights are the
responsibility of the Fund'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, 1997, 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
Fountain Square Government Cash Reserves Fund at July 31, 1997, the results of
its operations for the year then ended, and the changes in its net assets and
financial highlights for the periods presented therein in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Cincinnati, Ohio
September 12, 1997
121
<PAGE>
Fountain Square Commercial Paper Fund
Financial Highlights - Investment Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
Referemce is made to the Report of Ernst & Young LLP, Independent Auditors, on
page 28.
<TABLE>
<CAPTION>
Year Ended July 31,
---------------------------------------------
1997 1996 1995 1994 1993*
------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------------------------------- ------- ------- ------- ------ ------
Income from investment operations
- ---------------------------------------------------------------------------
Net investment income 0.05 0.05 0.05 0.03 0.03
- --------------------------------------------------------------------------- ------- ------- ------- ------ ------
Less distributions
- ---------------------------------------------------------------------------
Dividends to shareholders from net
investment income (0.05) (0.05) (0.05) (0.03) (0.03)
- --------------------------------------------------------------------------- ------- ------- ------- ------ ------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------------------------------- ======= ======= ======= ====== ======
Total return 5.11% 5.20% 5.25% 3.02% 2.70%
- ---------------------------------------------------------------------------
Ratios to Average Net Assets
- ---------------------------------------------------------------------------
Expenses 0.52% 0.49% 0.49% 0.49% 0.48%(b)
- ---------------------------------------------------------------------------
Net investment income 4.99% 5.06% 5.12% 2.97% 2.69%(b)
- ---------------------------------------------------------------------------
Expense waiver/reimbursement (a) 0.44% 0.40% 0.44% 0.45% 0.47%(b)
- ---------------------------------------------------------------------------
Supplemental data
- ---------------------------------------------------------------------------
Net assets, end of period (000 omitted) $33,438 $19,341 $10,169 $6,147 $4,714
- ---------------------------------------------------------------------------
</TABLE>
*Reflects operations for the period from August 11, 1992 (date of initial
public investment) to July 31, 1993.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Annualized.
(c) Not annualized.
(See Notes which are an integral part of the Financial Statements)
122
<PAGE>
Fountain Square Commercial Paper Fund
Financial Highlights - Trust Shares
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on
page 28.
<TABLE>
<CAPTION>
Year Ended July 31,
-----------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989*
-------- -------- -------- ------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------- -------- -------- -------- -------- -------- -------- -------- -------- -------
Income from investment
operations
- -------------------------------
Net investment income (loss) 0.05 0.05 0.05 0.03 0.03 0.04 0.07 0.08 0.01
- ------------------------------- -------- -------- -------- -------- -------- -------- -------- -------- -------
Less distributions
- -------------------------------
Dividends to shareholders
from net investment income (0.05) (0.05) (0.05) (0.03) (0.03) (0.04) (0.07) (0.08) (0.01)
- ------------------------------- -------- -------- -------- -------- -------- -------- -------- -------- -------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------- ======== ======== ======== ======== ======== ======== ======== ======== =======
Total return 5.11% 5.20% 5.25% 3.02% 2.78% 4.27% 6.89% 8.22% 1.19%
- -------------------------------
Ratios to Average Net Assets
- -------------------------------
Expenses 0.52% 0.49% 0.49% 0.49% 0.48% 0.46% 0.50% 0.53% 0.45%
- -------------------------------
Net investment income (loss) 4.99% 5.07% 5.12% 2.97% 2.75% 4.19% 6.61% 7.86% 8.95%
- -------------------------------
Expense waiver/
reimbursement (a) 0.09% 0.08% 0.09% 0.10% 0.12% 0.14% 0.14% 0.16% 0.35%
- -------------------------------
Supplemental data
- -------------------------------
Net assets, end of period
(000 omitted) $341,827 $300,821 $223,640 $213,126 $180,065 $194,308 $213,889 $174,727 $62,225
- -------------------------------
</TABLE>
*Reflects operations for the period from June 14, 1989 (date of initial public
offering) to July 31, 1989.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
123
<PAGE>
Fountain Square Commercial Paper Fund
Portfolio of Investments
July 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Amortized
Amount Security Description Cost
- ---------- ------------------------------------- ----------
<S> <C> <C>
Certificates of Deposits--0.5%
- ------------------------------------------------------
2,000,000 J.P. Morgan, 8/5/97 $2,000,025
------------------------------------- ----------
Total Certificates of Deposits 2,000,025
------------------------------------- ----------
Commercial Paper--80.8%
- ------------------------------------------------------
Bank, Domestic--5.3%
-------------------------------------
10,000,000 Banc One Corp., 8/22/97 9,968,033
-------------------------------------
10,000,000 Norwest Corp., 9/18/97 9,926,800
------------------------------------- ----------
Total 19,894,833
------------------------------------- ----------
Basic Materials--1.6%
-------------------------------------
6,000,000 Dupont Ei De Nemours, 10/2/97 5,941,513
------------------------------------- ----------
Brokerage--12.7%
-------------------------------------
7,000,000 Goldman Sachs Group, 9/5/97 6,961,753
-------------------------------------
5,000,000 Goldman Sachs Group, 11/5/97 4,925,867
-------------------------------------
5,000,000 Merrill Lynch, 8/11/97 4,992,222
-------------------------------------
8,000,000 Merrill Lynch, 8/15/97 7,982,407
-------------------------------------
6,000,000 Merrill Lynch, 9/11/97 5,961,938
-------------------------------------
7,000,000 Societe Generale, 8/6/97 6,994,546
-------------------------------------
10,000,000 Societe Generale, 10/3/97 9,902,349
------------------------------------- ----------
Total 47,721,082
------------------------------------- ----------
Capital Goods--2.6%
-------------------------------------
10,000,000 Cargill, Inc., 10/30/97 9,861,750
------------------------------------- ----------
Energy--4.0%
-------------------------------------
10,000,000 Petrofina Delaware, 8/18/97 9,973,980
-------------------------------------
5,000,000 Petrofina Delaware, 10/20/97 4,938,889
------------------------------------- ----------
Total 14,912,869
------------------------------------- ----------
</TABLE>
124
<PAGE>
Fountain Square Commercial Paper Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Amortized
Amount Security Description Cost
- ---------- ------------------------------------------- ----------
<C> <S> <C>
Commercial Paper--Continued
- ------------------------------------------------------------
Financial--48.8%
-------------------------------------------
5,000,000 A.I. Credit, 9/2/97 $4,974,978
-------------------------------------------
10,000,000 A.I. Credit, 10/14/97 9,886,944
-------------------------------------------
10,000,000 American Express Credit Corp., 11/25/97 9,821,489
-------------------------------------------
9,000,000 American General Finance Corp., 9/2/97 8,954,960
-------------------------------------------
9,800,000 American General Finance Corp., 10/17/97 9,684,714
-------------------------------------------
7,000,000 Associates Corp., 8/13/97 6,986,910
-------------------------------------------
6,000,000 Associates Corp., 9/26/97 5,948,200
-------------------------------------------
4,000,000 Associates Corp., 10/22/97 3,950,071
-------------------------------------------
7,000,000 Avco Financial Services, 8/6/97 6,994,526
-------------------------------------------
10,000,000 Avco Financial Services, 10/14/97 9,886,944
-------------------------------------------
10,000,000 CIT Group, 8/4/97 9,995,318
-------------------------------------------
7,000,000 CIT Group, 10/28/97 6,906,060
-------------------------------------------
10,000,000 Ford Motor Credit Corp., 8/14/97 9,979,670
-------------------------------------------
9,000,000 Ford Motor Credit Corp., 10/24/97 8,884,500
-------------------------------------------
7,000,000 General Electric Capital Corp., 10/27/97 6,904,252
-------------------------------------------
8,000,000 General Electric Capital Corp., 11/4/97 7,881,989
-------------------------------------------
10,000,000 IBM Credit Corp., 9/19/97 9,925,275
-------------------------------------------
6,000,000 Pitney Bowes Credit Corp., 8/18/97 5,984,048
-------------------------------------------
5,000,000 Pitney Bowes Credit Corp., 11/13/97 4,919,833
-------------------------------------------
7,000,000 Pitney Bowes Credit Corp., 12/19/97 6,848,917
-------------------------------------------
6,000,000 Prudential Funding Corp., 11/3/97 5,911,483
-------------------------------------------
11,700,000 Schering Corp., 8/12/97 11,679,838
-------------------------------------------
10,000,000 Xerox Credit Corp., 8/26/97 9,961,458
------------------------------------------- -----------
Total 182,872,377
------------------------------------------- -----------
</TABLE>
125
<PAGE>
Fountain Square Commercial Paper Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Amortized
Amount Security Description Cost
- --------- -------------------------------------------------- -------------
Commercial Paper--Continued
- ---------------------------------------------------------------
Miscellaneous--3.7%
--------------------------------------------------
<S> <C> <C>
8,000,000 Stanford University, 9/16/97 $ 7,943,777
--------------------------------------------------
6,000,000 Stanford University, 9/22/97 5,951,727
-------------------------------------------------- -----------
Total 13,895,504
-------------------------------------------------- -----------
Technology--2.1%
--------------------------------------------------
8,000,000 AT&T Corp., 8/14/97 7,984,487
-------------------------------------------------- -----------
Total Commercial Paper 303,084,415
-------------------------------------------------- -----------
Corporate Bonds--0.4%
- ---------------------------------------------------------------
Manufacturing--0.4%
--------------------------------------------------
1,500,000 IBM Corp., 6.38%, 11/1/97 1,502,166
-------------------------------------------------- -----------
Total Corporate Bonds 1,502,166
-------------------------------------------------- -----------
Repurchase Agreements--18.8%
- ---------------------------------------------------------------
45,452,000 JP Morgan, 5.74%, dated 7/31/97, due 8/1/97,
collateralized by U.S. Treasury Bills due 12/26/97
with a value of $46,361,056. 45,452,000
--------------------------------------------------
25,000,000 UBS Securities, 5.76%, dated 7/31/97, due 8/1/97,
collateralized by U.S. Treasury Bills due 10/23/97
with a value of $25,501,056. 25,000,000
-------------------------------------------------- -----------
Total Repurchase Agreements 70,452,000
-------------------------------------------------- -----------
Total Investments (Cost $377,038,606)*--100.5% 377,038,606
-------------------------------------------------- -----------
Liabilities in excess of other assets--0.5% (1,772,688)
-------------------------------------------------- -----------
Total Net Assets--100.0% $375,265,918
================================================== ===========
</TABLE>
Percentages indicated are based on net assets of $375,265,918.
*Also represents cost for federal tax purposes.
126
<PAGE>
Fountain Square Commercial Paper Fund
Statement of Assets and Liabilities
July 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
- ------------------------------------------------------------
Investments, at value (Amortized cost $306,586,606) $306,586,606
- ------------------------------------------------------------
Repurchase agreements (Amortized cost $70,452,000) 70,452,000
- ------------------------------------------------------------ ------------
Total Investments $377,038,606
- ------------------------------------------------------------
Cash 552
- ------------------------------------------------------------
Interest receivable 151,075
- ------------------------------------------------------------
Prepaid expenses and other assets 544
- ------------------------------------------------------------ ------------
Total Assets 377,190,777
------------------------------------------------------------ ------------
Liabilities:
- ------------------------------------------------------------
Dividends payable 1,711,297
- ------------------------------------------------------------
Accrued expenses and other payables:
- ------------------------------------------------------------
Investment advisory fees 126,243
- ------------------------------------------------------------
Administration fees 28,185
- ------------------------------------------------------------
Accounting and transfer agent fees 11,132
- ------------------------------------------------------------
Legal and audit fees 8,328
- ------------------------------------------------------------
Printing 19,552
- ------------------------------------------------------------
Registration & Filing 17,198
- ------------------------------------------------------------
Other 2,924
- ------------------------------------------------------------ ------------
Total Liabilities 1,924,859
- ------------------------------------------------------------ ------------
Net Assets:
- ------------------------------------------------------------
Paid-in capital 375,266,087
- ------------------------------------------------------------
Accumulated net realized gains (losses) on investment
transactions (106)
- ------------------------------------------------------------
Undistributed net investment income (loss) (63)
- ------------------------------------------------------------ ------------
Net Assets $375,265,918
- ------------------------------------------------------------ ============
Net Assets
- ------------------------------------------------------------
Trust Shares $341,827,450
- ------------------------------------------------------------
Investment Shares 33,438,468
- ------------------------------------------------------------ ------------
Total $375,265,918
- ------------------------------------------------------------ ============
Outstanding units of beneficial interest (shares)
- ------------------------------------------------------------
Trust Shares 341,827,864
- ------------------------------------------------------------
Investment Shares 33,438,495
- ------------------------------------------------------------ ------------
Total 375,266,359
- ------------------------------------------------------------ ============
Net asset value
- ------------------------------------------------------------
Offering and redemption price per share-Trust Shares $1.00
- ------------------------------------------------------------ ============
Offering and redemption price per share-Investor Shares $1.00
- ------------------------------------------------------------ ============
</TABLE>
(See Notes which are an integral part of the Financial Statements)
127
<PAGE>
Fountain Square Commercial Paper Fund
Statement of Operations
For the year ended July 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment Income:
- ---------------------------------------------------------------
Interest income $18,724,910
- --------------------------------------------------------------- -----------
Total Income 18,724,910
- --------------------------------------------------------------- -----------
Expenses:
- ---------------------------------------------------------------
Investment advisory fees $ 1,357,544
- ---------------------------------------------------------------
Administrative fees 426,394
- ---------------------------------------------------------------
Distribution fees-Investment Shares 92,287
- ---------------------------------------------------------------
Portfolio accounting fees 70,517
- ---------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 28,970
- ---------------------------------------------------------------
Trustees' fees 4,587
- ---------------------------------------------------------------
Audit fees 11,000
- ---------------------------------------------------------------
Custodian 33,974
- ---------------------------------------------------------------
Legal fees 8,417
- ---------------------------------------------------------------
Fund share registration costs 54,673
- ---------------------------------------------------------------
Printing and postage expense 38,123
- ---------------------------------------------------------------
Insurance expense 7,335
- ---------------------------------------------------------------
Other 23,346
- --------------------------------------------------------------- -----------
Total Expenses 2,157,167
- --------------------------------------------------------------- -----------
Less expenses voluntarily reduced (393,412)
- --------------------------------------------------------------- -----------
Net Expenses 1,763,755
- --------------------------------------------------------------- -----------
Net Investment Income 16,961,155
- --------------------------------------------------------------- -----------
Realized Losses from Investments:
- ---------------------------------------------------------------
Net realized gains (losses) from investment transactions (101)
- --------------------------------------------------------------- -----------
Change in net assets resulting
from operations $16,961,054
- --------------------------------------------------------------- ===========
</TABLE>
(See Notes which are an integral part of the Financial Statements)
128
<PAGE>
Fountain Square Commercial Paper Fund
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
1997 1996
--------------- ---------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
- -----------------------------------------------
Operations--
- -----------------------------------------------
Net investment income $ 16,961,155 $ 13,588,093
- -----------------------------------------------
Net realized losses on investment
transactions (101) (5)
- ----------------------------------------------- --------------- ---------------
Change in net assets resulting from
operations 16,961,054 13,588,088
- ----------------------------------------------- --------------- ---------------
Distributions to Shareholders--
- -----------------------------------------------
Dividends to shareholders from net
investment income:
- -----------------------------------------------
Trust Shares (15,645,249) (12,697,512)
- -----------------------------------------------
Investment Shares (1,315,906) (890,643)
- ----------------------------------------------- --------------- ---------------
Change in net assets from distributions
to shareholders (16,961,155) (13,588,155)
- ----------------------------------------------- --------------- ---------------
Fund Share (Principal) Transactions--
- -----------------------------------------------
Proceeds from sale of shares 1,395,843,822 1,182,031,780
- -----------------------------------------------
Net asset value of shares issued to
shareholders in payment of dividends declared 784,154 326,263
- -----------------------------------------------
Cost of shares redeemed (1,341,524,057) (1,096,004,620)
- ----------------------------------------------- --------------- ---------------
Change in net assets from Fund share
transactions 55,103,919 86,353,423
- ----------------------------------------------- --------------- ---------------
Change in net assets 55,103,818 86,353,356
- -----------------------------------------------
Net Assets:
- -----------------------------------------------
Beginning of period 320,162,100 233,808,744
- ----------------------------------------------- --------------- ---------------
End of period $375,265,918 $320,162,100
- ----------------------------------------------- =============== ===============
</TABLE>
(See Notes which are an integral part of the Financial Statements)
129
<PAGE>
Fountain Square Commercial Paper Fund
Notes to Financial Statements
July 31, 1997
- --------------------------------------------------------------------------------
(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. At July 31, 1997, the Trust consisted of thirteen separate investment
portfolios. The accompanying financial statements and notes relate only to the
Commercial Paper Fund (the "Fund").
The investment objective of the Fund is to achieve current income consistent
with stability of principal. The Fund pursues its objective by investing
exclusively in a portfolio of money market instruments maturing in 13 months or
less, with at least 65% of its assets invested in commercial paper.
The Fund offers two classes of shares: Trust Shares and Investment Shares. Each
class of shares has identical rights and privileges except with respect to
distribution (12b-1) fees paid by the Investment Shares, voting rights on
matters affecting a single class of shares and the exchange privileges of each
class of shares.
(2) Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles. The
preparation of financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of income and expenses
for the period. Actual results could differ from those estimates.
A. Securities Valuations--Investments of the Fund are valued at either amortized
cost, which approximates market value, or at original cost, which combined
with accrued interest approximates market value. Under the amortized cost
method, discount or premium is amortized on a constant basis to the maturity
of the security. Short-term securities with remaining maturities of sixty
days or less at the time of purchase may be valued at amortized cost, which
approximates fair market value. In addition, the Fund may not (a) purchase
any instruments with a remaining maturity greater than thirteen months unless
such instrument is subject to a demand feature, or (b) maintain a dollar-
weighted average maturity which exceeds 90 days.
130
<PAGE>
B. Repurchase Agreements--The Fund will only enter into repurchase agreements
with banks and other recognized financial institutions, such as
broker/dealers, which are deemed by the Trust's advisor to be creditworthy
pursuant to guidelines and/or standards reviewed or established by the Board
of Trustees (the "Trustees"). It is the policy of the Fund to require the
custodian or sub-custodian bank to take possession, to have legally
segregated in the Federal Reserve Book Entry System, or to have segregated
within the custodian bank's vault, all securities held as collateral under
repurchase agreement transactions. Additionally, procedures have been
established by the Fund to monitor, on a daily basis, the market value of
each repurchase agreement's collateral to ensure that the value of collateral
at least equals the repurchase price to be paid under the repurchase
agreement transaction. Risks may arise from the potential inability of
counterparties to honor the terms of the repurchase agreement. Accordingly,
the Fund could receive less than the repurchase price on the sale of
collateral securities.
C. Securities Transactions and Related Income--Securities transactions are
accounted for on the date the security is purchased or sold (trade date).
Interest income is recognized on the accrual basis and includes, where
applicable, the pro rata amortization of premium or discount. Dividend income
is recorded on the ex-dividend date. Gains or losses realized on sales of
securities are determined by comparing the identified cost of the security
lot sold with the net sales proceeds.
D. When-Issued and Delayed Delivery Transactions--The Fund may engage in when-
issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains 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 valued daily and begin earning interest on the settlement date.
E. Dividends to Shareholders--Dividends from net investment income are declared
daily and paid monthly and distributable net realized gains, if any, are
declared and distributed at least annually. Dividends from net investment
income and from net realized capital gains are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
expiring capital loss carryforwards and deferrals of certain losses.
F. Federal Taxes--It is the Fund's policy to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders each year substantially all of their income.
Accordingly, no provision for federal income tax is necessary.
131
<PAGE>
(3) Shares of Beneficial Interest
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
Trust Shares
Year Year
Ended Ended
7/31/97 7/31/96
--------- ---------
<S> <C> <C>
Shares sold 1,348,424,212 1,142,498,665
- --------------------------------------------------------------------------------
Shares issued to shareholders
in payment of distributions declared 784,154 326,263
- --------------------------------------------------------------------------------
Shares redeemed (1,308,202,316) (1,065,643,555)
- --------------------------------------------------------------------------------
Net change resulting from
Fund share transactions 41,006,050 77,181,373
- --------------------------------------------------------------------------------
<CAPTION>
Investment Shares
Year Year
Ended Ended
7/31/97 7/31/96
--------- ---------
<S> <C> <C>
Shares sold 47,419,610 39,533,115
- --------------------------------------------------------------------------------
Shares redeemed (33,321,741) (30,361,065)
- --------------------------------------------------------------------------------
Net change resulting from
Fund share transactions 14,097,869 9,172,050
- --------------------------------------------------------------------------------
</TABLE>
(4) Investment Advisory Fee and Other Transactions with Affiliates
Investment Advisory Fee--Fifth Third Bank, the Trust's investment Advisor (the
"Advisor"), receives for its services an annual investment advisory fee of
0.40%, which based on a percentage of the Fund's average daily net assets.
The Advisor may voluntarily choose to waive a portion of its fee and reimburse
certain operating expenses of the Fund. The Advisor can modify or terminate this
voluntary waiver and reimbursement at any time at its sole discretion. For the
year ended July 31, 1997, the Advisor waived $139,109 in advisory fees.
Administrative Fee--Effective December 1, 1995 BISYS Fund Services ("BISYS")
became the Trust's administrator. The administrator generally assists in all
aspects of the Trust's administration and operation including providing the Fund
with certain administrative personnel and services necessary to operate the
Fund. Also effective December 1, 1995, pursuant to a separate agreement with
BISYS, Fifth Third Bank performs sub-administrative services on behalf of the
Fund including providing certain
132
<PAGE>
administrative personnel and services necessary to operate the Fund, for which
it receives a fee from BISYS computed daily as a percentage of the daily net
assets of the Fund. Under the terms of the administration agreement, fees
payable to BISYS are computed daily as a percentage of the average net assets of
the Trust for the period. Administration fees are computed at 0.10% of first $1
billion of net assets of the Trust, 0.08% of net assets of the Trust between $1
billion and $2 billion, and 0.07% of more than $2 billion of net assets of the
Trust. Effective April 1, 1997, the administration fees are computed at 0.20% of
first $ billion of net assets of the Trust, 0.18% of net assets of the Trust
between $1 billion and $2 billion, and 0.17% of more than $2 billion of net
assets of the Trust. For the year ended July 31, 1997, the administrator waived
$128,042 in administrative fees.
Distribution Services Fee--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Effective December 1, 1995 BISYS serves as
the Trust's principal distributor. Under the terms of the Plan, the Fund will
compensate the principal distributor from the net assets of the Fund's
Investment Shares to finance activities intended to result in the sales of the
Fund's Investment Shares. The Plan provides that the Fund may incur distribution
expenses up to 0.35% of the average daily net assets of the Investment Shares,
annually, to compensate the distributor. The distributor may voluntarily choose
to waive all or a portion of its fee. The distributor can modify or terminate
this voluntary waiver at any time at its sole discretion. For the year ended
July 31, 1997, the distributor waived $92,287 of distribution fees.
Transfer and Dividend Disbursing Agent, Accounting and Custody Fees--Fifth Third
Bank serves as transfer and dividend disbursing agent for the Funds for which it
receives a fee. Fifth Third Bank sub-contracts the execution of the transfer and
dividend disbursing agent functions to a non-affiliated entity. The fee is based
on the level of each Fund's average net assets for the period, plus out-of-
pocket expenses. For the year ended July 31, 1997, Fifth Third Bank received
$6,272 for transfer agent fees.
Fifth Third Bank is the Funds' custodian & fund accountant for which it receives
a fee. The fee is based on the level of each Fund's average net assets for the
period, plus out-of-pocket expenses. Fifth Third Bank waived $33,974 of custody
fees for the year ended July 31, 1997. Fifth Third Bank received $70,517 for
fund accounting services.
Certain Officers and Trustees of the Trust are Officers and Trustees of the
above companies.
133
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
- --------------------------------------------------------------------------------
To the Board of Trustees and Shareholders of
FOUNTAIN SQUARE FUNDS:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Fountain Square Commercial Paper Fund (one of
the portfolios comprising Fountain Square Funds), as of July 31, 1997, and the
related statement of operations for the year then ended and statement of changes
in net assets and financial highlights for the periods presented therein. These
financial statements and financial highlights are the responsibility of the
Fund'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, 1997, 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
Fountain Square Commercial Paper Fund at July 31, 1997, the results of its
operations for the year then ended and the changes in its net assets and
financial highlights for the periods presented therein in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Cincinnati, Ohio
September 12, 1997
134
<PAGE>
Fountain Square U.S. Treasury Obligations Fund
Financial Highlights
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on
page 21.
<TABLE>
<CAPTION>
Year Ended July 31,
-------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989*
--------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------ --------- --------- --------- --------- --------- --------- --------- --------- ---------
Income from investment
operations
- ------------------------------
Net investment income 0.05 0.05 0.05 0.03 0.03 0.04 0.07 0.08 0.06
- ------------------------------ --------- --------- --------- --------- --------- --------- --------- --------- ---------
Less distributions
- ------------------------------
Dividends to shareholders
from net investment income (0.05) (0.05) (0.05) (0.03) (0.03) (0.04) (0.07) (0.08) (0.06)
- ------------------------------ --------- --------- --------- --------- --------- --------- --------- --------- ---------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------ ========= ========= ========= ========= ========= ========= ========= ========= =========
Total return 5.11% 5.24% 5.18% 3.02% 2.82% 4.32% 6.74% 8.15% 5.65%
- ------------------------------
Ratios to Average Net Assets
- ------------------------------
Expenses 0.42% 0.43% 0.44% 0.44% 0.44% 0.45% 0.49% 0.54% 0.56%
- ------------------------------ --------- --------- --------- --------- --------- --------- --------- --------- ---------
Net investment income 5.00% 5.10% 5.07% 2.99% 2.79% 4.18% 6.33% 7.84% 8.71%
- ------------------------------ --------- --------- --------- --------- --------- --------- --------- --------- ---------
Expense waiver/
reimbursement (a) 0.17% 0.12% 0.11% 0.14% 0.15% 0.15% 0.15% 0.15% 0.15%
- ------------------------------ --------- --------- --------- --------- --------- --------- --------- --------- ---------
Supplemental data
- ------------------------------
Net assets, end of period
(000 omitted) $529,087 $489,228 $321,640 $336,229 $290,408 $339,924 $242,247 $138,368 $141,743
- ------------------------------
</TABLE>
* Reflects operations for the period from December 1, 1989 (date of initial
public offering) to July 31, 1989.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
135
<PAGE>
Fountain Square U. S. Treasury Obligations Fund
Portfolio of Investments
July 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares or
Principal Amortized
Amount Security Description Cost
- ---------- --------------------------- -------------
<S> <C> <C>
U.S. Government Securities--21.3%
- ------------------------------------------------------------------
U.S. Treasury Notes--21.3%
-------------------------------------------------
10,000,000 5.75%, 9/30/97 $ 10,004,926
-------------------------------------------------
8,000,000 5.63%, 10/31/97 8,002,428
-------------------------------------------------
7,000,000 5.75%, 10/31/97 7,002,774
-------------------------------------------------
10,000,000 7.38%, 11/15/97 10,052,755
-------------------------------------------------
20,000,000 6.00%, 12/31/97 20,029,493
-------------------------------------------------
10,000,000 5.00%, 1/31/98 9,969,732
-------------------------------------------------
10,000,000 5.13%, 3/31/98 9,942,741
-------------------------------------------------
20,000,000 6.13%, 3/31/98 20,033,031
-------------------------------------------------
20,000,000 5.88%, 4/30/98 20,038,307
------------------------------------------------- -----------
Total U.S. Government Securities 115,076,187
--------------------------------------- -----------
Repurchase Agreements--78.9%
- -------------------------------------------------------------------------------
23,000,000 Bear Stearns & Co., 5.75%, dated 7/31/97, due
8/1/97, collateralized by U.S.Treasury Bonds,
6.00%, due 2/15/26 with avalue of $23,595,678. 23,000,000
-------------------------------------------------
23,000,000 BT Securities, 5.75%, dated 7/31/97, due 8/1/97,
collateralized by U.S. Treasury Notes, 6.00%, due
8/15/99 with a value of $23,471,000. 23,000,000
-------------------------------------------------
90,000,000 BZW Securities, 5.75%, dated 7/31/97, due 8/1/97,
collateralized by U.S. Treasury Notes, 6.38%, due
8/15/02 with a value of $54,414,443; and U.S.
Treasury Notes, 3.63%, due 7/15/02 with a value
of $37,386,240. 90,000,000
-------------------------------------------------
23,000,000 Deutsche Bank, 5.75%, dated 7/31/97, due 8/1/97,
collateralized by U.S. Treasury Bonds, 10.63%,
due 8/15/15 with a value of $23,486,000. 23,000,000
-------------------------------------------------
23,000,000 First Chicago, 5.75%, dated 7/31/97, due 8/1/97,
collateralized by U.S. Treasury Bills due 9/4/97
with a value of $154,217 and U.S. Treasury Notes,
5.88% - 6.75%, due 7/31/98 - 7/31/99 with
a value of 23,307,981. 23,000,000
-------------------------------------------------
</TABLE>
136
<PAGE>
<TABLE>
<CAPTION>
Fountain Square U.S. Treasury Obligations Fund
Shares or
Principal Amortized
Amount Security Description Cost
- ---------- ---------------------------------------------- -------------
<S> <C> <C>
Repurchase Agreements--Continued
- ---------------------------------------------------------------
91,933,000 JP Morgan, 5.74%, dated 7/31/97, due 8/1/97,
collateralized by U.S. Treasury Notes, 6.25%,
due 6/30/02 with a value of $21,815,037;
U.S. Treasury Notes, 6.50%, due 5/31/02 with
a value $28,815,167; and U.S. Treasury Bonds,
9.00%, due 11/15/18 with a value of
$43,141,660. 91,933,000
----------------------------------------------
15,000,000 Merrill Lynch, 5.70%, dated 7/31/97, due
8/1/97, collateralized by U.S. Treasury Bills
due 7/23/98 with a value of $15,300,757. 15,000,000
----------------------------------------------
23,000,000 Nesbitt Burns, 5.75%, dated 7/31/97, due
8/1/97, collateralized by U.S. Treasury Notes,
5.63%, due 11/30/98 with a value of
$3,097,000 and U.S. Treasury Notes, 8.75%,
due 8/15/00 with a value of $20,349,000. 23,000,000
----------------------------------------------
23,000,000 Prudential Securities, 5.75%, dated 7/31/97,
due 8/1/97, collateralized by U.S. Treasury
Bills, due 12/18/97 with a value of
$23,460,398. 23,000,000
----------------------------------------------
90,000,000 UBS Securities, 5.76%, dated 7/31/97, due
8/1/97, collateralized by U.S. Treasury Notes,
5.00%, due 2/15/99 with a value of
$17,573,671; U.S.Treasury Notes, 7.88%, due
11/15/99 with a value of $48,482,475;
U.S. Treasury Notes, 7.75%, due 11/30/99 with
a value of $284,795; and U.S. Treasury Notes,
7.75%, due 12/31/99 with a value of
$25,459,637. 90,000,000
---------------------------------------------- ------------
Total Repurchase Agreements 424,933,000
---------------------------------------------- ------------
Total Investments (Amortized Cost
$540,009,187)*--100.2% 540,009,187
---------------------------------------------- ------------
Liabilities in excess of other assets--0.2% (921,732)
---------------------------------------------- ------------
Total Net Assets--100.0% $539,087,455
============================================== ============
</TABLE>
Percentages indicated are based on net assets of $539,087,455.
*Also represents cost for federal tax purposes.
137
<PAGE>
Fountain Square U.S. Treasury Obligations Fund
Statement of Assets and Liabilities
July 31, 1997
- ----------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
- -----------------------------------------------------------
Investments, at value (Amortized cost $115,076,187) $115,076,187
- -----------------------------------------------------------
Repurchase agreements (Amortized cost $424,933,000) 424,933,000
- ----------------------------------------------------------- -------------
Total Investments $540,009,187
- -----------------------------------------------------------
Cash 768
- -----------------------------------------------------------
Interest receivable 1,619,411
- -----------------------------------------------------------
Prepaid expenses and other assets 820
- ----------------------------------------------------------- -------------
Total Assets 541,630,186
- ----------------------------------------------------------- -------------
Liabilities:
- -----------------------------------------------------------
Dividends payable 2,282,158
- -----------------------------------------------------------
Accrued expenses and other payables:
- -----------------------------------------------------------
Investment advisory fees 115,995
- -----------------------------------------------------------
Administration fees 37,849
- -----------------------------------------------------------
Accounting and transfer agent fees 15,362
- -----------------------------------------------------------
Custodian fees 4,492
- -----------------------------------------------------------
Legal and audit fees 8,328
- -----------------------------------------------------------
Printing 24,412
- -----------------------------------------------------------
Registration & Filing 15,595
- -----------------------------------------------------------
Trustees 1,647
- -----------------------------------------------------------
Other 36,893
- ----------------------------------------------------------- -------------
Total Liabilities 2,542,731
- ----------------------------------------------------------- -------------
Net Assets:
- -----------------------------------------------------------
Paid-in capital 539,034,964
- -----------------------------------------------------------
Accumulated net realized gains (losses) on investment
transactions 47,417
- -----------------------------------------------------------
Undistributed net investment income (loss) 5,074
- ----------------------------------------------------------- -------------
Net Assets $539,087,455
- ----------------------------------------------------------- =============
Outstanding units of beneficial interest (shares) 539,040,314
- ----------------------------------------------------------- =============
Net asset value
- -----------------------------------------------------------
Offering and redemption price per share $1.00
- ----------------------------------------------------------- =============
</TABLE>
(See Notes which are an integral part of the Financial Statements)
138
<PAGE>
Fountain Square U.S. Treasury Obligations Fund
Statement of Operations
For the year ended July 31, 1997
- ----------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment Income:
- -----------------------------------------------------------
Interest income $ 26,664,238
- ----------------------------------------------------------- -------------
Total Income 26,664,238
- ----------------------------------------------------------- -------------
Expenses:
- -----------------------------------------------------------
Investment advisory fees $1,965,939
- -----------------------------------------------------------
Administrative fees 609,651
- -----------------------------------------------------------
Portfolio accounting fees 91,138
- -----------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 27,820
- -----------------------------------------------------------
Trustees' fees 6,711
- -----------------------------------------------------------
Audit fees 11,000
- -----------------------------------------------------------
Custodian 49,349
- -----------------------------------------------------------
Legal fees 8,417
- -----------------------------------------------------------
Fund share registration costs 66,192
- -----------------------------------------------------------
Printing and postage expense 45,293
- -----------------------------------------------------------
Insurance expense 12,842
- -----------------------------------------------------------
Other --
- ----------------------------------------------------------- -------------
Total Expenses 2,894,352
- ----------------------------------------------------------- -------------
Less expenses voluntarily reduced (832,130)
- ----------------------------------------------------------- -------------
Net Expenses 2,062,222
- ----------------------------------------------------------- -------------
Net Investment Income 24,602,016
- ----------------------------------------------------------- -------------
Realized Gains (Losses) from Investments:
- -----------------------------------------------------------
Net realized gains (losses) from investment transactions 46,027
- ----------------------------------------------------------- -------------
Change in net assets resulting
from operations $ 24,648,043
- ----------------------------------------------------------- =============
</TABLE>
(See Notes which are an integral part of the Financial Statements)
139
<PAGE>
Fountain Square U.S. Treasury Obligations Fund
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
1997 1996
--------------- ---------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
- ------------------------------------------------------------------------
Operations--
- ------------------------------------------------------------------------
Net investment income $ 24,602,016 $ 19,816,920
- ------------------------------------------------------------------------
Net realized gains on investment transactions 46,027 1,390
- ------------------------------------------------------------------------ --------------- ---------------
Change in net assets resulting from operations 24,648,043 19,818,310
- ------------------------------------------------------------------------ --------------- ---------------
Distributions to Shareholders--
- ------------------------------------------------------------------------
Dividends to shareholders from net investment income (24,602,021) (19,811,841)
- ------------------------------------------------------------------------ --------------- ---------------
Change in net assets from distributions to shareholders (24,602,021) (19,811,841)
- ------------------------------------------------------------------------ --------------- ---------------
Fund Share (Principal) Transactions--
- ------------------------------------------------------------------------
Proceeds from sale of shares 1,825,126,116 1,423,327,002
- ------------------------------------------------------------------------
Net asset value of shares issued to shareholders
in payment of dividends declared 5,305,436 2,033,312
- ------------------------------------------------------------------------
Cost of shares redeemed (1,780,618,543) (1,257,778,477)
- ------------------------------------------------------------------------ --------------- ---------------
Change in net assets from Fund share transactions 49,813,009 167,581,837
- ------------------------------------------------------------------------ --------------- ---------------
Change in net assets 49,859,031 167,588,306
- ------------------------------------------------------------------------
Net Assets:
- ------------------------------------------------------------------------
Beginning of period 489,228,424 321,640,118
- ------------------------------------------------------------------------ --------------- ---------------
End of period $ 539,087,455 $ 489,228,424
- ------------------------------------------------------------------------ =============== ===============
</TABLE>
(See Notes which are an integral part of the Financial Statements)
140
<PAGE>
Fountain Square U.S. Treasury Obligations Fund
Notes to Financial Statements
July 31, 1997
- -------------------------------------------------------------------------------
(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. At July 31, 1997, the Trust consisted of thirteen separate investment
portfolios. The accompanying financial statements and notes relate only to the
U.S. Treasury Obligations Fund (the "Fund").
The investment objective of the Fund is to achieve stability of principal and
current income consistent with stability of principal. The Fund pursues its
objective by investing in short-term U.S. Treasury obligations.
(2) Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles. The
preparation of financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of income and expenses
for the period. Actual results could differ from those estimates.
A. Securities Valuations--Investments of the Fund are valued at either
amortized cost, which approximates market value, or at original cost, which
combined with accrued interest approximates market value. Under the
amortized cost method, discount or premium is amortized on a constant basis
to the maturity of the security. Short-term securities with remaining
maturities of sixty days or less at the time of purchase may be valued at
amortized cost, which approximates fair market value. In addition, the Fund
may not (a) purchase any instruments with a remaining maturity greater than
thirteen months unless such instrument is subject to a demand feature, or
(b) maintain a dollar-weighted average maturity which exceeds 90 days.
B. Repurchase Agreements--The Fund will only enter into repurchase agreements
with banks and other recognized financial institutions, such as
broker/dealers, which are deemed by the Trust's advisor to be creditworthy
pursuant to guidelines and/or standards reviewed or established by the
Board of Trustees (the "Trustees"). It is the policy of the Fund to require
the custodian or sub-custodian bank to take possession, to have legally
segregated in the Federal Reserve Book Entry System, or to have segregated
within the custodian bank's vault, all securities held as collateral under
repurchase agreement transactions. Additionally, procedures have been
established by the Fund to monitor, on a daily basis, the market value of
each repurchase agreement's collateral to ensure that the value of
collateral at least equals the repurchase price to be paid under the
repurchase
141
<PAGE>
agreement transaction. Risks may arise from the potential inability of
counterparties to honor the terms of the repurchase agreement. Accordingly,
the Fund could receive less than the repurchase price on the sale of
collateral securities.
C. Securities Transactions and Related Income--Securities transactions are
accounted for on the date the security is purchased or sold (trade date).
Interest income is recognized on the accrual basis and includes, where
applicable, the pro rata amortization of premium or discount. Dividend
income is recorded on the ex-dividend date. Gains or losses realized on
sales of securities are determined by comparing the identified cost of the
security lot sold with the net sales proceeds.
D. When-Issued and Delayed Delivery Transactions--The Fund may engage in when-
issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains 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 valued daily and begin earning interest on the
settlement date.
E. Dividends to Shareholders--Dividends from net investment income are
declared daily and paid monthly and distributable net realized gains, if
any, are declared and distributed at least annually. Dividends from net
investment income and from net realized capital gains are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are primarily due to
differing treatments for expiring capital loss carryforwards and deferrals
of certain losses.
F. Federal Taxes--It is the Fund's policy to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders each year substantially all of their income.
Accordingly, no provision for federal income tax is necessary.
(3) Shares of Beneficial Interest
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
Year Year
Ended Ended
7/31/97 7/31/96
-------- --------
<S> <C> <C>
Shares sold 1,825,126,116 1,423,327,002
- ------------------------------------------------------------------------------------------------
Shares issued to shareholders
in payment of distributions declared 5,305,436 2,033,312
- ------------------------------------------------------------------------------------------------
Shares redeemed (1,780,618,543) (1,257,778,477)
- ------------------------------------------------------------------------------------------------
Net change resulting from
Fund share transactions 49,813,009 167,581,837
- ------------------------------------------------------------------------------------------------
</TABLE>
142
<PAGE>
(4) Investment Advisory Fee and Other Transactions with Affiliates
Investment Advisory Fee--Fifth Third Bank, the Trust's investment Advisor (the
"Advisor"), receives for its services an annual investment advisory fee of
0.40%, which based on a percentage of the Fund's average daily net assets.
The Advisor may voluntarily choose to waive a portion of its fee and reimburse
certain operating expenses of the Fund. The Advisor can modify or terminate this
voluntary waiver and reimbursement at any time at its sole discretion. For the
year ended July 31, 1997, the advisor waived $655,154 in advisory fees.
Administrative Fee--Effective December 1, 1995 BISYS Fund Services ("BISYS")
became the Trust's administrator. The administrator generally assists in all
aspects of the Trust's administration and operation including providing the Fund
with certain administrative personnel and services necessary to operate the
Fund. Also effective December 1, 1995, pursuant to a separate agreement with
BISYS, Fifth Third Bank performs sub-administrative services on behalf of the
Fund including providing certain administrative personnel and services necessary
to operate the Fund, for which it receives a fee from BISYS computed daily as a
percentage of the daily net assets of the Fund. Under the terms of the
administration agreement, fees payable to BISYS are computed daily as a
percentage of the average net assets of the Trust for the period. Administration
fees are computed at 0.10% of first $1 billion of net assets of the Trust, 0.08%
of net assets of the Trust between $1 billion and $2 billion, and 0.07% of more
than $2 billion of net assets of the Trust. Effective April 1, 1997, the
administration fees are computed at 0.20% of first $1 billion of net assets of
the Trust, 0.18% of net assets of the Trust between $1 billion and $2 billion,
and 0.17% of more than $2 billion of net assets of the Trust. For the fiscal
year ended July 31, 1997, BISYS waived $176,976 in administrative fees.
Transfer and Dividend Disbursing Agent, Accounting and Custody Fees--Fifth Third
Bank serves as transfer and dividend disbursing agent for the Funds for which it
receives a fee. Fifth Third Bank sub-contracts the execution of the transfer and
dividend disbursing agent functions to a non-affiliated entity. The fee is based
on the level of each Fund's average net assets for the period, plus out-of-
pocket expenses. For the year ended July 31, 1997, Fifth Third Bank received
$9,322 for transfer and dividend disbursing agent fees.
Fifth Third Bank is the Funds' custodian & portfolio accountant for which it
receives a fee. The fees are based on the level of each Fund's average net
assets for the period plus out-of-pocket expenses. Fifth Third Bank received
fees of $49,349, and $91,138 for custodian and fund accounting services,
respectively for the fiscal year ended July 31, 1997.
Certain Officers and Trustees of the Trust are Officers and Trustees of the
above companies.
143
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
- --------------------------------------------------------------------------------
To the Board of Trustees and Shareholders of
FOUNTAIN SQUARE FUNDS
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Fountain Square U.S. Treasury Obligations Fund
(one of the portfolios comprising Fountain Square Funds), as of July 31, 1997,
and the related statement of operations for the year then ended, and statement
of changes in net assets and financial highlights for the periods presented
therein. These financial statements and financial highlights are the
responsibility of the Fund'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, 1997, 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
Fountain Square U.S. Treasury Obligations Fund at July 31, 1997, the results of
its operations for the year then ended, and the changes in its net assets and
financial highlights for the periods presented therein, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Cincinnati, Ohio
September 12, 1997
144
<PAGE>
ADDRESSES
<TABLE>
- -----------------------------------------------------------------------------------
<S> <C> <C>
Fountain Square Quality Growth Fund Fountain Square Funds
Fountain Square Equity Income Fund c/o Fifth Third Bank
Fountain Square Balanced Fund 38 Fountain Square Plaza
Fountain Square Mid Cap Fund Cincinnati, Ohio 45263
Fountain Square International Equity Fund
Fountain Square Bond Fund For Income
Fountain Square Quality Bond Fund
Fountain Square U.S. Government Securities Fund
Fountain Square Municipal Bond Fund
Fountain Square Ohio Tax Free Bond Fund
- -----------------------------------------------------------------------------------
Investment Advisor
Fifth Third Bank 38 Fountain Square Plaza
Cincinnati, Ohio 45263
- -----------------------------------------------------------------------------------
Custodian, Transfer Agent, Dividend Disbursing Agent, and Sub-Administrator
Fifth Third Bank 38 Fountain Square Plaza
Cincinnati, Ohio 45263
- -----------------------------------------------------------------------------------
Distributor and Administrator
BISYS Fund Services L.P. 3435 Stelzer Road
Columbus, Ohio 43219
- -----------------------------------------------------------------------------------
Independent Auditors
Ernst & Young LLP 1300 Chiquita Center
250 East Fifth Street
Cincinnati, Ohio 45202
- -----------------------------------------------------------------------------------
</TABLE>
<PAGE>
[LOGO OF FIFTH THIRD BANK APPEARS HERE]
Fifth Third Bank
Investment Advisor
