<PAGE> 1
FOUNTAIN SQUARE FUNDS
INVESTMENT A SHARES
INVESTMENT C SHARES
SUPPLEMENT DATED JULY 23, 1997 TO THE
PROSPECTUS DATED SEPTEMBER 30, 1996
(RESTATED AS OF APRIL 25, 1997)
The table of "Financial Highlights (unaudited)" for a share of
beneficial interest outstanding through the period May 31, 1997 below
supplements the unaudited financial statements of the Quality Bond, Ohio Tax
Free Bond, U.S. Government Securities, Quality Growth, Mid Cap, Balanced, and
International Equity Funds (the "Funds"), contained in the Statement of
Additional Information and sets forth certain information regarding the
investment operations of the Funds for the period presented.
FOUNTAIN SQUARE BOND FUND FOR INCOME FUND
FINANCIAL HIGHLIGHTS -- INVESTMENT A AND C SHARES
- -------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
January 27, 1997 to March 4, 1997 to
May 31, 1997(a) May 31, 1997(a)
------------------- -------------------
(Unaudited) (Unaudited)
Investment A Shares Investment C Shares
------------------- -------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $12.00 $12.01
------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.26 0.19
Net realized and unrealized gains (losses)
on investments (0.06) (0.02)
------ ------
Total from investment operations 0.20 0.17
------ ------
LESS DISTRIBUTIONS
Dividends to Shareholders from net
investment income (0.24) (0.21)
------ ------
NET ASSET VALUE, END OF PERIOD $11.96 $11.97
====== ======
TOTAL RETURN (B) 1.72%(f) 1.48%(f)
RATIOS TO AVERAGE NET ASSETS
Expenses 0.81%(d) 1.31%(d)
Net investment income (loss) 6.18%(d) 5.43%(d)
Expense waiver/reimbursement (c) 0.36%(d) 0.26%(d)
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $148,807 $ 106
Portfolio turnover rate (e) 48% 48%
</TABLE>
(a) Period from commencement of operations.
(b) Based on net asset value, which does not reflect the contingent deferred
sales charge.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) 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 return since inception of the fund, not annualized.
<PAGE> 2
FOUNTAIN SQUARE MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS -- INVESTMENT A AND C SHARES
- -------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
January 27, 1997 to February 20, 1997 to
May 31, 1997(a) May 31, 1997(a)
------------------- --------------------
(Unaudited) (Unaudited)
Investment A Shares Investment C Shares
------------------- --------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $12.00 $12.05
------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.18 0.12
Net realized and unrealized gains (losses)
on investments 0.04 0.03
------ ------
Total from investment operations 0.22 0.15
------ ------
LESS DISTRIBUTIONS
Dividends to Shareholders from net
investment income (0.17) (0.14)
------ ------
NET ASSET VALUE, END OF PERIOD $12.05 $12.06
====== ======
TOTAL RETURN (B) 1.88%(f) 1.70%(f)
RATIOS TO AVERAGE NET ASSETS
Expenses 0.85%(d) 1.35%(d)
Net investment income (loss) 4.61%(d) 3.86%(d)
Expense waiver/reimbursement (c) 0.36%(d) 0.26%(d)
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $98,137 $ 359
Portfolio turnover rate (e) 19% 19%
</TABLE>
(a) Period from commencement of operations.
(b) Based on net asset value, which does not reflect the contingent deferred
sales charge.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) 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 return since inception of the fund, not annualized.
<PAGE> 3
FOUNTAIN SQUARE EQUITY INCOME FUND
FINANCIAL HIGHLIGHTS -- INVESTMENT A AND C SHARES
- -------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
January 27, 1997 to February 5, 1997 to
May 31, 1997(a) May 31, 1997(a)
------------------- -------------------
(Unaudited) (Unaudited)
Investment A Shares Investment C Shares
------------------- -------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $12.00 $12.21
------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.11 0.07
Net realized and unrealized gains (losses)
on investments 1.28 1.09
------ ------
Total from investment operations 1.39 1.16
------ ------
LESS DISTRIBUTIONS
Dividends to Shareholders from net
investment income (0.09) (0.06)
------ ------
NET ASSET VALUE, END OF PERIOD $13.30 $13.31
====== ======
TOTAL RETURN (B) 11.67%(g) 11.48%(g)
RATIOS TO AVERAGE NET ASSETS
Expenses 1.08%(d) 1.58%(d)
Net investment income (loss) 2.69%(d) 1.94%(d)
Expense waiver/reimbursement (c) 0.36%(d) 0.26%(d)
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $111,365 $ 49
Portfolio turnover rate (e) 18% 18%
Average Commission rate paid (f) $0.0651 $0.0651
</TABLE>
(a) Period from commencement of operations.
(b) Based on net asset value, which does not reflect the contingent deferred
sales charge.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) 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.
(g) Represents return since inception of the fund, not annualized.
<PAGE> 4
FOUNTAIN SQUARE FUNDS
INVESTMENT A SHARES
INVESTMENT C SHARES
SUPPLEMENT DATED JULY 23, 1997 TO THE
COMBINED STATEMENT OF ADDITIONAL INFORMATION
DATED SEPTEMBER 30, 1996
(RESTATED AS OF APRIL 25, 1997)
FOUNTAIN SQUARE FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MAY 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Equity Municipal
Income Bond Fund Bond
Fund For Income Fund
------------- ------------- -------------
<S> <C> <C> <C>
Assets:
Investments, at value (Cost $77,637,712; $126,801,307;
and $94,927,496, respectively) $ 109,646,975 $ 127,168,944 $ 96,404,897
Repurchase agreements (Cost $1,480,000; $19,816,000;
and $0, respectively) 1,480,000 19,816,000 --
------------- ------------- -------------
Total Investments 111,126,975 146,984,944 96,404,897
Cash 511 510 --
Interest receivable 379,832 1,889,812 1,808,410
Receivable for investments sold -- 4,768,850 --
Receivable for fund shares sold 2,520 99,500 350,466
Prepaid expenses and other assets 10,527 178,131 10,747
------------- ------------- -------------
Total Assets 111,520,365 153,921,747 98,574,520
------------- ------------- -------------
Liabilities:
Payable for investments purchased -- 4,756,900 --
Payable for Fund shares redeemed -- 578 --
Other Payables -- 138,687 --
Accrued expenses and other payables:
Investment advisory fees 76,000 70,000 48,500
Administration fees 7,800 11,100 7,600
Accounting and transfer agent fees 5,933 6,533 5,933
Custodian fees 1,250 1,500 1,233
Legal and audit fees 6,300 5,000 6,700
Printing 4,450 3,000 4,200
Other 5,085 15,073 3,688
------------- ------------- -------------
Total Liabilities 106,818 5,008,371 77,854
------------- ------------- -------------
Net Assets :
Paid-in capital 70,895,004 148,521,346 96,690,987
Net unrealized appreciation on investments 32,009,263 367,637 1,477,401
Accumulated net realized gains/losses on investment transactions 8,346,401 (164,088) 214,253
Undistributed net investment income 162,879 188,481 114,025
------------- ------------- -------------
Total Net Assets $ 111,413,547 $ 148,913,376 $ 98,496,666
============= ============= =============
Net Assets
Investment A Shares $ 111,364,862 $ 148,807,170 $ 98,137,344
Investment C Shares 48,685 106,206 359,322
------------- ------------- -------------
Total $ 111,413,547 $ 148,913,376 $ 98,496,666
============= ============= =============
Outstanding shares of beneficial interest
Investment A Shares 8,372,075 12,437,154 8,143,465
Investment C Shares 3,657 8,876 29,806
------------- ------------- -------------
8,375,732 12,446,030 8,173,271
============= ============= =============
Net asset value
Redemption price per share - Investment A Shares $ 13.30 $ 11.96 $ 12.05
============= ============= =============
Offering price per share - Investment C Shares* $ 13.31 $ 11.97 $ 12.06
============= ============= =============
Maximum Sales Charge 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) $ 13.93 $ 12.52 $ 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)
<PAGE> 5
FOUNTAIN SQUARE FUNDS
STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDED MAY 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
EQUITY BOND FUND MUNICIPAL
INCOME FOR BOND
FUND * INCOME * FUND *
----------- ----------- -----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 42,962 $ 3,396,124 $ 1,861,236
Dividend income 1,293,211 3,958 --
----------- ----------- -----------
Total Income 1,336,173 3,400,082 1,861,236
----------- ----------- -----------
EXPENSES:
Investment advisory fees 290,137 269,149 189,287
Administrative fees 16,589 22,436 16,081
Organizational Costs 678 678 678
Distribution and Service fees - Investment A & C 143,286 187,899 136,160
Portfolio accounting, transfer and dividend
disbursing agent fees and expenses 34,422 34,511 34,326
Directors'/Trustees' fees 2,316 2,316 2,316
Custodian 4,141 5,706 4,039
Other 14,176 35,834 18,834
----------- ----------- -----------
Total Expenses 505,745 558,529 401,721
----------- ----------- -----------
Deduct--
Fee Waivers 130,126 176,225 122,908
----------- ----------- -----------
Net Expenses 375,619 382,304 278,813
----------- ----------- -----------
Net Investment Income 960,554 3,017,778 1,582,423
----------- ----------- -----------
REALIZED AND UNREALIZED GAINS
(LOSSES) FROM INVESTMENTS:
Net realized gains (losses) from
investments 8,346,401 (164,088) 214,253
Net change in unrealized appreciation/
depreciation from investments 2,535,808 (394,414) 36,924
----------- ----------- -----------
Net realized/unrealized gains
from investments 10,882,209 (558,502) 251,177
----------- ----------- -----------
Change in net assets resulting
from operations $11,842,763 $ 2,459,276 $ 1,833,600
=========== =========== ===========
</TABLE>
* Commencement of operations of the fund began January 27, 1997.
(See Notes which are an integral part of the Financial Statements)
<PAGE> 6
FOUNTAIN SQUARE FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED MAY 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
EQUITY INCOME FUND * BOND FUND FOR INCOME*
-------------------------- -----------------------------
Period Ended Year Ended Period Ended Year Ended
May 31, July 31, May 31, July 31,
1997 1996 1997 1996
-------------------------- ----------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
<S> <C> <C> <C> <C>
Net investment income $ 960,554 $ -- $ 3,017,778 $ --
Net realized gains (losses) on investment transactions 8,346,401 -- (164,088) --
Change in unrealized appreciation
of investments 2,535,808 -- (394,414) --
------------- ----- ------------- -------
Change in net assets resulting from operations 11,842,763 -- 2,459,276 --
------------- ----- ------------- -------
DISTRIBUTIONS TO SHAREHOLDERS--
Dividends to shareholders from net
investment income (797,675) -- (2,829,297) --
------------- ----- ------------- -------
FUND SHARE (PRINCIPAL) TRANSACTIONS--
Proceeds from sale of shares 104,809,238 -- 152,919,778 --
Net asset value of shares issued to shareholders
in payment of dividends declared 2,670 -- 14,169 --
Cost of shares redeemed (4,443,449) -- (3,650,550) --
------------- ----- ------------- -------
Change in net assets from Fund
share transactions 100,368,459 -- 149,283,397 --
------------- ----- ------------- -------
Change in net assets 111,413,547 -- 148,913,376 --
NET ASSETS:
Beginning of period -- -- -- --
------------- ----- ------------- -------
End of period $ 111,413,547 $ -- $ 148,913,376 $ --
============= ===== ============= =======
</TABLE>
<TABLE>
<CAPTION>
MUNICIPAL BOND FUND*
----------------------------
Period Ended Year Ended
May 31, July 31,
1997 1996
----------------------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
<S> <C> <C>
Net investment income $ 1,582,423 $ --
Net realized gains (losses) on investment transactions 214,253 --
Change in unrealized appreciation
of investments 36,924 --
------------- ------
Change in net assets resulting from operations 1,833,600 --
------------- ------
DISTRIBUTIONS TO SHAREHOLDERS--
Dividends to shareholders from net
investment income (1,468,398) --
------------- ------
FUND SHARE (PRINCIPAL) TRANSACTIONS--
Proceeds from sale of shares 107,971,615 --
Net asset value of shares issued to shareholders
in payment of dividends declared 1,906 --
Cost of shares redeemed (9,842,057) --
------------- ------
Change in net assets from Fund
share transactions 98,131,464 --
------------- ------
Change in net assets 98,496,666 --
NET ASSETS:
Beginning of period -- --
------------- ------
End of period $ 98,496,666 $ --
============= ======
</TABLE>
* Commencement of operations of the Funds began January 27, 1997.
(See Notes which are an integral part of the Financial Statements)
<PAGE> 7
FOUNTAIN SQUARE EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS
MAY 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ -------------------------------------------- ------------
<S> <C>
COMMON STOCK -- 96.8%
BANKING -- 13.8%
105,000 Bank of New York Co., Inc. 4,475,625
32,000 Firstar Corp. 956,000
70,000 Mellon Bank Corp. 6,125,000
71,000 Norwest Bank 3,798,500
------------
TOTAL 15,355,125
------------
CHEMICALS -- 4.3%
250,000 RPM, Inc. 4,750,000
------------
ELECTRIC EQUIPMENT -- 5.1%
44,000 Emerson Electric Co. 2,376,000
54,600 General Electric Co. 3,296,475
------------
TOTAL 5,672,475
------------
FINANCIAL SERVICES -- 11.6%
15,000 Cincinnati Financial Corp. 1,173,750
85,000 Edwards (A.G.), Inc. 3,155,625
96,000 Federal National Mortgage Stock 4,188,000
162,000 United Asset Management Corp. 4,515,750
------------
TOTAL 13,033,125
------------
FOOD -- 4.1%
107,000 Heinz (H.J.) Co. 4,601,000
------------
INSURANCE -- 3.4%
85,000 American General Corp. 3,761,250
------------
MANUFACTURING -- 4.3%
190,000 Federal Signal Corp. 4,845,000
------------
OFFICE EQUIPMENT & SUPPLIES -- 3.2%
50,000 Pitney-Bowes, Inc. 3,512,500
------------
OIL & GAS -- 11.2%
42,000 Amoco Corp. 3,753,750
65,000 Chevron Corp. 4,550,000
30,000 Mobil Corp. 4,196,250
------------
TOTAL 12,500,000
------------
PHARMACEUTICALS -- 8.0%
53,000 American Home Products 4,041,250
20,000 Merck & Co., Inc. 1,797,500
12,000 Pfizer, Inc. 1,234,500
20,000 Schering - Plough Corp. 1,815,000
------------
TOTAL 8,888,250
------------
RETAILING -- 2.8%
60,000 J.C. Penney, Inc. 3,090,000
------------
TELECOMMUNICATIONS -- 10.8%
135,000 Alltel Corp. 4,438,125
86,000 Ameritech Corp. 5,633,000
45,000 GTE Corp. 1,985,625
------------
TOTAL 12,056,750
------------
TRANSPORTATION -- 4.1%
80,000 GATX Corp. 4,540,000
------------
UTILITIES\ELECTRIC -- 7.2%
90,000 Cinergy Corp. 3,150,000
60,000 Duke Power 2,700,000
62,000 KU Energy Corp. 2,139,000
------------
TOTAL 7,989,000
------------
UTILITIES\NATURAL GAS -- 2.9%
110,000 AGL Resources, Inc. 2,103,750
22,000 Consolidated Natural Gas Co. 1,168,750
------------
TOTAL 3,272,500
------------
TOTAL COMMON STOCK (Cost $76,501,521) 107,866,975
------------
CONVERTIBLE BONDS -- 1.6%
Financial
1,000,000 Cincinnati Financial Corp., 5.50%, 5/1/02 1,780,000
------------
TOTAL CONVERTIBLE BONDS (Cost, $1,136,191) 1,780,000
------------
* Repurchase Agreement -- 1.3%
1,480,000 UBS Securities Repurchase Agreement
dated 5.52%, due 6/02/97 (at amortized cost) 1,480,000
------------
TOTAL REPURCHASE AGREEMENTS 1,480,000
------------
TOTAL INVESTMENTS (Cost, $79,117,712) 111,126,975
============
</TABLE>
* The repurchase agreement is fully collateralized by U.S. Government
and/or agency obligations based on market prices at the date of the
portfolio.
** The cost of investments for federal tax purposes amounts to
$79,117,712. The net unrealized appreciation of investments on
federal tax basis amounts to $32,009,26 which is composed of
$32,009,263 appreciation and $0 depreciation at May 31, 1997.
Note: The categories of investments are shown as a percentage of net assets
($111,413,547) at May 31, 1997
(See Notes which are an integral part of the Financial Statements.)
<PAGE> 8
FOUNTAIN SQUARE BOND FUND FOR INCOME
PORTFOLIO OF INVESTMENT
MAY 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ ------------------------------------------------------------------------- ------------
<S> <C>
ASSET BACKED SECURITIES -- 3.4%
Financial -- 3.4%
$3,000,000 Contimortgage Home Equity Loan Trust, 7.33%, 3/15/27 $ 2,977,140
2,000,000 Standard Credit Card Master Trust I, Series 1994-2 Class A, 7.25%,4/7/08 2,024,440
------------
Total Asset Backed Securities (Cost-$4,928,209) 5,001,580
------------
CORPORATE BONDS -- 42.6%
AGRICULTURE, FORESTRY & FISHING -- 2.6%
4,000,000 Archers-Danial-Midland Co., 6.25%, 5/15/03 3,860,407
------------
BANKING -- 4.1%
1,000,000 Deutsche Bank Financial Medium Term Note, 9.28%, 5/31/99 1,051,267
5,000,000 Southern National Corp., 7.05%, 5/23/03 4,984,240
------------
TOTAL 6,035,507
------------
CHEMICALS -- 3.4%
5,000,000 Engelhard Corp., 7.00%, 8/1/01 5,015,040
------------
COMPUTERS -- 2.0%
3,000,000 International Business Machines, 6.38%, 6/15/00 2,974,994
------------
DIVERSIFIED OPERATIONS -- 3.3%
5,000,000 Tyco International Ltd, 6.38%, 1/15/04 4,807,020
------------
FINANCIAL -- 18.8%
5,000,000 American General Finance Corp., 7.25% 4/15/00 5,073,955
5,000,000 Bear Stearns, Inc., 7.25%, 10/15/06 4,934,914
5,000,000 CIT Group Holdings, 6.25%, 3/28/01 4,921,235
5,000,000 General Electric Capital Corp., 6.94%, 3/25/27 5,001,100
5,000,000 Paine Webber Group, 6.68%, 2/10/04 4,826,880
2,500,000 RBSG Capital Corp., 10.13%, 3/1/04 2,854,550
------------
TOTAL 27,612,634
------------
INSURANCE -- 3.2%
5,000,000 Met Life, 6.30%, 11/1/03 4,759,509
------------
OFFICE AUTOMATION & EQUIPMENT -- 3.8%
5,000,000 Pitney Bowes, Inc., 8.63%, 2/15/08 5,516,459
------------
TELECOMMUNICATIONS -- 0.7%
1,000,000 British Telecommunications, Inc., 9.38%, 2/15/99 1,046,306
------------
UTILITIES -- 0.7%
1,000,000 Southern New England, 8.00%, 11/20/01 1,043,676
------------
TOTAL CORPORATE BONDS (Cost-$63,210,867) 62,671,552
------------
U.S. GOVERNMENT AGENCIES -- 9.3%
5,000,000 Federal Home Loan Bank, 7.87%, 12/15/97 5,057,490
3,250,000 Federal Home Loan Bank, 7.31%, 6/16/04 3,343,262
163 Federal Home Loan Mortgage Corp., 7.50%, 2/1/02 165
5,000,000 Federal National Mortgage Assoc., 8.50%, 2/1/97 (Callable 2/1/00) 5,194,465
------------
TOTAL U.S. GOVERNMENT AGENCIES (Cost-$13,435,171) 13,595,382
------------
U.S. Treasury Notes -- 31.2%
$1,000,000 8.63%, 8/15/97 1,006,875
2,500,000 9.00%, 5/15/98 2,571,875
2,580,000 9.25%, 8/15/98 2,676,750
1,750,000 7.13%, 10/15/98 1,774,610
5,000,000 6.25%, 3/31/99 5,007,815
10,000,000 6.50%, 4/30/99 10,056,250
2,000,000 8.00%, 8/15/99 2,070,626
4,000,000 7.75%, 2/15/01 4,170,000
7,250,000 7.50%, 11/15/01 7,524,144
750,000 6.13%, 12/31/01 738,985
8,200,000 6.88%, 5/15/06 8,302,500
------------
TOTAL U.S. TREASURY NOTES (Cost-$45,227,060) 45,900,430
------------
</TABLE>
<PAGE> 9
FOUNTAIN SQUARE BOND FUND FOR INCOME
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ----------- -------------------------------------------------------------------------- ------------
<S> <C>
REPURCHASE AGREEMENTS --13.5%
19,816,000 UBS Securities Repurchase Agreement, 5.52%, 6/2/97 19,816,000
------------
Total Repurchase Agreements (Cost-$19,816,000) 19,816,000
------------
Total Investments (Cost-$146,617,307) $146,984,944
============
</TABLE>
* The cost of investments for federal tax purposes amounts to
$146,617,307. The Net Unrealized appreciation of investments on federal
tax basis amounts to $367,637 which is composed of $1,185,371
appreciation and $817,735 depreciation at May 31, 1997.
Note: The categories of investments are shown as a percentage of net
assets($146,984,944) at May 31, 1997.
<PAGE> 10
FOUNTAIN SQUARE MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENT
MAY 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ -------------------------------------------------------------------------------- -----------
<S> <C>
MUNICIPAL BONDS -- 97.2%
ALABAMA -- 3.1%
2,000,000 Dothan GO, 5.25%, 9/1/10 (Callable 9/1/05 @ 102) 1,992,280
1,000,000 Shelby County Board of Education, Revenue, 5.50%, 2/1/08 (Callable 2/1/05 @ 102) 1,030,160
----------
Total 3,022,440
----------
ARIZONA -- 2.1%
1,000,000 Phoenix GO, 5.80%, 7/1/07 (Callable 7/1/05 @ 102) 1,068,440
1,000,000 State Transportation Board Excise, Revenue, 7.20%, 7/1/97 1,002,950
----------
Total 2,071,390
----------
CONNECTICUT -- 2.1%
2,000,000 State GO, 5.70%, 3/15/10 (Callable 3/15/03 @ 102) 2,054,960
----------
DELAWARE -- 2.1%
1,000,000 State GO, 5.80%, 8/15/99 1,033,340
1,000,000 Transportation Authority, Revenue, 5.70%, 7/1/06 (Callable 7/1/02 @ 102) 1,044,930
----------
Total 2,078,270
----------
FLORIDA -- 8.0%
1,625,000 Broward County Water & Sewer, Revenue, 7.00%, 10/1/98 1,674,725
1,000,000 Jacksonville Excise Taxes, Revenue, 5.25%, 10/1/08 (Callable 10/1/03 @ 101) 1,010,010
1,000,000 School District Boards Association Inc, Revenue, 6.70%, 7/1/97 1,002,500
1,000,000 State Board of Education Capital Outlay GO, 6.25%, 6/1/99 1,038,790
1,000,000 State GO, 6.20%, 7/1/99 (Callable 7/1/97 @ 101) 1,021,080
1,000,000 State Turnpike Authority, Revenue, 7.45%, 7/1/00 (Callable 7/1/99 @ 102) 1,079,000
1,000,000 Volusia County School District GO, 5.88%, 8/1/00 1,042,190
----------
Total 7,868,295
----------
HAWAII -- 2.1%
1,000,000 Honolulu City & County GO, 5.80%, 3/1/01 1,042,250
1,000,000 State GO, 6.90%, 12/1/00 1,035,480
----------
Total 2,077,730
----------
ILLINOIS -- 8.2%
1,000,000 Chicago GO, 5.40%, 1/1/09 (Callable 1/1/04 @ 102) 1,008,700
2,000,000 Chicago O'Hara International Airport, Revenue, 5.63%, 1/1/15 (Callable 1/1/06 @ 102) 1,998,780
1,000,000 Chicago Park District GO, 6.10%, 11/15/05 1,074,380
1,000,000 Chicago Park GO, 5.20%, 1/1/09 (Callable 1/1/06 @ 102) 995,140
2,000,000 Du Page County, Revenue, 5.60%, 1/1/21 2,012,960
1,000,000 State GO, 5.50%, 8/1/03 1,032,610
----------
Total 8,122,570
----------
INDIANA -- 6.0%
1,450,000 Bank Board, Revenue, 5.80%, 2/1/08 (Callable 2/1/05 @ 101) 1,515,989
1,450,000 Merrillville Multi School, Revenue Bond, 5.63%, 1/15/19 (Callable 1/15/07 @ 102) 1,420,594
1,000,000 Municipal Power Agency Supply, Revenue, 5.38%, 1/1/03 1,028,820
1,875,000 Munster School Building Corp., 5.70%, 7/15/10 (Callable 1/15/05 @ 101) 1,919,494
----------
Total 5,884,897
----------
KANSAS -- 1.3%
1,250,000 Douglas County, Union School District GO, 6.00%, 9/1/09 1,309,475
----------
KENTUCKY -- 2.0%
1,000,000 State Property & Buildings Commission, Revenue, 4.70%, 9/1/04 (Callable 9/1/03 989,890
@ 102)
1,000,000 State Property & Buildings Commission, Revenue, 5.30%, 11/1/07 1,024,910
(Callable 11/1/05 @ 102)
Total 2,014,800
----------
MASSACHUSETTS --1.0%
1,000,000 State GO, 5.25%, 8/1/06 (Callable 8/1/05 @ 101) 1,025,530
----------
</TABLE>
<PAGE> 11
FOUNTAIN SQUARE MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ -------------------------------------------------------------------------------- -----------
<S> <C>
MUNICIPAL BONDS -- CONTINUED
MARYLAND -- 2.0%
1,000,000 University System, Revenue, 4.35%, 10/1/03 972,840
1,000,000 Washington Subern San District Water GO, 5.00%, 6/1/02 1,016,350
----------
Total 1,989,190
----------
MICHIGAN -- 2.9%
1,000,000 Chelsea School District, GO, 5.70%, 5/1/10 (Callable 5/1/05 @ 101) 1,031,390
2,000,000 Johannesburg-Lewiston Schools, GO, 5.00%, 5/1/16 1,869,840
----------
Total 2,901,230
----------
MINNESOTA -- 4.1%
2,000,000 Hennepin County, Revenue, 5.75% 10/1/10 (Callable 10/1/02 @ 102) 2,068,680
2,000,000 Western Municipal Power Agency, Revenue, 5.50%, 1/1/12 (Callable 1/1/06 @ 102) 2,017,460
----------
Total 4,086,140
----------
NEBRASKA -- 0.8%
700,000 Lincoln Water Revenue, Revenue, 6.85%, 11/1/03 756,189
----------
NEW HAMPSHIRE -- 1.0%
1,000,000 State GO, 5.00%, 9/1/12 (Callable 9/1/06 @ 101) 963,740
----------
NEVADA -- 5.5%
1,285,000 Carson City, School District, GO, 5.00%, 4/1/06 (Callable 4/1/04 @ 101) 1,284,910
2,000,000 Clark County, School District, GO, 5.80%, 6/15/11 (Callable 6/15/05 @ 101) 2,051,680
1,000,000 Douglas County, School District, GO, 5.90%, 6/1/08 Callable 6/1/02 @ 101) 1,042,710
1,000,000 Washoe County, School District, GO, 7.70%, 8/1/04, MBIA 1,026,420
----------
Total 5,405,720
----------
OHIO -- 5.1%
1,000,000 Columbus GO, 6.88%, 9/15/05 (Callable 9/15/01 @ 100) 1,091,020
1,000,000 Columbus Sewer Improvement No 26-E-U GO, 6.50%, 9/15/01 1,077,180
1,000,000 State Building Authority, Revenue, 6.38%, 6/1/07 (Callable 6/1/01 @ 101) 1,068,370
1,000,000 State Public Facilities Commission, Revenue, 6.50%, 6/1/01 (Callable 6/1/99 @ 102) 1,061,540
750,000 University of Cincinnati Series R9, Revenue, 5.60%, 6/1/07 (Callable 6/1/03 @ 100) 772,695
----------
Total 5,070,805
----------
OKLAHOMA -- 1.1%
1,000,000 Woodward Municipal Authority Sales, Revenue, 5.85%, 11/1/12
(Callable 11/1/03 @ 101.5) 1,030,750
----------
PENNSYLVANIA -- 5.9%
1,750,000 Intergovernmental, Coop Authority Special Tax Revenue, 5.50% 6/15/16 1,725,587
2,000,000 State Higher Educational Facilities Authority Health Services, Revenue, 5.10%, 1/1/05 2,018,700
2,000,000 State GO, 5.13%, 3/15/04 2,029,060
----------
Total 5,773,347
----------
TENNESSEE -- 2.3%
1,000,000 Memphis GO, 5.40%, 8/1/09 (Callable 8/1/02 @ 101) 1,018,310
1,180,000 Oak Ridge GO, 5.55%, 7/1/10 (Callable 7/1/02 @ 102) 1,199,966
----------
Total 2,218,276
----------
TEXAS -- 9.1%
2,000,000 Houston Hotel Occupancy, 5.50%, 7/1/15 1,990,820
2,000,000 Lamar Consolidated Independent School District GO, 4.50% 2/15/09 1,856,640
1,000,000 Mesquite GO, 5.45%, 2/15/10 (Callable 2/15/05 @ 100) 1,008,300
1,000,000 San Antonia Improvement GO, 5.20%, 8/1/10 (Callable 8/1/06 @ 100) 995,590
1,000,000 State GO, 7.00%, 10/1/03 1,058,870
1,000,000 State GO, 7.60%, 12/1/97 (Callable 7/1/04 @ 100) 1,019,400
1,000,000 Water Developement Board, Revenue, 5.50%, 7/15/00 1,030,560
----------
Total 8,960,180
----------
</TABLE>
<PAGE> 12
FOUNTAIN SQUARE MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ------------ -------------------------------------------------------------------------------- -----------
<S> <C>
MUNICIPAL BONDS -- CONTINUED
UTAH -- 2.7%
1,000,000 Iron County School District, GO, 5.90%, 1/15/05 1,062,920
1,530,000 St George Water, Revenue, 5.60%, 6/1/10 (Callable 6/1/05 @ 101) 1,558,137
----------
Total 2,621,057
----------
VIRGINIA -- 2.1%
1,000,000 Beach GO, 5.70%, 11/1/07 (Callable 11/1/04 @ 102) 1,055,880
1,000,000 State Public Building Authority, Revenue, 5.70%, 8/1/00 1,035,250
----------
Total 2,091,130
----------
WASHINGTON -- 7.4%
1,000,000 King County School District No. 411 GO, 4.70%, 12/1/05 (Callable 12/1/03 @ 101) 979,560
2,000,000 King County School District No. 411 GO, 6.50%, 12/1/09 2,179,860
1,000,000 Spokane Regional Solid Waste, Revenue Bond, 5.50%, 12/1/10 1,013,540
2,000,000 State Public Power Supply System, Revenue, 5.60%, 7/1/07 2,046,300
1,000,000 State Public Power Supply System, Revenue, 7.50%, 7/1/03 (Callable 1/1/01 @ 102) 1,098,880
----------
Total 7,318,140
----------
WISCONSIN -- 7.2%
1,450,000 Appleton Area School District GO, 4.70%, 4/1/06 1,422,189
1,000,000 Milwaukee County GO, 6.00%, 12/1/99 1,027,020
1,000,000 Milwaukee GO, 5.30%, 6/15/07 1,030,430
1,500,000 State GO, Refunding, Series 3, 4.88%, 11/1/05 1,503,540
2,000,000 State GO, Series E, 6.80%, 5/1/98 2,054,140
----------
Total 7,037,319
----------
Total Municipal Bonds 95,753,570
----------
CASH EQUIVALENTS -- 0.7%
Stifs/Money Markets -- 0.7%
250,000 Federated Tax Free Trust 250,000
401,327 SEI Institutional Tax Free Fund 401,327
----------
Total Cash Equivalents 651,327
----------
Total Investments (Cost-$ 94,927,496) 96,404,897
</TABLE>
* The cost of investments for federal tax purposes amounts to $94,927,496. The
net unrealized appreciation of investments on federal tax basis amounts to
$1,477,401 which is composed of $1,750,570 appreciation and $273,169
depreciation at May 31, 1997.
Note: The categories of investments are shown as a percentage of net
assets($98,496,666) at May 31, 1997.
The following abbreviations are used in this portfolio.
GO -- General Obligation
MBIA -- Municipal Bond Insurance Association
<PAGE> 13
FOUNTAIN SQUARE FUNDS
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1997
(UNAUDITED)
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 May 31, 1997, the Trust consisted of thirteen separate investment
portfolios.
The accompanying financial statements relate only to the following Funds
(referred to individually as "Fund" and collectively as "Funds"):
Portfolio Name
Fountain Square Equity Income Fund ("Equity Income Fund")
Fountain Square Bond Fund For Income ("Bond Fund For Income")
Fountain Square Municipal Bond Fund ("Municipal Bond Fund")
The Equity and Income 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 and 12b-1 Fees paid by the Investment A Shares, voting
rights on matters affecting a single class of shares and the exchange privileges
of each class of shares.
The investment objective of the Equity Income Fund is to provide a high level of
current income consistent with capital appreciation. The Fund pursues its
objective by investing in a diversified portfolio of high quality common stocks
or convertible securities that have above-average current yield. The investment
objective of the Bond Fund For Income is to provide a high level of current
income. The Fund pursues its objective by investing in a diversified portfolio
of investment grade debt securities with remaining maturities of ten years or
less. The investment objective of the Municipal Bond Fund is to provide a high
level of current income that is exempt from federal regular income taxes. The
Fund pursues its objective by investing primarily in a diversified portfolio of
investment grade municipal securities.
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
<PAGE> 14
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 determined on the basis of the latest bid prices.
Investments in other open-end investment companies are valued at net asset value
as reported by such companies. 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
(the "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 advisor to be creditworthy pursuant to
guidelines and/or standards reviewed or established by 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. OPTION CONTRACTS--The Funds 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. At May 31, 1997, the Funds had no written options outstanding.
E. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Funds may engage in
when-issued or delayed delivery transactions. The Funds record when-issued
securities on the trade date and maintain security positions such that
sufficient liquid assets will be available to make payment for the securities
purchased. Securities purchased on a when-issued or delayed delivery basis are
valued daily and begin earning interest on the settlement date.
F. DIVIDENDS TO SHAREHOLDERS--Dividends from net investment income are declared
and paid
<PAGE> 15
monthly for the Funds. 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.
G. 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.
H. 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.
3) SHARES OF BENEFICIAL INTEREST
Transactions in Fund shares were as follows:
Printer: Insert lotus file here
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>
ANNUAL
FUND RATE
---- ----
<S> <C>
Equity Income Fund...................... 0.80%
Bond Fund For Income.................. 0.55%
Municipal Bond Fund.................... 0.55%
</TABLE>
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.
ADMINISTRATIVE FEE-BISYS Fund Services L.P. ("BISYS") serves as the Trust's
administrator.
<PAGE> 16
FOUNTAIN SQUARE FUNDS
<TABLE>
<CAPTION>
BOND FOR INCOME FUND
----------------------------------------------------------------------------
PERIOD ENDED PERIOD ENDED
MAY 31, 1997 * JANUARY 31, 1997 *
---------------------------------- ----------------------------------
SHARES AMOUNT SHARES AMOUNT
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Investment A Shares
Sold 12,737,418 $ 152,818,778 11,523,392 $ 85,580,831
Reinvestment of dividends 1,146 13,653 -- --
Redeemed (300,996) (3,650,485) (11,108) (166,530)
------------- ------------- ------------- -------------
Net increase - Investment A Shares 12,437,568 149,181,946 11,512,284 85,414,301
------------- ------------- ------------- -------------
Investment C Shares
Sold 8,424 101,000 -- --
Reinvestment of dividends 43 516 -- --
Redeemed (5) (65) -- --
------------- ------------- ------------- -------------
Net increase - Investment C Shares 8,462 101,451 -- --
------------- ------------- ------------- -------------
Net increase in Fund 12,446,030 149,283,397 11,512,284 85,414,301
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
MUNICIPAL BOND FUND
----------------------------------------------------------------------------
PERIOD ENDED PERIOD ENDED
MAY 31, 1997 * JANUARY 31, 1997 *
---------------------------------- ----------------------------------
SHARES AMOUNT SHARES AMOUNT
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Investment A Shares
Sold 8,964,560 $ 107,613,599 8,391,601 $ 11,242,649
Reinvestment of dividends 49 595 -- --
Redeemed (818,655) (9,812,052) (15,514) (187,435)
------------- ------------- ------------- -------------
Net increase - Investment A Shares 8,145,954 97,802,142 8,376,087 11,055,214
Investment C Shares
Sold 29,714 $ 358,016 -- $ --
Reinvestment of dividends 109 1,311 -- --
Redeemed (2,506) (30,005) -- --
------------- ------------- ------------- -------------
Net increase - Investment C Shares 27,317 329,322 -- --
------------- ------------- ------------- -------------
Net decrease in Fund 8,173,271 98,131,464 8,376,087 11,055,214
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
EQUITY INCOME FUND
----------------------------------------------------------------------------
PERIOD ENDED PERIOD ENDED
MAY 31, 1997 * JANUARY 31, 1997 *
---------------------------------- ----------------------------------
SHARES AMOUNT SHARES AMOUNT
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Investment A Shares
Sold 8,728,918 $ 104,804,238 8,608,367 $ 100,864,283
Reinvestment of dividends 196 2,459 -- --
Redeemed (353,794) (4,443,449) (19,739) (300,411)
------------- ------------- ------------- -------------
Net increase - Investment A Shares 8,375,320 100,363,248 8,588,628 100,563,872
------------- ------------- ------------- -------------
Investment C Shares
Sold 395 $ 5,000 -- $ --
Reinvestment of dividends 17 211 -- --
Redeemed -- -- -- --
------------- ------------- ------------- -------------
Net increase - Investment C Shares 412 5,211 -- --
------------- ------------- ------------- -------------
Net increase in Fund 8,375,732 100,368,459 8,588,628 100,563,872
============= ============= ============= =============
</TABLE>
<PAGE> 17
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 Funds. 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 at .025%.
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.
DISTRIBUTION SERVICES FEE--BISYS serves as the Trust's principal distributor
(the "Distributor"). The Trust has 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 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.
ADMINISTRATIVE SERVICES FEE--The Trust has 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.
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. 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' accounting records 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 is the Funds' 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. Custodian fees waived for the quarter ended May 31, 1997
were as follows:
FUND FEES WAIVED
---- -----------
Equity Income Fund $130,126
Bond Fund For Income 176,225
Municipal Bond Fund 122,908
Certain of the Officers and Trustees of the Trust are Officers and Trustees of
the above companies.
<PAGE> 18
5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities for the
quarter ended May 31, 1997, were as follows:
<TABLE>
<CAPTION>
EQUITY BOND MUNICIPAL
INCOME FUND FOR BOND
FUND INCOME FUND
---- ------ ----
<S> <C> <C> <C>
PURCHASES $18,574,496 $65,456,270 $17,635,513
SALES $18,492,619 $61,383,775 $13,907,918
</TABLE>
6) ACQUISITION OF COMMON COLLECTIVE TRUST FUNDS
On January 27, 1997, the Equity Income Fund, Bond Fund For Income, and
Municipal Bond Fund acquired all of the assets of various 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 Bond Municipal
Income Fund For Bond
Fund Income Fund
---- ------ ----
<S> <C> <C> <C>
Shares 8,607,971 11,494,611 8,339,644
Net Assets $103,295,647 $137,938,291 $100,075,733
Net Asset Value $ 12.00 $ 12.00 $ 12.00
Unrealized Appreciation (Depreciation) $ 29,473,455 $ 762,051 $ 1,440,477
</TABLE>
<PAGE> 19
FOUNTAIN SQUARE EQUITY INCOME FUND
FINANCIAL HIGHLIGHTS -- INVESTMENT A SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
For the
Period
Ended
May 31,
1997*
-------------
(Unaudited)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.00
-------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.11
Net realized and unrealized gains
on investments 1.28
-------------
Total from investment operations 1.39
-------------
LESS DISTRIBUTIONS
Dividends to Shareholders from net
investment income (0.09)
-------------
NET ASSET VALUE, END OF PERIOD $ 13.30
=============
TOTAL RETURN ** 11.67%(e)
RATIOS TO AVERAGE NET ASSETS
Expenses 1.08%(b)
Net investment income (loss) 2.69%(b)
Expense waiver/reimbursement (a) 0.36%(b)
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) 111,365
Portfolio turnover rate (c) 18%
Average Commission rate paid (d) $ 0.0651
</TABLE>
* Reflects operations for the period from January 27, 1997 (date of
commencement of operations) to May 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) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(d) 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.
(e) Represents return since inception of the fund, not annualized.
(See Notes which are an integral part of the Financial Statements)
<PAGE> 20
FOUNTAIN SQUARE EQUITY INCOME FUND
FINANCIAL HIGHLIGHTS -- INVESTMENT C SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
For the
Period
Ended
May 31,
1997*
--------
(Unaudited)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.21
--------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.07
Net realized and unrealized gains
on investments 1.09
--------
Total from investment operations 1.16
--------
LESS DISTRIBUTIONS
Dividends to Shareholders from net
investment income (0.06)
--------
NET ASSET VALUE, END OF PERIOD $ 13.31
========
TOTAL RETURN ** 11.48%(e)
RATIOS TO AVERAGE NET ASSETS
Expenses 1.58%(b)
Net investment income (loss) 1.94%(b)
Expense waiver/reimbursement (a) 0.26%(b)
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) 49
Portfolio turnover rate (c) 18%
Average Commission rate paid (d) $ 0.0651
</TABLE>
* Reflects operations for the period from February 5, 1997 (date of
commencement of operations) to May 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) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(d) Represents the total dollar amount of commissions paid on protfolio
transactions divided by total number of shares purchased and sold by
the Fund for which commissions were charged.
(e) Represents return since inception of the fund, not annualized.
(See Notes which are an integral part of the Financial Statements)
<PAGE> 21
FOUNTAIN SQUARE BOND FUND FOR INCOME FUND
FINANCIAL HIGHLIGHTS -- INVESTMENT A SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
For the
Period
Ended
May 31,
1997*
-----------
(Unaudited)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.00
-----------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.26
Net realized and unrealized losses
on investments (0.06)
-----------
Total from investment operations 0.20
-----------
LESS DISTRIBUTIONS
Dividends to Shareholders from net
investment income (0.24)
-----------
NET ASSET VALUE, END OF PERIOD $ 11.96
===========
TOTAL RETURN ** 1.72%(d)
RATIOS TO AVERAGE NET ASSETS
Expenses 0.81%(b)
Net investment income (loss) 6.18%(b)
Expense waiver/reimbursement (a) 0.36%(b)
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) 148,807
Portfolio turnover rate (c) 48%
</TABLE>
* Reflects operations for the period from January 27, 1997 (date of
commencement of operations) to May 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) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(d) Represents return since inception of the fund, not annualized.
(See Notes which are an integral part of the Financial Statements)
<PAGE> 22
FOUNTAIN SQUARE BOND FUND FOR INCOME FUND
FINANCIAL HIGHLIGHTS -- INVESTMENT C SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
For the
Period
Ended
May 31,
1997*
----------------
(Unaudited)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.01
-------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.19
Net realized and unrealized losses
on investments (0.02)
-------
Total from investment operations 0.17
-------
LESS DISTRIBUTIONS
Dividends to Shareholders from net
investment income (0.21)
-------
NET ASSET VALUE, END OF PERIOD $ 11.97
=======
TOTAL RETURN ** 1.48%(d)
RATIOS TO AVERAGE NET ASSETS
Expenses 1.31%(b)
Net investment income (loss) 5.43%(b)
Expense waiver/reimbursement (a) 0.26%(b)
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) 106
Portfolio turnover rate (c) 48%
</TABLE>
* Reflects operations for the period from March 4, 1997 (date of
commencement of operations) to May 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) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(d) Represents return since inception of the fund, not annualized.
(See Notes which are an integral part of the Financial Statements)
<PAGE> 23
FOUNTAIN SQUARE MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS -- INVESTMENT A SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
For the
Period
Ended
May 31,
1997*
----------
(Unaudited)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.00
----------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.18
Net realized and unrealized gains
on investments 0.04
----------
Total from investment operations 0.22
----------
LESS DISTRIBUTIONS
Dividends to Shareholders from net
investment income (0.17)
----------
NET ASSET VALUE, END OF PERIOD $ 12.05
==========
TOTAL RETURN ** 1.88%(d)
RATIOS TO AVERAGE NET ASSETS
Expenses 0.85%(b)
Net investment income (loss) 4.61%(b)
Expense waiver/reimbursement (a) 0.36%(b)
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) 98,137
Portfolio turnover rate (c) 19%
</TABLE>
* Reflects operations for the period from January 27, 1997 (date of
commencement of operations) to May 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) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(d) Represents return since inception of the fund, not annualized.
(See Notes which are an integral part of the Financial Statements)
<PAGE> 24
FOUNTAIN SQUARE MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS -- INVESTMENT C SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
For the
Period
Ended
May 31,
1997*
----------------
(Unaudited)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.05
-------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.12
Net realized and unrealized gains
on investments 0.03
-------
Total from investment operations 0.15
-------
LESS DISTRIBUTIONS
Dividends to Shareholders from net
investment income (0.14)
-------
NET ASSET VALUE, END OF PERIOD $ 12.06
=======
TOTAL RETURN ** 1.70%(d)
RATIOS TO AVERAGE NET ASSETS
Expenses 1.35%(b)
Net investment income (loss) 3.86%(b)
Expense waiver/reimbursement (a) 0.26%(b)
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) 359
Portfolio turnover rate (c) 19%
</TABLE>
* Reflects operations for the period from February 20, 1997 (date of
commencement of operations) to May 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) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(d) Represents return since inception of the fund, not annualized.
(See Notes which are an integral part of the Financial Statements)
