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[LOGO OF FIFTH THIRD FUNDS APPEARS HERE]
[GRAPHIC APPEARS HERE]
QUALITY GROWTH FUND
EQUITY INCOME FUND
Fifth Third Funds CARDINAL FUND
Stock and Bond Mutual Funds
PINNACLE FUND
BALANCED FUND
Annual Report to Shareholders MID CAP FUND
INTERNATIONAL EQUITY FUND
BOND FUND FOR INCOME
QUALITY BOND FUND
U.S. GOVERNMENT SECURITIES FUND
MUNICIPAL BOND FUND
OHIO TAX FREE BOND FUND
====================
July 31,1999
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NOTICE OF DELIVERY OF PROSPECTUSES,
SEMI-ANNUAL REPORTS AND ANNUAL REPORTS
In order to reduce expenses of the Fifth Third Funds incurred in connection with
the mailing of prospectuses, prospectus supplements, semi-annual reports and
annual reports to multiple shareholders at the same address, Fifth Third Funds
may in the future deliver one copy of a prospectus, prospectus supplement,
semi-annual report or annual report to a single investor sharing a street
address or post office box with other investors, provided that all such
investors have the same last name or are believed to be members of the same
family. If you share an address with another investor and wish to receive your
own prospectus, prospectus supplements, semi-annual reports and annual reports,
please call the Trust toll-free at (888) 799-5353.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by a prospectus for the Funds, which contains facts
concerning the objectives and policies, management fees, expenses and other
information.
For more complete information on the Fifth Third 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 Fifth Third Funds are
distributed by BISYS Fund Services, L.P.
Fifth Third Bank and its affiliate Heartland Capital Management, Inc. serve as
Investment Advisors to the Funds and receive a fee for their services.
Fifth Third Funds, like all mutual funds:
. are NOT FDIC insured
. have no bank guarantee
. may lose value
YEAR 2000 RISK
Investors should be aware that, like other mutual funds and financial and
business organizations around the world, each of the Funds offered by this
Prospectus could be adversely impacted if the computer systems used by Fifth
Third Bank, BISYS Fund Services L.P. ("BISYS") or other service providers and
entities with computer systems that are linked to Fund records do not properly
process and calculate date-related information and data from and after January
1, 2000. This is commonly known as "Year 2000 Risk." Fifth Third Bank and BISYS
are taking steps that they believe are reasonably designed to address Year 2000
Risk with respect to their computer systems and to obtain satisfactory
assurances that comparable steps are being taken by each of the Trust's other
service providers. There can be no assurance, however, that these steps will be
sufficient to avoid any adverse impact on the Funds.
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Letter from the Chief Investment Officer
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Dear Shareholder:
We are pleased to present the Fifth Third Funds' annual report to
Shareholders for the 12-month period ended July 31, 1999. This letter
includes an explanation of the principles that guide our investment
strategy, comments on recent economic and market conditions and a
discussion of our outlook for the coming period.
Financial markets face volatility
The stock market performed well during the 12-month period ended July
31, 1999. That performance was driven by strong economic growth, low
inflation and relatively low interest rates. The Standard and Poor's
500 Stock Index/1/ posted a 20.20% total return for the 12 month
period ended July 31, 1999.
However, investors experienced significant volatility. Stock prices
dropped early in the period as investors worried that severe economic
problems in overseas markets such as Asia, Russia and Latin America
would hurt U.S. corporate earnings. For example, the S&P 500 declined
14% in August 1999 to a low of 957.28.
The Federal Reserve Board (the Fed) subsequently lowered short-term
interest rates three times to increase liquidity. That action boosted
investor confidence in the stock market. During the second half of the
period, however, investors began to worry that stronger-than-expected
economic growth would fuel a rise in inflation and force the Fed to
increase rates in order to slow down the economy. In fact, despite
continued low inflation, the Fed opted to raise rates in late June.
Stocks rallied during this time due to strong economic growth that
helped corporations post solid earnings.
Large-company stocks continued to outperform shares of smaller firms
during much of the period, due to the superior earnings growth of
larger firms. In particular, technology stocks were strong performers,
as were shares of economically sensitive companies, which benefited
from strong economic growth in the second half of the period.
Conditions in the fixed-income markets were also volatile. Treasury
bonds performed well early on, as the overseas financial crisis
motivated investors to favor Treasuries over more risky corporate
issues. However, concerns about inflation and rising interest rates
dampened Treasury bonds' performance later in the period. A heavy
supply of high-quality corporate bonds adversely affected such issues
during the second half of the period, although lower-quality corporate
securities performed well due to their attractive yields.
A long-term, high-quality investment approach
The Fifth Third Equity Funds take a long-term approach to investing,
reflecting our belief that stock prices over the long-term track the
growth in corporate earnings. Our approach calls for identifying
high-quality companies with strong growth prospects, and paying
reasonable prices for shares of such firms.
Our strategy of seeking out high-quality growth companies led the
Fifth Third equity funds to maintain their strong weightings in the
technology sector during the period. We believe technology is where
strong growth is found these days--and where growth will be found in
the future as more companies spend heavily on computers, software and
other technologies that enhance productivity. However, we employ a
valuation discipline, and are consequently willing to trim our
technology exposure when we feel the stocks are overvalued.
---------------
/1/ Standard & Poor's 500 Stock Index is an unmanaged market index.
This index does not include transaction costs associated with
buying and selling securities, nor does it include any management
fees.
1
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Letter from the Chief Investment Officer (continued)
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We also increased slightly the funds' exposure to consumer cyclical
stocks--such as Home Depot, Lowe's and Wal-Mart Stores, Inc.-which benefit
from a strong economy and housing market. We reduced the funds' weighting
in financial stocks during the period due to rising interest rates. And we
scaled back the funds' exposure to shares of health-care firms because we
felt the sector had become overvalued. That said, we continue to expect
strong growth from both financial and health care firms going forward, as
aging baby boomers spend more money on health care and invest heavily for
retirement. We expect to increase the funds' positions in these sectors in
the future, when conditions are more favorable.
The Fifth Third fixed-income funds continued to focus on high-quality
issues, which we believe is the best long-term approach for shareholders.
The funds maintained neutral average maturities during much of the period
due to uncertainty over the strength of the economy and the direction of
inflation and interest rates. The fixed-income funds also took advantage of
attractive valuations in various sectors of the bond market during the
period.
Looking ahead
We expect the economy will likely continue to grow at a rapid pace during
the coming months, while corporate profit growth should remain strong. It
appears as though the S&P 500 in 1999 will show positive earnings growth
for the eighth year out of the last nine. Such growth would be
unprecedented in recent times.
Meanwhile, however, there are several conflicting signs regarding
inflation. Signs that indicate we may see rising inflation ahead include a
sharp rise in labor costs during the second quarter of 1999, coupled with a
slowdown in the growth of worker productivity. However, manufacturing and
housing activity as well as consumer credit increases have slowed recently,
indicating that inflationary fears may ease soon. We will watch for
evidence that may create a clearer picture of the economy and inflation.
Whatever happens, the Fifth Third Funds will not be overly influenced by
short-term conditions in the financial markets. No investor consistently
can accurately predict short-term movements in the markets. Instead, our
equity managers will continue to do what they do best: Invest in companies
that they believe stand the best chance of producing strong earnings growth
over the long-term. Our bond fund managers also will continue to emphasize
high-quality issues and avoid making large commitments regarding the
direction of interest rates, while pursuing opportunities to deliver
attractive returns and yields to shareholders.
Sincerely,
/s/ James D. Berghausen
James D. Berghausen, CFA
Chief Investment Officer
Fifth Third Bank
2
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3
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Investment Reviews
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Fifth Third Quality Growth Fund
An interview with Steven E. Folker, portfolio manager.
Q. How did the Fund perform during the 12-month period ended July 31, 1999?
A. The total return for the Fund was 26.48% on Investment A Shares (before the
deduction of sales charge), compared to 20.20% for the S&P 500 Index, one of the
Fund's benchmarks.
Q. What economic or market conditions contributed to the Fund's performance?
A. The period began with a decline in corporate profits partly due to weak
overseas economies. But the Federal Reserve Board (the Fed) lowered the federal
funds rate three times, for a total rate cut of 0.75 percentage points, which
helped set off a stock market rally and a surge of economic growth. By June, the
Fed was forced to raise the federal funds rate by 0.25 percentage points, due to
concerns about strong economic growth and the potential for rising inflation.
The market also was marked by the strong performance of three industry
sectors-technology, communication services and capital goods.
Q. How did you manage the Fund in that environment?
A. We decreased the Fund's weighting in technology early in the period due to
the sector's high valuations. When technology stocks sold off later in the
period, we bought back many of the large-company stocks in the sector at
attractive prices. As a result, we increased the Fund's technology holdings by
8% during the period. We also found opportunities in capital goods and
communication services stocks, which offered attractive valuations.*
Q. What stocks helped boost the Fund's returns?
A. The portfolio's strongest performers were all in the technology sector, which
was up 62% during the 12-month period. The best performing stocks included Texas
Instruments (3.6% of net assets), Oracle (1.6%), Cisco Systems (3.7%) and Intel
(5.4%).*
Q. Did you avoid any sectors?
We avoided sectors that showed too great a dependence on the economic cycle or
signs of sluggish long-term growth. Those sectors included basic materials,
utilities, and consumer staples. We also reduced the Fund's exposure in the
health care sector due in part to concerns about Medicare reform.
Q. What is your outlook for the stock market, and how will you manage the Fund
in that environment?
A. We believe that the economy will continue to grow, creating modest
inflationary pressures, but inflation should remain low. As international
economies continue to strengthen, the United States should benefit from their
prosperity. We will carefully monitor the valuations of the stocks the Fund owns
to be sure that they are at reasonable levels. We also will continue to look for
opportunities among sectors that show impressive growth potential, including the
technology and consumer cyclical.
Q. What were the Fund's top holdings as of July 31, 1999?
A. The Fund's top five holdings were Intel Corporation (5.4% of net assets),
Home Depot (4.7%), Tyco International (4.3%), Freddie Mac (4.0%), and Bank of
New York (4.0%).*
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* The composition of the Fund's portfolio is subject to change.
4
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Growth of $10,000 Invested in the Fifth Third Quality Growth Fund
<TABLE>
<CAPTION>
Investment Investment Institutional S&P 500 S&P/BARRA Lipper Growth
C Shares** A Shares* Shares Stock Index Growth Index Funds Average
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
7/89 10,000 9,550 10,000 10,000 10,000 10,000
7/90 11,109 10,638 11,139 10,647 11,185 10,558
7/91 13,047 12,542 13,133 12,007 12,916 12,062
7/92 14,906 14,401 15,079 13,539 14,503 13,430
7/93 15,041 14,546 15,232 14,713 14,717 15,174
7/94 15,520 15,009 15,716 15,477 15,465 15,918
7/95 19,120 18,491 19,362 19,509 20,217 19,953
7/96 21,511 20,837 21,819 22,739 23,782 21,911
7/97 32,859 32,087 33,599 34,590 37,214 31,543
7/98 37,266 36,619 38,345 41,282 46,486 35,638
7/99 46,865 46,317 48,620 49,623 57,739 41,859
</TABLE>
Average Annual Total Return for the Period Ended July 31, 1999/1/
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Investment A* Investment C** Institutional***
------------ ------------ -------------
1 Year............ 20.82%.................. 25.76%................. 26.80%
5 Year............ 24.12%.................. 24.74%................. 25.34%
10 Year........... 16.56%.................. 16.70%................. 17.13%
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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.
/1/ The quoted performance of the Quality Growth Fund includes performance of
certain collectively managed accounts advised by Fifth Third Bank, for periods
dating back to 7/31/89, 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 (without waivers or reimbursements). These collectively managed 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 such accounts had been registered, the performance may have
been adversely affected. The performance shown reflects the deduction of fees
for value-added services associated with a mutual fund, such as investment
management and fund accounting fees. The performance also reflects reinvestment
of all dividends and capital-gains distributions.
*Reflects the maximum sales charge of 4.50%.
**Investment C Shares were initially offered 4/25/96. 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% and Rule 12b-1 fees of up to 0.75% of the average daily
net asset value of Investment C Shares. If these fees were reflected,
performance would have been lower. Investment A Shares are subject to Rule 12b-1
fees of up to 0.25% of the average daily net asset value of Investment A Shares.
***The performance for the Institutional Shares prior to 8/11/98 is based on the
performance of the Investment A Shares.
The Fund's performance is measured against the Standard & Poor's 500 Stock Index
and the S&P/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, Inc. falling into this category. The S&P 500 Stock
Index and the S&P/BARRA Growth Index do not reflect the deduction of fees
associated with a mutual fund. The Lipper Growth Funds Average and the Fund's
performance reflect the deduction of fees for these value-added services.
5
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Fifth Third Equity Income Fund
An interview with John B. Schmitz, portfolio manager.
Q. How did the Fund perform during the twelve months ended July 31, 1999?
A. The Fund posted a total return of 9.90% on Investment A Shares (before
deduction of sales charge). That compared to a 11.57% total return for the
Lipper Equity Income Funds Average, and a 20.20% return for the Standard and
Poor's 500 Index. We made income distributions of $0.23 during the period, so
that the Fund's net asset value fell from $15.38 to $15.18 per share.
Q. What was the environment for stock market investors during the recent period?
A. The period was characterized by considerable volatility. A year ago, fears of
a global credit crunch dominated the financial markets. The Russian debt default
and continuing economic troubles in Asian and Latin America hurt stock prices
and helped spur three interest rate cuts by the Federal Reserve Board. Investors
subsequently regained confidence in the equity market, and corporate earnings
rebounded nicely.
The Fund typically invests in shares of established, high-quality companies with
stable earnings and dividend growth. Early in the period, investors expressed
concern that corporate earnings would fall short of expectations. But the
companies in which the Fund invests posted strong earnings and the Fund
benefited as a result. However, the Fund lagged the S&P 500 during the second
half of the period, as shares of less established firms led the index's gains.
Q. How did you manage the Fund in that environment?
A. The Fund's sector allocations remained stable: We maintained overweightings
in telecommunications, financial services and capital goods. The Fund was
underweighted in the technology sector, which doesn't provide much dividend
income.
We sold shares of companies whose fundamentals had deteriorated, eliminating the
Fund's positions in stocks such as United Asset Management, Federal Signal and
Hubbell. We added positions in Textron (3.2% of net assets), SouthTrust (3.7%),
Dana Corporation (4.0%) and Bristol Myers Squibb (0.9%). Two of the Fund's top
holdings--ALLTEL (4.3%), up 74% during the period and Ameritech (4.5%), up
48%--performed very well during the period. Both companies have shown
accelerated earnings growth, which has driven their stock prices higher.*
The Fund's top five holdings as of July 31, 1999 were GATX (5.7% of assets),
Ameritech (4.5%), ALLTEL (4.3%), Mobil (4.5%), and Bank of New York (4.6%).*
Q. What is your outlook for the stock market, and how will you manage the Fund
in that environment?
A. We expect continued earnings growth amid moderate economic growth. In our
opinion, the most difficult period of the global recession appears to be over,
and the U.S. economy has weathered the various global crises well. We should see
economic growth overseas, which should, in turn, generate further earnings
growth in the United States. Regardless of market conditions, we will continue
to focus on high-quality companies that can deliver rising dividends over time.
- ----------------
* The composition of the Fund's portfolio is subject to change.
6
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Growth of $10,000 Invested in the Fifth Third Equity Income Fund
<TABLE>
<CAPTION>
Investment Investment Institutional S&P 500 Lipper Equity Income
C Shares** A Shares* Shares Stock Index Funds Average
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
7/89 10,000 9,550 10,000 10,000 10,000
7/90 10,401 10,013 10,485 10,647 9,995
7/91 11,823 11,505 12,047 12,007 11,072
7/92 13,194 12,962 13,573 13,539 12,543
7/93 13,261 13,151 13,770 14,713 14,063
7/94 13,161 13,168 13,788 15,477 14,645
7/95 15,000 15,174 15,889 19,509 17,108
7/96 17,191 17,540 18,366 22,739 19,611
7/97 24,340 25,026 26,205 34,590 27,329
7/98 28,896 29,923 31,333 41,282 30,524
7/99 31,597 32,885 34,541 49,623 33,894
</TABLE>
Average Annual Total Return for the Period Ended July 31, 1999/1/
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Investment A* Investment C** Institutional***
------------ ------------ -------------
1 Year................ 4.98% ............. 9.34% ............... 10.24%
5 Year................ 18.99% ............. 19.14% ............... 20.16%
10 Year............... 12.65% ............. 12.19% ............... 13.20%
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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.
/1/ The quoted performance of the Equity Income Fund includes performance of
certain collectively managed accounts advised by Fifth Third Bank, for periods
dating back to 7/31/89, 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 (without waivers or reimbursements). These collectively managed 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 such accounts had been registered, the performance may have
been adversely affected. The performance shown reflects the deduction of fees
for value-added services associated with a mutual fund, such as investment
management and fund accounting fees. The performance also reflects reinvestment
of all dividends and capital-gains distributions.
*Reflects the maximum sales charge of 4.50%.
**Investment C Shares were initially offered on 1/27/97. 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% and Rule 12b-1 fees of up to 0.75% of the
average daily net asset value of Investment C Shares. If these fees were
reflected, performance would have been lower. Investment A Shares are subject to
Rule 12b-1 fees of up to 0.25% of the average daily net asset value of
Investment A Shares.
***The performance for the Institutional Shares prior to 8/11/98 is based on
the performance of the Investment A Shares.
The Fund's performance is measured against the Standard & Poor's 500 Stock Index
and the Lipper Equity Income Funds Average. The S&P 500 Stock 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,
Inc. falling into this category. The S&P 500 Stock Index does not reflect the
deduction of fees associated with a mutual fund. The Lipper Equity Income Funds
Average and the Fund's performance reflect the deduction of fees for these
value-added services.
7
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Fifth Third Cardinal Fund
An interview with Steven E. Folker, portfolio manager.
Q. How did the Fund perform during the 12-month period ended July 31, 1999?
A. The Fund posted a total return of 34.60% for Investment A Shares (before the
deduction of sales charge), during the period compared to a 20.20% return for
the S&P 500 Stock Index, one of the Fund's benchmarks.
Q. What economic or market conditions contributed to the Fund's
performance?
A. The stock market was characterized by low inflation, low interest rates and
strong corporate earnings during much of the period. A decline in corporate
profits due to weak overseas economies hurt stock prices in the fall and helped
convince the Federal Reserve Board to lower interest rates three times in late
1998. That caused the stock market and the economy to rebound sharply. The bull
market broadened in late April as investors began to favor shares of small- and
mid-cap companies. Stronger-than-expected economic growth and inflationary
concerns during the second half of the period caused the Fed to raise rates
slightly in June.
Q. How did you manage the Fund in that environment?
A. We found opportunities in undervalued shares of technology companies during
the October correction. As a result, we increased the Fund's technology holdings
by 8% during the period. We also found opportunities in other undervalued
sectors such as consumer cyclicals and capital goods. Strong performers for the
Fund included Texas Instruments (1.1% of net assets), Applied Materials (1.9%)
and KLA-Tencor Corporation (0.3%) in the technological sector.*
Q. Did you avoid any sectors?
A. We remained underweighted in basic materials, consumer staples, and energy
sectors, due to their low long-term growth potential and high economic
sensitivity.
Q. What is your outlook for the stock market, and how will you manage the Fund
in that environment?
A. In our view, inflation will likely remain low while corporate earnings will
continue to strengthen during the next several months. We will look for
opportunities among both large- and mid-cap companies in undervalued sectors. We
will also weed out stocks that become overvalued.
Q. What were the Fund's top holdings as of July 31, 1999?
A. The Fund's top five holdings were Microsoft (5.5% of net assets.), Lucent
Technologies (4.1%), General Electric (4.1%), Marsh & McLennan Companies (4.1)
and Intel Corporation (3.7%).*
* The composition of the Fund's portfolio is subject to change.
8
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Growth of $10,000 Invested in the Fifth Third Cardinal Fund
<TABLE>
<CAPTION>
Investment Investment Institutional
C Shares** A Shares* Shares S&P 500 Stock Index
<S> <C> <C> <C> <C>
7/89 10000 9550 10000 10000
7/90 10261 9799 10261 10647
7/91 11555 11035 11555 12007
7/92 13491 12884 13491 13539
7/93 14086 13453 14086 14713
7/94 14916 14245 14916 15477
7/95 16723 15970 16723 19509
7/96 18905 18054 18905 22739
7/97 28292 27019 28292 34590
7/98 32392 30934 32410 41282
7/99 38639 37211 39285 49623
</TABLE>
Average Annual Total Return for the Period Ended July 31, 1999/1/
Investment A* Investment C** Institutional***
------------- -------------- ----------------
1 Year................ 14.90% ............. 19.29% ............ 21.21%
5 Year................ 20.06% ............. 20.97% ............ 21.37%
10 Year............... 14.05% ............. 14.47% ............ 14.66%
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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.
/1/ The quoted performance of the Fifth Third Cardinal Fund includes performance
of its predecessor fund, The Cardinal Fund, an open-end investment company
advised by the Cardinal Management Group, for periods dating back to 5/31/75 and
prior to the Fifth Third Cardinal Fund's commencement of operations on 9/21/98.
The performance for the Fund shown for the periods prior to 9/21/98 reflects the
deduction of fees associated with The Cardinal Fund. If the fees associated with
the Fund had been deducted, performance would have been lower. The performance
also reflects reinvestment of all dividends and capital-gains distributions.
*Reflects the maximum sales charge of 4.50%.
**Investment C Shares were initially offered 9/21/98. 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% and Rule 12b-1 fees of up to 0.75% of the average daily
net asset value of Investment C Shares. If these fees were reflected,
performance would have been lower. Investment A Shares are subject to Rule 12b-1
fees of up to 0.25% of the average daily net asset value of Investment A Shares.
***The performance for the Institutional Shares prior to 8/11/98 is based on the
performance of the Investment A Shares.
The Fund's performance is measured against the Standard & Poor's 500 Index, a
managed index generally representative of the stock market. It is also measured
against the Lipper Growth Fund's Average, representative of the average of the
total returns reported by all of the mutual funds designated by Lipper, Inc. as
falling into this category. The Standard & Poor's 500 Index does 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.
9
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Fifth Third Pinnacle Fund
An interview with Thomas Maurath, portfolio manager.
Q. How did the Fund perform during the 12-month period ended July 31, 1999?
A. The Fund's net asset value rose during the period from $32.48 per share to
$37.20. The Fund posted a total return of 17.18% on Investment A Shares (before
deduction of sales charge)/1/, compared to a 20.20% return for the S&P 500 Stock
Index.
Q. What factors affected the Fund's performance during the period?
A. The economy remained relatively strong throughout the period, while inflation
remained low. However, we did witness shifts in some of the fundamental
underpinnings of the market. Last fall, the markets were reeling from fears of
international economic collapse. In the face of weak economic news, the Federal
Reserve Board (the Fed) lowered the federal funds rate three times, for a total
rate cut of 0.75 percentage points. The stock market responded by posting major
gains during the last three months of 1998. Since then, the economy has gained
considerable strength and the Fed is now concerned that it may have become too
strong. In fact, the Fed raised rates by 0.25 percentage points in June in order
to head off rising inflation. Meanwhile, the market's gains have broadened to
include small-company stocks and shares of economically sensitive companies.
Q. How did you manage the Fund in that environment?
A. We continued to focus on companies with the potential for improving earnings
growth. We increased the Fund's weighting in the technology sector after the
shares became undervalued following last October's market correction. The Fund
benefited from gains in technology holdings such as EMC (2.2% of net assets),
and UNISYS (3.2%).*
Top performers in the telecommunications sector included MCI WorldCom (2.1%) and
BellSouth (2.2%). Other stocks that helped the portfolio were in the energy
sector, which began to show some improvement early in 1999. The shift, which
reflected rising oil prices, benefited both Mobil (2.2%) and Arco (2.3%).*
Q. What is your outlook for the economy, and how will you manage the Fund in
that environment?
A. We expect that the U.S. economy will continue to grow, but will slow down
from its current torrid pace. Such a slowdown would allow the Fed to end its
current rate tightening policy by year-end, creating a favorable environment for
both the stock and bond markets. Another important development for the markets
is the revised budget outlook: It suggests that the national debt could be
reduced significantly in the coming years, which could be very positive for the
securities markets. Regardless of short-term economic conditions, we will
continue to invest in shares of high-quality companies with improving earnings
growth prospects.
Q. What are the Fund's top five holdings?
A. As of July 31, 1999, the Fund's top five holdings were UNISYS (3.2% of net
assets), Tyco International (2.9%), IBM (2.7%), General Electric (2.6%) and
Microsoft (2.6%).*
/1/ Performance information includes the performance of the Fund's predecessor,
The Pinnacle Fund.
* The composition of the Fund's portfolio is subject to change.
10
<PAGE>
Growth of $10,000 Invested in the Fifth Third Pinnacle Fund
Investment Investment Institutional
C Shares** A Shares* Shares S&P 500 Stock Index
- --------------------------------------------------------------------------------
7/89 10,000 9,550 10,000 10,000
7/90 11,296 10,788 11,296 10,647
7/91 12,341 11,786 12,341 12,007
7/92 13,172 12,579 13,172 13,539
7/93 14,025 13,394 14,025 14,713
7/94 14,073 13,440 14,073 15,477
7/95 17,483 16,696 17,483 19,509
7/96 21,427 20,463 21,427 22,739
7/97 31,147 29,745 31,147 34,590
7/98 37,690 36,649 38,377 41,282
7/99 43,946 42,947 45,068 49,623
Average Annual Total Return for the Period Ended July 31, 1999/1/
Investment A* Investment C** Institutional***
1 Year............... 11.93% ............. 16.60% ................. 17.44%
5 Year............... 25.00% ............. 25.58% ................. 26.21%
10 Year.............. 15.69% ............. 15.96% ................. 16.25%
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.
/1/ The quoted performance of the Fifth Third Pinnacle Fund includes performance
of its predecessor fund, The Pinnacle Fund, an open-end investment company
advised by Heartland Capital Management, Inc., for periods dating back to
7/31/89 and prior to the Fifth Third Pinnacle Fund's commencement of operations
on 3/9/98. The performance for the Fund shown for the periods prior to 3/9/98
reflects the deduction of fees associated with The Pinnacle Fund. If the fees
associated with the Fund had been deducted, performance would have been lower.
The performance also reflects reinvestment of all dividends and capital-gains
distributions.
*Reflects the maximum sales charge of 4.50%.
**Investment C Shares were initially offered 3/9/98. 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% and Rule 12b-1 fees of up to 0.75% of the average daily net asset
value of Investment C Shares. If these fees were reflected, performance would
have been lower. Investment A Shares are subject to Rule 12b-1 fees of up to
0.25% of the average daily net asset value of Investment A Shares.
***The performance for the Institutional Shares prior to 8/11/98 is based on the
performance of the Investment A Shares.
The Fund's performance is measured against the Standard & Poor's 500 Stock
Index. The S&P 500 Stock Index is an unmanaged index that is generally
representative of the U.S. stock market as a whole. The S&P 500 Stock Index does
not reflect the deduction of fees associated with a mutual fund.
11
<PAGE>
Fifth Third Balanced Fund
An interview with Steven E. Folker and Roberta Tucker, portfolio managers.
Q. How did the Fund perform during the 12-month period ended July 31, 1999?
A. During the period the Fund posted a total return of 14.30% on Investment A
Shares (before the deduction of sales charge). That compared to a 9.57% return
for the Fund's benchmark, the Lipper Balanced Funds Average.
Q. What economic or market conditions contributed to the Fund's performance?
A. The period was characterized by low inflation, strong economic growth and
strong corporate earnings. Investors' fears that overseas economic problems
would hurt the U.S. economy led to poor performance in the stock market early in
the period. The Federal Reserve Board lowered the federal funds rate three times
last fall, which helped lead to a sharp rebound in the stock market-especially
among shares of the largest companies. The market broadened in April as
investors began to flock to shares of small- and mid-cap companies due to their
attractive valuations. This June, the Fed reacted to concerns about inflation by
raising interest rates slightly.
The bond market experienced considerable volatility: Investors flocked to
Treasuries early in the period due to concerns about the financial stability of
some overseas markets. Later, Treasuries performed poorly as interest rates
rose; investors shifted assets to lower-quality corporate securities that
offered attractive yields.
Q. Did the Fund's allocation to stocks and bonds change during the period?
A. The Fund began the period with 62.6% of net assets in equities, 34.4% in
fixed-income securities and the remainder in cash. During the period we
decreased the Fund's equity exposure to 61.5% of net assets, while lowering its
stake in bonds to 34.1%, with the remainder in cash and cash equivalents. The
shift to equities was a response to attractive stock market valuations.*
Q. How did you position the Fund's equity holdings?
A. We continued to invest in shares of large and medium-sized companies. We
increased the Fund's exposure to mid-cap stocks due to impressive earnings among
mid-sized companies. The Fund's largest holdings were in the technology sector,
in which we found attractive valuations during the October correction. The Fund
also had exposure to other attractive areas of the market including consumer
cyclicals, capital goods, and financials. We had little or no exposure to the
utilities or consumer staples sectors. The best-performing stocks in the Fund's
portfolio included QLogic (0.5% of net assets), Texas Instruments (1.0%) and
Flextronics (0.6%).*
Q. How did you position the Fund's bond holdings?
A. We favored high-quality bonds, especially Treasuries, early in the period.
That approach benefited the Fund when investors-nervous about global economic
conditions-flocked to such issues for safety. Later we de-emphasized Treasuries
and mortgage-backed securities as interest rates rose, and found opportunities
among select lower-quality corporate bonds, which offered attractive yields.
Q. What is your outlook for the stock and bond markets during the next several
months, and how will you position the Fund in that environment?
A. Strong economic growth could lead to inflationary pressures during the next
few months, although the Federal Reserve Board seems willing to raise short-term
rates to prevent a rising inflation. Therefore, we believe the economy will
remain healthy and corporate earnings will continue to strengthen. As always, we
focus on high-growth areas of the economy, paying special attention to
opportunities among medium-sized companies that show good earnings. We will
structure the fixed-income portion of the portfolio with a neutral average
maturity and continue to emphasize corporate bonds, while maintaining an overall
high-quality portfolio.
Q. What were the Fund's top five equity holdings as of July 31, 1999?
A. The Fund's top five equity holdings were Intel (2.9% of net assets), Freddie
Mac (2.3%) Tyco International (1.9%) Bank of New York (1.9%) and Comair Holdings
(1.9%).*
* The composition of the Fund's portfolio is subject to change.
12
<PAGE>
Growth of $10,000 Invested in the Fifth Third Balanced Fund
<TABLE>
<CAPTION>
Investment Investment Institutional S&P 500 S&P/BARRA Lipper Balanced Lehman Brothers
C Shares** A Shares* Shares Stock Index Growth Index Funds Average Aggregate Bond Index
<S> <C> <C> <C> <C> <C> <C> <C>
7/89 10,000 9,550 10,000 10,000 10,000 10,000 10,000
7/90 11,192 10,752 11,258 10,647 11,185 10,382 10,705
7/91 13,172 12,702 13,301 12,007 12,916 11,628 11,851
7/92 15,491 14,996 15,703 13,539 14,503 13,133 13,603
7/93 16,021 15,525 16,256 14,713 14,717 14,533 14,987
7/94 16,347 15,841 16,588 15,477 15,465 14,943 14,999
7/95 19,513 18,910 19,801 19,509 20,217 17,328 16,516
7/96 20,747 20,141 21,090 22,739 23,782 19,059 17,428
7/97 28,532 27,891 29,205 34,590 37,214 24,982 19,307
7/98 30,720 30,237 31,662 41,282 46,486 27,476 20,825
7/99 34,954 34,561 36,275 49,623 57,739 30,203 21,342
</TABLE>
Average Annual Total Return for the Period Ended July 31, 1999/1/
Investment A* Investment C** Institutional***
------------ ------------ -------------
1 Year.............. 9.13% ............... 13.78% ................ 14.57%
5 Year.............. 15.81% ............... 16.42% ................ 16.94%
10 Year............. 13.20% ............... 13.33% ................ 13.75%
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.
/1/ The quoted performance of the Balanced Fund includes performance of certain
collectively managed accounts advised by Fifth Third Bank, for periods dating
back to 7/31/89, and prior to the Balanced Fund's commencement of operations on
11/20/92, as adjusted to reflect the expenses associated with the Fund (without
waivers or reimbursements). These collectively managed 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 such accounts had been registered, the performance may have been
adversely affected. The performance shown reflects the deduction of fees for
value-added services associated with a mutual fund, such as investment
management and fund accounting fees. The performance also reflects reinvestment
of all dividends and capital-gains distributions.
*Reflects the maximum sales charge of 4.50%.
**Investment C Shares were initially offered 4/25/96. 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% and Rule 12b-1 fees of up to 0.75% of the average daily
net asset value of Investment C Shares. If these fees were reflected,
performance would have been lower. Investment A Shares are subject to Rule 12b-1
fees of up to 0.25% of the average daily net asset value of Investment A Shares.
***The performance for the Institutional Shares prior to 8/11/98 is based on the
performance of the Investment A Shares.
The Fund's performance is measured against the Standard & Poor's 500 Stock
Index, S&P/BARRA Growth Index, both of which are 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, Inc. falling
into this category. The S&P 500 Stock Index, the S&P/BARRA Growth Index and the
Lehman Brothers Aggregate Bond Index do not reflect the deduction of fees
associated with a mutual fund. The Lipper Balanced Funds Average and the Fund's
performance reflect the deduction of fees for these value-added services.
13
<PAGE>
Fifth Third Mid Cap Fund
An interview with Steven E. Folker, portfolio manager.
Q. How did the Fund perform during the 12-month period ended July 31, 1999?
A. The total return for the Fund during the period was 7.29% on Investment A
Shares (before the deduction of sales charge), compared to a return of 19.32%
for the S&P MidCap 400 Index, and 17.16% for the Lipper Mid-Cap Funds Average.
Q. What economic or market conditions contributed to
the Fund's performance?
A. The stock market was characterized by low inflation and interest rates, as
well as strong corporate earnings during much of the period. Investors early on
flocked to shares of large companies due to fears of a global recession and
concerns about liquidity. However, investors favored mid-cap and small-cap
stocks as the economy and corporate earnings strengthened during the first half
of 1999.
Q. How did you manage the Fund in that environment?
A. We were able to invest in medium-sized companies with excellent growth
potential, when their shares traded at attractive prices. Technology was the
most attractive sector during the period--we increased our weighting in
technology from 8% at the beginning of the period to 28% at the end. We also
found opportunities in other sectors, including transportation, financial
services, and capital goods.*
Q. What stocks helped boost returns?
A. The Fund's best-performing stocks were in the technology sector. They
included QLogic (4.4% of net assets), Flextronics International (2.9%) and
Analog Devices (4.6%).*
Q. Did you avoid any sectors?
A. We remained significantly underweighted in the basic materials, utilities,
and energy sectors throughout the period due to their high sensitivity to the
economic cycle.
Q. What is your outlook for the stock market, and how will you manage the Fund
in that environment?
A. We believe that earnings gains will continue to bolster the shares of
medium-sized companies. In addition, continued low inflation and low interest
rates should keep the economy strong. The Fund is well-positioned to take
advantage of attractive valuations in the mid-cap market, and we will continue
to look for opportunities in undervalued sectors such as technology and capital
goods.
Q. What were the Fund's top holdings as of July 31,
1999?
A. The Fund's top holdings were Comair Holdings, Inc. (4.8% of net assets),
Cardinal Health (4.6%), Artesyn Technologies (4.6%), Analog Devices (4.6%) and
QLogic (4.4%).*
- ---------
* The composition of the Fund's portfolio is subject to change.
14
<PAGE>
Growth of $10,000 Invested in the Fifth Third Mid Cap Fund
Investment Investment Institutional Standard & Poor's Lipper MidCap
C Shares** A Shares* Shares MidCap 400 Index Funds Average
7/89 10,000 9,550 10,000 10,000 10,000
7/90 10,828 10,399 10,889 10,647 10,601
7/91 13,424 12,929 13,538 13,035 12,204
7/92 14,952 14,472 15,153 15,299 13,611
7/93 15,488 15,006 15,714 17,849 16,134
7/94 16,273 15,767 16,510 18,482 16,666
7/95 20,413 19,778 20,710 23,012 21,572
7/96 20,638 20,028 20,972 24,793 23,270
7/97 30,155 29,476 30,865 36,042 31,071
7/98 31,672 31,152 32,620 40,084 32,940
7/99 33,823 33,422 35,103 47,828 37,624
Average Annual Total Return for the Period Ended July 31, 1999/1/
Investment A* Investment C** Institutional***
------------ ------------ -------------
1 Year............... 2.48%..................6.79%.............. 7.61%
5 Year.............. 15.14%.................15.76%...............16.28%
10 Year.............. 12.83%.................12.96%...............13.38%
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.
/1/ The quoted performance of the Mid Cap Fund includes performance of certain
collectively managed accounts advised by Fifth Third Bank, for periods dating
back to 7/31/89 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 (without
waivers or reimbursements). These collectively managed 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 such accounts had been registered, the performance may have been
adversely affected. The performance shown reflects the deduction of fees for
value-added services associated with a mutual fund, such as investment
management and fund accounting fees. The performance also reflects reinvestment
of all dividends and capital-gains distributions.
*Reflects the maximum sales charge of 4.50%.
**Investment C Shares were initially offered 4/25/96. 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% and Rule 12b-1 fees of up to 0.75% of the average daily
net asset value of Investment C Shares. If these fees were reflected,
performance would have been lower. Investment A Shares are subject to Rule 12b-1
fees of up to 0.25% of the average daily net asset value of Investment A Shares.
***The performance for the Institutional Shares prior to 8/11/98 is based on the
performance of the Investment A Shares.
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, Inc. falling into this category. The Standard & Poor's MidCap 400 Index
does not reflect the deduction of fees associated with a mutual fund. The Lipper
MidCap Funds Average and the Fund's performance reflect the deduction of fees
for these value-added services.
15
<PAGE>
Fifth Third International Equity Fund/+/
An interview with John Schmitz, portfolio manager.
Q. How did the Fund perform during the 12-month period ended July 31, 1999?
A. The Fund returned 4.23% on Investment A Shares (before deduction of sales
charge). That compares to a 9.70% return for the Morgan Stanley Capital
International EAFE (Europe, Australasia and Far East) Index.
Q. How did foreign markets perform during the period?
A. Performance in European markets varied widely. Finland's market was up 81% in
local currency terms, while the markets of France (7.0% return during the
period), Germany (-13.0%) and the Netherlands (1.0%) were relatively poor
performers. In France, consumer confidence and spending supported moderate
corporate earnings growth, while economic growth was slow at best. High
unemployment in Germany stifled economic growth there.*
In Asia, Singapore's stock market rose more than 104%, thanks in part to reform
efforts. The government urged corporate cost cutting and aggressively pursued
reform throughout the corporate sector. Hong Kong experienced relatively weak
economic conditions, in part because its strong currency (which is pegged to the
U.S. dollar) made its exports relatively expensive. Japan has been on a fiscal
spending spree, which has bolstered its economy and helped spark stock market
gains. The yen also strengthened during the period, as we had expected.
Australia's economy saw phenomenal growth but the country's stock market did not
match that growth.
Q. How did you manage the Fund in that environment?
A. The Fund did not participate in the strong performance of the Finnish market.
The telecommunications firm Nokia comprises some 70% of its total market
capitalization and Nokia shares are overvalued in our opinion. The Fund
benefited from its underweight in Europe's core markets of France, Germany and
the Netherlands-all of which performed poorly. During the third quarter of 1998,
we invested 2.5% of the Fund's assets in the European real estate market. We
wanted to establish a position in that market before the inevitable economic
recovery occurs and boosts rents and home purchases.*
The Fund was overweight in Singapore-which paid off when that country's market
significantly outpaced other Asian markets. We reduced the Fund's exposure to
Hong Kong's market to a neutral position relative to the Fund's benchmark, due
to concerns over China's growing presence in the country. In Japan, the Fund had
50% of the benchmark's weighting during last year's third quarter. However, we
moved to an overweight position in time to benefit from the market's rebound.
The Fund also was overweighted in Australia. That market bottomed during the
period and then gained strength from a stronger Australian dollar. The
Australian economy has experienced its strongest growth ever during the last two
years, but the stock market has been slow to catch up.
Q. What is your outlook for global markets, and how will you manage the Fund in
that environment?
A. We expect slow growth in Europe's core markets. While these markets seem to
have bottomed, drastic reforms to address high unemployment and labor issues
need to take place before we see the kind of strong growth Europe's markets are
capable of achieving. We will continue to underweight the Fund's holdings in
Europe, but are prepared to deploy cash should the region's markets become more
attractive.
Singapore's market will likely continue to post strong gains, as it continues to
broaden into sectors other than technology. Singapore is also removing barriers
to foreign investors, which should make the market more liquid and attractive.
Hong Kong's political future remains uncertain, so we will retain our neutral
weighting in that country's market. We will also continue to overweight Japan in
anticipation of further economic reform and growth.
/+/International investing involves increased risk and volatility.
* The composition of the Fund's portfolio is subject to change.
16
<PAGE>
Growth of $10,000 Invested in the Fifth Third International Equity Fund
<TABLE>
<CAPTION>
Investment Investment Institutional Morgan Stanley
C Shares** A Shares* Shares Int'l EAFE Index
<S> <C> <C> <C> <C>
8/18/94 10000 9550 10000 10000
7/95 9830 9388 9830 10477
7/96 10710 10257 10740 10879
7/97 12986 12490 13079 12886
7/98 14618 14150 14817 13627
7/99 15184 14750 15486 14949
</TABLE>
Average Annual Total Return for the Period Ended July 31, 1999
Investment A* Investment C** Institutional***
------------ ------------ -------------
1 Year......................... -0.45%............3.87%.............4.52%
Since Inception (8/19/94)...... 8.17%............8.80%.............9.24%
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.
*Reflects the maximum sales charge of 4.50%.
**Investment C Shares were initially offered 4/25/96. 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% and Rule 12b-1 fees of up to 0.75% of the average daily
net asset value of Investment C Shares. If these fees were reflected,
performance would have been lower. Investment A Shares are subject to Rule 12b-1
fees of up to 0.25% of the average daily net asset value of Investment A Shares.
***The performance for the Institutional Shares prior to 8/11/98 is based on the
performance of the Investment A Shares.
The International Equity 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. The Fund's performance reflects the deduction of fees
for these value-added services.
17
<PAGE>
Fifth Third Bond Fund For Income
An interview with Roberta Tucker, portfolio manager.
Q. How did the Fund perform during the 12-month period ended July 31, 1999?
A. The Fund distributed $0.59 (investment A Shares) per share of income and its
net asset value decreased from $12.19 to $11.69 per share during the 12 months
ended July 31, 1999. The combination generated a total return of 2.42% on
Investment A Shares (before deduction of sales charge) for the period. That
return compared to a 3.73% total return for the Lehman Brothers Intermediate
Government/Corporate Bond Index and a 2.94% return for the Lipper
Short-Intermediate Investment Grade Bond Funds Average.
Q. What were the conditions in the bond market during the
period?
A. The U.S. economy continued to grow at a strong pace and inflation remained
low. Early in the period, investors worried that severe economic problems in
Asia, Russia and other overseas markets would create a liquidity crisis and hurt
U.S. economic growth. The Federal Reserve Board (the Fed) responded to those
threats by reducing short-term interest rates three times. Long-term Treasury
bonds' prices rose, as investors flocked to the safest, most-liquid securities.
Corporate bonds underperformed by comparison, and the spread between yields on
Treasury and corporate securities dramatically increased.
Yields rose during the second half of the period, however. Signs of
stronger-than-expected growth in the U.S. and recovering overseas markets caused
investors to worry about rising inflation and the possibility of a rate increase
by the Fed. In fact, the Fed in late June did boost short-term interest rates
slightly. Treasury securities and high-quality corporate bonds performed poorly
in that environment. Spreads between high-quality corporate bonds and Treasuries
widened to levels we saw last fall, due in part to a large supply of new
corporate issues that came to market. Investors during this time favored
lower-quality corporate securities, due to their attractive yields and the
strong corporate earnings environment.
Q. How did you position the Fund in that environment?
A. The Fund's average maturity was longer than that of its benchmark early in
the period. That approach benefited the Fund as Treasury yields fell. However,
we took profits later in the period and reduced the Fund's average maturity to a
relatively neutral position, where it remained for most of the period. We held a
large portion of the Fund in high-quality corporate bonds, which dampened
performance somewhat as high-quality bonds slumped later in the period.
Therefore, we found opportunities to capture additional yield by purchasing
select lower-quality corporate issues. We also reduced the Fund's exposure to
mortgage-backed securities as interest rates rose.
Q. What is your outlook for the bond market, and how will you manage the Fund in
that environment?
A. We anticipate that the economy will continue to grow at a rapid pace, which
could lead to inflationary pressures during the next few months. That said, the
Fed seems willing to raise short-term rates to prevent a spike in inflation. We
expect the Fed to take a somewhat moderate approach, perhaps raising rates only
once more during 1999, in part because of concerns over how the Y2K problem will
affect the markets.
We will maintain the Fund's average maturity near its relatively neutral
position. But we will be prepared to extend that maturity if interest rates show
signs of falling; that could happen later this year if the Fed moves
aggressively to slow down the economy. We also will continue to emphasize
corporate bonds, while maintaining an overall high-quality portfolio. The heavy
supply of corporate bonds is a temporary anomaly: Companies worried about Y2K
have issued a large number of new bonds recently to avoid issuing them near the
end of the year. Therefore we believe supply will fall in the coming months,
which should help the Fund's holdings in the corporate sector.
- ----------
* The composition of the Fund's portfolio is subject to change.
18
<PAGE>
Growth of $10,000 Invested in the Fifth Third Bond Fund For Income
<TABLE>
<CAPTION>
Lipper Short-Intermediate Lehman Brothers
Investment Investment Institutional Investment Grade Bond Intermediate Gov't
C Shares** A Shares* Shares Funds Average Corporate Index
<S> <C> <C> <C> <C> <C>
7/89 10,000 9,550 10,000 10,000 10,000
7/90 10,440 10,081 10,556 10,618 10,712
7/91 11,346 11,053 11,574 11,590 11,808
7/92 12,805 12,608 13,202 13,165 13,478
7/93 13,799 13,722 14,369 14,258 14,629
7/94 13,145 13,217 13,840 14,306 14,763
7/95 14,226 14,435 15,115 15,351 16,064
7/96 14,704 15,070 15,780 16,130 16,915
7/97 15,725 16,270 17,037 17,377 18,450
7/98 16,589 17,284 18,099 18,401 19,694
7/99 16,908 17,702 18,603 19,030 20,428
</TABLE>
- --------------------------------------------------------------------------------
Average Annual Total Return for the Period Ended July 31, 1999/1/
Investment A* Investment C** Institutional***
------------ ------------ -------------
1 Year................. -2.16%..............1.92%................2.79%
5 Year................. 5.05%..............5.16%................6.09%
10 Year................ 5.87%..............5.39%................6.40%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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.
/1/ The quoted performance of the Bond Fund For Income includes performance of
certain collectively managed accounts advised by Fifth Third Bank, for periods
dating back to 7/31/89, 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 (without waivers or reimbursements). These collectively managed 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 such accounts had been registered, the performance may have
been adversely affected. The performance shown reflects the deduction of fees
for value-added services associated with a mutual fund, such as investment
management and fund accounting fees. The performance also reflects reinvestment
of all dividends and capital-gains distributions.
*Reflects the maximum sales charge of 4.50%.
**Investment C Shares were initially offered 1/27/97. 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% and Rule 12b-1 fees of up to 0.75% of the average daily
net asset value of Investment C Shares. If these fees were reflected,
performance would have been lower. Investment A Shares are subject to Rule 12b-1
fees of up to 0.25% of the average daily net asset value of Investment A Shares.
***The performance for the Institutional Shares prior to 8/11/98 is based on the
performance of the Investment A Shares.
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-Intermediate Investment Grade Bond Funds
Average, representative of the average of the total returns reported by all of
the mutual funds designated by Lipper, Inc. falling into this category. The
Lehman Brothers Intermediate Government/Corporate Index does not reflect the
deduction of fees associated with a mutual fund. The Lipper Short-Intermediate
Investment Grade Bond Funds Average and the Fund's performance reflect the
deduction of fees for these value-added services.
19
<PAGE>
Fifth Third Quality Bond Fund
An interview with Roberta Tucker, portfolio manager.
Q. How did the Fund perform during the 12-month period ended July 31, 1999?
A. The Fund during the period delivered a 1.26% total return on Investment A
Shares (before deduction of sales charge). That performance reflected an income
distribution of $0.47 (investment A Shares) per share and an decrease in the
Fund's net asset value from $9.96 at the beginning of the period to $9.52 at the
end. The Fund's benchmarks, the Lehman Brothers Aggregate Bond Index and the
Lipper Intermediate Investment Grade Debt Funds Average, returned 2.49% and
1.43%, respectively.
Q. How did the bond market perform during the period?
A. The bond market experienced considerable volatility. Economic problems in
overseas markets caused investors to favor the highest-quality, most liquid
securities early in the period; as a result, Treasury bonds performed well. The
Federal Reserve Board (the Fed) reduced short-term interest rates three times in
response to fears of a potential liquidity crunch that could hurt the U.S.
economy. Corporate bond performance was disappointing in that environment,
because businesses were forced to offer higher rates relative to Treasuries to
attract capital. As a result, the spread between yields on Treasury and
corporate securities increased dramatically.
Treasury securities and high-quality corporate bonds performed poorly during the
second half of the period. Signs of very strong growth in the U.S. and
recovering overseas markets caused investors to worry about rising inflation and
the possibility of a rate increase by the Fed. In fact, the Fed eventually
increased short-term interest rates in late June. Spreads between high-quality
corporate bonds and Treasuries returned to the high levels that we saw last
fall, due in part to a large supply of new corporate issues that came to market.
Investors during this time favored lower-quality corporate securities, due to
strong corporate earnings and the bonds' attractive yields.
Q. How did you position the Fund in that environment?
A. Early in the period we positioned the Fund's average maturity longer than
that of its benchmark, and increased the Fund's weighting in Treasury bonds.
That approach helped the Fund when Treasury bonds rallied. We later shortened
the average maturity to a relatively neutral position as rates rose in the
second half of the period and investors expressed concerns about the future
direction of inflation and interest rates. We also reduced the Fund's exposure
to mortgage-backed securities and Treasuries as interest rates rose and as the
yield advantage on corporate bonds increased.
We maintained our commitment to high-quality issues, as evidenced by the Fund's
Aa1 credit rating. But we also boosted the Fund's total return by purchasing
select lower-quality corporate issues when their yield advantage relative to
Treasuries was significant. We then sold the securities when spreads narrowed,
and bought them again when spreads widened.
Q. What is your outlook for the bond market, and how will you position the Fund
in that environment?
A. Economic growth will likely remain strong, which could lead to inflationary
pressures going forward. That said, the Fed seems willing to raise short-term
rates to head off rising inflation. We will continue to emphasize corporate
bonds during the coming months, while maintaining an overall high-quality
portfolio. The recent heavy supply of corporate issues is a temporary technical
anomaly: Companies have issued a large number of new bonds in recent months
because they don't want to issue them near the end of the year, due to concerns
about Y2K. Therefore we believe that the supply of corporate bonds will fall,
which should help the Fund's holdings in that sector.
We will maintain the Fund's average maturity near its relatively neutral
position. But we will be ready to lengthen its maturity if interest rates show
signs of falling, which could happen if the Fed acts aggressively to slow down
the economy.
20
<PAGE>
Growth of $10,000 Invested in the Fifth Third Quality Bond Fund
<TABLE>
<CAPTION>
Lipper Intermediate Lehman Brothers
Investment Investment Institutional Investment Grade Aggregate Bond
C Shares** A Shares* Shares Debt Funds Average Index
<S> <C> <C> <C> <C> <C>
7/89 10000 9550 10000 10000 10000
7/90 10454 10028 10500 10355 10705
7/91 11362 10957 11474 11282 11851
7/92 12918 12503 13092 13007 13603
7/93 13850 13418 14050 14365 14987
7/94 13676 13250 13874 14313 14999
7/95 14891 14427 15107 15636 16516
7/96 15522 15060 15770 16431 17428
7/97 16868 16479 17255 18197 19307
7/98 17866 17618 18448 19474 20825
7/99 18011 17840 18722 19712 21342
</TABLE>
Average Annual Total Return for the Period Ended July 31, 19991
- --------------------------------------------------------------------------------
Investment A* Investment C** Institutional***
1 Year.................-3.30%..............0.81%...................1.48%
5 Year................. 5.16%..............5.66%...................6.18%
10 Year................ 5.96%..............6.06%...................6.47%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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.
1 The quoted performance of the Quality Bond Fund includes performance of
certain collectively managed accounts advised by Fifth Third Bank, for periods
dating back to 7/31/89, 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 (without waivers or reimbursements). These collectively managed 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 such accounts had been registered, the performance may have
been adversely affected. The performance shown reflects the deduction of fees
for value-added services associated with a mutual fund, such as investment
management and fund accounting fees. The performance also reflects reinvestment
of all dividends and capital-gains distributions.
*Reflects the maximum sales charge of 4.50%.
**Investment C Shares were initially offered 4/25/96. 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% and Rule 12b-1 fees of up to 0.75% of the average daily
net asset value of Investment C Shares. If these fees were reflected,
performance would have been lower. Investment A Shares are subject to Rule 12b-1
fees of up to 0.25% of the average daily net asset value of Investment A Shares.
***The performance for the Institutional Shares prior to 8/11/98 is based on the
performance of the Investment A Shares.
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, Inc. falling into this category. The
Lehman Brothers Aggregate Bond Index does not reflect the deduction of fees
associated with a mutual fund. The Lipper Intermediate Investment Grade Debt
Funds Average and the Fund's performance reflect the deduction of fees for these
value-added services.
21
<PAGE>
Fifth Third U.S. Government Securities Fund
An interview with Roberta Tucker, portfolio manager.
Q. How did the Fund perform during the 12-month period ended July 31, 1999?
A. The Fund distributed $0.47 (investment A Shares) per share and its net asset
value decreased from $9.82 to $9.64 per share during the 12 months ended July
31, 1999. The combination generated a total return of 2.89% on Investment A
Shares (before deduction of sales charge). That return compared to a 4.05% total
return for the Lehman Brothers Intermediate Government Bond Index and a 2.94%
return for the Lipper Short-Intermediate Government Bond Funds Average.
Q. What were conditions like in the bond market during that time?
A. Early in the period, investors worried that economic problems in overseas
markets would hurt the U.S. economy. Long-term Treasury bonds rallied as
investors flocked to the safest, most liquid securities. The spread between
yields on Treasury and corporate securities increased dramatically. The Federal
Reserve Board (the Fed) boosted economic growth and market liquidity by reducing
short-term interest rates three times last fall.
Yields rose during the second half of the period. Investors worried that signs
of stronger-than-expected growth in the U.S. and recovering overseas markets
would boost inflation, forcing the Federal Reserve Board to raise short-term
rates. In fact, the Fed did raise rates in late June. Treasury securities
performed poorly in that rising-rate environment.
Q. How did you position the Fund in that environment?
A. We extended the Fund's average maturity early in the period when Treasury
prices rose, which benefited the Fund. Later we shortened the Fund's average
maturity to a neutral position relative to its benchmark. We did not want to
make any large bets on the direction of interest rates, given the uncertain
inflation outlook during much of the period. We also increased the Fund's
exposure to agency and mortgage-backed issues, which offered a yield advantage
over Treasuries. Recently, the Fund's allocation to agency issues and
mortgage-backed debt was 38.5% and 16.7%, respectively.*
Q. What is your outlook for the bond market going forward, and how will you
manage the Fund in that environment?
A. Inflationary pressures could intensify during the next few months if economic
growth remains strong. That said, the Fed seems willing to raise short-term
rates to prevent a spike in inflation. We will maintain the Fund's neutral
average maturity in this uncertain environment. We also will maintain the Fund's
current exposure to Treasuries, de-emphasize its mortgage-backed holdings (due
to the rising rate environment) and increase the Fund's exposure to agency
issues.
- ----------
* The composition of the Fund's portfolio is subject to change.
22
<PAGE>
Growth of $10,000 Invested in the Fifth Third U.S. Government Securities Fund
<TABLE>
<CAPTION>
Lipper Short-Intermediate Lehman Brothers
Investment Investment Institutional U.S. Government Intermediate Government
C Shares** A Shares* Shares Bond Funds Average Bond Index
<S> <C> <C> <C> <C> <C>
7/89 10,000 9,550 10,000 10,000 10,000
7/90 10,641 10,207 10,688 10,759 10,712
7/91 11,495 11,071 11,592 11,823 11,808
7/92 12,462 12,056 12,624 13,233 13,478
7/93 13,175 12,759 13,360 14,231 14,629
7/94 13,190 12,773 13,375 14,282 14,763
7/95 14,200 13,751 14,399 15,348 16,064
7/96 14,694 14,250 14,921 16,124 16,915
7/97 15,709 15,365 16,089 17,403 18,450
7/98 16,525 16,313 17,082 18,439 19,694
7/99 16,907 16,785 17,622 19,027 20,428
</TABLE>
- --------------------------------------------------------------------------------
Average Annual Total Return for the Period Ended July 31, 1999/1/
Investment A* Investment C** Institutional***
------------ ------------ -------------
1 Year............... -1.71%...............2.31%...............3.16%
5 Year................ 4.65%...............5.09%...............5.67%
10 Year............... 5.32%...............5.39%...............5.83%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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.
/1/ The quoted performance of the U.S. Government Securities Fund includes
performance of certain collectively managed accounts advised by Fifth Third
Bank, for periods dating back to 7/31/89, 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 (without waivers or reimbursements). These
collectively managed 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 such accounts had
been registered, the performance may have been adversely affected. The
performance shown reflects the deduction of fees for value-added services
associated with a mutual fund, such as investment management and fund accounting
fees. The performance also reflects reinvestment of all dividends and
capital-gains distributions.
*Reflects the maximum sales charge of 4.50%.
**Investment C Shares were initially offered 4/25/96. 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% and Rule 12b-1 fees of up to 0.75% of the average daily
net asset value of Investment C Shares. If these fees were reflected,
performance would have been lower. Investment A Shares are subject to Rule 12b-1
fees of up to 0.25% of the average daily net asset value of Investment A Shares.
***The performance for the Institutional Shares prior to 8/11/98 is based on the
performance of the Investment A Shares.
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, Inc. falling
into this category. The Lehman Brothers Intermediate Government Bond Index does
not reflect the deduction of fees associated with a mutual fund. The Lipper
Short-Intermediate U.S. Government Bond Funds Average and the Fund's performance
reflect the deduction for fees for these value-added services.
23
<PAGE>
Fifth Third Municipal Bond Fund/+/
An interview with Kim Burford, portfolio manager.
Q. How did the Fund perform during the 12-month period ended July 31, 1999?
A. The Fund delivered a total return of 1.56% on Investment A Shares (before
deduction of sales charge). That return reflected a decrease in the Fund's net
asset value from $12.24 (investment A Shares) at the beginning of the period to
$11.79 at the end, and an income distribution of $0.44. The Fund's benchmarks,
the Lipper Intermediate Municipal Debt Funds Average, the Lehman Brothers 7-Year
Municipal Bond Index and the Lehman Brothers Municipal Bond Index, returned
2.25%, -0.19% and 2.88%, respectively.
Q. What were the conditions in the municipal bond market during the period?
A. During the first half of the period, overseas economic problems caused the
Federal Reserve to reduce interest rates three times. Municipal bonds performed
poorly during that time. Muni bonds typically underperform Treasuries in a
declining interest rate environment, and in this case preferred the safety and
liquidity of Treasury securities. A large supply of municipal issues during the
first half of the period also dampened performance in the muni sector. As a
result, yields on municipal bonds reached historically high levels as a
percentage of Treasury yields.
Interest rates rose during the second half of the period. Investors worried that
strong economic growth would force the Federal Reserve Board (the Fed) to raise
short-term rates to avoid a spike in inflation. In fact, the Fed did raise
short-term rates by 25 basis points late in the period. Municipal bonds
outperformed Treasuries in that rising-rate environment, and muni yields as a
percentage of Treasury yields declined.
The supply of new municipal issues decreased significantly during the final six
months of the period. However, there was weak demand for the intermediate-term
issues in which the Fund typically invests a large portion of its assets, due to
the relatively low coupons on those securities.
Q. How did you position the Fund in that environment?
A. The Fund's average maturity began the 12-month period at 8.1 years and
finished the period at 8.7 years. We extended the Fund's average maturity early
on, which benefited performance as bonds with relatively long maturities
outperformed shorter-term issues. However, we shortened the Fund's average
maturity to a roughly neutral position later in the period. We made that change
to reduce the Fund's position in intermediate-term bonds.
We also found opportunities among select lower-quality issues, which
outperformed bonds with high credit ratings during the latter half of the
period. At the same time, however, we maintained the Fund's overall high credit
quality. The Fund held 53.6% of its assets in revenue-backed bonds, 26% in
general obligation bonds, 10.8% in pre-refunded issues and the remainder in cash
and cash equivalents.*
Q. What is your outlook for the municipal bond market going forward, and how
will you position the Fund in that environment?
A. Interest rates will likely increase in the near term, as investors worry
about rising inflation and the possibility of another rate hike by the Fed. Muni
bonds may meet with weak demand in the coming months, especially if the stock
market remains strong. The Fund will seek to maintain an average maturity
roughly neutral to its benchmark, and perhaps somewhat shorter. We also will
structure the Fund using a barbell approach-a mix of very short- and long-term
securities--to de-emphasize the intermediate portion of the market.
/+/Some or all of the income may be subject to the federal alternative minimum
tax and to certain state and local taxes.
* The composition of the Fund's portfolio is subject to change.
24
<PAGE>
Growth of $10,000 Invested in the Fifth Third Municipal Bond Fund
<TABLE>
<CAPTION>
Lipper Intermediate
Investment Institutional Municipal Debt Lehman Brothers Lehman Brothers 7-Year
A Shares* Shares Funds Average Municipal Bond Index Municipal Bond Index
<S> <C> <C> <C> <C> <C>
7/89 9550 10000 10000 10000 10000
7/90 10059 10533 10618 10693 10741
7/91 10828 11338 11444 11627 11908
7/92 11929 12491 12839 13224 12713
7/93 12556 13147 13741 14393 13757
7/94 12733 13333 14084 14663 13480
7/95 13384 14015 15007 15817 14895
7/96 13929 14585 15768 16861 15331
7/97 14916 15619 17071 18590 16098
7/98 15555 16288 17890 19704 16720
7/99 15797 16561 18325 20271 16701
</TABLE>
Average Annual Total Return for the Period Ended July 31, 1999/1/
- --------------------------------------------------------------------------------
Investment A* Institutional**
1 Year..............................-3.04%......................1.68%
5 Year.............................. 3.44%......................4.43%
10 Year............................. 4.68%......................5.17%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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.
/1/ The quoted performance of the Municipal Bond Fund includes performance of
certain collectively managed accounts advised by Fifth Third Bank, for periods
dating back to 7/31/89, 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 (without waivers or reimbursements). These collectively managed 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 such accounts had been registered, the performance may have
been adversely affected. The performance shown reflects the deduction of fees
for value-added services associated with a mutual fund, such as investment
management and fund accounting fees. The performance also reflects reinvestment
of all dividends and capital-gains distributions.
*Reflects the maximum sales charge of 4.50%.
**The performance for the Institutional Shares prior to 8/11/98 is based on the
performance of the Investment A Shares.
As of July 31, 1999 the Fifth Third Municipal Bond Fund had no Investment C
shares outstanding.
The Fund's performance is measured against the Lehman Brothers 7-Year Municipal
Bond Index and the Lehman Brothers Municipal Bond Index, 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, Inc.
falling into this category. The Lehman Brothers 7-Year Municipal Bond Index and
the Lehman Brothers Municipal Bond Index do not reflect the deduction of fees
associated with a mutual fund. The Lipper Intermediate Municipal Debt Funds
Average and the Fund's performance reflect the deduction of fees for these
value-added services. The performance of the Municipal Bond Fund is now being
measured against the Lehman Brothers Municipal Bond Fund. The Advisor believes
the Lehman Brothers Municipal Bond Index better represents the average maturity
of the Fund.
25
<PAGE>
Fifth Third Ohio Tax Free Bond Fund+
An interview with Kim Burford, portfolio manager.
Q. How did the Fund perform during the 12-month period ended July 31, 1999?
A. The Fund distributed $0.38 (investment A Shares) per share of income during
the 12 months ended July 31, 1999, and its net asset value decreased from $10.29
to $10.02 per share. The combination generated a total return of 1.61% on
Investment A Shares (before deduction of sales charge). That return compared to
a 2.88% total return for the Lehman Brothers Municipal Bond Index, and 2.25% for
the Lipper Intermediate Municipal Debt Funds Average.
Q. How did the Ohio municipal bond market perform during
the period?
A. The performance of the Ohio muni market reflected conditions in the overall
municipal bond market. Municipal securities under-performed Treasury bonds early
in the period, as investors flocked to the safety and liquidity of Treasury
bonds due to global economic problems. Strong supply in the muni market also
hurt those issues' performance. The Federal Reserve Board (the Fed) reduced
interest rates three times early in the period; typically, muni bonds
underperform in a declining rate environment.
Muni bonds outperformed Treasuries later in the period, as renewed fears of
rising inflation and the possibility of a Fed rate increase pushed interest
rates higher. The supply of new munis decreased in the second half of the
period. But the intermediate portion of the muni market suffered from weak
investor demand due to its relatively low yields; that hurt the Fund's relative
performance.
Q. How did you position the Fund in that environment?
A. The Fund began the period with a relatively long average maturity, which
benefited the Fund as yields fell early in the period. We shortened the Fund's
average maturity to a relatively neutral position as interest rates rose and
investors fretted about inflation. We did so in part by selling
intermediate-term bonds. The Fund's average maturity began the period at 7.8
years and finished at 7.4 years. We also maintained the Fund's high overall
credit quality, which stood at Aa3 at the end of the period.
Q. What sectors of the muni market did the Fund favor?
A. The Fund invested in both revenue-backed bonds and general obligation issues.
We increased the Fund's exposure to revenue-backed securities during the period,
which outperformed other types of muni bonds.
Q. What is your outlook for the Ohio municipal bond market going forward, and
how will you manage the Fund in that environment?
A. Continued concerns over inflation and the possibility of another rate
increase by the Fed will likely cause rates to rise in the near term. Demand for
muni bonds may be weak in the months ahead, especially if the stock market
continues to post strong gains. The Fund will maintain a neutral average
maturity, and employ a barbell structure--that is, a combination of short-term
and long-term issues--in order to minimize exposure to the intermediate-term
bonds.
- --------
+Some or all of the income may be subject to the federal alternative minimum
tax and to certain state and local taxes.
26
<PAGE>
Growth of $10,000 Invested in the Fifth Third Ohio Tax Free Bond Fund
Lipper
Intermediate Lehman Brothers
Investment Investment Institutional Municipal Debt Municipal
C Shares** A Shares* Shares Funds Average Bond Index
7/89 10,000 9,550 10,000 10,000 10,000
7/90 10,487 10,073 10,548 10,618 10,693
7/91 11,205 10,795 11,304 11,444 11,627
7/92 12,385 11,990 12,555 12,839 13,224
7/93 12,819 12,450 13,036 13,741 14,393
7/94 13,069 12,693 13,291 14,084 14,663
7/95 13,987 13,584 14,224 15,007 15,817
7/96 14,542 14,171 14,839 15,768 16,861
7/97 15,536 15,232 15,950 17,071 18,590
7/98 16,089 15,900 16,650 17,890 19,704
7/99 16,270 16,157 16,960 18,325 20,271
- --------------------------------------------------------------------------------
Average Annual Total Return for the Period Ended July 31, 1999/1/
Investment A* Investment C** Institutional***
------------ ------------ -------------
1 Year...............-2.92%................1.13%...............1.86%
5 Year............... 3.98%................4.48%...............5.00%
10 Year.............. 4.92%................4.99%...............5.42%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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.
/1/ The quoted performance of the Ohio Tax Free Bond Fund includes performance
of certain collectively managed accounts advised by Fifth Third Bank, for
periods dating back to 7/31/89, 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 (without waivers or reimbursements). These collectively
managed 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 such accounts had been registered, the
performance may have been adversely affected. The performance shown reflects the
deduction of fees for value-added services associated with a mutual fund, such
as investment management and fund accounting fees. The performance also reflects
reinvestment of all dividends and capital-gains distributions.
*Reflects the maximum sales charge of 4.50%.
**Investment C Shares were initially offered 4/25/96. 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% and Rule 12b-1 fees of up to 0.75% of the average daily
net asset value of Investment C Shares. If these fees were reflected,
performance would have been lower. Investment A Shares are subject to Rule 12b-1
fees of up to 0.25% of the average daily net asset value of Investment A Shares.
***The performance for the Institutional Shares prior to 8/11/98 is based on the
performance of the Investment A Shares.
The Fund's performance is measured against the Lehman Brothers Municipal Bond
Index, an unmanaged index generally representative of the 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, Inc.
falling into this category. The Lehman Brothers Municipal Bond Index does not
reflect the deduction of fees associated with a mutual fund. The Lipper
Intermediate Municipal Debt Funds Average and the Fund's performance do reflect
the deduction of fees for these value-added services.
27
<PAGE>
Fifth Third Quality Growth Fund
Schedule of Portfolio Investments
July 31, 1999
(Amounts in thousands except share amounts)
- --------------------------------------------------------------------------------
Shares
or
Principal Security Market
Amount Description Value
- --------- --------------------------------------------- ----------
Common Stocks -- 94.9%
Banking -- 7.9%
760,000 Bank of New York Co., Inc. $ 28,073
85,000 First Tennessee National Corp. 3,113
580,000 Mellon Bank Corp. 19,575
75,000 Regions Financial Corp. 2,667
83,000 SouthTrust Corp. 3,050
--------
Total 56,478
--------
Beverages -- 1.0%
185,000 PepsiCo, Inc. 7,238
--------
Business Services -- 2.0%
220,000 Cintas Corp. 14,108
--------
Computer Software &
Services -- 6.1%
150,000 Computer Sciences Corp. (b) 9,656
260,000 Microsoft Corp. (b) 22,311
300,000 Oracle Corp. (b) 11,419
--------
Total 43,386
--------
Consumer Products -- 1.7%
150,000 Newell Rubbermaid, Inc. 6,488
62,000 Procter & Gamble Co. 5,611
--------
Total 12,099
--------
Electrical Equipment -- 1.9%
125,000 General Electric Co. 13,625
--------
Electronics -- 19.2%
420,000 Cisco Systems, Inc. (b) 26,092
126,000 EMC Corp. (b) 7,631
555,000 Intel Corp. 38,294
330,000 Lucent Technologies, Inc. 21,471
270,000 Tellabs, Inc. (b) 16,622
180,000 Texas Instruments, Inc. 25,920
--------
Total 136,030
--------
Energy -- 3.4%
45,000 Chevron Corp. 4,106
105,000 Mobil Corp. 10,737
150,000 Schlumberger Ltd. 9,084
--------
Total 23,927
--------
Financial Services -- 5.0%
155,000 Capital One Financial Corp. 7,188
500,000 Freddie Mac 28,688
--------
Total 35,876
--------
Insurance -- 4.5%
185,000 Allstate Corp. 6,568
137,000 Cincinnati Financial Corp. 5,155
265,000 Marsh & McLennan Cos., Inc. 20,139
--------
Total 31,862
--------
Manufacturing -- 9.9%
110,000 Avery Dennison Corp. 6,751
125,000 Dana Corp. 5,219
280,000 Illinois Tool Works, Inc. (c) 20,808
310,000 Tyco International Ltd. 30,282
140,000 Zebra Technologies Corp., Class
A (b) (c) 6,571
--------
Total 69,631
--------
Media/Publishing -- 2.7%
460,000 Interpublic Group of Cos., Inc. 19,320
--------
Medical Devices &
Supplies -- 4.8%
100,000 Baxter International, Inc. 6,869
360,000 Guidant Corp. 21,082
90,000 Medtronic, Inc. 6,486
--------
Total 34,437
--------
Medical Distribution -- 3.3%
340,000 Cardinal Health, Inc. 23,205
--------
Office Equipment &
Supplies -- 1.6%
180,000 Pitney Bowes, Inc. 11,453
--------
Pharmaceuticals -- 5.5%
170,000 American Home Products Corp. 8,670
104,000 Bristol-Myers Squibb Co. 6,916
285,000 Pfizer, Inc. 9,672
100,000 Schering-Plough Corp. 4,900
140,000 Warner-Lambert, Inc. 9,240
--------
Total 39,398
--------
Retail -- 9.4%
520,000 Home Depot, Inc. 33,182
400,000 Lowe's Cos., Inc. 21,100
300,000 Wal-Mart Stores, Inc. (c) 12,675
--------
Total 66,957
--------
Telecommunications -- 3.2%
275,000 MCI WorldCom, Inc. (b) 22,687
--------
Transportation -- 1.8%
520,000 Comair Holdings, Inc. 12,708
--------
Total Common Stocks 674,425
--------
Repurchase Agreements -- 4.9%
$ 34,921 Warburg/Dillon, 5.06%, dated
7/30/99, due 8/2/99 (at amortized
cost), collateralized by U.S. Treasury
Notes, 5.50%-11.62%, due 12/31/00-
11/15/02 with a value of $35,620. 34,921
--------
Total Repurchase Agreements 34,921
--------
Short Term Securities Purchased with
Collateral -- 3.2%
Certificates of Deposit -- 0.2%
762 Bankers Trust Co., Floating Rate
Certificate of Deposit, 5.32%,
5/15/00 762
-- Continued --
28
<PAGE>
Fifth Third Quality Growth Fund
- --------------------------------------------------------------------------------
Shares
or
Principal Security Market
Amount Description Value
- --------- --------------------------------------------- ----------
787 Chase Manhattan Corp., 4.90%,
8/11/99 $ 787
--------
Total 1,549
--------
Commercial Paper -- 0.1%
230 AT&T Corp., 5.10%, 8/2/99 230
230 Associates First Capital Corp., 5.10%,
8/2/99 230
230 Cargill, Inc., 5.12%, 8/2/99 230
230 Xerox Corp., 5.10%, 8/2/99 230
--------
Total 920
--------
Corporate Bonds -- 1.6%
1,601 American Express Corp., Floating
Rate Note, 5.32%, 2/18/00 1,601
10,050 Goldman Sachs, Floating Rate Note,
5.32%, 7/24/00 10,050
--------
Total 11,651
--------
U.S. Government Agency -- 1.0%
6,998 Sallie Mae, Floating Rate Note,
4.94%, 11/18/99 6,998
--------
Repurchase Agreement -- 0.3%
1,830 Goldman Sachs, Tri-Party, 5.04%,
dated 7/30/99, due 8/2/99 (at
amortized cost), collateralized by U.S.
Treasury Bond, 6.375%, due 8/15/27 with
a value of $73,024 1,830
--------
Total Short Term Securities
Purchased with Collateral 22,948
--------
Total Investments (cost $473,620) (a)
-- 103.1% 732,294
Liabilities in excess of other
assets -- (3.1%) (21,803)
--------
TOTAL NET ASSETS -- 100.0% $710,491
--------
(a) Cost for federal tax purposes differs from value by net unrealized
appreciation of $258,674, which is composed of $265,925 appreciation and
$7,251 depreciation at July 31, 1999.
(b) Non-income producing security.
(c) All or part of this security has been loaned at July 31, 1999.
(See Notes which are an integral part of the Financial Statements)
29
<PAGE>
Fifth Third Equity Income Fund
Schedule of Portfolio Investments
July 31, 1999
(Amounts in thousands except share amounts)
- --------------------------------------------------------------------------------
Shares
or
Principal Security Market
Amount Description Value
------------ ------------------------------------- ---------
Common Stock -- 98.8%
- -------------------------------------------------------
Banking -- 20.9%
-------------------------------------
210,000 Bank of New York Co., Inc. $ 7,756
-------------------------------------
118,000 Bank One Corp. 6,438
-------------------------------------
117,400 First Tennessee National Corp.(b) 4,300
-------------------------------------
118,400 Mellon Bank Corp. 3,996
-------------------------------------
170,000 SouthTrust Corp. 6,248
-------------------------------------
172,500 Wells Fargo & Co. 6,727
------------------------------------- ---------
Total 35,465
------------------------------------- ---------
Chemicals -- 2.5%
-------------------------------------
290,000 RPM, Inc. 4,241
------------------------------------- ---------
Conglomerates -- 3.2%
-------------------------------------
66,000 Textron, Inc. 5,429
------------------------------------- ---------
Consumer Products -- 4.0%
-------------------------------------
20,500 Clorox Co. 2,296
-------------------------------------
102,700 Newell Rubbermaid, Inc.(b) 4,442
------------------------------------- ---------
Total 6,738
------------------------------------- ---------
Electrical Equipment -- 5.7%
-------------------------------------
65,000 Emerson Electric Co. 3,880
-------------------------------------
40,000 General Electric Co. 4,360
-------------------------------------
71,700 TECO Energy, Inc.(b) 1,461
------------------------------------- ---------
Total 9,701
------------------------------------- ---------
Financial Services -- 4.2%
-------------------------------------
78,000 A.G. Edwards, Inc. 2,155
-------------------------------------
72,000 Fannie Mae 4,968
------------------------------------- ---------
Total 7,123
------------------------------------- ---------
Food -- 5.9%
-------------------------------------
45,500 Bestfoods 2,218
-------------------------------------
116,500 H.J. Heinz Co. 5,490
-------------------------------------
70,000 SYSCO Corp. 2,288
------------------------------------- ---------
Total 9,996
------------------------------------- ---------
Insurance -- 5.6%
-------------------------------------
12,000 American General Corp. 929
-------------------------------------
36,000 Cincinnati Financial Corp. (b) 1,355
-------------------------------------
95,200 Marsh & McLennan Cos., Inc. 7,234
------------------------------------- ---------
Total 9,518
------------------------------------- ---------
Manufacturing -- 4.0%
-------------------------------------
165,000 Dana Corp. 6,889
------------------------------------- ---------
Office Equipment &
Supplies -- 6.9%
-------------------------------------
88,000 Avery Dennison Corp. 5,401
-------------------------------------
100,000 Pitney Bowes, Inc. 6,363
------------------------------------- ---------
Total 11,764
------------------------------------- ---------
Oil & Gas -- 4.5%
-------------------------------------
75,000 Mobil Corp. 7,669
------------------------------------- ---------
Pharmaceuticals -- 10.1%
-------------------------------------
66,500 Abbott Laboratories (b) 2,855
-------------------------------------
24,000 Bristol-Myers Squibb Co. $ 1,596
-------------------------------------
38,900 Johnson & Johnson 3,584
-------------------------------------
40,000 Merck & Co., Inc. 2,708
-------------------------------------
80,000 Schering-Plough Corp. 3,919
-------------------------------------
37,500 Warner-Lambert, Co. 2,475
------------------------------------- ---------
Total 17,137
------------------------------------- ---------
Telecommunications -- 8.8%
-------------------------------------
102,500 ALLTEL Corp. 7,361
-------------------------------------
105,000 Ameritech Corp. 7,691
------------------------------------- ---------
Total 15,052
------------------------------------- ---------
Transportation -- 5.7%
-------------------------------------
245,000 GATX Corp. 9,769
------------------------------------- ---------
Utilities\Electric -- 3.4%
-------------------------------------
90,000 Cinergy Corp. 2,694
-------------------------------------
60,000 Duke Energy Corp. 3,177
------------------------------------- ---------
Total 5,871
------------------------------------- ---------
Utilities\Natural Gas -- 3.4%
-------------------------------------
28,390 LG&E Energy Corp. 614
--------------------------------------
199,000 NiSource, Inc. 5,161
------------------------------------- ---------
Total 5,775
------------------------------------- ---------
Total Common Stock 168,137
------------------------------------- ---------
Repurchase Agreement -- 2.2%
- --------------------------------------------------------
$ 3,819 Warburg/Dillon, 5.06%, dated
7/30/99, due 8/2/99 -- (at amortized
cost), collateralized by U.S. Treasury
Notes, 5.75%, due 09/30/99 with a
value of $3,899. 3,819
------------------------------------- ---------
Total Repurchase Agreement 3,819
------------------------------------- ---------
Short Term Securities Purchased with
Collateral -- 3.3%
- --------------------------------------------------------
Certificate of Deposit -- 0.2%
-------------------------------------
278 Bankers Trust Co., Floating Rate
Certificate of Deposit, 5.32%, 5/15/00 278
------------------------------------- ---------
Commercial Paper -- 0.5%
-------------------------------------
227 AT&T Corp., 5.10%, 8/2/99 227
-------------------------------------
227 Associates First Capital Corp., 5.10%,
8/2/99 227
-------------------------------------
227 Cargill, Inc., 5.12%, 8/2/99 227
-------------------------------------
227 Xerox Corp., 5.10%, 8/2/99 227
------------------------------------- ---------
Total 908
------------------------------------- ---------
Corporate Bonds -- 1.3%
-------------------------------------
261 American Express Corp., Floating
Rate Note, 5.32%, 2/18/00 261
-------------------------------------
1,984 Goldman Sachs, Floating Rate Note,
5.32%, 7/24/00 1,984
------------------------------------- ---------
Total 2,245
------------------------------------- ---------
U.S. Government Agency -- 0.2%
-------------------------------------
322 Sallie Mae, Floating Rate Note, 4.94%,
11/18/99 322
------------------------------------- ---------
--Continued--
30
<PAGE>
Fifth Third Equity Income Fund
- --------------------------------------------------------------------------------
Shares
or
Principal Security Market
Amount Description Value
------------ ------------------------------------- ---------
Repurchase Agreement -- 1.1%
-------------------------------------
1,800 Goldman Sachs, Tri-Party, 5.04%,
dated 7/30/99, due 8/2/99 -- (at
amortized cost), collateralized by U.S.
Treasury Bond, 6.375%, due 8/15/27
with a value of $73,024 $ 1,800
------------------------------------- ---------
Total Short Term Securities
Purchased with Collateral 5,553
------------------------------------- ---------
Total Investments -- (Cost $126,892)
(a) - 104.3% 177,509
-------------------------------------
Liabilities in excess
of other assets -- (4.3)% (7,283)
------------------------------------- ---------
TOTAL NET ASSETS -- 100.0% $170,226
------------------------------------- ---------
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting purposes in excess of federal income tax purposes
of $77. Cost for federal tax purposes differs from value by net unrealized
appreciation of $50,540, which is composed of $52, 999 appreciation and
$2,459 depreciation at July 31, 1999.
(b) All or part of this security has been loaned at July 31, 1999.
(See Notes which are an integral part of the Financial Statements)
31
<PAGE>
Fifth Third Cardinal Fund
Schedule of Portfolio Investments
July 31, 1999
(Amounts in thousands except share amounts)
- --------------------------------------------------------------------------------
Shares
or
Principal Security Market
Amount Description Value
------------ ------------------------------------- ---------
Common Stocks -- 99.6%
--------------------------------------------------
Banks -- 5.3%
-------------------------------------
45,000 AmSouth Bancorp. (c) $ 1,029
-------------------------------------
30,000 Bank of New York Co., Inc. 1,108
-------------------------------------
50,000 Bank One Corp. 2,728
-------------------------------------
37,500 Citigroup, Inc. 1,671
-------------------------------------
100,000 First Tennessee National Corp. (c) 3,663
-------------------------------------
72,600 Huntington Bancshares, Inc. 2,187
-------------------------------------
30,000 Mellon Bank Corp. 1,013
------------------------------------- ---------
Total 13,399
------------------------------------- ---------
Beverages -- 2.4%
-------------------------------------
50,000 Coca-Cola Co. 3,016
-------------------------------------
75,000 PepsiCo, Inc. 2,934
------------------------------------- ---------
Total 5,950
------------------------------------- ---------
Chemicals -- 1.5%
-------------------------------------
51,400 Dupont (E.I.) de Nemours & Co. 3,704
------------------------------------- ---------
Computer Software &
Services -- 7.0%
-------------------------------------
30,000 Computer Sciences Corp. (b) 1,931
-------------------------------------
160,000 Microsoft Corp. (b) 13,731
-------------------------------------
52,500 Oracle Corp. (b) 1,998
------------------------------------- ---------
Total 17,660
------------------------------------- ---------
Computer Systems &
Equipment -- 7.0%
-------------------------------------
104,000 Cisco Systems, Inc. (b) 6,461
-------------------------------------
100,000 Compaq Computer Corp. 2,400
-------------------------------------
104,000 Dell Computer Corp. (b) 4,251
-------------------------------------
20,000 Hewlett-Packard Co. 2,094
-------------------------------------
20,000 IBM Corp. 2,514
------------------------------------- ---------
Total 17,720
------------------------------------- ---------
Consumer Products -- 4.6%
-------------------------------------
25,000 Clorox Co. 2,800
-------------------------------------
35,000 Gillette Co. 1,533
-------------------------------------
30,000 Kimberly-Clark Corp. 1,830
-------------------------------------
60,000 Procter & Gamble Co. 5,430
------------------------------------- ---------
Total 11,593
------------------------------------- ---------
Electrical Equipment -- 4.1%
-------------------------------------
95,000 General Electric Co. 10,355
------------------------------------- ---------
Electronics -- 13.3%
-------------------------------------
65,000 Applied Materials, Inc. (b) 4,676
-------------------------------------
134,000 Intel Corp. 9,245
-------------------------------------
10,000 KLA-Tencor Corp. (b) 678
-------------------------------------
160,000 Lucent Technologies, Inc. 10,409
-------------------------------------
20,000 PRI Automation, Inc. (b) 619
-------------------------------------
80,000 Tellabs, Inc. (b) 4,925
-------------------------------------
20,000 Texas Instruments, Inc. 2,880
------------------------------------- ---------
Total 33,432
------------------------------------- ---------
Energy -- 7.2%
-------------------------------------
75,000 Mobil Corp. 7,668
-------------------------------------
30,000 Royal Dutch Petroleum Co. 1,830
-------------------------------------
40,000 Schlumberger, Ltd. 2,423
-------------------------------------
20,000 Texaco, Inc. 1,246
-------------------------------------
120,000 Williams Cos., Inc. 5,048
------------------------------------- ---------
Total 18,215
------------------------------------- ---------
Entertainment & Leisure -- 0.8%
-------------------------------------
70,000 The Walt Disney Co. 1,934
------------------------------------- ---------
Financial Services -- 3.5%
-------------------------------------
150,000 Charter One Financial, Inc. (c) 3,881
-------------------------------------
42,500 Fannie Mae 2,933
-------------------------------------
60,000 T. Rowe Price Associates, Inc. 2,100
------------------------------------- ---------
Total 8,914
------------------------------------- ---------
Healthcare -- 5.1%
-------------------------------------
30,000 Biomet, Inc. 1,091
-------------------------------------
50,000 Guidant Corp. 2,928
-------------------------------------
40,000 Johnson & Johnson 3,685
-------------------------------------
70,000 Medtronic, Inc. 5,045
------------------------------------- ---------
Total 12,749
------------------------------------- ---------
Insurance -- 7.3%
-------------------------------------
30,000 Allstate Corp. 1,065
-------------------------------------
45,000 American International Group, Inc. 5,226
-------------------------------------
50,000 Cincinnati Financial Corp. (c) 1,881
-------------------------------------
135,000 Marsh & McLennan Cos., Inc. 10,260
------------------------------------- ---------
Total 18,432
------------------------------------- ---------
Manufacturing -- 5.5%
-------------------------------------
80,000 Textron, Inc. 6,580
-------------------------------------
75,000 Tyco International, Ltd. 7,327
------------------------------------- ---------
Total 13,907
------------------------------------- ---------
Media/Publishing -- 3.1%
-------------------------------------
30,000 Gannett Co., Inc. 2,168
-------------------------------------
30,000 New York Times Co., Class A 1,179
-------------------------------------
50,000 Tribune Co. 4,403
------------------------------------- ---------
Total 7,750
------------------------------------- ---------
Medical Distribution -- 1.4%
-------------------------------------
53,000 Cardinal Health, Inc. 3,617
------------------------------------- ---------
Pharmaceuticals -- 7.9%
-------------------------------------
75,000 American Home Products Corp. 3,825
-------------------------------------
40,000 Amgen, Inc. (b) 3,075
-------------------------------------
50,000 Merck & Co., Inc. 3,384
-------------------------------------
150,000 Pfizer, Inc. 5,090
-------------------------------------
50,000 Schering-Plough Corp. 2,450
-------------------------------------
30,000 Warner-Lambert Co. 1,980
------------------------------------- ---------
Total 19,804
------------------------------------- ---------
Restaurants -- 0.7%
-------------------------------------
40,000 McDonald's Corp. 1,668
------------------------------------- ---------
Retail -- 5.0%
-------------------------------------
60,000 Kohl's Corp. (b) 4,563
-------------------------------------
70,000 Lowe's Cos., Inc. 3,693
-------------------------------------
--Continued--
32
<PAGE>
Fifth Third Cardinal Fund
- --------------------------------------------------------------------------------
Shares
or
Principal Security Market
Amount Description Value
------------ ------------------------------------- ---------
100,000 Wal-Mart Stores, Inc. $ 4,225
------------------------------------- ---------
Total 12,481
------------------------------------- ---------
Telecommunications -- 6.0%
-------------------------------------
40,000 GTE Corp. 2,948
-------------------------------------
100,000 MCI WorldCom, Inc. (b) 8,249
-------------------------------------
60,000 Qwest Communications
International, Inc. (b) (c) 1,770
-------------------------------------
40,000 Sprint Corp. (b) 2,068
------------------------------------- ---------
Total 15,035
------------------------------------- ---------
Transportation -- 0.9%
-------------------------------------
50,000 FDX Corp. (b) 2,241
------------------------------------- ---------
Total Common Stocks 250,560
------------------------------------- ---------
Repurchase Agreement -- 0.8%
- -------------------------------------------------------
Repurchase Agreement -- 0.8%
$1,999 Warburg/Dillon, 5.06%, dated
7/30/99, due 8/2/99 -- (at amortized
cost), collateralized by U.S. Treasury
Notes, 5.50%, due 12/31/00 with a
value of $2,043. 1,999
------------------------------------- ---------
Total Repurchase Agreement 1,999
------------------------------------- ---------
Short Term Securities Purchased with
Collateral -- 2.8%
- -------------------------------------------------------
Certificates of Deposit -- 0.4%
-------------------------------------
589 Bankers Trust Co., Floating Rate
Certificate of Deposit, 5.32%,
5/15/00 589
-------------------------------------
402 Chase Manhattan Corp., 4.90%,
8/11/99 402
------------------------------------- ---------
Total 991
------------------------------------- ---------
Commercial Paper -- 0.4%
-------------------------------------
230 AT&T Corp., 5.10%, 8/2/99 230
-------------------------------------
230 Associates First Capital Corp.,
5.10%, 8/2/99 230
-------------------------------------
230 Cargill, Inc., 5.12%, 8/2/99 230
-------------------------------------
230 Xerox Corp., 5.10%, 8/2/99 230
------------------------------------- ---------
Total 920
------------------------------------- ---------
Corporate Bond -- 0.3%
-------------------------------------
689 American Express Co., 5.32%,
2/18/00 689
------------------------------------- ---------
U.S. Government Agency -- 1.0%
-------------------------------------
2,537 Sallie Mae, Floating Rate Note,
4.94%, 11/18/99 2,537
------------------------------------- ---------
Repurchase Agreement -- 0.7%:
-------------------------------------
1,826 Goldman Sachs, Tri-Party, 5.04%,
dated 7/30/99, due 8/2/99 -- (at
amortized cost), collateralized by U.S.
Treasury Bond, 6.375%, due 8/15/27
with a value of $73,024 1,826
------------------------------------- ---------
Total Short Term Securities
Purchased with Collateral 6,963
------------------------------------- ---------
Total Investments (cost $120,151) (a)
-- 103.2% 259,522
-------------------------------------
Liabilities in excess of other
assets -- (3.2)% (7,947)
------------------------------------- ---------
TOTAL NET ASSETS -- 100.0% $251,575
------------------------------------- ---------
(a) Cost for federal tax purposes differs from value by net unrealized
appreciation of $139,262, which is composed of $140,786 appreciation and
$1,524 depreciation at July 31, 1999.
(b) Non-income producing security.
(c) All or part of this security has been loaned at July 31, 1999.
Market
Contracts Value
Options outstanding at end of period consist of:
Coca-Cola Co.., $65, 8/23/99 100 $ 3
Coca-Cola Co.., $70, 8/23/99 100 1
Hewlett-Packard Co., $95, 8/23/99 100 121
Hewlett-Packard Co., $100, 8/23/99 100 80
---- ----
Total written call options
(premiums received $96) 400 $205
---- ----
(See Notes which are an integral part of the Financial Statements)
33
<PAGE>
Fifth Third Pinnacle Fund
Schedule of Portfolio Investments
July 31, 1999
(Amounts in thousands except share amounts)
- --------------------------------------------------------------------------------
Shares
or
Principal Security Market
Amount Description Value
- ----------- --------------------------------------------- --------
Common Stocks -- 95.2%
- ---------------------------------------------------------
Aerospace/Defense -- 2.0%
---------------------------------------------
36,030 General Dynamics Corp. (c) $ 2,425
--------------------------------------------- ---------
Banking -- 1.9%
---------------------------------------------
10,542 First Midwest Bancorp., Inc. 431
---------------------------------------------
70,800 Firstar Corp. (c) 1,845
--------------------------------------------- ---------
Total 2,276
--------------------------------------------- ---------
Beverages -- 2.2%
---------------------------------------------
32,600 Anheuser-Busch Cos, Inc. 2,573
--------------------------------------------- ---------
Computer Software &
Services -- 4.2%
---------------------------------------------
67,700 Ceridian Corp. (b) 1,896
---------------------------------------------
35,900 Microsoft Corp. (b) 3,080
--------------------------------------------- ---------
Total 4,976
--------------------------------------------- ---------
Computer Systems &
Equipment -- 14.3%
---------------------------------------------
41,860 Cisco Systems, Inc. (b) 2,601
---------------------------------------------
43,320 EMC Corp. (b) 2,624
---------------------------------------------
25,750 IBM Corp. 3,236
---------------------------------------------
39,825 Lucent Technologies, Inc. 2,591
---------------------------------------------
34,740 Tellabs, Inc. (b) 2,139
---------------------------------------------
92,500 Unisys Corp. (b) 3,776
--------------------------------------------- ---------
Total 16,967
--------------------------------------------- ---------
Conglomerate -- 4.6%
---------------------------------------------
42,100 AlliedSignal, Inc. 2,723
---------------------------------------------
62,370 CBS Corp. (b) 2,741
--------------------------------------------- ---------
Total 5,464
--------------------------------------------- ---------
Consumer Durables -- 1.9%
---------------------------------------------
77,300 Masco Corp. 2,300
--------------------------------------------- ---------
Consumer Products -- 2.0%
---------------------------------------------
35,100 Quaker Oats Co. 2,389
--------------------------------------------- ---------
Electrical Equipment -- 2.6%
---------------------------------------------
28,400 General Electric Co. 3,096
--------------------------------------------- ---------
Electronics -- 4.8%
---------------------------------------------
43,200 Solectron Corp. (b) 2,784
---------------------------------------------
19,925 Texas Instruments, Inc. 2,869
--------------------------------------------- ---------
Total 5,653
--------------------------------------------- ---------
Financial Services -- 2.3%
---------------------------------------------
39,000 Fannie Mae 2,691
--------------------------------------------- ---------
Healthcare -- 3.9%
---------------------------------------------
41,800 Guidant Corp. 2,448
---------------------------------------------
35,285 United Healthcare Corp. 2,152
--------------------------------------------- ---------
Total 4,600
--------------------------------------------- ---------
Insurance -- 5.9%
---------------------------------------------
21,575 American International Group, Inc. 2,505
---------------------------------------------
23,100 CIGNA Corp. 2,037
---------------------------------------------
31,600 Marsh & McLennan Cos., Inc. 2,402
--------------------------------------------- ---------
Total 6,944
--------------------------------------------- ---------
Machinery -- 2.1%
---------------------------------------------
38,475 Ingersoll-Rand Co. 2,474
--------------------------------------------- ---------
Manufacturing -- 2.9%
---------------------------------------------
35,300 Tyco International Ltd. 3,448
--------------------------------------------- ---------
Medical Distribution -- 2.4%
---------------------------------------------
42,200 Cardinal Health, Inc. (c) 2,880
--------------------------------------------- ---------
Oil & Gas -- 4.6%
---------------------------------------------
30,690 Atlantic Richfield Co. 2,764
---------------------------------------------
25,800 Mobil Corp. 2,638
--------------------------------------------- ---------
Total 5,402
--------------------------------------------- ---------
Pharmaceuticals -- 6.4%
---------------------------------------------
37,300 Amgen, Inc. (b) 2,867
---------------------------------------------
31,600 Bristol-Myers Squibb Co. 2,101
---------------------------------------------
54,500 Schering-Plough Corp. 2,671
--------------------------------------------- ---------
Total 7,639
--------------------------------------------- ---------
Printing & Publishing -- 2.5%
---------------------------------------------
40,400 Time Warner, Inc. 2,909
--------------------------------------------- ---------
Retail -- 11.7%
---------------------------------------------
58,000 CVS Corp. 2,886
---------------------------------------------
42,200 Dayton-Hudson Corp. 2,730
---------------------------------------------
51,700 Home Depot, Inc. 3,299
---------------------------------------------
95,400 Kroger Co. (b) 2,510
---------------------------------------------
56,600 Wal-Mart Stores, Inc. 2,391
--------------------------------------------- ---------
Total 13,816
--------------------------------------------- ---------
Telecommunications -- 6.6%
---------------------------------------------
51,950 AT&T Corp. (c) 2,698
---------------------------------------------
54,300 BellSouth Corp. 2,606
---------------------------------------------
30,700 MCI WorldCom, Inc. (b) 2,533
--------------------------------------------- ---------
Total 7,837
--------------------------------------------- ---------
Transportation -- 3.4%
---------------------------------------------
47,870 FDX Corp. (b) 2,145
---------------------------------------------
104,850 Southwest Airlines Co. 1,940
--------------------------------------------- ---------
Total 4,085
--------------------------------------------- ---------
Total Common Stocks 112,844
--------------------------------------------- ---------
Repurchase Agreement -- 7.9%
- ---------------------------------------------------------
$ 9,383 Warburg/Dillion, 5.06%, dated
7/30/99, due 8/2/99 (at amortized
cost), collateralized by U.S. Treasury
Notes, 5.75%, due 09/30/99 with a
value of $9,573. 9,383
--------------------------------------------- ---------
Total Repurchase Agreement 9,383
--------------------------------------------- ---------
Short Term Securities Purchased with
Collateral -- 4.6%
- ---------------------------------------------------------
Certificates of Deposit -- 0.4%
---------------------------------------------
257 Bankers Trust Co., Floating Rate
Certificate of Deposit, 5.32%, 5/15/00 257
---------------------------------------------
238 Chase Manhattan Corp., 4.90%, 8/11/99 238
--------------------------------------------- ---------
Total 495
--------------------------------------------- ---------
-- Continued --
34
<PAGE>
Fifth Third Pinnacle Fund
- --------------------------------------------------------------------------------
Shares
or
Principal Security Market
Amount Description Value
- ----------- --------------------------------------------- --------
Commercial Paper -- 0.9%
---------------------------------------------
271 AT&T Corp., 5.10%, 8/2/99 $ 271
---------------------------------------------
271 Associates First Capital Corp.,
5.10%, 8/2/99 271
---------------------------------------------
271 Cargill, Inc., 5.12%, 8/2/99 271
---------------------------------------------
271 Xerox Corp., 5.10%, 8/2/99 271
--------------------------------------------- --------
Total 1,084
--------------------------------------------- --------
Corporate Bonds -- 1.3%
---------------------------------------------
805 American Express Co., Floating Rate
Note, 5.32%, 2/18/00 805
---------------------------------------------
684 Goldman Sachs, Floating Rate Note,
5.32%, 7/24/00 684
--------------------------------------------- --------
Total 1,489
--------------------------------------------- --------
U.S. Government Agency -- 0.2%
---------------------------------------------
187 Sallie Mae, Floating Rate Note,
4.94% 11/18/99 187
--------------------------------------------- --------
Repurchase Agreement -- 1.8%
---------------------------------------------
2,153 Goldman Sachs, Tri-Party, 5.04%,
dated 7/30/99, due 8/2/99 (at
amortized cost), collateralized by U.S.
Treasury Bond, 6.375%, due 8/15/27 with
a value of $73,024 2,153
--------------------------------------------- --------
Total Short Term Securities Purchased
with Collateral $ 5,408
--------------------------------------------- --------
Total Investments (Cost $108,211) (a)
-- 107.7% $127,635
--------------------------------------------- --------
Liabilities in excess of other
assets -- (7.7%) (9,103)
--------------------------------------------- --------
TOTAL NET ASSETS -- 100.0% $118,532
--------------------------------------------- --------
(a) Cost for federal tax purposes differs from value by net unrealized
appreciation of $19,424 which is composed of $21,962 appreciation and
$2,538 depreciation at July 31, 1999.
(b) Non-income producing.
(c) All or part of this security has been loaned at July 31, 1999.
(See Notes which are an integral part of the Financial Statements)
35
<PAGE>
<TABLE>
<CAPTION>
Fifth Third Balanced Fund
Schedule of Portfolio Investments
July 31, 1999
(Amounts in thousands except share amounts)
- --------------------------------------------------------------------------------
<S> <C> <C>
Shares
or
Principal Security Market
Amount Description Value
- --------------- ----------------------------------------- -----------
Common Stocks - 61.5%
- -----------------------------------------------------------
Banking - 5.0%
-----------------------------------------
117,000 Bank of New York Co., Inc. $ 4,321
-----------------------------------------
40,000 First Tennessee National Corp. 1,465
-----------------------------------------
120,000 Mellon Bank Corp. 4,049
-----------------------------------------
17,000 Regions Financial Corp. 605
-----------------------------------------
22,000 Southtrust Corp. 809
----------------------------------------- -----------
Total 11,249
----------------------------------------- -----------
Beverages - 0.5%
-----------------------------------------
30,000 PepsiCo, Inc. 1,174
----------------------------------------- -----------
Business Services - 2.7%
-----------------------------------------
60,000 Cintas Corp. 3,848
-----------------------------------------
40,000 Fastenal Co. (c) 2,365
----------------------------------------- -----------
Total 6,213
----------------------------------------- -----------
Computer Software &
Services - 7.7%
-----------------------------------------
65,000 BMC Software, Inc. 3,501
-----------------------------------------
30,000 Computer Sciences Corp. (b) 1,931
-----------------------------------------
105,000 Fiserv, Inc. (b) 3,130
-----------------------------------------
40,000 Microsoft Corp. (b) 3,432
-----------------------------------------
60,000 Oracle Corp. (b) 2,284
-----------------------------------------
115,000 Sterling Commerce, Inc. (b) (c ) 3,019
----------------------------------------- -----------
Total 17,297
----------------------------------------- -----------
Consumer Products - 0.9%
-----------------------------------------
25,000 Newell Rubbermaid, Inc. 1,081
-----------------------------------------
11,000 Procter & Gamble Co. 996
----------------------------------------- -----------
Total 2,077
----------------------------------------- -----------
Electrical Equipment - 0.6%
-----------------------------------------
12,000 General Electric Co. 1,308
----------------------------------------- -----------
Electronics - 11.6%
-----------------------------------------
30,000 Analog Devices, Inc. (b) 1,294
-----------------------------------------
5,000 Applied Materials, Inc. (b) 360
-----------------------------------------
120,000 Artesyn Technologies, Inc. (b) 2,970
-----------------------------------------
55,000 Cisco Systems, Inc. (b) 3,416
-----------------------------------------
26,000 EMC Corp. (b) 1,575
-----------------------------------------
30,000 Flextronics International Ltd. (b) 1,346
-----------------------------------------
94,000 Intel Corp. 6,485
-----------------------------------------
40,000 Lucent Technologies, Inc. 2,603
-----------------------------------------
17,000 Microchip Technology, Inc. (b) 852
-----------------------------------------
7,000 QLogic Corp. (b) 1,168
-----------------------------------------
35,000 Tellabs, Inc. (b) 2,155
-----------------------------------------
15,000 Texas Instruments, Inc. 2,160
----------------------------------------- -----------
Total 26,384
----------------------------------------- -----------
Energy - 1.5%
-----------------------------------------
8,000 Chevron Corp. 730
-----------------------------------------
15,000 Mobil Corp. 1,533
-----------------------------------------
17,000 Schlumberger Ltd. 1,030
----------------------------------------- -----------
Total 3,293
----------------------------------------- -----------
Financial Sevices - 4.5%
-----------------------------------------
30,000 A.G. Edwards, Inc. 829
-----------------------------------------
30,000 Capital One Financial Corp. 1,391
-----------------------------------------
90,000 Freddie Mac 5,164
-----------------------------------------
80,000 T. Rowe Price Associates, Inc. 2,800
----------------------------------------- -----------
Total 10,184
----------------------------------------- -----------
Healthcare - 4.5%
-----------------------------------------
22,000 Baxter International, Inc. 1,511
-----------------------------------------
60,000 Biomet 2,183
-----------------------------------------
70,000 Guidant Corp. 4,099
-----------------------------------------
10,000 Medtronic, Inc. 721
-----------------------------------------
120,000 STERIS Corp. (b) (c) 1,620
----------------------------------------- -----------
Total 10,134
----------------------------------------- -----------
Insurance - 2.1%
-----------------------------------------
25,000 Allstate Corp. 888
-----------------------------------------
19,000 Cincinnati Financial Corp. (c) 715
-----------------------------------------
40,000 Marsh & McLennan Cos., Inc. 3,039
----------------------------------------- -----------
Total 4,642
----------------------------------------- -----------
Manufacturing - 4.3%
-----------------------------------------
16,000 Avery Dennison Corp. 982
-----------------------------------------
25,000 Dana Corp. 1,044
-----------------------------------------
25,000 Illinois Tool Works, Inc. (c) 1,858
-----------------------------------------
10,000 OM Group, Inc. 374
-----------------------------------------
45,000 Tyco International Ltd. 4,396
-----------------------------------------
25,000 Zebra Technologies Corp.,
Class A (b) (c) 1,173
----------------------------------------- -----------
Total 9,827
----------------------------------------- -----------
Media/Publishing - 0.9%
-----------------------------------------
50,000 Interpublic Group of Cos., Inc. 2,101
----------------------------------------- -----------
Medical Distribution - 2.1%
-----------------------------------------
100,000 Bergen Brunswig Corp. 1,600
-----------------------------------------
47,000 Cardinal Health, Inc. 3,208
----------------------------------------- -----------
Total 4,808
----------------------------------------- -----------
Office Equipment &
Supplies - 0.6%
-----------------------------------------
22,000 Pitney Bowes, Inc. 1,400
----------------------------------------- -----------
Pharmaceuticals - 2.1%
-----------------------------------------
13,000 American Home Products Corp. 663
-----------------------------------------
20,000 Bristol-Myers Squibb Co. 1,330
-----------------------------------------
20,000 Pfizer, Inc. 679
-----------------------------------------
12,000 Schering-Plough Corp. 588
-----------------------------------------
21,000 Warner-Lambert, Inc. 1,386
----------------------------------------- -----------
Total 4,646
----------------------------------------- -----------
Retail - 4.7%
-----------------------------------------
95,000 Consolidated Stores Corp. (b) 1,484
-----------------------------------------
60,000 Home Depot, Inc. 3,829
-----------------------------------------
54,000 Lowe's Cos., Inc. 2,849
-----------------------------------------
70,000 Pier 1 Imports, Inc. 656
</TABLE>
-Continued-
36
<PAGE>
Fifth Third Balanced Fund
- --------------------------------------------------------------------------------
Shares
or
Principal Security Market
Amount Description Value
- --------------- ----------------------------------------- -----------
$ 44,000 Wal-Mart Stores, Inc. $ 1,859
----------------------------------------- -----------
Total 10,677
----------------------------------------- -----------
Telecommunications -- 2.7%
-----------------------------------------
50,000 CenturyTel, Inc. 2,138
-----------------------------------------
48,000 MCI WorldCom, Inc. (b) 3,960
----------------------------------------- -----------
Total 6,098
----------------------------------------- -----------
Transportation -- 2.5%
-----------------------------------------
175,000 Comair Holdings, Inc. 4,277
-----------------------------------------
25,000 Kansas City Southern Industries, Inc. 1,381
----------------------------------------- -----------
Total 5,658
----------------------------------------- -----------
Total Common Stocks 139,170
----------------------------------------- -----------
Corporate Bonds -- 9.5%
- -----------------------------------------------------------
Financial Services -- 5.3%
-----------------------------------------
3,000 Associates Corp., 5.80%, 4/20/04 (c) 2,867
-----------------------------------------
4,000 Bank One Corp., 6.88%, 8/1/06 3,938
-----------------------------------------
3,000 Salomon Smith Barney Holdings,
7.38%, 5/15/07 (c) 3,005
2,500 Toyota Motor Credit Corp., 5.50%,
12/15/08 2,264
----------------------------------------- -----------
Total 12,074
----------------------------------------- -----------
Industrial -- 1.7%
-----------------------------------------
1,000 Service Corp. International, 6.50%,
3/15/08 (c) 916
-----------------------------------------
3,000 Teleglobe, Inc., 7.20%, 7/20/09 2,895
----------------------------------------- -----------
Total 3,811
----------------------------------------- -----------
Telecommunications -- 2.5%
-----------------------------------------
3,000 Lucent Technologies, 6.45%,
3/15/29 (c) 2,692
-----------------------------------------
3,000 Sprint Capital Corp, 5.88%, 5/1/04 2,872
----------------------------------------- -----------
Total 5,564
----------------------------------------- -----------
Total Corporate Bonds 21,449
----------------------------------------- -----------
U.S. Government Securities -- 24.6%
- -----------------------------------------------------------
Mortgage Backed
Securities -- 10.9%
-----------------------------------------
543 Fannie Mae, 6.00%, 4/1/11,
Pool # 344185 521
-----------------------------------------
16,132 Fannie Mae, 6.50%, 4/1/14,
Pool # 323748 15,760
-----------------------------------------
2 Freddie Mac, 9.50%, 10/1/02,
Pool #380009 2
-----------------------------------------
8 Freddie Mac, 8.00%, 8/1/08,
Pool #272525 8
-----------------------------------------
5,802 Ginnie Mae, 6.50%, 10/20/28,
Pool #2658 5,479
-----------------------------------------
3,002 Ginnie Mae, 6.00%, 2/15/29,
Pool # 497573 2,766
----------------------------------------- -----------
Total 24,536
----------------------------------------- -----------
U.S. Government Agencies -- 4.3%
-----------------------------------------
4,000 Fannie Mae 5.31%, 5/18/01 3,955
-----------------------------------------
3,000 FHLB, 5.13%, 9/15/03 2,857
-----------------------------------------
3,000 Freddie Mac, 5.25%, 2/16/01 2,969
----------------------------------------- -----------
Total 9,781
----------------------------------------- -----------
U.S. Treasury Bonds -- 2.8%
-----------------------------------------
2,250 7.25%, 5/15/16 2,450
-----------------------------------------
4,500 5.25%, 11/15/28 (c) 3,927
----------------------------------------- -----------
Total 6,377
----------------------------------------- -----------
U.S. Treasury Notes -- 6.6%
-----------------------------------------
6,000 5.38%, 2/15/01 (c) 5,982
-----------------------------------------
4,000 6.25%, 2/28/02 4,049
-----------------------------------------
2,000 4.75%, 2/15/04 (c) 1,913
-----------------------------------------
3,000 5.88%, 11/15/05 (c) 2,976
----------------------------------------- -----------
Total 14,920
----------------------------------------- ===========
Total U.S. Government Securities 55,614
----------------------------------------- -----------
Repurchase Agreement -- 4.2%
- -----------------------------------------------------------
Repurchase Agreement -- 4.2%
-----------------------------------------
9,404 Warburg/Dillon, 5.06%, dated
7/30/99, due 8/2/99 -- (at amortized
cost), collateralized by U.S. Treasury
Notes, 5.50%, dated 12/31/00 with a
value of $9,595 9,404
----------------------------------------- -----------
Total Repurchase Agreement 9,404
----------------------------------------- -----------
Short Term Securities Purchased with
Collateral -- 12.4%
- -----------------------------------------------------------
Certificates of Deposit -- 1.1%
-----------------------------------------
781 Bankers Trust Co., Floating Rate
Certificate of Deposit, 5.32%, 5/15/00 781
-----------------------------------------
1,809 Chase Manhattan Corp., 4.90%,
8/11/99 1,809
----------------------------------------- -----------
Total 2,590
----------------------------------------- -----------
Commercial Paper -- 2.6%
-----------------------------------------
1,471 AT&T Corp., 5.10%, 8/2/99 1,471
-----------------------------------------
1,471 Associates First Capital Corp.,
5.10%, 8/2/99 1,471
-----------------------------------------
1,471 Cargill, Inc., 5.12%, 8/2/99 1,471
-----------------------------------------
1,471 Xerox Corp., 5.10%, 8/2/99 1,471
----------------------------------------- -----------
Total 5,884
----------------------------------------- -----------
Corporate Bonds -- 1.3%
-----------------------------------------
765 American Express Co., Floating Rate
Note, 5.32%, 2/18/00 765
-----------------------------------------
2,114 Goldman Sachs, Floating Rate Note,
5.32%, 7/24/00 2,114
----------------------------------------- -----------
Total 2,879
----------------------------------------- -----------
U.S. Government Agency -- 2.2%
-----------------------------------------
4,947 Sallie Mae, Floating Rate Note,
4.94%, 11/18/99 4,947
----------------------------------------- -----------
Repurchase Agreement -- 5.2%
-----------------------------------------
11,713 Goldman Sachs, Tri-Party, 5.04%,
dated 7/30/99, due 8/2/99 (at
amortized cost), collateralized by U.S.
Treasury Bond, 6.375%, due 8/15/27
with a value of $73,024 11,713
----------------------------------------- -----------
-Continued-
37
<PAGE>
Fifth Third Balanced Fund
- --------------------------------------------------------------------------------
Shares
or
Principal Security Market
Amount Description Value
- --------------- ----------------------------------------- -----------
Total Short Term Securities
Purchased with Collateral 28,013
----------------------------------------- -----------
Total Investments (cost $218,121)(a)
-112.2% 253,650
-----------------------------------------
Liabilities in excess of other
assets -- (12.2)% (27,656)
----------------------------------------- -----------
TOTAL NET ASSETS -- 100.0% $225,994
----------------------------------------- -----------
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for financial
reporting purposes in excess of federal income tax purposes of $19. Cost for
federal tax purposes differs from value by net unrealized appreciation of
$35,510, which is composed of $44,969 appreciation and $9,459 depreciation at
July 31, 1999.
(b) Non-income producing security.
(c) All or part of this security has been loaned at July 31, 1999.
The following abbreviations are used in this portfolio:
FHLB -- Federal Home Loan Bank
(See Notes which are an integral part of the Financial Statements)
38
<PAGE>
This page intentionally left blank.
39
<PAGE>
Fifth Third Mid Cap Fund
Schedule of Portfolio Investments
July 31, 1999
(Amounts in thousands except share amounts)
- --------------------------------------------------------------------------------
Shares
or
Principal Security Market
Amount Description Value
- --------------------------------------------------------------------------------
Common Stocks -- 99.6%
- ---------------------------------------------------------
Banking -- 6.9%
---------------------------------------
225,000 First Tennessee National Corp. $ 8,241
---------------------------------------
130,000 Regions Financial Corp. 4,623
---------------------------------------
65,000 SouthTrust Corp. 2,389
--------------------------------------- ----------
Total 15,253
--------------------------------------- ----------
Business Services -- 6.3%
---------------------------------------
25,750 Boron, LePore & Associates, Inc. (b) 201
---------------------------------------
140,000 Cintas Corp. 8,978
---------------------------------------
80,000 Fastenal Co. (c) 4,730
--------------------------------------- ----------
Total 13,909
--------------------------------------- ----------
Computer Software &
Services -- 10.9%
---------------------------------------
121,000 BMC Software, Inc. (b) (c) 6,519
---------------------------------------
42,000 Citrix Systems, Inc. (b) (c) 2,187
---------------------------------------
292,000 Fiserv, Inc. (b) 8,705
---------------------------------------
175,000 Sterling Commerce, Inc. (b) (c) 4,594
---------------------------------------
78,000 Whittman-Hart, Inc. (b) 1,974
--------------------------------------- ----------
Total 23,979
--------------------------------------- ----------
Consumer Products -- 1.5%
---------------------------------------
77,000 Newell Rubbermaid, Inc. 3,330
--------------------------------------- ----------
Electronics -- 23.7%
---------------------------------------
54,000 ADC Telecommunications, Inc. (b) 2,403
---------------------------------------
235,000 Analog Devices, Inc. (b) 10,133
---------------------------------------
4,500 Applied Materials, Inc. (b) 324
---------------------------------------
410,000 Artesyn Technologies, Inc. (b) 10,147
---------------------------------------
142,000 Flextronics International Ltd. (b) 6,372
---------------------------------------
175,000 Microchip Technology, Inc. (b) (c) 8,772
---------------------------------------
58,000 QLogic Corp. (b) 9,679
---------------------------------------
67,000 Vitesse Semiconductor Corp. (b) 4,280
--------------------------------------- ----------
Total 52,110
--------------------------------------- ----------
Financial Services -- 5.6%
---------------------------------------
170,000 A.G. Edwards, Inc. 4,696
---------------------------------------
220,000 T. Rowe Price Associates, Inc. 7,700
--------------------------------------- ----------
Total 12,396
--------------------------------------- ----------
Healthcare -- 7.1%
---------------------------------------
90,000 Biomet, Inc. 3,274
---------------------------------------
365,000 STERIS Corp. (b) (c) 4,928
---------------------------------------
170,000 Sybron International Corp. (b) 5,067
---------------------------------------
55,000 Universal Health Services, Inc. (b) 2,341
--------------------------------------- ---------
Total 15,610
--------------------------------------- ---------
Insurance -- 5.1%
---------------------------------------
65,000 Cincinnati Financial Corp. 2,446
---------------------------------------
46,000 MGIC Investment Corp. 2,268
---------------------------------------
152,000 Mutual Risk Management, Ltd. (c) 4,531
---------------------------------------
60,000 Reinsurance Group of America, Inc. 2,108
--------------------------------------- ----------
Total 11,353
--------------------------------------- ----------
Manufacturing -- 4.0%
---------------------------------------
90,000 OM Group, Inc. 3,369
---------------------------------------
115,000 Zebra Technologies Corp.,
Class A (b) (c) 5,398
--------------------------------------- ----------
Total 8,767
--------------------------------------- ----------
Media/Publishing -- 2.7%
---------------------------------------
85,000 Omnicom Group, Inc. 6,024
--------------------------------------- ----------
Medical Distribution -- 7.0%
---------------------------------------
322,000 Bergen Brunswig Corp. 5,152
---------------------------------------
150,000 Cardinal Health, Inc. 10,238
--------------------------------------- ----------
Total 15,390
--------------------------------------- ----------
Printing & Publishing -- 0.9%
50,000 Consolidated Graphics, Inc. (b) 1,988
--------------------------------------- ----------
Retail -- 6.7%
---------------------------------------
390,000 Casey's General Stores, Inc. 5,996
---------------------------------------
225,000 Consolidated Stores Corp. (b) 3,516
---------------------------------------
100,000 Dollar General Corp. 2,644
---------------------------------------
280,000 Pier 1 Imports, Inc. 2,625
--------------------------------------- ----------
Total 14,781
--------------------------------------- ----------
Telecommunications -- 2.6%
---------------------------------------
136,500 CenturyTel, Inc. 5,835
--------------------------------------- ----------
Transportation -- 8.6%
---------------------------------------
435,000 Comair Holdings, Inc. 10,630
---------------------------------------
155,000 GATX Corp. 6,181
---------------------------------------
40,000 Kansas City Southern Industries, Inc. 2,211
--------------------------------------- ----------
Total 19,022
--------------------------------------- ----------
Total Common Stocks 219,747
--------------------------------------- ----------
Repurchase Agreement -- 0.2%
- ---------------------------------------------------------
$ 521 Warburg/Dillon, 5.06%, dated
7/30/99, due 8/2/99 (at amortized
cost), collateralized by U.S. Treasury
Notes, 5.50%, due 12/31/00 with a value
of $532. 521
--------------------------------------- ----------
Total Repurchase Agreement 521
--------------------------------------- ==========
Short Term Securities Purchased with
Collateral -- 12.8%
- ---------------------------------------------------------
Certificates of Deposit -- 1.2%
---------------------------------------
881 Bankers Trust Co., Floating Rate
Certificate of Deposit, 5.32%,
5/15/00 881
---------------------------------------
1,676 Chase Manhattan Corp., 4.90%,
8/11/99 1,676
--------------------------------------- ----------
Total 2,557
--------------------------------------- ----------
Commercial Paper -- 2.5%
---------------------------------------
1,355 AT&T Corp., 5.10%, 8/2/99 1,355
---------------------------------------
1,355 Associates First Capital Corp.,
5.10%, 8/2/99 1,355
---------------------------------------
1,355 Cargill, Inc., 5.12%, 8/2/99 1,355
---------------------------------------
1,355 Xerox Corp., 5.10%, 8/2/99 1,355
--------------------------------------- ----------
Total $ 5,420
--------------------------------------- ----------
-Continued-
40
<PAGE>
Fifth Third Mid Cap Fund
- --------------------------------------------------------------------------------
Shares
or
Principal Security Market
Amount Description Value
- --------------------------------------------------------------------------------
Corporate Bonds -- 3.0%
---------------------------------------
1,470 American Express Corp., Floating
Rate Note, 5.32%, 2/18/00 1,470
---------------------------------------
5,173 Goldman Sachs, Floating Rate Note,
5.32%, 7/24/00 5,174
--------------------------------------- ----------
Total 6,644
--------------------------------------- ----------
U.S. Government Agency -- 1.3%
---------------------------------------
2,855 Sallie Mae, Floating Rate Note,
4.94%, 11/18/99 2,855
--------------------------------------- ----------
Repurchase Agreement -- 4.9%
---------------------------------------
10,794 Goldman Sachs, Tri-Party, 5.04%,
dated 7/30/99, due 8/2/99 (at
amortized cost), collateralized by U.S.
Treasury Bond, 6.375%, due 8/15/27
with a value of $73,024 10,794
--------------------------------------- ----------
Total Short Term Securities
Purchased with Collateral $ 28,270
--------------------------------------- ----------
Total Investments (Cost $207,337) (a)
-- 112.6% 248,538
---------------------------------------
Liabilities in excess of other
assets -- (12.6)% (27,791)
--------------------------------------- ----------
TOTAL NET ASSETS -- 100.0% $220,747
--------------------------------------- ----------
(a) Cost for federal tax purposes differs from value by net unrealized
appreciation of $41,201, which is composed of $60,045 appreciation and
$18,844 depreciation at July 31, 1999.
(b) Non-income producing security.
(c) All or part of this security has been loaned at July 31, 1999.
(See Notes which are an integral part of the Financial Statements)
41
<PAGE>
Fifth Third International Equity Fund
Schedule of Portfolio Investments
July 31, 1999
(Amounts in thousands except share amounts)
Shares
or
Principal Security Market
Amount Description Value
- ------------ ------------------------------------------------------ ----------
Common Stocks -- 89.7%
- --------------------------------------------------------------------
Australia -- 1.7%
------------------------------------------------------
10,522 Amcor, Ltd. $ 57
------------------------------------------------------
15,158 AMP, Ltd. 172
------------------------------------------------------
6,010 Australian Gas & Light 39
------------------------------------------------------
17,735 Boral, Ltd. 30
------------------------------------------------------
3,535 Brambles Industries, Ltd. 94
------------------------------------------------------
25,777 Broken Hill Proprietary Co., Ltd. 285
------------------------------------------------------
10,050 Coca-Cola Amatil, Ltd. 40
------------------------------------------------------
17,668 Coles Myer, Ltd. 103
------------------------------------------------------
12,888 Coloniel, Ltd. 45
------------------------------------------------------
1,716 CSL, Ltd. 15
------------------------------------------------------
17,309 CSR, Ltd. 48
------------------------------------------------------
1,983 F.H. Faulding & Co., Ltd. 13
------------------------------------------------------
28,703 Fosters Brewing Group 84
------------------------------------------------------
21,443 General Property Trust Units 37
------------------------------------------------------
3,662 Gio Australia Holdings, Ltd. 9
------------------------------------------------------
19,299 Goodman Fielder Wattie, Ltd. 19
------------------------------------------------------
3,194 Howard Smith, Ltd. 25
------------------------------------------------------
4,679 ICI Australia, Ltd. 25
------------------------------------------------------
4,418 Leighton Holdings 17
------------------------------------------------------
8,546 Lend Lease Corp. 107
------------------------------------------------------
5,772 Mayne Nickless, Ltd. 20
------------------------------------------------------
21,372 National Australia Bank, Ltd. 327
------------------------------------------------------
30,324 News Corp., Ltd. 269
------------------------------------------------------
31,276 Normandy Mining, Ltd. 23
------------------------------------------------------
10,969 North, Ltd. 25
------------------------------------------------------
18,220 Pacific Dunlop, Ltd. 26
------------------------------------------------------
14,934 Pioneer International 40
------------------------------------------------------
6,396 QBE Insurance Group, Ltd. 24
------------------------------------------------------
2,938 Rio Tinto, Ltd. 53
------------------------------------------------------
9,754 Santos, Ltd. 32
------------------------------------------------------
6,738 Schroders Property Fund 11
------------------------------------------------------
10,150 Southcorp. Holdings, Ltd. 39
------------------------------------------------------
5,084 Stockland Trust Group 12
------------------------------------------------------
5,119 Suncorp-Metway, Ltd. 28
------------------------------------------------------
5,269 TABCORP Holdings, Ltd. 36
------------------------------------------------------
78,066 Telstra Corp., Ltd. 428
------------------------------------------------------
29,114 Western Mining, Ltd. 127
------------------------------------------------------
3,009 Westfarmers, Ltd. 27
------------------------------------------------------
21,162 Westfield Trust 45
------------------------------------------------------
29,357 Westpac Banking Corp., Ltd. 190
------------------------------------------------------
18,351 Woolworths, Ltd. 66
------------------------------------------------------ ----------
Total 3,112
------------------------------------------------------ ----------
Austria -- 0.4%
-------------------------------------------------------
716 Austria Tabakwerke AG 40
-------------------------------------------------------
797 Austrian Airlines 19
-------------------------------------------------------
3,644 Bank Austria 193
-------------------------------------------------------
153 BAU Holding AG 5
-------------------------------------------------------
359 Boehler-Uddeholm 17
-------------------------------------------------------
55 BWT AG 11
-------------------------------------------------------
230 EA-Generali AG 41
-------------------------------------------------------
690 Flughafen Wein AG 29
-------------------------------------------------------
120 Lenzing AG 7
-------------------------------------------------------
390 Mayr-Melnhof Karton AG 18
-------------------------------------------------------
97 Mikro Systemeintl AG 4
-------------------------------------------------------
298 Oesterreichische Brau-Beteiligun 14
-------------------------------------------------------
992 Oesterreichische Elektrizitaetsw (b) 153
-------------------------------------------------------
869 OMV AG 74
-------------------------------------------------------
455 Redex Herallith 12
-------------------------------------------------------
488 VA Technologies 48
-------------------------------------------------------
2,248 Weinerberger Baustoffindustrie 53
------------------------------------------------------- ----------
Total 738
------------------------------------------------------- ----------
France -- 7.8%
-------------------------------------------------------
718 Accor SA 171
-------------------------------------------------------
1,738 Air Liquid 283
-------------------------------------------------------
3,001 Alcatel Alsthom 462
-------------------------------------------------------
6,258 AXA SA 733
-------------------------------------------------------
3,905 Banque Nationale De Paris 322
-------------------------------------------------------
1,165 BIC 63
-------------------------------------------------------
530 Bouygues 147
-------------------------------------------------------
2,336 Canal Plus 164
-------------------------------------------------------
1,081 Cap Gemini Sogeti 184
-------------------------------------------------------
4,368 Carrefour SA 601
-------------------------------------------------------
1,450 Casino Guichard Perrachon 125
-------------------------------------------------------
3,346 Cie Paribas 380
-------------------------------------------------------
1,887 Dassault Systems SA 69
-------------------------------------------------------
1,887 De St. Gobain 342
-------------------------------------------------------
817 Eridania Beghin-Say SA 105
-------------------------------------------------------
255 Essilor International 83
-------------------------------------------------------
454 Fonciere Lyonnaise 66
-------------------------------------------------------
16,935 France Telecom SA 1,220
-------------------------------------------------------
1,192 Groupe Danone 303
-------------------------------------------------------
1,601 Klepierre 159
-------------------------------------------------------
1,246 L'OREAL 809
-------------------------------------------------------
2,114 La Farge-Coppee 229
-------------------------------------------------------
2,710 La Gardere Groupe Sca 107
-------------------------------------------------------
542 Le Grand SA 111
-------------------------------------------------------
1,670 Lvmh Moet Vuitton Hennessy Lous 475
-------------------------------------------------------
2,707 Lyonnaise Des Eaux SA 478
-------------------------------------------------------
4,074 Michelin Class B, Registered 165
-------------------------------------------------------
1,699 Pechiney SA, Series A 80
-------------------------------------------------------
1,345 Pernod Ricard 90
-------------------------------------------------------
995 Peugeot SA 171
-------------------------------------------------------
2,238 Pinaukt Printemps Redo 374
-------------------------------------------------------
358 Promodes 233
-------------------------------------------------------
7,100 Rhone Poulenc SA 347
-------------------------------------------------------
138 Sagem SA (b) 36
-------------------------------------------------------
8,208 Sanofi Synthelabo SA (b) 341
-------------------------------------------------------
3,281 Schneider SA 201
-------------------------------------------------------
1,264 Seita 73
-------------------------------------------------------
573 Silic 96
-------------------------------------------------------
-Continued-
42
<PAGE>
Fifth Third International Equity Fund
- --------------------------------------------------------------------------------
Shares
or
Principal Security Market
Amount Description Value
- ---------- ------------------------------------------------------ ---------
2,292 Simco-Union SA, Registered $ 202
-------------------------------------------------------
5,277 Societe Elf Aquitane SA 904
-------------------------------------------------------
1,827 Societe Generale 343
-------------------------------------------------------
649 Sodexho SA 107
-------------------------------------------------------
3,145 Thomson CSF 104
-------------------------------------------------------
4,912 Total SA, Class B 626
-------------------------------------------------------
1,670 Unibail Union Du Credit Bail 221
-------------------------------------------------------
5,460 Unisor Sacilor SA 82
-------------------------------------------------------
1,695 Valeo SA 128
-------------------------------------------------------
8,955 Vivendi 704
------------------------------------------------------- ---------
Total 13,819
------------------------------------------------------- ---------
Germany -- 7.1%
-------------------------------------------------------
883 Adidas 79
-------------------------------------------------------
917 Agiva AG 19
-------------------------------------------------------
4,553 Allianz AG 1,214
-------------------------------------------------------
350 Amb Aachener Muenchner
Beteiligungs 34
-------------------------------------------------------
11,467 BASF AG 519
-------------------------------------------------------
13,217 Bayer AG 567
-------------------------------------------------------
7,482 Bayerische Vereins AG 426
-------------------------------------------------------
1,200 Bilfinger & Berger 32
-------------------------------------------------------
17 Brau & Brunnen (b) 1
-------------------------------------------------------
433 CKAG Konzern AG 43
-------------------------------------------------------
2,200 Continental Gummiwerke AG 46
-------------------------------------------------------
18,599 DailmerChrysler AG 1,468
-------------------------------------------------------
1,333 Degussa-Huels AG (b) 56
-------------------------------------------------------
9,383 Deutsche Bank AG 595
-------------------------------------------------------
38,463 Deutsche Telekom 1,584
-------------------------------------------------------
9,067 Dresdner Bank AG 389
-------------------------------------------------------
357 Heidelberger Zement 36
-------------------------------------------------------
1,950 Hochtief AG 99
-------------------------------------------------------
217 Karstadt AG 104
-------------------------------------------------------
1,300 Kloeckner Humboldt Deutz AG (b) 9
-------------------------------------------------------
2,817 Kugelfischer Georg Schaefer 28
-------------------------------------------------------
167 Linde AG 116
-------------------------------------------------------
6,633 Lufthansa AG 122
-------------------------------------------------------
2,330 Man AG 77
-------------------------------------------------------
6,170 Mannesmann AG 938
-------------------------------------------------------
4,017 Merck KGaA 134
-------------------------------------------------------
4,363 Metro AG 239
-------------------------------------------------------
3,034 Muenchener Rueckversicher 585
-------------------------------------------------------
2,830 Preussag AG 164
-------------------------------------------------------
7,959 RWE AG 337
-------------------------------------------------------
1,025 SAP AG 341
-------------------------------------------------------
1,450 Schering AG 153
-------------------------------------------------------
10,417 Siemens AG 862
-------------------------------------------------------
17 STRABAG AG (b) 1
-------------------------------------------------------
7,670 Thyssen Krupp AG (b) 179
-------------------------------------------------------
9,117 VEBA AG 560
-------------------------------------------------------
500 Viag AG 257
-------------------------------------------------------
5,430 Volkswagen AG 324
------------------------------------------------------- ---------
Total 12,737
------------------------------------------------------- ---------
Great Britain -- 20.3%
-------------------------------------------------------
28,964 Abbey National PLC 503
-------------------------------------------------------
20,955 Albert Fisher Group PLC (b) 4
-------------------------------------------------------
1,453 Allders PLC 3
-------------------------------------------------------
30,808 Allied Zurich PLC 371
-------------------------------------------------------
4,250 Amec PLC 18
-------------------------------------------------------
12,584 Anglian Water PLC 152
-------------------------------------------------------
20,285 Arjo Wiggins Appleton PLC 80
-------------------------------------------------------
16,369 Associated British Foods PLC 109
-------------------------------------------------------
12,734 Associated British Ports Holdings PLC 61
-------------------------------------------------------
22,606 BAA PLC 231
-------------------------------------------------------
10,041 Baird (William) PLC 18
-------------------------------------------------------
29,096 Barclays PLC 859
-------------------------------------------------------
6,078 Barratt Development PLC 34
-------------------------------------------------------
16,640 Bass PLC 241
-------------------------------------------------------
727 Bba Group PLC 6
-------------------------------------------------------
15,317 Beazer Group PLC 46
-------------------------------------------------------
10,589 Berisford PLC 45
-------------------------------------------------------
4,129 Berkeley Group PLC 53
-------------------------------------------------------
18,567 BICC Group PLC, Registered 28
-------------------------------------------------------
37,523 Blue Circle Industries PLC 268
-------------------------------------------------------
11,937 BOC Group PLC 247
-------------------------------------------------------
20,348 Boots Co. PLC 249
-------------------------------------------------------
38,775 BPB Industries PLC 252
-------------------------------------------------------
39,517 British Aerospace PLC 261
-------------------------------------------------------
22,249 British Airways PLC 145
-------------------------------------------------------
30,808 British American Tobacco PLC 259
-------------------------------------------------------
80,363 British Gas 480
-------------------------------------------------------
61,496 British Land Co. PLC 508
-------------------------------------------------------
167,028 British Petroleum Co. PLC 3,259
-------------------------------------------------------
33,152 British Sky Broadcasting Group PLC 312
-------------------------------------------------------
55,883 British Steel PLC 149
-------------------------------------------------------
104,670 British Telecommunications PLC 1,816
-------------------------------------------------------
15,138 Burmah Castrol PLC 311
-------------------------------------------------------
37,775 Cable & Wireless PLC 460
-------------------------------------------------------
42,092 Cadbury Schweppes PLC 266
-------------------------------------------------------
15,470 Capital Shopping Centres 103
-------------------------------------------------------
48,116 Caradon PLC 133
-------------------------------------------------------
5,826 Carillion PLC (b) 52
-------------------------------------------------------
6,849 Carpetright PLC 49
-------------------------------------------------------
81,832 Centrica PLC 186
-------------------------------------------------------
2,595 Cobham PLC 39
-------------------------------------------------------
19,570 CGU PLC 272
-------------------------------------------------------
14,294 Compass Group PLC 149
-------------------------------------------------------
1,422 Delta Group PLC 3
-------------------------------------------------------
70,458 Diageo PLC 716
-------------------------------------------------------
2,638 Dialog Corp. PLC (b) 3
-------------------------------------------------------
3,516 Emap PLC 68
-------------------------------------------------------
38,109 EMI Group PLC 318
-------------------------------------------------------
16,028 Enterprise Oil 123
-------------------------------------------------------
15,528 Firstgroup PLC (b) 72
-------------------------------------------------------
12,673 Fki PLC 45
-------------------------------------------------------
56,760 General Electric Co. PLC 563
-------------------------------------------------------
30,611 GKN PLC 528
-------------------------------------------------------
60,853 Glaxo Holdings PLC 1,540
-------------------------------------------------------
36,930 Granada Group PLC 363
-------------------------------------------------------
70,130 Grant Chester Holdings 178
-------------------------------------------------------
36,370 Great Portland Estates 131
-------------------------------------------------------
20,953 Great Universal Stores PLC 216
-------------------------------------------------------
-Continued-
43
<PAGE>
Fifth Third International Equity Fund
- --------------------------------------------------------------------------------
Shares
or
Principal Security Market
Amount Description Value
- ---------- ------------------------------------------------------ ---------
47,181 Halifax PLC $ 522
-------------------------------------------------------
26,120 Hammerson PLC 202
-------------------------------------------------------
30,110 Hanson PLC 267
-------------------------------------------------------
8,170 House Of Fraser PLC 12
-------------------------------------------------------
141,207 HSBC Holding PLC 1,688
-------------------------------------------------------
5,440 Hyder PLC 56
-------------------------------------------------------
14,972 IMI PLC 64
-------------------------------------------------------
15,009 Imperial Chemical Industries PLC 174
-------------------------------------------------------
8,779 Jarvis PLC 40
-------------------------------------------------------
859 JBA Holdings PLC 4
-------------------------------------------------------
17,699 Johnson Matthey PLC 166
-------------------------------------------------------
30,736 Kingfisher PLC 344
-------------------------------------------------------
31,319 Hilton Group PLC 124
-------------------------------------------------------
3,792 Laird Group PLC 19
-------------------------------------------------------
57,100 Land Securities PLC 762
-------------------------------------------------------
63,439 LASMO PLC 173
-------------------------------------------------------
106,739 Legal & General Group PLC 257
-------------------------------------------------------
7,091 LEX Services PLC 63
-------------------------------------------------------
6,829 Limit PLC 16
-------------------------------------------------------
102,776 Lloyds TSB Group PLC 1,343
-------------------------------------------------------
12,857 London Clubs International PLC 33
-------------------------------------------------------
4,224 London Forfaiting Co, PLC 3
-------------------------------------------------------
16,622 Lonrho PLC 164
-------------------------------------------------------
1,126 LOW & Bonar PLC 4
-------------------------------------------------------
1,089 Manchester United PLC 4
-------------------------------------------------------
56,567 Marks & Spencer PLC 349
-------------------------------------------------------
142 Mayflower Corp. PLC 1
-------------------------------------------------------
1,306 McKechnie PLC 11
-------------------------------------------------------
3,342 Meggitt Holdings PLC 10
-------------------------------------------------------
48,311 MEPC PLC 397
-------------------------------------------------------
13,195 Mirror Group PLC 56
-------------------------------------------------------
32,358 Misys PLC 285
-------------------------------------------------------
26,271 National Power PLC 187
-------------------------------------------------------
9,712 Next PLC 107
-------------------------------------------------------
25,360 NFC PLC 90
-------------------------------------------------------
535 Ocean Group PLC 9
-------------------------------------------------------
17,121 Parity PLC 63
-------------------------------------------------------
15,321 Peninsular & Oriental Steam
Navigation Co. 247
-------------------------------------------------------
6,811 Pennon Group PLC 119
-------------------------------------------------------
101,969 Pilkington PLC 155
-------------------------------------------------------
1,188 Powerscreen International PLC (b) 4
-------------------------------------------------------
39,167 Prudential Corp. PLC 581
-------------------------------------------------------
6,266 Racal Electronics PLC 39
-------------------------------------------------------
9,806 Railtrack Group PLC 180
-------------------------------------------------------
35,232 Rank Group PLC 169
-------------------------------------------------------
23,750 Reed International PLC 180
-------------------------------------------------------
56,003 Rentokil Initial PLC 218
-------------------------------------------------------
23,956 Reuters Group 340
-------------------------------------------------------
14,874 Rexam PLC 75
-------------------------------------------------------
22,417 Rio Tinto PLC, Registered 424
-------------------------------------------------------
8,802 RMC Group PLC 153
-------------------------------------------------------
22,636 Rolls-Royce PLC 94
-------------------------------------------------------
27,112 Royal & Sun Alliance Insurance
Group PLC 224
-------------------------------------------------------
7,254 Rugby Group PLC 13
-------------------------------------------------------
21,762 Safeway PLC 82
-------------------------------------------------------
37,680 Sainsbury (J) PLC 228
-------------------------------------------------------
3,151 Schroder PLC 71
-------------------------------------------------------
3,196 Scotia Holdings PLC (b) 6
-------------------------------------------------------
10 Scottish & Newcastle PLC 0
-------------------------------------------------------
13,891 Scottish & Southern Energy PLC 134
-------------------------------------------------------
25,884 Scottish Power PLC 215
-------------------------------------------------------
119,018 Invensys PLC 644
-------------------------------------------------------
971 Skillsgroup PLC 4
-------------------------------------------------------
53,244 Slough Estates PLC 314
-------------------------------------------------------
104,777 SmithKline Beecham PLC 1,290
-------------------------------------------------------
3,348 Smiths Industries PLC 47
-------------------------------------------------------
27,374 Stagecoach Holdings PLC 97
-------------------------------------------------------
12,805 T.I. Group PLC 96
-------------------------------------------------------
5,826 Tarmac PLC 52
-------------------------------------------------------
15,043 Tate & Lyle PLC 103
-------------------------------------------------------
14,080 Taylor Woodrow PLC 40
-------------------------------------------------------
63,382 Tesco PLC 165
-------------------------------------------------------
10,626 Thames Water PLC 164
-------------------------------------------------------
948 Torotrak PLC (b) 3
-------------------------------------------------------
13,870 United Utilities Group PLC 179
-------------------------------------------------------
1,587 Vickers PLC 4
-------------------------------------------------------
97,328 Vodafone Group PLC 2,069
-------------------------------------------------------
1,114 Allday PLC 1
-------------------------------------------------------
666 Wickes PLC 4
-------------------------------------------------------
18,148 WPP Group PLC 161
-------------------------------------------------------
11,610 Yorkshire Water PLC 83
-------------------------------------------------------
16,633 Astrazeneca Group PLC 608
------------------------------------------------------- ---------
Total 36,102
------------------------------------------------------- ---------
Hong Kong -- 1.5%
-------------------------------------------------------
14,684 Bank of East Asia, Ltd. (b) 36
-------------------------------------------------------
47,000 Cathay Pacific Airways, Ltd. 67
-------------------------------------------------------
33,000 Cheung Kong Holdings, Ltd. 289
-------------------------------------------------------
35,000 CLP Holdings, Ltd. 158
-------------------------------------------------------
24,000 Hang Lung Development Co., Ltd. 28
-------------------------------------------------------
29,500 Hang Seng Bank, Ltd. 323
-------------------------------------------------------
74,700 Hong Kong & China Gas, Ltd. 102
-------------------------------------------------------
11,000 Hong Kong & Shanghai Hotel, Ltd. 8
-------------------------------------------------------
162,626 Cable & Wireless HKT, Ltd. 382
-------------------------------------------------------
26,000 Hopewell Holdings (b) 19
-------------------------------------------------------
54,000 Hutchison Whampoa, Ltd. 512
-------------------------------------------------------
16,528 Hysan Development, Ltd. 22
-------------------------------------------------------
13,000 Johnson Electronic Holdings 54
-------------------------------------------------------
33,210 New World Developments Co., Ltd. 88
-------------------------------------------------------
15 Regal Hotels International (b) 0
-------------------------------------------------------
16,000 Shangri-La Asia, Ltd. 19
-------------------------------------------------------
37,780 Sino Land Co. 20
-------------------------------------------------------
32,000 South China Morning Post, Ltd. 22
-------------------------------------------------------
33,000 Sun Hung Kai Properties, Ltd. 285
-------------------------------------------------------
24,000 Swire Pacific, Ltd., Class A 112
-------------------------------------------------------
6,000 Television Broadcasts, Ltd. 28
-------------------------------------------------------
34,600 Wharf Holdings, Ltd. 103
------------------------------------------------------- ---------
Total 2,677
------------------------------------------------------- ---------
Indonesia -- 0.0%
-------------------------------------------------------
19,000 Mulia Industrindo (b) 2
------------------------------------------------------- ---------
-Continued-
44
<PAGE>
Fifth Third International Equity Fund
- --------------------------------------------------------------------------------
Shares
or
Principal Security Market
Amount Description Value
- ---------- ------------------------------------------------------ ---------
Italy -- 2.4%
-------------------------------------------------------
16,042 Alitalia SpA $ 46
-------------------------------------------------------
1,716 Assicuratrice Industrial 18
-------------------------------------------------------
12,749 Assicurazioni Generali SpA 409
-------------------------------------------------------
18,091 Banc San Paolo Torino 230
-------------------------------------------------------
24,557 Banca Commerciale Italiana 152
-------------------------------------------------------
4,185 Banca Popolare Di Milano 30
-------------------------------------------------------
32,997 Banco Ambrosiano Veneto 134
-------------------------------------------------------
21,578 Benetton Group SpA 45
-------------------------------------------------------
1,111 Burgo (Cartiere) SpA 8
-------------------------------------------------------
54,298 Credito Italiano 231
-------------------------------------------------------
8,608 Edison SpA 74
-------------------------------------------------------
100,960 Ente Nazional Indrocarburi SpA 615
-------------------------------------------------------
52,335 Fiat SpA 184
-------------------------------------------------------
5,594 Impregilo SpA 4
-------------------------------------------------------
52,906 Istituto Nazionale Assicuraz 121
-------------------------------------------------------
1,909 Italcementi SpA 26
-------------------------------------------------------
2,822 Italcementi SpA RNC 13
-------------------------------------------------------
5,868 Italgas SpA 23
-------------------------------------------------------
15,414 Mediaset SpA 139
-------------------------------------------------------
8,160 Mediobanca Banca SpA 82
-------------------------------------------------------
18,194 Montedison SpA 29
-------------------------------------------------------
13,792 Montedison SpA RNC 16
-------------------------------------------------------
54,859 Olivetti Ing & Co. SpA (b) 125
-------------------------------------------------------
22,026 Parmalat Finanziaria SpA 29
-------------------------------------------------------
29,409 Pirelli SpA 76
-------------------------------------------------------
6,181 RAS SpA 58
-------------------------------------------------------
3 RAS SpA RNC 0
-------------------------------------------------------
1,492 Reno (Saffa) 4
-------------------------------------------------------
2,737 Rinascente 20
-------------------------------------------------------
2,317 Sirti SpA 11
-------------------------------------------------------
11,739 Snia BPD SpA 14
-------------------------------------------------------
1 Societa Assicuratrice Industriale SpA 0
-------------------------------------------------------
46,259 Telecom Italia SpA 458
-------------------------------------------------------
11,274 Telecom Italia SpA RNC 62
-------------------------------------------------------
81,600 TIM SpA 472
-------------------------------------------------------
18,562 TIM SpA RNC 61
-------------------------------------------------------
690,832 Unione Immobiliare SpA 310
------------------------------------------------------- ---------
Total 4,329
------------------------------------------------------- ---------
Japan -- 25.8%
-------------------------------------------------------
3,300 Acom Co., Ltd. 311
-------------------------------------------------------
3,000 Advantest 382
-------------------------------------------------------
32,400 Ajinomoto Co., Inc. 399
-------------------------------------------------------
36,600 Aoki Corp. (b) 24
-------------------------------------------------------
48,900 Asahi Bank, Ltd. 251
-------------------------------------------------------
16,000 Asahi Breweries, Ltd. 209
-------------------------------------------------------
63,000 Asahi Chemical Industry Co., Ltd. 316
-------------------------------------------------------
41,800 Asahi Glass Co., Ltd. 257
-------------------------------------------------------
107,000 Bank of Tokyo-Mitsubishi, Ltd. 1,632
-------------------------------------------------------
36,400 Bank of Yokohama, Ltd. 107
-------------------------------------------------------
24,000 Bridgestone Corp. 738
-------------------------------------------------------
21,400 Canon, Inc. 677
-------------------------------------------------------
12,800 Casio Computer Co., Ltd. 94
-------------------------------------------------------
13,400 Chiba Bank 53
-------------------------------------------------------
13,600 Chugai Pharmaceutical Co., Ltd. 165
-------------------------------------------------------
3,800 Credit Saison Co., Ltd. 79
-------------------------------------------------------
20,600 Dai Nippon Printing Co., Ltd. 351
-------------------------------------------------------
22,600 Daiei, Inc. 92
-------------------------------------------------------
600 Daikin Industries, Ltd. 7
-------------------------------------------------------
21,600 Daiwa House Industry Co., Ltd. 227
-------------------------------------------------------
49,000 Daiwa Securities, Ltd. 425
-------------------------------------------------------
142 East Japan Railway Co. 895
-------------------------------------------------------
13,800 Ebara Corp. 166
-------------------------------------------------------
4,800 Fanuc Co., Ltd. 283
-------------------------------------------------------
60,000 Fuji Bank 460
-------------------------------------------------------
13,000 Fuji Photo Film Co., Ltd. 500
-------------------------------------------------------
52,000 Fujitsu, Ltd. 1,559
-------------------------------------------------------
15,800 Furukawa Electric Co. 81
-------------------------------------------------------
8,000 Gunma Bank, Ltd. 56
-------------------------------------------------------
11,000 Hankyu Corp. 45
-------------------------------------------------------
21,000 Hazama Corp. (b) 17
-------------------------------------------------------
102,000 Hitachi, Ltd. 1,027
-------------------------------------------------------
22,000 Honda Motor Co., Ltd. 953
-------------------------------------------------------
59,000 Industrial Bank of Japan 479
-------------------------------------------------------
11,000 ITO-Yokado Co., Ltd. 748
-------------------------------------------------------
66,000 Japan Airlines 239
-------------------------------------------------------
51,000 Japan Energy Corp. 66
-------------------------------------------------------
8,600 Joyo Bank 38
-------------------------------------------------------
11,800 JUSCO, Ltd. 243
-------------------------------------------------------
41,400 Kajima Corp. 172
-------------------------------------------------------
27,200 Kansai Electric Power, Inc. 570
-------------------------------------------------------
14,000 Kao Corp. 389
-------------------------------------------------------
33,400 Kawasaki Steel Corp. 68
-------------------------------------------------------
33,000 Kinki Nippon Railway 172
-------------------------------------------------------
42,400 Kirin Brewery Co., Ltd. 524
-------------------------------------------------------
35,400 Komatsu, Ltd. 222
-------------------------------------------------------
61,000 Kubota Corp. 165
-------------------------------------------------------
66,400 Kumagai Gumi Co., Ltd. (b) 71
-------------------------------------------------------
5,700 Kyocera Corp. 396
-------------------------------------------------------
600 Kyowa Hakko Kogyo Co., Ltd. 4
-------------------------------------------------------
56,800 Marubenii Corp. 125
-------------------------------------------------------
5,000 Marui Co., Ltd. 77
-------------------------------------------------------
49,000 Matsushita Electric
Industrial Co., Ltd. 1,164
-------------------------------------------------------
65,000 Mitsubishi Chemical Corp. 211
-------------------------------------------------------
43,000 Mitsubishi Corp. 350
-------------------------------------------------------
71,800 Mitsubishi Electric Corp. 382
-------------------------------------------------------
18,000 Mitsubishi Estate Co., Ltd. 187
-------------------------------------------------------
93,000 Mitsubishi Heavy Industries, Ltd. 411
-------------------------------------------------------
40,200 Mitsubishi Material Corp. 88
-------------------------------------------------------
30,000 Mitsubishi Trust & Banking Co. 306
-------------------------------------------------------
39,800 Mitsui & Co. 283
-------------------------------------------------------
42,400 Mitsui Engineering &
Shipbuilding Co., Ltd. (b) 48
-------------------------------------------------------
13,400 Mitsui Fudosan 111
-------------------------------------------------------
30,200 Mitsui Trust & Bankings Co. 56
-------------------------------------------------------
22,600 Mitsukoshi, Ltd. (b) 112
-------------------------------------------------------
6,000 Murata Manufacturing Co., Ltd. 444
-------------------------------------------------------
13,800 Mycal Corp. 88
-------------------------------------------------------
37,200 NEC Corp. 583
-------------------------------------------------------
42,400 New Oji Paper Co. 254
-------------------------------------------------------
22,600 NGK Insulators, Ltd. 238
-------------------------------------------------------
7,600 Nippon Denso, Ltd. 170
-------------------------------------------------------
-Continued-
45
<PAGE>
Fifth Third International Equity Fund
- --------------------------------------------------------------------------------
Shares
or
Principal Security Market
Amount Description Value
- ---------- ------------------------------------------------------ ---------
16,600 Nippon Express Co., Ltd. $ 112
-------------------------------------------------------
600 Nippon Fire & Marine Insurance 2
-------------------------------------------------------
124,800 Nippon Kokan 111
-------------------------------------------------------
19,600 Nippon Light Metal Co. 28
-------------------------------------------------------
8,600 Nippon Meat Packers, Inc. 123
-------------------------------------------------------
61,800 Nippon Oil Co., Ltd. 274
-------------------------------------------------------
237,800 Nippon Steel Corp. 607
-------------------------------------------------------
300 Nippon Telegraph & Telephone Corp. 3,816
-------------------------------------------------------
61,000 Nippon Yusen Kabushiki Kaisha 213
-------------------------------------------------------
73,600 Nissan Motors Co., Ltd. (b) 437
-------------------------------------------------------
41,000 Nomura Securities Co., Ltd. 574
-------------------------------------------------------
23,400 Odakyu Electric Railway 83
-------------------------------------------------------
900 Orix Corp. 93
-------------------------------------------------------
84,200 Osaka Gas Co., Ltd. 304
-------------------------------------------------------
19,600 Penta-Ocean Construction Co., Ltd. 37
-------------------------------------------------------
6,000 Pioneer Electronic Corp. 115
-------------------------------------------------------
2,000 Rohm Co. 374
-------------------------------------------------------
81,000 Sakura Bank 337
-------------------------------------------------------
12,800 Sankyo Co., Ltd. 338
-------------------------------------------------------
57,000 Sanyo Electric Co. 262
-------------------------------------------------------
3,800 Secom Co., Ltd. 450
-------------------------------------------------------
4,200 Sega Enterprise, Ltd. 59
-------------------------------------------------------
21,600 Sekisui House, Ltd. 243
-------------------------------------------------------
35,200 Sharp Corp. 499
-------------------------------------------------------
5,000 Shimano, Inc. 134
-------------------------------------------------------
30,600 Shimizu Construction 136
-------------------------------------------------------
7,800 Shin-Etsu Chemical Co. 283
-------------------------------------------------------
9,800 Shiseido Co., Ltd. 135
-------------------------------------------------------
19,400 Shizuoka Bank 218
-------------------------------------------------------
41,400 Shon Denko KK 56
-------------------------------------------------------
1,600 SMC Corp. 197
-------------------------------------------------------
9,200 Sony Corp. 1,170
-------------------------------------------------------
52,000 Sumitomo Bank, Ltd. 702
-------------------------------------------------------
80,600 Sumitomo Chemical Co., Ltd. 409
-------------------------------------------------------
25,200 Sumitomo Corp. 189
-------------------------------------------------------
28,400 Sumitomo Electric Industries 357
-------------------------------------------------------
5,000 Sumitomo Forestry Co., Ltd. 40
-------------------------------------------------------
21,600 Sumitomo Metal & Mining 101
-------------------------------------------------------
77,600 Sumitomo Metal Industries (b) 97
-------------------------------------------------------
21,600 Sumitomo Osaka Cement Co. 40
-------------------------------------------------------
42,400 Taisei Construction 96
-------------------------------------------------------
12,800 Taisho Pharmaceutical Co. 496
-------------------------------------------------------
13,000 Taiyo Yuden Co., Ltd. 232
-------------------------------------------------------
24,400 Takeda Chemical Industries 1,322
-------------------------------------------------------
40,400 Teijin, Ltd. 163
-------------------------------------------------------
8,000 The 77 Bank, Ltd. 79
-------------------------------------------------------
27,600 Tobu Railway Co., Ltd. 83
-------------------------------------------------------
6,900 Tohoku Electric Power Co., Inc. 113
-------------------------------------------------------
90,800 Tokai Bank 502
-------------------------------------------------------
39,000 Tokio Marine Fire Insurance Co. 452
-------------------------------------------------------
35,200 Tokyo Electric Power 837
-------------------------------------------------------
2,000 Tokyo Electron, Ltd. 143
-------------------------------------------------------
40,600 Tokyo Gas, Ltd. 102
-------------------------------------------------------
24,400 Tokyu Corp. 64
-------------------------------------------------------
15,600 Toppan Printing Co., Ltd. 186
-------------------------------------------------------
57,100 Toray Industries, Inc. 291
-------------------------------------------------------
21,600 Toto, Ltd. 161
-------------------------------------------------------
32,400 Toyobo, Ltd. 51
-------------------------------------------------------
88,000 Toyota Motor Corp. 3,097
-------------------------------------------------------
41,400 Ube Industries, Inc. 87
-------------------------------------------------------
9,000 Yamanouchi Pharmaceutical Co., Ltd. 416
-------------------------------------------------------
20,000 Yokogawa Electric Corp. 120
------------------------------------------------------- ---------
Total 45,940
------------------------------------------------------- ---------
Netherlands -- 5.8%
-------------------------------------------------------
34,178 ABN Amro Holdings NV 768
-------------------------------------------------------
13,478 Aegon NV 1,040
-------------------------------------------------------
7,840 Akzo NV 335
-------------------------------------------------------
1,826 Buhrmann NV 37
-------------------------------------------------------
13,619 Elsevier NV 173
-------------------------------------------------------
663 Getronics NV 27
-------------------------------------------------------
1,061 Getronics NV 44
-------------------------------------------------------
2,120 Hagemeyer NV 59
-------------------------------------------------------
8,089 Heineken NV 438
-------------------------------------------------------
23,699 ING Groep NV 1,212
-------------------------------------------------------
1,849 KLM Royal Dutch Airlines NV 49
-------------------------------------------------------
13,845 Koninklijke Ahold NV 483
-------------------------------------------------------
28 Koninklijke Hoogovens NV 2
-------------------------------------------------------
10,643 Konninklijke KNP NV 486
-------------------------------------------------------
590 Nedlloyd Groep NV 17
-------------------------------------------------------
2,108 Oce Van Grinten 46
-------------------------------------------------------
7,714 Philips Electronics NV 788
-------------------------------------------------------
46,277 Royal Dutch Petroleum Co. 2,892
-------------------------------------------------------
11,308 TNT Post Group NV 273
-------------------------------------------------------
12,917 Unilever NV 915
-------------------------------------------------------
1,476 Vedior NV 25
-------------------------------------------------------
1,086 Verenigde Machinefabrieken
Stork NV 27
-------------------------------------------------------
6,416 Wolters Kluwer NV CVA 234
------------------------------------------------------- ---------
Total 10,370
------------------------------------------------------- ---------
Portugal -- 1.0%
-------------------------------------------------------
9,479 Banco Commercial 253
-------------------------------------------------------
5,800 Banco Espirito Santo 145
-------------------------------------------------------
5,066 Banco Portugues Investmento 106
-------------------------------------------------------
2,900 Brisa Autostradas 115
-------------------------------------------------------
900 Cie De Seguros Tranquilidad 23
-------------------------------------------------------
4,300 Cimpor Cimentos 74
-------------------------------------------------------
100 Corporacao Industrial Do Norte 3
-------------------------------------------------------
29,000 Electricidade De Portugal 516
-------------------------------------------------------
500 Inapa 4
-------------------------------------------------------
3,950 Jeronimo Martins (b) 127
-------------------------------------------------------
5,200 Portucel Industrial 33
-------------------------------------------------------
8,782 Portugal Telecom 389
-------------------------------------------------------
200 Sociedade De Construcoes Soares
Da Costa SA (b) 1
-------------------------------------------------------
900 Somague (SOC DE Empreitadas) 3
-------------------------------------------------------
2,200 Sonae 65
-------------------------------------------------------
800 Unicer 14
------------------------------------------------------- ---------
Total 1,871
------------------------------------------------------- ---------
Singapore -- 2.6%
-------------------------------------------------------
46,000 City Development, Ltd. 320
-------------------------------------------------------
5,350 Creative Technology, Ltd. 56
-------------------------------------------------------
-Continued-
46
<PAGE>
Fifth Third International Equity Fund
- --------------------------------------------------------------------------------
Shares
or
Principal Security Market
Amount Description Value
- ---------- ------------------------------------------------------ ---------
17,000 Cycle & Carriage, Ltd. $ 93
-------------------------------------------------------
90,250 DBS Land, Ltd. 188
-------------------------------------------------------
41,000 Development Bank of Singapore, Ltd. 533
-------------------------------------------------------
17,000 First Capital Corp., Ltd. 24
-------------------------------------------------------
18,000 Fraser & Neave, Ltd. 75
-------------------------------------------------------
51,000 Hotel & Properties 53
-------------------------------------------------------
49,000 Keppel Corp., Ltd. 166
-------------------------------------------------------
27,000 Natsteel, Ltd. 48
-------------------------------------------------------
37,000 Neptune Orient Lines, Ltd. (b) 47
-------------------------------------------------------
61,960 OCBC - Foreign 519
-------------------------------------------------------
85 Overseas Union Enterprises, Ltd. 0
-------------------------------------------------------
26,000 Parkway Holdings, Ltd. 59
-------------------------------------------------------
105,802 Sembcorp Industries, Ltd. 160
-------------------------------------------------------
54,000 Singapore International Airlines, Ltd. 507
-------------------------------------------------------
21,059 Singapore Press Holdings 373
-------------------------------------------------------
169,000 Singapore Technology
Engineering, Ltd. 210
-------------------------------------------------------
360,000 Singapore Telecommunications, Ltd. 613
-------------------------------------------------------
94,000 United Industries Corp., Ltd. 58
-------------------------------------------------------
42,000 United Overseas Bank, Ltd. 307
-------------------------------------------------------
66,000 United Overseas Land, Ltd. 62
-------------------------------------------------------
14,000 Venture Manufacturing
Singapore, Ltd. 116
------------------------------------------------------- ---------
Total 4,587
------------------------------------------------------- ---------
Spain -- 3.8%
-------------------------------------------------------
2,244 Acerinox SA 72
-------------------------------------------------------
7,923 Acesa Autopista 88
-------------------------------------------------------
1,633 ACS Actividades Cons y Serv 44
-------------------------------------------------------
2,712 Alba 68
-------------------------------------------------------
15,532 Argentaria Corporation 341
-------------------------------------------------------
2,258 Azucarera Ebro 34
-------------------------------------------------------
62,217 Banco Bilbao Vizcaya 781
-------------------------------------------------------
106,695 Banco Santander SA 1,059
-------------------------------------------------------
2,149 Corporacion Mapfre 39
-------------------------------------------------------
5,148 Dragados Y Construcciones SA 63
-------------------------------------------------------
45 Empresa Nacional de Celulosas SA 1
-------------------------------------------------------
29,415 Endesa SA 579
-------------------------------------------------------
2,258 Fomento De Construction 132
-------------------------------------------------------
13,275 Gas Natural SDG SA 288
-------------------------------------------------------
4,419 General De Aguas D'Barcelona 69
-------------------------------------------------------
26,819 Iberdrola SA 374
-------------------------------------------------------
7,561 Inmobiliaria Metro 170
-------------------------------------------------------
7,920 Prima Inmobiliaria (b) 72
-------------------------------------------------------
28,986 Repsol SA 596
-------------------------------------------------------
993 SOL Melia SA 40
-------------------------------------------------------
5,337 Tabacalera 104
-------------------------------------------------------
84,216 Telefonica De Espana 1,349
-------------------------------------------------------
6,524 Telepizza (b) 29
-------------------------------------------------------
8,849 Union Electrica Fenosa SA 119
-------------------------------------------------------
26,021 Vallehermoso SA 250
-------------------------------------------------------
772 Zardoya Otis 20
------------------------------------------------------- ---------
Total 6,781
------------------------------------------------------- ---------
Sweden -- 3.3%
-------------------------------------------------------
100 AGA AB, Series A 1
-------------------------------------------------------
5,000 AGA AB, Series B 71
-------------------------------------------------------
11,989 AstraZeneca PLC 438
-------------------------------------------------------
4,000 Atlas Copco AB, Series A 107
-------------------------------------------------------
2,100 Atlas Copco AB, Series B 55
-------------------------------------------------------
1 Boliden, Ltd. (b) 0
-------------------------------------------------------
8,090 Castellum International, Ltd. 73
-------------------------------------------------------
14,103 Diligentia AB 112
-------------------------------------------------------
8,400 Drott AB 82
-------------------------------------------------------
9,500 Electrolux AB, Series B 198
-------------------------------------------------------
45,100 Ericsson LM, Series B 1,472
-------------------------------------------------------
16,300 Foereningssparbanken 259
-------------------------------------------------------
25,300 Hennes & Mauritz, Series B 660
-------------------------------------------------------
2,900 Netcom, Series B (b) 101
-------------------------------------------------------
2,300 OM Gruppen AB 24
-------------------------------------------------------
6,100 Sandvik, Series A 151
-------------------------------------------------------
2,500 Sandvik, Series B 62
-------------------------------------------------------
12,100 Securitas AB, B Shares 179
-------------------------------------------------------
15,900 Skandia Forsakring 299
-------------------------------------------------------
18,500 Skandinaviska Enskilda Banken,
Class A 213
-------------------------------------------------------
3,900 Skanska AB, Series B 143
-------------------------------------------------------
2,700 SKF AB, Series B 59
-------------------------------------------------------
3,800 SSAB Swedish Steel 45
-------------------------------------------------------
6,800 Svenska Cellulosa AB, Series B 197
-------------------------------------------------------
20,100 Svenska Handelsbanken, Series A 266
-------------------------------------------------------
4,560 Tornet Fastighets AB 63
-------------------------------------------------------
4,500 Trelleborg AB, Series B 38
-------------------------------------------------------
4,500 Volvo AB, Series A 138
-------------------------------------------------------
9,500 Volvo AB, Series B 297
-------------------------------------------------------
1,800 WM-Data AB, Series B 68
------------------------------------------------------- ---------
Total 5,871
------------------------------------------------------- ---------
Switzerland -- 6.2%
-------------------------------------------------------
5,700 ABB Ltd. (b) 552
-------------------------------------------------------
380 Adecco SA, Registered 213
-------------------------------------------------------
125 Alusuisse-Lonza Holding, Registered 149
-------------------------------------------------------
5,600 Credit Suisse Group, Registered 1,058
-------------------------------------------------------
65 George Fischer, Registered 20
-------------------------------------------------------
150 Holderbank Financiere Glarus AG 180
-------------------------------------------------------
815 Nestle SA, Registered 1,600
-------------------------------------------------------
1,325 Novartis AG, Registered 1,911
-------------------------------------------------------
34 Roche Holdings AG 615
-------------------------------------------------------
143 Roche Holdings AG, Genuss 1,579
-------------------------------------------------------
335 Sairgroup 75
-------------------------------------------------------
115 SMH Swiss Corp. 90
-------------------------------------------------------
43 Societe Generale 50
-------------------------------------------------------
95 Sulzer AG, Registered (b) 56
-------------------------------------------------------
300 Swiss Reinsurance Co., Registered 575
-------------------------------------------------------
1,230 Swisscom AG 439
-------------------------------------------------------
4,202 UBS AG, Registered 1,279
-------------------------------------------------------
130 Valora Holding AG, Registered 31
-------------------------------------------------------
985 Zurich Allied AG 571
------------------------------------------------------- ---------
Total 11,043
------------------------------------------------------- ---------
Thailand -- 0.0%
-------------------------------------------------------
8,700 CMIC Finance &
Securities Co., Ltd. (b) 0
-------------------------------------------------------
13,300 Finance One PLC (b) 0
-------------------------------------------------------
14,500 General Finance &
Securities Co., Ltd. (b) 0
-------------------------------------------------------
-Continued-
47
<PAGE>
Fifth Third International Equity Fund
- --------------------------------------------------------------------------------
Shares
or
Principal Security Market
Amount Description Value
- ------------- ------------------------------------------------------ ---------
9,100 Univest Land Public Co., Ltd. (b) $ 0
------------------------------------------------------- ---------
Total Common Stocks (Cost $130,374) 159,979
------------------------------------------------------- ---------
Preferred Stock -- 0.7
- ---------------------------------------------------------------------
Australia -- 0.1%
-------------------------------------------------------
26,791 News Corp., Ltd. 216
------------------------------------------------------- ---------
Austria -- 0.0%
-------------------------------------------------------
2 BAU Holding AG 0
------------------------------------------------------- ---------
Germany -- 0.2%
-------------------------------------------------------
775 SAP AG 293
-------------------------------------------------------
1,750 Volkswagen AG 61
------------------------------------------------------- ---------
Total 354
------------------------------------------------------- ---------
Great Britain -- 0.4%
-------------------------------------------------------
60,525 Unilever (b) 583
------------------------------------------------------- ---------
Italy -- 0.0%
-------------------------------------------------------
18,150 Fiat SpA 31
------------------------------------------------------- ---------
Netherlands -- 0.0%
-------------------------------------------------------
14,467 Unilever NV (b) 77
-------------------------------------------------------
Total Preferred Stock (Cost $1,052) 1,261
------------------------------------------------------- ---------
Warrants and Rights -- 0.0%
- ---------------------------------------------------------------------
Great Britain -- 0.0%
-------------------------------------------------------
15,528 Firstgroup PLC 2
------------------------------------------------------- ---------
Hong Kong -- 0.0%
-------------------------------------------------------
5,750 Hong Kong & China Gas Ltd.,
Warrants (b) 0
------------------------------------------------------- ---------
Portugal -- 0.0%
-------------------------------------------------------
4,300 Cimpor Cimentos De Portugal,
Bonus Coupons (b) 45
------------------------------------------------------- ---------
Singapore -- 0.0%
-------------------------------------------------------
4,565 Neptune Orient Lines Rights (b) 0
------------------------------------------------------- ---------
Thailand -- 0.0%
-------------------------------------------------------
1,290 National Finance & Security
Warrants (b) 0
------------------------------------------------------- ---------
Total Warrants and Rights (Cost $43) 47
------------------------------------------------------- ---------
Convertible Securities -- 0.0%
- -------------------------------------------------------
Portugal -- 0.0%
-------------------------------------------------------
$ 960 Jeronimo Martins, 12/30/04 6
------------------------------------------------------- ---------
Total Convertible Securities (Cost $5) 6
------------------------------------------------------- ---------
Corporate Bonds -- 0.0%
-------------------------------------------------------
Australia -- 0.0%
-------------------------------------------------------
0 RGC, Ltd., 0.00%,
12/31/00 0
------------------------------------------------------- ---------
France -- 0.0%
-------------------------------------------------------
0 Casino Guichard, 4.50%, 7/12/01 0
-------------------------------------------------------
7 Sodexho SA, 6.00%, 6/7/04 $ 7
------------------------------------------------------- ---------
Total Corporate Bonds (Cost $27) 7
------------------------------------------------------- ---------
Repurchase Agreements -- 5.8%
- --------------------------------------------------------------------
United States -- 5.8%
------------------------------------------------------
10,400 Warburg/Dillon, 5.06%, dated
7/30/99, due 8/2/99 (at amortized
cost), collateralized by U.S. Treasury
Notes, 5.75%, due 9/30/99 with a value
of $10,609. 10,400
------------------------------------------------------ ----------
Total Repurchase Agreements
(Cost $10,400) 10,400
------------------------------------------------------ ----------
Total Investments (Cost $141,901) (a)
-- 96.2% 171,700
-----------------------------------------------------
Other assets in excess of
liabilities -- 3.8% 6,744
----------------------------------------------------- ----------
TOTAL NET ASSETS -- 100.0% $178,444
------------------------------------------------------ ----------
a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for financial
reporting purposes in excess of federal income tax purposes of $2,474 and by the
amount of market to market adjustments for passive foreign investment companies
$566. Cost for federal income tax purposes differs from value by net unrealized
appreciation (depreciation) of securities as follows:
Unrealized appreciation $33,057
Unrealized depreciation ($ 6,298)
----------
Net unrealized appreciation $26,759
----------
(b) Non-income producing security
The International Equity Fund's investment concentration, by industry, as of
July 31, 1999, was as follows:
Automotive 4.26%
Business & Financial Services 16.60%
Chemicals 2.85%
Electric 6.10%
Food 3.99%
Insurance 5.58%
Oil & Gas Producers 8.30%
Pharmaceuticals 4.43%
Real Estate 3.23%
Telecommunications 10.81%
Other 33.85%
Open futures contracts as of July 31, 1999: (Amounts in thousands except number
of contracts)
Number of Opening Market
Contracts Contract Type Position Value
7 Long DAX, 9/17/99 $ 965 $ 959
9 Long MIB Tel, 9/17/99 1,654 1,575
11 Short Hang Seng, 8/30/99 965 941
11 Long TOPIX, 9/9/99 1,171 1,400
At July 31, 1999, the International Equity Fund had outstanding forward foreign
currency exchange contracts on the following page (Amounts in Thousands except
unrealized appreciation (depreciation).
(See Notes which are an integral part of the Financial Statements)
48
<PAGE>
Fifth Third International Equity Fund
- --------------------------------------------------------------------------------
Contract Unrealized
Delivery Amount Contract Value Appreciation
Date (Local Currency) U.S. Dollar (Depreciation)
- --------------------------------------------------------------------------------
British Sterling Pounds
Long Contracts
8/12/99 673 $ 1,096 ($ 5,261)
10/12/99 898 1,412 43,142
10/12/99 4,491 7,121 154,349
10/12/99 2,245 3,547 89,525
10/12/99 1.347 2,125 57,345
Short Contracts
8/12/99 673 1,089 (1,193)
10/12/99 8,981 13,987 (562,046)
Euro
Long Contracts
9/10/99 660 684 25,210
9/10/99 1,589 1,657 50,287
10/12/99 2,619 2,741 79,375
10/12/99 13,092 13,882 217,040
10/12/99 6,547 6,942 112,523
10/12/99 3,928 4,156 76,545
Short Contracts
8/2/99 2,861 3,049 (13,583)
8/3/99 26 28 (219)
10/12/99 26,186 26,834 (1,365,033)
Hong Kong Dollar
Long Contracts
8/30/99 675 87 (13)
Short Contracts
8/3/99 7,843 1,010 247
Japanese Yen
Long Contracts
8/24/99 689,993 5,854 204,748
8/24/99 5,271 44 2,126
10/21/99 576,326 4,906 204,743
Short Contracts
8/24/99 210,029 1,710 (133,860)
9/16/99 373,703 3,229 (67,081)
10/21/99 576,326 4,930 (180,717)
Singapore Dollar
Short Contracts
8/2/99 454 270 (77)
8/3/99 133 79 (178)
8/4/99 25 15 44
Swedish Krone
Short Contracts
8/3/99 1,923 235 (194)
Swiss Franc
Long Contracts
8/3/99 355 239 (254)
(See Notes which are an integral part of the Financial Statements)
49
<PAGE>
Fifth Third Bond Fund For Income
Schedule of Portfolio Investments
July 31, 1999
(Amounts in thousands)
- --------------------------------------------------------------------------------
Principal Security Market
Amount Description Value
- ---------- --------------------------------------------- --------
Asset Backed Securities -- 1.4%
- --------------------------------------------------------
Financial -- 1.4%
---------------------------------------------
$ 3,352 GE Capital Management, 6.94%,
3/25/27 $ 3,352
--------------------------------------------- --------
Total Asset Backed Securities 3,352
--------------------------------------------- --------
Corporate Bonds -- 37.3%
- ---------------------------------------------------------
Financial -- 17.2%
---------------------------------------------
5,000 American General Finance Corp.,
5.75%, 11/1/03 4,799
---------------------------------------------
5,000 AT&T Capital Corp., 7.50%,
11/15/00 5,024
---------------------------------------------
5,000 Nationsbank Corp., 5.75%, 3/15/01 4,961
---------------------------------------------
8,000 Norwest Financial Corp., 6.38%,
7/16/02 7,952
---------------------------------------------
8,000 Reliastar Financial Corp., 7.13%,
3/1/03 8,078
---------------------------------------------
5,000 Shawmut National Corp., 7.20%,
4/15/03 5,084
---------------------------------------------
5,000 Southern National Corp., 7.05%,
5/23/03 5,029
--------------------------------------------- --------
Total 40,927
--------------------------------------------- --------
Industrial -- 7.7%
---------------------------------------------
5,000 First Data Corp., 6.38%, 12/15/07 4,813
---------------------------------------------
4,000 Service Corp. Intl., 6.38%, 10/1/00 3,970
---------------------------------------------
5,000 Supervalue, Medium Term Note,
6.64%, 6/9/06 4,798
---------------------------------------------
5,000 Tyco International, Ltd., 6.38%,
1/15/04 4,914
--------------------------------------------- --------
Total 18,495
--------------------------------------------- --------
Manufacturing -- 2.0%
---------------------------------------------
5,000 Kellwood Co., 7.88%, 7/15/09 4,880
--------------------------------------------- --------
Oil & Gas Producers &
Services -- 1.9%
---------------------------------------------
5,000 Atlantic Richfield Corp.,
5.90%, 4/15/09 4,639
--------------------------------------------- --------
Telecommunications -- 5.3%
---------------------------------------------
8,000 MCI Worldcom, Inc., 6.13%, 4/15/02 7,886
---------------------------------------------
5,000 Sprint Capital Corp., 5.88%, 5/1/04 4,786
--------------------------------------------- --------
Total 12,672
--------------------------------------------- --------
Utilities -- 3.2%
---------------------------------------------
7,000 Puget Sound Energy, Inc., 6.46%,
3/9/09 6,683
---------------------------------------------
1,000 Southern New England, 8.00%,
11/20/01 1,035
--------------------------------------------- --------
Total 7,718
--------------------------------------------- --------
Total Corporate Bonds 89,331
--------------------------------------------- --------
U.S. Government Securities -- 53.0%
- --------------------------------------------------------
Mortgage Backed Securities -- 12.5%
---------------------------------------------
955 Ginnie Mae, 10.50%, 7/15/14,
Pool #321016 1,040
---------------------------------------------
907 Ginnie Mae, 8.50%, 6/15/22,
Pool #220207 961
---------------------------------------------
29,651 Ginnie Mae, 6.50%, 8/20/28,
Pool #2630 28,002
--------------------------------------------- --------
Total 30,003
--------------------------------------------- --------
U.S. Government Agencies -- 17.1%
---------------------------------------------
7,000 Fannie Mae, 5.31%, 5/18/01 6,922
---------------------------------------------
8,000 Fannie Mae, 5.81%, 3/2/04
(Callable 3/2/01 @ 100) 7,747
---------------------------------------------
10,000 FFCB, 5.90%, 8/6/01
(Callable 8/6/99 @ 100) 9,932
---------------------------------------------
5,000 FHLB, 5.61%, 8/10/01 4,957
---------------------------------------------
4,000 FHLB, 5.13%, 9/15/03 3,809
---------------------------------------------
7,750 Freddie Mac, 5.75%, 7/15/03 7,562
--------------------------------------------- --------
Total 40,929
--------------------------------------------- --------
U.S. Treasury Notes -- 23.4%
---------------------------------------------
4,000 5.38%, 2/15/01 (b) 3,989
---------------------------------------------
11,500 6.13%, 12/31/01 11,600
---------------------------------------------
4,000 6.50%, 5/31/02 (b) 4,076
---------------------------------------------
7,000 5.75%, 4/30/03 6,972
---------------------------------------------
8,500 5.25%, 5/15/04 (b) 8,306
---------------------------------------------
11,000 5.88%, 11/15/05 (b) 10,911
---------------------------------------------
5,000 6.88%, 5/15/06 (b) 5,222
---------------------------------------------
4,750 5.50%, 5/15/09 (b) 4,606
--------------------------------------------- --------
Total 55,682
--------------------------------------------- --------
Total U.S. Government Securities 126,614
--------------------------------------------- --------
Repurchase Agreement -- 7.1%
- --------------------------------------------------------
17,066 Warburg/Dillon, 5.06%, dated
7/30/99, due 8/2/99 (at amortized
cost), collateralized by U.S. Treasury
Notes, 5.75%, due 9/30/99 with a value
of $17,411. 17,066
--------------------------------------------- --------
Total Repurchase Agreement 17,066
--------------------------------------------- --------
Short Term Securities Purchased with
Collateral -- 16.1%
- --------------------------------------------------------
Certificate of Deposit -- 0.9%
---------------------------------------------
1,912 Bankers Trust Co., Floating Rate
Certificate of Deposit, 5.32%,
5/15/00 1,912
---------------------------------------------
2,086 Chase Manhattan Corp., 4.90%, 8/11/99 2,086
--------------------------------------------- --------
Total 3,998
--------------------------------------------- --------
Commercial Paper -- 3.8%
---------------------------------------------
2,267 AT&T Corp., 5.10%, 8/2/99 2,267
---------------------------------------------
2,268 Associates First Capital Corp.,
5.10%, 8/2/99 2,268
---------------------------------------------
2,268 Cargill, Inc., 5.12%, 8/2/99 2,268
---------------------------------------------
2,268 Xerox Corp., 5.10%, 8/2/99 2,268
--------------------------------------------- --------
Total 9,071
--------------------------------------------- --------
Corporate Bond -- 0.4%
---------------------------------------------
926 American Express Corp., Floating
Rate Note, 5.32%, 2/18/00 926
--------------------------------------------- --------
--Continued--
50
<PAGE>
Fifth Third Bond Fund For Income
-------------------------------------------------------------------------
Principal Security Market
Amount Description Value
---------- -------------------------------------- --------
U.S. Government Agency -- 2.7%
--------------------------------------
6,475 Sallie Mae, Floating Rate Note,
4.94%, 11/18/99 $ 6,475
-------------------------------------- --------
Repurchase Agreement -- 7.5%
--------------------------------------
18,047 Goldman Sachs, Tri-Party, 5.04%,
dated 7/30/99, due 8/2/99 (at
amortized cost), collateralized by
U.S. Treasury Bond, 6.375%, due 8/15/27
with a value of $73,024 18,047
-------------------------------------- --------
Total Short Term Securities
Purchased with Collateral 38,517
-------------------------------------- --------
Total Investments (Cost $279,525)(a)
-- 114.9% 274,880
--------------------------------------
Liabilities in excess of other
assets -- (14.9)% (35,593)
-------------------------------------- --------
TOTAL NET ASSETS -- 100.0% $239,287
-------------------------------------- --------
a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for financial
reporting purposes in excess of federal income tax purposes of $100. Cost for
federal income tax purposes differs from value by net unrealized appreciation
(depreciation) of securities as follows:
Unrealized appreciation $ 357
Unrealized depreciation ($5,102)
---------
Net unrealized depreciation ($4,745)
---------
(b) All or part of this security has been loaned at July 31, 1999.
The following abbreviations are used in this portfolio:
FHLB -- Federal Home Loan Bank
FFCB -- Federal Farm Credit Bank
(See Notes which are an integral part of the Financial Statements)
51
<PAGE>
Fifth Third Quality Bond Fund
Schedule of Portfolio Investments
July 31, 1999
(Amounts in thousands)
- --------------------------------------------------------------------------
Principal Security Market
Amount Description Value
- ----------------- ---------------------------------------------- ---------
Corporate Bonds - 36.6%
- ----------------------------------------------------------------
Financial - 16.7%
----------------------------------------------
$5,000 Abitibi Consolidated Financial,
7.88%, 8/1/09 $ 4,933
----------------------------------------------
5,000 Bank One Corp., 6.88%, 8/1/06 4,921
----------------------------------------------
5,000 Bear Stearns Co., Inc., 6.45%, 8/1/02 4,909
----------------------------------------------
5,000 Goldman Sachs Group, 6.65%,
5/15/09 4,757
----------------------------------------------
5,000 Toyota Motor Credit Corp., 5.50%,
12/15/08 4,527
---------------------------------------------- ---------
Total 24,047
---------------------------------------------- ---------
Manufacturing - 3.4%
----------------------------------------------
5,000 Kellwood Co., 7.88%, 7/15/09 4,880
---------------------------------------------- ---------
Multimedia - 3.5%
----------------------------------------------
5,000 Viacom, Inc., 7.75%, 6/1/05 5,085
---------------------------------------------- ---------
Oil & Gas - 3.2%
----------------------------------------------
5,000 Atlantic Richfield, 5.90%, 4/15/09 (b) 4,639
---------------------------------------------- ---------
Telecommunications - 9.8%
----------------------------------------------
5,000 Lucent Technologies, 6.45%,
3/15/29 (b) 4,487
----------------------------------------------
5,000 Sprint Capital Corp., 5.88%, 5/1/04 4,786
----------------------------------------------
5,000 Teleglobe, Inc., 7.70%, 7/20/29 4,809
---------------------------------------------- ---------
Total 14,082
---------------------------------------------- ---------
Total Corporate Bonds 52,733
---------------------------------------------- ---------
U.S. Government Securities - 59.2%
- ----------------------------------------------------------------
Mortgage Backed Securities - 30.5%
----------------------------------------------
26,887 Fannie Mae, 6.50%, 4/1/14 26,267
----------------------------------------------
3 Freddie Mac, 9.50%, 10/1/02,
Pool #38-0009, CMO 3
----------------------------------------------
10 Freddie Mac, 8.00%, 8/1/08,
Pool #27-2525, CMO 10
----------------------------------------------
11,120 Ginnie Mae, 6.50%, 10/20/28 10,501
----------------------------------------------
7,931 Ginnie Mae, 6.00%, 2/15/29 7,308
---------------------------------------------- ---------
Total 44,089
---------------------------------------------- ---------
U.S. Government Agencies - 9.8%
----------------------------------------------
7,250 Fannie Mae, 5.74%, 5/17/02
(Callable 5/17/00 @ 100) 7,159
----------------------------------------------
2,000 Fannie Mae, 6.38%, 6/15/09 1,954
----------------------------------------------
5,000 Freddie Mac, 5.25%, 2/16/01
(Callable 2/16/00 @ 100) 4,948
---------------------------------------------- ---------
Total 14,061
---------------------------------------------- ---------
U.S. Treasury Bonds - 1.5%
----------------------------------------------
1,250 5.25%, 11/15/28 (b) 1,091
----------------------------------------------
1,250 5.25%, 2/15/29 (b) 1,104
---------------------------------------------- ---------
Total 2,195
---------------------------------------------- ---------
U.S. Treasury Notes - 17.4%
----------------------------------------------
9,250 5.38%, 2/15/01 (b) 9,224
----------------------------------------------
5,000 5.75%, 6/30/01 (b) 5,008
----------------------------------------------
5,000 5.75%, 11/30/02 (b) 4,988
----------------------------------------------
5,000 4.75%, 2/15/04 (b) 4,781
----------------------------------------------
1,000 6.88%, 5/15/06 (b) 1,044
---------------------------------------------- ---------
Total 25,045
---------------------------------------------- ---------
Total U.S. Government Securities 85,390
---------------------------------------------- ---------
Repurchase Agreement - 2.9%
- ----------------------------------------------------------------
4,205 Warburg/Dillion, 5.06%, dated
7/30/99, due 8/2/99 (at amortized
cost), collateralized by U.S. Treasury
Notes, 5.50%, due 12/31/00 with a value
of $4,293. 4,205
---------------------------------------------- ---------
Total Repurchase Agreement 4,205
---------------------------------------------- ---------
Short Term Securities Purchased with
Collateral - 23.2%
- ----------------------------------------------------------------
Certificates of Deposit - 1.7%
----------------------------------------------
540 Bankers Trust Co., Floating Rate
Certificate of Deposit, 5.32%, 5/15/00 540
----------------------------------------------
1,951 Chase Manhattan Corp., 4.90%, 8/11/99 1,951
---------------------------------------------- ---------
Total 2,491
---------------------------------------------- ---------
Commercial Paper - 5.6%
----------------------------------------------
2,026 AT&T Corp., 5.10%, 8/2/99 2,026
----------------------------------------------
2,025 Associates First Capital Corp.,
5.10%, 8/2/99 2,025
----------------------------------------------
2,025 Cargill, Inc., 5.12%, 8/2/99 2,025
----------------------------------------------
2,025 Xerox Corp., 5.10%, 8/2/99 2,025
---------------------------------------------- ---------
Total 8,101
---------------------------------------------- ---------
Corporate Bond - 1.0%
----------------------------------------------
1,483 American Express Co., Floating Rate
Note, 5.32%, 2/18/00 1,483
---------------------------------------------- ---------
U.S. Government Agency - 3.7%
----------------------------------------------
5,319 Sallie Mae, Floating Rate Note,
4.94%, 11/18/99 5,319
---------------------------------------------- ---------
Repurchase Agreement - 11.2%
----------------------------------------------
16,116 Goldman Sachs, Tri-Party, 5.04%,
dated 7/30/99, due 8/2/99 (at
amortized cost), collateralized by U.S.
Treasury Bond, 6.375%, due 8/15/27
with a value of $73,024 16,116
---------------------------------------------- ---------
Total Short Term Securities
Purchased with Collateral 33,510
---------------------------------------------- ---------
Total Investments (Cost $179,915) (a)
- 122.0% 175,838
---------------------------------------------- ---------
Liabilities in excess of other
assets - (22.0)% (31,664)
---------------------------------------------- ---------
TOTAL NET ASSETS - 100.0% $ 144,174
---------------------------------------------- ---------
a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for financial
reporting purposes in excess of federal income tax purposes of $70. Cost for
federal income tax purposes differs from value by net unrealized appreciation
(depreciation) of securities as follows:
Unrealized appreciation $ 2
Unrealized depreciation ($4,149)
---------
Net unrealized depreciation ($4,147)
---------
(b) All or part of this security has been loaned as of July 31, 1999.
The following abbreviation is used in this portfolio:
CMO -- Collateralized Mortgage Obligation
(See Notes which are an integral part of the Financial Statements)
52
<PAGE>
Fifth Third U.S. Government Securities Fund
Schedule of Portfolio Investments
July 31, 1999
(Amounts in thousands)
- --------------------------------------------------------------------------------
Principal Security Market
Amount Description Value
- --------------- ----------------------------------------- -----------
U.S. Government Securities - 93.2%
- -----------------------------------------
Mortgage Backed Securities - 16.8%
-----------------------------------------
$ 747 Fannie Mae, 6.00%, 6/1/01 $ 746
-----------------------------------------
3,684 Fannie Mae, 6.00%, 10/1/04 3,628
-----------------------------------------
1,837 Fannie Mae, 6.50%, 12/01/04 1,836
-----------------------------------------
1,889 Freddie Mac, 6.00%, 9/1/05 1,846
----------------------------------------- -----------
Total 8,056
-----------------------------------------
U.S. Government Agencies - 37.6%
-----------------------------------------
2,000 Fannie Mae, 5.78%, 2/12/03
(Callable 2/12/01 @ 100) 1,963
-----------------------------------------
4,000 Fannie Mae, 5.75%, 4/15/03 3,920
-----------------------------------------
2,000 Fannie Mae, 5.96%, 2/23/04
(Callable 2/23/00 @ 100) 1,941
-----------------------------------------
2,000 Fannie Mae, 6.29%, 5/9/05
(Callable 5/9/01 @ 100) 1,935
-----------------------------------------
2,000 FFCB, 5.90%, 8/6/01
(Callable 8/6/99 @ 100) 1,986
-----------------------------------------
2,000 FFCB, 5.10%, 11/24/03 1,904
-----------------------------------------
3,000 Freddie Mac, 5.50%, 8/23/02
(Callable 2/23/00 @ 100) 2,930
-----------------------------------------
1,500 Freddie Mac, 5.00%, 1/15/04 1,416
----------------------------------------- -----------
Total 17,995
----------------------------------------- -----------
U.S. Treasury Notes - 38.8%
-----------------------------------------
3,600 5.88%, 11/30/01 3,614
-----------------------------------------
5,000 6.25%, 6/30/02 (b) 5,064
-----------------------------------------
1,000 4.25%, 11/15/03 (b) 939
-----------------------------------------
1,000 4.75%, 2/15/04 (b) 956
-----------------------------------------
3,000 6.50%, 5/15/05 3,070
-----------------------------------------
2,500 5.88%, 11/15/05 (b) 2,480
-----------------------------------------
2,500 5.63%, 2/15/06 (b) 2,445
----------------------------------------- -----------
Total 18,568
----------------------------------------- -----------
Total U.S. Government Securities 44,619
----------------------------------------- -----------
Repurchase Agreement - 5.3%
- -----------------------------------------------------------
2,543 Warburg/Dillion, 5.06%, dated
7/30/99, due 8/2/99 (at amortized
cost), collateralized by U.S. Treasury
Notes, 5.50%, due 12/31/00 with a
value of $2,596 2,543
----------------------------------------- -----------
Total Repurchase Agreement 2,543
----------------------------------------- -----------
Short Term Securities Purchased with
Collateral - 25.9%
- -----------------------------------------------------------
Certificate of Deposit N 2.2%
-----------------------------------------
1,047 Chase Manhattan Corp., 4.90%,
8/11/99 1,047
----------------------------------------- -----------
Commercial Paper - 7.7%
- -----------------------------------------------------------
919 AT&T Corp., 5.10%, 8/2/99 919
-----------------------------------------
919 Associates First Capital Corp., 5.10%,
8/2/99 919
-----------------------------------------
919 Cargill, Inc., 5.12%, 8/2/99 919
-----------------------------------------
919 Xerox Corp., 5.10%, 8/2/99 919
----------------------------------------- -----------
Total 3,676
----------------------------------------- -----------
U.S. Government Agency - 0.7%
-----------------------------------------
357 Sallie Mae, Floating Rate Note,
4.94%, 11/18/99 357
----------------------------------------- -----------
Repurchase Agreement - 15.3%
-----------------------------------------
7,314 Goldman Sachs, Tri-Party, 5.04%,
dated 7/30/99, due 8/2/99 (at
amortized cost), collateralized by U.S.
Treasury Bond, 6.375%, due 8/15/27
with a value of $73,024 7,314
----------------------------------------- -----------
Total Short Term Securities
Purchased with Collateral 12,394
----------------------------------------- -----------
Total Investments (Cost $60,333) (a)
- 124.4% 59,556
----------------------------------------- -----------
Liabilities in excess of other
assets - (24.4)% (11,694)
----------------------------------------- -----------
TOTAL NET ASSETS - 100.0% $ 47,862
----------------------------------------- -----------
(a) Cost for federal tax purposes differs from value by net unrealized
depreciation of $777, which is composed of $107 appreciation and $884
depreciation at July 31, 1999.
(b) All or part of this security has been loaned at July 31, 1999.
The following abbreviation is used in this portfolio:
FFCB - Federal Farm Credit Bank
(See Notes which are an integral part of the Financial Statements)
53
<PAGE>
Fifth Third Municipal Bond Fund
Schedule of Portfolio Investments
July 31, 1999
(Amounts in thousands except share amounts)
- --------------------------------------------------------------------------------
Principal Security Market
Amount Description Value
- --------------------------------------------------------------------------------
Municipal Bonds -- 89.4%
- ------------------------------------------------------------
Alabama -- 1.5%
------------------------------------------
$ 2,000 Alabama State, Public School &
College Authority, Revenue, 4.25%,
11/1/18 (Callable 11/1/08 @ 101.50)
FSA $ 1,682
------------------------------------------ ----------
Arizona -- 2.8%
------------------------------------------
4,000 Maricopa County Community
College District, Series C, GO, 3.25%,
7/1/14 (Callable 7/1/08 @ 101) 3,194
------------------------------------------ ----------
California -- 2.9%
------------------------------------------
2,170 Los Angeles, Wastewater Systems
Revenue, Series C, 4.00%, 6/1/15
(Callable 6/1/08 @ 101) MBIA 1,847
------------------------------------------
1,505 Sanger, Unified School District, GO,
5.35%, 8/1/15, MBIA 1,543
------------------------------------------ ----------
Total 3,390
------------------------------------------ ----------
Florida -- 12.1%
------------------------------------------
2,455 Escambia County, Revenue, 4.60%,
1/1/07, AMBAC 2,444
------------------------------------------
2,500 Florida State Board of Education,
Series B, Revenue, 5.00%, 7/1/05,
FGIC 2,571
------------------------------------------
3,000 Florida State Board of Education,
Series D, GO, 5.25%, 6/1/10
(Callable 6/1/08 @ 101) 3,064
------------------------------------------
1,000 Orlando, Capital Improvement,
Revenue, 6.00%, 10/1/22(Prerefunded
10/1/01 @ 102) 1,059
------------------------------------------
2,000 Reedy Creek, Series A, GO, 5.25%,
6/1/09 (Callable 6/1/08 @ 100)
MBIA 2,055
------------------------------------------
2,500 Village Center Community
Development District, Series A,
Revenue, 5.50%, 11/1/12, MBIA 2,597
------------------------------------------ ----------
Total 13,790
------------------------------------------ ----------
Georgia -- 4.9%
------------------------------------------
2,000 Fulton County, Hospital Authority
Revenue, 6.38%, 9/1/22 (Prerefunded
9/1/02 @ 102) 2,158
------------------------------------------
3,445 Georgia State, Series C, GO, 5.00%,
7/1/09 3,499
------------------------------------------ ----------
Total 5,657
------------------------------------------ ----------
Illinois -- 5.9%
------------------------------------------
1,230 Cook County Community School
District #097 Oak Park, Series A,
GO, 5.50%, 12/1/12 (Callable 12/1/09 @ 100) 1,253
------------------------------------------
1,500 Du Page County Community High
School District #099, Downers Grove,
GO, 5.50%, 12/1/15 (Callable 12/1/09
@ 100) FSA 1,514
------------------------------------------
3,000 Illinois State Toll Highway Authority,
Series A, Revenue, 3.50%, 1/1/05
(Callable 1/1/03 @ 100) 2,841
------------------------------------------
1,055 Macon County & Decatur Illinois,
Certificate Participation, 6.50%,
1/1/05, FGIC 1,147
------------------------------------------ ----------
Total 6,755
------------------------------------------ ----------
Indiana -- 6.3%
------------------------------------------
1,625 Ball State University, Series I,
Revenue, 3.35%, 7/1/00, FGIC 1,621
------------------------------------------
1,275 Munster School Building Corp.,
Revenue, 5.70%, 7/15/10
(Prerefunded 1/15/05 @ 101) MBIA 1,358
------------------------------------------
2,000 South Bend Indiana Community
School Corp., Riley School Building
Corp., Refunding, Revenue, 5.25%,
7/1/12 (Callable 7/1/08 @ 101) 1,998
------------------------------------------
2,245 Tipton Community School Building
Corp., Revenue, 5.55%, 7/15/12, FSA 2,327
------------------------------------------ ----------
Total 7,304
------------------------------------------ ----------
Kansas -- 1.1%
------------------------------------------
1,250 Douglas County, Unified School
District, GO, 6.00%, 9/1/09
(Prerefunded 9/1/03 @ 100) 1,323
------------------------------------------ ----------
Kentucky -- 1.7%
------------------------------------------
$ 2,000 Carrollton & Henderson Public
Energy Authority, Series A, Revenue,
5.00%, 1/1/09, FSA 2,009
------------------------------------------ ----------
Maine -- 0.8%
------------------------------------------
1,000 Maine Municipal Bond Bank, Series
C, Revenue, 5.20%, 11/1/18 (Callable
11/1/09 @ 101) 976
------------------------------------------ ----------
Massachusetts -- 3.3%
------------------------------------------
4,000 State, Industrial Financial Agency,
Bradford College, Revenue,
5.25%, 11/1/18 - Callable 11/1/08 @ 102) 3,773
------------------------------------------ ----------
Michigan -- 1.4%
------------------------------------------
1,500 Michigan Municipal Bond Authority,
Revenue, 7.00%, 11/1/03, AMBAC 1,652
------------------------------------------ ----------
Missouri -- 1.7%
------------------------------------------
2,000 Kansas City, Streetlight Project,
Series B, GO, 5.00%, 2/1/13
(Callable 2/1/07 @ 101) 1,979
------------------------------------------ ----------
Nebraska -- 1.9%
------------------------------------------
2,000 Omaha, Public Power District, 5.90%,
2/1/06 2,149
------------------------------------------ ----------
Nevada -- 3.5%
------------------------------------------
4,000 Clark County, Flood Control, GO,
5.25%, 11/1/10 (Callable 11/1/08
@ 101) FGIC 4,073
------------------------------------------ ----------
New Jersey -- 2.6%
------------------------------------------
3,000 New Jersey State Transportation
Authority, Series A, Revenue,
5.13%, 6/15/15 (Callable 6/15/09 @ 100) 2,960
------------------------------------------ ----------
North Carolina -- 3.7%
------------------------------------------
2,750 Cumberland County, Finance Corp.
Public Building & Equipment Projects,
Revenue, 4.75%, 12/1/17 (Callable
12/1/08 @ 102), MBIA 2,513
------------------------------------------
2,000 North Carolina Medical Care
Community Hospital, Revenue, 4.75%,
12/1/28 (Callable 12/1/08 @ 101) 1,746
------------------------------------------ ----------
Total 4,259
------------------------------------------ ----------
-Continued-
54
<PAGE>
Fifth Third Municipal Bond Fund
- --------------------------------------------------------------------------------
Principal Security Market
Amount Description Value
- --------------------------------------------------------------------------------
Ohio -- 2.2%
------------------------------------------
$ 1,000 Columbus, Sewer Improvement
Bonds, GO, 6.50%, 9/15/01 $ 1,050
------------------------------------------
1,500 Ohio State Highway Capital
Improvements, Series B, GO, 5.00%, 5/1/07 1,535
------------------------------------------ ---------
Total 2,585
------------------------------------------ ---------
Oregon -- 0.9%
------------------------------------------
1,000 Yamhill County School District #029J,
GO, 6.10%, 6/1/11 (Prerefunded 6/1/04
@ 101), FSA 1,083
------------------------------------------ ---------
Pennsylvania -- 7.6%
------------------------------------------
1,000 Pennsylvania Convention Center
Authority, Revenue, Series A, 6.70%,
9/1/16, FGIC 1,154
------------------------------------------
2,550 Pittsburgh Water & Sewer Systems
Authority, Revenue, Series C,
5.05%, 9/1/25, FSA (Callable 3/1/08 @ 100) 2,378
------------------------------------------
1,000 State Higher Education Assistance
Agency Student Loan Revenue,
Series A, 4.63%, 12/1/00 1,009
------------------------------------------
2,000 State, Higher Education Facilities
Authority Health Services, Revenue,
5.10%, 1/1/05 1,995
------------------------------------------
2,000 Trinity Area School District, GO,
6.63%, 11/1/11 (Prerefunded
11/1/01 @ 100) FGIC 2,109
------------------------------------------ ---------
Total 8,645
------------------------------------------ ---------
South Carolina -- 3.9%
------------------------------------------
2,000 South Carolina State Capital
Improvement, GO, 4.50%, 4/1/05
(Callable 4/1/03 @ 102) 2,011
------------------------------------------
2,480 South Carolina Transportation
Infrastructure Bank Revenue, Series A,
5.00%, 10/1/07, MBIA 2,530
------------------------------------------ ---------
Total 4,541
------------------------------------------ ---------
South Dakota -- 2.2%
------------------------------------------
2,375 Heartland Consumers Power District
Electric Revenue, 6.00%, 1/1/09, FSA 2,562
------------------------------------------
Texas -- 2.4%
------------------------------------------
1,000 Tarrant County, Junior College
District, GO, 5.00%, 2/15/09 (Callable
2/15/07 @ 100) 1,006
------------------------------------------
2,000 Travis County, GO, 4.50%, 3/1/15
(Callable 3/1/08 @ 100) 1,806
------------------------------------------ ---------
Total 2,812
------------------------------------------ ---------
Utah -- 6.6%
------------------------------------------
1,000 Salt Lake City, Motor Fuel Excise Tax
Revenue, Series A, 5.40%, 2/1/03 1,034
------------------------------------------
1,530 St. George, Water Revenue, 5.60%,
6/1/10 (Callable 6/1/05 @ 101) 1,587
------------------------------------------
4,000 Timpanogos Special Service Sewer,
Revenue, adjustable 3.19%, 6/1/19 4,000
------------------------------------------
1,000 Utah State Building Ownership
Authority, Revenue, 5.50%,
5/15/09, FSA 1,043
------------------------------------------ ---------
Total 7,664
------------------------------------------ ---------
Washington -- 1.9%
------------------------------------------
2,000 King County, School District No. 411,
GO, 6.50%, 12/1/09 (Prerefunded
12/1/02 @ 100), AMBAC 2,144
------------------------------------------ ---------
West Virginia -- 2.7%
------------------------------------------
3,000 State, School Building Authority,
Revenue, 5.00%, 7/1/02 3,069
------------------------------------------ ---------
Wisconsin -- 0.9%
------------------------------------------
1,000 Milwaukee, GO, 5.30%, 6/15/07
(Prerefunded 6/15/02 @ 100) 1,029
------------------------------------------ ---------
Total Municipal Bonds 103,059
------------------------------------------ ---------
Short-Term Investments -- 9.6%
- ------------------------------------------------------------
STIFS/MONEY MARKETS -- 9.6%
------------------------------------------
5,438 Federated Tax Free Trust 5,438
------------------------------------------
5,654 SEI Institutional Tax Free Fund 5,655
------------------------------------------ ---------
Total Short-Term Investments 11,093
------------------------------------------ ---------
Total Investments (Cost $116,598) (a)
-- 99.0% 114,152
------------------------------------------
Other assets in excess of
liabilities -- 1.0% 1,157
------------------------------------------ ---------
TOTAL NET ASSETS -- 100.0% $115,309
------------------------------------------ ---------
(a) Cost for federal tax purposes differs from value by net unrealized
depreciation of $2,446, which is composed of $325 appreciation and $2,771
depreciation at July 31, 1999.
The following abbreviations are used in this portfolio:
AMBAC -- American Municipal Bond Assurance Corporation
GO -- General Obligation
FGIC -- Financial Guaranty Insurance Corporation
FSA -- Financial Security Assurance
MBIA -- Municipal Bond Investors Assurance Corporation
(See Notes which are an integral part of the Financial Statements)
55
<PAGE>
Fifth Third Ohio Tax Free Bond Fund
Schedule of Portfolio Investments
July 31, 1999
(Amounts in thousands)
- --------------------------------------------------------------------------------
Principal Security Market
Amount Description Value
- -------------- -------------------------------------------- -----------
Municipal Bonds -- 94.1%
- --------------------------------------------------------------
Guam -- 1.2%
--------------------------------------------
$ 2,500 Guam Government, Revenue, Series
A, 5.00%, 11/1/02, AMBAC $ 2,568
-------------------------------------------- ----------
Ohio -- 91.5%
1,000 Akron Bath Copley Ohio Childrens
Hospital Medical Center Akron, 7.25%,
11/15/12 (Prerefunded 11/15/00 @ 102) 1,063
--------------------------------------------
500 Akron, Various Purpose
Improvement, GO, 5.60%, 12/1/06
(Callable 12/1/04 @ 102), MBIA 531
--------------------------------------------
1,500 Beavercreek Ohio Local School
District, 6.60%, 12/1/15 1,737
--------------------------------------------
1,510 Bowling Green State University,
Higher Education, Revenue, 5.55%,
6/1/10 (Callable 6/1/06 @ 101), AMBAC 1,567
--------------------------------------------
5,000 Butler County, Transportation
Improvement District, Revenue,
5.00%, 4/1/02, FSA 5,102
--------------------------------------------
4,000 Butler County, Transportation,
Series A, Revenue, 5.13%, 4/1/17
(Callable 4/1/08 @ 102), FSA 3,902
--------------------------------------------
600 Cincinnati, GO, 7.00%, 10/1/00 622
--------------------------------------------
5,000 Cincinnati, GO, 4.38%, 12/1/01 5,042
--------------------------------------------
5,000 Cincinnati, GO, 4.38%, 12/1/02 5,041
--------------------------------------------
1,875 Cincinnati, GO, 4.20%, 12/1/10 1,763
--------------------------------------------
700 Clark County Ohio BANS, 3.65%,
6/22/00 701
--------------------------------------------
4,500 Cleveland City School District,
Revenue, 4.80%, 6/1/03, AMBAC 4,579
--------------------------------------------
5,000 Cleveland Ohio City School District,
5.00%, 6/1/02, AMBAC 5,111
--------------------------------------------
2,500 Cleveland Ohio Public Power System
Revenue, 5.25%, 11/15/14 (Callable
11/15/08 @ 101) 2,497
--------------------------------------------
5,000 Cleveland Ohio Waterworks Revenue
Refunding & Improvement-Series I,
5.00%, 1/1/28 (Callable 1/1/08 @ 101) 4,663
--------------------------------------------
500 Cleveland Waterworks, Series G,
Revenue, 5.40%, 1/1/06, MBIA 522
--------------------------------------------
2,500 Cleveland Waterworks, Series I,
Revenue, 5.25%, 1/1/11 (Callable
1/1/08 @ 101), FSA 2,530
--------------------------------------------
5,000 Cleveland, Public Power, Series 1,
Revenue, 5.25%, 11/15/16 (Callable
11/15/06 @ 102), MBIA 4,966
--------------------------------------------
2,000 Columbus Ohio Adjustable-Series 1,
3.05%, 12/1/17 2,000
--------------------------------------------
1,000 Columbus Ohio Refunding-Series B,
6.50%, 1/1/10 (Callable 1/1/02 @ 102) 1,068
--------------------------------------------
4,000 Columbus Ohio Water System
Revenue, 5.00%, 11/1/07 4,087
--------------------------------------------
1,000 Columbus Refunding Limited,
Series A, GO, 5.30%, 7/1/09 (Callable
7/1/03 @ 101.5) 1,023
--------------------------------------------
1,350 Columbus, Series 2, GO, 5.50%,
5/15/08 (Callable 5/15/04 @ 102) 1,406
--------------------------------------------
3,435 Cuyahoga County, GO, 5.60%,
5/15/13, MBIA-IBC 3,614
--------------------------------------------
3,000 Cuyahoga County Hospital, Series B,
Revenue, 5.00%, 1/1/08 3,006
--------------------------------------------
4,000 Cuyahoga Hospital Refunding,
Revenue, 5.63%, 1/15/13 (Callable
1/15/06 @ 102), MBIA 4,082
--------------------------------------------
3,000 Cuyahoga Jail Facilities, GO, 5.25%,
10/1/13, MBIA-IBC 3,054
--------------------------------------------
2,500 Dublin City School District, GO,
4.65%, 12/1/08 (Callable 12/1/07
@ 101), MBIA 2,471
--------------------------------------------
500 Euclid City School District, GO,
6.70%, 12/1/02, (Prerefunded
12/1/01 @ 102) 538
--------------------------------------------
1,000 Euclid City School District, GO,
5.20%, 12/1/10 (Callable 12/1/05
@ 102), AMBAC 1,015
--------------------------------------------
1,500 Euclid City School District, GO,
5.13%, 12/1/11 (Callable 12/1/05
@ 102), AMBAC 1,504
--------------------------------------------
1,000 Franklin County, GO, 6.80%, 12/1/02
(Prerefunded 12/1/00 @ 102) 1,058
--------------------------------------------
1,000 Franklin County Ohio Hospital
Revenue, 5.20%, 5/1/29 (Callable
5/1/09 @ 102) 937
--------------------------------------------
1,030 Franklin Refunding & Improvements,
Medical, Revenue, 6.50%, 5/1/07
(Callable 11/1/02 @ 102) 1,112
--------------------------------------------
1,455 Greater Cleveland Regional Transit
Authority Ohio, 5.38%, 12/1/11
(Callable 12/1/08 @ 101) 1,489
--------------------------------------------
4,250 Greater Cleveland Transportation,
Series R, GO, 4.75%, 12/1/15
(Callable 12/1/08 @ 101), FGIC 3,961
--------------------------------------------
2,510 Hamilton County Ohio, 5.00%,
12/1/24 (Callable 12/1/08 @ 101) 2,346
--------------------------------------------
3,670 Hamilton County Ohio Hospital
Facilities Revenue, 5.25%, 5/15/11
(Callable 11/15/08 @ 101) 3,713
--------------------------------------------
1,000 Hamilton County, Sewer System,
Series A, Revenue, 5.60%, 12/1/08
(Callable 12/1/05 @ 102), FGIC 1,055
--------------------------------------------
500 Hamilton Hospital Facilities,
Revenue, 7.00%, 1/1/09 (Callable
1/1/00 @ 100) 507
--------------------------------------------
1,000 Hamilton Hospital Refunding,
Revenue, 6.10%, 1/1/00 1,010
--------------------------------------------
1,000 Hamilton Hospital Refunding,
Revenue, 6.50%, 1/1/02, (Prerefunded
1/1/01 @ 100), FGIC 1,035
--------------------------------------------
3,750 Knox County Community Hospital,
Revenue, 5.00, 6/1/12, Asset GTY 3,666
--------------------------------------------
1,150 Knox County Hospital Facilities,
Revenue, 4.70%, 6/1/08, Asset GTY 1,119
--------------------------------------------
1,000 Lakota Local School District, GO,
6.40%, 12/1/01, AMBAC 1,051
--------------------------------------------
1,520 Loveland Ohio City School District
Refunding, Series A, 3.65%, 12/1/02 1,495
--------------------------------------------
-Continued-
56
<PAGE>
Fifth Third Ohio Tax Free Bond Fund
- --------------------------------------------------------------------------------
Principal Security Market
Amount Description Value
---------- -------------------------------------------- -----------
$ 1,750 Montgomery County, Solid Waste,
Revenue, 5.25%, 11/1/04, MBIA $ 1,821
--------------------------------------------
3,000 Montgomery County, Solid Waste,
Revenue, 5.40%, 11/1/08 (Callable
11/1/05 @ 102), MBIA 3,119
--------------------------------------------
1,000 Montgomery Sisters of Charity,
Revenue, 6.50%, 5/15/08 (Callable
5/15/01 @ 102), MBIA 1,058
--------------------------------------------
1,000 Ohio State Building Authority, 5.25%,
4/1/09 (Callable 4/1/08 @ 101) 1,026
--------------------------------------------
2,410 Ohio State Building Authority, 5.25%,
10/1/10 (Callable 4/1/09 @ 101) 2,459
--------------------------------------------
1,000 Ohio State Building Authority, 5.25%,
10/1/10 (Callable 4/1/09 @ 101) 1,020
--------------------------------------------
3,000 Ohio State Hi-way Capital
Improvement-Series C, 5.00%,
5/1/06 3,079
--------------------------------------------
2,250 Ohio State Public Facilities
Community Higher Education Capital
Facilities-Series II-A, 5.20%, 5/1/00 2,279
--------------------------------------------
250 Ohio State Public Facilities
Community Higher Education Capital
Facilities-Series II-A, 4.25%, 12/1/00 252
--------------------------------------------
1,500 Ohio State Public Facilities
Community Higher Education Capital
Facilities-Series II-B, 5.00%, 11/1/99 1,506
--------------------------------------------
4,250 Parma Ohio Hospital Improvement
Revenue, 5.25%, 11/1/13 (Callable
11/1/08 @ 101) 4,137
--------------------------------------------
590 Perrysburg Ohio Exempted Village
School District, 3.55%, 12/1/01 583
--------------------------------------------
1,000 State Building Facilities, Revenue,
6.20%, 10/1/07 (Callable 10/1/02
@ 102) 1,071
--------------------------------------------
1,000 State Higher Education, Revenue,
5.15%, 11/1/08 (Callable 11/1/06
@ 101) 1,022
--------------------------------------------
500 State Higher Education, Revenue,
6.70%, 5/1/01, (Callable 5/1/00
@ 102), MBIA 522
--------------------------------------------
5,000 State Highway, Series V, GO, 4.80%,
5/15/04 5,103
--------------------------------------------
5,000 State Infrastructure, GO, 5.10%,
8/1/09 (Callable 8/1/07 @ 101) 5,090
--------------------------------------------
5,000 State Public Facilities, Series II-A,
Revenue, 4.50%, 12/1/08
(Callable 12/1/07 @ 100) 4,877
--------------------------------------------
500 State Public Facilities, Series II-A,
Revenue, 5.50%, 12/1/03 (Callable
12/1/01 @ 102), FSA 522
--------------------------------------------
3,000 State Public Facilities, Series II-B,
Revenue, 5.75%, 11/1/04, AMBAC 3,188
--------------------------------------------
2,000 State Public Facilities, Series II-B,
Revenue, 5.75%, 11/1/05 (Callable
11/1/04 @ 100), AMBAC 2,116
--------------------------------------------
2,500 State Special Obligation, Education,
Series B, Revenue, 5.00%, 12/1/06,
FSA 2,562
--------------------------------------------
1,000 State Special Obligations, Education,
Series A, Revenue, 5.80%, 6/1/03,
AMBAC 1,054
--------------------------------------------
5,000 State Turnpike, Series A, Revenue,
5.75%, 2/15/14 (Callable
2/15/06 @ 102), MBIA 5,405
--------------------------------------------
5,000 State Water, Revenue, 5.13%, 12/1/08
(Callable 6/1/05 @ 101), MBIA 5,105
--------------------------------------------
4,000 State Water, Revenue, 5.30%,
12/1/10 (Callable 6/1/05 @ 101),
MBIA 4,079
--------------------------------------------
1,000 Sycamore Ohio Community School
District, 4.45%, 12/1/10 (Callable
12/1/09 @ 101) 949
--------------------------------------------
555 Tiffin, Sewer System, GO, 6.60%,
12/1/03, (Callable 12/1/01 @ 101) 592
--------------------------------------------
500 University of Cincinnati, CP, 6.30%,
12/1/00, MBIA 517
--------------------------------------------
3,000 University of Cincinnati, CP, 5.00%,
6/1/10, MBIA 3,015
--------------------------------------------
2,000 Wauseon Village School District, GO,
5.45%, 12/1/14 (Callable
6/1/07 @ 101), MBIA 2,039
--------------------------------------------
1,000 West Geauga Local School District,
GO, 5.55%, 11/1/05 (Callable 11/1/04
@ 102), AMBAC 1,058
--------------------------------------------
1,000 West Geauga Local School District,
GO, 5.65%, 11/1/06 (Callable 11/1/04
@ 102), AMBAC 1,065
--------------------------------------------
2,090 Westerville Ohio, GO, 5.25%, 12/1/11
(Callable 12/1/09 @ 101) 2,120
--------------------------------------------
5,000 Westerville Ohio, GO, 4.50%,
12/1/18 (Callable 12/1/09 @ 101) 4,387
--------------------------------------------
2,000 Westlake City School District,
Series A, GO, 5.05%, 12/1/04 2,051
-------------------------------------------- --------
Total 188,209
-------------------------------------------- --------
Puerto Rico -- 0.9%
--------------------------------------------
1,750 Puerto Rico Commonwealth
Highway, Series X, Revenue, 4.80%,
7/1/00 1,770
-------------------------------------------- --------
Virgin Islands (0.5%)
--------------------------------------------
1,000 Virgin Islands Water & Power
Authority Electric System Revenue,
5.13%, 7/1/04 1,026
-------------------------------------------- --------
Total Municipal Bonds 193,573
-------------------------------------------- --------
Short-Term Investments -- 4.7%
- --------------------------------------------------------------
STIFS/Money Markets - 4.7%
--------------------------------------------
8,722 Countrywide Ohio Tax Free
Money Fund 8,722
--------------------------------------------
1,005 Vanguard Ohio Tax Free Money
Market Fund 1,005
-------------------------------------------- --------
Total Short-Term Investments 9,727
-------------------------------------------- --------
Total Investments (Cost $203,162) (a)
-- 98.8% 203,300
-------------------------------------------- --------
Other assets in excess of
liabilities -- 1.2% 2,458
-------------------------------------------- --------
TOTAL NET ASSETS -- 100.0% $205,758
-------------------------------------------- --------
(a) Cost for federal tax purposes differs from value by net unrealized
appreciation of $138 which is composed of $2,926 appreciation and $2,788
depreciation at July 31, 1999.
The following abbreviations are used in this portfolio:
AMBAC -- American Municipal Bond Assurance Corporation
ASSET -- GTY -- Asset Guaranty
CP -- Certificate of Participation
FGIC -- Federal Guarantee Insurance Corporation
FSA -- Financial Security Assurance
GO -- General Obligation
IBC -- Insured Bond Certificate
MBIA -- Municipal Bond Insurance Association
(See Notes which are an integral part of the Financial Statements)
57
<PAGE>
Fifth Third Funds
Statements of Assets and Liabilities
July 31, 1999
(Amounts in thousands except per share amounts)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Quality Equity
Growth Income Cardinal Pinnacle Balanced Mid Cap
Fund Fund Fund Fund Fund Fund
-------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Assets:
- ------------------------------------------------------
Investments, at value (cost $436,869; $121,273;
$116,326; $96,675; $197,004 and $196,022,
respectively) $695,543 $171,890 $255,697 $116,099 $232,533 $237,223
- ------------------------------------------------------
Repurchase agreements at cost 36,751 5,619 3,825 11,536 21,117 11,315
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
Total Investments 732,294 177,509 259,522 127,635 253,650 248,538
- ------------------------------------------------------
Cash -- -- 5 -- 1 7
- ------------------------------------------------------
Interest and dividends receivable 439 308 134 76 1,084 45
- -------------------------------------------------------
Receivable for investments sold 4,851 1,168 -- -- 776 1,772
- -------------------------------------------------------
Receivable for Fund shares sold 942 110 172 894 208 64
- -------------------------------------------------------
Deferred organization costs -- 6 -- -- -- --
- -------------------------------------------------------
Other Assets 23 24 138 17 21 21
- ------------------------------------------------------- -------- -------- -------- -------- -------- --------
Total Assets 738,549 179,125 259,971 128,622 255,740 250,447
- ------------------------------------------------------- -------- -------- -------- -------- -------- --------
Liabilities:
- -------------------------------------------------------
Payable to Custodian 27 -- -- -- -- --
- -------------------------------------------------------
Payable for investments purchased 4,311 3,174 -- 4,383 1,367 1,129
- -------------------------------------------------------
Payable for Fund shares redeemed 157 7 898 139 143 91
- -------------------------------------------------------
Call options written, at value
(premiums received $96) -- -- 205 -- -- --
- -------------------------------------------------------
Payable for return of collateral received for
securities on loan 22,948 5,553 6,963 5,408 28,013 28,270
- -------------------------------------------------------
Accrued expenses and other payables:
- -------------------------------------------------------
Investment advisory fees 493 119 133 80 157 156
- -------------------------------------------------------
Administration fees 10 3 5 2 4 3
- -------------------------------------------------------
Distribution services -- Investment A shares 25 4 167 11 17 6
- -------------------------------------------------------
Distribution services -- Investment C shares 4 1 -- 6 3 1
- -------------------------------------------------------
Shareholder servicing -- Investment C shares 2 -- -- 1 1 --
- -------------------------------------------------------
Accounting fees 21 10 6 11 10 12
- -------------------------------------------------------
Custodian fees 3 2 1 4 3 4
- -------------------------------------------------------
Other 57 26 18 45 28 28
- ------------------------------------------------------- -------- -------- --------- -------- -------- --------
Total Liabilities 28,058 8,899 8,396 10,090 29,746 29,700
- ------------------------------------------------------- -------- -------- --------- -------- -------- --------
Net Assets:
- -------------------------------------------------------
Paid-in capital 414,003 113,262 67,327 97,310 170,752 163,635
- -------------------------------------------------------
Accumulated undistributed net investment
income (loss) -- 19 -- -- 541 --
- -------------------------------------------------------
Accumulated undistributed net realized
gain on investments 37,814 6,328 44,986 1,798 19,172 15,911
- -------------------------------------------------------
Net unrealized appreciation from investments 258,674 50,617 139,262 19,424 35,529 41,201
- ------------------------------------------------------- -------- -------- -------- -------- -------- --------
Total Net Assets $710,491 $170,226 $251,575 $118,532 $225,994 $220,747
- ------------------------------------------------------- ======== ======== ======== ======== ======== ========
Net Assets
- -------------------------------------------------------
Institutional shares $583,753 $148,525 $ 6,946 $ 61,943 $139,616 $191,987
- -------------------------------------------------------
Investment A shares 116,963 20,268 243,790 49,936 79,686 27,966
- -------------------------------------------------------
Investment C shares 9,775 1,433 839 6,653 6,692 794
- ------------------------------------------------------- -------- -------- -------- -------- -------- --------
Total $710,491 $170,226 $251,575 $118,532 $225,994 $220,747
- ------------------------------------------------------- ======== ======== ======== ======== ======== ========
Shares of Beneficial Interest
- -------------------------------------------------------
Institutional shares 24,983 9,776 356 1,661 8,653 12,095
- -------------------------------------------------------
Investment A shares 5,018 1,335 12,577 1,343 4,942 1,768
- -------------------------------------------------------
Investment C shares 425 94 44 180 415 51
- ------------------------------------------------------- -------- -------- -------- -------- -------- --------
Total 30,426 11,205 12,977 3,184 14,010 13,914
- ------------------------------------------------------- ======== ======== ======== ======== ======== ========
Net asset value
- -------------------------------------------------------
Institutional shares $ 23.37 $ 15.19 $ 19.51 $ 37.28 $ 16.13 $ 15.87
- ------------------------------------------------------- ======== ======== ======== ======== ======== ========
Investment A shares-redemption price per share $ 23.31 $ 15.18 $ 19.38 $ 37.20 $ 16.12 $ 15.82
- ------------------------------------------------------- ======== ======== ======== ======== ======== ========
Investment C shares-offering price per share* $ 22.97 $ 15.19 $ 19.22 $ 36.92 $ 16.13 $ 15.52
- ------------------------------------------------------- ======== ======== ======== ======== ======== ========
Maximum sales charge-Investment A Shares 4.50% 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) $ 24.41 $ 15.90 $ 20.29 $ 38.95 $ 16.88 $ 16.57
- ------------------------------------------------------- ======== ======== ======== ======== ======== ========
</TABLE>
*Redemption price per share varies by length of time shares are held.
(See Notes which are an integral part of the Financial Statements)
58
<PAGE>
Fifth Third Funds
Statements of Assets and Liabilities
July 31, 1999
(Amounts in thousands except per share amounts)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Bond U.S. Ohio
International Fund Quality Government Municipal Tax Free
Equity For Bond Securities Bond Bond
Fund Income Fund Fund Fund Fund
------------- --------- --------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Assets:
- ------------------------------------------------
Investments, at value (cost $131,501; $244,412;
$159,594; $50,476; $116,598; and $203,162,
respectively) $161,300 $239,767 $155,517 $ 49,699 $114,152 $203,300
- ------------------------------------------------
Repurchase agreements (at Cost) 10,400 35,113 20,321 9,857 -- --
- ------------------------------------------------ -------- -------- -------- -------- -------- --------
Total Investments 171,700 274,880 175,838 59,556 114,152 203,300
- ------------------------------------------------
Cash 3,522 293 4 23 -- 6
- ------------------------------------------------
Foreign currency (cost $486) 494 -- -- -- -- --
- ------------------------------------------------
Interest and dividends receivable 122 3,101 1,422 630 1,189 2,104
- ------------------------------------------------
Receivable for investments sold 4,007 -- -- -- -- --
- ------------------------------------------------
Receivable for Fund shares sold -- 108 655 100 21 434
- ------------------------------------------------
Reclaim receivables 309 -- -- -- -- --
- ------------------------------------------------
Variation margin receivable 22 -- -- -- -- --
- ------------------------------------------------
Deferred organization costs -- 3 -- -- 4 --
- ------------------------------------------------
Other assets 21 47 20 29 18 53
- ------------------------------------------------ -------- -------- -------- -------- -------- --------
Total Assets 180,197 278,432 177,939 60,338 115,384 205,897
- ------------------------------------------------ -------- -------- -------- -------- -------- --------
Liabilities:
- ------------------------------------------------
Payable for investments purchased 549 -- -- -- -- --
- ------------------------------------------------
Payable for Fund shares redeemed 3 401 159 39 -- --
- ------------------------------------------------
Payable for return of collateral received for
securities on loan -- 38,517 33,510 12,394 -- --
- ------------------------------------------------
Payable for variation margin in foreign
currency contracts 1,012 -- -- -- -- --
- ------------------------------------------------
Accrued expenses and other payables:
- ------------------------------------------------
Investment advisory fees 150 113 67 19 54 96
- ------------------------------------------------
Administration fees 3 5 1 -- 1 8
- ------------------------------------------------
Distribution services -- Investment A shares 1 9 2 1 -- 5
- ------------------------------------------------
Distribution services -- Investment C shares -- -- 1 -- -- 1
- ------------------------------------------------
Accounting and transfer agent fees 8 29 6 4 9 15
- ------------------------------------------------
Custodian fees 20 4 3 2 1 2
- ------------------------------------------------
Other 7 67 16 17 10 12
- ------------------------------------------------ -------- -------- -------- -------- -------- --------
Total Liabilities 1,753 39,145 33,765 12,476 75 139
- ------------------------------------------------ -------- -------- -------- -------- -------- --------
Net Assets:
- ------------------------------------------------
Paid-in capital 141,750 263,357 150,566 49,772 116,679 205,304
- ------------------------------------------------
Accumulated undistributed net investment
income (loss) (369) 51 18 -- 16 4
- ------------------------------------------------
Accumulated undistributed net realized
gain (loss) on investments, futures and
foreign currency transactions 8,236 (19,476) (2,333) (1,133) 1,060 312
- ------------------------------------------------
Net unrealized appreciation/(depreciation)
from investments 28,827 (4,645) (4,077) (777) (2,446) 138
- ------------------------------------------------ -------- -------- -------- -------- -------- --------
Total Net Assets $178,444 $239,287 $144,174 $ 47,862 $115,309 $205,758
- ------------------------------------------------ ======== ======== ======== ======== ======== ========
Net Assets
- ------------------------------------------------
Institutional shares $172,388 $198,212 $133,537 $ 42,239 $114,923 $182,679
- ------------------------------------------------
Investment A shares 5,821 40,508 9,826 5,192 386 22,008
- ------------------------------------------------
Investment C shares 235 567 811 431 -- 1,071
- ------------------------------------------------ -------- -------- -------- -------- -------- --------
Total $178,444 $239,287 $144,174 $ 47,862 $115,309 $205,758
- ------------------------------------------------ ======== ======== ======== ======== ======== ========
Shares of beneficial interest outstanding
- ------------------------------------------------
Institutional shares 13,464 16,946 14,028 4,383 9,763 18,229
- ------------------------------------------------
Investment A shares 453 3,464 1,032 538 33 2,196
- ------------------------------------------------
Investment C shares 18 48 85 45 -- 107
- ------------------------------------------------ -------- -------- -------- -------- -------- --------
Total 13,935 20,458 15,145 4,966 9,796 20,532
- -------------------------------------------------- ======== ======== ======== ======== ======== ========
Net asset value
- --------------------------------------------------
Institutional shares $ 12.80 $ 11.70 $ 9.52 $ 9.64 $ 11.77 $ 10.02
- -------------------------------------------------- ======== ======== ======== ======== ======== ========
Investment A shares--redemption price per share $ 12.84 $ 11.69 $ 9.52 $ 9.64 $ 11.79 $ 10.02
- -------------------------------------------------- ======== ======== ======== ======== ======== ========
Investment C shares--offering price per share* $ 12.76 $ 11.69 $ 9.51 $ 9.61 $ -- $ 10.01
- -------------------------------------------------- ======== ======== ======== ======== ======== ========
Maximum Sales Charge-Investment A Shares 4.50% 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) $ 13.45 $ 12.24 $ 9.97 $ 10.09 $ 12.35 $ 10.49
- -------------------------------------------------- ======== ======== ======== ======== ======== ========
</TABLE>
*Redemption price per share varies by length of time shares are held.
(See Notes which are an integral part of the Financial Statements)
59
<PAGE>
Fifth Third Funds
Statements of Operations
For the Year Ended July 31, 1999
(Amounts in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Quality Equity
Growth Income Cardinal Cardinal Pinnacle Balanced Mid Cap
Fund Fund Fund* Fund** Fund Fund Fund
------- ------ -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------
Interest income $ 693 $ 345 $ 52 $ 1,057 $ 210 $ 4,043 $ 185
- ---------------------------------
Dividend income 4,807 4,094 2,155 4,074 487 1,168 1,337
- ---------------------------------
Securities lending income 59 11 7 -- 4 61 76
- --------------------------------- --------- --------- --------- --------- --------- --------- ---------
Total Income 5,559 4,450 2,214 5,131 701 5,272 1,598
- --------------------------------- --------- --------- --------- --------- --------- --------- ---------
EXPENSES:
- ---------------------------------
Investment advisory fees 4,920 1,311 1,364 1,827 586 1,673 1,753
- ---------------------------------
Administrative fees 1,079 288 400 48 129 367 385
- ---------------------------------
Distribution services -
Investment A Shares 268 50 529 687 67 181 86
- ---------------------------------
Distribution services -
Investment C Shares*** 66 10 1 -- 31 43 7
- ---------------------------------
Shareholder servicing -
Investment C Shares*** 22 3 1 -- 10 14 2
- ---------------------------------
Fund accounting fees 178 51 20 35 55 43 63
- ---------------------------------
Custodian fees 29 13 7 36 15 14 19
- ---------------------------------
Trustees fees 4 1 -- 30 1 1 2
- ---------------------------------
Transfer agent fees 90 30 28 188 38 32 51
- ---------------------------------
Audit fees 15 11 4 -- 11 8 13
- ---------------------------------
Legal fees 24 5 2 -- 4 4 6
- ---------------------------------
Organization costs -- 1 -- 11 -- -- --
- ---------------------------------
Other fees 104 37 100 197 48 42 57
- --------------------------------- --------- --------- --------- --------- --------- --------- ---------
Total Expenses 6,799 1,811 2,456 3,059 995 2,422 2,444
- ---------------------------------
Less fees voluntarily
reduced (347) (88) (115) (278) (22) (116) (173)
- --------------------------------- --------- --------- --------- --------- --------- --------- ---------
Net Expenses 6,452 1,723 2,341 2,781 973 2,306 2,271
- --------------------------------- --------- --------- --------- --------- --------- --------- ---------
Net Investment Income
(Loss) (893) 2,727 (127) 2,350 (272) 2,966 (673)
- --------------------------------- --------- --------- --------- --------- --------- --------- ---------
Realized and Unrealized Gains
(Losses) from Investments:
- ---------------------------------
Net realized gains from
investments and option
contracts 37,816 8,042 50,121 22,115 1,798 19,297 16,933
- ---------------------------------
Net change in unrealized
appreciation from
investments and
option contracts 110,913 5,206 31,784 (13,872) 8,988 7,387 847
- --------------------------------- --------- --------- --------- --------- --------- --------- ---------
Net realized and unrealized
gains from investments 148,729 13,248 81,905 8,243 10,786 26,684 17,780
- --------------------------------- --------- --------- --------- --------- --------- --------- ---------
Change in net assets resulting
from operations $ 147,836 $ 15,975 $ 81,778 $ 10,593 $ 10,514 $ 29,650 $ 17,107
- --------------------------------- --------- --------- --------- --------- --------- --------- ---------
</TABLE>
* Reflects operations for the period from October 1, 1998 through July 31,
1999.
** Reflects operations for the year ended September 30, 1998
*** The Cardinal Fund Investment C Shares commenced operations on October 22,
1998.
(See Notes which are an integral part of the Financial Statements)
60
<PAGE>
Fifth Third Funds
Statements of Operations
For the Year Ended July 31, 1999
(Amounts in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Bond U.S. Ohio
International Fund Quality Govt. Municipal Tax Free
Equity For Bond Securities Bond Bond
Fund Income Fund Fund Fund Fund
------------- ------ ------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
- ------------------------------------------------------
Interest income $ -- $ 13,414 $ 6,968 $ 2,628 $ 5,456 $ 9,428
- ------------------------------------------------------
Dividend income 3,647 1,029 -- -- -- --
- ------------------------------------------------------
Securities lending income -- 112 85 5 -- --
- ------------------------------------------------------
Foreign tax withholding (337) -- -- -- -- --
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
Total Income 3,310 14,555 7,053 2,633 5,456 9,428
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
EXPENSES:
- ------------------------------------------------------
Investment advisory fees 1,634 1,369 680 261 661 1,122
- ------------------------------------------------------
Administrative fees 292 437 217 83 211 358
- ------------------------------------------------------
Distribution services - Investment A Shares 94 144 31 16 10 72
- ------------------------------------------------------
Distribution services - Investment C Shares 2 3 5 2 -- 7
- ------------------------------------------------------
Shareholder servicing - Investment C Shares 1 1 2 1 -- 2
- ------------------------------------------------------
Fund accounting fees 154 33 50 41 62 95
- ------------------------------------------------------
Custodian fees 210 8 15 7 9 15
- ------------------------------------------------------
Trustees' fees 2 1 1 1 1 2
- ------------------------------------------------------
Transfer agent fees 73 28 28 16 25 44
- ------------------------------------------------------
Audit fees 12 6 10 8 11 15
- ------------------------------------------------------
Legal fees 9 3 4 2 4 8
- ------------------------------------------------------
Organization costs 10 2 -- -- 1 --
- ------------------------------------------------------
Other fees 64 54 50 76 37 108
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
Total Expenses 2,557 2,089 1,093 514 1,032 1,848
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
Less fees voluntarily reduced (100) (100) (89) (136) (143) (126) (317)
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
Net Expenses 2,457 2,000 957 371 906 1,531
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
Net Investment Income 853 12,555 6,096 2,262 4,550 7,897
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
Realized and Unrealized Gains (Losses)
from Investments, Futures and
Foreign Currency Transactions:
- ------------------------------------------------------
Net realized gains (losses) from investments
and foreign currency transactions 13,990 (69) (455) 242 1,741 443
- ------------------------------------------------------
Net change in unrealized appreciation
from investments, futures and
assets and liabilities denominated in
foreign currencies (6,932) (7,273) (4,537) (1,188) (4,244) (4,924)
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
Net realized and unrealized gains from
investments, futures and foreign currency
transactions 7,058 (7,342) (4,992) (946) (2,503) (4,481)
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
Change in net assets resulting
from operations $ 7,911 $ 5,213 $ 1,104 $ 1,316 $ 2,047 $ 3,416
- ------------------------------------------------------ -------- -------- -------- -------- -------- --------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
61
<PAGE>
<TABLE>
<CAPTION>
Fifth Third Funds
Statements of Changes in Net Assets
(Amounts in thousands)
- -----------------------------------------------------------------------------------------------------------------------------------
Quality Growth Fund Equity Income Fund Cardinal Fund
----------------------------- ----------------------------- ----------------------------------------------
Year Ended Year Ended Year Ended Year Ended Period Ended Year Ended Year Ended
July 31, 1999 July 31, 1998 July 31, 1999 July 31, 1998 July 31, 1999* Sept. 30, 1998 Sept. 30, 1997
------------- ------------- ------------- ------------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (Decrease)
in Net Assets:
- ----------------------
Operations:
- ----------------------
Net investment
income (loss) $ (893) $ 434 $ 2,727 $ 2,352 $ (127) $ 2,350 $ 2,539
- ---------------------
Net realized gain
on investments
and options
contracts 37,816 59,514 8,042 15,497 50,121 22,115 19,070
- ---------------------
Net change in
unrealized
appreciation
(depreciation) on
investments and
options contracts 110,913 4,293 5,206 5,045 31,784 (13,872) 63,545
- --------------------- --------- --------- --------- --------- --------- --------- ---------
Change in net assets
resulting from
operations 147,836 64,241 15,975 22,894 81,778 10,593 85,154
- --------------------- --------- --------- --------- --------- --------- --------- ---------
Distributions to
Institutional
Shareholders:**
- ----------------------
From net investment
income -- -- (2,541) -- -- (271) (174)
- ----------------------
In excess of net
investment
income -- -- -- -- (14) (65) --
- ----------------------
From net realized
gains from investment
transactions (44,404) -- (13,249) -- (695) (3,387) --
- ----------------------
Distributions to
Investment A
Shareholders:
- ----------------------
From net investment
income -- (469) (233) (2,377) -- (2,265) (2,179)
- ----------------------
In excess of net
investment income -- (98) -- -- (91) (543) --
- ----------------------
From net realized
gains from investment
transactions (7,704) (33,264) (1,262) (12,092) (8,141) (31,312) (19,080)
- ----------------------
Distributions to
Investment C
Shareholders:***
- ----------------------
From net investment
income -- -- (13) (5) -- -- --
- ----------------------
In excess of net
investment income -- -- -- -- -- -- --
- ----------------------
From net realized
gains from investment
transactions (747) (424) (108) (29) (2) -- --
- ---------------------- --------- --------- --------- --------- --------- --------- ---------
Change in net assets
from shareholders
distributions (52,855) (34,255) (17,406) (14,503) (8,943) (37,843) (21,433)
- ---------------------- --------- --------- --------- --------- --------- --------- ---------
Fund Share (Principal)
Transactions:
- ----------------------
Proceeds from shares
issued 564,335 155,883 166,364 22,229 134,687 19,985 37,747
- ----------------------
Dividends reinvested 30,076 33,981 14,953 12,237 8,410 35,482 19,967
- ----------------------
Cost of shares
redeemed (507,326) (94,255) (161,032) (11,901) (222,802) (64,561) (55,688)
- ---------------------- --------- --------- --------- --------- --------- --------- ---------
Change in net assets
from capital
transactions 87,085 95,609 20,285 22,565 (79,705) (9,094) 2,026
- ---------------------- --------- --------- --------- --------- --------- --------- ---------
Change in net assets 182,066 125,595 18,854 30,956 (6,870) (36,344) 65,747
- ----------------------
Net Assets:
- ----------------------
Beginning of period 528,425 402,830 151,372 120,416 258,445 294,789 229,042
- ----------------------
End of period $ 710,491 $ 528,425 $ 170,226 $ 151,372 $ 251,575 $ 258,445 $ 294,789
- ---------------------- ========= ========= ========= ========= ========= ========= =========
</TABLE>
* Reflects operations for the period from October 1, 1998 through July 31,
1999.
** Institutional Shares commenced operations on August 11, 1998.
*** The Cardinal Fund Investment C Shares commenced operations on October 22,
1998.
(See Notes which are an integral part of the Financial Statements)
62
<PAGE>
<TABLE>
<CAPTION>
Fifth Third Funds
Statements of Changes in Net Assets
(Amounts in thousands)
- -----------------------------------------------------------------------------------------------------------------------------------
Pinnacle Fund Balanced Fund Mid Cap Fund
------------------------------ ----------------------------- ---------------------------------------------
Year Ended Period Ended Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, 1999 July 31, 1998* Dec. 31, 1997 July 31, 1999 July 31, 1998 July 31, 1999 July 31, 1998
------------- -------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (Decrease)
in Net Assets:
- -------------------
Operations:
- -------------------
Net investment
income (loss) $ (272) $ (20) $ 89 $ 2,966 $ 2,786 $ (673) $ (409)
- -------------------
Net realized gain
on investments
and options
contracts 1,798 1,357 3,106 19,297 13,331 16,933 29,257
- -------------------
Net change in
unrealized
appreciation
(depreciation)
on investments 8,988 2,924 2,647 7,387 (4,158) 847 (19,322)
- ------------------- --------- --------- --------- --------- --------- --------- ---------
Change in net
assets resulting
from operations 10,514 4,261 5,842 29,650 11,959 17,107 9,526
- ------------------- --------- --------- --------- --------- --------- --------- ---------
Distributions to
Institutional
Shareholders:**
- -------------------
From net
investment income -- -- -- (1,913) -- -- --
- -------------------
In excess of net
investment
income -- -- -- -- -- -- --
- -------------------
From net realized
gains from
investment
transactions (657) -- -- (6,302) -- (17,252) --
- -------------------
Distributions to
Investment A
Shareholders:
- -------------------
From net
investment income- -- -- (89) (825) (2,794) -- --
- -------------------
In excess of net
investment income -- -- -- -- -- -- --
- -------------------
From net realized
gains from
investment
transactions (267) (389) (3,104) (3,196) (11,108) (2,814) (19,805)
- -------------------
Distributions to
Investment C
Shareholders:
- -------------------
From net
investment income -- -- -- (48) (31) -- --
- -------------------
In excess of net
investment income -- -- -- -- -- -- --
- -------------------
From net realized
gains from
investment
transactions (43) -- -- (246) (183) (89) (77)
- ------------------- --------- --------- --------- --------- --------- --------- ---------
Change in net
assets from
shareholders
distributions (967) (389) (3,193) (12,530) (14,116) (20,155) (19,882)
- ------------------- --------- --------- --------- --------- --------- --------- ---------
Fund Share
(Principal)
Transactions:
- -------------------
Proceeds from
shares issued 114,051 12,728 2,808 191,974 67,400 219,274 50,599
- -------------------
Dividends
reinvested 857 372 3,056 12,293 13,909 20,149 19,882
- -------------------
Cost of shares
redeemed (42,394) (2,773) (2,732) (173,366) (25,100) (234,224) (27,993)
- ------------------- --------- --------- --------- --------- --------- --------- ---------
Change in net
assets from
capital
transactions 72,514 10,327 3,132 30,901 56,209 5,199 42,448
- ------------------- --------- --------- --------- --------- --------- --------- ---------
Change in net
assets 82,061 14,199 5,781 48,021 54,052 2,151 32,092
- -------------------
Net Assets:
- -------------------
Beginning of period 36,471 22,272 16,491 177,973 123,921 218,596 186,504
- -------------------
End of period $ 118,532 $ 36,471 $ 22,272 $ 225,994 $ 177,973 $ 220,747 $ 218,596
- ------------------- ========= ========= ========= ========= ========= ========= =========
</TABLE>
* Reflects period of operations from January 1, 1998 through July 31, 1998,
which includes operations of the Fifth Third Pinnacle Fund's predecessor
fund, the Pinnacle Fund.
** Institutional Shares commenced operations on August 11, 1998.
(See Notes which are an integral part of the Financial Statements)
63
<PAGE>
[CAPTION]
<TABLE>
Fifth Third Funds
Statements of Changes in Net Assets
(Amounts in thousands)
International Equity Fund Bond Fund For Income Quality Bond Fund
----------------------------- ------------------------------ ------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, 1999 July 31, 1998 July 31, 1999 July 31, 1998 July 31, 1999 July 31, 1998
Increase (Decrease) in Net Assets:
- ----------------------------------
Operations:
- ----------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 853 $ 967 $ 12,555 $ 9,445 $ 6,096 $ 5,451
- ----------------------------------
Net realized gains (loss) from
investments 13,990 1,150 (69) 2,652 (455) 2,228
- ----------------------------------
Net change in unrealized
appreciation (depreciation) on
investments (6,932) 15,840 (7,273) (1,872) (4,537) (1,186)
- ---------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Change in net assets resulting
from operations 7,911 17,957 5,213 10,225 1,104 6,493
- ---------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Distributions to Institutional
Shareholders*:
- ----------------------------------
From net investment income (1,864) -- (10,087) -- (5,647) --
- ----------------------------------
In excess of net investment
income (1,258) -- -- -- -- --
- ----------------------------------
From net realized gains from
investment transactions (848) -- (3,334) -- (1,135) --
- ----------------------------------
Distributions to Investment A
Shareholders:
- ----------------------------------
From net investment income (34) (7,328) (2,367) (9,598) (445) (5,493)
- ----------------------------------
In excess of net investment
income (39) -- -- -- -- --
- ----------------------------------
From net realized gains from
investment transactions (29) (3,565) (1,215) (688) (97) --
- ----------------------------------
Distributions to Investment C
Shareholders:
- ----------------------------------
From net investment income (2) (12) (19) (6) (30) (11)
- ----------------------------------
In excess of net investment
income (1) -- -- -- -- --
- ----------------------------------
From net realized gains from
investment transactions (1) (6) (7) (1) (6) --
- ---------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Change in net assets from
shareholder distributions (4,076) (10,911) (17,029) (10,293) (7,360) (5,504)
- ---------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Fund Share (Principal)
Transactions:
- ----------------------------------
Proceeds from shares issued 172,059 17,767 337,051 47,089 165,370 29,415
- ----------------------------------
Dividends reinvested 2,981 8,420 3,526 942 4,145 3,177
- ----------------------------------
Cost of shares redeemed (164,019) (21,583) (277,775) (16,776) (127,278) (17,380)
- ---------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Change in net assets from
capital transactions 11,021 4,604 62,802 31,255 42,237 15,212
- ---------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Change in net assets 14,856 11,650 50,986 31,187 35,981 16,201
- ----------------------------------
Net Assets:
- ----------------------------------
Beginning of period 163,588 151,938 188,301 157,114 108,193 91,992
- ---------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
End of period $ 178,444 $ 163,588 $ 239,287 $ 188,301 $ 144,174 $ 108,193
- ---------------------------------- ============ ============ ============ ============ ============ ============
</TABLE>
* Institutional Shares commenced operations on August 11, 1998, except for
the International Equity Fund which commenced operations on October 9,
1998.
(See Notes which are an integral part of the Financial Statements)
64
<PAGE>
<TABLE>
<CAPTION>
Fifth Third Funds
Statements of Changes in Net Assets
(Amounts in thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Government
Securities Fund Municipal Bond Fund Ohio Tax Free Bond Fund
----------------------------- ------------------------------ ------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, 1999 July 31, 1998 July 31, 1999 July 31, 1998 July 31, 1999 July 31, 1998
-------------- ------------- -------------- -------------- -------------- --------------
Increase (Decrease) in Net Assets:
- ----------------------------------
Operations:
- ----------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 2,262 $ 2,201 $ 4,550 $ 4,401 $ 7,897 $ 7,296
- ----------------------------------
Net realized gains from
investments 242 359 1,741 1,788 443 1,120
- ----------------------------------
Net change in unrealized
appreciation (depreciation)
on investments (1,188) (51) (4,244) (1,726) (4,924) (935)
- ---------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Change in net assets resulting
from operations 1,316 2,509 2,047 4,463 3,416 7,481
- ---------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Distributions to Institutional
Shareholders*:
- ----------------------------------
From net investment income (2,077) -- (4,546) -- (7,003) --
- ----------------------------------
In excess of net investment
income (7) -- (67) -- (21) --
- ----------------------------------
From net realized gains from
investment transactions -- -- (2,095) -- (1,047) --
- ----------------------------------
Distributions to Investment A
Shareholders:
- ----------------------------------
From net investment income (249) (2,189) (14) (4,470) (867) (7,297)
- ---------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
In excess of net investment
income (1) -- -- (12) (3) (2)
- ----------------------------------
From net realized gains from
investment transactions -- -- (4) (780) (144) (664)
- ----------------------------------
Distributions to Investment C
Shareholders:
- ----------------------------------
From net investment income (12) (3) -- -- (28) (14)
- ----------------------------------
In excess of net investment
income -- -- -- -- -- --
- ----------------------------------
From net realized gains from
investment transactions -- -- -- -- (4) (2)
- ---------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Change in net assets from
shareholder distributions (2,346) (2,192) (6,726) (5,262) (9,117) (7,979)
- ---------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Fund Share (Principal)
Transactions:
- ----------------------------------
Proceeds from shares issued 53,369 7,520 131,991 33,225 217,745 42,650
- ----------------------------------
Dividends reinvested 1,128 1,061 2,119 792 2,194 1,647
- ----------------------------------
Cost of shares redeemed (47,273) (9,720) (131,455) (17,512) (198,030) (23,297)
- ---------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Change in net assets from
capital transactions 7,224 (1,139) 2,655 16,505 21,909 21,000
- ---------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Change in net assets 6,194 (822) (2,024) 15,706 16,208 20,502
- ---------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Net Assets:
- ----------------------------------
Beginning of period 41,668 42,490 117,333 101,627 189,550 169,048
- ---------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
End of period $ 47,862 $ 41,668 $ 115,309 $ 117,333 $ 205,758 $ 189,550
- ---------------------------------- ============ ============ ============ ============ ============ ============
</TABLE>
* Institutional Shares commenced operations on August 11, 1998.
(See Notes which are an integral part of the Financial Statements)
65
<PAGE>
Fifth Third Funds
Statements of Cash Flows
For the Year Ended July 31, 1999
(Amounts in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S.
Bond Quality Government
Fund For Bond Securities
Income Fund Fund
-------- ------- ----------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Total investment income $ 14,555 $ 7,053 $ 2,633
Net expenses (2,000) (957) (371)
- -------------------------------------------------------------------- ----------- ----------- -----------
Net investment income (loss) 12,555 6,096 2,262
- -------------------------------------------------------------------- ----------- ----------- -----------
Adjustments to reconcile net investment income to net cash
provided (used) in operating activities:
Amortization of discount/premium 852 186 59
Change in interest and dividends receivable 366 25 (288)
Change in accrued expenses, other payables, prepaid
expenses, and other assets 358 (494) (62)
- -------------------------------------------------------------------- ----------- ----------- -----------
Total adjustments 1,576 (283) (291)
- -------------------------------------------------------------------- ----------- ----------- -----------
Net cash provided (used) by operating activities 14,131 5,813 1,971
- --------------------------------------------------------------------
Cash Flows from Investing Activities:
Proceeds from sales of investments 4,031,760 3,675,182 554,499
Purchases of investments (4,091,371) (3,715,869) (561,325)
Net purchases of short-term investments with cash received
as collateral from securities lending (38,365) (31,461) (12,394)
- -------------------------------------------------------------------- ----------- ----------- -----------
Net cash provided (used) by investing activities (97,976) (72,148) (19,220)
- --------------------------------------------------------------------
Cash Flows from Financing Activities:
Proceeds from shares issued 337,051 165,370 53,369
Cost of shares redeemed (277,775) (127,278) (47,273)
Distributions paid to shareholders (17,029) (7,360) (2,346)
Dividends reinvested 3,526 4,145 1,128
Net collateral received from securities lending 38,365 31,461 12,394
- -------------------------------------------------------------------- ----------- ----------- -----------
Net cash provided (used) by financing activities 84,138 66,338 17,272
- --------------------------------------------------------------------
Net increase (decrease) in cash 293 3 23
- --------------------------------------------------------------------
Cash at beginning of period -- 1 --
- -------------------------------------------------------------------- ----------- ----------- -----------
Cash at end of period $ 293 $ 4 $ 23
- -------------------------------------------------------------------- =========== =========== ===========
(See Notes which are an integral part of the Financial Statements)
</TABLE>
66
<PAGE>
Fifth Third Funds
Statements of Cash Flows
For the Year Ended July 31, 1999
(Amounts in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Quality Equity
Growth Income Cardinal Cardinal
Fund Fund Fund* Fund**
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Cash Flows from Operating Activities:
Total investment income $ 5,559 $ 4,450 $ 2,214 $ 5,131
Net expenses (6,452) (1,723) (2,341) (2,781)
- ---------------------------------------------------------------- ----------- ----------- ----------- -----------
Net investment income (loss) (893) 2,727 (127) 2,350
- ---------------------------------------------------------------- ----------- ----------- ----------- -----------
Adjustments to reconcile net investment income to net cash
provided (used) in operating activities:
Amortization of discount/premium -- -- -- (28)
Change in interest and dividends receivable (86) 61 252 96
Change in accrued expenses, other payables, prepaid
expenses, and other assets (535) 33 436 (124)
- ---------------------------------------------------------------- ----------- ----------- ----------- -----------
Total adjustments (621) 94 688 (56)
- ---------------------------------------------------------------- ----------- ----------- ----------- -----------
Net cash provided (used) by operating activities (1,514) 2,821 561 2,294
Cash Flows from Investing Activities:
Proceeds from sales of investments 3,705,173 1,833,070 392,143 4,612,313
Purchases of investments (3,737,916) (1,838,771) (304,052) (4,567,937)
Net purchases of short-term investments with cash received
as collateral from securities lending 93,733 21,036 (6,963) --
- ---------------------------------------------------------------- ----------- ----------- ----------- -----------
Net cash provided (used) by investing activities 60,990 15,335 81,128 44,376
Cash Flows from Financing Activities:
Proceeds from shares issued 564,335 166,364 134,687 19,933
Cost of shares redeemed (507,326) (161,032) (222,802) (64,240)
Distributions paid to shareholders (52,855) (17,406) (8,943) (37,843)
Dividends reinvested 30,076 14,953 8,410 35,481
Net collateral received from securities lending (93,733) (21,036) 6,963 --
- ---------------------------------------------------------------- ----------- ----------- ----------- -----------
Net cash provided (used) by financing activities (59,503) (18,157) (81,685) (46,669)
Net increase (decrease) in cash (27) (1) 4 1
Cash at beginning of period -- 1 1 --
- ---------------------------------------------------------------- ----------- ----------- ----------- -----------
Cash at end of period $ (27) $ -- $ 5 $ 1
- ---------------------------------------------------------------- =========== ============ =========== ===========
**Reflects operations for the period from October 1, 1998 through July 31, 1999.
**Reflects operations for the year ended September 30, 1998.
(See Notes which are an integral part of the Financial Statements)
</TABLE>
67
<PAGE>
Fifth Third Funds
Statements of Cash Flows
For the Year Ended July 31, 1999
(Amounts in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Pinnacle Balanced Mid Cap
Fund Fund Fund
-------- -------- --------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Total investment income $ 701 $ 5,272 $ 1,598
Net expenses (973) (2,306) (2,271)
- ------------------------------------------------------------------ ----------- ----------- -----------
Net investment income (loss) (272) 2,966 (673)
- ------------------------------------------------------------------ ----------- ----------- -----------
Adjustments to reconcile net investment income to net cash
provided (used) in operating activities:
Amortization of discount/premium -- 132 --
Change in interest and dividends receivable (45) (170) 5
Change in accrued expenses, other payables, prepaid
expenses, and other assets (370) 51 100
- ------------------------------------------------------------------ ----------- ----------- -----------
Total adjustments (415) 13 105
- ------------------------------------------------------------------ ----------- ----------- -----------
Net cash provided (used) by operating activities (687) 2,979 (568)
- ------------------------------------------------------------------
Cash Flows from Investing Activities:
Proceeds from sales of investments 1,142,301 2,589,045 1,073,363
Purchases of investments (1,213,161) (2,610,395) (1,057,833)
Net purchases of short-term investments with cash received
as collateral from securities lending 127 (4,039) 35,389
- ------------------------------------------------------------------ ----------- ----------- -----------
Net cash provided (used) by investing activities (70,733) (25,389) 50,919
- ------------------------------------------------------------------
Cash Flows from Financing Activities:
Proceeds from shares issued 114,051 191,974 219,274
Cost of shares redeemed (42,394) (173,366) (234,224)
Distributions paid to shareholders (967) (12,530) (20,155)
Dividends reinvested 857 12,293 20,149
Net collateral received from securities lending (127) 4,039 (35,389)
- ------------------------------------------------------------------ ----------- ----------- -----------
Net cash provided (used) by financing activities 71,420 22,410 (50,345)
- ------------------------------------------------------------------
Net increase (decrease) in cash -- -- 6
- ------------------------------------------------------------------
Cash at beginning of period -- 1 1
- ------------------------------------------------------------------ ----------- ----------- -----------
Cash at end of period $ -- $ 1 $ 7
- ------------------------------------------------------------------ =========== =========== ===========
**Reflects operations for the period from October 1, 1998 through July 31, 1999.
**Reflects operations for the year ended September 30, 1998.
(See Notes which are an integral part of the Financial Statements)
</TABLE>
68
<PAGE>
Fifth Third Funds
Notes to Financial Statements
July 31, 1999
- --------------------------------------------------------------------------------
(1) Organization
Fifth Third Funds, formerly known as the 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, 1999 the Trust
consisted of sixteen separate investment portfolios.
The accompanying financial statements relate only to the following Funds:
Portfolio Name
- --------------------------------------------------------------------------------
Fifth Third Quality Growth Fund ("Quality Growth Fund")
Fifth Third Equity Income Fund ("Equity Income Fund")
Fifth Third Cardinal Fund
Fifth Third Pinnacle Fund ("Pinnacle Fund")
Fifth Third Balanced Fund ("Balanced Fund")
Fifth Third Mid Cap Fund ("Mid Cap Fund")
Fifth Third International Equity Fund ("International Equity Fund")
Fifth Third Bond Fund For Income ("Bond Fund For Income")
Fifth Third Quality Bond Fund ("Quality Bond Fund")
Fifth Third U.S. Government Securities Fund ("U.S. Government Securities Fund")
Fifth Third Municipal Bond Fund ("Municipal Bond Fund")
Fifth Third Ohio Tax Free Bond Fund ("Ohio Tax Free Bond Fund")
The Funds each issue three classes of shares: Institutional, 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, 12b-1 fees paid by Investment A Shares and Investment C
Shares, voting rights on matters affecting a single class of shares, and the
exchange privileges of each class of shares. The Institutional Shares were first
offered for sale to the public on September 21, 1998. As of January 8, 1998, all
Investment C Shares of Municipal Bond Fund were redeemed. Municipal Bond Fund
Investment C Shares continue to be open for investment with an offering price
equal to Municipal Bond Fund Investment A Shares, however, as of July 31, 1999,
there were no shareholders of the Municipal Bond Fund Investment C Shares.
(2) Reorganizations
The Trust entered an Agreement and Plan of Reorganization with the Pinnacle Fund
pursuant to which all of the assets and liabilities of the Pinnacle Fund were
transferred to a new portfolio of the Trust (the Fifth Third Pinnacle Fund). The
reorganization, which qualified as a tax-free exchange for federal income tax
purposes, was approved by shareholders of the Pinnacle Fund at a special
shareholder meeting held on February 27, 1998, and consummated on March 6, 1998.
Immediately before and after the reorganization the Pinnacle Fund and the Fifth
Third Pinnacle Fund, respectively, had shares outstanding of 809, Net Assets of
$24,714, and Unrealized Appreciation of $9,452 (amounts in thousands).
The Trust entered into an Agreement and Plan of Reorganization and Liquidation
with The Cardinal Group pursuant to which all of the assets and liabilities of
each Cardinal Group Portfolio were transferred to a portfolio of the Trust in
exchange for shares of the corresponding portfolio of the Trust. The Cardinal
Government Obligations Fund transferred its assets and liabilities to the Bond
Fund For Income. The Cardinal Balanced Fund transferred its assets and
liabilities to the Fifth Third Balanced
69
<PAGE>
Fifth Third Funds
Notes to Financial Statements (continued)
July 31, 1999
- --------------------------------------------------------------------------------
Fund. The Cardinal Aggressive Growth Fund transferred its assets and liabilities
to the Mid Cap Fund. The Cardinal Fund transferred its assets and liabilities to
the Fifth Third Cardinal Fund. The reorganization, which qualified as a tax-free
exchange for federal income purposes, was approved by shareholders of The
Cardinal Group at a special shareholder meeting held on July 24, 1998 and
consummated on September 21, 1998. The following is a summary of shares
outstanding, net assets, net asset value per share and unrealized appreciation
immediately before and after the reorganization for the Bond Fund For Income,
the Balanced Fund, the Mid Cap Fund and the Fifth Third Cardinal Fund:
After
Before Reorganization Reorganization
------------------------- --------------
Cardinal
Government Fifth Third Fifth Third
Obligations Bond Fund Bond Fund
Fund For Income For Income
------------------------- --------------
Shares (000) 10,758 15,517 22,652
Net Assets (000) $88,802 $193,229 $282,031
Unrealized Appreciation (000) $1,433 $5,311 $6,744
After
Before Reorganization Reorganization
------------------------- --------------
Cardinal Fifth Third Fifth Third
Balance Balanced Balanced
Fund Fund Fund
------------------------- --------------
Shares (000) 1,282 12,080 13,183
Net Assets (000) $15,632 $171,175 $186,807
Unrealized Appreciation (000) $3,146 $17,138 $20,284
After
Before Reorganization Reorganization
------------------------- --------------
Cardinal
Aggressive Fifth Third Fifth Third
Growth Mid Cap Mid Cap
Fund Fund Fund
------------------------- --------------
Shares (000) 833 13,540 14,220
Net Assets (000) $9,980 $198,539 $208,519
Unrealized Appreciation (000) $3,054 $19,575 $22,629
After
Before Reorganization Reorganization
------------------------- --------------
Fifth Third Fifth Third
Cardinal Cardinal Cardinal
Fund Fund Fund
------------------------- --------------
Shares (000) 17,572 0 17,572
Net Assets (000) $263,745 $0 $263,745
Unrealized Appreciation (000) $113,875 $0 $113,875
(3) 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.
70
<PAGE>
Fifth Third Funds
Notes to Financial Statements (continued)
July 31, 1999
- --------------------------------------------------------------------------------
A. Securities Valuations--Investments in equity securities generally are
determined on the basis of market price. Other fixed income securities are
valued at market prices using an independent pricing service.
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 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 Trust 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 the market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gains or losses from investments.
Realized foreign exchange gains or losses arise from sales and maturities of
securities, sales of foreign currencies, currency exchange fluctuations between
the trade and settlement dates of securities transactions, and the difference
between the amount of assets and liabilities recorded 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, including investments in securities, resulting from changes in the
currency exchange rates.
E. Forward Currency Contracts:--The International Equity Fund may enter into a
forward currency contract ("forward") which is an agreement between two parties
to buy and sell a currency at a set price on a future date. The market value of
the forward fluctuates with changes in currency exchange rates. The forward is
marked-to-market daily and the change in market value is recorded by a Fund as
unrealized appreciation or depreciation. When the forward is closed the Fund
records a realized gain or loss equal to the difference between the value at the
time it was opened and the value at the time it was closed. A Fund could be
exposed to risk if a counterparty is unable to meet the terms of a forward or if
the value of the currency changes unfavorably.
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 form 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.
71
<PAGE>
Fifth Third Funds
Notes to Financial Statements (continued)
July 31, 1999
- --------------------------------------------------------------------------------
G. Futures Contracts--The Funds may enter into futures contracts for the delayed
delivery of securities at a fixed price at some future date or for the change in
the value of a specified financial index over a predetermined time period. Cash
or securities are deposited with brokers in order to maintain a position.
Subsequent payments made or received by the Fund based on the daily change in
the market value of the position are recorded as unrealized appreciation or
depreciation until the contract is closed out, at which time the gain or loss is
realized.
The use of futures contracts involves, to varying degrees, elements of market
risk. Risks arise from the possible imperfect correlation in movements in the
price of futures contracts, interest rates and the underlying hedged assets, and
the possible inability of counterparties to meet the terms of their contracts.
However, the Fund's activities in futures contracts are conducted through
regulated exchanges which minimize counterparty credit risks.
H. Option Contracts--The Funds may write or purchase option contracts with the
exception of the Pinnacle Fund, the Municipal Bond Fund and the Ohio Tax Free
Bond Fund. These transactions are to hedge against changes in interest rates,
security prices, currency fluctuations, and other market developments, or for
the purposes of earning additional income (i.e. speculation). The risk
associated with purchasing an option is that the Fund pays a premium whether or
not the option is exercised. Additionally, the Funds bear the risk of loss of
premium and change in market value should the counterparty not perform under the
contract. Put and call options purchased are accounted for in the same manner as
other securities owned. The cost of securities acquired through the exercise of
call options is increased by the premiums paid. The proceeds from securities
sold through the exercise of put options are decreased by premiums paid.
In writing an option, the Funds contract with a specified counterparty to
purchase (written put option) or sell (written call option) a specified quantity
(notional amount) of an underlying asset at a specified price during a specified
period upon demand of the counterparty. The risk associated with writing an
option is that the Funds bear the market risk of an unfavorable change in the
price of an underlying asset, and may be required to buy or sell an underlying
asset under the contractual terms of the option at a price different from the
current market value. Written options involve financial risk which may exceed
amounts reflected in the accompanying financial statements.
The table below reflects the Cardinal FundOs and the Mid Cap FundOs activities
in written options, all of which were for purposes of earning additional income
during the period. No other Funds engaged in written option contracts.
Cardinal Fund Mid Cap Fund
------------------------ ------------------------
Number Premiums Number Premiums
of Contracts (in 000Os) of Contracts (in 000Os)
------------------------ ------------------------
Balance at 9/30/98 0 $ 0 0 $ 0
Options written 3,810 846 420 73
Options expired (3,210) (742) (420) (73)
Options exercised (100) (100) (3) 0 0
Options terminated (100) (5) 0 0
Balance at 7/31/99 400 $ 96 0 $ 0
I. 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.
72
<PAGE>
Fifth Third Funds
Notes to Financial Statements (continued)
July 31, 1999
- --------------------------------------------------------------------------------
J. Dividends to Shareholders--Dividends from net investment income are declared
and paid monthly for the Quality Growth Fund, the Equity Income Fund, the Bond
Fund For Income, the Quality Bond Fund, the U.S. Government Securities Fund, the
Municipal Bond Fund, and the Ohio Tax Free Bond Fund. Dividends from net
investment income are declared and paid quarterly for the Quality Growth Fund,
the Fifth Third Cardinal Fund, the Mid Cap Fund, the Balanced Fund and the
Pinnacle Fund. Dividends from net investment income are declared and paid
annually for the 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.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the composition of net assets based on their federal
tax-basis treatment; temporary differences do not require reclassifications.
Dividends and distributions to shareholders which exceed net investment income
and net realized gains for financial reporting purposes but not for tax purposes
are reported as dividends in excess of net investment income or distributions in
excess of net realized gains. To the extent they exceed net investment income
and net realized gains for tax purposes, they are reported as distribution of
capital. During the current fiscal year, differences were primarily due to
differing treatments for mortgaged-backed securities, foreign currency
transactions and different book/tax accretion of certain income items.
As of July 31, 1999, the following reclassifications have been made to increase
(decrease) such accounts with offsetting adjustments made to paid-in capital
(amounts in thousands):
Accumulated Accumulate Net
Undistributed Net Realized gain/(loss)
Investment Income on Investments
------------------------------------------
Quality Growth Fund 893 (1)
Cardinal Fund 251 (251)
Pinnacle Fund 272 0
Balanced Fund 114 (114)
Mid Cap Fund 673 (1,021)
International Fund 895 (894)
Bond Fund for Income (42) (16,870)
U.S. Government Securities Fund 8 (8)
Municipal Bond Fund 83 (83)
Ohio Tax Free Bond Found 28 (28)
K. Federal Taxes--It is the policy of each Fund to qualify or continue to
qualify as a regulated investment company by complying with the provisions
available to certain investment companies, as defined in applicable sections of
the Internal Revenue Code, and to make distributions of net investment income
and net realized capital gain sufficient to relieve it from all, or
substantially all, federal income taxes.
L. Organizational Costs--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.
M. Lending Portfolio Securities--To generate additional income, the Funds, may
lend up to one-third of securities in which they are invested pursuant to
agreements requiring that the loan be continuously
73
<PAGE>
Fifth Third Funds
Notes to Financial Statements
July 31, 1999
- --------------------------------------------------------------------------------
secured by cash, U.S. Government or U.S. Government Agency securities, shares of
an investment trust or mutual fund, or any combination of cash and such
securities as collateral equal at all times to at least 100% of the market value
plus accrued interest on the securities lent. The Funds continue to earn
interest and dividends on securities lent while simultaneously seeking to earn
interest on the investment of collateral.
When cash is received as collateral for securities loaned, the Funds may invest
such cash in short-term U.S. Government Securities, Repurchase Agreements, or
other short-term corporate securities. The cash or subsequent short-term
investments are recorded as assets of the Funds, offset by a corresponding
liability to repay the cash at the termination of the loan. In addition, the
short-term securities purchased with the cash collateral are included in the
accompanying schedules of portfolio investments. Fixed income securities
received as collateral are not recorded as an asset or liability of the Fund
because the Fund does not have effective control of such securities.
There may be risks of delay in recovery of the securities or even loss of rights
in the collateral should the borrower of the securities fail financially.
However, loans will be made only to borrowers deemed by the Advisor to be of
good standing and creditworthy under guidelines established by the Board of
Trustees and when, in the judgment of the Advisor, the consideration which can
be earned currently from such securities loans justifies the attendant risks.
Loans are subject to termination by the Funds or the borrower at any time, and
are, therefore, not considered to be illiquid investments. According to GAAP, a
statement of cash flows is presented if the Fund lent out, on average, more than
10% of net assets during the year. Under this guideline, a statement of cash
flows is presented for each of the Funds listed below. As of July 31, 1999, the
following Funds had securities with the following market values on loan (Amounts
in Thousands):
Market
Market Value
Value of of Loaned
Collateral Securities
--------------------------------
Quality Growth Fund $22,948 $22,341
Cardinal Fund $ 6,963 $ 6,711
Pinnacle Fund $ 5,408 $ 5,213
Equity Income Fund $ 5,553 $ 5,356
Balanced Fund $28,013 $27,178
Mid Cap Fund $28,270 $27,443
Bond Fund For Income $38,517 $37,614
Quality Bond Fund $33,510 $32,743
U.S. Government Securities Fund $12,394 $12,052
The loaned securities were fully collateralized by cash, U.S. Government
securities, short-term corporate notes and repurchase agreements as of July 31,
1999.
74
<PAGE>
(4) Shares of Beneficial Interest
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
Quality Growth Fund Equity Income Fund Cardinal Fund
----------------------------- ----------------------------- --------------------------------
Year ended Year ended Year Ended Year ended Period ended Year ended
July 31, 1999 July 31, 1998 July 31, 1999 July 31, 1998 July 31, 1999*** Sept. 30, 1998
------------- ------------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
- ---------------------------
Institutional Shares:*
- ---------------------------
Shares issued $ 530,496 $ -- $ 152,738 $ -- $ 3,789 $ 4,380
- ---------------------------
Dividends reinvested 21,625 -- 13,337 -- 708 3,721
- ---------------------------
Shares redeemed (58,830) -- (20,956) -- (29,006)
- --------------------------- ------------- ------------- ------------- ------------- ------------- --------------
Institutional Shares $ 493,291 $ -- $ 145,119 $ -- $ (24,509) $ 1,208
- --------------------------- ------------- ------------- ------------- ------------- ------------- --------------
Investment A Shares:
- ---------------------------
Shares issued $ 31,873 $ 150,594 $ 12,789 $ 21,208 $ 130,093 $ 15,605
- ---------------------------
Dividends reinvested 7,704 33,557 1,495 12,203 7,700 31,761
- ---------------------------
Shares redeemed (446,037) (93,341) (139,585) (11,702) (57,668)
- --------------------------- ------------- ------------- ------------- ------------- ------------- --------------
Investment A Shares $ (406,460) $ 90,810 $ (125,301) $ 21,709 $ (55,994) $ (10,302)
- --------------------------- ------------- ------------- ------------- ------------- ------------- --------------
Investment C Shares:**
- ---------------------------
Shares issued $ 1,966 $ 5,289 $ 837 $ 1,021 $ 805 $ --
- ---------------------------
Dividends reinvested 747 424 121 34 2 --
- ---------------------------
Shares redeemed (2,459) (914) (491) (199) (9) --
- --------------------------- ------------- ------------- ------------- ------------- ------------- --------------
Investment C Shares $ 254 $ 4,799 $ 467 $ 856 $ 798 $ --
- --------------------------- ------------- ------------- ------------- ------------- ------------- --------------
Total net increase from
capital transactions $ 87,085 $ 95,609 $ 20,285 $ 22,565 $ (79,705) $ (9,094)
- --------------------------- ============= ============= ============= ============= ============= ==============
<CAPTION>
Quality Growth Fund Equity Income Fund Cardinal Fund
----------------------------- ----------------------------- --------------------------------
Year ended Year ended Year Ended Year ended Period ended Year ended
July 31, 1999 July 31, 1998 July 31, 1999 July 31, 1998 July 31, 1999*** Sept. 30, 1998
------------- ------------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
SHARE TRANSACTIONS:
- -----------------------------
Institutional Shares:*
- -----------------------------
Shares issued 26,627 -- 10,265 -- 206 261
- -----------------------------
Dividends reinvested 1,102 -- 894 -- 42 242
- -----------------------------
Shares redeemed (2,746) -- (1,383) -- (1,611) (399)
- ----------------------------- ------------- ------------- ------------- ------------- ------------- --------------
Institutional Shares 24,983 -- 9,776 -- (1,363) 104
- ----------------------------- ------------- ------------- ------------- ------------- ------------- --------------
Investment A Shares:
- -----------------------------
Shares issued 1,478 7,816 849 1,375 6,747 961
- -----------------------------
Dividends reinvested 393 1,875 100 848 458 2,062
- -----------------------------
Shares redeemed (22,519) (4,806) (9,395) (776) (10,296) (3,449)
- ----------------------------- ------------- ------------- ------------- ------------- ------------- --------------
Investment A Shares (20,648) 4,885 (8,446) 1,447 (3,091) (426)
- ----------------------------- ------------- ------------- ------------- ------------- ------------- --------------
Investment C Shares:**
- -----------------------------
Shares issued 93 275 56 67 44 --
- -----------------------------
Dividends reinvested 38 24 8 2 -- --
- -----------------------------
Shares redeemed (122) (47) (33) (12) -- --
- ----------------------------- ------------- ------------- ------------- ------------- ------------- --------------
Investment C Shares 9 252 31 57 44 --
- ----------------------------- ------------- ------------- ------------- ------------- ------------- --------------
Total net increase from share
transactions 4,344 5,137 1,361 1,504 (4,410) (322)
- ----------------------------- ============= ============= ============= ============= ============= ==============
</TABLE>
- -----------------------
***Institutional Shares commenced operations on August 11, 1998.
***Cardinal Fund Investment C Shares commenced operations on October 22, 1998.
***Reflects period of operations from October 1, 1998 to July 31, 1999.
75
<PAGE>
Fifth Third Funds
Notes to Financial Statements (continued)
July 31, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Pinnacle Fund Balanced Fund Mid Cap Fund
---------------------------- --------------------------- ----------------------------
Year ended Period ended Year Ended Year ended Year ended Year ended
July 31, 1999 July 31, 1998* July 31, 1999 July 31, 1998 July 31, 1999 July 31, 1998
------------- ------------- ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
- ---------------------------
Institutional Shares:**
- ---------------------------
Shares issued $ 62,101 $ -- $ 149,852 $ -- $ 206,711 $ --
- ---------------------------
Dividends reinvested 547 -- 7,995 -- 17,251 --
- ---------------------------
Shares redeemed (7,248) -- (30,451) -- (33,307) --
- --------------------------- --------- --------- --------- --------- --------- ---------
Institutional Shares $ 55,400 $ -- 127,396 $ -- $ 190,655 $ --
- --------------------------- --------- --------- --------- --------- --------- ---------
Investment A Shares:
- ---------------------------
Shares issued $ 45,895 $ 11,774 $ 39,143 $ 63,734 $ 12,360 $ 49,749
- ---------------------------
Dividends reinvested 267 372 4,004 13,694 2,809 19,805
- ---------------------------
Shares redeemed (34,241) (2,732) (141,129) (24,887) (200,404) (27,793)
- --------------------------- --------- --------- --------- --------- --------- ---------
Investment A Shares $ 11,921 $ 9,414 $ (97,982) $ 52,541 $(185,235) $ 41,761
- --------------------------- --------- --------- --------- --------- --------- ---------
Investment C Shares:
- ---------------------------
Shares issued $ 6,055 $ 954 $ 2,979 $ 3,666 $ 203 $ 810
- ---------------------------
Dividends reinvested 43 -- 294 215 89 77
- ---------------------------
Shares redeemed (905) (41) (1,786) (213) (513) (200)
- --------------------------- --------- --------- --------- --------- --------- ---------
Investment C Shares $ 5,193 913 $ 1,487 $ 3,668 $ (221) $ 687
- --------------------------- --------- --------- --------- --------- --------- ---------
Total net increase from capital
transactions $ 72,514 $ 10,327 $ 30,901 $ 56,209 $ (5,199) 42,448
- --------------------------- ========= ========= ========= ========= ========= ======
<CAPTION>
Pinnacle Fund Balanced Fund Mid Cap Fund
---------------------------- --------------------------- ----------------------------
Year ended Period ended Year ended Year ended Year ended Year ended
July 31, 1999 July 31, 1998* July 31, 1999 July 31, 1998 July 31, 1999 July 31, 1998
------------- ------------- ------------ ------------- ------------- -------------
SHARE TRANSACTIONS:
- ---------------------------
Institutional Shares:**
- ---------------------------
Shares issued 1,846 -- 10,062 -- 13,100 --
- ---------------------------
Dividends reinvested 16 535 -- 1,172
- ---------------------------
Shares redeemed (201) -- (1,944) -- (2,177) --
- --------------------------- --------- --------- --------- --------- --------- ---------
Institutional Shares 1,661 -- 8,653 -- 12,095 --
- --------------------------- --------- --------- --------- --------- --------- ---------
Investment A Shares:
- ---------------------------
Shares issued 1,293 370 2,603 4,237 831 2,852
- ---------------------------
Dividends reinvested 8 12 268 960 191 1,234
- ---------------------------
Shares redeemed (1,057) (87) (9,486) (1,649) (12,693) (1,606)
- --------------------------- --------- --------- --------- --------- --------- ---------
Investment A Shares 244 295 (6,615) 3,548 (11,671) 2,480
- --------------------------- --------- --------- --------- --------- --------- ---------
Investment C Shares:
- ---------------------------
Shares issued 175 30 191 243 13 47
- ---------------------------
Dividends reinvested 1 -- 20 15 6 5
- ---------------------------
Shares redeemed (25) (1) (115) (14) (34) (12)
- --------------------------- --------- --------- --------- --------- --------- ---------
Investment C Shares 151 29 96 244 (15) 40
- --------------------------- --------- --------- --------- --------- --------- ---------
Total net increase from share
transactions 2,056 324 2,134 3,792 409 2,520
- --------------------------- ========= ========= ========= ========= ========= =========
</TABLE>
*Reflects period of operations from January 1, 1998 through July 31, 1998,
which includes operations of the Fifth Third Pinnacle Fund's predecessor fund,
the Pinnacle Fund.
**Institutional Shares commenced operations on August 11, 1998.
76
<PAGE>
Fifth Third Funds
Notes to Financial Statements (continued)
July 31, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
International Equity Fund Bond Fund For Income Quality Bond Fund
---------------------------- ---------------------------- ----------------------------
Year ended Year ended Year ended Year ended Year ended Year ended
July 31, 1999 July 31, 1998 July 31, 1999 July 31, 1998 July 31, 1999 July 31, 1998
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
- ------------------------------------
Institutional Shares:*
- ------------------------------------
Shares issued $ 164,328 $ -- $ 231,142 $ -- $ 160,131 $ --
- ------------------------------------
Dividends reinvested 2,875 -- 566 -- 3,567 --
- ------------------------------------
Shares redeemed (12,727) -- (24,242) -- (23,886) --
- ------------------------------------ --------- --------- --------- --------- --------- ---------
Institutional Shares $ 154,476 $ -- $ 207,466 $ -- $ 139,812 $ --
- ------------------------------------ --------- --------- --------- --------- --------- ---------
Investment A Shares:
- ------------------------------------
Shares issued $ 7,642 $ 17,630 $ 105,463 $ 46,834 $ 4,556 $ 29,113
- ------------------------------------
Dividends reinvested 102 8,402 2,934 936 542 3,166
- ------------------------------------
Shares redeemed (151,143) (21,499) (253,420) (16,738) (103,133) (17,260)
- ------------------------------------ --------- --------- --------- --------- --------- ---------
Investment A Shares $(143,399) $ 4,533 $(145,023) $ 31,032 $ (98,035) $ 15,019
- ------------------------------------ --------- --------- --------- --------- --------- ---------
Investment C Shares:
- ------------------------------------
Shares issued 89 $ 137 $ 446 $ 255 $ 683 $ 302
- ------------------------------------
Dividends reinvested 4 18 26 6 36 11
- ------------------------------------
Shares redeemed (149) (84) (113) (38) (259) (120)
- ------------------------------------ --------- --------- --------- --------- --------- ---------
Investment C Shares $ (56) $ 71 $ 359 $ 223 $ 460 $ 193
- ------------------------------------ --------- --------- --------- --------- --------- ---------
Total net increase from capital
transactions $ 11,021 $ 4,604 $ 62,802 $ 31,255 $ 42,237 $ 15,212
- ------------------------------------ ========= ========= ========= ========= ========= =========
<CAPTION>
International Equity Fund Bond Fund For Income Quality Bond Fund
---------------------------- ---------------------------- ----------------------------
Year ended Year ended Year ended Year ended Year ended Year ended
July 31, 1999 July 31, 1998 July 31, 1999 July 31, 1998 July 31, 1999 July 31, 1998
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
SHARE TRANSACTIONS:
- ------------------------------------
Institutional Shares:*
- ------------------------------------
Shares issued 14,269 -- 18,894 -- 16,059 --
- ------------------------------------
Dividends reinvested 242 -- 47 -- 359 --
- ------------------------------------
Shares redeemed (1,047) -- (1,995) -- (2,390) --
- ------------------------------------ --------- --------- --------- --------- --------- ---------
Institutional Shares 13,464 -- 16,946 -- 14,028 --
- ------------------------------------ --------- --------- --------- --------- --------- ---------
Investment A Shares:
- ------------------------------------
Shares issued 652 1,493 8,482 3,843 456 2,937
- ------------------------------------
Dividends reinvested 8 798 242 77 55 320
- ------------------------------------
Shares redeemed (13,205) (1,886) (20,692) (1,372) (10,306) (1,745)
- ------------------------------------ --------- --------- --------- --------- --------- ---------
Investment A Shares (12,545) 405 (11,968) 2,548 (9,795) 1,512
- ------------------------------------ --------- --------- --------- --------- --------- ---------
Investment C Shares:
- ------------------------------------
Shares issued 8 11 36 21 68 30
- ------------------------------------
Dividends reinvested -- 2 2 -- 3 1
- ------------------------------------
Shares redeemed (13) (7) (9) (3) (26) (12)
- ------------------------------------ --------- --------- --------- --------- --------- ---------
Investment C Shares (5) 6 29 18 45 19
- ------------------------------------ --------- --------- --------- --------- --------- ---------
Total net increase from share
transactions 915 411 5,007 2,566 4,278 1,531
- ------------------------------------ ========= ========= ======== ========= ======== =========
</TABLE>
*Institutional Shares commenced operations on August 11, 1998, except for the
International Equity Fund which commenced operations on October 9, 1998.
77
<PAGE>
Fifth Third Funds
Notes to Financial Statements (continued)
July 31, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Government Ohio Tax Free
Securities Fund Municipal Bond Fund Bond Fund
---------------------------- ---------------------------- ----------------------------
Year ended Year ended Year ended Year ended Year ended Year ended
July 31, 1999 July 31, 1998 July 31, 1999 July 31, 1998 July 31, 1999 July 31, 1998
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
- ------------------------------
Institutional Shares:*
- ------------------------------
Shares issued $ 50,088 $ -- $ 130,817 $ -- $ 208,365 $ --
- ------------------------------
Dividends reinvested 866 -- 2,102 -- 1,148 --
- ------------------------------
Shares redeemed (7,602) -- (12,961) -- (21,233) --
- ------------------------------ --------- --------- --------- --------- --------- ---------
Institutional Shares $ 43,352 $ -- 119,958 $ -- $ 188,280 $ --
- ------------------------------ --------- --------- --------- --------- --------- ---------
Investment A Shares:
- ------------------------------
Shares issued $ 2,738 $ 7,450 $ 1,174 $ 33,225 $ 8,720 $ 42,242
- ------------------------------
Dividends reinvested 250 1,058 17 792 1,013 1,632
- ------------------------------
Shares redeemed (39,440) (9,689) (118,494) (17,501) (176,628) (23,210)
- ------------------------------ --------- --------- --------- --------- --------- ---------
Investment A Share $ (36,452) $ (1,181) $(117,303) $ 16,516 $(166,895) $ 20,664
- ------------------------------ --------- --------- --------- --------- --------- ---------
Investment C Shares:
- ------------------------------
Shares issued $ 543 $ 70 $ -- $ -- $ 660 $ 408
- ------------------------------
Dividends reinvested 12 3 -- -- 33 15
- ------------------------------
Shares redeemed (231) (31) -- (11) (169) (87)
- ------------------------------ --------- --------- --------- --------- --------- ---------
Investment C Shares $ 324 $ 42 $ -- $ (11) $ 524 $ 336
- ------------------------------ --------- --------- --------- --------- --------- ---------
Total net increase from capital
transactions $ 7,224 $ (1,139) $ 2,655 $ 16,505 21,909 $ 21,000
- ------------------------------ ========= ========= ========= ========= ======== =========
<CAPTION>
U.S. Government Ohio Tax Free
Securities Fund Municipal Bond Fund Bond Fund
---------------------------- ---------------------------- ----------------------------
Year ended Year ended Year ended Year ended Year ended Year ended
July 31, 1999 July 31, 1998 July 31, 1999 July 31, 1998 July 31, 1999 July 31, 1998
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
SHARE TRANSACTIONS:
- ------------------------------
Institutional Shares:*
- ------------------------------
Shares issued 5,065 -- 10,657 -- 20,180 --
- ------------------------------
Dividends reinvested 88 -- 172 -- 111 --
- ------------------------------
Shares redeemed (770) -- (1,066) -- (2,062) --
- ------------------------------ ------------ ------------ ------------ ------------ ------------ ------------
Institutional Shares 4,383 -- 9,763 -- 18,229 --
- ------------------------------ ------------ ------------ ------------ ------------ ------------ ------------
Investment A Shares:
- ------------------------------
Shares issued 275 761 96 2,708 840 4,103
- ------------------------------
Dividends reinvested 25 108 1 64 98 159
- ------------------------------
Shares redeemed (3,992) (990) (9,650) (1,426) (17,114) (2,256)
- ------------------------------ ------------ ------------ ------------ ------------ ------------ ------------
Investment A Shares (3,692) (121) (9,553) 1,346 (16,176) 2,006
- ------------------------------ ------------ ------------ ------------ ------------ ------------ ------------
Investment C Shares:
- ------------------------------
Shares issued 56 7 -- -- 64 40
- ------------------------------
Dividends reinvested 1 -- -- -- 3 1
- ------------------------------
Shares redeemed (24) (3) -- (1) (17) (8)
- ------------------------------ ------------ ------------ ------------ ------------ ------------ ------------
Investment C Shares 33 4 -- (1) 50 33
- ------------------------------ ------------ ------------ ------------ ------------ ------------ ------------
Total net increase from share
transactions 724 (117) 210 1,345 2,103 2,039
- ------------------------------ ============ ============ ============ ============ ============ ============
*Institutional Shares commenced operations on August 11, 1998.
</TABLE>
78
<PAGE>
Fifth Third Funds
Notes to Financial Statements (continued)
July 31, 1999
- --------------------------------------------------------------------------------
(5) 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.
Morgan Stanley Asset Management, Inc. is the International Equity Fund's
sub-Advisor (the "Sub-Advisor"). The Advisor compensates the Sub-Advisor at a
rate based on the International Equity Fund's average daily net assets.
Administrative Fee--BISYS Fund Services ("BISYS") serves as 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. 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, BISYS' fees are computed
daily as a percentage of the average net assets of the Trust for the period.
Administration fees are computed at 0.20% 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.
Distribution Services Fee-- BISYS serves as the Trust's principal distributor
(the "Distributor"). In accordance with Rule 12b-1 under the 1940 Act, the Trust
entered into a Distribution Plan with the Distributor with respect to Investment
A Shares and Investment C Shares. Under the Distribution Plan, the Funds may pay
a fee to the Distributor. These fees may be used by BISYS to pay banks,
including the investment adviser, broker dealers and other institutions, or to
reimburse BISYS or its affiliates for administration, distribution and
shareholder service assistance in connection with the distribution of the Fund.
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 0.25% 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. Fifth Third Bank handles the execution of the transfer and
dividend disbursing agent functions.
Fifth Third Bank also maintains the Funds' accounting records except with
respect to the International Equity Fund 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. BISYS Fund Services provides 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 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
Certain Officers and Trustees of the Trust are Officers and Trustees of the
above companies but are not paid any fees directly by the Trust for serving as
Officers and Trustees of the Trust.
79
<PAGE>
Fifth Third Funds
Notes to Financial Statements (continued)
July 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Quality Equity
Growth Income Cardinal Pinnacle Balanced Mid Cap
Fund Fund Fund Fund Fund Fund
------- ------ -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
(Amounts in thousands)
Investment Advisory Fees:
- ----------------------------------------------
Annual fee before voluntary fee
reductions (percentage of average
net assets) 0.80% 0.80% 0.60% 0.80% 0.80% 0.80%
- ----------------------------------------------
Administrative Fees:
- ----------------------------------------------
Voluntary fee reductions $ 290 $ 75 $ 25 $ 9 $ 91 $ 156
- ----------------------------------------------
Distribution Services Fees:
- ----------------------------------------------
Annual fee before voluntary fee
reductions (percentage of average
net assets) Investment A Shares 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
Investment C Shares 0.75% 0.75% 0.75% 0.75% 0.75% 0.75%
- ----------------------------------------------
Voluntary fee reductions - Investment A Shares $ 35 $ 10 $ 0 $ 3 $ 11 $ 15
- ----------------------------------------------
Voluntary fee reductions - Investment C Shares $ 22 $ 3 $ 0 $ 10 $ 14 $ 2
- ----------------------------------------------
Administrative Services Fees:
- ----------------------------------------------
Annual fee before voluntary fee
reductions (percentage of average
net assets) Investment C Shares 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
- ----------------------------------------------
Miscellaneous Fees:
- ----------------------------------------------
Fees reimbursed by investment advisor` -- -- $ 90 -- -- --
- ----------------------------------------------
<CAPTION>
U.S. Ohio
International Bond Quality Government Municipal Tax Free
Equity Fund For Bond Securities Bond Bond
Fund Income Fund Fund Fund Fund
------------- -------- ------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
(Amounts in thousands)
Investment Advisory Fees:
- ----------------------------------------------
Annual fee before voluntary fee
reductions (percentage of average
net assets) 1.00% 0.55% 0.55% 0.55% 0.55% 0.55%
- ----------------------------------------------
Voluntary fee reductions -- -- -- $ 38 -- $ 79
- ----------------------------------------------
Administrative Fees:
- ----------------------------------------------
Voluntary fee reductions -- $ 70 $ 120 $ 46 $ 116 $176
- ----------------------------------------------
Distribution Services Fees:
- ----------------------------------------------
Annual fee before voluntary fee
reductions (percentage of average
net assets) Investment A Shares 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
Investment C Shares 0.75% 0.75% 0.75% 0.75% 0.75% 0.75%
- ----------------------------------------------
Voluntary fee reductions - Investment A Shares $ 84 $ 13 $ 7 $ 3 $ 8 $ 13
- ----------------------------------------------
Voluntary fee reductions - Investment C Shares $ 1 $ 1 $ 2 $ 1 -- $ 2
- ----------------------------------------------
Administrative Services Fees:
- ----------------------------------------------
Annual fee before voluntary fee
reductions (percentage of average
net assets) Investment C Shares 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
- ----------------------------------------------
Miscellaneous Fees:
- ----------------------------------------------
Fees reimbursed by investment advisor` $ 15 $ 5 $ 7 $ 55 $ 2 $ 47
- ----------------------------------------------
</TABLE>
80
<PAGE>
Fifth Third Funds
Notes to Financial Statements (continued)
July 31, 1999
- --------------------------------------------------------------------------------
(6) Investment Transactions
Purchases and sales of investments, excluding short-term securities for the
period ended July 31, 1999, were as follows (Amounts in Thousands):
<TABLE>
<CAPTION>
Quality Equity
Growth Income Cardinal Pinnacle Balanced Mid Cap
Fund Fund Fund Fund Fund Fund
- ----------------------- ------- ------ -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Purchases $213,542 $113,844 $ 39,900 $103,472 $259,571 $104,440
- -----------------------
Sales $203,646 $108,382 $142,456 $ 35,046 $256,651 $129,820
- -----------------------
<CAPTION> U.S. Ohio
International Bond Fund Quality Government Municipal Tax Free
Equity For Bond Securities Bond Bond
Fund Income Fund Fund Fund Fund
- ----------------------- ------------- --------- ------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Purchases $ 76,965 $239,784 $427,414 $ 47,470 $124,595 $102,694
- -----------------------
Sales $ 60,327 $358,010 $384,447 $ 41,454 $130,967 $ 91,417
- -----------------------
</TABLE>
(7) Concentration of Credit Risk
The Ohio Tax Free Bond 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 Portfolio is more susceptible to factors
adversely affecting issuers of Ohio municipal securities than a fund that is not
concentrated in these issuers.
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 or portfolio securities and currency
holdings. The International Equity Fund has a relatively large concentration of
securities invested in companies domiciled in Great Britain and Japan. The Fund
may be more susceptible to the political, social and economic events adversely
affecting British and Japanese companies than funds not so concentrated.
(8) Federal Income Tax Information (Unaudited)
For corporate shareholders the following percentage of the total ordinary income
distributions paid during the fiscal year ended July 31, 1999 qualify for the
corporate dividends received deduction for the following funds:
Percentage
--------------
Equity Income Fund 100%
Cardinal Fund 81.19%
Balanced Fund 20.18%
During the fiscal year ended July 31, 1999 the Trust declared tax-exempt income
distributions as follows (Amounts in Thousands):
Tax Exempt Distributions
------------------------
Municipal Bond Fund $ 4,557
Ohio Tax Free Bond Fund 7,898
81
<PAGE>
Fifth Third Funds
Notes to Financial Statements (continued)
July 31, 1999
- --------------------------------------------------------------------------------
As of July 31, 1999, for federal income purposes, the following Funds have
capital loss carryforwards available to offset future capital gains, if any
(Amounts in Thousands):
Amount Expires
----------------------------
Mid Cap Fund $ 590 2006
Bond Fund For Income 2,098 2002
6,381 2003
3,223 2004
1,375 2005
U.S. Government Securities Fund 959 2004
Capital and foreign currency losses incurred after October 31, within a Fund's
fiscal year are deemed to arise on the first business day of the following
fiscal year for tax purposes. The following Funds have incurred and will elect
to defer such capital and foreign currency losses (Amounts in Thousands):
Post-October Foreign
Capital Losses Currency Losses
-------------------------------
International Equity Fund $ - $816
Bond Fund for Income 6,298
Quality Bond Fund 2,264
U.S. Government Securities Fund 173
During the fiscal year ended July 31, 1999 the Trust declared long term capital
gain distributions as follows (Amounts in Thousands):
Long-Term 20%
-------------
Quality Growth Fund $44,846
Equity Income Fund 14,458
Cardinal Fund 8,397
Pinnacle Fund 967
Balanced Fund 6,859
Mid Cap Fund 13,784
International Equity Fund 878
Bond Fund for Income 1,136
Municipal Bond Fund 1,557
Ohio Tax Free Fund 1,118
82
<PAGE>
This page intentionally left blank.
83
<PAGE>
Fifth Third Funds
Quality Growth Fund--Financial Highlights
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
Period ended
July 31, 1999*
--------------
Institutional Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 19.45
- ----------------------------------- ----------
Income from Investment Operations:
- -----------------------------------
Net investment income/(loss) (0.02)
- -----------------------------------
Net realized and unrealized gains/
(losses) from investments 5.89
- ----------------------------------- ----------
Total from Investment Operations 5.87
- ----------------------------------- ----------
Distributions to shareholders from:
- -----------------------------------
Net investment income --
- -----------------------------------
Net realized gain on investments (1.95)
- ----------------------------------- ----------
Total Distributions (1.95)
- ----------------------------------- ----------
Net Asset Value, End of Period $ 23.37
- ----------------------------------- ==========
Total Return (excludes sales charge) 32.08% (a)
- -----------------------------------
Ratios to Average Net Assets:
- -----------------------------------
Expenses 1.00% (b)
- -----------------------------------
Net investment income/(loss) (0.10%) (b)
- -----------------------------------
Expense waiver/reimbursement (c) 0.05% (b)
- -----------------------------------
Supplemental data:
- -----------------------------------
Net Assets at end of period (000) $ 583,753
- -----------------------------------
Portfolio turnover (d) 34%
- -----------------------------------
<TABLE>
<CAPTION>
Year ended Year ended Year ended Year ended Year ended
July 31, 1999 July 31, 1998 July 31, 1997 July 31, 1996 July 31, 1995
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Investment A Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 20.26 $ 19.23 $ 13.16 $ 11.79 $ 9.70
- ------------------------------------ --------- ----------- ----------- ----------- ----------
Income from Investment Operations:
- ------------------------------------
Net investment income/(loss) (0.06) 0.03 0.08 0.12 0.14
- ------------------------------------
Net realized and unrealized gains/
(losses) from investments 5.06 2.49 6.75 1.37 2.09
- ------------------------------------ --------- ----------- ----------- ----------- ----------
Total from Investment Operations 5.00 2.52 6.83 1.49 2.23
- ------------------------------------ --------- ----------- ----------- ----------- ----------
Distributions to shareholders from:
- ------------------------------------
Net investment income -- (0.03) (0.09) (0.12) (0.14)
- ------------------------------------
Net realized gains on vestments (1.95) (1.46) (0.67) -- --
- ------------------------------------ --------- ----------- ----------- ----------- ----------
Total Distributions (1.95) (1.49) (0.76) (0.12) (0.14)
- ------------------------------------ --------- ----------- ----------- ----------- ----------
Net Asset Value, End of Period $ 23.31 $ 20.26 $ 19.23 $ 13.16 $ 11.79
- ------------------------------------ ========= =========== =========== =========== ==========
Total Return (excludes sales charge) 26.48% 14.12% 54.02% 12.69% 23.21%
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 1.21% 1.00% 1.00% 0.99% 1.00%
- ------------------------------------
Net investment income/(loss) (0.29%) 0.10% 0.45% 0.98% 1.44%
- ------------------------------------
Expense waiver/reimbursement (c) 0.08% 0.37% 0.36% 0.03% 0.05%
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $ 116,963 $ 520,068 $ 399,683 $ 134,469 $ 82,594
- ------------------------------------
Portfolio turnover (d) 34% 45% 37% 37% 34%
- ------------------------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
84
<PAGE>
Fifth Third Funds
Quality Growth Fund -- Financial Highlights (continued)
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year ended Year ended Year ended Period ended
July 31, 1999 July 31, 1998 July 31, 1997 July 31, 1996**
------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C>
Investment C Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 20.10 $ 19.18 $ 13.16 $ 13.37
- ------------------------------------ --------- --------- --------- ---------
Income from Investment Operations:
- ------------------------------------
Net investment income/(loss) (0.18) (0.07) (0.03) --
- ------------------------------------
Net realized and unrealized gains/
(losses) from investments 5.00 2.45 6.72 (0.21)
- ------------------------------------ --------- --------- --------- ---------
Total from Investment Operations 4.82 2.38 6.69 (0.21)
- ------------------------------------ --------- --------- --------- ---------
Distributions to shareholders from:
- ------------------------------------
Net investment income -- -- -- --
- ------------------------------------
Net realized gain on investment (1.95) (1.46) (0.67) --
- ------------------------------------ --------- --------- --------- ---------
Total Distributions (1.95) (1.46) (0.67) --
- ------------------------------------ --------- --------- --------- ---------
Net Asset Value, End of Period $ 22.97 $ 20.10 $ 19.18 $ 13.16
- ------------------------------------ ========= ========= ========= =========
Total Return (excludes sales charge) 25.76% 13.41% 52.79% 12.50% (e)
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 1.80% 1.63% 1.75% 1.77% (b)
- ------------------------------------
Net investment income/(loss) (0.89%) (0.54)% (0.32)% 0.26% (b)
- ------------------------------------
Expense waiver/reimbursement (c) 0.30% 0.39% 0.26% 0.06% (b)
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $ 9,775 $ 8,357 $ 3,146 $ 420
- ------------------------------------
Portfolio turnover (d) 34% 45% 37% 37%
- ------------------------------------
* Reflects operations for the period from August 11, 1998 (date of
commencement of operations) to July 31, 1999.
** Reflects operations for the period from April 25, 1996 (date of
commencement of operations) to July 31, 1996.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(e) 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.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
85
<PAGE>
Fifth Third Funds
Equity Income Fund--Financial Highlights
- --------------------------------------------------------------------------------
(For a share of outstanding throughout each period)
Period ended
July 31, 1999*
--------------
Institutional Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 14.79
- ------------------------------------ --------
Income from Investment Operations:
- ------------------------------------
Net investment income/(loss) 0.25
- ------------------------------------
Net realized and unrealized gains
from investments 1.86
- ------------------------------------ --------
Total from Investment Operations 2.11
- ------------------------------------ --------
Distributions to shareholders from:
- ------------------------------------
Net investment income (0.26)
- ------------------------------------
In excess of net investment income --
- ------------------------------------
Net realized gain on investments (1.45)
- ------------------------------------ --------
Total Distributions (1.71)
- ------------------------------------
Net Asset Value, End of Period $ 15.19
- ------------------------------------ ========
Total Return (excludes sales charge) 14.63% (a)
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 1.07% (b)
- ------------------------------------
Net investment income 1.63% (b)
- ------------------------------------
Expense waiver/reimbursement (c) 0.05% (b)
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $148,525
- ------------------------------------
Portfolio turnover (d) 69%
- ------------------------------------
<TABLE>
<CAPTION>
Year ended Year ended Period ended
July 31, 1999 July 31, 1998 July 31, 1997**
------------- ------------- ---------------
<S> <C> <C> <C>
Investment A Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 15.38 $ 14.44 $ 12.00
- ------------------------------------ -------- -------- --------
Income from Investment Operations:
- ------------------------------------
Net investment income/(loss) 0.29 0.26 0.15
- ------------------------------------
Net realized and unrealized gains
from investments 1.19 2.43 2.43
- ------------------------------------ -------- ------- --------
Total from Investment Operations 1.48 2.69 2.58
- ------------------------------------ -------- ------- --------
Distributions to shareholders from:
- ------------------------------------
Net investment income (0.23) (0.27) (0.14)
- ------------------------------------
In excess of net investment income -- -- --
- ------------------------------------
Net realized gain on investments (1.45) (1.48) --
- ------------------------------------ -------- ------- --------
Total Distributions (1.68) (1.75) (0.14)
- ------------------------------------ -------- ------- --------
Net Asset Value, End of Period $ 15.18 $ 15.38 $ 14.44
- ------------------------------------ ======== ======== ========
Total Return (excludes sales charge) 9.90% 19.57% 21.64% (a)
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 1.27% 1.01% 1.06% (b)
- ------------------------------------
Net investment income 1.58% 1.73% 2.32% (b)
- ------------------------------------
Expense waiver/reimbursement (c) 0.10% 0.43% 0.42% (b)
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $ 20,268 $150,404 $120,324
- ------------------------------------
Portfolio turnover (d) 69% 41% 28%
- ------------------------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
86
<PAGE>
Fifth Third Funds
Equity Income Fund -- Financial Highlights (continued)
- -------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year ended Year ended Period ended
July 31, 1999 July 31, 1998 July 31, 1997**
------------- ------------- ---------------
<S> <C> <C> <C>
Investment C Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 15.39 $ 14.45 $ 12.00
- ------------------------------------ -------- -------- --------
Income from Investment Operations
- ------------------------------------
Net investment income 0.14 0.17 0.10
- ------------------------------------
Net realized and unrealized gains/
(losses) from investments 1.26 2.41 2.45
- ------------------------------------ -------- -------- --------
Total from Investment Operations 1.40 2.58 2.55
- ------------------------------------ -------- -------- --------
Distributions to shareholders from:
- ------------------------------------
Net investment income (0.15) (0.16) (0.10)
- ------------------------------------
In excess of net investment income -- -- --
- ------------------------------------
Net realized gain on investments (1.45) (1.48) --
- ------------------------------------ --------- --------- --------
Total Distributions (1.60) (1.64) (0.10)
- ------------------------------------ -------- -------- --------
Net Asset Value, End of Period $ 15.19 $ 15.39 $ 14.45
- ------------------------------------ ======== ======== ========
Total Return (excludes sales charge) 9.34% 18.72% 21.30% (a)
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 1.83% 1.57% 1.81% (b)
- ------------------------------------
Net investment income 0.88% 1.21% 1.56% (b)
- ------------------------------------
Expense waiver/reimbursement (c) 0.30% 0.52% 0.26% (b)
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $ 1,433 $ 968 $ 92
- ------------------------------------
Portfolio turnover (d) 69% 41% 28%
- ------------------------------------
</TABLE>
* Reflects operations for the period from August 11, 1998 (date of
commencement of operations) to July 31, 1999.
** Reflects operations for the period from January 27, 1997 (date of
commencement of operations) to July 31, 1997.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(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)
87
<PAGE>
Fifth Third Funds
Cardinal Fund**** -- Financial Highlights
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Period ended Year ended Period ended
July 31, 1999* Sept. 30, 1998 Sept. 30, 1997**
-------------- -------------- -----------------
<S> <C> <C> <C>
Institutional Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 14.86 $ 16.64 $ 12.92
- ------------------------------------ -------- -------- --------
Income from Investment Operations:
- ------------------------------------
Net investment income 0.04 0.15 0.12
- ------------------------------------
Net realized and unrealized gains/
(losses) from investments 5.17 0.28 3.70
- ------------------------------------ -------- -------- --------
Total from Investment Operations 5.21 0.43 3.82
- ------------------------------------ -------- -------- --------
Distributions to shareholders from:
- ------------------------------------
Net investment income (0.01) (0.15) (0.10)
- ------------------------------------
In excess of net investment income -- (0.05) --
- ------------------------------------
Net realized gain on investments (0.55) (2.01) --
- ------------------------------------ -------- -------- --------
Total Distributions (0.56) (2.21) (0.10)
- ------------------------------------ -------- -------- --------
Net Asset Value, End of Period $ 19.51 $ 14.86 $ 16.64
- ------------------------------------ ======== ======== ========
Total Return (excludes sales charge) 35.61% (a) 2.60% 29.77%
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 0.82% (b) 0.84% 1.00%
- ------------------------------------
Net investment income/(loss) 0.16% (b) 0.85% 1.04%
- ------------------------------------
Expense waiver/reimbursement (c) 0.07% (b) 0.09% 0.00%
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $ 6,946 $ 25,542 $ 26,881
- ------------------------------------
Portfolio turnover (d) 15% 15% 0.13%
- ------------------------------------
<CAPTION>
Period ended Year ended Year ended Year ended Year ended
July 31, 1999* Sept. 30, 1998 Sept. 30, 1997 Sept. 30, 1996 Sept. 30, 1995
--------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Investment A Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 14.87 $ 16.65 $ 13.13 $ 13.23 $ 12.73
- ------------------------------------ -------- -------- -------- -------- --------
Income from Investment Operations:
- ------------------------------------
Net investment income (0.01) 0.14 0.14 0.25 0.36
- ------------------------------------
Net realized and unrealized gains/
(losses) from investments 5.08 0.27 4.64 1.95 1.32
- ------------------------------------ -------- -------- -------- -------- --------
Total from Investment Operations 5.07 0.41 4.78 2.20 1.68
- ------------------------------------ -------- -------- -------- -------- --------
Distributions to shareholders from:
- ------------------------------------
Net investment income (0.01) (0.14) (0.13) (0.26) (0.35)
- ------------------------------------
In excess of net investment income -- (0.04) -- -- --
- ------------------------------------
Net realized gains (0.55) (2.01) (1.13) (2.04) (0.83)
- ------------------------------------ -------- -------- -------- -------- --------
Total Distributions (0.56) (2.19) (1.26) (2.30) (1.18)
- ------------------------------------ -------- -------- -------- -------- --------
Net Asset Value, End of Period $ 19.38 $ 14.87 $ 16.65 $ 13.13 $ 13.23
- ------------------------------------ ======== ======== ======== ======== ========
Total Return (excludes sales charge) 34.60% (a) 2.50% 39.17% 17.96% 14.84%
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 1.04% (b) 0.92% 1.06% 0.75% 0.70%
- ------------------------------------
Net investment income/(loss) (0.07%) (b) 0.76% 0.97% 1.90% 2.89%
- ------------------------------------
Expense waiver/reimbursement (c) 0.07% (b) 0.09% 0.06% 0.10% 0.00%
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $243,790 $232,903 $267,908 $229,042 $226,181
- ------------------------------------
Portfolio turnover (d) 15% 15% 13% 58% 20%
- ------------------------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
88
<PAGE>
Fifth Third Funds
Cardinal Fund****--Financial Highlights (continued)
- --------------------------------------------------------------------------------
(For a share of outstanding throughout each period)
Period ended
July 31, 1999***
-----------------
Investment C Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 15.63
- ------------------------------------ --------
Income from Investment Operations:
- ------------------------------------
Net investment income (0.05)
- ------------------------------------
Net realized and unrealized gains/
(losses) from investments 4.19
- ------------------------------------ --------
Total from Investment Operations 4.14
- ------------------------------------ --------
Distributions to shareholders from:
- ------------------------------------
Net investment income --
- ------------------------------------
In excess of net investment income --
- ------------------------------------
Net realized gains (0.55)
- ------------------------------------ --------
Total Distributions (0.55)
- ------------------------------------ --------
Net Asset Value, End of Period $ 19.22
- ------------------------------------ ========
Total Return (excludes sales charge) 26.99% (a)
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 1.65% (b)
- ------------------------------------
Net investment income/(loss) (0.66%)(b)
- ------------------------------------
Expense waiver/reimbursement (c) 0.24% (b)
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $ 839
- ------------------------------------
Portfolio turnover (d) 15%
- ------------------------------------
* Reflects operations for the period from October 1, 1998 through July 31,
1999.
** Reflects operations for the period from January 2, 1997 (date of
commencement of operations) to September 30, 1997.
*** Reflects operations for the period from October 22, 1998 (date of
commencement of operations) to July 31, 1999.
**** Information prior to September 21, 1998 is for the Cardinal Fund, the
predecessor of the Fifth Third Cardinal Fund.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(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)
89
<PAGE>
Fifth Third Funds
Pinnacle Fund*--Financial Highlights
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
Period ended
July 31, 1999**
---------------
Institutional Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 31.26
- ------------------------------------ --------
Income from Investment Operations:
- ------------------------------------
Net investment income/(loss) (0.06)
- ------------------------------------
Net realized and unrealized gains
from investments 6.71
- ------------------------------------ --------
Total from Investment Operations 6.65
- ------------------------------------ --------
Distributions to shareholders from:
- ------------------------------------
Net investment income --
- ------------------------------------
Net realized gain on investments (0.63)
- ------------------------------------ --------
Total Distributions (0.63)
- ------------------------------------ --------
Net Asset Value, End of Period $ 37.28
- ------------------------------------ ========
Total Return (excludes sales charge) 21.53%(a)
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 1.21% (b)
- ------------------------------------
Net investment income/(loss) (0.24%) (b)
- ------------------------------------
Expense waiver/reimbursement (c) 0.01% (b)
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $ 61,943
- ------------------------------------
Portfolio turnover (d) 51%
- ------------------------------------
<TABLE>
<CAPTION>
Year ended Period ended Year ended Year ended Year ended Year ended
July 31, 1999 July 31, 1998*** Dec 31, 1997 Dec 31, 1996 Dec 31, 1995 Dec. 31, 1994
--------------- ---------------- ------------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Investment A Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 32.35 $ 27.71 $ 23.96 $ 22.47 $ 18.83 $ 21.15
- ------------------------------------ ---------- ----------- --------- -------- -------- --------
Income from Investment Operations:
- ------------------------------------
Net investment income/(loss) (0.09) (0.02) 0.13 0.05 0.11 0.09
- ------------------------------------
Net realized and unrealized gain
from investments 5.57 5.13 8.25 5.04 6.54 (0.34)
- ------------------------------------ ---------- ----------- --------- -------- -------- --------
Total from Investment Operations 5.48 5.11 8.38 5.09 6.65 (0.25)
- ------------------------------------ ---------- ----------- --------- -------- -------- --------
Distributions to shareholders from:
- ------------------------------------
Net investment income -- -- (0.13) (0.05) (0.11) (0.09)
- ------------------------------------
Net realized gain on investments (0.63) (0.47) (4.50) (3.55) (2.90) (1.98)
- ------------------------------------ ---------- ----------- --------- -------- -------- --------
Total Distributions (0.63) (0.47) (4.63) (3.60) (3.01) (2.07)
- ------------------------------------ ---------- ----------- --------- -------- -------- --------
Net Asset Value, End of Period $ 37.20 $ 32.35 $ 27.71 $ 23.96 $ 22.47 $ 18.83
- ------------------------------------ ========== =========== ======== ======== ======== ========
Total Return (excludes sales charge) 17.18% 18.58% (a) 35.40% 22.50% 35.40% (1.10%)
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 1.41% 1.28% (b) 1.12% 1.16% 1.14% 1.15%
- ------------------------------------
Net investment income/(loss) (0.47%) (0.12%) (b) 0.46% 0.18% 0.44% 0.41%
- ------------------------------------
Expense waiver/reimbursement (c) 0.02% 0.30% (b) 0.00% 0.00% 0.00% 0.00%
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $ 49,936 $ 35,549 $ 22,272 $ 16,461 $ 14,673 $ 13,014
- ------------------------------------
Portfolio turnover (d) 51% 38% 50% 44% 68% 91%
- ------------------------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
90
<PAGE>
Fifth Third Funds
Pinnacle Fund* -- Financial Highlights (continued)
- --------------------------------------------------------------------------------
(For a share of beneficial interest outstanding throughout each period)
Year ended Period ended
July 31, 1999 July 31, 1998****
------------- -------------
Investment C Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 32.28 $ 30.16
- ------------------------------------ --------- ---------
Income from Investment Operations:
- ------------------------------------
Net investment income/(loss) (0.23) (0.04)
- ------------------------------------ --------- ---------
Net realized and unrealized gain
from investments 5.50 2.16
- ------------------------------------ --------- ---------
Total from Investment Operations 5.27 2.12
- ------------------------------------ --------- ---------
Distributions to shareholders from:
- ------------------------------------
Net investment income -- --
- ------------------------------------
Net realized gain on investments (0.63) --
- ------------------------------------ --------- ---------
Total Distributions (0.63) --
- ------------------------------------ --------- ---------
Net Asset Value, End of Period $ 36.92 $ 32.28
- ------------------------------------ ========= =========
Total Return (excludes sales charge) 16.56% 7.07% (a)
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 1.95% 2.17% (b)
- ------------------------------------
Net investment income/(loss) (1.00%) (0.84%) (b)
- ------------------------------------
Expense waiver/reimbursement (c) 0.26% 0.42% (b)
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $ 6,653 $ 922
- ------------------------------------
Portfolio turnover (d) 51% 38%
- ------------------------------------
* Information prior to the period March 9, 1998 is for the Pinnacle Fund,
the predecessor Fund of the Fifth Third Pinnacle Fund.
** Reflects operations for the period from August 11, 1998 (date of
commencement of operations) to July 31, 1999.
*** Reflects the period of operations from January 1, 1998 to July 31, 1998.
***** Reflects the period of operations for the period March 9, 1998 (date of
commencement of operations) to July 31, 1998.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(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)
91
<PAGE>
Fifth Third Funds
Balanced Fund--Financial Highlights
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
Period ended
July 31, 1999*
-------------
Institutional Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 14.60
- ------------------------------------ --------
Income from Investment Operations:
- ------------------------------------
Net investment income 0.22
- ------------------------------------
Net realized and unrealized gains
from investments 2.27
- ------------------------------------ --------
Total from Investment Operations 2.49
- ------------------------------------ --------
Distributions to shareholders from:
- ------------------------------------
Net investment income (0.22)
- ------------------------------------
Net realized gain on investments (0.74)
- ------------------------------------ --------
Total Distributions (0.96)
- ------------------------------------ --------
Net Asset Value, End of Period $ 16.13
- ------------------------------------ ========
Total Return (excludes sales charge) 17.63% (a)
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 1.00% (b)
- ------------------------------------
Net investment income/(loss) 1.54% (b)
- ------------------------------------
Expense waiver/reimbursement (c) 0.04% (b)
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $139,616
- ------------------------------------
Portfolio turnover (d) 128%
- ------------------------------------
<TABLE>
<CAPTION>
Year ended Year ended Year ended Year ended Year ended
July 31, 1999 July 31, 1998 July 31, 1997 July 31, 1996 July 31, 1995
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Investment A Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 14.99 $ 15.33 $ 11.75 $ 11.28 $ 9.70
- ------------------------------------ ------------- ------------- ------------- ------------- -------------
Income from Investment Operations:
- ------------------------------------
Net investment income 0.20 0.27 0.27 0.27 0.28
- ------------------------------------
Net realized and unrealized
from investments 1.86 0.92 4.06 0.47 1.57
- ------------------------------------ ------------- ------------- ------------- ------------- -------------
Total from Investment Operations 2.06 1.19 4.33 0.74 1.85
- ------------------------------------ ------------- ------------- ------------- ------------- -------------
Distributions to shareholders from:
- ------------------------------------
Net investment income (0.19) (0.28) (0.26) (0.27) (0.27)
- ------------------------------------
Net realized gain on investments (0.74) (1.25) (0.49) -- --
- ------------------------------------ ------------- ------------- ------------- ------------- -------------
Total Distributions (0.93) (1.53) (0.75) (0.27) (0.27)
- ------------------------------------ ------------- ------------- ------------- ------------- -------------
Net Asset Value, End of Period $ 16.12 $ 14.99 $ 15.33 $ 11.75 $ 11.28
- ------------------------------------ ============= ============= ============= ============= =============
Total Return (excludes sales charge) 14.30% 8.41% 38.45% 6.52% 19.37%
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 1.28% 1.00% 1.00% 1.00% 1.00%
- ------------------------------------
Net investment income/(loss) 1.22% 1.84% 2.05% 2.31% 2.73%
- ------------------------------------
Expense waiver/reimbursement (c) 0.06% 0.43% 0.40% 0.06% 0.06%
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $ 79,686 $ 173,177 $ 122,765 $ 92,808 $ 58,075
- ------------------------------------
Portfolio turnover (d) 128% 135% 101% 61% 58%
- ------------------------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
92
<PAGE>
Fifth Third Funds
Balanced Fund -- Financial Highlights (continued)
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year ended Year ended Year ended Period ended
July 31, 1999 July 31, 1998 July 31, 1997 July 31, 1996**
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Investment C Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 15.01 $ 15.34 $ 11.75 $ 12.13
- ------------------------------------ ------------- ------------- ------------- -------------
Income from Investment Operations:
- ------------------------------------
Net investment income 0.11 0.17 0.16 0.05
- ------------------------------------
Net realized and unrealized
from investments 1.88 0.92 4.08 (0.39)
- ------------------------------------ ------------- ------------- ------------- -------------
Total from Investment Operations 1.99 1.09 4.24 (0.34)
- ------------------------------------ ------------- ------------- ------------- -------------
Distributions to shareholders from:
- ------------------------------------
Net investment income (0.13) (0.17) (0.16) (0.04)
- ------------------------------------
Net realized gain on investments (0.74) (1.25) (0.49) --
- ------------------------------------ ------------- ------------- ------------- -------------
Total Distributions (0.87) (1.42) (0.65) (0.04)
- ------------------------------------ ------------- ------------- ------------- -------------
Net Asset Value, End of Period $ 16.13 $ 15.01 $ 15.34 $ 11.75
- ------------------------------------ ------------- ------------- ------------- -------------
Total Return (excludes sales charge) 13.78% 7.67% 37.52% 6.32% (e)
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 1.76% 1.58% 1.75% 1.78% (b)
- ------------------------------------
Net investment income/(loss) 0.78% 1.24% 1.30% 1.60% (b)
- ------------------------------------
Expense waiver/reimbursement (c) 0.29% 0.49% 0.30% 0.07% (b)
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $ 6,692 $ 4,796 $ 1,155 $ 264
- ------------------------------------
Portfolio turnover (d) 128% 135% 101% 61%
- ------------------------------------
</TABLE>
* Reflects operations for the period from August 11, 1998 (date of
commencement of operations) to July 31, 1999.
** Reflects operations for the period from April 25, 1996 (date of
commencement of operations) to July 31, 1996.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(e) Represents total return for Investment A shares for the period from August
1, 1995 to April 24, 1996 plus the total return for Investment C shares for
the period from April 25, 1996 to July 31, 1996.
(See Notes which are an integral part of the Financial Statements)
93
<PAGE>
Fifth Third Funds
Mid Cap Fund -- Financial Highlights
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
Period ended
July 31, 1999*
-------------
Institutional Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 15.40
- ------------------------------------ --------
Income from Investment Operations:
- ------------------------------------
Net investment income/(loss) (0.04)
- ------------------------------------
Net realized and unrealized gains/
(losses) from investments 1.95
- ------------------------------------ --------
Total from Investment Operations 1.91
- ------------------------------------ --------
Distributions to shareholders from:
- ------------------------------------
Net investment income --
- ------------------------------------
In excess of net investment income --
- ------------------------------------
Net realized gains (1.44)
- ------------------------------------ --------
Total Distributions (1.44)
- ------------------------------------ --------
Net Asset Value, End of Period $ 15.87
- ------------------------------------ ========
Total Return (excludes sales charge) 13.13% (a)
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 0.97% (b)
- ------------------------------------
Net investment income/(loss) (0.26)% (b)
- ------------------------------------
Expense waiver/reimbursement (c) 0.07% (b)
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $191,987
- ------------------------------------
Portfolio turnover (d) 49%
- ------------------------------------
<TABLE>
<CAPTION>
Year ended Year ended Year ended Year ended Year ended
July 31, 1999 July 31, 1998 July 31, 1997 July 31, 1996 July 31, 1995
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Investment A Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 16.19 $ 16.98 $ 12.60 $ 12.59 $ 10.10
- ------------------------------------ ------------- ------------- ------------- ------------- -------------
Income from Investment Operations:
- ------------------------------------
Net investment income/(loss) (0.10) (0.03) 0.02 0.06 0.08
- ------------------------------------
Net realized and unrealized gains/
(losses) from investments 1.17 0.98 5.55 0.11 2.48
- ------------------------------------ ------------- ------------- ------------- ------------- -------------
Total from Investment Operations 1.07 0.95 5.57 0.17 2.56
- ------------------------------------ ------------- ------------- ------------- ------------- -------------
Distributions to shareholders from:
- ------------------------------------
Net investment income -- -- (0.02) (0.07) (0.07)
- ------------------------------------
In excess of net investment income -- -- (0.02) -- --
- ------------------------------------
Net realized gains (1.44) (1.74) (1.15) (0.09) --
- ------------------------------------ ------------- ------------- ------------- ------------- -------------
Total Distributions (1.44) (1.74) (1.19) (0.16) (0.07)
- ------------------------------------ ------------- ------------- ------------- ------------- -------------
Net Asset Value, End of Period $ 15.82 $ 16.19 $ 16.98 $ 12.60 $ 12.59
- ------------------------------------ ============= ============= ============= ============= =============
Total Return (excludes sales charge) 7.29% 5.69% 47.17% 1.27% 25.45%
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 1.28% 1.01% 1.00% 1.00% 1.00%
- ------------------------------------
Net investment income/(loss) (0.59%) (0.19%) 0.10% 0.42% 0.77%
- ------------------------------------
Expense waiver/reimbursement (c) 0.11% 0.40% 0.37% 0.06% 0.18%
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $ 27,966 $ 217,547 $ 186,066 $ 72,663 $ 47,184
- ------------------------------------
Portfolio turnover (d) 49% 44% 52% 54% 23%
- ------------------------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
94
<PAGE>
Fifth Third Funds
Mid Cap Fund -- Financial Highlights (continued)
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year ended Year ended Year ended Period ended
July 31, 1999 July 31, 1998 July 31, 1997 July 31, 1996**
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Investment C Shares
- -------------------------------------
Net Asset Value, Beginning of Period $ 15.98 $ 16.88 $ 12.59 $ 13.72
- ------------------------------------- ------------- ------------- ------------- -------------
Income from Investment Operations:
- -------------------------------------
Net investment income/(loss) (0.18) (0.05) (0.07) (0.01)
- -------------------------------------
Net realized and unrealized gains/
(losses) from investments 1.16 0.89 5.51 (1.12)
- ------------------------------------- ------------- ------------- ------------- -------------
Total from Investment Operations 0.98 0.84 5.44 (1.13)
- ------------------------------------- ------------- ------------- ------------- -------------
Distributions to shareholders from:
- -------------------------------------
Net investment income -- -- -- --
- -------------------------------------
In excess of net investment income -- -- -- --
- -------------------------------------
Net realized gain on investment (1.44) (1.74) (1.15) --
- ------------------------------------- ------------- ------------- ------------- -------------
Total Distributions (1.44) (1.74) (1.15) --
- ------------------------------------- ------------- ------------- ------------- -------------
Net Asset Value, End of Period $ 15.52 $ 15.98 $ 16.88 $ 12.59
- ------------------------------------- ============= ============= ============= =============
Total Return (excludes sales charge) 6.79% 5.03% 46.05% 1.11% (e)
- -------------------------------------
Ratios to Average Net Assets:
- -------------------------------------
Expenses 1.85% 1.61% 1.75% 1.78% (b)
- -------------------------------------
Net investment income/(loss) (1.07%) (0.81%) (0.62%) (0.51%)(b)
- -------------------------------------
Expense waiver/reimbursement (c) 0.32% 0.44% 0.27% 0.06% (b)
- -------------------------------------
Supplemental data:
- -------------------------------------
Net Assets at end of period (000) $ 794 $ 1,049 $ 439 $ 229
- -------------------------------------
Portfolio turnover (d) 49% 44% 52% 54%
- -------------------------------------
</TABLE>
* Reflects operations for the period from August 11, 1998 (date of
commencement of operations) to July 31, 1999.
** Reflects operations for the period from April 24, 1996 (date of
commencement of operations) to July 31, 1996.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(e) Represents total return for Investment A shares for the period from August
1, 1995 to April 23, 1996 plus the total return for Investment C shares for
the period fro April 24, 1996 to July 31, 1996.
(See Notes which are an integral part of the Financial Statements)
95
<PAGE>
Fifth Third Funds
International Equity Fund -- Financial Highlights
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
Period ended
July 31, 1999*
Institutional Shares
Net Asset Value, Beginning of Period $ 10.50
- --------------------------------------- -------------
Income from Investment Operations
- ---------------------------------------
Net investment income/(loss) 0.09
- ---------------------------------------
Net realized and unrealized gains/
(losses) from investments 2.52
- --------------------------------------- -------------
Total from Investment Operations 2.61
- --------------------------------------- -------------
Distributions to shareholders from:
- ---------------------------------------
Net investment income (0.14)
- ---------------------------------------
In excess of net investment income (0.10)
- ---------------------------------------
Net realized gains (0.07)
- --------------------------------------- -------------
Total Distributions (0.31)
- --------------------------------------- -------------
Net Asset Value, End of Period $ 12.80
- --------------------------------------- =============
Total Return (excludes sales charge) 25.02% (a)
- ---------------------------------------
Ratios to Average Net Assets:
- ---------------------------------------
Expenses 1.50% (b)
- ---------------------------------------
Net investment income/(loss) 0.67 (b)
- ---------------------------------------
Expense waiver/reimbursement (c) 0.00% (b)
- ---------------------------------------
Supplemental data:
- ---------------------------------------
Net Assets at end of period (000) $172,388
- ---------------------------------------
Portfolio turnover (d) 42%
- ---------------------------------------
<TABLE>
<CAPTION>
Year ended Year ended Year ended Year ended Period ended
July 31, 1999 July 31, 1998 July 31, 1997 July 31, 1996 July 31, 1995**
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Investment A Shares
- -------------------------------------
Net Asset Value, Beginning of Period $ 12.56 $ 12.05 $ 10.74 $ 9.83 $ 10.00
- ------------------------------------- ------------- ------------- ------------- ------------- -------------
Income from Investment Operations
- -------------------------------------
Net investment income/(loss) 0.03 0.09 0.04 0.01 0.05
- -------------------------------------
Net realized and unrealized gains/
(losses) from investments 0.49 1.31 2.15 0.90 (0.22)
- ------------------------------------- ------------- ------------- ------------- ------------- -------------
Total from Investment Operations 0.52 1.40 2.19 0.91 (0.17)
- ------------------------------------- ------------- ------------- ------------- ------------- -------------
Distributions to shareholders from:
- -------------------------------------
Net investment income (0.08) (0.59) (0.66) -- --
- -------------------------------------
In excess of net investment income (0.09) -- (0.16) -- --
- -------------------------------------
Net realized gains (0.07) (0.30) (0.06) -- --
- ------------------------------------- ------------- ------------- ------------- ------------- -------------
Total Distributions (0.24) (0.89) (0.88) -- --
- ------------------------------------- ------------- ------------- ------------- ------------- -------------
Net Asset Value, End of Period $ 12.84 $ 12.56 $ 12.05 $ 10.74 $ 9.83
- ------------------------------------- ============= ============= ============= ============= =============
Total Return (excludes sales charge) 4.23% 13.29% 21.78% 9.26% (1.70%) (a)
- -------------------------------------
Ratios to Average Net Assets:
- -------------------------------------
Expenses 1.52% 1.47% 1.38% 1.61% 1.65% (b)
- -------------------------------------
Net investment income/(loss) 0.03% 0.66% 0.39% 0.32% 0.62% (b)
- -------------------------------------
Expense waiver/reimbursement (c) 0.18% 0.35% 0.35% 0.05% 0.07% (b)
- -------------------------------------
Supplemental data:
- -------------------------------------
Net Assets at end of period (000) $ 5,821 $ 163,297 $ 151,728 $ 120,349 $ 86,442
- -------------------------------------
Portfolio turnover (d) 42% 39% 60% 41% 54%
- -------------------------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
96
<PAGE>
<TABLE>
<CAPTION>
Fifth Third Funds
International Equity Fund -- Financial Highlights (continued)
- -------------------------------------------------------------------------------------------------------------
(For a share outstanding throughout each period)
Year ended Year ended Year ended Period ended
July 31, 1999 July 31, 1998 July 31, 1997 July 31, 1996***
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Investment C Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 12.51 $ 12.01 $ 10.71 $ 11.21
- ------------------------------------ ----------- ------------- ------------- -------------
Income from Investment Operations
- ------------------------------------
Net investment income/(loss) -- (0.06) (0.02) 0.01
- ------------------------------------
Net realized and unrealized gains/
(losses) from investments 0.46 1.39 2.16 (0.51)
- ------------------------------------ ----------- ------------- ------------- -------------
Total from Investment Operations 0.46 1.33 2.14 (0.50)
- ------------------------------------ ----------- ------------- ------------- -------------
Distributions to shareholders from:
- ------------------------------------
Net investment income (0.14) (0.53) (0.46) --
- ------------------------------------
In excess of net investment income -- -- (0.32) --
- ------------------------------------
Net realized gains (0.07) (0.30) (0.06) --
- ------------------------------------ ----------- ------------- ------------- -------------
Total Distributions (0.21) (0.83) (0.84) --
- ------------------------------------ ----------- ------------- ------------- -------------
Net Asset Value, End of Period $ 12.76 $ 12.51 $ 12.01 $ 10.71
- ------------------------------------ =========== ============= ============= =============
Total Return (excludes sales charge) 3.79% 12.57% 21.25% 8.95% (a)
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 2.25% 2.22% 2.13% 2.34% (b)
- ------------------------------------
Net investment income/(loss) (0.08%) (0.09%) (0.28%) 0.76% (b)
- ------------------------------------
Expense waiver/reimbursement (c) 0.25% 0.25% 0.25% 0.00% (b)
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $ 235 $ 291 $ 210 $ 57
- ------------------------------------
Portfolio turnover (d) 42% 39% 60% 41%
- ------------------------------------
</TABLE>
* Reflects operations for the period from October 9, 1998 (date of
commencement of operations) to July 31, 1999.
** Reflects operations for the period from August 19, 1994 (date of
commencement of operations) to July 31, 1995.
*** Reflects operations for the period from April 25, 1996 (date of
commencement of operations) to July 31, 1996.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(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)
97
<PAGE>
Fifth Third Funds
Bond Fund For Income -- Financial Highlights
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
Period ended
July 31, 1999*
-------------
Institutional Shares
- ----------------------------------------
Net Asset Value, Beginning of Period $ 12.27
- ---------------------------------------- -------------
Investment Operations
- ----------------------------------------
Net investment income/(loss) 0.56
- ----------------------------------------
Net realized and unrealized gains/
(losses) from investments (0.30)
- ---------------------------------------- -------------
Total from Investment Operations: 0.26
- ---------------------------------------- -------------
Distributions to shareholders from:
- ----------------------------------------
Net investment income (0.62)
- ----------------------------------------
In excess of net investments --
- ----------------------------------------
Net realized gains (0.21)
- ---------------------------------------- -------------
Total Distributions (0.83)
- ---------------------------------------- -------------
Net Asset Value, End of Period $ 11.70
- ---------------------------------------- =============
Total Return (excludes sales charge) 2.12% (a)
- ----------------------------------------
Ratios to Average Net Assets:
- ----------------------------------------
Expenses 0.75% (b)
- ----------------------------------------
Net investment income/(loss) 5.12% (b)
- ----------------------------------------
Expense waiver/reimbursement (c) 0.03% (b)
- ----------------------------------------
Supplemental data:
- ----------------------------------------
Net Assets at end of period (000) $198,212
- ----------------------------------------
Portfolio turnover (d) 104%
- ----------------------------------------
<TABLE>
<CAPTION>
Year ended Year ended Period ended
July 31, 1999 July 31, 1998 July 31, 1997**
-------------- -------------- --------------
<S> <C> <C> <C>
Investment A Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 12.19 $ 12.19 $ 12.00
- ------------------------------------ -------------- -------------- --------------
Income from Investment Operations:
- ------------------------------------
Net investment income/(loss) 0.71 0.68 0.37
- ------------------------------------
Net realized and unrealized gains/
(losses) from investments (0.41) 0.06 0.18
- ------------------------------------ -------------- -------------- --------------
Total from Investment Operations 0.30 0.74 0.55
- ------------------------------------ -------------- -------------- --------------
Distributions to shareholders from:
- ------------------------------------
Net investment income (0.59) (0.69) (0.36)
- ------------------------------------
In excess from net investments -- -- --
- ------------------------------------
Net realized gains (0.21) (0.05) --
- ------------------------------------ -------------- -------------- --------------
Total Distributions (0.80) (0.74) (0.36)
- ------------------------------------ -------------- -------------- --------------
Net Asset Value, End of Period $ 11.69 $ 12.19 $ 12.19
- ------------------------------------ ============== ============== ==============
Total Return (excludes sales charge) 2.42% 6.23% 4.64% (a)
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 0.97% 0.75% 0.79% (b)
- ------------------------------------
Net investment income/(loss) 4.80% 5.54% 6.08% (b)
- ------------------------------------
Expense waiver/reimbursement (c) 0.05% 0.42% 0.42% (b)
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $ 40,508 $ 188,071 $ 157,108
- ------------------------------------
Portfolio turnover (d) 104% 127% 157%
- ------------------------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
98
<PAGE>
<TABLE>
<CAPTION>
Fifth Third Funds
Bond Fund For Income -- Financial Highlights (continued)
- -----------------------------------------------------------------------------------------
(For a share outstanding throughout each period)
Year ended Year ended Period ended
July 31, 1999 July 31, 1998*** July 31, 1997**
-------------- -------------- -------------
<S> <C> <C> <C>
Investment C Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 12.19 $ 12.18 $ 12.00
- ------------------------------------ -------------- -------------- -------------
Income from Investment Operations
- ------------------------------------
Net investment income/(loss) 0.53 0.60 (0.01)
- ------------------------------------
Net realized and unrealized gains/
(losses) from investments (0.29) 0.05 0.50
- ------------------------------------ -------------- -------------- -------------
Total from Investment Operations 0.24 0.65 0.49
- ------------------------------------ -------------- -------------- -------------
Distributions to shareholders from:
- ------------------------------------
Net investment income (0.53) (0.59) (0.22)
- ------------------------------------
In excess of net investment income -- -- (0.09)
- ------------------------------------
Net realized gains (0.21) (0.05) --
- ------------------------------------ -------------- -------------- -------------
Total Distributions (0.74) (0.64) (0.31)
- ------------------------------------ -------------- -------------- -------------
Net Asset Value, End of Period $ 11.69 $ 12.19 $ 12.18
- ------------------------------------ ============== ============== =============
Total Return (excludes sales charge) 1.92% 5.50% 4.18% (a)
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 1.54% 1.34% 1.54% (b)
- ------------------------------------
Net investment income/(loss) 3.40% 4.89% 4.20% (b)
- ------------------------------------
Expense waiver/reimbursement (c) 0.28% 0.32% 0.26% (b)
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $ 567 $ 230 $ 6
- ------------------------------------
Portfolio turnover (d) 104% 127% 157%
- ------------------------------------
</TABLE>
* Reflects operations for the period from August 11, 1998 (date of
commencement of operations) to July 31, 1999.
** Reflects operations for the period from January 27, 1997 (date of
commencement of operations) to July 31, 1997.
*** Per share information is calculated using the average share method.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(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)
99
<PAGE>
Fifth Third Funds
Quality Bond Fund -- Financial Highlights
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
Period ended
July 31, 1999*
--------------
Institutional Shares
- -------------------------------------
Net Asset Value, Beginning of Period $ 10.02
- ------------------------------------- ------------
Income from Investment Operations
- -------------------------------------
Net investment income 0.48
- -------------------------------------
Net realized and unrealized gains/
(losses) from investments (0.38)
- ------------------------------------- ------------
Total from Investment Operations 0.10
- ------------------------------------- ------------
Distributions to shareholders from:
- -------------------------------------
Net investment income (0.49)
- -------------------------------------
In excess of net investments --
- -------------------------------------
Net realized gains (0.11)
- ------------------------------------- ------------
Total Distributions (0.60)
- ------------------------------------- ------------
Net Asset Value, End of Period $ 9.52
- ------------------------------------- ============
Total Return (excludes sales charge) 0.88% (a)
- -------------------------------------
Ratios to Average Net Assets:
- -------------------------------------
Expenses 0.75% (b)
- -------------------------------------
Net investment income/(loss) 4.95% (b)
- -------------------------------------
Expense waiver/reimbursement (c) 0.11% (b)
- -------------------------------------
Supplemental data:
- -------------------------------------
Net Assets at end of period (000) $133,537
- -------------------------------------
Portfolio turnover (d) 349%
- -------------------------------------
<TABLE>
<CAPTION>
Year ended Year ended Year ended Year ended Year ended
July 31, 1999 July 31, 1998 July 31, 1997 July 31, 1996 July 31, 1995
-------------- -------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Investment A Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 9.96 $ 9.85 $ 9.52 $ 9.72 $ 9.55
- ------------------------------------ -------------- -------------- -------------- --------------- --------------
Investment Operations
- ------------------------------------
Net investment income/(loss) 0.65 0.54 0.55 0.56 0.64
- ------------------------------------
Net realized and unrealized gains/
(losses) from investments (0.51) 0.12 0.32 (0.19) 0.17
- ------------------------------------ -------------- -------------- -------------- --------------- --------------
Total from Investment Operations 0.14 0.66 0.87 0.37 0.81
- ------------------------------------ -------------- -------------- -------------- --------------- --------------
Distributions to shareholders from:
- ------------------------------------
Net investment income (0.47) (0.55) (0.54) (0.57) (0.64)
- ------------------------------------
In excess of net investment income -- -- -- -- --
- ------------------------------------
Net realized gains (0.11) -- -- -- --
- ------------------------------------ -------------- -------------- -------------- --------------- --------------
Total Distributions (0.58) (0.55) (0.54) (0.57) (0.64)
- ------------------------------------ -------------- -------------- -------------- --------------- --------------
Net Asset Value, End of Period $ 9.52 $ 9.96 $ 9.85 $ 9.52 $ 9.72
- ------------------------------------ ============== ============== ============== =============== ==============
Total Return (excludes sales charge) 1.26% 6.91% 9.43% 3.86% 8.89%
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 0.92% 0.75% 0.75% 0.75% 0.75%
- ------------------------------------
Net investment income/(loss) 4.85% 5.50% 5.71% 5.80% 6.72%
- ------------------------------------
Expense waiver/reimbursement (c) 0.17% 0.45% 0.41% 0.06% 0.09%
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $ 9,826 $ 107,794 $ 91,789 $ 83,422 $ 55,767
- ------------------------------------
Portfolio turnover (d) 349% 279% 181% 117% 138%
- ------------------------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
100
<PAGE>
<TABLE>
<CAPTION>
Fifth Third Funds
Quality Bond Fund -- Financial Highlights (continued)
- ------------------------------------------------------------------------------------------------------
(For a share outstanding throughout each period)
Year ended Year ended Year ended Period ended
July 31, 1999 July 31, 1998 July 31, 1997 July 31, 1996**
-------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Investment C Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 9.95 $ 9.86 $ 9.53 $ 9.62
- ------------------------------------ ------------- ------------- -------------- --------------
Income from Investment Operations
- ------------------------------------
Net investment income/(loss) 0.43 0.48 0.49 0.14
- ------------------------------------
Net realized and unrealized gains/
(losses) from investments (0.33) 0.09 0.32 (0.08)
- ------------------------------------ ------------- ------------- -------------- --------------
Total from Investment Operations 0.10 0.57 0.81 0.06
- ------------------------------------ ------------- ------------- -------------- --------------
Distributions to shareholders from:
- ------------------------------------
Net investment income (0.43) (0.48) (0.48) (0.15)
- ------------------------------------
In excess of net investment income -- -- -- --
- ------------------------------------
Net realized gains (0.11) -- -- --
- ------------------------------------ ------------- ------------- -------------- --------------
Total Distributions (0.54) (0.48) (0.48) (0.15)
- ------------------------------------ ------------- ------------- -------------- --------------
Net Asset Value, End of Period $ 9.51 $ 9.95 $ 9.86 $ 9.53
- ------------------------------------ ============= ============= ============== ==============
Total Return (excludes sales charge) 0.75% 5.92% 8.68% 3.71% (e)
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 1.43% 1.50% 1.50% 1.52% (b)
- ------------------------------------
Net investment income/(loss) 4.23% 4.76% 4.97% 5.03% (b)
- ------------------------------------
Expense waiver/reimbursement (c) 0.36% 0.35% 0.31% 0.09% (b)
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $ 811 $ 399 $ 204 $ 162
- ------------------------------------
Portfolio turnover (d) 349% 279% 181% 117%
- ------------------------------------
</TABLE>
* Reflects operations for the period from August 11, 1998 (date of
commencement of operations) to July 31, 1999.
** Reflects operations for the period from April 25, 1996 (date of
commencement of operations) to July 31, 1996.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(e) 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.
(See Notes which are an integral part of the Financial Statements)
101
<PAGE>
Fifth Third Funds
U.S. Government Securities Fund -- Financial Highlights
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
Period ended
July 31, 1999*
--------------
Institutional Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 9.89
- ------------------------------------ --------------
Income from Investment Operations:
- ------------------------------------
Net investment income/(loss) 0.46
- ------------------------------------
Net realized and unrealized gains/
(losses) from investments (0.22)
- ------------------------------------ --------------
Total from Investment Operations 0.24
- ------------------------------------ --------------
Distributions to shareholders from:
- ------------------------------------
Net investment income (0.49)
- ------------------------------------ --------------
Total Distributions (0.49)
- ------------------------------------ --------------
Net Asset Value, End of Period $ 9.64
- ------------------------------------ ==============
Total Return (excludes sales charge) 2.43% (a)
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 0.75% (b)
- ------------------------------------
Net investment income/(loss) 4.80% (b)
- ------------------------------------
Expense waiver/reimbursement (c) 0.28% (b)
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $ 42,239
- ------------------------------------
Portfolio turnover (d) 93%
- ------------------------------------
<TABLE>
<CAPTION>
Year ended Year ended Year ended Year ended Year ended
July 31, 1999 July 31, 1998 July 31, 1997 July 31, 1996 July 31, 1995
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Investment A Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 9.82 $ 9.75 $ 9.55 $ 9.77 $ 9.64
- ------------------------------------ -------------- -------------- -------------- -------------- --------------
Income from Investment Operations:
- ------------------------------------
Net investment income/(loss) 0.55 0.52 0.54 0.55 0.58
- ------------------------------------
Net realized and unrealized gains/
(losses) from investments (0.26) 0.07 0.19 (0.20) 0.13
- ------------------------------------ -------------- -------------- -------------- -------------- --------------
Total from Investment Operations 0.29 0.59 0.73 0.35 0.71
- ------------------------------------ -------------- -------------- -------------- -------------- --------------
Distributions to shareholders from:
- ------------------------------------
Net investment income (0.47) (0.52) (0.53) (0.57) (0.58)
- ------------------------------------ -------------- -------------- -------------- -------------- --------------
Total Distributions (0.47) (0.52) (0.53) (0.57) (0.58)
- ------------------------------------ -------------- -------------- -------------- -------------- --------------
Net Asset Value, End of Period $ 9.64 $ 9.82 $ 9.75 $ 9.55 $ 9.77
- ------------------------------------ ============== ============== ============== ============== ==============
Total Return (excludes sales charge) 2.89% 6.17% 7.83% 3.63% 7.66%
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 0.95% 0.75% 0.75% 0.75% 0.75%
- ------------------------------------
Net investment income/(loss) 4.62% 5.30% 5.56% 5.67% 5.98%
- ------------------------------------
Expense waiver/reimbursement (c) 0.33% 0.53% 0.50% 0.29% 0.39%
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $ 5,192 $ 41,550 $ 42,414 $ 30,754 $ 25,054
- ------------------------------------
Portfolio turnover (d) 93% 155% 169% 103% 115%
- ------------------------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
102
<PAGE>
<TABLE>
<CAPTION>
Fifth Third Funds
U.S. Government Securities Fund -- Financial Highlights (continued)
- -------------------------------------------------------------------------------------------------------------
(For a share outstanding throughout each period)
Year ended Year ended Year ended Period ended
July 31, 1999 July 31, 1998 July 31, 1997 July 31, 1996**
-------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
Investment C Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 9.80 $ 9.75 $ 9.56 $ 9.65
- ------------------------------------ -------------- -------------- -------------- ---------------
Income from Investment Operations
- ------------------------------------
Net investment income/(loss) 0.41 0.46 0.46 0.16
- ------------------------------------
Net realized and unrealized gains/
(losses) from investments (0.18) 0.04 0.19 (0.10)
- ------------------------------------ -------------- -------------- -------------- ---------------
Total from Investment Operations 0.23 0.50 0.65 0.06
- ------------------------------------ -------------- -------------- -------------- ---------------
Distributions to shareholders from:
- ------------------------------------
Net investment income (0.42) (0.45) (0.46) (0.15)
- ------------------------------------ -------------- -------------- -------------- ---------------
Total Distributions (0.42) (0.45) (0.46) (0.15)
- ------------------------------------ -------------- -------------- -------------- ---------------
Net Asset Value, End of Period $ 9.61 $ 9.80 $ 9.75 $ 9.56
- ------------------------------------ ============== ============== ============== ===============
Total Return (excludes sales charge) 2.31% 5.19% 6.92% 3.48% (e)
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 1.40% 1.50% 1.50% 1.52% (b)
- ------------------------------------
Net investment income/(loss) 4.20% 4.56% 4.82% 4.80% (b)
- ------------------------------------
Expense waiver/reimbursement (c) 0.54% 0.43% 0.40% 0.37% (b)
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $ 431 $ 118 $ 75 $ 49
- ------------------------------------
Portfolio turnover (d) 93% 155% 169% 103%
- ------------------------------------
</TABLE>
* Reflects operations for the period from August 11, 1998 (date of
commencement of operations) to July 31, 1999.
** Reflects operations for the period from April 24, 1996 (date of
commencement of operations) to July 31, 1996.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(e) Represents total return for Investment A shares for the period from August
1, 1995 to April 23, 1996 plus the total return for Investment C shares for
the period from April 24, 1996 to July 31, 1996.
(See Notes which are an integral part of the Financial Statements)
103
<PAGE>
Fifth Third Funds
Municipal Bond Fund -- Financial Highlights
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
Period ended
July 31, 1999*
-------------
Institutional Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 12.30
- ------------------------------------ -------------
Income from Investment Operations:
- ------------------------------------
Net investment income/(loss) 0.47
- ------------------------------------
Net realized and unrealized gains/
(losses) from investments (0.32)
- ------------------------------------ -------------
Total from Investment Operations 0.15
- ------------------------------------ -------------
Distributions to shareholders from:
- ------------------------------------
Net investment income (0.47)
- ------------------------------------
In excess of net investment income --
- ------------------------------------
Net realized gains (0.21)
- ------------------------------------ -------------
Total Distributions (0.68)
- ------------------------------------ -------------
Net Asset Value, End of Period $ 11.77
- ------------------------------------ =============
Total Return (excludes sales charge) 1.18% (a)
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 0.75% (b)
- ------------------------------------
Net investment income/(loss) 3.79% (b)
- ------------------------------------
Expense waiver/reimbursement (c) 0.11% (b)
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $114,923
- ------------------------------------
Portfolio turnover (d) 110%
- ------------------------------------
<TABLE>
<CAPTION>
Year ended Year ended Period ended
July 31, 1999 July 31, 1998 July 31, 1997**
-------------- -------------- --------------
<S> <C> <C> <C>
Investment A Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 12.24 $ 12.33 $ 12.00
- ------------------------------------ -------------- -------------- --------------
Income from Investment Operations
- ------------------------------------
Net investment income/(loss) 0.45 0.50 0.28
- ------------------------------------
Net realized and unrealized gains/
(losses) from investments (0.25) 0.01 0.32
- ------------------------------------ -------------- -------------- --------------
Total from Investment Operations 0.20 0.51 0.60
- ------------------------------------ -------------- -------------- --------------
Distributions to shareholders from:
- ------------------------------------
Net investment income (0.44) (0.51) (0.27)
- ------------------------------------
In excess of net investment
income/(loss) -- -- --
- ------------------------------------
Net realized gains (0.21) (0.09) --
- ------------------------------------ -------------- -------------- --------------
Total Distributions (0.65) (0.60) (0.27)
- ------------------------------------ -------------- -------------- --------------
Net Asset Value, End of Period $ 11.79 $ 12.24 $ 12.33
- ------------------------------------ ============== ============== ==============
Total Return (excludes sales charge) 1.56% 4.28% 5.04% (a)
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 0.81% 0.76% 0.81% (b)
- ------------------------------------
Net investment income/(loss) 3.99% 4.09% 4.44% (b)
- ------------------------------------
Expense waiver/reimbursement(c) 0.31% 0.45% 0.42% (b)
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $ 386 $ 117,333 $ 101,616
- ------------------------------------
Portfolio turnover (d) 110% 121% 63%
</TABLE>
(See Notes which are an integral part of the Financial Statements)
104
<PAGE>
<TABLE>
<CAPTION>
Fifth Third Funds
Municipal Bond Fund -- Financial Highlights (continued)
- -------------------------------------------------------------------------------------------------
(For a share outstanding throughout each period)
Year ended Period ended Period ended
July 31, 1999**** July 31, 1998*** July 31, 1997**
-------------- -------------- --------------
<S> <C> <C> <C>
Investment C Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ -- $ 12.33 $ 12.00
- ------------------------------------ -------------- -------------- --------------
Investment Operations
- ------------------------------------
Net investment income/(loss) 0.18 (0.20)
- ------------------------------------
Net realized and unrealized gains/
(losses) from investments -- 0.07 0.75
- ------------------------------------ -------------- -------------- --------------
Total from Investment Operations -- 0.25 0.55
- ------------------------------------ -------------- -------------- --------------
Distributions to shareholders from:
- ------------------------------------
Net investment income (0.18) (0.16)
- ------------------------------------
In excess of net investment income -- -- (0.06)
- ------------------------------------
Net realized gains (0.09) --
- ------------------------------------ -------------- -------------- --------------
Total Distributions -- (0.27) (0.22)
- ------------------------------------ -------------- -------------- --------------
Net Asset Value, End of Period -- $ 12.31 $ 12.33
- ------------------------------------ ============== ============== ==============
Total Return (excludes sales charge) N/A 2.03% (a) 4.65% (a)
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses N/A 1.51% (b) 1.56% (b)
- ------------------------------------
Net investment income/(loss) N/A 3.41% (b) 3.09% (b)
- ------------------------------------
Expense waiver/reimbursement (c) N/A 0.37% (b) 0.26% (b)
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $ -- $ -- $ 11
- ------------------------------------
Portfolio turnover (d) 110% 121% 63%
- ------------------------------------
</TABLE>
* Reflects operations for the period from August 11, 1998 (date of
commencement of operations) to July 31, 1999.
** Reflects operations for the period from January 27, 1997 (date of
commencement of operations) to July 31, 1997.
*** Reflects operations for the period from August 1, 1997 (date of
commencement of operations) to January 8, 1998. As of July 31, 1998, no
shares or assets existed in the Investment C Shares. The ending net asset
value is the last NAV for a share redeemed on January 8, 1998. Per share
information information is calculated using the average share method for
Investment C Shares.
**** As of July 31, 1999, no shares or assets existed in the Investment C
Shares. The Municipal Bond Investment C Shares continue to be open for
investment with an offering price equal to the Municpal Bond Fund
Investment A Shares.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(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>
Fifth Third Funds
Ohio Tax Free Bond Fund - Financial Highlights
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
Period ending
July 31, 1999*
--------------
Institutional Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 10.33
- ------------------------------------ --------------
Income from Investment Operations:
- ------------------------------------
Net investment income 0.40
- ------------------------------------
Net realized and unrealized gains/
(losses) from investments (0.24)
- ------------------------------------ --------------
Total from Investment Operations 0.16
- ------------------------------------ --------------
Distributions to shareholders from:
- ------------------------------------
Net investment income (0.40)
- ------------------------------------
In excess on net investment income (0.01)
- ------------------------------------
Net realized gains (0.06)
- ------------------------------------ --------------
Total Distributions (0.47)
- ------------------------------------ --------------
Net Asset Value, End of Period $ 10.02
- ------------------------------------ ==============
Total Return (excludes sales charge) 1.48% (a)
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 0.82% (b)
- ------------------------------------
Net investment income/(loss) 3.81% (b)
- ------------------------------------
Expense waiver/reimbursement (c) 0.05% (b)
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $ 182,679
- ------------------------------------
Portfolio turnover (d) 47%
- ------------------------------------
<TABLE>
<CAPTION>
Year ended Year ended Year ended Year ended Year ended
July 31, 1999 July 31, 1998 July 31, 1997 July 31, 1996 July 31, 1995
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Investment A Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 10.29 $ 10.31 $ 10.01 $ 9.99 $ 9.75
- ------------------------------------ -------------- -------------- -------------- -------------- --------------
Income from Investment Operations
- ------------------------------------
Net investment income 0.46 0.42 0.43 0.40 0.42
- ------------------------------------
Net realized and unrealized gains/
(losses) from investments (0.29) 0.02 0.30 0.03 0.24
- ------------------------------------ -------------- -------------- -------------- -------------- --------------
Total from Investment Operations 0.17 0.44 0.73 0.43 0.66
- ------------------------------------ -------------- -------------- -------------- -------------- --------------
Distributions to shareholders from:
- ------------------------------------
Net investment income (0.38) (0.42) (0.43) (0.41) (0.42)
- ------------------------------------
In excess of net investment income -- -- -- -- --
- ------------------------------------
Net realized gains (0.06) (0.04) -- -- --
- ------------------------------------ -------------- -------------- -------------- -------------- --------------
Total Distributions (0.44) (0.46) (0.43) (0.41) (0.42)
- ------------------------------------ -------------- -------------- -------------- -------------- --------------
Net Asset Value, End of Period $ 10.02 $ 10.29 $ 10.31 $ 10.01 $ 9.99
- ------------------------------------ ============== ============== ============== ============== ==============
Total Return (excludes sales charge) 1.63% 4.38% 7.49% 4.33% 7.02%
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 1.00% 0.74% 0.75% 0.74% 0.35%
- ------------------------------------
Net investment income/(loss) 3.68% 4.09% 4.27% 4.01% 4.36%
- ------------------------------------
Expense waiver/reimbursement (c) 0.21% 0.43% 0.37% 0.32% 0.77%
- ------------------------------------
Supplemental data:
- ------------------------------------
Net Assets at end of period (000) $ 22,008 $ 188,966 $ 168,800 $ 35,463 $ 28,315
- ------------------------------------
Portfolio turnover (d) 47% 42% 49% 30% 27%
- ------------------------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
106
<PAGE>
Fifth Third Funds
Ohio Tax Free Bond Fund -- Financial Highlights (continued)
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year ended Year ended Year ended Period ended
July 31, 1999 July 31, 1998 July 31, 1997 July 31, 1996**
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Investment C Shares
- ------------------------------------
Net Asset Value, Beginning of Period $ 10.28 $ 10.31 $ 10.00 $ 10.02
- ------------------------------------ -------------- ------------- -------------- -------------
Incoem from Investment Operations:
- ------------------------------------
Net investment income 0.33 0.35 0.36 0.10
- ------------------------------------
Net realized and unrealized gains/
(losses) from investments (0.21) 0.01 0.31 (0.01)
- ------------------------------------ -------------- ------------- -------------- -------------
Total from Investment Operations 0.12 0.36 0.67 0.09
- ------------------------------------ -------------- ------------- -------------- -------------
Distributions to shareholders from:
- ------------------------------------
Net investment income (0.33) (0.35) (0.35) (0.11)
- ------------------------------------
In excess of net investment income -- -- (0.01) --
- ------------------------------------
Net realized gains (0.06) (0.04) -- --
- ------------------------------------ -------------- ------------- -------------- -------------
Total Distributions (0.39) (0.39) (0.36) (0.11)
- ------------------------------------ -------------- ------------- -------------- -------------
Net Asset Value, End of Period $ 10.01 $ 10.28 $ 10.31 $ 10.00
- ------------------------------------ ============== ============= ============== =============
Total Return (excludes sales charge) 1.13% 3.56% 6.84% 3.98% (e)
- ------------------------------------
Ratios to Average Net Assets:
- ------------------------------------
Expenses 1.55% 1.49% 1.50% 1.52% (b)
- ------------------------------------
Net investment income/(loss) 3.05% 3.33% 3.51% 3.41% (b)
- ------------------------------------
Expense waiver/reimbursement (c) 0.38% 0.33% 0.27% 0.28% (b)
- ------------------------------------
Supplemental data: Net
- ------------------------------------
Assets at end of period (000) $ 1,071 $ 584 $ 248 $ 38
- ------------------------------------
Portfolio turnover (d) 47% 42% 49% 30%
- ------------------------------------
</TABLE>
* Reflects operations for the period from August 11, 1998 (date of
commencement of operations) to July 31, 1999.
** Reflects operations for the period from April 24, 1996 (date of
commencement of operations) to July 31, 1999.
(a) Not annualized.
(b) Annualized.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(e) Represents total return for Investment A shares for the period from August
1, 1995 to April 24, 1996 plus the total return for Investment C shares for
the period fro April 24, 1996 to July 31, 1996.
(See Notes which are an integral part of the Financial Statements)
107
<PAGE>
Report of Independent Auditors
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders
Fifth Third Funds
We have audited the accompanying statements of assets and liabilities, including
the schedules of portfolio investments, of the Fifth Third Quality Growth Fund,
Fifth Third Equity Income Fund, Fifth Third Cardinal Fund, Fifth Third Pinnacle
Fund, Fifth Third Balanced Fund, Fifth Third Mid Cap Fund, Fifth Third
International Equity Fund, Fifth Third Bond Fund for Income, Fifth Third Quality
Bond Fund, Fifth Third U.S. Government Securities Fund, Fifth Third Municipal
Bond Fund, and Fifth Third Ohio Tax Free Bond Fund (the Funds) as of July 31,
1999, and the related statements of operations, statements of changes in net
assets, statements of cash flows and financial highlights for each of the
periods indicated therein. These financial statements and financial highlights
are the responsibility of the Funds' management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits. The financial statements and financial highlights for the Fifth
Third Pinnacle Fund for each of the respective years or periods ended December
31, 1997 were audited by other auditors whose report dated January 27, 1998
expressed an unqualified opinion. The financial statements and financial
highlights for Fifth Third Cardinal Fund for each of the respective years or
periods ended September 30, 1997 were audited by other auditors whose report
dated November 14, 1997 expressed an unqualified opinion.
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 and financial highlights. Our procedures included confirmation of
securities owned as of July 31, 1999, by correspondence with the custodian and
others. 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 Funds as of July 31, 1999, and the results of their operations, the
changes in their net assets and their financial highlights for each of the
periods indicated therein, in conformity with generally accepted accounting
principles.
/s/ Ernst & Young LLP
Cincinnati, Ohio
September 22, 1999
108
<PAGE>
Addresses
- --------------------------------------------------------------------------------
Fifth Third Quality Growth Fund Fifth Third Funds
Fifth Third Equity Income Fund c/o Fifth Third Bank
Fifth Third Cardinal Fund 38 Fountain Square Plaza
Fifth Third Pinnacle Fund Cincinnati, Ohio 45263
Fifth Third Balanced Fund
Fifth Third Mid Cap Fund
Fifth Third International Equity Fund
Fifth Third Bond Fund For Income
Fifth Third Quality Bond Fund
Fifth Third U.S. Government
Securities Fund
Fifth Third Municipal Bond Fund
Fifth Third Ohio Tax Free Bond Fund
- --------------------------------------------------------------------------------
Investment Advisor Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
- --------------------------------------------------------------------------------
Investment Advisor (Pinnacle Fund only) Heartland Capital Management, Inc.
251 North Illinois Street, Suite 610
Indianapolis, Indiana 46204
- --------------------------------------------------------------------------------
Sub-Advisor (International Equity Fund
only) Morgan Stanley Asset Management, Inc.
1221 Avenue of the Americas
New York, New York 10020
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
<PAGE>
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