COMPASS CAPITAL FUNDS LOGO
[GRAPHIC OMITTED]
BOND
PORTFOLIOS
SEMI-ANNUAL REPORT TO SHAREHOLDERS
MARCH 31, 1996
SHORT GOVERNMENT BOND PORTFOLIO
INTERMEDIATE GOVERNMENT
BOND PORTFOLIO
INTERMEDIATE BOND PORTFOLIO
CORE BOND PORTFOLIO
GOVERNMENT INCOME PORTFOLIO
MANAGED INCOME PORTFOLIO
INTERNATIONAL BOND PORTFOLIO
TAX-FREE INCOME PORTFOLIO
PENNSYLVANIA TAX-FREE
INCOME PORTFOLIO
NEW JERSEY TAX-FREE
INCOME PORTFOLIO
OHIO TAX-FREE INCOME PORTFOLIO
<PAGE>
COMPASS CAPITAL FUNDS
BELLEVUE PARK CORPORATE CENTER
400 BELLEVUE PARKWAY
WILMINGTON, DE 19809
May 1, 1996
Dear Fellow Investor:
We are pleased to present the first consolidated Semi-Annual Report to
Shareholders of the Compass Capital Funds for the six months ended March 31,
1996. This report affords us the opportunity to provide investors with each
fund's portfolio security holdings, performance results, financial statements
and six-month market commentary by the investment sub-adviser.
The Compass Capital Funds were launched on January 13, 1996, and represent
a consolidation of the PNC funds, the Compass funds affiliated with Midlantic
and the open-end institutional funds of BlackRock Financial Management. The 28
separate Compass Capital Funds, comprised of 11 Bond, 9 Equity and 8 Money
Market Portfolios, are managed by premier investment managers:
(BULLET) PNC Equity Advisors Company manages the growth equity Portfolios;
(BULLET) Provident Capital Management, Inc. manages the value equity
Portfolios;
(BULLET) CastleInternational Asset Management,Ltd. manages the
international equity Portfolios;
(BULLET) BlackRock Financial Management, Inc. manages the domestic fixed
income Portfolios;
(BULLET) Morgan Grenfell manages the International Bond Portfolio; and
(BULLET) PNC Institutional Management Corporation manages the money market
Portfolios.
Each fund within the family maintains a strict investment discipline
according to its pure investment style (e.g., for equities, "value" or "growth"
and for fixed income, "short duration" or "intermediate duration"), which
provides investors with the best opportunity to match their investment
expectations with actual results.
We appreciate your investment with the Compass Capital Funds and look
forward to maintaining your respect and confidence and to help in pursuing your
long-term wealth building objectives. You are encouraged to call our toll-free
information number at 800-FUTURE4 for questions about the Compass
Capital Portfolios.
Sincerely,
\s\KAREN H. SABATH
Karen H. Sabath
President, Compass Capital Group, Inc.
1
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COMPASS CAPITAL FUNDS
SEMI-ANNUAL REPORT OF THE INVESTMENT ADVISER
PNC Asset Management Group serves as the investment adviser to the Compass
Capital Funds and is pleased to provide the following commentary on the markets
and the Portfolios.
MARKET OVERVIEW
The semi-annual period between September 30, 1995 and March 31, 1996
witnessed two profoundly different market environments for fixed income
securities. The Treasury market rally of 1995 continued through the middle of
February 1996, as market demand for fixed income securities remained strong due
to a combination of moderate economic growth, low absolute levels of inflation
and two reductions of the Fed funds target rate. Economic data released during
January, including weak retail sales and consumer confidence reports, reinforced
the belief among market participants that the economy was not accelerating fast
enough to increase inflationary pressures; for example, consumer confidence fell
to its lowest level in almost a year and retail sales for 1995 registered their
smallest annual gain in four years.
Investor sentiment toward fixed income securities, however, reversed during
mid-February, as data indicating accelerating economic growth, in conjunction
with a sharp rise in commodity prices, rekindled inflationary concerns. Positive
news for the economy which may indicate increased levels of inflation can cause
bond yields to rise and prices to fall. Economic strength was demonstrated in
numerous economic reports, including factory orders, consumer spending and
housing starts. The March 8 release of the February employment report, which
showed a gain of 705,000 new jobs, forced investors to reconsider and then
adjust their assumptions regarding the weakness of the U.S. economy. This
number, although subsequently revised downward, was more than double economists'
estimates and produced the largest one-day price decline in U.S. bond prices in
over seven years. For the first quarter of 1996, GDP grew 2.8%, which
represented a strong rebound from the 0.5% gain posted in the fourth quarter of
1995.
TREASURIES
Interest rate movements over the six month period illustrated the change in
investor sentiment toward fixed income securities. Interest rates across the
Treasury yield curve fell dramatically from November to mid-February, as seen in
the decline in yield levels of the ten-year Treasury, which fell 65 basis points
(0.65%) from 6.17% on September 30, 1995 to a low of 5.52% on January 19.
However, data released during February suggested renewed economic vigor and
placed pressure on bond prices. These fears translated into a sharp rise in bond
yields across the Treasury yield curve. The yield of the ten-year Treasury ended
the semi-annual period at 6.34%, an increase of 82 basis points in approximately
two and one-half months and a 17 basis point increase from September 30, 1995.
MORTGAGE-BACKED SECURITIES
The mortgage-backed securities (MBS) market didn't keep pace with the
Treasury market rally during the fourth quarter of 1995 due to increased
refinancing activity as homeowners took advantage of lower interest rates by
prepaying their mortgages. As interest rates rose during January and February,
the resultant higher mortgage rates decreased the likelihood of further
increases in refinancing activity and helped produce strong performance in the
MBS market versus other taxable fixed income sectors. We believe that mortgages
are poised for continued good performance for the remainder of 1996, as interest
rate volatility is expected to decrease in the coming months, which could
translate into lower refinancing levels and reduced new issue supply.
2
<PAGE>
COMPASS CAPITAL FUNDS
SEMI-ANNUAL REPORT OF THE INVESTMENT ADVISER (CONTINUED)
SHORT DURATION SECURITIES
Asset-backed securities (ABS) performed well over the past six months
despite a significant increase in supply. This was due to strong investor demand
for finite maturity, short duration assets with relatively stable cash flows,
which allowed ABS yield spreads to comparable maturity Treasuries to remain
fairly stable despite the high levels of new issuance. However, the
creditworthiness of the ABS market has become more of a focus as the levels of
consumer debt have risen. As of yet, the level of delinquencies has not
increased dramatically on a historical basis. Adjustable-rate mortgages (ARMs)
underperformed other short duration sectors during the fourth quarter of 1995,
as the decline in interest rates combined with a narrowing spread between fixed-
and adjustable-rate mortgages resulted in extremely fast ARM prepayment speeds.
The rising interest rate environment of the first quarter produced mixed
performance in the ARM market. ARM prices rose as new issuance dwindled, but
were unable to sustain their rally after the market correction on March 8. This
resulted in widening ARM yield spreads as prices fell towards quarter-end.
CORPORATES
Corporate bond returns exceeded those of all other taxable fixed income
sectors during the fourth quarter of 1995 as investor demand easily absorbed a
heavy new issuance calendar. High levels of supply were in response to a
combination of lower interest rates and corporate mergers and restructurings.
Also aiding the performance of corporates were the strong gains posted by the
equity markets, which reinforced favorable credit quality and corporate earnings
trends. As the fixed income markets reversed in February, corporate new issuance
waned in response to higher interest rates. Additionally, the tightening of
corporate bond yield spreads to comparable maturity Treasuries, a relationship
which occurred throughout 1995 as corporate bond prices rose, began to meet
resistance as it appeared that corporate earnings had peaked.
MUNICIPALS
Municipal bond yields declined through early 1996 before following the
taxable bond market's reversal in February. Municipal bond performance lagged
the Treasury market in the fourth quarter of 1995 due to increased supply in the
lower interest rate environment and lower than expected seasonal demand from
municipal bond coupon payments and redemptions. The specter of tax reform had
the most significant impact on the municipal market throughout 1995. Demand for
municipal bonds weakened as investors feared that the tax-free advantage of
municipal income could be reduced by tax reform exempting all investment income
from taxation. During the first quarter of 1996, however, municipals
outperformed taxable fixed income securities as the probability of impending tax
reform decreased significantly, thereby increasing demand by both retail
investors and property & casualty insurance companies. We believe that municipal
securities have the potential to outperform Treasuries in 1996.
INTERNATIONAL BOND MARKET
The performance of the international fixed income markets continued to be
led by the U.S. bond market during late 1995 and into 1996. International fixed
income markets reacted to stronger economic data, although not to the extent
seen in the U.S. With growth still subdued in Japan and Europe, and no
substantial threat of inflation, overseas markets present an attractive
opportunity to seek incremental yield. Although the foreign markets may continue
to be sensitive to the direction of the U.S. market, the central banks of both
Japan and Germany appear disinclined to raise short-term rates in the near
future.
3
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COMPASS CAPITAL FUNDS
SEMI-ANNUAL REPORT OF THE INVESTMENT ADVISER (CONTINUED)
OUTLOOK
BlackRock and Morgan Grenfell are currently neutral on the domestic and
international fixed income markets, as recent economic data has failed to paint
a clear picture as to the direction of the U.S. economy. However, we believe
that current inflationary fears will subside, as higher commodity prices cannot
be passed along to the consumer. Our longer-term belief is that the level of
consumer debt will significantly restrict economic growth, as consumer debt as a
percentage of disposable income has risen to levels not seen since the recession
highs of 1990. With consumers accounting for two-thirds of GDP growth, we feel
that sustained economic growth cannot occur in an environment of rising personal
bankruptcies and high credit card debt.
During February and March, commentary from Federal Reserve officials
acknowledged the increased economic activity and contributed to those months'
negative performance. We believe that U.S. economic growth will decline from its
current accelerated pace and level at approximately 2.0% to 2.5%. In this
environment, the Federal Reserve is likely to remain on hold until more
consistent economic data is released. Over the longer term, we believe that both
markets are poised for positive performance and lower absolute yields by
year-end.
COMPASS CAPITAL BOND PORTFOLIO HIGHLIGHTS
SHORT GOVERNMENT BOND PORTFOLIO
The Portfolio increased its exposure to asset-backed securities (ABS), as
yield spreads over short maturity Treasury securities remained steady despite
ongoing high new issuance levels. Specifically, we purchased high quality (AAA)
ABS when spreads widened in response to increasing consumer debt levels.
Although ABS new supply is expected to remain heavy, we believe there is little
risk of yield spread widening, since ABS should benefit from strong overall
demand for short duration securities. To facilitate our increased ABS holdings,
the Portfolio reduced its adjustable rate mortgage weighting, as yield spreads
in that sector tightened due to diminishing supply and increased bank demand.
INTERMEDIATE BOND PORTFOLIO
The decline in long-term interest rate volatility afforded the Portfolio an
opportunity to increase its overall mortgage exposure, primarily focusing on 15-
and 30-year 6.5% and 7.0% pass-throughs. The Portfolio reduced its adjustable
rate mortgage weighting, however, as yield spreads in that sector tightened due
to diminishing supply and increased bank demand. We selectively increased our
corporate holdings during the first quarter of 1996, focusing on Yankee bonds,
which are U.S. dollar denominated foreign issues. Specifically, the Portfolio
purchased Italy and Quebec issues at attractive yield spreads.
INTERMEDIATE GOVERNMENT BOND PORTFOLIO
Since year-end, the Portfolio more than doubled its allocation to recently
issued 15- and 30-year 6.5% and 7.0% pass-through mortgage securities, taking
advantage of attractive yield spreads and the fundamental reduction in long-term
volatility. The Portfolio reduced its weightings in short maturity mortgage
product, such as adjustable rate mortgages and CMOs while maintaining its
overweighted position in AAA-rated asset-backed securities, which have performed
well despite relatively high levels of new issuance in that market.
CORE BOND PORTFOLIO
The Portfolio increased mortgage exposure, focusing on slight discount
coupon (6.5% and 7.0%) mortgage pass-throughs, which offered good relative value
due to their historically wide yield spreads and our belief that long-term
interest rate volatility will continue to decrease in the coming months. The
Portfolio has also maintained its allocation to asset-backed securities, whose
yield spreads over comparable maturity Treasuries have remained relatively
steady despite ongoing high issuance levels.
4
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COMPASS CAPITAL FUNDS
SEMI-ANNUAL REPORT OF THE INVESTMENT ADVISER (CONTINUED)
MANAGED INCOME PORTFOLIO
As part of an overall increase in exposure to the mortgage market, the
Portfolio has been focusing on 15- and 30-year discount coupon (6.5% and 7.0%)
mortgage pass-throughs. These coupons appear to offer the best value, as higher
coupons have become relatively expensive due to strong technicals and the
market's bearish sentiment.The Portfolio has also maintained a significant
allocation to corporate bonds and is currently overweighted in BBB-rated
securities. Strong new issue trends in the Yankee, or U.S. dollar-denominated
foreign issuer, market have kept yield spreads to Treasuries attractive and we
will continue to look to add on opportunity.
GOVERNMENT INCOME PORTFOLIO
The Portfolio significantly reduced its allocation to Treasury securities
since year-end, moving most of the assets into the mortgage-backed security
(MBS)market.MBS appear attractive in light of the decline in long-term
volatility and historically attractive yield spreads relative to
Treasuries. Within the MBS market, the Portfolio has purchased recently issued
6.5% and 7.0% coupon pass-through securities while nearly halving its adjustable
rate mortgage holdings due to spread tightening in that sector.
TAX FREE INCOME PORTFOLIOS
Tax-Free Income Portfolio
Pennsylvania Tax Free Income Portfolio
Ohio Tax Free Income Portfolio
New Jersey Tax Free Income Portfolio
All of the Compass Capital municipal portfolios have been favoring callable
premium coupon bonds over par bonds and non-callable alternatives due to their
defensive structure in a rising interest rate environment. The Portfolios have
been sellers of 10-15 year non-callable bonds, taking advantage of the relative
richness of these issues versus callable issues. Additionally, we have been
selling inherited odd lot positions on opportunity in order to improve the
structure, liquidity and enhance the income of the Portfolios. The trading
activity within the state-specific Portfolios has been muted due to a sharp
reduction in new issue supply, which has decreased the availability of
securities in the Pennsylvania, Ohio and New Jersey municipal bond markets.
INTERNATIONAL BOND PORTFOLIO
The Portfolio has maintained its heavy weighting towards the European
markets, ending the period with 74% of its assets allocated to five European
countries. Within that market, we sold our French positions, moving the assets
into both Germany and Denmark and eliminated the Portfolio's Spanish bonds,
whose proceeds were used to increase positions in the United Kingdom and Sweden.
The balance of the Portfolio is largely invested in Japan (approximately 20%),
with the largest exception being a 3% position in Australian bonds. Overall, the
Portfolio is 97% hedged into U.S. dollars, with the exception being the new
Australian position.
Respectfully submitted,
\s\RICHARD C. CALDWELL
Richard C. Caldwell
Chairman
PNC Asset Management Group, Inc.
5
<PAGE>
COMPASS CAPITAL FUNDS
COMPARISON OF CHANGE IN VALUE OF $10,000 IN THE COMPASS CAPITAL SHORT
GOVERNMENT BOND AND CORE BOND PORTFOLIOS AND THEIR RESPECTIVE INDEX COMPARISON
FROM INCEPTION AND AT EACH FISCAL YEAR END:
SHORT GOVERNMENT BOND PORTFOLIO 1
INSTITUTIONAL SHARES
- -------------------------------------
AVERAGE ANNUAL TOTAL RETURN
One Year 7.18%
From Inception 5.09%
- -------------------------------------
- -------------------------------------
Annualized Total Return3 from 1/13/96
(Commencement of Operations) through
3/31/96:
Service shares (0.11)%
Investor A shares (3.15)%
- -------------------------------------
PLOT POINTS
Short Government Bond Merrill Lynch 1-3 Year Index
Jul-92 9992 9991.4
Sep-92 10076.72 10175.08
Dec-92 10134.51 10193.67
Mar-93 10292.7 10418.71
Jun-93 10463.86 10531
Sep-93 10615.87 10682.07
Dec-93 10702.14 10745.19
Mar-94 10686.28 10691.56
Jun-94 10708.71 10700.42
Sep-94 10835.38 10805.85
Dec-94 10854.15 10806.23
Mar-95 11203.96 11171.29
Jun-95 11519.2 11529.88
Sep-95 11725.43 11703.68
Dec-95 11993.59 11997.52
Mar-96 12017.19 12037.48
Past performance is not a guarantee of future results.
CORE BOND PORTFOLIO
INSTITUTIONAL SHARES
- -------------------------------------
AVERAGE ANNUAL TOTAL RETURN
One Year 10.12%
From Inception 6.73%
- -------------------------------------
- ----------------------------------------------
Annualized Total Return3 from Commencement
of Operations (1/13/96 for Service shares;
1/31/96 for Investor A shares; and 3/18/96 for
Investor B shares) through 3/31/96:
Service shares (1.90)%
Investor A shares (6.84)%
Investor B shares (4.18)%
- ----------------------------------------------
PLOT POINTS
Core Bond Lehman Aggregate Index
Dec-92 10032 10031
Mar-03 10415.01 10446.1987
Jun-93 10587.33 10723.6444
Sep-93 11020.71 11003.1311
Dec-93 11010 11009.0999
Mar-94 10722.79 10692.778
Jun-94 10616.59 10582.8414
Sep-94 10698.13 10647.5381
Dec-94 10752.99 10687.7923
Mar-95 11275.12 11226.8853
Jun-95 11935.45 11910.9446
Sep-95 12178.94 12145.2228
Dec-95 12716.38 12662.4846
Mar-96 12422.867 12436.6056
Past performance is not a guarantee of future results.
1 The Short Government Bond Portfolio commenced operations on July 17, 1992 as
the Short Duration Portfolio (the "Predecessor Short Government Bond
Portfolio") of The BFM Institutional Trust Inc. On January 13, 1996, the
assets and liabilities of the Predecessor Short Government Bond Portfolio
were transferred to this Portfolio and were combined with the assets of a
pre-existing portfolio maintained by the Fund.The information in this chart
for performance prior to January 13, 1996 relates to the Predecessor Short
Government Bond Portfolio.
2 The Core Bond Portfolio commenced operations on December 9, 1992 as the Core
Fixed Income Portfolio (the "Predecessor Core Bond Portfolio") of The BFM
Institutional Trust Inc. On January 13, 1996, the assets and liabilities of
the Predecessor Core Bond Portfolio were transferred to the Core Bond
Portfolio, which had no prior operating history. The information in this chart
for performance prior to January 13, 1996 relates to the Predecessor Core Bond
Portfolio.
3 The performance of Service, Investor A and Investor B shares in each Portfolio
will ordinarily be less than the performance of the Institutional shares of
the Portfolio due to the impact of class-specific expenses, such as fees
relating to the Fund's Amended and Restated Distribution and Service Plan and,
in the case of Investor A and Investor B shares, front-end and contingent
deferred sales charges.Total return information for Investor A and Investor B
shares reflects the imposition of the maximum front-end sales load and
contingent deferred sales load, respectively. See Notes to Financial
Statements.
6
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COMPASS CAPITAL FUNDS
SHORT GOVERNMENT BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
MARCH 31, 1996
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- ------ -----------
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 37.2%
Federal Farm Credit Bank
Discount Notes
6.70% 09/30/96 $ 2,000 $ 2,009,740
Federal Home Loan Mortgage
Corporation
7.86% 01/21/97 2,000 2,035,480
Financing Corp.
5.56% 10/15/98 1,250 1,077,413
Tennessee Valley Authority
8.375% 10/01/99 2,000 2,142,500
U.S. Treasury Notes
5.375%*** 11/30/97 27,750 27,589,050
7.25% 02/15/98 6,380 6,542,371
5.125% 02/28/98 5,920 5,852,630
5.50%*** 11/15/98 26,060 25,801,743
5.00% 02/15/99 8,000 7,815,840
5.875% 03/31/99 13,700 13,683,149
6.25% 02/15/03 2,185 2,179,974
-----------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost $97,333,072) 96,729,890
-----------
MORTGAGE PASS-THROUGHS -- 21.7%
Federal Home Loan Mortgage
Corporation
7.25% 10/03-06/08 326 327,126
7.375% 03/01/06 280 281,646
8.00% 09/01/11 951 981,423
8.25% 06/01/09 183 189,238
8.50% 06/01/24 1,167 1,212,177
8.75% 01/01/13 264 275,820
Federal Home Loan Mortgage
Corporation, 1 Year CMT ARM
8.00%** 04/01/22 4,256 4,301,605
Federal Home Loan Mortgage
Corporation, 15 Year
10.50% 02/01/03 7,226 7,606,452
11.00% 07/01/04 3,184 3,376,158
Federal National Mortgage
Association, 1 Year CMT ARM
6.357%** 06/01/25 1,234 1,275,133
6.879%** 07/01/24 1,466 1,513,037
7.079%** 01/01/21 909 908,650
7.390%** 11/01/24 395 407,364
7.432%** 01/01/21 886 887,914
Federal National Mortgage
Association, 3 Year CMT ARM
7.845%** 05/01/18 229 230,141
PAR
MATURITY (000) VALUE
-------- ------ -----------
MORTGAGE PASS-THROUGHS (CONTINUED)
Federal National Mortgage
Association
6.50% 10/01/05 $ 2,525 $ 2,520,302
8.50% 03/01/23 4,898 5,020,092
10.00% 04/01/20 362 393,047
Federal National Mortgage
Association, 15 Year
11.00% 07/01/01 871 923,366
Government National Mortgage
Association, 1 Year CMT ARM
6.50%** 03/22-11/25 12,754 12,914,499
Government National Mortgage
Association
6.75% 01/20/18 1,498 1,516,789
7.00% 10/20/21 938 955,034
8.25% 01/15/09 8,018 8,338,293
-----------
TOTAL MORTGAGE PASS-THROUGHS
(Cost $56,688,295) 56,355,306
-----------
MULTIPLE CLASS MORTGAGE
PASS-THROUGHS -- 4.6%
Capstead Securities, Corp. IV,
Series 92-1, Class F
8.40% 04/25/19 477 477,511
Collateralized Mortgage
Securities Corp., Series I-2,
Class A
9.45% 05/01/13 210 212,185
Federal National Mortgage
Association, Series 90-60,
Class J
9.00% 06/25/17 438 439,004
Federal National Mortgage
Association, Series 93-121, Class PB
4.75% 09/25/07 3,177 3,161,773
Kidder Peabody Mortgage
Assets Trust, Series 14,
Class B
8.50% 09/01/14 221 223,436
Morgan Stanley Capital I,
Series 86-C, Class U4
9.00% 05/01/16 6,671 6,792,258
Security Mortgage Acceptance
Corp., Series 1-B, Class 3
9.00% 11/01/06 564 573,859
-----------
TOTAL MULTIPLE CLASS MORTGAGE
PASS-THROUGHS
(Cost $12,049,187) 11,880,026
-----------
See accompanying notes to financial statements.
7
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SHORT GOVERNMENT BOND PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- ------ -----------
COMMERCIAL MORTGAGE-BACKED
SECURITIES -- 0.6%
Structured Assets Securities
Corp., Series 96-C,
Class A1
5.711% 02/25/28 $ 1,711 $ 1,698,146
-----------
(Cost $1,710,783)
ASSET BACKED SECURITIES -- 33.3%
Advanta Credit Master Trust,
Series 96-1, Class A
5.668% 01/15/07 5,000 5,000,000
American Express Master Trust,
Series 94-1, Class A
7.15% 08/15/99 4,750 4,831,641
Banc One Auto Grantor Trust,
Series 96, Class A
6.10% 10/15/02 2,300 2,299,281
Chase Manhattan Credit Card
Master Trust, Series 91-1,
Class A
8.75% 08/15/99 1,500 1,514,250
Chase Manhattan Grantor
Trust, Series 95-A, Class A
6.00% 09/17/01 4,816 4,823,816
Chase Manhattan Grantor
Trust, Series 95-B, Class A
5.90% 11/15/01 5,925 5,923,330
Chase Manhattan Grantor
Trust, Series 96-A, Class A
5.20% 02/15/02 4,427 4,376,235
Daimler Benz Auto Loan
Grantor Trust, Series 95-A,
Class A
5.85% 05/15/02 1,196 1,196,285
Dayton Hudson Credit Card
Master Trust, Series 95-1,
Class A
6.10% 02/25/02 2,300 2,299,281
Discover Card Master Trust I,
Series 94-2, Class A
5.725% 04/15/96 10,000 10,067,187
Fifth-Third Auto Trust,
Series 96-A, Class A
6.20% 09/01/01 2,900 2,910,422
First USA Credit Card Master
Trust, Series 93-3, Class A
5.625% 12/15/00 2,000 2,001,875
Ford Credit Grantor Trust,
Series 95-B, Class A
5.90% 10/15/00 1,332 1,329,771
PAR
MATURITY (000) VALUE
-------- ------ -----------
ASSET BACKED SECURITIES (CONTINUED)
Honda Auto Receivables
Grantor Trust, Series 95-A,
Class A
6.20% 12/15/00 $ 6,155 $ 6,172,047
Household Affinity Credit Card
Master Trust I, Series 94-2,
Class A
7.00% 12/15/99 11,200 11,374,944
John Deere Owner Trust,
Series 93-B, Class B
4.10% 10/15/00 259 257,762
Mellon Home Equity Loan Trust,
Series 96-1, Class A
5.638% 04/01/01 2,000 1,999,375
Merrill Lynch Asset Backed Corp.,
Series 92-1, Class A2
5.50% 5/15/98 420 419,775
Merrill Lynch Asset Backed Corp.,
Series 93-1, Class A2
5.125% 07/15/98 452 451,558
NationsBank Auto Grantor Trust,
Series 95-A, Class A
5.85% 6/15/02 2,147 2,146,905
Premier Auto Trust, Series 93-2,
Class A3
4.90% 10/15/98 480 476,102
Premier Auto Trust, Series 93-6,
Class A2
4.65% 11/02/99 3,126 3,090,778
Premier Auto Trust, Series 95-1,
Class A2
7.35% 05/04/97 205 205,498
Standard Credit Card Master
Trust, Series 91-3, Class A
8.875% 09/07/99 5,000 5,280,469
Standard Credit Card Master
Trust, Series 91-6, Class A
7.875% 01/07/00 6,000 6,189,375
-----------
TOTAL ASSET BACKED SECURITIES
(Cost $86,668,329) 86,637,963
-----------
PURCHASED OPTIONS -- 0.0%
U.S. Treasury Notes (expire 4/8/96) 490 49
-----------
(Cost $8,891)
See accompanying notes to financial statements.
8
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SHORT GOVERNMENT BOND PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- ------ -----------
SHORT TERM INVESTMENTS -- 2.6%
Federal Home Loan Bank
Discount Notes
5.30% 04/01/96 $ 4,200 $ 4,200,000
5.805%** 04/08/96 1,500 1,501,875
4.40%** 04/27/98 1,000 990,000
Smith Barney Money
Market Fund 69 69,053
------------
TOTAL SHORT TERM INVESTMENTS
(Cost $6,746,991) 6,760,928
------------
TOTAL INVESTMENTS IN
SECURITIES -- 100.0%
(Cost $261,205,548*) $260,062,308
============
REVERSE REPURCHASE
AGREEMENTS -- (10.3%)
Lehman Brothers (Agreement
dated 03/25/96 to be
repurchased at $12,872,502.
Collateralized by $12,700,000
U.S. Treasury Notes, 5.375%
due 11/30/97. The value of the
collateral is $12,872,502).
5.50% 04/01/96 12,859 (12,858,750)
Yamaichi Bank (Agreement dated
03/28/96 to be repurchased at
$11,482,052. Collateralized by
$11,400,000 U.S. Treasury Notes,
5.5% due 11/15/98. The value of
the collateral is $11,482,052).
4.40% 04/03/96 11,471 (11,471,250)
------------
TOTAL REVERSE REPURCHASE
AGREEMENTS
(Cost $24,330,000) $ (24,330,000)
=============
- -------------
* Also cost for Federal income tax purposes. The gross unrealized appreciation
(depreciation) on a tax basis is as folllows:
Gross unrealized appreciation $ 577,933
Gross unrealized depreciation (1,721,173)
-----------
$(1,143,240)
===========
** Rates shown are as of March 31, 1996.
*** Partial principal in the amount of $24,100,000 has been pledged as
collateral for reverse repurchase agreements.
See accompanying notes to financial statements.
9
<PAGE>
COMPASS CAPITAL FUNDS
SHORT GOVERNMENT BOND PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1996
ASSETS
Investments at value (Cost $261,205,548) ..................... $260,062,308
Interest receivable .......................................... 3,070,123
Receivable from advisor ...................................... 49,621
Investments sold receivable .................................. 14,357,497
Capital shares sold receivable ............................... 114,059
Prepaid expenses ............................................. 34,181
------------
TOTAL ASSETS ............................................ 277,687,789
------------
LIABILITIES
Investments purchased payable ................................ 16,162,440
Reverse repurchase agreements payable ........................ 24,350,881
Capital shares redeemed payable .............................. 356,111
Accrued expenses payable ..................................... 449,671
Distributions payable ........................................ 1,136,993
------------
TOTAL LIABILITIES ....................................... 42,456,096
------------
NET ASSETS (Applicable to 5,395,553 Institutional shares,
18,549,533 Service shares and 73,484 Investor A shares
outstanding) ................................................. $235,231,693
============
NET ASSET VALUE AND REDEMPTION PRICE PER INSTITUTIONAL,
SERVICE AND INVESTOR A SHARE ($235,231,693 (DIVIDE) 24,018,570) $ 9.79
=======
OFFERING PRICE PER INSTITUTIONAL AND SERVICE SHARE ............... $ 9.79
=======
MAXIMUM OFFERING PRICE PER INVESTOR A SHARE
($9.79 (DIVIDE) .97) .......................................... $ 10.09
=======
See accompanying notes to financial statements.
10
<PAGE>
COMPASS CAPITAL FUNDS
INTERMEDIATE GOVERNMENT BOND PORTFOLIO
STATEMENT OF NET ASSETS
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- ------ -----------
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 33.3%
Federal Home Loan Bank Notes
6.44% 07/25/97 $ 5,000 $ 5,054,600
Federal National Mortgage
Association
8.35% 11/10/99 5,000 5,347,249
Guaranteed Export Credit
Certificates
6.28% 06/15/04 800 792,928
Small Business Administration
6.67% 02/10/06 2,800 2,719,500
6.65% 11/01/15 2,500 2,424,219
6.85% 12/01/15 1,700 1,654,312
U.S. Treasury Notes
5.375% 11/30/97 19,000 18,889,800
7.25% 02/15/98 2,300 2,358,535
5.125% 02/28/98 3,250 3,213,015
5.50% 11/15/98 12,845 12,717,705
5.875% 03/31/99 250 249,693
6.875% 08/31/99 7,320 7,514,711
5.625% 02/28/01 900 882,783
-----------
TOTAL U.S. GOVERNMENT &
AGENCY OBLIGATIONS
(Cost $63,954,379) 63,819,050
-----------
MORTGAGE PASS-THROUGHS -- 48.1%
Federal Home Loan Mortgage
Corporation
6.50% 03/01/26 23,500 22,339,687
7.00% 05/16-10/25 9,235 9,220,127
8.00% 06/01/17 1,699 1,732,421
9.00% 10/01/20 5,798 6,119,779
Federal Home Loan Mortgage
Corporation, 1 Year CMT ARM
8.00%** 04/01/22 1,966 1,987,393
Federal Home Loan Mortgage
Corporation, 15 Year
7.00% 05/01/02 459 454,411
Federal Housing Administration,
USGI, Series 2056
7.46% 05/01/21 1,936 1,951,853
Federal National Mortgage
Association
6.50% 10/01/05 1,847 1,843,695
7.00% 10/01/10 7,372 7,362,422
PAR
MATURITY (000) VALUE
-------- ------ -----------
MORTGAGE PASS-THROUGHS (CONTINUED)
Federal National Mortgage
Association, 1 Year CMT ARM
7.39%** 11/01/24 $ 1,909 $ 1,969,432
Federal National Mortgage
Association Multi-Family
6.50% 10/25/03 5,983 5,923,849
Government National Mortgage
Association
7.00% 04/18/26 8,500 8,290,156
9.00% 11/15/17 5,061 5,354,667
Government National Mortgage
Association, 1 Year CMT ARM
6.50%** 05/25-11/25 11,994 12,165,835
Government National Mortgage
Association, 15 Year
6.50% 05/01/99 3,344 3,291,761
7.00% 01/15/99 2,052 2,060,832
-----------
TOTAL MORTGAGE PASS-THROUGHS
(Cost $93,208,435) 92,068,320
-----------
MULTIPLE CLASS MORTGAGE
PASS-THROUGHS -- 4.0%
Collateralized Mortgage
Obligation Trust, Series 36,
Class A, (PO)
6.11% 10/25/17 1,228 928,973
Community Program Loan Trust,
Series 87, Class A
4.50% 10/01/18 4,500 3,801,093
FBC Mortgage Securities Trust 5,
Series A, Class 3
9.00% 01/20/18 1,056 1,091,871
Federal National Mortgage
Association, Series G-5,
Class Z
8.25% 03/25/21 1,886 1,929,719
-----------
TOTAL MULTIPLE CLASS MORTGAGE
PASS-THROUGHS
(Cost $8,046,162) 7,751,656
-----------
See accompanying notes to financial statements.
11
<PAGE>
INTERMEDIATE GOVERNMENT BOND PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- ------ -----------
COMMERCIAL MORTGAGE BACKED
SECURITIES -- 0.9%
Structured Asset Securities
Corp., Series 96,
Class A1B
5.751% 02/25/28 $ 1,700 $ 1,670,617
-----------
(Cost $1,700,023)
ASSET BACKED SECURITIES -- 13.4%
CMGT
5.20% 02/15/02 4,152 4,104,212
Capital Auto Receivables Asset
Trust, Series 93-2, Class A4
4.70% 05/15/97 1,095 1,093,991
Dayton Hudson Credit Card
Master Trust, Series 95-1,
Class A
6.10% 02/25/02 2,000 1,999,375
Discover Card Master Trust,
Series 94-2, Class A
5.725% 04/15/96 5,415 5,451,382
Fifth Third Auto Grantor Trust,
Series 96, Class A
6.20% 09/01/01 3,900 3,914,016
HFC Home Equity Loan Asset
Backed Certificates,
Series 93-1, Class A
4.75% 05/20/08 1,786 1,765,611
Mellon Home Equity Loan
Trust, Series 96-1,
Class A1
5.61% 04/01/01 1,000 999,688
Premier Auto Trust,
Series 95-1, Class A
7.35% 05/04/97 2,308 2,311,850
Sears Credit Account Master
Trust, Series 95-5, Class A
6.05% 01/15/08 2,150 2,085,836
Union Acceptance Corp.,
Series 96, Class A
5.40% 04/07/03 2,026 1,996,849
-----------
TOTAL ASSET BACKED SECURITIES
(Cost $25,879,520) 25,722,810
-----------
PAR
MATURITY (000) VALUE
-------- ------ -----------
MUNICIPAL BONDS -- 2.6%
Los Angeles County Taxable
Pension Obligation
8.62% 06/30/06 $ 2,750 $ 3,055,938
Stanislaus County Taxable
Pension Obligation
7.15% 08/15/13 2,000 1,997,500
------------
TOTAL MUNICIPAL BONDS
(Cost $4,889,438) 5,053,438
------------
PURCHASED OPTIONS -- 0.0%
U. S. Treasury Notes
5.25% 12/31/97 2,909 291
------------
(Cost $52,663)
SHORT TERM INVESTMENTS -- 18.0%
Federal Home Loan Bank
Discount Note
5.30% 04/01/96 30,400 30,400,000
Federal Home Loan Bank
Notes
5.805%** 04/08/96 1,000 1,001,250
4.40%** 04/27/98 3,000 2,970,000
Smith Barney Money
Market Fund 125 124,566
------------
TOTAL SHORT TERM INVESTMENTS
(Cost $34,473,983) 34,495,816
------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $232,204,603* 120.3% 230,581,998
LIABILITIES IN EXCESS OF
OTHER ASSETS (20.3%) (38,974,305)
------ ------------
NET ASSETS (Applicable to
13,594,406 Institutional,
4,792,906 Service and
831,972 Investor A shares
outstanding) 100.0% $191,607,693
====== ============
NET ASSET VALUE AND REDEMPTION
PRICE PER INSTITUTIONAL, SERVICE
AND INVESTOR A SHARE
($191,607,693 (DIVIDE) 19,219,284) $ 9.97
======
See accompanying notes to financial statements.
12
<PAGE>
INTERMEDIATE GOVERNMENT BOND PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
VALUE
------
OFFERING PRICE PER INSTITUTIONAL
AND SERVICE SHARE $ 9.97
======
MAXIMUM OFFERING PRICE
PER INVESTOR A SHARE
($9.97 (DIVIDE) .96) $10.39
======
* Also cost for Federal income tax purposes. The gross unrealized appreciation
(depreciation) on a tax basis is as folllows:
Gross unrealized appreciation $ 586,011
Gross unrealized depreciation (2,208,616)
-----------
Net depreciation $(1,622,605)
===========
** Rates shown are the rates as of March 31, 1996.
See accompanying notes to financial statements.
13
<PAGE>
COMPASS CAPITAL FUNDS
INTERMEDIATE BOND PORTFOLIO
STATEMENT OF NET ASSETS
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- ------- -----------
U.S. GOVERNMENT & AGENCY
SECURITIES -- 13.8%
Federal Home Loan Bank Notes
6.99% 04/25/97 $ 2,500 $ 2,536,375
Federal National Mortgage
Association
8.70% 06/10/99 1,000 1,074,220
8.25% 12/18/00 2,000 2,161,680
Guaranteed Export Credit
Certificates
6.28% 06/15/04 700 693,812
Small Business Administration
6.67% 02/10/06 3,100 3,010,875
U.S. Treasury Notes
5.375% 11/30/97 7,200 7,158,240
5.125% 02/28/98 2,950 2,916,429
5.50% 11/15/98 8,405 8,321,706
5.875% 03/31/99 2,150 2,147,355
-----------
TOTAL U.S GOVERNMENT &
AGENCY SECURITIES
(Cost $30,112,884) 30,020,692
-----------
MORTGAGE PASS-THROUGHS -- 38.5%
Federal Home Loan Mortgage
Corporation
6.50% 10/16/25 27,500 26,142,188
7.00% 04/16/96 1,500 1,500,000
Federal Home Loan Mortgage
Corporation, 7 Year
7.00% 08/15/00 1,656 1,665,395
Federal Home Loan Mortgage
Corporation
7.00% 10/15/25 3,906 3,896,722
Federal Home Loan Mortgage
Corporation, 1 Year CMT ARM
8.00%** 04/01/22 1,373 1,387,614
Federal Home Loan Mortgage
Corporation, 15 Year
8.50% 06/01/05 4,803 4,957,286
Federal Home Loan Mortgage
Corporation
9.00% 06/01/21 1,678 1,720,521
9.00% 12/01/01 272 285,014
9.00% 04/01/26 1,500 1,570,781
Federal Home Loan Mortgage
Corporation, 7 Year
9.50% 08/97-2/05 782 819,015
Federal Home Loan Mortgage
Corporation
9.50% 05/01/21 4,111 4,417,558
PAR
MATURITY (000) VALUE
-------- ------- -----------
MORTGAGE PASS-THROUGHS (CONTINUED)
Federal Housing Adminisration,
USGI, Series 2056
7.46% 05/01/21 $ 2,304 $ 2,323,635
Federal National Mortgage
Association Multi-Family
6.50% 10/25/03 1,800 1,769,906
Federal National Mortgage
Association
8.00% 03/01/08 5,458 5,623,470
Federal National Mortgage
Association, 15 Year
9.50% 03/01/05 29 30,657
Federal National Mortgage
Association, 1 Year CMT ARM
7.622%** 11/01/24 3,093 3,191,021
Government National Mortgage
Association, 1 Year CMT ARM
6.50%** 05/20/25 9,446 9,575,548
Government National Mortgage
Association
7.00% 04/01/26 3,500 3,413,594
Government National Mortgage
Association, 15 Year
7.50% 04/07-12/07 2,610 2,669,769
8.00% 05/15/99 227 235,149
Government National Mortgage
Association
9.00% 11/15/17 4,217 4,513,618
Prudential Home Mortgage
Securities, 1 Year CMT ARM
7.958%** 12/25/23 2,310 2,351,613
-----------
TOTAL MORTGAGE PASS-THROUGHS
(Cost $84,784,835) 84,060,074
-----------
MULTIPLE CLASS MORTGAGE
PASS-THROUGHS -- 5.4%
Bear Stearns Secured Investors
Trust, Series 88-8,
Class B (PO)
7.75% 12/01/18 1,089 1,054,550
Community Program Loan Trust,
Series 87, Class A4
4.50% 10/01/18 4,800 4,054,500
Federal National Mortgage
Association, Series 91-1,
Class L, (IO)
10.85% 01/25/21 1,496 451,177
See accompanying notes to financial statements.
14
<PAGE>
INTERMEDIATE BOND PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- ------- -----------
MULTIPLE CLASS MORTGAGE
PASS-THROUGHS (CONTINUED)
Federal National Mortgage
Association, Series 89-16,
Class B, (PO)
6.13% 03/25/19 $ 2,385 $ 1,829,716
Federal National Mortgage
Association, SeriesG-5,
Class Z
8.25% 03/25/21 1,886 1,918,864
Ryland Acceptance Corp.
Four, Series 75, Class E
9.40% 08/01/18 2,395 2,528,210
-----------
TOTAL MULTIPLE CLASS
MORTGAGE PASS-THROUGHS
(Cost $12,164,729) 11,837,017
-----------
CORPORATE BONDS -- 22.2%
FINANCE -- 11.6%
Associates Corp, N.A.
7.46% 03/28/00 1,600 1,653,739
Crestar Financial Corp.
8.25% 07/15/02 1,800 1,916,136
Den Danske Bank
7.25% 06/15/05 1,500 1,502,056
Equitable Life Surplus Note
6.95% 12/01/05 1,000 980,821
Goldman Sachs Group LP
6.25% 02/01/03 2,000 1,914,227
Meridian Bancorp
6.625% 06/15/00 1,500 1,504,105
Metropolitan Life Insurance Co.
7.00% 11/01/05 1,000 988,470
6.30% 11/01/03 1,000 956,192
New American Capital, Inc.
6.965% 04/12/96 1,400 1,403,500
North Carolina National Bank
8.50% 11/01/96 500 507,500
Norwest Financial
8.375% 01/15/00 5,000 5,337,500
Paine Webber Group, Inc.
7.875% 02/15/03 1,500 1,550,783
Prudential Insurance Co.
7.65% 07/01/07 1,550 1,575,187
Salomon Brothers
7.75% 05/15/00 1,500 1,529,245
Salomon Inc.
8.90% 02/15/00 500 528,024
Siam Commercial Bank
7.50% 03/15/06 1,500 1,479,626
-----------
25,327,111
-----------
PAR
MATURITY (000) VALUE
-------- ------- -----------
INDUSTRIAL -- 6.7%
Atlantic Richfield
10.25% 07/02/00 $ 3,000 $ 3,182,813
Burlington Northern
6.94% 01/02/14 1,000 977,190
Centex Corp.
7.375% 06/01/05 1,400 1,373,750
General Motors Acceptance
Corp.
6.625% 11/21/05 3,000 2,906,536
RJR Nabisco, Inc.
7.05% 07/15/07 450 436,778
Ryder Systems, Inc.
7.66% 09/15/99 3,500 3,631,250
Tenneco Credit Corp.
10.125% 12/01/97 1,500 1,605,525
Texaco Capital Co.
9.00% 12/15/99 500 544,375
-----------
14,658,217
-----------
UTILITY -- 0.9%
Connecticut Light and Power
7.625% 04/01/97 1,488 1,491,720
Mobile Energy Services Co.
1st Mortgage Bond
8.665% 01/01/17 500 511,250
-----------
2,002,970
-----------
YANKEE -- 3.0%
London Life Insurance Co.
6.875% 09/15/05 1,000 984,173
Quebec Province
9.00% 05/08/01 2,150 2,349,662
Republic of Italy
0.00% 01/10/01 4,455 3,258,126
-----------
6,591,961
-----------
TOTAL CORPORATE BONDS
(Cost $48,186,825) 48,580,259
-----------
ASSET BACKED SECURITIES -- 18.6%
Small Business Administration,
Series 1995, Class K
6.65% 11/01/15 2,700 2,618,156
Capital Auto Receivables Asset
Trust, Series 93, Class A
4.70% 05/15/97 1,095 1,093,992
Chase Manhattan Grantor Trust,
Series 96, Class A
5.20% 04/15/02 5,601 5,535,914
See accompanying notes to financial statements.
15
<PAGE>
INTERMEDIATE BOND PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- ------- -----------
ASSET BACKED SECURITIES (CONTINUED)
Daimler Benz Auto Trust,
Series 95, Class A
5.85% 05/15/02 $2,391 $ 2,392,571
Dayton Hudson Credit Card
Master Trust, Series 95,
Class A
6.10% 02/25/02 2,200 2,199,313
Discover Card Master Trust I,
Series 94, Class A
5.663% 04/15/96 9,000 9,060,469
Fifth Third Bank Asset Trust,
Series 96, Class A
6.20% 09/01/01 3,900 3,914,016
Green Tree Finacial Corp.,
Series 93, Class A
6.40% 10/15/18 2,200 2,007,500
HFC Home Equity Loan Asset
Backed Certificates,
Series 93, Class A
4.75% 05/20/08 3,447 3,407,319
Mellon Home Equity Loan
Trust, Series 96, Class A
5.610% 04/01/01 1,000 999,688
The Money Store Home
Equity Trust, Series 94,
Class D
7.625% 12/15/95 505 506,610
Premier Auto Trust, Series 95,
Class A
7.35% 05/04/97 2,564 2,568,724
Sears Cridit Account Master
Trust, Series 95, Class A
6.05% 11/30/05 2,050 1,988,820
Union Acceptance Corp.,
Series 96, Class A
5.40% 04/07/03 2,219 2,187,025
-----------
TOTAL ASSET BACKED SECURITIES
(Cost $40,914,502) 40,480,117
-----------
MUNICIPAL BONDS -- 1.2%
Los Angeles County Taxable
Pension Obligation
8.62% 06/30/06 2,300 2,555,875
-----------
(Cost $2,416,653)
PAR
MATURITY (000) VALUE
-------- ------- ------------
COMMERCIAL MORTGAGE-BACKED
SECURITIES -- 2.3%
Merrill Lynch Mortgage
Investors, Inc.
7.50% 05/25/15 $ 1,200 $ 1,197,474
Resolution Trust Corp.
7.10% 12/25/24 2,038 2,002,010
Structured Asset Securities Corp.
5.751% 02/25/28 1,750 1,719,753
------------
TOTAL COMMERCIAL MORTGAGE
BACKED SECURITIES
(Cost $4,977,008) 4,919,237
------------
OPTIONS PURCHASED -- 0.0%
U.S. Treasury Note 3,133 313
------------
(Cost $56,668)
SHORT TERM INVESTMENTS -- 12.4%
Federal Home Loan Bank
Discount Note
5.30% 04/01/96 23,750 23,750,000
Federal Home Loan Bank Notes
5.805%** 04/08/97 1,000 1,001,250
4.40%** 04/27/97 2,000 1,980,000
Smith Barney Money
Market Fund 185 185,334
------------
TOTAL SHORT TERM INVESTMENTS
(Cost $26,898,523) 26,916,584
------------
TOTAL INVESTMENTS
(Cost $250,512,627*) 114.4% 249,370,168
------------
LIABILITIES IN EXCESS OF
OTHER ASSETS (Including
$42,903,842 of investment
purchases payable) (14.4%) (31,472,867)
------------
See accompanying notes to financial statements.
16
<PAGE>
INTERMEDIATE BOND PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
VALUE
------------
NET ASSETS (Applicable to 18,514,649
Institutional, 4,666,140 Service and
89,790 Investor A shares
outstanding 100.0% $217,897,301
====== ============
NET ASSET VALUE AND REDEMPTION
PRICE PER INSTITUTIONAL, SERVICE
AND INVESTOR A SHARE
($217,897,301 (DIVIDE) 23,270,579) $9.36
=====
OFFERING PRICE PER INSTITUTIONAL AND
SERVICE SHARE $9.36
=====
MAXIMUM OFFERING PRICE PER
INVESTOR A SHARE
($9.36 (DIVIDE) .96) $9.75
=====
- -------------
* Also cost for Federal income tax purposes. The gross unrealized appreciation
(depreciation) on a tax basis is as folllows:
Gross unrealized appreciation $ 1,232,296
Gross unrealized depreciation (2,374,755)
-----------
$(1,142,459)
===========
** Rates shown are the rates as of March 31, 1996.
See accompanying notes to financial statements.
17
<PAGE>
COMPASS CAPITAL FUNDS
CORE BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
MARCH 31, 1996
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- ------- ------------
U.S. GOVERNMENT & AGENCY
SECURITIES -- 30.1%
Federal Home Loan Mortgage
Corporation
7.125% 07/21/99 $ 3,000 $ 3,094,920
Small Business Administration,
Class 96-2, Series B
6.375% 02/01/16 4,000 3,813,750
U.S. Treasury Bonds
6.25% 08/15/23 200 185,002
U.S. Treasury Notes
5.375% 11/30/97 9,200 9,146,640
5.125% 02/28/98 29,700 29,362,014
5.50% 11/15/98 24,825 24,578,982
5.875% 03/31/99 9,100 9,088,807
6.875% 08/31/99 17,515 17,980,897
5.50% 12/31/00 6,000 5,852,820
5.625% 02/28/01 7,130 6,993,602
-----------
TOTAL U.S. GOVERNMENT &
AGENCY OBLIGATIONS
(Cost $110,516,624) 110,097,434
------------
MORTGAGE PASS-THROUGHS -- 28.8%
Federal Home Loan Mortgage Corporation
6.50% 02/11-02/26 82,520 80,438,140
8.00% 03/05-01/26 2,082 2,123,809
Federal Home Loan Mortgage
Corporation, 1 Year CMT ARM
7.90%** 09/01/23 426 433,491
Federal Housing Administration
East Point Chelsea
10.225% 05/01/33 99 105,120
Federal Housing Administration
9.00% 10/15/24 483 509,893
9.50% 11/15/26 619 664,324
Federal National Mortgage
Association Multi-Family
6.50% 10/25/03 100 98,328
Federal National Mortgage
Association
7.50% 09/01/10 285 289,612
8.00% 10/09-5/22 225 229,576
9.00% 06/01/24 604 634,299
Government National Mortgage
Association, 1 Year CMT ARM
6.00%** 02/24-06/25 1,209 1,218,010
6.50%** 05/20/25 273 277,584
PAR
MATURITY (000) VALUE
-------- ------- ------------
MORTGAGE PASS-THROUGHS (CONTINUED)
Government National Mortgage
Association
7.00% 07/15/20 $15,000 $ 14,629,688
8.50% 01/10-04/20 1,814 1,891,948
9.00% 09/16-12/19 1,579 1,664,853
10.50% 01/15/16 32 35,897
11.00% 05/16-09/19 19 20,559
11.50% 07/15/13 9 10,642
12.00% 01/03-03/15 9 10,471
12.50% 04/15/13 1 1,728
------------
TOTAL MORTGAGE PASS-THROUGHS
(Cost $106,549,242) 105,287,972
------------
MULTIPLE CLASS MORTGAGE
PASS-THROUGHS -- 3.6%
Community Program Loan
Trust, Series 87-4, Class Z
4.50% 10/01/18 9,850 8,320,172
Federal Home Loan Mortgage
Corporation, Series 1114,
Class D
8.00% 03/15/05 593 594,172
Federal National Mortgage
Association, Trust 90-37,
Class H
9.50% 09/25/18 361 362,494
Federal National Mortgage
Association, Trust 91-1,
Class L (IO)
10.888% 01/25/21 365 110,143
First Boston Corp. Mortgage
Securities Trust, Series A-3,
Class 3
9.45% 08/20/17 82 84,037
Prudential Home Mortgage
Securities, Series 93-55,
Class A, 1 Year CMT ARM
7.958% 12/25/23 3,156 3,211,959
Salomon Brothers Mortgage
Securities, Series 87-3,
Class A (PO)
3.95% 10/23/17 147 108,922
Smith Barney Mortgage
Capital Trust, Series 4,
Class Z
9.90% 09/01/18 517 548,505
------------
TOTAL MULTIPLE CLASS MORTGAGE
PASS-THROUGHS
(Cost $13,740,520) 13,340,404
------------
See accompanying notes to financial statements.
18
<PAGE>
CORE BOND PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- ------- ------------
COMMERCIAL MORTGAGE-BACKED
SECURITIES -- 0.2%
Paine Webber Mortgage
Acceptance Corp.,
Series 95-M1, Class A
6.70% 01/15/07 $ 800 $ 795,399
First Boston Mortgage
Securities Corp.,
Series 93-M1, Class A
6.75% 09/25/06 118 115,848
-----------
TOTAL COMMERCIAL MORTGAGE-BACKED
PASS-THROUGHS
(Cost $919,111) 911,247
-----------
ASSET BACKED SECURITIES -- 6.7%
American Express Master Trust,
Series 94-1, Class A
7.15% 08/15/99 2,000 2,034,375
Chase Manhattan Credit Card
Master Trust, Series 91-1, Class A
8.75% 08/15/99 2,250 2,271,375
CIT Group Securitization Corp.,
Series 95-2, Class B
7.65% 5/15/26 300 289,594
Green Tree Financial Corp.,
Series 96-2, Class B
7.90% 4/15/27 3,650 3,624,906
Green Tree Financial Corp.,
Series 93-1, Class A
6.90% 04/15/18 400 400,500
Green Tree Financial Corp.,
Series 93-4, Class A
6.60% 01/15/19 600 590,250
Green Tree Financial Corp.,
Series 94-5, Class A
7.95% 11/15/19 400 416,250
Green Tree Financial Corp.,
Series 93-3, Class B
6.85% 10/15/18 4,000 3,861,250
Green Tree Financial Corp.,
Series 95-7, Class B
7.35% 11/15/26 600 593,625
Green Tree Home Improvement
Loan Trust, Series 94-D,
Class M
9.05% 01/15/15 700 748,563
Merrill Lynch Asset Backed
Corp., Series 93-1, Class A
5.125% 07/15/98 452 451,526
PAR
MATURITY (000) VALUE
-------- ------- ------------
ASSET BACKED SECURITIES (CONTINUED)
Merrill Lynch Asset Backed Corp.,
Series 92-1, Class A
5.50% 05/15/98 $ 252 $ 251,865
Merrill Lynch Mortgage
Investors, Inc., Series 92-D,
Class A
7.75% 07/15/17 300 306,750
National Credit Card Trust,
Series 89-4, Class A
9.45% 12/31/97 263 265,616
Premier Auto Trust,
Series 93-2, Class A
4.90% 10/15/98 1,920 1,904,409
Standard Credit Card Master
Trust, Series 91-6,
Class A
7.875% 01/07/00 2,000 2,063,125
Standard Credit Card Master
Trust, Series 95-1, Class A
8.25% 01/07/07 4,100 4,452,344
-----------
TOTAL ASSET BACKED SECURITIES
(Cost $24,823,397) 24,526,323
-----------
CORPORATE BONDS -- 14.8%
FINANCE -- 3.8%
Associates Corp. of
North America
8.625% 06/15/97 3,000 3,096,420
6.75% 07/15/97 60 60,563
7.875% 09/30/01 1,000 1,065,000
Banque Nationale de Paris
of New York
9.875% 05/25/98 1,000 1,071,250
Crestar Financial Corp.
8.25% 07/15/02 400 425,808
Equitable Life Assurance Co.
7.70% 12/01/15 250 246,354
First Security Corp.
7.00% 07/15/05 300 297,799
General Electric Capital Corp.
8.125% 02/01/99 1,000 1,050,120
Household Finance Co.
7.625% 01/15/03 2,500 2,589,911
Liberty Mutual Co.
8.50% 05/15/25 300 313,127
Meditrust
7.375% 07/15/00 350 351,750
See accompanying notes to financial statements.
19
<PAGE>
CORE BOND PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- ------- ------------
CORPORATE BONDS (CONTINUED)
FINANCE (CONTINUED)
Metropolitan Life Insurance Co.
6.30% 11/01/03 $ 400 $ 382,477
SouthTrust Bank of Georgia
7.74% 05/15/25 100 107,140
Salomon Brothers, Inc.
6.70% 12/01/98 450 449,296
7.50% 02/01/03 2,500 2,478,125
Smith Barney Holdings
5.375% 06/01/96 100 99,926
-----------
14,085,066
-----------
INDUSTRIAL -- 8.7%
Caterpillar Financial Services
8.72% 07/21/97 100 103,480
Centex Corp.
7.375% 06/01/05 250 244,108
Ford Capital BV
9.125% 04/08/96 100 100,085
9.00% 08/15/98 1,000 1,062,500
Ford Motor Credit
8.00% 06/15/02 1,000 1,062,500
7.75% 03/15/05 4,000 4,195,000
General Motors Acceptance
Corp.
6.75% 03/15/03 650 645,396
ITT Corp.
6.25% 11/15/00 250 246,563
Nabisco, Inc.
7.55% 06/15/15 3,175 3,060,974
News America Holdings, Inc.
7.75% 12/01/45 3,000 2,740,578
Norfolk Southern Corp.
9.00% 03/01/21 4,000 4,760,000
TECO Energy, Inc.
9.25% 06/19/97 1,000 1,037,500
Texaco Capital
8.26% 09/15/98 1,250 1,310,938
8.50% 02/15/03 5,000 5,481,250
Union Pacific Corp.
7.00% 02/01/16 1,450 1,367,703
Weyerhaeuser Co.
8.84% 04/12/99 4,000 4,290,000
-----------
31,708,575
-----------
PAR
MATURITY (000) VALUE
-------- ------- ------------
YANKEE -- 2.3%
Hydro-Quebec
7.50% 04/01/16 $ 3,000 $ 2,978,832
Grand Metropolitan
Investment Corp.
7.125% 09/15/04 5,000 5,075,000
Republic of Italy
6.875% 09/27/23 350 313,374
------------
8,367,206
------------
TOTAL CORPORATE BONDS
(Cost $53,133,006) 54,160,847
------------
SHORT TERM INVESTMENTS -- 15.8%
Federal Home Loan Bank
Discount Note
5.30% 04/01/96 57,700 57,700,000
Smith Barney Money
Market Fund 51 50,878
------------
TOTAL SHORT TERM
INVESTMENTS
(Cost $57,750,878) 57,750,878
------------
TOTAL INVESTMENTS IN
SECURITIES -- 100.0%
(Cost $367,432,778*) $366,075,105
============
- -------------
* Also cost for Federal income tax purposes. The gross unrealized appreciation
(depreciation) on a tax basis is as folllows:
Gross unrealized appreciation $ 2,325,994
Gross unrealized depreciation (3,683,667)
-----------
$(1,357,673)
===========
See accompanying notes to financial statements.
20
<PAGE>
COMPASS CAPITAL FUNDS
CORE BOND PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1996
ASSETS
Investments at value (Cost $367,432,778) ...................... $366,075,105
Interest receivable ........................................... 3,233,765
Receivable from advisor ....................................... 15,486
Investments sold receivable ................................... 23,412,541
Capital shares sold receivable ................................ 4,012,296
Prepaid expenses .............................................. 58,078
------------
TOTAL ASSETS ............................................. 396,807,271
------------
LIABILITIES
Investments purchased payable ................................. 97,574,923
Capital shares redeemed payable ............................... 454,176
Accrued expenses payable ...................................... 446,982
Deferred dollar roll income ................................... 12,446
Distributions payable ......................................... 1,414,388
------------
TOTAL LIABILITIES ........................................ 99,902,915
------------
NET ASSETS (Applicable to 6,730,397 Institutional shares,
24,134,409 Service shares, 8,359 Investor A shares and
8,051 Investor B shares outstanding) .......................... $296,904,356
============
NET ASSET VALUE AND REDEMPTION PRICE PER INSTITUTIONAL
SERVICE AND INVESTOR A SHARE
($296,826,951 (DIVIDE) 30,873,165) ............................ $ 9.61
======
OFFERING PRICE PER INSTITUTIONAL AND SERVICE SHARE ............... $ 9.61
======
MAXIMUM OFFERING PRICE PER INVESTOR A SHARE
($9.61 (DIVIDE) .96) .......................................... $10.01
======
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE
(subject to a maximum contingent deferred sales charge of 4.5%)
PER INVESTOR B SHARE
($77,405 (DIVIDE) 8,051) ...................................... $ 9.61
======
See accompanying notes to financial statements.
21
<PAGE>
COMPASS CAPITAL FUNDS
GOVERNMENT INCOME PORTFOLIO
STATEMENT OF NET ASSETS
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- ------- ------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 3.6%
Federal Home Loan Bank Notes
4.40% 04/27/98 $ 500 $ 495,000
-----------
TOTAL U.S. GOVERNMENT &
AGENCY OBLIGATIONS
(Cost $491,667) 495,000
-----------
MORTGAGE PASS THROUGHS -- 113.5%
Federal Home Loan Mortgage
Corporation
6.50% 01/26-04/26 1,940 1,845,174
8.00% 09/01/25 1,020 1,039,762
9.00% 06/21-04/26 1,980 2,080,499
Federal Home Loan Mortgage
Corporation, 15 Year
6.50% 02/15/11 1,000 978,750
7.00% 04/16/11 3,500 3,500,000
Federal Home Loan Mortgage
Corporation, 1 Year CMT ARM
8.00%** 04/01/22 357 360,780
Federal National Mortgage
Association, 15 Year
7.00% 08/01/10 590 589,042
Government National Mortgage
Association
5.50% 04/15/26 500 492,969
7.50% 04/18/24 4,500 4,492,969
Government National Mortgage
Association, 1 Year CMT ARM
6.50%** 05/20/25 418 424,873
-----------
TOTAL MORTGAGE PASS-THROUGHS
(Cost $15,828,611) 15,804,818
-----------
ASSET BACKED SECURITIES -- 11.7%
Advanta Credit Card Master
Trust, Series 96-A, Class A1
6.00% 11/15/05 450 434,039
First USA Credit Card Master
Trust, Series 93-1, Class A
5.625% 02/15/00 500 501,250
PAR
MATURITY (000) VALUE
-------- ------- ------------
ASSET BACKED SECURITIES (CONTINUED)
Premier Auto Trust, Series 95-1,
Class A-2
7.35% 05/04/97 $ 154 $ 154,123
Sears Credit Account Master
Trust, Series 1995-5, Class A
6.05% 01/15/08 250 242,539
Small Business Administration
Participation Certificates,
Series 95-20J, Class 1
6.85% 12/01/15 300 291,938
-----------
TOTAL ASSET BACKED SECURITIES
(Cost $1,653,298) 1,623,889
-----------
MULTIPLE CLASS MORTGAGE
PASS-THROUGHS -- 19.2%
Capstead Securities, Corp. IV,
Series 92-1, Class F
8.40% 04/25/19 322 322,081
FBC Mortgage Securities
Trust 5, Series A, Class 3
9.00% 01/20/18 621 642,277
Merrill Lynch Trust, Series 36,
Class D
9.85% 11/01/18 885 922,474
Ryland Acceptance Corp.,
Series 75, Class E
9.40% 08/01/18 750 791,715
-----------
TOTAL MULTIPLE CLASS MORTGAGE
PASS-THROUGHS
(Cost $2,682,308) 2,678,547
-----------
MUNICIPAL BONDS -- 4.0%
Los Angeles County Taxable
Pension Obligation
8.62% 06/30/06 500 555,625
-----------
(Cost $525,152)
SHORT TERM INVESTMENTS -- 35.9%
Federal Home Loan Bank
Discount Notes
5.30% 04/01/96 5,000 5,000,000
-----------
(Cost $5,000,000)
See accompanying notes to financial statements.
22
<PAGE>
GOVERNMENT INCOME PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
VALUE
-----------
TOTAL INVESTMENTS
(Cost $26,181,036*) 187.9% $26,157,879
===========
LIABILITIES IN EXCESS OF
OTHER ASSETS (Including
$12,474,623 of investment
purchases payable) (87.9%) (12,235,920)
-----------
NET ASSETS (Applicable to 320,062
Investor A shares and 1,032,048
Investor B Shares outstanding) 100.0% $13,921,959
====== ===========
NET ASSET VALUE AND REDEMPTION
PRICE PER INVESTOR A SHARE
($3,295,500 (DIVIDE) 320,062) $10.30
======
MAXIMUM OFFERING PRICE PER
INVESTOR A SHARE
($10.30 (DIVIDE) .955) $10.79
======
NET ASSET VALUE, OFFERING PRICE
AND REDEMPTION PRICE (Subject
to a maximum contingent deferred
sales charge of 4.5%) PER
INVESTOR B SHARE
($10,626,459 (DIVIDE) 1,032,048) $10.30
======
- -------------
* Also cost for Federal income tax purposes. The gross unrealized appreciation
(depreciation) on a tax basis is as folllows:
Gross unrealized appreciation $ 64,405
Gross unrealized depreciation (87,562)
--------
$(23,157)
========
** Rates shown are the rates as of March 31, 1996.
See accompanying notes to financial statements.
23
<PAGE>
COMPASS CAPITAL FUNDS
MANAGED INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- ------- ------------
U.S. GOVERNMENT & AGENCY SECURITIES -- 22.0%
Federal Home Loan Bank
Notes
4.40% 04/27/98 $ 8,000 $ 7,920,000
Federal National Mortgage
Association
8.25% 12/18/00 12,000 12,970,080
Small Business Administration
6.375% 02/15/16 8,700 8,294,906
U.S. Treasury Bonds
6.25% 08/15/23 6,000 5,550,059
U.S. Treasury Notes
5.375% 11/30/97 16,200 16,106,040
7.25% 02/15/98 14,000 14,356,300
5.125% 02/28/98 12,920 12,772,970
5.50% 11/15/98 41,557 41,145,166
5.00% 02/15/99 22,200 21,688,956
5.875% 03/31/99 9,200 9,188,684
6.875% 08/31/99 4,300 4,414,380
5.625% 02/28/01 40,735 39,954,610
------------
TOTAL U.S GOVERNMENT &
AGENCY SECURITIES
(Cost $195,298,358) 194,362,151
------------
MORTGAGE PASS-THROUGHS -- 29.1%
Federal Home Loan Mortgage
Corporation
6.50% 9/25-4/26 140,050 133,562,813
7.50% 10/01/20 4,000 4,060,000
9.00% 06/01/21 5,741 6,056,057
9.00% 04/01/26 5,750 6,021,328
10.00% 01/01/19 122 134,713
Federal Home Loan Mortgage
Corporation, 15 Year
6.50% 03/01/11 1,836 1,836,000
7.50% 10/01/98 3,988 4,070,594
Federal Home Loan Mortgage
Corporation, 1Year CMT ARM
8.00%** 04/01/22 2,471 2,497,706
Federal National Mortgage
Association
6.50% 10/01/25 22,230 21,132,460
Federal National Mortgage
Association, 15 Year
7.00% 10/01/10 3,768 3,763,577
Government National Mortgage
Association, 1 Year CMT ARM
6.50%** 05/20/25 17,666 17,939,087
PAR
MATURITY (000) VALUE
-------- ------- ------------
MORTGAGE PASS-THROUGHS (CONTINUED)
Government National Mortgage
Association
7.00% 02/05-07/20 $ 38,829 $ 37,870,518
8.50% 06/20-01/21 1,017 1,060,300
8.50% 04/01/26 1,000 1,041,250
9.00% 06/00-04/01 3,324 3,505,132
9.50% 09/16-12/24 3,919 4,177,879
Prudential Home Mortgage
Securites, Series 93-52, Class A1,
1 Year CMT ARM
8.119%** 11/25/23 6,912 7,041,769
------------
TOTAL MORTGAGE PASS-THROUGHS
(Cost $257,875,732) 255,771,183
------------
MULTIPLE CLASS MORTGAGE PASS-THROUGHS -- 2.1%
Capstead Securities,
Corp. IV, Series 92-1,
Class F
8.40% 01/25/19 953 955,023
Community Program Loan
Trust, Series 87, Class A4
4.50% 10/01/18 13,375 11,297,695
Ryland Acceptance Corp.,
Four, Series 75, Class E
9.40% 08/01/18 6,150 6,492,063
------------
TOTAL MULTIPLE CLASS MORTGAGE
PASS-THROUGHS
(Cost $19,368,716) 18,744,781
------------
ASSET BACKED SECURITIES -- 5.4%
CIT Group Securitization Corp.,
Series 95-2, Class B
7.65% 05/15/26 3,950 3,812,984
Discover Card Master Trust,
Series 96-3, Class A
6.05% 08/18/08 7,650 7,213,711
First Chicago Master Trust II,
Series 91-D, Class A
8.40% 06/15/98 9,750 9,713,438
Green Tree Financial Corp.,
Series 95-7, Class B1
7.35% 11/15/26 3,925 3,883,297
Green Tree Financial Corp.,
Series 96-2, Class B2
7.90% 03/14/14 2,500 2,482,813
See accompanying notes to financial statements.
24
<PAGE>
MANAGED INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- ------- ------------
ASSET BACKED SECURITIES (CONTINUED)
Prime Credit Card Master Trust,
Series 95-1, Class A
6.75% 11/15/05 $ 34,100 $ 4,128,187
Standard Credit Card Master Trust,
Series 95-1, Class A
8.25% 01/07/07 7,875 8,551,758
Union Acceptance Corp.,
Series 96, Class A
5.40% 04/07/03 8,297 8,177,574
-----------
TOTAL ASSET BACKED SECURITIES
(Cost $48,826,906) 47,963,762
-----------
CORPORATE BONDS -- 14.5%
FINANCE -- 6.0%
Associates Corp, N.A.
7.46% 03/28/00 4,000 4,134,348
Equitable Life Assurance Society
7.70% 12/01/15 3,500 3,448,959
Ford Motor Credit Corp.
5.20% 06/24/96 5,000 4,949,500
Household International Corp.
6.00% 03/15/99 5,000 4,950,000
Larwin Group
8.00% 12/01/99 2 2,180
Liberty Mutual Co.
8.50% 05/15/25 4,250 4,435,968
Metropolitan Life Insurance Co.
6.30% 11/01/03 3,950 3,776,959
7.00% 11/01/05 2,500 2,471,175
Morgan Stanley Group, Inc.
7.50% 09/01/99 5,000 5,150,000
New American Capital, Inc.
7.313% 04/12/00 5,200 5,213,000
Paine Webber, Inc.
6.31% 07/22/99 5,000 4,964,400
Prudential Insurance Co.
7.65% 07/01/07 600 609,750
Salomon Brothers, Inc.
7.50% 02/01/03 3,000 2,974,509
Salomon Inc.
8.90% 02/15/00 2,500 2,640,119
Siam Commercial Bank
7.50% 03/15/06 3,000 2,959,251
-----------
52,680,118
-----------
INDUSTRIAL -- 6.7%
Burlington Industries
7.25% 09/15/05 2,000 1,961,566
Burlington Northern
7.00% 12/15/25 2,000 1,838,181
6.94% 01/01/14 3,300 3,224,727
PAR
MATURITY (000) VALUE
-------- ------ -----------
INDUSTRIAL (CONTINUED)
Centex Corp.
7.375% 06/01/05 $ 5,000 $ 4,906,250
Coastal Corp.
10.25% 10/15/04 2,500 2,994,877
9.75% 08/01/03 2,000 2,297,760
Ford Motor Co.
8.00% 10/01/96 7,000 7,082,670
General Motors Acceptance
Corp.
6.30% 03/31/97 5,000 5,037,650
6.75% 03/15/03 2,450 2,432,648
Georgia Pacific
8.625% 05/15/25 5,000 5,015,293
News America Holdings, Inc.
7.75% 10/01/45 7,490 6,842,309
Ralston Purina Co.
7.875% 06/15/25 2,800 2,828,000
RJR Nabisco, Inc.
7.05% 07/15/07 1,550 1,515,125
7.55% 06/15/15 4,800 4,627,614
Tenneco Credit Corp.
10.125% 12/01/97 1,300 1,391,455
USX Corp.
8.50% 03/01/23 4,790 4,920,780
------------
58,916,905
------------
UTILITY -- 1.3%
Idaho Power Co.
8.75% 03/15/27 2,250 2,404,553
Mobile Energy Services Co.
8.665% 01/01/17 2,150 2,198,375
Pennsylvania Power & Light Co.
9.375% 07/01/21 1,000 1,098,750
Texas Utilities Electric Co.
9.75% 05/01/21 5,000 5,581,400
------------
11,283,078
------------
YANKEE -- 0.6%
London Life Insurance Co.
6.875% 09/15/05 3,000 2,952,519
Tenaga
7.50% 01/15/49 2,250 2,065,058
------------
5,017,577
------------
TOTAL CORPORATE BONDS
(Cost $128,752,195) 127,897,678
------------
See accompanying notes to financial statements.
25
<PAGE>
MANAGED INCOME PORTFOLIO
SCHEDULEOFINVESTMENTS (CONTINUED)
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- ------ ------------
MUNICIPAL BONDS -- 1.7%
Los Angeles County Taxable
Pension Obligation
6.97% 06/30/08 $ 3,855 $ 3,773,081
8.30% 06/30/02 2,000 2,157,500
8.62% 06/30/06 8,300 9,223,375
------------
TOTAL MUNICIPAL BONDS
(Cost $14,669,045) 15,153,956
------------
COMMERCIAL MORTGAGE-BACKED
SECURITIES -- 0.6%
Credit Suisse-First Boston,
Series 95, Class C
7.458% 11/25/27 2,000 1,985,000
Merrill Lynch Mortgage Investors,
Inc., Series 95-C, Class D
7.884% 05/25/15 2,200 2,180,784
Morgan Stanley, Series 95, Class D
8.25% 08/15/27 1,000 1,009,716
------------
TOTAL COMMERCIAL MORTGAGE
BACKED SECURITIES
(Cost $5,199,415) 5,175,500
------------
SHORT TERM INVESTMENTS -- 24.6%
Federal Home Loan Bank Discount
Notes
5.30% 04/01/96 119,250 119,250,000
Federal Home Mortgage
Corporation Discount Notes
5.25% 04/01/96 22,140 22,140,000
Nikko Securities (Repurchase
Agreement, dated 3/29/96
to be repurchased at $75,033,750.
Collateralized by $74,044,000
U.S. Treasury Notes, 7.5% due
12/31/96. The value of collateral
is $76,588,000).
5.40% 04/01/96 75,000 75,000,000
Smith Barney Money Market
Fund 420 420,046
------------
TOTAL SHORT TERM INVESTMENTS
(Cost $216,810,046) 216,810,046
------------
TOTAL INVESTMENTS -- 100.0%
(Cost $886,800,413*) $881,879,057
============
- -------------
* Cost for Federal income tax purposes at March 31, 1996 was $501,229,217. The
gross unrealized appreciation (depreciation) on a tax basis is as folllows:
Gross unrealized appreciation $ 3,236,085
Gross unrealized depreciation (8,157,441)
-----------
Net depreciation $(4,921,356)
===========
** Rates shown are the rates as of March 31, 1996.
See accompanying notes to financial statements.
26
<PAGE>
COMPASS CAPITAL FUNDS
MANAGED INCOME PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1996
(UNAUDITED)
ASSETS
Investments at value (Cost $886,800,413) ...................... $881,879,057
Interest receivable ........................................... 7,037,707
Investments sold receivable ................................... 46,938,653
Capital shares sold receivable ................................ 1,940,649
Prepaid expenses .............................................. 24,104
------------
TOTAL ASSETS ............................................. 937,820,170
------------
LIABILITIES
Investments purchased payable ................................. 276,324,162
Capital shares redeemed payable ............................... 583,035
Accrued expenses payable ...................................... 398,034
------------
TOTAL LIABILITIES ........................................ $277,305,231
------------
NET ASSETS (Applicable to 49,149,635 Institutional shares,
14,415,151 Service shares and 1,209,741 Investor A shares
outstanding) .................................................. $660,514,939
============
NET ASSET VALUE AND REDEMPTION PRICE PER INSTITUTIONAL,
SERVICE AND INVESTOR A SHARE ($660,514,939 (DIVIDE) 64,774,527) $10.20
======
OFFERING PRICE PER INSTITUTIONAL AND SERVICE SHARE ............... $10.20
======
MAXIMUM OFFERING PRICE PER INVESTOR A SHARE
($10.20 (DIVIDE) .955) ........................................ $10.68
======
See accompanying notes to financial statements.
27
<PAGE>
COMPASS CAPITAL FUNDS
INTERNATIONAL BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
PAR
MATURITY (000)** VALUE
-------- -------- ------------
FOREIGN BONDS -- 100.0%
AUSTRALIA -- 3.1%
Australian Government Bonds
7.50% 07/15/05 1,500 $ 1,073,767
-----------
DENMARK -- 12.7%
Kingdom of Denmark
9.00% 11/15/00 8,500 1,653,014
7.00% 12/15/04 5,400 932,740
8.00% 03/15/06 10,000 1,812,758
-----------
4,398,512
-----------
GERMANY -- 37.4%
African Development Bank
7.25% 10/21/99 2,000 1,449,864
Bayerische Hypotheken Bank
6.00% 09/13/00 2,500 1,736,721
Bundesrepublic Deutschland
7.25% 10/21/02 1,600 1,159,350
Deutsche Ausgleichsbank
6.50% 09/25/00 2,000 1,415,607
Deutsche Pfandbriefe Hypobank
5.00% 02/22/01 1,500 993,953
Federal National Mortgage Association
Global Bond
6.00% 08/23/00 2,000 1,386,653
KFW International Finance
7.25% 12/03/97 2,000 1,432,249
Norddeutsche Landesbank Finance
6.00% 01/05/04 2,500 1,644,648
Rheinesche Hypobank
5.50% 12/20/99 1,000 689,024
Westdeutsche Landbank
6.25% 09/15/03 1,500 1,011,687
-----------
12,919,756
ITALY -- 5.7%
Buoni Poliennali del Tes
10.50% 11/01/00 1,100,000 711,196
European Investment Bank
12.75% 02/15/00 1,800,000 1,251,371
-----------
1,962,567
JAPAN -- 20.6%
Asian Development Bank
3.125% 06/29/05 100,000 933,999
Austria Republic
6.25% 10/16/03 135,000 1,532,369
Interamerican Development Bank
6.00% 10/30/01 135,000 1,481,869
Japan Development Bank
6.50% 09/20/01 145,000 1,626,385
PAR
MATURITY (000)** VALUE
-------- -------- -----------
JAPAN (CONTINUED)
World Bank Global Bond
4.50% 03/20/03 150,000 $ 1,542,189
-----------
7,116,811
-----------
SWEDEN -- 8.8%
Sweden Government Bond
10.25% 05/05/00 8,700 1,416,073
13.00% 06/15/01 9,000 1,625,215
-----------
3,041,288
-----------
UNITED KINGDOM -- 11.7%
Abbey National Treasury PLC
8.00% 04/02/03 600 894,310
Bayerische Landesbank Giro
8.50% 02/26/03 500 765,761
National Power PLC
10.625% 03/26/01 500 834,899
United Kingdom Treasury Bonds
8.50% 12/07/05 1,000 1,561,561
-----------
4,056,531
-----------
TOTAL FOREIGN BONDS
(Cost $34,569,499) 34,569,232
-----------
LOCAL
CURRENCY
--------
INVESTMENTS IN CURRENCY -- 0.0%
Danish Krone 5 1
German Deutche Mark 258 175
Italian Lira 746,217 476
New Zealand Dollars 51 35
-----------
TOTAL INVESTMENTS IN CURRENCY
(Cost $689) 687
-----------
TOTAL INVESTMENTS IN SECURITIES
(Cost $34,570,188*) 100.0% $34,569,919
======== ===========
- -------------
* Also cost for Federal income tax purposes. The gross unrealized
appreciation (depreciation) on a tax basis is as follows:
Gross unrealized appreciation $ 707,266
Gross unrealized depreciation (707,535)
----------
$ (269)
==========
** In local currency.
See accompanying notes to financial statements.
28
<PAGE>
COMPASS CAPITAL FUNDS
INTERNATIONAL BOND PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1996
(UNAUDITED)
ASSETS
Investments at value (Cost $34,570,188) ....................... $34,569,919
Cash .......................................................... 423,577
Interest receivable ........................................... 1,248,624
Capital shares sold receivable ................................ 725
Net unrealized appreciation on forward foreign
currency contracts .......................................... 859,270
Prepaid expenses .............................................. 7,357
-----------
TOTAL ASSETS ............................................. 37,109,472
-----------
LIABILITIES
Net unrealized depreciation on forward foreign
currency contracts .......................................... 175,529
Accrued expenses payable ...................................... 80,841
Foreign taxes payable ......................................... 24,820
-----------
TOTAL LIABILITIES ........................................ 281,190
-----------
NET ASSETS (Applicable to 3,269,668 Service shares outstanding) .. $36,828,282
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
SERVICE SHARE ($36,828,282 (DIVIDE) 3,269,668) ................ $11.26
======
See accompanying notes to financial statements.
29
<PAGE>
COMPASS CAPITAL FUNDS
TAX-FREE INCOME PORTFOLIO
STATEMENT OF NET ASSETS
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- -------- ----------
MUNICIPAL BONDS -- 103.2%
ARIZONA -- 2.4%
Phoenix G.O.
6.375% 07/01/13 $ 200 $ 210,250
Salt River Proj. Agr. Imp. &
Pwr. Dist. Elec. Sys. Rev.,
Ser. 93A
5.300% 01/01/03 500 516,250
Scottsdale Mun. Prop. Corp.
Lease Rev. Ser. 92
6.250% 11/01/10 500 525,000
----------
1,251,500
----------
CALIFORNIA -- 2.7%
California Pol. Ctrl. Fin. Auth.
Res. Rec. Rev., Wst. Mngt.,
Inc., Ser. 91A
7.150% 02/01/11 200 216,500
Los Angeles Pub. Imp., Ser. 95A
6.000% 09/01/10 1,140 1,174,200
----------
1,390,700
----------
COLORADO -- 6.5%
Arapahoe Cnty. Cap. Imp. Rev.,
Hgwy.Trust Fund, Ser. 86
0.000% 08/31/04 900 528,750
Chicago O'Hare Intnl. Aprt. Spec.
Fac. Rev., Amer. Air. Proj.
5.000% 01/01/18 600 531,750
Denver City & Cnty. Apt. Rev.,
Ser. 92
6.750% 11/15/13 500 518,750
6.125% 11/15/25 1,500 1,468,125
Jefferson Cnty. Sch. Dist. G.O.,
Ser. 92
6.000% 12/15/12 300 308,625
----------
3,356,000
----------
FLORIDA -- 3.8%
Florida Dep. of Trans. G.O.,
Ser. 91
6.250% 07/01/07 400 425,500
Palm Beach Cnty. Sld. Wst.
Auth. Rev., Ser. 84
8.625% 07/01/04 500 538,125
Valusia Cnty. Ed. Rev. Swr. 96
6.125% 10/15/16 1,000 991,350
----------
1,954,975
----------
PAR
MATURITY (000) VALUE
-------- -------- ----------
GEORGIA -- 3.3%
Atlanta G.O., Ser. 94A
6.125% 12/01/23 $ 500 $ 511,875
Georgia G.O., Ser. 92B
6.300% 03/01/10 310 340,613
Georgia Mun. Elec. Auth. Rev.
6.125% 01/01/14 400 412,000
Gwinnett Cnty. G.O.
6.000% 01/01/10 400 418,500
----------
1,682,988
----------
HAWAII -- 3.3%
Hawaii St. G.O., Ser. 90
7.000% 06/01/00 5,000 548,125
Honolulu City & Cnty. G.O.,
Ser. 90C
7.150% 06/01/00 1,000 1,110,000
----------
1,658,125
----------
ILLINOIS -- 9.9%
Berwyn Rev., MacNeal Mem.
Hosp. Assoc. Proj., Ser. 95
6.000% 06/01/09 400 413,000
Chicago O'Hare Intl. Apt.
Spec. Fac. Rev.
6.375% 01/01/15 2,500 2,596,875
Illinois Ed. Fac. Auth. Rev.,
Shedd Aquar. Soc.,
Ser. 87A
8.625% 07/01/17 560 595,000
Met. Pier & Expo. Auth. Hosp.
Fac. Rev., Ser. 96,
McCormick Con. Ctr.
6.250% 07/01/17 1,000 977,500
Winnebago & Boone Cnty.
G.O., Sch. Dist. No. 205,
Ser. 92C
5.900% 02/01/05 500 533,125
----------
5,115,500
----------
KANSAS -- 1.6%
Johnson Cnty. G.O.,
Internal Insp., Ser. 92A
6.000% 09/01/07 400 422,500
Kansas Dep. of Trans., Ser. A
6.000% 09/01/12 400 407,500
----------
830,000
----------
See accompanying notes to financial statements.
30
<PAGE>
TAX-FREE INCOME PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- -------- ----------
MUNICIPAL BONDS (CONTINUED)
KENTUCKY -- 1.0%
Jefferson Cnty. Cap. Proj. Corp.
Lease Rev., Ser. 93A
5.65% 08/15/03 $ 300 $ 316,500
Kentucky Econ. Dev. Fin. Auth.
Hlth. Fac. Rev., Scottsville
Med. Ctr., Ser. 94A
9.00% 11/01/24 125 130,625
----------
447,125
----------
MARYLAND -- 0.2%
Baltimore Port Fac. Rev., Cons.
Coal Sales, Ser. 84A
6.50% 10/01/11 100 107,500
----------
MICHIGAN -- 6.5%
Dickinson Cnty. Econ. Dev.
Corp. Pol. Ctrl. Rev., Champ.
Intl. Corp. Proj., Ser. 93
5.85% 10/01/18 2,400 2,310,000
Wyandotte Elec. Rev., Ser. 92
6.25% 10/01/17 1,000 1,045,000
----------
3,355,000
----------
MISSISSIPPI -- 1.5%
Jackson Cnty. Pol. Ctrl. Rev.,
Gulf Pwr. Co. Proj., Ser. 91
7.125% 04/01/21 750 765,000
----------
MISSOURI -- 3.7%
Lake of the Ozarks Cnty. Rev.,
Mo. Bdg. Sys., Ser. 96
6.25% 12/01/16 2,000 1,910,000
----------
NEBRASKA -- 0.6%
Omaha Pub. Pwr. Dist. Rev.,
Ser. 93A
5.50% 02/01/07 300 309,750
----------
NEW MEXICO -- 1.1%
New Mexico St. Univ. Imp. Rev.
5.70% 04/01/09 500 511,250
----------
NEW YORK -- 10.5%
New York City G.O., Ser. 92B,
FRDD
3.25%** 04/07/96 300 300,000
New York City G.O., Ser. 95B
7.25% 08/15/07 500 554,375
New York City G.O., Ser. 95A
6.00% 08/01/05 1,000 1,003,750
PAR
MATURITY (000) VALUE
-------- -------- ----------
NEW YORK (CONTINUED)
New York City Ind. Dev. Agcy. Spec.
Fac. Rev., Term. One Group
Assoc. Proj., Ser. 94
6.00% 01/01/15 $ 500 $ 486,250
New York St. Thruway Auth.
Rev., Hgwy. & Bdg. Traf.
Fund, Ser. 95A
5.40% 04/01/08 1,000 1,003,750
New York St. Hsg. Fin. Agcy.
Rev., Ser. 96A
6.375% 11/01/04 2,000 2,070,000
----------
5,418,125
----------
NORTH CAROLINA -- 0.6%
North Carolina Mun. Pwr.
Agcy. Rev., Catawba
Elec. Proj.
6.00% 01/01/10 300 317,625
----------
OHIO -- 8.3%
Columbus, Refuse Coal
Fired Plant 5-E-L, Ser. 91
6.625% 09/15/01 225 248,344
Lakota Loc. Sch. Dist. G.O.,
Ser. 94
7.00% 12/01/08 1,000 1,163,750
Ohio Wtr. Dev. Auth. Rev.,
Ser. 92
6.00% 12/01/08 1,000 1,047,500
Ohio Wtr. Dev. Auth. Rev.,
Clean Wtr., Ser. 92
5.65% 12/01/05 300 311,250
Ohio Wtr. Dev. Auth. Rev.,
North Star Broken Hill
Proj., Ser. 95
6.45% 09/01/20 1,000 1,013,750
Ohio Wtr. Dev. Auth. Rev.,
Steel-Cargil North Star
Broken Hill Proj., Ser. 95
6.30% 09/01/20 500 511,250
----------
4,295,844
----------
OREGON -- 1.6%
Portland Swr. Sys. Rev.,
Ser. 92A
6.00% 10/01/12 300 309,375
Washington Cnty. Sch.
Dist. G.O., Forest Grove, Ser. 94
6.00% 06/01/05 500 539,375
----------
848,750
----------
See accompanying notes to financial statements.
31
<PAGE>
TAX-FREE INCOME PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- -------- ----------
MUNICIPAL BONDS (CONTINUED)
PENNSYLVANIA -- 4.3%
Bradford Area Sch. Dist. G.O.
5.80% 10/01/19 $1,000 $ 1,001,250
Pennsylvania St. High. Ed.
Rev., Carnegie Mellon Univ.,
Ser. 95, FRDD
3.50%** 04/01/96 $200 200,000
Seneca Valley Sch. Dist. G.O.,
Ser. 92A
5.75% 07/01/10 $500 507,500
Wayne Highlands Sch. Dist. G.O.,
Ser. 94
6.00% 04/01/12 500 508,125
-----------
2,216,875
-----------
SOUTH CAROLINA -- 3.8%
Charleston Cnty. Ind. Rev.,
Massey Coal Term. Corp.,
Ser. 85, FRDD
3.50%** 04/01/96 500 500,000
Piedmont Mun. Pwr. Agcy.
Elec. Rev., Ser. 92
6.25% 01/01/09 500 540,625
Piedmont Mun. Pwr. Agcy.
Elec. Rev., Ser. 85B
6.25% 01/01/18 500 514,375
South Carolina Pub. Ser.
Auth. Rev., Ser. 91D,
Santee Cooper Proj.
6.50% 07/01/14 100 105,250
Spartanburg Wtr. Sys. Imp. Rev.
6.20% 06/01/09 300 315,375
-----------
1,975,625
-----------
SOUTH DAKOTA -- 1.1%
South Dakota Lease Rev.
Tran. Cert., Ser. 93A
6.375% 09/01/05 500 541,875
-----------
TENNESSEE -- 7.3%
Maury Cnty. Ind. Dev. Pol.
Ctrl. Rev., Saturn Corp. Proj.,
Ser. 94
6.50% 09/01/24 1,500 1,556,250
Memphis-Shelby Apt. Auth.
Rev. Ser. 93B
6.50% 02/15/09 1,000 1,082,500
PAR
MATURITY (000) VALUE
-------- -------- ----------
TENNESSEE (CONTINUED)
Tennessee G.O., Ser. 91B
6.85% 06/01/01 $1,000 $1,116,250
----------
3,755,000
----------
TEXAS -- 8.6%
Harris Cnty. Rev.,Toll Road
Sub Lein, Ser. 91
7.00% 08/01/09 500 546,250
Nuveen Texas Quality, Inc.,
ARPS
3.75%** 04/02/96 1,200 1,200,000
Texas Wtr. Dev. Bd. Rev.,
Ser. 96A
5.875% 07/15/17 2,175 2,033,625
Sabine Riv. Auth. Pol. Ctrl.
Rev., Southwestern Elec.
Pwr. Proj., Ser.86
8.20% 07/01/14 85 87,448
Univ. of Texas Rev., Ser. 91A
7.00% 08/15/07 500 556,250
----------
4,423,573
----------
UTAH -- 0.2%
Salt Lake City Hos. Rev.,
Ser. 88A
8.125% 05/15/15 100 122,250
----------
VERMONT -- 2.1%
Vermont G.O., Ser. 90A
6.75% 02/01/00 1,000 1,093,750
----------
VIRGINIA -- 1.8%
Hampton G.O., Ser. 95
6.00% 01/15/08 400 420,500
Virginia Hsg. Dev. Auth.
Rev., Commonwealth Mtg.,
Ser. 95A-1
6.70% 07/01/05 500 521,875
----------
942,375
----------
WASHINGTON -- 3.4%
Port of Seattle Rev, Ser. 92A
6.25% 01/01/09 500 517,500
Washington St. G.O., Ser. 93A
5.75% 10/01/17 1,250 1,235,937
----------
1,753,437
----------
See accompanying notes to financial statements.
32
<PAGE>
TAX-FREE INCOME PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- -------- -----------
MUNICIPAL BONDS (CONTINUED)
WISCONSIN -- 0.5%
Milwaukee Met. Swr. Dist. G.O.,
Ser. 92A
6.125% 10/01/03 $ 250 $ 272,500
-----------
WYOMING -- 1.0%
Sweetwater Cnty. Sld. Wst.
Disp. Rev., FMC Corp.
Proj., Ser. 94A
7.00% 06/01/24 500 520,625
-----------
TOTAL MUNICIPAL BONDS
(Cost $52,459,197) 53,143,642
-----------
SHORT TERM INVESTMENTS -- 0.1%
Smith Barney Tax-Free Money
Market Fund 69 69,221
-----------
TOTAL SHORT TERM INVESTMENTS
(Cost $69,221) 69,221
-----------
TOTAL INVESTMENTS IN SECURITIES
(Cost $52,528,418*) 103.3% 53,212,863
LIABILITIES IN EXCESS OF
OTHER ASSETS (3.3%) (1,712,860)
------- -----------
NET ASSETS (Applicable to 1,036,955
Institutional, 3,192,163 Service and
565,763 Investor A shares
outstanding) 100.0% $51,500,003
======= ===========
NET ASSET VALUE AND REDEMPTION
PRICE PER INSTITUTIONAL, SERVICE
AND INVESTOR A SHARE
($51,500,033 (DIVIDE) 4,794,881) $10.74
======
OFFERING PRICE PER INSTITUTIONAL
AND SERVICE SHARE $10.74
======
MAXIMUM OFFERING PRICE PER
INVESTOR A SHARE
($10.74 (DIVIDE) .96) $11.19
======
- ---------------
* Also cost for Federal income tax purposes. The gross unrealized appreciation
(depreciation) on a tax basis is as follows:
Gross unrealized appreciation $ 885,399
Gross unrealized depreciation (200,954)
---------
$ 684,445
=========
** Rates shown are the rates as of March 31, 1996 and the maturities shown are
the longer of next interest readjustment date or the date the principal
amount can be recovered through demand.
See accompanying notes to financial statements.
33
<PAGE>
COMPASS CAPITAL FUNDS
PENNSYLVANIA TAX-FREE INCOME PORTFOLIO
STATEMENT OF NET ASSETS
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- -------- -----------
MUNICIPAL BONDS -- 97.9%
PENNSYLVANIA -- 93.3%
Allegheny Cnty. Hosp. Dev. Auth.
Rev., Mercy Hosp. Proj., Ser. 86
7.375% 04/01/15 $ 750 $ 771,060
Allegheny Cnty. G.O., Ser. 91C-38
6.200% 09/01/01 250 269,375
Allegheny Cnty. Hosp. Dev. Auth.
Rev., Children's Hosp. Proj.,
Ser. 90A
7.000% 07/01/06 500 533,750
Allegheny Cnty. Res. Fin. Auth.
Mtge. Rev., Single Fam. Proj.,
Ser. 94Y
6.250% 05/01/17 400 405,000
Bradford Area Sch. Dist. G.O.,
Sch. Imp. Proj.. Ser. 95
5.800% 10/01/19 3,000 3,003,750
Bucks Cnty. Wtr. & Swr. Auth.
Rev., Wtr. Util. Imp., Ser. 92B
6.500% 12/01/02 1,750 1,922,813
Cambria Cnty. G.O,. Ser. 91
8.250% 06/01/00 600 657,750
Central Bucks Sch. Dist. G.O.,
Sch. Imp. Proj., Ser. 93A
5.150% 05/15/08 1,015 999,775
Central Bucks Sch. Dist. G.O.,
Sch. Imp. Proj., Ser. 94A
6.700% 11/15/04 500 556,875
Chester Cnty. G.O., Ser. 91
6.700% 08/01/01 385 420,613
Crawford Cent. Sch. Dist. G.O.,
Sch. Imp., Ser. 95
5.700% 02/15/10 2,175 2,215,781
5.750% 02/15/11 1,585 1,608,775
Dauphin Cnty. Gen. Auth. Rev.,
A-F Sch. Dist. Pooled Fin.
Prog., Ser. 86
5.300% 06/01/05 535 535,054
5.400% 06/01/06 565 565,102
5.500% 06/01/07 550 549,962
6.850% 06/01/09 800 859,000
Deer Lakes Sch. Dist. G.O.,
Ser. 95
6.450% 01/15/19 1,300 1,340,625
6.350% 01/15/14 1,000 1,027,500
Delaware Cnty. Auth. Hlth.
Care Rev., Mercy Hlth. Corp.,
Ser. 93B
6.000% 11/15/07 1,000 977,500
PAR
MATURITY (000) VALUE
-------- -------- -----------
PENNSYLVANIA (CONTINUED)
Delaware River Port Auth. of
PA & N.J. Rev. Ser. 95
5.450% 01/01/12 $3,750 $ 3,670,312
Erie Cnty. Prison Auth.
Lease Rev., Correc.
Fac. Imp., Ser. 91
6.250% 11/01/01 500 538,750
Exeter Township Swr.
Auth. Rev., Ser. 92
6.200% 07/15/22 1,000 1,018,750
Geisinger Auth. Hlth.
Sys. Rev.,
3.600% 07/01/22 300 300,000
Harrisburg Auth. Lease
Rev., Correc. Fac. Imp.,
Ser. 91
6.500% 06/01/01 500 545,000
Indiana Cnty. Hosp. Auth.
Rev., Ser. 92A
7.125% 07/01/23 1,500 1,520,625
Lancaster Cnty. Hosp. Auth.
Rev., Hlth. Ctr.-Masonic
Homes Proj., Ser. 94
5.300% 11/15/08 500 481,875
Lebanon Cnty. Hosp. Auth.
Rev., Good Samaritan
Hosp. Proj., Ser. 93
5.550% 11/15/04 355 346,125
6.000% 11/15/18 750 684,375
6.000% 11/15/09 500 470,000
Ligonier Valley Sch. Dist.
G.O., Sch. Imp., Ser. 94
5.650% 03/01/14 2,000 1,970,000
Montgomery Cnty. Higher
Ed. & Hlth. Auth. Rev.,
Frankford Hosp., Ser. 86
7.875% 01/01/97 500 524,685
Moon Township Wtr. & Swr.
Auth. Rev., Ser. 94
6.700% 12/01/99 1,000 1,077,500
New Garden Township Swr.
Auth. Rev., Ser. 91
7.000% 03/01/15 420 455,175
Northampton Cnty. Higher Ed.
Auth. Rev., Moravian Coll.,
Ser. 94
6.100% 07/01/12 1,950 2,008,500
Northampton Cnty. Ind. Dev.
Auth. Poll. Ctrl. Rev., Met.
Ed. Co. Proj., Ser. 95A
6.100% 07/15/21 1,000 1,017,500
See accompanying notes to financial statements.
34
<PAGE>
PENNSYLVANIA TAX-FREE INCOME PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- -------- -----------
MUNICIPAL BONDS (CONTINUED)
PENNSYLVANIA (CONTINUED)
Northumberland Cnty. Auth.
Gntd. Lease Rev., Ser. 92
6.500% 08/15/02 $ 500 $ 548,750
Pennsbury Sch. Dist. G.O., Ser. 94
6.650% 08/15/04 685 766,344
Pennsylvania Commonwealth
Turnpike Rev., Ser. 91
6.500% 06/01/04 445 480,044
Pennsylvania Fin. Auth. Rev.,
Mun. Cap. Imp. Proj., Ser. 93
6.600% 11/01/09 3,260 3,496,350
Pennsylvania G.O., Ser. 94A
6.500% 11/01/05 250 269,687
Pennsylvania Higher Ed. Assis.
Agcy. Stud. Loan Rev., Ser. 84A
4.625% 12/01/00 2,000 1,995,000
Pennsylvania Higher Ed. Fac.
Auth. Rev., Duquesne Univ.,
Ser. 91C
6.750% 04/01/20 1,000 1,062,500
Pennsylvania Higher Ed. Fac.
Auth. Rev., Philadelphia Coll.
of Tex. & Sci., Ser. 93
4.950% 02/01/02 255 250,537
5.150% 02/01/04 1,230 1,197,712
5.450% 02/01/07 285 276,806
Pennsylvania Hsg. Fin. Auth.
Rev., Single Fam. Mtge., Ser. 95
6.200% 10/01/14 1,000 1,006,250
Pennsylvania Infra. Invest. Auth.
Rev., Pennvest Proj., Ser. 90B
6.800% 09/01/10 2,000 2,217,500
Pennsylvania Intergov. Coop.
Auth. Spec. Tax Rev., City of
Philadelphia Fund. Prog., Ser. 93
5.250% 06/15/06 1,000 1,000,000
5.750% 06/15/15 1,000 988,750
5.600% 06/15/15 500 483,125
Pennsylvania Intergov. Coop.
Auth. Spec. Tax Rev., City of
Philadelphia Fund. Prog., Ser. 94
7.000% 06/15/04 500 563,750
Pennsylvania St. Cert. of Part.,
Correc. Fac., Ser. 93A
5.000% 07/01/15 3,000 2,696,250
Pennsylvania St. Higher Ed.,
Drexel Univ., Ser. 90
7.250% 05/01/10 500 546,250
Pennsylvania St. Higher Ed.,
Suequehanna Univ., Ser. 90
6.900% 03/01/02 750 786,563
PAR
MATURITY (000) VALUE
-------- -------- -----------
PENNSYLVANIA (CONTINUED)
Pennsylvania St. Higher Ed.,
Thomas Jefferson Univ., Ser. 90
7.550% 11/01/00 $ 500 $ 568,125
Pennsylvania St. Hsng.
Fin. Agcy.
6.400% 07/01/12 500 505,625
Pennsylvania St. Ind. Dev.
Auth. Rev., Econ. Dev., Ser. 94
5.800% 07/01/09 700 720,125
Pennsylvania St. Turnpike
Oil Fran. Tax Rev., Ser. 94A
5.875% 12/01/08 500 516,875
Pennsylvania St. Turnpike
Turnpike Rev., Ser. 92P
6.000% 12/01/09 500 515,000
Philadelphia Ind. Dev. Auth.
Rev., Nat. Bd. of Med.
Exam. Proj., Ser. 92
6.750% 05/01/12 500 534,375
Philadelphia Hosp. & Higher
Ed. Fac. Auth. Rev., Friends
Hosp., Ser. 93
5.950% 05/01/04 500 495,625
6.200% 05/01/11 500 474,375
Philadelphia Hosp. & Higher
Ed. Fac. Auth. Rev., Grad.
Hlth. Sys., Ser. 93A
5.100% 07/01/98 470 468,237
Philadelphia Ind. Dev. Auth.
Rev., PGH Dev. Corp., Ser. 93
5.250% 07/01/17 810 747,225
5.250% 07/01/17 1,000 922,500
Philadelphia Mun. Auth.
Rev., Ser. 93A
5.625% 11/15/14 2,000 1,952,500
Philadelphia Sch. Dist. G.O.,
Ser. 91A
6.700% 07/01/99 250 267,813
Philadelphia Wtr. & Wst. Wtr.
Rev., Ser. 95
6.250% 08/01/11 750 802,500
6.750% 08/01/03 500 557,500
Pittsburgh G.O.
6.125% 09/01/17 500 517,500
Pittsburgh Urban Dev. Auth.
Mtge. Rev., Ser. 93A
5.500% 10/01/10 500 476,250
Pittsburgh Wtr. & Swr. Auth.
Rev., Ser. 91A
6.000% 09/01/01 1,000 1,063,750
See accompanying notes to financial statements.
35
<PAGE>
PENNSYLVANIA TAX-FREE INCOME PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- -------- -----------
MUNICIPAL BONDS (CONTINUED)
PENNSYLVANIA (CONTINUED)
Ringgold Sch. Dist. Rev.,
Ser. 95
6.200% 02/01/19 $ 500 $ 508,750
Schuylkill Dev. Auth. Lease Rev.,
Ser. 91A
7.125% 06/01/13 1,250 1,387,500
Southeastern Pennsylvania Tranp.
Auth. Spec. Tax Rev,. Ser. 95A
5.875% 03/01/09 1,230 1,260,750
5.900% 03/01/20 2,075 2,038,687
St. Public Sch. Building Auth., Mid
Valley Sch. Dist. Proj. Rev.,
Ser. 92D
6.250% 01/01/07 500 531,250
Washington Cnty. Ind. Dev. Auth.
Poll. Ctr. Rev., Ser. 93F, Western
Penn. Pwr. Co.,
4.950% 03/01/03 2,000 1,985,000
West Chester Area Sch. Dist.
G.O., Ser. 95
6.200% 03/01/02 1,000 1,068,750
West View Mun. Auth. Spec.
Rev., Ser. 85
9.000% 05/15/99 400 453,000
Westmoreland Cnty. Ind. Dev.
Auth. Rev., Hlth. Sys. Proj.,
Ser. 93A
6.000% 07/01/11 200 203,750
-----------
78,024,737
-----------
PUERTO RICO -- 4.6%
Puerto Rico Commonwealth
G.O,. Ser. 93
5.500% 07/01/13 1,750 1,695,312
Puerto Rico Commonwealth
High. Rev. Ser. 96Z
6.000% 07/01/02 1,250 1,341,975
Puerto Rico Elec. Pwr. Auth.
Rev., Ser. 91P
6.750% 07/01/03 250 272,813
Puerto Rico Pub. Bldg. Auth.
Rev., Ser. 92J
6.500% 07/01/03 500 547,500
-----------
3,857,600
-----------
TOTAL MUNICIPAL BONDS
(Cost $81,016,554) 81,882,337
-----------
PAR
MATURITY (000) VALUE
-------- -------- -----------
SHORT TERM INVESTMENTS -- 2.7%
California Hlth. Fac. Fin. Auth.
Rev., Sutter Hlth. Ctr.,
Ser. 90A, FRDD
3.550%** 04/01/96 $ 900 $ 900,000
Farmington, New Mexico Poll.
Ctrl. Rev., Arizona Pub.
Ser. Co., Ser. 94B, FRDD
3.750%** 04/01/96 220 220,000
Grand Rapids Michigan Wtr.
Sply., Ser. 93, FGIC, FRDD
3.750%** 04/01/96 300 300,000
New York City G.O., FGIC,
FRDD
3.250%** 04/01/96 300 300,000
Peninsula Ports Auth. of
Virginia Port Fac. Rev.,
Shell Coal & Term. Co.
Proj., Ser. 87, FRDD
3.750%** 04/01/96 200 200,000
Smith Barney Tax Free
Money Market Fund 126 126,019
Vanguard Pennsylvania
Tax-Exempt Money Fund 100 100,000
West Feliciana, Parish Louisiana
Poll. Ctrl. Rev., FRDD
3.800%** 04/01/96 100 100,000
-----------
TOTAL SHORT TERM INVESTMENTS
(Cost $2,246,019) 2,246,019
-----------
TOTAL INVESTMENTS
(Cost $83,262,571*) 100.6% $84,128,356
LIABILITIES IN EXCESS OF
OTHER ASSETS (0.6%) (526,947)
-----------
NETASSETS (Applicable to
450,106 Institutional shares,
3,225,480 Service shares,
3,892,621 Investor A shares and
482,718 Investor B shares
outstanding) 100.0% $83,601,409
======== ===========
NET ASSET VALUE AND REDEMPTION
PRICE PER INSTITUTIONAL, SERVICE
AND INVESTOR A SHARE
($78,588,811 (DIVIDE) 7,568,207) $10.38
======
See accompanying notes to financial statements.
36
<PAGE>
PENNSYLVANIA TAX-FREE INCOME PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
VALUE
-----------
OFFERING PRICE PER INSTITUTIONAL
AND SERVICE SHARE $10.38
======
MAXIMUM OFFERING PRICE PER
INVESTOR A SHARE
($10.38 (DIVIDE) .96) $10.81
======
NET ASSET VALUE, OFFERING
PRICE AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 4.5%)
PER INVESTOR B SHARE
($5,012,598 (DIVIDE) 482,718) $10.38
======
* Also cost for Federal income tax purposes. The gross unrealized appreciation
(depreciation) on a tax basis is as folllows:
Gross unrealized appreciation $1,376,859
Gross unrealized depreciation (511,074)
-----------
$ 865,785
==========
** Rates shown are the rates as of March 31, 1996 and the maturities shown are
the longer of next interest readjustment date or the date the principal
amount can be recovered through demand.
See accompanying notes to financial statements.
37
<PAGE>
COMPASS CAPITAL FUNDS
NEW JERSEY TAX-FREE PORTFOLIO
STATEMENT OF NET ASSETS
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- -------- -----------
MUNICIPAL BONDS -- 104.9%
NEW JERSEY -- 95.4%
Absecon Bd. of Ed. G.O.,
Ser. 92
5.625% 12/15/02 $ 770 $ 795,025
Brick Township Mun. Util.
Auth. Rev., Ser. 77
6.75% 12/01/16 1,000 1,132,500
Brigantine G.O., Ser. 92
6.25% 08/01/03 730 793,875
Camden Cnty. Imp. Auth.
Lease Rev., Ser. 92
6.00% 12/01/12 500 515,000
5.70% 12/01/05 500 514,375
Camden Cnty. Swr. Auth.
Rev. Ser .96
5.50% 07/15/05 2,250 2,323,125
Cherry Hill Township Unlimited
Tax G.O., Ser. 92
6.00% 06/01/06 500 528,750
Delaware River Joint Toll Bdg.
Rev., Ser. 92
6.25% 07/01/12 1,400 1,463,000
Dover Township G.O.
6.00% 10/15/03 1,000 1,087,500
Edison Township G.O.,
Ser. 91
6.50% 06/01/04 500 550,625
6.50% 06/01/03 1,000 1,095,000
Essex Cnty. Imp. Auth. Lease
Rev., Jail & Yth. Hsg. Proj.,
Ser. 94
6.90% 12/01/14 500 578,125
Evesham Mun. Util. Auth. Rev.,
Ser. 90B
6.80% 07/01/01 1,010 1,035,250
6.85% 07/01/02 1,080 1,108,350
Evesham Mun. Util. Auth. Rev.,
Ser. 93A
5.60% 07/01/15 2,500 2,465,625
Flemington - Raritan Sch. Dist.
Unlimited Tax G.O., Ser. 95
6.25% 02/01/12 500 530,000
Irvington Township G.O., Ser. 93
5.00% 10/01/11 1,000 942,500
Knowlton Township Bd. of Ed.
Unlimited Tax G.O. Ser. 91
6.60% 08/15/11 169 188,857
Lacey Township Wtr. Auth. Rev.,
Ser. 93
6.00% 12/01/12 1,000 1,026,250
PAR
MATURITY (000) VALUE
-------- -------- -----------
NEW JERSEY (CONTINUED)
Landis Swr. Auth. Rev.,
Ser. 93
5.40% 10/01/06 $ 500 $ 512,500
Medford Township Bd. of
Ed. G.O., Ser. 95
5.95% 02/01/11 500 512,500
Mercer Cnty. Imp. Rev.,
Govt. Lease Prog., Ser. 90
7.25% 12/01/98 985 1,067,494
Mercer Cnty. Imp. Rev.,
Hamilton Bd. of Ed. Proj.,
Ser. 92
5.90% 06/01/03 500 531,875
Middletown Township Swr.
Auth. Rev., Ser. 93A
5.05% 01/01/07 1,095 1,079,944
Millburn Township Sch. Dist.
G.O., Ser. 95
5.35% 07/15/10 1,150 1,144,250
Moorestown Township Sch.
Dist. G.O., Ser. 91
6.60% 06/01/05 450 500,063
Morris Cnty. G.O., Ser. 91
6.00% 07/15/04 2,443 2,635,386
Morris Cnty. G.O., Ser. 95
5.00% 07/15/13 1,000 946,250
Morristown G.O., Ser. 95
6.40% 08/01/14 500 542,500
New Jersey Bldg. Auth. Rev.,
Ser. 89
7.20% 06/15/99 1,200 1,321,500
New Jersey Econ. Dev. Auth.
Mark. Trans. Fac. Rev.,
Ser. 91A
5.70% 07/01/05 4,500 4,719,375
New Jersey Econ. Dev. Auth.
Rev., Ser. 89
6.625% 06/15/01 1,050 1,148,437
New Jersey Econ. Dev. Auth.
Rev., Ser. 95
5.55% 08/01/04 565 589,719
New Jersey Econ. Dev. Auth.
Rev., Invamed Inc. Proj.,
Ser. 95
6.10% 07/01/07 200 206,500
6.00% 07/01/06 300 309,750
New Jersey Econ. Dev. Auth.
Rev., W.Y. Hldg. Co. Proj.,
Ser. 95
5.95% 06/01/05 865 879,056
See accompanying notes to financial statements.
38
<PAGE>
NEW JERSEY TAX-FREE PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- -------- -----------
MUNICIPAL BONDS (CONTINUED)
NEW JERSEY (CONTINUED)
New Jersey Hlth. Care Fac.
Fin. Auth. Rev., Dover Gen.
Hosp. & Med. Ctr., Ser. 94
5.875% 07/01/12 $ 500 $ 510,000
New Jersey Hlth. Care Fac. Fin.
Auth. Rev., Cathederal. Hlth.
Ctr., Ser. 90
7.25% 02/15/21 1,000 1,068,750
New Jersey Sports & Expo.
Rev. Ser. 93A
5.30% 09/01/09 955 945,450
New Jersey Sports & Expo.
Rev. Ser. 93A, Con. Ctr.
Lux. Tax
6.00% 07/01/12 1,000 1,023,750
New Jersey St. Hwy. Auth.
Rev., Gard. St. Pkwy., Ser. 92
6.25% 01/01/14 500 516,250
6.20% 01/01/10 750 809,062
6.00% 01/01/05 1,350 1,436,062
New Jersey St. Hwy. Auth.
Rev., Gard. St. Pkwy., Ser. 93
4.90% 01/01/05 1,000 997,500
New Jersey St. Hsg. & Mtg.
Fin. Agcy. Rev., Ser. 92A
6.95% 11/01/13 750 780,000
6.70% 05/01/05 500 526,875
6.70% 11/01/05 1,000 1,053,750
New Jersey St. Trans. Auth.
Rev. Ser. 92A
6.00% 06/15/00 1,030 1,086,650
New Jersey St. Trans. Auth.
G.O,. Ser. 96A
6.00% 12/15/05 2,500 2,709,375
5.00% 12/15/09 2,000 1,925,000
New Jersey St. Tpke. Auth.
Rev., Ser. 91A
6.90% 01/01/14 970 973,473
New Jersey St. Tpke. Auth.
Rev., Ser. 91C
6.25% 01/01/10 1,350 1,405,687
New Jersey St. Tpke. Auth.
Rev., Ser. A
6.40% 01/01/02 250 265,937
New Jersey St. Tpke. Auth.
Rev., Ser. C
6.50% 01/01/16 500 526,875
New Jersey St. G.O., Ser. 89C
6.50% 01/15/04 1,000 1,066,250
6.50% 01/15/08 1,000 1,068,750
PAR
MATURITY (000) VALUE
-------- -------- -----------
NEW JERSEY (CONTINUED)
New Jersey St. G.O., Ser. 90
7.00% 04/01/03 $ 500 $ 555,000
New Jersey St. G.O., Ser. 91
6.25% 09/15/01 1,000 1,082,500
New Jersey St. G.O., Ser. 92D
6.00% 02/15/11 2,000 2,110,000
New Jersey Wstwtr. Rev.
Ser. 89B
7.00% 05/15/04 950 1,029,563
Newark Bd. of Ed. G.O.
Ser. 94
5.875% 12/15/13 1,000 1,012,500
North Arlington G.O., Ser. 94
4.80% 02/01/13 441 401,310
North Bergen Township G.O.
Ser. 92
5.90% 08/15/01 500 528,750
North Jersey Wtr. Sply. Rev.,
Wanaque Nth. Proj. Ser. 91A
6.50% 11/15/06 510 556,538
Northwest Bergen Cnty. Rev.
Ser. 92
5.90% 07/15/06 755 803,131
Ocean Cnty. G.O. Ser.91
6.30% 04/15/97 1,000 1,028,030
Ocean Cnty. G.O. Ser.91A
6.25% 10/01/01 1,280 1,380,800
Ocean Cnty. Util. Auth. Rev,.
Ser. 95A
6.30% 01/01/12 1,005 1,059,019
Passaic Cnty. G.O., Ser. 95A
6.00% 09/01/07 2,750 2,939,063
Passaic Valley Swr. Rev.,
Ser. 92D
5.70% 12/01/02 3,305 3,503,300
Passaic Valley Wtr. Comm.
Sply. Rev. Ser. 92A
5.95% 12/15/02 500 537,500
Point Pleasant G.O., Ser. 95
5.70% 12/01/03 500 526,250
Port Auth. of New York &
New Jersey Rev., Ser. 89
7.25% 04/01/14 1,500 1,530,000
Roselle G.O. Ser. 93
4.85% 10/15/05 1,000 983,750
South Jersey Port Auth.
Rev. Ser. 93G
5.50% 01/01/15 2,280 2,166,000
Tinton Falls Sch. Sys. G.O.
Ser. 94
5.875% 10/15/09 1,010 1,035,250
Union City G.O., Ser. 92
6.375% 11/01/07 485 532,894
See accompanying notes to financial statements.
39
<PAGE>
NEW JERSEY TAX-FREE PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- -------- -----------
MUNICIPAL BONDS (CONTINUED)
NEW JERSEY (CONTINUED)
Wanaque Valley Reg. Swr.
Auth. Rev. Ser. 93B
5.65% 09/01/08 $ 585 $ 599,625
Warren Cnty. Pol. Ctrl. Fin.
Auth. Rev.
5.70% 12/01/03 500 534,375
Weehawken Township G.O.
Ser.92
6.15% 07/01/04 350 377,563
West Long Branch Bd. of Ed.
G.O., Ser. 94
5.00% 12/15/09 1,380 1,321,350
West Windsor Plainsboro
Township Bd. of Ed. G.O.,
Ser. 93
5.80% 03/15/06 1,000 1,055,000
Winslow Township Unlimited
Tax G.O.Ser.92
6.40% 10/01/05 870 936,338
Woodbridge Township G.O.,
Ser. 92
5.80% 08/15/03 500 528,125
6.05% 08/15/05 500 530,625
Woodbridge Township G.O.,
Ser. 94C
5.00% 09/15/11 1,000 935,000
-----------
TOTAL NEW JERSEY
(Cost $88,980,890) 90,135,426
-----------
PUERTO RICO -- 9.1%
Puerto Rico Commonwealth
High. Rev. Ser. 96Y
6.25% 07/01/04 3,815 4,180,210
Puerto Rico Commonwealth
High. Rev. Ser. 96Z
6.25% 07/01/07 2,105 2,305,059
Puerto Rico Elec. Pwr. Auth.
Rev., Ser. 94S
6.125% 07/01/08 1,000 1,097,500
University of Puerto Rico
Rev., Ser. 88L
7.75% 06/01/96 1,015 1,042,375
----------
TOTAL PUERTO RICO
(Cost $8,584,996) 8,625,144
----------
PAR
MATURITY (000) VALUE
-------- -------- -----------
NEW YORK -- 0.4%
New York City G.O., Ser. 92B FRDD
3.25%** 04/01/96 $400 $ 400,000
----------
(Cost $400,000)
TOTAL INVESTMENTS
(Cost $97,965,886*) 104.9% 99,160,570
LIABILITIES IN EXCESS OF
OTHER ASSETS (4.9%) (4,652,300)
-------- ----------
NET ASSETS
Applicable to 8,319,045 Service
and 44,720 Investor A
shares outstanding) 100.0% $94,508,270
======== ===========
NET ASSET VALUE AND REDEMPTION
PRICE PER SERVICE AND
INVESTOR A SHARE
($94,508,270 (DIVIDE) 8,363,765) $11.30
======
OFFERING PRICE PER SERVICE
SHARE $11.30
======
MAXIMUM OFFERING PRICE PER
INVESTOR A SHARE
($11.30 (DIVIDE) .96) $11.77
======
* Also cost for Federal income tax purposes. The gross unrealized
appreciation (depreciation) on a tax basis is as folllows:
Gross unrealized appreciation $1,922,178
Gross unrealized depreciation (727,494)
----------
$1,194,684
==========
** Rates shown are the rates as of March 31, 1996 and the maturities shown are
the longer of next interest readjustment date or the date the principal
amount can be recovered through demand.
See accompanying notes to financial statements.
40
<PAGE>
COMPASS CAPITAL FUNDS
OHIO TAX-FREE INCOME PORTFOLIO
STATEMENT OF NET ASSETS
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- -------- -----------
MUNICIPAL BONDS -- 89.0%
OHIO -- 80.1%
Akron, Bath, Copley Joint
Township Rev., Hosp. Dist.,
Ser. 93
5.500% 11/15/03 $ 250 $ 230,000
Brunswick G.O., Ser. 94
6.300% 12/01/05 210 214,988
Butler Cnty. Hosp. Fac. Rev.,
Middletown Reg. Hosp.,
Ser. 91
6.750% 11/15/03 50 54,375
Cleveland Apt. Sys. Rev.,
Ser. 94B,
5.700% 01/01/04 150 153,750
Cleveland Pub. Pwr. Sys. Rev.,
First Mort., Ser. 91B
7.000% 11/15/01 100 107,625
Columbus Mun. Apt. Auth. Rev.,
Port Columbus Int. Apt.,
Ser. 94A
6.000% 01/01/04 150 155,438
Columbus Park, Rec. & Zoo
Auth. G.O., Ser. 86
7.250% 07/01/01 25 28,250
Columbus Swr. Auth. G.O.,
Ser. 91
9.000% 09/15/97 175 187,688
Columbus Swr. Auth. G.O.,
Ser. 92
5.800% 05/01/08 280 294,350
Cuyahoga Cnty. Hosp. Rev.,
Fairview Gen. Hosp. Proj.,
Ser. 94A
5.500% 02/15/04 200 187,250
Fairfield City Sch. Dist. G.O.,
Ser. 94
7.450% 12/01/14 300 337,875
Franklin Cnty. Hosp. Rev.,
Drs. Hosp. Proj., Ser. 93
5.875% 12/01/03 330 311,850
Hamilton Cnty. Swr. Sys. Rev.,
Ser. 95A
6.000% 12/01/02 500 538,125
Hilliard Sch. Dist. G.O., Ser. 86
6.000% 12/01/06 250 270,938
Kings Local Sch. Dist. G.O.,
Ser. 94
7.600% 12/01/05 200 224,500
PAR
MATURITY (000) VALUE
-------- -------- -----------
OHIO (CONTINUED)
Loveland City Sch. Dist. G.O.,
Ser. 92
6.650% 12/01/02 $ 145 $ 155,331
Medina G.O., Ser. 86
7.250% 12/01/03 50 57,313
Montgomery Cnty. Hosp. Rev.,
Kettering Mem. Hosp.,
Ser. 89
7.375% 04/01/99 200 216,500
North Royalton City Sch.
Dist. G.O., Ser. 94
6.625% 12/01/06 100 113,125
Northwestern Local Sch.
Dist. G.O., Wayne &
Ashland Cntys., Ser. 94
7.200% 12/01/10 300 354,000
Ohio G.O., Ser. 95
6.000% 08/01/05 225 239,906
Ohio Hsg. Fin. Agcy. Rev.,
Res. Mort., Ser. 94B-2
6.350% 09/01/04 150 151,312
Ohio Mun. Elec. Gen. Agcy.
Rev., Ser. 93
5.375% 02/15/13 425 410,656
Ohio Pub. Bldg. Men. Hlth.
Rev., Ser. 96
4.500% 12/01/08 500 461,875
Ohio St. Bldg. Data Ctr.
Rev., Ser. 93A
5.900% 10/01/07 450 475,312
Ohio St. Higher Ed. Fac.
Comm. Rev., Ohio
Dominican Coll., Ser. 94
6.625% 12/01/04 250 260,313
Ohio St. Wtr. Dev. Auth. Rev.,
Steel-Cargill North Star
Broken Hill Proj., Ser. 95
6.300% 09/01/20 500 511,250
Olentangy Loc. Sch. Dist.
G.O., Ser. 95A
6.000% 12/01/08 225 239,062
Student Loan Fund. Corp.
Rev., Univ. of Cincinnati,
Ser. 93A
5.750% 08/01/03 65 66,544
Summit Cnty. Hosp. Rev.,
Cuyahoga Falls Gen. Hosp.
Proj., Ser. 94A
6.650% 07/01/14 200 196,000
See accompanying notes to financial statements.
41
<PAGE>
OHIO TAX-FREE INCOME PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
MARCH 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- -------- -----------
MUNICIPAL BONDS (CONTINUED)
OHIO (CONTINUED)
Univ. of Cincinnati Gen.
Rcpts. Rev., Ser. R-9
5.600% 06/01/09 $ 75 $ 75,187
Univ. of Toledo Gen. Rcpts.
Rev., Ser. 92A
5.900% 06/01/20 425 427,125
---------
7,707,813
---------
PUERTO RICO -- 8.9%
Puerto Rico Commonwlth. G.O.,
Ser. 93
5.500% 07/01/13 510 494,062
Puerto Rico Elec. Pwr. Auth.
Rev., Ser. 89
5.000% 07/01/12 400 362,000
---------
856,062
---------
TOTAL MUNICIPAL BONDS
(Cost $8,464,118) 8,563,875
---------
SHORT TERM INVESTMENTS -- 9.8%
Grand Rapids Mich. Wtr. Sply.
Rev., Ser. 93 FRDD
3.750%** 04/01/96 50 50,000
New York City Mun. Wtr. Fin.
Auth. Wtr. & Swr. Sys. Rev.,
Ser. 94G FRDD
3.700%** 04/01/96 100 100,000
Peninsula Ports Authority of
Virginia Port Fac. Rev., Shell
Coal & Term. Co. Proj.,
Ser. 87 FRDD
3.750%** 04/01/96 100 100,000
Smith Barney Tax Free
Money Market Fund 14 13,688
Uinta Cnty. Wyoming Poll.
Ctrl. Rev., Ser. 93 FRDD
3.700%** 04/01/96 675 675,000
---------
TOTAL SHORT TERM INVESTMENTS
(Cost $938,688) 938,688
---------
TOTAL INVESTMENTS IN SECURITIES
(Cost $9,402,806*) 98.8% 9,502,563
VALUE
-----------
OTHER ASSETS IN EXCESS
OF LIABILITIES 1.2% $ 115,784
------ ----------
NET ASSETS (Applicable to 35,379
Institutional, 586,128 Service,
322,528 Investor A and 11,523
Investor B shares outstanding) 100.0% $9,618,347
====== ==========
NET ASSET VALUE AND REDEMPTION
PRICE PER INSTITUTIONAL,
SERVICE AND INVESTOR A
SHARE
($9,502,361 (DIVIDE) 944,035) $10.07
======
OFFERING PRICE PER INSTITUTIONAL
AND SERVICE SHARE $10.07
======
MAXIMUM OFFERING PRICE PER
INVESTOR A SHARE
($10.07 (DIVIDE) .96) $10.49
======
NET ASSET VALUE, OFFERING
PRICE AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 4.5%)
PER INVESTOR B SHARE
($115,986 (DIVIDE) 11,523) $10.07
======
* Also cost for Federal income tax purposes. The gross unrealized
appreciation (depreciation) on a tax basis is as folllows:
Gross unrealized appreciation 202,081
Gross unrealized depreciation (102,324)
---------
Net Appreciation $ 99,757
=========
** Rates shown are the rates as of March 31, 1996 and the maturities shown are
the longer of next interest readjustment date or the date the principal
amount can be recovered through demand.
- ----------------------------------------------
INVESTMENT ABBREVIATIONS
ARM Adjustable Rate Mortgage
CMT Constant Maturity Treasury
FRDD Floating Rate Demand Deposit
IO Interest Only
PO Principal Only
- ----------------------------------------------
See accompanying notes to financial statements.
42
<PAGE>
COMPASS CAPITAL FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
SHORT INTERMEDIATE
GOVERNMENT GOVERNMENT INTERMEDIATE CORE
BOND BOND BOND BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------- ---------- ---------- ----------
FOR THE FOR THE FOR THE FOR THE
PERIOD 7/1/95 SIX MONTHS SIX MONTHS PERIOD 7/1/95
THROUGH ENDED ENDED THROUGH
3/31/96 3/31/96 3/31/96 3/31/96
---------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Investment income:
Interest ................................................ $4,722,663 $6,481,949 $7,306,477 $5,315,543
---------- ---------- ---------- ----------
Expenses:
Investment advisory fee ................................. 316,814 486,816 522,371 378,895
Administration fee ...................................... 146,185 214,235 230,200 169,829
Custodian fee ........................................... 13,650 30,561 33,597 19,628
Transfer agent fee ...................................... 15,063 34,935 31,688 18,940
Service fees ............................................ 116,290 73,549 60,883 150,454
Distribution fees ....................................... 418 14,314 1,294 26
Legal and audit ......................................... 11,581 7,916 11,473 11,250
Printing ................................................ 7,882 4,907 8,928 7,174
Registration fees and expenses .......................... 22,444 15,001 10,872 31,255
Organization ............................................ 13,477 -- 2,286 44,490
Trustees' fees and officer's salary ..................... 2,057 1,263 1,292 3,105
Other ................................................... 40,202 2,982 7,299 9,448
---------- ---------- ---------- ----------
706,063 886,479 922,183 844,494
Less fees voluntarily waived
and expenses reimbursed ............................... (150,900) (297,594) (307,382) (206,223)
---------- ---------- ---------- ----------
Total operating expenses ........................... 555,163 588,885 614,801 638,271
---------- ---------- ---------- ----------
Interest expense ........................................... 248,772 317,003 590,901 55,045
---------- ---------- ---------- ----------
Total expenses ..................................... 803,935 905,888 1,205,702 693,316
---------- ---------- ---------- ----------
Net investment income ...................................... 3,918,728 5,576,061 6,100,775 4,622,227
---------- ---------- ---------- ----------
Realized and unrealized gain (loss) on investments:
Net realized gain from investment transactions .......... 1,395,164 581,059 1,293,923 6,070,648
Change in unrealized depreciation
of investments ........................................ (3,644,972) (1,739,562) (2,482,603) (14,061,504)
---------- ---------- ---------- ----------
Net loss on investments .................................... (2,249,808) (1,158,503) (1,188,680) (7,990,856)
---------- ---------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations ............................... $1,668,920 $4,417,558 $4,912,095 $(3,368,629)
========== ========== ========== ===========
</TABLE>
See accompanying notes to financial statements.
43
<PAGE>
COMPASS CAPITAL FUNDS
STATEMENTS OF OPERATIONS (CONTINUED)
<TABLE>
<CAPTION>
GOVERNMENT MANAGED INTERNATIONAL TAX-FREE
INCOME INCOME BOND INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- ----------- --------- ---------
FOR THE FOR THE FOR THE FOR THE
SIX MONTHS SIX MONTHS PERIOD 2/1/95 SIX MONTHS
ENDED ENDED THROUGH ENDED
3/31/96 3/31/96 3/31/96 3/31/96
--------- ----------- --------- ---------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Investment Income:
Interest ................................................ $ 613,347 $19,718,733 $ 429,931 $ 816,322
--------- ----------- --------- ---------
Expenses:
Investment advisory fee ................................. 34,521 1,526,696 35,574 73,903
Administration fee ...................................... 15,198 661,990 13,456 33,408
Custodian fee ........................................... 9,389 69,903 8,293 7,508
Transfer agent fee ...................................... 8,163 101,109 2,640 6,726
Service fees ............................................ 14,222 195,488 15,437 26,493
Distribution fees ....................................... 44,634 26,071 -- 13,863
Legal and audit ......................................... 845 29,824 465 1,092
Printing ................................................ 351 15,383 279 667
Registration fees and expenses .......................... 13,737 12,501 5,313 12,296
Organization ............................................ 4,036 -- 819 2,353
Trustees' fees and officer's salary ..................... 91 3,982 94 196
Other ................................................... 5,175 12,673 1,791 351
--------- ----------- --------- ---------
150,362 2,655,620 84,161 178,856
Less fees voluntarily waived
and expenses reimbursed ............................... (58,836) (654,724) (6,966) (52,757)
--------- ----------- --------- ---------
Total operating expenses ........................... 91,526 2,000,896 77,195 126,099
--------- ----------- --------- ---------
Interest Expense ........................................... 146,356 -- -- --
--------- ----------- --------- ---------
Total expenses ..................................... 237,882 2,000,896 77,195 126,099
--------- ----------- --------- ---------
Net investment income ...................................... 375,465 17,717,837 352,736 690,223
--------- ----------- --------- ---------
Realized and unrealized gain (loss) on
investments and foreign currency transactions:
Net realized gain (loss) from:
Investment transactions ............................... 154,689 5,029,618 584,786 (56,625)
Foreign currency transactions and forward
foreign currency contracts ......................... -- -- (255,735) --
Change in unrealized appreciation
(depreciation) from:
Investments ........................................... (310,141) (11,101,692) (626,968) 328,168
Foreign currency transactions and forward
foreign currency contracts ......................... -- -- (356,545) --
--------- ----------- --------- ---------
Net gain (loss) on investments and
foreign currency ........................................ (155,452) (6,072,074) (654,462) 271,543
--------- ----------- --------- ---------
Net increase (decrease) in net assets resulting
from operations ......................................... $ 220,013 $11,645,763 $(301,726) $ 961,766
========= =========== ========= =========
</TABLE>
See accompanying notes to financial statements.
44
<PAGE>
COMPASS CAPITAL FUNDS
STATEMENTS OF OPERATIONS (CONTINUED)
<TABLE>
<CAPTION>
PENNSYLVANIA NEW JERSEY OHIO
TAX-FREE TAX-FREE TAX-FREE
INCOME INCOME INCOME
PORTFOLIO PORTFOLIO PORTFOLIO
---------- ----------- ---------
FOR THE FOR THE FOR THE
SIX MONTHS PERIOD 2/1/96 SIX MONTHS
ENDED THROUGH ENDED
3/31/96 3/31/96 3/31/96
---------- ----------- ---------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
Investment Income:
Interest ......................................................... $2,013,249 $ 790,560 $ 245,919
---------- ----------- ---------
Expenses:
Investment advisory fee .......................................... 183,266 79,284 22,434
Administration fee ............................................... 81,106 35,661 9,887
Custodian fee .................................................... 9,527 4,174 6,253
Transfer agent fee ............................................... 23,190 5,610 2,472
Service fees ..................................................... 41,175 47,611 8,075
Distribution fees ................................................ 107,888 119 5,855
Legal and audit .................................................. 2,964 1,152 1,623
Printing ......................................................... 1,832 687 231
Registration fees and expenses ................................... 5,749 7,462 1,273
Organization ..................................................... 7,845 820 1,235
Trustees' fees and officer's salary .............................. 485 239 60
Other ............................................................ 5,922 2,011 4,117
---------- ----------- ---------
470,949 184,830 63,515
Less fees voluntarily waived
and expenses reimbursed ........................................ (108,290) (49,627) (29,872)
---------- ----------- ---------
Total operating expenses .................................... 362,659 135,203 33,643
---------- ----------- ---------
Net investment income ............................................... 1,650,590 655,357 212,276
---------- ----------- ---------
Realized and unrealized gain (loss) on investments:
Net realized gain (loss)
from investment transactions ................................... 222,055 (12,041) 30,018
Change in unrealized depreciation
of investments ................................................. (246,510) (2,433,198) (49,720)
---------- ----------- ---------
Net loss on investments .......................................... (24,455) (2,455,239) (19,702)
---------- ----------- ---------
Net increase (decrease) in net assets
resulting from operations ...................................... $1,626,135 $(1,789,882) $ 192,574
========== =========== =========
</TABLE>
See accompanying notes to financial statements.
45
<PAGE>
COMPASS CAPITAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SHORT GOVERNMENT INTERMEDIATE GOVERNMENT INTERMEDIATE BOND
BOND PORTFOLIO BOND PORTFOLIO PORTFOLIO
---------------------------- ---------------------------- ----------------------------
FOR THE FOR THE FOR THE
PERIOD 7/1/95 FOR THE SIX MONTHS FOR THE SIX MONTHS FOR THE
THROUGH YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
3/31/96 6/30/95 3/31/96 9/30/95 3/31/96 9/30/95
------------- ------------ ------------- ------------- ------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations
Net investment income ............... $ 3,918,728 $ 2,082,671 $ 5,576,061 $ 11,103,911 $ 6,100,775 $ 8,282,180
Net gain (loss) on investments ...... (2,249,808) 908,723 (1,158,503) 7,168,332 (1,188,680) 6,126,253
------------- ------------ ------------- ------------- ------------- -------------
Net increase (decrease) in
net assets
resulting from operations ........ 1,668,920 2,991,394 4,417,558 18,272,243 4,912,095 14,408,433
------------- ------------ ------------- ------------- ------------- -------------
Distributions to shareholders from
Net investment income
Institutional Shares ................ (1,842,630)* (2,092,080) (3,902,457) (7,538,593) (4,940,959) (6,107,918)
Service Shares ...................... (2,026,179) -- (1,316,770) (3,019,296) (1,131,495) (2,086,482)
Investor A Shares ................... (5,132) -- (236,375) (515,648) (21,314) (26,612)
------------- ------------ ------------- ------------- ------------- -------------
Total distribution from
net investment income .......... (3,873,941) (2,092,080) (5,455,602) (11,073,537) (6,093,768) (8,221,012)
------------- ------------ ------------- ------------- ------------- -------------
In excess of net investment income
Institutional Shares ................ (164,529)* -- -- -- -- --
------------- ------------ ------------- ------------- ------------- -------------
Net realized gains
Institutional Shares ................ (58,282)* (27,706) -- -- (519,741) --
Service Shares ...................... -- -- -- -- (125,660) --
Investor A Shares ................... -- -- -- -- (2,393) --
------------- ------------ ------------- ------------- ------------- -------------
Total distributions from
net realized gains ............. (58,282) (27,706) -- -- (647,794) --
------------- ------------ ------------- ------------- ------------- -------------
Total distributions to
shareholders ................... (4,096,752) (2,119,786) (5,455,602) (11,073,537) (6,741,562) (8,221,012)
------------- ------------ ------------- ------------- ------------- -------------
Capital share transactions ............... 193,173,293 12,349,814 (1,753,017) (11,093,899) 57,382,334 48,409,985
------------- ------------ ------------- ------------- ------------- -------------
Total increase
(decrease) in net assets ....... 190,745,461 13,221,422 (2,791,061) (3,895,193) 55,552,867 54,597,406
Net assets:
Beginning of period ................... 44,486,232 31,264,810 194,398,754 198,293,947 162,344,434 107,747,028
------------- ------------ ------------- ------------- ------------- -------------
End of period ......................... $ 235,231,693 $ 44,486,232 $ 191,607,693 $ 194,398,754 $ 217,897,301 $ 162,344,434
============= ============ ============= ============= ============= =============
<FN>
*Institutional Shares includes all activity of the prior class of shares before January 13, 1996, the date of the merger.
</FN>
</TABLE>
See accompanying notes to financial statements.
46
<PAGE>
COMPASS CAPITAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
CORE BOND PORTFOLIO GOVERNMENT INCOME PORTFOLIO MANAGED INCOME PORTFOLIO
--------------------------- ------------------------- ---------------------------
FOR THE FOR THE
PERIOD FOR THE PERIOD FOR THE
7/1/95 FOR THE SIX MONTHS 10/03/94 1 SIX MONTHS FOR THE
THROUGH YEAR ENDED ENDED THROUGH ENDED YEAR ENDED
3/31/96 6/30/95 3/31/96 9/30/95 3/31/96 9/30/95
----------- ----------- ----------- ----------- ------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations
Net investment income .................$ 4,622,227 $ 1,075,779 $ 375,465 $ 471,896 $ 17,717,837 $ 32,642,122
Net gain (loss) on investments ........ (7,990,856) 1,074,604 (155,452) 624,907 (6,072,074) 31,108,808
------------ ----------- ----------- ----------- ------------ ------------
Net increase (decrease) in net
assets resulting from operations ... (3,368,629) 2,150,383 220,013 1,096,803 11,645,763 63,750,930
------------ ----------- ----------- ----------- ------------ ------------
Distributions to shareholders from
Net investment income
Institutional Shares .................. (1,906,399)* (1,083,760) -- -- (13,575,686) (26,544,370)
Service Shares ........................ (2,729,527) -- -- -- (3,641,084) (5,430,486)
Investor A Shares ..................... (228) -- (96,186) (116,675) (325,609) (667,266)
Investor B Shares ..................... (58) -- (279,279) (355,221) -- --
------------ ----------- ----------- ----------- ------------ ------------
Total distribution from
net investment income ............ (4,636,212) (1,083,760) (375,465) (471,896) (17,542,379) (32,642,122)
------------ ----------- ----------- ----------- ------------ ------------
In excess of net investment income
Institutional Shares .................. -- -- -- -- -- (643,455)
Service Shares ........................ -- -- -- -- -- (131,639)
Investor A Shares ..................... -- -- -- -- -- (16,175)
------------ ----------- ----------- ----------- ------------ ------------
Total distribution in excess
of net investment income ......... -- -- -- -- -- (791,269)
------------ ----------- ----------- ----------- ------------ ------------
Net realized gains
Institutional Shares .................. (880,411)* (9,414) -- -- (4,581,108) --
Service Shares ........................ -- -- -- -- (1,264,449) --
Investor A Shares ..................... -- -- (81,209) -- (119,988) --
Investor B Shares ..................... -- -- (277,151) -- -- --
------------ ----------- ----------- ----------- ------------ ------------
Total distributions from
net realized gains ............... (880,411) (9,414) (358,360) -- (5,965,545) --
------------ ----------- ----------- ----------- ------------ ------------
Total distributions to
shareholders ..................... (5,516,623) (1,093,174) (733,825) (471,896) (23,507,924) (33,433,391)
(33,433,391)
------------ ----------- ----------- ----------- ------------ ------------
Capital share transactions ................. 273,598,804 18,626,241 1,258,037 12,552,827 100,406,429 68,016,777
------------ ----------- ----------- ----------- ------------ ------------
Total increase (decrease)
in net assets .................... 264,713,552 19,683,450 744,225 13,177,734 88,544,268 98,334,316
Net assets:
Beginning of period ................... 32,190,804 12,507,354 13,177,734 -- 571,970,671 473,636,355
------------ ----------- ----------- ----------- ------------ ------------
End of period .........................$296,904,356 $32,190,804 $13,921,959 $13,177,734 $660,514,939 $571,970,671
============ =========== =========== =========== ============ ============
<FN>
*Institutional Shares includes all activity of the prior class of shares before January 13, 1996, the date of the merger.
</FN>
</TABLE>
See accompanying notes to financial statements.
47
<PAGE>
COMPASS CAPITAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
INTERNATIONAL TAX-FREE PENNSYLVANIA TAX-FREE
BOND PORTFOLIO INCOME PORTFOLIO INCOME PORTFOLIO
--------------------------- ------------------------- -------------------------
FOR THE FOR THE FOR THE FOR THE
PERIOD 2/1/96 PERIOD 3/1/95 SIX MONTHS FOR THE SIX MONTHS FOR THE
THROUGH THROUGH ENDED YEAR ENDED ENDED YEAR ENDED
3/31/96 1/31/96 3/31/96 9/30/95 3/31/96 9/30/95
---------- ----------- ----------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations
Net investment income $ 352,736 $ 2,371,030 $ 690,223 $ 476,804 $ 1,650,590 $ 2,926,137
Net gain (loss) on investments and
foreign currency transactions...... (654,462) 4,801,275 271,543 544,133 (24,455) 2,922,626
---------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations.......... (301,726) 7,172,305 961,766 1,020,937 1,626,135 5,848,763
----------- ---------- ----------- ----------- ----------- -----------
Distributions to shareholders from
Net investment income
Institutional Shares.................. -- -- (125,548) (7,110) (86,746) (75,362)
Service Shares........................ (130,630)* (3,221,772)* (422,222) (152,612) (521,113) (622,721)
Investor A Shares..................... -- -- (139,861) (315,032) (959,921) (2,145,636)
Investor B Shares..................... -- -- -- -- (82,810) (82,418)
----------- ---------- ----------- ----------- ----------- -----------
Total distributions from net
investment income................ (130,630) (3,221,772) (687,631) (474,754) (1,650,590) (2,926,137)
----------- ----------- ----------- ----------- ----------- -----------
Net realized gains
Institutional Shares.................. -- -- -- (191) -- --
Service Shares........................ -- -- -- (5,402) -- --
Investor A Shares..................... -- -- -- (13,686) -- --
----------- ----------- ----------- ----------- ----------- -----------
Total distributions from
net realized gains............... -- -- -- (19,279) -- --
----------- ----------- ----------- ----------- ----------- -----------
Total distributions to shareholders (130,630) (3,221,772) (687,631) (494,033) (1,650,590) (2,926,137)
----------- ----------- ----------- ----------- ----------- -----------
Capital share transactions................. (366,143) (11,980,752 39,650,700 1,834,910 20,935,880 1,048,267
----------- ----------- ----------- ----------- ----------- -----------
Total increase (decrease)
in net assets.................... (798,499) (8,030,219) 39,924,835 2,361,814 20,911,425 3,970,893
Net assets:
Beginning of period................... 37,626,781 45,657,000 11,575,168 9,213,354 62,689,984 58,719,091
----------- ----------- ----------- ----------- ----------- -----------
End of period......................... $36,828,282 $37,626,781 $51,500,003 $11,575,168 $83,601,409 $62,689,984
=========== =========== =========== =========== =========== ===========
<FN>
*Service Shares includes all activity of the prior class of shares before February 13, 1996, the date of the merger.
</FN>
</TABLE>
See accompanying notes to financial statements.
48
<PAGE>
COMPASS CAPITAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
NEW JERSEY TAX-FREE OHIO TAX-FREE
INCOME PORTFOLIO INCOME PORTFOLIO
------------------------------- -----------------------------
FOR THE
FOR THE PERIOD FOR THE FOR THE
PERIOD 2/1/96 3/1/95 SIX MONTHS YEAR
THROUGH THROUGH ENDED ENDED
3/31/96 1/31/96 3/31/96 9/30/95
----------- ----------- ---------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations
Net investment income .......................... $ 655,357 $ 3,947,696 $ 212,276 $ 453,884
Net gain (loss) on investments ................. (2,455,239) 5,660,929 (19,702) 377,450
----------- ----------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations ................... (1,799,882) 9,608,625 192,574 831,334
----------- ----------- ---------- ----------
Distributions to shareholders from
Net investment income
Institutional Shares ........................... (819,433) -- (7,393) (7,866)
Service Shares ................................. (1,059) (3,798,344)* (125,121) (259,043)
Investor A Shares .............................. -- (1) (77,576) (184,186)
Investor B Shares .............................. -- -- (2,186) (2,789)
----------- ----------- ---------- ----------
Total distributions from net
investment income ......................... (820,492) (3,798,345) (212,276) (453,884)
----------- ----------- ---------- ----------
Total distributions from
net realized gains ........................ -- -- -- --
----------- ----------- ---------- ----------
Total distributions to shareholders ......... (820,492) (3,798,345) (212,276) (453,884)
----------- ----------- ---------- ----------
Capital share transactions .......................... (861,562) (4,677,074) 879,034 1,341
----------- ----------- ---------- ----------
Total increase (decrease)
in net assets ............................. (3,481,936) 1,133,206 859,332 378,791
Net assets:
Beginning of period ............................ 97,990,206 96,857,000 8,759,015 8,380,224
----------- ----------- ---------- ----------
End of period .................................. $94,508,270 $97,990,206 $9,618,347 $8,759,015
=========== =========== ========== ==========
<FN>
*Service Shares includes all activity of the prior class of shares before January 13, 1996, the date of the merger.
</FN>
</TABLE>
See accompanying notes to financial statements.
49
<PAGE>
COMPASS CAPITAL FUNDS
FINANCIAL HIGHLIGHTS
(FOR A SHAREOUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SHORT GOVERNMENT BOND PORTFOLIO
----------------------------------------------------------------------------------
INSTITUTIONAL CLASS 5 SERVICE CLASS INVESTOR A CLASS
---------------------------------------------- ------------ ----------------
FOR THE FOR THE FOR THE FOR THE
PERIOD PERIOD PERIOD PERIOD
7/1/95 YEAR YEAR 7/17/92 1 1/13/96 1 1/13/96 1
THROUGH ENDED ENDED THROUGH THROUGH THROUGH
3/31/96 6/30/95 6/30/94 6/30/93 3/31/96 3/31/96
------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of
period .................................. $ 9.83 $ 9.71 $ 9.96 $10.00 $ 9.91 $ 9.91
------- ------- ------- ------- -------- -----
Income from investment operations
Net investment income .................... 0.42 0.58 0.48 0.51 0.11 0.10
Net gain (loss) on investments
(both realized and unrealized) ......... -- 0.13 (0.25) (0.06) (0.12) (0.12)
------- ------- ------- ------- -------- -----
Total from investment operations ............ 0.42 0.71 0.23 0.45 (0.01) (0.02)
------- ------- ------- ------- -------- -----
Less distributions
Distributions from net
investment income ...................... (0.41) (0.58) (0.48) (0.49) (0.11) (0.10)
Distributions in excess
of net investment income ............... (0.04) -- -- -- -- --
Distributions from net realized
capital gains .......................... (0.01) (0.01) -- -- -- --
------- ------- ------- ------- -------- -----
Total distributions .................... (0.46) (0.59) (0.48) (0.49) (0.11) (0.10)
------- ------- ------- ------- -------- -----
Net asset value at end of period ............ $ 9.79 $ 9.83 $ 9.71 $ 9.96 $ 9.79 $ 9.79
------- ------- ------- ------- -------- -----
Total return ................................ 4.25% 6.99% 2.33% 4.63% (0.11)% (0.15)%3
Ratios/Supplemental data
Net assets at end of period
(in thousands) ......................... $52,843 $44,486 $31,265 $51,611 $181,670 $ 719
Ratios of operating expenses
to average net assets
After advisory/administration
fee waivers ......................... 0.63%2,4 0.57% 0.57% 0.56%2 0.85%2,4 1.01%2,4
Before advisory/administration
fee waivers ......................... 0.83%2 1.05% 1.02% 0.66% 1.05% 1.21%2
Ratios of net investment income to
average net assets
After advisory/administration
fee waivers ......................... 5.25%2 6.08% 4.70% 5.32%2 5.25%2 4.94%2
Before advisory/administration
fee waivers ......................... 5.05%2 5.60% 4.25% 5.22% 5.05%2 4.74%2
Portfolio turnover rate .................. 185% 586% 455% 513% 185% 185%
<FN>
- ------------
1 Commencement of operations.
2 Annualized.
3 Sales load not reflected in total return.
4 Including interest expense, ratios for the Institutional, Service and Investor A classes would have been 0.96%, 1.18% and 1.34%,
respectively, for the period ended March 31, 1996. For the periods prior to March 31, 1996, interest income was presented net
of interest expense.
5 Institutional Class includes all activity of the prior class of shares before January 13, 1996, the date of the merger.
</FN>
</TABLE>
See accompanying notes to financial statements.
50
<PAGE>
COMPASS CAPITAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
INTERMEDIATE GOVERNMENT BOND PORTFOLIO
-----------------------------------------------------------------------
INSTITUTIONAL CLASS
-----------------------------------------------------------------------
FOR THE
FOR THE PERIOD
SIX MONTHS YEAR YEAR YEAR 4/20/92 1
ENDED ENDED ENDED ENDED THROUGH
3/31/96 9/30/95 9/30/94 9/30/93 9/30/92
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period ................. $ 10.02 $ 9.64 $ 10.60 $ 10.46 $ 10.00
-------- -------- -------- -------- --------
Income from investment operations
Net investment income ............................... 0.29 0.58 0.55 0.54 0.24
Net gain (loss) on investments
(both realized and unrealized) .................... 0.24 0.38 (0.86) 0.16 0.46
-------- -------- -------- -------- --------
Total from investment operations ............... 0.53 0.96 (0.31) 0.70 0.70
-------- -------- -------- -------- --------
Less distributions
Distributions from net investment income ............ (0.58) (0.58) (0.55) (0.54) (0.24)
Distributions from net realized capital gains ....... -- -- (0.10) (0.02) --
-------- -------- -------- -------- --------
Total distributions ............................ (0.58) (0.58) (0.65) (0.56) (0.24)
-------- -------- -------- -------- --------
Net asset value at end of period ....................... $ 9.97 $ 10.02 $ 9.64 $ 10.60 $ 10.46
======== ======== ======== ======== ========
Total return ........................................... 2.38% 10.28% (3.08)% 6.88% 7.14%
Ratios/Supplemental data
Net assets at end of period (in thousands) .......... $135,527 $134,835 $128,974 $137,065 $105,620
Ratios of operating expenses to average net assets
After advisory/administration fee waivers ......... 0.51%2,6 0.42%6 0.40% 0.73% 0.80%2
Before advisory/administration fee waivers ........ 0.82%2 0.79% 0.80% 0.81% 0.80%2
Ratios of net investment income to average net assets
After advisory/administration fee waivers ......... 5.82%2 5.94% 5.48% 5.23% 5.28%2
Before advisory/administration fee waivers ........ 5.51%2 5.57% 5.08% 5.15% 5.28%2
Portfolio turnover rate ................................ 311% 247% 9% 80% 38%
<FN>
- ------------
1 Commencement of operations.
2 Annualized.
6 Including interest expense, ratios would have been 0.84% and 0.42% for the periods ended March 31, 1996 and September 30,
1995, respectively.
</FN>
</TABLE>
See accompanying notes to financial statements.
51
<PAGE>
COMPASS CAPITAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
INTERMEDIATE GOVERNMENT BOND PORTFOLIO
-------------------------------------------------
SERVICE CLASS
-------------------------------------------------
FOR THE
FOR THE PERIOD
SIX MONTHS YEAR YEAR 7/29/93 1
ENDED ENDED ENDED THROUGH
3/31/96 9/30/95 9/30/94 9/30/93
------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value at beginning of period .............................. $ 10.02 $ 9.64 $ 10.60 $ 10.45
------- ------ ------- -------
Income from investment operations
Net investment income ............................................ 0.27 0.56 0.53 0.09
Net gain (loss) on investments
(both realized and unrealized) ................................. 0.23 0.37 (0.86) 0.15
------ ------- ------ -------
Total from investment operations ............................ 0.50 0.93 (0.33) 0.24
------ ------- ------ -------
Less distributions
Distributions from net investment income ......................... (0.55) (0.55) (0.53) (0.09)
Distributions from net realized capital gains .................... -- -- (0.10) --
------ ------- ------ -------
Total distributions ......................................... (0.55) (0.55) (0.63) (0.09)
------ ------- ------ -------
Net asset value at end of period .................................... $ 9.97 $ 10.02 $ 9.64 $ 10.60
====== ======= ====== =======
Total return ........................................................ 2.22% 9.99% (3.31)% 2.30%
Ratios/Supplemental data
Net assets at end of period (in thousands) ....................... $47,784 $49,762 $60,812 $15,035
Ratios of operating expenses to average net assets
After advisory/administration fee waivers ...................... 0.81%2,6 0.69%6 0.65% 0.67%2
Before advisory/administration fee waivers ..................... 1.12%2 1.06% 1.05% 0.75%2
Ratios of net investment income to average net assets
After advisory/administration fee waivers ...................... 5.52%2 5.67% 5.30% 5.14%2
Before advisory/administration fee waivers ..................... 5.21%2 5.30% 4.90% 5.06%2
Portfolio turnover rate ............................................. 311% 247% 9% 80%
<FN>
- ------------
1 Commencement of operations.
2 Annualized.
6 Including interest expense, ratios would have been 1.14% and 0.69% for the
periods ended March 31, 1996 and September 30, 1995, respectively.
</FN>
</TABLE>
See accompanying notes to financial statements.
52
<PAGE>
COMPASS CAPITAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
INTERMEDIATE GOVERNMENT BOND PORTFOLIO
----------------------------------------------------------
INVESTOR A CLASS
----------------------------------------------------------
FOR THE
FOR THE PERIOD
SIX MONTHS YEAR YEAR YEAR 5/11/92 1
ENDED ENDED ENDED ENDED THROUGH
3/31/96 9/30/95 9/30/94 9/30/93 9/30/92
---------- ------- ------- ------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period ........................ $10.03 $ 9.64 $10.60 $10.46 $10.05
------ ------ ------ ------ ------
Income from investment operations
Net investment income ...................................... 0.27 0.55 0.53 0.54 0.24
Net gain (loss) on investments (both realized
and unrealized) .......................................... 0.23 0.39 (0.87) 0.16 0.41
------ ------ ------ ------ ------
Total from investment operations ...................... 0.50 0.94 (0.34) 0.70 0.65
------ ------ ------ ------ ------
Less distributions
Distributions from net investment income ................... (0.55) (0.55) (0.52) (0.54) (0.24)
Distributions from net realized capital gains .............. -- -- (0.10) (0.02) --
------ ------ ------ ------ ------
Total distributions ................................... (0.55) (0.55) (0.62) (0.56) (0.24)
------ ------ ------ ------ ------
Net asset value at end of period .............................. $ 9.97 $10.03 $ 9.64 $10.60 $10.46
====== ====== ====== ====== ======
Total return .................................................. 2.16%3 9.98%3 (3.36)%3 6.84%3 6.64%3
Ratios/Supplemental data
Net assets at end of period (in thousands) .................. $8,297 $9,802 $8,508 $7,666 $1,484
Ratios of operating expenses to average net assets
After advisory/administration fee waivers ................ 0.90%2,6 0.70%6 0.65% 0.76% 0.80%2
Before advisory/administration fee waivers ............... 1.20%2 1.07% 1.05% 0.84% 0.80%2
Ratios of net investment income to average net assets
After advisory/administration fee waivers ................ 5.43%2 5.67% 5.24% 5.19% 5.28%2
Before advisory/administration fee waivers ............... 5.13%2 5.30% 4.84% 5.11% 5.28%2
Portfolio turnover rate ....................................... 311% 247% 9% 80% 38%
<FN>
- ------------
1 Commencement of operations.
2 Annualized.
3 Sales load not reflected in total return.
6 Including interest expense, ratios would have been 1.23% and 0.70% for the
periods ended March 31, 1996 and September 30, 1995, respectively.
</FN>
</TABLE>
See accompanying notes to financial statements.
53
<PAGE>
COMPASS CAPITAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
INTERMEDIATE BOND PORTFOLIO
------------------------------------------------------------------------------
INSTITUTIONAL CLASS SERVICE CLASS
-------------------------------------- -----------------------------------
FOR THE FOR THE
FOR THE PERIOD FOR THE PERIOD
SIX MONTHS YEAR YEAR 9/17/93 1 SIX MONTHS YEAR YEAR 9/23/93 1
ENDED ENDED ENDED THROUGH ENDED ENDED ENDED THROUGH
3/31/96 9/30/95 9/30/94 9/30/93 3/31/96 9/30/95 9/30/94 9/30/93
------- ------- ------- ------- ------- ------- ------- -------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period .... $ 9.43 $ 9.05 $ 10.01 $ 10.00 $ 9.43 $ 9.05 $ 10.01 $ 9.99
------ ------ ------- ------- ------ ------ ------ ------
Income from investment operations
Net investment income ................... 0.28 0.56 0.54 0.02 0.26 0.54 0.54 --
Net gain (loss) on investments
(both realized and unrealized) ........ (0.04) 0.38 (0.88) (0.01) (0.04) 0.38 (0.91) 0.02
------ ------ ------ ------- ------ ------ ------ ------
Total from investment operations .... (0.24) 0.94 (0.34) 0.01 0.22 0.92 (0.37) 0.02
------ ------ ------ ------- ------ ------ ------ ------
Less distributions
Distributions from net investment
income ................................ (0.28) (0.56) (0.56) -- (0.26) (0.54) (0.53) --
Distributions from net realized
capital gains ......................... (0.03) -- (0.06) -- (0.03) -- (0.06) --
------ ------ ------ ------- ------ ------ ------ ------
Total distributions ................. (0.31) (0.56) (0.62) -- (0.29) (0.54) (0.59) --
------ ------ ------ ------- ------ ------ ------ ------
Net asset value at end of period .......... $ 9.36 $ 9.43 $ 9.05 $ 10.01 $ 9.36 $ 9.43 $ 9.05 $10.01
====== ====== ====== ======= ====== ====== ====== ======
Total return .............................. 2.53% 10.76% (3.52)% 0.10% 2.38% 10.46% (3.80)% 0.20%
Ratios/Supplemental data
Net assets at end of period
(in thousands) ........................ $173,339 $124,979 $71,896 $56,713 $43,559 $36,713 $35,764 $ 91
Ratios of operating expenses
to average net assets
After advisory/administration
fee waivers ......................... 0.53%2,6 0.47%6 0.45% 0.45%2 0.83%2,6 0.74%6 0.70% 0.70%2
Before advisory/administration
fee waivers ......................... 0.82%2 0.81% 0.88% 0.84%2 1.12%2 1.09% 1.13% 1.09%2
Ratios of net investment income
to average net assets
After advisory/administration
fee waivers ......................... 5.90%2 6.18% 5.54% 4.72%2 5.61%2 5.90% 5.33% 4.35%2
Before advisory/administration
fee waivers ......................... 5.60%2 5.84% 5.11% 4.33%2 5.31%2 5.55% 4.90% 3.96%2
Portfolio turnover rate ................... 415% 262% 92% 4% 415% 262% 92% 4%
<FN>
- ------------
1 Commencement of operations.
2 Annualized.
6 Including interest expense, ratios for the Institutional and Service Classes
would have been 1.10% and 1.40% for the period ended March 31, 1996,
respectively, and 0.55% and 0.82% for the period ended September 30, 1995,
respectively.
</FN>
</TABLE>
See accompanying notes to financial statements.
54
<PAGE>
COMPASS CAPITAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
(FOR A SHAREOUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
INTERMEDIATE BOND PORTFOLIO
----------------------------------------------
INVESTOR A CLASS
----------------------------------------------
FOR THE
FOR THE PERIOD
SIX MONTHS YEAR 5/20/94 1
ENDED ENDED THROUGH
3/31/96 9/30/95 9/30/94
------- ------- -------
(UNAUDITED)
<S> <C> <C> <C>
Net asset value at beginning of period ................................. $9.43 $9.05 $9.23
----- ----- -----
Income from investment operations
Net investment income .................................................. 0.26 0.54 0.20
Net gain (loss) on investments (both realized and unrealized) .......... (0.04) 0.38 (0.17)
----- ----- -----
Total from investment operations ....................................... 0.22 0.92 0.03
----- ----- -----
Less distributions
Distributions from net investment income ............................ (0.26) (0.54) (0.21)
Distributions from net realized capital gains ....................... (0.03) -- --
----- ----- -----
Total distributions ............................................ (0.29) (0.54) (0.21)
----- ----- -----
Net asset value at end of period ....................................... $9.36 $9.43 $9.05
===== ===== =====
Total return ........................................................... 2.42%3 10.35%3 0.31%3
Ratios/Supplemental data
Net assets at end of period (in thousands) .......................... $ 841 $ 647 $ 87
Ratios of operating expenses to average net assets
After advisory/administration fee waivers ......................... 0.93%2,6 0.76%6 0.85%2
Before advisory/administration fee waivers ........................ 1.23%2 1.11% 1.28%2
Ratios of net investment income to average net assets
After advisory/administration fee waivers ......................... 5.50%2 5.89% 5.35%2
Before advisory/administration fee waivers ........................ 5.21%2 5.55% 4.92%2
Portfolio turnover rate ................................................ 415% 262% 92%
<FN>
- ------------
1 Commencement of operations.
2 Annualized.
3 Sales load not reflected in total return.
6 Including interest expense, ratios would have been 1.50% and 0.84% for the
periods ended March 31, 1996 and September 30, 1995, respectively.
</FN>
</TABLE>
See accompanying notes to financial statements.
55
<PAGE>
COMPASS CAPITAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
CORE BOND PORTFOLIO
-----------------------------------------------------------------------------------
INSTITUTIONAL CLASS 6 SERVICE CLASS INVESTOR A CLASS INVESTOR B CLASS
---------------------------------- ------------- ---------------- ----------------
FOR THE FOR THE FOR THE FOR THE FOR THE
PERIOD PERIOD PERIOD PERIOD PERIOD
7/1/95 YEAR YEAR 12/9/92 1 1/13/96 1 1/31/96 1 3/18/96 1
THROUGH ENDED ENDED THROUGH THROUGH THROUGH THROUGH
3/31/96 6/30/95 6/30/94 6/30/93 3/31/96 3/31/96 3/31/96
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period ... $ 9.85 $ 9.36 $10.37 $10.00 $ 9.91 $9.99 $9.58
------ ------ ------ ------ ------ ----- -----
Income from investment operations
Net investment income ................. 0.47 0.62 0.55 0.32 0.11 0.08 0.01
Net gain (loss) on investments
(both realized and unrealized) ...... (0.07) 0.50 (0.60) 0.37 (0.30) (0.38) 0.03
------ ------ ------ ------ ------ ----- -----
Total from investment operations ......... 0.40 1.12 (0.05) 0.69 (0.19) (0.30) 0.04
------ ------ ------ ------ ------ ----- -----
Less distributions
Distributions from net investment
income .............................. (0.47) (0.62) (0.55) (0.32) (0.11) (0.08) (0.01)
Distributions from net realized capital
gains ............................... (0.17) (0.01) (0.41) -- -- -- --
------ ------ ------ ------ ------ ----- -----
Total distributions .............. (0.64) (0.63) (0.96) (0.32) (0.11) (0.08) (0.01)
------ ------ ------ ------ ------ ----- -----
Net asset value at end of period ......... $ 9.61 $ 9.85 $ 9.36 $10.37 $ 9.61 $9.61 $9.61
====== ====== ====== ====== ====== ===== =====
Total return ............................. 3.93% 11.79% (0.69)% 6.88% (1.90)% (2.96)%3 0.33%4
Ratios/Supplemental data
Net assets at end of period
(in thousands) ......................$64,707 $32,191 $12,507 $7,803 $232,040 $ 80 $ 77
Ratios of operating expenses to
average net assets
After advisory/administration
fee waivers ...................... 0.66%2,5 0.55% 0.55% 0.55% 0.85%2,5 1.02%2,5 1.77%2,5
Before advisory/administration
fee waivers ...................... 0.91%2 1.75% 2.65% 2.44%2 1.10%2 1.27%2 2.02%2
Ratios of net investment income to
average net assets
After advisory/administration
fee waivers ...................... 5.89%2 6.62% 5.61% 5.57%2 5.46%2 5.43%2 4.71%2
Before advisory/administration
fee waivers ...................... 5.64%2 5.43% 3.51% 3.68%2 5.21%2 5.19%2 4.46%2
Portfolio Turnover .................... 723% 435% 722% 354% 723% 723% 723%
<FN>
- ------------
1 Commencement of operations.
2 Annualized.
3 Sales load not reflected in total return.
4 Contingent deferred sales load not reflected in total return.
5 Including interest expense, ratios for the Institutional,Service, Investor A
and Investor B classes would have been 0.75%, 0.94%, 1.11% and 1.86%,
respectively, for the period ended March 31, 1996. For the periods prior to
March 31, 1996, interest income was presented net of interest expense.
6 Institutional Class includes all activity of the prior class of shares before
January 13, 1996, the date of the merger.
</FN>
</TABLE>
See accompanying notes to financial statements.
56
<PAGE>
COMPASS CAPITAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
GOVERNMENT INCOME PORTFOLIO
-----------------------------------------------------------------
INVESTOR A INVESTOR B
CLASS CLASS
----------------------------- -------------------------
FOR THE FOR THE
FOR THE PERIOD FOR THE PERIOD
SIX MONTHS 10/03/94 1 SIX MONTHS 10/03/94 1
ENDED THROUGH ENDED THROUGH
3/31/96 9/30/95 3/31/96 9/30/95
------- ------- ------- -------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value at beginning of period $10.68 $10.00 $ 10.68 $ 10.00
------ ------ ------- -------
Income from investment operations
Net investment income 0.32 0.55 0.28 0.50
Net gain on investments (both realized and unrealized) (0.38) 0.68 (0.38) 0.68
------ ------ ------- -------
Total from investment operations (0.06) 1.23 (0.10) 1.18
------ ------ ------- -------
Less distributions
Distributions from net investment income (0.32) (0.55) (0.28) (0.50)
Distributions from net realized capital gains -- -- -- --
------ ------ ------- -------
Total distributions (0.32) (0.55) (0.28) (0.50)
------ ------ ------- -------
Net asset value at end of period $10.30 $10.68 $ 10.30 $ 10.68
====== ====== ======= =======
Total return 2.01%3 14.27%3 1.65%4 13.52%4
Ratios/Supplemental data
Net assets at end of period (in thousands) $3,292 $2,990 $10,636 $10,188
Ratios of operating expenses to average net assets
After advisory/administration fee waivers 0.78%2,6 0.37%2,6 1.49%2,6 1.05%2,6
Before advisory/administration fee waivers 1.63%2 1.81%2 2.34% 2.50%2
Ratios of net investment income to average net assets
After advisory/administration fee waivers 6.00%2 6.89%2 5.23%2 6.17%2
Before advisory/administration fee waivers 5.14%2 5.44%2 4.42%2 4.72%2
Portfolio turnover rate 293% 258% 293% 258%
<FN>
- ------------
1 Commencement of operations.
2 Annualized.
3 Sales load not reflected in total return.
4 Contingent deferred sales load not reflected in total return.
6 Including interest expense, ratios for the Investor A and Investor B classes
would have been 2.90% and 3.61% for the period ended March 31, 1996,
respectively, and 0.92% and 1.60% for the period ended September 30, 1995,
respectively.
</FN>
</TABLE>
See accompanying notes to financial statements.
57
<PAGE>
COMPASS CAPITAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
MANAGED INCOME PORTFOLIO
---------------------------------------------------------------
INSTITUTIONAL CLASS
---------------------------------------------------------------
FOR THE
SIX MONTHS YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
3/31/96 9/30/95 9/30/94 9/30/93 9/30/92 9/30/91
------- ------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period ................... $ 10.38 $ 9.79 $ 11.17 $ 10.74 $ 10.26 $ 9.70
------- ------- ------ ------- ------- -------
Income from investment operations
Net investment income ................................. 0.31 0.65 0.64 0.67 0.69 0.74
Net gain (loss) on investments (both
realized and unrealized) ............................ (0.09) 0.60 (1.21) 0.56 0.48 0.63
------- ------- ------ ------- ------- -------
Total from investment operations ................. 0.22 1.25 (0.57) 1.23 1.17 1.37
------- ------- ------ ------- ------- -------
Less distributions
Distributions from net investment income .............. (0.30) (0.65) (0.64) (0.67) (0.69) (0.73)
Distribution in excess of net investment income ....... -- (0.01) (0.02) -- -- (0.08)
Distributions from net realized capital gains ......... (0.10) -- (0.14) (0.13) -- --
Distributions in excess of net realized gains ......... -- -- (0.01) -- -- --
------- ------- ------ ------- ------- -------
Total distributions .............................. (0.40) (0.66) (0.81) (0.80) (0.69) (0.81)
------- ------- ------ ------- ------- -------
Net asset value at end of year ........................... $ 10.20 $ 10.38 $ 9.79 $ 11.17 $ 10.74 $ 10.26
======= ======= ====== ======= ======= =======
Total return ............................................. 2.16% 13.27% (5.27)% 12.13% 11.80% 14.74%
Ratios/Supplemental data
Net assets at end of year (in thousands) .............. $501,186 $443,148 $395,060 $341,791 $314,075 $52,802
Ratios of total expenses to average net assets
After advisory/administration fee waivers ........... 0.58%2 0.57% 0.55% 0.74% 0.80% 0.80%
Before advisory/administration fee waivers .......... 0.80%2 0.77% 0.77% 0.78% 0.80% 0.84%
Ratios of net investment income to average net assets
After advisory/administration fee waivers ........... 5.88%2 6.44% 6.11% 6.25% 6.28% 7.36%
Before advisory/administration fee waivers .......... 5.66%2 6.24% 5.89% 6.21% 6.28% 7.32%
Portfolio turnover rate .................................. 370% 203% 61% 72% 56% 38%
<FN>
- ------------
2 Annualized.
</FN>
</TABLE>
See accompanying notes to financial statements.
58
<PAGE>
COMPASS CAPITAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
MANAGED INCOME PORTFOLIO
-------------------------------------------------
SERVICE CLASS
-------------------------------------------------
FOR THE
FOR THE PERIOD
SIX MONTHS YEAR YEAR 7/29/93 1
ENDED ENDED ENDED THROUGH
3/31/96 9/30/95 9/30/94 9/30/93
------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value at beginning of period ............................. $ 10.38 $ 9.79 $ 11.17 $ 10.96
------- ------- ------- -------
Income from investment operations
Net investment income ........................................... 0.30 0.63 0.59 0.11
Net gain (loss) on investments (both realized and unrealized) ... (0.08) 0.60 (1.18) 0.21
------- ------- ------- -------
Total from investment operations ........................... 0.22 1.23 (0.59) 0.32
------- ------- ------- -------
Less distributions
Distributions from net investment income ........................ (0.30) (0.63) (0.62) (0.11)
Distribution in excess of net investment income ................. -- (0.01) (0.02) --
Distributions from net realized capital gains ................... (0.10) -- (0.14) --
Distributions in excess of net realized gains ................... -- -- (0.01) --
------- ------- ------- -------
Total distributions ........................................ (0.40) (0.64) (0.79) (0.11)
------- ------- ------- -------
Net asset value at end of period ................................... $ 10.20 $ 10.38 $ 9.79 $ 11.17
======= ======= ======= =======
Total return ....................................................... 2.04% 12.97% (5.49)% 2.93%
Ratios/Supplemental data
Net assets at end of period (in thousands) ...................... $146,994 $116,846 $67,655 $15,322
Ratios of total expenses to average net assets
After advisory/administration fee waivers ..................... 0.88%2 0.85% 0.80% 0.80%2
Before advisory/administration fee waivers .................... 1.10%2 1.05% 1.02% 0.84%2
Ratios of net investment income to average net assets
After advisory/administration fees waivers .................... 5.57%2 6.14% 5.95% 5.83%2
Before advisory/administration fees waivers ................... 5.36%2 5.94% 5.73% 5.79%2
Portfolio turnover rate ............................................ 370% 203% 61% 72%
- ------------
<FN>
1 Commencement of operations.
2 Annualized.
</FN>
</TABLE>
See accompanying notes to financial statements.
59
<PAGE>
COMPASS CAPITAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
MANAGED INCOME PORTFOLIO
-----------------------------------------------------------
INVESTOR A CLASS
-----------------------------------------------------------
FOR THE
FOR THE PERIOD
SIX MONTHS YEAR YEAR YEAR 2/05/92 1
ENDED ENDED ENDED ENDED THROUGH
3/31/96 9/30/95 9/30/94 9/30/93 9/30/92
------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of period ..................... $ 10.38 $ 9.79 $ 11.18 $10.74 $10.40
------- ------- ------- ------ ------
Income from investment operations
Net investment income ................................... 0.28 0.60 0.57 0.66 0.46
Net gain (loss) on investments
(both realized and unrealized) ........................ (0.08) 0.60 (1.19) 0.57 0.34
------- ------- ------- ------ ------
Total from investment operations ................... 0.20 1.20 (0.62) 1.23 0.80
------- ------- ------- ------ ------
Less distributions
Distributions from net investment income ................ (0.28) (0.60) (0.60) (0.66) (0.46)
Distribution in excess of net investment income ......... -- (0.01) (0.02) -- --
Distributions from net realized capital gains ........... (0.10) -- (0.14) (0.13) --
Distributions in excess of net realized gains ........... -- -- (0.01) -- --
------- ------- ------- ------ ------
Total distributions ................................ (0.38) (0.61) (0.77) (0.79) (0.46)
------- ------- ------- ------ ------
Net asset value at end of period ........................... $ 10.20 $ 10.38 $ 9.79 $11.18 $10.74
======= ======= ======= ====== ======
Total return ............................................... 1.92%3 12.74%3 (5.76)%3 12.13%3 7.86%3
Ratios/Supplemental data
Net assets at end of period (in thousands) .............. $12,336 $11,977 $10,921 $7,252 $1,417
Ratios of total expenses to average net assets
After advisory/administration fee waivers ............. 1.08%2 1.05% 1.00% 0.84% 0.80%2
Before advisory/administration fee waivers ............ 1.29%2 1.25% 1.22% 0.88% 0.80%2
Ratios of net investment income to average net assets
After advisory/administration fees waivers ............ 5.38%2 5.96% 5.66% 6.09% 6.28%2
Before advisory/administration fees waivers ........... 5.17%2 5.76% 5.44% 6.05% 6.28%2
Portfolio turnover rate .................................... 370% 203% 61% 72% 56%
<FN>
- ------------
1 Commencement of operations.
2 Annualized.
3 Sales load not reflected in total return.
</FN>
</TABLE>
See accompanying notes to financial statements.
60
<PAGE>
COMPASS CAPITAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
INTERNATIONAL BOND PORTFOLIO
------------------------------------------------------------
SERVICE CLASS 7
------------------------------------------------------------
FOR THE FOR THE FOR THE
PERIOD PERIOD PERIOD
2/1/96 3/1/95 YEAR YEAR YEAR 7/1/91 1
THROUGH THROUGH ENDED ENDED ENDED THROUGH
3/31/96 1/31/96 2/28/95 2/28/94 2/28/93 2/29/92
------- ------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period ................... $ 11.40 $ 10.52 $ 10.75 $ 10.76 $ 10.21 $ 10.00
------- ------- ------- ------- ------- -------
Income from investment operations
Net investment income ................................. 0.12 0.62 0.62 0.65 0.52 0.31
Net realized gain (loss) on investment and
foreign currency related transactions ............... (0.22) 1.13 (0.48) 0.46 0.47 0.26
------- ------- ------- ------- ------- -------
Total from investment operations ................. (0.10) 1.75 0.14 1.11 0.99 0.57
------- ------- ------- ------- ------- -------
Less distribution
Distributions from net investment income .............. (0.04) (0.88) (0.13) (0.90) (0.30) --
Distributions from net realized capital gains ......... -- -- (0.24) (0.22) (0.14) (0.36)
------- ------- ------- ------- ------- -------
Total distributions .............................. (0.04) (0.88) (0.37) (1.12) (0.44) (0.36)
------- ------- ------- ------- ------- -------
Net asset value at end of period ......................... $ 11.26 $ 11.39 $ 10.52 $ 10.75 $ 10.76 $ 10.21
======= ======= ======= ======= ======= =======
Total return ............................................. 5.24% 16.79%3 1.50% 10.24% 9.55% 5.84%5
Ratios/Supplemental data
Net assets at end of period (in thousands) ............ $36,934 $37,627 $45,657 $46,888 $38,257 $27,774
Ratios of expenses to average net assets
After advisory/administration fee waivers ........... 1.28%2 1.23%2 1.24% 1.38% 1.30% 1.33%2
Before advisory/administration fee waivers .......... 1.39%2 1.23%2 1.24% 1.38% 1.30% 1.37%2
Ratios of net investment income to
average net assets
After advisory/administration fee waivers ........... 7.11%2 5.62%2 5.96% 6.00% 6.31% 6.79%2
Before advisory/administration fee waivers .......... 7.00%2 5.62%2 5.96% 6.00% 6.31% 6.75%2
Portfolio turnover rate .................................. 37% 158.73% 130.64% 128.14% 115.25% 110.13%
<FN>
- ------------
1 Commencement of operations.
2 Annualized.
5 Not annualized.
7 Service Class includes all activity of the prior class of shares before
February 13, 1996, the date of the merger.
</FN>
</TABLE>
See accompanying notes to financial statements.
61
<PAGE>
COMPASS CAPITAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
TAX-FREE INCOME PORTFOLIO
-------------------------------------------------
INSTITUTIONAL CLASS
-------------------------------------------------
FOR THE
FOR THE PERIOD
SIX MONTHS YEAR YEAR 1/21/93 1
ENDED ENDED ENDED THROUGH
3/31/96 9/30/95 9/30/94 9/30/93
------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value at beginning of period ................................. $ 10.61 $10.04 $11.31 $10.61
------- ------ ------ ------
Income from investment operations
Net investment income ............................................... 0.21 0.48 0.53 0.42
Net gain (loss) on investments
(both realized and unrealized) .................................... 0.18 0.59 (0.93) 0.70
------- ------ ------ ------
Total from investment operations ............................... 0.39 1.12 (0.40) 1.12
------- ------ ------ ------
Less distributions
Distributions from net investment income ............................ (0.26) (0.53) (0.53) (0.42)
Distributions from net realized capital gains ....................... -- (0.02) (0.34) --
------- ------ ------ ------
Total distributions ............................................ (0.26) (0.55) (0.87) (0.42)
------- ------ ------ ------
Net asset value at end of period ....................................... $ 10.74 $10.61 $10.04 $11.31
======= ====== ====== ======
Total return ........................................................... 3.69% 11.54% (3.77)% 10.72%
Ratios/Supplemental data
Net assets at end of period (in thousands) .......................... $11,137 $ 271 $ 132 $ 675
Ratios of total expenses to average net assets
After advisory/administration fee waivers ......................... 0.59%2 0.52% 0.50% 0.50%2
Before advisory/administration fee waivers ........................ 0.95%2 1.30% 1.73% 1.28%2
Ratios of net investment income to average net assets
After advisory/administration fee waivers ......................... 4.79%2 5.19% 4.97% 5.14%2
Before advisory/administration fee waivers ........................ 4.43%2 4.41% 3.74% 4.36%2
Portfolio turnover rate ................................................ 112% 92% 40% 71%
<FN>
- ------------
1 Commencement of operations.
2 Annualized.
</FN>
</TABLE>
See accompanying notes to financial statements.
62
<PAGE>
COMPASS CAPITAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
TAX-FREE INCOME PORTFOLIO
-------------------------------------------------
SERVICE CLASS
--------------------------------------------------
FOR THE
FOR THE PERIOD
SIX MONTHS YEAR YEAR 7/29/93 1
ENDED ENDED ENDED THROUGH
3/31/96 9/30/95 9/30/94 9/30/93
---------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value at beginning of period .............................. $ 10.61 $10.04 $11.31 $10.97
------- ------ ------ ------
Income from investment operations
Net investment income ............................................ 0.25 0.50 0.51 0.09
Net gain (loss) on investments
(both realized and unrealized) ................................. 0.13 0.59 (0.93) 0.34
------- ------ ------ ------
Total from investment operations ............................ 0.38 1.09 (0.42) 0.43
------- ------ ------ ------
Less distributions
Distributions from net investment income ......................... (0.25) (0.50) (0.51) (0.09)
Distributions from net realized capital gains .................... -- (0.02) (0.34) --
------- ------ ------ ------
Total distributions ......................................... (0.25) (0.52) (0.85) (0.09)
------- ------ ------ ------
Net asset value at end of period .................................... $ 10.74 $10.61 $10.04 $11.31
======= ====== ====== ======
Total return ........................................................ 3.56% 11.24% (4.02)% 3.92%
Ratios/Supplemental data
Net assets at end of period (in thousands) ....................... $34,286 $4,713 $2,109 $ 634
Ratios of total expenses to average net assets
After advisory/administration fee waivers ...................... 0.86%2 0.80% 0.75% 0.71%2
Before advisory/administration fee waivers ..................... 1.22%2 1.57% 1.98% 1.49%2
Ratios of net investment income to average net assets
After advisory/administration fee waivers ...................... 4.68%2 4.92% 4.75% 4.99%2
Before advisory/administration fee waivers ..................... 4.32%2 4.15% 3.52% 4.21%2
Portfolio turnover rate ............................................. 112% 92% 40% 71%
<FN>
- ------------
1 Commencement of operations.
2 Annualized.
</FN>
</TABLE>
See accompanying notes to financial statements.
63
<PAGE>
COMPASS CAPITAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
TAX-FREE INCOME PORTFOLIO
-------------------------------------------------------------
INVESTOR A CLASS
-------------------------------------------------------------
FOR THE
SIX MONTHS YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
3/31/96 9/30/95 9/30/94 9/30/93 9/30/92 9/30/91
------- ------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period ................... $10.61 $10.04 $11.31 $10.60 $10.33 $ 9.91
------ ------ ------ ------ ------ ------
Income from investment operations
Net investment income ................................. 0.25 0.48 0.48 0.55 0.58 0.64
Net gain (loss) on investments
(both realized and unrealized) ...................... 0.12 (0.59) (0.93) 0.83 0.49 0.46
------ ------ ------ ------ ------ ------
Total from investment operations ................. 0.37 1.07 (0.45) 1.38 1.07 1.10
------ ------ ------ ------ ------ ------
Less distributions
Distributions from net investment income .............. (0.24) (0.48) (0.48) (0.55) (0.59) (0.66)
Distributions from net realized capital gains ......... -- (0.02) (0.34) (0.12) (0.21) (0.02)
------ ------ ------ ------ ------ ------
Total distributions .............................. (0.24) (0.50) (0.82) (0.67) (0.80) (0.68)
------ ------ ------ ------ ------ ------
Net asset value at end of period ......................... $10.74 $10.61 $10.04 $11.31 $10.60 $10.33
====== ====== ====== ====== ====== ======
Total return ............................................. 3.45%3 10.99%3 (4.19)%3 13.48%3 10.67%3 11.40%3
Ratios/Supplemental data
Net assets at end of period in thousands) ............. $6,077 $6,591 $6,972 $7,831 $7,349 $3,510
Ratios of total expenses to average net assets
After advisory/administration fee waivers ........... 1.06%2 1.00% 0.95% 0.57% 0.53% 1.00%
Before advisory/administration fee waivers .......... 1.42%2 1.78% 2.18% 1.36% 1.67% 1.89%
Ratios of net investment income to
average net assets
After advisory/administration fee waivers ........... 4.55%2 4.74% 4.53% 5.06% 5.56% 6.23%
Before advisory/administration fee waivers .......... 4.19%2 3.96% 3.30% 4.27% 4.42% 5.34%
Portfolio turnover rate .................................. 112% 92% 40% 71% 38% 95%
<FN>
- ------------
3 Sales load not reflected in total return.
</FN>
</TABLE>
See accompanying notes to financial statements.
64
<PAGE>
COMPASS CAPITAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
PENNSYLVANIA TAX-FREE INCOME PORTFOLIO
--------------------------------------------------
INSTITUTIONAL CLASS
--------------------------------------------------
FOR THE
FOR THE PERIOD
SIX MONTHS YEAR YEAR 12/1/92 1
ENDED ENDED ENDED THROUGH
3/31/96 9/30/95 9/30/94 9/30/93
------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value at beginning of period ............................. $10.33 $ 9.82 $10.70 $10.00
------ ------ ------ ------
Income from investment operations
Net investment income ........................................... 0.26 0.52 0.53 0.39
Net gain (loss) on investments
(both realized and unrealized) ................................ 0.05 0.51 (0.85) 0.73
------ ------ ------ ------
Total from investment operations ........................... 0.31 1.03 (0.32) 1.12
------ ------ ------ ------
Less distributions
Distributions from net investment income ........................ (0.26) (0.52) (0.53) (0.39)
Distributions from net realized capital gains ................... -- -- (0.03) (0.03)
------ ------ ------ ------
Total distributions ........................................ (0.26) (0.52) (0.56) (0.42)
------ ------ ------ ------
Net asset value at end of period ................................... $10.38 $10.33 $ 9.82 $10.70
====== ====== ====== ======
Total return ....................................................... 3.01% 10.81% (2.96)% 11.69%
Ratios/Supplemental data
Net assets at end of period (in thousands) ...................... $4,674 $2,092 $ 639 $ 256
Ratios of total expenses to average net assets
After advisory/administration fee waivers ..................... 0.57%2 0.52% 0.39% 0.09%2
Before advisory/administration fee waivers .................... 0.86%2 0.84% 0.99% 0.97%2
Ratios of net investment income to average net assets
After advisory/administration fee waivers ..................... 4.91%2 5.23% 5.27% 5.19%2
Before advisory/administration fee waivers .................... 4.61%2 4.91% 4.67% 4.31%2
Portfolio turnover rate ............................................ 56% 66% 30% 40%
<FN>
- ------------
1 Commencement of operations.
2 Annualized.
</FN>
</TABLE>
See accompanying notes to financial statements.
65
<PAGE>
COMPASS CAPITAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
PENNSYLVANIA TAX-FREE INCOME PORTFOLIO
--------------------------------------------------
SERVICE CLASS
--------------------------------------------------
FOR THE
FOR THE PERIOD
SIX MONTHS YEAR YEAR 7/29/931
ENDED ENDED ENDED THROUGH
3/31/96 9/30/95 9/30/94 9/30/93
------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value at beginning of period .............................. $ 10.33 $ 9.82 $ 10.70 $10.43
------- ------- ------- ------
Income from investment operations
Net investment income ............................................ 0.24 0.50 0.51 0.09
Net gain (loss) on investments
(both realized and unrealized) ................................. 0.05 0.51 (0.85) 0.28
------- ------- ------- ------
Total from investment operations ............................ 0.29 1.01 (0.34) 0.37
------- ------- ------- ------
Less distributions
Distributions from net investment income ......................... (0.24) (0.50) (0.51) (0.09)
Distributions from net realized capital gains .................... -- -- (0.03) (0.01)
------- ------- ------- ------
Total distributions ......................................... (0.24) (0.50) (0.54) (0.10)
------- ------- ------- ------
Net asset value at end of period .................................... $ 10.38 $ 10.33 $ 9.82 $10.70
======= ======= ======= ======
Total return ........................................................ 2.86% 10.51% (3.20)% 3.54%
Ratios/Supplemental data
Net assets at end of period (in thousands) ....................... $33,476 $13,815 $11,518 $3,894
Ratios of expenses to average net assets
After advisory/administration fee waivers ...................... 0.86%2 0.79% 0.55% 0.34%2
Before advisory/administration fee waivers ..................... 1.16%2 1.11% 1.15% 1.22%2
Ratios of net investment income to
average net assets
After advisory/administration fee waivers ...................... 4.62%2 5.04% 4.97% 4.90%2
Before advisory/administration fee waivers ..................... 4.33%2 4.72% 4.37% 4.02%2
Portfolio turnover rate ............................................. 56% 66% 30% 40%
<FN>
- ------------
1 Commencement of operations.
2 Annualized.
</FN>
</TABLE>
See accompanying notes to financial statements.
66
<PAGE>
COMPASS CAPITAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
PENNSYLVANIA TAX-FREE INCOME PORTFOLIO
-----------------------------------------------------
INVESTOR A CLASS
-----------------------------------------------------
FOR THE
FOR THE PERIOD
SIX MONTHS YEAR YEAR 12/1/92 1
ENDED ENDED ENDED THROUGH
3/31/96 9/30/95 9/30/94 9/30/93
------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value at beginning of period ............................ $ 10.33 $ 9.82 $ 10.70 $ 10.00
------- ------- ------- -------
Income from investment operations
Net investment income .......................................... 0.24 0.48 0.52 0.42
Net gain (loss) on investments
(both realized and unrealized) ............................... 0.05 0.51 (0.85) 0.73
------- ------- ------- -------
Total from investment operations .......................... 0.29 0.99 (0.33) 1.15
------- ------- ------- -------
Less distributions
Distributions from net investment income ....................... (0.24) (0.48) (0.52) (0.42)
Distributions from net realized capital gains .................. -- -- (0.03) (0.03)
------- ------- ------- -------
Total distributions ....................................... (0.24) (0.48) (0.55) (0.45)
------- ------- ------- -------
Net asset value at end of period .................................. $ 10.38 $ 10.33 $ 9.82 $ 10.70
======= ======= ======= =======
Total return ...................................................... 2.78%3 10.30%3 (3.06)%3 11.69%3
Ratios/Supplemental data
Net assets at end of period (in thousands) ..................... $40,429 $42,775 $46,563 $35,934
Ratios of total expenses to average net assets
After advisory/administration fee waivers .................... 1.02%2 0.98% 0.41% 0.07%2
Before advisory/administration fee waivers ................... 1.31%2 1.30% 1.01% 0.95%2
Ratios of net investment income to average net assets
After advisory/administration fee waivers .................... 4.49%2 4.88% 5.06% 5.19%2
Before advisory/administration fee waivers ................... 4.19%2 4.56% 4.46% 4.31%2
Portfolio turnover rate ........................................... 56% 66% 30% 40%
<FN>
- ------------
1 Commencement of operations.
2 Annualized.
3 Sales load not reflected in total return.
</FN>
</TABLE>
See accompanying notes to financial statements.
67
<PAGE>
COMPASS CAPITAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
PENNSYLVANIA TAX-FREE INCOME PORTFOLIO
----------------------------------------
INVESTOR B CLASS
----------------------------------------
FOR THE
FOR THE PERIOD
SIX MONTHS 10/03/941
ENDED THROUGH
3/31/96 9/30/95
---------- --------
(UNAUDITED)
<S> <C> <C>
Net asset value at beginning of period ................................... $10.33 $ 9.82
------ ------
Income from investment operations
Net investment income ................................................. 0.20 0.42
Net gain (loss) on investments
(both realized and unrealized) ...................................... 0.05 0.51
------ ------
Total from investment operations ................................. 0.25 0.93
------ ------
Less distributions
Distributions from net investment income .............................. (0.20) (0.42)
Distributions from net realized capital gains ......................... -- --
------ ------
Total distributions .............................................. (0.20) (0.42)
------ ------
Net asset value at end of period ......................................... $10.38 $10.33
====== ======
Total return ............................................................. 2.42%4 9.69%4
Ratios/Supplemental data
Net assets at end of period (in thousands) ............................ $4,998 $4,008
Ratios of total expenses to average net assets
After advisory/administration fee waivers ........................... 1.71%2 1.57%2
Before advisory/administration fee waivers .......................... 2.01%2 1.89%2
Ratios of net investment income to average net assets
After advisory/administration fee waivers ........................... 3.75%2 4.07%2
Before advisory/administration fee waivers .......................... 3.45%2 3.75%2
Portfolio turnover rate .................................................. 56% 66%
<FN>
- ------------
1 Commencement of operations.
2 Annualized.
4 Contingent deferred sales load not reflected in total return.
</FN>
</TABLE>
See accompanying notes to financial statements.
68
<PAGE>
COMPASS CAPITAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
NEW JERSEY TAX-FREE INCOME PORTFOLIO
----------------------------------------------------------------------------
SERVICE CLASS 4 INVESTOR A CLASS
------------------------------------------------------- ----------------
FOR THE FOR THE FOR THE FOR THE FOR THE
PERIOD PERIOD PERIOD PERIOD PERIOD
2/1/96 3/1/95 YEAR YEAR YEAR 7/1/91 1 2/1/96 1/26/96 1
THROUGH THROUGH ENDED ENDED ENDED THROUGH THROUGH THROUGH
3/31/96 1/31/96 2/28/95 2/28/94 2/28/93 2/29/92 3/31/96 1/31/96
------- ------- ------- ------- ------- ------- ------- -------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period ...... $ 11.61 $ 10.94 $ 11.31 $ 11.30 $ 10.46 $ 10.00 $11.61 $11.54
------- ------- ------- ------- ------- ------- ------ ------
Income from investment operations
Net investment income ...................... 0.11 0.46 0.51 0.54 0.52 0.34 0.09 --
Net gain (loss) on investments
(both realized and unrealized) ......... (0.32) 0.65 (0.36) 0.04 0.85 0.45 (0.31) 0.07
------- ------- ------- ------- ------- ------- ------ ------
Total from investment operations .... (0.21) 1.11 0.15 0.58 1.37 0.79 (0.22) 0.07
------- ------- ------- ------- ------- ------- ------ ------
Less distributions
Distributions from net
investment income ......................... (0.10) (0.44) (0.51) (0.54) (0.53) (0.33) (0.09) --
Distributions from net realized
capital gains ............................. -- -- (0.01) (0.03) -- -- -- --
------- ------- ------- ------- ------- ------- ------ ------
Total distributions ................. (0.10) (0.44) (0.52) (0.57) (0.53) (0.33) (0.09) --
------- ------- ------- ------- ------- ------- ------ ------
Net asset value at end of period ............ $ 11.30 $ 11.61 $ 10.94 $ 11.31 $ 11.30 $ 10.46 $11.30 $11.61
======= ======= ======= ======= ======= ======= ====== ======
Total return ................................ 2.62% 10.35% 1.49% 5.18% 13.48% 8.02% (1.43)%3 0.63%3
Ratios/Supplemental data
Net assets at end of period
(in thousands) ............................ $94,003 $97,976 $96,857 $111,354 $47,169 $10,673 $ 503 $ 14
Ratios of total expenses to
average net assets
After advisory/administration
fee waivers ............................. 0.85%2 0.88%2 0.79% 0.38% 0.48% 0.52%2 1.02%2 1.02%2
Before advisory/administration
fee waivers ............................. 1.17%2 0.90%2 0.87% 0.86% 1.04% 1.29%2 1.34%2 1.36%2
Ratios of net investment income to
average net assets
After advisory/administration
fee waivers ............................. 4.13%2 4.43%2 4.71% 4.75% 5.04% 5.35%2 3.45%2 2.79%2
Before advisory/administration
fee waivers ............................. 3.81%2 4.41%2 4.63% 4.27% 4.48% 4.58%2 3.13%2 2.45%2
Portfolio turnover rate ..................... 27% 26% 28% 12% 16% 0% 27% 26%
<FN>
- ------------
1 Commencement of operations.
2 Annualized.
3 Sales load not reflected in total return.
4 Service Class includes all activity of the prior class of shares for all
periods beforeJanuary 13, 1996, the date of the merger.
</FN>
</TABLE>
See accompanying notes to financial statements.
69
<PAGE>
COMPASS CAPITAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
OHIO TAX-FREE INCOME PORTFOLIO
--------------------------------------------------
INSTITUTIONAL CLASS
--------------------------------------------------
FOR THE
FOR THE PERIOD
SIX MONTHS YEAR YEAR 12/1/92 1
ENDED ENDED ENDED THROUGH
3/31/96 9/30/95 9/30/94 9/30/93
------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value at beginning of period ............................. $10.05 $ 9.60 $10.53 $10.00
------ ------ ------- ------
Income from investment operations
Net investment income ........................................... 0.26 0.55 0.53 0.36
Net gain (loss) on investments
(both realized and unrealized) ................................ 0.02 0.45 (0.91) 0.53
------ ------ ------- ------
Total from investment operations ........................... 0.28 1.00 (0.38) 0.89
------ ------ ------- ------
Less distributions
Distributions from net investment income ........................ (0.26) (0.55) (0.53) (0.36)
Distributions from net realized capital gains ................... -- -- (0.02) --
------ ------ ------- ------
Total distributions ........................................ (0.26) (0.55) (0.55) (0.36)
------ ------ ------- ------
Net asset value at end of period ................................... $10.07 $10.05 $ 9.60 $10.53
====== ====== ======= ======
Total return ....................................................... 2.79% 10.75% (3.75)% 9.10%
Ratios/Supplemental data
Net assets at end of period (in thousands) ...................... $ 356 $ 200 $ 127 $1,676
Ratios of total expenses to average net assets
After advisory/administration fee waivers ..................... 0.46%2 0.12% 0.10% 0.08%2
Before advisory/administration fee waivers .................... 1.12%2 1.19% 1.49% 2.59%2
Ratios of net investment income to average net assets
After advisory/administration fee waivers ..................... 5.02%2 5.61% 5.16% 4.99%2
Before advisory/administration fee waivers .................... 4.36%2 4.54% 3.77% 2.48%2
Portfolio turnover rate ............................................ 56% 63% 61% 36%
<FN>
- ------------
1 Commencement of operations.
2 Annualized.
</FN>
</TABLE>
See accompanying notes to financial statements.
70
<PAGE>
COMPASS CAPITAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
OHIO TAX-FREE INCOME PORTFOLIO
--------------------------------------------------
SERVICE CLASS
--------------------------------------------------
FOR THE
FOR THE PERIOD
SIX MONTHS YEAR YEAR 7/29/93 1
ENDED ENDED ENDED THROUGH
3/31/96 9/30/95 9/30/94 9/30/93
------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value at beginning of period ............................... $10.05 $ 9.60 $10.53 $10.24
------ ------ ------ ------
Income from investment operations
Net investment income ............................................. 0.24 0.52 0.49 0.09
Net gain (loss) on investments
(both realized and unrealized) .................................. 0.02 0.45 (0.91) 0.29
------ ------ ------ ------
Total from investment operations ............................. 0.26 0.97 (0.42) 0.38
------ ------ ------ ------
Less distributions
Distributions from net investment income .......................... (0.24) (0.52) (0.49) (0.09)
Distributions from net realized capital gains ..................... -- -- (0.02) --
------ ------ ------ ------
Total distributions .......................................... (0.24) (0.52) (0.51) (0.09)
------ ------ ------ ------
Net asset value at end of period ..................................... $10.07 $10.05 $ 9.60 $10.53
====== ====== ====== ======
Total return ......................................................... 2.64% 10.45% (4.00)% 3.68%
Ratios/Supplemental data
Net assets at end of period (in thousands) ........................ $5,900 $5,150 $4,428 $ 907
Ratios of total expenses to average net assets
After advisory/administration fee waivers ....................... 0.71%2 0.39% 0.35% 0.32%2
Before advisory/administration fee waivers ...................... 1.38%2 1.46% 1.74% 2.83%2
Ratios of net investment income to average net assets
After advisory/administration fee waivers ....................... 4.77%2 5.39% 5.06% 4.71%2
Before advisory/administration fee waivers ...................... 4.10%2 4.31% 3.67% 2.20%2
Portfolio turnover rate .............................................. 56% 63% 61% 36%
<FN>
- ------------
1 Commencement of operations.
2 Annualized.
</FN>
</TABLE>
See accompanying notes to financial statements.
71
<PAGE>
COMPASS CAPITAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
OHIO TAX-FREE INCOME PORTFOLIO
--------------------------------------------------
INVESTOR A CLASS
--------------------------------------------------
FOR THE
FOR THE PERIOD
SIX MONTHS YEAR YEAR 12/1/92 1
ENDED ENDED ENDED THROUGH
3/31/96 9/30/95 9/30/94 9/30/93
------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value at beginning of period ............................. $10.05 $ 9.60 $10.53 $10.00
------ ------ ------ ------
Income from investment operations
Net investment income ........................................... 0.24 0.52 0.53 0.36
Net gain (loss) on investments
(both realized and unrealized) ................................ 0.02 0.45 (0.91) 0.53
------ ------ ------ ------
Total from investment operations ........................... 0.54 0.97 (0.38) 0.89
------ ------ ------ ------
Less distributions
Distributions from net investment income ........................ (0.24) (0.52) (0.53) (0.36)
Distributions from net realized capital gains ................... -- -- (0.02) --
------ ------ ------ ------
Total distributions ........................................ (0.24) (0.52) (0.55) (0.36)
------ ------ ------ ------
Net asset value at end of period $10.07 $10.05 $ 9.60 $10.53
====== ====== ====== ======
Total return ....................................................... 2.59%3 10.46% (3.75)%3 9.10%3
Ratios/Supplemental data
Net assets at end of period (in thousands) ...................... $3,246 $3,303 $3,825 $2,386
Ratios of total expenses to average net assets
After advisory/administration fee waivers ..................... 0.81%2 0.38% 0.10% 0.07%2
Before advisory/administration fee waivers .................... 1.47%2 1.45% 1.49% 2.58%2
Ratios of net investment income to average net assets
After advisory/administration fee waivers ..................... 4.67%2 5.42% 5.18% 4.90%2
Before advisory/administration fee waivers .................... 4.00%2 4.35% 3.79% 2.39%2
Portfolio turnover rate ............................................ 56% 63% 61% 36%
<FN>
- ------------
1 Commencement of operations.
2 Annualized.
3 Sales load not reflected in total return.
</FN>
</TABLE>
See accompanying notes to financial statements.
72
<PAGE>
COMPASS CAPITAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
OHIO TAX-FREE INCOME PORTFOLIO
--------------------------------------
INVESTOR B CLASS
--------------------------------------
FOR THE
FOR THE PERIOD
SIX MONTHS 10/13/94 1
ENDED THROUGH
3/31/96 9/30/95
------- -------
(UNAUDITED)
<S> <C> <C>
Net asset value at beginning of period .................................. $10.05 $ 9.58
------ ------
Income from investment operations
Net investment income ................................................ 0.20 0.42
Net gain (loss) on investments
(both realized and unrealized) ..................................... 0.02 0.47
------ ------
Total from investment operations ................................ 0.22 0.89
------ ------
Less distributions
Distributions from net investment income ............................. (0.20) (0.42)
Distributions from net realized capital gains ........................ -- --
------ ------
Total distributions ............................................. (0.20) (0.42)
------ ------
Net asset value at end of period ........................................ $10.07 $10.05
====== ======
Total return ............................................................ 2.20%4 9.33%4
Ratios/Supplemental data
Net assets at end of period (in thousands) ........................... $ 116 $ 106
Ratios of total expenses to average net assets
After advisory/administration fee waivers .......................... 1.57%2 1.17%2
Before advisory/administration fee waivers ......................... 2.23%2 2.25%2
Ratios of net investment income to average net assets
After advisory/administration fee waivers .......................... 3.90%2 4.48%2
Before advisory/administration fee waivers ......................... 3.24%2 3.41%2
Portfolio turnover rate ................................................. 56% 63%
<FN>
- ------------
1 Commencement of operations.
2 Annualized.
4 Contingent deferred sales load not reflected in total return.
</FN>
</TABLE>
See accompanying notes to financial statements.
73
<PAGE>
COMPASS CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996
Compass Capital Funds (the "Fund") (formerly The PNC Fund(REGISTRATION
MARK)) was organized on December 22, 1988 as a Massachusetts business trust and
is registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company. The Fund consists of twenty-eight
separate Portfolios: Money Market Portfolio, Municipal Money Market Portfolio,
U.S. Treasury Money Market Portfolio, Ohio Municipal Money Market Portfolio,
Pennsylvania Municipal Money Market Portfolio, North Carolina Municipal Money
Market Portfolio, Virginia Municipal Money Market Portfolio, New Jersey
Municipal Money Market Portfolio, Value Equity Portfolio, Growth Equity
Portfolio, Small Cap Growth Equity Portfolio, Select Equity Portfolio, Index
Equity Portfolio, Small Cap Value Equity Portfolio, International Equity
Portfolio, International Emerging Markets Portfolio, Balanced Portfolio, Managed
Income Portfolio, Tax-Free Income Portfolio, Core Bond Portfolio, Intermediate
Government Bond Portfolio, Ohio Tax-Free Income Portfolio, Pennsylvania Tax-Free
Income Portfolio, New Jersey Tax-Free Income Portfolio, Short Government Bond
Portfolio, Intermediate Bond Portfolio, International Bond Portfolio and
Government Income Portfolio. This report relates solely to Short Government Bond
Portfolio, Intermediate Government Bond Portfolio, Intermediate Bond Portfolio,
Core Bond Portfolio, Government Income Portfolio, Managed Income Portfolio,
International Bond Portfolio, Tax-Free Income Portfolio, Pennsylvania Tax-Free
Income Portfolio, New Jersey Tax-Free Income Portfolio and Ohio Tax-Free Income
Portfolio (the "Portfolios").
The notes to financial statements are unaudited with respect to all of the
portfolios except the Short Government Bond Portfolio and Core Bond Portfolio.
The Short Government BondPortfolio and Core Bond Portfolio were audited as of
March 31, 1996 and the nine months then ended. The Fund decided to have this
period audited as part of the conversion of all Portfolios to a September 30
fiscal year end.
On September 29, 1995 and October 2, 1995, respectively, the Board of
Trustees of the Fund and the Board of Trustees of The Compass Capital Group of
Funds ("Compass") approved an asset purchase agreement providing for the
transfer of all of the assets and liabilities of Compass to the Fund.At a
special meeting of shareholders held on December 11, 1995, the shareholders of
Compass voted to approve the asset purchase agreement. Pursuant to the asset
purchase agreement, on January 13, 1996 all of the assets and liabilities of
Compass were transferred to the Fund in a tax-free exchange for Service shares
of the Fund, except the assets and liabilities of the Compass International
Fixed Income Fund which were transferred on February 13, 1996. The detail of
these business combinations as they relate to the Portfolios are described in
Note (G) of this report.
On September 29, 1995 and September 28, 1995, respectively, the Board of
Trustees of the Fund and the Board of Directors of The BFM Institutional
Trust,Inc. ("BFM") approved an asset purchase agreement providing for the
transfer of all of the assets and liabilities of BFM to the Fund. At a special
meeting of shareholders held on December 20, 1995, the shareholders of BFM voted
to approve the asset purchase agreement. Pursuant to the asset purchase
agreement, on January 13, 1996 all of the assets and liabilities of BFM's Short
Duration Portfolio and Core Fixed Income Portfolio were transferred to the Fund
in a tax-free exchange for Institutional shares of the Fund. The detail of these
business combinations as they relate to the Portfolios are described in Note (G)
of this report.
Each Portfolio has five classes of shares, one class being referred to as
the Service shares, one class being referred to as the Institutional shares, one
class being referred to as the Investor A shares, one class being referred to as
the Investor B shares, and one class being referred to as the Investor C shares.
No Service shares of the Government Income Portfolio, no Institutional shares of
the Government Income, New Jersey Tax-Free Income Portfolios, no Investor A
shares of the International Bond Portfolio, no Investor B shares of the Short
Government Bond, Intermediate Government Bond, Intermediate Bond,Managed Income,
International
74
<PAGE>
COMPASS CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996
Bond, Tax-Free Income and New Jersey Tax-Free Income Portfolios and no Investor
C shares of any Portfolio had been issued through March 31, 1996. Investor A,
Investor B, Investor C, Institutional and Service shares in a Portfolio
represent equal pro rata interests in such Portfolio, except that they bear
different expenses which reflect the difference in the distribution arrangements
applicable to them and the range of services provided to them. Pursuant to the
Fund's Amended and Restated Distribution and Service Plan (the "Plan"), Investor
A shares may bear the expense of distribution fees at an annual rate not to
exceed .10% of the average daily net asset value of each Portfolio's outstanding
Investor A shares. Under the Plan, Investor A shares may also bear the expense
of service fees and shareholder processing fees at annual rates not to exceed
.25% and .15%, respectively, of the average daily net asset value of each
Portfolio's outstanding Investor A shares. Pursuant to the Plan, Investor B and
Investor C shares may bear the expense of distribution fees at an annual rate
not to exceed .75% of the average daily net asset value of each Portfolio's
outstanding Investor B and Investor C shares, respectively. Under the Plan,
Investor B and Investor C shares may also bear the expense of service fees and
shareholder processing fees at annual rates not to exceed .25% and .15%,
respectively, of the average daily net asset value of each Portfolio's
outstanding Investor B and Investor C shares, respectively. Pursuant to the
Plan, Service shares may bear the expense of service fees and shareholder
processing fees at annual rates not to exceed .15% and .15%, respectively, of
the average daily net asset value of each Portfolio's outstanding Service
shares. Institutional shares do not bear the expense of distribution fees,
service fees or shareholder processing fees under the Plan. In addition,
Institutional and Service shares bear a Transfer Agent fee at an annual rate not
to exceed .03% and Investor A, Investor B and Investor C shares bear a Transfer
Agent fee at an annual rate not to exceed .10% of the average daily net assets
of such respective classes.
(A) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements. The preparation of
financial statements in conformity with generally accepted accounting principles
requires the use of management estimates.
SECURITY VALUATION -- Portfolio securities for which market quotations are
readily available are valued at market value, which is currently determined
using the last reported sales price. If no sales are reported, as in the case of
some securities traded over-the-counter, portfolio securities are valued at the
mean between the last reported bid and asked prices. Corporate bonds and
tax-exempt bonds are valued on the basis of quotations provided by a pricing
service which uses information with respect to transactions on bonds, quotations
from bond dealers, market transactions in comparable securities and various
relationships between securities in determining value. Short-term obligations
with maturities of 60 days or less are valued at amortized cost which
approximates market value. Discounts and premiums on debt securities are
amortized for book and tax purposes using the effective yield-to-maturity method
over the term of the instrument.
DIVIDENDS TO SHAREHOLDERS -- Dividends from net investment income are
declared by each Portfolio each day on "settled" shares (i.e. shares for which
the particular Portfolio has received payment in Federal funds) and are paid
monthly. Over the course of a year, substantially all of each Portfolio's net
investment income will be declared as dividends. The amount of the daily
dividend for each Portfolio will be based on periodic projections of its net
investment income. Net realized capital gains, if any, will be distributed at
least annually. The character of distributions made during the year from net
investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes due to differences between
generally accepted accounting principles and tax accounting, related to the
character of income and expense recognition.
75
<PAGE>
COMPASS CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996
FEDERAL TAXES -- No provision is made for Federal taxes as it is the Fund's
intention to have each Portfolio continue to qualify as a regulated investment
company and to make the requisite distributions to its shareholders which will
be sufficient to relieve it from Federal income and excise taxes.
FOREIGN CURRENCY TRANSLATION -- The books and records of the International
Bond Portfolio are maintained in U.S. dollars. Foreign currency amounts are
translated into U.S. dollars on the following basis:
(I) market value of investment securities, assets and liabilities at the
current rate of exchange; and
(II) purchases and sales of investment securities, income and expenses at
the relevant rates of exchange prevailing on the respective dates of
such transactions.
The International Bond Portfolio isolates that portion of gains and losses
on investment securities which is due to changes in the forgeign exchange rates
from that which is due to changes in market prices of such securities.
The International Bond Portfolio reports certain foreign currency related
transactions as components of realized and unrealized gains for financial
reporting purposes, whereas such components are treated as ordinary income for
Federal income tax purposes.
FORWARD FOREIGN CURRENCY CONTRACTS -- The International Bond Portfolio
enters into forward foreign currency contracts as a hedge against either
specific transactions or portfolio positions. These contracts are adjusted by
the daily exchange rate of the underlying currency and any gains or losses are
recorded as unrealized until the contract settlement date. Such contracts, which
protect the value of the International Bond Portfolio's investment securities
against a decline in the value of currency, do not eliminate fluctuations in the
underlying prices of the securities. They simply establish an exchange rate at a
future date. Also, although such contracts tend to minimize the risk of loss due
to a decline in the value of a hedged currency, at the same time they tend to
limit any potential gain that might be realized should the value of such foreign
currency increase. Risks may arise upon entering into these contracts from the
potential inability of counterparties to meet the terms of their contracts and
from unanticipated movements in the value of a foreign currency relative to the
U.S. dollar.
The aggregate principal amounts of the contracts are not recorded as the
International Bond Portfolio intends to settle the contracts prior to delivery.
Under the terms of foreign currency contracts open at March 31, 1996, the
International Bond Portfolio is obligated to deliver or receive currency in
exchange for U.S. dollars as indicated below:
<TABLE>
<CAPTION>
UNREALIZED
VALUE AT FOREIGN
SETTLEMENT CURRENCY CONTRACT MARCH 31 EXCHANGE
DATE BOUGHT AMOUNT 1996 GAIN/(LOSS)
- --------- ------------------------------------------ ---------- ---------- ----------
<C> <S> <C> <C> <C> <C>
04/01/96 Italian Lira 2,200,000,000 1,404,581 1,402,468 $ (2,113)
04/12/96 Canadian Dollar 3,650,000 2,661,014 2,677,785 16,771
04/16/96 Japanese Yen 238,000,000 2,270,962 2,230,762 (40,200)
04/17/96 Danish Kroner 4,200,000 738,786 737,616 (1,170)
04/19/96 French Franc 21,400,000 4,295,273 4,253,239 (42,034)
04/19/96 Swedish Krona 2,600,000 370,909 388,391 17,481
05/28/96 Spanish Peseta 182,000,000 1,450,743 1,460,323 9,580
---------- ---------- --------
13,192,268 13,150,583 $(41,685)
========== ========== ========
</TABLE>
76
<PAGE>
COMPASS CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996
<TABLE>
<CAPTION>
UNREALIZED
VALUE AT FOREIGN
SETTLEMENT CURRENCY CONTRACT MARCH 31 EXCHANGE
DATE SOLD AMOUNT 1996 GAIN/(LOSS)
- ---------- ------------------------------------------ ---------- ---------- ---------
<C> <S> <C> <C> <C> <C>
04/09/96 Italian Lira 3,100,000,000 1,940,046 1,976,205 $(36,159)
04/12/96 Canadian Dollar 5,200,000 3,814,256 3,814,926 (670)
04/16/96 Japanese Yen 826,000,000 7,949,952 7,742,056 207,896
04/17/96 DanishKroner 14,300,000 2,542,094 2,511,407 30,687
04/19/96 German Mark 19,400,000 13,498,916 13,156,556 342,360
04/19/96 French Franc 21,400,000 4,369,130 4,253,239 115,891
04/19/96 British Pound Sterlin 2,730,000 4,195,990 4,165,503 30,487
04/19/96 Swedish Krona 24,200,000 3,596,682 3,615,021 (18,339)
04/26/96 Italian Lira 2,280,000,000 1,415,534 1,450,376 (34,842)
05/28/96 Spanish Peseta 182,000,000 1,474,269 1,460,323 13,946
05/31/96 Danish Kroner 16,000,000 2,857,143 2,814,622 42,521
06/18/96 Japanese Yen 190,000,000 1,826,923 1,795,274 31,649
---------- ---------- --------
49,480,935 48,755,508 $725,427
========== ========== ========
</TABLE>
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Investment transactions are
accounted for on the trade date. The cost of investments sold is determined by
use of the specific identification method for both financial reporting and
Federal income tax purposes. Interest income is recorded on the accrual basis.
Certain expenses, principally fees relating to the Plan, are class specific
expenses. Expenses not directly attributable to a specific Portfolio or class
are allocated among all of the Portfolios or classes of the Fund based on their
relative net assets.
REPURCHASE AGREEMENTS -- Money market instruments may be purchased from
banks and non-bank dealers subject to the seller's agreement to repurchase them
at an agreed upon date and price. Collateral for repurchase agreements may have
longer maturities than the maximum permissible remaining maturity of portfolio
investments. The seller will be required on a daily basis to maintain the value
of the securities subject to the agreement at not less than the repurchase
price. The agreements are conditioned upon the collateral being deposited under
the Federal Reserve book-entry system or held in a separate account by the
Fund's custodian or an authorized securities depository.
REVERSE REPURCHASE AGREEMENTS -- The Fund enters into reverse repurchase
agreements with qualified, third party brokers-dealers as determined by and
under the direction of the Fund's Board of Trustees. Interest on the value of
the reverse repurchase agreements issued and outstanding is based upon
competitive market rates at the time of issuance. At the time the Fund enters
into a reverse repurchase agreement, it establishes and maintains a segregated
account with the custodian containing liquid high grade securities having a
value not less than the repurchase price, including accrued interest, of the
reverse repurchase agreement.
TBA PURCHASE COMMITMENTS -- The Portfolios may enter into "TBA" (to be
announced) purchase commitments to purchase securities for a fixed price at a
future date, typically not exceeding 45 days. TBA purchase commitments may be
considered securities in themselves, and involve a risk of loss if the value of
the security to be purchased declines prior to settlement date, which risk is in
addition to the risk of decline in the value of the Fund's other assets.
Unsettled TBA purchase commitments are valued at the current market value of the
underlying securities, according to the procedures described under "Security
Valuation" above.
77
<PAGE>
COMPASS CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996
MORTGAGE DOLLAR ROLLS -- The Fund may enter into mortgage dollar rolls
(principally in TBA's) in which the Fund sells mortgage securities for delivery
in the current month and simultaneously contracts to repurchase similar, but not
identical, securities at an agreed-upon price on a fixed date. The Fund accounts
for such dollar rolls as purchases and sales and receives compensation as
consideration for entering into the commitment to repurchase. The Fund maintains
liquid high grade securities not less than the outstanding value of such dollar
rolls.
In a "fee" roll, the compensation is recorded as deferred income and
amortized to income over the roll period. In a "drop" roll, the compensation is
paid via a lower price for the security upon its repurchase. The counterparty
receives all principal and interest payments, including prepayments, made in
respect of a security subject to such a contract while it is the holder.
Mortgage dollar rolls may be renewed with a new purchase and repurchase price
fixed and a cash settlement made on settlement date without physical delivery of
the securities subject to the contract. The Fund engages in dollar rolls for the
purpose of enhancing the Fund's yield, principally by earning a negotiated fee.
ORGANIZATION COSTS -- Costs incurred by each Portfolio in connection with
its organization, registration and initial public offering have been deferred
and are being amortized using the straight-line method over a five-year period
beginning on the date on which each Portfolio commenced its investment
activities.
OTHER -- Securities denominated in currencies other than U.S. dollars are
subject to changes in value due to fluctuations in exchange rates.
Some countries in which the Portfolios invest require governmental approval
for the repatriation of investment income, capital or the proceeds of sales of
securities by foreign investors. In addition, if there is a deterioration in a
country's balance of payments or for other reasons, a country may impose
temporary restrictions on foreign capital remittances abroad.
The securities exchanges of certain foreign markets are substantially
smaller, less liquid and more volatile than the major securities markets in the
United States. Consequently, acquisition and disposition of securities by the
Portfolios may be inhibited. In addition, a significant proportion of the
aggregate market value of equity securities listed on the major securities
exchanges in emerging markets are held by a smaller number of investors.This may
limit the number of shares available for acquisition or disposition by the Fund.
(B) TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Pursuant to an Investment Advisory Agreement, PNC Asset Management Group,
Inc. ("PAMG"), a wholly-owned subsidiary of PNC Bank, National Association ("PNC
Bank"), serves as investment adviser for the Portfolios. BlackRock Financial
Management, Inc. ("BlackRock"), a wholly-owned subsidiary of PAMG, serves as
sub-adviser for all of the Portfolios except for International Bond Portfolio,
which is sub-advised by Morgan Grenfell Investment Services Limited ("Morgan
Grenfell"). PAMG, PNC Bank and BlackRock are indirect wholly-owned subsidiaries
of PNC Bank Corp.
For its advisory services, PAMG is entitled to receive fees, computed daily
and paid monthly, at the following annual rates, based on each Portfolio's
average daily net assets:
<TABLE>
<CAPTION>
EACH PORTFOLIO
EXCEPT THE INTERNATIONAL
BOND PORTFOLIO INTERNATIONAL BOND PORTFOLIO
------------------------ ----------------------------
INVESTMENT INVESTMENT
AVERAGE DAILY NET ASSETS ADVISORY FEE ADVISORY FEE
- ------------------------- ------------------------ ----------------------------
<S> <C> <C>
first $1 billion ............... .500% .550%
$1 billion - $2 billion ........ .450 .500
$2 billion - $3 billion ........ .425 .475
greater than $3 billion ........ .400 .450
</TABLE>
78
<PAGE>
COMPASS CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996
PAMG may, at its discretion, waive all or any portion of its advisory fee
for any Portfolio. For the periods ended March 31, 1996, advisory fees and
waivers for each Portfolio were as follows:
GROSS NET ADVISORY
ADVISORY FEE WAIVER FEE
-------------- -------- ------------
Short Government Bond Portfolio ...... $ 316,814 $110,845 $ 205,969
Intermediate Government Bond Portfolio 486,816 227,062 259,754
Intermediate Bond Portfolio .......... 522,371 225,766 296,605
Core Bond Portfolio .................. 378,895 143,061 235,834
Government Income Portfolio .......... 34,521 34,521 --
Managed Income Portfolio ............. 1,526,696 458,009 1,068,687
International Bond Portfolio ......... 35,514 -- 35,514
Tax-Free Income Portfolio ............ 73,903 35,949 37,954
Pennsylvania Tax-Free Income Portfolio 183,266 78,522 104,744
New Jersey Tax-Free Income Portfolio . 79,284 31,714 47,570
Ohio Tax-Free Income Portfolio ....... 22,434 19,985 2,449
PAMG pays BlackRock and Morgan Grenfell fees for their sub-advisory
services.
PFPC Inc. ("PFPC"), an indirect wholly-owned subsidiary of PNC Bank Corp.,
Compass Capital Group, Inc. ("CCG"), an indirect wholly-owned subsidiary of PNC
Bank Corp., and Compass Distributors, Inc. ("CDI") act as co-administrators for
the Fund. The combined administration fee is computed daily and payable monthly,
based on a percentage of the average daily net assets of each Portfolio, at the
following annual rates: .23% of the first $500 million, .21% of the next $500
million, .19% of the next $1 billion and .18% of average daily net assets in
excess of $2 billion.
PFPC, CCG and CDI may, and at their discretion, voluntarily waive all or
any portion of their administration fees for any portfolio. For the periods
ended March 31, 1996, administration fees and waivers for each Portfolio were as
follows:
GROSS NET
ADMINISTRATION ADMINISTRATION
FEE WAIVER FEE
-------------- -------- --------------
Short Government Bond Portfolio ...... $146,185 $ 40,055 $106,130
Intermediate Government Bond Portfolio 214,235 70,532 143,703
Intermediate Bond Portfolio .......... 230,200 81,616 148,584
Core Bond Portfolio .................. 169,829 63,172 106,657
Government Income Portfolio .......... 15,198 15,198 --
Managed Income Portfolio ............. 661,990 196,715 465,275
International Bond Portfolio ......... 13,456 6,966 6,490
Tax-Free Income Portfolio ............ 33,408 16,808 16,600
Pennsylvania Tax-Free Income Portfolio 81,106 29,768 51,338
New Jersey Tax-Free Income Portfolio . 35,661 17,913 17,748
Ohio Tax-Free Income Portfolio ....... 9,887 9,887 --
In addition, PNC Bank serves as custodian for each of the Fund's
Portfolios. PFPC serves as transfer and dividend disbursing agent.
79
<PAGE>
COMPASS CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996
PAMG, PFPC, CCG and CDI have also voluntarily agreed to reimburse expenses
in the amount of $2,354 with respect to the Core Bond Portfolio, $3,479 with
respect to the Ohio Tax-Free Income Portfolio and $9,117 with respect to the
Government Income Portfolio for the periods ended March 31, 1996.
PAMG, PFPC, CCG and CDI have also agreed to reimburse each Portfolio for
the amount, if any, by which the total operating and management expenses of such
Portfolio for any fiscal year exceed the most restrictive state blue sky expense
limitation in effect from time to time, to the extent required by such
limitation. No such reimbursements were necessary for the periods ended March
31, 1996.
(C) PURCHASES AND SALES OF SECURITIES
For the periods ended March 31, 1996, purchases and sales of securities,
other than short-term and government securities, were as follows:
PURCHASES SALES
------------ ------------
Short Government Bond Portfolio .............. $289,338,992 $134,840,264
Intermediate Government Bond Portfolio ....... 240,445,065 197,340,882
Intermediate Bond Portfolio .................. 370,218,589 254,276,073
Core Bond Portfolio .......................... 454,126,477 239,741,897
Government Income Portfolio .................. 31,147,828 13,275,266
Managed Income Portfolio ..................... 794,911,327 597,918,387
International Bond Portfolio ................. 13,041,669 14,308,053
Tax-Free Income Portfolio .................... 86,267,046 33,101,177
Pennsylvania Tax-Free Income Portfolio ....... 51,084,860 29,000,735
New Jersey Tax-Free Income Portfolio ......... 29,797,767 26,808,689
Ohio Tax-Free Income Portfolio ............... 6,001,589 4,874,596
For the periods ended March 31, 1996, purchases and sales of government
securities were as follows:
PURCHASES SALES
-------------- --------------
Short Government Bond Portfolio .............. $ 510,577,869 $ 406,330,622
Intermediate Government Bond Portfolio ....... 420,936,264 429,725,845
Intermediate Bond Portfolio .................. 558,528,263 618,062,775
Core Bond Portfolio .......................... 713,209,279 600,429,905
Government Income Portfolio .................. 36,659,478 42,888,765
Managed Income Portfolio ..................... 1,497,827,706 1,507,030,881
80
<PAGE>
COMPASS CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996
(D) CAPITAL SHARES
Transactions in capital shares for each period were as follows:
<TABLE>
<CAPTION>
SHORT-GOVERNMENT PORTFOLIO
----------------------------------------------------------------
FOR THE PERIOD 7/1/95 FOR THE YEAR ENDED
THROUGH 3/31/96 6/30/95
------------------------------ ------------------------------
SHARES VALUE SHARES VALUE
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Prior Shares
Exchanged in merger ...................... (5,134,946) $ (50,925,592) -- $ --
Shares sold .............................. 2,933,108 28,958,863 3,732,764 35,832,684
Shares issued in reinvestment of dividends 86,191 850,722 202,717 1,972,138
Shares redeemed .......................... (2,408,838) (23,680,688) (2,629,898) (25,455,008)
------------- ------------- ------------- -------------
(4,524,485) (44,796,695) 1,305,583 12,349,814
Institutional Shares
Exchanged in merger ...................... 5,134,946 50,887,316 -- --
Shares sold .............................. 416,055 4,146,509 -- --
Shares issued in merger .................. 940,915 9,405,883 -- --
Shares issued in reinvestment of dividends 10,535 104,431 -- --
Shares redeemed .......................... (1,106,898) (11,157,065) -- --
------------- ------------- ------------- -------------
5,395,553 53,386,624 -- --
Service Shares
Shares sold .............................. 475,915 4,712,118 -- --
Shares issued in merger .................. 19,399,025 192,267,748 -- --
Shares issued in reinvestment of dividends 50,924 503,581 -- --
Shares redeemed .......................... (1,376,331) (13,627,909) -- --
------------- ------------- ------------- -------------
18,549,533 183,855,538 -- --
Investor A Shares
Shares sold .............................. 39,732 397,522 -- --
Shares issued in merger .................. 34,465 337,269 -- --
Shares issued in reinvestment of dividends 301 2,975 -- --
Shares redeemed .......................... (1,014) (9,940) -- --
------------- ------------- ------------- -------------
73,484 727,826 -- --
------------- ------------- ------------- -------------
Net increase .................................. 19,494,085 $ 193,173,293 1,305,583 $ 12,349,814
============= ============= ============= =============
</TABLE>
81
<PAGE>
COMPASS CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996
<TABLE>
<CAPTION>
INTERMEDIATE GOVERNMENT BOND PORTFOLIO
----------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
3/31/96 (UNAUDITED) 9/30/95
------------------------------ ------------------------------
SHARES VALUE SHARES VALUE
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class .................. 2,145,364 $ 21,793,213 26,590,354 $ 259,605,434
ServiceClass ......................... 812,111 8,201,836 10,448,411 101,923,874
Series A Investor Class .............. 63,301 640,041 267,053 2,604,567
Shares issued in reinvestment of dividends:
Institutional Class .................. 318,604 3,213,277 630,753 6,148,282
Service Class ........................ 89,356 901,214 227,356 2,209,698
Investor A Class ..................... 22,975 231,771 51,849 505,595
Shares redeemed:
Institutional Class .................. (2,323,857) (23,506,792) (27,151,217) (264,697,056)
Service Class ........................ (1,073,974) (10,875,348) (12,021,173) (117,212,240)
Investor A Class ..................... (232,022) (2,352,229) (224,167) (2,182,053)
------------- ------------- ------------- -------------
Net (decrease) ............................ (178,142) $ (1,753,017) (1,180,781) $ (11,093,899)
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE BOND PORTFOLIO
----------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
3/31/96 (UNAUDITED) 9/30/95
------------------------------ ------------------------------
SHARES VALUE SHARES VALUE
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class .................. 6,360,012 $ 60,299,265 26,801,698 $ 244,543,588
ServiceClass ......................... 1,197,159 11,383,330 6,336,367 57,979,751
Investor A Class ..................... 28,967 275,970 66,539 607,535
Shares issued in merger:
Institutional Class .................. -- -- 1,103,217 10,414,371
Service Class ........................ -- -- -- --
Investor A Class ..................... -- -- -- --
Shares issued in reinvestment of dividends:
Institutional Class .................. 482,664 4,579,062 568,561 5,225,884
Service Class ........................ 91,490 867,921 159,312 1,458,975
Investor A Class ..................... 2,499 23,707 2,890 26,612
Shares redeemed:
Institutional Class .................. (1,582,457) (15,051,762) (23,165,781) (211,763,234)
Service Class ........................ (516,212) (4,897,912) (6,554,873) (59,987,572)
Investor A Class ..................... (10,273) (97,247) (10,462) (95,925)
------------- ------------- ------------- -------------
Net increase .............................. 6,053,849 $ 57,382,334 5,307,468 $ 48,409,985
============= ============= ============= =============
</TABLE>
82
<PAGE>
COMPASS CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996
<TABLE>
<CAPTION>
CORE BOND PORTFOLIO
----------------------------------------------------------------
FOR THE PERIOD 7/1/95 FOR THE YEAR ENDED
THROUGH 3/31/96 6/30/95
------------------------------ ------------------------------
SHARES VALUE SHARES VALUE
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Prior Class
Exchange in merger ....................... (4,700,542) $ (46,206,171) -- $ --
Shares sold .............................. 1,497,044 14,872,835 1,971,644 18,993,483
Shares issued in reinvestment of dividends 196,492 1,955,692 104,932 995,146
Shares redeemed .......................... (260,446) (2,606,563) (145,220) (1,362,388)
------------- ------------- ------------- -------------
(3,267,452) (31,984,207) 1,931,356 18,626,241
Institutional Class
Exchanged in merger ...................... 4,700,542 46,582,367 -- --
Shares sold .............................. 2,616,796 25,552,564 -- --
Shares issued in reinvestment of dividends 27,377 269,114 -- --
Shares redeemed .......................... (614,318) (6,135,169) -- --
------------- ------------- ------------- -------------
6,730,397 66,268,876 -- --
Service Class
Shares sold .............................. 346,922 3,408,413 -- --
Shares issued in merger .................. 25,643,056 254,122,684 -- --
Shares issued in reinvestment of dividends 40,334 396,628 -- --
Shares redeemed .......................... (1,895,903) (18,771,943) -- --
------------- ------------- ------------- -------------
24,134,409 239,155,782 -- --
Investor A Class
Shares sold .............................. 9,091 87,910 -- --
Shares issued in reinvestment of dividends 4 40 -- --
Shares redeemed .......................... (736) (7,068) -- --
------------- ------------- ------------- -------------
8,359 80,882 -- --
Investor B Class
Shares sold .............................. 8,051 77,471 -- --
Shares issued in reinvestment of dividends -- -- -- --
Shares redeemed .......................... -- -- -- --
------------- ------------- ------------- -------------
8,051 77,471 -- --
------------- ------------- ------------- -------------
Net increase ............................. 27,613,764 $ 273,598,804 1,931,356 $ 18,626,241
============= ============= ============= =============
</TABLE>
83
<PAGE>
COMPASS CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996
<TABLE>
<CAPTION>
GOVERNMENT INCOME PORTFOLIO
------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE PERIOD
3/31/96 (UNAUDITED) 10/3/941 THROUGH 9/30/95
---------------------------- ----------------------------
SHARES VALUE SHARES VALUE
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Shares sold:
Investor A Class ..................... 80,151 $ 855,728 300,898 $ 3,068,403
Investor B Class ..................... 124,731 1,322,812 999,120 10,170,346
Shares issued in reinvestment of dividends:
Investor A Class ..................... 14,929 158,762 10,966 113,720
Investor B Class ..................... 32,126 341,345 18,231 190,601
Shares redeemed:
Investor A Class ..................... (54,992) (585,303) (31,890) (328,162)
Investor B Class ..................... (78,810) (835,307) (63,350) (662,081)
------------ ------------ ------------ ------------
Net increase ......................... 118,135 $ 1,258,037 1,233,975 $ 12,552,827
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
MANAGED INCOME PORTFOLIO
----------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
3/31/96 (UNAUDITED) 9/30/95
------------------------------ ------------------------------
SHARES VALUE SHARES VALUE
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class .................. 7,263,548 $ 75,321,306 81,039,235 $ 809,394,059
Service Class ........................ 4,421,039 46,222,577 17,764,304 177,958,649
Investor A Class ..................... 173,380 1,815,833 356,045 3,587,731
Shares issued in reinvestment of dividends:
Institutional Class .................. 1,612,210 16,830,815 2,491,007 24,875,485
Service Class ........................ 354,667 3,700,614 395,609 3,967,740
Investor A Class ..................... 39,894 416,560 61,685 615,380
Shares redeemed:
Institutional Class .................. (2,423,837) (25,305,921) (81,193,145) (810,656,296)
Service Class ........................ (1,619,007) (16,949,111) (13,813,314) (137,936,912)
Investor A Class ..................... (157,459) (1,646,244) (379,561) (3,789,059)
------------- ------------- ------------- -------------
Net increase ......................... 9,664,435 $ 100,406,429 6,721,865 $ 68,016,777
============= ============= ============= =============
<FN>
1 Commencement of operations.
</FN>
</TABLE>
84
<PAGE>
COMPASS CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996
<TABLE>
<CAPTION>
INTERNATIONAL BOND PORTFOLIO
------------------------------------------------------------
FOR THE PERIOD 2/1/96 THROUGH FOR THE PERIOD 3/1/95
3/31/96 (UNAUDITED) THROUGH 1/31/96
---------------------------- ----------------------------
SHARES VALUE SHARES VALUE
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Prior Class
Exchanged in merger ...................... (3,283,656) $(32,423,342) -- $ --
Shares sold .............................. 3,704 42,086 315,538 3,593,223
Shares issued in reinvestment of dividends -- -- 140,790 1,586,753
Shares redeemed .......................... (21,862) (248,982) (1,495,630) (17,160,728)
------------ ------------ ------------ ------------
(3,301,814) (32,630,238) (1,039,302) (11,980,752)
Service Class
Exchanged in merger ...................... 3,283,656 32,423,342 -- --
Shares sold .............................. 26,503 299,053 -- --
Shares issued in reinvestment of dividends 4,807 54,081 -- --
Shares redeemed .......................... (45,298) (512,381) -- --
------------ ------------ ------------ ------------
3,269,668 32,264,095 -- --
------------ ------------ ------------ ------------
Net (decrease) ........................... (32,146) $ (366,143) (1,039,302) $(11,980,752)
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
TAX-FREE INCOME PORTFOLIO
------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
3/31/96 (UNAUDITED) 9/30/95
---------------------------- ----------------------------
SHARES VALUE SHARES VALUE
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class .................. 1,016,478 $ 11,080,411 24,770 $ 264,124
Service Class ........................ 423,488 4,619,958 470,326 4,886,018
Investor A Class ..................... 29,523 324,211 41,149 418,358
Shares issued in merger:
Institutional Class .................. -- -- -- --
Service Class ........................ 2,577,471 27,376,586 -- --
Investor A Class ..................... -- -- -- --
Shares issued in reinvestment of dividends:
Institutional Class .................. 104 1,120 56 585
Service Class ........................ 8,396 91,045 4,229 42,982
Investor A Class ..................... 10,540 114,044 25,911 262,939
Shares redeemed:
Institutional Class .................. (5,159) (55,901) (12,488) (126,996)
Service Class ........................ (261,448) (2,859,534) (240,413) (2,481,706)
Investor A Class ..................... (95,514) (1,041,240) (140,436) (1,431,394)
------------ ------------ ------------ ------------
Net increase ......................... 3,703,879 $ 39,650,700 173,104 $ 1,834,910
============ ============ ============ ============
</TABLE>
85
<PAGE>
COMPASS CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996
<TABLE>
<CAPTION>
NEW JERSEY TAX-FREE INCOME PORTFOLIO
------------------------------------------------------------
FOR THE PERIOD 2/1/96 FOR THE PERIOD 3/1/95
THROUGH 3/31/96 (UNAUDITED) THROUGH 1/31/96
---------------------------- ----------------------------
SHARES VALUE SHARES VALUE
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Prior Class
Exchange in merger ....................... -- $ -- (8,451,862) ($94,366,666)
Shares sold .............................. -- -- 790,370 8,844,324
Shares issued in reinvestment of dividends -- -- 122,048 1,368,581
Shares redeemed .......................... -- -- (1,317,562) (14,786,239)
------------ ------------ ------------ ------------
-- -- (8,857,006) (98,940,000)
Service Class
Exchange in merger ....................... -- -- 8,451,862 94,366,666
Shares sold .............................. 90,452 1,040,291 75,252 843,989
Shares issued in reinvestment of dividends 22,307 256,872 -- --
Shares redeemed .......................... (232,405) (2,653,748) (83,191) (962,039)
------------ ------------ ------------ ------------
Investor A Class
Shares sold .............................. 47,195 537,751 1,237 14,310
Shares issued in reinvestment of dividends 28 318 -- --
Shares redeemed .......................... (3,740) (43,046) -- --
------------ ------------ ------------ ------------
-- -- 1,237 14,310
Net (decrease) ........................... (76,163) $ (861,562) (411,846) $ (4,677,074)
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
OHIO TAX-FREE INCOME PORTFOLIO
--------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
3/31/96 (UNAUDITED) 9/30/95
-------------------------- --------------------------
SHARES VALUE SHARES VALUE
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class .................. 18,679 $ 191,952 15,107 $ 149,562
Service Class ........................ 206,765 2,130,585 163,992 1,576,763
Investor A Class ..................... 5,753 58,955 34,691 326,770
Investor B Class ..................... 771 8,000 10,355 100,009
Shares issued in reinvestment of dividends:
Institutional Class .................. 86 891 217 2,100
Service Class ........................ -- -- 1,987 18,626
Investor A Class ..................... 6,086 62,616 17,613 170,813
Investor B Class ..................... 161 1,647 236 2,346
Shares redeemed:
Institutional Class .................. (3,269) (33,244) (8,638) (82,274)
Service Class ........................ (132,906) (1,361,478) (114,927) (1,115,016)
Investor A Class ..................... (17,759) (180,890) (122,186) (1,148,358)
Investor B Class ..................... -- -- -- --
----------- ----------- ----------- -----------
Net increase (decrease) .............. 84,367 $ 879,034 (1,553) $ 1,341
=========== =========== =========== ===========
</TABLE>
86
<PAGE>
COMPASS CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996
<TABLE>
<CAPTION>
PENNSYLVANIA TAX-FREE INCOME PORTFOLIO
------------------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
3/31/96 (UNAUDITED) 9/30/95
---------------------------- ----------------------------
SHARES VALUE SHARES VALUE
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class .................. 319,453 $ 3,397,167 174,604 $ 1,773,519
Service Class ........................ 783,503 8,278,004 584,628 5,807,836
Investor A Class ..................... 137,216 1,434,392 444,461 4,391,785
Investor B Class ..................... 120,499 1,272,617 384,161 3,817,733
Shares issued in merger:
Institutional Class .................. -- -- -- --
Service Class ........................ 1,676,837 17,707,384 -- --
Investor A Class ..................... -- -- -- --
Investor B Class ..................... -- -- -- --
Shares issued in reinvestment of dividends:
Institutional Class .................. -- -- -- --
Service Class ........................ 958 10,149 6,576 62,462
Investor A Class ..................... 63,745 673,720 179,097 1,806,597
Investor B Class ..................... 4,245 44,867 5,701 57,559
Shares redeemed:
Institutional Class .................. (71,960) (760,125) (37,001) (380,000)
Service Class ........................ (573,745) (6,073,458) (425,531) (4,223,172)
Investor A Class ..................... (450,757) (4,733,362) (1,223,482) (12,048,917)
Investor B Class ..................... (30,190) (315,475) (1,698) (17,135)
------------ ------------ ------------ ------------
Net increase ......................... 1,979,804 $ 20,935,880 91,516 $ 1,048,267
============ ============ ============ ============
</TABLE>
87
<PAGE>
COMPASS CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996
(E) AT MARCH 31, 1996, NET ASSETS CONSISTED OF:
<TABLE>
<CAPTION>
SHORT INTERMEDIATE
GOVERNMENT GOVERNMENT INTERMEDIATE CORE
BOND BOND BOND BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- ------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Capital paid-in .......................... $ 236,936,464 $ 196,475,432 $ 217,942,901 $ 293,270,572
Undistributed net investment income ...... -- 138,758 62,900 --
Accumulated net realized gain (loss) on
investment transactions ............... (561,531) (3,383,892) 1,033,959 4,991,457
Net unrealized appreciation (depreciation)
on investments ........................ (1,143,240) (1,622,605) (1,142,459) (1,357,673)
------------- ------------- ------------- -------------
$ 235,231,693 $ 191,607,693 $ 217,897,301 $ 296,904,356
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
GOVERNMENT MANAGED INTERNATIONAL TAX-FREE
INCOME INCOME BOND INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- ------------- -------------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Capital paid-in .......................... $ 13,810,864 $ 663,890,718 $ 32,848,105 $ 51,736,571
Undistributed net investment income ...... -- -- 727,426 5,716
Distributions in excess of net
investment income ..................... -- (625,978) -- --
Accumulated net realized gain (loss) on
investment transactions ............... 134,252 2,170,431 2,580,532 (926,729)
Net unrealized appreciation (depreciation)
on investments ........................ (23,157) (4,920,232) 672,219 (684,445)
------------- ------------- ------------- -------------
$ 13,921,959 $ 660,514,939 $ 36,828,282 $ 51,500,003
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
PENNSYLVANIA NEW JERSEY OHIO
TAX-FREE TAX-FREE TAX-FREE
INCOME INCOME INCOME
PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
Capital paid-in .......................... $ 84,507,412 $ 93,401,364 $ 9,832,241
Undistributed net investment income ...... -- -- --
Distributions in excess of net
investment income ..................... -- (8,784) --
Accumulated net realized gain (loss) on
investment transactions ............... (1,771,788) (78,994) (313,651)
Net unrealized appreciation (depreciation)
on investments ........................ 865,785 1,194,684 99,757
------------ ------------ ------------
$ 83,601,409 $ 94,508,270 $ 9,618,347
============ ============ ============
</TABLE>
88
<PAGE>
COMPASS CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996 (UNAUDITED)
(F) CAPITAL LOSS CARRYOVERS
At September 30, 1995, capital loss carryovers were available to offset
possible future realized capital gains as follows: $75,045 in the Tax-Free
Income Portfolio which expire in the year 2003, $1,276,892 in the Intermediate
Government Bond Portfolio which expire in the year 2003, $343,667 in the Ohio
Tax-Free Income Portfolio which expire in the year 2003, $300,925 in the
Pennsylvania Tax-Free Income Portfolio which expire in the year 2003, and
$1,533,757 in the Short Government Bond Portfolio which expire in the year 2003.
(G) MERGER
The following table summarizes certain relevant information of the Fund
prior to and immediately after the business combination on January 13, 1996.
Unless indicated otherwise, the Fund Portfolio is the accounting survivor. The
new combined funds maintain all the operating history of the accounting
survivor.
<TABLE>
<CAPTION>
THE COMPASS CAPITAL GROUP OF FUNDS
AND BFM INSTITUTIONAL TRUST
- ------------------------------------------------------------
UNREALIZED
NET ASSET APPRECIATION
SHARES AT VALUE AT (DEPRECIATION)
FUND NAME 1/13/96 1/13/96 AT 1/13/96
- ---------------- ---------- ------------ ------------
<S> <C> <C> <C>
Compass Short/
Intermediate 17,823,988 $185,294,507 $2,323,602
BFMShort Duration 5,134,946 50,887,316 152,254
Compass Fixed Income 23,551,686 254,122,684 12,296,000
BFM Core Fixed Income 4,700,542 46,582,367 496,596
Compass International
Fixed Income 3,283,656 37,282,000 743,937
Compass Municipal Bond 2,613,503 28,042,883 666,296
Compass Pennsylvania
Municipal Bond 1,753,206 17,707,384 261,087
Compass New Jersey
Municipal Bond 8,451,862 96,739,285 2,320,972
</TABLE>
<TABLE>
<CAPTION>
THE COMPASS CAPITAL FUNDS
- --------------------------------------------------------------
COMBINED
SHARES NET ASSETS
NEW ISSUED IN AFTER NAV
PORTFOLIO BUSINESS BUSINESS PER
NAME COMBINATION COMBINATION SHARE
- ------------------ ----------- ------------ ------
<S> <C> <C> <C>
Short Government Bond 1 18,697,730
5,134,946 $252,550,348 $ 9.91
Core Bond 1 25,643,056
4,700,542 300,705,051 $9.91
International Bond 2,3 3,283,656 37,282,000 $11.35
Tax-Free Income 2,577,471 52,470,771 $10.88
Pennsylvania
Tax-Free Income 1,676,837 85,209,617 $10.56
New Jersey
Tax-Free Income2 8,451,862 96,739,285 $11.45
<FN>
- ------------------
1 The BFM Institutional Trust, Inc.'s portfolio is the accounting survivor in
this business combination.
2 The Compass Capital Group of Funds' portfolio is the accounting survivor in
this business combination. 3 The effective date for this business
combination was on February 13, 1996.
</FN>
</TABLE>
89
<PAGE>
COMPASS CAPITAL FUNDS
SPECIAL MEETING OF SHAREHOLDERS
At a Special Meeting of Shareholders of the Fund (the "Special Meeting")
called on January 4, 1996, and adjourned from time to time, the following
actions were taken:
(1) The following individuals were elected to serve on the Board of
Trustees by the shareholders of all portfolios of the Fund (except the New
Jersey Municipal Money Market Portfolio) voting together in the aggregate:
NUMBER OF NUMBER OF
NAME OF TRUSTEE VOTES FOR VOTES WITHHELD
- --------------- ----------------- --------------
William O. Albertini 2,645,247,684.790 81,386.435
Raymond J. Clark 2,645,250,522.952 78,548.273
Robert M. Hernandez 2,645,244,520.505 84,550.720
Anthony M. Santomero 2,645,249,457.988 79,613.237
David R. Wilmerding, Jr. 2,645,254,541.991 74,529.234
(2) The approval of the selection of Coopers & Lybrand, L.L.P. as the
Fund's independent accountant for the fiscal year ending September 30, 1996 was
ratified by the shareholders of all portfolios of the Fund (except the New
Jersey Municipal Money Market Portfolio) voting together in the aggregate as
follows:
VOTES FOR VOTES AGAINST ABSTAINED
--------- ------------- -----------
2,645,041,144.560 180,978.235 106,948.430
(3) The new investment advisory agreement with PAMG and the new
sub-advisory agreement with BlackRock were approved by the shareholders of the
Short Government Bond, Intermediate Government Bond, Intermediate Bond,
Government Income, Managed Income, Tax-Free Income, Pennsylvania Tax-Free Income
and Ohio Tax-Free Income Portfolios (voting separately on a
Portfolio-by-Portfolio basis) as follows:
<TABLE>
<CAPTION>
PORTFOLIO VOTES FOR VOTES AGAINST ABSTAINED
- --------- --------------- ------------- ------------
<S> <C> <C> <C>
Short Government Bond 1,402,897.888 0.00 0.00
Intermediate Government Bond 17,589,829.495 0.00 6,192.463
Intermediate Bond 19,044,629.875 0.00 1,933.00
Government Income 1,229,173.456 10,038.00 8,227.00
Managed Income 49,016,238.054 3,127.064 7,095.115
Tax-Free Income 592,679.518 0.00 19,632.882
Pennsylvania Tax-Free Income 5,029,804.032 12,600.400 37,641.885
Ohio Tax-Free Income 531,182.068 0.00 3,700.875
</TABLE>
90
<PAGE>
COMPASS CAPITAL FUNDS
SPECIAL MEETING OF SHAREHOLDERS (CONTINUED)
(4) A new distribution plan was approved by the Service and Institutional
shares of each Portfolio (voting separately on a class-by-class basis) as
follows:
PORTFOLIO VOTES FOR VOTES AGAINST ABSTAINED
- ------- -------------- ------------- ------------
Short Government Bond
Service Shares 650,094.00 0.00 0.00
Institutional Shares 748,297.00 0.00 0.00
Intermediate Government Bond
Service Shares 4,819,647.00 0.00 0.00
Institutional Shares 11,960,406.182 0.00 0.00
Intermediate Bond
Service Shares 4,125,017.00 0.00 0.00
Institutional Shares 14,885,945.744 0.00 0.00
Managed Income
Service Shares 11,106,346.385 0.00 0.00
Institutional Shares 37,777,397.075 0.00 3,287.741
Tax-Free Income
Service Shares 437,440.082 0.00 0.00
Institutional Shares 25,548.557 0.00 0.00
Pennsylvania Tax-Free Income
Service Shares 1,255,406.00 0.00 0.00
Institutional Shares 202,027.00 0.00 0.00
Ohio Tax-Free Income
Service Shares 482,549.00 0.00 0.00
Institutional Shares 15,107.00 0.00 0.00
(5) A revised fundamental borrowing limitation was approved by the
shareholders of the Managed Income, Intermediate Government Bond, Short
Government Bond, Intermediate Bond and Government Income Portfolios (voting
separately on a Portfolio-by-Portfolio basis) as follows:
PORTFOLIO VOTES FOR VOTES AGAINST ABSTAINED
- ------- --------------- ------------- -----------
Managed Income 49,018,865.094 501.024 7,095.115
Intermediate Government Bond 17,151,839.703 0.00 444,182.255
Short Government Bond 1,402,897.888 0.00 0.00
Intermediate Bond 19,019,216.041 35.834 27,311.00
Government Income 641,406.456 14,849.00 591,183.00
91
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF THE COMPASS CAPITAL FUNDS:
We have audited the accompanying statements of assets and liabilities, including
the schedule of investments of the Core Bond and Short Government Bond
Portfolios, formerly the BFM Institutional Trust Core Fixed Income and Short
Duration Portfolios respectively, of the Compass Capital Funds as of March 31,
1996, and the related statement of operations, the statement of changes in net
assets and financial highlights for the period from July 1, 1995 to March 31,
1996. These financial statements and financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit. The statement
of changes in net assets and the financial highlights for the year ended June
30, 1995 and for each of the prior periods presented, of the Core Bond and Short
Government Portfolios of Compass Capital Funds, formerly the BFM Institutional
Trust Core Fixed Income and Short Duration Portfolios, were audited by other
auditors, whose report dated August 7, 1995 expressed an unqualified opinion
thereon.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of investments held by the custodian and
brokers as of March 31, 1996. 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
audit provides 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 the
Core Bond and Short Government Bond Portfolios of the Compass Capital Funds, as
of March 31, 1996 and the results of their operations, the changes in their net
assets, and financial highlights for the period from July 1, 1995 to March 31,
1996 in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
May 17, 1996
<PAGE>
================================================================================
Investment Adviser
PNC Asset Management Group, Inc.
Philadelphia,Pennsylvania 19101
Sub-Adviser -- Short Government Bond Portfolio, Intermediate Government Bond
Portfolio, Intermediate Bond Portfolio, Core Bond Portfolio, Government Income
Portfolio, Managed Income Portfolio, Tax-Free Income Portfolio, Pennsylvania
Tax-Free Income Portfolio, New Jersey Tax-Free Income Portfolio and Ohio
Tax-Free Income Portfolio
BlackRock Financial Management,Inc.
New York, New York 10154
Sub-Adviser -- International Bond Portfolio
Morgan Grenfell Investment Services Limited
London, United Kingdom
Custodian
PNCBank, National Association
Philadelphia,Pennsylvania 19101
Co-Administrator and Transfer Agent
PFPCInc.
Wilmington,Delaware 19809
Co-Administrator and Distributor
Compass Distributors,Inc.
Radnor,Pennsylvania 19087
Co-Administrator
Compass Capital Group, Inc.
New York, NY 10154
Counsel
Drinker Biddle &Reath
Philadelphia, Pennsylvania 19107
Independent Accountants
Coopers &Lybrand,L.L.P.
Philadelphia,Pennsylvania 19103
- --------------------------------------------------------------------------------
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY PNC BANK, NATIONAL ASSOCIATION OR ANY OTHER BANK AND SHARES ARE NOT FEDERALLY
INSURED BY, GUARANTEED BY, OBLIGATIONS OF OR OTHERWISE SUPPORTED BY THE U.S.
GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD, OR ANY OTHER GOVERNMENTAL AGENCY. INVESTMENTS IN SHARES OF THE FUND
INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
- --------------------------------------------------------------------------------
COMI-T-01F
