COMPASS CAPITAL FUNDS
(LOGO OMITTED)
(GRAPHIC OMITTED)
ANNUAL REPORT
TO SHAREHOLDERS
SEPTEMBER 30, 1996
EQUITY
PORTFOLIOS
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NOT
FDIC (BULLET) MAY LOSE VALUE
INSURED (BULLET) NO BANK GUARANTEE
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<PAGE>
COMPASS CAPITAL FUNDS
EQUITY PORTFOLIOS
-----------------
(BULLET) Value Equity (BULLET) International Emerging Markets
(BULLET) Growth Equity (BULLET) Select Equity
(BULLET) Small Cap Value Equity (BULLET) Index Equity
(BULLET) Small Cap Growth Equity (BULLET) International Equity
(BULLET) Balanced
TABLE OF CONTENTS
-----------------
Letter from the President .................................. 1
Portfolio Summaries
Value Equity ......................................... 3
Growth Equity ........................................ 4
Small Cap Value Equity ............................... 5
Small Cap Growth Equity .............................. 6
International Equity ................................. 7
International Emerging Markets ....................... 8
Select Equity ........................................ 9
Index Equity ......................................... 10
Balanced ............................................. 11
Statements of Net Assets/Schedules of Investments .......... 13-33
International Equity Statement of
Net Assets and Liabilities ..................... 24
Portfolio Financial Statements
Statements of Operations ............................. 34-35
Statements of Changes in Net Assets .................. 36-37
Financial Highlights ................................. 38-45
Notes to Financial Statements .............................. 46
Report of Independent Accountants .......................... 58
DFA Investment Trust Company Annual Report ................. 60
<PAGE>
PRESIDENT'S LETTER COMPASS CAPITAL FUNDS
November 15, 1996
Dear Shareholder,
We are pleased to present this annual report of the Compass Capital Funds.
We hope that you will agree that the enhancements made to our shareholder
reports are helpful.The most important change is the creation of individual
portfolio summaries that should make it easier for you to find out about
investment activity in your portfolio.Equally important is the addition of a
chart that illustrates how all classes of each portfolio performed compared to
its benchmark, making it easier to evaluate performance.These changes - designed
to help you stay informed about your investment - are part of our continuing
effort to improve how we communicate with you. We hope you find them useful now
and in the future.
WHAT HAPPENED IN THE ECONOMY AND FINANCIAL MARKETS
Over the last twelve months, the financial markets have rewarded most
investors with remarkable gains.The stock market, reflecting the continued
strength of corporate earnings, was up over 26% - extending the bull market to
an unprecedented sixth year and making it one of the longest bull markets in the
post-World War II era.Similarly the bond market, reflecting moderate economic
growth and relatively low inflation produced returns of over 4%. So, whether
invested in stocks or bonds, most investors have had a great year.
OUR THOUGHTS ON THE ECONOMY
We believe that favorable long-term trends of slower growth and low
inflation should give the stock and bond markets reason to advance in the coming
year. However, with the markets having registered dramatic gains over the last
couple of years and short-term volatility increasing, it may be unrealistic to
expect the stock and bond markets to replicate that performance over the year.
We believe stock market gains of 8-10% should still be viewed as excellent.
WHAT THIS MEANS TO SHAREHOLDERS
More than ever, we would like to remind all our shareholders to stay
focused on the long term and to use prudence when assessing an investment
strategy. Additionally, it is important for investors to keep in mind that a
regular program of investing in diversified portfolios of stocks and bonds may
prove successful and actually reduce the overall level of risk to their
investment.
Finally, with our portfolio managers maintaining a pure investment style -
the strict adherence to investment policy guidelines - investors are assured
that they are getting what they expected when making their investment. As a
result, we are confident that Compass Capital Funds give investors the best
opportunity to match their expectations with actual investment results.
On the following pages, you will find a summary of the portfolio's
performance in light of the recent economic environment. We would like to thank
you for your confidence in CompassCapital Funds and we look forward to helping
you reach your long-term investment goals.
Sincerely,
(/S/ Karen H. Sabath)
Karen H. Sabath
President, Compass Capital Group, Inc.
1
<PAGE>
UNDERSTANDING YOUR FUND'S ANNUAL REPORT COMPASS CAPITAL FUNDS
On the pages immediately following, you will find a PORTFOLIO SUMMARY for
each Compass Capital equity portfolio. The portfolio summaries were designed to
provide you with insight into your manager's investment strategies and approach
and lists the manager, the size of the portfolio, performance of each share
class and the benchmark against which the portfolio's performance is measured.
In addition each summary lists the portfolio's objective and a brief description
of important investment activity that has taken place over the period.
Accompanying each portfolio summary is a PERFORMANCE GRAPH that illustrates
the growth of a $10,000 investment in each of the portfolio's share classes from
the start of operations of the portfolio (rather than the introduction date of
each share class) to that of its benchmark(s) to help you gauge the performance
of the portfolio. Compass Capital Funds offer multiple share classes and
variable pricing options. The expenses of each class differ depending on the
class distribution expenses and the range of shareholder servicing and
processing services provided to such class. In addition, purchases of Investor
A, Investor B and Investor C shares are subject to a sales charge. For more
detailed information about the different share classes, including class specific
fees and expenses, consult your financial advisor or call us for a prospectus.
As you review the information in these summaries, please keep in mind that
all performance information assumes the reinvestment of all dividends and
capital gains distributions and past performance does not predict future
results. Also, investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost.
Following the individual portfolio summaries is a STATEMENT OF NET ASSETS
for each portfolio. This statement shows you the net asset value per share of
each class of each portfolio and how it is calculated -- by subtracting the
total liabilities allocated to such class from the total assets allocated to
such class and then dividing by the number of shares of such class that are
outstanding. Additionally, you'll find a complete listing of all the securities
owned by each portfolio (categorized by industry or country), their value as of
September 30, 1996 and the percent of the portfolio each represents.
Next, you will find the FINANCIAL STATEMENTS, which include the Statements
of Operations, Changes in Net Assets and Financial Highlights for each
portfolio. Collectively these statements will provide you with a complete
financial picture of each portfolio as of September 30, 1996.
Finally, you will notice the REPORT OF INDEPENDENT ACCOUNTANTS. To maintain
consistency in reporting across the mutual fund industry the law requires that
all financial reports be reviewed by an independent accountant to ensure that
they were prepared in accordance with generally accepted accounting principles
to accurately present the financial position of our portfolios.
2
<PAGE>
COMPASS CAPITAL FUNDS
VALUE EQUITY PORTFOLIO SUMMARY
COMPARISON OF CHANGE IN VALUE
OF A $10,000 INVESTMENT IN THE VALUE
EQUITY PORTFOLIO, S&P 500 INDEX AND
RUSSELL 1000 VALUE INDEX FROM
INCEPTION AND AT EACH FISCAL YEAR END
PORTFOLIO SUB-ADVISOR:
Provident Capital Management
TOTAL NET ASSETS (9/30/96): $1.2 billion
PERFORMANCE BENCHMARK:
Russell 1000 Value Index
INVESTMENT APPROACH:
Pursues long-term capital appreciation by investing in equity securities
believed by the Manager to be undervalued. Typically, the Manager will focus
on stocks with lower than average price-to-earnings and price-to-book ratios
and market capitalizations in excess of $1 billion. A company's earnings
trend and its stock's dividend growth rate will also be factors considered in
security selection.
RECENT PORTFOLIO MANAGEMENT ACTIVITY:
(BULLET) The Manager reduced holdings in the financial sector, which includes
bank stocks, and the technology sector in response to their
strong performance.
(BULLET) Proceeds from these sales have been recycled into capital goods,
telephones and tobacco stocks, reflecting the Portfolio's more
defensive structure heading into the fourth quarter of 1996.
[GRAPHIC OMITTED]
Plot Points for Value Equity Portfolio Summary
<TABLE>
<CAPTION>
Institutional Service Investor A Investor B Investor C S&P 500 Russell 1000
Class Class Class Class Class Index Value Index
<S> <C> <C> <C> <C> <C> <C> <C>
4/20/92 10,000 10,000 9,550 10,000 10,000 10,000 10,000
9/30/92 9,881 9,881 9,438 9,881 9,881 10,212 11,000
9/30/93 12,047 12,041 11,497 12,047 12,047 11,539 12,000
9/30/94 12,500 12,465 11,891 12,451 12,451 11,964 16,000
9/30/95 15,715 15,631 14,891 15,590 15,590 15,522 18,000
9/30/96 19,017 18,863 17,947 18,329 18,703 17,639 20,000
</TABLE>
For the period ended September 30, 1996. Past performance is not
predictive of future results.
Average Annual Total Return
---------------------------
1 Year From Inception
--------- --------------
Institutional Class 21.01% 15.53%
Service Class 20.68% 15.33%
Investor A Class 15.07% 14.05%
Investor B Class 14.57% 14.59%
Investor C Class 14.57% 15.11%
The performance information above includes information relating to each class of
the Portfolio since the commencement of operations of the Portfolio, rather than
the date such class was introduced. The performance information of Service,
Investor A, Investor B and Investor C shares prior to their respective
introduction dates on 7/29/93, 5/2/92, 1/18/96 and 8/16/96 does not reflect
shareholder servicing, shareholder processing and distribution fees and certain
other expenses borne by Service, Investor A, Investor B and Investor C shares
which, if reflected, would change the performance quoted with respect to such
periods. If these expenses had been reflected in the performance information,
then the performance of Service, Investor A, Investor B and Investor C shares
for such periods would be reduced. Performance information presented for
Service, Investor A, Investor B and Investor C shares prior to their
introduction is based upon historical expenses of the predecessor class
(Institutional shares first introduced 4/20/92) which do not reflect the actual
expenses that an investor would have incurred as a holder of Service, Class A,
Class B or Class C shares of the Portfolio.
THE COMPARATIVE INDEX FROM PREVIOUS YEARS WAS CHANGED TO MORE ACCURATELY REFLECT
THE TYPE OF HOLDINGS OF THE VALUE EQUITY PORTFOLIO.
3
<PAGE>
COMPASS CAPITAL FUNDS
GROWTH EQUITY PORTFOLIO SUMMARY
COMPARISON OF CHANGE IN VALUE
OF A $10,000 INVESTMENT IN THE
GROWTH EQUITY PORTFOLIO, THE RUSSELL
1000 INDEX AND THE RUSSELL 1000
GROWTH INDEX FROM INCEPTION AND AT
EACH FISCAL YEAR END
PORTFOLIO SUB-ADVISOR:
PNC Equity Advisors Company
TOTAL NET ASSETS (9/30/96): $691.1 million
PERFORMANCE BENCHMARK:
Russell 1000 Growth Index
INVESTMENT APPROACH:
Pursues long-term capital appreciation by investing in stocks of companies
considered by the Manager to have favorable and above-average earnings growth
prospects and market capitalizations greater than $1 billion.
RECENT PORTFOLIO MANAGEMENT ACTIVITY:
(BULLET) The Manager increased its weightings in the healthcare and retail
sectors and initiated new positions in selected technology, consumer
and healthcare stocks, maintaining the Portfolio's concentration
in high quality, large cap stocks that will provide defensive
characteristics while maintaining a high growth profile.
(BULLET) The Manager reduced exposure to the financial and consumer services
sectors.
[GRAPHIC OMITTED]
Plot Points for Growth Equity Portfolio Summary
Institutional Service Investor A Investor B Russell 1000 Russell 1000
Class Class Class Class Growth Index Index
11/1/89 10000 10000 9550 10000 10000 10000
9/30/90 10040 10040 9588 10040 9397 9096
9/30/91 11993 11993 11453 11993 13030 12167
9/30/92 12581 12581 12014 12580 14448 13579
9/30/93 15370 15358 14650 15340 15310 15646
9/30/94 13656 13638 12982 13594 16204 16041
9/30/95 17736 17649 16780 17571 21420 20852
9/30/96 21051 20886 19832 20639 26004 24962
For the period ended September 30, 1996. Past Performance is not
predictive of future results.
Average Annual Total Return
------------------------------
1 Year 5 Years From Inception
------- -------- ----------------
Institutional Class 18.67% 11.91% 11.36%
Service Class 18.34% 11.73% 11.23%
Investor A Class 12.89% 10.58% 10.40%
Investor B Class 12.17% 11.02% 11.04%
The performance information above includes information relating to each class of
the Portfolio since the commencement of operations of the Portfolio, rather than
the date such class was introduced. The performance information of Service,
Investor A and Investor B shares prior to their introduction dates on 7/29/93,
3/19/92 and 1/24/96, respectively, does not reflect shareholder servicing,
shareholder processing and distribution fees and certain other expenses borne by
Service, Investor A and Investor B shares which, if reflected, would reduce the
performance quoted with respect to such periods. If these expenses had been
reflected in the performance information, then the performance of Service,
Investor A and Investor B shares for such periods would be reduced. Performance
information presented for Service, Investor A and Investor B shares prior to
their introduction is based upon historical expenses of the predecessor class
(Institutional shares) which do not reflect the actual expenses that an investor
would have incurred as a holder of Service or Investor A or Investor B shares of
the Portfolio.
THE COMPARATIVE INDEX FROM PREVIOUS YEARS WAS CHANGED TO MORE ACCURATELY REFLECT
THE TYPE OF HOLDINGS OF THE GROWTH EQUITY PORTFOLIO.
4
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COMPASS CAPITAL FUNDS
SMALL CAP VALUE EQUITY PORTFOLIO SUMMARY
COMPARISON OF CHANGE IN VALUE
OF A $10,000 INVESTMENT IN THE
SMALL CAP VALUE EQUITY PORTFOLIO
AND THE RUSSELL 2000 INDEX FROM
INCEPTION AND AT EACH FISCAL YEAR END
PORTFOLIO SUB-ADVISOR:
Provident Capital Management
TOTAL NET ASSETS (9/30/96): $322.8 million
PERFORMANCE BENCHMARK:
Russell 2000 Index
INVESTMENT APPROACH:
Pursues long-term capital appreciation by investing in small cap equity
securities considered by the Manager to be undervalued. Typically, the
Manager will focus on stocks with lower than average price-to-earnings and
price-to-book ratios and market capitalizations less than $1 billion. A
company's earnings trend and its stock's dividend growth rate will also be
factors considered in security selection.
RECENT PORTFOLIO MANAGEMENT ACTIVITY:
(BULLET) The Manager recently reduced its allocation to cyclical stocks,
which we believe may have difficulties increasing earnings due to
a lack of pricing power.
(BULLET) Exposure to the financial sector, particularly regional banking
companies, was increased. In addition to being undervalued and
fundamentally attractive, the Manager expects ongoing consolidation
in the regional banking industry to continue, which could further
improve stock valuations in the sector.
[GRAPHIC OMITTED]
Plot Points for Small Cap Value Equity Portfolio Summary
Institutional Service Investor A Investor B Russell 2000
Class Class Class Class Index
4/13/92 10,000 10,000 9,550 10,000 10,000
9/30/92 10,150 10,150 9,694 10,150 9,933
9/30/93 13,232 13,232 12,636 13,232 13,225
9/30/94 14,062 14,021 13,378 14,008 13,603
9/30/95 16,512 16,426 15,643 16,295 16,783
9/30/96 18,600 18,448 17,528 17,782 18,987
For the period ended September 30, 1996. Past performance is not
predictive of future results.
Average Annual Total Return
---------------------------
1 Year From Inception
---------- --------------
Institutional Class 12.64% 14.89%
Service Class 12.30% 14.68%
Investor A Class 7.04% 13.37%
Investor B Class 6.34% 13.74%
The performance information above includes information relating to each class of
the Portfolio since the commencement of operations of the Portfolio, rather than
the date such class was introduced. The performance information of Service,
Investor A and Investor B shares prior to their respective introduction dates on
7/29/93, 6/2/92 and 10/3/94 does not reflect shareholder servicing, shareholder
processing and distribution fees and certain other expenses borne by Service,
Investor A and Investor B shares which, if reflected, would change the
performance quoted with respect to such periods. If these expenses had been
reflected in the performance information, then the performance of Service,
Investor A and Investor B shares for such periods would be reduced. Performance
information presented for Service, Investor A and Investor B shares prior to
their introduction is based upon historical expenses of the predecessor class
(Institutional shares first introduced on 4/13/92) which do not reflect the
actual expenses that an investor would have incurred as a holder of Service,
Investor A or Investor B shares of the Portfolio.
5
<PAGE>
COMPASS CAPITAL FUNDS
SMALL CAP GROWTH EQUITY PORTFOLIO SUMMARY
COMPARISON OF CHANGE IN VALUE
OF A $10,000 INVESTMENT IN THE
SMALL CAP GROWTH EQUITY PORTFOLIO
AND THE RUSSELL 2000 GROWTH INDEX FROM
INCEPTION AND AT EACH FISCAL YEAR END
PORTFOLIO SUB-ADVISOR:
PNC Equity Advisors Company
TOTAL NET ASSETS (9/30/96): $493.3 million
PERFORMANCE BENCHMARK:
Russell 2000 Growth Index
INVESTMENT APPROACH:
Pursues long-term capital appreciation by investing in stocks of companies
considered by the Manager to have favorable and above-average earnings growth
prospects and market capitalizations less than $1 billion.
RECENT PORTFOLIO MANAGEMENT ACTIVITY:
(BULLET) The Manager increased weightings in two of the Portfolio's three
major sector weightings -- consumer cyclicals and technology --
during the third quarter.
(BULLET) Exposure to the healthcare sector -- the Portfolio's second largest
sector weighting -- remained overweighted versus the benchmark
despite being reduced over the past three months.
(BULLET) The Manager continued to improve the overall quality of individual
issues held in the Portfolio, evidenced by an increase in the
overall return on equity of the individual securities and a decline
in the average stock's long-term debt.
[GRAPHIC OMITTED]
Plot Points for Small Cap Growth Equity Portfolio Summary
Institutional Service Investor A Investor B Investor C Russell 2000
Class Class Class Class Class Growth Index
9/14/93 10000 10000 9550 10000 10000 10000
9/30/93 10470 10470 9999 10470 10470 10141
9/30/94 10168 10144 9665 10121 10121 10231
9/30/95 15099 15026 14306 14981 14981 13111
9/30/96 22025 21809 20718 20889 21535 14764
For the period ended September 30, 1996. Past Performance is not
predictive of future results.
Average Annual Total Return
----------------------------
1 Year From Inception
-------- ----------------
Institutional Class 45.87% 29.56%
Service Class 45.14% 29.16%
Investor A Class 38.24% 27.00%
Investor B Class 37.28% 27.35%
Investor C Class 42.31% 28.63%
The performance information above includes information relating to each class of
the Portfolio since the commencement of operations of the Portfolio, rather than
the date such class was introduced. The performance information of Service,
Investor A, Investor B and Investor C shares prior to their introduction dates
on 9/15/93, 9/15/93, 1/18/96 and 9/6/96, respectively, does not reflect
shareholder servicing, shareholder processing and distribution fees and certain
other expenses borne by Service, Investor A, Investor B and Investor C shares
which, if reflected, would change the performance quoted for such periods. If
these expenses had been reflected in the performance information, then the
performance of Service, Investor A, Investor B and Investor C shares for such
periods would be reduced. Performance information presented for Service,
Investor A, Investor B and Investor C shares prior to their introduction is
based upon historical expenses of the predecessor class (Institutional shares)
which do not reflect the actual expenses that an investor would have incurred as
a holder of Service, Investor A, Investor B and Investor C shares of the
Portfolio.
6
<PAGE>
COMPASS CAPITAL FUNDS
INTERNATIONAL EQUITY PORTFOLIO SUMMARY
COMPARISON OF CHANGE IN VALUE
OF A $10,000 INVESTMENT IN THE
INTERNATIONAL EQUITY PORTFOLIO
AND THE EAFE INDEX FROM INCEPTION
AND AT EACH FISCAL YEAR END
PORTFOLIO SUB-ADVISOR:
CastleInternational Asset Management Limited
TOTAL NET ASSETS (9/30/96): $572.4 million
PERFORMANCE BENCHMARK:
The Morgan Stanley Capital International
Europe, Australia and the Far East Index ("EAFE")
INVESTMENT APPROACH:
Pursues long-term capital appreciation by investing in non-dollar denominated
stocks of issuers in countries included in the EAFE Index. Within this
universe, a value style of investing is employed to select stocks which the
Manager believes are undervalued.
RECENT PORTFOLIO MANAGEMENT ACTIVITY:
(BULLET) The Manager began to reduce its Japanese position in September 1996,
taking advantage of a modest recovery in that market.
(BULLET) In Europe, the United Kingdom also rebounded during the third
quarter in response to strong economic news, prompting the Manager
to begin to pare back holdings in the U.K.
(BULLET) In Asia, exposure to Hong Kong was increased in response to a
positive economic outlook and accelerating growth in China.
[GRAPHIC OMITTED]
Plot Points for International Equity Portfolio Summary
Institutional Service Investor A Investor B EAFE
Class Class Class Class Index
4/27/92 10,000 10,000 9,500 10,000 10,000
9/30/92 9,939 9,939 9,442 9,939 10,333
9/30/93 12,693 12,693 12,057 12,693 13,098
9/30/94 14,053 14,006 13,291 13,991 14,424
9/30/95 14,399 14,317 13,558 14,184 15,301
9/30/96 15,553 15,420 14,586 14,848 16,669
For the period ended September 30, 1996. Past Performance is not
predictive of future results.
Average Annual Total Return
---------------------------
1 Year From Inception
-------- ---------------
Institutional Class 8.01% 10.48%
Service Class 7.71% 10.26%
Investor A Class 2.18% 8.89%
Investor B Class 1.97% 9.33%
The performance information above includes information relating to each class of
the Portfolio since the commencement of operations of the Portfolio, rather than
the date such class was introduced. The performance information of Service,
Investor A and Investor B shares prior to their introduction dates on 7/29/93,
6/2/92 and 10/3/94, respectively, does not reflect shareholder servicing,
shareholder processing and distribution fees and certain other expenses borne by
Service, Investor A and Investor B shares which, if reflected, would change the
performance quoted for such periods. If these expenses had been reflected in the
performance information, then the performance of Service, Investor A and
Investor B shares for such periods would be reduced. Performance information
presented for Service, Investor A and Investor B shares prior to their
introduction dates is based upon historical expenses of the predecessor class
(Institutional shares) which do not reflect the actual expenses that an investor
would have incurred as a holder of Service, Investor A or Investor B shares of
the Portfolio.
7
<PAGE>
COMPASS CAPITAL FUNDS
INTERNATIONAL EMERGING MARKETS PORTFOLIO SUMMARY
COMPARISON OF CHANGE IN VALUE
OF A $10,000 INVESTMENT IN THE
EMERGING MARKETS PORTFOLIO
AND THE MSCI EMERGING MARKETS/FREE
INDEX FROM INCEPTION AND AT EACH
FISCAL YEAR END
PORTFOLIO SUB-ADVISOR:
CastleInternational Asset Management Limited
TOTAL NET ASSETS (9/30/96): $109.9 million
PERFORMANCE BENCHMARK:
Morgan Stanley Capital International Emerging Markets Free Index
INVESTMENT APPROACH:
Pursues long-term capital appreciation by investing in non-dollar denominated
stocks of issuers in emerging markets (generally any country considered to be
emerging or developing by the World Bank, the International Finance Corporate
or the United Nations). Within this universe, a value style of investing is
employed to select stocks which the Manager believes are undervalued.
RECENT PORTFOLIO MANAGEMENT ACTIVITY:
(BULLET) The Manager maintained the Portfolio's underweighting in Asian
emerging markets, which have been hurt by the recent weakness in
prices of semi-conductors.
(BULLET) The Portfolio's largest allocation continues to be to South Africa,
whose currency has strengthened in response to an increase in that
country's trade surplus.
[GRAPHIC OMITTED]
Plot Points for International Emerging Markets Portfolio Summary
Institutional Service Investor A Investor B MSCI Emerging
Class Class Class Class Free Index
6/17/94 10,000 10,000 9,500 10,000 10,000
9/30/94 10,560 10,550 10,013 10,540 12,076
9/30/95 8,478 8,450 7,997 8,418 9,937
9/30/96 9,068 9,008 8,514 8,630 10,456
For the period ended September 30, 1996. Past Performance is not
predictive of future results.
Average Annual Total Return
---------------------------
1 Year From Inception
-------- --------------
Institutional Class 6.97% -4,19%
Service Class 6.61% -4.47%
Investor A Class 1.18% -6.80%
Investor B Class 1.46% -6.22%
The performance information above includes information relating to each class of
the Portfolio since the commencement of operations of the Portfolio, rather than
the date such class was introduced. The performance information of Investor B
shares prior to their introduction date on 7/2/96 does not reflect shareholder
servicing, shareholder processing and distribution fees and certain other
expenses borne by Investor B shares which, if reflected, would change the
performance quoted for such periods. If these expenses had been reflected in the
performance information, then the performance of Investor B shares for such
periods would be reduced. Performance information presented for Investor B
shares prior to their introduction date is based upon historical expenses of the
predecessor class (Institutional shares) which do not reflect the actual
expenses that an investor would have incurred as a holder of Investor B shares
of the Portfolio.
8
<PAGE>
COMPASS CAPITAL FUNDS
SELECT EQUITY PORTFOLIO SUMMARY
COMPARISON OF CHANGE IN VALUE
OF A $10,000 INVESTMENT IN THE
SELECT EQUITY PORTFOLIO
AND THE S&P 500 INDEX FROM INCEPTION
AND AT EACH FISCAL YEAR END
PORTFOLIO SUB-ADVISOR:
Provident Capital Management
TOTAL NET ASSETS (9/30/96): $395.7 million
PERFORMANCE BENCHMARK:
S&P 500 Index
INVESTMENT APPROACH:
Seeks long-term capital appreciation by maintaining comparable sector
weightings to the S&P 500 Index while overweighting or underweighting
specific securities within those sectors as the Manager identifies market
opportunity.
RECENT PORTFOLIO MANAGEMENT ACTIVITY:
(BULLET) The Portfolio kept pace with its performance benchmark, the S&P 500,
benefiting from the Manager's overweighted positions in Sunbeam
(up 56% in the third quarter of 1996), Compaq (31%), Intel (30%) and
Adaptec (27%).
[GRAPHIC OMITTED]
Plot Points for Select Equity Portfolio Summary
Institutional Service Investor A Investor B Investor C S&P 500
Class Class Class Class Class Index
9/13/93 10000 10000 9550 10000 10000 10000
9/30/93 9970 9970 9521 9970 9970 9962
9/30/94 10149 10124 9659 10114 10114 10329
9/30/95 12560 12497 11909 12470 12470 13400
9/30/96 15052 14924 14197 14376 14821 16132
For the period ended September 30, 1996. Past Performance is not
predictive of future results.
Average Annual Total Return
---------------------------
1 Year From Inception
----------- --------------
Institutional Class 19.84% 14.34%
Service Class 19.43% 14.04%
Investor A Class 13.86% 12.18%
Investor B Class 13.51% 12.64%
The performance information above includes information relating to each class of
the Portfolio since the commencement of operations of the Portfolio, rather than
the date such class was introduced. The performance information of Service,
Investor A, Investor B and Investor C shares prior to their introduction dates
on 9/15/93, 10/13/93, 3/27/96 and 9/27/96, respectively, does not reflect
shareholder servicing, shareholder processing and distribution fees and certain
other expenses borne by Service, Investor A, Investor B and Investor C shares
which, if reflected, would change the performance quoted for such periods. If
these expenses had been reflected in the performance information, then the
performance of Service, Investor A, Investor B and Investor C shares for such
periods would be reduced. Performance information presented for Service,
Investor A, Investor B and Investor C shares prior to their introduction dates
is based upon historical expenses of the predecessor class (Institutional
shares) which do not reflect the actual expenses that an investor would have
incurred as a holder of Service, Investor A, Investor B and Investor C shares of
the Portfolio.
9
<PAGE>
COMPASS CAPITAL FUNDS
INDEX EQUITY PORTFOLIO SUMMARY
COMPARISON OF CHANGE IN VALUE
OF A $10,000 INVESTMENT IN THE
INDEX EQUITY PORTFOLIO
AND THE S&P 500 INDEX FROM INCEPTION
AND AT EACH FISCAL YEAR END
ADVISOR TO THE INDEX MASTER PORTFOLIO:
Dimensional Fund Advisors Inc.
TOTAL NET ASSETS (9/30/96): $246.2 million
PERFORMANCE BENCHMARK:
S&P 500 Index
INVESTMENT APPROACH:
Seeks long-term capital appreciation by utilizing a passive investment style
that attempts to replicate the total return of the S&P 500 Index.
RECENT PORTFOLIO MANAGEMENT ACTIVITY:
(BULLET) The Portfolio holds substantially all of the stocks contained in the
S&P 500 Index in approximately the same proportion as they are
represented in the Index by investing in the U.S. Large Company
Series (the "Index Master Portfolio") of the DFA Investment Trust
Company.
[GRAPHIC OMITTED]
Plot Points for Index Equity Portfolio Summary
Institutional Service Investor A Investor B Investor C S&P 500
Class Class Class Class Class Index
4/20/92 10,000 10,000 9,700 10,000 10,000 10,000
9/30/92 10,162 10,162 9,856 10,162 10,162 10,212
9/30/93 11,422 11,416 11,072 11,414 11,414 11,539
9/30/94 11,773 11,738 11,365 11,717 11,717 11,964
9/30/95 15,222 15,142 14,634 15,087 15,087 15,522
9/30/96 18,239 18,088 17,461 17,586 17,945 18,687
For the period ended September 30, 1996. Past Performance is not
predictive of future results.
Average Annual Total Return
------------------------------
1 Year From Inception
-------- ----------------
Institutional Class 19.82% 14.45%
Service Class 19.45% 14.24%
Investor A Class 15.73% 13.34%
Investor B Class 13.59% 13.52%
Investor C Class 17.75% 14.04%
The performance information above includes information relating to each class of
the Portfolio since the commencement of operations of the Portfolio, rather than
the date such class was introduced. The performance information of Service,
Investor A, Investor B and Investor C shares prior to their introduction dates
on 9/13/93, 6/2/92, 2/7/96 and 8/14/96, respectively, does not reflect
shareholder servicing, shareholder processing and distribution fees and certain
other expenses borne by Service, Investor A, Investor B and Investor C shares
which, if reflected, would change the performance quoted for such periods. If
these expenses had been reflected in the performance information, then the
performance of Service, Investor A, Investor B and Investor C shares for such
periods would be reduced. Performance information presented for Service,
Investor A, Investor B and Investor C shares prior to their introduction dates
is based upon historical expenses of the predecessor class (Institutional
shares) which do not reflect the actual expenses that an investor would have
incurred as a holder of Service, Investor A, Investor B and Investor C shares of
the Portfolio.
10
<PAGE>
COMPASS CAPITAL FUNDS
BALANCED PORTFOLIO SUMMARY
COMPARISON OF CHANGE IN VALUE
OF A $10,000 INVESTMENT IN THE
BALANCED PORTFOLIO, S&P 500 AND
SALOMON BROAD INVESTMENT GRADE
("BIG") INDEX FROM INCEPTION AND AT
EACH FISCAL YEAR END
PORTFOLIO SUB-ADVISORS:
EQUITY PORTION: Provident Capital Management
FIXED INCOME PORTION: BlackRock Financial Management, Inc.
TOTAL NET ASSETS (9/30/96): $250.9 million
PERFORMANCE BENCHMARK:
EQUITY PORTION: S&P 500 Index
FIXED INCOME PORTION: Salomon BIG
(Broad Investment Grade)
INVESTMENT APPROACH:
Pursues both long-term capital appreciation and current income through
investments in a blend of equity and fixed income securities. The Portfolio
will typically maintain a 65% equity and 35% fixed income asset allocation.
RECENT PORTFOLIO MANAGEMENT ACTIVITY:
(BULLET) The third quarter performance of the equity portion of the Portfolio
was boosted by the technology sector holdings. Security selection
also aided returns in the semiconductor, paper & forest products,
department store, domestic oil, money center banks and medical
product industries.
(BULLET) Within the fixed income portion of the Portfolio, the Manager
reduced overall mortgage exposure, predominately selling newly
issued pass-through securities and adjustable-rate mortgages.
Proceeds from these sales were recycled into U.S.Treasuries and
agencybonds and asset-backed securities.
[GRAPHIC OMITTED]
Plot Points for Balanced Portfolio Summary
Institutional Service Investor A Investor B S&P500 Salomon
Class Class Class Class Index "BIG"
5/14/90 10000 10000 9550 10000 10000 10000
9/30/90 9236 9236 8821 9236 8985 10555
9/30/91 11459 11459 10942 11459 11785 12247
9/30/92 13197 13197 12603 13197 13088 13799
9/30/93 14893 14887 14216 14884 14789 15202
9/30/94 14875 14832 14145 14809 15333 14716
9/30/95 17898 17788 16953 17639 19894 16786
9/30/96 20484 20301 19323 19957 23950 17615
For the period ended September 30, 1996. Past Performance is not
predictive of future results.
Average Annual Total Return
------------------------------
1 Year 5 Years From Inception
------ -------- --------------
Institutional Class 14.43% 12.32% 11.88%
Service Class 14.11% 12.12% 11.72%
Investor A Class 8.82% 11.02% 10.86%
Investor B Class 8.02% 11.28% 11.42%
The performance information above includes information relating to each class of
the Portfolio since the commencement of operations of the Portfolio, rather than
the date such class was introduced. The performance information of Service,
Investor B and Institutional shares prior to their respective introduction dates
on 7/29/93, 10/3/94 and 5/1/92 does not reflect the shareholder servicing,
shareholder processing and distribution fees and certain other expenses borne by
Service, Investor B and Institutional shares which, if reflected, would change
the performance quoted for such periods. If these expenses had been reflected in
the performance information, then the performance of Investor C shares for such
periods would be reduced and the performance of Service and Institutional shares
for such periods would be increased. Performance information presented for
Institutional, Service and Investor B shares prior to their introduction is
based upon historical expenses of the predecessor class (Investor A shares)
which do not reflect the actual expenses that an investor would have incurred as
a holder of Service, Institutional and Investor B shares of the Portfolio.
11
<PAGE>
COMPASS CAPITAL FUNDS
EQUITY REPORT
IMPORTANT TAX INFORMATION FOR SHAREHOLDERS OF THE EQUITY PORTFOLIOS
During the fiscal year ended September 30, 1996, the following Portfolios
of Compass Capital Funds declared the following dividends from realized capital
gains:
SHORT-TERM LONG-TERM
CAPITAL GAIN, CAPITAL GAIN,
PER SHARE PER SHARE
------------ -------------
Value Equity Portfolio ................ $.0725 $ .90
Growth Equity Portfolio ............... .06 .3150
Small Cap Value Equity Portfolio ...... -- .8730
International Equity Portfolio ........ .0850 .5875
International Emerging Markets
Portfolio ............................ .01 --
Select Equity Portfolio ............... .2450 .1450
Index Equity Portfolio ................ .2350 1.4650
Balanced Portfolio .................... .13 --
FOR CORPORATE SHAREHOLDERS ONLY:
The percentage of dividends from net investment income declared in the
fiscal year ended September 30, 1996 which qualify for the corporate dividends
received deduction is as follows:
Value Equity Portfolio ............................. 100.0%
Growth Equity Portfolio ............................ 100.0
Small Cap Value Equity Portfolio ................... 100.0
Small Cap Growth Equity Portfolio .................. 70.6
International Equity Portfolio ..................... 0.0
International Emerging Markets Portfolio ........... 0.0
Select Equity Portfolio ............................ 100.0
Index Equity Portfolio ............................. 58.6
Balanced Portfolio ................................. 52.7
IMPORTANT TAX INFORMATION FOR SHAREHOLDERS OF THE
INTERNATIONAL EQUITY PORTFOLIO.
During the fiscal year ended September 30, 1996, the International Equity
Portfolio distributed $7,140,475 of foreign source income on which the Portfolio
paid foreign taxes of $1,237,166. This information is being furnished to you
pursuant to notice requirements of Sections 853 (a) and 855 (d) of the Internal
Revenue Code, as amended, and the Treasury Regulations thereunder.
12
<PAGE>
AS OF SEPTEMBER 30, 1996
STATEMENT OF NET ASSETS COMPASS CAPITAL FUNDS
VALUE EQUITY PORTFOLIO
NUMBER
OF SHARES VALUE
--------- ------
COMMON STOCKS -- 95.7%
AEROSPACE -- 3.0%
AlliedSignal, Inc. 324,700 $ 21,389,612
Rockwell International Corp. 112,700 6,353,463
United Technologies Corp. 70,350 8,450,794
------------
36,193,869
------------
AIR TRANSPORTATION -- 0.7%
Northwest Airlines Corp.-
Class A** 240,600 8,511,225
------------
BANKS -- 10.8%
Bank of Boston Corp. 328,240 18,996,890
#Bank of New York Co., Inc. 662,200 19,452,125
BankAmerica Corp. 111,500 9,156,937
#CoreStates Financial Corp. 730,433 31,591,227
#Crestar Financial Corp. 186,500 11,003,500
First Chicago NBD Co. 401,668 18,175,477
#Fleet Financial Group, Inc. 415,500 18,489,750
NationsBank, Inc. 50,900 4,421,937
------------
131,287,843
------------
CHEMICALS -- 6.8%
#Dow Chemical Co. 201,300 16,154,325
E.I. Du Pont de Nemours & Co. 222,525 19,637,831
#IMC Fertilizer Group, Inc. 268,600 10,508,975
#Lubrizol Corp. 652,300 18,753,625
PPG Industries, Inc. 316,100 17,187,938
------------
82,242,694
------------
COMPUTER & OFFICE EQUIPMENT -- 0.8%
Xerox Corp. 180,600 9,684,675
------------
COMPUTER SOFTWARE & SERVICES -- 0.4%
Stratus Computer, Inc. 228,300 4,508,925
------------
CONGLOMERATES -- 3.1%
#Elf Aquitaine ADR 294,400 11,592,000
#Royal Dutch Petroleum Co. 119,500 18,656,938
Ultramar PLC ADR 257,200 7,780,300
------------
38,029,238
------------
CONSTRUCTION -- 0.6%
Armstrong World Industries, Inc. 107,600 6,711,550
------------
ELECTRONICS -- 5.2%
Applied Materials, Inc.** 378,100 10,445,012
Avnet, Inc. 196,000 9,506,000
General Electric Co. 202,800 18,454,800
Intel Corp. 62,900 6,003,019
#Texas Instruments, Inc. 213,300 11,758,163
Varian Associates, Inc. 147,300 7,070,400
----------
63,237,394
----------
ENERGY & UTILITIES -- 8.7%
Entergy Corp. 403,900 10,905,300
FPL Group, Inc. 409,700 17,719,525
#NIPSCO 292,400 10,453,300
Peco Energy Co. 687,200 16,321,000
#Public Service Enterprise
Group, Inc. 397,800 10,641,150
Southern Co. 1,046,700 23,681,588
#Unicom Corp. 656,230 16,487,779
-----------
106,209,642
-----------
- -------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
---------- ---------
FINANCE -- 3.2%
AMBAC, Inc. 191,700 $10,687,275
Dean Witter Discover & Co. 290,536 15,979,480
H & R Block, Inc. 414,800 12,340,300
------------
39,007,055
------------
FOOD & AGRICULTURE -- 0.9%
Archer Daniels Midland Co. 558,390 10,749,007
------------
INSURANCE -- 5.9%
Aetna, Inc. 98,900 6,960,087
Allstate Corp. 255,224 12,569,782
Aon Corp. 104,000 5,642,000
Chubb Corp. 298,800 13,744,800
MBIA, Inc. 100,800 8,643,600
Reliastar Financial Corp. 182,300 8,659,250
TIG Holdings, Inc. 194,100 5,823,000
USF&G Corp. 521,100 9,640,350
------------
71,682,869
------------
MACHINERY & HEAVY EQUIPMENT -- 1.7%
Deere & Co. 343,000 14,406,000
Dover Corp. 138,900 6,632,475
------------
21,038,475
------------
MEDICAL & MEDICAL SERVICES -- 0.6%
#Foundation Health Co.** 229,000 7,757,375
------------
MEDICAL INSTRUMENTS & SUPPLIES -- 0.6%
Beckman Instruments 199,800 7,767,225
------------
METAL & MINING -- 2.9%
Aluminum Co. of America 165,800 9,782,200
#Phelps Dodge Corp. 307,300 19,705,613
Reynolds Metals Co. 114,600 5,858,925
------------
35,346,738
------------
MOTOR VEHICLES -- 5.7%
Chrysler Corp. 420,100 12,025,362
Dana Corp. 370,400 11,204,600
Ford Motor Co. 493,200 15,412,500
General Motors Corp. 319,704 15,345,792
Goodyear Tire & Rubber Co. 342,400 15,793,200
------------
69,781,454
------------
OIL & GAS -- 6.3%
#Atlantic Richfield Co. 96,600 12,316,500
#Chevron Corp. 189,200 11,848,650
#Diamond Shamrock, Inc. 168,200 5,235,225
Exxon Corp. 216,400 18,015,300
Mobil Corp. 108,200 12,524,150
Phillips Petroleum Co. 106,100 4,535,775
Tenneco, Inc. 232,200 11,639,025
------------
76,114,625
------------
PAPER & FOREST PRODUCTS -- 2.6%
Champion International Corp. 263,500 12,088,063
#International Paper Co. 466,500 19,826,250
------------
31,914,313
------------
PHARMACEUTICALS -- 4.0%
American Home Products Corp. 112,500 7,171,875
#Bristol-Myers Squibb Co. 192,300 18,532,912
Eli Lilly & Co. 172,900 11,152,050
#Merck & Co., Inc. 169,750 11,946,156
------------
48,802,993
------------
See accompanying notes to financial statements.
13
<PAGE>
AS OF SEPTEMBER 30, 1996
STATEMENT OF NET ASSETS
VALUE EQUITY PORTFOLIO (CONTINUED)
NUMBER
OF SHARES VALUE
---------- ----------
COMMON STOCKS (CONTINUED)
RETAIL MERCHANDISING -- 4.4%
Fingerhut Cos., Inc. 620,700 $ 8,224,275
J.C. Penney Co., Inc. 225,900 12,226,837
#K Mart Corp.** 1,094,300 11,216,575
Kroger Co. 313,100 14,011,225
Sears, Roebuck & Co. 178,800 8,001,300
--------------
53,680,212
--------------
TELECOMMUNICATIONS -- 9.0%
AT&T Corp. 380,300 19,870,675
#Bell Atlantic Corp. 255,700 15,310,037
GTE Corp. 454,600 17,502,100
NYNEX Corp. 336,000 14,616,000
Pacific Telesis Group 202,900 6,822,513
Sprint Corp. 446,700 17,365,463
US West Communications
Group 617,200 18,361,700
--------------
109,848,488
--------------
TEXTILES -- 0.6%
Fruit of the Loom, Inc.** 235,500 7,300,500
--------------
TOBACCO -- 4.2%
Philip Morris Cos., Inc. 352,000 31,592,000
UST, Inc. 656,100 19,436,963
--------------
51,028,963
--------------
TRANSPORTATION -- 3.0%
Conrail Corp. 162,800 11,782,650
#CSX Corp. 239,000 12,069,500
Norfolk Southern Corp. 142,700 13,039,213
--------------
36,891,363
--------------
TOTAL COMMON STOCKS
(Cost $1,021,862,769) 1,165,328,710
--------------
PAR
MATURITY (000)
-------- ---------
SHORT TERM INVESTMENTS -- 4.7%
Federal Home Loan Mortgage Corp.
Discount Notes
5.70% 10/01/96 $56,500 56,500,000
Smith Barney Money Market Fund 1,033 1,033,091
--------------
TOTAL SHORT TERM INVESTMENTS
(Cost $57,533,091) 57,533,091
--------------
- -------------------------------------------------------------------------------
VALUE
--------
TOTAL INVESTMENTS IN
SECURITIES
(Cost $1,079,395,860*) 100.4% $1,222,861,801
LIABILITIES IN EXCESS OF
OTHER ASSETS (0.4%) (5,007,851)
--------- --------------
NET ASSETS (Applicable to 47,619,429
Institutional shares, 29,797,457 Service
shares, 1,706,737 Investor A shares,
205,791 Investor B shares and 13,396
Investor C shares
outstanding) 100.0% $1,217,853,950
======== ==============
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
INSTITUTIONAL SHARE
($731,022,572 (DIVIDE) 47,619,429) $15.35
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
SERVICE SHARE
($457,283,472 (DIVIDE) 29,797,457) $15.35
======
NET ASSET VALUE AND
REDEMPTION PRICE PER
INVESTOR A SHARE
($26,190,321 (DIVIDE) 1,706,737) $15.35
======
MAXIMUM OFFERING PRICE
PER INVESTOR A SHARE
($15.35 (DIVIDE) .955) $16.07
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 4.5%)
PER INVESTOR B SHARE
($3,152,382 (DIVIDE) 205,791) $15.32
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 1.0%)
PER INVESTOR C SHARE
($205,203 (DIVIDE) 13,396) $15.32
======
- -----------------
* Also cost for Federal income tax purposes. The gross unrealized
appreciation (depreciation) on a tax basis is as follows:
Gross unrealized appreciation $172,688,675
Gross unrealized depreciation (29,222,734)
------------
$143,465,941
============
** Non-income producing security.
# Total or partial securities on loan.
See accompanying notes to financial statements.
14
<PAGE>
AS OF SEPTEMBER 30, 1996
COMPASS CAPITAL FUNDS
GROWTH EQUITY PORTFOLIO
NUMBER
OF SHARES VALUE
---------- -------------
COMMON STOCKS -- 96.5%
ADVERTISING -- 1.6%
Interpublic Group of Cos., Inc. 57,600 $ 2,721,600
Omnicom Group, Inc. 172,100 8,045,675
-----------
10,767,275
-----------
AEROSPACE -- 1.2%
Allied-Signal, Inc. 84,500 5,566,438
United Technologies Corp. 25,300 3,039,163
-----------
8,605,601
-----------
AIR TRANSPORTATION -- 0.8%
#Atlas Air, Inc.** 78,400 3,351,600
Southwest Airlines 104,600 2,392,725
-----------
5,744,325
-----------
BANKS -- 4.1%
BankAmerica Corp. 83,100 6,824,588
Chase Manhattan Corp. 106,100 8,501,263
#First Bank System, Inc. 90,400 6,045,500
Wells Fargo & Co. 25,900 6,734,000
-----------
28,105,351
-----------
BEVERAGES -- 2.7%
#Anheuser Busch Cos., Inc. 97,600 3,672,200
Panamerican Beverages, Inc.
Class A 71,300 2,932,213
#Pepsico, Inc. 421,300 11,901,725
-----------
18,506,138
-----------
BROADCASTING -- 0.6%
Clear Channel Communications, Inc.** 46,000 4,071,000
-----------
CHEMICALS -- 2.8%
#Olin Corp. 49,400 4,149,600
#PPG Industries, Inc. 99,500 5,410,313
W.R. Grace & Co. 135,900 10,192,500
-----------
19,752,413
-----------
COMPUTER & OFFICE EQUIPMENT -- 5.2%
Computer Associates
International, Inc. 53,300 3,184,675
Harris Corp. 90,400 5,887,300
#HBO and Co. 187,900 12,542,325
#Three Com Corp.** 158,900 9,543,931
Xerox Corp. 88,300 4,735,088
----------
35,893,319
----------
COMPUTER SOFTWARE & SERVICES -- 7.9%
Cisco Systems, Inc.** 191,800 11,903,588
Computer Sciences Corp.** 10,600 814,875
Electronic Data Systems Corp. 148,300 9,101,913
#First Data Corp. 146,000 11,917,250
#Microsoft Corp.** 62,900 8,294,938
#Oracle Corp.** 121,650 5,177,728
#Parametric Technology Corp.** 149,800 7,396,375
----------
54,606,667
----------
CONSTRUCTION -- 0.3%
Nucor Corp. 45,000 2,283,750
----------
CONTAINERS -- 0.5%
Sealed Air Corp.** 86,200 3,210,950
----------
- -------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
---------- -----------
ELECTRONICS -- 7.0%
Adaptec Inc.** 61,500 $ 3,690,000
Atmel Corp.** 91,600 2,828,150
#General Electric Co. 170,600 15,524,600
Hewlett Packard Co. 134,600 6,561,750
#Intel Corp. 140,500 13,408,969
#Nokia Corporation ADR 61,300 2,712,525
Varian Associates, Inc. 75,400 3,619,200
-----------
48,345,194
-----------
ENTERTAINMENT & LEISURE -- 4.4%
Carnival Corp. , Class A 95,700 2,966,700
#Circus Circus Enterprises, Inc.** 177,600 6,282,600
#HFS, Inc.** 86,200 5,764,625
La Quinta Inns Inc. 235,600 4,594,200
Marriott International, Inc. 72,500 3,996,563
#Walt Disney Co. 104,600 6,629,025
-----------
30,233,713
-----------
FINANCE -- 2.6%
Advanta Corp. Class B 54,000 2,308,500
Federal National Mortgage
Association 110,800 3,864,150
First USA, Inc. 57,900 3,206,213
Household International, Inc. 33,400 2,747,150
Reuters Holdings PLC ADR 86,000 5,955,500
-----------
18,081,513
-----------
FOOD & AGRICULTURE -- 2.3%
Campbell Soup Co. 47,900 3,736,200
CPC International, Inc. 63,900 4,784,513
Kellogg Co. 85,300 5,875,037
Sysco Corp. 55,300 1,859,462
-----------
16,255,212
-----------
INSURANCE -- 3.6%
Ace, Ltd. 151,600 8,015,850
American International
Group, Inc. 46,700 4,705,025
American Re Corp. 124,300 7,893,050
General Re Corp. 31,200 4,422,600
-----------
25,036,525
-----------
MACHINERY & HEAVY EQUIPMENT -- 3.1%
Black & Decker Corp. 164,800 6,839,200
Illinois Tool Works, Inc. 139,200 10,039,800
Millipore Corp. 114,300 4,514,850
-----------
21,393,850
-----------
MEDICAL & MEDICAL SERVICES -- 5.7%
Centocor, Inc.** 98,800 3,507,400
#Healthsouth Corp.** 261,700 10,042,737
Medpartners Inc.** 449,671 10,230,015
Medtronic, Inc. 107,600 6,899,850
#Pacificare Health Systems Inc.
Class B** 59,400 5,138,100
#United Healthcare Corp. 83,600 3,479,850
-----------
39,297,952
-----------
MEDICAL INSTRUMENTS & SUPPLIES -- 1.0%
Boston Scientific Corp.** 120,800 6,946,000
-----------
MOTOR VEHICLES -- 1.4%
Harley-Davidson, Inc. 89,000 3,827,000
Lear Corp.** 186,600 6,157,800
-----------
9,984,800
-----------
See accompanying notes to financial statements.
15
<PAGE>
AS OF SEPTEMBER 30, 1996
STATEMENT OF NET ASSETS
GROWTH EQUITY PORTFOLIO (CONTINUED)
NUMBER
OF SHARES VALUE
---------- ------------
COMMON STOCKS (CONTINUED)
PAPER & FOREST PRODUCTS -- 0.9%
#Kimberly-Clark Corp. 69,800 $ 6,151,125
------------
PHARMACEUTICALS -- 12.8%
American Home Products Corp. 218,300 13,916,625
#Amgen, Inc.** 112,300 7,088,937
Genetics Institute, Inc.** 47,000 3,266,500
Johnson & Johnson 280,100 14,355,125
Pfizer, Inc. 162,800 12,881,550
Pharmacia & Upjohn, Inc. 229,800 9,479,250
Rhone-Poulenc Rorer, Inc. 160,600 11,824,175
Smithkline Beecham PLC 153,700 9,356,487
Warner-Lambert Co. 93,000 6,138,000
-------------
88,306,649
-------------
PUBLISHING -- 1.4%
#News Corp. Ltd. ADR 185,000 3,861,875
#Scholastic Corporation** 81,900 5,937,750
-------------
9,799,625
-------------
RESTAURANTS -- 1.4%
#Boston Chicken** 171,400 6,041,850
#McDonald's Corp. 71,600 3,392,050
-------------
9,433,900
-------------
RETAIL MERCHANDISING -- 9.5%
Barnes & Noble, Inc.** 182,700 6,280,312
Gap Inc. 163,900 4,732,612
#Kroger Co.** 183,300 8,202,675
Mattel, Inc. 237,000 6,132,375
Officemax, Inc.** 10,000 140,000
#PetSmart, Inc.** 309,200 8,000,550
#Saks Holdings, Inc.** 210,000 7,350,000
#Sears, Roebuck & Co. 148,700 6,654,325
#Service Corp. International 283,200 8,566,800
#Staples, Inc.** 210,000 4,659,375
Wal-Mart Stores, Inc. 180,800 4,768,600
-------------
65,487,624
-------------
SOAPS & COSMETICS -- 3.8%
Avon Products, Inc. 60,000 2,977,500
Colgate-Palmolive Co. 71,900 6,246,312
Estee Lauder Companies 102,100 4,581,737
Procter & Gamble Co. 127,400 12,421,500
-------------
26,227,049
-------------
TECHNOLOGY -- 1.0%
Biogen, Inc.** 87,800 6,672,800
-------------
TELECOMMUNICATIONS -- 3.8%
Ericsson (L.M.) Telephone ADR 222,700 5,651,012
#Lucent Technologies, Inc. 110,300 5,060,012
MFS Communications Co., Inc.** 139,200 6,072,600
#U.S. Robotics Corp. 112,700 7,283,237
World Communications, Inc.** 93,600 2,000,700
-------------
26,067,561
-------------
TEXTILES -- 0.5%
Nike, Inc. 28,200 3,426,300
-------------
TOBACCO -- 2.6%
Philip Morris Cos., Inc. 202,600 18,183,350
-------------
TOTAL COMMON STOCKS
(Cost $513,927,414) 666,877,531
-------------
- -------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
---------- ---------- ------------
SHORT TERM INVESTMENTS -- 4.1%
Federal Home Loan
Mortgage Corp.
5.70% 10/01/96 $26,865 $ 26,865,000
U.S. Treasury Bills
5.16% 12/19/96 1,216*** 1,202,827
------------
TOTAL SHORT TERM INVESTMENTS
(Cost $28,067,215) 28,067,827
------------
TOTAL INVESTMENTS IN
SECURITIES
(Cost $541,994,629*) 100.6% 694,945,358
LIABILITIES IN EXCESS OF
OTHER ASSETS (0.6%) (3,808,613)
-------- -------------
NET ASSETS (Applicable to 32,161,547
Institutional shares, 12,776,479
Service shares, 1,109,844 Investor
A shares and 159,031 Investor B
shares outstanding) 100.0% $691,136,745
======== =============
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER INSTITUTIONAL SHARE
($481,171,216 (DIVIDE) 32,161,547) $14.96
=======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER SERVICE SHARE
($191,023,000 (DIVIDE) 12,776,479) $14.95
=======
NET ASSET VALUE AND
REDEMPTION PRICE PER
INVESTOR A SHARE
($16,579,152 (DIVIDE) 1,109,844) $14.94
=======
MAXIMUM OFFERING PRICE
PER INVESTOR A SHARE
($14.94 (DIVIDE) .955) $15.64
=======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 4.5%)
PER INVESTOR B SHARE
($2,363,377 (DIVIDE) 159,031) $14.86
=======
- -----------------
* Also cost for Federal income tax purposes. The gross unrealized
appreciation (depreciation) on a tax basis is as follows:
Gross unrealized appreciation $ 154,969,890
Gross unrealized depreciation (2,019,161)
---------------
$152,950,729
===============
** Non-income producing security.
*** Principal amount of securities pledged as initial margin
requirement of $937,500 on 75 Standard & Poor's 500 Stock
Index futures contracts expiring December 1996. The
value of such contracts on September 30, 1996 was
$25,927,500, thereby resulting in an unrealized gain of $88,125.
# Total or partial securities on loan.
See accompanying notes to financial statements.
16
<PAGE>
AS OF SEPTEMBER 30, 1996
COMPASS CAPITAL FUNDS
SMALL CAP VALUE EQUITY PORTFOLIO
NUMBER
OF SHARES VALUE
---------- ------------
COMMON STOCKS -- 95.7%
AIR TRANSPORTATION -- 0.8%
#Alaska Air Group, Inc.** 119,500 $ 2,554,313
-----------
BANKS -- 7.9%
Albank Financial Corp. 155,952 4,483,620
#BankAtlantic Bancorp, Inc.
Class A 56,146 736,916
BankAtlantic Bancorp, Inc.
Class B 241,624 3,261,924
Banknorth Group, Inc. 129,000 4,821,375
Commerce Bancorp, Inc. 132,981 3,507,374
Commonwealth Bancorp, Inc. 24,600 292,125
Security Capital Corp. 8,200 530,950
Standard Federal Bancorp. 90,800 4,154,100
Susquehanna Bancshares, Inc. 128,300 3,816,925
-----------
25,605,309
-----------
CHEMICALS -- 1.5%
Bush Boake Allen, Inc.** 199,800 4,770,225
-----------
COMPUTER & OFFICE EQUIPMENT -- 0.8%
Bell Micro Products, Inc.** 333,300 2,583,075
-----------
COMPUTER SOFTWARE & SERVICES -- 2.0%
Computer Horizons Corp. 120,600 3,437,100
Computer Task Group, Inc. 96,700 3,009,788
-----------
6,446,888
-----------
CONSTRUCTION -- 4.1%
Beazer Homes USA, Inc.** 226,300 3,253,063
BMC West Corp.** 195,600 2,713,950
Charter Power Systems, Inc. 136,600 3,517,450
Pacific Greystone Corp. 346,400 3,593,900
-----------
13,078,363
-----------
CONTAINERS -- 1.2%
BWay Corp.** 203,500 3,713,875
-----------
DURABLE GOODS -- 1.1%
Wellman, Inc. 206,700 3,617,250
-----------
ELECTRONICS -- 9.3%
Belden, Inc. 106,640 3,092,560
Berg Electronics Corp.** 144,000 3,924,000
Cable Design Technologies 66,900 2,676,000
Electro Scientific Industries, Inc.* 176,000 3,256,000
Franklin Electronic
Publishers, Inc.** 184,800 2,356,200
Holophane Corp. 210,900 3,954,375
#Lattice Semiconductor Corp.** 140,700 4,062,713
Mark IV Industries, Inc. 145,200 3,158,100
Marshall Industries** 115,500 3,479,438
-----------
29,959,386
-----------
ENERGY & UTILITIES -- 4.6%
Central Louisiana Electric Co. 60,800 1,588,400
Eastern Enterprises 46,100 1,740,275
Eastern Utilities Associates 63,400 1,069,875
IES Industries, Inc. 50,690 1,539,709
Piedmont Natural Gas, Inc. 76,500 1,845,563
Public Service Co. 95,900 1,870,050
Sierra Pacific Resources 71,540 1,851,098
TNP Enterprises,Inc. 62,100 1,536,975
UGI Corp. Holding Co. 77,810 1,828,535
-----------
14,870,480
-----------
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
---------- -----------
FINANCE -- 3.4%
Astoria Financial Corp. 93,700 $ 2,717,300
Peoples Heritage Financial
Group 124,200 2,903,175
PFF Bancorp, Inc. 267,100 3,305,363
#Webster Financial Corp. 55,900 1,970,475
-----------
10,896,313
-----------
FOOD & AGRICULTURE -- 1.8%
Daka International, Inc.** 229,800 2,068,200
Suiza Foods Corp.** 214,400 3,698,400
-----------
5,766,600
-----------
FURNITURE -- 1.1%
Ethan Allen Interiors , Inc. 114,100 3,551,363
-----------
GLASS -- 1.4%
Libbey, Inc. 174,400 4,599,800
-----------
INSURANCE -- 8.5%
American Travellers Corp.** 78,250 2,592,031
Baldwin & Lyons, Inc. Class B 169,200 3,109,050
Commerce Group, Inc. 150,820 3,318,040
Enhance Financial Services
Group, Inc. 140,300 4,629,900
Harleysville Group, Inc. 120,600 3,135,600
Physician Corp. of America** 167,800 2,034,575
Pxre Corp. 128,200 2,932,575
State Auto Financial Corp. 175,950 2,595,263
United Wisconsin Services, Inc. 67,930 1,986,952
W.R. Berkley Corp. 26,500 1,212,375
-----------
27,546,361
-----------
JEWELRY -- 1.1%
Movado Group, Inc. 142,900 3,608,225
-----------
MACHINERY & HEAVY EQUIPMENT -- 10.6%
Alamo Group, Inc.** 148,140 2,166,547
BW/IP Holdings Inc.** 208,300 3,228,650
CMI Corp. Class A** 376,700 1,459,712
Harmon Industries, Inc. 178,300 2,986,525
Hirsch International Corp. 194,750 3,602,875
K2, Inc. 178,300 4,658,087
Lydall, Inc.** 211,150 5,146,781
Pentair, Inc. 106,500 2,822,250
Plantronics, Inc.** 109,860 4,133,482
US Can Corp.** 244,200 3,937,725
-----------
34,142,634
-----------
MEDICAL & MEDICAL SERVICES -- 3.6%
Mariner Health Group, Inc.** 211,950 3,258,731
North American Biologicals 429,400 5,099,125
Sierra Health Services, Inc.** 99,000 3,403,125
-----------
11,760,981
------------
MEDICAL INSTRUMENTS & SUPPLIES -- 1.0%
Beckman Instruments, Inc. 81,800 3,179,975
-----------
METAL & MINING -- 4.6%
Gibraltar Steel Corp.** 164,200 3,694,500
Mueller Industries, Inc.** 90,900 3,692,812
Rouge Steel Co. 148,700 3,234,225
Wolverine Tube, Inc. 97,100 4,175,300
-----------
14,796,837
-----------
See accompanying notes to financial statements.
17
<PAGE>
AS OF SEPTEMBER 30, 1996
STATEMENT OF NET ASSETS
SMALL CAP VALUE EQUITY PORTFOLIO (CONTINUED)
NUMBER
OF SHARES VALUE
---------- -----------
COMMON STOCKS (CONTINUED)
MOTOR VEHICLES -- 1.4%
A.O. Smith Corp. Class B 139,500 $ 3,470,063
TBC Corp. 179,400 1,143,675
-----------
4,613,738
-----------
OIL & GAS -- 4.5%
Belco Oil & Gas Corp.** 208,100 5,566,675
Forasol-Foramer NV** 317,700 3,852,112
Oneok, Inc. 50,600 1,391,500
Seacor Holdings, Inc.** 74,700 3,791,025
-----------
14,601,312
-----------
PAPER & FOREST PRODUCTS -- 2.8%
Caraustar Industries, Inc. 166,500 4,942,969
Chesapeake Corp. 153,900 4,232,250
-----------
9,175,219
-----------
REAL ESTATE -- 5.2%
Avalon Properties, Inc. 102,600 2,385,450
Beacon Properties Corp. 57,700 1,673,300
Camden Property Trust 92,900 2,380,562
Felcor Suite Hotels, Inc. 47,000 1,515,750
Highwoods Properties, Inc. 47,500 1,442,813
Patriot American
Hospitality, Inc. 52,500 1,765,313
Reckson Associates
Realty Corp. 46,200 1,715,175
Shurgard Storage Centers, Inc. 99,400 2,571,975
Storage Trust Realty 60,200 1,309,350
-----------
16,759,688
-----------
RETAIL MERCHANDISING -- 6.8%
Bombay Co.** 529,900 2,980,687
Carson Pirie Scott & Co.** 182,700 4,864,387
Fingerhut Co. 230,900 3,059,425
Freds, Inc., Class A 225,200 1,998,650
Roberds, Inc.** 124,000 1,054,000
Stanhome, Inc. 44,200 1,276,275
Value City Department
Stores, Inc. 150,800 1,357,200
Vons Co., Inc. 30,900 1,324,836
Zale Corp. 184,600 4,038,125
-----------
21,953,585
-----------
SANITARY SERVICES -- 0.3%
Dames & Moore, Inc. 70,000 936,250
-----------
TEXTILES -- 2.2%
Cone Mills Corp. ** 274,400 2,160,900
Crown Crafts, Inc. 160,940 1,528,930
Phillips-Van Heusen Corp. 302,900 3,369,762
-----------
7,059,592
-----------
TOBACCO -- 1.1%
Universal Corp. 136,100 3,470,550
-----------
TRANSPORTATION -- 1.0%
Midwest Express Holdings, Inc.** 111,680 3,336,440
-----------
TOTAL COMMON STOCKS
(Cost $271,543,207) 308,954,627
-----------
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
---------- ---------- ------------
SHORT TERM INVESTMENTS -- 6.0%
Federal Home Loan Mortgage Corp.
Discount Notes
5.70% 10/01/96 19,000 $ 19,000,000
Smith Barney Money Market Fund 242 242,474
------------
TOTAL SHORT TERM INVESTMENTS
(Cost $19,242,474) 19,242,474
------------
TOTAL INVESTMENTS IN
SECURITIES
(Cost $290,785,681*) 101.7% 328,197,101
LIABILITIES IN EXCESS OF
OTHER ASSETS (1.7%) (5,426,127)
-------- ------------
NET ASSETS (Applicable to 13,443,808
Institutional shares, 5,067,028
Service shares, 1,540,306 Investor A
shares and 149,187 Investor B shares
outstanding) 100.0% $322,770,974
======= ============
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER INSTITUTIONAL SHARE
($214,827,731 (DIVIDE) 13,443,808) $15.98
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER SERVICE SHARE
($80,980,514 (DIVIDE) 5,067,028) $15.98
======
NET ASSET VALUE AND
REDEMPTION PRICE PER
INVESTOR A SHARE
($24,605,308 (DIVIDE) 1,540,306) $15.97
======
MAXIMUM OFFERING PRICE
PER INVESTOR A SHARE
($15.97 (DIVIDE) .955) $16.72
=======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 4.5%)
PER INVESTOR B SHARE
($2,357,421 (DIVIDE) 149,187) $15.80
======
- -----------------
* Also cost for Federal income tax purposes. The gross unrealized
appreciation (depreciation) on a tax basis is as follows:
Gross unrealized appreciation $ 57,334,356
Gross unrealized depreciation (19,922,936)
------------
$ 37,411,420
============
** Non-income producing security.
# Total or partial securities on loan.
See accompanying notes to financial statements.
18
<PAGE>
AS OF SEPTEMBER 30, 1996
COMPASS CAPITAL FUNDS
SMALL CAP GROWTH EQUITY PORTFOLIO
NUMBER
OF SHARES VALUE
---------- -----------
COMMON STOCKS -- 90.2%
ADVERTISING -- 0.2%
The Leap Group, Inc.** 75,700 $ 766,463
-----------
BEVERAGES -- 0.7%
#Boston Beer Co., Inc.** 163,200 3,162,000
-----------
BUSINESS SERVICES -- 13.7%
Abacus Direct Corp.** 21,500 451,500
#Access Health Market, Inc.** 94,500 5,287,500
#Accustaff, Inc.** 259,200 6,706,800
#APAC Teleservices, Inc.** 201,600 10,332,000
Apollo Group, Inc.** 135,625 3,627,969
Envoy Corp.** 74,200 2,875,250
HCIA, Inc.** 45,000 2,700,000
IMC Mortgage Co.** 87,200 2,790,400
May & Speh, Inc.** 74,000 1,480,000
Norrell Corp. 169,800 5,348,700
Oxford Resources Corp.** 75,600 1,615,950
Paychex, Inc. 21,375 1,239,750
#Quintiles Transnational Corp.** 49,600 3,633,200
Robert Half International, Inc.** 163,600 6,032,750
Sitel Corp.** 194,300 8,646,350
Transactions Systems
Architects, Inc.** 44,800 1,892,800
Vincam Group, Inc.** 3,700 141,525
Wackenhut Corrections Corp.** 127,200 2,830,200
-----------
67,632,644
-----------
COMPUTER & OFFICE EQUIPMENT -- 13.0%
Baan Company N.V.** 57,800 1,929,075
#CBT Group PLC** 174,400 8,196,800
Comverse Technology, Inc.** 200,300 7,786,662
#HBO and Co. 26,000 1,735,500
#Inacom Corp.** 80,400 2,753,700
Legato Systems, Inc.** 87,100 4,137,250
Natural Microsystems Corp.** 97,000 4,668,125
Network Appliance, Inc.** 93,000 2,790,000
Rational Software Corp.** 184,000 6,279,000
Systemsoft Corp.** 285,700 9,785,225
Technology Solutions Co.** 202,850 7,074,394
Vantive Corp.** 59,000 3,820,250
Veritas Software Co.** 46,600 3,296,950
-----------
64,252,931
-----------
COMPUTER SOFTWARE & SERVICES -- 8.7%
Acxiom Corp.** 150,000 6,168,750
Aspen Technology, Inc.** 114,400 7,750,600
Bisys Group, Inc.** 120,000 4,920,000
Citrix Systems, Inc.** 109,800 5,627,250
Electronics For Imaging, Inc.** 70,400 5,051,200
Manugistics** 142,000 5,715,500
National Techteam, Inc.** 124,200 3,368,925
Pegasystems, Inc.** 135,000 3,510,000
Xionics Document
Technologies, Inc.** 42,100 631,500
-----------
42,743,725
-----------
CONSTRUCTION -- 0.9%
Champion Enterprises, Inc.** 200,000 4,525,000
-----------
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
---------- -----------
ELECTRONICS -- 5.4%
Cambridge Technology
Partners, Inc.** 234,900 $ 7,105,725
Dynatech Corp.** 108,400 4,959,300
Gemstar Resources Ltd.** 64,500 1,902,750
Sawtek, Inc.** 105,900 2,753,400
Ultrak, Inc.** 150,200 4,130,500
Vitesse Semiconductor Inc.** 149,500 5,774,437
-----------
26,626,112
-----------
ENTERTAINMENT & LEISURE -- 2.4%
#Doubletree Corp.** 86,100 3,433,238
Regal Cinemas, Inc.** 220,350 5,508,750
#Speedway Motorsports, Inc.** 87,600 2,299,500
The North Face, Inc.** 26,100 737,325
-----------
11,978,813
-----------
FINANCE -- 3.2%
#Aames Financial Corp. 150,000 7,556,250
#Amresco, Inc.** 115,000 2,630,625
#Cityscape Financial Corp.** 100,000 2,650,000
#The Money Store, Inc. 114,750 3,040,875
-----------
15,877,750
-----------
INSURANCE -- 1.1%
HCC Insurance Holdings, Inc. 110,250 3,183,469
United Dental Care, Inc.** 63,600 2,297,550
-----------
5,481,019
-----------
MANUFACTURING -- 1.7%
Oakwood Homes Corp.** 180,000 4,950,000
Southern Energy Homes, Inc.** 205,500 3,288,000
-----------
8,238,000
-----------
MEDICAL & MEDICAL SERVICES -- 6.0%
American Medical
Response, Inc.** 55,800 2,008,800
Clintrials Research, Inc.** 106,600 4,343,950
#FPA Medical Management, Inc.** 40,000 1,055,000
NCS Healthcare, Inc.** 56,600 1,775,825
#Occusystems, Inc.** 129,000 3,870,000
#Orthodontic Centers of
America, Inc.** 100,000 2,037,500
Pediatrix Medical Group, Inc.** 110,500 5,538,812
Phycor, Inc.** 105,300 4,007,981
Renal Treatment Centers, Inc.* 74,200 2,467,150
Serologicals Corp.** 71,700 2,491,575
-----------
29,596,593
-----------
MEDICAL INSTRUMENTS & SUPPLIES -- 1.2%
Minimed, Inc.** 74,800 1,879,350
#Omnicare, Inc. 100,000 3,050,000
Techne Corp.** 44,000 1,028,500
-----------
5,957,850
-----------
MEDICAL OLD -- 0.1%
CRA Managed Care, Inc.** 10,000 540,000
-----------
MOTOR VEHICLES -- 0.3%
Keystone Automotive
Industries, Inc.** 100,000 1,225,000
-----------
See accompanying notes to financial statements.
19
<PAGE>
AS OF SEPTEMBER 30, 1996
STATEMENT OF NET ASSETS
SMALL CAP GROWTH EQUITY PORTFOLIO (CONTINUED)
NUMBER
OF SHARES VALUE
---------- -----------
COMMON STOCKS (CONTINUED)
OIL & GAS -- 1.3%
Marine Drilling Co., Inc.** 71,800 $ 691,075
Reading & Bates Corp.** 100,000 2,712,500
Seacor Holdings, Inc.** 63,100 3,202,325
-----------
6,605,900
-----------
PHARMACEUTICALS -- 7.4%
Dura Pharmaceuticals, Inc.** 232,200 8,562,375
#Jones Medical Industries, Inc. 220,500 10,694,250
Medicis Pharmaceutical Corp.** 106,000 5,114,500
Noven Pharmaceuticals, Inc.** 36,800 464,600
Paraxel International Corp.** 76,500 4,819,500
Rexall Sundown, Inc.** 188,000 6,862,000
-----------
36,517,225
-----------
PUBLISHING & PRINTING -- 0.8%
Gartner Group, Inc.** 120,000 4,080,000
-----------
REAL ESTATE -- 0.6%
Signature Resorts, Inc.** 75,000 1,781,250
Studio Plus Hotels, Inc.** 78,250 1,291,125
-----------
3,072,375
-----------
RESTAURANTS -- 4.0%
CKE Restaurants, Inc.** 57,400 1,765,050
#Einstein/Noah Bagel Corp.** 106,800 3,284,100
Landry's Seafood
Restaurants, Inc.** 187,000 4,675,000
Logan's Roadhouse, Inc.** 49,200 990,150
Papa John's International, Inc.** 78,450 4,118,625
#Quality Dining, Inc.** 173,700 4,950,450
-----------
19,783,375
-----------
RETAIL -- 0.5%
Gargoyles, Inc.** 3,800 80,750
Pacific Sunwear of California** 75,000 2,465,625
-----------
2,546,375
-----------
RETAIL MERCHANDISING -- 3.4%
Cost Plus, Inc.** 7,400 171,125
#Donna Karan Intl, Inc.** 37,200 850,950
Finish Line, Inc.** 61,900 2,940,250
Gadzooks, Inc.** 62,550 2,173,612
Global Directmail Corp.** 37,000 1,766,750
#Just for Feet, Inc.** 62,525 3,134,066
#Oakley, Inc.** 30,200 1,283,500
Petco Animal Supplies, Inc.** 105,000 2,861,250
West Marine, Inc.** 45,200 1,491,600
-----------
16,673,103
-----------
RETAIL MERCHANDISING -- 0.1%
#Hot Topic, Inc.** 20,000 470,000
-----------
SANITARY SERVICES -- 3.2%
Continental Waste
Industries, Inc.** 166,666 3,729,152
United Waste Systems, Inc.** 202,000 7,019,500
USA Waste Services, Inc.** 163,030 5,135,445
-----------
15,884,097
-----------
SOAPS & COSMETICS -- 0.6%
#USA Detergents, Inc.** 75,900 3,017,025
-----------
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
---------- ------------
TELECOMMUNICATIONS -- 7.0%
Boston Communications
Group, Inc.** 38,000 $ 617,500
Cascade Communications
Corp.** 38,100 3,105,150
#DSP Communications, Inc.** 133,200 7,442,550
P-Com, Inc.** 107,000 2,648,250
Precision Response, Corp.** 175,200 6,745,200
Savill Systems Ireland PLC** 271,400 9,566,850
Tel-Save Holdings, Inc.** 148,400 4,266,500
------------
34,392,000
------------
TEXTILES -- 1.9%
Nautica Enterprises, Inc.** 128,200 4,134,450
St. John Knits, Inc. 75,000 3,759,375
#Tommy Hilfiger Corp.** 25,000 1,481,250
------------
9,375,075
------------
TRANSPORTATION -- 0.8%
Rural/Metro Corp.** 103,900 3,792,350
------------
TOTAL COMMON STOCKS
(Cost $272,612,977) 444,812,800
------------
PAR
MATURITY (000)
-------- ----------
CORPORATE BONDS -- 0.5%
Speedway Motorsports,Inc.
5.75% 09/30/03 $ 2,300 2,334,500
------------
(Cost $2,300,000)
SHORT-TERM INVESTMENTS -- 11.6%
Federal Home Loan Bank
Discount Notes
5.70% 10/01/96 50,305 50,305,000
Federal National Mortgage
Association Discount Notes
5.19% 10/04/96 5,065 5,062,809
U.S. Treasury Bills
5.16% 12/19/96 1,900*** 1,903,894
------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $57,271,979) 57,271,703
------------
TOTAL INVESTMENTS IN
SECURITIES
(Cost $332,184,956*) 102.3% 504,419,003
LIABILITIES IN EXCESS OF
OTHER ASSETS (2.3%) (11,151,526)
-------- -------------
NET ASSETS (Applicable to 13,653,681
Institutional shares, 7,287,872
Service shares, 1,288,710 Investor
A shares, 302,852 Investor B shares
and 15,304 Investor C shares
outstanding) 100.0% $493,267,477
======== ============
See accompanying notes to financial statements.
20
<PAGE>
AS OF SEPTEMBER 30, 1996
COMPASS CAPITAL FUNDS
VALUE
------------
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER INSTITUTIONAL SHARE
($299,563,010 (DIVIDE) 13,653,681) $21.94
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER SERVICE SHARE
($158,901,122 (DIVIDE) 7,287,872) $21.80
======
NET ASSET VALUE AND
REDEMPTION PRICE PER
INVESTOR A SHARE
($27,954,075 (DIVIDE) 1,288,710) $21.69
======
MAXIMUM OFFERING PRICE
PER INVESTOR A SHARE
($21.69 (DIVIDE) .955) $22.71
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 4.5%)
PER INVESTOR B SHARE
($6,519,803 (DIVIDE) 302,852) $21.53
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 1.0%)
PER INVESTOR C SHARE
($329,467 (DIVIDE) 15,304) $21.53
======
- -----------------
* Also cost for Federal income tax purposes. The gross unrealized
appreciation (depreciation) on a tax basis is as follows:
Gross unrealized appreciation $175,678,462
Gross unrealized depreciation (3,444,415)
------------
$172,234,047
============
** Non-income producing security.
*** Principal amount of securities pledged as initial margin requirement
of $1,812,500 on 145 Standard & Poor's 500 Stock Index futures contracts
expiring December 1996. The value of such contracts on
September 30, 1996 was $50,126,500, thereby resulting in an
unrealized gain of $143,676.
# Total or partial securities on loan.
See accompanying notes to financial statements.
21
<PAGE>
AS OF SEPTEMBER 30, 1996
SCHEDULE OF INVESTMENTS
INTERNATIONAL EQUITY PORTFOLIO
NUMBER
OF SHARES VALUE
------------ -----------
COMMON STOCKS -- 91.9%
AUSTRALIA -- 3.3%
AAPC Limited 4,300,000 $ 2,722,072
Australia & New Zealand
Banking Group 1,145,000 6,550,658
Australian Gas Light Co. 500,000 2,690,420
M.I.M. Holdings, Ltd. 1,580,000 1,925,391
QNI Limited 1,766,000 3,703,326
WMC, Ltd. 235,000 1,511,818
-----------
19,103,685
-----------
AUSTRIA -- 0.5%
Voest Alpine Stahl AG 91,500 3,162,374
-----------
DENMARK -- 0.7%
Den Danske Bank AB 56,000 4,080,546
-----------
FINLAND -- 0.4%
UPM-Kymmene Corp.** 122,780 2,558,421
-----------
FRANCE -- 5.7%
Christian Dior SA 51,400 6,013,676
Credit Local de France 49,400 4,210,363
SGS-Thomson Microelectronics** 54,000 2,582,586
Sylea 38,168 4,110,684
Total SA 34,000 2,677,191
Union Des Assurances Federal 22,489 2,631,159
Usinor Sacilor 259,000 3,998,508
Veba AG 120,000 6,282,607
-----------
32,506,774
-----------
GERMANY -- 4.3%
Bankgesellschaft Berlin AG 132,500 2,647,396
Daimler-Benz AG 168,000 9,217,163
Deutsche Bank AG 120,000 5,640,354
Deutsche Lufthansa AG 4,305 609,158
Mannesmann AG 11,500 4,307,697
Plettac AG 8,715 1,884,016
-----------
24,305,784
-----------
HONG KONG -- 5.6%
CDL Hotels 6,453,000 3,504,888
Cheung Kong 775,000 5,963,235
Founder Hong Kong, Ltd.** 4,700,000 1,838,597
Guoco Group, Ltd. 470,000 2,297,486
HSBC Holdings PLC 335,000 6,216,700
New World Development Co. 800,000 4,200,290
Swire Pacific Ltd. 'A' Shares 200,000 1,791,072
Wheelock and Co. 2,900,000 6,412,942
-----------
32,225,210
-----------
ITALY -- 2.5%
Banca Popolare di Bergamo 282,000 4,523,866
Burgo Cartiere 465,000 2,262,327
Olivetti & Co. SpA 9,000,000 3,321,893
Telecom Italia Mobile SpA 1,950,000 4,333,333
-----------
14,441,419
-----------
JAPAN -- 40.0%
Amway Japan, Ltd. 69,308 3,007,178
Asahi Bank Ltd. 479,000 5,453,429
Autobacs Seven Co., Ltd. 47,000 4,141,730
Bridgestone Corp. 344,000 6,198,476
Canon, Inc. 267,000 5,241,865
Chugoku Bank, Ltd. 207,000 3,414,433
Daicel Chemical Industry, Ltd. 655,000 3,464,366
Daiwa House Industry 280,000 4,016,136
DDI Corp. 960 7,754,012
Fuji Photo Film Co. 246,000 7,475,930
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
------------ -----------
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
Honda Motor Co., Ltd. 305,000 $ 7,655,760
Horiba 227,000 2,787,898
Inax 318,000 3,021,784
Jusco Co. 151,000 4,588,884
Kuraray Co., Ltd. 475,000 4,811,744
Laox 148,500 2,795,607
Mabuchi Motor 57,000 3,168,086
Maruko Co., Ltd. 55,880 3,656,871
Matsushita Electric
Industrial Co. 464,000 7,778,395
Minebea Co., Ltd. 476,000 4,220,206
Mitsubishi Electric Corp. 736,000 5,014,433
Mitsubishi Heavy Industries, Ltd. 1,000,000 8,130,883
Mitsubishi Materials Corp. 1,031,000 4,935,491
Mitsui Fudosan 325,000 4,311,968
Nippon Steel Corp. 1,708,000 5,297,786
Nishimatsu Construction 590,000 5,712,237
NKK Corp. 1,980,000 5,076,468
Noritsu Koki Co., Ltd. 31,000 1,775,796
Orix Corp. 99,500 3,835,500
Ricoh Co. 570,000 5,825,190
Rinnai Corp. 173,000 3,970,238
Ryohin Keikaku Co. 52,000 4,400,538
Sankyo Co. 68,600 2,521,381
Sanyo Shinpan Finance Co. 99,700 6,077,633
Sawako 5,700 93,510
Sekisui Chemical Co. 515,000 6,094,128
Shin-Etsu Chemical Co. 220,000 3,944,420
Shiseido Co., Ltd. 634,000 7,615,957
Sumitomo Marine & Fire
Insurance Co. 1,012,000 7,965,361
Sumitomo Trust & Banking 479,000 6,011,654
Suzuki Motor Co., Ltd. 424,000 5,169,341
Takeda Chemical Ind. 540,000 9,875,392
THK Co., Ltd. 210,000 3,708,651
Tokyo Electron, Ltd. 90,000 2,606,006
Tsubaki Nakashima Co., Ltd. 250,000 2,711,788
Tsukishima Kikai 167,000 3,488,212
Yamanashi Chuo Bank 388,000 3,860,870
Yamato Transport Co., Ltd. 387,000 4,197,848
-----------
228,881,470
-----------
NETHERLANDS -- 4.5%
DSM NV 78,100 7,666,258
Hollandsche Beton Groep NV 27,500 4,981,011
Internationale Nederlanden
Groep NV 304,097 9,488,040
Vendex International NV 90,000 3,507,450
-----------
25,642,759
-----------
NORWAY -- 1.5%
Norsk Hydro AS 124,524 5,829,883
Smedvig ASA 'A' Shares 105,000 2,163,284
Smedvig ASA 'B' Shares 26,250 486,335
-----------
8,479,502
-----------
SINGAPORE -- 0.7%
Development Bank of Singapore 124,000 1,523,904
United Overseas Bank 250,000 2,433,047
-----------
3,956,951
-----------
SPAIN -- 2.7%
Asturiana de Zinc** 167,182 1,158,726
Autopistas del Mare 198,000 2,837,162
Iberdrola SA 27,900 270,505
See accompanying notes to financial statements.
22
<PAGE>
AS OF SEPTEMBER 30, 1996
COMPASS CAPITAL FUNDS
NUMBER
OF SHARES VALUE
------------ -----------
COMMON STOCKS(CONTINUED)
SPAIN (CONTINUED)
Repsol SA 7,000 $ 230,044
Repsol SA ADR 120,000 3,975,000
Telefonica de Espana ADR 125,000 6,953,125
------------
15,424,562
------------
SWEDEN -- 0.5%
Cardo AB 124,000 2,750,773
------------
SWITZERLAND -- 3.7%
Baloise Holding, Ltd. 2,093 4,379,185
Ciba-Geigy AG 6,978 8,921,339
CS Holding 56,500 5,584,250
Valora Holding AG Regd. 12,880 2,238,036
------------
21,122,810
------------
UNITED KINGDOM -- 15.3%
Allied Carpets Group PLC 670,000 2,909,726
Asda Group PLC 2,150,000 3,549,811
BBA Group PLC 700,000 3,702,790
British Gas 1,000,000 3,122,175
British Petroleum 350,000 3,631,583
Burton Group PLC 1,420,00 3,255,670
Courtaulds PLC 500,000 3,763,825
Croda International PLC 200,000 1,148,710
Glaxo Wellcome PLC 240,000 3,761,634
Glynwed International 600,000 3,460,215
Guardian Royal Exchange 900,000 3,626,887
Inchcape PLC 737,000 3,131,495
Jarvis Hotels PLC** 1,100,000 2,702,755
London Insurance Market
Investment Trust 1,260,000 2,652,205
Medeva PLC 875,000 3,498,753
Mirror Group PLC 1,130,000 3,837,536
NFC PLC 1,000,000 2,848,300
Powergen PLC 120,000 910,830
Powerscreen International 364,720 3,136,473
RJB Mining PLC 350,000 2,944,156
Royal Bank of Scotland PLC 360,000 2,755,026
Scottish & Newcastle PLC 350,000 3,672,664
Shell Transport & Trading
Co. PLC 250,000 3,814,687
Somerfield PLC** 1,430,000 3,535,961
Sun Life & Provincial Holdings** 1,100,000 3,993,880
T & N PLC 987,000 2,054,391
Wolseley PLC 450,000 3,422,655
Yorkshire Water PLC 255,000 2,524,149
------------
87,368,942
------------
TOTAL COMMON STOCKS
(Cost $502,204,840) 526,011,982
------------
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
------------ ------------
PREFERRED STOCKS -- 1.4%
GEA AG Non Voting Pfd. 14,525 $ 4,824,222
Spar Handels AG Non
Voting Pfd. 268,440 3,323,627
------------
TOTAL PREFERRED STOCKS
(Cost $7,162,543) 8,147,849
------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $509,367,383*) 93.3% 534,159,831
OTHER ASSETS IN EXCESS OF
LIABILITIES 6.7% 38,282,921
-------- ------------
NET ASSETS 100.0% $572,442,752
======== ============
- -----------------
* Also cost for Federal income tax purposes. The gross unrealized
appreciation (depreciation) on a tax basis is as follows:
Gross unrealized appreciation $ 48,015,908
Gross unrealized depreciation (23,223,460)
------------
$ 24,792,448
============
** Non-income producing security.
See accompanying notes to financial statements.
23
<PAGE>
SEPTEMBER 30, 1996
STATEMENT OF ASSETS AND LIABILITIES COMPASS CAPITAL FUNDS
INTERNATIONAL EQUITY PORTFOLIO
ASSETS
Investments at value (Cost $509,367,383) ..................... $534,159,831
Cash denominated in foreign currencies (Cost $4,624) ......... 4,662
Cash ......................................................... 21,886,632
Dividends receivable ......................................... 1,860,974
Interest receivable .......................................... 345,932
Investments sold receivable .................................. 14,412,994
Capital shares sold receivable ............................... 3,381,950
Prepaid expenses ............................................. 29,265
-------------
TOTAL ASSETS .......................................... 576,082,240
-------------
LIABILITIES
Investments purchased payable ................................ 2,666,393
Capital shares redeemed payable .............................. 200,723
Accrued expenses payable ..................................... 772,372
-------------
TOTAL LIABILITIES ..................................... 3,639,488
-------------
NETASSETS (Applicable to 28,937,804 Institutional
shares, 12,062,371 Service
shares, 1,485,086 Investor A shares and
203,426 Investor B shares outstanding) ....................... $572,442,752
============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER INSTITUTIONAL SHARE
($388,587,540 (DIVIDE) 28,937,804) ........................... $13.43
======
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER SERVICE SHARE ($161,321,008 (DIVIDE) 12,062,371) ......... $13.37
======
NET ASSET VALUE AND REDEMPTION PRICE
PER INVESTOR A SHARE ($19,842,197 (DIVIDE) 1,485,086) ........ $13.36
======
MAXIMUM OFFERING PRICE PER INVESTOR A SHARE
($13.36 (DIVIDE) 0.950) ...................................... $14.06
======
NETASSET VALUE, OFFERING AND REDEMPTION PRICE
(subject to a maximum contingent
deferred sales charge of
4.5%) PER INVESTOR B SHARE ($2,692,007 (DIVIDE) 203,426) ..... $13.23
======
See accompanying notes to financial statements.
24
<PAGE>
AS OF SEPTEMBER 30, 1996
STATEMENT OF NET ASSETS COMPASS CAPITAL FUNDS
INTERNATIONAL EMERGING MARKETS PORTFOLIO
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
------------- ----------
COMMON STOCKS -- 83.9%
ARGENTINA -- 1.7%
Inversiones y
Respresentacion SA 250,000 $ 730,110
Siderca SA 350,000 521,579
YPF Sociedad Anonima - ADR 25,000 571,875
----------
1,823,564
----------
BRAZIL -- 5.6%
Centrais Electricas de Santa
Catarina SA (Reg. S) 27,000 2,247,750
#Iochpe Maxion SA - ADR 130,000 422,500
Souza Cruz SA 120,000 799,216
Telecomunicacoes Brasileiras
SA - Telebras 40,798,367 2,653,292
----------
6,122,758
----------
CHILE -- 3.8%
Enersis SA - ADR 27,500 886,875
Maderas y Sinteticos Sociedad
Anonima SA 125,000 1,765,625
Santa Isabel SA - ADR 58,000 1,486,250
----------
4,138,750
----------
CHINA -- 1.4%
Heilongjiang Electric Power Co.,
Ltd. - B 1,500,000 555,000
Hua Xin Cement Co., Ltd. - B 1,323,200 303,013
Shanghai Jintai Co., Ltd. - B 1,143,450 157,796
Shanghai Refrigerator Compressor
Co., Ltd. - B 1,200,000 552,000
----------
1,567,809
----------
COLOMBIA -- 0.8%
Banco Industrial Colombian -
ADR 45,000 838,125
----------
GREECE -- 1.5%
Alpha Credit Bank 14,666 899,956
Edrassi Psallidas 31,200 334,202
Michaniki SA 50,000 471,228
----------
1,705,386
----------
HONG KONG -- 4.0%
China Hong Kong Photo Products
Holdings, Ltd. 900,000 328,794
Founder Hong Kong, Ltd.** 2,418,000 945,899
Guangdong Kelon Electric
Holding - H 1,251,000 525,780
Guangshen Railway Co., Ltd. 790,000 303,933
Inner Mongolia Erdos Cashmere
Products Co., Ltd. - B 750,000 375,000
Qingling Automobiles Co. - H 1,050,000 403,961
Shenzhen Chiwan Wharf
Holdings, Ltd. - B** 1,000,000 497,879
Tingyi Holding Corp.** 1,874,000 395,021
Wuxi Little Swan Co., Ltd. - B** 850,000 571,591
----------
4,347,858
----------
HUNGARY -- 2.7%
Danubius Hotels 26,950 521,983
Egis Gyogyszergyar 18,000 1,272,516
Egis Gyogyszergyar EDR
(Reg. S) 4,400 311,059
Pannonplast Muanyagipari 27,008 902,359
----------
3,007,917
----------
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
------------- ----------
INDIA -- 3.0%
Crompton Greaves, Ltd. - GDR
(Reg. S)** 30,000 $ 139,470
Gujarat Ambuja Cements, Ltd. -
GDR 70,000 612,500
Hindalco Industries, Ltd. - GDR
(Reg. S) 37,500 712,500
#Mahindra and Mahindra, Ltd. -
GDR (Reg. 144A) 52,500 538,125
Reliance Industries, Ltd. - GDS
(Reg. S) 50,000 537,500
Tata Engineering & Locomotive
Co., Ltd. - GDR 57,000 741,000
----------
3,281,095
----------
INDONESIA -- 3.4%
Calcutta Electric Supply Co.,
Ltd. - GDR** 150,000 262,500
PT Bank Dagang Nasional
(Foreign Shares) 1,000,000 721,361
PT Indah Kiat Pulp & Paper
(Foreign Shares) 948,830 725,312
PT Indah Kiat Pulp & Paper
Warrants (Foreign Shares)** 94,098 38,498
PT Ramayana Lestari Sentosa** 290,000 487,080
PT Semen Cibinong
(Foreign Shares) 200,000 516,796
PT Sinar Mas Agro Resources
Agricultural Production and
Technology Corp.
(Foreign Shares) 708,000 510,724
Pt Tambang Timah
(Foreign Shares) 300,000 510,336
----------
3,772,607
----------
ISRAEL -- 2.1%
Blue Square - Isreal, Ltd. -
ADR 100,000 1,475,000
Blue Square Chain Stores
Properties & Investments** 60,000 438,459
Makhteshim Chemical
Works, Ltd.** 60,000 351,946
----------
2,265,405
----------
KOREA -- 4.0%
Chung Ho Computer Co. 300 13,992
Daesung Industrial Co. 5,000 353,725
Daesung Industrial Co. 3,148 216,985
Housing and Commercial Bank** 490 11,575
Hyundai Marine & Fire
Insurance Co. 13,000 659,843
Korea Electric Power Corp. 19,380 640,913
Korea Mobile Telecommunications
Corp. - ADR (Reg. 144A)** 45,000 686,250
L.G. Construction, Ltd. 15,000 319,806
Nasan Industrial Co. 10,352 322,285
Pohang Iron & Steel Co. 4,150 228,489
#Pohang Iron & Steel Co. - ADR 20,000 427,500
Samsung Display Devices Co. 8,227 511,260
Samsung Electronics - GDR
(Reg. 144A)** 56 3
Samsung Electronics - GDS** 18 812
Shinhan Bank 3,570 64,005
----------
4,457,443
----------
See accompanying notes to financial statements.
25
<PAGE>
AS OF SEPTEMBER 30, 1996
STATEMENT OF NET ASSETS
INTERNATIONAL EMERGING MARKETS PORTFOLIO (CONTINUED)
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
------------- ----------
COMMON STOCKS (CONTINUED)
MALAYSIA -- 3.2%
Arab Malaysian Finance
Berhad (Foreign Shares) 125,000 $ 673,411
Asas Dunia Berhad 210,000 808,691
IJM Corp. Berhad 350,000 681,591
Multi-Purpose Holdings Berhad 350,000 597,789
Pacific and Orient Berhad 300,000 778,164
-----------
3,539,646
-----------
MEXICO -- 13.0%
Alfa SA - A 224,722 999,096
Altos Hornos de Mexico SA** 230,000 1,474,320
Apasco SA - ADR 60,000 2,082,120
Cementos de Mexico SA -
CPO 520,000 1,946,118
Consorcio G Grupo Dina SA 400,000 253,749
Corporacion Geo SA - B** 199,400 926,211
Desc Sociedad de Fomento
Industrial SA - B 200,000 1,125,415
Desc Sociedad de Fomento
Industrial SA - C 4,167 23,172
Farmacias Benavides SA - B 300,000 607,565
Fomento Economico Mexicano
SA - B 170,000 518,912
Grupo Cementos
Chihuahua - B 1,300,000 1,656,271
Grupo Financiero Banamex
Accival - B 483,700 1,050,210
Grupo Financiero Banamex
Accival - L 14,511 29,658
Grupo Financiero Banorte - B** 402,500 432,681
Grupo Herdez SA - B 1,400,000 509,091
Grupo Industrial San
Luis - CPO 110,000 627,737
-----------
14,262,326
-----------
PAKISTAN -- 0.7%
Engro Chemical Pakistan, Ltd. 120,000 458,127
Pakistan Telecommunications
Corp. - GDS** 4,000 350,000
-----------
808,127
-----------
PERU -- 1.6%
Banco Wiese - ADR 60,000 382,500
CPT Telefonica del Peru
SA - ADR 60,000 1,372,500
-----------
1,755,000
-----------
PHILIPPINES -- 3.4%
Alaska Milk Corp.** 3,000,000 219,847
Benpres Holdings Corp. -
GDR (Reg. S)** 59,000 483,800
C&P Homes, Inc. 450,000 304,866
DMCI Holdings, Inc. 1,000,000 744,275
Metro Pacific Corp. 2,600,000 754,198
Philippine National Bank 48,000 792,366
Southeast Asia Cement Holding** 3,500,000 414,122
-----------
3,713,474
-----------
POLAND -- 0.6%
Debica 30,000 641,140
-----------
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
------------- -----------
PORTUGAL -- 1.9%
Cimentos de Portugal SA 20,000 $ 420,477
Portugal Telecom SA** 30,000 770,766
Sonae Investimentos Sociedade
Gestora de Participacoes
Sociais SA 30,000 869,285
-----------
2,060,528
-----------
SOUTH AFRICA -- 18.2%
AECI Ltd. 200,000 1,052,051
Anglovaal Industries, Ltd. 300,000 1,439,127
Anglovaal, Ltd. - N 20,000 586,678
Barlow, Ltd. 180,000 1,746,802
Engen, Ltd. 36,400 199,100
Gencor Beherend Beperk, Ltd. 380,000 1,357,742
Impala Platinum Holdings, Ltd. 110,000 1,364,689
Murray & Roberts, Ltd. 531,900 1,912,212
Premier Group Holdings, Ltd. 1,140,195 1,609,450
Pretoria Portland Cement Co.,
Ltd. 125,000 2,026,356
Rustenburg Platinum Holdings,
Ltd. 25,000 394,243
SA Iron & Steel Industrial Corp.,
Ltd. 2,500,000 1,648,655
Sasol, Ltd. 150,000 1,769,960
Standard Bank Investment Corp.,
Ltd. 20,000 824,879
Tongaat-Hulett Group, Ltd. 170,000 2,109,065
-----------
20,041,009
-----------
TAIWAN -- 2.5%
#Acer, Inc. - GDR (Reg. S)** 42,000 321,300
#Acer, Inc. - GDR (Reg. 144A)** 70,000 535,500
#Taiwan Fund, Inc. 80,000 1,850,000
-----------
2,706,800
-----------
THAILAND -- 2.0%
Bangkok Insurance Co., Ltd.
(Foreign Shares) 30,000 475,740
Post Publishing Co., Ltd. 64,900 189,452
Siam Commercial Bank Public
Co., Ltd. (Foreign Shares) 82,000 996,292
Thai Stanley Electric Co., Ltd.
(Foreign Shares) 112,500 519,231
-----------
2,180,715
-----------
TURKEY -- 2.8%
Eczacibasi Yapi Gerecleri Sanayi
Ve Ticaret A.S. 30,630,000 1,267,149
Netas Telekomunik 1,000,000 261,281
Petkim Petrokimya Holding A.S. 1,996,000 880,061
Raks Elektronik Sanayi Ve
Ticaret A.S. 1,000,000 242,230
Yapi Ve Kredi Bankasi A.S. 18,600,000 465,734
-----------
3,116,455
-----------
TOTAL COMMON STOCKS
(Cost $88,429,996) 92,153,937
-----------
See accompanying notes to financial statements.
26
<PAGE>
AS OF SEPTEMBER 30, 1996
COMPASS CAPITAL FUNDS
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
-------------- ------------
PREFERRED STOCKS -- 10.8%
Banco Bradesco SA 122,104,380 $ 1,040,458
Brasmotor SA 4,500,000 1,661,606
Casa Anglo Brasileira - SA 23,000,000 1,092,556
Cia Brasileira de Distribuicao
Grupo Pao de Acucar** 25,000,000 483,595
Cia Cervejaria Brahma 970,000 603,291
Cia Cervejaria Brahma Warrants** 77,560 29,246
Cia Cimento Portland Itau 3,200,000 852,498
Cia Energetica de Minas Gerais 39,000,000 1,165,034
Cia Vale do Rio Doce 40,000 793,340
Iochpe Maxion SA 8,970,000 1,010,333
Petroleo Brasileiro SA 15,000,000 1,718,903
Sadia-Concordia SA Industria
E Comercio 1,327,000 779,824
Telecomunicacoes Brasileiras
SA - Telebras 695,282 54,921
Usiminas Sider Minas Gerais SA 600,000,000 593,536
-----------
TOTAL PREFERRED STOCKS
(Cost $11,737,333) 11,879,141
-----------
PAR
MATURITY (000)
-------- -----------
CONVERTIBLE BONDS -- 1.7%
Yang Ming Marine Transport, Inc.
(Reg. 144A)
2.00% 10/06/01 $ 200 238,600
2.00% 10/06/01 590 703,870
Yang Ming Marine Transport, Inc.
2.00% 10/06/01 750 893,438
---------
TOTAL CONVERTIBLE BONDS
(Cost $1,747,431) 1,835,908
-----------
SHORT TERM INVESTMENTS -- 6.1%
Federal Home Loan Mortgage
Corp. Discount Notes
5.70% 10/01/96 6,700 6,700,000
-----------
(Cost $6,700,000)
- --------------------------------------------------------------------------------
VALUE
-----------
TOTAL INVESTMENTS IN SECURITIES
(Cost $108,614,760*) 102.5% $112,568,986
LIABILITIES IN EXCESS OF
OTHER ASSETS (2.5%) (2,705,557)
------- ------------
NET ASSETS (Applicable to 7,835,028
Institutional shares, 4,355,467
Service shares, 343,864 Investor
A shares and 24,878 Investor
B shares outstanding) 100.0% 109,863,429
====== ============
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER INSTITUTIONAL SHARE
($68,664,449 (DIVIDE) 7,835,028) $8.76
=====
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER SERVICE SHARE
($37,987,178 (DIVIDE) 4,355,467) $8.72
=====
NET ASSET VALUE AND
REDEMPTION PRICE PER
INVESTOR A SHARE
($2,995,584 (DIVIDE) 343,864) $8.71
=====
MAXIMUM OFFERING PRICE
PER INVESTOR A SHARE
($8.71 (DIVIDE) .950) $9.17
=====
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 4.5%)
PER INVESTOR B SHARE
($216,218 (DIVIDE) 24,878) $8.69
=====
- -----------------
* Also cost for Federal income tax purposes. The gross unrealized
appreciation (depreciation) on a tax basis is as follows:
Gross unrealized appreciation $11,735,585
Gross unrealized depreciation (7,781,359)
-------------
$ 3,954,226
===========
** Non-income producing security.
# Total or partial securities on loan.
See accompanying notes to financial statements.
27
<PAGE>
AS OF SEPTEMBER 30, 1996
STATEMENT OF NET ASSETS
SELECT EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
---------- -----------
COMMON STOCKS -- 97.3%
AEROSPACE -- 2.0%
Boeing Co. 31,700 $ 2,995,650
Lockheed Martin Corp. 35,200 3,172,400
United Technologies Corp. 14,800 1,777,850
-----------
7,945,900
-----------
AIR TRANSPORTATION -- 0.4%
Delta Air Lines, Inc. 20,100 1,447,200
-----------
BANKS -- 6.1%
Bank of Boston Corp. 9,000 520,875
BankAmerica Corp. 59,300 4,870,013
Chase Manhattan Corp. 41,136 3,296,022
Citicorp 39,800 3,606,875
CoreStates Financial Corp. 64,700 2,798,275
First Chicago NBD, Corp. 74,600 3,375,650
First Union Corp. 29,800 1,989,150
NationsBank, Inc. 19,000 1,650,625
Norwest Corp. 51,200 2,092,800
-----------
24,200,285
-----------
BEVERAGES -- 4.0%
Anheuser Busch Cos., Inc. 66,600 2,505,825
Coca-Cola Co. 161,300 8,206,138
#Pepsico, Inc. 176,600 4,988,950
-----------
15,700,913
-----------
CHEMICALS -- 3.6%
#Air Products & Chemicals, Inc. 52,500 3,058,125
#Dow Chemical Co. 24,700 1,982,175
E.I. Du Pont de Nemours
and Co. 47,035 4,150,839
#PPG Industries, Inc. 54,300 2,952,563
Rohm & Haas Co. 33,000 2,161,500
-----------
14,305,202
-----------
COMPUTER & OFFICE EQUIPMENT -- 6.3%
Adaptec, Inc.** 37,600 2,256,000
Cabletron Systems, Inc.** 21,600 1,474,200
Compaq Computer Corp.** 68,400 4,386,150
Intel Corp. 86,000 8,207,625
International Business
Machines Corp. 43,200 5,378,400
Xerox Corp. 62,000 3,324,750
-----------
25,027,125
-----------
COMPUTER SOFTWARE & SERVICES -- 2.0%
Bay Networks, Inc.** 61,550 1,677,238
#Microsoft Corp.** 46,300 6,105,813
-----------
7,783,051
-----------
CONSTRUCTION -- 0.4%
Fluor Corp. 24,100 1,482,150
-----------
DURABLE GOODS -- 0.2%
Sunbeam Corp. 38,700 894,938
-----------
ELECTRONICS -- 5.7%
#A.M.P., Inc. 45,700 1,770,875
Emerson Electric Co. 36,400 3,280,550
General Electric Co. 93,700 8,526,700
Hewlett Packard Co. 73,400 3,578,250
Motorola, Inc. 47,900 2,472,838
Texas Instruments, Inc. 55,700 3,070,463
-----------
22,699,676
-----------
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
---------- -----------
ENERGY & UTILITIES -- 3.7%
Allegheny Power System, Inc. 35,800 $ 1,038,200
Cinergy Corp. 75,900 2,343,413
Entergy Corp. 134,400 3,628,800
#FPL Group, Inc. 58,800 2,543,100
NIPSCO Industries, Inc. 50,200 1,794,650
PECO Energy Co. 41,100 976,125
Southern Co. 94,900 2,147,113
-----------
14,471,401
-----------
ENTERTAINMENT & LEISURE -- 0.7%
Walt Disney Co. 45,700 2,896,238
-----------
FINANCE -- 3.5%
#Dean Witter Discover and Co. 64,700 3,558,500
Federal National Mortgage
Association 116,600 4,066,425
First USA, Inc. 40,600 2,248,225
#Fleet Financial Group, Inc. 92,900 4,134,050
-----------
14,007,200
-----------
FOOD & AGRICULTURE -- 4.3%
Burlington Northern
Santa Fe Corp. 29,000 2,446,875
CPC International, Inc. 50,100 3,751,237
#CSX Corp. 48,800 2,464,400
H.J. Heinz Co. 97,500 3,290,625
IMC Fertilizer Group, Inc. 27,200 1,065,688
McCormick & Co., Inc. 68,500 1,601,187
Tyson Foods, Inc. 84,100 2,244,419
-----------
16,864,431
-----------
FURNITURE -- 0.4%
Armstrong World
Industries, Inc. 22,500 1,403,437
-----------
INSURANCE -- 5.1%
Aetna, Inc. 27,028 1,902,096
Allstate Corp. 91,200 4,491,600
American International
Group, Inc. 53,700 5,410,275
#General Re Corp. 27,700 3,926,475
Humana, Inc.** 114,100 2,310,525
United Healthcare Corp. 51,800 2,156,175
-----------
20,197,146
-----------
MACHINERY & HEAVY EQUIPMENT -- 1.4%
Applied Materials, Inc.** 85,000 2,348,125
Illinois Tool Works, Inc. 41,800 3,014,825
-----------
5,362,950
-----------
MEDICAL & MEDICAL SERVICES -- 0.8%
Columbia Healthcare Corp. 55,300 3,145,187
-----------
METAL & MINING -- 2.4%
Alumax, Inc.** 29,300 981,550
Barrick Gold Corp. 75,700 1,901,962
Minnesota Mining &
Manufacturing Co. 37,600 2,627,300
#Phelps Dodge Corp. 60,700 3,892,388
-----------
9,403,200
-----------
MOTOR VEHICLES -- 4.1%
Cummins Engine, Inc. 42,500 1,673,437
Eaton Corp. 65,200 3,936,450
Ford Motor Co. 133,200 4,162,500
#General Motors Corp. 82,500 3,960,000
#Goodyear Tire & Rubber Co. 53,800 2,481,525
-----------
16,213,912
-----------
See accompanying notes to financial statements.
28
<PAGE>
AS OF SEPTEMBER 30, 1996
COMPASS CAPITAL FUNDS
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
---------- -----------
COMMON STOCKS(CONTINUED)
OIL & GAS -- 8.7%
Atlantic Richfield Co. 25,700 $ 3,276,750
#Elf Aquitaine ADR 74,600 2,937,375
Exxon Corp. 123,600 10,289,700
#Noble Affiliates, Inc. 31,900 1,347,775
#Royal Dutch Petroleum Co. 68,000 10,616,500
#Schlumberger Ltd. 24,800 2,095,600
Tenneco, Inc. 23,000 1,152,875
#Unocal Corp. 76,300 2,746,800
-----------
34,463,375
-----------
PAPER & FOREST PRODUCTS -- 1.8%
Champion International, Inc. 44,500 2,041,437
#International Paper Co. 65,600 2,788,000
Mead Corp. 42,400 2,485,700
-----------
7,315,137
-----------
PHARMACEUTICALS -- 8.4%
American Home Products Corp. 65,900 4,201,125
Bristol-Meyers Squibb Co. 46,800 4,510,350
#Eli Lilly & Co. 91,000 5,869,500
Johnson & Johnson 141,000 7,226,250
Merck & Co., Inc. 95,800 6,741,925
Pfizer, Inc. 58,900 4,660,462
-----------
33,209,612
-----------
PUBLISHING & PRINTING -- 1.8%
#A.H. Belo Corp. 56,500 1,949,250
McGraw-Hill Companies, Inc. 60,200 2,566,025
#News Corp. Ltd. ADR 128,100 2,674,087
-----------
7,189,362
-----------
RESTAURANTS -- 1.6%
Brinker International, Inc. 115,300 1,960,100
#McDonald's Corp. 93,200 4,415,350
-----------
6,375,450
-----------
RETAIL MERCHANDISING -- 4.3%
Circuit City Stores, Inc. 37,400 1,351,075
Home Depot, Inc. 40,900 2,326,187
J.C. Penney Co., Inc. 54,900 2,974,134
Kroger Co.** 59,500 2,662,625
#May Department Stores Co. 57,300 2,786,212
Wal-Mart Stores, Inc. 189,500 4,998,062
-----------
17,098,295
-----------
SERVICES - HOTELS & MOTELS -- 0.5%
La Quinta Inns, Inc. 110,000 2,145,000
-----------
SOAPS & COSMETICS -- 2.6%
Colgate-Palmolive Co. 50,200 4,361,125
Procter & Gamble Co. 59,500 5,801,250
-----------
10,162,375
-----------
TELECOMMUNICATIONS -- 8.4%
Alltel Corp. 125,700 3,503,887
AT&T Corp. 148,400 7,753,900
#Bell Atlantic Corp. 60,800 3,640,400
Frontier Corp. 120,300 3,202,987
GTE Corp. 112,700 4,338,950
#Oracle Corp.** 111,250 4,735,078
SBC Communications, Inc. 127,900 6,155,187
-----------
33,330,389
-----------
TOBACCO -- 2.1%
Philip Morris Cos., Inc. 93,700 8,409,575
-----------
TOTAL COMMON STOCKS
(Cost $333,670,299) 385,150,112
-----------
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- ------------- -----------
SHORT TERM INVESTMENTS -- 3.3%
Federal Home Loan Mortgage
Corp. Discount Notes
5.70% 10/01/96 $12,000 $ 12,000,000
Smith Barney Money Market Fund 562 562,062
U.S. Treasury Bills
5.04% 12/19/96 270*** 267,075
------------
TOTAL SHORT TERM INVESTMENTS
(Cost $12,829,076) 12,829,137
------------
TOTAL INVESTMENTS IN
SECURITIES
(Cost $346,499,375*) 100.6% 397,979,249
LIABILITIES IN EXCESS OF
OTHER ASSETS (0.6%) (2,294,038)
-------- -------------
NET ASSETS (Applicable to 20,224,887
Institutional shares, 8,389,376 Service
shares, 459,447 Investor A shares, 88,377
Investor B shares and 3,698 Investor C
shares outstanding) 100.0% $395,685,211
====== ============
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER INSTITUTIONAL SHARE
($274,434,201 (DIVIDE) 20,224,887) $13.57
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER SERVICE SHARE
($113,776,872 (DIVIDE) 8,389,376) $13.56
======
NET ASSET VALUE AND
REDEMPTION PRICE PER
INVESTOR A SHARE
($6,227,831 (DIVIDE) 459,447) $13.56
======
MAXIMUM OFFERING PRICE
PER INVESTOR A SHARE
($13.56 (DIVIDE) .955) $14.20
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 4.5%)
PER INVESTOR B SHARE
($1,196,233 (DIVIDE) 88,377) $13.54
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 1.0%)
PER INVESTOR C SHARE
($50,074 (DIVIDE) 3,698) $13.54
======
- -----------------
* Also cost for Federal income tax purposes. The gross unrealized
appreciation (depreciation) on a tax basis is as follows:
Gross unrealized appreciation $57,216,996
Gross unrealized depreciation (5,737,122)
===========
$51,479,874
===========
** Non-income producing security.
*** Principal amount of securities pledged as initial margin
requirement of $250,000 on 20 Standard & Poor's 500 Stock Index
futures contracts expiring December 1996. The value of such contracts
on September 30, 1996 was $6,914,000, thereby resulting in an unrealized
gain of $154,000.
# Total or partial securities on loan.
See accompanying notes to financial statements.
29
<PAGE>
AS OF SEPTEMBER 30, 1996
STATEMENT OF NET ASSETS
INDEX EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
VALUE
-----------
Investment in The U.S. Large Company
Series of The DFA Investment
Trust Company
(Cost $185,398,315) 100.4% $247,320,047
------------
LIABILITIES IN EXCESS OF
OTHER ASSETS (0.4%) (1,076,044)
------------
NET ASSETS (Applicable to 9,099,383
Institutional shares, 7,381,175
Service shares, 913,386 Investor
A shares, 208,537 Investor B shares
and 31,018 Investor C shares
outstanding) 100.0% $246,244,003
====== ============
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER INSTITUTIONAL SHARE
($127,075,727 (DIVIDE) 9,099,383) $13.97
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER SERVICE SHARE
($103,079,955 (DIVIDE) 7,381,175) $13.97
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER INVESTOR A SHARE
($12,752,111 (DIVIDE) 913,386) $13.96
======
MAXIMUM OFFERING PRICE
PER INVESTOR A SHARE
($13.96 (DIVIDE) .970) $14.39
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 4.5%)
PER INVESTOR B SHARE
($2,904,256 (DIVIDE) 208,537) $13.93
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 1.0%)
PER INVESTOR C SHARE
($431,954 (DIVIDE) 31,018) $13.93
======
See accompanying notes to financial statements and accompanying financial
statements and related notes for The DFA Investment Trust Company.
30
<PAGE>
AS OF SEPTEMBER 30, 1996
COMPASS CAPITAL FUNDS
BALANCED PORTFOLIO
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
----------- -----------
COMMON STOCKS -- 64.4%
AEROSPACE -- 2.7%
Allied-Signal, Inc. 34,700 $ 2,285,863
Boeing Co. 9,600 907,200
#United Technologies Corp. 29,900 3,591,738
-----------
6,784,801
-----------
BANKS -- 2.9%
CoreStates Financial Corp. 53,800 2,326,850
First Chicago NBD Corp. 59,800 2,705,950
NationsBank, Inc. 26,300 2,284,813
-----------
7,317,613
-----------
BEVERAGES -- 1.4%
Coca-Cola Co. 53,800 2,737,075
#Pepsico, Inc. 23,900 675,175
-----------
3,412,250
-----------
CHEMICALS -- 2.7%
#Dow Chemical Co. 23,900 1,917,975
E.I. du Pont de Nemours
and Co. 31,100 2,744,575
#I.M.C. Fertilizer Group, Inc. 28,700 1,122,888
#Lubrizol Corp. 35,900 1,032,125
-----------
6,817,563
-----------
COMPUTER & OFFICE EQUIPMENT -- 3.7%
#3 Com Corp.** 35,900 2,156,244
Compaq Computer Corp.** 37,100 2,379,038
#Intel Corp. 31,100 2,968,106
Xerox Corp. 32,300 1,732,088
-----------
9,235,476
-----------
COMPUTER SOFTWARE & SERVICES -- 2.7%
#First Data Corp. 33,500 2,734,438
International Business
Machines Corp. 8,400 1,045,800
#Microsoft Corp.** 22,700 2,993,563
-----------
6,773,801
-----------
CONSTRUCTION -- 0.7%
Fluor Corp. 27,500 1,691,250
-----------
CONSUMER NON-DURABLES -- 0.7%
#Kroger Co.** 35,900 1,606,525
-----------
ELECTRONICS -- 4.3%
#AMP, Inc. 20,300 786,625
Electronic Data Systems Corp.** 41,900 2,571,613
Emerson Electric Co. 17,900 1,613,238
General Electric Co. 47,900 4,358,900
Motorola, Inc. 27,500 1,419,688
-----------
10,750,064
-----------
ENERGY & UTILITIES -- 2.2%
Entergy 89,700 2,421,900
NIPSCO 35,900 1,283,425
PECO Energy 79,000 1,876,250
-----------
5,581,575
-----------
ENTERTAINMENT & LEISURE -- 1.6%
La Quinta Inns, Inc. 89,700 1,749,150
#Walt Disney Co. 37,100 2,351,213
-----------
4,100,363
-----------
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
----------- -----------
FINANCE -- 3.2%
#Dean Witter Discover and Co. 53,800 $ 2,959,000
Federal National Mortgage
Association 86,100 3,002,738
#Fleet Financial Group, Inc. 47,900 2,131,550
-----------
8,093,288
-----------
FOOD & AGRICULTURE -- 1.2%
CPC International, Inc. 23,900 1,789,512
H.J. Heinz Co. 35,900 1,211,625
-----------
3,001,137
-----------
INSURANCE -- 3.4%
Allstate Corp. 26,600 1,310,050
American International
Group, Inc. 35,900 3,616,925
#General Re Corp. 13,200 1,871,100
The Chubb Corp. 38,300 1,761,800
-----------
8,559,875
-----------
MACHINERY & HEAVY EQUIPMENT -- 0.9%
Illinois Tool Works, Inc. 32,300 2,329,637
-----------
MEDICAL & MEDICAL SERVICES -- 1.4%
Medtronic, Inc. 40,700 2,609,887
#United Healthcare Corp.** 20,300 844,987
-----------
3,454,874
-----------
METAL & MINING -- 1.9%
Minnesota Mining &
Manufacturing Co. 29,900 2,089,262
#Phelps Dodge Corp. 43,100 2,763,787
-----------
4,853,049
-----------
MOTOR VEHICLES -- 1.4%
Chrysler Corp. 33,500 958,937
Ford Motor Co. 47,900 1,496,875
General Motors Corp. 22,700 1,089,600
-----------
3,545,412
-----------
OIL & GAS -- 4.9%
#Chevron Corp. 9,600 601,200
Exxon Corp. 33,500 2,788,875
Mobil Corp. 9,600 1,111,200
Royal Dutch Petroleum Co. 19,100 2,981,988
Tenneco, Inc. 59,800 2,997,475
#Unocal Corp. 52,600 1,893,600
-----------
12,374,338
-----------
PAPER & FOREST PRODUCTS -- 0.5%
#International Paper Co. 28,700 1,219,750
-----------
PHARMACEUTICALS -- 7.0%
American Home Products Corp. 71,800 4,577,250
Bristol-Myers Squibb Co. 35,900 3,459,862
#Eli Lilly & Co. 57,400 3,702,300
Johnson & Johnson 47,900 2,454,875
Merck & Co., Inc. 46,700 3,286,513
-----------
17,480,800
-----------
PUBLISHING & PRINTING -- 0.8%
McGraw-Hill Companies, Inc. 45,500 1,939,437
-----------
See accompanying notes to financial statements.
31
<PAGE>
AS OF SEPTEMBER 30, 1996
STATEMENT OF NET ASSETS
BALANCED PORTFOLIO (CONTINUED)
NUMBER
OF SHARES VALUE
----------- ------------
COMMON STOCKS(CONTINUED)
RESTAURANTS -- 1.0%
#McDonald's Corp. 53,800 $ 2,548,775
------------
RETAIL MERCHANDISING -- 2.9%
#K Mart Corp. 116,100 1,190,025
May Department Stores Co. 35,900 1,745,637
#Sears Roebuck & Co. 50,200 2,246,450
Wal-Mart Stores, Inc. 75,400 1,988,675
------------
7,170,787
------------
SOAPS & COSMETICS -- 1.7%
Colgate-Palmolive Co. 29,900 2,597,562
Procter & Gamble Co. 17,900 1,745,250
------------
4,342,812
------------
TELECOMMUNICATIONS -- 3.7%
Alltel Corp. 56,200 1,566,575
AT &T Corp. 41,900 2,189,275
GTE Corp. 40,700 1,566,950
NYNEX Corp. 45,500 1,979,250
SBC Communications, Inc. 41,900 2,016,437
------------
9,318,487
------------
TOBACCO -- 1.4%
Philip Morris Co., Inc. 38,300 3,437,425
------------
TRANSPORTATION -- 1.5%
Conrail Corp. 28,700 2,077,162
Norfolk Southern Corp. 19,100 1,745,262
------------
3,822,424
------------
TOTAL COMMON STOCKS
(Cost $125,242,918) 161,563,588
------------
PAR
MATURITY (000)
--------- ---------
U.S. TREASURY AND AGENCY
OBLIGATIONS -- 20.2%
Federal Home Loan Bank Bonds
4.40% 04/27/98 $1,000 977,500
Federal Home Loan Mortgage Corporation
9.00% 06/01/21 872 911,192
6.50% 02/01/26 25 23,638
8.00% 02/13/26 2,000 2,018,125
7.00% 05/01/26 1,698 1,642,530
7.50% 05/26-08/26 9,043 8,952,729
Federal National Mortgage Association
7.00% 10/10-05/11 3,854 3,810,303
Government National Mortgage Association
7.00% 04/01/26 1,009 971,934
U.S. Treasury Bonds
6.00% 02/15/26 980 861,743
6.75% 08/15/26 3,400 3,322,854
U.S. Treasury Notes
6.12% 03/31/98 7,800 7,815,989
#6.00% 08/15/99 2,940 2,919,920
#6.37% 03/31/01 4,075 4,064,771
6.50% 05/31/01 1,280 1,281,881
6.62% 06/30/01 230 231,405
#6.50% 08/31/01 5,250 5,256,142
6.87% 05/15/06 1,085 1,097,423
#7.00% 07/15/06 4,455 4,549,179
------------
TOTAL U.S. TREASURY AND
AGENCY OBLIGATIONS
(Cost $50,547,505) 50,709,258
------------
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
---------- ---------- -----------
MULTIPLE CLASS MORTGAGE
PASS-THROUGHS -- 0.2%
Federal Home Loan Mortgage
Corporation, Series 1907,
Class L (PO)
6.65% 06/15/20 $ 700 $ 399,000
-----------
(Cost $402,937)
ASSET BACKED SECURITIES -- 6.0%
Chase Manhattan Grantor Trust,
Series 96-A, Class A
5.20% 02/15/02 2,633 2,596,585
Chemical Master Credit Card
Trust 1
7.09% 02/15/09 755 752,169
CIT Group Securization Corp.
7.65% 05/15/26 450 419,344
Community Program Loan Trust
4.50% 10/01/18 2,050 1,709,188
CS First Boston Mortgage
Securities Corp.
7.45% 11/25/27 250 244,961
Discover Card Master Trust
6.50% 10/16/03 1,000 1,010,000
Green Tree Financial Corp.
6.85% 10/15/18 1,300 1,228,906
7.35% 11/15/26 400 390,938
Merrill Lynch Mortgage
Investors, Inc.
7.56% 05/25/15 450 448,661
7.24% 04/25/28 1,000 1,000,000
NationsBank Auto Grantor Trust
5.85% 06/15/02 841 838,649
Premier Auto Trust
6.75% 11/06/00 1,000 1,007,031
Prudential Home Mortgage
Securities
8.11% 11/25/23 759 771,085
Small Business Administration
Program
6.37% 02/15/16 1,127 1,066,880
Small Business Administration,
Series 96-1, Class C
7.35% 08/01/06 1,050 1,044,750
Standard Credit Card Master
Trust
8.25% 01/08/07 590 628,166
-----------
TOTAL ASSET BACKED SECURITIES
(Cost $15,440,270) 15,157,313
-----------
See accompanying notes to financial statements.
32
<PAGE>
AS OF SEPTEMBER 30, 1996
COMPASS CAPITAL FUNDS
Par
MATURITY (000) VALUE
---------- ----------- -----------
CORPORATE BONDS -- 5.2%
Associates Corp., N.A.
7.25% 05/15/98 $ 200 $ 203,000
Burlington Industries
7.25% 09/15/05 200 193,503
Burlington Northern
7.00% 12/15/25 600 543,364
Coastal Corp.
9.75% 08/01/03 500 563,806
Equitable Life
7.70% 12/01/15 350 339,235
Fairfax Financial
8.30% 04/15/26 550 552,082
Ford Motor Credit Corp.
7.50% 06/15/04 250 253,969
General Electric Capital
8.00% 01/15/98 200 204,500
Hydro-Quebec Canada
7.50% 04/01/16 900 871,854
Idaho Power Co.
8.75% 03/15/27 1,000 1,056,290
ITT Corp.
7.75% 11/15/25 350 321,973
Liberty Mutual(DOUBLE DAGGER)
8.50% 05/15/25 750 781,813
Meridian Bancorp
6.62% 06/15/00 450 447,613
Metropolitan Life
6.30% 11/01/03 300 284,414
7.00% 11/01/05 350 339,055
Mobile Energy Services Co.
8.66% 01/01/17 293 296,702
Nabisco, Inc.
6.85% 06/15/05 300 287,297
7.05% 07/15/07 180 172,909
7.55% 06/15/15 700 671,208
New American Capital, Inc.
6.91% 10/14/96 600 604,500
News America Holdings
7.75% 12/01/45 610 558,588
Paine Webber Group, Inc.
7.87% 02/15/03 1,000 1,018,039
Quebec Province
7.50% 07/15/23 400 382,345
Ralston Purina Co.
7.87% 06/15/25 300 295,875
Reliance Industries
9.37% 06/24/26 305 321,338
Siam Commercial Bank
7.50% 03/15/06 900 875,756
Tele-Communications, Inc.
8.25% 01/15/03 200 201,602
Tenaga National
7.50% 01/15/44 250 225,661
WMX Technologies, Inc.
8.25% 11/15/99 250 261,875
-----------
TOTAL CORPORATE BONDS
(Cost $13,173,674) 13,130,166
-----------
MUNICIPAL BONDS -- 0.9%
Los Angeles County Taxable Pension Obligation
8.62% 06/30/06 1,650 1,812,000
6.97% 06/30/08 400 388,000
-----------
TOTAL MUNICIPAL BONDS
(Cost $2,136,137) 2,200,000
-----------
- --------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
---------- ----------- -----------
MEDIUM TERM NOTES -- 0.1%
Salomon Brothers
8.90% 02/15/00 $ 300 $ 315,480
------------
(Cost $311,026)
SHORT TERM INVESTMENTS -- 3.6%
Federal Home Loan Bank
Discount Notes
5.15% 10/01/96 8,900 8,900,000
Smith Barney Money Market Fund 29 29,344
------------
TOTAL SHORT TERM INVESTMENTS
(Cost $8,929,344) 8,929,344
------------
TOTAL INVESTMENTS IN
SECURITIES
(Cost $216,183,811*) 100.6% 252,404,149
LIABILITIES IN EXCESS OF
OTHER ASSETS (0.6%) (1,484,174)
-------- ------------
NET ASSETS (Applicable to 2,487,754
Shares, 8,887,069 Service Shares,
4,762,624 Investor A Shares,
487,563 Investor B Shares
outstanding) 100.0% $250,919,975
====== ============
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER INSTITUTIONAL SHARE
($37,566,878 (DIVIDE) 2,487,754) $15.10
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER SERVICE SHARE
($134,120,677 (DIVIDE) 8,887,069) $15.09
======
NET ASSET VALUE AND
REDEMPTION PRICE PER
INVESTOR A SHARE
($71,899,325 (DIVIDE) 4,762,624) $15.10
======
MAXIMUM OFFERING PRICE
PER INVESTOR A SHARE
($15.10 (DIVIDE) .955) $15.81
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 4.5%)
PER INVESTOR B SHARE
($7,333,095 (DIVIDE) 487,563) $15.04
======
- -----------------
* Also cost for Federal income tax purposes. The gross unrealized
appreciation (depreciation) on a tax basis is as follows:
Gross unrealized appreciation $38,519,643
Gross unrealized depreciation (2,299,305)
-----------
$36,220,338
===========
** Non-income producing security.
# Total or partial securities on loan.
++ Principal amount of securities pledged as collateral is $500,000 on 19
net long U.S. Treasury Note futures contracts expiring December 1996. The
value of such contracts on September 30, 1996 was $6,902,406, thereby
resulting in an unrealized loss $43,844. Outstanding at September 30, 1996
are 24 30-year U.S. Treasury Bond future call options written expiring in
November 1996 with a value of $5,000 and an exercise price of 114.
See accompanying notes to financial statements.
33
<PAGE>
FOR THE YEAR ENDED SEPTEMBER 30, 1996
STATEMENTS OF OPERATIONS
COMPASS CAPITAL FUNDS
<TABLE>
<CAPTION>
VALUE GROWTH SMALL CAP SMALL CAP INTERNATIONAL
EQUITY EQUITY VALUE EQUITY GROWTH EQUITY EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ------------ --------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Investment income:
Interest ............................. $ 2,165,637 $ 1,154,701 $ 912,355 $ 2,591,701 $ 1,076,526
Dividends ............................ 30,104,224 5,777,634 3,455,669 149,210 10,429,125
Net investment income from
The U.S. Large Company
Series of The DFA Investment
Trust Company ...................... -- -- -- -- --
Foreign taxes withheld ............... -- -- -- -- (1,237,166)
------------ ------------ ----------- ------------ -----------
Total investment income ......... 32,269,861 6,932,335 4,368,024 2,740,911 10,268,485
------------ ------------ ----------- ------------ -----------
Expenses:
Investment advisory fee .............. 5,557,359 2,777,808 1,569,181 1,930,941 3,863,591
Administration fee ................... 2,188,422 1,140,271 648,081 796,051 1,160,426
Custodian fee ........................ 163,487 93,985 66,496 90,767 655,909
Transfer agent fee ................... 341,900 166,347 106,876 124,968 181,682
Service fees ......................... 1,253,211 577,230 223,330 364,998 459,698
Distribution fees .................... 88,171 55,923 105,705 76,748 86,971
Legal and audit ...................... 86,451 42,535 24,181 29,968 41,051
Printing ............................. 46,808 18,340 11,996 14,812 19,033
Registration fees and expenses ....... 53,148 80,623 28,142 60,836 48,600
Organization ......................... 69,569 32,006 -- 28,735 44,259
Trustees' fees and officer's
salary ............................. 17,882 11,728 4,800 6,809 8,924
Other ................................ 27,411 12,782 12,259 9,733 13,602
------------ ------------ ----------- ------------ -----------
9,893,819 5,009,578 2,801,047 3,535,366 6,583,746
Less fees voluntarily waived ......... (880,128) (575,342) (33,107) (68,117) (562,241)
------------ ------------ ----------- ------------ -----------
Total expenses .................. 9,013,691 4,434,236 2,767,940 3,467,249 6,021,505
------------ ------------ ----------- ------------ -----------
Net investment income (deficit) ......... 23,256,170 2,498,099 1,600,084 (726,338) 4,246,980
------------ ------------ ----------- ------------ -----------
Realized and unrealized gain on
investments and foreign currency
transactions:
Net realized gain (deficit) from:
Investment transactions ......... 176,352,512 26,859,081 43,868,536 31,071,009 16,422,064
Futures contracts -- 2,535,862 -- 3,579,010 --
Foreign currency related
transactions .................. -- -- -- -- 7,942,283
------------ ------------ ----------- ------------ -----------
176,352,512 29,394,943 43,868,536 34,650,019 24,364,347
------------ ------------ ----------- ------------ -----------
Change in unrealized appreciation/
(depreciation) from:
Investments ........................ (4,910,031) 70,267,334 (12,365,246) 105,353,706 10,158,378
Futures contracts .................. -- 57,500 -- 143,676 --
Foreign currency related
transactions ..................... -- -- -- -- (433,120)
------------ ------------ ----------- ------------ -----------
(4,910,031) 70,324,834 (12,365,246) 105,497,382 9,725,258
------------ ------------ ----------- ------------ -----------
Net gain on investments and foreign
currency transactions ................ 171,442,481 99,719,777 31,503,290 140,147,401 34,089,605
------------ ------------ ----------- ------------ -----------
Net increase in assets resulting from
operations ........................... $194,698,651 $102,217,876 $33,103,374 $139,421,063 $38,336,585
============ ============ =========== ============ ===========
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL
EMERGING SELECT INDEX
MARKETS EQUITY EQUITY BALANCED
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Investment income:
Interest ........................... $ 625,082 $ 858,634 $ 537,894 $ 5,597,117
Dividends .......................... 1,606,463 8,348,273 3,036,763 3,497,796
Net investment income from
The U.S. Large Company
Series of The DFA Investment
Trust Company .................... -- -- 1,687,421 --
Foreign taxes withheld ............. (111,396) -- -- --
---------- ----------- ----------- -----------
Total investment income ....... 2,120,149 9,206,907 5,262,078 9,094,913
---------- ----------- ----------- -----------
Expenses:
Investment advisory fee ............ 960,267 2,069,619 276,660 1,264,711
Administration fee ................. 174,256 848,872 491,265 517,571
Custodian fee ...................... 210,195 82,288 37,103 72,905
Transfer agent fee ................. 22,014 116,835 71,999 120,345
Service fees ....................... 74,705 309,134 262,091 392,587
Distribution fees .................. 11,065 21,759 42,740 316,760
Legal and audit .................... 8,631 29,402 45,598 24,254
Printing ........................... 3,253 17,248 39,072 12,502
Registration fees and expenses ..... 40,744 80,832 24,496 30,637
Organization ....................... 8,700 4,410 -- 9,067
Trustees' fees and officer's
salary ........................... 1,288 6,360 3,760 5,008
Other .............................. 18,718 8,512 24,396 16,055
---------- ----------- ----------- -----------
1,533,836 3,595,271 1,319,180 2,782,402
Less fees voluntarily waived ....... (75,190) (470,145) (673,800) (250,406)
---------- ----------- ----------- -----------
Total expenses ................ 1,458,646 3,125,126 645,380 2,531,996
---------- ----------- ----------- -----------
Net investment income (deficit) ....... 661,503 6,081,781 4,616,698 6,562,917
---------- ----------- ----------- -----------
Realized and unrealized gain on
investments and foreign currency
transactions:
Net realized gain (deficit) from:
Investment transactions ....... (2,885,004) 37,846,487 10,786,686 8,971,458
Futures contracts -- 232,435 1,360,299 269,417
Foreign currency related
transactions ................ (153,582) -- -- --
---------- ----------- ----------- -----------
(3,038,586) 38,078,922 12,146,985 9,240,875
---------- ----------- ----------- -----------
Change in unrealized appreciation/
(depreciation) from:
Investments ...................... 7,265,780 19,598,788 21,465,360 13,796,647
Futures contracts ................ -- (341,700) (19,600) (29,145)
Foreign currency related
transactions ................... 419 -- -- --
---------- ----------- ----------- -----------
7,266,199 19,257,088 21,445,760 13,767,502
---------- ----------- ----------- -----------
Net gain on investments and foreign
currency transactions .............. 4,227,613 57,336,010 33,592,745 23,008,377
---------- ----------- ----------- -----------
Net increase in assets resulting from
operations ......................... $4,889,116 $63,417,791 $38,209,443 $29,571,294
========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
34&35
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
COMPASS CAPITAL FUNDS
SMALL CAP VALUE
VALUE EQUITY PORTFOLIO GROWTH EQUITY PORTFOLIO EQUITY PORTFOLIO
---------------------------- -------------------------- --------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
9/30/96 9/30/95 9/30/96 9/30/95 9/30/96 9/30/95
------------ ----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net
assets:
Operations:
Net investment income
(deficit) ............... $ 23,256,170 $ 17,003,248 $ 2,498,099 $ 2,409,347 $ 1,600,084 $ 771,476
Net gain (loss) on
investments and foreign
currency related
transactions ............ 171,442,481 129,067,157 99,719,777 62,310,733 31,503,290 36,315,269
-------------- ------------ ------------ ------------ ------------ ------------
Net increase (decrease)
in net assets resulting
from operations ......... 194,698,651 146,070,405 102,217,876 64,720,080 33,103,374 37,086,745
-------------- ------------ ------------ ------------ ------------ ------------
Distributions to shareholders
from:
Net investment income:
Institutional Shares ...... (14,286,618) (13,178,740) (1,136,763) (2,327,933) (1,400,389) (867,157)
Service Shares ............ (8,962,904) (3,103,505) (254,368) (616,352) (268,681) (91,955)
Investor A Shares ......... (426,677) (296,322) -- (67,622) (35,201) --
Investor B Shares ......... (15,517) -- -- -- -- --
Investor C Shares ......... (811) -- -- -- -- --
-------------- ------------ ------------ ------------ ------------ ------------
Total distribution from
net investment income ... (23,692,527) (16,578,567) (1,391,131) (3,011,907) (1,704,271) (959,112)
-------------- ------------ ------------ ------------ ------------ ------------
Net realized gains:
Institutional Shares ...... (34,958,288) (11,450,041) (6,935,080) -- (9,611,837) (7,036,364)
Service Shares ............ (12,256,162) (2,299,900) (2,398,963) -- (3,671,321) (2,075,543)
Investor A Shares ......... (1,214,058) (248,638) (303,768) -- (1,218,870) (823,691)
Investor B Shares ......... -- -- -- -- (92,835) (23,641)
Investor C Shares ......... -- -- -- -- -- --
-------------- ------------ ------------ ------------ ------------ ------------
Total distributions from
net realized gains ...... (48,428,508) (13,998,579) (9,637,811) -- (14,594,863) (9,959,239)
-------------- ------------ ------------ ------------ ------------ ------------
Capital:
Institutional ............. -- -- -- -- -- --
Service ................... -- -- -- -- -- --
Investor A Shares ......... -- -- -- -- -- --
Investor B Shares ......... -- -- -- -- -- --
Investor C Shares ......... -- -- -- -- -- --
-------------- ------------ ------------ ------------ ------------ ------------
Total distributions from
capital ................. -- -- -- -- -- --
-------------- ------------ ------------ ------------ ------------ ------------
Total distributions to
shareholders ............ (72,121,035) (30,577,146) (11,028,942) (3,011,907) (16,299,134) (10,918,351)
-------------- ------------ ------------ ------------ ------------ ------------
Capital share transactions .... 399,261,871 (112,921,499) 301,601,842 97,002,613 53,279,248 (4,095,954)
-------------- ------------ ------------ ------------ ------------ ------------
Total increase (decrease)
in net assets ........... 521,839,487 2,571,760 392,790,776 158,710,786 70,083,488 22,072,440
Net assets:
Beginning of period ....... 696,014,463 693,442,703 298,345,969 139,635,183 252,687,486 230,615,046
-------------- ------------ ------------ ------------ ------------ ------------
End of period ............. $1,217,853,950 $696,014,463 $691,136,745 $298,345,969 $322,770,974 $252,687,486
============== ============ ============ ============ ============ ============
SMALL CAP GROWTH INTERNATIONAL INTERNATIONAL EMERGING
EQUITY PORTFOLIO EQUITY PORTFOLIO MARKETS PORTFOLIO
-------------------------- -------------------------- --------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
9/30/96 9/30/95 9/30/96 9/30/95 9/30/96 9/30/95
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net
assets:
Operations:
Net investment income
(deficit) ................ $ (726,338) $ 182,020 $ 4,246,980 $ 5,351,273 $ 661,503 $ 448,258
Net gain (loss) on
investments and foreign
currency related
transactions ............. 140,147,401 58,822,948 34,089,605 7,527,285 4,227,613 (3,368,750)
------------ ------------ ------------ ------------ ------------ -----------
Net increase (decrease)
in net assets resulting
from operations .......... 139,421,063 59,004,968 38,336,585 12,878,558 4,889,116 (2,920,492)
------------ ------------ ------------ ------------ ------------ -----------
Distributions to shareholders
from:
Net investment income:
Institutional Shares ....... (211,287) (134,031) (4,294,793) (2,564,224) -- (359,180)
Service Shares ............. -- (1,124) (1,383,668) (602,030) -- (126,070)
Investor A Shares .......... -- -- (210,717) (52,611) -- (18,873)
Investor B Shares .......... -- -- (14,131) -- -- --
Investor C Shares .......... -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ -----------
Total distribution from
net investment income .... (211,287) (135,155) (5,903,309) (3,218,865) -- (504,123)
------------ ------------ ------------ ------------ ------------ -----------
Net realized gains:
Institutional Shares ....... -- -- (16,180,662) (7,774,154) (45,943) (85,253)
Service Shares ............. -- -- (5,506,015) (2,155,634) (19,291) (106,636)
Investor A Shares .......... -- -- (869,371) (429,789) (2,963) (55,511)
Investor B Shares .......... -- -- (61,711) (14,711) -- --
Investor C Shares .......... -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ -----------
Total distributions from
net realized gains ....... -- -- (22,617,759) (10,374,288) (68,197) (247,400)
------------ ------------ ------------ ------------ ------------ -----------
Capital:
Institutional .............. -- -- -- -- -- (18,501)
Service .................... -- -- -- -- -- (6,494)
Investor A Shares .......... -- -- -- -- -- (972)
Investor B Shares .......... -- -- -- -- -- --
Investor C Shares .......... -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ -----------
Total distributions from
capital .................. -- -- -- -- -- (25,967)
------------ ------------ ------------ ------------ ------------ -----------
Total distributions to
shareholders ............. (211,287) (135,155) (28,521,068) (13,593,153) (68,197) (777,490)
------------ ------------ ------------ ------------ ------------ -----------
Capital share transactions ..... 138,191,328 67,115,660 125,201,967 63,627,948 58,140,563 41,726,944
------------ ------------ ------------ ------------ ------------ -----------
Total increase (decrease)
in net assets ............ 277,401,104 125,985,473 135,017,484 62,913,353 62,961,482 38,028,962
Net assets:
Beginning of period ........ 215,866,373 89,880,900 437,425,268 374,511,915 46,901,947 8,872,985
------------ ------------ ------------ ------------ ------------ -----------
End of period .............. $493,267,477 $215,866,373 $572,442,752 $437,425,268 $109,863,429 $46,901,947
============ ============ ============ ============ ============ ===========
SELECT INDEX
EQUITY PORTFOLIO EQUITY PORTFOLIO BALANCED PORTFOLIO
-------------------------- -------------------------- -------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
9/30/96 9/30/95 9/30/96 9/30/95 9/30/96 9/30/95
------------ ------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net
assets:
Operations:
Net investment income
(deficit) ................. $ 6,081,781 $ 3,895,658 $ 4,616,698 $ 5,887,011 $ 6,562,917 $ 5,586,249
Net gain (loss) on
investments and foreign
currency related
transactions .............. 57,336,010 37,776,640 33,592,745 49,924,337 23,008,377 24,561,091
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease)
in net assets resulting
from operations ........... 63,417,791 41,672,298 38,209,443 55,811,348 29,571,294 30,147,340
------------ ------------ ------------ ------------ ------------ ------------
Distributions to shareholders
from:
Net investment income:
Institutional Shares ........ (4,512,721) (2,701,925) (2,965,619) (4,208,433) (938,462) (821,125)
Service Shares .............. (1,433,794) (1,140,724) (1,824,167) (1,134,278) (3,553,382) (2,625,630)
Investor A Shares ........... (61,193) (35,042) (196,504) (107,929) (1,882,795) (2,128,267)
Investor B Shares ........... (3,156) -- (14,252) -- (101,081) (61,853)
Investor C Shares -- -- (1,308) -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Total distribution from
net investment income ..... (6,010,864) (3,877,691) (5,001,850) (5,450,640) (6,475,720) (5,636,875)
------------ ------------ ------------ ------------ ------------ ------------
Net realized gains:
Institutional Shares ........ (8,002,431) (722,978) (13,669,694) (1,653,604) (242,642) (223,248)
Service Shares .............. (2,803,130) (611,965) (8,539,902) (329,586) (784,225) (746,415)
Investor A Shares ........... (135,347) (10,239) (935,892) (31,480) (626,288) (696,601)
Investor B Shares ........... -- -- -- -- (32,915) (12,892)
Investor C Shares ........... -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Total distributions from
net realized gains ........ (10,940,908) (1,345,182) (23,145,488) (2,014,670) (1,686,070) (1,679,156)
------------ ------------ ------------ ------------ ------------ ------------
Capital:
Institutional ............... -- -- -- -- -- --
Service ..................... -- -- -- -- -- --
Investor A Shares ........... -- -- -- -- -- --
Investor B Shares ........... -- -- -- -- -- --
Investor C Shares -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Total distributions from
capital ................... -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Total distributions to
shareholders .............. (16,951,772) (5,222,873) (28,147,338) (7,465,310) (8,161,790) (7,316,031)
------------ ------------ ------------ ------------ ------------ ------------
Capital share transactions ...... 22,892,723 191,859,670 58,712,108 (48,630,289) 48,301,845 12,436,803
------------ ------------ ------------ ------------ ------------ ------------
Total increase (decrease)
in net assets ............. 69,358,742 228,309,095 68,774,213 (284,251) 69,711,349 35,268,112
Net assets:
Beginning of period ......... 326,326,469 98,017,374 177,469,790 177,754,041 181,208,626 145,940,514
------------ ------------ ------------ ------------ ------------ ------------
End of period ...............$395,685,211 $326,326,469 $246,244,003 $177,469,790 $250,919,975 $181,208,626
============ ============ ============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
36&37
<PAGE>
FOR THE PERIOD ENDED
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout the Period
COMPASS CAPITAL FUNDS
<TABLE>
<CAPTION>
NET NET GAIN DISTRIBUTIONS NET NET
ASSET (LOSS) ON DISTRIBUTIONS FROM NET ASSET ASSETS
VALUE NET INVESTMENTS FROM NET DISTRIBUTIONS REALIZED VALUE END OF
BEGINNING INVESTMENT (BOTH REALIZED INVESTMENT FROM CAPITAL END OF TOTAL PERIOD
OF PERIOD INCOME AND UNREALIZED) INCOME CAPITAL GAINS PERIOD RETURN (000)
====================================================================================================================================
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------
VALUE EQUITY
- -------------
INSTITUTIONAL CLASS
9/30/96 $13.92 $ 0.35 $ 2.41 $(0.36) $ -- $(0.97) $15.35 21.01% $731,024
9/30/95 11.62 0.34 2.54 (0.33) -- (0.25) 13.92 25.73 508,273
9/30/94 11.68 0.27 0.16 (0.27) -- (0.22) 11.62 3.76 577,996
9/30/93 9.78 0.22 1.91 (0.23) -- -- 11.68 21.92 432,776
4/20/92 1 through
9/30/92 10.00 0.12 (0.24) (0.10) -- -- 9.78 (1.19) 322,806
SERVICE CLASS
9/30/96 $13.92 $ 0.32 $2.40 $(0.32) $ -- $(0.97) $15.35 20.68% $457,283
9/30/95 11.62 0.30 2.55 (0.30) -- (0.25) 13.92 25.40 170,832
9/30/94 11.68 0.25 0.16 (0.25) -- (0.22) 11.62 3.51 105,035
7/29/93 1 through
9/30/93 11.21 0.04 0.48 (0.05) -- -- 11.68 4.64 23,137
INVESTOR A CLASS
9/30/96 $13.92 $ 0.28 $2.41 $(0.29) $ -- $(0.97) $15.35 20.52%3 $ 26,190
9/30/95 11.62 0.27 2.56 (0.28) -- (0.25) 13.92 25.223 16,910
9/30/94 11.69 0.23 0.15 (0.23) -- (0.22) 11.62 3.323 10,412
9/30/93 9.78 0.22 1.91 (0.22) -- -- 11.69 21.953 4,865
5/2/92 1 through
9/30/92 10.00 0.12 (0.24) (0.10) -- -- 9.78 (1.19)3 16
INVESTOR B CLASS
1/18/96 1 through
9/30/96 $13.56 $ 0.13 $1.80 $(0.17) $ -- $ -- $15.32 14.26%4 $ 3,152
INVESTOR C CLASS
8/16/96 1 through
9/30/96 $14.91 $ 0.02 $0.45 $(0.06) $ -- $ -- $15.32 3.16%4 $ 205
- --------------
GROWTH EQUITY
- --------------
INSTITUTIONAL CLASS
9/30/96 $13.03 $ 0.08 $2.29 $(0.06) $ -- $(0.38) $14.96 18.67% $481,171
9/30/95 10.19 0.13 2.88 (0.17) -- -- 13.03 29.88 211,543
9/30/94 11.58 0.06 (1.34) (0.01) -- (0.10) 10.19 (11.14) 97,834
9/30/93 9.92 0.06 2.07 (0.07) (0.01) (0.39) 11.58 22.18 100,049
9/30/92 10.28 0.21 0.30 (0.37) -- (0.50) 9.92 4.98 58,372
SERVICE CLASS
9/30/96 $13.02 $ 0.05 $2.28 $(0.02) $ -- $(0.38) $14.95 18.34% $191,023
9/30/95 10.18 0.10 2.87 (0.13) -- -- 13.02 29.43 76,769
9/30/94 11.57 0.03 (1.32) -- -- (0.10) 10.18 (11.20) 36,752
7/29/93 1 through
9/30/93 10.54 -- 1.03 -- -- -- 11.57 9.77 8,606
INVESTOR A CLASS
9/30/96 $13.01 $ 0.02 $2.29 $ -- $ -- $(0.38) $14.94 18.18%3 $ 16,579
9/30/95 10.16 0.08 2.87 (0.10) -- -- 13.01 29.263 10,034
9/30/94 11.57 0.02 (1.33) -- -- (0.10) 10.16 (11.38)3 5,049
9/30/93 9.92 0.02 2.10 (0.07) (0.01) (0.39) 11.57 22.08 3 2,362
3/14/92 1 through
9/30/92 10.09 0.08 (0.10) (0.15) -- -- 9.92 (0.17)3 239
INVESTOR B CLASS
1/24/96 1 through
9/30/96 $13.08 $(0.02) $1.80 $ -- $ -- $ -- $14.86 13.61%4 $ 2,364
- -----------------------
SMALL CAP VALUE EQUITY
- -----------------------
INSTITUTIONAL CLASS
9/30/96 $15.16 $ 0.10 $1.70 $(0.11) $ -- $(0.87) $15.98 12.64% $214,828
9/30/95 13.62 0.06 2.17 (0.08) -- (0.61) 15.16 17.43 168,334
9/30/94 13.08 0.04 0.77 (0.02) -- (0.25) 13.62 6.28 168,360
9/30/93 10.14 0.04 3.02 (0.04) -- (0.08) 13.08 30.36 128,805
4/13/92 1 through
9/30/92 10.00 0.02 0.13 (0.01) -- -- 10.14 1.50 75,045
</TABLE>
<TABLE>
<CAPTION>
RATIO OF NET
RATIO OF EXPENSES INVESTMENT INCOME
RATIO OF TO AVERAGE RATIO OF NET TO AVERAGE
EXPENSES TO NET ASSETS INVESTMENT INCOME NET ASSETS PORTFOLIO AVERAGE
AVERAGE NET (EXCLUDING TO AVERAGE NET (EXCLUDING TURNOVER COMMISSION
ASSETS WAIVERS) ASSETS WAIVERS) RATE RATE5
===================================================================================================================
<C> <C> <C> <C> <C> <C> <C>
- -------------
VALUE EQUITY
- -------------
INSTITUTIONAL CLASS
9/30/96 0.75% 0.84% 2.40% 2.32% 60% $0.0556
9/30/95 0.67 0.81 2.68 2.53 12 --
9/30/94 0.65 0.81 2.44 2.28 11 --
9/30/93 0.80 0.83 2.07 2.04 11 --
4/20/92 1 through
9/30/92 0.85 2 0.85 2 2.62 2 2.62 2 13 --
SERVICE CLASS
9/30/96 1.05% 1.14% 2.13% 2.04% 60% $0.0556
9/30/95 0.95 1.09 2.40 2.26 12 --
9/30/94 0.90 1.06 2.24 2.08 11 --
7/29/93 1 through
9/30/93 0.91 2 0.94 2 2.44 2 2.41 2 11 --
INVESTOR A CLASS
9/30/96 1.22% 1.31% 1.93% 1.84% 60% $0.0556
9/30/95 1.11 1.25 2.24 2.10 12 --
9/30/94 1.05 1.21 2.08 1.92 11 --
9/30/93 0.92 0.95 1.96 1.93 11 --
5/2/92 1 through
9/30/92 0.85 2 0.85 2 2.62 2 2.62 2 13 --
INVESTOR B CLASS
1/18/96 1 through
9/30/96 1.92%2 2.00%2 1.34%2 1.25%2 60% $0.0556
INVESTOR C CLASS
8/16/96 1 through
9/30/96 1.80%2 1.88%2 1.29%2 1.20%2 60% $0.0556
- --------------
GROWTH EQUITY
- --------------
INSTITUTIONAL CLASS
9/30/96 0.75% 0.86% 0.63% 0.51% 58% $0.0598
9/30/95 0.67 0.85 1.20 1.01 55 --
9/30/94 0.65 0.89 0.62 0.38 212 --
9/30/93 0.81 0.87 0.50 0.44 175 --
9/30/92 0.85 0.86 2.07 2.06 162 --
SERVICE CLASS
9/30/96 1.05% 1.17% 0.31% 0.20% 58% $0.0598
9/30/95 0.95 1.13 0.91 0.73 55 --
9/30/94 0.90 1.14 0.51 0.26 212 --
7/29/93 1 through
9/30/93 0.89 2 0.95 2 (0.03)2 (0.09)2 175 --
INVESTOR A CLASS
9/30/96 1.22% 1.34% 0.15% 0.04% 58% $0.0598
9/30/95 1.11 1.29 0.76 0.58 55 --
9/30/94 1.05 1.29 0.29 0.05 212 --
9/30/93 0.91 0.97 0.18 0.12 175 --
3/14/92 1 through
9/30/92 0.85 2 0.86 2 2.07 2 2.06 2 162 --
INVESTOR B CLASS
1/24/96 1 through
9/30/96 1.93%2 2.05%2 (0.47)%2 (0.58)%2 58% $0.0598
- -----------------------
SMALL CAP VALUE EQUITY
- -----------------------
INSTITUTIONAL CLASS
9/30/96 0.85% 0.86% 0.68% 0.67% 50% $0.0580
9/30/95 0.75 0.84 0.44 0.35 31 --
9/30/94 0.73 0.85 0.28 0.16 18 --
9/30/93 0.83 0.87 0.31 0.27 41 --
4/13/92 1 through
9/30/92 0.85 2 0.89 2 0.51 2 0.47 2 17 --
</TABLE>
See accompanying notes to financial statements.
38 & 39
<PAGE>
FOR THE PERIOD ENDED
FINANCIAL HIGHLIGHTS (CONTINUED)
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
COMPASS CAPITAL FUNDS
NET NET GAIN DISTRIBUTIONS NET
ASSET (LOSS) ON DISTRIBUTIONS FROM NET ASSET
VALUE NET INVESTMENTS FROM NET DISTRIBUTIONS REALIZED VALUE
BEGINNING INVESTMENT (BOTH REALIZED INVESTMENT FROM CAPITAL END OF TOTAL
OF PERIOD INCOME AND UNREALIZED) INCOME CAPITAL GAINS PERIOD RETURN
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SERVICE CLASS
9/30/96 $15.15 $ 0.06 $ 1.70 $(0.06) $ -- $(0.87) $15.98 12.30%
9/30/95 13.59 0.02 2.18 (0.03) -- (0.61) 15.15 17.17
9/30/94 13.08 -- 0.77 (0.01) -- (0.25) 13.59 5.96
7/29/93 1 through
9/30/93 12.28 -- 0.80 -- -- -- 13.08 6.51
INVESTOR A CLASS
9/30/96 $15.14 $ 0.03 $ 1.69 $(0.02) $ -- $(0.87) $15.97 12.06%3
9/30/95 13.58 -- 2.17 -- -- (0.61) 15.14 16.96 3
9/30/94 13.07 (0.01) 0.77 -- -- (0.25) 13.58 5.93 3
9/30/93 10.14 0.03 3.02 (0.04) -- (0.08) 13.07 30.36 3
6/2/92 1 through
9/30/92 10.06 0.02 0.07 (0.01) -- -- 10.14 0.89 3
INVESTOR B CLASS
9/30/96 $15.06 $(0.04) $ 1.65 $ -- $ -- $(0.87) $15.80 11.34%4
10/3/94 1 through
9/30/95 13.51 (0.05) 2.21 -- -- (0.61) 15.06 16.95 4
- ------------------------
SMALL CAP GROWTH EQUITY
- ------------------------
INSTITUTIONAL CLASS
9/30/96 $15.06 $(0.01) $ 6.91 $(0.02) $ -- $ -- $21.94 45.87%
9/30/95 10.16 0.02 4.90 (0.02) -- -- 15.06 48.50
9/30/94 10.47 0.03 (0.33) (0.01) -- -- 10.16 (2.89)
9/14/93 1 through
9/30/93 10.00 -- 0.47 -- -- -- 10.47 4.70
SERVICE CLASS
9/30/96 $15.02 $(0.06) $ 6.84 $ -- $ -- $ -- $21.80 45.14%
9/30/95 10.14 (0.01) 4.89 -- -- -- 15.02 48.13
9/30/94 10.47 0.01 (0.34) -- -- -- 10.14 (3.12)
9/15/93 1 through
9/30/93 9.96 -- 0.51 -- -- -- 10.47 5.12
INVESTOR A CLASS
9/30/96 $14.98 $(0.06) $ 6.77 $ -- $ -- $ -- $21.69 44.79%3
9/30/95 10.12 (0.02) 4.88 -- -- -- 14.98 48.02 3
9/30/94 10.47 -- (0.35) -- -- -- 10.12 (3.33)3
9/15/93 1 through
9/30/93 9.96 -- 0.51 -- -- -- 10.47 5.12 3
INVESTOR B CLASS
1/18/96 1 through
9/30/96 $14.87 $(0.07) $ 6.73 $ -- $ -- $ -- $21.53 38.27%4
INVESTOR C CLASS
9/6/96 1 through
9/30/96 $19.66 $(0.01) $ 1.88 $ -- $ -- $ -- $21.53 9.51%4
- ---------------------
INTERNATIONAL EQUITY
- ---------------------
INSTITUTIONAL CLASS
9/30/96 $13.27 $ 0.17 $ 0.84 $(0.18) $ -- $(0.67) $13.43 8.01%
9/30/95 13.44 0.17 0.13 (0.11) -- (0.36) 13.27 2.46
9/30/94 12.48 0.15 1.17 (0.11) -- (0.25) 13.44 10.71
9/30/93 9.87 0.11 2.61 (0.11) -- -- 12.48 27.72
4/27/92 1 through
9/30/92 10.00 0.11 (0.17) (0.07) -- -- 9.87 (0.61)
SERVICE CLASS
9/30/96 $13.24 $ 0.19 $ 0.78 $(0.17) $ -- $(0.67) $13.37 7.71%
9/30/95 13.41 0.11 0.16 (0.08) -- (0.36) 13.24 2.19
9/30/94 12.47 0.14 1.14 (0.09) -- (0.25) 13.41 10.36
7/29/93 1 through
9/30/93 11.76 0.02 0.69 -- -- -- 12.47 6.03
</TABLE>
<TABLE>
<CAPTION>
RATIO OF NET
NET RATIO OF EXPENSES INVESTMENT INCOME
ASSETS RATIO OF TO AVERAGE RATIO OF NET TO AVERAGE
END OF EXPENSES TO NET ASSETS INVESTMENT INCOME NET ASSETS PORTFOLIO AVERAGE
PERIOD AVERAGE NET (EXCLUDING TO AVERAGE NET (EXCLUDING TURNOVER COMMISSION
(000) ASSETS WAIVERS) ASSETS WAIVERS) RATE RATE5
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
SERVICE CLASS
9/30/96 $ 80,981 1.15% 1.16% 0.38% 0.37% 50% $0.0580
9/30/95 61,313 1.02 1.12 0.16 0.07 31 --
9/30/94 45,372 0.98 1.10 0.03 (0.09) 18 --
7/29/93 1 through
9/30/93 21,689 0.99 2 1.03 2 0.12 2 0.08 2 41 --
INVESTOR A CLASS
9/30/96 $ 24,605 1.32% 1.33% 0.20% 0.19% 50% $0.0580
9/30/95 21,563 1.18 1.28 0.00% (0.09) 31 --
9/30/94 16,884 1.13 1.25 (0.11) (0.23) 18 --
9/30/93 9,084 0.94 0.98 0.19 0.15 41 --
6/2/92 1 through
9/30/92 62 0.85 2 0.89 2 0.51 2 0.47 2 17 --
INVESTOR B CLASS
9/30/96 $ 2,357 2.04% 2.05% (0.50)% (0.51)% 50% $0.0580
10/3/94 1 through
9/30/95 1,477 1.80 2 1.89 2 (0.61)2 (0.70)2 31 --
- ------------------------
SMALL CAP GROWTH EQUITY
- ------------------------
INSTITUTIONAL CLASS
9/30/96 $299,563 0.86% 0.88% (0.07)% (0.09)% 89% $0.0569
9/30/95 145,915 0.75 0.88 0.22 0.09 74 --
9/30/94 65,612 0.48 1.04 0.45 (0.10) 89 --
9/14/93 1 through
9/30/93 11,310 0.73 2 1.42 2 (0.11)2 (0.80)2 9 --
SERVICE CLASS
9/30/96 $158,901 1.16% 1.18% (0.38)% (0.40)% 89% $0.0569
9/30/95 62,604 1.03 1.16 (0.07) (0.20) 74 --
9/30/94 22,648 0.71 1.27 0.21 (0.34) 89 --
9/15/93 1 through
9/30/93 911 0.99 2 1.68 2 (0.34)2 (1.03)2 9 --
INVESTOR A CLASS
9/30/96 $ 27,954 1.33% 1.35% (0.55)% (0.57)% 89% $0.0569
9/30/95 7,348 1.20 1.33 (0.24) (0.36) 74 --
9/30/94 1,620 0.86 1.42 0.07 (0.49) 89 --
9/15/93 1 through
9/30/93 41 1.13 2 1.82 2 (0.48)2 (1.17)2 9 --
INVESTOR B CLASS
1/18/96 1 through
9/30/96 $ 6,520 2.06%2 2.08%2 (1.34)%2 (1.36)%2 89% $0.0569
INVESTOR C CLASS
9/6/96 1 through
9/30/96 $ 329 1.74%2 1.76%2 (0.93)%2 (0.95)%2 89% $0.0569
- ---------------------
INTERNATIONAL EQUITY
- ---------------------
INSTITUTIONAL CLASS
9/30/96 $388,588 1.06% 1.17% 0.90% 0.79% 70% $0.0158
9/30/95 312,588 0.97 1.14 1.42 1.24 105 --
9/30/94 284,905 0.95 1.14 1.27 1.08 37 --
9/30/93 131,052 1.10 1.16 1.17 1.11 31 --
4/27/92 1 through
9/30/92 60,357 1.20 2 1.21 2 2.59 2 2.58 2 15 --
SERVICE CLASS
9/30/96 $161,321 1.36% 1.47% 0.71% 0.60% 70% $0.0158
9/30/95 106,045 1.25 1.42 1.16 0.98 105 --
9/30/94 75,174 1.20 1.39 1.09 0.90 37 --
7/29/93 1 through
9/30/93 11,985 1.18 2 1.24 2 1.01 2 0.95 2 31 --
</TABLE>
See accompanying notes to financial statements.
40 & 41
<PAGE>
FOR THE PERIOD ENDED
FINANCIAL HIGHLIGHTS (CONTINUED)
For a Share Outstanding Throughout the Period
COMPASS CAPITAL FUNDS
<TABLE>
<CAPTION>
NET NET GAIN DISTRIBUTIONS NET
ASSET (LOSS) ON DISTRIBUTIONS FROM NET ASSET
VALUE NET INVESTMENTS FROM NET DISTRIBUTIONS REALIZED VALUE
BEGINNING INVESTMENT (BOTH REALIZED INVESTMENT FROM CAPITAL END OF TOTAL
OF PERIOD INCOME AND UNREALIZED) INCOME CAPITAL GAINS PERIOD RETURN
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTOR A CLASS
9/30/96 $13.24 $0.14 $ 0.81 $(0.16) $ -- $(0.67) $13.36 7.58%3
9/30/95 13.40 0.11 0.13 (0.04) -- (0.36) 13.24 2.00 3
9/30/94 12.47 0.12 1.15 (0.09) -- (0.25) 13.40 10.24 3
9/30/93 9.87 0.12 2.59 (0.11) -- -- 12.47 27.72 3
6/2/92 1 through
9/30/92 10.68 0.09 (0.83) (0.07) -- -- 9.87 (6.94)3
INVESTOR B CLASS
9/30/96 $13.20 $0.08 $ 0.77 $(0.15) $ -- $(0.67) $13.23 6.81%4
10/3/94 1 through
9/30/95 13.35 0.05 0.16 -- -- (0.36) 13.20 1.77 4
- -------------------------------
INTERNATIONAL EMERGING MARKETS
- -------------------------------
INSTITUTIONAL CLASS
9/30/96 $ 8.19 $0.08 $ 0.50 $ -- $ -- $(0.01) $ 8.76 6.97%
9/30/95 10.56 0.08 (2.15) (0.10) (0.01) (0.19) 8.19 (19.72)
6/17/94 1 through
9/30/94 10.00 0.03 0.53 -- -- -- 10.56 5.60
SERVICE CLASS
9/30/96 $ 8.18 $0.04 $ 0.51 $ -- $ -- $(0.01) $ 8.72 6.61%
9/30/95 10.55 0.06 (2.15) (0.08) (0.01) (0.19) 8.18 (19.91)
6/17/94 1 through
9/30/94 10.00 0.02 0.53 -- -- -- 10.55 5.50
INVESTOR A CLASS
9/30/96 $ 8.18 $0.02 $ 0.52 $ -- $ -- $(0.01) $ 8.71 6.49%3
9/30/95 10.54 0.03 (2.14) (0.05) (0.01) (0.19) 8.18 (20.12)3
6/17/94 1 through
9/30/94 10.00 0.02 0.52 -- -- -- 10.54 5.40 3
INVESTOR B CLASS
7/2/96 1 through
9/30/96 $ 8.85 $ -- $(0.16) $ -- $ -- $ -- $ 8.69 (1.81)%4
- --------------
SELECT EQUITY
- --------------
INSTITUTIONAL CLASS
9/30/96 $11.88 $0.21 $ 2.08 $(0.21) $ -- $(0.39) $13.57 19.84%
9/30/95 9.92 0.22 2.08 (0.22) -- (0.12) 11.88 23.76
9/30/94 9.97 0.22 (0.04) (0.23) -- -- 9.92 1.79
9/13/93 1 through
9/30/93 10.00 0.01 (0.04) -- -- -- 9.97 (0.30)
SERVICE CLASS
9/30/96 $11.88 $0.17 $ 2.07 $(0.17) $ -- $(0.39) $13.56 19.43%
9/30/95 9.92 0.22 2.05 (0.19) -- (0.12) 11.88 23.43
9/30/94 9.97 0.19 (0.04) (0.20) -- -- 9.92 1.55
9/15/93 1 through
9/30/93 10.00 -- (0.03) -- -- -- 9.97 (0.30)
INVESTOR A CLASS
9/30/96 $11.88 $0.15 $ 2.07 $(0.15) $ -- $(0.39) $13.56 19.23%3
9/30/95 9.92 0.20 2.06 (0.18) -- (0.12) 11.88 23.29 3
10/13/93 1 through
9/30/94 9.96 0.18 (0.03) (0.19) -- -- 9.92 1.54 3
INVESTOR B CLASS
3/27/96 1 through
9/30/96 $12.83 $0.04 $ 0.73 $(0.06) $ -- $ -- $13.54 6.58%4
INVESTOR C CLASS
9/27/96 1 through
9/30/96 $13.52 $ -- $ 0.02 $ -- $ -- $ -- $13.54 0.15%4
</TABLE>
<TABLE>
<CAPTION>
RATIO OF NET
NET RATIO OF EXPENSES INVESTMENT INCOME
ASSETS RATIO OF TO AVERAGE RATIO OF NET TO AVERAGE
END OF EXPENSES TO NET ASSETS INVESTMENT INCOME NET ASSETS PORTFOLIO AVERAGE
PERIOD AVERAGE NET (EXCLUDING TO AVERAGE NET (EXCLUDING TURNOVER COMMISSION
(000) ASSETS WAIVERS) ASSETS WAIVERS) RATE RATE5
============================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTOR A CLASS
9/30/96 $ 19,842 1.53% 1.64% 0.45% 0.34% 70% $0.0158
9/30/95 17,721 1.40 1.58 0.97 0.80 105 --
9/30/94 14,433 1.35 1.54 0.96 0.77 37 --
9/30/93 3,669 1.25 1.31 1.27 1.21 31 --
6/2/92 1 through
9/30/92 58 1.20 2 1.21 2 2.59 2 2.58 2 16 --
INVESTOR B CLASS
9/30/96 $2,692 2.23% 2.34% (0.18)% (0.29)% 70% $0.0158
10/3/94 1 through
9/30/95 1,071 2.06 2 2.23 2 0.59 2 0.41 2 105 --
- ------------------------------
INTERNATIONAL EMERGING MARKETS
- ------------------------------
INSTITUTIONAL CLASS
9/30/96 $ 68,664 1.78% 1.88% 0.96% 0.87% 44% $0.0018
9/30/95 29,319 1.78 2.02 1.90 1.66 75 --
6/17/94 1 through
9/30/94 2,511 1.75 2 2.73 2 1.19 2 0.21 2 4 --
SERVICE CLASS
9/30/96 $ 37,987 2.08% 2.18% 0.70% 0.60% 44% $0.0018
9/30/95 15,020 2.06 2.30 1.72 1.48 75 --
6/17/94 1 through
9/30/94 3,505 2.00 2 2.98 2 1.10 2 0.12 2 4 --
INVESTOR A CLASS
9/30/96 $ 2,996 2.25% 2.35% 0.45% 0.35% 44% $0.0018
9/30/95 2,563 2.20 2.44 1.54 1.30 75 --
6/17/94 1 through
9/30/94 2,857 2.15 2 3.13 2 0.74 2 (0.24)2 4 --
INVESTOR B CLASS
7/2/96 1 through
9/30/96 $ 216 2.90%2 3.00%2 0.17%2 0.07%2 44% $0.0018
- --------------
SELECT EQUITY
- --------------
INSTITUTIONAL CLASS
9/30/96 $274,434 0.74% 0.87% 1.70% 1.58% 55% $0.0487
9/30/95 238,813 0.67 0.85 2.35 2.17 51 --
9/30/94 48,123 0.65 0.93 2.11 1.82 88 --
9/13/93 1 through
9/30/93 69,268 0.65 2 0.87 2 2.17 2 1.95 2 2 --
SERVICE CLASS
9/30/96 $113,777 1.04% 1.17% 1.41% 1.28% 55% $0.0487
9/30/95 83,705 0.95 1.13 2.10 1.91 51 --
9/30/94 49,293 0.90 1.18 1.96 1.68 88 --
9/15/93 1 through
9/30/93 704 0.90 2 1.12 2 1.92 2 1.70 2 2 --
INVESTOR A CLASS
9/30/96 $ 6,228 1.21% 1.34% 1.24% 1.11% 55% $0.0487
9/30/95 3,808 1.12 1.30 1.91 1.73 51 --
10/13/93 1 through
9/30/94 601 1.05 2 1.34 2 1.89 2 1.60 2 88 --
INVESTOR B CLASS
3/27/96 1 through
9/30/96 $ 1,196 1.92%2 2.04%2 0.59%2 0.46%2 55% $0.0487
INVESTOR C CLASS
9/27/96 1 through
9/30/96 $50 0.00%2 0.00%2 0.00%2 0.00%2 55% $0.0487
</TABLE>
See accompanying notes to financial statements.
42 & 43
<PAGE>
FOR THE PERIOD ENDED
FINANCIAL HIGHLIGHTS (CONTINUED)
For a Share Outstanding Throughout the Period
COMPASS CAPITAL FUNDS
<TABLE>
<CAPTION>
NET NET GAIN DISTRIBUTIONS NET
ASSET (LOSS) ON DISTRIBUTIONS FROM NET ASSET
VALUE NET INVESTMENTS FROM NET DISTRIBUTIONS REALIZED VALUE
BEGINNING INVESTMENT (BOTH REALIZED INVESTMENT FROM CAPITAL END OF TOTAL
OF PERIOD INCOME AND UNREALIZED) INCOME CAPITAL GAINS PERIOD RETURN
=================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------
INDEX EQUITY
- -------------
INSTITUTIONAL CLASS
9/30/96 $13.58 $0.30 $2.13 $(0.34) $ -- $(1.70) $13.97 19.82%
9/30/95 10.93 0.38 2.73 (0.34) -- (0.12) 13.58 29.30
9/30/94 11.02 0.31 0.03 (0.32) -- (0.11) 10.93 3.07
9/30/93 10.06 0.27 0.97 (0.28) -- -- 11.02 12.40
4/20/92 1 through
9/30/92 10.00 0.13 0.03 (0.10) -- -- 10.06 1.62
SERVICE CLASS
9/30/96 $13.58 $0.29 $2.10 $(0.30) $ -- $(1.70) $13.97 19.45%
9/30/95 10.93 0.35 2.73 (0.31) -- (0.12) 13.58 28.99
9/30/94 11.02 0.29 0.02 (0.29) -- (0.11) 10.93 2.78
9/13/93 1 through
9/30/93 10.76 0.05 0.29 (0.08) -- -- 11.02 3.16
INVESTOR A CLASS
9/30/96 $13.58 $0.27 $2.09 $(0.28) $ -- $(1.70) $13.96 19.31%3
9/30/95 10.93 0.34 2.73 (0.30) -- (0.12) 13.58 28.77 3
9/30/94 11.02 0.25 0.04 (0.27) -- (0.11) 10.93 2.66 3
9/30/93 10.06 0.27 0.96 (0.27) -- -- 11.02 12.33 3
6/2/92 1 through
9/30/92 10.07 0.10 (0.01) (0.10) -- -- 10.06 0.91 3
INVESTOR B CLASS
2/7/96 1 through
9/30/96 $13.20 $0.08 $0.77 $(0.12) $ -- $ -- $13.93 6.50%4
INVESTOR C CLASS
8/14/96 1 through
9/30/96 $13.47 $0.02 $0.50 $(0.06) $ -- $ -- $13.93 3.90%4
- ---------
BALANCED
- ---------
INSTITUTIONAL CLASS
9/30/96 $13.73 $0.46 $ 1.49 $(0.45) $ -- $(0.13) $15.10 14.43%
9/30/95 11.98 0.46 1.90 (0.47) -- (0.14) 13.73 20.32
9/30/94 12.42 0.38 (0.39) (0.37) -- (0.06) 11.98 (0.11)
9/30/93 11.53 0.30 1.15 (0.30) -- (0.26) 12.42 12.86
5/1/92 1 through
9/30/92 11.01 0.17 0.51 (0.16) -- -- 11.53 6.23
SERVICE CLASS
9/30/96 $13.72 $0.42 $ 1.49 $(0.41) $ -- $(0.13) $15.09 14.11%
9/30/95 11.98 0.44 1.88 (0.44) -- (0.14) 13.72 19.94
9/30/94 12.42 0.34 (0.38) (0.34) -- (0.06) 11.98 (0.36)
7/29/93 1 through
9/30/93 12.05 0.06 0.38 (0.07) -- -- 12.42 3.66
INVESTOR A CLASS
9/30/96 $13.73 $0.40 $ 1.49 $(0.39) $ -- $(0.13) $15.10 13.98%3
9/30/95 11.98 0.43 1.88 (0.42) -- (0.14) 13.73 19.86 3
9/30/94 12.42 0.32 (0.38) (0.32) -- (0.06) 11.98 (0.50)3
9/30/93 11.53 0.30 1.14 (0.29) -- (0.26) 12.42 12.80 3
9/30/92 10.82 0.34 1.22 (0.39) -- (0.46) 11.53 15.17 3
INVESTOR B CLASS
9/30/96 $13.69 $0.31 $ 1.47 $(0.30) $ -- $(0.13) $15.04 13.14%4
10/3/94 1 through
9/30/95 11.95 0.33 1.93 (0.38) -- (0.14) 13.69 19.38 4
</TABLE>
<TABLE>
<CAPTION>
RATIO OF NET
NET RATIO OF EXPENSES INVESTMENT INCOME
ASSETS RATIO OF TO AVERAGE RATIO OF NET TO AVERAGE
END OF EXPENSES TO NET ASSETS INVESTMENT INCOME NET ASSETS PORTFOLIO AVERAGE
PERIOD AVERAGE NET (EXCLUDING TO AVERAGE NET (EXCLUDING TURNOVER COMMISSION
(000) ASSETS WAIVERS) ASSETS WAIVERS) RATE RATE5
=========================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
- -------------
INDEX EQUITY
- -------------
INSTITUTIONAL CLASS
9/30/96 $127,076 0.18% 0.50%(DOUBLE DAGGER) 2.29% 1.98% 18%6* $0.03196*
9/30/95 109,433 0.17 0.50 2.92 2.59 0.18 --
9/30/94 147,746 0.15 0.52 2.72 2.35 17 --
9/30/93 186,163 0.40 0.52 2.46 2.34 8 --
4/20/9 1 through
9/30/92 175,888 0.45 2 0.64 2 2.85 2 2.66 2 23 --
SERVICE CLASS
9/30/96 $103,080 0.48% 0.80%(DOUBLE DAGGER) 1.98% 1.67% 18%6* $0.03196*
9/30/95 61,536 0.45 0.79 2.62 2.28 18 --
9/30/94 27,376 0.40 0.77 2.49 2.12 17 --
9/13/93 1 through
9/30/93 12,441 0.41 2 0.53 2 3.04 2 2.92 2 8 --
INVESTOR A CLASS
9/30/96 $ 12,752 0.65% 0.97%(DOUBLE DAGGER) 1.81% 1.49% 18%6* $0.03196*
9/30/95 6,501 0.61 0.95 2.44 2.10 18 --
9/30/94 2,632 0.55 0.92 2.35 1.98 17 --
9/30/93 1,263 0.49 0.61 2.48 2.36 8 --
6/2/92 1 through
9/30/92 56 0.45 2 0.64 2 2.85 2 2.66 2 23 --
INVESTOR B CLASS
2/7/96 1 through
9/30/96 $ 2,904 1.38%2 1.60%2(DOUBLE DAGGER) 0.93%2 0.71%2 18%6* $0.03196*
INVESTOR C CLASS
8/14/96 1 through
9/30/96 $ 432 1.25%2 1.43%2(DOUBLE DAGGER) 0.71%2 0.53%2 18%6* $0.03196*
- ---------
BALANCED
- ---------
INSTITUTIONAL CLASS
9/30/96 $ 37,567 0.79% 0.90% 3.16% 3.06% 275% $0.0599
9/30/95 24,525 0.67 0.88 3.78 3.56 154 --
9/30/94 17,610 0.65 0.91 3.16 2.89 54 --
9/30/93 12,928 0.80 0.98 2.89 2.71 32 --
5/1/92 1 through
9/30/92 2,501 0.95 2 1.51 2 3.28 2 2.72 2 36 --
SERVICE CLASS
9/30/96 $134,121 1.09% 1.20% 2.87% 2.76% 275% $0.0599
9/30/95 85,668 0.94 1.16 3.49 3.28 154 --
9/30/94 66,024 0.90 1.16 2.96 2.70 54 --
7/29/93 1 through
9/30/93 15,842 0.93 2 1.11 2 2.75 2 2.57 2 32 --
INVESTOR A CLASS
9/30/96 $ 71,899 1.19% 1.30% 2.75% 2.65% 275% $0.0599
9/30/95 67,892 1.07 1.28 3.38 3.16 154 --
9/30/94 62,307 1.05 1.31 2.77 2.51 54 --
9/30/93 39,529 0.91 1.09 2.79 2.61 32 --
9/30/92 8,481 0.95 1.51 3.28 2.72 36 --
INVESTOR B CLASS
9/30/96 $ 7,333 1.98% 2.09% 1.99% 1.88% 275% $0.0599
10/3/94 1 through
9/30/95 3,124 1.72 2 1.94 2 2.71 2 2.49 2 154 --
<FN>
1 Commencement of operations of Share Class.
2 Annualized.
3 Sales load not reflected in total return.
4 Contingent deferred sales load not reflected in total return.
5 Computed by dividing the total amount of commission paid by the total number
of shares purchased and sold during the period.
6 For the period 10/1/95 through 5/31/96.
* See accompanying footnotes to The DFA Investment Trust Company.
(DOUBLE DAGGER) Including expenses allocated from The U.S. Large Company Series
of The DFA Investment Trust Company of 0.13%.
</FN>
</TABLE>
See accompanying notes to financial statements.
44 & 45
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Compass Capital FundsSM ("the Fund") (formerly The PNC(REGISTRATION MARK)
Fund) 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 currently has 29
publicly-offered portfolios, nine of which are included in these financial
statements (the "Portfolios"). Each Portfolio is authorized to issue an
unlimited number of shares with a par value of $0.001. Portfolios of the Fund
offer as many as five classes of shares. Shares of all classes of a Portfolio
represent equal pro rata interests in such Portfolio, except that each class
bears different expenses which reflect the difference in the range of services
provided to them. The following table provides a list of the Portfolios included
in this report along with a summary of their respective class-specific fee
arrangements as provided under the Fund's Amended and Restated Distribution and
Service Plan (the "Plan"). Fees are expressed as a percentage of average daily
net asset values of the respective classes.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio Share Classes
- ----------------------------------------------------------------------------------------------------------------------------
Institutional Service Investor A Investor B Investor C
- ----------------------------------------------------------------------------------------------------------------------------
Contractual Actual Contractual Actual Contractual Actual Contractual Actual Contractual Actual
Fees Fees (4) Fees (1) Fees (4) Fees (2) Fees (4) Fees (3) Fees (4) Fees (3) Fees (4)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Value Equity None None 0.30% 0.30% 0.50% 0.40% 1.15% 1.15% 1.15% 1.15%
- ----------------------------------------------------------------------------------------------------------------------------
Growth Equity None None 0.30% 0.30% 0.50% 0.40% 1.15% 1.15% 1.15% N/A
- ----------------------------------------------------------------------------------------------------------------------------
Small Cap Value
Equity None None 0.30% 0.30% 0.50% 0.40% 1.15% 1.15% 1.15% N/A
- ----------------------------------------------------------------------------------------------------------------------------
Small Cap Growth
Equity None None 0.30% 0.30% 0.50% 0.40% 1.15% 1.15% 1.15% 1.15%
- ----------------------------------------------------------------------------------------------------------------------------
International
Equity None None 0.30% 0.30% 0.50% 0.40% 1.15% 1.15% 1.15% N/A
- ----------------------------------------------------------------------------------------------------------------------------
International
Emerging Markets None None 0.30% 0.30% 0.50% 0.40% 1.15% 1.15% 1.15% N/A
- ----------------------------------------------------------------------------------------------------------------------------
Select Equity None None 0.30% 0.30% 0.50% 0.40% 1.15% 1.15% 1.15% 1.15%
- ----------------------------------------------------------------------------------------------------------------------------
Index Equity None None 0.30% 0.30% 0.50% 0.40% 1.15% 1.15% 1.15% 1.15%
- ----------------------------------------------------------------------------------------------------------------------------
Balanced None None 0.30% 0.30% 0.50% 0.40% 1.15% 1.15% 1.15% N/A
- ----------------------------------------------------------------------------------------------------------------------------
<FN>
(1) -- the maximum annual contractual fees are comprised of a .15% service fee and .15% shareholder processing fee.
(2) -- the maximum annual contractual fees are comprised of a .10% distribution fee, .25% service fee and .15% shareholder
processing fee.
(3) -- the maximum annual contractual fees are comprised of a .75% distribution fee, .25% service fee and .15% shareholder
processing fee.
(4)-- The actual fees are as of September 30, 1996.
</FN>
</TABLE>
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 asset 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. Actual results could differ from the
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 are valued
on the basis of 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 and paid quarterly for the Portfolios. 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
principles related to the character of income and expense recognition.
46
<PAGE>
COMPASS CAPITAL FUNDS
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
Equity Portfolio and International Emerging Markets 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. It is not practical to isolate that portion of both
realized and unrealized gains and losses on investments in the
statement of operations that result from fluctuations in foreign
currency exchange rates. The Portfolios report forward foreign
currency contracts and foreign currency related transactions as
components of realized gains for financial reporting purposes, whereas
such components are treated as ordinary income for federal income tax
purposes.
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.
Dividends are recorded on the ex-dividend date. 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.
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.
FUTURES TRANSACTIONS -- Certain Portfolios may enter into futures contracts
subject to certain limitations. Upon entering into a futures contract, the
Portfolio is required to deposit cash or pledge U.S. Government securities of an
initial margin. Subsequent payments, which are dependent on the daily
fluctuations in the value of the underlying security or securities, are made or
received by the Portfolio each day (daily variation margin) and are recorded as
unrealized gains or losses until the contracts are closed. When the contracts
are closed, the Portfolio records a realized gain or loss equal to the
difference between the proceeds from (or cost of) the closing transaction and
the Portfolio's basis in the contracts. Risks of entering into futures contracts
include the possibility that there will not be a perfect price correlation
between the futures contracts and the underlying securities. Second, it is
possible that a lack of liquidity for futures contracts could exist in the
secondary market, resulting in an inability to close a futures position prior to
its maturity date. Third, the purchase of a futures contract involves the risk
that a Portfolio could lose more than the original margin deposit required to
initiate a futures transaction.
FORWARD FOREIGN CURRENCY CONTRACTS -- International Equity Portfolio may
enter into forward currency contracts to hedge against adverse changes in the
relationship of the U.S. dollar to foreign currencies. At September 30, 1996,
the Portfolio had not entered into any forward currency contracts.
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.
47
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SECURITIES LENDING -- Loans of securities are required at all times to be
secured by collateral at least equal to 102% of the market value of the
securities on loan. However, in the event of default or bankruptcy by the other
party to the agreement, realization and/or retention of the collateral may be
subject to legal proceedings. The market value of securities on loan to brokers
and the value of collateral held by the Fund with respect to such loans
(including rights to draw on letters of credit) at September 30, 1996, is as
follows:
MARKET VALUE VALUE OF
OF SECURITIES COLLATERAL
ON LOAN RECEIVED
------------- ------------
Value Equity Portfolio ...... $197,258,751 $206,664,300
Growth Equity Portfolio ..... 152,148,528 158,523,100
Small Cap Value Equity
Portfolio ................. 6,517,538 6,800,600
Small Cap Growth Equity
Portfolio ................. 64,954,325 67,172,500
International Emerging
Markets Portfolio ......... 3,585,050 3,904,500
Select Equity Portfolio ..... 61,978,216 63,798,100
Balanced Portfolio .......... 50,454,666 52,043,513
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 each of the Fund's Portfolios, except
for the Index Equity Portfolio. PNC Equity Advisors Company ("PEAC"), a
wholly-owned subsidiary of PAMG, serves as the sub-adviser for the Growth Equity
and Small Cap Growth Equity Portfolios. Provident Capital Management, Inc.
("PCM") serves as the sub-adviser for the Value Equity, Small Cap Value Equity
and Select Equity Portfolios. Castle International Asset Management Limited
("Castle International"), a wholly-owned subsidiary of PAMG, serves as the
sub-adviser for the International Equity and International Emerging Markets
Portfolios. PCM and BlackRock Financial Management, Inc. ("BlackRock"), a wholly
owned subsidiary of PAMG, serve as sub-advisers for the Balanced Portfolio. PNC
Bank, PAMG, PEAC, Castle International, PCM and BlackRock are indirect
wholly-owned subsidiaries of PNC Bank Corp.
For their advisory services, PAMG is entitled to receive fees at the
following annual rates, computed daily and payable monthly, based on each
Portfolio's average daily net assets:
VALUE EQUITY, GROWTH EQUITY, SMALL CAP GROWTH EQUITY, SELECT EQUITY, SMALL
CAP VALUE EQUITY AND BALANCED PORTFOLIOS -- .55% of the first $1 billion, .50%
of the next $1 billion, .475% of the next $1 billion, and .45% of net assets in
excess of $3 billion.
INTERNATIONAL EQUITY PORTFOLIO -- .75% of its first $1 billion, .70% of the
next $1 billion, .675% of the next $1 billion and .65% of net assets in excess
of $3 billion.
INTERNATIONAL EMERGING MARKETS PORTFOLIO-- 1.25% of its first $1 billion,
1.20% of the next $1 billion, 1.155% of the next $1 billion, and 1.10% of net
assets in excess of $3 billion.
48
<PAGE>
COMPASS CAPITAL FUNDS
PNC InstitutionalManagement Corporation ("PIMC") and PEAC served as
investment adviser and sub-adviser, respectively, to the Index Equity Portfolio
until its June 2, 1996 conversion to a feeder portfolio of the U.S. Large
Company Series of The DFA Investment Trust Company. Under the previous advisory
arrangements, PIMC was entitled to receive fees, computed daily and payable
monthly, at the annual rate of .20% of the Portfolio's average daily net assets.
PIMC is a wholly-owned subsidiary of PAMG.
PAMG may, at its discretion, waive all or any portion of its advisory fees
for any Portfolio. For the year ended September 30, 1996, advisory fees and
waivers for each Portfolio were as follows:
GROSS NET
ADVISORY FEE WAIVER ADVISORY FEE
------------- ----------- ------------
Value Equity Portfolio ..... $5,557,359 $568,200 $4,989,159
Growth Equity Portfolio .... 2,777,808 306,883 2,470,925
Small Cap Value Equity
Portfolio ................ 1,569,181 24,942 1,544,239
Small Cap Growth Equity
Portfolio ................ 1,930,941 30,531 1,900,410
International Equity
Portfolio ................ 3,863,591 329,949 3,533,642
International Emerging
Markets Portfolio ........ 960,267 75,190 885,077
Select Equity Portfolio .... 2,069,619 243,496 1,826,123
Index Equity Portfolio ..... 295,854 262,827 33,027
Balanced Portfolio ......... 1,264,711 145,669 1,119,042
PAMG pays PEAC, PCM, Castle International and BlackRock 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, at their discretion, waive all or any portion of
their administration fees for any Portfolio. For the year ended September 30,
1996, administration fees and waivers for each Portfolio were as follows:
GROSS NET
ADMINISTRATION ADMINISTRATION
FEE WAIVER FEE
-------------- -------- --------------
Value Equity Portfolio ..... $2,188,422 $311,928 $1,876,494
Growth Equity Portfolio .... 1,140,271 268,459 871,812
Small Cap Value Equity
Portfolio ................ 648,081 8,165 639,916
Small Cap Growth Equity
Portfolio ................ 796,051 37,586 758,465
International Equity
Portfolio ................ 1,160,426 232,292 928,134
International Emerging
Markets Portfolio ........ 174,256 -- 174,256
Select Equity Portfolio .... 848,872 226,649 622,223
Index Equity Portfolio ..... 498,693 410,973 87,720
Balanced Portfolio ......... 517,571 104,737 412,834
In addition, PNC Bank serves as custodian for each of the Fund's
Portfolios. PFPC serves as transfer and dividend disbursing agent.
PAMG, PFPC, CCG and CDI also agreed for the year ended September 30, 1996
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 year ended September 30, 1996.
49
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(C) PURCHASES AND SALES OF SECURITIES
For the year ended September 30, 1996, purchases and sales of securities,
other than short-term and government securities, were as follows:
PURCHASES SALES
-------------- ------------
Value Equity Portfolio .................... $2,024,818,204 $416,560,711
Growth Equity Portfolio ................... 549,108,737 283,945,698
Small Cap Value Equity Portfolio .......... 164,393,877 121,817,593
Small Cap Growth Equity Portfolio ......... 353,697,962 277,214,531
International Equity Portfolio ............ 433,023,979 336,984,669
International Emerging Markets Portfolio .. 89,867,661 28,654,601
Select Equity Portfolio ................... 278,362,087 198,151,666
Index Equity Portfolio .................... 813,823,357 34,436,348
Balanced Portfolio ........................ 280,672,200 221,284,814
For the year ended September 30, 1996, purchases and sales of government
securities were as follows:
PURCHASES SALES
------------ ------------
Growth Equity Portfolio $ 25,525,382 $ 941,457
Small Cap Value Equity Portfolio 7,990,613 --
Small Cap Growth Equity Portfolio 23,469,834 2,860,870
International Emerging Markets Portfolio 12,641,174 --
Select Equity Portfolio 6,291,903 1,486,480
Index Equity Portfolio 21,646,997 1,056,500
Balanced Portfolio 380,763,600 363,071,814
50
<PAGE>
COMPASS CAPITAL FUNDS
(D) CAPITAL SHARES
Transactions in capital shares for each period were as follows:
<TABLE>
<CAPTION>
VALUE EQUITY PORTFOLIO
---------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
9/30/96 9/30/95
------------------------------ --------------------------------
SHARES VALUE SHARES VALUE
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class ..... 19,259,923 $ 287,107,525 39,806,402 $ 485,454,140
ServiceClass ............ 29,347,389 425,296,069 13,651,523 167,503,866
Investor A Class ........ 653,789 9,550,039 522,382 6,408,950
Investor B Class ........ 206,871 3,063,719 -- --
Investor C Class ........ 13,343 200,850 -- --
Shares issued in merger:
Institutional Class ..... -- -- -- --
Service Class ........... 25,439,684 344,453,317 -- --
Investor A Class ........ -- -- -- --
Investor B Class ........ -- -- -- --
Investor C Class ........ -- -- -- --
Shares issued in reinvestment
of dividends:
Institutional Class ..... 3,343,988 46,434,785 1,999,048 23,502,361
Service Class ........... 1,181,096 16,510,986 377,633 4,490,590
Investor A Class ........ 115,817 1,605,978 45,592 539,781
Investor B Class ........ 886 13,424 -- --
Investor C Class ........ 53 811 -- --
Shares redeemed:
Institutional Class ..... (11,497,933) (169,845,985) (55,022,048) (666,165,878)
Service Class ........... (38,443,494) (561,055,997) (10,793,521) (131,676,643)
Investor A Class ........ (277,767) (4,045,015) (248,896) (2,978,666)
Investor B Class ........ (1,966) (28,635) -- --
Investor C Class ........ -- -- -- --
----------- ------------- ----------- -------------
Net increase (decrease) ...... 29,341,679 $ 399,261,871 (9,661,885) $(112,921,499)
=========== ============= =========== =============
</TABLE>
51
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
GROWTH EQUITY PORTFOLIO
---------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
9/30/96 9/30/95
------------------------------ --------------------------------
SHARES VALUE SHARES VALUE
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class ..... 19,572,888 $ 273,185,487 8,949,787 $ 94,077,319
Service Class ........... 5,064,533 69,149,584 3,489,704 38,638,397
Investor A Class ........ 498,827 6,895,508 398,709 4,341,086
Investor B Class ........ 161,652 2,277,756 -- --
Shares issued in merger:
Institutional Class ..... -- -- -- --
Service Class ........... 12,988,182 162,741,919 -- --
Investor A Class ........ -- -- -- --
Investor B Class ........ -- -- -- --
Shares issued in reinvestment
of dividends:
Institutional Class ..... 607,854 7,878,559 196,587 2,214,461
Service Class ........... 166,800 2,161,020 43,054 483,243
Investor A Class ........ 23,314 299,818 6,055 67,542
Investor B Class ........ -- -- -- --
Shares redeemed:
Institutional Class ..... (4,258,888) (58,885,007) (2,504,812) (27,490,603)
Service Class ........... (11,340,891) (161,564,728) (1,246,828) (13,924,047)
Investor A Class ........ (183,519) (2,501,309) (130,464) (1,404,785)
Investor B Class ........ (2,621) (36,765) -- --
----------- ------------- ----------- -------------
Net increase ................. 23,298,131 $ 301,601,842 9,201,792 $ 97,002,613
=========== ============= =========== =============
</TABLE>
<TABLE>
<CAPTION>
SMALL CAP VALUE EQUITY PORTFOLIO
---------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
9/30/96 9/30/95
------------------------------ --------------------------------
SHARES VALUE SHARES VALUE
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class ..... 5,727,409 $ 88,470,134 3,247,317 $ 43,889,030
Service Class ........... 1,901,562 29,000,834 1,933,988 26,215,140
Investor A Class ........ 338,792 5,155,013 490,006 6,546,560
Investor B Class ........ 59,852 911,033 99,958 1,340,506
Shares issued in reinvestment
of dividends:
Institutional Class ..... 645,109 9,328,566 583,970 7,278,163
Service Class ........... 226,962 3,270,019 142,109 1,768,041
Investor A Class ........ 80,917 1,164,116 62,375 773,445
Investor B Class ........ 6,393 91,094 1,891 23,431
Shares redeemed:
Institutional Class ..... (4,304,534) (62,163,080) (5,088,140) (68,414,244)
Service Class ........... (1,109,462) (17,067,663) (1,365,808) (18,476,822)
Investor A Class ........ (303,906) (4,648,531) (371,340) (4,988,558)
Investor B Class ........ (15,176) (232,287) (3,731) (50,646)
----------- ------------- ----------- -------------
Net increase (decrease) ...... 3,253,918 $ 53,279,248 (267,405) $ (4,095,954)
=========== ============ =========== =============
</TABLE>
52
<PAGE>
COMPASS CAPITAL FUNDS
<TABLE>
<CAPTION>
SMALL CAP GROWTH EQUITY PORTFOLIO
---------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
9/30/96 9/30/95
------------------------------ --------------------------------
SHARES VALUE SHARES VALUE
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class ..... 16,663,138 $ 306,180,268 5,846,875 $ 73,048,654
Service Class ........... 5,259,549 95,359,750 2,638,340 32,805,587
Investor A Class ........ 971,103 18,192,162 383,446 4,805,592
Investor B Class ........ 304,774 5,998,905 -- --
Investor C Class ........ 15,304 316,405 -- --
Shares issued in merger:
Institutional Class ..... -- -- -- --
Service Class ........... 1,673,203 24,895,586 -- --
Investor A Class ........ -- -- -- --
Investor B Class ........ -- -- -- --
Investor C Class ........ -- -- -- --
Shares issued in reinvestment
of dividends:
Institutional Class ..... 9,532 148,705 10,636 112,951
Service Class ........... -- -- 70 741
Investor A Class ........ -- -- -- --
Investor B Class ........ -- -- -- --
Investor C Class ........ -- -- -- --
Shares redeemed:
Institutional Class ..... (12,706,267) (236,144,606) (2,627,342) (34,788,122)
Service Class ........... (3,811,615) (73,436,186) (704,809) (8,205,498)
Investor A Class ........ (172,984) (3,281,785) (52,895) (664,245)
Investor B Class ........ (1,922) (37,876) -- --
Investor C Class ........ -- -- -- --
----------- ------------- ----------- ------------
Net increase ................. 8,203,815 $ 138,191,328 5,494,321 $ 67,115,660
=========== ============= =========== ============
</TABLE>
53
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY PORTFOLIO
---------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
9/30/96 9/30/95
------------------------------ --------------------------------
SHARES VALUE SHARES VALUE
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class ..... 20,240,830 $ 268,092,956 7,143,152 $ 90,990,043
Service Class ........... 8,177,309 108,086,063 3,963,956 50,508,637
Investor A Class ........ 478,669 6,295,830 576,812 7,365,133
Investor B Class ........ 126,819 1,666,256 87,040 1,112,573
Shares issued in merger:
Institutional Class ..... -- -- -- --
Service Class ........... 3,806,698 48,839,940 -- --
Investor A Class ........ -- -- -- --
Investor B Class ........ -- -- -- --
Shares issued in reinvestment
of dividends:
Institutional Class ..... 1,337,783 16,922,952 677,308 8,488,879
Service Class ........... 402,264 5,080,592 156,042 1,950,124
Investor A Class ........ 85,228 1,076,431 38,670 479,738
Investor B Class ........ 5,789 72,831 1,195 14,710
Shares redeemed:
Institutional Class ..... (16,204,435) (214,155,160) (5,461,130) (70,728,562)
Service Class ........... (8,332,086) (111,145,703) (1,716,286) (21,971,597)
Investor A Class ........ (417,192) (5,496,470) (354,475) (4,491,778)
Investor B Class ........ (10,326) (134,551) (7,091) (89,952)
----------- ------------- ----------- ------------
Net increase ................. 9,697,350 $ 125,201,967 5,105,193 $ 63,627,948
=========== ============= =========== ============
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EMERGING MARKETS PORTFOLIO
---------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
9/30/96 9/30/95
------------------------------ --------------------------------
SHARES VALUE SHARES VALUE
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class ..... 5,661,897 $ 47,868,196 3,720,739 $31,597,655
Service Class ........... 3,327,086 28,370,538 1,770,541 15,273,076
Investor A Class ........ 131,558 1,124,251 104,829 965,262
Investor B Class ........ 25,343 222,080 -- --
Shares issued in reinvestment
of dividends:
Institutional Class ..... 4,708 36,395 35,132 297,045
Service Class ........... 1,536 11,843 14,029 121,552
Investor A Class ........ 381 2,939 8,376 74,699
Investor B Class ........ -- -- -- --
Shares redeemed:
Institutional Class ..... (1,411,383) (11,922,973) (413,927) (3,623,170)
Service Class ........... (809,955) (6,723,237) (279,961) (2,356,165)
Investor A Class ........ (101,320) (845,446) (70,993) (623,010)
Investor B Class ........ (465) (4,023) -- --
---------- ------------ ---------- -----------
Net increase ................. 6,829,386 $ 58,140,563 4,888,765 $41,726,944
=========== ============ ========== ===========
54
<PAGE>
COMPASS CAPITAL FUNDS
SELECT EQUITY PORTFOLIO
---------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
9/30/96 9/30/95
------------------------------ --------------------------------
SHARES VALUE SHARES VALUE
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class ..... 7,014,322 $ 90,778,286 26,941,842 $ 289,698,859
Service Class ........... 4,393,824 55,600,018 8,140,613 85,754,956
Investor A Class ........ 188,355 2,393,475 274,865 2,910,433
Investor B Class ........ 89,238 1,170,225 -- --
Investor C Class ........ 3,698 50,000 -- --
Shares issued in reinvestment
of dividends:
Institutional Class ..... 964,985 11,899,120 299,078 3,178,860
Service Class ........... 261,309 3,214,497 130,000 1,334,111
Investor A Class ........ 15,974 196,492 4,263 45,281
Investor B Class ........ 223 2,987 -- --
Investor C Class ........ -- -- -- --
Shares redeemed:
Institutional Class ..... (7,848,144) (99,717,894) (11,998,924) (125,982,186)
Service Class ........... (3,310,365) (41,842,855) (6,195,728) (64,879,779)
Investor A Class ........ (65,514) (837,399) (19,091) (200,865)
Investor B Class ........ (1,084) (14,229) -- --
Investor C Class ........ -- -- -- --
---------- ------------ ----------- -------------
Net increase ................. 1,706,821 $ 22,892,723 17,576,918 $ 191,859,670
========== ============ =========== =============
</TABLE>
<TABLE>
<CAPTION>
INDEX EQUITY PORTFOLIO
---------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
9/30/96 9/30/95
------------------------------ --------------------------------
SHARES VALUE SHARES VALUE
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class ..... 4,484,065 $ 59,683,113 16,863,208 $ 197,762,422
Service Class ........... 3,817,000 50,684,497 6,120,901 72,357,126
Investor A Class ........ 502,304 6,723,301 289,994 3,525,169
Investor B Class ........ 210,696 2,839,706 -- --
Investor C Class ........ 30,961 425,185 -- --
Shares issued in reinvestment
of dividends:
Institutional Class ..... 1,243,410 15,521,894 497,279 5,731,282
Service Class ........... 738,516 9,213,090 116,802 1,385,719
Investor A Class ........ 90,152 1,131,385 11,755 139,322
Investor B Class ........ 845 11,680 -- --
Investor C Class ........ 57 789 -- --
Shares redeemed:
Institutional Class ..... (4,685,091) (62,461,246) (22,819,763) (278,729,292)
Service Class ........... (1,705,590) (22,882,230) (4,210,903) (50,051,366)
Investor A Class ........ (157,934) (2,138,524) (63,655) (750,671)
Investor B Class ........ (3,004) (40,532) -- --
Investor C Class -- -- -- --
---------- ------------ ----------- -------------
Net increase (decrease) ...... 4,566,387 $ 58,712,108 (3,194,382) $ (48,630,289)
========== ============ =========== =============
</TABLE>
55
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
BALANCED PORTFOLIO
---------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
9/30/96 9/30/95
------------------------------ --------------------------------
SHARES VALUE SHARES VALUE
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class ..... 1,495,474 $ 22,044,696 2,511,895 $ 31,028,569
Service Class ........... 5,780,619 83,542,569 7,589,298 94,169,784
Investor A Class ........ 723,332 10,528,196 779,591 9,725,800
Investor B Class ........ 278,873 4,050,321 236,213 2,898,052
Shares issued in merger:
Institutional Class ..... -- -- -- --
Service Class ........... 2,440,889 34,294,489 -- --
Investor A Class ........ -- -- -- --
Investor B Class ........ -- -- -- --
Shares issued in reinvestment
of dividends:
Institutional Class ..... 70,021 1,020,402 76,942 958,206
Service Class ........... 269,899 3,931,350 261,656 3,251,626
Investor A Class ........ 171,778 2,492,258 226,064 2,796,580
Investor B Class ........ 8,524 123,532 5,578 70,292
Shares redeemed:
Institutional Class ..... (864,140) (12,698,183) (2,271,997) (28,182,832)
Service Class ........... (5,846,594) (84,992,584) (7,118,747) (88,401,222)
Investor A Class ........ (1,078,557) (15,629,171) (1,259,763) (15,706,295)
Investor B Class ........ (27,995) (406,030) (13,630) (171,757)
---------- ------------ ----------- -------------
Net increase ................. 3,422,123 $ 48,301,845 1,023,100 $ 12,436,803
========== ============ =========== =============
</TABLE>
(E) AT SEPTEMBER 30, 1996, NET ASSETS CONSISTED OF:
<TABLE>
<CAPTION>
SMALL CAP SMALL CAP INTERNATIONAL
VALUE EQUITY GROWTH EQUITY VALUE EQUITY GROWTH EQUITY EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Capital paid in .................. $ 904,485,134 $511,655,712 $245,041,945 $291,123,948 $523,163,118
Undistributed net
investment income ............. 24,607 1,106,968 19,976 -- 13,013,962
Accumulated net realized
gain (loss) on investment
transactions, futures
contracts and foreign
exchange contracts ............ 169,878,268 25,335,211 40,297,633 29,765,806 11,592,332
Net unrealized appreciation
on investment transactions,
futures contracts and foreign
exchange contracts ............ 143,465,941 153,038,854 37,411,420 172,377,723 24,673,340
-------------- ------------ ------------ ------------ ------------
$1,217,853,950 $691,136,745 $322,770,974 $493,267,477 $572,442,752
============== ============ ============ ============ ============
</TABLE>
56
<PAGE>
COMPASS CAPITAL FUNDS
<TABLE>
<CAPTION>
INTERNATIONAL SELECT INDEX
EMERGING MARKETS EQUITY EQUITY BALANCED
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Capital paid in ..................................... $108,357,728 $311,378,356 $172,176,744 $206,249,734
Undistributed net investment income ................. 507,921 88,884 129,907 65,771
Accumulated net realized gain (loss) on
investment transactions, futures contracts
and foreign exchange contracts ................... (2,956,446) 32,584,097 12,015,620 8,409,989
Net unrealized appreciation on investment
transactions, futures contracts and foreign
exchange contracts ............................... 3,954,226 51,633,874 61,921,732 36,194,481
------------ ------------ ------------ ------------
$109,863,429 $395,685,211 $246,244,003 $250,919,975
============ ============ ============ ============
</TABLE>
(F) CAPITAL LOSS CARRYOVER
At September 30, 1995, a capital loss carryover of $679,601, which expires
in the year 2004 was available to offset possible future realized capital gains
in the International Emerging Portfolio. At September 30, 1996, deferred
post-October losses for the International Emerging Markets Portfolio were
$2,273,600.
(G) MERGER
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 details of this
business combination as it relates to the Portfolios are described below.
The following table summarizes certain relevant information of the Fund
prior to and immediately after the business combination. The Fund Portfolios are
the accounting survivors and, as such, the new combined funds maintain all the
operating history of the Fund Portfolios.
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
- ------------------------ ---------- ------------ --------------
Equity Income .......... 28,396,812 $344,453,317 $17,227,647
Growth ................. 13,274,219 162,741,919 21,104,698
Small Company .......... 2,364,413 24,895,586 610,916
International Equity ... 3,625,831 48,839,940 5,558,142
Balanced ............... 320,140 34,294,486 1,566,037
COMPASS CAPITAL FUNDS
- -------------------------------------------------------------------
COMBINED
SHARES NET ASSETS
NEW ISSUED IN AFTER NAV
PORTFOLIO BUSINESS BUSINESS PER
NAME COMBINATION COMBINATION SHARE
- ------------------------- ----------- -------------- ------
Value Equity ............ 25,439,684 $1,066,660,942 $13.54
Growth Equity ........... 12,988,182 495,952,512 $12.53
Small Cap Growth Equity . 1,673,203 278,684,029 $14.88
International Equity .... 3,806,698 507,920,573 $12.83
Balanced ................ 2,440,889 228,489,486 $14.05
57
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS COMPASS CAPITAL FUNDS
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF THE COMPASS CAPITAL FUNDS:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of the International Equity Portfolio of the
Compass Capital Funds, and the statements of net assets of the Value Equity,
Growth Equity, Small Cap Value Equity, Small Cap Growth Equity,International
Emerging Markets, Select Equity, Index Equity and Balanced Portfolios of the
Compass Capital Fund as of September 30, 1996, and the related statements of
operations for the periods then ended, the statements of changes in net assets
for each of the two years (or periods) in the period then ended, and the
financial highlights for each of the periods presented. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express and opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments held by the
custodian and brokers as of September 30, 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Compass Capital Funds (Value Equity, Growth Equity, Small Cap Value Equity,
Small Cap Growth Equity, International Equity, International Emerging Markets,
Select Equity, Index Equity and Balanced Portfolios), as of September 30, 1996,
and the results of their operations for the periods then ended, the changes in
their net assets for each of the two years (or periods) in the period then
ended, and the financial highlights for each of the periods presented, in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
November 22, 1996
58
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
THE DFA INVESTMENT TRUST COMPANY
THE U.S. LARGE COMPANY SERIES
ANNUAL REPORT
TEN MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED)
YEAR ENDED NOVEMBER 30, 1995
<PAGE>
TABLE OF CONTENTS THE DFA INVESTMENT TRUST COMPANY
Page
Statements of Net Assets ........................... 62
Statements of Operations ........................... 67
Statements of Changes in Net Assets ................ 68
Financial Highlights ............................... 69
Notes to Financial Statements ...................... 70
THIS REPORT IS SUBMITTED FOR THE INFORMATION OF THE FUND'S SHAREHOLDERS. IT IS
NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS UNLESS PRECEDED OR
ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
<PAGE>
STATEMENTS OF NET ASSETS THE DFA INVESTMENT TRUST COMPANY
THE U.S. LARGE COMPANY SERIES
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
SEPTEMBER 30, 1996 NOVEMBER 30, 1995
---------------------- -------------------------
(UNAUDITED)
SHARES VALUE(DAGGER) SHARES VALUE(DAGGER)
------ ------------ ------- --------------
<S> <C> <C> <C> <C>
COMMON STOCKS -- (99.7% AND 99.50%, RESPECTIVELY)
AMP, Inc. ..................... 16,904 $ 655,030 4,640 $ 186,180
AMR Corp. ..................... 6,900 549,413* 1,800 137,925*#
AON Corp. ..................... 8,250 447,563 -- --
AT & T Corp ................... 124,939 6,528,063 34,219 2,258,454
Abbott Laboratories ........... 60,500 2,979,625 17,100 694,687
Advanced Micro
Devices, Inc. ............... 10,500 154,875* 2,300 47,150
Aetna, Inc. ................... 11,537 811,916 2,500 183,438
Ahmanson (H.F.) & Co. ......... 8,800 246,400 2,500 66,875#
Air Products & Chemicals, Inc. 8,500 495,125 2,500 138,750
Airtouch Communications, Inc. . 38,300 1,058,038* 10,700 311,637*
Alberto-Culver Co. Class B .... 2,100 91,088 200 6,450
Albertson's Inc. .............. 19,500 821,438 5,500 169,125
Alcan Aluminum, Ltd. .......... 17,500 525,000 4,900 162,312
Alco Standard Corp. ........... 9,800 488,775 2,200 95,700
Alexander & Alexander
Services, Inc. .............. 3,500 58,188 900 19,687
Allegheny Teledyne, Inc. ...... 13,600 307,700* -- --
Allergan, Inc. ................ 4,900 186,813 1,200 37,200
AlliedSignal, Inc. ............ 21,900 1,442,663 6,100 288,225
Allstate Corp. ................ 34,227 1,685,680 9,838 403,357
Alltel Corp. .................. 14,500 404,188 4,200 123,900
Aluminium Co. of America ...... 13,700 808,300 3,800 222,300
Alza Corp. .................... 6,400 172,000* 1,600 36,800*
Amdahl Corp. .................. 9,100 85,881* 2,600 24,700*
Amerada Hess Corp. ............ 7,100 375,413 2,100 99,750#
American Brands, Inc. ......... 13,600 574,600 4,200 175,350
American Electric
Power Co., Inc. ............. 14,500 589,063 4,100 154,262
American Express Co. .......... 37,400 1,729,750 10,500 446,250
American General Corp. ........ 16,100 607,775 4,500 152,437#
American Greetings Corp. ......
Class A ..................... 5,700 163,519 1,600 43,700
American Home
Products Corp. .............. 49,300 3,142,875 6,600 602,250
American International
Group, Inc. ................. 36,362 3,663,472 10,300 924,425
American Stores Co. ........... 11,500 460,000 3,300 86,625
Ameritech Corp. ............... 42,900 2,257,613 12,000 660,000
Amgen, Inc. ................... 20,600 1,301,663* 5,600 278,250*
Amoco Corp. ................... 38,400 2,707,200 10,800 731,700
Andrew Corp. .................. 4,562 227,530* 750 32,531*
Anheuser-Busch
Companies, Inc. ............. 39,200 1,474,900 5,400 357,750
Apple Computer, Inc. .......... 9,700 215,219 2,600 99,287
Applied Materials, Inc. ....... 14,000 387,625* 4,000 194,250*
Archer-Daniels Midland Co. .... 42,178 811,927 11,692 201,687
Armco, Inc. ................... 8,200 36,900* 2,300 13,225*
Armstrong World
Industries, Inc. ............ 2,800 174,650 900 53,887
Asarco, Inc. .................. 3,450 91,856 1,100 38,912
Ashland, Inc. ................. 4,900 194,775 1,400 48,825
Atlantic Richfield Co. ........ 12,300 1,568,250 3,500 379,313
Autodesk, Inc. ................ 3,600 93,375 1,200 42,450
Automatic Data Processing, Inc. 22,400 977,200 3,100 246,837
Avery Dennison Corp. .......... 4,000 222,000 1,200 57,150
Avon Products, Inc. ........... 10,500 521,063 1,400 101,675
Baker Hughes, Inc. ............ 10,900 331,088 3,100 63,162
Ball Corp. .................... 2,400 58,800 600 17,175
Bally Entertainment Corp. ..... 3,800 107,825* 1,200 14,550*
Baltimore Gas & Electric Co. .. 11,350 296,519 3,050 81,206#
Banc One Corp. ................ 34,711 1,423,151 8,502 324,139
Bank of Boston Corp. .......... 12,100 700,288 2,400 111,300
Bank of New York Co., Inc. .... 30,000 881,250 4,000 188,500
BankAmerica Corp. ............. 28,168 2,313,297 8,156 518,926
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
SEPTEMBER 30, 1996 NOVEMBER 30, 1995
---------------------- -------------------------
(UNAUDITED)
SHARES VALUE(DAGGER) SHARES VALUE(DAGGER)
------ ------------ ------- --------------
<S> <C> <C> <C> <C>
Bankers Trust New York Corp. ... 6,100 $ 479,613 1,800 $ 16,775
Bard (C.R.), Inc. .............. 4,400 136,950 1,300 37,537
Barnett Banks, Inc. ............ 14,400 486,000 2,200 132,275
Barrick Gold Corp. ............. 27,500 690,938 7,800 205,725
Battle Mountain Gold Co. ....... 17,400 134,850 -- --
Bausch & Lomb, Inc. ............ 4,400 161,700 1,400 50,575
Bay Networks, Inc. ............. 14,400 392,400* -- --
Baxter International, Inc. ..... 21,000 981,750 6,100 256,200
Becton Dickinson & Co. ......... 9,800 433,650 1,600 111,600
Bell Atlantic Corp. ............ 33,700 2,017,788 9,500 598,500
Bellsouth Corp. ................ 77,200 2,856,400 21,600 839,700
Bemis Co., Inc. ................ 4,100 138,888 1,300 33,962
Beneficial Corp. ............... 4,300 247,250 1,200 60,900
Bethlehem Steel Corp. .......... 8,700 87,000* 2,500 35,000*
Beverly Enterprises ............ 7,700 83,738* 2,000 23,250*
Biomet, Inc. ................... 8,900 144,625* 2,500 46,094*
Black & Decker Corp. ........... 6,800 282,200 2,000 74,750
Block (H.&R.), Inc. ............ 7,900 235,025 2,400 106,800
Boatmen's Bancshares, Inc. ..... 12,300 686,494 2,800 108,150
Boeing Co. ..................... 27,200 2,570,400 7,400 539,275
Boise Cascade Corp. ............ 3,900 132,600 1,200 44,700
Boston Scientific Corp. ........ 13,600 782,000* 3,300 133,650*
Briggs & Stratton Corp. ........ 2,300 102,063 800 33,300
Bristol Myers Squibb Co. ....... 38,900 3,748,988 11,000 882,750
Brown Group, Inc. .............. -- -- 400 5,600
Brown-Forman Corp. Class B ..... 5,300 207,363 900 34,312
Browning-Ferris Industries, Inc. 16,500 412,500 4,700 141,587
Brunswick Corp. ................ 7,500 180,000 2,200 47,025
Burlington Northern
Santa Fe Corp. ............... 11,637 981,872 3,089 249,051
Burlington Resources, Inc. ..... 9,900 439,313 2,800 107,800
CIGNA Corp. .................... 5,800 695,275 1,700 187,000
CPC International, Inc. ........ 11,100 831,113 3,100 213,125
CSX Corp. ...................... 16,400 828,200 2,200 192,775
CUC International, Inc. ........ 19,100 761,613* 3,800 144,400*
Cabletron Systems, Inc. ........ 5,800 395,850* 1,500 124,500*
Caliber Systems, Inc. .......... 2,900 46,763 -- --
Campbell Soup Co. .............. 19,300 1,505,400 5,500 307,312
Capital Cities ABC, Inc. ....... -- -- 3,300 407,962
Carolina Power & Light Co. ..... 11,600 400,200 3,400 111,775
Case Corp. ..................... 5,700 277,875 -- --
Caterpillar, Inc. .............. 15,100 1,138,163 4,400 270,050
Centex Corp. ................... 2,300 75,038 800 26,300
Central & South West Corp. ..... 16,200 421,200 4,100 110,187
Ceridian Corp. ................. 5,200 260,000* 800 33,600
Champion International Corp. ... 7,300 334,888 2,100 98,962
Charming Shoppes, Inc. ......... 8,000 47,750* 2,200 5,156
Chase Manhattan Corp. .......... 33,996 2,723,930 3,700 225,238
Chemical Banking Corp. ......... -- -- 5,298 317,880
Chevron Corp. .................. 50,800 3,181,350 14,100 696,187
Chrysler Corp. ................. 57,600 1,648,800 8,400 435,750
Chubb Corp. .................... 13,700 630,200 2,000 194,500
Cincinnati Milacron, Inc. ...... 3,100 58,513 600 15,675
Cinergy Corp. .................. 12,293 379,546 3,418 100,831
Circuit City Stores, Inc. ...... 7,400 267,325 2,200 63,800
Cisco Sytems, Inc. ............. 50,000 3,103,125* 5,900 496,706*
Citicorp ....................... 37,400 3,389,375 9,000 36,750
Clorox Co. ..................... 4,100 393,088 1,100 83,325
Coastal Corp. .................. 8,050 332,063 2,200 73,150
Coca-Cola Co. .................. 193,300 9,834,138 27,300 2,067,975#
Colgate-Palmolive Co. .......... 11,200 973,000 3,000 219,750
Columbia Gas System, Inc. ...... 4,200 235,200 1,000 43,250*
Columbia/HCA Healthcare Corp. .. 34,455 1,959,628# 9,455 488,114
Comcast Corp. Class A Special .. 18,550 286,366 4,200 82,687
Comerica, Inc. ................. 8,900 458,350 -- --
Community Psychiatric Centers .. 3,538 33,169* 900 10,012
</TABLE>
See accompanying notes to financial statements.
62
<PAGE>
STATEMENTS OF NET ASSETS THE DFA INVESTMENT TRUST COMPANY
THE U.S. LARGE COMPANY SERIES (CONTINUED)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
SEPTEMBER 30, 1996 NOVEMBER 30, 1995
---------------------- -------------------------
(UNAUDITED)
SHARES VALUE(DAGGER) SHARES VALUE(DAGGER)
------ ------------ ------- --------------
<S> <C> <C> <C> <C>
Compaq Computer Corp. ......... 20,700 $1,327,388* 5,700 $ 282,150*
Computer Associates
International, Inc. ......... 27,975 1,671,506 5,250 343,875
Computer Sciences Corp. ....... 5,700 438,188* 1,300 94,575*
Conagra, Inc. ................. 18,850 928,363 5,350 213,331
Conrail, Inc. ................. 6,000 434,250 1,700 118,787
Consolidated Edison Co. of
New York, Inc. .............. 18,200 505,050 5,100 147,262
Consolidated Freightways, Inc. 3,500 85,750 800 21,000
Consolidated Natural Gas Co. .. 7,100 380,738 2,000 88,750
Cooper Industries, Inc. ....... 8,200 354,650 2,300 83,950
Cooper Tire & Rubber Co. ...... 6,600 142,725 1,800 44,325
Coors (Adolph) Co. Class B .... 3,100 68,006 1,000 20,375
Corestates Financial Corp. .... 17,200 743,900 3,000 116,250
Corning, Inc. ................. 17,900 698,100 4,900 147,612
Crane Co. ..................... 2,400 106,500 500 17,062
Cray Research, Inc. ........... -- -- 500 12,000*
Crown Cork & Seal Co., Inc. ... 9,800 452,025 1,900 79,562*
Cummins Engine Co., Inc. ...... 3,300 129,938 700 27,475#
Cyprus Amax Minerals Co., Inc. 7,250 155,875 2,100 57,750
DSC Communications Corp. ...... 9,000 226,688* 2,500 98,906*
DTE Energy Co. ................ 11,200 313,600 -- --
Dana Corp. .................... 8,000 242,000 2,100 61,425
Darden Restaurants, Inc. ...... 12,300 106,088* 3,400 39,525
Data General Corp. ............ 3,100 43,400* 1,000 12,125*
Dayton-Hudson Corp. ........... 16,800 555,400 1,700 123,462
Dean Witter, Discover & Co. ... 12,977 713,735 3,566 181,866
Deere & Co. ................... 20,300 852,600 5,700 187,387
Dell Computer Corp. ........... 7,000 544,250* -- --
Delta Air Lines, Inc. ......... 6,100 439,200 1,000 77,625
Deluxe Corp. .................. 6,300 237,825 1,600 44,200
Detroit Edison Co. ............ -- -- 3,200 104,400#
Dial Corp. .................... -- -- 2,100 56,700
Digital Equipment Corp. ....... 11,700 418,275* 3,200 188,400*
Dillard Department Stores, Inc.
Class A ..................... 8,900 287,025 2,300 66,412
Disney (Walt) Co. ............. 52,800 3,346,200 11,200 673,400#
Dominion Resources, Inc. VA ... 13,800 520,950 3,850 152,556
Donnelley (R.R.) & Sons Co. ... 11,800 380,550 3,300 126,637
Dover Corp. ................... 8,700 415,425 2,400 93,300
Dow Chemical Co. .............. 19,400 1,556,850 5,800 411,075
Dow Jones & Co., Inc. ......... 7,400 273,800 1,900 72,913
Dresser Industries, Inc. ...... 13,900 413,525 3,900 92,137
DuPont (E.I.) de Nemours
& Co. ....................... 43,300 3,821,225 12,000 798,000
Duke Power Co. ................ 15,900 741,338 4,500 201,937
Dun & Bradstreet Corp. ........ 13,000 775,125 3,800 237,025
E G & G, Inc. ................. 3,700 66,138 1,300 25,025
EMC Corp. MA .................. 17,900 404,988* -- --
Eastern Enterprises ........... 1,700 64,175 300 9,750
Eastman Chemical Co. .......... 6,050 353,169 1,625 106,641
Eastman Kodak Co. ............. 26,700 2,095,950 7,400 503,200
Eaton Corp. ................... 5,900 356,213 1,800 98,100
Echlin, Inc. .................. 4,700 147,463 1,400 51,100
Echo Bay Mines, Ltd. .......... 10,900 96,056 2,500 25,937
Ecolab, Inc. .................. 5,100 172,125 1,300 37,375
Edison International .......... 34,200 611,325 -- --
Emerson Electric Co. .......... 17,400 1,568,175 4,900 382,200
Engelhard Corp. ............... 11,074 254,702 3,037 70,990
Enron Corp. ................... 19,400 790,550 5,500 206,250
Enserch Corp. ................. 5,200 108,550 1,500 23,250
Entergy Corp. ................. 17,700 477,900 4,800 133,800
Exxon Corp. ................... 96,100 8,000,325 26,900 2,081,387
FMC Corp. ..................... 2,800 190,050* 600 44,325*
FPL Group, Inc. ............... 14,300 618,475 4,000 173,500
Federal Express Corp. ......... 4,400 348,700* 1,100 82,225*
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
SEPTEMBER 30, 1996 NOVEMBER 30, 1995
---------------------- -------------------------
(UNAUDITED)
SHARES VALUE(DAGGER) SHARES VALUE(DAGGER)
------ ------------ ------- --------------
<S> <C> <C> <C> <C>
Federal Home Loan Mortgage
Corp ........................ 13,900 $ 1,360,463 3,800 $ 292,600
Federal National Mortgage
Association ................. 84,600 2,950,425 6,000 657,000
Federal Paper Board Co., Inc. . -- -- 1,000 52,000
Federated Department
Stores, Inc. ................ 16,100 539,350* 3,900 113,587*#
Fifth Third Bancorp ........... 7,800 453,375 -- --
First Bank System, Inc. ....... 10,800 722,250 2,900 149,712
First Chicago NBD Corp. ....... 24,393 1,103,783# 1,800 125,100
First Data Corp. .............. 17,300 1,412,113 2,500 177,500#
First Fidelity Bancorp ........ -- -- 1,600 117,400
First Interstate Bancorp ...... -- -- 1,500 201,000
First Union Corp. ............. 22,040 1,471,170 3,600 196,650
Fleet Financial Group, Inc. ... 20,364 906,198 3,200 133,600
Fleetwood Enterprises, Inc. ... 2,600 79,950 800 19,200
Fleming Companies, Inc. ....... 2,800 48,650 900 20,812
Fluor Corp. ................... 6,400 393,600 1,800 117,000
Ford Motor Co. ................ 91,800 2,868,750 23,300 658,225
Foster Wheeler Corp. .......... 3,250 142,188 600 23,700
Freeport McMoran Copper &
Gold, Inc. Class B .......... 14,900 465,625 3,000 81,375*
Fruit of The Loom, Inc. Class A 5,800 179,800* 1,300 25,187*
GPU, Inc. ..................... 9,200 282,900 -- --
GTE Corp. ..................... 75,200 2,895,200 21,000 895,125
Gannett Co., Inc. ............. 11,000 774,125 2,900 176,900
Gap, Inc. ..................... 22,300 643,913 3,000 135,750
General Dynamics Corp. ........ 4,800 330,600 1,200 71,550
General Electric Co. .......... 128,200 11,666,128 36,400 2,447,900
General Instrument Corp. ...... 9,880 244,530* -- --
General Mills, Inc. ........... 12,200 736,575 3,400 187,425
General Motors Corp. .......... 58,700 2,817,600 16,100 780,850
General Public Utilities Corp. -- -- 2,400 75,900
General RE Corp. .............. 6,200 878,850 1,900 284,287
General Signal Corp. .......... 3,800 167,200 1,200 38,700
Genuine Parts Co. ............. 9,550 417,813 2,550 102,956
Georgia-Pacific Corp. ......... 7,000 553,875 2,000 155,500
Giant Food, Inc. Class A ...... 4,600 156,400 1,400 45,150
Giddings & Lewis, Inc. ........ 2,750 32,313 900 14,119
Gillette Co. .................. 34,700 2,502,738 9,700 503,187
Golden West Financial Corp. ... 4,700 274,363 1,200 61,350
Goodrich (B.F.) Co. ........... 4,100 185,013 500 35,062
Goodyear Tire & Rubber Co. .... 12,100 558,113 3,400 144,075
Grace (W.R.) & Co. ............ 7,500 562,500 2,200 133,650
Grainger (W.W.), Inc. ......... 4,100 288,025 1,000 66,875
Great Atlantic & Pacific
Tea Co., Inc. ............... 3,000 77,625 700 15,312
Great Lakes Chemical Corp. .... 4,900 279,300 1,500 106,687
Great Western Financial Corp. . 10,600 280,900 3,000 76,500
Green Tree Financial Corp. .... 10,500 412,125 -- --
HFS, Inc. ..................... 9,200 615,250* -- --
Halliburton Co. ............... 9,000 464,625 2,400 104,100
Handleman Co. ................. -- -- 600 3,750
Harcourt General, Inc. ........ 5,623 310,671 1,423 57,276
Harland (John H.) Co. ......... 2,450 73,500 500 10,312
Harnischfeger Industries, Inc. 3,676 138,769 900 30,488
Harrahs Entertainment, Inc. ... 8,000 149,000 2,200 54,725*
Harris Corp. .................. 3,000 195,375 700 40,337
Hasbro, Inc. .................. 6,650 246,881 1,750 53,375
Heinz (H.J.) Co. .............. 28,450 960,188 8,100 258,188
Helmerich & Payne, Inc. ....... 2,000 87,250 400 10,900
Hercules, Inc. ................ 8,300 454,425 2,300 126,212
Hershey Foods Corp. ........... 11,800 592,950 1,700 104,975
Hewlett-Packard Co. ........... 79,100 3,856,125 11,000 911,625
Hilton Hotels Corp. ........... 15,200 431,300 1,000 64,625
Home Depot, Inc. .............. 37,248 2,118,480 10,366 459,991
</TABLE>
See accompanying notes to financial statements.
63
<PAGE>
STATEMENTS OF NET ASSETS THE DFA INVESTMENT TRUST COMPANY
THE U.S. LARGE COMPANY SERIES (CONTINUED)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
SEPTEMBER 30, 1996 NOVEMBER 30, 1995
---------------------- ------------------------
(UNAUDITED)
SHARES VALUE(DAGGER) SHARES VALUE(DAGGER)
------ ------------ ------- --------------
<S> <C> <C> <C> <C>
Homestake Mining Co. ........ 11,300 $ 165,263 2,900 $ 47,850
Honeywell, Inc. ............. 9,700 612,313 2,900 138,112
Household International, Inc. 7,400 608,650 2,200 137,500
Houston Industries, Inc. .... 20,300 449,138 2,900 132,675
Humana, Inc. ................ 12,400 251,100* -- --
ITT Corp. ................... 9,200 401,350* 2,500 306,563
ITT Hartford Group, Inc. .... 9,200 542,800 -- --
ITT Industries, Inc. ........ 9,000 217,125 -- --
Illinois Tool Works, Inc. ... 9,100 656,338 2,400 152,100
Inco, Ltd. .................. 13,100 402,825 2,600 92,625
Ingersoll-Rand Co. .......... 8,300 394,250 2,400 92,100
Inland Steel Industries, Inc. 3,900 69,713 1,100 28,737
Intel Corp. ................. 63,700 6,079,369 17,800 1,082,463
Intergraph Corp. ............ 3,700 40,238* 800 13,800*
International Business
Machines Corp. ............ 42,000 5,229,000 12,400 1,198,150
International Flavors &
Fragrances, Inc. .......... 8,500 370,813 2,500 127,812
International Paper Co. ..... 23,000 977,500 5,400 205,875
Interpublic Group of
Companies, Inc. ........... 6,000 283,500 1,800 69,075
James River Corp. of Virginia 6,700 185,088# 1,600 50,400#
Jefferson-Pilot Corp. ....... 5,450 282,038 850 60,350
Johnson & Johnson ........... 103,300 5,294,125 14,000 1,212,750
Johnson Controls, Inc. ...... 3,100 232,500 700 48,475
Jostens, Inc. ............... 3,200 66,800 800 19,800
K Mart Corp. ................ 37,200 381,300 9,900 76,725#
Kaufman & Broad Home Corp. .. 3,100 40,300 600 7,800
Kellogg Co. ................. 16,500 1,136,438 4,600 351,325
Kerr-McGee Corp. ............ 3,800 231,325 1,300 75,238
Keycorp ..................... 18,000 792,000 4,900 180,688
Kimberly Clark Corp. ........ 21,742 1,916,014 3,400 261,375
King World Productions, Inc. 3,000 110,625* 600 23,775*
Knight Ridder, Inc. ......... 7,600 281,200 1,100 70,950
Kroger Co. .................. 9,500 425,125* 2,600 87,100*
LSI Logic Corp. ............. 9,800 227,850* -- --
Laidlaw, Inc. ...............
Class B Non-Voting ........ 24,200 266,200 5,000 46,250
Lilly (Eli) & Co. ........... 42,600 2,747,700 6,000 597,000
Limited, Inc. ............... 20,900 399,713 7,600 135,850
Lincoln National Corp. ...... 8,200 359,775 2,200 102,850
Liz Claiborne, Inc. ......... 5,600 208,600 1,500 44,063
Lockheed Martin Corp. ....... 15,457 1,393,062 4,404 323,144
Loews Corp. ................. 9,100 704,113 1,200 184,200
Longs Drug Stores Corp. ..... 1,700 73,950 300 11,925
Loral Corp. ................. -- -- 3,700 125,338
Louisiana Land &
Exploration Co. ........... 2,500 131,563 600 23,400
Louisiana-Pacific Corp. ..... 8,300 188,825 2,400 64,800#
Lowe's Companies, Inc. ...... 13,400 547,725 3,600 113,400
Luby's Cafeterias, Inc. ..... 1,950 46,800 500 11,000
Lucas Varity P.L.C ..........
Sponsored ADR ............. 4,126 162,461* -- --
Lucent Technologies, Inc. ... 5,000 229,375 -- --
MBNA Corp. .................. 17,325 602,044 3,200 129,200
MCI Communications Corp. .... 53,300 1,362,481 14,700 392,306
MGIC Investment Corp. ....... 4,500 303,188 -- --
Mallinckrodt Group, Inc. .... 5,700 237,263 1,500 51,188
Manor Care, Inc. ............ 4,800 184,200 1,450 47,306
Marriott International, Inc. 10,000 551,250 2,600 96,850
Marsh & McLennan
Companies, Inc. ........... 5,500 534,188 1,500 130,125
Masco Corp. ................. 12,300 369,000 3,500 103,250
Mattel, Inc. ................ 21,452 555,071 4,800 134,400
May Department Stores Co. ... 19,300 938,463 5,400 235,575
Maytag Corp. ................ 8,000 156,000 2,400 48,900
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
SEPTEMBER 30, 1996 NOVEMBER 30, 1995
---------------------- ------------------------
(UNAUDITED)
SHARES VALUE(DAGGER) SHARES VALUE(DAGGER)
------ ------------ ------- --------------
<S> <C> <C> <C> <C>
McDermott International, Inc. ... 4,200 $ 91,350 1,300 $ 23,563
McDonalds Corp. ................. 54,000 2,558,250# 15,000 669,375
McDonnell Douglas Corp. ......... 17,200 903,000 2,300 204,988
McGraw-Hill Companies, Inc. ..... 7,700 328,213 1,200 100,500
Mead Corp. ...................... 4,000 234,500 1,300 74,263
Medtronic, Inc. ................. 18,100 1,160,663 5,000 274,375
Mellon Bank Corp. ............... 10,450 619,163 3,100 165,850
Melville Corp. .................. 8,000 353,000 2,400 74,700
Mercantile Stores Co., Inc. ..... 2,900 156,600 600 27,900
Merck & Co., Inc. ............... 94,500 6,650,438 26,800 1,658,250
Meredith Corp. .................. 2,300 113,563 700 27,563
Merrill Lynch & Co., Inc. ....... 13,100 859,688 3,700 205,813
Micron Technology, Inc. ......... 16,100 491,050 4,600 251,850
Microsoft Corp. ................. 46,400 6,116,100* 12,700 1,105,694*
Millipore Corp. ................. 3,500 138,250 800 29,800
Minnesota Mining &
Manufacturing Co. ............. 32,700 2,284,913 9,000 589,500
Mobil Corp. ..................... 30,400 3,518,800 8,700 908,063
Monsanto Co. .................... 45,500 1,660,750 2,600 297,700
Moore Corp., Ltd. ............... 7,800 143,325 2,300 41,113
Morgan (J.P.) & Co., Inc. ....... 14,600 1,297,575 4,100 321,850
Morgan Stanley Group, Inc. ...... 11,700 582,075 1,800 155,250
Morrison Knudsen Corp. .......... -- -- 600 3,600#
Morton International, Inc. ...... 11,300 449,175 3,200 110,800
Motorola, Inc. .................. 46,200 2,385,075 12,800 784,000
NBD Bancorp, Inc. ............... -- -- 3,450 132,394
Nacco Industries, Inc. Class A .. 600 28,650 100 5,700
Nalco Chemical Co. .............. 5,300 192,125 1,500 45,938
National City Corp. ............. 17,100 720,338 3,200 103,600
National Semiconductor Corp. .... 10,600 213,325* 2,600 55,575*
National Service Industries, Inc. 3,900 136,500 1,000 32,500
NationsBank Corp. ............... 23,171 2,012,981 5,824 415,688
Navistar International Corp. .... 5,970 50,745* 1,450 15,769*
New York Times Class A .......... 7,700 259,875 2,100 61,950
Newell Co. ...................... 12,400 372,000 3,400 89,675
Newmont Mining Corp. ............ 7,615 359,809 1,723 74,304
Niagra Mohawk Power Corp. ....... 11,100 88,800 3,000 29,625
Nicor, Inc. ..................... 3,900 131,625 900 22,838
Nike, Inc. Class B .............. 11,200 1,360,800 2,200 127,600
Noram Energy Corp. .............. 10,300 153,213 2,700 21,263
Nordstrom, Inc. ................. 6,200 235,988 1,900 74,813
Norfolk Southern Corp. .......... 9,700 886,338 2,900 228,375
Northern States Power Co. MN .... 5,200 242,450 1,300 61,100
Northern Telecom, Ltd. .......... 19,900 1,149,225 5,500 222,063
Northrop Grumman Corp. .......... 4,400 353,100 1,000 61,500
Norwest Corp. ................... 28,200 1,152,675 6,900 227,700
Novell, Inc. .................... 28,200 311,963* 8,100 136,181*
Nucor Corp. ..................... 6,800 345,100 2,000 99,750
Nynex Corp. ..................... 33,600 1,461,600 9,200 456,550
Occidental Petroleum Corp. ...... 24,600 575,025 7,000 154,875#
Ogden Corp. ..................... -- -- 1,200 25,500
Ohio Edison Co. ................. 11,700 226,688 3,300 75,075#
Oneok, Inc. ..................... 2,200 60,500 400 9,400
Oracle Systems Corp. ............ 50,975 2,169,623* 9,450 428,203*
Oryx Energy Co. ................. 8,100 143,775* 2,100 27,563*
Outboard Marine Corp. ........... -- -- 300 6,150
Owens-Corning Fiberglas Corp. ... 4,000 147,500* 900 39,938*
PECO Energy Co. ................. 17,200 408,500 4,800 139,200
PNC Bank Corp. .................. 26,250 876,094 5,100 149,175#
PP &L Resources, Inc. ........... 12,200 266,875 -- --
PPG Industries, Inc. ............ 14,700 799,313 4,500 204,188
Paccar, Inc. .................... 3,060 167,918 760 33,440
PacifiCorp ...................... 22,700 468,188 6,200 121,675#
Pacific Enterprises ............. 6,300 190,575 2,000 53,500
Pacific Gas & Electric Co. ...... 32,100 698,175 9,100 250,250
Pacific Telesis Group ........... 33,000 1,109,625 9,300 279,000
</TABLE>
See accompanying notes to financial statements.
64
<PAGE>
STATEMENTS OF NET ASSETS THE DFA INVESTMENT TRUST COMPANY
THE U.S. LARGE COMPANY SERIES (CONCLUDED)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
SEPTEMBER 30, 1996 NOVEMBER 30, 1995
---------------------- ------------------------
(UNAUDITED)
SHARES VALUE(DAGGER) SHARES VALUE(DAGGER)
------ ------------ ------- --------------
<S> <C> <C> <C> <C>
Pall Corp. .................... 8,766 $ 247,640 2,600 $ 70,525
Panenergy Corp. ............... 11,500 398,188 -- --
Panhandle Eastern Corp. ....... -- -- 3,100 87,963#
Parker-Hannifin Corp. ......... 5,650 237,300 1,500 55,125
Penney (J.C.) Co., Inc. ....... 17,400 941,775 4,800 225,000
Pennzoil Co. .................. 3,500 185,063 1,000 39,625
Peoples Energy Corp. .......... 2,600 88,400 700 21,350
Pep Boys -- Manny,
Moe & Jack .................. 4,800 171,000 1,400 37,100
Pepsico, Inc. ................. 121,700 3,438,025 17,100 944,775#
Perkin Elmer Corp. ............ 3,500 202,563 1,100 39,600
Pfizer, Inc. .................. 49,700 3,932,513 13,600 788,800
Pharmacia & Upjohn, Inc. ...... 39,380 1,624,425 5,365 192,469
Phelps Dodge Corp. ............ 5,100 327,038 1,600 108,600
Philip Morris Companies, Inc. . 64,100 5,752,975 18,200 1,597,050
Phillips Petroleum Co. ........ 20,300 867,825 5,700 189,525
Pioneer Hi-Bred
International, Inc. ......... 6,300 381,150 1,800 103,050
Pitney Bowes, Inc. ............ 11,500 606,625 3,200 143,200
Pittston Co. Services Group ... -- -- 700 21,350
Placer Dome, Inc. ............. 18,500 437,063 5,300 131,175
Polaroid Corp. ................ 3,700 162,800 800 36,900
Potlatch Corp. ................ 2,300 89,125 600 24,225
Praxair, Inc. ................. 11,800 507,400 3,000 87,375
Premark International, Inc. ... -- -- 1,300 66,300
Price/Costco, Inc. ............ 15,203 312,612* 4,165 69,503*
Procter & Gamble Co. .......... 53,416 5,208,060 14,900 1,286,988
Providian Corp. ............... 7,200 309,600 2,200 88,275
Public Service Enterprise
Group, Inc. ................. 18,900 505,575 5,200 154,050
Pulte Corp. ................... 1,900 48,688 700 21,525
Quaker Oats Co. ............... 10,400 380,900 3,000 104,250
Ralston Purina Group .......... 8,100 554,850 2,300 147,200
Raychem Corp. ................. 3,400 255,000 900 46,800
Raytheon Co. .................. 18,500 1,029,063 5,600 249,200
Reebok International, Ltd. .... 4,800 166,800 1,600 41,600
Republic New York Corp. ....... 4,300 297,238 1,200 75,600
Reynolds Metals Co. ........... 4,900 250,513 1,500 86,625
Rite Aid Corp. ................ 6,400 232,000 1,900 59,375
Roadway Services, Inc. ........ -- -- 700 35,175
Rockwell International Corp. .. 16,900 952,738 4,800 235,200
Rohm & Haas Co. ............... 5,000 327,500 1,600 96,400
Rowan Companies, Inc. ......... 6,700 124,788 2,000 15,000*
Royal Dutch Petroleum Co. ..... 41,700 6,510,413 11,500 1,476,313
Rubbermaid, Inc. .............. 11,600 284,200 3,500 96,250
Russell Corp. ................. 3,100 99,975 700 18,638
Ryans Family Steak Houses, Inc. 4,200 31,631* 1,300 9,669*
Ryder System, Inc. ............ 6,000 177,750 1,700 40,588#
SBC Communications, Inc. ...... 47,500 2,285,938 13,100 707,400
SCE Corp. ..................... -- -- 9,800 153,125
Safeco Corp. .................. 9,700 338,288 1,400 99,663
Safety Kleen Corp. ............ 4,500 74,250 1,300 18,525
Saint Jude Medical, Inc. ...... 6,050 244,647* 1,800 71,213*
Saint Paul Companies, Inc. .... 6,500 360,750 1,700 95,200
Salomon, Inc. ................. 8,000 365,000 2,400 87,300#
Santa Fe Energy Resources, Inc. 7,080 100,890* 2,100 19,425*
Santa Fe Pacific Corp. ........ 10,054 125,675 2,803 33,636
Sara Lee Corp. ................ 37,200 1,329,900 10,300 332,175
Schering-Plough Corp. ......... 28,400 1,746,600 8,200 470,475
Schlumberger, Ltd. ............ 18,800 1,588,600 5,100 323,850
Scientific-Atlanta, Inc. 5,800 92,075 1,500 23,813
Scott Paper Co. ............... -- -- 3,400 194,225
Seagate Technology, Inc. ...... 8,000 447,000* -- --
Seagram Co., Ltd. ............. 28,800 1,076,400 8,200 299,300
Sears, Roebuck & Co. .......... 30,200 1,351,450 8,400 330,750
Service Corp. International ... 18,200 550,550 1,950 79,219
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
SEPTEMBER 30, 1996 NOVEMBER 30, 1995
---------------------- -------------------------
(UNAUDITED)
SHARES VALUE(DAGGER) SHARES VALUE(DAGGER)
------ ------------ ------- --------------
<S> <C> <C> <C> <C>
Shared Medical Systems Corp. ... 1,900 $ 107,944 700 $ 30,231
Shawmut National Corp. ......... -- -- 2,600 97,500
Sherwin-Williams Co. ........... 6,500 301,438 1,800 71,325
Shoney's, Inc. ................. 3,900 35,588* 700 7,525*#
Sigma-Aldrich Corp. ............ 3,900 223,031 1,200 59,250
Silicon Graphics, Inc. ......... 12,700 280,988* 3,500 127,750*
Snap-On, Inc. .................. 6,300 202,388 1,000 44,250
Sonat, Inc. .................... 6,700 296,475 1,700 54,825
Southern Co. ................... 51,700 1,169,713 14,400 329,400#
Southwest Airlines Co. ......... 11,100 253,913 3,200 80,000
Springs Industries, Inc. Class A 1,450 64,525 600 25,200
Sprint Corp. ................... 33,600 1,306,200 7,400 296,000
Stanley Works .................. 6,700 188,438 800 40,500
Stone Container Corp. .......... 7,700 120,313 2,114 33,031
Stride Rite Corp. .............. 3,900 35,100 1,000 8,750
Sun Company, Inc. .............. 5,800 133,400 1,600 44,400#
Sun Microsystems ............... 14,020 870,116* 2,200 185,350*
Suntrust Banks, Inc. ........... 17,600 721,600 2,600 177,450
Supervalu, Inc. ................ 5,200 143,000 1,600 51,600
Sysco Corp. .................... 13,900 467,388 3,800 116,375
TJX Companies, Inc. ............ 5,500 197,313 1,600 26,600
TRW, Inc. ...................... 5,000 465,000 1,300 97,338
Tandem Computers, Inc. ......... 9,000 96,750* 2,400 30,000*
Tandy Corp. .................... 4,615 186,331 1,515 72,152
Tektronix, Inc. ................ 2,600 106,275 900 48,488
Tele-Communications, Inc.
Class A ...................... 50,400 752,850* 12,300 228,319*
Teledyne, Inc. ................. -- -- 1,300 31,525
Tellabs, Inc. .................. 6,800 480,250* 2,000 79,000*
Temple-Inland, Inc. ............ 4,200 221,550 1,300 58,988
Tenet Healthcare Corp. ......... 16,500 367,125* 4,400 78,650*
Tenneco, Inc. .................. 13,500 676,688 3,900 187,200
Texaco, Inc. ................... 20,400 1,876,800 5,700 421,800
Texas Instruments, Inc. ........ 14,700 810,338 4,000 231,500
Texas Utilities Co. ............ 17,500 693,438 4,900 188,650
Textron, Inc. .................. 6,400 544,000 2,000 153,250
Thomas & Betts Corp. ........... 3,300 135,300 400 29,350
Three COM Corp. ................ 13,000 780,813* -- --
Time Warner, Inc. .............. 30,260 1,168,793 8,360 334,400
Times Mirror Co. Class A ....... 8,100 360,450 2,400 78,000
Timken Co. ..................... 2,500 98,125 500 20,188
Torchmark Corp. ................ 5,450 250,019 1,550 65,875
Toys 'R' Us, Inc. .............. 21,100 614,538* 6,000 139,500*
Transamerica Corp. ............. 5,200 363,350 1,400 107,275
Travelers Group, Inc. .......... 36,448 1,790,508 6,852 407,694
Tribune Co. .................... 4,700 366,600 1,300 83,850
Trinova Corp. .................. 2,300 72,450 800 24,600
Tupperware Corp. ............... 4,700 230,300* -- --
Tyco International, Ltd. ....... 11,900 513,188 3,600 112,950
UNUM Corp. ..................... 5,700 365,513 1,700 92,013
US Bancorp ..................... 12,400 489,800 2,150 72,966
US Healthcare, Inc. ............ -- -- 3,600 164,025
US West, Inc. .................. 36,700 1,091,825 10,100 315,625
US West, Inc. Media Group
Class ........................ 36,300 612,563* 20,200 363,600*
USAir Group, Inc. .............. 4,800 79,200* 1,400 18,725*
USF&G Corp. .................... 9,100 168,350 2,300 39,675
USLIFE Corp. ................... 2,725 81,750 750 21,656
UST, Inc. ...................... 15,200 450,300 4,300 140,288
USX-Marathon Group, Inc. ....... 22,200 480,075 6,300 115,763
USX-US Steel Group ............. 6,320 180,120 1,620 52,853
Unicom Corp., Inc. ............. 16,700 419,588 4,500 144,000
Unilever NV .................... 12,500 1,970,313 3,500 465,063
Union Camp Corp. ............... 5,400 263,925 1,400 68,775
Union Carbide Corp. ............ 10,200 465,375 3,100 122,838
Union Electric Co. ............. 7,800 287,625 2,300 92,288
</TABLE>
See accompanying notes to financial statements.
65
<PAGE>
STATEMENTS OF NET ASSETS THE DFA INVESTMENT TRUST COMPANY
THE U.S. LARGE COMPANY SERIES (CONCLUDED)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
SEPTEMBER 30, 1996 NOVEMBER 30, 1995
---------------------- -------------------------
(UNAUDITED)
SHARES VALUE(DAGGER) SHARES VALUE(DAGGER)
------ ------------ ------- --------------
<S> <C> <C> <C> <C>
Union Pacific Corp. ........ 19,000 $ 1,391,750# 4,300 $ 291,325
Unisys Corp. ............... 13,200 80,850* 3,800 24,700*
United Healthcare Corp. .... 14,200 591,075 3,700 232,638
United States Surgical Corp. 4,900 208,250 1,100 27,638
United Technologies Corp. .. 9,300 1,117,163 2,600 243,750
Unocal Corp. ............... 19,100 687,600 5,500 147,813
VF Corp. ................... 4,900 294,613 1,300 67,600
Varity Corp. ............... -- -- 1,000 38,750*
Viacom, Inc. Class B ....... 28,534 1,012,957* 6,221 300,163*
WMX Technologies, Inc. ..... 38,000 1,249,250 10,400 306,800
Wachovia Corp. ............. 12,900 638,550 3,800 171,000
Wal-Mart Stores, Inc. ...... 177,900 4,692,113 49,600 1,190,400
Walgreen Co. ............... 19,100 706,700 5,500 160,188
Warner-Lambert Co. ......... 21,000 1,386,000 2,900 258,825
Wells Fargo & Co. .......... 7,399 1,923,740 900 189,225
Wendy's International, Inc. 9,700 208,550 2,300 47,438
Western Atlas, Inc. ........ 4,100 255,225* 1,300 62,238*
Westinghouse Electric Corp. 32,100 597,863 7,900 133,313
Westvaco Corp. ............. 7,750 229,594 2,150 58,856
Weyerhaeuser Co. ........... 15,400 710,325 4,500 203,625
Whirlpool Corp. ............ 5,700 288,563 1,500 83,250
Whitman Corp. .............. 8,300 191,938 2,400 52,800
Williamette Industries, Inc. 4,300 280,575 1,200 72,900
Williams Companies, Inc. ... 7,957 405,807 2,300 96,600#
Winn-Dixie Stores, Inc. .... 11,700 408,038 1,600 102,600
Woolworth Corp. ............ 10,300 212,438* 2,800 42,000#
Worldcom, Inc. ............. 29,920 643,280* -- --
Worthington Industries, Inc. 6,875 138,789 2,075 40,981
Wrigley (Wm.) Jr. Co. ...... 8,900 536,225 2,600 122,525
Xerox Corp. ................ 25,000 1,340,625* 2,300 315,388
Yellow Corp. ............... 2,300 30,188 800 9,550
Zurn Industries, Inc. ...... -- -- 200 4,900
-------- ------------ ---------- -----------
TOTAL COMMON STOCKS
(Cost $299,439,341 and
$68,158,757, respectively) $404,182,897 $96,600,848
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
SEPTEMBER 30, 1996 NOVEMBER 30, 1995
---------------------- -------------------------
(UNAUDITED)
FACE FACE
AMOUNT VALUE(DAGGER) AMOUNT VALUE(DAGGER)
------ ------------ ------ --------------
<S> <C> <C> <C> <C>
TEMPORARY CASH INVESTMENTS --
(0.2% AND 0.1%, RESPECTIVELY)
Repurchase Agreement, PNC
Securities Corp. 5.40%, 10/01/96
(Collateralized by U.S. Treasury
Notes, 6.000%, 08/31/97)
(Cost $690,000) ................ $ 690 $ 690,000
-----------
Repurchase Agreement, PNC
Securities Corp. 5.65%, 12/01/95
(Collateralized by U.S. Treasury
Notes, 6.125%, 05/31/97)
(Cost $140,000) ................ $140 $ 140,000
-------------
TOTAL INVESTMENTS --
(99.9% AND 99.6%, RESPECTIVELY)
(Cost $300,129,341 and
$68,298,757, respectively) ..... 404,872,897 96,740,848
------------- -------------
OTHER ASSETS AND LIABILITIES --
(0.1% AND 0.4%, RESPECTIVELY) .. (331,633) 377,529
------------- -------------
NET ASSETS-- (100.0%)** .......... $ 405,204,530 $ 97,118,377
============= =============
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER SHARE ...................... N/A $ 13.48
=============
<FN>
- --------------------
(DAGGER) See Note B to Financial Statements.
* Non-Income Producing Securities
# Securities on Loan
** Applicable to 7,203,088 Outstanding $.01 Par Value Shares (Unlimited Number
of Shares Authorized) at November 30, 1995
</FN>
</TABLE>
See accompanying notes to financial statements.
66
<PAGE>
STATEMENTS OF OPERATIONS THE DFA INVESTMENT TRUST COMPANY
THE U.S. LARGE COMPANY SERIES (AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
TEN MONTHS YEAR
ENDED ENDED
SEPT. 30, NOV. 30,
1996 1995
---------- --------
(UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME
Dividends .......................................... $ 3,964 $ 1,944
Interest ........................................... 78 40
Income From Securities Lending ..................... 6 --
-------- --------
Total Investment Income .......................... 4,048 1,984
-------- --------
Expenses
Investment Advisory Services ....................... 44 19
Accounting & Transfer Agent Fees ................... 56 75
Custodian's Fee .................................... 48 29
Legal Fees ......................................... 58 2
Audit Fees ......................................... 6 2
Shareholders' Reports .............................. 3 3
Trustees' Fees and Expenses ........................ 1 1
Other .............................................. 10 7
-------- --------
Total Expenses ................................... 226 138
Less: Expenses Reimbursed .......................... -- (119)
-------- --------
Net Expenses ....................................... 226 19
-------- --------
NET INVESTMENT INCOME ............................ 3,822 1,965
-------- --------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net Realized Gain on Investment Securities ............ 709 172
Change in Unrealized Appreciation (Depreciation)
of Investment Securities ........................... 21,479 21,274
-------- --------
NET GAIN ON INVESTMENT SECURITIES ..................... 22,188 21,446
-------- --------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .. $ 26,010 $ 23,411
======== ========
</TABLE>
See accompanying notes to financial statements.
67
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS THE DFA INVESTMENT TRUST COMPANY
THE U.S. LARGE COMPANY SERIES (AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
TEN MONTHS YEAR YEAR
ENDED ENDED ENDED
SEPT. 30, NOV. 30, NOV. 30,
1996 1995 1994
---------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net Investment Income ................................ $ 3,822 $ 1,965 $ 1,224
Net Realized Gain (Loss) on Investment Securities ... 709 172 (43)
Change in Unrealized Appreciation (Depreciation) of
Investment Securities .............................. 21,479 21,274 (687)
--------- --------- ---------
Net Increase in Net Assets Resulting from Operations 26,010 23,411 494
--------- --------- ---------
Distributions From:
Net Investment Income ................................ (1,215) (1,886) (1,252)
Net Realized Gains ................................... (685) -- (33)
--------- --------- ---------
Total Distributions ................................ (1,900) (1,886) (1,285)
--------- --------- ---------
Capital Share Transactions(1):
Shares Issued ........................................ 32,324 31,424 16,588
Shares Issued in Lieu of Cash Distributions .......... 1,744 1,585 1,173
Shares Redeemed ...................................... (10,535 (6,073) (6,166)
--------- --------- ---------
Net Increase From Capital Share Transactions ....... 23,533 26,936 11,595
Transactions in Interest(1):
Contributions ........................................ 283,520 -- --
Withdrawals .......................................... (23,076) -- --
--------- --------- ---------
Net Increase From Transactions in Interest ......... 260,444 -- --
--------- --------- ---------
Total Increase ..................................... 308,087 48,461 10,804
--------- --------- ---------
NET ASSETS
Beginning of Period .................................. 97,118 48,657 37,853
--------- --------- ---------
End of Period ........................................ $ 405,205 $ 97,118 $ 48,657
========= ========= =========
(1) SHARES ISSUED AND REDEEMED:
Shares Issued ........................................ 2,257 2,738 1,612
Shares Issued in Lieu of Cash Distributions .......... 121 135 114
Shares Redeemed ...................................... (754) (484) (597)
--------- --------- ---------
1,624 2,389 1,129
========= ========= =========
<FN>
- ----------------
(1) Capital Share Transactions and Shares Issued and Redeemed are reported through May 31, 1996.
Effective June 1, 1996, the Series was reorganized as a partnership.
</FN>
</TABLE>
See accompanying notes to financial statements.
68
<PAGE>
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
FINANCIAL HIGHLIGHTS THE DFA INVESTMENT TRUST COMPANY
THE U.S. LARGE COMPANY SERIES
<TABLE>
<CAPTION>
TEN MONTHS YEAR YEAR FEB. 8 3
ENDED ENDED ENDED TO
SEPT. 30, NOV. 30, NOV. 30, NOV. 30,
1996 1995 1994 1993
------------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period(2).. $ 13.48 $ 10.11 $ 10.27 $ 10.00
------------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS(2)
Net Investment Income ................ 0.15 0.30 0.28 0.24
Net Gains (Losses) on Securities
(Realized and Unrealized) .......... 1.41 3.36 (0.14) 0.26
------------- ---------- ---------- ----------
Total from Investment Operations 1.56 3.66 0.14 (0.50)
------------- ---------- ---------- ----------
LESS DISTRIBUTIONS(2)
Net Investment Income ................ (0.16) (0.29) (0.29) (0.23)
Net Realized Gains ................... (0.08) -- (0.01) --
------------- ---------- ---------- ----------
Total Distributions ............. (0.24) (0.29) (0.30) (0.23)
------------- ---------- ---------- ----------
Net Asset Value, End of Period(2) ....... $ 14.80 $ 13.48 $ 10.11 $ 10.27
============= ========== ========== ==========
Total Return(2) ......................... 11.60%# 36.77% 1.30% 5.05%#
Net Assets, End of Period (thousands) ... $ 405,205 $ 97,118 $ 48,657 $ 37,853
Ratio of Expenses to Average Net Assets . 0.13%* 0.02%(a) 0.02%(a) 0.02%*(a)
Ratio of Net Investment Income to Average
Net Assets ........................... 2.15%* 2.61%(a) 2.83%(a) 2.87%*(a)
Portfolio Turnover Rate ................. 11.64%* 2.38% 8.52% 34.36%*
Average Commission Rate(1) .............. $ 0.0216 N/A N/A N/A
<FN>
- ----------------
* Annualized
# Non-Annualized
(1) Computed by dividing the total amount of brokerage commissions paid by the total shares of investment securities
purchased and sold during the period for which commissions were charged, as required by the SEC for fiscal
years beginning after September 1, 1995.
(2) Items calculated for the period December 1, 1995 through May 31, 1996. Effective June 1, 1996, the Series was
reorganized as a partnership, and these items are no longer applicable.
(3) Commencement of Operations.
(a) Had certain reimbursements not been in effect the ratios of expenses to average net assets for the periods ended
November 30, 1995, 1994 and 1993 would have been 0.18%, 0.33% and 0.48%, respectively, and the ratios of net
investment income to average net assets for the periods ended November 30, 1995, 1994 and 1993, would have been
2.45%, 2.52% and 2.41%, respectively.
</FN>
</TABLE>
See accompanying notes to financial statements.
69
<PAGE>
NOTES TO FINANCIAL STATEMENTS THE DFA INVESTMENT TRUST COMPANY
A. ORGANIZATION:
The DFA Investment Trust Company (the "Trust") is an open-end management
investment company registered under the Investment Company Act of 1940. At
September 30, 1996, The Trust consisted of fifteen investment portfolios: The
U.S. 6-10 Small Company Series, The U.S. Large Company Series, The Enhanced U.S.
Large Company Series, The U.S. Small Cap Value Series, The U.S. Large Cap Value
Series, The DFA One-Year Fixed Income Series, The DFA Two-Year Corporate Fixed
Income Series, The DFA Two-Year Government Series, The Japanese Small Company
Series, The Pacific Rim Small Company Series, The United Kingdom Small Company
Series, The Continental Small Company Series, The DFA International Value
Series, The Emerging Markets Series and The DFA Two-Year Global Fixed Income
Series. At November 30, 1995, The DFA Two-Year Corporate Fixed Income Series,
The DFA Two-Year Government Series, The Japanese Small Company Series, The
Pacific Rim Small Company Series, The United Kingdom Small Company Series, The
Continental Small Company Series and The DFA Two-Year Global Fixed Income Series
had not yet commenced operations. These financial statements relate solely to
The U.S. Large Company Series (the "Series").
On June 1, 1996, the Series was reorganized from an entity taxed as a
corporation to an entity taxed as a partnership for income tax purposes. This
reorganization was accomplished by an amendment to the organization document of
the Series which for income tax purposes was treated as a liquidation of the
Series, immediate distribution of its assets to its sole shareholder at May 31,
1996, which was The U.S. Large Company Portfolio (the "Portfolio") and
subsequent contribution of those assets from the Portfolio, along with a nominal
contribution from the Advisor to this Series to create the partnership.
On June 2, 1996, an unrelated investment company contributed assets valued
at $225,957,696 to the Series in exchange for a 63.4% interest in the Series.
The total net assets of the Series increased to $356,632,854 immediately
following this transaction.
These transactions are expected to be tax-free events to all parties
involved based on rulings obtained from the Internal Revenue Service.
For financial reporting purposes, the Series continues to exist and as
such, will maintain all of its previous operating history throughout the
financial statements.
Information included in these footnotes as of and for the period ended
September 30, 1996 is unaudited.
B. SIGNIFICANT ACCOUNTING POLICIES:
The following significant accounting policies are in conformity with
generally accepted accounting principles for investment companies. Such policies
are consistently followed by the Trust in preparation of its financial
statements. The preparation of financial statements in accordance with generally
accepted accounting principles may require management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
1. SECURITY VALUATION: Securities held by the Series which are listed on a
securities exchange and for which market quotations are readily available are
valued at the last quoted sale price of the day, or if there is no such reported
sale, at the mean between the most recent bid and asked prices. Price
information on listed securities is taken from the exchange where the security
is primarily traded. Unlisted securities for which market quotations are readily
available are valued at the mean between the most recent bid and asked prices.
The value of securities for which quotations are not readily available are
determined in good faith at fair value using methods determined by the Board of
Directors.
2. FEDERAL INCOME TAXES: Prior to June 1, 1996, the Series qualified as a
regulated investment company and distributed all of its taxable income.
Accordingly, no provision for federal taxes was required in the financial
statements prior to that time. Effective June 1, 1996, the Series is treated as
a partnership for federal income tax purposes. Any interest, dividends and gains
or losses of the Series will be deemed to have been "passed through" to its
Feeder Funds.
70
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) THE DFA INVESTMENT TRUST COMPANY
3. REPURCHASE AGREEMENTS: The Series may purchase money market instruments
subject to the seller's agreement to repurchase them at an agreed upon date and
price. The seller will be required on a daily basis to maintain the value of the
collateral subject to the agreement at not less than the repurchase price
(including accrued interest). The agreements are conditioned upon the collateral
being deposited under the Federal Reserve book-entry system or with the Fund's
custodian or a third party sub-custodian. All repurchase agreements were entered
into on September 30, 1996 or November 30, 1995.
4. OTHER: Security transactions are accounted for on the date the
securities are purchased or sold. Costs used in determining realized gains and
losses on the sale of investment securities are those of specific securities
sold. Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income is recorded on an accrual basis. Expenses
directly attributable to a Series are directly charged. Common expenses are
allocated using methods determined by the Board of Directors.
C. INVESTMENT ADVISOR:
Dimensional Fund Advisors Inc. (the "Advisor") provides investment advisory
services to the Series. For the ten months ended September 30, 1996 and the year
ended November 30, 1995, the Series' advisory fees were computed daily and paid
monthly to the Advisor based on an effective annual rate of 0.025 of 1%.
Through November 30, 1995, the Advisor had agreed to bear all of the
ordinary operating expenses of the Series except for the advisory fee. Effective
December 1, 1995, the Series is obligated to bear all of its expenses including
its advisory fee.
Certain officers of the Series are also officers, directors and
shareholders of the Advisor.
D. PURCHASES AND SALES OF SECURITIES:
The Series made the following purchases and sales of investment securities
(amounts in thousands):
TEN MONTHS YEAR
ENDED ENDED
SEPT. 30, NOV. 30,
1996 1995
---------- ----------
(UNAUDITED)
Purchases ..................... $250,332 $26,675
Sales ......................... 20,037 1,770
E. INVESTMENT TRANSACTIONS:
The gross unrealized appreciation and depreciation for financial reporting
and federal income tax purposes of investment securities was as follows (amounts
in thousands):
TEN MONTHS YEAR
ENDED ENDED
SEPT. 30, NOV. 30,
1996 1995
---------- ----------
(UNAUDITED)
Gross Unrealized Appreciation ...... $109,728 $28,997
Gross Unrealized Depreciation ...... (4,984) (555)
---------- ----------
Net ................................ $104,744 $28,442
========== ==========
At November 30, 1995, the Series had a capital loss carryover of
approximately $172,000 for federal income tax purposes expiring on November 30,
2001.
71
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) THE DFA INVESTMENT TRUST COMPANY
F. COMPONENTS OF NET ASSETS:
At November 30, 1995, net assets consisted of (amounts in thousands):
Paid-In Capital ....................................... $69,255
Undistributed Net Investment Income ................... 97
Undistributed Net Realized Gain ....................... (676)
Unrealized Appreciation of Investment Securities ...... 28,442
----------
$97,118
==========
G. SECURITIES LENDING
Loans of domestic securities are required at all times to be secured by
collateral at least equal to 102% of the market value of the securities on loan.
However, in the event of default or bankruptcy by the other party to the
agreement, realization and/or retention of the collateral may be subject to
legal proceedings. In the event that the borrower fails to return loaned
securities, and cash collateral being maintained by the borrower is insufficient
to cover the value of loaned securities, and provided such collateral
insufficiency is not the result of investment losses, the lending agent has
agreed to pay the amount of the shortfall to the Series or, at the option of the
lending agent, replace the loaned securities. The market value of securities on
loan to brokers from the Series and the related collateral cash, and
indemnification received as follows:
TEN MONTHS YEAR
ENDED ENDED
SEPT. 30, NOV. 30,
1996 1995
------------ --------------
(UNAUDITED)
Value of Securities on Loan .................. $3,808,137 $6,064,020
Value of Collateral and Indemnification ...... 3,884,300 6,262,200
72
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS THE DFA INVESTMENT TRUST COMPANY
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF
THE DFA INVESTMENT TRUST COMPANY:
We have audited the accompanying statements of net assets of The U.S. Large
Company Series of The DFA Investment Trust Company as of November 30, 1995, and
the related statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the periods presented. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards required that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatements. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
November 30, 1995, by correspondence with the custodians and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
U.S. Large Company Series of The DFA Investment Trust Company as of November 30,
1995, and the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and its
financial highlights for each of the periods presented, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
January 19, 1996
73
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
Investment Adviser
PNC Asset Management Group, Inc.
Philadelphia, Pennsylvania 19101
PNC Institutional Management Corporation
Wilmington, Delaware 19809
Sub-Adviser -- Value Equity Portfolio,
Small Cap Value Equity Portfolio,
International Equity Portfolio,
International Emerging Markets Portfolio,
Select Equity Portfolio and
Balanced Portfolio
Provident Capital Management,Inc.
Philadelphia, Pennsylvania 19103
Sub-Adviser -- Growth Equity Portfolio,
Small Cap Growth Equity Portfolio and
Index Equity Portfolio
PNC Equity Advisors Company
Philadelphia, Pennsylvania 19101
Sub-Adviser -- Balanced Portfolio
BlackRock Financial Management, Inc.
New York, New York 10154
Custodian
PNC Bank, National Association
Philadelphia, Pennsylvania 19101
Co-Administrator and Transfer Agent
PFPC Inc.
Wilmington, Delaware 19809
Co-Administrator and Distributor
Compass Distributors, Inc.
Radnor, Pennsylvania 19087
Co-Administrator
Compass Capital Group, Inc.
New York, New York 10154
Counsel
Drinker Biddle & Reath
Philadelphia, Pennsylvania 19107
Independent Accountants
Coopers & Lybrand, L.L.P.
Philadelphia, Pennsylvania 19103
<PAGE>
COMPASS CAPITAL FUNDS
COMPASS CAPITAL FUNDS
Compass Capital Funds is a leading mutual fund company currently managing in
excess of $11 billion in over 25 portfolios designed to fit a broad range of
investment goals. Each portfolio is managed by recognized experts in equity,
fixed income, international, and tax-free investing who adhere to a pure
investment style.
STOCK PORTFOLIOS
================================================================================
Index Equity Small Cap Value Equity
Select Equity Small Cap Growth Equity
Growth Equity International Equity
Value Equity International Emerging Markets
STOCK & BOND PORTFOLIOS
================================================================================
Balanced
BOND PORTFOLIOS
================================================================================
Short Government Bond Government Income
Intermediate Government Bond Managed Income
Intermediate Bond International Bond
Core Bond
TAX-FREE BOND PORTFOLIOS
================================================================================
Tax-Free Income New Jersey Tax-Free Income
Pennsylvania Tax-Free Income Ohio Tax-Free Income
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COMPASS CAPITAL FUNDS
P.O. Box 8907
Wilmington, DE 19899
COMPASS CAPITAL FUNDS - AT YOUR SERVICE
As a Compass Capital Funds shareholder, you have some special privileges.
Whether it's automatic investment plans, informative newsletters or ready access
to your account, you can benefit from services designed to make investing
simple.
24-HOUR ACCOUNT INFORMATION
Call us at 1-800-441-7762, 24 hours a day, 7 days a week to get information
about your account balances, recent transactions and share prices. Note:
Institutional and Service Share Class investors should call 1-800-441-7764.
You can also reach us on the Internet through the World Wide Web by accessing
HTTP://WWW.COMPASSFUNDS.COM.
EXCHANGE PRIVILEGES
Should your investment goals change, shareholders in our Investor Class shares
may exchange all or part of their investments into the same share class of any
other portfolio of Compass Capital funds.(1)
AUTOMATIC INVESTMENT PLANS
Investor Class shareholders who want to invest regularly can arrange to have $50
or more automatically deducted from their checking or savings account and
invested in any of the Compass Capital portfolios.
SYSTEMATIC WITHDRAWAL PLANS
Investor Class shareholders can establish a systematic withdrawal plan and
receive periodic payments, of $100 or more from their Compass Capital
portfolios, as long as their account is at least $10,000.
RETIREMENT PLANS
Shareholders may make investments in conjunction with individual IRA accounts or
rollover IRAs.
(1) Compass Capital Funds reserves the right to modify or terminate the exchange
privileges at any time.
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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.
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SR 9/30/96-EP
