EQUITY PORTFOLIOS
ANNUAL
REPORT
TO SHAREHOLDERS
SEPTEMBER 30, 1997
[GRAPHIC OMITTED]
COMPASS CAPITAL FUNDS
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PURE INVESTMENT STYLE (SERVICE MARK)
* NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE *
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[LOGO OMITTED] COMPASS CAPITAL FUNDS
EQUITY PORTFOLIOS
* LARGE CAP VALUE EQUITY
* LARGE CAP GROWTH EQUITY
* MID-CAP VALUE EQUITY
* MID-CAP GROWTH EQUITY
* SMALL CAP VALUE EQUITY
* SMALL CAP GROWTH EQUITY
* INTERNATIONAL EQUITY
* INTERNATIONAL SMALL CAP EQUITY
* INTERNATIONAL EMERGING MARKETS
* SELECT EQUITY
* INDEX EQUITY
* BALANCED
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TABLE OF
CONTENTS
PRESIDENT'S LETTER................................................. 1
PORTFOLIO SUMMARIES
LARGE CAP VALUE EQUITY....................................... 2
LARGE CAP GROWTH EQUITY...................................... 3
MID-CAP VALUE EQUITY......................................... 4
MID-CAP GROWTH EQUITY........................................ 5
SMALL CAP VALUE EQUITY....................................... 6
SMALL CAP GROWTH EQUITY...................................... 7
INTERNATIONAL EQUITY......................................... 8
INTERNATIONAL SMALL CAP EQUITY............................... 9
INTERNATIONAL EMERGING MARKETS............................... 10
SELECT EQUITY................................................ 11
INDEX EQUITY................................................. 12
BALANCED..................................................... 13
NOTE ON PERFORMANCE INFORMATION.............................. 14
STATEMENT OF NET ASSETS/SCHEDULE OF INVESTMENTS.................. 15-40
PORTFOLIO FINANCIAL STATEMENTS
STATEMENTS OF OPERATIONS................................... 42-43
STATEMENTS OF CHANGES IN NET ASSETS........................ 44-46
FINANCIAL HIGHLIGHTS....................................... 48-55
NOTES TO FINANCIAL STATEMENTS.................................... 56-69
REPORT OF INDEPENDENT ACCOUNTANTS................................ 70
DFA INVESTMENT TRUST COMPANY ANNUAL REPORT.......................... 71-83
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COMPASS CAPITAL FUNDS [LOGO OMITTED]
PRESIDENT'S LETTER
November 15, 1997
Dear Shareholder:
We are pleased to present the Annual Report for the Compass Capital Funds
for 1997, a year characterized by a bull market for equities and bonds and
strong performance by the Compass Capital Funds' portfolios.
Over the twelve month period ended September 30, 1997, the financial
markets exhibited remarkable strength. The stock market broke through to an
all-time high this year and overall was up nearly 38% (as measured by the S&P
500 Index), extending one of the longest bull markets in modern times yet
another year. At the same time, the bond market's performance reflected low
inflation and steady economic growth, producing returns for investors of over 8%
(as measured by the Lehman Brothers Aggregate Index).
Because we know how important it is for you to keep track of your
investments, we continue to work hard to make the Annual Report for the Compass
Capital Funds easy to read and understand. We have organized the pages into
individual summaries for all our funds, highlighting key portfolio management
activities for the year. Also included in each summary page is a performance
graph which shows how all classes of each portfolio performed versus its
benchmark.
Compass Capital's emphasis on Pure Investment Style(SERVICE MARK) has
continued to enable investors to receive actual returns on individual portfolios
that are consistent with their expectations. What's more, in our ongoing efforts
to develop quality investment products to meet virtually any individual need, we
have introduced three new funds since our 1996 Annual Report: Compass Capital
Mid-Cap Growth Equity, Compass Capital Mid-Cap Value Equity and Compass Capital
International Small Cap Equity Portfolios.
Compass Capital International Small Cap Equity Portfolio, which was
launched on September 26, 1997, seeks to provide strong growth potential and
diversification benefits by primarily investing in smaller companies domiciled
in industrialized foreign countries -- an asset class that is considered
undervalued by many analysts.
While it may be unrealistic to expect the same magnitude of gains in the
stock market as we have enjoyed in recent years, particularly in light of
October's global equity market volatility, we believe that equity markets can
continue to offer opportunities to disciplined investors.We also see strong
opportunities in fixed income products as we believe that historically low
inflation rates may enable bond or bond fund investors to earn strong
returns.Most importantly, we maintain our core belief - that a disciplined
investment strategy will best serve investors in their pursuit of long-term
investment goals.
Thank you for your confidence in Compass Capital Funds. We appreciate the
opportunity to help you achieve your long-term investment goals.
Sincerely,
(/S/ KAREN SABATH)
Karen H. Sabath
PRESIDENT, COMPASS CAPITAL GROUP, INC.
1
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[LOGO OMITTED] COMPASS CAPITAL FUNDS
LARGE CAP VALUE EQUITY
PORTFOLIO
PORTFOLIO SUB-ADVISOR:
PROVIDENT CAPITAL MANAGEMENT, INC.
TOTAL NET ASSETS (9/30/97):
$1.4 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 FOCUSES ON
STOCKS WITH LOWER THAN AVERAGE PRICE-TO-EARNINGS AND PRICE-TO-BOOK RATIOS AND
MARKET CAPITALIZATIONS IN EXCESS OF $5 BILLION. A COMPANY'S EARNINGS TREND AND
ITS STOCK'S DIVIDEND GROWTH RATE ARE ALSO FACTORS CONSIDERED IN SECURITY
SELECTION.
RECENT PORTFOLIO MANAGEMENT ACTIVITY:
(BULLET) THE MANAGER HAS MAINTAINED AN OVERWEIGHTING IN THE FINANCIAL AND
RETAIL SECTORS, INITIATING POSITIONS IN AMERICAN GENERAL AND NATIONSBANK. BOTH
STOCKS WERE ATTRACTIVELY VALUED. IN THE CASE OF NATIONSBANK, THE FUND PURCHASED
SHARES AFTER THE STOCK DROPPED 15% FROM ITS 1997 HIGH AFTER IT ANNOUNCED PLANS
TO ACQUIRE BARNETT BANK.
(BULLET) PROFITS WERE TAKEN IN TOYS 'R' US AND XEROX, WHICH HAD BEEN
SUCCESSFUL HOLDINGS, AND REDEPLOYED INTO THE RETAIL AND TECHNOLOGY SECTORS.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE LARGE CAP
VALUE EQUITY PORTFOLIO AND RUSSELL 1000 VALUE INDEX FROM INCEPTION AND AT EACH
FISCAL YEAR END.
[GRAPHIC OMITTED]
PLOT POINTS FOLLOW
Institutional Service Investor A Investor B Investor C Russell 1000
Class Class Class Class Class Value Index
4/20/92 $10,000 $10,000 $ 9,550 $10,000 $10,000 $10,000
9/30/92 9,881 9,881 9,438 9,881 9,881 10,634
9/30/93 12,047 12,041 11,497 12,047 12,047 13,331
9/30/94 12,500 12,465 11,891 12,451 12,451 13,238
9/30/95 15,715 15,631 14,891 15,590 15,590 16,903
9/30/96 19,017 18,863 17,947 18,703 18,703 19,936
12/31/96 20,892 20,696 19,711 20,484 20,484 21,925
3/31/97 21,241 21,042 20,007 20,779 20,778 22,486
6/30/97 24,155 23,900 22,716 23,671 23,671 26,410
9/30/97 26,177 25,883 24,592 25,068 25,579 28,420
FOR PERIOD ENDING SEPTEMBER 30, 1997
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR FROM INCEPTION
Institutional Class 37.66% 21.51% 19.32%
Service Class 37.22% 21.24% 19.07%
Investor A Class (Load Adjusted) 30.88% 20.00% 17.96%
Investor A Class (NAV) 37.01% 21.11% 18.95%
Investor B Class (Load Adjusted) 29.88% 20.33% 18.25%
Investor B Class (NAV) 36.00% 20.82% 18.69%
Investor C Class (Load Adjusted) 34.64% 20.82% 18.69%
Investor C Class (NAV) 36.00% 20.82% 18.69%
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 INCEPTION DATES OF THE PORTFOLIO'S SHARE
CLASSES WERE AS FOLLOWS: INSTITUTIONAL SHARES, 4/20/92; INVESTOR A SHARES,
5/2/92; SERVICE SHARES, 7/29/93; INVESTOR B SHARES, 1/18/96; AND INVESTOR C
SHARES, 8/16/96. SEE "NOTE ON PERFORMANCE INFORMATION" ON PAGE 14 FOR FURTHER
INFORMATION ON HOW PERFORMANCE DATA WAS CALCULATED.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
2
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COMPASS CAPITAL FUNDS [LOGO OMITTED]
LARGE CAP GROWTH EQUITY
PORTFOLIO
PORTFOLIO SUB-ADVISOR:
PNC EQUITY ADVISORS COMPANY
TOTAL NET ASSETS (9/30/97):
$779.0 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 $5 BILLION.
RECENT PORTFOLIO MANAGEMENT ACTIVITY:
(BULLET) THE FUND MAINTAINED AN OVERWEIGHT IN THE TECHNOLOGY SECTOR,
PARTICULARLY IN COMPUTER HARDWARE, WHERE THE MANAGER BELIEVES EARNINGS TRENDS
ARE LIKELY TO REMAIN FAVORABLE. RECENTLY, THE FUND INCREASED ITS POSITIONS IN
INTEL, MIRCOSOFT AND TEXAS INSTRUMENTS.
(BULLET) THE MANAGER HAS BEEN REDUCING AN OVERWEIGHT IN FINANCIAL STOCKS,
WHICH HAVE ALREADY POSTED STRONG PERFORMANCE. THE FUND'S FINANCIAL HOLDINGS
REMAIN CONCENTRATED IN BANK STOCKS WHICH HAVE RECENTLY BENEFITED FROM
CONSOLIDATION.
(BULLET) THE FUND HAS BEEN USING PROCEEDS FROM FINANCIAL STOCK SALES TO
INCREASE WEIGHTINGS IN PHARMACEUTICALS AND BEVERAGES, WHICH HAD BEEN
UNDERWEIGHTED.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE LARGE CAP
GROWTH EQUITY PORTFOLIO AND RUSSELL 1000 GROWTH INDEX FROM INCEPTION AND AT EACH
FISCAL YEAR END.
[GRAPHIC OMITTED]
PLOT POINTS FOLLOW
Institutional Service Investor A Investor B Investor C Russell 1000
Class Class Class Class Class Growth Index
11/01/89 $10,000 $10,000 $ 9,550 $10,000 $10,000 $10,000
9/30/90 10,040 10,040 9,588 10,040 10,040 9,096
9/30/91 11,993 11,993 11,453 11,993 11,993 12,167
9/30/92 12,581 12,581 12,014 12,580 12,580 13,579
9/30/93 15,370 15,358 14,650 15,340 15,340 15,646
9/30/94 13,656 13,638 12,982 13,594 13,594 16,041
9/30/95 17,736 17,649 16,780 17,571 17,571 20,853
9/30/96 21,051 20,886 19,832 20,639 20,639 24,958
12/31/96 21,887 21,701 20,592 21,400 21,400 26,948
3/31/97 21,749 21,546 20,452 21,197 21,197 27,365
6/30/97 25,870 25,621 24,305 25,150 25,150 32,540
9/30/97 28,144 27,858 26,412 27,281 27,281 34,987
FOR PERIOD ENDING SEPTEMBER 30, 1997
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR FROM INCEPTION
Institutional Class 33.69% 17.47% 13.96%
Service Class 33.38% 17.23% 13.81%
Investor A Class (Load Adjusted) 27.22% 15.99% 13.04%
Investor A Class (NAV) 33.18% 17.07% 13.70%
Investor B Class (Load Adjusted) 26.23% 16.27% 13.51%
Investor B Class (NAV) 32.18% 16.74% 13.51%
Investor C Class (Load Adjusted) 30.86% 16.74% 13.51%
Investor C Class (NAV) 32.18% 16.74% 13.51%
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 INCEPTION DATES OF THE PORTFOLIO'S SHARE
CLASSES WERE AS FOLLOWS: INSTITUTIONAL SHARES, 11/1/89; INVESTOR A SHARES,
3/14/92; SERVICE SHARES, 7/29/93; INVESTOR B SHARES, 1/24/96; AND INVESTOR C
SHARES, 1/24/97. SEE "NOTE ON PERFORMANCE INFORMATION" ON PAGE 14 FOR FURTHER
INFORMATION ON HOW PERFORMANCE DATA WAS CALCULATED.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
3
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[LOGO OMITTED] COMPASS CAPITAL FUNDS
MID-CAP VALUE EQUITY
PORTFOLIO
PORTFOLIO SUB-ADVISOR:
PROVIDENT CAPITAL MANAGEMENT, INC.
TOTAL NET ASSETS (9/30/97):
$134.9 MILLION
PERFORMANCE BENCHMARK:
RUSSELL MID CAP VALUE INDEX
INVESTMENT APPROACH:
PURSUES LONG-TERM CAPITAL APPRECIATION BY INVESTING IN EQUITY SECURITIES
BELIEVED BY THE MANAGER TO BE UNDERVALUED. TYPICALLY, THE MANAGER FOCUSES ON
STOCKS WITH LOWER THAN AVERAGE PRICE-TO-EARNINGS AND PRICE-TO-BOOK RATIOS AND
MARKET CAPITALIZATIONS BETWEEN $1 BILLION AND $5 BILLION. A COMPANY'S EARNINGS
TREND AND ITS STOCK'S DIVIDEND GROWTH RATE ARE ALSO FACTORS CONSIDERED IN
SECURITY SELECTION.
RECENT PORTFOLIO MANAGEMENT ACTIVITY:
(BULLET) THE MANAGER'S RECENT OVERWEIGHTING IN THE BASIC MATERIALS AND
CONSUMER STAPLES SECTORS CONTRIBUTED TO STRONG FUND PERFORMANCE VERSUS ITS
BENCHMARK.
(BULLET) STOCK SELECTION BENEFITED FROM TWO PROPOSED MERGER TRANSACTIONS
DURING THE QUARTER: DRUG DISTRIBUTION COMPANY BERGEN BRUNSWIG AGREED TO MERGE
WITH CARDINAL HEALTH, AND SIGNET CORP. AGREED TO BE BOUGHT BY FIRST UNION CORP.
BOTH BERGEN AND SIGNET STOCK PRICES ROSE SUBSTANTIALLY FOLLOWING THE NEWS.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE MID-CAP VALUE
EQUITY PORTFOLIO AND THE RUSSELL MID CAP VALUE INDEX FROM INCEPTION.
[GRAPHIC OMITTED]
PLOT POINTS FOLLOW
Institutional Service Investor A Investor B Investor C Russell Mid Cap
Class Class Class Class Class Value Index
12/31/96 $10,000 $10,000 $ 9,550 $10,000 $10,000 $10,000
3/31/97 10,084 10,071 9,617 10,065 10,065 10,169
6/30/97 11,383 11,363 10,838 11,328 11,328 11,450
9/30/97 12,910 12,881 12,273 12,246 12,695 12,910
FOR PERIOD ENDING SEPTEMBER 30, 1997
AVERAGE ANNUAL TOTAL RETURN
1 YEAR FROM INCEPTION
Institutional Class N/A 29.11%
Service Class N/A 28.81%
Investor A Class (Load Adjusted) N/A 22.74%
Investor A Class (NAV) N/A 28.51%
Investor B Class (Load Adjusted) N/A 22.41%
Investor B Class (NAV) N/A 28.23%
Investor C Class (Load Adjusted) N/A 26.92%
Investor C Class (NAV) N/A 28.23%
THE INCEPTION DATE OF THE PORTFOLIO'S INSTITTUIONAL, SERVICE, INVESTOR A,
INVESTOR B AND INVESTOR C SHARES WAS 12/27/96. SEE "NOTE ON PERFORMANCE
INFORMATION" ON PAGE 14 FOR FURTHER INFORMATION ON HOW PERFORMANCE DATA WAS
CALCULATED.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
4
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COMPASS CAPITAL FUNDS [LOGO OMITTED]
MID-CAP GROWTH EQUITY
PORTFOLIO
PORTFOLIO SUB-ADVISOR:
PNC EQUITY ADVISORS COMPANY
TOTAL NET ASSETS (9/30/97):
$136.1 MILLION
PERFORMANCE BENCHMARK:
RUSSELL MID CAP 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 BETWEEN $1 BILLION AND $5 BILLION.
RECENT PORTFOLIO MANAGEMENT ACTIVITY:
(BULLET) THE FUND INCREASED PORTFOLIO WEIGHTINGS IN THE ENERGY AND
TECHNOLOGY SECTORS TO OVERWEIGHTED VERSUS THE BENCHMARK, WHICH BENEFITED RETURNS
OVER THE PERIOD.
(BULLET) THESE INCREASES WERE FINANCED BY REDUCTIONS IN THE FINANCE,
CONSUMER SERVICE AND RETAIL SECTORS.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE MID-CAP GROWTH
EQUITY PORTFOLIO AND THE RUSSELL MID CAP GROWTH INDEX FROM INCEPTION.
[GRAPHIC OMITTED]
PLOTS POINTS FOLLOW
Institutional Service Investor A Investor B Investor C Russell Mid Cap
Class Class Class Class Class Growth Index
12/31/96 $10,000 $10,000 $ 9,550 $10,000 $10,000 $10,000
3/31/97 8,894 8,894 8,484 8,884 8,884 9,615
6/30/97 10,528 10,507 10,025 10,488 10,488 11,030
9/30/97 12,151 12,121 11,547 11,518 11,940 11,860
FOR PERIOD ENDING SEPTEMBER 30, 1997
AVERAGE ANNUAL TOTAL RETURN
1 YEAR FROM INCEPTION
Institutional Class N/A 22.00%
Service Class N/A 21.70%
Investor A Class (Load Adjusted) N/A 15.95%
Investor A Class (NAV) N/A 21.40%
Investor B Class (Load Adjusted) N/A 15.70%
Investor B Class (NAV) N/A 21.10%
Investor C Class (Load Adjusted) N/A 19.90%
Investor C Class (NAV) N/A 21.10%
THE INCEPTION DATE OF THE PORTFOLIO'S INSTITTUIONAL, SERVICE, INVESTOR A,
INVESTOR B AND INVESTOR C SHARES WAS 12/27/96. SEE "NOTE ON PERFORMANCE
INFORMATION" ON PAGE 14 FOR FURTHER INFORMATION ON HOW PERFORMANCE DATA WAS
CALCULATED.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
5
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[LOGO OMITTED] COMPASS CAPITAL FUNDS
SMALL CAP VALUE EQUITY
PORTFOLIO
PORTFOLIO SUB-ADVISOR:
PROVIDENT CAPITAL MANAGEMENT, INC.
TOTAL NET ASSETS (9/30/97):
$479.5 MILLION
PERFORMANCE BENCHMARK:
RUSSELL 2000 VALUE 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
FOCUSES 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 ARE ALSO FACTORS CONSIDERED IN
SECURITY SELECTION.
RECENT PORTFOLIO MANAGEMENT ACTIVITY:
(BULLET) STOCK SELECTION PROVIDED MOST OF THE FUND'S EXCESS RETURN VERSUS
ITS BENCHMARK. IN PARTICULAR, TWO PROPOSED MERGERS IN SEPTEMBER BOOSTED RETURNS:
HUDSON FOODS AGREED TO BE BOUGHT BY TYSON FOODS AND ML BANCORP AGREED TO MERGE
INTO SOVEREIGN BANCORP.
(BULLET) SECTOR SELECTION ALSO AIDED RETURNS DUE TO THE FUND'S UNDERWEIGHT
IN UTILITY STOCKS AND OVERWEIGHT IN TECHNOLOGY HOLDINGS VERSUS THE BENCHMARK.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE SMALL CAP
VALUE EQUITY PORTFOLIO AND THE RUSSELL 2000 VALUE INDEX FROM INCEPTION AND AT
EACH FISCAL YEAR END.
[GRAPHIC OMITTED]
PLOT POINTS FOLLOW
Institutional Service Investor A Investor B Investor C Russell 2000
Class Class Class Class Class Value Index
4/13/92 $10,000 $10,000 $ 9,550 $10,000 $10,000 $10,000
9/30/92 10,150 10,150 9,694 10,150 10,150 9,933.34
9/30/93 13,232 13,232 12,636 13,232 13,232 13,225.3
9/30/94 14,062 14,021 13,378 14,008 14,008 13,603.2
9/30/95 16,512 16,426 15,643 16,295 16,295 16,783.2
9/30/96 18,600 18,448 17,528 18,143 18,143 18,990.5
12/31/96 20,371 20,202 19,200 19,825 19,825 19,978.5
3/31/97 20,208 20,015 19,014 19,601 19,601 18,946.4
6/30/97 23,964 23,705 22,528 23,166 23,166 21,805
9/30/97 27,410 27,109 25,740 26,161 26,426 24,616
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR FROM INCEPTION
Institutional Class 47.36% 21.98% 20.24%
Service Class 46.95% 21.71% 19.99%
Investor A Class (Load Adjusted) 40.26% 20.46% 18.86%
Investor A Class (NAV) 46.85% 21.57% 19.87%
Investor B Class (Load Adjusted) 39.14% 20.61% 19.00%
Investor B Class (NAV) 45.67% 21.09% 19.44%
Investor C Class (Load Adjusted) 44.21% 21.09% 19.44%
Investor C Class (NAV) 45.67% 21.09% 19.44%
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 INCEPTION DATES OF THE PORTFOLIO'S SHARE
CLASSES WERE AS FOLLOWS: INSTITUTIONAL SHARES, 4/13/92; INVESTOR A SHARES,
6/2/92; SERVICE SHARES, 7/29/93; INVESTOR B SHARES, 10/3/94; AND INVESTOR C
SHARES, 10/1/96. SEE "NOTE ON PERFORMANCE INFORMATION" ON PAGE 14 FOR FURTHER
INFORMATION ON HOW PERFORMANCE DATA WAS CALCULATED.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
6
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COMPASS CAPITAL FUNDS [LOGO OMITTED]
SMALL CAP GROWTH EQUITY
PORTFOLIO
PORTFOLIO SUB-ADVISOR:
PNC EQUITY ADVISORS COMPANY
TOTAL NET ASSETS (9/30/97):
$832.7 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 THE PORTFOLIO'S EXPOSURE TO THE ENERGY AND
TECHNOLOGY SECTORS AND REDUCED EXPOSURE TO FINANCE, CONSUMER SERVICES AND
HEALTHCARE.
(BULLET) SECTOR SELECTION AIDED FUND PERFORMANCE, AS THE OVERWEIGHT
POSITIONS VERSUS THE BENCHMARK IN ENERGY AND TECHNOLOGY BOOSTED RETURNS.
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.
[GRAPH OMITTED]
PLOT POINTS FOLLOW
Institutional Service Investor A Investor B Investor C Russell 2000
Class Class Class Class Class Growth Index
9/14/93 $10,000 $10,000 $ 9,550 $10,000 $10,000 $10,000
9/30/93 10,470 10,470 9,999 10,470 10,470 10,141
9/30/94 10,168 10,144 9,665 10,121 10,121 10,231
9/30/95 15,099 15,026 14,306 14,981 14,981 13,111
9/30/96 22,025 21,809 20,718 21,535 21,535 14,763
12/31/96 21,331 21,109 20,041 20,784 20,783 14,803
3/31/97 17,182 16,988 16,115 16,691 16,691 13,240
6/30/97 20,921 20,678 19,608 20,267 20,266 15,564
9/30/97 25,524 25,197 23,883 23,911 24,650 18,197
FOR PERIOD ENDING SEPTEMBER 30, 1997
AVERAGE ANNUAL TOTAL RETURN
1 YEAR FROM INCEPTION
Institutional Class 15.89% 26.06%
Service Class 15.54% 25.66%
Investor A Class (Load Adjusted) 10.11% 24.00%
Investor A Class (NAV) 15.28% 25.42%
Investor B Class (Load Adjusted) 9.32% 24.04%
Investor B Class (NAV) 14.47% 24.98%
Investor C Class (Load Adjusted) 13.33% 24.98%
Investor C Class (NAV) 14.47% 24.98%
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 INCEPTION DATES OF THE PORTFOLIO'S SHARE
CLASSES WERE AS FOLLOWS: INSTITUTIONAL SHARES, 9/14/93; SERVICE AND INVESTOR A
SHARES, 9/15/93; INVESTOR B SHARES, 1/18/96; AND INVESTOR C SHARES, 9/6/96. SEE
"NOTE ON PERFORMANCE INFORMATION" ON PAGE 14 FOR FURTHER INFORMATION ON HOW
PERFORMANCE DATA WAS CALCULATED.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
7
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[LOGO OMITTED] COMPASS CAPITAL FUNDS
INTERNATIONAL EQUITY
PORTFOLIO
PORTFOLIO SUB-ADVISOR:
CASTLEINTERNATIONAL ASSET MANAGEMENT LIMITED
TOTAL NET ASSETS (9/30/97):
$661 MILLION
PERFORMANCE BENCHMARK:
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 INCREASED THE FUND'S EXPOSURE TO CONTINENTAL EUROPE
OVER THE PERIOD IN RESPONSE TO THE REGION'S FAVORABLE ECONOMIC ENVIRONMENT.
(BULLET) THE U.K. ALLOCATION WAS ALSO INCREASED AS U.K. EQUITIES HAVE
PERFORMED WELL AND THE MANAGER BELIEVES THEY CONTINUE TO HOLD GOOD VALUE.
(BULLET) THE FUND'S WEIGHTING TO JAPAN WAS REDUCED FOLLOWING STRONG SECOND
QUARTER PERFORMANCE. THIS PROVED BENEFICIAL AS THAT MARKET DROPPED SHARPLY
DURING THE THIRD QUARTER.
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.
Institutional Service Investor A Investor B Investor C
Class Class Class Class Class EAFE Index
4/27/92 $10,000 $10,000 $ 9,500 $10,000 $10,000 $10,000
9/30/92 9,939 9,939 9,442 9,939 9,939 9,682
9/30/93 12,693 12,693 12,057 12,693 12,693 12,273
9/30/94 14,053 14,006 13,291 13,991 13,991 13,513
9/30/95 14,399 14,317 13,558 14,184 14,184 14,337
9/30/96 15,553 15,420 14,586 15,150 15,150 15,616
12/31/96 16,076 15,927 15,066 15,623 15,623 15,876
3/31/97 15,966 15,794 14,939 15,466 15,466 15,638
6/30/97 17,699 17,501 16,530 17,095 17,095 17,679
9/30/97 17,869 17,658 16,679 17,043 17,215 17,566
FOR PERIOD ENDING SEPTEMBER 30, 1997
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR FROM INCEPTION
Institutional Class 14.88% 12.45% 11.28%
Service Class 14.52% 12.19% 11.03%
Investor A Class (Load Adjusted) 8.67% 10.91% 9.88%
Investor A Class (NAV) 14.36% 12.06% 10.92%
Investor B Class (Load Adjusted) 8.50% 11.17% 10.11%
Investor B Class (NAV) 13.63% 11.62% 10.52%
Investor C Class (Load Adjusted) 12.49% 11.62% 10.52%
Investor C Class (NAV) 13.63% 11.62% 10.52%
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 INCEPTION DATES OF THE PORTFOLIO'S SHARE
CLASSES WERE AS FOLLOWS: INSTITUTIONAL SHARES, 4/27/92; INVESTOR A SHARES,
6/2/92; SERVICE SHARES, 7/29/93; INVESTOR B SHARES, 10/3/94; AND INVESTOR C
SHARES, 12/5/96. SEE "NOTE ON PERFORMANCE INFORMATION" ON PAGE 14 FOR FURTHER
INFORMATION ON HOW PERFORMANCE DATA WAS CALCULATED.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
8
<PAGE>
COMPASS CAPITAL FUNDS [LOGO OMITTED]
INTERNATIONAL SMALL CAP EQUITY
PORTFOLIO
PORTFOLIO SUB-ADVISOR:
CASTLEINTERNATIONAL ASSET MANAGEMENT LIMITED
TOTAL NET ASSETS (9/30/97):
$16.6 MILLION
PERFORMANCE BENCHMARK:
SALOMON BROTHERS EXTENDED MARKETS WORLD EX-U.S. INDEX
INVESTMENT APPROACH:
PURSUES LONG-TERM CAPITAL APPRECIATION BY INVESTING PRIMARILY IN A
PORTFOLIO OF EQUITY SECURITIES OF SMALL CAP ISSUERS LOCATED IN FOREIGN
COUNTRIES. THE PORTFOLIO WILL PURSUE NON-DOLLAR DENOMINATED STOCKS PRIMARILY OF
ISSUES IN COUNTRIES INCLUDED IN THE SALOMON BROTHERS EXTENDED MARKETS WORLD
EX-U.S. INDEX. IN ADDITION, THERE MAY ALSO, ON OCCASION, BE LIMITED (UP TO 20%)
EXPOSURE TO SMALL CAP STOCKS OF ISSUERS IN EMERGING MARKETS.
RECENT PORTFOLIO MANAGEMENT ACTIVITY:
(BULLET) SINCE ITS INITIAL FUNDING ON SEPTEMBER 26, 1997, THE PORTFOLIO HAS
BEEN CONCENTRATED IN THE U.K. AND CONTINENTAL EUROPE DUE TO THE MANAGER'S
SHORT-TERM FAVORABLE OUTLOOK.
(BULLET) ADDITIONAL FUNDS WILL BE INVESTED IN JAPAN AND OTHER PACIFIC
MARKETS; HOWEVER, THE MANAGER EXPECTS TO INITIALLY UNDERWEIGHT THESE MARKETS
RELATIVE TO THE FUND'S BENCHMARK.
(BULLET) THE EMERGING MARKETS EXPOSURE IS CURRENTLY BELOW 5%, WELL BELOW
THE MAXIMUM ALLOWABLE LEVEL OF 20%.
TOTAL RETURN PERFORMANCE INFORMATION NOT REFLECTED.
FUND INCEPTION DATE WAS 9/26/97.
9
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
INTERNATIONAL EMERGING MARKETS
PORTFOLIO
PORTFOLIO SUB-ADVISOR:
CASTLEINTERNATIONAL ASSET MANAGEMENT LIMITED
TOTAL NET ASSETS (9/30/97):
$188.5 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 CORPORATION 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 AN UNDERWEIGHT POSITION IN THE ASIAN
MARKETS THROUGHOUT THE PERIOD, WHICH PROVED BENEFICIAL AS ECONOMIC, POLITICAL
AND INTEREST RATE CONCERNS CAUSED CURRENCIES IN MANY OF THESE MARKETS TO DROP
SHARPLY.
(BULLET) THE PORTFOLIO MOVED TO OVERWEIGHT POSITIONS IN BRAZIL, SOUTH
AFRICA AND CHINA.
(BULLET) PROFITS WERE TAKEN IN GREECE AFTER THE MARKET REACTED POSITIVELY
TO NEWS THAT ATHENS WOULD HOST THE 2004 OLYMPIC GAMES.
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.
[GRAPHIC OMITTED]
PLOT POINTS FOLLOW
MSCI
Institutional Service Investor A Investor B Investor C Emerging
Class Class Class Class Class Free Index
6/17/94 $10,000 $10,000 $ 9,500 $10,000 $10,000 $10,000
9/30/94 10,560 10,550 10,013 10,540 10,540 12,076
9/30/95 8,478 8,450 7,997 8,418 8,418 9,937
9/30/96 9,068 9,008 8,514 8,943 8,943 10,456
12/31/96 8,972 8,904 8,416 8,820 8,820 10,394
3/31/97 10,196 10,113 9,550 9,993 9,993 11,274
6/30/97 10,953 10,855 10,242 10,703 10,703 12,276
9/30/97 10,079 9,975 9,409 9,524 9,818 11,175
FOR PERIOD ENDING SEPTEMBER 30, 1997
AVERAGE ANNUAL TOTAL RETURN
1 YEAR FROM INCEPTION
Institutional Class 11.16% 0.24%
Service Class 10.74% -0.07%
Investor A Class (Load Adjusted) 4.97% -1.83%
Investor A Class (NAV) 10.51% -0.28%
Investor B Class (Load Adjusted) 4.84% -1.63%
Investor B Class (NAV) 9.78% -0.56%
Investor C Class (Load Adjusted) 8.68% -0.56%
Investor C Class (NAV) 9.78% -0.56%
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 INCEPTION DATES OF THE PORTFOLIO'S SHARE
CLASSES WERE AS FOLLOWS: INSTITUTIONAL SHARES, SERVICE SHARES AND INVESTOR A
SHARES, 6/17/94; INVESTOR B SHARES, 4/25/96; AND INVESTOR C SHARES, 3/21/97. SEE
"NOTE ON PERFORMANCE INFORMATION" ON PAGE 14 FOR FURTHER INFORMATION ON HOW
PERFORMANCE DATA WAS CALCULATED.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
10
<PAGE>
COMPASS CAPITAL FUNDS [LOGO OMITTED]
SELECT EQUITY
PORTFOLIO
PORTFOLIO SUB-ADVISOR:
PROVIDENT CAPITAL MANAGEMENT, INC.
TOTAL NET ASSETS (9/30/97):
$591.8 MILLION
PERFORMANCE BENCHMARK:
S&P 500 INDEX
INVESTMENT APPROACH:
SEEKS LONG-TERM CAPITAL APPRECIATION BY MAINTAINING COMPARABLE SECTOR
WEIGHTINGS TO THE BENCHMARK WHILE OVERWEIGHTING OR UNDERWEIGHTING SPECIFIC
SECURITIES WITHIN THOSE SECTORS AS THE MANAGER IDENTIFIES MARKET OPPORTUNITY.
RECENT PORTFOLIO MANAGEMENT ACTIVITY:
(BULLET) THE MANAGER HAS MAINTAINED A FOCUS ON SECURITY SELECTION WITHIN
INDUSTRIES. IN PARTICULAR, STRONG SECURITY SELECTION IN THE TECHNOLOGY SECTOR
(COMPAQ COMPUTER AND TEXAS INSTRUMENTS) HAS BOOSTED FUND PERFORMANCE.
(BULLET) SOME OF THE FUND'S NON-S&P 500 HOLDINGS (ADAPTEC AND BRINKER
INTERNATIONAL) HAVE ADDED STRONG PERFORMANCE.
(BULLET) RECENT ADDITIONS TO THE FUND INCLUDE LOWES, NATIONSBANK AND PEP
BOYS, WHICH THE MANAGER BELIEVES TO BE ATTRACTIVELY VALUED RELATIVE TO
COMPETITORS WITHIN THEIR RESPECTIVE INDUSTRIES.
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.
[GRAPHIC OMITTED]
PLOT POINTS FOLLOW
Institutional Service Investor A Investor B Investor C S&P 500
Class Class Class Class Class Index
9/13/93 $10,000 $10,000 $ 9,550 $10,000 $10,000 $10,000
9/30/93 9,970 9,970 9,521 9,970 9,970 10,206
9/30/94 10,149 10,124 9,659 10,114 10,114 10,369
9/30/95 12,560 12,497 11,909 12,470 12,470 13,454
9/30/96 15,052 14,924 14,197 14,822 14,822 16,190
12/31/96 16,467 16,316 15,529 16,160 16,160 17,539
3/31/97 16,902 16,736 15,922 16,540 16,540 18,009
6/30/97 19,856 19,649 18,674 19,367 19,367 21,152
9/30/97 21,448 21,210 20,152 20,435 20,852 22,761
FOR PERIOD ENDING SEPTEMBER 30, 1997
AVERAGE ANNUAL TOTAL RETURN
1 YEAR FROM INCEPTION
Institutional Class 42.50% 20.74%
Service Class 42.12% 20.43%
Investor A Class (Load Adjusted) 35.55% 18.89%
Investor A Class (NAV) 41.95% 20.25%
Investor B Class (Load Adjusted) 34.37% 19.00%
Investor B Class (NAV) 40.70% 19.90%
Investor C Class (Load Adjusted) 39.29% 19.90%
Investor C Class (NAV) 40.70% 19.90%
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 INCEPTION DATES OF THE PORTFOLIO'S SHARE
CLASSES WERE AS FOLLOWS: INSTITUTIONAL SHARES, 9/13/93; SERVICE SHARES, 9/15/93;
INVESTOR A SHARES, 10/13/93; INVESTOR B SHARES, 3/27/96; AND INVESTOR C SHARES,
9/27/96. SEE "NOTE ON PERFORMANCE INFORMATION" ON PAGE 14 FOR FURTHER
INFORMATION ON HOW PERFORMANCE DATA WAS CALCULATED.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
11
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
INDEX EQUITY
PORTFOLIO
ADVISOR TO THE INDEX MASTER PORTFOLIO:
DIMENSIONAL FUND ADVISORS INC.
TOTAL NET ASSETS (9/30/97):
$452.0 MILLION
PERFORMANCE BENCHMARK:
S&P 500 INDEX
INVESTMENT APPROACH:
UTILIZES A PASSIVE INVESTMENT STYLE THAT PURSUES THE REPLICATION OF THE S&P
500 INDEX TOTAL RETURN.
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.
(BULLET) THE PORTFOLIO'S INVESTMENT STRATEGY HAS PRODUCED TOTAL RETURNS
THAT HAVE CLOSELY TRACKED THE S&P 500 INDEX MINUS EXPENSES ASSOCIATED WITH EACH
SHARE CLASS.
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.
[GRAPHIC OMITTED]
PLOT POINTS FOLLOW
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 17,944 17,945 18,677
12/31/96 19,738 19,560 18,889 19,369 19,370 20,235
3/31/97 20,251 20,053 19,358 19,819 19,819 20,776
6/30/97 23,759 23,510 22,687 23,186 23,186 24,401
9/30/97 25,531 24,246 24,357 24,572 24,821 26,258
FOR PERIOD ENDING SEPTEMBER 30, 1997
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR FROM INCEPTION
Institutional Class 39.98% 20.23% 18.76%
Service Class 39.58% 19.96% 18.51%
Investor A Class (Load Adjusted) 35.31% 19.11% 17.74%
Investor A Class (NAV) 39.49% 19.84% 18.40%
Investor B Class (Load Adjusted) 32.09% 19.07% 17.71%
Investor B Class (NAV) 38.31% 19.56% 18.14%
Investor C Class (Load Adjusted) 36.93% 19.56% 18.14%
Investor C Class (NAV) 38.31% 19.56% 18.14%
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 INCEPTION DATES OF THE PORTFOLIO'S SHARE
CLASSES WERE AS FOLLOWS: INSTITUTIONAL SHARES, 4/20/92; INVESTOR A SHARES,
6/2/92; SERVICE SHARES, 7/29/93; INVESTOR B SHARES, 2/7/96; AND INVESTOR C
SHARES, 8/14/96. SEE "NOTE ON PERFORMANCE INFORMATION" ON PAGE 14 FOR FURTHER
INFORMATION ON HOW PERFORMANCE DATA WAS CALCULATED.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
12
<PAGE>
COMPASS CAPITAL FUNDS [LOGO OMITTED]
BALANCED
PORTFOLIO
PORTFOLIO SUB-ADVISOR:
Equity Portion: PROVIDENT CAPITAL MANAGEMENT, INC.
Fixed Income Portion: BLACKROCK FINANCIAL MANAGEMENT, INC.
TOTAL NET ASSETS (9/30/97):
$318.7 MILLION
PERFORMANCE BENCHMARK:
Equity Portion: S&P 500 INDEX
Fixed Income Portion: SALOMON BROAD INVESTMENT GRADE INDEX
INVESTMENT APPROACH:
HOLDS A BLEND OF EQUITY AND FIXED INCOME SECURITIES TO DELIVER TOTAL RETURN
THROUGH CAPITAL APPRECIATION AND CURRENT INCOME. THE PORTFOLIO WILL TYPICALLY
MAINTAIN A 65% EQUITY AND 35% FIXED INCOME ASSET ALLOCATION.
RECENT PORTFOLIO MANAGEMENT ACTIVITY:
(BULLET) WITHIN THE EQUITY PORTION, TECHNOLOGY AND FINANCIAL STOCKS WERE
AGAIN THE BEST PERFORMING SECTORS. IN PARTICULAR, COMPUTER HARDWARE COMPANIES
(COMPAQ AND IBM) AND BANK AND BROKERAGE HOLDINGS POSTED EXCELLENT RETURNS. OTHER
SEGMENTS THAT HAVE RECENTLY TURNED IN STRONG PERFORMANCE INCLUDE RETAIL AND
LONG-DISTANCE TELEPHONE, WHERE THE PORTFOLIO'S VALUE ORIENTED POSITIONS IN
K-MART AND AT&T HELPED BOOST RETURNS.
(BULLET) WITHIN THE FIXED INCOME PORTION, THE PORTFOLIO'S EXPOSURE TO MOST
SECTORS OF THE RESIDENTIAL MORTGAGE-BACKED SECURITY (MBS) MARKET WAS
SUBSTANTIALLY REDUCED DUE TO HEIGHTENED PREPAYMENT FEARS.THE MANAGER USED THE
MBS PROCEEDS TO INCREASE COMMERCIAL MORTGAGE-BACKED SECURITY AND FHA
CONSTRUCTION LOAN HOLDINGS, WHICH OFFER A YIELD PREMIUM OVER U.S. TREASURIES.THE
PORTFOLIO ENDED THE PERIOD WITH A LONGER DURATION (INTEREST RATE SENSITIVITY)
THAN THE BENCHMARK, REFLECTING THE MANAGER'S POSITIVE VIEW ON INTEREST RATES AND
INFLATION.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE BALANCED
PORTFOLIO AND S&P 500 /SALOMON BIG INDEX FROM INCEPTION AND AT EACH FISCAL
YEAR END.
[GRAPHIC OMITTED]
PLOT POINTS FOLLOW
65% S&P 500,
Institutional Service Investor A Investor B Investor C 35% Salomon
Class Class Class Class Class BIG Index
5/14/90 $10,000 $10,000 $ 9,550 $10,000 $10,000 $10,000
6/30/90 10,240 10,240 9,779 10,240 10,240 10,304
9/30/90 9,236 9,236 8,821 9,236 9,236 9,875
12/31/90 9,998 9,998 9,548 9,998 9,998 10,510
3/31/91 10,827 10,827 10,340 10,827 10,827 11,227
6/30/91 10,796 10,796 10,310 10,796 10,796 11,347
9/30/91 11,459 11,459 10,943 11,459 11,459 11,978
12/31/91 12,243 12,243 11,692 12,243 12,243 12,720
3/31/92 12,165 12,165 11,618 12,165 12,165 12,512
6/30/92 12,469 12,469 11,908 12,469 12,469 12,923
9/30/92 13,197 13,197 12,603 13,197 13,197 13,426
12/31/92 13,690 13,690 13,074 13,690 13,690 13,689
3/31/93 14,160 14,160 13,523 14,160 14,160 14,269
6/30/93 14,481 14,481 13,829 14,481 14,481 14,549
9/30/93 14,894 14,888 14,215 14,885 14,885 14,929
12/31/93 15,309 15,294 14,600 15,288 15,288 15,053
3/31/94 14,821 14,797 14,109 14,774 14,774 14,580
6/30/94 14,647 14,615 13,941 14,598 14,598 14,507
9/30/94 14,875 14,833 14,144 14,810 14,810 14,806
12/31/94 14,827 14,776 14,082 14,725 14,725 14,842
3/31/95 15,802 15,741 14,996 15,666 15,666 15,837
6/30/95 16,989 16,910 16,105 16,788 16,788 16,994
9/30/95 17,900 17,789 16,950 17,640 17,640 17,673
12/31/95 18,936 18,805 17,914 18,613 18,613 18,543
3/31/96 19,418 19,285 18,351 19,033 19,033 18,683
6/30/96 20,002 19,837 18,884 19,547 19,547 19,033
9/30/96 20,484 20,301 19,320 19,956 19,956 19,466
12/31/96 21,871 21,661 20,609 21,245 21,245 20,415
3/31/97 22,142 21,913 20,844 21,452 21,452 20,537
6/30/97 25,000 24,728 23,517 24,272 24,272 23,104
9/30/97 26,306 25,999 24,721 25,462 25,462 24,530
FOR PERIOD ENDING SEPTEMBER 30, 1997
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR FROM INCEPTION
Institutional Class 28.43% 14.80% 13.99%
Service Class 28.07% 14.52% 13.80%
Investor A Class (Load Adjusted) 22.19% 13.38% 13.03%
Investor A Class (NAV) 27.93% 14.42% 13.73%
Investor B Class (Load Adjusted) 21.21% 13.47% 13.42%
Investor B Class (NAV) 26.95% 13.93% 13.42%
Investor C Class (Load Adjusted) 25.68% 13.93% 13.42%
Investor C Class (NAV) 26.95% 13.93% 13.42%
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 INCEPTION DATES OF THE PORTFOLIO'S SHARE
CLASSES WERE AS FOLLOWS: INVESTOR A SHARES, 5/14/90; INSTITUTIONAL SHARES,
5/1/92; SERVICE SHARES, 7/29/93; INVESTOR B SHARES, 10/3/94; AND INVESTOR C
SHARES, 12/20/96. SEE "NOTE ON PERFORMANCE INFORMATION" ON PAGE 14 FOR FURTHER
INFORMATION ON HOW PERFORMANCE DATA WAS CALCULATED.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
13
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
NOTE ON PERFORMANCE INFORMATION
The performance information above includes information for each class of
each Portfolio since the commencement of operations of the Portfolio, rather
than the date such class was introduced. Performance information for each class
introduced after the commencement of operations of a Portfolio is therefore
based on the performance history of a predecessor class or predecessor classes.
If a class of shares in a Portfolio (the "Subsequent Class") has more than one
predecessor class, the performance data predating the introduction of the
Subsequent Class is based initially on the performance of the Portfolio's first
operational predecessor class (the "Initial Class"); thereafter, the performance
of the Subsequent Class is based upon the performance of any other predecessor
class or classes which were introduced after the Initial Class and which had
total operating expenses more similar to those of the Subsequent Class. In the
case of Investor A, Investor B, Investor C and Service Shares, the performance
information for periods prior to their introduction dates has not been restated
to reflect the shareholder servicing and processing and/or distribution fees and
certain other expenses borne by these share classes which, if reflected, would
reduce the performance quoted. Accordingly, the performance information may be
used in assessing each Portfolio's performance history but does not reflect how
the distinct classes would have performed on a relative basis prior to the
introduction of these classes, which would require an adjustment to the ongoing
expenses.
Performance information is restated to reflect the current maximum
front-end sales charge (in the case of Investor A Shares) or the maximum
contingent deferred sales charge (in the case of Investor B and Investor C
Shares), and assumes the reinvestment of dividends and distributions. The
maximum front-end sales charges for Investor A Shares are as follows: Large Cap
Value Equity, Large Cap Growth Equity, Small Cap Value Equity, Small Cap Growth
Equity, Mid-Cap Value Equity, Mid-Cap Growth Equity, Select Equity and Balanced
Portfolios -- 4.50%; International Equity, International Emerging Markets and
International Small Cap Equity Portfolios -- 5.00%; and Index Equity Portfolio
- -- 3.00%. The maximum contingent deferred sales charge for Investor B Shares and
Investor C Shares of all of the Portfolios is 4.50% and 1.00%, respectively.
The performance information also reflects fee waivers that subsidize and
reduce the total operating expenses of each Portfolio. The Portfolios' returns
would have been lower if there were not such waivers. PAMG and the Portfolio's
Administrators are under no obligation to waive or continue waiving their fees.
Investment return and principal value of an investment will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost.
- --------------------------------------------------------------------------------
IMPORTANT TAX INFORMATION FOR SHAREHOLDERS OF THE EQUITY PORTFOLIOS (UNAUDITED)
During the fiscal year ended September 30, 1997, 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
------------- -------------
Large Cap Value Equity Portfolio ............ $0.5668 $1.9579
Large Cap Growth Equity Portfolio ........... -- 0.7400
Small Cap Value Equity Portfolio ............ 0.3291 1.8453
Small Cap Growth Equity Portfolio ........... -- 1.4932
International Equity Portfolio .............. 0.2590 0.1505
Select Equity Portfolio ..................... 0.4650 0.7450
Index Equity Portfolio ...................... 0.0607 0.6182
Balanced Portfolio .......................... 0.0300 0.4900
FOR CORPORATE SHAREHOLDERS ONLY:
The percentage of dividends from net investment income declared in the
fiscal year ended September 30, 1997 which qualify for the corporate dividends
received deduction is as follows:
Large Cap Value Equity Portfolio .......................... 100.0%
Large Cap Growth Equity Portfolio ......................... 100.0
Mid-Cap Value Equity Portfolio ............................ 100.0
Small Cap Value Equity Portfolio .......................... 100.0
Small Cap Growth Equity Portfolio ......................... 37.4
Select Equity Portfolio ................................... 100.0
Balanced Portfolio ........................................ 45.8
IMPORTANT TAX INFORMATION FOR SHAREHOLDERS OF THE INTERNATIONAL EQUITY AND
INTERNATIONAL EMERGING MARKETS PORTFOLIOS.
During the fiscal year ended September 30, 1997, the International Equity
Portfolio distributed $12,352,962 of foreign source income on which the
Portfolio paid foreign taxes of $858,683 and International Emerging Markets
Portfolio distributed $791,133 of foreign source income on which the Portfolio
paid foreign taxes of $124,358. 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.
14
<PAGE>
COMPASS CAPITAL FUNDS [LOGO OMITTED]
STATEMENT OF NET ASSETS
LARGE CAP VALUE EQUITY PORTFOLIO
(FORMERLY KNOWN AS VALUE EQUITY)
NUMBER
AS OF SEPTEMBER 30, 1997 OF SHARES VALUE
--------- -----------
COMMON STOCKS -- 99.2%
AEROSPACE -- 1.6%
Allied-Signal, Inc. 524,400 $ 22,287,000
-------------
AIR TRANSPORTATION -- 1.2%
#Northwest Airlines Corp. Class A** 402,200 16,691,300
-------------
BANKS -- 12.2%
Banc One Corp. 371,400 20,728,762
Bank of New York Co., Inc. 304,300 14,606,400
BankAmerica Corp. 216,800 15,894,150
#BankBoston Corp. 232,840 20,591,787
Chase Manhattan Corp. 180,900 21,346,200
#CoreStates Financial Corp. 219,333 14,517,103
Crestar Financial Corp. 307,700 14,423,437
#First Chicago NBD Corp. 272,168 20,480,642
#First Union Corp. 273,800 13,707,112
NationsBank, Inc. 236,900 14,658,187
-------------
170,953,780
-------------
BUSINESS SERVICES -- 1.1%
Varian Associates, Inc. 241,300 14,990,762
-------------
CHEMICALS -- 4.5%
Dow Chemical Co. 183,300 16,623,019
E.I. du Pont de Nemours & Co. 189,650 11,675,328
#IMC Fertilizer Group, Inc. 574,000 20,233,500
#PPG Industries, Inc. 235,300 14,750,369
-------------
63,282,216
-------------
COMPUTER & OFFICE EQUIPMENT -- 3.0%
#Ikon Office Solutions, Inc. 497,600 12,719,900
Seagate Technology, Inc.** 398,100 14,381,362
Xerox Corp. 174,200 14,665,462
-------------
41,766,724
-------------
CONSUMER DURABLES -- 1.7%
#Black & Decker Corp. 636,000 23,691,000
-------------
CONTAINERS -- 0.5%
Crown Cork & Seal Co., Inc.** 152,100 7,015,612
-------------
ELECTRONICS -- 3.9%
Avnet, Inc. 173,100 11,002,669
General Electric Co. 248,000 16,879,500
Rockwell International Corp. 200,500 12,618,969
#Texas Instruments, Inc. 105,800 14,296,225
-------------
54,797,363
-------------
ENERGY & UTILITIES -- 6.5%
Entergy Corp. 395,900 10,318,144
#FPL Group, Inc. 401,600 20,582,000
NIPSCO Industries, Inc. 286,600 12,073,025
Pacificorp 598,700 13,395,912
PECO Energy Co. 273,700 6,414,844
Southern Co. 962,100 21,707,381
#Unicom Corp. 284,630 6,653,226
-------------
91,144,532
-------------
FINANCE -- 5.7%
AMBAC Financial Group, Inc. 261,800 10,651,987
Fleet Financial Group, Inc. 202,300 13,263,294
H & R Block, Inc. 419,100 16,187,737
Morgan Stanley, Dean Witter,
Discover & Co. 541,172 29,257,111
Washington Mutual, Inc. 165,800 11,564,550
-------------
80,924,679
-------------
NUMBER
OF SHARES VALUE
---------- ------------
FOOD & AGRICULTURE -- 1.3%
Archer Daniels Midland Co. 741,184 $ 17,742,104
-------------
INSURANCE -- 5.5%
Aetna, Inc. 147,700 12,028,319
Allstate Corp. 154,024 12,379,679
American General Corp. 256,300 13,295,562
Chubb Corp. 234,300 16,649,944
Cigna Corp. 54,700 10,187,875
MBIA, Inc. 53,100 6,660,731
USF&G Corp. 287,000 6,583,063
-------------
77,785,173
-------------
MACHINERY & HEAVY EQUIPMENT -- 2.9%
Cooper Industries, Inc. 243,000 13,137,188
Deere & Co. 346,500 18,624,375
#Dover Corp. 136,200 9,244,575
-------------
41,006,138
-------------
MEDICAL & MEDICAL SERVICES -- 1.4%
Columbia Healthcare Corp. 262,700 7,552,625
#Foundation Health Systems, Inc.** 364,500 11,664,000
-------------
19,216,625
-------------
METAL & MINING -- 2.3%
#Aluminum Co. of America 140,000 11,480,000
Phelps Dodge Corp. 162,400 12,606,300
Reynolds Metals Co. 112,300 7,952,244
-------------
32,038,544
-------------
MOTOR VEHICLES -- 6.1%
Chrysler Corp. 411,800 15,159,388
Dana Corp. 405,100 20,001,813
Ford Motor Co. 401,500 18,167,875
General Motors Corp. 201,804 13,508,255
Goodyear Tire & Rubber Co. 269,300 18,514,375
-------------
85,351,706
-------------
OIL & GAS -- 9.3%
#Atlantic Richfield Co. 189,400 16,181,863
#British Petroleum Co., PLC ADR 135,600 12,314,175
#Chevron Corp. 185,500 15,431,281
Exxon Corp. 223,100 14,292,344
Mobil Corp. 172,200 12,742,800
Phillips Petroleum Co. 289,400 14,940,275
Royal Dutch Petroleum Co. 404,400 22,444,200
Tenneco, Inc. 142,300 6,812,613
Ultramar Diamond Shamrock Corp. 507,464 16,397,430
-------------
131,556,981
-------------
PAPER & FOREST PRODUCTS -- 2.5%
Champion International Corp. 170,200 10,371,563
#International Paper Co. 182,700 10,059,919
Kimberly-Clark Corp.** 306,900 15,018,919
-------------
35,450,401
-------------
PHARMACEUTICALS -- 3.2%
American Home Products Corp. 110,300 8,051,900
Bristol-Myers Squibb Co. 164,400 13,604,100
Merck & Co., Inc. 113,850 11,377,884
Pharmacia & Upjohn, Inc. 347,600 12,687,400
-------------
45,721,284
-------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
STATEMENT OF NET ASSETS
LARGE CAP VALUE EQUITY PORTFOLIO (CONCLUDED)
(FORMERLY KNOWN AS VALUE EQUITY)
NUMBER
AS OF SEPTEMBER 30, 1997 OF SHARES VALUE
---------- -----------
COMMON STOCKS (CONTINUED)
RETAIL MERCHANDISING -- 8.0%
Albertson's, Inc. 385,200 $ 13,433,850
#Federated Department Stores, Inc.** 373,300 16,098,563
J.C. Penney Co., Inc. 417,200 24,301,900
#K Mart Corp.** 667,200 9,340,800
Kroger Co. 486,700 14,692,256
Limited, Inc. 479,700 11,722,669
Lowe's Cos., Inc. 379,800 14,764,725
#Toys "R" Us, Inc.** 225,700 8,012,350
-------------
112,367,113
-------------
TELECOMMUNICATIONS -- 9.3%
AT&T Corp. 468,800 20,773,700
Bell Atlantic Corp. 453,679 36,492,805
GTE Corp. 418,600 18,993,975
SBC Communications, Inc. 193,985 11,905,829
Sprint Corp. 437,900 21,895,000
US West Communications Group 535,000 20,597,500
-------------
130,658,809
-------------
TEXTILES -- 0.9%
Fruit of the Loom, Inc.** 443,300 12,467,813
-------------
TOBACCO -- 3.2%
Philip Morris Cos., Inc. 662,100 27,518,531
UST, Inc. 594,600 18,172,463
-------------
45,690,994
-------------
TRANSPORTATION -- 1.4%
CSX Corp. 210,300 12,302,550
Norfolk Southern Corp. 78,400 8,094,800
-------------
20,397,350
-------------
TOTAL COMMON STOCKS
(Cost $1,037,294,465) 1,394,996,003
-------------
PAR
MATURITY (000)
-------- -------
SHORT TERM INVESTMENTS -- 1.2%
Federal Home Loan Mortgage Corp.
Discount Notes
6.05% 10/01/97 $12,000 12,000,000
Smith Barney Money Market Fund 5,431 5,431,377
-------------
TOTAL SHORT TERM INVESTMENTS
(Cost $17,431,376) 17,431,377
-------------
VALUE
-------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $1,054,725,841*) 100.4% $1,412,427,380
LIABILITIES IN EXCESS OF
OTHER ASSETS (0.4%) (5,501,721)
------ --------------
NET ASSETS (Applicable to 42,417,278
Institutional shares, 33,979,079 Service
shares, 2,690,305 Investor A shares,
1,133,899 Investor B shares and 81,878
Investor C shares outstanding) 100.0% $1,406,925,659
====== ==============
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
INSTITUTIONAL SHARE
($743,404,678 (DIVIDE) 42,417,278) $17.53
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER SERVICE SHARE
($595,188,865 (DIVIDE) 33,979,079) $17.52
======
NET ASSET VALUE AND
REDEMPTION PRICE PER
INVESTOR A SHARE
($47,130,883 (DIVIDE) 2,690,305) $17.52
======
MAXIMUM OFFERING PRICE
PER INVESTOR A SHARE
($17.52 (DIVIDE) .955) $18.34
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 4.5%)
PER INVESTOR B SHARE
($19,773,281 (DIVIDE) 1,133,899) $17.44
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 1.0%)
PER INVESTOR C SHARE
($1,427,952 (DIVIDE) 81,878) $17.44
======
- ---------------
* Also cost for Federal income tax purposes. The gross unrealized appreciation
depreciation) on a tax basis is as follows:
Gross unrealized appreciation $365,496,977
Gross unrealized depreciation (7,795,438)
------------
$357,701,539
============
** Non-income producing security.
# Total or partial securities on loan.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
COMPASS CAPITAL FUNDS [LOGO OMITTED]
STATEMENT OF NET ASSETS
LARGE CAP GROWTH EQUITY PORTFOLIO
(FORMERLY KNOWN AS GROWTH EQUITY)
NUMBER
AS OF SEPTEMBER 30, 1997 OF SHARES VALUE
---------- -------------
COMMON STOCKS -- 96.6%
ADVERTISING -- 0.8%
Omnicom Group, Inc. 81,100 $ 5,900,025
------------
AEROSPACE -- 2.1%
Allied-Signal, Inc. 114,200 4,853,500
Boeing Co. 124,540 6,779,646
#United Technologies Corp. 57,100 4,625,100
------------
16,258,246
------------
BANKS -- 4.1%
BankAmerica Corp. 89,000 6,524,812
Chase Manhattan Corp. 85,100 10,041,800
H.F. Ahmanson & Co. 71,200 4,045,050
MBNA Corp. 103,700 4,199,850
Wells Fargo & Co. 25,000 6,875,000
------------
31,686,512
------------
BEVERAGES -- 2.7%
Panamerican Beverages, Inc.
Class A 227,200 8,875,000
Pepsico, Inc. 300,400 12,184,975
------------
21,059,975
------------
BROADCASTING -- 2.0%
Chancellor Media Corp. 90,200 4,746,775
Clear Channel Communications,
Inc.** 169,000 10,963,875
------------
15,710,650
------------
COMPUTER & OFFICE EQUIPMENT -- 14.6%
3Com Corp.** 151,000 7,738,750
Cisco Systems, Inc.** 327,400 23,920,662
Compaq Computer Corp.** 238,300 17,812,925
Computer Associates International,
Inc. 90,200 6,477,487
Dell Computer Corp.** 118,300 11,460,312
#Gateway 2000, Inc.** 51,200 1,609,600
Harris Corp. 85,800 3,925,350
HBO & Co. 364,200 13,748,550
International Business Machines
Corp. 56,100 5,943,094
#Quantum Corp.** 297,500 11,397,969
#Read-Rite Corporation** 138,500 3,393,250
#Western Digital Corp.** 154,300 6,181,644
------------
113,609,593
------------
COMPUTER SOFTWARE & SERVICES -- 4.6%
#First Data Corp. 109,900 4,128,119
Gulfstream Aerospace Corp.** 133,300 3,865,700
Microsoft Corp.** 126,900 16,790,456
#Parametric Technology Corp.** 250,600 11,057,725
------------
35,842,000
------------
CONTAINERS -- 0.6%
Crown Cork & Seal Co., Inc. 102,500 4,727,812
------------
ELECTRONICS -- 11.5%
#Adaptec, Inc.** 145,400 6,797,450
General Electric Co. 308,600 21,004,087
Intel Corp. 437,100 40,349,794
Motorola, Inc. 55,800 4,010,625
#Nokia Corp., ADR 118,900 11,154,306
Texas Instruments, Inc. 47,200 6,377,900
------------
89,694,162
------------
NUMBER
OF SHARES VALUE
---------- ------------
ENTERTAINMENT & LEISURE -- 2.6%
Carnival Corp., Class A 45,100 $ 2,085,875
#Circus Circus Enterprises, Inc.** 153,100 3,856,206
Marriott International, Inc. 60,500 4,299,281
#Mirage Resorts, Inc.** 242,300 7,299,287
Walt Disney Co. 35,200 2,838,000
------------
20,378,649
------------
FINANCE -- 3.4%
Citicorp 28,900 3,870,794
Federal National Mortgage
Association 178,500 8,389,500
Household International, Inc. 52,400 5,931,025
Washington Mutual, Inc. 113,850 7,941,037
------------
26,132,356
------------
FINANCIAL SERVICES -- 0.5%
Travelers Group, Inc. 58,800 4,013,100
------------
FOOD & AGRICULTURE -- 1.6%
Conagra, Inc. 125,100 8,256,600
Tyson Foods, Inc. 180,300 4,225,781
------------
12,482,381
------------
INSURANCE -- 3.9%
Ace, Ltd. 73,900 6,946,600
Aetna, Inc. 63,100 5,138,706
Allstate Corp. 50,300 4,042,862
American International Group, Inc. 53,750 5,546,328
General Re Corp. 10,000 1,985,000
Mid Ocean, Ltd. 104,300 6,610,013
------------
30,269,509
------------
MACHINERY & HEAVY EQUIPMENT -- 1.2%
Applied Materials, Inc. 40,300 3,838,575
Illinois Tool Works, Inc. 120,100 6,005,000
------------
9,843,575
------------
MEDICAL & MEDICAL SERVICES -- 4.9%
Healthsouth Corp.** 494,300 13,191,631
#Medpartners, Inc.** 138,471 2,968,472
Medtronic, Inc. 154,200 7,247,400
#United Healthcare Corp. 177,700 8,885,000
#Wellpoint Health Networks, Inc.** 100,700 5,834,306
------------
38,126,809
------------
MEDICAL INSTRUMENTS & SUPPLIES -- 1.2%
#Boston Scientific Corp.** 41,500 2,290,281
#Cardinal Health, Inc. 32,000 2,272,000
#Guidant Corp. 87,200 4,883,200
------------
9,445,481
------------
OIL & GAS -- 2.9%
#Diamond Offshore Drilling, Inc.** 139,800 7,715,213
Reading & Bates Corp.** 166,700 6,928,469
Sante Fe International Corp.** 179,900 8,365,350
------------
23,009,032
------------
PAPER & FOREST PRODUCTS -- 0.6%
Fort James Corp. 98,000 4,489,625
------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
STATEMENT OF NET ASSETS
LARGE CAP GROWTH EQUITY PORTFOLIO (CONCLUDED)
(FORMERLY KNOWN AS GROWTH EQUITY)
NUMBER
AS OF SEPTEMBER 30, 1997 OF SHARES VALUE
---------- ------------
COMMON STOCKS (CONTINUED)
PHARMACEUTICALS -- 11.2%
American Home Products Corp. 160,400 $ 11,709,200
Bristol-Myers Squibb Co. 138,400 11,452,600
Eli Lilly & Co. 47,000 5,660,564
Johnson & Johnson 259,000 14,924,875
Merck & Co., Inc. 124,500 12,442,219
Pfizer, Inc. 118,300 7,105,394
Schering-Plough Corp. 220,200 11,340,300
Smithkline Beecham PLC 76,400 3,734,050
Warner-Lambert Co. 67,400 9,094,788
------------
87,463,990
------------
REAL ESTATE -- 2.1%
Patriot American Hospitality, Inc. 156,701 4,994,858
Spieker Properties, Inc. 220,400 8,939,975
Starwood Lodging Trust** 39,000 2,240,063
------------
16,174,896
------------
RETAIL MERCHANDISING -- 6.6%
Dayton Hudson Corp. 65,000 3,895,938
Kroger Co.** 194,400 5,868,450
Mattel, Inc. 171,200 5,671,000
Service Corp. International 344,100 11,075,719
#Staples, Inc.** 300,400 8,298,550
TJX Companies, Inc. 132,200 4,040,363
Wal-Mart Stores, Inc. 337,200 12,349,950
------------
51,199,970
------------
SOAPS & COSMETICS -- 3.7%
Avon Products, Inc. 127,000 7,874,000
#Colgate-Palmolive Co. 111,700 7,784,094
Procter & Gamble Co. 190,200 13,135,688
------------
28,793,782
------------
TELECOMMUNICATIONS -- 1.3%
#Oracle Corp.** 150,075 5,468,358
World Communications, Inc.** 133,300 4,715,488
------------
10,183,846
------------
TOBACCO -- 5.9%
Philip Morris Cos., Inc. 700,800 29,127,000
RJR Nabisco Holdings Corp. 492,400 16,926,250
------------
46,053,250
------------
TOTAL COMMON STOCKS
(Cost $503,706,459) 752,549,226
------------
PAR
MATURITY (000) VALUE
-------- ---------- ------------
SHORT TERM INVESTMENTS -- 3.1%
Federal Home Loan Mortgage Corp.
Discount Notes
6.05% 10/01/97 $23,366 $ 23,366,000
Smith Barney Money Market Fund 2 1,554
U.S. Treasury Bills
4.95% 12/18/97 750*** 742,306
------------
TOTAL SHORT TERM INVESTMENTS
(Cost $24,109,510) 24,109,860
------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $527,815,969*) 99.7% 776,659,086
OTHER ASSETS IN EXCESS OF
LIABILITIES 0.3% 2,301,581
----- ------------
NET ASSETS (Applicable to 25,520,035
Institutional shares, 13,860,569 Service
shares, 1,352,284 Investor A shares,
423,615 Investor B shares and 11,078
Investor C shares outstanding) 100.0% $778,960,667
====== ============
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER INSTITUTIONAL SHARE
($482,850,683 (DIVIDE) 25,520,035) $18.92
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER SERVICE SHARE
($262,408,953 (DIVIDE) 13,860,569) $18.93
======
NET ASSET VALUE AND
REDEMPTION PRICE PER
INVESTOR A SHARE
($25,574,775 (DIVIDE) 1,352,284) $18.91
======
MAXIMUM OFFERING PRICE
PER INVESTOR A SHARE
($18.91 (DIVIDE) .955) $19.80
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 4.5%)
PER INVESTOR B SHARE
($7,919,171 (DIVIDE) 423,615) $18.69
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 1.0%)
PER INVESTOR C SHARE
($207,085 (DIVIDE) 11,078) $18.69
======
- --------------
* Also cost for Federal income tax purposes. The gross unrealized
appreciation (depreciation) on a tax basis is as follows:
Gross unrealized appreciation $251,459,225
Gross unrealized depreciation (2,616,108)
------------
$248,843,117
============
** Non-income producing security.
*** Principal amount of securities pledged as initial margin requirement of
$696,000 on 40 Standard & Poor's 500 Stock Index futures contracts expiring
December 1997. The value of such contracts on September 30, 1997 was
$19,090,000, thereby resulting in an unrealized gain of $313,578.
# Total or partial securities on loan.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
COMPASS CAPITAL FUNDS [LOGO OMITTED]
STATEMENT OF NET ASSETS
MID-CAP VALUE EQUITY PORTFOLIO
NUMBER
AS OF SEPTEMBER 30, 1997 OF SHARES VALUE
---------- ------------
COMMON STOCKS -- 94.6%
AIR TRANSPORTATION -- 1.8%
#Northwest Airlines Corp. Class A** 26,300 $ 1,091,450
UAL Corp.** 15,200 1,286,300
------------
2,377,750
------------
AUTOMOTIVE -- 1.5%
#Lear Corp. 39,600 1,950,300
------------
BANKS -- 11.1%
Amsouth Bancorp. 36,050 1,746,172
Associated Banc-Corp. 9,500 428,094
Charter One Financial 34,300 2,027,987
Compass Bancshares, Inc. 39,650 1,541,394
First Hawaiian, Inc. 37,300 1,482,675
First Virginia Banks, Inc. 21,750 1,033,125
Pacific Century Financial Corp. 25,100 1,353,831
Sovereign Bancorp, Inc. 99,900 1,748,250
Union Planters Corp. 26,400 1,475,100
Washington Federal, Inc. 71,580 2,120,557
------------
14,957,185
------------
BUSINESS SERVICES -- 1.4%
Varian Associates, Inc. 31,000 1,925,875
------------
CHEMICALS -- 3.0%
Albemarle Corp. 55,800 1,395,000
Arco Chemical Co. 30,900 1,405,950
Ashland, Inc. 22,500 1,223,437
------------
4,024,387
------------
COMPUTER & OFFICE EQUIPMENT -- 2.9%
Harris Corp. 32,400 1,482,300
Komag, Inc.** 65,900 1,342,712
Western Digital Corp.** 25,500 1,021,594
------------
3,846,606
------------
CONSTRUCTION -- 4.7%
Centex Corp. 21,600 1,260,900
Harsco Corp. 28,900 1,311,337
Martin Marietta Materials, Inc. 41,200 1,483,200
USG Corp.** 25,900 1,241,581
#Vulcan Materials Co. 12,200 1,061,400
------------
6,358,418
------------
CONTAINERS -- 0.8%
Owens-Illinois, Inc.** 32,200 1,092,787
------------
DURABLE GOODS -- 2.2%
Whirlpool Corp. 27,200 1,803,700
York International Corp. 26,000 1,163,500
------------
2,967,200
------------
ELECTRONICS -- 5.4%
Arrow Electronics, Inc.** 37,500 2,175,000
Boston Edison Co. 36,000 1,104,750
DPL, Inc. 42,300 1,036,350
Florida Progress Corp. 36,400 1,201,200
#SCI Systems, Inc.** 36,800 1,823,900
------------
7,341,200
------------
NUMBER
OF SHARES VALUE
---------- -----------
ENERGY & UTILITIES -- 5.8%
Cipsco, Inc. 25,900 $ 987,437
Ipalco Enterprises, Inc. 14,700 503,475
LG&E Energy Corp. 33,200 736,625
New Century Energies, Inc. 26,200 1,088,937
NIPSCO Industries, Inc. 20,200 850,925
Pioneer Natural Resouces Co. 40,000 1,675,000
Scana Corp. 40,800 1,022,550
Sierra Pacific Resources 28,200 904,162
------------
7,769,111
------------
ENTERTAINMENT & LEISURE -- 0.9%
Harrah's Entertainment, Inc.** 53,300 1,195,919
------------
FINANCE -- 5.2%
Countrywide Credit Industries, Inc. 49,700 1,810,944
Donaldson, Lufkin & Jenrette, Inc. 15,000 1,073,437
Finova Group, Inc. 20,200 1,911,425
First Financial Savings Assn. 23,200 790,250
#The Money Store, Inc. 51,000 1,453,500
------------
7,039,556
------------
FOOD & AGRICULTURE -- 1.9%
Food Lion, Inc. Class A 86,600 722,569
Food Lion, Inc. Class B 73,800 590,400
#Supervalu, Inc. 30,800 1,208,900
------------
2,521,869
------------
INSURANCE -- 8.5%
Allmerica Financial Corp. 32,600 1,432,362
American Financial Group, Inc. 29,900 1,330,550
Everest Reinsurance Holdings, Inc. 31,200 1,279,200
Old Republic International Corp. 37,100 1,446,900
#Partnerre, Ltd. 31,300 1,347,856
#PMI Group, Inc. 34,900 2,000,206
Protective Life Corp. 29,000 1,464,500
Reliastar Financial Corp. 30,800 1,226,225
------------
11,527,799
------------
MACHINERY & HEAVY EQUIPMENT -- 2.0%
Case Corp. 21,300 1,419,112
Cooper Industries, Inc. 24,100 1,302,906
------------
2,722,018
------------
MEDICAL & MEDICAL SERVICES -- 5.1%
Bergen Brunswig Corp. 27,500 1,110,312
#Foundation Health Systems, Inc.** 43,800 1,401,600
#Integrated Health Services, Inc. 37,800 1,263,938
Tenet Healthcare Corp.** 63,700 1,855,263
Wellpoint Health Networks, Inc.** 21,400 1,239,863
------------
6,870,976
------------
MEDICAL INSTRUMENTS & SUPPLIES -- 0.7%
Beckman Instruments, Inc. 21,800 927,863
------------
METAL & MINING -- 1.6%
Philip Environmental, Inc.** 68,900 1,257,425
Reynolds Metals Co. 12,900 913,481
------------
2,170,906
------------
MISCELLANEOUS SERVICES -- 2.1%
ITT Industries, Inc. 43,600 1,446,975
Tecumseh Products Co. Class A 23,800 1,325,363
------------
2,772,338
------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
STATEMENT OF NET ASSETS
MID-CAP VALUE EQUITY PORTFOLIO (CONCLUDED)
NUMBER
AS OF SEPTEMBER 30, 1997 OF SHARES VALUE
---------- -----------
COMMON STOCKS (CONTINUED)
MOTOR VEHICLES -- 1.1%
Echlin, Inc. 43,600 $ 1,528,725
------------
OIL & GAS -- 5.0%
Mitchell Energy & Development Corp. 62,900 1,753,338
Pennzoil Co. 6,600 525,938
Sonat, Inc. 32,000 1,628,000
Ultramar Diamond Shamrock Corp. 45,200 1,460,525
Valero Energy New 41,900 1,374,844
------------
6,742,645
------------
PAPER & FOREST PRODUCTS -- 3.2%
Mead Corp. 18,000 1,300,500
Rayonier, Inc. 30,900 1,494,788
Union Camp Corp. 25,800 1,591,538
------------
4,386,826
------------
REAL ESTATE -- 4.3%
Carramerica Realty Corp. 40,900 1,308,800
Equity Residential Properties Trust 22,600 1,233,113
Felcor Suite Hotels, Inc. 31,500 1,293,469
Health & Retirement Property Trust 51,500 972,063
Simon Property Group, Inc. 28,600 943,800
------------
5,751,245
------------
RESTAURANTS -- 2.4%
Darden Restaurants 111,700 1,291,531
Outback Steakhouse** 71,200 1,966,900
------------
3,258,431
------------
RETAIL MERCHANDISING -- 3.8%
American Greetings Corp. Class A 43,800 1,615,125
Dillards, Inc. Class A 26,200 1,147,888
Heilig-Meyers Co.** 78,100 1,200,788
Limited, Inc. 49,500 1,209,656
------------
5,173,457
------------
TELECOMMUNICATIONS -- 1.6%
Frontier Corp. 46,800 1,076,400
Southern New England
Telecommunications Corp. 28,000 1,146,250
------------
2,222,650
------------
TEXTILES -- 2.6%
Fruit of the Loom, Inc.** 58,100 1,634,063
Phillips Services Corp. 10,000 182,500
Springs Industries, Inc. Class A 31,200 1,638,000
------------
3,454,563
------------
TOBACCO -- 0.9%
DIMON, Inc. 49,700 1,242,500
------------
TRANSPORTATION -- 1.1%
Kansas City Southern Industries,
Inc. 42,000 1,446,375
------------
TOTAL COMMON STOCKS
(Cost $108,259,304) 127,567,480
------------
PAR
MATURITY (000) VALUE
---------- -------- -------------
SHORT TERM INVESTMENTS -- 6.2%
Federal Home Loan Mortgage
Corp. Discount Notes
6.05% 10/01/97 $4,000 $ 4,000,000
Smith Barney Money Market Fund 4,347 4,347,273
------------
TOTAL SHORT TERM INVESTMENTS
(Cost $8,347,273) 8,347,273
------------
TOTAL INVESTMENTS IN
SECURITIES
(Cost $116,606,577*) 100.8% 135,914,753
LIABILITIES IN EXCESS OF
OTHER ASSETS (0.8%) (1,024,591)
------ ------------
NET ASSETS (Applicable to 8,351,135
Institutional shares, 1,779,448 Service
shares, 181,200 Investor A shares,
227,690 Investor B shares and 1,632
Investor C shares outstanding) 100.0% $134,890,162
====== ============
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER INSTITUTIONAL SHARE
($106,886,465 (DIVIDE) 8,351,135) $12.80
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER SERVICE SHARE
($22,757,390 (DIVIDE) 1,779,448) $12.79
======
NET ASSET VALUE AND
REDEMPTION PRICE PER
INVESTOR A SHARE
($2,314,615 (DIVIDE) 181,200) $12.77
======
MAXIMUM OFFERING PRICE
PER INVESTOR A SHARE
($12.77 (DIVIDE) .955) $13.37
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 4.5%)
PER INVESTOR B SHARE
($2,910,835 (DIVIDE) 227,690) $12.78
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 1.0%)
PER INVESTOR C SHARE
($20,857 (DIVIDE) 1,632) $12.78
======
- -------------
* Also cost for Federal income tax purposes. The gross unrealized
appreciation (depreciation) on a tax basis is as follows:
Gross unrealized appreciation $20,200,229
Gross unrealized depreciation (892,053)
-----------
$19,308,176
===========
** Non-income producing security.
# Total or partial securities on loan.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
COMPASS CAPITAL FUNDS [LOGO OMITTED]
STATEMENT OF NET ASSETS
MID-CAP GROWTH EQUITY PORTFOLIO
NUMBER
AS OF SEPTEMBER 30, 1997 OF SHARES VALUE
---------- -----------
COMMON STOCKS -- 92.3%
BUSINESS SERVICES -- 5.4%
#Accustaff, Inc.** 58,800 $ 1,852,200
Apollo Group, Inc.** 37,200 1,576,350
#Quintiles Transnational Corp.** 23,000 1,937,750
Robert Half International, Inc.** 48,150 1,992,206
------------
7,358,506
------------
COMPUTER & OFFICE EQUIPMENT -- 3.5%
HBO & Co. 51,400 1,940,350
Microchip Technology, Inc.** 21,900 988,922
Tech Data Corp.** 20,400 938,400
Veritas Software Corp.** 20,300 891,931
------------
4,759,603
------------
COMPUTER SOFTWARE & SERVICES -- 10.1%
Acxiom Corp.** 53,200 927,675
BMC Software, Inc.** 28,000 1,813,000
#Cambridge Technology Partners,
Inc.** 49,200 1,761,975
CBT Group PLC** 27,200 2,182,800
Comverse Technology, Inc.** 31,000 1,635,250
Data General Corp.** 1,800 47,925
#J. D. Edwards & Co.** 25,300 847,550
Pegasystems, Inc.** 35,700 1,084,387
Peoplesoft, Inc.** 25,600 1,529,600
Sylvan Learning Systems, Inc.** 44,300 1,943,662
------------
13,773,824
------------
CONSTRUCTION -- 2.6%
Cognex Corp.** 48,800 1,604,300
Oakwood Homes Corp. 66,900 1,898,287
------------
3,502,587
------------
ELECTRONICS -- 12.8%
Adaptec, Inc.** 31,800 1,486,650
ASM Lithography Holding NV** 21,900 2,162,625
Concord EFS, Inc.** 23,900 645,300
#Electronics for Imaging, Inc.** 37,600 1,917,600
KLA Instruments Corp.** 27,200 1,837,700
Linear Technology Corp. 26,600 1,828,750
Maxim Integrated Products, Inc.** 26,300 1,878,806
#SCI Systems, Inc.** 46,500 2,304,656
Teradyne, Inc.** 11,500 618,844
Uniphase Corp.** 11,700 930,150
Vitesse Semiconductor Corp.** 37,200 1,843,725
------------
17,454,806
------------
ENTERTAINMENT & LEISURE -- 0.9%
Doubletree Corp.** 24,100 1,162,825
------------
FINANCE -- 2.9%
Green Tree Financial Corp. 18,300 860,100
MGIC Investment Corp. 29,800 1,707,912
#The Money Store, Inc. 48,000 1,368,000
------------
3,936,012
------------
INSURANCE -- 1.5%
Conseco, Inc. 41,600 2,030,600
------------
JEWELRY -- 0.8%
Tiffany & Co. 26,600 1,130,500
------------
NUMBER
OF SHARES VALUE
---------- ------------
MEDICAL & MEDICAL SERVICES -- 6.4%
Genesis Health Ventures, Inc.** 54,000 $ 2,102,625
Health Management Associates, Inc.** 18,400 581,900
Healthcare & Retirement Corp.** 51,700 1,922,594
Healthcare Compare Corp.** 10,000 638,750
Healthsouth Corp.** 71,900 1,918,831
Quorum Health Group, Inc.** 28,650 700,134
Universal Health Services Class B** 20,300 877,975
------------
8,742,809
------------
MEDICAL INSTRUMENTS & SUPPLIES -- 6.6%
Arterial Vascular Engineering,
Inc.** 12,000 666,000
#Cardinal Health, Inc. 10,900 773,900
#Elan Corp.** 26,100 1,306,631
Guidant Corp. 32,000 1,792,000
Sofamor Danek Group, Inc.** 27,500 1,570,938
Steris Corp.** 33,400 1,373,575
#Stryker Corp.** 32,800 1,432,950
------------
8,915,994
------------
MISCELLANEOUS SERVICES -- 2.5%
Corrections Corporation of America** 44,900 1,953,150
Stewart Enterprises, Inc. 32,300 1,413,125
------------
3,366,275
------------
OIL & GAS -- 10.5%
ENSCO International, Inc. 57,800 2,279,488
Global Industries, Ltd.** 52,500 2,093,438
Global Marine, Inc.** 63,900 2,124,675
Nabors Industries, Inc.** 24,000 934,500
Petroleum Geo-Services ASA** 29,800 2,015,225
Reading & Bates Corp.** 49,100 2,040,719
Smith International, Inc.** 20,100 1,561,519
Tidewater, Inc. 21,100 1,250,175
------------
14,299,739
------------
PHARMACEUTICALS -- 3.7%
Agouron Pharmaceuticals, Inc.** 11,700 563,063
Dura Pharmaceuticals, Inc.** 22,100 964,113
#Rexall Sundown, Inc.** 31,900 1,455,438
Watson Pharmaceuticals, Inc.** 33,700 2,013,575
------------
4,996,189
------------
PUBLISHING & PRINTING -- 0.9%
Central Newspapers, Inc. 17,200 1,277,100
------------
RESTAURANTS -- 2.6%
CKE Restaurants, Inc. 57,600 2,419,200
Papa John's International, Inc.** 33,500 1,145,281
------------
3,564,481
------------
RETAIL MERCHANDISING -- 12.0%
Barnes & Noble, Inc.** 74,100 2,093,325
Borders Group, Inc.** 61,400 1,688,500
Consolidated Stores Corp.** 45,900 1,922,063
Dollar General Corp. 52,575 1,790,836
#Dollar Tree Stores, Inc.** 49,100 2,065,269
General Nutrition Companies, Inc.** 53,400 1,555,275
Kohls Corp.** 28,100 1,995,100
Proffitt's, Inc.** 30,900 1,830,825
#Starbucks Corp.** 34,500 1,442,531
------------
16,383,724
------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
STATEMENT OF NET ASSETS
MID-CAP GROWTH EQUITY PORTFOLIO (CONCLUDED)
NUMBER
AS OF SEPTEMBER 30, 1997 OF SHARES VALUE
---------- ------------
COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS -- 3.2%
ADC Telecommunications, Inc.** 30,000 $ 975,000
Advanced Fibre Communications** 25,400 1,041,400
P-Com, Inc.** 39,600 947,925
#Tellabs, Inc.** 26,700 1,375,050
------------
4,339,375
------------
TEXTILES -- 1.1%
Jones Apparel Group, Inc.** 27,400 1,479,600
------------
WASTE MANAGEMENT -- 2.3%
#USA Waste Services, Inc.** 79,510 3,170,461
------------
TOTAL COMMON STOCKS
(Cost $103,742,587) 125,645,010
------------
PAR
MATURITY (000)
---------- ----------
SHORT TERM INVESTMENTS -- 9.2%
Federal Home Loan Mortgage
Corp Discount Notes
6.05% 10/01/97 $12,286 12,286,000
Smith Barney Money Market Fund 2 1,586
U.S. Treasury Bills
4.94% 12/18/97 205*** 202,897
------------
TOTAL SHORT TERM INVESTMENTS
(Cost $12,490,390) 12,490,483
------------
TOTAL INVESTMENTS IN
SECURITIES
(Cost $116,232,977*) 101.5% 138,135,493
LIABILITIES IN EXCESS OF
OTHER ASSETS (1.5%) (2,017,794)
------ -----------
NET ASSETS (Applicable to 8,827,588
Institutional shares, 1,888,234 Service
shares, 218,185 Investor A shares,
222,164 Investor B shares and 6,978
Investor C shares outstanding) 100.0% $136,117,699
====== ============
VALUE
-------------
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
INSTITUTIONAL SHARE
($107,708,533 (DIVIDE) 8,827,588) $12.20
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
SERVICE SHARE
($22,983,982 (DIVIDE) 1,888,234) $12.17
======
NET ASSET VALUE AND
REDEMPTION PRICE PER
INVESTOR A SHARE
($2,649,715 (DIVIDE) 218,185) $12.14
======
MAXIMUM OFFERING PRICE
PER INVESTOR A SHARE
($12.14 (DIVIDE) .955) $12.71
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 4.5%)
PER INVESTOR B SHARE
($2,690,940 (DIVIDE) 222,164) $12.11
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 1.0%)
PER INVESTOR C SHARE
($84,529 (DIVIDE) 6,978) $12.11
======
- ---------------
* Also cost for Federal income tax purposes. The gross unrealized
appreciation (depreciation) on a tax basis is as follows:
Gross unrealized appreciation $22,229,319
Gross unrealized depreciation (326,803)
-----------
$21,902,516
===========
** Non-income producing security.
*** Principal amount of securities pledged as initial margin requirement of
$156,600 on 9 Standard & Poor's 500 Stock Index futures contracts expiring
December 1997. The value of such contracts on September 30, 1997 was
$4,200,750, thereby resulting in an unrealized gain of $70,876.
# Total or partial securities on loan.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22
<PAGE>
COMPASS CAPITAL FUNDS [LOGO OMITTED]
STATEMENT OF NET ASSETS
SMALL CAP VALUE EQUITY PORTFOLIO
NUMBER
AS OF SEPTEMBER 30, 1997 OF SHARES VALUE
---------- -----------
COMMON STOCKS -- 96.1%
AIR TRANSPORTATION -- 0.9%
#Alaska Air Group, Inc.** 129,400 $ 4,254,025
-----------
BANKS -- 7.5%
Albank Financial Corp. 149,552 6,318,572
#BankAtlantic Bancorp, Inc. Class A 142,359 2,206,564
#BankAtlantic Bancorp, Inc. Class B 250,024 3,937,878
Banknorth Group, Inc. 119,400 6,522,225
Commerce Bancorp, Inc. 108,460 4,216,382
Homeside, Inc.** 177,400 4,590,225
ML Bancorp, Inc. 81,900 2,242,012
Prime Banchares, Inc.** 15,700 298,300
Susquehanna Bancshares, Inc. 188,550 5,797,912
-----------
36,130,070
-----------
CHEMICALS -- 1.0%
Bush Boake Allen, Inc.** 146,500 4,871,125
-----------
COMPUTER & OFFICE EQUIPMENT -- 4.0%
Bell and Howell Co.** 202,300 6,562,106
Bell Micro Products, Inc.** 234,100 2,604,362
#HMT Technology Corp.** 300,300 4,710,956
#Hutchinson Technology, Inc.** 153,000 5,135,062
-----------
19,012,486
-----------
CONSTRUCTION -- 2.3%
Oakwood Homes Corp. 183,400 5,203,975
Pacific Greystone Corp.** 282,300 5,610,712
-----------
10,814,687
-----------
CONTAINERS -- 1.1%
Silgan Holdings, Inc.** 132,600 5,304,000
-----------
DURABLE GOODS -- 2.3%
Kellwood Co. 156,600 5,549,512
Wellman, Inc. 240,100 5,567,319
-----------
11,116,831
-----------
ELECTRONICS -- 10.0%
BEI Electronics, Inc. 2,500 39,375
BEI Technologies, Inc. 8,700 112,013
Belden, Inc. 121,640 4,584,307
Berg Electronics Corp.** 133,500 7,175,625
Cable Design Technologies** 66,900 2,546,381
Dallas Semiconductor Corp. 111,400 4,985,150
Electro Scientific Industries,
Inc.** 88,900 5,422,900
Holophane Corp.** 220,900 5,080,700
Lattice Semiconductor Corp.** 36,700 2,390,087
Mark IV Industries, Inc. 192,445 5,171,959
Marshall Industries** 76,400 2,960,500
Park Electrochemical Corp. 174,700 5,066,300
Xicor, Inc.** 322,100 2,395,619
-----------
47,930,916
-----------
ENERGY & UTILITIES -- 6.7%
C & D Technology, Inc. 136,600 6,266,525
Central Louisiana Electric Co. 77,900 2,147,119
Cilcorp, Inc. 58,400 2,441,850
Eastern Enterprises 60,000 2,238,750
IES Industries, Inc. 119,790 3,818,306
Piedmont Natural Gas, Inc. 76,500 2,228,062
Santa Fe Energy Resources, Inc.** 372,800 4,660,000
Sierra Pacific Resources 87,640 2,809,957
TNP Enterprises, Inc. 125,800 3,160,725
UGI Corp. Holding Co. 77,810 2,149,501
-----------
31,920,795
-----------
NUMBER
OF SHARES VALUE
---------- -----------
FINANCE -- 4.5%
Astoria Financial Corp. 83,800 $ 4,216,187
Peoples Heritage Financial Group 145,300 6,148,006
PFF Bancorp, Inc.** 267,100 5,175,062
Webster Financial Corp. 99,200 5,828,000
-----------
21,367,255
-----------
FOOD & AGRICULTURE -- 1.7%
Hudson Foods, Inc. Class A 111,000 2,365,687
#Suiza Foods Corp.** 115,300 5,937,950
-----------
8,303,637
-----------
GLASS -- 1.0%
Libbey, Inc. 135,300 4,828,519
-----------
INSURANCE -- 7.3%
American Bankers Insurance
Group, Inc. 176,000 6,424,000
Commerce Group, Inc. 117,120 3,616,080
#Enhance Financial Services
Group, Inc. 122,800 6,723,300
Penn Treaty American Corp.** 108,500 3,580,500
Penn-America Group, Inc. 182,500 3,695,625
PXRE Corp. 160,600 5,068,938
W.R. Berkley Corp. 139,950 6,026,597
-----------
35,135,040
-----------
JEWELRY -- 1.1%
Movado Group, Inc. 267,937 5,492,719
-----------
MACHINERY & HEAVY EQUIPMENT -- 6.2%
Alamo Group, Inc. 148,140 3,434,996
Brown & Sharpe Manufacturing Co.
Class A** 263,300 3,735,569
Harmon Industries, Inc. 178,300 4,724,950
K2, Inc. 163,000 4,095,375
Pentair, Inc. 131,100 4,834,313
Plantronics, Inc.** 120,120 4,534,530
US Can Corp.** 254,000 4,222,750
-----------
29,582,483
-----------
MEDICAL & MEDICAL SERVICES -- 3.5%
Healthcare Realty Trust, Inc. 87,000 2,474,063
#Integrated Health Services, Inc. 157,000 5,249,688
Mariner Health Group, Inc.** 269,950 4,251,713
Sierra Health Services, Inc.** 136,900 5,013,963
-----------
16,989,427
-----------
MEDICAL INSTRUMENTS & SUPPLIES -- 2.6%
ADAC Laboratories** 240,900 4,501,819
Beckman Instruments, Inc. 82,700 3,519,919
Marquette Medical Systems, Inc.
Class A** 141,600 4,389,600
-----------
12,411,338
-----------
METAL & MINING -- 3.0%
Gibraltar Steel Corp.** 199,800 4,870,125
Mueller Industries, Inc.** 134,900 6,129,519
Wolverine Tube, Inc.** 109,700 3,441,838
-----------
14,441,482
-----------
MISCELLANEOUS SERVICES -- 2.4%
CDI Corp.** 84,300 3,182,325
Flagstar Bancorp, Inc.** 211,400 4,386,550
RMI Titanium Co.** 161,400 4,035,000
-----------
11,603,875
-----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
STATEMENT OF NET ASSETS
SMALL CAP VALUE EQUITY PORTFOLIO (CONCLUDED)
NUMBER
AS OF SEPTEMBER 30, 1997 OF SHARES VALUE
---------- -------------
COMMON STOCKS (CONTINUED)
MOTOR VEHICLES -- 1.2%
Borge-Warner Automotive, Inc. 104,900 $ 5,966,188
------------
OIL & GAS -- 4.2%
#Belco Oil & Gas Corp.** 237,500 5,180,469
Flowserve Corp. 101,328 3,027,174
Oneok, Inc. 73,900 2,410,988
Pride Petroleum Services, Inc.** 136,838 4,652,492
SEACOR SMIT, Inc.** 75,100 4,656,200
------------
19,927,323
------------
PAPER & FOREST PRODUCTS -- 2.0%
Caraustar Industries, Inc. 141,800 4,856,650
Chesapeake Corp. 125,100 4,534,875
------------
9,391,525
------------
REAL ESTATE -- 7.3%
Alexandria Real Estate Equities, Inc. 82,900 2,367,831
Avalon Properties, Inc. 102,600 3,052,350
Boykin Lodging Trust, Inc. 90,200 2,407,213
Brandywine Realty Trust 105,400 2,523,013
Burnham Pacific Properties, Inc. 171,000 2,532,938
Camden Property Trust 92,900 2,845,063
Capstone Capital Trust, Inc. 58,800 1,411,200
CCA Prison Realty Trust 16,100 607,775
Chelsea GCA Realty, Inc. 55,900 2,333,825
Felcor Suite Hotels, Inc. 52,000 2,135,250
Glenborough Realty Trust, Inc. 83,100 2,300,831
Highwoods Properties, Inc. 97,000 3,431,375
Patriot American Hospitality, Inc. 106,800 3,404,251
Prentiss Properties Trust 123,800 3,574,725
------------
34,927,640
------------
RESTAURANTS -- 2.8%
Buffets, Inc.** 467,300 5,052,681
#Lone Star Steakhouse & Saloon,
Inc.** 204,500 4,268,938
Ruby Tuesday, Inc.** 164,900 4,204,950
------------
13,526,569
------------
RETAIL MERCHANDISING -- 4.3%
Carson Pirie Scott & Co.** 139,100 5,485,756
Fingerhut Co. 214,600 4,828,500
Stanhome, Inc. 133,700 3,952,506
Zale Corp.** 242,200 6,282,063
------------
20,548,825
------------
TEXTILES -- 2.5%
Crown Crafts, Inc. 160,940 2,333,630
Dress Barn, Inc.** 179,600 4,310,400
Guilford Mills, Inc. 199,500 5,187,000
------------
11,831,030
------------
TOBACCO -- 2.2%
Universal Corp. 101,300 3,672,125
UST, Inc. 267,800 6,828,900
------------
10,501,025
------------
TRANSPORTATION -- 0.5%
Midwest Express Holdings, Inc.** 78,870 2,528,769
------------
TOTAL COMMON STOCKS
(Cost $322,775,434) 460,659,604
------------
PAR
MATURITY (000) VALUE
---------- --------- ------------
SHORT TERM INVESTMENTS -- 5.1%
Federal Home Loan Mortgage
Corp. Discount Notes
6.05% 10/01/97 $21,000 $ 21,000,000
Smith Barney Money Market Fund 3,576 3,576,191
------------
TOTAL SHORT TERM INVESTMENTS
(Cost $24,576,191) 24,576,191
------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $347,351,625*) 101.2% 485,235,795
LIABILITIES IN EXCESS OF
OTHER ASSETS (1.2%) (5,765,091)
------ ------------
NET ASSETS (Applicable to 15,341,308
Institutional shares, 6,062,404 Service
shares, 1,684,915 Investor A shares,
553,875 Investor B shares and 106,167
Investor C shares outstanding) 100.0% $479,470,704
====== ============
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
INSTITUTIONAL SHARE
($309,899,071 (DIVIDE) 15,341,308) $20.20
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
SERVICE SHARE
($122,430,648 (DIVIDE) 6,062,404) $20.20
======
NET ASSET VALUE AND
REDEMPTION PRICE PER
INVESTOR A SHARE
($34,031,124 (DIVIDE) 1,684,915) $20.20
======
MAXIMUM OFFERING PRICE
PER INVESTOR A SHARE
($20.20 (DIVIDE) .955) $21.15
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 4.5%)
PER INVESTOR B SHARE
($11,001,175 (DIVIDE) 553,875) $19.86
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 1.0%)
PER INVESTOR C SHARE
($2,108,686 (DIVIDE) 106,167) $19.86
======
- ------------
* Also cost for Federal income tax purposes. The gross unrealized
appreciation (depreciation) on a tax basis is as follows:
Gross unrealized appreciation $138,491,935
Gross unrealized depreciation (607,765)
------------
$137,884,170
============
** Non-income producing security.
# Total or partial securities on loan.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24
<PAGE>
COMPASS CAPITAL FUNDS [LOGO OMITTED]
STATEMENT OF NET ASSETS
SMALL CAP GROWTH EQUITY PORTFOLIO
NUMBER
AS OF SEPTEMBER 30, 1997 OF SHARES VALUE
---------- ------------
COMMON STOCKS -- 96.2%
AIR TRANSPORTATION -- 1.1%
Expeditors International of
Washington, Inc. 225,500 $ 9,442,812
------------
BANKS -- 0.2%
#Net.Bank, Inc.** 156,700 1,664,937
------------
BUSINESS SERVICES -- 8.7%
#Accustaff, Inc.** 110,400 3,477,600
#Apollo Group, Inc.** 159,825 6,772,584
Applied Graphics Technologies,
Inc.** 55,500 3,121,875
Asyst Technologies, Inc.** 103,000 4,573,844
Caribiner International, Inc.** 212,700 8,667,525
Complete Business Solutions, Inc.** 95,200 2,713,200
Engineering Animation, Inc.** 69,600 2,653,500
Hagler Bailly, Inc.** 44,700 1,134,262
Industrial Distribution Group,
Inc.** 28,600 600,600
Norrell Corp. 122,900 4,224,687
Ontrack Data International, Inc.** 188,400 4,380,300
Pre-Paid Legal Services, Inc.** 247,600 6,994,700
Quintiles Transnational Corp.** 98,200 8,273,350
Robert Half International, Inc.** 278,250 11,512,594
Staff Leasing, Inc.** 50,800 1,250,950
Transactions Systems Architects,
Inc.** 41,700 1,694,062
------------
72,045,633
------------
COMMUNICATIONS -- 0.8%
Level One Communications, Inc.** 172,350 6,937,087
------------
COMPUTER & OFFICE EQUIPMENT -- 6.6%
Hyperion Software Corp.** 149,900 4,675,006
IDX Systems Corp.** 151,600 5,239,675
#IMNT Systems, Inc.** 89,700 2,410,688
Natural Microsystems Corp.** 261,400 9,933,200
Radiant Systems, Inc.** 139,600 2,931,600
Technology Solutions Co.** 79,150 2,552,587
Transition Systems, Inc.** 195,500 4,007,750
VERITAS Software Corp.** 224,550 9,866,166
Visio Corp.** 312,900 13,063,575
------------
54,680,247
------------
COMPUTER SOFTWARE & SERVICES -- 13.5%
3D Labs, Inc. Ltd.** 131,500 4,240,875
Apex PC Solutions, Inc.** 145,300 5,503,237
Aspect Development, Inc.** 61,700 2,533,556
Cambridge Technology Partners,
Inc.** 228,500 8,183,156
CBT Group PLC ADR** 169,300 13,586,325
Comverse Technology, Inc.** 297,400 15,687,850
Daou Systems, Inc.** 95,100 2,971,875
Great Plains Software, Inc.** 41,400 1,159,200
Harbinger Corp.** 157,300 5,721,787
Industri-Matematik International
Corp.** 213,900 5,240,550
Information Management Resources,
Inc.** 216,950 6,183,075
JDA Software Group, Inc.** 217,600 7,942,400
Manugistics Group Inc.** 188,500 6,738,875
Pegasystems, Inc.** 99,300 3,016,237
Smallworldwide PLC ADR** 152,900 3,134,450
Smart Modular Technologies, Inc.** 120,100 9,968,300
Sylvan Learning Systems, Inc.** 186,500 8,182,687
Whittman-Hart, Inc.** 75,400 2,299,700
------------
112,294,135
------------
CONSTRUCTION -- 0.7%
Morrison Knudsen Warrants** 162 810
Oakwood Homes Corp. 204,100 5,791,337
------------
5,792,147
------------
NUMBER
OF SHARES VALUE
---------- -------------
ELECTRONICS -- 13.5%
Anicom, Inc.** 57,200 $ 958,100
Black Box, Inc.** 29,500 1,290,625
DII Group, Inc.** 204,200 6,693,931
Electronics for Imaging, Inc.** 159,600 8,139,600
Faro Technologies, Inc.** 1,000 16,375
#Galileo Technology Ltd.** 45,200 1,491,600
Jabil Circuit, Inc.** 353,700 23,167,350
Kent Electronics Corp.** 177,900 7,027,050
Micrel, Inc.** 200,800 8,496,350
Orbotech, Ltd.** 152,200 8,789,550
Photronics Labs, Inc.** 43,000 2,604,187
Powerwave Technologies, Inc.** 141,300 5,475,375
Qlogic Corp.** 130,400 5,460,500
Sawtek, Inc.** 109,100 5,045,875
Semtech Corp.** 96,700 6,684,387
Spectrian Corp.** 45,800 2,936,925
Triquint Semiconductor, Inc.** 82,700 3,013,381
Vitesse Semiconductor Corp.** 301,000 14,918,313
------------
112,209,474
------------
ENTERTAINMENT & LEISURE -- 2.8%
Anchor Gaming** 75,000 6,656,250
Capstar Hotel Co.** 193,300 6,487,631
Cinar Films, Inc. Class B** 66,000 2,516,250
#Doubletree Corp.** 99,600 4,805,700
Speedway Motorsports, Inc.** 100,000 2,456,250
------------
22,922,081
------------
FINANCE -- 0.8%
NCO Group, Inc.** 69,400 2,567,800
#The Money Store, Inc. 130,050 3,706,425
------------
6,274,225
------------
INSURANCE -- 1.6%
HCC Insurance Holdings, Inc. 190,250 5,053,516
Vesta Insurance Group, Inc. 149,200 8,504,400
------------
13,557,916
------------
MACHINERY & HEAVY EQUIPMENT -- 0.9%
Motivepower Industries, Inc.** 50,200 1,305,200
#Zoltek Cos., Inc.** 93,300 5,936,213
------------
7,241,413
------------
MEDICAL & MEDICAL SERVICES -- 7.1%
American Oncology Resources, Inc.** 223,600 3,605,550
#Assisted Living Concepts, Inc.** 161,100 2,577,600
ATL Ultrasound, Inc.** 76,300 3,567,025
#Concentra Managed Care, Inc.** 240,679 8,498,977
FPA Medical Management, Inc.** 308,700 10,611,563
Medical Resources, Inc.** 193,600 3,751,000
National Surgery Centers, Inc.** 169,950 3,696,413
#Qiagen NV** 98,800 4,594,200
Renal Care Group, Inc.** 73,150 2,633,400
Serologicals Corp.** 121,950 2,774,363
Sunrise Assisted Living, Inc.** 105,100 3,796,738
Theragenics Corp.** 188,700 9,364,238
------------
59,471,067
------------
MEDICAL INSTRUMENTS & SUPPLIES -- 2.9%
Cerner Corp.** 87,800 2,101,713
Hanger Orthopedic Group, Inc.** 188,000 2,808,250
Molecular Dynamics, Inc.** 136,000 3,672,000
Sabratek Corp.** 155,700 5,663,588
Safeskin Corp.** 223,900 9,935,563
------------
24,181,114
------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
STATEMENT OF NET ASSETS
SMALL CAP GROWTH EQUITY PORTFOLIO (CONTINUED)
NUMBER
AS OF SEPTEMBER 30, 1997 OF SHARES VALUE
---------- -------------
COMMON STOCKS (CONTINUED)
MISCELLANEOUS SERVICES -- 0.1%
Eagle Geophysical, Inc.** 64,800 $ 1,279,800
------------
MOTOR VEHICLES -- 0.4%
Keystone Automotive Industries,
Inc.** 173,500 3,665,188
------------
OIL & GAS -- 8.6%
Atwood Oceanics, Inc.** 87,200 9,820,900
#Core Laboratories NV** 151,000 5,285,000
Global Industries, Ltd.** 226,800 9,043,650
Marine Drilling Companies, Inc.** 368,100 11,503,125
Patterson Energy, Inc.** 241,500 12,648,563
Petroleum Geo-Services ASA** 164,600 11,131,075
Reading & Bates Corp.** 113,300 4,709,031
Trico Marine Services, Inc.** 224,100 7,787,475
------------
71,928,819
------------
PHARMACEUTICALS -- 4.4%
#Dura Pharmaceuticals, Inc.** 104,600 4,563,175
Incyte Pharmaceuticals, Inc.** 79,800 6,703,200
#Medicis Pharmaceutical Corp.** 181,500 8,326,313
Paraxel International Corp.** 236,900 9,357,550
#Rexall Sundown, Inc.** 162,400 7,409,500
------------
36,359,738
------------
REAL ESTATE -- 1.7%
#Signature Resorts, Inc.** 191,100 9,077,250
Vistana, Inc.** 223,400 4,803,100
------------
13,880,350
------------
RESTAURANTS -- 3.2%
CKE Restaurants, Inc. 258,400 10,852,800
Landry's Seafood Restaurants,
Inc.** 203,600 5,980,750
Logan's Roadhouse, Inc.** 55,800 1,450,800
Papa John's International, Inc.** 201,475 6,887,927
#Schlotzsky's, Inc.** 68,000 1,287,750
------------
26,460,027
------------
RETAIL MERCHANDISING -- 4.5%
Action Performance Co., Inc.** 238,100 6,934,663
Claire's Stores, Inc. 171,100 3,828,363
Linens 'N Things, Inc.** 128,400 4,301,400
Men's Wearhouse, Inc.** 45,000 1,676,250
Pacific Sunwear of California** 180,500 7,400,500
Petco Animal Supplies, Inc.** 73,200 2,296,650
Stein Mart, Inc.** 214,800 7,034,700
Strayer Education, Inc. 77,800 3,539,900
------------
37,012,426
------------
SANITARY SERVICES -- 1.9%
American Disposal Services, Inc.** 237,500 7,421,875
Superior Services, Inc.** 256,400 7,307,400
Waste Industries, Inc.** 50,300 1,204,056
------------
15,933,331
------------
SECURITY BROKERS & DEALERS -- 1.3%
E*Trade Group, Inc.** 239,900 11,275,300
------------
SOCIAL SERVICES -- 0.9%
Ciber, Inc.** 163,800 7,739,550
------------
NUMBER
OF SHARES VALUE
---------- ------------
TELECOMMUNICATIONS -- 7.6%
Boston Technology, Inc.** 71,700 $ 2,428,838
Digital Microwave Corp.** 94,500 4,228,875
DSP Group, Inc.** 118,800 4,662,900
Information Management Associates,
Inc.** 86,200 1,055,950
MRV Communications, Inc.** 44,400 1,620,600
Nice Systems, Ltd.** 170,500 9,590,625
Pacific Gateway Exchange, Inc.** 86,500 3,384,313
#Saville Systems Ireland PLC** 201,800 14,176,450
#Tekelec** 168,000 5,722,500
#Tel-Save Holdings, Inc.** 566,900 13,641,031
Yurie Systems, Inc.** 86,100 3,121,125
------------
63,633,207
------------
TOBACCO -- 0.2%
800-JR CIGAR, Inc.** 50,100 1,753,500
------------
TRANSPORTATION -- 0.2%
Swift Transport, Inc.** 48,400 1,530,650
------------
TOTAL COMMON STOCKS
(Cost $529,261,406) 801,166,174
------------
PAR
MATURITY (000)
---------- ----------
CORPORATE BONDS -- 0.3%
Speedway Motorsports, Inc.
5.75% 09/30/03 $ 2,300 2,363,250
(Cost $2,300,000) ------------
SHORT TERM INVESTMENTS -- 4.1%
Federal Home Loan Mortgage
Corp. Discount Notes
6.05% 10/01/97 32,948 32,948,000
Smith Barney Money Market Fund 1 646
U.S. Treasury Bills
4.77% 12/18/97 200*** 197,948
4.94% 12/18/97 810*** 801,690
------------
TOTAL SHORT TERM INVESTMENTS
(Cost $33,947,901) 33,948,284
------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $565,509,307*) 100.6% 837,477,708
LIABILITIES IN EXCESS OF
OTHER ASSETS (0.6%) (4,785,387)
------- ------------
NET ASSETS (Applicable to 20,992,732
Institutional shares, 9,608,082 Service
shares, 2,466,020 Investor A shares,
1,759,280 Investor B shares and 616,263
Investor C shares outstanding) 100.0% $832,692,321
======= ============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26
<PAGE>
COMPASS CAPITAL FUNDS [LOGO OMITTED]
STATEMENT OF NET ASSETS
SMALL CAP GROWTH EQUITY PORTFOLIO (CONCLUDED)
VALUE
----------
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
INSTITUTIONAL SHARE
($495,904,386 (DIVIDE) 20,992,732) $23.62
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
SERVICE SHARE
($225,088,937 (DIVIDE) 9,608,082) $23.43
======
NET ASSET VALUE AND
REDEMPTION PRICE PER
INVESTOR A SHARE
($57,323,064 (DIVIDE) 2,466,020) $23.25
======
MAXIMUM OFFERING PRICE
PER INVESTOR A SHARE
($23.25 (DIVIDE) .955) $24.35
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 4.5%)
PER INVESTOR B SHARE
($40,269,605 (DIVIDE) 1,759,280) $22.89
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 1.0%)
PER INVESTOR C SHARE
($14,106,329 (DIVIDE) 616,263) $22.89
======
- ---------------
* Also cost for Federal income tax purposes. The gross unrealized
appreciation (depreciation) on a tax basis is as follows:
Gross unrealized appreciation $273,610,920
Gross unrealized depreciation (1,642,519)
------------
$271,968,401
============
** Non-income producing security.
*** Principal amount of securities pledged as initial margin requirement of
$870,000 on 50 Standard & Poor's 500 Stock Index futures contracts expiring
December 1997. The value of such contracts on September 30, 1997 was
$23,862,500, thereby resulting in an unrealized gain of $393,750.
# Total or partial securities on loan.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
STATEMENT OF NET ASSETS
INTERNATIONAL EQUITY PORTFOLIO
NUMBER
AS OF SEPTEMBER 30, 1997 OF SHARES VALUE
---------- ------------
COMMON STOCKS -- 97.7%
AUSTRALIA -- 3.0%
AAPC, Ltd. 3,350,000 $ 1,386,106
CSR, Ltd. 500,000 2,054,297
M.I.M. Holdings, Ltd. 2,610,000 3,201,872
National Mutual Holdings, Ltd. 2,500,000 4,228,367
News Corporation, Ltd. 935,000 4,803,277
QNI, Ltd. 840,058 1,158,616
WMC, Ltd. 590,000 2,775,261
------------
19,607,796
------------
AUSTRIA -- 0.3%
Voest Alpine Stahl AG 45,750 2,215,283
------------
DENMARK -- 0.5%
Den Danske Bank AB 28,000 3,050,127
------------
FINLAND -- 0.5%
UPM-Kymmene Corp.** 122,780 3,412,297
------------
FRANCE -- 9.5%
Assurances Generales de France** 195,000 7,724,139
Axa SA 176,550 11,844,000
Christian Dior SA 51,400 6,939,741
Dexia France 49,400 4,679,623
Michelin (C.G.D.E.) Class `B' 150,000 8,520,572
SGS-Thomson Microelectronics
NV** 98,500 9,281,019
Total SA 54,000 6,180,323
Usinor Sacilor 379,000 7,659,598
------------
62,829,015
------------
GERMANY -- 8.8%
Commerzbank AG 326,500 11,772,925
Daimler-Benz AG** 60,000 4,956,979
Deutsche Bank AG 195,000 13,687,309
MAN AG 18,900 5,964,423
Mannesmann AG 22,500 10,698,517
Veba AG 189,500 11,053,988
------------
58,134,141
------------
HONG KONG -- 2.1%
CDL Hotels International 4,300,000 1,555,958
Cheung Kong, Ltd. 270,000 3,035,668
Hong Kong Electric Holdings, Ltd. 1,170,000 4,354,614
New World Development Co. 500,000 3,024,037
Wheelock and Co. 1,120,000 2,279,659
------------
14,249,936
------------
ITALY -- 4.3%
Burgo Cartiere SpA 465,000 3,017,119
Ente Nazionale Idrocarburi SpA** 854,000 5,377,852
Telecom Italia Mobile SpA 1,950,000 7,738,319
Telecom Italia SpA 1,815,000 12,091,939
------------
28,225,229
------------
NUMBER
OF SHARES VALUE
---------- -----------
JAPAN -- 26.2%
Amada Co., Ltd. 395,000 $ 2,288,100
Bridgestone Corp. 397,000 9,540,897
Daiwa Securities Co., Ltd. 805,000 4,936,604
Fuji Photo Film Co. 225,000 9,285,655
Hitachi Cable, Ltd. 185,000 1,243,350
Hitachi, Ltd. 904,000 7,866,081
Horiba 31,000 336,538
Ito-Yokado Co., Ltd. 131,000 7,099,859
Komori Corp. 189,000 3,946,963
Mabuchi Motors Co., Ltd. 123,000 6,982,266
Matsushita Electric Industrial Co. 558,000 10,080,716
Mitsui Fudosan Co., Ltd. 293,000 3,569,321
Mitsui Petrochemical 1,064,000 3,121,372
NKK Corp. 3,700,000 4,967,266
Orix Corp. 66,500 5,059,004
Ricoh Co. 787,000 11,804,674
Ryohin Keikaku Co. 55,000 3,568,824
Sanwa Bank, Ltd. 714,000 8,757,106
Shin-Etsu Chemical Co. 365,000 10,042,264
Shiseido Co., Ltd. 399,000 6,414,685
Sumitomo Bank, Ltd. 248,000 3,740,449
Sumitomo Marine & Fire
Insurance Co. 1,183,000 8,186,003
Sumitomo Trust & Banking 682,000 6,782,133
Suzuki Motor Co., Ltd. 677,000 6,507,997
Takeda Chemical Industries 290,000 8,699,760
Tokyo Electron, Ltd. 179,000 10,932,543
Tsubaki Nakashima Co., Ltd. 250,000 1,586,973
Yamaha Motor Co., Ltd. 342,000 2,947,543
Yamanashi Chuo Bank 388,000 2,890,627
------------
173,185,573
------------
KOREA -- 0.0%
Samsung Electronics GDR 273 14,626
------------
NETHERLANDS -- 4.4%
Hollandsche Beton Groep NV 275,000 5,666,114
Internationale Nederlanden
Groep NV 111,097 5,102,903
Philips Electronics NV 135,000 11,424,695
Vendex International NV 115,000 6,819,438
------------
29,013,150
------------
SINGAPORE -- 4.0%
DBS Land, Ltd. 1,639,000 3,986,322
Development Bank of
Singapore, Ltd. 660,000 6,731,612
Jardine Matheson Holdings, Ltd. 605,000 4,900,500
Singapore Press Holdings, Ltd. 315,000 4,633,867
United Overseas Bank, Ltd. 850,000 6,279,830
------------
26,532,131
------------
SPAIN -- 3.8%
Banco de Santander 360,000 11,794,975
Repsol SA 157,000 6,784,925
Repsol SA ADR 21,000 910,875
Telefonica de Espana ADR 60,000 5,643,750
------------
25,134,525
------------
SWEDEN -- 0.9%
Sparbanken Sverige AB 240,000 5,790,452
------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28
<PAGE>
COMPASS CAPITAL FUNDS [LOGO OMITTED]
STATEMENT OF NET ASSETS
INTERNATIONAL EQUITY PORTFOLIO (CONCLUDED)
NUMBER
AS OF SEPTEMBER 30, 1997 OF SHARES VALUE
---------- -----------
COMMON STOCKS (CONTINUED)
SWITZERLAND -- 6.6%
Baloise Holding Ltd. 4,186 $ 6,475,866
Credit Suisse Group 51,200 6,917,492
Nestle SA 4,250 5,920,311
Novartis, Ltd. 8,693 13,328,788
Roche Holding AG 1,285 11,397,483
------------
44,039,940
------------
UNITED KINGDOM -- 22.8%
Abbey National PLC 360,000 5,539,154
Asda Group PLC 1,910,000 4,872,391
Barclays PLC 360,000 9,717,458
BBA Group PLC 575,000 3,911,518
Boots Co. PLC 450,000 6,372,639
British Aerospace PLC 200,000 5,363,124
British Petroleum Co. PLC 590,000 8,897,353
British Telecommunications PLC 670,000 4,422,764
Bryant Group PLC 1,425,000 2,836,918
BTR PLC 682,500 2,766,978
Glaxo Wellcome PLC 337,500 7,586,777
Granada Group PLC 330,000 4,659,970
Grand Metropolitan PLC 850,000 8,111,584
Jarvis Hotels PLC** 1,100,000 2,659,800
Land Securities PLC 310,000 4,899,755
Limelight Group PLC** 1,100,000 771,342
Lloyds TSB PLC 925,000 12,443,229
Medeva PLC 670,000 2,257,284
National Grid Group PLC 1,330,000 6,067,407
NFC PLC 1,450,000 3,447,665
Norwich Union PLC** 625,000 3,395,275
Prudential Corp. PLC 425,000 4,730,616
Royal Bank of Scotland PLC 475,000 5,287,159
Rubicon Group PLC 1,065,000 2,214,646
Senior Engineering PLC 940,000 2,492,636
Shell Transport & Trading Co. PLC 695,000 5,080,742
Smithkline Beecham PLC 590,000 5,720,746
Soco International PLC** 221,000 1,414,320
Sun Life & Provincial Holdings PLC** 337,500 2,230,605
Unilever PLC 180,000 5,262,052
Yorkshire Water PLC 680,000 5,250,606
------------
150,684,513
------------
TOTAL COMMON STOCKS
(Cost $546,358,641) 646,118,734
------------
NUMBER
OF SHARES VALUE
---------- ------------
PREFERRED STOCKS -- 1.5%
GEA AG Non Voting Pfd. 22,900 $ 7,797,096
Spar Handels AG Non Voting Pfd. 134,220 2,279,294
------------
TOTAL PREFERRED STOCKS
(Cost $7,076,430) 10,076,390
------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $553,435,071*) 99.2% 656,195,124
OTHER ASSETS IN EXCESS OF
LIABILITIES 0.8% 5,218,699
----- -----------
NET ASSETS (Applicable to 29,555,889
Institutional shares, 13,715,766 Service
shares, 1,533,040 Investor A shares,
406,812 Investor B shares and 10,727
Investor C shares outstanding) 100.0% $661,413,823
====== ============
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
INSTITUTIONAL SHARE
($433,135,369 (DIVIDE) 29,555,889) $14.65
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
SERVICE SHARE
($199,939,213 (DIVIDE) 13,715,766) $14.58
======
NET ASSET VALUE AND
REDEMPTION PRICE PER
INVESTOR A SHARE
($22,335,232 (DIVIDE)1,533,040) $14.57
======
MAXIMUM OFFERING PRICE
PER INVESTOR A SHARE
($14.57 (DIVIDE) .950) $15.34
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 4.5%)
PER INVESTOR B SHARE
($5,849,769 (DIVIDE) 406,812) $14.38
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 1.0%)
PER INVESTOR C SHARE
($154,240 (DIVIDE) 10,727) $14.38
======
- --------------
* Also cost for Federal income tax purposes. The gross unrealized
appreciation (depreciation) on a tax basis is as follows:
Gross unrealized appreciation $133,708,316
Gross unrealized depreciation (30,948,263)
------------
$102,760,053
============
** Non-income producing security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
29
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
STATEMENT OF NET ASSETS
INTERNATIONAL SMALL CAP EQUITY PORTFOLIO
NUMBER
AS OF SEPTEMBER 30, 1997 OF SHARES VALUE
---------- ------------
COMMON STOCKS -- 74.6%
DENMARK -- 1.6%
Martin Gruppen 4,000 $ 273,447
------------
EGYPT -- 2.8%
Paints & Chemicals Industries GDR 40,000 470,000
------------
FRANCE -- 1.6%
Grand Optical-Photoservice 1,500 273,063
------------
GERMANY -- 6.0%
Koenig & Bauer-Albert AG 2,500 324,069
Quante AG 1,200 298,879
Rofin-Sinar Technologies AG** 15,000 256,000
Schaltbau AG 830 115,108
------------
994,056
------------
ITALY -- 1.0%
De Rigo SPA ADR** 20,000 160,000
------------
JAPAN -- 11.6%
Bank of Iwate Ltd. 2,500 145,024
Daiwa Industries Ltd. 24,000 154,537
Denny's Japan Co., Ltd. 4,000 101,102
Exedy Corp. 17,000 153,559
Fuji Machine Mfg. Co. 4,000 145,189
Horiba 14,000 151,985
Kansai Sekiwa Real Estate 13,000 64,639
Matsumotokiyoshi 4,000 171,045
Nichicon Corp. 13,000 160,520
Nippon Denwa Shisetsu Co. 27,000 161,101
Plenus Co., Ltd. 4,000 135,908
Rinnai Corp. 9,000 150,659
Trusco Nakayama Corp. 4,700 79,456
World Co., Ltd. 4,000 156,460
------------
1,931,184
------------
NETHERLANDS -- 6.1%
Aalberts Industries NV 10,000 301,523
GTI Holdings NV 10,000 282,929
Hunter Douglas NV 10,000 428,162
------------
1,012,614
------------
SPAIN -- 7.9%
Adolfo Dominguez SA** 8,000 280,335
Aldeasa SA** 20,000 438,191
Corp. Fin Reunin** 50,000 284,054
Prosegur, CIA de Seguridad SA** 25,000 307,370
------------
1,309,950
------------
SWEDEN -- 1.1%
Getinge Industrier AB 10,000 187,873
------------
SWITZERLAND -- 4.8%
Kuoni Reisen AG 120 477,723
Sika Finanz AG 1,000 323,845
------------
801,568
------------
UNITED KINGDOM -- 30.1%
Aea Technology PLC 25,000 196,059
Alexon Group PLC** 75,000 277,465
Anglo Irish Bank Corp. PLC 200,000 309,504
Avon Rubber PLC 30,000 311,922
Britax International PLC 50,000 104,377
Delphi Group PLC 25,000 273,032
Hicking Pentecost PLC 60,000 277,103
Jarvis Hotels PLC 125,000 302,250
Jarvis PLC 60,000 276,619
Perkins Foods PLC 200,000 299,832
Peter Black Holdings PLC 50,000 286,936
Pressac Holdings PLC 70,000 296,205
Save Group PLC 100,000 138,632
SGB Group PLC** 75,000 197,672
Skillgroup PLC 150,000 350,610
T & S Stores PLC 25,000 75,160
TLG PLC 150,000 276,861
Transtec PLC 150,000 267,189
NUMBER
OF SHARES VALUE
---------- ------------
UNITED KINGDOM (CONTINUED)
Vardon PLC 100,000 $ 188,604
Wyko Group PLC 125,000 303,258
------------
5,009,290
------------
TOTAL COMMON STOCKS
(Cost $12,524,651) 12,423,045
------------
PREFERRED STOCKS -- 2.0%
GEA AG Non Voting Pfd. 1,000 340,485
(Cost $342,244) ------------
PAR
MATURITY (000)
---------- -------
SHORT TERM INVESTMENTS -- 93.3%
Federal Home Loan Mortgage Corp.
Discount Notes
6.05% 10/01/97 $15,512 15,512,000
(Cost $15,512,000) ------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $28,378,895*) 169.99% 28,275,530
LIABILITIES IN EXCESS OF
OTHER ASSETS (including $12,857,942
of investment purchases payable) (69.99%) (11,641,667)
------- ------------
NET ASSETS (Applicable to 1,550,001
Institutional shares, 1 Service share,
32,754 Investor A shares, 71,518
Investor B shares and 18,314
Investor C shares outstanding) 100.0% $ 16,633,863
====== ============
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
INSTITUTIONAL SHARE
($15,414,738 (DIVIDE) 1,550,001) $ 9.94
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
SERVICE SHARE
($9.94 (DIVIDE) 1) $ 9.94
======
NET ASSET VALUE AND
REDEMPTION PRICE
PER INVESTOR A SHARE
($325,738 (DIVIDE) 32,754) $ 9.94
======
MAXIMUM OFFERING PRICE
PER INVESTOR A SHARE
($9.94 (DIVIDE) .950) $10.46
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 4.5%)
PER INVESTOR B SHARE
($711,245 (DIVIDE) 71,518) $ 9.94
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 1.0%)
PER INVESTOR C SHARE
($182,132 (DIVIDE) 18,314) $ 9.94
======
- ------------------
* Also cost for Federal income tax purposes. The gross unrealized
appreciation (depreciation) on a tax basis is as follows:
Gross unrealized appreciation $ 44,698
Gross unrealized depreciation (139,110)
---------
$(94,412)
========
** Non-income producing security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
30
<PAGE>
COMPASS CAPITAL FUNDS [LOGO OMITTED]
STATEMENT OF NET ASSETS
INTERNATIONAL EMERGING MARKETS PORTFOLIO
NUMBER
AS OF SEPTEMBER 30, 1997 OF SHARES VALUE
---------- -------------
COMMON STOCKS -- 86.8%
ARGENTINA -- 2.1%
Inversiones y Respresentacion SA 250,000 $ 1,100,220
Siderar S.A.I.C. 14,000 78,556
Siderca SA 375,455 1,122,835
YPF Sociedad Anonima - ADR - D 45,000 1,659,375
------------
3,960,986
------------
BRAZIL -- 10.1%
Centrais Electricas de Santa
Catarina - GDR (Reg. S) 27,000 3,712,500
Companhia de Saneamento Basico
do Estado de Sao Paulo** 10,400,000 2,723,358
Iochpe Maxion SA - ADR** 130,000 296,660
Multicanal Participacoes SA -
ADR** 140,000 1,487,500
Telecomunicacoes Brasileiros SA
- Telebras 74,300,000 8,575,684
#Uniao de Bancos Brasileiros SA -
GDR** 61,649 2,257,895
------------
19,053,597
------------
CHILE -- 7.2%
#Banco Santiago SA - ADR 100,000 2,387,500
Chilgener SA - ADR 74,475 2,043,408
Cristalerias de Chile SA - ADR 88,500 1,631,719
#Enersis SA - ADR 54,500 2,019,906
Maderas y Sinteticos Sociedad
Anonima SA - ADR 125,000 1,750,000
Quinenco SA - ADR** 131,000 2,079,625
Santa Isabel SA - ADR 72,000 1,678,500
------------
13,590,658
------------
CHINA -- 3.3%
First Tractor Co., Ltd.** 1,500,000 1,230,938
Guangdong Kelon Electric
Holding - H 1,150,000 1,486,172
Heilongjiang Electric Power Co.,
Ltd. - B 1,250,000 1,125,000
Inner Mongolia Erdos Cashmere
Products Co., Ltd. - B 900,000 702,000
Shenzhen Chiwan Wharf Holdings,
Ltd. - B 1,300,000 530,887
Wuxi Little Swan Co., Ltd. - B 700,000 1,138,925
------------
6,213,922
------------
COLOMBIA -- 0.4%
#Banco Industrial Colombian SA -
ADR 45,000 804,375
------------
EGYPT -- 4.1%
MISR International Bank - GDR
(Reg. S)** 200,000 3,540,000
Olympic Group** 294,000 1,078,144
Paints & Chemicals Industries -
GDR** 173,000 2,032,750
Suez Cement Co. - GDR (Reg. S) 45,000 1,073,250
------------
7,724,144
------------
GREECE -- 1.3%
Alpha Credit Bank 21,998 1,616,109
Edrassi Psallidas 28,250 214,629
Michaniki SA 72,000 585,722
------------
2,416,460
------------
NUMBER
OF SHARES VALUE
---------- -----------
HONG KONG -- 2.2%
Bengang Steel Plates Co.,
Ltd. - B** 6,200,000 $ 2,011,114
Founder Hong Kong, Ltd. 1,061,600 1,035,808
YGM Trading, Ltd. 900,000 1,023,520
------------
4,070,442
------------
HUNGARY -- 1.2%
Danubius Hotel & Spa** 26,950 870,758
Pannonplast Muanyagipari 27,306 1,481,862
------------
2,352,620
------------
INDIA -- 7.0%
Gujarat Ambuja Cements, Ltd. - GDR 100,000 925,000
Hindalco Industries, Ltd. - GDR
(Reg. 144A) 64,500 2,225,250
Industrial Credit & Investment Corp.
of India, Ltd. - GDR (Reg. S) 130,000 2,037,750
Reliance Industries, Ltd. - GDS
(Reg. S) 72,000 1,657,800
State Bank of India, Ltd. - GDR
(Reg. S) 88,000 2,026,200
Tata Engineering & Locomotive Co.,
Ltd. - GDR (Reg. S) 269,000 2,555,500
Videsh Sanchar Nigam Co., Ltd. -
GDR** 103,000 1,729,112
------------
13,156,612
------------
INDONESIA -- 3.0%
PT Telekomunikasi Indonesia - B
(Foreign Shares) 620,000 683,131
PT Alumindo Perkasa
(Foreign Shares) 1,364,000 321,307
PT Bank Dagang Nasional
(Foreign Shares) 5,600,000 1,106,383
PT Bank Dagang Nasional
Warrants (Foreign Shares)** 650,000 37,538
PT Indah Kiat Pulp & Paper
(Foreign Shares) 2,224,887 862,228
PT Indah Kiat Pulp & Paper
Warrants (Foreign Shares)** 187,360 27,905
PT Ramayana Lestari Sentosa
(Foreign Shares) 470,000 964,286
PT Semen Cibinong
(Foreign Shares) 2,000,000 425,532
PT Tambang Timah
(Foreign Shares) 800,000 1,173,252
------------
5,601,562
------------
ISRAEL -- 1.3%
Blue Square Chain Stores
Properties & Investments** 60,000 536,755
Blue Square, Ltd. - ADR** 100,000 1,300,000
Makhteshim Chemical Works, Ltd.** 92,322 634,602
------------
2,471,357
------------
KOREA -- 3.2%
Hyundai Fire & Marine Insurance
Co.** 13,000 468,852
LG Construction, Ltd. 60,000 793,443
LG Semiconductor Co.** 7,400 249,093
Pohang Iron & Steel Co. 18,730 1,518,542
Samchully Co. 16,380 787,672
Samsung Electronics Co. 18,085 1,774,405
SK Telecom Co., Ltd. - ADR 46,350 417,150
------------
6,009,157
------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
31
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
STATEMENT OF NET ASSETS
INTERNATIONAL EMERGING MARKETS PORTFOLIO (CONTINUED)
NUMBER
AS OF SEPTEMBER 30, 1997 OF SHARES VALUE
---------- ------------
COMMON STOCKS (CONTINUED)
MALAYSIA -- 1.2%
IJM Corp. Berhad 575,000 $ 474,987
Telekom Malaysia Berhad 315,000 956,370
Tenaga Nasional Berhad 330,000 890,022
------------
2,321,379
------------
MEXICO -- 7.4%
Altos Hornos de Mexico SA** 575,000 1,690,959
#Apasco SA - ADR 60,000 2,268,660
Cementos de Mexico SA - CPO 520,000 2,723,810
Consorcio G Grupo Dina SA 213,000 332,247
Corporacion Geo SA - B** 199,400 1,247,212
Fomento Economico Mexicano
SA - B 170,000 1,461,519
Grupo Cementos de Chihuahua
SA - B 2,000,000 2,723,295
Grupo Financiero Banorte SA - B** 402,500 683,784
Sanluis Corporacion SA - B - CPO 110,000 860,746
------------
13,992,232
------------
PAKISTAN -- 0.7%
Engro Chemical, Ltd. 350,000 1,296,953
------------
PERU -- 2.3%
Banco Wiese - ADR 60,000 412,500
CPT Telefonica del Peru SA -
B - ADR 100,000 2,362,500
#Luz del Sur SA - ADR (Reg. S)** 86,000 1,542,625
------------
4,317,625
------------
PHILIPPINES -- 1.7%
Benpres Holdings Corp. - GDR
(Reg. S)** 150,000 682,500
Manila Electric Co. - B 270,000 931,304
Metro Pacific Corp. 6,600,000 793,913
Philippine National Bank** 262,875 563,848
Southeast Asia Cement Holding** 16,000,000 268,985
------------
3,240,550
------------
POLAND -- 1.2%
Bank Handlowy W. Warszawie** 92,000 1,317,358
Debica 30,000 872,297
------------
2,189,655
------------
PORTUGAL -- 1.4%
Cimentos de Portugal SA 20,000 540,625
Portugal Telecom SA 30,000 1,301,267
Sonae Investimentos Sociedade Gestora
de Participacoes Sociais, SA 20,000 790,708
------------
2,632,600
------------
RUSSIA -- 1.0%
Gazprom- ADS** 75,000 1,893,750
------------
SOUTH AFRICA -- 15.5%
AECI, Ltd. 490,000 2,575,904
Anglovaal Industries, Ltd. 390,000 1,305,439
Anglovaal, Ltd. - N 20,000 428,066
Barlow, Ltd. 181,373 2,072,334
Billiton PLC** 127,500 491,069
Engen, Ltd. 450,000 2,413,904
Gencor Beherend Beperk, Ltd. 102,000 240,747
Illovo Sugar, Ltd. 514,000 937,453
Impala Platinum Holdings, Ltd. 110,000 1,280,442
Meikles Africa, Ltd. 1,750,000 3,762,500
Murray & Roberts, Ltd. 1,180,000 3,012,981
Premier Group Holdings, Ltd. 1,169,773 1,571,243
NUMBER
OF SHARES VALUE
---------- -----------
SOUTH AFRICA (CONTINUED)
Pretoria Portland Cement Co., Ltd. 129,493 $ 1,986,643
Anglo American Platinum Holdings,
Ltd. 514 8,906
SA Iron & Steel Industrial Corp.,
Ltd. 2,630,906 1,676,599
Sasol, Ltd. 210,000 2,895,076
Tongaat-Hulett Group, Ltd. 174,538 2,630,897
------------
29,290,203
------------
TAIWAN -- 2.7%
Accton Technology Corp. - GDR
(Reg. S)** 267,500 1,598,313
Acer, Inc. - GDR (Reg. 144A)** 87,500 870,625
Acer, Inc. - GDR (Reg. S)** 90,000 895,500
Yageo Corp. - GDR** 84,000 1,675,800
------------
5,040,238
------------
THAILAND -- 1.3%
Bangkok Insurance Co., Ltd.
(Foreign Shares) 30,000 425,105
Siam Cement Co., Ltd.
(Foreign Shares) 44,800 744,792
Siam Commercial Bank Public Co.,
Ltd. (Foreign Shares) 256,600 844,597
Telecomasia Corp. Public Co., Ltd.
(Foreign Shares)** 500,000 418,410
------------
2,432,904
------------
TURKEY -- 1.7%
Eczacibasi Yapi Gerecleri Sanayi
ve Ticaret A.S.** 30,630,000 1,388,757
Netas Telekomunik** 1,000,000 332,874
Raks Elektronik Sanayi ve Ticaret
A.S. 1,000,000 327,135
Yapi ve Kredi Bankasi A.S. 43,338,000 1,081,958
------------
3,130,724
------------
UNITED KINGDOM -- 2.3%
Billiton PLC** 612,500 2,359,767
Saudi Arabian Investment Fund** 200,000 2,050,000
------------
4,409,767
------------
TOTAL COMMON STOCKS
(Cost $153,485,697) 163,614,472
------------
PREFERRED STOCKS -- 8.6%
Banco Bradesco SA** 122,104,380 1,285,661
Brasmotor SA** 4,500,000 874,626
Casa Anglo Brasileira SA 48,200,000 1,970,219
Cia Brasileira de Distribuicao
Grupo Pao de Acucar 25,000,000 585,082
Cia Cimento Portland Itau 3,200,000 978,102
Cia Energetica de Minas Gerais 39,000,000 2,177,737
Cia Paranaense de Energia-
Copel - B 164,680,000 2,853,351
Eletropaulo-Eletricide de Sao
Paula SA - B** 7,000,000 1,643,978
Eletropaulo-Eletricide de Sao
Paula SA - B Rights** 1,680,700 86,642
Iochpe Maxion SA** 9,413,750 815,973
Michaniki SA 72,000 67,517
Petroleo Brasileiro SA 3,287,000 935,715
Sadia-Concordia SA Industria
E Comercio 1,327,000 1,319,735
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
32
<PAGE>
COMPASS CAPITAL FUNDS [LOGO OMITTED]
STATEMENT OF NET ASSETS
INTERNATIONAL EMERGING MARKETS PORTFOLIO (CONCLUDED)
NUMBER
AS OF SEPTEMBER 30, 1997 OF SHARES VALUE
---------- -----------
PREFERRED STOCKS (CONTINUED)
Telecomunicacoes Brasileiras
SA - Telebras 695,282 $ 89,765
Usiminas Siderurgicas de Minas
Gerais SA 60,000 655,292
------------
TOTAL PREFERRED STOCKS
(Cost $13,460,865) 16,339,395
------------
PAR
MATURITY (000)
--------- --------
CONVERTIBLE BONDS -- 2.4%
Far East Department Stores
3.00% 07/06/01 $1,440 1,508,400
Siliconware Precision Industries
0.50% 07/21/02 1,200 1,275,000
Yang Ming Marine Transport, Inc.
2.00% 10/06/99 1,340 1,494,100
Yang Ming Marine Transport, Inc.
(Reg. 144A)
2.00% 10/06/99 200 223,000
------------
TOTAL CONVERTIBLE BONDS
(Cost $4,536,113) 4,500,500
------------
SHORT TERM INVESTMENTS -- 4.8%
Federal Home Loan Mortgage
Corp Discount Notes
6.05% 10/01/97 9,028 9,028,000
------------
(Cost $9,028,000)
TOTAL INVESTMENTS IN SECURITIES
(Cost $180,510,675*) 102.6% 193,482,367
LIABILITIES IN EXCESS OF
OTHER ASSETS (2.6%) (4,933,865)
------ ------------
NET ASSETS (Applicable to 11,985,768
Institutional shares, 6,858,798 Service
shares, 463,777 Investor A shares,
192,528 Investor B shares and 9,180
Investor C shares outstanding) 100.0% $188,548,502
====== ============
VALUE
-------------
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
INSTITUTIONAL SHARE
($116,107,033 (DIVIDE) 11,985,768) $ 9.69
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
SERVICE SHARE
($66,063,738 (DIVIDE) 6,858,798) $ 9.63
======
NET ASSET VALUE AND
REDEMPTION PRICE PER
INVESTOR A SHARE
($4,454,003 (DIVIDE) 463,777) $ 9.60
======
MAXIMUM OFFERING PRICE
PER INVESTOR A SHARE
($9.60 (DIVIDE) .950) $10.11
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 4.5%)
PER INVESTOR B SHARE
($1,836,163 (DIVIDE) 192,528) $ 9.54
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 1.0%)
PER INVESTOR C SHARE
($87,565 (DIVIDE) 9,180) $ 9.54
======
- ---------------
* Also cost for Federal income tax purposes. The gross unrealized
appreciation (depreciation) on a tax basis is as follows:
Gross unrealized appreciation $33,344,816
Gross unrealized depreciation (20,373,124)
-----------
$12,971,692
===========
** Non-income producing security.
# Total or partial securities on loan.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
33
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
STATEMENT OF NET ASSETS
SELECT EQUITY PORTFOLIO
NUMBER
AS OF SEPTEMBER 30, 1997 OF SHARES VALUE
---------- -----------
COMMON STOCKS -- 96.8%
AEROSPACE -- 1.8%
Boeing Co. 69,000 $ 3,756,187
Lockheed Martin Corp. 38,300 4,083,737
United Technologies Corp. 32,200 2,608,200
------------
10,448,124
------------
AIR TRANSPORTATION -- 0.5%
Delta Air Lines, Inc. 32,000 3,014,000
------------
BANKS -- 7.9%
Banc One Corp. 212,269 11,847,264
BankAmerica Corp. 59,400 4,354,762
Chase Manhattan Corp. 76,936 9,078,448
CoreStates Financial Corp. 77,500 5,129,531
First Chicago NBD, Corp. 81,200 6,110,300
First Union Corp. 84,800 4,245,300
#NationsBank, Inc. 98,800 6,113,250
------------
46,878,855
------------
BEVERAGES -- 3.3%
Anheuser Busch Cos., Inc. 85,200 3,844,650
Coca-Cola Co. 177,600 10,822,500
Pepsico, Inc. 123,400 5,005,412
------------
19,672,562
------------
CHEMICALS -- 3.5%
Air Products & Chemicals, Inc. 35,800 2,969,162
Dow Chemical Co. 36,900 3,346,369
E.I. Du Pont de Nemours and Co. 80,670 4,966,247
#IMC Global, Inc. 110,200 3,884,550
PPG Industries, Inc. 49,700 3,115,569
Rohm & Haas Co. 23,300 2,235,344
------------
20,517,241
------------
COMPUTER & OFFICE EQUIPMENT -- 5.3%
Cisco Systems, Inc.** 59,800 4,369,137
Compaq Computer Corp.** 99,200 7,415,200
#Ikon Office Solutions, Inc. 101,600 2,597,150
International Business Machines
Corp. 93,500 9,905,156
Seagate Technology, Inc.** 103,300 3,731,712
Xerox Corp. 41,000 3,451,687
------------
31,470,042
------------
COMPUTER SOFTWARE & SERVICES -- 2.1%
Microsoft Corp.** 95,900 12,688,769
------------
CONSTRUCTION -- 0.3%
Fluor Corp. 36,700 1,968,037
------------
ELECTRONICS -- 9.3%
Adaptec, Inc.** 55,500 2,594,625
AMP, Inc. 61,600 3,299,450
Emerson Electric Co. 77,700 4,477,462
General Electric Co. 203,600 13,857,525
Hewlett Packard Co. 80,100 5,571,956
Intel Corp. 140,400 12,960,675
Motorola, Inc. 77,400 5,563,125
Texas Instruments, Inc. 50,300 6,796,787
------------
55,121,605
------------
ENERGY & UTILITIES -- 2.5%
Cinergy Corp. 82,500 2,758,594
Entergy Corp. 140,500 3,661,781
FPL Group, Inc. 63,900 3,274,875
NIPSCO Industries, Inc. 54,400 2,291,600
Southern Co. 128,300 2,894,769
------------
14,881,619
------------
NUMBER
OF SHARES VALUE
---------- -----------
ENTERTAINMENT & LEISURE -- 1.5%
Harrah's Entertainment, Inc.** 105,300 $ 2,362,669
La Quinta Inns, Inc. 84,700 1,995,744
Walt Disney Co. 53,500 4,313,437
------------
8,671,850
------------
FINANCE -- 4.5%
Federal National Mortgage
Association 137,900 6,481,300
Fleet Financial Group, Inc. 79,500 5,212,219
Morgan Stanley, Dean Witter,
Discover & Co. 140,500 7,595,781
Washington Mutual, Inc. 101,200 7,058,700
------------
26,348,000
------------
FOOD & AGRICULTURE -- 2.6%
Archer Daniels Midland Co. 136,500 3,267,469
Burlington Northern Santa Fe Corp. 31,600 3,053,350
CPC International, Inc. 62,900 5,826,112
Tyson Foods, Inc. 133,700 3,133,594
------------
15,280,525
------------
INSURANCE -- 4.9%
Aetna, Inc. 36,428 2,966,605
Allstate Corp. 86,400 6,944,400
American International Group, Inc. 87,600 9,039,225
Cigna Corp. 16,400 3,054,500
General Re Corp. 21,800 4,327,300
Humana, Inc.** 111,900 2,664,619
------------
28,996,649
------------
MACHINERY & HEAVY EQUIPMENT -- 1.7%
Applied Materials, Inc.** 55,900 5,324,475
Illinois Tool Works, Inc. 90,800 4,540,000
------------
9,864,475
------------
MEDICAL & MEDICAL SERVICES -- 1.0%
Columbia Healthcare Corp. 66,350 1,907,563
United Healthcare Corp. 85,600 4,280,000
------------
6,187,563
------------
METAL & MINING -- 1.5%
Barrick Gold Corp. 107,300 2,655,675
Minnesota Mining & Manufacturing Co. 40,800 3,774,000
Phelps Dodge Corp. 33,000 2,561,625
------------
8,991,300
------------
MOTOR VEHICLES -- 3.9%
#Cummins Engine, Inc. 45,300 3,536,231
Eaton Corp. 46,400 4,286,200
Ford Motor Co. 144,900 6,556,725
General Motors Corp. 81,100 5,428,631
Goodyear Tire & Rubber Co. 43,200 2,970,000
------------
22,777,787
------------
OIL & GAS -- 9.1%
Atlantic Richfield Co. 56,000 4,784,500
#British Petroleum Co., PLC ADR 48,000 4,359,000
Enron Corp. 81,500 3,137,750
Exxon Corp. 259,000 16,592,188
Mobil Corp. 92,200 6,822,800
Noble Affiliates, Inc. 34,700 1,552,825
Royal Dutch Petroleum Co. 211,600 11,743,800
Schlumberger Ltd. 54,200 4,562,963
------------
53,555,826
------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
34
<PAGE>
COMPASS CAPITAL FUNDS [LOGO OMITTED]
STATEMENT OF NET ASSETS
SELECT EQUITY PORTFOLIO (CONCLUDED)
NUMBER
AS OF SEPTEMBER 30, 1997 OF SHARES VALUE
---------- ------------
COMMON STOCKS (CONTINUED)
PAPER & FOREST PRODUCTS -- 1.7%
International Paper Co. 59,700 $ 3,287,231
Kimberly-Clark Corp. 68,800 3,366,900
Mead Corp. 49,300 3,561,925
------------
10,216,056
------------
PHARMACEUTICALS -- 7.9%
American Home Products Corp. 101,900 7,438,700
Bristol-Myers Squibb Co. 77,200 6,388,300
Eli Lilly & Co. 45,500 5,479,906
Johnson & Johnson 96,700 5,572,338
Merck & Co., Inc. 113,200 11,312,925
Pfizer, Inc. 97,400 5,850,088
Pharmacia & Upjohn, Inc. 121,500 4,434,750
------------
46,477,007
------------
PUBLISHING & PRINTING -- 1.0%
McGraw-Hill Companies, Inc. 49,000 3,316,688
Tribune Co. 52,500 2,798,906
------------
6,115,594
------------
RESTAURANTS -- 1.1%
Brinker International, Inc.** 122,900 2,189,156
McDonald's Corp. 90,100 4,291,013
------------
6,480,169
------------
RETAIL MERCHANDISING -- 5.8%
Albertson's, Inc. 75,500 2,633,063
J.C. Penney Co., Inc. 110,500 6,436,625
Kroger Co.** 96,500 2,913,094
Limited, Inc. 123,900 3,027,806
Lowe's Cos., Inc. 169,400 6,585,425
Pep Boys - Manny Moe & Jack 81,000 2,207,250
Toys "R" Us, Inc.** 102,700 3,645,850
Wal-Mart Stores, Inc. 192,600 7,053,975
------------
34,503,088
------------
SOAPS & COSMETICS -- 2.5%
#Colgate-Palmolive Co. 99,000 6,899,063
Procter & Gamble Co. 111,800 7,721,188
------------
14,620,251
------------
TELECOMMUNICATIONS -- 7.3%
Alltel Corp. 131,400 4,533,300
AT&T Corp. 171,900 7,617,319
Bell Atlantic Corp. 73,700 5,928,244
GTE Corp. 122,600 5,562,975
Lucent Technologies, Inc. 50,194 4,084,537
#Oracle Corp.** 176,125 6,417,555
SBC Communications, Inc. 149,200 9,157,150
------------
43,301,080
------------
TEXTILES -- 0.8%
Fruit of the Loom, Inc.** 81,000 2,278,125
The Warnaco Group, Inc. 86,300 2,740,025
------------
5,018,150
------------
TOBACCO -- 1.8%
Philip Morris Cos., Inc. 255,200 10,606,750
------------
TRANSPORTATION -- 0.5%
CSX Corp. 53,100 3,106,350
------------
TOTAL COMMON STOCKS
(Cost $401,548,819) 577,779,324
------------
PAR
MATURITY (000) VALUE
--------- --------- ------------
SHORT TERM INVESTMENTS -- 2.8%
Federal Home Loan Mortgage
Corp. Discount Notes
6.05% 10/01/97 $12,000 $ 12,000,000
Smith Barney Money Market Fund 3,545 3,545,116
U.S. Treasury Bills
4.95% 12/18/97 1,000*** 989,741
------------
TOTAL SHORT TERM INVESTMENTS
(Cost $16,534,391) 16,534,857
------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $418,083,210*) 0.4% 594,314,181
LIABILITIES IN EXCESS OF
OTHER ASSETS (0.4%) (2,538,452)
------ -----------
NET ASSETS (Applicable to 21,687,989
Institutional shares, 9,968,031 Service
shares, 1,082,651 Investor A shares,
1,054,062 Investor B shares and 21,678
Investor C shares outstanding) 100.0% $591,775,729
====== ============
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER INSTITUTIONAL SHARE
($379,686,642 (DIVIDE) 21,687,989) $17.51
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER SERVICE SHARE
($174,418,263 (DIVIDE) 9,968,031) $17.50
======
NET ASSET VALUE AND
REDEMPTION PRICE PER
INVESTOR A SHARE
($18,948,763 (DIVIDE) 1,082,651) $17.50
======
MAXIMUM OFFERING PRICE PER
INVESTOR A SHARE
($17.50 (DIVIDE) .955) $18.32
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 4.5%)
PER INVESTOR B SHARE
($18,344,805 (DIVIDE) 1,054,062) $17.40
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 1.0%)
PER INVESTOR C SHARE
($377,256 (DIVIDE) 21,678) $17.40
======
- -----------
* Also cost for Federal income tax purposes. The gross unrealized
appreciation (depreciation) on a tax basis is as follows:
Gross unrealized appreciation $178,698,913
Gross unrealized depreciation (2,467,942)
------------
$176,230,971
============
** Non-income producing security.
*** Principal amount of securities pledged as initial margin requirement of
$261,000 on 15 Standard & Poor's 500 Stock Index futures contracts expiring
December 1997. The value of such contracts on September 30, 1997 was
$7,158,750, thereby resulting in an unrealized gain of $21,750.
# Total or partial securities on loan.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
35
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
STATEMENT OF NET ASSETS
INDEX EQUITY PORTFOLIO
AS OF SEPTEMBER 30, 1997 VALUE
-------------
Investment in The U.S. Large Company
Series of The DFA Investment
Trust Company
(Cost $329,320,801) 99.9% $451,588,404
OTHER ASSETS IN EXCESS OF
LIABILITIES 0.1% 389,647
------ ------------
NET ASSETS (Applicable to 9,103,906
Institutional shares, 10,553,449 Service
shares, 1,852,190 Investor A shares,
2,099,976 Investor B shares and 1,079,191
Investor C shares outstanding) 100.0% $451,978,051
====== ============
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
INSTITUTIONAL SHARE
($166,786,275 (DIVIDE) 9,103,906) $18.32
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
SERVICE SHARE
($193,319,311 (DIVIDE) 10,553,449) $18.32
======
NET ASSET VALUE AND
REDEMPTION PRICE PER
INVESTOR A SHARE
($33,933,239 (DIVIDE) 1,852,190) $18.32
======
MAXIMUM OFFERING PRICE
PER INVESTOR A SHARE
($18.32 (DIVIDE) .97) $18.89
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 4.5%)
PER INVESTOR B SHARE
($38,271,329 (DIVIDE) 2,099,976) $18.22
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 1.0%)
PER INVESTOR C SHARE
($19,667,897 (DIVIDE) 1,079,191) $18.22
======
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS AND ACCOMPANYING FINANCIAL
STATEMENTS AND RELATED NOTES FOR THE DFA INVESTMENT TRUST COMPANY.
36
<PAGE>
COMPASS CAPITAL FUNDS [LOGO OMITTED]
STATEMENT OF NET ASSETS
BALANCED PORTFOLIO
NUMBER
AS OF SEPTEMBER 30, 1997 OF SHARES VALUE
---------- ------------
COMMON STOCKS -- 59.7%
AEROSPACE -- 2.1%
Allied-Signal, Inc. 58,900 $ 2,503,250
Boeing Co. 16,200 881,887
United Technologies Corp. 40,600 3,288,600
------------
6,673,737
------------
BANKS -- 3.4%
Banc One Corp. 71,100 3,968,269
CoreStates Financial Corp. 45,700 3,024,769
First Chicago NBD Corp. 50,800 3,822,700
------------
10,815,738
------------
BEVERAGES -- 1.1%
Coca-Cola Co. 40,600 2,474,062
Pepsico, Inc. 25,400 1,030,287
------------
3,504,349
------------
CHEMICALS -- 2.0%
Dow Chemical Co. 20,300 1,840,956
E.I. du Pont de Nemours & Co. 48,700 2,998,094
IMC Fertilizer Group, Inc. 39,600 1,395,900
------------
6,234,950
------------
COMPUTER & OFFICE EQUIPMENT -- 5.2%
3Com Corp.** 38,600 1,978,250
Cisco Systems, Inc. 40,600 2,966,337
Compaq Computer Corp. 71,100 5,314,725
International Business Machines
Corp. 25,400 2,690,812
Seagate Technology, Inc.** 35,500 1,282,437
Xerox Corp. 27,400 2,306,737
------------
16,539,298
------------
COMPUTER SOFTWARE & SERVICES -- 2.3%
#First Data Corp. 56,900 2,137,306
Microsoft Corp.** 38,600 5,107,262
------------
7,244,568
------------
CONSUMER DURABLES -- 0.8%
Black & Decker Corp. 67,000 2,495,750
------------
ELECTRONICS -- 4.4%
AMP, Inc. 20,300 1,087,319
Emerson Electric Co. 24,400 1,406,050
General Electric Co. 73,100 4,975,369
Intel Corp. 50,800 4,689,475
Motorola, Inc. 26,400 1,897,500
------------
14,055,713
------------
ENERGY & UTILITIES -- 1.5%
Entergy Corp. 76,200 1,985,962
NIPSCO Industries, Inc. 32,500 1,369,062
PECO Energy Co. 67,000 1,570,312
------------
4,925,336
------------
ENTERTAINMENT & LEISURE -- 0.8%
Walt Disney Co. 31,500 2,539,687
------------
FINANCE -- 3.7%
Federal National Mortgage
Association 73,100 3,435,700
Fleet Financial Group, Inc. 50,800 3,330,575
Morgan Stanley, Dean Witter,
Discover & Co. 91,400 4,941,312
------------
11,707,587
------------
NUMBER
OF SHARES VALUE
---------- -----------
FOOD & AGRICULTURE -- 0.6%
CPC International, Inc. 22,300 $ 2,065,537
------------
INSURANCE -- 3.5%
Allstate Corp. 22,600 1,816,475
American International Group, Inc. 45,700 4,715,669
Chubb Corp. 32,500 2,309,531
General Re Corp. 11,200 2,223,200
------------
11,064,875
------------
MACHINERY & HEAVY EQUIPMENT -- 1.0%
Illinois Tool Works, Inc. 65,000 3,250,000
------------
MEDICAL & MEDICAL SERVICES -- 1.3%
Medtronic, Inc. 58,900 2,768,300
United Healthcare Corp. 28,400 1,420,000
------------
4,188,300
------------
METAL & MINING -- 1.6%
Minnesota Mining & Manufacturing
Co. 23,400 2,164,500
Phelps Dodge Corp. 36,600 2,841,075
------------
5,005,575
------------
MOTOR VEHICLES -- 2.0%
Chrysler Corp. 28,400 1,045,475
Ford Motor Co. 42,600 1,927,650
General Motors Corp. 22,300 1,492,706
Goodyear Tire & Rubber Co. 29,400 2,021,250
------------
6,487,081
------------
OIL & GAS -- 4.0%
Chevron Corp. 20,300 1,688,706
Exxon Corp. 56,900 3,645,156
Mobil Corp. 20,300 1,502,200
Royal Dutch Petroleum Co. 65,000 3,607,500
Tenneco, Inc. 50,800 2,432,050
------------
12,875,612
------------
PAPER & FOREST PRODUCTS -- 0.4%
International Paper Co. 24,400 1,343,525
------------
PHARMACEUTICALS -- 5.8%
American Home Products Corp. 56,900 4,153,700
Bristol-Myers Squibb Co. 53,800 4,451,950
Eli Lilly & Co. 31,500 3,793,781
Johnson & Johnson 35,500 2,045,687
Merck & Co., Inc. 40,600 4,057,463
------------
18,502,581
------------
PUBLISHING & PRINTING -- 0.8%
McGraw-Hill Companies, Inc. 38,600 2,612,738
------------
RESTAURANTS -- 0.7%
McDonald's Corp. 45,700 2,176,463
------------
RETAIL MERCHANDISING -- 2.7%
K Mart Corp.** 98,500 1,379,000
Kroger Co.** 87,300 2,635,369
Lowe's Cos., Inc.** 45,700 1,776,588
Wal-Mart Stores, Inc. 78,200 2,864,075
------------
8,655,032
------------
SOAPS & COSMETICS -- 1.9%
#Colgate-Palmolive Co. 50,800 3,540,125
Procter & Gamble Co. 34,500 2,382,656
------------
5,922,781
------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
37
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
STATEMENT OF NET ASSETS
BALANCED PORTFOLIO (CONTINUED)
NUMBER
AS OF SEPTEMBER 30, 1997 OF SHARES VALUE
---------- -----------
COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS -- 3.5%
Alltel Corp. 47,700 $ 1,645,650
AT&T Corp. 40,600 1,799,088
Bell Atlantic Corp. 29,600 2,380,950
GTE Corp. 34,500 1,565,438
Lucent Technologies, Inc. 11,500 935,813
SBC Communications, Inc. 46,700 2,866,213
------------
11,193,152
------------
TOBACCO -- 1.7%
Philip Morris Cos., Inc. 126,900 5,274,281
------------
TRANSPORTATION -- 0.9%
Norfolk Southern Corp. 26,400 2,725,800
------------
TOTAL COMMON STOCKS
(Cost $114,815,836) 190,080,046
------------
PAR
MATURITY (000)
-------- -------
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 13.4%
Federal Home Loan Bank Notes
4.90%* 10/27/97 $1,000 996,250
Small Business Administration
Participation Certificates,
Series 97-20F, Class 1
7.20% 06/01/17 1,110 1,136,332
Small Business Investment Cos.
Pass-Through, Series 96-P10C,
Class 1
7.35% 08/10/06 1,050 1,086,411
Small Business Investment Cos.
Pass-Through, Series 97-P10C,
Class 1
6.85% 08/01/07 1,250 1,272,665
U.S. Treasury Bonds
6.62% 02/15/27 1,385 1,418,461
#6.37% 08/15/27 4,465 4,443,880
U.S. Treasury Notes
6.25% 03/31/99 6,480 6,527,758
6.25% 05/31/99 1,875 1,888,613
5.87% 08/31/99 1,100 1,101,012
5.87% 02/15/00 230 230,106
6.37% 05/15/00 5,990 6,063,437
#6.00% 08/15/00 400 401,424
#6.62% 03/31/02 6,100 6,245,972
#6.25% 06/30/02 7,765 7,840,088
#6.25% 08/31/02 335 338,072
6.50% 10/15/06 1,500 1,532,805
------------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost $42,156,676) 42,523,286
------------
MORTGAGE PASS-THROUGHS -- 6.0%
Federal Home Loan Mortgage
Corporation
9.00% 06/01/21 705 749,780
7.50% 09/01/27 7,620 7,746,206
Federal Housing Administration,
Huntoon Paige
7.31% 10/01/24 1,691 1,724,878
Federal Housing Administration,
Reilly Mortgage Securities
6.89% 11/11/18 1,298 1,284,713
Federal National Mortgage
Association 15 Year
7.00% 10/01/10-
04/01/12 3,435 3,470,855
PAR
MATURITY (000) VALUE
---------- -------- -----------
MORTGAGE PASS-THROUGHS (CONTINUED)
Government National Mortgage
Association
6.50% 01/15/24-
06/15/24 $1,485 $ 1,453,243
7.50% 01/21/27 2,750 2,793,828
------------
TOTAL MORTGAGE PASS-THROUGHS
(Cost $19,074,098) 19,223,503
------------
MULTIPLE CLASS MORTGAGE PASS-THROUGHS -- 2.7%
Community Program Loan Trust,
Series 87-A, Class A4
4.50% 10/01/18 1,967 1,731,534
Federal Home Loan Mortgage Corp.,
Series 96, Class PG (IO)
7.50% 05/15/21 750 221,250
Federal Home Loan Mortgage Corp.,
Series 96, Class PM (IO)
7.50% 06/15/27 2,130 924,552
Federal National Mortgage Association,
Series 93-113, Class B (PO)
6.50% 07/25/23 460 326,698
Federal National Mortgage Association,
Series 96-54, Class A (PO)
6.50% 04/25/21 612 506,971
Federal National Mortgage Association,
Series 96-56, Class E (PO)
7.00% 04/25/23 232 150,894
Federal National Mortgage Association,
Series 274, Class 1
4.00% 10/01/25 251 197,633
Independent National Mortgage Corp.,
Series 95U, Class A1
7.25% 01/25/26 585 588,006
Residential Accredit Loans, Inc.,
Series 97-QS7, Class A1
7.50% 08/15/27 1,116 1,129,460
Residential Asset Securitization Trust,
Series 97-A7, Class A1
7.50% 09/25/27 1,359 1,375,160
Salomon Brothers Mortgage Securities VI,
Series 87-1 (IO)
11.00% 04/20/07 959 294,164
Salomon Brothers Mortgage Securities VI,
Series 87-1 (PO)
5.00% 02/17/17 842 651,490
Salomon Brothers Mortgage Securities VI,
Series 87-2 (IO)
11.00% 03/06/17 611 187,621
Salomon Brothers Mortgage Securities VI,
Series 87-2 (PO)
5.00% 03/06/17 595 460,314
------------
TOTAL MULTIPLE CLASS MORTGAGE
PASS-THROUGHS
(Cost $8,665,674) 8,745,747
------------
ASSET BACKED SECURITIES -- 7.7%
Arcadia Automobile Receivable Trust,
Series 97-C, Class A2
6.05% 02/15/00 1,600 1,604,000
Banc One Auto Grantor Trust,
Series 97-A, Class A
6.27% 11/20/03 1,318 1,323,420
CIT Group Securitization Corp.,
Series 95-2, Class B
7.65% 05/15/26 450 441,773
Contimortgage Home Equity Loan
Series Trust
6.37% 03/15/08 3,000 2,997,656
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
38
<PAGE>
COMPASS CAPITAL FUNDS [LOGO OMITTED]
STATEMENT OF NET ASSETS
BALANCED PORTFOLIO (CONTINUED)
PAR
AS OF SEPTEMBER 30, 1997 MATURITY (000) VALUE
-------- ------- ----------
ASSET BACKED SECURITIES (CONTINUED)
Copelco Capital Funding Corp.,
Series 97-A, Class A3
6.27% 04/20/05 $2,000 $ 2,008,125
Discover Card Master Trust I,
Series 96-4, Class A
6.01%* 10/16/03 1,500 1,522,266
Equivantage Home Equity Loan Trust,
Series 96-1, Class A
6.55% 10/25/25 441 437,841
First USA Credit Card Master Trust,
Series 94-4
5.99%* 08/15/03 2,000 2,015,938
Green Tree Financial Corp., Series 96-6,
Class B2
8.35% 09/15/27 500 535,547
Green Tree Financial Corp., Series 93-3,
Class B
6.85% 10/15/18 1,300 1,293,500
Green Tree Financial Corp., Series 95-7,
Class B1
7.35% 11/15/26 400 407,500
Green Tree Financial Corp., Series 96-6,
Class A6
7.95% 09/15/27 1,000 1,061,875
Green Tree Financial Corp., Series 96-9,
Class A6
7.69% 01/15/28 1,150 1,203,188
Green Tree Financial Corp., Series 97-3,
Class A7
7.64% 01/15/15 1,050 1,095,117
Green Tree Financial Corp., Series 97-3,
Class B2
8.03% 07/15/28 550 577,328
Mellon Bank Home Equity Loan Trust,
Series 96-1, Class B2
6.10% 04/15/26 1,300 1,302,438
Nissan Auto Receivable Grantor Trust,
Series 95-A, Class A
6.10%* 08/15/01 592 592,351
Puget Power Conservation Grantor Trust,
Series 97-1
6.23% 07/11/02 1,100 1,097,594
Sears Credit Card Master Trust
Series 1996-3, Class A
7.00% 07/16/08 900 926,016
Security Pacific Home Equity Loan,
Series 91-1, Class B
8.85% 05/15/21 885 894,414
Student Loan Marketing Association,
Series 97-3, Class A2
5.77%**** 10/25/10 1,200 1,194,375
------------
TOTAL ASSET BACKED SECURITIES
(Cost $24,355,957) 24,532,262
------------
CORPORATE BONDS -- 6.5%
FINANCE -- 2.7%
Bear Stearns Capital
7.00% 01/15/27 1,050 1,061,813
Equitable Life Assurance Society
7.70% 12/01/15 350 363,087
First of America
8.12% 01/31/27 1,300 1,340,881
Great Western Finance
8.20% 02/01/27 1,000 1,029,566
Liberty Mutual Co.
8.50% 05/15/25 750*** 837,474
PAR
MATURITY (000) VALUE
-------- -------- ----------
CORPORATE BONDS (CONTINUED)
Meridian Bancorp.
6.62% 06/15/00 $ 450 $ 454,624
Merrill Lynch & Co.
6.47% 06/27/00 1,000 1,006,203
Metropolitan Life Insurance Co.
6.30% 11/01/03 300 294,396
Paine Webber, Inc.
7.87% 02/15/03 1,000 1,051,684
Safeco Corporation
6.87% 07/15/07 950 952,010
Salomon, Inc.
8.90% 02/15/00 300 316,719
------------
8,708,457
------------
INDUSTRIAL -- 1.6%
Burlington Industries
7.25% 09/15/05 200 198,056
ERAC USA Finance Co.
6.95% 03/01/04 1,200 1,208,897
GMAC Pass-Through Trust
6.50% 01/17/00 1,100 1,105,785
ITT Corp.
7.37% 11/15/15 210 202,510
7.75% 11/15/25 350 334,847
RJR Nabisco, Inc.
6.85% 06/15/05 300 300,615
7.05% 07/15/07 180 181,707
7.55% 06/15/15 700 721,139
Time Warner
6.10% 12/30/01 1,000 978,750
------------
5,232,306
------------
UTILITY -- 0.2%
Mobile Energy Services, L.L.C.
8.66% 01/01/17 284 303,209
Texas Utilities Capital Trust
8.17% 02/01/37 420 428,540
------------
731,749
------------
YANKEE -- 1.9%
BGB Finance
6.62% 12/30/99 300 303,162
Exp-Imp Bank Korea
7.12% 09/20/01 1,200 1,200,857
Fairfax Financial
8.30% 04/15/26 550 590,341
Israel Electric Corp., LTD
7.87% 12/15/26 350 362,303
Pan American Beverages
7.25% 07/01/09 1,200 1,209,949
Reliance Industries
9.37% 06/24/26 305 329,892
Republic of Colombia
7.62% 02/15/07 1,000 982,341
SBC Glacier Financial, Series 2-A
5.90% 09/10/06 300 299,953
Telefonica De Argentina
11.87% 11/01/04 625 753,986
------------
6,032,784
------------
TOTAL CORPORATE BONDS
(Cost $20,206,395) 20,705,296
------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
39
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
STATEMENT OF NET ASSETS
BALANCED PORTFOLIO (CONCLUDED)
PAR
AS OF SEPTEMBER 30, 1997 MATURITY (000) VALUE
-------- ------- -----------
TAXABLE MUNICIPAL BONDS -- 1.2%
Los Angeles County Taxable
Pension Obligation
8.62% 06/30/06 $1,650 $1,861,500
6.97% 06/30/08 400 404,000
New Jersey Economic Development
Authority
7.56% 02/15/16 2,425 680,479
7.59% 02/15/17 850 222,156
7.65% 02/15/20 895 189,606
7.62% 02/15/21 630 125,080
7.62% 02/15/22 895 166,595
7.63% 02/15/23 340 59,361
------------
TOTAL TAXABLE MUNICIPAL BONDS
(Cost $3,423,855) 3,708,777
------------
COMMERCIAL MORTGAGE-BACKED
SECURITIES -- 1.3%
CS First Boston Mortgage Securities
Corp., Series 95-AEW1, Class C
7.45% 11/25/27 250 253,164
J.P. Morgan Commercial Mortgage
Finance Corp., Series 96-C3, Class A1
7.33% 04/25/28 481 497,600
Merrill Lynch Mortgage Investors, Inc.,
Series 95-C1, Class C
7.57%* 05/25/15 450 463,581
Merrill Lynch Mortgage Investors, Inc.,
Series 96-C1, Class A2
7.24% 04/25/28 1,000 1,031,224
Merrill Lynch Mortgage Investors, Inc.,
Series 96-C1, Class A3
7.42% 04/25/28 500 520,240
Structured Asset Securities Corp.,
Series 96-CFL, Class X1 (IO)
7.50% 02/25/28 7,776 405,187
Structured Asset Securites Corp.,
Series 97-N1, Class D
6.15% 09/25/28 1,000 1,000,000
------------
TOTAL COMMERCIAL MORTGAGE-
BACKED SECURITIES
(Cost $4,082,023) 4,170,996
------------
SHORT TERM INVESTMENTS -- 2.0%
Federal Home Loan Mortgage
Corp. Discount Notes
6.05% 10/01/97 6,300 6,300,000
Smith Barney Money Market Fund 106 105,843
U.S. Treasury Bills
4.90% 12/18/97 20*** 19,795
4.82% 12/26/97 120*** 118,575
------------
TOTAL SHORT TERM INVESTMENTS
(Cost $6,544,248) 6,544,213
------------
TOTAL INVESTMENTS IN SECURITIES
(Cost $243,324,762*) 100.5% 320,234,126
LIABILITIES IN EXCESS
OF ASSETS (0.5%) (1,583,257)
------ ------------
NET ASSETS (Applicable to 1,737,994
Institutional shares, 9,677,363
Service shares, 4,785,456 Investor A
shares, 1,293,963 Investor B shares
and 4,780 Investor C shares
outstanding) 100.0% $318,650,869
====== ============
VALUE
------------
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
INSTITUTIONAL SHARE
($31,674,134 (DIVIDE) 1,737,994) $18.22
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
PER SERVICE SHARE
($176,232,471 (DIVIDE) 9,677,363) $18.21
======
NET ASSET VALUE AND
REDEMPTION PRICE
PER INVESTOR A SHARE
($87,202,151 (DIVIDE) 4,785,456 ) $18.22
======
MAXIMUM OFFERING PRICE
PER INVESTOR A SHARE
($18.22 (DIVIDE) .955) $19.08
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 4.5%)
PER INVESTOR B SHARE
($23,455,474 (DIVIDE) 1,293,963) $18.13
======
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE
(SUBJECT TO A MAXIMUM CONTINGENT
DEFERRED SALES CHARGE OF 1.0%)
PER INVESTOR C SHARE
($86,639 (DIVIDE) 4,780) $18.13
======
- ---------------
* Also cost for Federal income tax purposes. The gross unrealized
appreciation (depreciation) on a tax basis is as follows:
Gross unrealized appreciation $77,688,230
Gross unrealized depreciation (778,866)
-----------
$76,909,364
===========
** Non-income producing security.
*** Principal amount of securities pledged as collateral is $500,000 on 109 net
long U.S. Treasury Bond futures contracts and 64 net long U.S. Treasury
Note futures contracts expiring December 1997. The value of such contracts
on September 30,1997 was $19,589,188, thereby resulting in an unrealized
gain of $197,845. Principal amount of securities pledged as initial margin
requirement of $87,000 on 5 Standards & Poor's 500 Stock Index futures
contracts expiring December 1997. The value of such contracts on September
30,1997 was $2,386,250, thereby resulting in an unrealized gain of $7,250.
**** Rates shown are the rates as of September 30, 1997.
# Total or partial securities on loan.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
40
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
COMPASS CAPITAL FUNDS [LOGO OMITTED]
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
LARGE CAP LARGE CAP MID-CAP MID-CAP
VALUE GROWTH VALUE GROWTH SMALL CAP SMALL CAP
EQUITY EQUITY EQUITY EQUITY VALUE EQUITY GROWTH EQUITY
FOR THE PERIOD ENDED SEPTEMBER 30, 1997 PORTFOLIO PORTFOLIO PORTFOLIO 1 PORTFOLIO 1 PORTFOLIO PORTFOLIO
------------ ------------ ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Interest ................................. $ 1,797,249 $ 1,456,159 $ 265,856 $ 546,377 $ 965,867 $ 4,957,414
Dividends ................................ 33,307,683 8,083,335 1,285,417 53,155 6,315,003 162,021
Net investment income from master ........ -- -- -- -- -- --
Foreign taxes withheld ................... -- -- -- -- -- --
------------ ------------ ----------- ----------- ------------ ------------
Total investment income ............. 35,104,932 9,539,494 1,551,273 599,532 7,280,870 5,119,435
------------ ------------ ----------- ----------- ------------ ------------
Expenses:
Investment advisory fee .................. 6,967,163 3,951,518 503,466 503,129 2,044,063 3,202,592
Administration fee ....................... 2,757,522 1,608,766 144,881 144,786 854,790 1,331,685
Custodian fee ............................ 226,000 131,288 29,796 30,073 99,636 132,094
Transfer agent fee ....................... 446,848 280,573 33,026 33,261 168,502 271,302
Service fees ............................. 1,620,787 691,084 34,280 35,106 302,403 592,478
Distribution fees ........................ 232,486 120,161 5,222 6,043 147,126 336,250
Legal and audit .......................... 120,652 55,392 5,057 4,054 30,001 48,867
Printing ................................. 98,179 56,685 5,403 3,954 25,030 40,620
Registration fees and expenses ........... 52,427 69,413 11,101 11,163 39,945 65,578
Trustees' fees and officer's salary ...... 39,045 15,205 1,647 1,678 8,270 11,076
Other .................................... 383,660 23,860 3,870 4,424 13,337 28,719
------------ ------------ ----------- ----------- ------------ ------------
12,944,769 7,003,945 777,749 777,671 3,733,103 6,061,261
Less fees voluntarily waived ............. (906,172) (478,700) (23,592) (22,770) (36,578) (33,632)
------------ ------------ ----------- ----------- ------------ ------------
Interest expense ......................... -- -- -- -- -- --
------------ ------------ ----------- ----------- ------------ ------------
Total expenses ...................... 12,038,597 6,525,245 754,157 754,901 3,696,525 6,027,629
------------ ------------ ----------- ----------- ------------ ------------
Net investment income (loss) ................ 23,066,335 3,014,249 797,116 (155,369) 3,584,345 (908,194)
------------ ------------ ----------- ----------- ------------ ------------
Realized and unrealized gain on investments
and foreign currency transactions:
Net realized gain (loss) from:
Investment transactions ................ 174,349,861 105,585,611 3,711,066 (220,217) 44,514,616 13,823,939
Futures contracts ...................... -- 3,748,360 -- 1,421,662 -- 18,186,768
Foreign currency related transactions .. -- -- -- -- -- --
------------ ------------ ----------- ----------- ------------ ------------
174,349,861 109,333,971 3,711,066 1,201,445 44,514,616 32,010,707
------------ ------------ ----------- ----------- ------------ ------------
Change in unrealized appreciation
(depreciation) from:
Investments ............................ 214,235,598 95,892,388 19,308,176 21,902,516 100,472,750 99,734,354
Futures contracts ...................... -- 225,453 -- 70,876 -- 250,074
Foreign currency related transactions .. -- -- -- -- -- --
------------ ------------ ----------- ----------- ------------ ------------
214,235,598 96,117,841 19,308,176 21,973,392 100,472,750 99,984,428
------------ ------------ ----------- ----------- ------------ ------------
Net gain (loss) on investments and foreign
currency transactions .................... 388,585,459 205,451,812 23,019,242 23,174,837 144,987,366 131,995,135
------------ ------------ ----------- ----------- ------------ ------------
Net increase (decrease) in assets
resulting from operations .............. $411,651,794 $208,466,061 $23,816,358 $23,019,468 $148,571,711 $131,086,941
============ ============ =========== =========== ============ ============
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL INTERNATIONAL
INTERNATIONAL SMALL CAP EMERGING SELECT INDEX
EQUITY EQUITY MARKETS EQUITY EQUITY BALANCED
FOR THE PERIOD ENDED SEPTEMBER 30, 1997 PORTFOLIO PORTFOLIO 2 PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ------------ -------------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Interest ................................. $ 1,236,262 $ 4,998 $ 412,863 $ 728,093 $ -- $ 7,409,409
Dividends ................................ 12,078,078 -- 3,040,140 9,293,918 -- 3,540,320
Net investment income from master ........ -- -- -- -- 6,196,020 --
Foreign taxes withheld ................... (858,683) -- (124,358) -- -- --
----------- -------- ----------- ------------ ------------ -----------
Total investment income ............. 12,455,657 4,998 3,328,645 10,022,011 6,196,020 10,949,729
----------- -------- ----------- ------------ ------------ -----------
Expenses:
Investment advisory fee .................. 4,656,917 1,817 1,938,470 2,716,828 -- 1,579,155
Administration fee ....................... 1,403,937 418 426,814 1,132,159 786,547 660,374
Custodian fee ............................ 712,035 351 359,665 101,539 -- 77,334
Transfer agent fee ....................... 249,491 84 62,450 173,605 147,209 143,474
Service fees ............................. 545,702 -- 164,221 453,285 538,929 534,753
Distribution fees ........................ 118,144 -- 21,719 93,156 273,386 423,513
Legal and audit .......................... 53,080 33 13,380 31,732 39,655 20,807
Printing ................................. 51,925 2 13,158 34,939 17,883 25,414
Registration fees and expenses ........... 58,749 -- 54,642 45,163 42,139 42,244
Trustees' fees and officer's salary ...... 12,838 4 2,617 9,290 8,541 5,771
Other .................................... 41,176 112 36,958 20,110 31,941 21,624
----------- -------- ----------- ------------ ------------ -----------
7,903,994 2,821 3,094,094 4,811,806 1,886,230 3,534,463
Less fees voluntarily waived ............. (640,115) (407) (144,524) (341,889) (672,437) (165,118)
----------- -------- ----------- ------------ ------------ -----------
Interest expense ......................... -- -- -- -- -- 8,464
----------- -------- ----------- ------------ ------------ -----------
Total expenses ...................... 7,263,879 2,414 2,949,570 4,469,917 1,213,793 3,377,809
----------- -------- ----------- ------------ ------------ -----------
Net investment income (loss) ................ 5,191,778 2,584 379,075 5,552,094 4,982,227 7,571,920
----------- -------- ----------- ------------ ------------ -----------
Realized and unrealized gain on investments
and foreign currency transactions:
Net realized gain (loss) from:
Investment transactions ................ 6,492,235 -- 3,961,050 39,409,751 188,497 21,137,880
Futures contracts ...................... -- -- -- 1,783,884 -- 742,351
Foreign currency related transactions .. (1,672,243) -- (201,053) -- -- --
----------- -------- ----------- ------------ ------------ -----------
4,819,992 -- 3,759,997 41,193,635 188,497 21,880,231
----------- -------- ----------- ------------ ------------ -----------
Change in unrealized appreciation
(depreciation) from:
Investments ............................ 77,967,567 (94,412) 9,017,466 124,751,097 107,463,405 40,671,339
Futures contracts ...................... -- -- -- (132,250) -- 249,494
Foreign currency related transactions .. 327,596 -- (65,293) -- -- --
----------- -------- ----------- ------------ ------------ -----------
78,295,163 (94,412) 8,952,173 124,618,847 107,463,405 40,920,833
----------- -------- ----------- ------------ ------------ -----------
Net gain (loss) on investments and foreign
currency transactions .................... 83,115,155 (94,412) 12,712,170 165,812,482 107,651,902 62,801,064
----------- -------- ----------- ------------ ------------ -----------
Net increase (decrease) in assets
resulting from operations .............. $88,306,933 ($91,828) $13,091,245 $171,364,576 $112,634,129 $70,372,984
=========== ======== =========== ============ ============ ===========
<FN>
- ---------------
1 For the period December 27, 1996 (commencement of operations) through
September 30, 1997.
2 For the period September 26, 1997 (commencement of operations) through
September 30, 1997.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
42-43
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
COMPASS CAPITAL FUNDS [LOGO OMITTED]
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
LARGE CAP LARGE CAP MID-CAP VALUE MID-CAP GROWTH
VALUE EQUITY PORTFOLIO GROWTH EQUITY PORTFOLIO EQUITY PORTFOLIO EQUITY PORTFOLIO
------------------------------ -------------------------- ------------------ ------------------
FOR THE FOR THE FOR THE FOR THE FOR THE PERIOD FOR THE PERIOD
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 12/27/96 1 THROUGH 12/27/96 1 THROUGH
9/30/97 9/30/96 9/30/97 9/30/96 9/30/97 9/30/97
-------------- -------------- ------------ ------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income (deficit) .$ 23,066,335 $ 23,256,170 $ 3,014,249 $ 2,498,099 $ 797,116 $ (155,369)
Net gain (loss) on investments
and foreign currency related
transactions .................. 388,585,459 171,442,481 205,451,812 99,719,777 23,019,242 23,174,837
-------------- -------------- ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from
operations .................... 411,651,794 194,698,651 208,466,061 102,217,876 23,816,358 23,019,468
-------------- -------------- ------------ ------------ ------------ ------------
Distributions to shareholders from:
Net investment income:
Institutional Shares ............ (13,758,751) (14,286,618) (3,233,374) (1,136,763) (671,220) --
Service Shares .................. (8,690,512) (8,962,904) (551,885) (254,368) (102,519) --
Investor A Shares ............... (566,730) (426,677) (28,989) -- (7,342) --
Investor B Shares ............... (100,630) (15,517) -- -- (2,026) --
Investor C Shares ............... (6,938) (811) -- -- (36) --
-------------- -------------- ------------ ------------ ------------ ------------
Total distribution from net
investment income ............. (23,123,561) (23,692,527) (3,814,248) (1,391,131) (783,143) --
-------------- -------------- ------------ ------------ ------------ ------------
Net realized gains:
Institutional Shares ............ (118,697,319) (34,958,288) (23,813,741) (6,935,080) -- --
Service Shares .................. (74,902,263) (12,256,162) (9,521,137) (2,398,963) -- --
Investor A Shares ............... (4,450,693) (1,214,058) (845,179) (303,768) -- --
Investor B Shares ............... (686,113) -- (142,913) -- -- --
Investor C Shares ............... (37,282) -- -- -- -- --
-------------- -------------- ------------ ------------ ------------ ------------
Total distributions from net
realized gains ................ (198,773,670) (48,428,508) (34,322,970) (9,637,811) -- --
-------------- -------------- ------------ ------------ ------------ ------------
Total distributions to
shareholders ................. (221,897,231) (72,121,035) (38,137,218) (11,028,942) (783,143) --
-------------- -------------- ------------ ------------ ------------ ------------
Capital share transactions .......... (682,854) 399,261,871 (82,504,921) 301,601,842 111,856,947 113,098,231
-------------- -------------- ------------ ------------ ------------ ------------
Total increase in net assets .... 189,071,709 521,839,487 87,823,922 392,790,776 134,890,162 136,117,699
Net assets:
Beginning of period ............. 1,217,853,950 696,014,463 691,136,745 298,345,969 -- --
-------------- -------------- ------------ ------------ ------------ ------------
End of period ...................$1,406,925,659 $1,217,853,950 $778,960,667 $691,136,745 $134,890,162 $136,117,699
============== ============== ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
SMALL CAP SMALL CAP INTERNATIONAL
VALUE EQUITY PORTFOLIO GROWTH EQUITY PORTFOLIO EQUITY PORTFOLIO
--------------------------- --------------------------- --------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
9/30/97 9/30/96 9/30/97 9/30/96 9/30/97 9/30/96
------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income (deficit) .$ 3,584,345 $ 1,600,084 $ (908,194) $ (726,338) $ 5,191,778 $ 4,246,980
Net gain (loss) on investments
and foreign currency related
transactions .................. 144,987,366 31,503,290 131,995,135 140,147,401 83,115,155 34,089,605
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from
operations .................... 148,571,711 33,103,374 131,086,941 139,421,063 88,306,933 38,336,585
------------ ------------ ------------ ------------ ------------ ------------
Distributions to shareholders from:
Net investment income:
Institutional Shares ............ (2,644,746) (1,400,389) (433,573) (211,287) (8,151,028) (4,294,793)
Service Shares .................. (734,773) (268,681) -- -- (2,965,174) (1,383,668)
Investor A Shares ............... (176,487) (35,201) -- -- (336,258) (210,717)
Investor B Shares ............... (10,398) -- -- -- (41,787) (14,131)
Investor C Shares ............... (762) -- -- -- (32) --
------------ ------------ ------------ ------------ ------------ ------------
Total distribution from net
investment income ............. (3,567,166) (1,704,271) (433,573) (211,287) (11,494,279) (5,903,309)
------------ ------------ ------------ ------------ ------------ ------------
Net realized gains:
Institutional Shares ............ (29,222,142) (9,611,837) (21,197,629) -- (11,783,420) (16,180,662)
Service Shares .................. (10,944,596) (3,671,321) (10,929,423) -- (4,941,534) (5,506,015)
Investor A Shares ............... (3,377,127) (1,218,870) (2,203,319) -- (620,819) (869,371)
Investor B Shares ............... (336,403) (92,835) (608,317) -- (90,494) (61,711)
Investor C Shares ............... (416) -- (61,208) -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Total distributions from net
realized gains ................ (43,880,684) (14,594,863) (34,999,896) -- (17,436,267) (22,617,759)
------------ ------------ ------------ ------------ ------------ ------------
Total distributions to
shareholders ................. (47,447,850) (16,299,134) (35,433,469) (211,287) (28,930,546) (28,521,068)
------------ ------------ ------------ ------------ ------------ ------------
Capital share transactions .......... 55,575,869 53,279,248 243,771,372 138,191,328 29,594,684 125,201,967
------------ ------------ ------------ ------------ ------------ ------------
Total increase in net assets .... 156,699,730 70,083,488 339,424,844 277,401,104 88,971,071 135,017,484
Net assets:
Beginning of period ............. 322,770,974 252,687,486 493,267,477 215,866,373 572,442,752 437,425,268
------------ ------------ ------------ ------------ ------------ ------------
End of period ...................$479,470,704 $322,770,974 $832,692,321 $493,267,477 $661,413,823 $572,442,752
============ ============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL
SMALL CAP EQUITY INTERNATIONAL EMERGING
PORTFOLIO MARKETS PORTFOLIO
----------------- --------------------------
FOR THE PERIOD FOR THE FOR THE
09/26/97 1 THROUGH YEAR ENDED YEAR ENDED
9/30/97 9/30/97 9/30/96
------------------ ------------ ----------
<S> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income (deficit) . $ 2,584 $ 379,075 $ 661,503
Net gain (loss) on investments
and foreign currency related
transactions .................. (94,412) 12,712,170 4,227,613
----------- ------------ ------------
Net increase (decrease) in net
assets resulting from
operations .................... (91,828) 13,091,245 4,889,116
----------- ------------ ------------
Distributions to shareholders from:
Net investment income:
Institutional Shares ............ -- (474,769) --
Service Shares .................. -- (179,460) --
Investor A Shares ............... -- (12,546) --
Investor B Shares ............... -- -- --
Investor C Shares ............... -- -- --
----------- ------------ ------------
Total distribution from net
investment income ............. -- (666,775) --
----------- ------------ ------------
Net realized gains:
Institutional Shares ............ -- -- (45,943)
Service Shares .................. -- -- (19,291)
Investor A Shares ............... -- -- (2,963)
Investor B Shares ............... -- -- --
Investor C Shares ............... -- -- --
----------- ------------ ------------
Total distributions from net
realized gains ................ -- -- (68,197)
----------- ------------ ------------
Total distributions to
shareholders ................. -- (666,775) (68,197)
----------- ------------ ------------
Capital share transactions .......... 16,725,691 66,260,603 58,140,563
----------- ------------ ------------
Total increase in net assets .... 16,633,863 78,685,073 62,961,482
Net assets:
Beginning of period ............. -- 109,863,429 46,901,947
----------- ------------ ------------
End of period ................... $16,633,863 $188,548,502 $109,863,429
=========== ============ ============
<FN>
- ------------
1 Commencement of operations.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
44-45
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
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
9/30/97 9/30/96 9/30/97 9/30/96 9/30/97 9/30/96
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income .................. $ 5,552,094 $ 6,081,781 $ 4,982,227 $ 4,616,698 $ 7,571,920 $ 6,562,917
Net gain on investments and foreign
currency related transactions ........ 165,812,482 57,336,010 107,651,902 33,592,745 62,801,064 23,008,377
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets
resulting from operations ............ 171,364,576 63,417,791 112,634,129 38,209,443 70,372,984 29,571,294
------------ ------------ ------------ ------------ ------------ ------------
Distributions to shareholders from:
Net investment income:
Institutional Shares ................... (4,137,153) (4,512,721) (2,473,762) (2,965,619) (972,993) (938,462)
Service Shares ......................... (1,370,431) (1,433,794) (1,969,191) (1,824,167) (4,320,625) (3,553,382)
Investor A Shares ...................... (96,476) (61,193) (256,444) (196,504) (2,073,865) (1,882,795)
Investor B Shares ...................... (14,738) (3,156) (100,050) (14,252) (283,194) (101,081)
Investor C Shares ...................... (111) -- (53,663) (1,308) (622) --
------------ ------------ ------------ ------------ ------------ ------------
Total distribution from net
investment income .................... (5,618,909) (6,010,864) (4,853,110) (5,001,850) (7,651,299) (6,475,720)
------------ ------------ ------------ ------------ ------------ ------------
Net realized gains:
Institutional Shares ................... (24,271,695) (8,002,431) (6,172,085) (13,669,694) (1,274,430) (242,642)
Service Shares ......................... (10,159,155) (2,803,130) (5,024,090) (8,539,902) (4,988,172) (784,225)
Investor A Shares ...................... (598,242) (135,347) (620,161) (935,892) (2,456,117) (626,288)
Investor B Shares ...................... (140,029) -- (141,880) -- (283,940) (32,915)
Investor C Shares ...................... (383) -- (20,100) -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Total distributions from net
realized gains ....................... (35,169,504) (10,940,908) (11,978,316) (23,145,488) (9,002,659) (1,686,070)
------------ ------------ ------------ ------------ ------------ ------------
Total distributions to shareholders .... (40,788,413) (16,951,772) (16,831,426) (28,147,338) (16,653,958) (8,161,790)
------------ ------------ ------------ ------------ ------------ ------------
Capital share transactions ................. 65,514,355 22,892,723 109,931,345 58,712,108 14,011,868 48,301,845
------------ ------------ ------------ ------------ ------------ ------------
Total increase in net assets ........... 196,090,518 69,358,742 205,734,048 68,774,213 67,730,894 69,711,349
Net assets:
Beginning of period .................... 395,685,211 326,326,469 246,244,003 177,469,790 250,919,975 181,208,626
------------ ------------ ------------ ------------ ------------ ------------
End of period ..........................$591,775,729 $395,685,211 $451,978,051 $246,244,003 $318,650,869 $250,919,975
============ ============ ============ ============ ============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
46
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
COMPASS CAPITAL FUNDS [LOGO OMITTED]
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<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>
- ----------------------
LARGE CAP VALUE EQUITY
- ----------------------
INSTITUTIONAL CLASS
9/30/97 $15.35 $ 0.31 $ 4.69 $(0.30) $ -- $(2.52) $17.53 37.66%
9/30/96 13.92 0.35 2.41 (0.36) -- (0.97) 15.35 21.01
9/30/95 11.62 0.34 2.54 (0.33) -- (0.25) 13.92 25.73
9/30/94 11.68 0.27 0.16 (0.27) -- (0.22) 11.62 3.76
9/30/93 9.78 0.22 1.91 (0.23) -- -- 11.68 21.92
SERVICE CLASS
9/30/97 $15.35 $ 0.24 $ 4.70 $(0.25) $ -- $(2.52) $17.52 37.22%
9/30/96 13.92 0.32 2.40 (0.32) -- (0.97) 15.35 20.68
9/30/95 11.62 0.30 2.55 (0.30) -- (0.25) 13.92 25.40
9/30/94 11.68 0.25 0.16 (0.25) -- (0.22) 11.62 3.51
7/29/93 1 through 9/30/93 11.21 0.04 0.48 (0.05) -- -- 11.68 4.64
INVESTOR A CLASS
9/30/97 $15.35 $ 0.23 $ 4.69 $(0.23) $ -- $(2.52) $17.52 37.01%3
9/30/96 13.92 0.28 2.41 (0.29) -- (0.97) 15.35 20.52 3
9/30/95 11.62 0.27 2.56 (0.28) -- (0.25) 13.92 25.22 3
9/30/94 11.69 0.23 0.15 (0.23) -- (0.22) 11.62 3.32 3
9/30/93 9.78 0.22 1.91 (0.22) -- -- 11.69 21.95 3
INVESTOR B CLASS
9/30/97 $15.32 $ 0.14 $ 4.64 $(0.14) $ -- $(2.52) $17.44 36.40%4
1/18/96 1 through 9/30/96 13.56 0.13 1.80 (0.17) -- -- 15.32 14.26 4
INVESTOR C CLASS
9/30/97 $15.32 $ 0.15 $ 4.63 $(0.14) $ -- $(2.52) $17.44 35.99%4
8/16/96 1 through 9/30/96 14.91 0.02 0.45 (0.06) -- -- 15.32 3.16 4
- -----------------------
LARGE CAP GROWTH EQUITY
- -----------------------
INSTITUTIONAL CLASS
9/30/97 $14.96 $ 0.09 $ 4.72 $(0.11) $ -- $(0.74) $18.92 33.69%
9/30/96 13.03 0.08 2.29 (0.06) -- (0.38) 14.96 18.67
9/30/95 10.19 0.13 2.88 (0.17) -- -- 13.03 29.88
9/30/94 11.58 0.06 (1.34) (0.01) -- (0.10) 10.19 (11.14)
9/30/93 9.92 0.06 2.07 (0.07) (0.01) (0.39) 11.58 22.18
SERVICE CLASS
9/30/97 $14.95 $ 0.04 $ 4.72 $(0.04) $ -- $(0.74) $18.93 33.38%
9/30/96 13.02 0.05 2.28 (0.02) -- (0.38) 14.95 18.34
9/30/95 10.18 0.10 2.87 (0.13) -- -- 13.02 29.43
9/30/94 11.57 0.03 (1.32) -- -- (0.10) 10.18 (11.20)
7/29/93 1 through 9/30/93 10.54 -- 1.03 -- -- -- 11.57 9.77
INVESTOR A CLASS
9/30/97 $14.94 $ 0.01 $ 4.72 $(0.02) $ -- $(0.74) $18.91 33.18%3
9/30/96 13.01 0.02 2.29 -- -- 0.38 14.94 18.18 3
9/30/95 10.16 0.08 2.87 (0.10) -- -- 13.01 29.26 3
9/30/94 11.57 0.02 (1.33) -- -- (0.10) 10.16 (11.38)3
9/30/93 9.92 0.02 2.10 (0.07) (0.01) (0.39) 11.57 22.08 3
INVESTOR B CLASS
9/30/97 $14.86 $(0.07) $ 4.64 $ -- $ -- $(0.74) $18.69 32.18%4
1/24/96 1 through 9/30/96 13.08 (0.02) 1.80 -- -- -- 14.86 13.61 4
INVESTOR C CLASS
1/24/97 1 through 9/30/97 $15.23 $(0.03) $ 3.49 $ -- $ -- $ -- $18.69 22.78%
- --------------------
MID-CAP VALUE EQUITY
- --------------------
INSTITUTIONAL CLASS
12/27/96 1 through 9/30/97 $10.00 $ 0.10 $ 2.80 $(0.10) $ -- $ -- $12.80 29.11%
SERVICE CLASS
12/27/96 1 through 9/30/97 $10.00 $ 0.07 $ 2.80 $(0.08) $ -- $ -- $12.79 28.81%
INVESTOR A CLASS
12/27/96 1 through 9/30/97 $10.00 $ 0.07 $ 2.78 $(0.08) $ -- $ -- $12.77 28.51%3
INVESTOR B CLASS
12/27/96 1 through 9/30/97 $10.00 $ 0.03 $ 2.79 $(0.04) $ -- $ -- $12.78 28.23%4
INVESTOR C CLASS
12/27/96 1 through 9/30/97 $10.00 $ 0.02 $ 2.80 $(0.04) $ -- $ -- $12.78 28.23%4
- ---------------------
MID-CAP GROWTH EQUITY
- ---------------------
INSTITUTIONAL CLASS
12/27/96 1 through 9/30/97 $10.00 $(0.01) $ 2.21 $ -- $ -- $ -- $12.20 22.00%
SERVICE CLASS
12/27/96 1 through 9/30/97 $10.00 $(0.03) $ 2.20 $ -- $ -- $ -- $12.17 21.70%
</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 RATE 5
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------
LARGE CAP VALUE EQUITY
- ----------------------
INSTITUTIONAL CLASS
9/30/97 $743,405 0.78% 0.85% 1.94% 1.87% 37% $0.0580
9/30/96 731,024 0.75 0.84 2.40 2.32 60 0.0556
9/30/95 508,273 0.67 0.81 2.68 2.53 12 --
9/30/94 577,996 0.65 0.81 2.44 2.28 11 --
9/30/93 432,776 0.80 0.83 2.07 2.04 11 --
SERVICE CLASS
9/30/97 $595,189 1.09% 1.16% 1.62% 1.55% 37% $0.0580
9/30/96 457,283 1.05 1.14 2.13 2.04 60 0.0556
9/30/95 170,832 0.95 1.09 2.40 2.26 12 --
9/30/94 105,035 0.90 1.06 2.24 2.08 11 --
7/29/93 1 through 9/30/93 23,137 0.91 2 0.94 2 2.44 2 2.41 2 11 --
INVESTOR A CLASS
9/30/97 $ 47,131 1.26% 1.33% 1.44% 1.37% 37% $0.0580
9/30/96 26,190 1.22 1.31 1.93 1.84 60 0.0556
9/30/95 16,910 1.11 1.25 2.24 2.10 12 --
9/30/94 10,412 1.05 1.21 2.08 1.92 11 --
9/30/93 4,865 0.92 0.95 1.96 1.93 11 --
INVESTOR B CLASS
9/30/97 $ 19,773 2.00% 2.07% 0.64% 0.57% 37% $0.0580
1/18/96 1 through 9/30/96 3,152 1.92 2.00 2 1.34 2 1.25 2 60 0.0556
INVESTOR C CLASS
9/30/97 $ 1,428 2.01% 2.08% 0.61% 0.54% 37% $0.0580
8/16/96 1 through 9/30/96 205 1.80 2 1.88 2 1.29 2 1.20 2 60 0.0556
- -----------------------
LARGE CAP GROWTH EQUITY
- -----------------------
INSTITUTIONAL CLASS
9/30/97 $482,851 0.79% 0.86% 0.54% 0.47% 81% $0.0594
9/30/96 481,171 0.75 0.86 0.63 0.51 58 0.0598
9/30/95 211,543 0.67 0.85 1.20 1.01 55 --
9/30/94 97,834 0.65 0.89 0.62 0.38 212 --
9/30/93 100,049 0.81 0.87 0.50 0.44 175 --
SERVICE CLASS
9/30/97 $262,409 1.10% 1.17% 0.24% 0.17% 81% $0.0594
9/30/96 191,023 1.05 1.17 0.31 0.20 58 0.0598
9/30/95 76,769 0.95 1.13 0.91 0.73 55 --
9/30/94 36,752 0.90 1.14 0.51 0.26 212 --
7/29/93 1 through 9/30/93 8,606 0.89 2 0.95 2 (0.03)2 (0.09)2 175 --
INVESTOR A CLASS
9/30/97 $ 25,575 1.27% 1.34% 0.07% 0% 81% $0.0594
9/30/96 16,579 1.22 1.34 0.15 0.04 58 0.0598
9/30/95 10,034 1.11 1.29 0.76 0.58 55 --
9/30/94 5,049 1.05 1.29 0.29 0.05 212 --
9/30/93 2,362 0.91 0.97 0.18 0.12 175 --
INVESTOR B CLASS
9/30/97 $ 7,919 2.01% 2.08% (0.66)% (0.73)% 81% $0.0594
1/24/96 1 through 9/30/96 2,364 1.93 2 2.05 2 (0.47)2 (0.58)2 58 0.0598
INVESTOR C CLASS
1/24/97 1 through 9/30/97 $ 207 2.02%2 2.09%2 (0.66)%2 (0.73)%2 81% $0.0594
- --------------------
MID-CAP VALUE EQUITY
- --------------------
INSTITUTIONAL CLASS
12/27/96 1 through 9/30/97 $106,886 1.15%2 1.19%2 1.33%2 1.29%2 36% $0.0528
SERVICE CLASS
12/27/96 1 through 9/30/97 $ 22,757 1.44%2 1.48%2 0.98%2 0.94%2 36% $0.0528
INVESTOR A CLASS
12/27/96 1 through 9/30/97 $ 2,315 1.61%2 1.64%2 0.77%2 0.73%2 36% $0.0528
INVESTOR B CLASS
12/27/96 1 through 9/30/97 $ 2,911 2.32%2 2.36%2 0.04%2 0%2 36% $0.0528
INVESTOR C CLASS
12/27/96 1 through 9/30/97 $ 21 2.33%2 2.37%2 0.13%2 0.09%2 36% $0.0528
- ---------------------
MID-CAP GROWTH EQUITY
- ---------------------
INSTITUTIONAL CLASS
12/27/96 1 through 9/30/97 $107,709 1.13%2 1.17%2 (0.16)%2 (0.20)%2 64% $0.0576
SERVICE CLASS
12/27/96 1 through 9/30/97 $ 22,984 1.44%2 1.48%2 (0.54)%2 (0.58)%2 64% $0.0576
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
48-49
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
COMPASS CAPITAL FUNDS [LOGO OMITTED]
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<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
12/27/96 1 through 9/30/97 $10.00 $(0.03) $2.17 $ -- $ -- $ -- $12.14 21.40%3
INVESTOR B CLASS
12/27/96 1 through 9/30/97 $10.00 $(0.05) $2.16 $ -- $ -- $ -- $12.11 21.10%4
INVESTOR C CLASS
12/27/96 1 through 9/30/97 $10.00 $(0.07) $2.18 $ -- $ -- $ -- $12.11 21.10%4
- ----------------------
SMALL CAP VALUE EQUITY
- ----------------------
INSTITUTIONAL CLASS
9/30/97 $15.98 $ 0.17 $6.39 $(0.17) $ -- $(2.17) $20.20 47.36%
9/30/96 15.16 0.10 1.70 (0.11) -- (0.87) 15.98 12.64
9/30/95 13.62 0.06 2.17 (0.08) -- (0.61) 15.16 17.43
9/30/94 13.08 0.04 0.77 (0.02) -- (0.25) 13.62 6.28
9/30/93 10.14 0.04 3.02 (0.04) -- (0.08) 13.08 30.36
SERVICE CLASS
9/30/97 $15.98 $ 0.13 $6.39 $(0.13) $ -- $(2.17) $20.20 46.95%
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
9/30/97 $15.97 $ 0.10 $6.40 $(0.10) $ -- $(2.17) $20.20 46.85%3
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
INVESTOR B CLASS
9/30/97 $15.80 $ 0.08 $6.19 $(0.04) $ -- $(2.17) $19.86 45.67%4
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
INVESTOR C CLASS
10/1/96 1 through 9/30/97 $15.76 $ 0.02 $6.29 $(0.04) $ -- $(2.17) $19.86 46.04%4
- -----------------------
SMALL CAP GROWTH EQUITY
- -----------------------
INSTITUTIONAL CLASS
9/30/97 $21.94 $ 0.02 $3.18 $(0.03) $ -- $(1.49) $23.62 15.89%
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
9/30/97 $21.80 $(0.03) $3.15 $ -- $ -- $(1.49) $23.43 15.54%
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
9/30/97 $21.69 $(0.04) $3.09 $ -- $ -- $(1.49) $23.25 15.28%3
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
9/30/97 $21.53 $(0.07) $2.92 $ -- $ -- $(1.49) $22.89 14.47%4
1/18/96 1 through 9/30/96 14.87 (0.07) 6.73 -- -- -- 21.53 38.27 4
INVESTOR C CLASS
9/30/97 $21.53 $(0.11) $2.96 $ -- $ -- $(1.49) $22.89 14.47%4
9/6/96 1 through 9/30/96 19.66 (0.01) 1.88 -- -- -- 21.53 9.51 4
- --------------------
INTERNATIONAL EQUITY
- --------------------
INSTITUTIONAL CLASS
9/30/97 $13.43 $ 0.14 $1.77 $(0.28) $ -- $(0.41) $14.65 14.88%
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
</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
12/27/96 1 through 9/30/97 $ 2,650 1.59%2 1.63%2 (0.73)%2 (0.77)%2 64% $0.0576
INVESTOR B CLASS
12/27/96 1 through 9/30/97 $ 2,691 2.32%2 2.36%2 (1.50)%2 (1.54)%2 64% $0.0576
INVESTOR C CLASS
12/27/96 1 through 9/30/97 $ 85 2.35%2 2.39%2 (1.49)%2 (1.53)%2 64% $0.0576
- ----------------------
SMALL CAP VALUE EQUITY
- ----------------------
INSTITUTIONAL CLASS
9/30/97 $309,899 0.87% 0.88% 1.09% 1.08% 66% $0.0504
9/30/96 214,828 0.85 0.86 0.68 0.67 50 0.0580
9/30/95 168,334 0.75 0.84 0.44 0.35 31 --
9/30/94 168,360 0.73 0.85 0.28 0.16 18 --
9/30/93 128,805 0.83 0.87 0.31 0.27 41 --
SERVICE CLASS
9/30/97 $122,431 1.17% 1.18% 0.79% 0.78% 66% $0.0504
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
9/30/97 $ 34,031 1.34% 1.35% 0.63% 0.62% 66% $0.0504
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 0.0 (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 --
INVESTOR B CLASS
9/30/97 $ 11,001 2.07% 2.08% (0.15)% (0.16)% 66% $0.0504
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 --
INVESTOR C CLASS
10/1/96 1 through 9/30/97 $ 2,109 2.04%2 2.05%2 (0.18)%2 (0.19)%2 66% $0.0504
- -----------------------
SMALL CAP GROWTH EQUITY
- -----------------------
INSTITUTIONAL CLASS
9/30/97 $495,904 0.87% 0.87% 0.01% 0.01% 82% $0.0572
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
9/30/97 $225,089 1.17% 1.17% (0.29)% (0.29)% 82% $0.0572
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
9/30/97 $ 57,323 1.34% 1.34% (0.46)% (0.46)% 82% $0.0572
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
9/30/97 $ 40,270 2.07% 2.07% (1.23)% (1.23)% 82% $0.0572
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
9/30/97 $ 14,106 2.07% 2.07% (1.25)% (1.25)% 82% $0.0572
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
9/30/97 $433,135 1.06% 1.16% 0.94% 0.84% 62% $0.0166
9/30/96 388,588 1.36 1.46 0.65 0.54 70 0.0158
9/30/95 312,588 1.53 1.63 0.50 0.40 105 --
9/30/94 284,905 2.27 2.37 (0.21) (0.32) 37 --
9/30/93 131,052 2.28 2.38 (0.47) (0.58) 31 --
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
50-51
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
COMPASS CAPITAL FUNDS [LOGO OMITTED]
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<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>
SERVICE CLASS
9/30/97 $13.37 $ 0.10 $ 1.76 $(0.24) $ -- $(0.41) $14.58 14.52%
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
INVESTOR A CLASS
9/30/97 $13.36 $ 0.07 $ 1.77 $(0.22) $ -- $(0.41) $14.57 14.36%3
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
INVESTOR B CLASS
9/30/97 $13.23 $ 0.07 $ 1.66 $(0.17) $ -- $(0.41) $14.38 13.63%4
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
INVESTOR C CLASS
12/5/96 1 through 9/30/97 $13.21 $ 0.15 $ 1.19 $(0.17) $ -- $ -- $14.38 10.33%4
- ------------------------------
INTERNATIONAL SMALL CAP EQUITY
- ------------------------------
INSTITUTIONAL CLASS
9/26/97 1 through 9/30/97 $10.00 $ -- $(0.06) $ -- $ -- $ -- $ 9.94 (0.30)%
SERVICE CLASS
9/26/97 1 through 9/30/97 $10.00 $ -- $(0.06) $ -- $ -- $ -- $ 9.94 (0.30)%
INVESTOR A CLASS
9/26/97 1 through 9/30/97 $10.00 $ -- $(0.06) $ -- $ -- $ -- $ 9.94 (0.30)%3
INVESTOR B CLASS
9/26/97 1 through 9/30/97 $10.00 $ -- $(0.06) $ -- $ -- $ -- $ 9.94 (0.30)%4
INVESTOR C CLASS
9/26/97 1 through 9/30/97 $10.00 $ -- $(0.06) $ -- $ -- $ -- $ 9.94 (0.30)%4
- -----------------------------
INTERNATIONAL EMERGING EQUITY
- -----------------------------
INSTITUTIONAL CLASS
9/30/97 $ 8.76 $ 0.03 $ 0.95 $(0.05) $ -- $ -- $ 9.69 11.16%
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 through 9/30/94 10.00 0.03 0.53 -- -- -- 10.56 5.60
SERVICE CLASS
9/30/97 $ 8.72 $ 0.01 $ 0.93 $(0.03) $ -- $ -- $ 9.63 10.74%
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 through 9/30/94 10.00 0.02 0.53 -- -- -- 10.55 5.50
INVESTOR A CLASS
9/30/97 $ 8.71 $(0.06) $ 0.98 $(0.03) $ -- $ -- $ 9.60 10.51%3
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
9/30/97 $ 8.69 $(0.04) $ 0.89 $ -- $ -- -- $ 9.54 9.78%4
7/2/96 1 through 9/30/96 8.85 -- (0.16) -- -- -- 8.69 (1.81)4
INVESTOR C CLASS
3/21/97 1 through 9/30/97 $ 9.70 $(0.01) $(0.15) $ -- $ -- $ -- $ 9.54 (3.08)%4
- -------------
SELECT EQUITY
- -------------
INSTITUTIONAL CLASS
9/30/97 $13.57 $ 0.19 $ 5.15 $(0.19) $ -- $(1.21) $17.51 42.50%
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
9/30/97 $13.56 $ 0.11 $ 5.18 $(0.14) $ -- $(1.21) $17.50 42.12%
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)
</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
9/30/97 $199,939 1.36% 1.46% 0.42% 0.32% 62% $0.0166
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 --
INVESTOR A CLASS
9/30/97 $ 22,335 1.53% 1.63% 0.50% 0.40% 62% $0.0166
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 --
INVESTOR B CLASS
9/30/97 $ 5,850 2.27% 2.37% (0.22)% (0.32)% 62% $0.0166
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 --
INVESTOR C CLASS
12/5/96 1 through 9/30/97 $ 155 2.28%2 2.38%2 (0.48)%2 (0.58)%2 62% $0.0166
- ------------------------------
INTERNATIONAL SMALL CAP EQUITY
- ------------------------------
INSTITUTIONAL CLASS
9/26/97 1 through 9/30/97 $ 15,415 1.33%2 1.55%2 1.42%2 1.19%2 0% $0.0268
SERVICE CLASS
9/26/97 1 through 9/30/97 $ 10 1.63%2 1.86%2 1.42%2 1.19%2 0% $0.0268
INVESTOR A CLASS
9/26/97 1 through 9/30/97 $ 326 1.30%2 1.52%2 1.44%2 1.22%2 0% $0.0268
INVESTOR B CLASS
9/26/97 1 through 9/30/97 $ 711 1.30%2 1.52%2 1.58%2 1.35%2 0% $0.0268
INVESTOR C CLASS
9/26/97 1 through 9/30/97 $ 182 1.30%2 1.52%2 1.44%2 1.22%2 0% $0.0268
- -----------------------------
INTERNATIONAL EMERGING EQUITY
- -----------------------------
INSTITUTIONAL CLASS
9/30/97 $116,107 1.78% 1.87% 0.37% 0.27% 33% $0.0016
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 through 9/30/94 2,511 1.75 2 2.73 2 1.19 2 0.21 2 4 --
SERVICE CLASS
9/30/97 $ 66,064 2.08% 2.17% 0.09% (0.01)% 33% $0.0016
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 through 9/30/94 3,505 2.00 2 2.98 2 1.10 2 0.12 2 4 --
INVESTOR A CLASS
9/30/97 $ 4,454 2.25% 2.34% (0.08)% (0.18)% 33% $0.0016
9/30/96 2,996 2.26 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
9/30/97 $ 1,836 2.98% 3.07% (0.80)% (0.90)% 33% $0.0016
7/2/96 1 through 9/30/96 216 2.902 3.00 2 0.17 2 0.07 2 44 0.0018
INVESTOR C CLASS
3/21/97 1 through 9/30/97 $ 88 2.58%2 2.67%2 (0.27)%2 (0.37)%2 33% $0.0016
- -------------
SELECT EQUITY
- -------------
INSTITUTIONAL CLASS
9/30/97 $379,687 0.79% 0.86% 1.24% 1.17% 29% $0.0547
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
9/30/97 $174,418 1.09% 1.16% 0.93% 0.86% 29% $0.0547
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 0.902 1.12 2 1.92 2 1.70 2 2 --
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
52-53
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
COMPASS CAPITAL FUNDS [LOGO OMITTED]
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<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
9/30/97 $13.56 $0.11 $ 5.16 $(0.12) $ -- $(1.21) $17.50 41.95%3
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
9/30/97 $13.54 $0.05 $ 5.07 $(0.05) $ -- $(1.21) $17.40 40.70%4
3/27/96 1 through 9/30/96 12.83 0.04 0.73 (0.06) -- -- 13.54 6.58 4
INVESTOR C CLASS
9/30/97 $13.54 $0.04 $ 5.08 $(0.05) $ -- $(1.21) $17.40 40.70%4
9/27/96 1 through 9/30/96 13.52 -- 0.02 -- -- -- 13.54 0.15 4
- ------------
INDEX EQUITY
- ------------
INSTITUTIONAL CLASS
9/30/97 $13.97 $0.04 $ 5.02 $(0.03) $ -- $(0.68) $18.32 39.78%
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
SERVICE CLASS
9/30/97 $13.97 $0.23 $ 5.01 $(0.21) $ -- $(0.68) $18.32 39.58%
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
9/30/97 $13.96 $0.21 $ 5.02 $(0.19) $ -- $(0.68) $18.32 39.49%3
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
INVESTOR B CLASS
9/30/97 $13.93 $0.13 $ 4.94 $(0.10) $ -- $(0.68) $18.22 38.31%4
2/7/96 1 through 9/30/96 13.20 0.08 0.77 (0.12) -- -- 13.93 6.50 4
INVESTOR C CLASS
9/30/97 $13.93 $0.13 $ 4.94 $(0.10) $ -- $(0.68) $18.22 38.31%4
8/14/96 1 through 9/30/96 13.47 0.02 0.50 (0.06) -- -- 13.93 3.90 4
- --------
BALANCED
- --------
INSTITUTIONAL CLASS
9/30/97 $15.10 $0.52 $ 3.62 $(0.50) $ -- $(0.52) $18.22 28.43%
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
SERVICE CLASS
9/30/97 $15.09 $0.45 $3.64 $(0.45) $ -- $(0.52) $18.21 28.07%
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
9/30/97 $15.10 $0.39 $ 3.68 $(0.43) $ -- $(0.52) $18.22 27.93%3
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
INVESTOR B CLASS
9/30/97 $15.04 $0.31 $ 3.61 $(0.31) $ -- $(0.52) $18.13 26.95%4
9/30/96 13.69 0.31 1.47 (0.30) -- (0.13) 15.04 13.14 3
10/3/94 1 through 9/30/95 11.95 0.33 1.93 (0.38) -- (0.14) 13.69 19.38 3
INVESTOR C CLASS
12/20/96 1 through 9/30/97 $15.62 $0.28 $ 2.54 $(0.31) $ -- $ -- $18.13 23.95%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
9/30/97 $ 18,949 1.27% 1.34% 0.75% 0.68% 29% $0.0547
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
9/30/97 $ 18,345 2.01% 2.08% (0.02)% (0.09)% 29% $0.0547
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
9/30/97 $ 377 2.01% 2.08% (0.12)% (0.19)% 29% $0.0547
9/27/96 1 through 9/30/96 50 0.0 2 0.0 2 0.0 2 0.0 2 55 0.0487
- ------------
INDEX EQUITY
- ------------
INSTITUTIONAL CLASS
9/30/97 $166,786 0.18% 0.38%(DOUBLE DAGGER) 1.71% 1.51% --* $ --*
9/30/96 127,076 0.18 0.50(DOUBLE DAGGER) 2.29 1.98 0.18 6* 0.0319 6*
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 --
SERVICE CLASS
9/30/97 $193,319 0.48% 0.68%(DOUBLE DAGGER) 1.41% 1.21% --* $ --*
9/30/96 103,080 0.48 0.80(DOUBLE DAGGER) 1.98 1.67 0.18 6* 0.0319 6*
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
9/30/97 $ 33,934 0.65% 0.85%(DOUBLE DAGGER) 1.23% 1.03% --* $ --*
9/30/96 12,752 0.65 0.97(DOUBLE DAGGER) 1.81 1.49 18 6* 0.0319 6*
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 --
INVESTOR B CLASS
9/30/97 $ 38,271 1.38% 1.58%(DOUBLE DAGGER) 0.45% 0.25% --* $ --*
2/7/96 1 through 9/30/96 2,904 1.38 2 1.60 2(DOUBLE DAGGER) 0.93 2 0.71 1 18 6* 0.0319 6*
INVESTOR C CLASS
9/30/97 $ 19,668 1.38% 1.58%(DOUBLE DAGGER) 0.45% 0.25% --* $ --*
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* 0.0319 6*
- --------
BALANCED
- --------
INSTITUTIONAL CLASS
9/30/97 $ 31,674 0.84% 0.89% 2.98% 2.92% 173% $0.0364
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 --
SERVICE CLASS
9/30/97 $176,232 1.14% 1.20% 2.68% 2.62% 173% $0.0364
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
9/30/97 $ 87,202 1.24% 1.30% 2.58% 2.52% 173% $0.0364
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 --
INVESTOR B CLASS
9/30/97 $ 23,455 2.05% 2.11% 1.78% 1.72% 173% $0.0364
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 --
INVESTOR C CLASS
12/20/96 1 through 9/30/97 $ 87 2.03%2 2.09%2 1.90%2 1.84%2 173% $0.0364
<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 0.077% and 0.12% for the years ended
September 30, 1997 and 1996, respectively.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
54-55
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS
Compass Capital Funds(SERVICE MARK) ("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 31 publicly-offered portfolios, 12 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 six 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>
Large Cap Value Equity None None 0.30% 0.30% 0.50% 0.40% 1.15% 1.15% 1.15% 1.15%
- ------------------------------------------------------------------------------------------------------------------------------------
Large Cap Growth Equity None None 0.30% 0.30% 0.50% 0.40% 1.15% 1.15% 1.15% 1.15%
- ------------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Value Equity None None 0.30% 0.30% 0.50% 0.40% 1.15% 1.15% 1.15% 1.15%
- ------------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Growth Equity None None 0.30% 0.30% 0.50% 0.40% 1.15% 1.15% 1.15% 1.15%
- ------------------------------------------------------------------------------------------------------------------------------------
Small Cap Value Equity None None 0.30% 0.30% 0.50% 0.40% 1.15% 1.15% 1.15% 1.15%
- ------------------------------------------------------------------------------------------------------------------------------------
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% 1.15%
- ------------------------------------------------------------------------------------------------------------------------------------
International Small Cap
Equity None None 0.30% 0.30% 0.50% 0.40% 1.15% 1.15% 1.15% 1.15%
- ------------------------------------------------------------------------------------------------------------------------------------
International Emerging
Markets None None 0.30% 0.30% 0.50% 0.40% 1.15% 1.15% 1.15% 1.15%
- ------------------------------------------------------------------------------------------------------------------------------------
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% 1.15%
- ------------------------------------------------------------------------------------------------------------------------------------
<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, 1997.
</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.
The Index Equity Portfolio invests solely in The U.S. Large Company Series
of The DFA Investment Trust Company. The financial statements of which are
included elsewhere in this report and should be read in conjunction with the
financial statements of Index Equity Portfolio.
(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 these
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. Portfolio securities which are primarily
traded on foreign securities exchanges are normally valued at the preceding
closing values of such securities on their respective exchanges. 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 approxi-
56
<PAGE>
COMPASS CAPITAL FUNDS [LOGO OMITTED]
mates 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.
The Index Equity Portfolio's investment reflects its proportionate interest
in the net assets of The U.S. Large Company Series of The DFA Investment Trust
Company.
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.
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.
FUTURES TRANSACTIONS -- The Fund invests in financial futures contracts
solely for the purpose of hedging its existing portfolio securities, or
securities that the Fund intends to purchase, against fluctuations in fair value
caused by changes in prevailing market interest rates. 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, 1997,
the Portfolios 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.
57
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
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, 1997, is as
follows:
<TABLE>
<CAPTION>
MARKET VALUE OF SECURITIES VALUE OF COLLATERAL
ON LOAN RECEIVED
-------------------------- -------------------
<S> <C> <C>
Large Cap Value Equity Portfolio ........ $127,067,888 $131,635,312
Large Cap GrowthEquity Portfolio ........ 76,408,392 79,035,243
Mid-Cap Growth .......................... 20,634,418 20,893,310
Mid-Cap Value ........................... 12,848,031 13,259,500
Small Cap Value Equity Portfolio ........ 28,219,451 29,453,910
Small Cap Growth Equity Portfolio ....... 80,862,394 84,855,900
International Emerging Markets
Portfolio ............................. 5,940,166 6,135,200
Select Equity Portfolio ................. 23,715,702 24,609,835
Balanced Portfolio ...................... 18,877,142 19,512,275
</TABLE>
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.
The Index Equity Portfolio accrues its respective share of income net of
expenses daily on their investment in The U.S. Large Company Series of The DFA
Investment Trust Company, which is treated as a partnership for federal income
tax purposes. All of the net investment income and realized and unrealized gains
and losses from the security transactions of the Master Fund is allocated pro
rata at the time of such determination.
(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 Large Cap
Growth Equity, formerly known as Growth Equity, Mid-Cap Growth Equity and Small
Cap Growth Equity Portfolios. Provident Capital Management, Inc. ("PCM") serves
as the sub-adviser for the Large Cap Value Equity, formerly known as Value
Equity, Mid-Cap Value Equity, Small Cap Value Equity and Select Equity
Portfolios. CastleInternational Asset Management Limited
("CastleInternational"), an affiliate of PAMG, serves as the sub-adviser for the
International Equity, International Small Cap 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, CastleInternational, 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:
Large Cap Value Equity, Large Cap Growth Equity, Small Cap Value Equity,
Small Cap Growth Equity, Select 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.
Mid-Cap Value Equity and Mid-Cap Growth Equity-- .80% of the first $1
billion, .70% of the next $1 billion, .675 of the next $1 billion and .625% of
net assets in excess of $3 billion.
58
<PAGE>
COMPASS CAPITAL FUNDS [LOGO OMITTED]
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 Small Cap Equity-- 1.00% of its first $1 billion, .95% of the
next $1 billion, .90% of the next $1 billion and .85% 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.
PNC Institutional Management 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 period ended September 30, 1997, advisory fees and
waivers for each Portfolio were as follows:
GROSS NET
ADVISORY FEE WAIVER ADVISORY FEE
------------- -------- ------------
Large Cap Value Equity Portfolio ......... $6,967,163 $711,218 $6,255,945
Large Cap Growth Equity Portfolio ........ 3,951,518 232,456 3,719,062
Mid-Cap Value Equity Portfolio ........... 503,466 4,043 499,423
Mid-Cap Growth Equity Portfolio .......... 503,129 4,087 499,042
Small Cap Value Equity Portfolio ......... 2,044,063 6,698 2,037,365
Small Cap Growth Equity Portfolio ........ 3,202,592 33,632 3,168,960
International Equity Portfolio ........... 4,656,917 556,518 4,100,399
International Small Cap Equity ........... 1,817 364 1,453
International Emerging Markets
Portfolio ............................. 1,938,470 143,927 1,794,543
Select Equity Portfolio .................. 2,716,828 153,167 2,563,661
Balanced Portfolio ....................... 1,579,155 91,884 1,487,271
PAMG pays PEAC, PCM, CastleInternational 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: .20% of the first $500 million, .18% of the next $500
million, .16% of the next $1 billion and .15% 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 period ended September 30,
1997, administration fees and waivers for each Portfolio were as follows:
GROSS NET
ADMINISTRATION ADMINISTRATION
FEE WAIVER FEE
-------------- -------- --------------
Large Cap Value Equity Portfolio .... $2,757,522 $194,954 $2,562,568
Large Cap Growth Equity Portfolio ... 1,608,766 246,244 1,362,522
Mid-Cap Value Equity Portfolio ...... 144,881 19,549 125,332
Mid-Cap Growth Equity Portfolio ..... 144,786 18,683 126,097
Small Cap Value Equity Portfolio .... 854,790 29,880 824,910
Small Cap Growth Equity Portfolio ... 1,331,685 -- 1,331,685
International Equity Portfolio ...... 1,403,937 83,597 1,320,340
International Small Cap Equity ...... 418 43 375
International Emerging Markets
Portfolio ........................ 426,814 597 426,217
Select Equity Portfolio ............. 1,132,159 188,722 943,437
Index Equity Portfolio .............. 786,547 672,437 114,110
Balanced Portfolio .................. 660,374 73,234 587,140
In addition, PNC Bank serves as custodian for each of the Fund's
Portfolios. PFPC serves as transfer and dividend disbursing agent.
59
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Under the Fund's Distribution and Service Plan (the "Plan"), Investor
Shares of the Portfolios bear the expense of payments ("distribution fees") made
to CDI, as the Fund's distributor (the "Distributor"), or affiliats of PNC Bank,
for distribution and sales support services. Under the Plan, the Fund has
entered into service arrangements with Service Organizations (including PNC Bank
and its affiliates) with respect to each class of Investor Shares and Service
Shares. Refer to the fee table in the "Notes to Financial Statements" for fee
information.
(C) PURCHASES AND SALES OF SECURITIES
For the period ended September 30, 1997, purchases and sales of securities,
other than short-term and government securities, were as follows:
PURCHASES SALES
------------ ------------
Large Cap Value Equity Portfolio .............. $462,334,587 $604,284,329
Large Cap Growth Equity Portfolio ............. 831,277,132 556,695,903
Mid-Cap Value Equity Portfolio ................ 128,583,300 25,573,091
Mid-Cap Growth Equity Portfolio ............... 149,806,392 40,174,789
Small Cap Value Equity Portfolio .............. 220,140,682 208,182,203
Small Cap Growth Equity Portfolio ............. 663,190,181 420,629,658
International Equity Portfolio ................ 405,406,241 366,547,376
International Small Cap Equity ................ 12,866,894 --
International Emerging Markets Portfolio ...... 113,451,576 44,419,775
Select Equity Portfolio ....................... 175,290,376 137,368,505
Balanced Portfolio ............................ 244,616,140 231,570,330
For the period ended September 30, 1997, purchases and sales of government
securities were as follows:
PURCHASES SALES
------------ ------------
Large Cap Growth Equity Portfolio ............. $ 3,022,467 $ 585,447
Mid-Cap Growth Equity Portfolio ............... 1,807,566 --
Small Cap Growth Equity Portfolio ............. 13,030,664 200,789
Select Equity Portfolio ....................... 13,285,769 --
Balanced Portfolio ............................ 221,659,670 215,565,336
60
<PAGE>
COMPASS CAPITAL FUNDS [LOGO OMITTED]
(D) CAPITAL SHARES
Transactions in capital shares for each period were as follows:
<TABLE>
<CAPTION>
LARGE CAP VALUE EQUITY PORTFOLIO
---------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
9/30/97 9/30/96
------------------------------ -------------------------------
SHARES VALUE SHARES VALUE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class .......................... 3,763,955 $ 58,797,910 19,259,923 $ 287,107,525
Service Class ................................ 6,182,931 94,977,627 29,347,389 425,296,069
Investor A Class ............................. 1,094,419 16,718,645 653,789 9,550,039
Investor B Class ............................. 996,134 15,393,514 206,871 3,063,719
Investor C Class ............................. 70,459 1,084,088 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 .......................... 8,626,314 119,927,815 3,343,988 46,434,785
Service Class ................................ 4,813,057 66,818,409 1,181,096 16,510,986
Investor A Class ............................. 352,293 4,926,795 115,817 1,605,978
Investor B Class ............................. 54,207 757,478 886 13,424
Investor C Class ............................. 120 1,899 53 811
Shares redeemed:
Institutional Class .......................... (17,592,420) (265,113,113) (11,497,933) (169,845,985)
Service Class ................................ (6,814,366) (105,724,113) (38,443,494) (561,055,997)
Investor A Class ............................. (463,144) (7,246,351) (277,767) (4,045,015)
Investor B Class ............................. (122,233) (1,969,444) (1,966) (28,635)
Investor C Class ............................. (2,097) (34,013) -- --
----------- ------------- ----------- -------------
Net increase (decrease) ........................... 959,629 $ (682,854) 29,341,679 $ 399,261,871
=========== ============= =========== =============
</TABLE>
61
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
LARGE CAP GROWTH EQUITY PORTFOLIO
---------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
9/30/97 9/30/96
------------------------------ -------------------------------
SHARES VALUE SHARES VALUE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class ........................... 4,100,138 $ 68,934,353 19,572,888 $ 273,185,487
Service Class ................................. 3,591,480 57,907,296 5,064,533 69,149,584
Investor A Class .............................. 491,684 8,038,672 498,827 6,895,508
Investor B Class .............................. 286,063 4,650,177 161,652 2,277,756
Investor C Class .............................. 11,078 195,240 -- --
Shares issued in merger:
Institutional Class ........................... -- -- -- --
Service Class ................................. -- -- 12,988,182 162,741,919
Investor A Class .............................. -- -- -- --
Investor B Class .............................. -- -- -- --
Investor C Class .............................. -- -- -- --
Shares issued in reinvestment of dividends:
Institutional Class ........................... 1,684,601 25,068,778 607,854 7,878,559
Service Class ................................. 530,577 7,853,001 166,800 2,161,020
Investor A Class .............................. 58,305 862,280 23,314 299,818
Investor B Class .............................. 9,660 141,908 -- --
Investor C Class .............................. -- -- -- --
Shares redeemed:
Institutional Class ...........................(12,426,251) (200,944,440) (4,258,888) (58,885,007)
Service Class ................................. (3,037,967) (49,500,077) (11,340,891) (161,564,728)
Investor A Class .............................. (307,549) (5,200,889) (183,519) (2,501,309)
Investor B Class .............................. (31,139) (511,220) (2,621) (36,765)
Investor C Class .............................. -- -- -- --
----------- ------------- ----------- -------------
Net increase (decrease) ............................ (5,039,320) $ (82,504,921) 23,298,131 $ 301,601,842
=========== ============= =========== =============
</TABLE>
62
<PAGE>
COMPASS CAPITAL FUNDS [LOGO OMITTED]
<TABLE>
<CAPTION>
MID-CAP VALUE EQUITY PORTFOLIO MID-CAP GROWTH EQUITY PORTFOLIO
------------------------------ -------------------------------
FOR THE PERIOD 12/27/96 1 FOR THE PERIOD 12/27/96 1
THROUGH 9/30/97 THROUGH 9/30/97
------------------------------ -------------------------------
SHARES VALUE SHARES VALUE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class ........................... 8,896,850 $ 94,138,731 9,480,474 $ 96,275,352
Service Class ................................. 1,914,151 20,681,721 2,116,730 21,700,683
Investor A Class .............................. 189,936 2,103,982 226,905 2,349,724
Investor B Class .............................. 232,883 2,670,486 225,130 2,348,912
Investor C Class .............................. 2,260 25,652 6,978 67,081
Shares issued in reinvestment of dividends:
Institutional Class ........................... 15,331 195,462 -- --
Service Class ................................. 2,705 34,453 -- --
Investor A Class .............................. 617 7,085 -- --
Investor B Class .............................. 186 2,005 -- --
Investor C Class .............................. 3 36 -- --
Shares redeemed:
Institutional Class ........................... (561,046) (6,293,710) (652,886) (7,158,764)
Service Class ................................. (137,408) (1,534,976) (228,496) (2,359,332)
Investor A Class .............................. (9,353) (105,588) (8,720) (93,962)
Investor B Class .............................. (5,379) (60,403) (2,966) (31,463)
Investor C Class .............................. (631) (7,989) -- --
---------- ------------ ---------- ------------
Net increase ....................................... 10,541,105 $111,856,947 11,163,149 $113,098,231
========== ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
SMALL CAP VALUE EQUITY PORTFOLIO
---------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
9/30/97 9/30/96
------------------------------ -------------------------------
SHARES VALUE SHARES VALUE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class .......................... 6,663,986 $114,030,745 5,727,409 $ 88,470,134
Service Class ................................ 1,903,335 31,016,901 1,901,562 29,000,834
Investor A Class ............................. 430,036 7,152,490 338,792 5,155,013
Investor B Class ............................. 406,141 7,016,554 59,852 911,033
Investor C Class ............................. 109,385 1,912,858 -- --
Shares issued in reinvestment of dividends:
Institutional Class .......................... 1,841,845 26,273,991 645,109 9,328,566
Service Class ................................ 635,002 9,026,515 226,962 3,270,019
Investor A Class ............................. 249,425 3,549,482 80,917 1,164,116
Investor B Class ............................. 24,354 340,893 6,393 91,094
Investor C Class ............................. 36 513 -- --
Shares redeemed:
Institutional Class .......................... (6,608,331) (111,217,171) (4,304,534) (62,163,080)
Service Class ................................ (1,542,961) (24,616,052) (1,109,462) (17,067,663)
Investor A Class ............................. (534,852) (8,443,485) (303,906) (4,648,531)
Investor B Class ............................. (25,807) (419,136) (15,176) (232,287)
Investor C Class ............................. (3,254) (49,229) -- --
---------- ------------- ---------- ------------
Net increase ...................................... 3,548,340 $ 55,575,869 3,253,918 $ 53,279,248
========== ============= ========== ============
<FN>
- --------------
1 Commencement of operations.
</FN>
</TABLE>
63
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
SMALL CAP GROWTH EQUITY PORTFOLIO
---------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
9/30/97 9/30/96
------------------------------ -------------------------------
SHARES VALUE SHARES VALUE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class .......................... 24,570,369 $465,310,898 16,663,138 $306,180,268
Service Class ................................ 4,276,637 79,601,918 5,259,549 95,359,750
Investor A Class ............................. 6,094,862 114,486,135 971,103 18,192,162
Investor B Class ............................. 1,664,738 31,445,733 304,774 5,998,905
Investor C Class ............................. 639,762 11,859,117 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 .......................... 821,752 16,346,714 9,532 148,705
Service Class ................................ 430,248 8,510,309 -- --
Investor A Class ............................. 110,912 2,180,539 -- --
Investor B Class ............................. 29,715 578,839 -- --
Investor C Class ............................. 2,009 39,134 -- --
Shares redeemed:
Institutional Class .......................... (18,053,070) (341,609,017) (12,706,267) (236,144,606)
Service Class ................................ (2,386,675) (45,263,011) (3,811,615) (73,436,186)
Investor A Class ............................. (5,028,464) (94,607,993) (172,984) (3,281,785)
Investor B Class ............................. (238,025) (4,304,650) (1,922) (37,876)
Investor C Class ............................. (40,812) (803,293) -- --
---------- ------------- ---------- -------------
Net increase ...................................... 12,893,958 $ 243,771,372 8,203,815 $ 138,191,328
========== ============= ========== =============
</TABLE>
64
<PAGE>
COMPASS CAPITAL FUNDS [LOGO OMITTED]
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY PORTFOLIO
---------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
9/30/97 9/30/96
------------------------------ -------------------------------
SHARES VALUE SHARES VALUE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class .......................... 18,427,749 $ 249,827,119 20,240,830 $ 268,092,956
Service Class ................................ 4,798,267 65,276,413 8,177,309 108,086,063
Investor A Class ............................. 5,766,495 78,085,410 478,669 6,295,830
Investor B Class ............................. 227,413 3,097,248 126,819 1,666,256
Investor C Class ............................. 10,724 155,185 -- --
Shares issued in merger:
Institutional Class .......................... -- -- -- --
Service Class ................................ -- -- 3,806,698 48,839,940
Investor A Class ............................. -- -- -- --
Investor B Class ............................. -- -- -- --
Investor C Class ............................. -- -- -- --
Shares issued in reinvestment of dividends:
Institutional Class .......................... 1,267,456 16,587,621 1,337,783 16,922,952
Service Class ................................ 429,352 5,605,176 402,264 5,080,592
Investor A Class ............................. 72,891 951,131 85,228 1,076,431
Investor B Class ............................. 10,030 129,581 5,789 72,831
Investor C Class ............................. 3 32 -- --
Shares redeemed:
Institutional Class .......................... (19,077,120) (261,816,900) (16,204,435) (214,155,160)
Service Class ................................ (3,574,224) (48,412,325) (8,332,086) (111,145,703)
Investor A Class ............................. (5,791,432) (79,432,520) (417,192) (5,496,470)
Investor B Class ............................. (34,057) (458,487) (10,326) (134,551)
Investor C Class ............................. -- -- -- --
---------- ------------- ---------- -------------
Net increase ...................................... 2,533,547 $ 29,594,684 9,697,350 $ 125,201,967
========== ============= ========== =============
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL SMALL CAP EQUITY PORTFOLIO
----------------------------------------
FOR THE PERIOD 9/26/97 1
THROUGH 9/30/97
----------------------------------------
SHARES VALUE
--------- -----------
<S> <C> <C>
Shares sold:
Institutional Class .............................. 1,550,001 $15,500,010
Service Class .................................... 1 10
Investor A Class ................................. 32,754 327,508
Investor B Class ................................. 71,518 715,023
Investor C Class ................................. 18,314 183,140
Shares issued in reinvestment of dividends:
Institutional Class .............................. -- --
Service Class .................................... -- --
Investor A Class ................................. -- --
Investor B Class ................................. -- --
Investor C Class ................................. -- --
Shares redeemed:
Institutional Class .............................. -- --
Service Class .................................... -- --
Investor A Class ................................. -- --
Investor B Class ................................. -- --
Investor C Class ................................. -- --
--------- -----------
Net increase .......................................... 1,672,588 $16,725,691
========= ===========
<FN>
- ------------
1 Commencement of operations.
</FN>
</TABLE>
65
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
INTERNATIONAL EMERGING MARKETS PORTFOLIO
---------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
9/30/97 9/30/96
------------------------------ -------------------------------
SHARES VALUE SHARES VALUE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class ........................... 6,194,114 $ 58,681,787 5,661,897 $ 47,868,196
Service Class ................................. 3,396,941 32,721,399 3,327,086 28,370,538
Investor A Class .............................. 222,576 2,150,041 131,558 1,124,251
Investor B Class .............................. 192,786 1,883,783 25,343 222,080
Investor C Class .............................. 9,264 92,800 -- --
Shares issued in reinvestment of dividends:
Institutional Class ........................... 12,211 103,871 4,708 36,395
Service Class ................................. 1 7 1,536 11,843
Investor A Class .............................. 1,111 11,578 381 2,939
Investor B Class .............................. -- -- -- --
Investor C Class .............................. -- -- -- --
Shares redeemed:
Institutional Class ........................... (2,055,585) (19,721,701) (1,411,383) (11,922,973)
Service Class ................................. (893,611) (8,425,552) (809,955) (6,723,237)
Investor A Class .............................. (103,774) (989,388) (101,320) (845,446)
Investor B Class .............................. (25,136) (247,215) (465) (4,023)
Investor C Class .............................. (84) (807) -- --
---------- ------------ ----------- ------------
Net increase ....................................... 6,950,814 $ 66,260,603 6,829,386 $ 58,140,563
========== ============ =========== ============
</TABLE>
<TABLE>
<CAPTION>
SELECT EQUITY PORTFOLIO
---------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
9/30/97 9/30/96
------------------------------ -------------------------------
SHARES VALUE SHARES VALUE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class ........................... 5,853,339 $ 85,232,930 7,014,322 $ 90,778,286
Service Class ................................. 3,109,666 46,747,048 4,393,824 55,600,018
Investor A Class .............................. 754,034 11,663,168 188,355 2,393,475
Investor B Class .............................. 996,963 15,826,909 89,238 1,170,225
Investor C Class .............................. 21,826 354,432 3,698 50,000
Shares issued in reinvestment of dividends:
Institutional Class ........................... 1,825,871 24,532,069 964,985 11,899,120
Service Class ................................. 607,614 8,141,550 261,309 3,214,497
Investor A Class .............................. 51,092 692,892 15,974 196,492
Investor B Class .............................. 11,367 152,295 223 2,987
Investor C Class .............................. 14 188 -- --
Shares redeemed:
Institutional Class ........................... (6,216,108) (92,157,955) (7,848,144) (99,717,894)
Service Class ................................. (2,138,625) (32,181,860) (3,310,365) (41,842,855)
Investor A Class .............................. (181,922) (2,752,937) (65,514) (837,399)
Investor B Class .............................. (42,645) (682,951) (1,084) (14,229)
Investor C Class .............................. (3,860) (53,423) -- --
--------- ------------ ---------- ------------
Net increase ....................................... 4,648,626 $ 65,514,355 1,706,821 $ 22,892,723
========= ============ ========== ============
</TABLE>
66
<PAGE>
COMPASS CAPITAL FUNDS [LOGO OMITTED]
<TABLE>
<CAPTION>
INDEX EQUITY PORTFOLIO
---------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
9/30/97 9/30/96
------------------------------ -------------------------------
SHARES VALUE SHARES VALUE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class .......................... 2,462,483 $ 38,257,001 4,484,065 $ 59,683,113
Service Class ................................ 4,417,051 70,407,935 3,817,000 50,684,497
Investor A Class ............................. 1,150,737 18,875,513 502,304 6,723,301
Investor B Class ............................. 1,935,614 31,084,295 210,696 2,839,706
Investor C Class ............................. 1,131,696 18,023,818 30,961 425,185
Shares issued in reinvestment of dividends:
Institutional Class .......................... 556,932 7,642,144 1,243,410 15,521,894
Service Class ................................ 439,467 6,053,435 738,516 9,213,090
Investor A Class ............................. 60,839 861,293 90,152 1,131,385
Investor B Class ............................. 13,467 192,015 845 11,680
Investor C Class ............................. 2,605 38,351 57 789
Shares redeemed:
Institutional Class .......................... (3,014,892) (47,987,128) (4,685,091) (62,461,246)
Service Class ................................ (1,684,244) (26,809,793) (1,705,590) (22,882,230)
Investor A Class ............................. (272,772) (4,364,443) (157,934) (2,138,524)
Investor B Class ............................. (57,642) (960,311) (3,004) (40,532)
Investor C Class ............................. (86,128) (1,382,780) -- --
--------- ------------ ---------- ------------
Net increase ...................................... 7,055,213 $109,931,345 4,566,387 $ 58,712,108
========== ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
BALANCED PORTFOLIO
---------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
9/30/97 9/30/96
------------------------------ -------------------------------
SHARES VALUE SHARES VALUE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold:
Institutional Class .......................... 440,057 $ 7,176,252 1,495,474 $ 22,044,696
Service Class ................................ 2,917,801 47,278,637 5,780,619 83,542,569
Investor A Class ............................. 658,450 10,926,754 723,332 10,528,196
Investor B Class ............................. 867,487 14,542,010 278,873 4,050,321
Investor C Class ............................. 4,757 83,032 -- --
Shares issued in merger:
Institutional Class .......................... -- -- -- --
Service Class ................................ -- -- 2,440,889 34,294,489
Investor A Class ............................ -- -- -- --
Investor B Class ............................ -- -- -- --
Investor C Class ............................ -- -- -- --
Shares issued in reinvestment of dividends:
Institutional Class .......................... 98,648 1,554,413 70,021 1,020,402
Service Class ................................ 423,634 6,704,875 269,899 3,931,350
Investor A Class ............................. 280,237 4,501,717 171,778 2,492,258
Investor B Class ............................. 33,001 532,907 8,524 123,532
Investor C Class ............................. 23 392 -- --
Shares redeemed:
Institutional Class .......................... (1,288,465) (20,912,724) (864,140) (12,698,183)
Service Class ................................ (2,551,141) (41,613,142) (5,846,594) (84,992,584)
Investor A Class ............................. (915,855) (15,203,656) (1,078,557) (15,629,171)
Investor B Class ............................. (94,088) (1,559,599) (27,995) (406,030)
Investor C Class ............................. -- -- -- --
--------- ------------ ---------- ------------
Net increase ................................. 874,546 $ 14,011,868 3,422,123 $ 48,301,845
========== ============ ========== ============
</TABLE>
67
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(E) AT SEPTEMBER 30, 1997, NET ASSETS CONSISTED OF:
<TABLE>
<CAPTION>
LARGE CAP LARGE CAP MID-CAP MID-CAP SMALL CAP SMALL CAP
VALUE EQUITY GROWTH EQUITY VALUE EQUITY GROWTH EQUITY VALUE EQUITY GROWTH EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- ------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Capital paid in ................... $903,802,280 $429,150,791 $111,856,947 $113,098,231 $300,617,814 $533,987,126
Undistributed net
investment income .............. -- 306,969 13,973 -- 37,155 --
Accumulated net realized
gain on investment
transactions, futures
contracts and foreign
exchange contracts ............. 145,421,840 100,346,212 3,711,066 1,046,076 40,931,565 26,343,044
Net unrealized appreciation
on investment transactions,
futures contracts and foreign
exchange contracts ............. 357,701,539 249,156,695 19,308,176 21,973,392 137,884,170 272,362,151
-------------- ------------ ------------ ------------ ------------ ------------
$1,406,925,659 $778,960,667 $134,890,162 $136,117,699 $479,470,704 $832,692,321
============== ============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL INTERNATIONAL INTERNATIONAL SELECT INDEX
EQUITY SMALL CAP EQUITY EMERGING MARKETS EQUITY EQUITY BALANCED
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Capital paid in ................... $552,757,802 $16,725,691 $174,618,331 $376,892,711 $282,108,089 $220,261,602
Undistributed net investment
income ......................... 5,039,217 2,584 19,167 22,069 259,024 2,260
Accumulated net realized
gain on investment
transactions, futures
contracts and foreign
exchange contracts ............. 648,299 -- 1,004,605 38,608,228 225,801 21,271,693
Net unrealized appreciation
(depreciation) on investment
transactions, futures
contracts and foreign
exchange contracts ............. 102,968,505 (94,412) 12,906,399 176,252,721 169,385,137 77,115,314
------------ ----------- ------------ ------------ ------------ ------------
$661,413,823 $16,633,863 $188,548,502 $591,775,729 $451,978,051 $318,650,869
============ =========== ============ ============ ============ ============
</TABLE>
68
<PAGE>
COMPASS CAPITAL FUNDS [LOGO OMITTED]
(F) 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.
<TABLE>
<CAPTION>
THE COMPASS CAPITAL GROUP OF FUNDS
AND BFM INSTITUTIONAL TRUST COMPASS CAPITAL FUNDS
- -----------------------------------------------------------------------------------------------------------------------------------
COMBINED
UNREALIZED SHARES NET ASSETS
NET ASSET APPRECIATION NEW ISSUED IN AFTER NAV
SHARES AT VALUE AT (DEPRECIATION) PORTFOLIO BUSINESS BUSINESS PER
FUND NAME 1/13/96 1/13/96 AT 1/13/96 NAME COMBINATION COMBINATION SHARE
- ----------------------- ---------- ------------ -------------- -------------------------- ----------- ------------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Equity Income ......... 28,396,812 $344,453,317 $17,227,647 Large Cap Value Equity* .. 25,439,684 $1,066,660,942 $13.54
Growth ................ 13,274,219 162,741,919 21,104,698 Large Cap Growth Equity**. 12,988,182 495,952,512 $12.53
Small Company ......... 2,364,413 24,895,586 610,916 Small Cap Growth Equity .. 1,673,203 278,684,029 $14.88
International Equity .. 3,625,831 48,839,940 5,558,142 International Equity ..... 3,806,698 507,920,573 $12.83
Balanced .............. 320,140 34,294,486 1,566,037 Balanced ................. 2,440,889 228,489,486 $14.05
<FN>
- -----------
*formerly known as Value Equity.
**formerly known as Growth Equity.
</FN>
</TABLE>
69
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF THE COMPASS CAPITAL FUNDS:
We have audited the accompanying statements of net assets of the Large Cap Value
Equity (formerly known as Value Equity), Large Cap Growth Equity (formerly known
as Growth Equity), Mid-Cap Value Equity, Mid-Cap Growth Equity, Small Cap Value
Equity, Small Cap Growth Equity, International Equity, International Small Cap
Equity, International Emerging Markets, Select Equity, Index Equity, and
Balanced Portfolios of the Compass Capital Funds ("the Fund") as of September
30, 1997, and the related statements of operations for the year then ended, or
period from December 27, 1996 (commencement of operations) to September 30, 1997
for the Mid-Cap Value Equity and Mid-Cap Growth Equity Portfolios, and the
period from September 26, 1997 (commencement of operations) to September 30,
1997 for the International Small Cap Equity Portfolio, the statements of changes
in net assets for each of the two years (or periods) in the period then ended,
or the period from December 27, 1996 (commencement of operations) to September
30, 1997 for the Mid-Cap Value Equity and Mid-Cap Growth Portfolios, and the
period from September 26, 1997 (commencement of operations) to September 30,
1997 for the International Small Cap Equity Portfolio, 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 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 owned as of
September 30, 1997, by correspondence with the custodians and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Compass Capital Funds (Large Cap Value Equity, Large Cap Growth Equity, Mid-Cap
Value Equity, Mid-Cap Growth Equity, Small Cap Value Equity, Small Cap Growth
Equity, International Equity, International Small Cap Equity, International
Emerging Markets, Select Equity, Index Equity, and Balanced Portfolios) as of
September 30, 1997, the results of their operations for the year then ended, or
the period from December 27, 1996 (commencement of operations) to September 30,
1997 for the Mid-Cap Value Equity and Mid-Cap Growth Equity Portfolios, and the
period from September 26, 1997 (commencement of operations) to September 30,
1997 for the International Small Cap Equity portfolio, and the changes in its
net assets for each of the two years (or periods) in the period then ended, or
the period from December 27, 1996 (commencement of operations) to September 30,
1997 for the Mid-Cap Value Equity and Mid-Cap Growth Equity Portfolios, and the
period from September 26, 1997 (commencement of operations) to September 30,
1997 for the International Small Cap Equity Portfolio, and the financial
highlights for each periods presented, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
November 14, 1997
70
<PAGE>
THE DFA INVESTMENT TRUST COMPANY
THE U.S. LARGE COMPANY SERIES
TEN MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED)
YEAR ENDED NOVEMBER 30, 1996
<PAGE>
TABLE OF CONTENTS THE DFA INVESTMENT TRUST COMPANY
THE U.S. LARGE COMPANY SERIES
Page
Statements of Net Assets ................................................ 73
Statements of Operations ................................................ 78
Statements of Changes in Net Assets ..................................... 79
Financial Highlights .................................................... 80
Notes to Financial Statements ........................................... 81
Report of Independent Accountants ....................................... 83
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
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1997 NOVEMBER 30, 1996
---------------------- -----------------------
(UNAUDITED)
SHARES VALUE(DAGGER) SHARES VALUE (DAGGER)
------- ------------- ------- --------------
COMMON STOCKS -- (99.6% AND 99.5%, RESPECTIVELY)
3 COM Corp. ............ 36,200 $1,857,512* 13,600 $1,023,400*#
AMP, Inc. .............. 23,204 1,242,864 17,704 677,178#
AMR Corp. .............. 9,700 1,073,669* 7,400 675,250*
AON Corp. .............. 17,575 929,278 8,750 532,656
AT & T Corp. ........... 171,339 7,592,459 130,139 5,107,956
Abbott Laboratories .... 81,200 5,191,725 63,000 3,512,250#
Adobe Systems Inc. ..... 7,700 387,406 -- --
Advanced Micro Devices,
Inc. ................. 14,800 481,925* #10,900 264,325*#
Aeroquip Vickers Inc. .. 3,000 147,000 -- --
Aetna, Inc. ............ 15,937 1,297,869 12,137 875,381
Ahmanson (H.F.) & Co. .. 10,200 579,487 8,700 287,100
Air Products & Chemicals,
Inc. ................. 11,700 970,369 9,000 625,500
Airtouch Communications,
Inc. ................. 53,000 1,878,187* 40,300 1,032,688*
Alberto-Culver Co.
Class B .............. 5,900 179,581 2,300 109,250
Albertson's Inc. ....... 25,800 899,775 20,400 711,450
Alcan Aluminum, Ltd. ... 23,900 830,525 18,200 641,550
Alexander & Alexander
Services, Inc. ....... -- -- 3,700 53,650
Allegheny Teledyne,
Inc. ................. 18,500 529,562 14,000 327,250
Allergan, Inc. ......... 6,700 242,456 5,300 170,263
AlliedSignal, Inc. ..... 59,600 2,533,000# 22,800 1,670,100
Allstate Corp. ......... 45,827 3,683,345 35,927 2,164,602
Alltel Corp. ........... 19,600 676,200 15,300 487,688
Aluminium Co. of
America .............. 18,300 1,500,600 14,100 897,113
Alza Corp. ............. 8,900 258,100* 6,800 192,100*
Amdahl Corp. ........... -- -- 9,800 116,375*
Amerada Hess Corp. ..... 9,700 598,369 7,500 441,563
American Electric Power
Co., Inc. ............ 19,900 905,450 15,100 626,650
American Express Co. ... 49,600 4,061,000 38,300 2,001,175#
American General Corp. . 26,080 1,352,900 16,500 678,563
American Greetings Corp.
Class A .............. 7,800 287,137 6,000 169,875
American Home Products
Corp. ................ 68,500 5,000,500 51,300 3,296,025
American International
Group, Inc. .......... 74,093 7,645,471 37,862 4,354,130
American Stores Co. .... 28,700 699,562 11,800 470,525
Ameritech Corp. ........ 58,000 3,857,000 44,400 2,614,050
Amgen, Inc. ............ 27,900 1,336,584 21,300 1,299,300*
Amoco Corp. ............ 51,800 4,992,225 40,200 3,120,525
Anadarko Petroleum
Corp. ................ 6,300 452,419 -- --
Andrew Corp. ........... 9,393 245,686 4,862 282,300*
Anheuser-Busch Companies,
Inc. ................. 51,700 2,332,962 40,100 1,699,238
Apache Corp. ........... 9,500 407,312* -- --
Apple Computer, Inc. ... 13,400 291,031*# 10,100 244,925*#
Applied Materials, Inc. 19,100 1,819,872* 14,500 554,625*
Archer-Daniels Midland
Co. .................. 59,091 1,414,491 44,078 969,716
Armco, Inc. ............ 11,300 67,800* 8,600 38,700*
Armstrong World Industries,
Inc. ................. 4,300 288,369 3,000 225,750
Asarco, Inc. ........... 4,350 139,200 3,450 94,013
Ashland, Inc. .......... 7,800 424,125 5,200 249,600
Atlantic Richfield Co. . 33,900 2,896,331 13,000 1,808,625
Autodesk, Inc. ......... 5,000 227,187 3,700 103,138
Automatic Data Processing,
Inc. ................. 31,000 1,550,000 23,400 1,003,275
Autozone, Inc. ......... 15,900 477,000* -- --
Avery Dennison Corp. ... 10,700 428,000 4,300 303,688
Avon Products, Inc. .... 14,100 874,200 10,700 596,525
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1997 NOVEMBER 30, 1996
---------------------- -----------------------
(UNAUDITED)
SHARES VALUE(DAGGER) SHARES VALUE (DAGGER)
------- ------------- ------- --------------
Baker Hughes, Inc. ....... 17,700 $ 774,375 11,700 $ 428,513
Ball Corp. ............. 3,300 114,881 2,500 61,250
Bally Entertainment Corp. -- -- 4,200 122,325*
Baltimore Gas & Electric
Co. .................. 15,450 428,737 11,950 333,106
Banc One Corp. ......... 61,311 3,421,920 35,111 1,672,161
BankBoston Corp. (formerly
Bank of Boston Corp.) 15,300 1,353,094 12,300 859,463
Bank of New York Co.,
Inc. ................. 39,900 1,915,200 31,100 1,115,713
BankAmerica Corp. ...... 73,536 5,391,108 29,068 2,994,004
Bankers Trust New York
Corp. ................ 10,400 1,274,000 6,500 565,500
Bard (C.R.), Inc. ...... 6,000 203,625 4,600 128,800
Barnett Banks, Inc. .... 21,000 1,485,750 15,600 686,400
Barrick Gold Corp. ..... 39,200 970,200 28,800 864,000#
Battle Mountain Gold
Co. .................. 24,100 173,218 18,100 131,225
Bausch & Lomb, Inc. .... 5,800 234,900 4,600 170,775
Baxter International,
Inc. ................. 29,600 1,546,600 22,000 935,000
Bay Networks, Inc. ..... 20,900 807,262* 15,200 406,600*
Becton Dickinson & Co. . 12,800 612,800 10,100 424,200
Bell Atlantic Corp. .... 81,806 6,580,270 35,300 2,219,488
Bellsouth Corp. ........ 104,500 4,833,125 80,300 3,242,113
Bemis Co., Inc. ........ 5,500 246,125 4,300 153,188
Beneficial Corp. ....... 5,700 434,269 4,300 267,138
Bethlehem Steel Corp. .. 11,800 121,687* 9,000 81,000*#
Beverly Enterprises .... 11,500 199,812 8,000 106,000*
Biomet, Inc. ........... 11,700 280,434 9,300 154,031
Black & Decker Corp. ... 9,900 368,775 7,100 268,913
Block (H.&R.), Inc. .... 11,000 424,875 8,400 245,700 #
Boatmen's Bancshares,
Inc. ................. -- -- 12,600 841,050
Boeing Co. ............. 105,586 5,747,838 28,100 2,792,438
Boise Cascade Corp. .... 5,700 239,756 3,900 120,900
Boston Scientific
Corp. ................ 20,400 1,125,825*# 14,300 834,763*
Briggs & Stratton
Corp. ................ 2,800 138,425 2,400 99,300
Bristol Myers Squibb
Co. ................. 105,000 8,688,750 40,500 4,606,875
Brown-Forman Corp.
Class B .............. 7,300 362,719# 5,600 260,400
Browning-Ferris Industries,
Inc. ................. 22,400 852,600 17,100 459,563
Brunswick Corp. ........ 10,500 370,125# 7,900 201,450
Burlington Northern Santa
Fe Corp. ............. 16,437 1,588,225 12,337 1,108,788
Burlington Resources,
Inc. ................. 13,000 667,062# 10,100 535,300
CIGNA Corp. ............ 7,700 1,434,125 6,100 862,388
CPC International, Inc. 15,000 1,389,375 11,700 974,025
CSX Corp. .............. 23,000 1,345,500 17,100 799,425
CUC International, Inc. 43,050 1,334,550*# 31,750 837,406*
CVS Corp. .............. 18,100 1,029,437 8,600 353,675
Cabletron Systems, Inc. 16,600 531,200* 12,200 492,575*#
Caliber Systems, Inc. .. 4,100 222,425 3,200 62,000
Campbell Soup Co. ...... 48,400 2,371,600 18.900 1,561,613
Cardinal Health Inc. ... 11,500 816,500# -- --
Carolina Power & Light
Co. ................. 16,100 578,594 12,300 450,488#
Case Corp. ............. 8,000 533,000 5,900 309,750
Caterpillar, Inc. ...... 39,800 2,146,712 15,600 1,234,350
Centex Corp. ........... 3,100 180,962 2,300 82,800
Central & South West
Corp. ............... 22,300 494,781 16,900 452,075#
Ceridian Corp. ......... 8,400 310,800*# 5,500 264,688*
Champion International
Corp. ................ 10,000 609,375 7,700 331,100
Charming Shoppes, Inc. . 11,100 68,508* 8,400 42,525*
Chase Manhattan Corp. .. 44,796 5,285,928 35,296 3,335,472
Chevron Corp. .......... 68,900 5,731,619 52,700 3,530,900
Chrysler Corp. ......... 71,200 2,621,050 58,900 2,090,950
Chubb Corp. ............ 18,400 1,307,550 14,100 764,925
See accompanying notes to financial statements.
73
<PAGE>
STATEMENTS OF NET ASSETS THE DFA INVESTMENT TRUST COMPANY
THE U.S. LARGE COMPANY SERIES (CONTINUED)
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1997 NOVEMBER 30, 1996
---------------------- -----------------------
(UNAUDITED)
SHARES VALUE(DAGGER) SHARES VALUE (DAGGER)
------- ------------- ------- --------------
Cincinnati Milacron,
Inc. ................ 4,100 $ 110,187 3,200 $ 66,400
Cinergy Corp. .......... 16,493 551,485 12,693 425,216
Circuit City Stores,
Inc. ................ 10,400 419,250 7,900 263,663#
Cisco Systems, Inc. .... 70,400 5,145,800* 52,300 3,553,131*#
Citicorp ............... 48,200 6,455,787 38,800 4,238,900
Clear Channel
Communications Inc. .. 10,300 668,212* -- --
Clorox Co. ............. 11,000 815,375 4,200 437,850
Coastal Corp. .......... 11,150 682,937 8,550 411,469
Coca-Cola Co. .......... 261,500 15,935,156 201,200 10,286,332
Cognizant Corp. ........ 17,600 717,200# 13,700 472,650*
Colgate-Palmolive Co. .. 31,100 2,167,281 11,900 1,102,238
Columbia Gas System,
Inc. ................ 5,800 406,000 4,500 290,813
Columbia/HCA Healthcare
Corp. ................ 69,082 1,986,107 54,182 2,167,280
Comcast Corp. Class A
Special .............. 36,850 946,584 26,350 443,009
Comerica, Inc. ......... 11,000 868,312 9,300 544,050
Community Psychiatric
Centers .............. -- -- 6 54*
Compaq Computer Corp. .. 79,795 5,964,676* 21,800 1,727,650*#
Computer Associates
International, Inc. .. 38,275 2,748,623 29,375 1,931,406
Computer Sciences
Corp. ................ 8,100 573,075* 6,100 479,613*
Conagra, Inc. .......... 25,150 1,659,900 19,650 1,043,906
Conrail, Inc. .......... -- -- 6,300 612,675#
Conseco, Inc. .......... 19,800 966,487 -- --
Consolidated Edison Co. of
New York, Inc. ....... 24,800 843,200# 19,000 551,000
Consolidated Freightways,
Inc. ................. -- -- 3,600 86,850
Consolidated Natural Gas
Co. .................. 10,200 593,512 7,700 439,863
Cooper Industries, Inc. 12,800 692,000 8,700 361,050
Cooper Tire & Rubber Co. 8,200 217,812 6,800 139,400
Coors (Adolph) Co.
Class B ............. 4,000 151,625 3,100 61,225
Corestates Financial
Corp. ............... 21,300 1,409,794 18,000 969,750
Corning, Inc. .......... 24,200 1,143,450 18,600 753,300
Costco Companies, Inc. . 22,303 838,453* 15,803 368,407*
Countrywide Credit
Industries Inc. ...... 11,300 411,744 -- --
Crane Co. .............. 4,700 193,287 2,400 112,200
Crown Cork & Seal Co.,
Inc. ................. 13,500 622,687 10,300 545,900
Cummins Engine Co., Inc. 3,900 304,444 3,200 144,800
Cyprus Amax Minerals Co.,
Inc. ................. 9,750 234,000 7,550 186,863#
DSC Communications
Corp. ................ 12,400 333,637* 9,400 169,788*
DTE Energy Co. ......... 15,200 462,650 11,700 374,400
Dana Corp. ............. 10,900 538,187 8,200 255,225
Darden Restaurants,
Inc. ................ 16,100 186,156 12,700 109,538
Data General Corp. ..... 5,000 133,125* 3,200 46,800*
Dayton-Hudson Corp. .... 22,900 1,372,569 17,400 676,425
Dean Witter, Discover &
Co. .................. -- -- 13,277 907,815
Deere & Co. ............ 26,800 1,440,500 20,800 928,200
Dell Computer Corp. .... 34,800 3,370,162* 7,300 742,319*
Delta Air Lines, Inc. .. 7,700 725,244 6,400 481,600
Deluxe Corp. ........... 8,700 291,994# 6,700 207,700
Digital Equipment Corp. 16,000 693,000* 12,600 463,050*#
Dillard Department Stores,
Inc. Class A ......... 11,800 516,987 9,200 281,750
Disney (Walt) Co. ...... 71,200 5,740,500 54,800 4,041,500
Dominion Resources, Inc.
VA ................... 19,500 738,562# 14,400 549,000
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1997 NOVEMBER 30, 1996
---------------------- -----------------------
(UNAUDITED)
SHARES VALUE(DAGGER) SHARES VALUE (DAGGER)
------- ------------- ------- --------------
Donnelley (R.R.) & Sons
Co. .................. 15,400 $ 549,587 12,400 $ 415,400
Dover Corp. ............ 11,800 800,925 9,200 491,050
Dow Chemical Co. ....... 24,000 2,176,500 19,800 1,658,250
Dow Jones & Co.,
Inc. ................. 10,000 467,500 7,800 271,050
Dresser Industries,
Inc. ................. 18,500 795,500 14,400 471,600
DuPont (E.I.) de Nemours
& Co. ................ 119,100 7,332,094 45,300 4,269,525
Duke Power Co. ......... 38,066 1,881,888# 16,400 760,550
Dun & Bradstreet Corp. . 18,000 510,750 13,700 309,963
E G & G, Inc. .......... 4,900 101,369 3,800 69,350
EMC Corp. MA ........... 26,100 1,523,587* 18,700 603,075*
Eastern Enterprises .... 2,100 78,356 1,700 63,750
Eastman Chemical Co. ... 8,250 511,500# 6,350 362,744
Eastman Kodak Co. ...... 34,500 2,240,344 27,200 2,203,200
Eaton Corp. ............ 8,000 739,000 6,300 436,275
Echlin, Inc. ........... 6,600 231,412 5,000 168,125
Echo Bay Mines, Ltd. ... 14,700 83,606 11,200 69,300
Ecolab, Inc. ........... 6,900 335,081 5,200 202,150
Edison International ... 41,800 1,055,450 35,400 703,575
Emerson Electric Co. ... 46,900 2,702,612 18,100 1,776,063
Engelhard Corp. ........ 15,074 325,033 11,574 225,693
Enron Corp. ............ 32,200 1,239,700 20,500 937,875
Enserch Corp. .......... -- -- 5,600 130,900
Entergy Corp. .......... 25,400 661,987 18,400 499,100
Equifax Inc. ........... 15,900 499,856 -- --
Exxon Corp. ............ 260,800 16,707,500 100,200 9,481,425
FMC Corp. .............. 3,900 346,125* 3,100 239,475*
FPL Group, Inc. ........ 19,200 984,000 14,800 682,650
Federal Express Corp. .. 12,100 968,000* 9,200 407,100*
Federal Home Loan Mortgage
Corp. ................ 73,400 2,587,350 14,400 1,645,200
Federal National Mortgage
Association .......... 111,900 5,259,300 88,200 3,638,250
Federated Department Stores,
Inc. ................. 22,000 948,750* 16,800 573,300*#
Fifth Third Bancorp .... 16,200 1,059,075 8,600 604,150
First Bank System, Inc. -- -- 11,400 830,775
First Chicago NBD Corp. 31,093 2,339,748 25,593 1,503,589
First Data Corp. ....... 46,700 1,754,169# 36,100 1,439,488
First Union Corp. ...... 59,280 2,967,705 22,240 1,698,580
Fleet Financial Group,
Inc. ................. 26,264 1,721,933 21,264 1,177,494
Fleetwood Enterprises,
Inc. ................. 3,800 127,537 2,900 88,450
Fleming Companies, Inc. 4,000 73,250 3,100 50,763
Fluor Corp. ............ 8,700 466,537 6,800 462,400
Ford Motor Co. ......... 125,900 5,696,975 95,500 3,127,625
Fort James Corporation
(formerly James River Corp.
of Virginia) ......... 19,900 911,669 6,900 220,800#
Fortune Brands (formerly
American Brands Inc.) 18,200 613,112 13,800 658,950
Foster Wheeler Corp. ... 4,250 186,734 3,250 117,406
Freeport McMoran Copper &
Gold, Inc. Class B ... 21,000 605,062# 15,800 497,700
Frontier Corporation ... 17,300 397,900 -- --
Fruit of the Loom, Inc.
Class A .............. 8,000 225,000* 6,200 220,875*
GPU, Inc. .............. 12,700 455,612 9,700 326,163
GTE Corp. .............. 100,900 4,578,337 78,200 3,509,225
Gannett Co., Inc. ...... 14,800 1,597,475 11,400 894,900
Gap, Inc. .............. 28,200 1,411,762 23,200 745,300
General Dynamics Corp. . 6,500 566,312 5,100 376,125
General Electric Co. ... 345,300 23,501,981 133,300 13,863,182
General Instrument Corp. -- -- 11,080 245,145*
General Mills, Inc. .... 16,800 1,158,150 12,800 812,800
General Motors Corp. ... 76,900 5,147,494 61,100 3,520,888
See accompanying notes to financial statements.
74
<PAGE>
STATEMENTS OF NET ASSETS THE DFA INVESTMENT TRUST COMPANY
THE U.S. LARGE COMPANY SERIES (CONTINUED)
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1997 NOVEMBER 30, 1996
---------------------- -----------------------
(UNAUDITED)
SHARES VALUE(DAGGER) SHARES VALUE (DAGGER)
------- ------------- ------- --------------
General RE Corp. ........ 8,600 $ 1,707,100 6,700 $ 1,130,625
General Signal Corp. .... 5,300 229,225 4,000 172,500
Genuine Parts Co. ....... 18,875 581,586 9,750 438,750
Georgia-Pacific Corp. ... 9,600 1,002,000 7,400 538,350
Giant Food, Inc.
Class A ............... 6,200 201,887 4,800 162,000
Giddings & Lewis, Inc. .. -- -- 2,850 33,131
Gillette Co. ............ 58,900 5,083,806 36,000 2,655,000
Golden West Financial
Corp. ................. 6,000 538,500 4,700 317,250
Goodrich (B.F.) Co. ..... 5,700 257,925 4,400 197,450
Goodyear Tire & Rubber
Co. ................... 16,300 1,120,625# 12,500 606,250
Grace (W.R.) & Co. ...... 7,600 559,550 7,100 375,413*
Grainger (W.W.), Inc. ... 5,300 471,700 4,100 325,950
Great Atlantic & Pacific
Tea Co., Inc. ......... 4,000 127,000 3,100 101,525
Great Lakes Chemical
Corp. ................. 6,200 305,737 5,200 278,850
Green Tree Financial
Corp. ................. 14,200 667,400 11,100 464,813
Guidant Corp. ........... 15,600 873,600# -- --
HFS, Inc. ............... 16,700 1,243,106* 10,000 647,500*
Halliburton Co. ......... 26,700 1,388,400 10,100 608,525
Harcourt General, Inc. .. 7,523 372,859 5,92 323,544
Harland (John H.) Co. ... 3,350 77,259 2,550 78,731
Harnischfeger Industries,
Inc. .................. 5,276 225,549 3,876 171,998
Harrahs Entertainment,
Inc. .................. 10,600 237,837* 8,300 147,325*
Harris Corp. ............ 8,200 375,150 3,200 219,200
Hartford (The) Financial
Services Group
(formerly ITT Hartford
Group Inc.) ........... 12,500 1,075,781 9,500 649,563
Hasbro, Inc. ............ 13,425 377,578 6,950 285,819
Healthsouth Corp. ....... 36,200 966,087*# -- --
Heinz (H.J.) Co. ........ 38,950 1,799,003 29,850 1,130,569
Helmerich & Payne, Inc. . 2,600 208,000 2,000 107,500
Hercules, Inc. .......... 10,600 527,350 8,600 417,100
Hershey Foods Corp. ..... 15,000 847,500 12,500 623,438
Hewlett-Packard Co. .....109,700 7,631,006 82,600 4,450,075
Hilton Hotels Corp. ..... 26,500 892,719# 15,800 462,150
Home Depot, Inc. ........ 77,072 4,017,378 38,748 2,019,740
Homestake Mining Co. .... 15,300 234,281 11,800 178,475
Honeywell, Inc. ......... 13,300 893,594 10,200 699,975
Household International,
Inc. .................. 11,200 1,267,700 7,800 739,050
Houston Industries, Inc. 30,000 652,500 20,100 442,200
Humana, Inc. ............ 17,200 409,575* 13,200 249,150*
Huntington Bancshares
Inc. ................. 16,900 608,928* -- --
ITT Corp. ............... 12,400 840,100*# 9,500 438,188*
ITT Industries, Inc. .... 12,500 414,844 9,500 222,063
Ikon Office Solutions,
Inc. .................. 14,000 357,875# 10,500 543,375
Illinois Tool Works,
Inc. .................. 26,200 1,310,000 9,900 848,925
Inco, Ltd. .............. 17,500 438,594 13,600 474,300
Ingersoll-Rand Co. ...... 17,500 753,594 8,800 409,200
Inland Steel Industries,
Inc. .................. 5,200 113,750 3,900 72,638
Intel Corp. .............172,300 15,921,597 66,400 8,420,333
Intergraph Corp. ........ -- -- 3,800 34,438*
International Business
Machines Corp. ........103,600 10,975,125 42,600 6,789,375
International Flavors &
Fragrances, Inc. ...... 11,500 563,500 8,900 404,950
International Paper Co. . 31,800 1,750,987 24,200 1,028,500
Interpublic Group of
Companies, Inc. ....... 13,050 669,628 6,600 326,700
Jefferson-Pilot Corp. ... 7,350 580,650 5,750 334,938
Johnson & Johnson .......140,400 8,090,550 107,500 5,710,938
Johnson Controls, Inc. .. 8,800 436,150 3,400 263,500
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1997 NOVEMBER 30, 1996
---------------------- -----------------------
(UNAUDITED)
SHARES VALUE(DAGGER) SHARES VALUE (DAGGER)
------- ------------- ------- --------------
Jostens, Inc. ........... 4,000 $ 108,500 3,200 $ 68,000
KLA-Tencor Corp. ........ 9,000 607,781* -- --
K Mart Corp. ............ 51,400 719,600* 39,300 437,213*
Kaufman & Broad Home
Corp. ................. 4,100 88,919 3,200 41,200
Kellogg Co. ............. 43,400 1,828,225# 17,100 1,160,663#
Kerr-McGee Corp. ........ 4,900 337,181# 4,000 280,000
Keycorp ................. 22,800 1,450,650 18,600 974,175
Kimberly Clark Corp. .... 58,784 2,876,742 22,742 2,223,031
King World Productions,
Inc. .................. 3,900 168,675 3,100 118,188*
Knight Ridder, Inc. ..... 9,500 518,937# 7,700 323,400
Kroger Co. .............. 26,800 809,025* 10,100 465,863*#
LSI Logic Corp. ......... 14,900 478,662*# 10,400 313,300*
Laidlaw, Inc. Class B
Non-Voting ............ 34,600 516,837 25,300 309,925
Lilly (Eli) & Co. ....... 58,700 7,069,681 44,200 3,381,300
Limited, Inc. ........... 28,500 696,469 21,800 392,400
Lincoln National Corp. .. 10,700 744,987 8,400 452,550
Liz Claiborne, Inc. ..... 7,500 412,031 5,900 250,013
Lockheed Martin Corp. ... 20,557 2,191,890 16,157 1,464,228
Loews Corp. ............. 12,200 1,377,837 9,300 862,575
Longs Drug Stores Corp. . 4,100 109,419 1,700 85,213
Louisiana Land &
Exploration Co. ....... 3,600 281,925 2,800 167,300
Louisiana-Pacific Corp. . 11,500 287,500 8,800 199,100
Lowe's Companies, Inc. .. 18,200 707,525 13,900 564,688
Luby's Cafeterias, Inc. . -- -- 1,950 42,900
Lucent Technologies,
Inc. .................. 67,790 5,516,411# 51,390 2,633,738*#
MBIA, Inc. .............. 4,700 589,556 -- --
MBNA Corp. .............. 35,187 1,425,073 17,925 723,722
MCI Communications Corp. 72,800 2,136,225 55,600 1,699,275
MGIC Investment Corp. ... 12,000 687,750 4,800 359,400
Mallinckrodt Group, Inc. 7,600 273,600 6,000 264,000
Manor Care, Inc. ........ 6,700 222,775 5,100 128,775
Marriott International,
Inc. ................. 13,400 952,237 10,300 574,225
Marsh & McLennan
Companies, Inc. ....... 17,700 1,356,262# 5,800 657,575
Masco Corp. ............. 17,300 792,556 13,000 474,500
Mattel, Inc. ............ 30,752 1,018,660 22,052 680,856
May Department Stores
Co. ................... 24,800 1,351,600 20,100 979,875
Maytag Corp. ............ 10,400 354,900 8,200 156,825
McDermott International,
Inc. .................. 5,800 211,700 4,400 78,100
McDonald's Corp. ........ 72,500 3,452,812 56,400 2,636,700
McDonnell Douglas Corp. . -- -- 17,400 920,025
McGraw-Hill Companies,
Inc. .................. 10,600 717,487 8,000 364,000
Mead Corp. .............. 5,500 397,375 4,300 254,775
Medtronic, Inc. ......... 49,200 2,312,400 19,400 1,282,825
Mellon Bank Corp. ....... 26,500 1,450,875 10,550 762,238
Mercantile Stores Co.,
Inc. .................. 3,900 245,456 3,000 150,750
Merck & Co., Inc. .......127,300 12,722,044 98,200 8,150,600#
Meredith Corp. .......... 5,700 188,812 2,200 113,300
Merrill Lynch & Co.,
Inc. .................. 34,900 2,589,144 13,600 1,091,400
Micron Technology, Inc. . 22,200 770,062*# 16,800 556,500
Microsoft Corp. .........126,300 16,715,067*# 48,300 7,580,081*
Millipore Corp. ......... 4,600 225,975 3,500 143,063
Minnesota Mining &
Manufacturing Co. ..... 43,900 4,060,750 33,800 2,830,750
Mirage Resorts Inc. ..... 18,800 566,350*# -- --
Mobil Corp. ............. 83,000 6,142,000 31,800 3,847,800
Monsanto Co. ............ 62,100 2,421,900 47,300 1,880,175
Moore Corp., Ltd. ....... 9,300 176,700 8,100 170,100
Morgan (J.P.) & Co.,
Inc. .................. 18,800 2,136,150 15,000 1,415,625#
Morgan Stanley Group,
Inc. .................. 62,009 3,352,362 12,300 739,538
See accompanying notes to financial statements.
75
<PAGE>
STATEMENTS OF NET ASSETS THE DFA INVESTMENT TRUST COMPANY
THE U.S. LARGE COMPANY SERIES (CONTINUED)
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1997 NOVEMBER 30, 1996
---------------------- -----------------------
(UNAUDITED)
SHARES VALUE(DAGGER) SHARES VALUE (DAGGER)
------- ------------- ------- --------------
Morton International,
Inc. .................. 14,600 $ 518,300 11,500 $ 464,313
Motorola, Inc. .......... 62,900 4,520,937 47,900 2,652,463
Nacco Industries, Inc.
Class A ............... 800 94,050 800 38,200
Nalco Chemical Co. ...... 6,900 276,431 5,500 209,688
National City Corp. ..... 22,600 1,391,312 17,900 830,113
National Semiconductor
Corp. ................. 15,300 627,300* 11,200 274,400*
National Service Industries,
Inc. .................. 4,800 210,900 3,900 136,500
NationsBank Corp. ....... 75,176 4,651,515# 23,571 2,442,545#
Navistar International
Corp. ................. 7,770 214,646* 6,070 57,665*
New York Times Class A .. 10,100 530,250 7,900 295,263
Newell Co. .............. 16,900 676,000# 12,800 396,800
Newmont Mining Corp. .... 16,513 742,053 8,015 383,718
Nextlevel Systems
Inc. .................. 15,480 259,290* -- --
Niagara Mohawk Power
Corp. ................. 15,100 144,394* 11,700 102,375*
Nicor, Inc. ............. 5,000 187,500 4,100 151,188
Nike, Inc. Class B ...... 30,400 1,611,200# 23,200 1,319,500
Noram Energy Corp. ...... -- -- 11,100 172,050
Nordstrom, Inc. ......... 8,400 535,500 6,600 287,513
Norfolk Southern Corp. .. 13,200 1,362,900 10,200 918,000
Northern States Power Co.
MN .................... 7,800 388,050 5,600 263,900#
Northern Telecom, Ltd. .. 27,600 2,868,675 20,800 1,367,600
Northrop Grumman Corp. .. 7,000 849,625 4,700 390,688
Norwest Corp. ........... 39,600 2,425,500 29,900 1,397,825
Novell, Inc. ............ 36,700 329,727* 28,500 315,281*
Nucor Corp. ............. 9,300 489,994 7,100 386,063
Nynex Corp. ............. -- -- 35,400 1,641,675
Occidental Petroleum
Corp. ................ 34,800 902,625 26,100 626,400
Ohio Edison Co. ......... 16,100 377,344 12,300 282,900
Oneok, Inc. ............. 2,800 91,350 2,200 60,500
Oracle Systems Corp. ....103,162 3,762,189*# 52,775 2,592,572*
Oryx Energy Co. ......... 11,100 282,356* 8,500 176,375*
Owens Corning . ......... 5,600 204,400 4,200 180,075
Owens-Illinois Inc. ..... 14,800 502,275* -- --
PECO Energy Co. ......... 23,400 548,437 17,900 456,450
PNC Bank Corp. .......... 32,350 1,579,084 27,550 1,088,225
PP&L Resources, Inc. .... 17,300 378,438 13,000 297,375
PPG Industries, Inc. .... 18,900 1,184,794 15,000 918,750
Paccar, Inc. ............ 8,120 452,690 3,160 210,930
PacifiCorp .............. 31,100 695,862 23,800 499,800
Pacific Enterprises ..... 8,700 294,712 6,900 211,313
Pacific Gas & Electric
Co. ................... 46,100 1,068,944 33,600 810,600#
Pacific Telesis Group -- -- 34,600 1,280,200
Pall Corp. .............. 13,266 286,048 9,366 244,687
Panenergy Corp. ......... -- -- 12,200 536,800
Parametric Technology
Corp. ................. 13,400 590,856*# -- --
Parker-Hannifin Corp. ... 11,625 523,125 6,050 245,781
Penney (J.C.) Co., Inc. . 26,100 1,520,325 18,100 972,875
Pennzoil Co. ............ 5,000 398,437 3,800 213,750
Peoples Energy Corp. .... 3,700 139,444 2,900 105,125
Pep Boys-- Manny, Moe
& Jack ................ 6,600 179,850 5,100 186,788
Pepsico, Inc. ...........161,500 6,550,844 126,500 3,779,188
Perkin Elmer Corp. ...... 4,700 343,394# 3,500 215,688
Pfizer, Inc. ............136,300 8,186,519 51,900 4,651,538
Pharmacia & Upjohn, Inc. 53,580 1,955,670 40,980 1,582,853
Phelps Dodge Corp. ...... 6,400 496,800 5,300 384,913
Philip Morris Companies,
Inc. ..................255,400 10,615,062 66,100 6,816,563
Phillips Petroleum Co. .. 27,900 1,440,337 21,300 961,163
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1997 NOVEMBER 30, 1996
---------------------- -----------------------
(UNAUDITED)
SHARES VALUE(DAGGER) SHARES VALUE (DAGGER)
------- ------------- ------- --------------
Pioneer Hi-Bred
International, Inc. .. 8,800 $ 800,800 6,700 $ 467,325
Pitney Bowes, Inc. ...... 15,300 1,272,769 12,000 708,000
Placer Dome, Inc. ....... 25,200 481,950 19,400 458,325
Polaroid Corp. .......... 4,800 245,700 3,700 157,713
Potlatch Corp. .......... 2,900 145,906 2,300 101,775
Praxair, Inc. ........... 16,700 854,831 12,600 612,675
Procter & Gamble Co. ....142,432 9,836,710 55,316 6,015,615
Progressive Corp. ....... 7,600 814,150# -- --
Providian Corp. ......... 9,800 388,937 7,600 406,600
Public Service Enterprise
Group, Inc. ........... 24,600 633,450 19,700 563,913#
Pulte Corp. ............. 2,100 80,325 1,900 58,188
Quaker Oats Co. ......... 14,600 735,475 10,900 429,188
Ralston Purina Group .... 11,200 991,200 8,600 657,900
Raychem Corp. ........... 4,700 397,150 3,700 315,425
Raytheon Co. ............ 24,900 1,472,212 19,100 976,488
Reebok International,
Ltd. .................. 5,800 282,387 4,500 171,000
Republic New York Corp. . 5,800 659,025 4,500 397,125
Reynolds Metals Co. ..... 7,700 545,256 5,200 309,400
Rite Aid Corp. .......... 12,900 715,144 6,800 269,450
Rockwell International
Corp. ................. 22,300 1,403,506 17,700 1,137,225
Rohm & Haas Co. ......... 6,600 633,187 5,300 422,013
Rowan Companies, Inc. ... 9,100 324,187* 6,900 163,013
Royal Dutch Petroleum
Co. ...................226,000 12,543,000* 43,200 7,338,600
Rubbermaid, Inc. ........ 15,800 403,887 12,100 290,400
Russell Corp. ........... 3,900 114,806 3,100 89,125
Ryans Family Steak Houses,
Inc. .................. -- -- 4,100 28,316*
Ryder System, Inc. ...... 8,200 294,687 6,600 200,475
SBC Communications,
Inc. .................. 96,404 5,916,795 49,200 2,589,150
Safeco Corp. ............ 13,200 698,775 10,200 425,850
Safety Kleen Corp. ...... 6,100 146,019 4,700 74,613
Saint Jude Medical,
Inc. ................. 9,650 338,353*# 6,55 0274,281*
Saint Paul Companies,
Inc. ................. 8,800 717,750 6,800 400,350
Salomon, Inc. ........... 11,400 857,137 8,500 387,813#
Santa Fe Energy Resources,
Inc. .................. -- -- 7,280 105,560*
Santa Fe Pacific Corp. -- -- 10,654 122,521*
Sara Lee Corp. .......... 50,600 2,605,900# 39,200 1,538,600
Schering-Plough Corp. ... 77,100 3,970,650 29,800 2,123,250
Schlumberger, Ltd. ...... 52,300 4,403,006 19,800 2,059,200
Schwab (Charles) Corp. .. 27,950 999,213# -- --
Scientific-Atlanta,
Inc. ................. 8,200 185,525 6,200 96,100
Seagate Technology,
Inc. ................. 25,700 928,412* 17,000 671,500*
Seagram Co., Ltd. ....... 39,000 1,374,750 30,200 1,234,425#
Sears, Roebuck & Co. .... 41,300 2,351,519 31,600 1,572,100
Service Corp.
International ......... 26,400 849,750 19,100 575,388
Shared Medical Systems
Corp. ................. 2,700 142,762 1,900 94,050
Sherwin-Williams Co. .... 18,100 532,819 6,900 391,575
Shoney's, Inc. -- -- 3,900 32,175*
Sigma-Aldrich Corp. ..... 10,600 348,806 4,100 257,275
Silicon Graphics, Inc. .. 18,600 488,250*# 13,900 276,263*
Snap-On, Inc. ........... 6,300 290,193 4,900 177,625
Sonat, Inc. ............. 9,100 462,963 7,000 362,250
Southern Co. ............ 72,300 1,631,269 54,400 1,210,400
Southwest Airlines Co. .. 15,400 491,837 11,700 289,575
Springs Industries, Inc.
Class A ............... 2,150 112,875 1,750 81,375
Sprint Corp. ............ 45,400 2,270,000 34,700 1,453,063
Stanley Works ........... 9,300 399,900 7,200 212,400
State Street Corp. ...... 17,100 1,042,031 -- --
Stone Container Corp. ... 10,500 163,406 8,000 123,000
Stride Rite Corp. ....... 5,000 67,812 4,000 40,000
See accompanying notes to financial statements.
76
<PAGE>
STATEMENTS OF NET ASSETS THE DFA INVESTMENT TRUST COMPANY
THE U.S. LARGE COMPANY SERIES (CONTINUED)
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1997 NOVEMBER 30, 1996
---------------------- -----------------------
(UNAUDITED)
SHARES VALUE(DAGGER) SHARES VALUE (DAGGER)
------- ------------- ------- --------------
Sun Company, Inc. ....... 7,700 $ 337,356 6,000 $ 150,000
Sun Microsystems ........ 38,740 1,812,306* 14,820 862,339*
Sunamerica Inc. ......... 20,550 805,303 -- --
Suntrust Banks, Inc. .... 22,500 1,528,594 18,000 913,500
Supervalu, Inc. ......... 6,400 251,200 5,500 162,938
Sysco Corp. ............. 18,400 679,650 14,700 501,638
TJX Companies, Inc. ..... 17,200 525,675 5,900 266,238
TRW, Inc. ............... 13,100 718,862 5,300 516,088
Tandem Computers, Inc. .. -- -- 9,500 129,438*
Tandy Corp. ............. 11,230 377,609 4,815 202,832
Tektronix, Inc. ......... 3,500 236,031 2,700 131,625
Tele-Communications, Inc.
Class A ............... 53,300 1,090,984* 52,700 714,744*
Tellabs, Inc. ........... 19,000 979,687*# 14,400 575,100*
Temple-Inland, Inc. ..... 6,000 384,000 4,500 241,875
Tenet Healthcare Corp. .. 32,000 932,000* 17,400 389,325*
Tenneco, Inc. ........... 18,000 861,750 13,800 703,800
Texaco, Inc. ............ 55,600 3,415,925 21,400 2,121,275
Texas Instruments, Inc. . 20,200 2,729,525 15,300 975,375
Texas Utilities Co. ..... 25,297 910,692 18,100 714,950
Textron, Inc. ........... 17,400 1,131,000 6,600 629,475
Thermo-Electron Corp. ... 15,900 636,000* -- --
Thomas & Betts Corp. .... 5,800 316,825 3,300 149,325
Time Warner, Inc. ....... 59,160 3,205,732 45,960 1,872,870#
Times Mirror Co.
Class A ............... 10,100 554,869 8,400 439,950
Timken Co. .............. 6,500 260,406 2,600 118,625
Torchmark Corp. ......... 14,500 569,125 5,850 304,200
Toys 'R' Us, Inc. ....... 30,100 1,068,550* 22,100 762,450*
Transamerica Corp. ...... 6,900 686,550 5,400 428,625
Travelers Group, Inc. ... 67,496 4,606,583 51,796 2,330,822
Tribune Co. ............. 13,000 693,062 5,000 432,500
Trinova Corp. ........... -- -- 2,300 83,950
Tupperware Corp. ........ 6,400 180,000 5,000 265,000
Tyco International,
Ltd. .................. 28,200 2,314,162* 12,300 673,425
UNUM Corp. .............. 14,800 675,250 6,000 426,750
US Airways Group Inc. ... 8,200 339,275* 5,200 120,900*
US Bancorp .............. 25,898 2,499,157 12,500 535,938
US West, Inc.
Communications Group .. 50,500 1,944,250 38,500 1,203,125
US West, Inc. Media
Group ................. 63,800 1,423,537* 50,400 963,900*
USF&G Corp. ............. 11,600 266,075 9,500 190,000
USLIFE Corp. ............ -- -- 2,825 87,222
UST, Inc. ............... 19,300 589,856 15,200 495,900
USX-Marathon Group,
Inc. .................. 30,500 1,134,219 23,200 530,700
USX-US Steel Group ...... 9,020 313,445 6,820 205,453
Unicom Corp., Inc. ...... 22,900 535,287# 17,400 463,275
Unilever NV ............. 16,900 3,593,362 12,900 2,233,313
Union Camp Corp. ........ 7,200 444,150 5,600 275,100
Union Carbide Corp. ..... 13,100 637,806# 10,500 484,313
Union Electric Co. ...... 10,800 415,125 8,200 325,950
Union Pacific Corp. ..... 26,000 1,628,250 19,700 1,147,525
Union Pacific Resources
Group, Inc. ........... 26,876 703,815 20,076 599,771*#
Unisys Corp. ............ 18,400 281,750*# 14,000 106,750*
United Healthcare Corp. . 19,900 995,000# 14,800 638,250
United States Surgical
Corp. ................. 7,700 224,744 5,100 204,638
United Technologies
Corp. ................. 24,800 2,008,800# 9,800 1,374,450
Unocal Corp. ............ 26,200 1,133,150# 20,000 815,000
VF Corp. ................ 6,800 629,850 5,200 352,950
Viacom, Inc. Class B .... 37,134 1,174,363* 28,834 1,088,484*
WMX Technologies, Inc. .. 47,900 1,673,506 39,600 1,425,600
Wachovia Corp. .......... 17,000 1,224,000 13,500 810,000
Wal-Mart Stores, Inc. ...238,700 8,742,387 185,200 4,722,600
Walgreen Co. ............ 51,800 1,327,375 19,900 830,825
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1997 NOVEMBER 30, 1996
---------------------- -----------------------
(UNAUDITED)
SHARES VALUE(DAGGER) SHARES VALUE (DAGGER)
------- ------------- ------- --------------
Washington Mutual Inc.
(formerly Great Western
Financial Corp.) ...... 26,520 $1,848,112 11,100 $ 345,488
Warner-Lambert Co. ...... 28,700 3,872,706 21,900 1,565,850
Wells Fargo & Co. ....... 9,399 2,584,725 7,599 2,162,865
Wendy's International,
Inc. .................. 13,900 295,375 10,400 222,300
Western Atlas, Inc. ..... 5,700 501,600* 4,400 310,200*
Westinghouse Electric
Corp. ................. 68,300 1,848,369 34,000 637,500#
Westvaco Corp. .......... 10,550 380,459 8,250 233,063
Weyerhaeuser Co. ........ 21,000 1,246,875 16,000 736,000
Whirlpool Corp. ......... 7,800 517,237 6,000 300,000
Whitman Corp. ........... 10,700 291,575 8,500 195,500
Willamette Industries,
Inc. .................. 11,600 443,700 4,500 304,875
Williams Companies,
Inc. .................. 16,735 783,407 8,457 474,649
Winn-Dixie Stores,
Inc. .................. 15,700 556,369# 12,200 410,225
Woolworth Corp. ......... 14,200 314,175* 10,700 256,800*
Worldcom, Inc. .......... 95,220 3,365,432* 31,320 726,233*#
Worthington Industries,
Inc. .................. 10,075 203,704 7,375 147,039
Wrigley (Wm.) Jr.
Co. ................... 12,300 926,344 9,400 548,725
Xerox Corp. ............. 34,200 2,879,212 26,200 1,287,075
----------- --------------
TOTAL COMMON STOCKS --
(Cost 485,574,231 and
317,115,248,
respectively) ......... $773,283,237 $464,364,945
------------ ------------
FACE
AMOUNT
VALUE(DAGGER) (000) VALUE(DAGGER)
------------- ------ --------------
TEMPORARY CASH INVESTMENTS --
(0.0% and 0.6%, respectively)
Repurchase Agreement, PNC
Securities Corp. 5.45%, 12/02/96
(Collateralized by U.S. Treasury
Bills, 4.93%, 01/16/97)
(Cost 2,599,000) ........ $2,599 $ 2,599,000
------------
TOTAL INVESTMENTS --
(99.6% and 100.1%, respectively)
(Cost 485,574,231 and
319,714,248,
respectively) ........... 773,283,237 466,963,945
------------ ------------
OTHER ASSETS AND LIABILITIES --
(0.4% and (0.1%), respectively)
Other Assets ............ 5,043,387 1,553,594
Payable for Investment
Securities Purchased .. -- (2,008,214)
Loan Payable ............ (1,044,500) --
Other Liabilities ....... (802,232) (68,292)
------------ ------------
3,196,655 (522,912)
------------ ------------
NET ASSETS-- (100.0%) ..... $776,479,892 $466,441,033
============ ============
- --------------------
(DAGGER)See Note B to Financial Statements.
* Non-Income Producing Securities
# Securities on Loan
See accompanying notes to financial statements.
77
<PAGE>
STATEMENTS OF OPERATIONS THE DFA INVESTMENT TRUST COMPANY
THE U.S. LARGE COMPANY SERIES
<TABLE>
<CAPTION>
(AMOUNTS IN THOUSANDS)
TEN MONTHS YEAR
ENDED ENDED
SEPT. 30, NOV. 30,
1997 1996
----------- ---------
(UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME
Dividends ............................................... $ 9,283 $ 5,468
Interest ................................................ 113 98
Income From Securities Lending .......................... 33 7
-------- -------
Total Investment Income ............................... 9,429 5,573
-------- -------
EXPENSES
Investment Advisory Services ............................ 127 62
Accounting & Transfer Agent Fees ........................ 76 67
Custodian's Fee ......................................... 91 64
Legal Fees .............................................. 5 71
Audit Fees .............................................. 9 9
Shareholders' Reports ................................... 7 5
Trustees' Fees and Expenses ............................. 1 3
Other ................................................... 39 10
-------- -------
Total Expenses ........................................ 355 291
-------- -------
NET INVESTMENT INCOME ................................. 9,074 5,282
-------- -------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net Realized Gain (Loss) on Investment Securities .......... 1,079 (18)
Change in Unrealized Appreciation (Depreciation)
of Investment Securities ................................ 140,459 63,985
-------- -------
NET GAIN ON INVESTMENT SECURITIES ....................... 141,538 63,967
-------- -------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ....... $150,612 $69,249
======== =======
</TABLE>
See accompanying notes to financial statements.
78
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS THE DFA INVESTMENT TRUST COMPANY
THE U.S. LARGE COMPANY SERIES
<TABLE>
<CAPTION>
(AMOUNTS IN THOUSANDS)
TEN MONTHS YEAR YEAR
ENDED ENDED ENDED
SEPT. 30, NOV. 30, NOV. 30,
1997 1996 1995
----------- -------- ---------
(UNAUDITED)
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net Investment Income ........................................ $ 9,074 $ 5,282 $ 1,965
Net Realized Gain (Loss) on Investment Securities ........... 1,079 (18) 172
Change in Unrealized Appreciation (Depreciation) of
Investment Securities ...................................... 140,459 63,985 21,274
-------- -------- -------
Net Increase in Net Assets Resulting from Operations ....... 150,612 69,249 23,411
-------- -------- -------
Distributions From:
Net Investment Income ........................................ -- (1,215) (1,886)
Net Realized Gains ........................................... -- (686) --
-------- -------- -------
Total Distributions ........................................ -- (1,901) (1,886)
-------- -------- -------
Capital Share Transactions(1):
Shares Issued ................................................ -- 32,324 31,424
Shares Issued in Lieu of Cash Distributions .................. -- 1,744 1,585
Shares Redeemed .............................................. -- (10,535) (6,073)
-------- -------- -------
Net Increase from Capital Share Transactions ............... -- 23,533 26,936
-------- -------- -------
Transactions in Interest(1):
Contributions ................................................ 220,376 309,297 --
Withdrawals .................................................. (60,949) (30,855) --
-------- -------- -------
Net Increase from Transactions in Interest ................. 159,427 287,442 --
-------- -------- -------
Total Increase ............................................. 310,039 369,323 48,461
-------- -------- -------
NET ASSETS
Beginning of Period .......................................... 466,441 97,118 48,657
-------- -------- -------
End of Period ................................................ $776,480 $466,441 $97,118
======== ======== =======
(1) SHARES ISSUED AND REDEEMED:
Shares Issued ................................................ -- 2,257 2,738
Shares Issued in Lieu of Cash Distributions .................. -- 121 135
Shares Redeemed -- (754) (484)
-------- -------- -------
-- 1,624 2,389
======== ======== =======
<FN>
- ----------------
(1) Capital Share Transactions and Shares Issued and Redeemed are reported
through May 31, 1996. Transactions in Interest are reported for the period
June 1 through November 30, 1996 and subsequent periods. Effective June 1,
1996, the Series was reorganized as a partnership.
</FN>
</TABLE>
See accompanying notes to financial statements.
79
<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 YEAR FEB. 8
ENDED ENDED ENDED ENDED TO
SEPT. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
1997 1996(2) 1995 1994 1993
----------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <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) .............. $776,480 $466,441 $97,118 $48,657 $37,853
Ratio of Expenses to Average Net Assets ............ 0.07%* 0.12% 0.02%(a) 0.02%(a) 0.02%*(a)
Ratio of Net Investment Income to Average
Net Assets ...................................... 1.78%* 2.12% 2.61%(a) 2.83%(a) 2.87%*(a)
Portfolio Turnover Rate ............................ 4.67% 14.09% 2.38% 8.52% 34.36%*
Average Commission Rate(1) ......................... $ 0.0202 $ 0.0212 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 are 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.
(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.
80
<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, 1997, The Trust currently offers sixteen portfolios, of which The
U.S. Large Company Series (the "Series") is presented in this report.
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 within these Notes to Financial Statements as of and
for the period ended September 30, 1997 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.
Securities for which quotations are not readily available are valued 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.
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 Series'
custodian or a third party sub-custodian. All open repurchase agreements were
entered into on November 30, 1996.
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 the accrual basis. Expenses
directly attributable to the 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, 1997 and the year
ended November 30, 1996, 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.
81
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) THE DFA INVESTMENT TRUST COMPANY
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,
1997 1996
----------- ---------
(UNAUDITED)
Purchases $189,744 $282,929
Sales 23,621 34,231
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,
1997 1996
----------- ---------
(UNAUDITED)
Gross Unrealized Appreciation ............ $290,940 $150,865
Gross Unrealized Depreciation ............ (3,231) (3,615)
-------- --------
Net ...................................... $287,709 $147,250
======== ========
F. LINE OF CREDIT:
In July, 1996, the Trust, together with other DFA-advised portfolios,
entered into a $50 million unsecured line of credit with its domestic custodian
bank. Each portfolio is permitted to borrow, subject to its investment
limitations, up to a maximum of $50 million per portfolio. Borrowings under the
line are charged interest at the current overnight federal funds rate plus a
variable rate determined at the date of borrowing. Each portfolio is
individually and not jointly liable for its particular advances under the line.
There is no commitment fee on the unused portion of the line of credit. For the
ten months ended September 30, 1997 and year ended November 30, 1996, the Series
borrowed against the line of credit as follows:
<TABLE>
<CAPTION>
WEIGHTED WEIGHTED NUMBER OF INTEREST
AVERAGE AVERAGE DAYS EXPENSE
INTEREST RATE LOAN BALANCE OUTSTANDING INCURRED
------------- ------------ ----------- --------
<S> <C> <C> <C> <C>
Ten Months Ended September 30, 1997 (Unaudited) ........ 6.06% $1,401,351 19 $6,616
Year Ended November 30, 1996 ........................... 5.78% 550,235 10 1,502
</TABLE>
There was an outstanding balance of $1,044,500 under the line of credit at
September 30, 1997. There were no outstanding borrowings under the line of
credit at November 30, 1996.
G. SECURITIES LENDING
Security loans 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 received is as follows:
SEPT. 30, NOV. 30,
1997 1996
----------- -----------
(UNAUDITED)
Value of Securities on Loan ..................$55,519,629 $28,816,339
Value of Collateral and Indemnification ...... 57,263,342 29,392,666
82
<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 statement of net assets of The U.S. Large
Company Series of The DFA Investment Trust Company as of November 30, 1996, 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 of 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 misstatements. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosure in the financial
statements. Our procedures included confirmation of investments owned as of
November 30, 1996, 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 materials respects, the financial position of The
U.S. Large Company Series of The DFA Investment Trust Company as of November 30,
1996, 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 17, 1997
83
<PAGE>
[LOGO OMITTED] COMPASS CAPITAL FUNDS
Investment Adviser
PNC Asset Management Group, Inc.
Philadelphia, Pennsylvania 19103
Sub-Adviser -- Large Cap Value Equity Portfolio, Mid-Cap Value Equity Portfolio,
Small Cap Value Equity Portfolio, Select Equity Portfolio and Balanced Portfolio
Provident Capital Management,Inc.
Philadelphia, Pennsylvania 19103
Sub-Adviser -- Large Cap Growth Equity Portfolio, Mid-Cap Growth Equity
Portfolio, and Small Cap Growth Equity Portfolio
PNC Equity Advisors Company
Philadelphia, Pennsylvania 19103
Sub-Adviser -- Balanced Portfolio
BlackRock Financial Management, Inc.
New York, New York 10154
Sub-Adviser -- International Equity Portfolio, International Small Cap Equity
Portfolio and International Emerging Markets Portfolio
CastleInternational Asset Management Limited
Edinburgh, Scotland EH2 3AH
Custodian
PNC Bank, National Association
Philadelphia, Pennsylvania 19103
Co-Administrator and Transfer Agent
PFPC Inc.
Wilmington, Delaware 19809
Co-Administrator and Distributor
Compass Distributors, Inc.
West Conshohocken, Pennsylvania 19428
Co-Administrator
Compass Capital Group, Inc.
New York, New York 10154
Counsel
Simpson, Thacher & Bartlett
New York, New York 10017
(A partnership which includes professional corporations)
Independent Accountants
Coopers & Lybrand, L.L.P.
Philadelphia, Pennsylvania 19103
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COMPASS CAPITAL FUNDS [LOGO OMITTED]
FUND SPECTRUM
COMPASS CAPITAL FUNDS IS A LEADING MUTUAL FUND COMPANY CURRENTLY MANAGING IN
EXCESS OF $13 BILLION IN 31 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.(SERVICE MARK)
STOCK PORTFOLIOS
Large Cap Value Equity International Equity
Large Cap Growth Equity International Small Cap Equity
Mid-Cap Value Equity International Emerging Markets
Mid-Cap Growth Equity Select Equity
Small Cap Value Equity Index Equity
Small Cap Growth Equity
STOCK & BOND PORTFOLIO
Balanced
BOND PORTFOLIOS
Low Duration 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
MONEY MARKET PORTFOLIOS
Money Market North Carolina Municipal Money Market
U.S. Treasury Money Market Ohio Municipal Money Market
Municipal Money Market Pennsylvania Municipal Money Market
New Jersey Municipal Money Market Virginia Municipal Money Market
SHAREHOLDER PRIVILEGES
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 $1,000.
RETIREMENT PLANS
Shareholders may make investments in conjunction with individual IRA accounts or
rollover IRAs.
GENERAL INFORMATION ABOUT THE COMPASS FUNDS
If you would like additional reports or have questions regarding any of the 31
Compass Capital Funds, please call 1-888-4COMPASS. (1) Compass Capital Funds
reserves the right to modify or terminate the exchange privileges at any time.
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COMPASS CAPITAL FUNDS
[LOGO OMITTED]
PURE INVESTMENT STYLE(SERVICE MARK)
P.O. BOX 8907
WILMINGTON, DE 19899
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 THE PRINCIPAL AMOUNT
INVESTED.
AR 9/30/97-EP
