Firstar Stellar Treasury Fund
Firstar Stellar Tax-Free Money Market Fund
Firstar Stellar Ohio Tax-Free Money Market Fund
MONEY MARKET FUNDS
combined semi-annual report
May 31, 1999
(FIRSTAR STELLAR FUNDS LOGO)
PRESIDENT'S MESSAGE
Dear Shareholder:
On behalf of the Firstar Stellar Funds, thank you for your continued confidence
and for giving us the opportunity to help you achieve your financial goals.
From late 1998 through May of 1999, financial markets experienced substantial
short-term volatility. The investment strategies employed by the Firstar
Stellar Funds are designed to provide you steady performance through up and down
markets.
On the following pages you will find the results for December 1, 1998 through
May 31, 1999 for the cash management funds, as well as questions and answers
from our portfolio managers regarding fund performance. I hope you will take
the time to read this important information.
FIRSTAR STELLAR TREASURY FUND
This Fund seeks to provide income to shareholders with a principal value that is
stable.*<F1> To achieve this the Fund invests exclusively in short-term
Treasury securities. For the six month period ended May 31, 1999, the Fund
returned 1.93% for C shares and 2.01% for Y shares. This Fund remains a solid
choice for investors who are seeking taxable income with the maximum in
stability.
FIRSTAR STELLAR TAX-FREE MONEY MARKET FUND
This Fund seeks current income which is exempt from Federal taxation with a
principal value that is stable.*<F1> This is achieved by investing totally in a
diversified portfolio of short-term municipal securities.**<F2> For the six
month period ended May 31, 1999, the total return of the Fund was 1.21%. This
is an excellent choice for risk averse investors who seek tax-free income.
FIRSTAR STELLAR OHIO TAX-FREE MONEY MARKET FUND
This Fund seeks current income which is exempt from both Federal and Ohio state
income tax. This is accomplished by investing in municipal obligations of the
state of Ohio and its municipalities.**<F2> The return for the six months ended
May 31, 1999 was 1.32%. If you are an Ohio resident looking for tax-free income
with principal stability this Fund is a great choice.
We thank you for using the Firstar Stellar Funds to meet your investment needs
and we look forward to providing solid performance and service to you in the
future.
Sincerely,
/s/Daniel B. Benhase
Daniel B. Benhase
President
July 15, 1999
*<F1>Although money market funds seek to maintain a share value of $1.00,
there is no guarantee that they will do so. Investments in money market funds
are neither insured nor guaranteed by the U.S. Government.
**<F2>Income may be subject to the federal alternative minimum tax and state
and local taxes.
INVESTMENT REVIEWS
FIRSTAR STELLAR TREASURY FUND
Q Interest rates increased in the second quarter of 1999 due to concerns
about the domestic economy. How did the Treasury Fund perform?
A Short-term interest rates remained stable through the first quarter of
1999 with a slight increase during the second quarter of 1999 due to
inflationary concerns in the economy. The Treasury Fund yield remained
stable through the first and second quarter of 1999 and maintained competitive
yields compared to its peer group.
Q Is the Treasury Fund rated by a rating Agency?
A Yes. The Treasury Fund is rated "AAA", the highest rating possible, by
Fitch IBCA.
Q What is your outlook for this Fund for the remainder of 1999?
A We expect short-term rates to remain relatively stable through the rest of
1999. While the strong economy has continued to put upward pressure on interest
rates, we expect the growth rate of the economy to soften later this year and do
not foresee a significant increase in short-term rates.
FIRSTAR STELLAR TAX-FREE MONEY MARKET FUND
Q What major factors affected the tax-free money market in early 1999?
A Short-term tax-exempt variable rate demand notes fluctuated 200 basis
points in the first quarter of 1999, and finished the quarter 100 basis points
higher at 4.05% than where they started. While the second quarter of 1999 raised
inflationary concerns, short-term tax-exempt variable rate demand notes actually
dropped as low as 2.25% before rising back to 3.70%. The Firstar Stellar
Tax-Free Money Market Fund yield fluctuated in similar fashion to the market
overall.
Q Have economic concerns increased interest rates in the tax-free money
markets?
A Short-term tax-free rates initially fell in the second quarter of 1999
before rising on inflationary concerns in the economy. However, the rise in
short-term tax-free rates was not significant and did not reach the same levels
as where the quarter began.
Q What is your outlook for the remainder of 1999?
A Despite some inflationary concerns in the economy, we expect short-term
tax-exempt rates to remain stable over the remainder of 1999. We will maintain
an average maturity comparable to the industry benchmark, and continue to place
emphasis on maintaining a high-quality profile of securities that are not
subject to the federal alternative minimum tax.
FIRSTAR STELLAR OHIO TAX-FREE MONEY MARKET FUND
Q What major factors affected the tax-free money market in early 1999?
A Short-term tax-exempt variable rate demand notes fluctuated 200 basis
points in the first quarter of 1999, and finished the quarter 100 basis points
higher at 4.05% than where they started. While the second quarter of 1999 raised
inflationary concerns, short-term tax-exempt variable rate demand notes actually
dropped as low as 2.25% before rising back to 3.70%. The Firstar Stellar Ohio
Tax-Free Money Market Fund yield fluctuated in similar fashion to the market
overall.
Q Have economic concerns increased interest rates in the tax-free money
markets?
A Short-term tax-free rates initially fell in the second quarter of 1999
before rising on inflationary concerns in the economy. However, the rise in
short-term tax-free rates was not significant and did not reach the same levels
as where the quarter began.
Q What is your outlook for the remainder of 1999?
A Despite some inflationary concerns in the economy, we expect short-term
tax-exempt rates to remain stable over the remainder of 1999. We will maintain
an average maturity comparable to the industry benchmark, and continue to place
emphasis on maintaining a high-quality profile of securities that are not
subject to the federal alternative minimum tax.
PORTFOLIOS OF INVESTMENTS
FIRSTAR STELLAR TREASURY FUND May 31, 1999 (unaudited)
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PRINCIPAL AMOUNT AMORTIZED COST
- --------------------------------------------------------------------------------
U.S. TREASURIES - 33.0%
U.S. TREASURY NOTES - 33.0%
$60,000,000 6.00%, 6/30/1999 $60,055,167
70,000,000 6.375%, 7/15/1999 70,157,552
80,000,000 5.875%, 8/31/1999 80,290,966
70,000,000 6.875%, 8/31/1999 70,366,162
40,000,000 5.75%, 9/30/1999 40,141,797
60,000,000 7.125%, 9/30/1999 60,446,954
50,000,000 5.625%, 10/31/1999 50,204,233
20,000,000 7.50%, 10/31/1999 20,227,952
75,000,000 7.75%, 12/31/1999 76,272,712
40,000,000 5.375%, 1/31/2000 40,188,028
20,000,000 7.75%, 1/31/2000 20,370,252
20,000,000 5.50%, 2/29/2000 20,106,915
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Total 608,828,690
- --------------------------------------------------------------------------------
TOTAL U.S. TREASURIES 608,828,690
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REPURCHASE AGREEMENTS - 54.3%
- --------------------------------------------------------------------------------
90,000,000 Donaldson, Lufkin
and Jenrette
Securities Corp., 4.80%,
dated 5/28/1999, due
6/1/1999, repurchase price
90,048,000 (Collateralized
by U.S. Government Securities) 90,000,000
455,000,000 Lehman Brothers Inc., 4.80%,
dated 5/28/1999, due
6/1/1999, repurchase price
$455,242,667 (Collateralized
by U.S. Government Securities) 455,000,000
455,000,000 Swiss Bank, 4.80%, dated
5/28/1999, due 6/1/1999,
repurchase price $455,242,667
(Collateralized by U.S.
Government Securities) 455,000,000
- --------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS 1,000,000,000
- --------------------------------------------------------------------------------
MUTUAL FUNDS - 6.3%
27,229,819 Merrill Lynch
Institutions
Treasury Fund 27,229,819
88,802,587 Short Term Investment
Fund 88,802,587
- --------------------------------------------------------------------------------
TOTAL MUTUAL FUNDS 116,032,406
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS - 93.6% 1,724,861,096
- --------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES - 6.4% 118,847,110
- --------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $1,843,708,206
- --------------------------------------------------------------------------------
(See Notes to Financial Statements.)
FIRSTAR STELLAR TAX-FREE MONEY MARKET FUND May 31, 1999 (unaudited)
- --------------------------------------------------------------------------------
PRINCIPAL AMOUNT AMORIZED COST
- --------------------------------------------------------------------------------
SHORT-TERM MUNICIPALS - 99.0%
- --------------------------------------------------------------------------------
ARIZONA - 0.7%
$1,000,000 Tempe, AZ Industrial Development
Authorities, IDR Bonds Mandatory
Put, Safeway, Inc., (Bankers Trust
Company LOC), 3.25%, 10/15/1999 $1,000,000
- --------------------------------------------------------------------------------
COLORADO - 1.4%
2,000,000 Smith Creek Metropolitan District of
Colorado, Revenue Bonds Weekly VRDNs,
(NationsBank, Fort Worth LOC),
3.40%, 10/1/2035 2,000,000
- --------------------------------------------------------------------------------
FLORIDA - 2.3%
1,900,000 Putnam County, FL Development Authority
Pollution Control, Revenue Bonds Weekly
VRDNs, Seminole Electric,
3.35%, 3/15/2014 1,900,000
1,260,000 Putnam County, FL Development Authority
Pollution Control, Revenue Bonds Weekly
VRDNs, Seminole Electric,
3.60%, 3/15/2014 1,260,000
- --------------------------------------------------------------------------------
Total 3,160,000
- --------------------------------------------------------------------------------
HAWAII - 1.6%
2,225,000 Hawaii Department Budget & Finance,
Special Purpose Revenue Bonds Weekly
VRDNs, Kuakini Medical Center Project,
(Bank of Hawaii LOC), 3.30%, 7/1/2005 2,225,000
- --------------------------------------------------------------------------------
ILLINOIS - 19.8%
2,230,000 Bethany, IL Home & Hospital First
Mortgage Revenue Bonds, Methodist
Church, 7.75%, 4/1/2009,
Prerefunded 4/1/2000 2,312,518
1,535,000 Illinois Development Finance Authority,
Revenue Bonds Weekly VRDNs, Xavier
University, (American National Bank &
Trust LOC), 3.30%, 10/1/2012 1,535,000
3,500,000 Illinois Development Finance Authority,
Revenue Bonds Weekly VRDNs, Aurora
Catholic High School, (Northern Trust
Corp. LOC), 3.30%, 4/1/2024 3,500,000
1,000,000 Illinois Development Finance Authority,
Revenue Bonds Weekly VRDNs, St. Ignatius
College, (Northern Trust Corp. LOC),
3.30%, 6/1/2024 1,000,000
1,055,000 Illinois Development Finance Authority,
Revenue Bonds Weekly VRDNs, Lake
Forest Academy, (Northern Trust Corp.
LOC), 3.30%, 12/1/2024 1,055,000
1,520,000 Illinois Development Finance Authority,
Revenue Bonds Weekly VRDNs, St. Paul's
House Project, (LaSalle National Bank
LOC), 3.30%, 2/1/2025 1,520,000
2,000,000 Illinois Development Finance Authority,
Revenue Bonds Weekly VRDNs, Roosevelt
University, (American National Bank,
Chicago LOC), 3.30%, 4/1/2025 2,000,000
1,000,000 Illinois Development Finance Authority,
Revenue Bonds Weekly VRDNs, Rest
Haven Illinan, (South Holland Trust &
Savings LOC), 3.30%, 1/1/2027 1,000,000
2,000,000 Illinois Development Finance Authority
Series 1993A, Weekly VRDNs, Loyola
Academy, (Northern Trust Corp. LOC),
3.25%, 10/1/2027 2,000,000
4,500,000 Illinois Development Finance Authority
Series 1996, Variable/Fixed Rate Demand
Revenue Bonds Weekly VRDNs, Chicago
Symphony Orchestra Project, (Bank of
America Illinois LOC), 3.20%, 6/1/2031 4,500,000
2,000,000 Illinois Development Finance Authority
Pollution Control Series C, Revenue Bonds
Weekly VRDNs, Illinois Power Company,
(ABN-AMRO Bank N.A. LOC),
3.00%, 8/26/1999 2,000,000
2,500,000 Illinois Educational Facilities Authority,
Revenue Bonds Weekly VRDNs, Newberry
Library Project, (Northern Trust Corp.
LOC), 3.25%, 3/1/2028 2,500,000
2,900,000 Illinois Health Facilities Authority, Revenue
Bonds Weekly VRDNs, Gottlieb Health
Resources, Inc., (Harris Trust & Savings
Bank,Chicago LOC), 3.25%, 11/15/2025 2,900,000
- --------------------------------------------------------------------------------
Total 27,822,518
- --------------------------------------------------------------------------------
INDIANA - 2.4%
1,000,000 Indiana Bond Bank, Advance Funding
Program, Revenue Bonds, Series A,
4.55%, 8/1/1999 1,002,082
2,400,000 Indiana State Development Finance
Authority, Revenue Bonds Weekly VRDNs,
Indiana Historical Society, (NBD Bank
LOC), 3.25%, 8/1/2031 2,400,000
- --------------------------------------------------------------------------------
Total 3,402,082
- --------------------------------------------------------------------------------
KENTUCKY - 2.7%
3,800,000 Mason County, KY Pollution Control,
Revenue Bonds Weekly VRDNs, East
Kentucky Power, 3.35%, 10/15/2014 3,800,000
- --------------------------------------------------------------------------------
LOUISIANA - 3.8%
5,250,000 Jefferson Parish, LA Hospital Service
District No. 2, Revenue Bonds Weekly
VRDNs, 3.30%, 12/1/2015 5,250,000
- --------------------------------------------------------------------------------
MARYLAND - 1.2%
1,700,000 Baltimore, MD, EDA Weekly VRDNs, Field
Container Co. L.P., (American National
Bank, Chicago LOC), 3.30%, 12/1/1999 1,700,000
- --------------------------------------------------------------------------------
MISSISSIPPI - 1.4%
2,000,000 Forest, MS, IDR Refunding Bonds
Weekly VRDNs, Sara Lee Corp.,
3.30%, 10/1/2012 2,000,000
- --------------------------------------------------------------------------------
MISSOURI - 5.1%
7,200,000 Missouri State Environmental
Improvement & Energy Authority,
Revenue Bonds Weekly VRDNs,
Kansas City Power and Light Co.,
3.30%, 7/1/2017 7,200,000
- --------------------------------------------------------------------------------
NEW MEXICO - 1.5%
2,000,000 Albuquerque, NM Educational Facilities,
Revenue Bonds, 7.375%, 10/1/2014 2,066,772
- --------------------------------------------------------------------------------
OHIO - 25.6%
- --------------------------------------------------------------------------------
500,000 Butler County, OH, GO LT BANs,
4.10%, 8/5/1999 500,343
2,000,000 Butler County, OH, GO LT BANs,
3.55%, 10/21/1999 2,003,012
1,250,000 Butler County, OH, GO LT BANs,
3.49%, 3/16/2000 1,253,732
470,000 Centerville, OH, Health Care,
Revenue Bonds Weekly VRDNs,
Bethany Lutheran Village, (PNC Bank,
Ohio, N.A. LOC), 3.30%, 11/1/2013 470,000
1,670,000 Clermont County, OH, GO LT BANs,
3.40%, 12/16/1999 1,671,753
2,900,000 Cleveland, OH Income Tax Revenue
Bonds, Weekly VRDNs, (Toronto-Dominion
Bank LOC), 3.35%, 5/15/2024 2,900,000
5,000,000 Cuyahoga County, OH Hospital Authority
Series B Daily VRDNs, Cleveland Clinic,
3.30%, 1/1/2025 5,000,000
2,000,000 East Muskingum Water Authority, OH
Series 1998, BANs, 4.32%, 6/24/1999 2,000,387
1,000,000 Erie County, OH, GO LT BANs,
4.25%, 6/1/1999 1,000,000
1,800,000 Franklin County, OH Health System
Revenue Bonds, Daily VRDNs, Franciscan
Sisters, St. Anthony, (Chase Manhattan
Bank LOC), 3.35%, 7/1/2015 1,800,000
670,000 Franklin County, OH Hospital Revenue
Bonds, Weekly VRDNs, U.S. Health
Corp. of Columbus, 3.35%, 12/1/2011 670,000
700,000 Franklin County, OH Hospital Facility
Authority Series A, Weekly VRDNs, U.S.
Health Corp. of Columbus, (Morgan
Guaranty Trust Co., New York LOC),
3.35%, 12/1/2021 700,000
750,000 Hamilton County, OH Hospital Facilities
Authority Series 1997A, Weekly VRDNs,
Children's Hospital Medical Center, (PNC
Bank, Ohio, N.A. LOC), 3.35%, 5/15/2017 750,000
3,000,000 Hamilton County, OH Hospital Facilities
Authority Series B, Revenue Bonds Weekly
VRDNs, Health Alliance of Greater
Cincinnati, (MBIA Insurance Corporation
INS), 3.30%, 1/1/2018 3,000,000
750,000 Marysville, OH, GO UT BANs,
3.36%, 3/18/2000 751,495
3,000,000 Mayfield, OH, GO LT BANs,
3.65%, 9/28/1999 3,002,171
1,000,000 Ohio School Districts Cash Flow
Borrowing Program Series B TANs,
3.60%, 6/30/1999 1,000,345
450,000 Ohio State IDR, Weekly VRDNs, Cincinnati
Riverfront Coliseum, Inc., (PNC Bank,
Ohio, N.A. LOC), 3.30%, 6/1/2002 450,000
485,000 Ohio State IDR, Weekly VRDNs, Cincinnati
Riverfront Coliseum, Inc., (PNC Bank, Ohio,
N.A. LOC), 3.45%, 6/1/2003 485,000
2,000,000 Summit County, OH Series A,
GO LT BANs, 4.50%, 6/3/1999 2,000,080
1,000,000 University of Cincinnati, OH, BANs,
Series AJ, 3.14%, 3/1/2000 1,001,527
3,535,000 Warren County, OH Health Care Facilities,
Revenue Bonds Weekly VRDNs, (Fifth
Third Bank LOC), 3.30%, 7/1/2023 3,535,000
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Total 35,944,845
- --------------------------------------------------------------------------------
OREGON - 3.4%
4,845,000 Portland, OR Weekly VRDNs, University
Park Apartments, (Bank of Boston
LOC), 3.25%, 10/1/2011 4,845,000
- --------------------------------------------------------------------------------
PENNSYLVANIA - 6.4%
4,000,000 Allegheny County, PA IDA
3.15%, 7/8/1999 4,000,000
2,000,000 Allentown, PA Area Hospital Authority
Series B, Revenue Bonds Weekly VRDNs,
Sacred Heart Hospital, (First Union
National Bank LOC), 3.30%, 7/1/2023 2,000,000
1,625,000 Butler County, PA IDA, Health, Hospital
Series B, Lutheran Welfare, (PNC Bank,
N.A. LOC), 2.95%, 11/1/1999 1,625,000
1,320,000 Pennsylvania Infrastructure Invitation
Authority Series A, Revenue Bonds,
(Prerefunded 9/1/99 @ 102),
6.90%, 9/1/1999 1,357,616
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Total 8,982,616
- --------------------------------------------------------------------------------
TENNESSEE - 4.8%
3,600,000 Metropolitan Government Nashville &
Davidson County, TN HEFA,
Educational Facilities Revenue Bonds
Series 1997, Weekly VRDNs, Belmont
University Project, (SunTrust Bank,
Nashville LOC), 3.30%, 12/1/2022 3,600,000
3,100,000 Rutherford County, TN IDB Weekly
VRDNs, Square D Co., (Societe Generale,
Chicago, IL LOC), 3.25%, 4/1/2017 3,100,000
- --------------------------------------------------------------------------------
Total 6,700,000
- --------------------------------------------------------------------------------
TEXAS - 4.2%
2,170,000 Bexar County, Health Facilities
Development Authority Weekly VRDNs,
Army Retirement Resources Foundation,
(Rabobank Nederland, Utrecht LOC),
3.10%, 7/1/2011 2,170,000
1,800,000 San Antonio, TX IDA Weekly VRDNs,
San Antonio River Center Associates,
(PNC Bank, N.A. LOC), 3.45%,
12/1/2012 1,800,000
2,000,000 Waller County, TX IDC, Industrial
Improvement Revenue Bonds Weekly
VRDNs, Tubular Steel, Inc., (Wachovia
Bank of Georgia NA LOC),
3.25%, 9/1/1999 2,000,000
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Total 5,970,000
- --------------------------------------------------------------------------------
UTAH - 2.9%
4,000,000 Provo City, UT Energy Systems, Revenue
Bonds, 7.625%, 11/1/2012 4,071,652
- --------------------------------------------------------------------------------
VIRGINIA - 2.6%
1,660,000 Rockbridge County, VA IDA, IDR Bonds,
Safeway, Inc., (Bankers Trust Co. LOC),
3.05%, 8/2/1999 1,660,000
1,950,000 Virginia State Residential Authority Solid
Waste Disposal System, Series A,
Revenue Bonds, 7.30%, 4/1/2015 2,052,186
- --------------------------------------------------------------------------------
Total 3,712,186
- --------------------------------------------------------------------------------
WASHINGTON - 1.9%
2,500,000 Seattle, WA Municipal Water, Revenue
Bonds, 7.25%, 5/1/2017 2,637,870
- --------------------------------------------------------------------------------
WASHINGTON, D.C. - 3.3%
1,800,000 District of Columbia Series B, GO UT,
7.50%, 6/1/2010, Prerefunded 6/1/2000 1,906,548
2,605,000 District of Columbia, Revenue Bonds,
VRDN, Association of American
Medical Colleges, 7.50%, 2/15/2020,
Prerefunded 2/15/2000 2,732,739
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Total 4,639,287
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM MUNICIPALS 139,129,828
- --------------------------------------------------------------------------------
MUTUAL FUNDS - 0.4%
3,059 AIM Tax-Free Investments Co. 3,059
588,498 SEI Tax Exempt Money Market Fund 588,498
- --------------------------------------------------------------------------------
TOTAL MUTUAL FUNDS 591,557
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS - 99.4% 139,721,385
- --------------------------------------------------------------------------------
OTHER ASSETS, LESS LIABILITIES - 0.6% 828,670
- --------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $140,550,055
- --------------------------------------------------------------------------------
(See Notes to Financial Statements.)
FIRSTAR STELLAR OHIO TAX-FREE MONEY MARKET FUND May 31, 1999 (unaudited)
- --------------------------------------------------------------------------------
PRINCIPAL AMOUNT AMORTIZED COST
- --------------------------------------------------------------------------------
OHIO SHORT-TERM INVESTMENTS - 103.4%
- --------------------------------------------------------------------------------
OHIO SHORT-TERM MUNICIPALS - 102.3%
$2,200,000 Butler County, OH, GO LT BANs,
4.10%, 7/8/1999 $2,201,914
200,000 Butler County, OH, GO LT BANs,
3.49%, 3/16/2000 200,597
200,000 Centerville, OH Weekly VRDNs, Bethany
Lutheran Village, (PNC Bank, Ohio, N.A.
LOC), 3.30%, 5/1/2008 200,000
1,000,000 Clermont County, OH, GO LT BANs,
3.40%, 12/16/1999 1,001,050
2,500,000 Cleveland, OH Income Tax Revenue Bonds,
Weekly VRDNs, (Toronto-Dominion Bank
LOC), 3.35%, 5/15/2024 2,500,000
1,800,000 Columbus, OH, GO UT Weekly VRDNs,
3.20%, 6/1/2016 1,800,000
1,700,000 Columbus, OH, GO UT Weekly VRDNs,
3.20%, 12/1/2017 1,700,000
100,000 Columbus, OH Electrical Systems,
Electric, Light, & Power Improvement
Revenue Bonds Monthly VRDNs, (Union
Bank of Switzerland, Zurich LOC),
3.65%, 9/1/2009 100,137
1,000,000 Columbus, OH Sewer System, Revenue
Bonds Series 1994, Weekly VRDNs,
3.25%, 6/1/2011 1,000,000
1,500,000 Cuyahoga County, OH, Hospital Revenue
Bonds Weekly VRDNs, Cleveland Clinic,
3.30%, 1/1/2024 1,500,000
2,635,000 Cuyahoga County, OH, Hospital Revenue
Bonds Weekly VRDNs, Cleveland Clinic,
3.30%, 1/1/2025 2,635,000
500,000 Erie County, OH, GO LT BANs,
4.25%, 6/1/1999 500,000
500,000 Franklin County, OH, Hospital Revenue
Bonds, Weekly VRDNs, U.S. Health
Corp. of Columbus, 3.35%, 12/1/2011 500,000
2,500,000 Franklin County, OH Hospital Facility
Authority Series A, Weekly VRDNs, U.S.
Health Corp. of Columbus, (Morgan
Guaranty Trust Co., New York LOC),
3.35%, 12/1/2021 2,500,000
1,500,000 Franklin County, OH Hospital Revenue
Bonds, Weekly VRDNs, Doctors Ohio
Health Corp., (National City Bank LOC),
3.45%, 12/1/2028 1,500,000
1,000,000 Hamilton County, OH, Weekly VRDNs,
General Protestant Orphan Home,
(Fifth Third Bank, Cincinnati LOC),
3.38%, 12/1/2017 1,000,000
2,500,000 Hamilton County, OH Hospital Facilities
Authority Series 1997A, Weekly VRDNs,
Children's Hospital Medical Center,
(PNC Bank, Ohio, N.A. LOC),
3.35%, 5/15/2017 2,500,000
1,900,000 Hamilton County, OH Hospital Facilities
Authority Series B, Revenue Bonds
Weekly VRDNs, Health Alliance of
Greater Cincinnati, (MBIA Insurance
Corporation INS), 3.30%, 1/1/2018 1,900,000
2,000,000 Hamilton County, OH Hospital Facilities
Authority Series E, Revenue Bonds
Weekly VRDNs, Health Alliance of
Greater Cincinnati, (MBIA Insurance
Corporation INS), 3.30%, 1/1/2018 2,000,000
1,500,000 Hamilton, OH Multifamily Series A,
Revenue Bonds Weekly VRDNs, Knollwood
Village, (Bank One Indiana N.A. LOC),
3.42%, 1/1/2030 1,500,000
1,000,000 Loveland, OH City School District, GO UT
BANs, 4.00%, 7/15/1999 1,001,143
400,000 Mariemont, OH, BANs, 4.28%, 8/27/1999 400,348
690,000 Marion County, OH Hospital Authority
Series 1991, Weekly VRDNs, Marion
County, OH Pooled Hospital Program,
(Bank One, Ohio, N.A. LOC),
3.42%, 11/1/2021 690,000
750,000 Marysville, OH, GO UT BANs,
3.36%, 3/18/2000 751,495
1,000,000 Marysville Village School District, OH,
BANs, 3.685%, 6/30/1999 1,000,418
900,000 Mason, OH EDA Weekly VRDNs, Cedar
Village Project, (Fifth Third Bank, Cincinnati
LOC), 3.35%, 12/1/2017 900,000
498,787 Mercer County, OH, GO LT BANs,
3.90%, 10/21/1999 499,536
2,900,000 Middleburg Heights, OH, Hospital
Improvement Revenue Bonds Weekly
VRDNs, (KeyBank N.A. LOC),
3.45%, 8/15/2022 2,900,000
500,000 Milford, OH, GO LT BANs,
3.30%, 3/1/2000 500,906
200,000 North Ridgeville, OH, BANs,
4.375%, 6/2/1999 200,002
2,000,000 Ohio State Highway Capital Improvement
Series C, GO UT, 4.00%, 5/1/2000 2,015,180
410,000 Ohio State, IDR Weekly VRDNs, Cincinnati
Riverfront Coliseum, Inc., (PNC Bank,
Ohio, N.A. LOC), 3.45%, 6/1/1999 410,000
2,000,000 Ohio State University, 3.10%, 8/19/1999 2,000,000
2,000,000 Ohio State Water Development Authority,
Pollution Control Series 1997, Revenue
Bonds Weekly VRDNs, Philip Morris
Cos., Inc., 3.30%, 9/1/2018 2,000,000
140,000 Scioto County Regional Water District, OH,
Revenue Bonds, 3.75%, 6/1/1999 140,000
1,000,000 Southwest Licking Local School District, OH,
GO UT BANs, 3.75%, 6/15/1999 1,000,248
1,000,000 Southwest Local School District Hamilton
County, OH, BANs, 3.83%, 6/17/1999 1,000,294
800,000 Southwest Regional Water District, OH,
BANs, 4.10%, 8/19/1999 800,501
615,000 Springboro, OH, GO LT BANs,
4.05%, 7/29/1999 615,235
500,000 Summit County, OH Series B, GO LT BANs,
3.625%, 11/18/1999 501,639
1,000,000 Summit County, OH Civic Facility Weekly
VRDNs, Young Mens Christian Association,
(KeyBank, N.A. LOC), 3.35%, 12/1/2017 1,000,000
320,000 Sycamore Community City School
District, OH, (AMBAC INS),
3.20%, 12/1/1999 320,000
800,000 Tiffin, OH, GO LT, 3.95%, 7/8/1999 800,196
1,000,000 University of Cincinnati, OH, BANs,
3.26%, 8/18/1999 1,000,607
1,000,000 Walnut Hills High School Alumni
Foundation, OH, Revenue Bonds
Weekly VRDNs, (Fifth Third Bank LOC),
3.38%, 12/1/2006 1,000,000
1,000,000 Warren County, OH Health Care Facilities
Series A, Weekly VRDNs, Otterbein Homes,
(Fifth Third Bank, Cincinnati LOC),
3.35%, 7/1/2021 1,000,000
- --------------------------------------------------------------------------------
TOTAL OHIO SHORT-TERM MUNICIPALS 53,186,446
- --------------------------------------------------------------------------------
OHIO MONEY MARKET MUTUAL FUND - 1.1%
580,991 Midwest Ohio Tax-Free Fund 580,991
- --------------------------------------------------------------------------------
TOTAL OHIO MONEY MARKET MUTUAL FUND 580,991
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS - 103.4% 53,767,437
- --------------------------------------------------------------------------------
LIABILITIES, LESS OTHER ASSETS - (3.4%) (1,745,209)
- --------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $52,022,228
- --------------------------------------------------------------------------------
(See Notes to Financial Statements.)
ABBREVIATIONS TO PORTFOLIOS OF INVESTMENTS
The following abbreviations are used in these portfolios:
AMBAC -- American Municipal Bond Assurance Corporation
BANs -- Bond Anticipation Notes
EDA -- Economic Development Authority
GO -- General Obligation
HEFA -- Health and Education Facilities Authority
IDA -- Industrial Development Authority
IDB -- Industrial Development Bond
IDR -- Industrial Development Revenue
INS -- Insured
LOC -- Letter of Credit
LT -- Limited Tax
MBIA -- Municipal Bond Investors Assurance
UT -- Unlimited Tax
VRDNs -- Variable Rate Demand Notes
STATEMENTS OF ASSETS AND LIABILITIES
May 31, 1999 (unaudited)
Firstar
Firstar Stellar
Stellar Ohio
Firstar Tax-Free Tax-Free
Stellar Money Money
Treasury Market Market
Fund Fund Fund
- --------------------------------------------------------------------------------
ASSETS:
Investments in
repurchase
agreements $1,000,000,000 -- --
Investments in
securities, at
amortized cost 724,861,096 $139,721,385 $53,767,437
- --------------------------------------------------------------------------------
Total investments
in securities,
at amortized
cost 1,724,861,096 139,721,385 53,767,437
- --------------------------------------------------------------------------------
Cash -- 36,522 4,621
Income receivable 15,953,493 1,198,129 448,993
Receivable
for investments
sold 110,000,000 -- --
- --------------------------------------------------------------------------------
Total assets 1,850,814,589 140,956,036 54,221,051
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LIABILITIES:
Income distribution
payable 5,730,704 294,273 127,204
Payable to bank 12,634 -- --
Payable for
investments
purchased -- -- 2,021,847
Payable to affiliates 1,362,084 107,532 39,707
Accrued expenses 961 4,176 10,065
- --------------------------------------------------------------------------------
Total liabilities 7,106,383 405,981 2,198,823
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS $1,843,708,206 $140,550,055 $52,022,228
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS:
C Shares $502,709,087 $140,550,055 $52,022,228
Y Shares 1,340,999,119 -- --
- --------------------------------------------------------------------------------
Total net
assets $1,843,708,206 $140,550,055 $52,022,228
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHARES OUTSTANDING:
C Shares 502,709,087 140,550,055 52,022,228
Y Shares 1,340,999,119 -- --
- --------------------------------------------------------------------------------
Total shares
outstanding 1,843,708,206 140,550,055 52,022,228
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
C Shares $1.00 $1.00 $1.00
Y Shares $1.00 -- --
- --------------------------------------------------------------------------------
Investments,
at identified
cost $1,724,861,096 $139,721,385 $53,767,437
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Investments, at tax cost $1,724,861,096 $139,721,385 $53,767,437
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(See Notes to Financial Statements.)
STATEMENTS OF OPERATIONS
Six Months Ended May 31, 1999 (unaudited)
Firstar
Firstar Stellar
Stellar Ohio
Firstar Tax-Free Tax-Free
Stellar Money Money
Treasury Market Market
Fund Fund Fund
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest income $42,265,454 $2,318,558 $965,247
EXPENSES:
Investment advisory fees 4,441,598 404,044 167,946
Shareholder services fees 2,221,087 183,730 76,339
Administration fees 977,152 80,809 33,589
Distribution services
fees -- C Shares 378,316 -- --
Custodian fees 222,080 18,366 7,634
Transfer and dividend
disbursing agent fees
and expenses 190,344 17,416 7,350
Federal and state
registration fees 101,388 8,064 10,265
Portfolio accounting fees 79,002 20,790 20,748
Auditing fees 13,874 8,568 5,558
Printing and postage 10,920 7,056 2,352
Trustees' fees 2,758 2,870 2,688
Legal fees 1,316 1,316 2,156
Miscellaneous 19,418 1,050 658
- --------------------------------------------------------------------------------
Total expenses 8,659,253 754,079 337,283
- --------------------------------------------------------------------------------
Waivers--
- --------------------------------------------------------------------------------
Waiver of investment
advisory fees -- (73,463) (122,289)
Waiver of shareholder
services fees (1,541,598) (128,368) (53,730)
- --------------------------------------------------------------------------------
Total waivers (1,541,598) (201,831) (176,019)
- --------------------------------------------------------------------------------
Net expenses 7,117,655 552,248 161,264
- --------------------------------------------------------------------------------
NET INVESTMENT
INCOME $35,147,799 $1,766,310 $803,983
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(See Notes to Financial Statements.)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
FIRSTAR FIRSTAR
STELLAR STELLAR OHIO
FIRSTAR TAX-FREE TAX-FREE
STELLAR MONEY MONEY
TREASURY MARKET MARKET
FUND FUND FUND
----------------------------------- -------------------------------- ----------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED PERIOD ENDED
MAY 31, 1999 NOVEMBER 30, MAY 31, 1999 NOVEMBER 30, MAY 31, 1999 NOVEMBER 30,
(UNAUDITED) 1998 (UNAUDITED) 1998 (UNAUDITED) 1998(A)<F3>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE)
IN NET ASSETS
OPERATIONS--
Net investment income $35,147,799 $63,044,398 $1,766,310 $3,435,860 $803,983 $1,005,066
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS--
Distributions from
net investment
income
C Shares (9,712,715) (20,969,988) (1,766,310) (3,435,860) (803,983) (1,005,066)
Y Shares (25,435,084) (42,074,410) -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Change in net assets
from distributions
to shareholders (35,147,799) (63,044,398) (1,766,310) (3,435,860) (803,983) (1,005,066)
- ------------------------------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS--
Proceeds from sales of
shares 4,556,777,205 9,879,339,361 202,762,375 490,492,605 80,516,434 137,909,771
Net asset value of
shares issued to
shareholders
in payment of
distributions
declared 228,898 433,873 2,832 5,730 4,632 3,259
Cost of shares redeemed(4,378,871,382) (9,342,895,476) (196,771,588) (482,289,434) (86,112,487) (80,299,381)
- ------------------------------------------------------------------------------------------------------------------------------------
Change in net assets
from share
transactions 178,134,721 536,877,758 5,993,619 8,208,901 (5,591,421) 57,613,649
- ------------------------------------------------------------------------------------------------------------------------------------
Change in net
assets 178,134,721 536,877,758 5,993,619 8,208,901 (5,591,421) 57,613,649
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 1,665,573,485 1,128,695,727 134,556,436 126,347,535 57,613,649 --
- ------------------------------------------------------------------------------------------------------------------------------------
End of period $1,843,708,206 $1,665,573,485 $140,550,055 $134,556,436 $52,022,228 $57,613,649
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
(a)<F3> Reflects operations from December 2, 1997 (date of initial public investment) to November 30, 1998.
(See Notes to Financial Statements.)
</TABLE>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
<TABLE>
RATIOS TO AVERAGE NET ASSETS
NET ASSET DISTRIBUTIONS --------------------------------------------- NET ASSETS,
VALUE, NET FROM NET NET ASSET NET EXPENSE END OF
PERIOD ENDED BEGINNING INVESTMENT INVESTMENT VALUE, END TOTAL INVESTMENT WAIVER/ PERIOD
NOVEMBER 30, OF PERIOD INCOME INCOME OF PERIOD RETURN(a)<F4> EXPENSES INCOME REIMBURSEMENT (B)<F5> (000 OMITTED)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FIRSTAR STELLAR TREASURY FUND
C SHARES
1994 $1.00 0.03 (0.03) $1.00 3.30% 0.70% 3.24% 0.20% $358,766
1995 $1.00 0.05 (0.05) $1.00 5.23% 0.71% 5.14% 0.20% $654,963
1996 $1.00 0.05 (0.05) $1.00 4.80% 0.70% 4.69% 0.20% $829,259
1997 $1.00 0.05 (0.05) $1.00 4.85% 0.73% 4.73% 0.20% $469,400
1998 $1.00 0.05 (0.05) $1.00 4.69% 0.88% 4.58% 0.20% $542,430
1999(f)<F9> $1.00 0.02 (0.02) $1.00 1.93% 0.91%(d)<F7>3.85%(d)<F7> 0.17%(d)<F7> $502,709
Y SHARES
1997(c)<F6> $1.00 0.03 (0.03) $1.00 3.37% 0.72%(d)<F7>4.87%(d)<F7> 0.20%(d)<F7> $659,296
1998 $1.00 0.05 (0.05) $1.00 4.84% 0.73% 4.73% 0.20% $1,123,144
1999(f)<F9> $1.00 0.02 (0.02) $1.00 2.01% 0.76%(d)<F7>4.00%(d)<F7> 0.17%(d)<F7> $1,340,999
FIRSTAR STELLAR TAX-FREE MONEY MARKET FUND
C SHARES
1994 $1.00 0.02 (0.02) $1.00 2.15% 0.65% 2.12% 0.35% $135,427
1995 $1.00 0.03 (0.03) $1.00 3.32% 0.66% 3.26% 0.35% $167,356
1996 $1.00 0.03 (0.03) $1.00 2.91% 0.70% 2.87% 0.31% $153,256
1997 $1.00 0.03 (0.03) $1.00 3.02% 0.69% 2.96% 0.30% $126,348
1998 $1.00 0.03 (0.03) $1.00 2.83% 0.75% 2.79% 0.30% $134,556
1999(f)<F9> $1.00 0.01 (0.01) $1.00 1.21% 0.75%(d)<F7>2.40%(d)<F7> 0.27%(d)<F7> $140,550
FIRSTAR STELLAR OHIO TAX-FREE MONEY MARKET FUND
C SHARES
1998(e)<F8> $1.00 0.03 (0.03) $1.00 2.85% 0.69%(d)<F7>2.81%(d)<F7> 0.60%(d)<F7> $57,614
1999(f)<F9> $1.00 0.01 (0.01) $1.00 1.32% 0.53%(d)<F7>2.63%(d)<F7> 0.57%(d)<F7> $52,022
- -----------------------------------------------------------------------------------------------------------------------------------
(a)<F4>Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
(b)<F5>This voluntary expense decrease is reflected in both the expense and net investment income ratios.
(c)<F6>Reflects operations for the period from March 25, 1997 (date of initial public investment) to November 30, 1997.
(d)<F7>Computed on an annualized basis.
(e)<F8>Reflects operations for the period from December 2, 1997 (date of initial public investment) to November 30, 1998.
(f)<F9>For the six months ended May 31, 1999 (unaudited).
</TABLE>
(See Notes to Financial Statements.)
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1999(unaudited)
(1) ORGANIZATION
Firstar Stellar Funds, formerly Star Funds (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as an open-end
management investment company. The Trust consists of ten diversified portfolios
and one non-diversified portfolio. The financial statements of the following
portfolios (individually referred to as the "Fund", or collectively as the
"Funds") are presented herein along with each Fund's investment objective:
PORTFOLIO NAME INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
Firstar Stellar Treasury Fund Stability of principal and current
("Treasury Fund") income consistent with stability of
principal.
Firstar Stellar Tax-Free Money Current income exempt from federal
Market Fund ("Tax-Free regular income tax consistent
Money Market Fund") with stability of principal.
Firstar Stellar Ohio Tax-Free Current income exempt from federal
Money Market Fund ("Ohio income tax and the personal
Tax-Free Money Market Fund") income taxes imposed by the
state of Ohio and Ohio
municipalities with stability of
principal.
The financial statements of the Bond Funds and the Stock Funds are presented
separately. The assets of each portfolio are segregated and a shareholder's
interest is limited to the portfolio in which shares are held.
The Treasury Fund offers two classes of shares, (C Shares and Y Shares); the
Tax-Free Money Market Fund offers one class of shares (C Shares); and the Ohio
Tax-Free Money Market Fund offers one class of shares (C Shares).
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
A. INVESTMENT VALUATIONS
The Funds' use of the amortized cost method which approximates market, to value
their portfolio securities is in accordance with Rule 2a-7 under the Act.
Investments in other open-end investment companies are valued at net asset
value.
B. REPURCHASE AGREEMENTS
It is the policy of the Funds to require the custodian bank to take possession,
to have legally segregated in the Federal Reserve Book Entry System, or to have
segregated within the custodian bank's vault, all securities held as collateral
under repurchase agreement transactions. Additionally, procedures have been
established by the Funds to monitor, on a daily basis, the market value of each
repurchase agreement's collateral to ensure that the value of collateral at
least equals the repurchase price to be paid under the repurchase agreement
transaction.
The Funds will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed by
the Funds' adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the "Trustees").
Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Funds could receive less
than the repurchase price on the sale of collateral securities.
C. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS
Interest income and expenses are accrued daily. Net investment income other than
class specific expenses, and realized and unrealized gains and losses are
allocated daily to each class of shares based upon the relative net asset value
of outstanding shares (or the value of dividend-eligible shares, as appropriate)
of each class of shares at the beginning of the day (after adjusting for the
current day's capital share activity of the respective class). Distributions to
shareholders are recorded on the ex-dividend date.
D. FEDERAL TAXES
It is each Fund's policy to comply with the provisions of the Internal Revenue
Code, as amended applicable to regulated investment companies and to distribute
to shareholders each year substantially all of its income. Accordingly, no
provisions for federal taxes are necessary.
E. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
The Funds may engage in when-issued or delayed delivery transactions. The Funds
record when-issued securities on the trade date and maintain security positions
such that sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed delivery
basis are marked to market daily and begin earning interest on the settlement
date.
F. USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts of assets, liabilities, revenues and expenses reported in the
financial statements. Actual results could differ from those estimated.
G. OTHER
Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value). At May
31, 1999, paid in capital for the Treasury Fund, Tax-Free Money Market Fund and
Ohio Tax-Free Money Market Fund aggregated $1,843,708,206, $140,550,055 and
$52,022,228, respectively. Transactions in Fund shares were as follows:
TREASURY FUND
------------------------------
SIX MONTHS YEAR
ENDED ENDED
MAY 31, NOVEMBER 30,
C SHARES 1999 1998
- --------------------------------------------------------------------------------
Shares sold 2,412,548,278 4,205,836,659
Shares issued to shareholders
in payment of distributions
declared 83,194 139,604
Shares redeemed (2,452,352,358) (4,132,946,429)
------------------------------
Net change resulting from
C Share transactions (39,720,886) 73,029,834
------------------------------
TREASURY FUND
------------------------------
SIX MONTHS YEAR
ENDED ENDED
MAY 31, NOVEMBER 30,
Y SHARES 1999 1998
- --------------------------------------------------------------------------------
Shares sold 2,144,228,927 5,673,502,702
Shares issued to shareholders
in payment of distributions
declared 145,704 294,269
Shares redeemed (1,926,519,024) (5,209,949,047)
------------------------------
Net change resulting from
Y Share transactions 217,855,607 463,847,924
------------------------------
Net change resulting from
Fund share transactions 178,134,721 536,877,758
------------------------------
------------------------------
TAX-FREE MONEY
MARKET FUND
------------------------------
SIX MONTHS YEAR
ENDED ENDED
MAY 31, NOVEMBER 30,
C SHARES 1999 1998
- --------------------------------------------------------------------------------
Shares sold 202,762,375 490,492,605
Shares issued to shareholders
in payment of distributions
declared 2,832 5,730
Shares redeemed (196,771,588) (482,289,434)
------------------------------
Net change resulting from
C Share transactions 5,993,619 8,208,901
------------------------------
OHIO TAX-FREE
MONEY MARKET FUND
------------------------------
SIX MONTHS PERIOD
ENDED ENDED
MAY 31, NOVEMBER 30,
C SHARES 1999 1998*<F10>
- --------------------------------------------------------------------------------
Shares sold 80,516,434 137,909,771
Shares issued to shareholders
in payment of distributions
declared 4,632 3,259
Shares redeemed (86,112,487) (80,299,381)
------------------------------
Net change resulting from
C Share transactions (5,591,421) 57,613,649
------------------------------
*<F10> Reflects operations for the period from December 2, 1997 (date of
initial public investment) to November 30, 1998.
(4) INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A. GENERAL
Certain officers of Firstar Bank, N.A. and Firstar Mutual Fund Services, LLC
serve as officers or Trustees of the Trust. Firstar Bank, N.A. and Firstar
Mutual Fund Services, LLC are related by virtue of each being a subsidiary of
Firstar Corporation.
B. INVESTMENT ADVISORY FEES
Firstar Bank, N.A., the Trust's investment adviser (the "Adviser"), receives for
its services an annual investment advisory fee based on a percentage of each
Fund's average daily net assets as follows:
FUND NAME ANNUAL RATE
- ----------------------------------------------
Treasury Fund 0.50%
Tax-Free Money Market Fund 0.55%
Ohio Tax-Free Money Market Fund 0.55%
- ----------------------------------------------
The Adviser may voluntarily choose to waive a portion of its fee. The Adviser
may modify or terminate this voluntary waiver of its advisory fees at any time
at its sole discretion.
C. ADMINISTRATIVE FEES
Firstar Mutual Fund Services, LLC ("Firstar") provides the Funds with certain
administrative personnel and services. Firstar receives a fee at an annual rate
of 0.11% of the average daily net assets of each Fund for the period.
D. DISTRIBUTION SERVICES FEES
Pursuant to the provisions of a distribution plan adopted in accordance with the
Investment Company Act Rule 12b-1 (the "Plan"), C Shares of the Trust may pay to
the distributor of the Funds an amount computed at an annual rate of 0.25% of
the average daily net assets to finance any activity which is principally
intended to result in the sale of shares subject to the Plan. Effective April 1,
1999, Edgewood Services, Inc. became the distributor of the Funds. Prior to that
date, B.C. Ziegler and Company served as the distributor of the Funds.
Currently, only the Treasury Fund is accruing and paying 12b-1 fees. The Tax-
Free Money Market Fund and the Ohio Tax-Free Money Market Fund will not accrue
or pay any distribution expenses pursuant to the Plan until a "Y" class of
shares has been registered with the Securities and Exchange Commission.
E. SHAREHOLDER SERVICES FEES
Under the terms of a Shareholder Services Agreement with Firstar Bank, N.A.,
each Fund may pay Firstar Bank, N.A. up to 0.25% of average daily net assets of
the Funds for the period. Prior to March 1, 1999, Firstar Bank, N.A. limited the
Shareholder Servicing fee to 0.05% of average daily net assets. As of March 1,
1999, the Shareholder Servicing fee was changed to 0.10% of average daily net
assets. The fee paid to Firstar Bank, N.A. is used to finance certain services
for shareholders and to maintain shareholder accounts. Firstar Bank, N.A. can
modify or terminate this limitation at any time at its sole discretion.
F. TRANSFER AND DIVIDEND DISBURSING AGENT FEES
Firstar Bank, N.A. serves as transfer and dividend disbursing agent for the
Funds. The fee paid to Firstar Bank, N.A. is based on the size, type and number
of accounts and transactions made by shareholders.
G. PORTFOLIO ACCOUNTING FEES
Firstar is the Funds' accounting services agent. Firstar is responsible for
maintaining the Funds' accounting records for which it receives a fee. The fee
is based on the level of each Fund's average daily net assets for the period,
subject to an annual minimum of $39,000 per Fund, plus out-of-pocket expenses.
H. CUSTODIAN FEES
Firstar Bank, N.A. is the Funds' custodian for which it receives a fee. The fee
is based on the level of each Fund's average daily net assets for the period,
plus out-of-pocket expenses.
TRUSTEES OFFICERS
Thomas L. Conlan Jr. Daniel B. Benhase
PRESIDENT
Dr. Alfred Gottschalk Joseph C. Neuberger
VICE PRESIDENT
Dr. Robert J. Hill Michael T. Karbouski
TREASURER
Dawn M. Hornback Elaine E. Richards
SECRETARY
Lawrence M. Turner
William H. Zimmer III
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government or the Federal
Deposit Insurance Corporation. Investment in mutual funds involves investment
risks, including the possible loss of principal. Although money market funds
seek to maintain a stable net asset value of $1.00 per share, there is no
assurance that they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Trust's prospectus which contains facts
concerning its objectives and policies, management fees, expenses and other
information.
Firstar Stellar Funds are available through:
o the Firstar Funds Center,
o Investment Specialists who are either registered
representatives of Firstar Investment Services, Inc.,
a registered broker/dealer, NASD and SIPC member,
or registered representatives of MDS Securities,
a division of Conseco Financial Services, Inc.,
a registered broker/dealer, NASD and SIPC member,
o and through selected shareholder organizations.
This report is authorized for distribution only when preceded or
accompanied by a current prospectus.
For Account Balance and Investor Services Information
1-800-677-FUND
1-414-287-3808
Firstar Stellar Funds
615 East Michigan Street
P.O. Box 701
Milwaukee, WI 53201-0701
www.firstarstellarfunds.com
(FIRSTAR STELLAR FUNDS LOGO)
Form# SFMMSEM-99
