<PAGE> PAGE 1
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<PAGE> PAGE 2
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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<PAGE> PAGE 6
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<PAGE> PAGE 7
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<PAGE> PAGE 8
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<PAGE> PAGE 9
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<PAGE> PAGE 10
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<PAGE> PAGE 11
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<PAGE> PAGE 12
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<PAGE> PAGE 13
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<PAGE> PAGE 14
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<PAGE> PAGE 15
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<PAGE> PAGE 16
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SIGNATURE ANNE D. FONTAINE
TITLE TREASURER
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<NAME> FONTAINE CAPITAL APPRECIATION FUND
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<SERIES>
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<NAME> FONTAINE GLOBAL INCOME FUND
<S> <C>
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<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 4,063,819
<INVESTMENTS-AT-VALUE> 3,998,378
<RECEIVABLES> 191,871
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<TOTAL-LIABILITIES> 1,434,925
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<PAID-IN-CAPITAL-COMMON> 2,839,176
<SHARES-COMMON-STOCK> 253,409
<SHARES-COMMON-PRIOR> 101,297
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (9,715)
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (70,672)
<NET-ASSETS> 2,758,789
<DIVIDEND-INCOME> 20,440
<INTEREST-INCOME> 43,586
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<NET-INVESTMENT-INCOME> 41,603
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<APPREC-INCREASE-CURRENT> (74,151)
<NET-CHANGE-FROM-OPS> 152,222
<EQUALIZATION> 0
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<DISTRIBUTIONS-OF-GAINS> 184,770
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<NUMBER-OF-SHARES-SOLD> 235,669
<NUMBER-OF-SHARES-REDEEMED> 100,375
<SHARES-REINVESTED> 16,818
<NET-CHANGE-IN-ASSETS> 1,699,246
<ACCUMULATED-NII-PRIOR> 205
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<PER-SHARE-NAV-BEGIN> 10.46
<PER-SHARE-NII> .26
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<PER-SHARE-DIVIDEND> .30
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</TABLE>
[Coopers & Lybrand Letterhead]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees of
the Fontaine Trust, comprised of:
Fontaine Capital Appreciation Fund,
Fontaine Global Growth Fund, and
Fontaine Global Income Fund
In planning and performing our audits of the financial
statements and financial highlights of the Fontaine Trust,
comprised of: Fontaine Capital Appreciation Fund, Fontaine Global
Growth Fund, and Fontaine Global Income Fund (the "Funds") for the
year ended December 31, 1996, we considered its internal control
structure, including procedures for safeguarding securities, in
order to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and financial
highlights and to comply with the requirements of Form N-SAR, not
to provide assurance on the internal control structure.
The management of the Funds is responsible for
establishing and maintaining an internal control structure. In
fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and
related costs of internal control structure policies and
procedures. Two of the objectives of an internal control
structure are to provide management with reasonable, but not
absolute, assurance that assets are safeguarded against loss from
unauthorized use or disposition and that transactions are executed
in accordance with management's authorization and recorded
properly to permit preparation of financial statements in
conformity with generally accepted accounting principles.
Because of inherent limitations in any internal control
structure, errors or irregularities may occur and not be detected.
Also, projection of any evaluation of the structure to future
periods is subject to the risk that it may become inadequate
because of changes in conditions or that the effectiveness of the
design and operation may deteriorate.
Our consideration of the internal control structure would
not necessarily disclose all matters in the internal control
structure that might be material weaknesses under standards
established by the American Institute of Certified Public
Accountants. A material weakness is a condition in which the
design or operation of the specific internal control structure
elements does not reduce to a relatively low level the risk that
errors or irregularities in amounts that would be material in
relation to the financial statements and financial highlights
being audited may occur and not be detected within a timely period
by employees in the normal course of performing their assigned
functions. However, we noted no matters involving the Funds'
internal control structure, including procedures for safeguarding
securities, that we consider to be material weaknesses, as defined
above, as of December 31, 1996.
This report is intended solely for the information and use
of management and Board of Trustees of the Funds and the Securities
and Exchange Commission.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
February 20, 1997
