EXPEDITION FUNDS
Investment Adviser and Custodian:
Compass Bank
15 S. 20th Street
Birmingham, Alabama 35233
Distributor:
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, Pennsylvania 19456
Transfer Agent:
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
Servicing Agent:
Boston Financial Data Services, Inc.
Two Heritage Drive
Quincy, Massachusetts 02171
Independent Auditors:
Deloitte & Touche LLP
2500 One PPG Place
Pittsburgh, Pennsylvania 15222-5401
Counsel:
Morgan, Lewis & Bockius LLP
1800 M Street, N.W.
Washington, D.C. 20036
EXPEDITION
FUNDS
Formerly The Starburst Funds
Money Market Fund
- ----------------------------------------
Semi-Annual
Report
to Shareholders
- ----------------------------------------
APRIL 30, 1997
EXP-F-007-01
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
As part of our commitment to provide you with the highest possible level of
service, we are pleased to announce the following changes to our family of
mutual funds.
NEW NAME--The Starburst Funds have been renamed the Expedition Funds. Though the
name has changed, the funds' portfolios will continue to be managed by the
experienced professionals of Compass Bank's Asset Management Division.
NEW FUND ADMINISTRATOR--The Board has appointed SEI Fund Resources as the new
fund administrator. SEI brings a great deal of experience and ability to help
develop distribution strategies to broaden the investor base and investment
options of the Expedition Funds.
NEW EQUITY FUND--The Expedition Equity Fund is a new fund which will soon be
available for investors. This fund's primary objective is to provide long-term
growth of capital through investment in the stock market. Its secondary
objective is to provide income. Investments will include both large and
mid-capitalization stocks using a blended style of management.
EXPEDITION BOND FUND--Formerly called the Starburst Government Income Fund and
now called the Expedition Bond Fund, this fund's shareholders may enjoy
opportunities to increase their income potential because the fund is now able to
purchase a wider variety of securities, including corporate bonds. The average
maturity of the fund is expected to range between 3 to 5 years.
MONEY MARKET FUND--Shareholders may see an increase in their monthly dividend as
a result of a reduction in the expenses of the fund.
Please read the remainder of this semi-annual report of the Expedition Funds for
more information.
We are excited about the enhancements we are able to offer you with the
Expedition Funds. And as always, we appreciate the opportunity to serve your
investment needs and look forward to helping you plan for your financial
expedition. Please contact us at 1-800-992-2085 should you have any questions.
Cordially,
Jan Koenig, CFA
Chief Investment Officer
Compass Asset Management
THE EXPEDITION MONEY MARKET FUND
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
During the six-month period ended April 30, 1997, the yield on the three-month
treasury bill increased 8 basis points while the yield on the one-year treasury
bill increased 46 basis points. Thus the money market yield curve steepened 38
basis points. The Federal Reserve increased the Fed Funds rate target to 5.50%
from 5.25% as a preemptive measure to control the risk of higher inflation.
Tight labor markets, increased consumer confidence and lower exchange rates may
increase the pressure on the Federal Reserve to take further action later this
year.
Because of conflicting economic data and uncertainty regarding Federal Reserve
monetary policy, Fund average maturity was targeted at 46 to 56 days throughout
most of the period. Fund assets were heavily concentrated in 30 and 60-day
commercial paper and one-year corporate notes while the remainder of the Fund
was invested in overnight repurchase agreements.
The range bound trading of the fixed-income markets that began after the Federal
Reserve meeting in March may continue through the second quarter or until
economic data prompts the Federal Reserve to take more action. However,
volatility outside the current trading ranges could occur due to an overreaction
by the market to temporary or inaccurate data. Nevertheless, Fund average
maturity is expected to remain near the Donoghue All Taxable Money Fund Average
while the Fund's adviser attempts to add value through the selection of
attractive commercial paper and corporate notes.
THE EXPEDITION MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
CERTIFICATES OF DEPOSIT--6.6%
- ------------------------------------------------------------------------------------------------
$ 5,000,000 Barclays Bank PLC, London, 5.50%, 5/27/1997 $ 5,000,000
---------------------------------------------------------------------------------
5,000,000 Societe Generale, Paris, 5.38%, 5/5/1997 5,000,025
--------------------------------------------------------------------------------- --------------
TOTAL CERTIFICATE OF DEPOSIT 10,000,025
--------------------------------------------------------------------------------- --------------
COMMERCIAL PAPER--61.4%
- ------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES--3.2%
---------------------------------------------------------------------------------
5,000,000 Pitney Bowes Credit Corp., 5.35%-5.65%, 5/15/1997-7/7/1997 4,973,084
--------------------------------------------------------------------------------- --------------
FINANCE--9.8%
---------------------------------------------------------------------------------
3,000,000 American General Finance Corp., 5.368%, 5/9/1997 2,996,453
---------------------------------------------------------------------------------
5,000,000 BankAmerica Corp., 5.392%, 6/9/1997 4,971,183
---------------------------------------------------------------------------------
7,000,000 Merrill Lynch & Co., Inc., 5.524%-5.576%, 5/9/1997 6,991,389
--------------------------------------------------------------------------------- --------------
Total 14,959,025
--------------------------------------------------------------------------------- --------------
FINANCE--AUTOMOTIVE--3.3%
---------------------------------------------------------------------------------
5,000,000 Vehicle Services of America, 5.383%, 5/28/1997 4,980,088
--------------------------------------------------------------------------------- --------------
FINANCIAL SERVICES--15.7%
---------------------------------------------------------------------------------
7,000,000 Avco Financial Services, Inc., 5.408%-5.529%, 5/16/1997-5/22/1997 6,981,442
---------------------------------------------------------------------------------
3,000,000 General Electric Capital Corp., 5.379%, 5/5/1997 2,998,223
---------------------------------------------------------------------------------
7,000,000 Goldman Sachs Group, LP, 5.53%-5.555%, 5/27/1997 6,972,122
---------------------------------------------------------------------------------
7,000,000 Xerox Credit Corp., 5.357%-5.533%, 5/1/1997-5/16/1997 6,993,125
--------------------------------------------------------------------------------- --------------
Total 23,944,912
--------------------------------------------------------------------------------- --------------
FUNDING CORP.--21.5%
---------------------------------------------------------------------------------
2,000,000 Centric Funding Corp., 5.566%, 5/8/1997 1,997,846
---------------------------------------------------------------------------------
5,000,000 Falcon Asset Securitization Corp., 5.542%-5.543%, 5/13/1997 4,990,800
---------------------------------------------------------------------------------
7,000,000 Madison Funding Corp., 5.648%-5.753%, 5/28/1997-6/25/1997 6,957,075
---------------------------------------------------------------------------------
7,000,000 Preferred Receivable Funding, 5.351%-5.378%, 5/12/1997-5/27/1997 6,977,676
---------------------------------------------------------------------------------
7,000,000 Receivables Capital Corp., 5.547%, 5/27/1997 6,972,093
---------------------------------------------------------------------------------
$ 5,000,000 Safeco Credit Co., 5.701%, 7/29/1997 $ 4,930,531
--------------------------------------------------------------------------------- --------------
</TABLE>
THE EXPEDITION MONEY MARKET FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMERCIAL PAPER--CONTINUED
- ------------------------------------------------------------------------------------------------
FUNDING CORP.--CONTINUED
---------------------------------------------------------------------------------
Total 32,826,021
--------------------------------------------------------------------------------- --------------
PRODUCER MANUFACTURING--3.3%
---------------------------------------------------------------------------------
5,000,000 General Electric Co., 5.526%, 5/19/1997 4,986,250
--------------------------------------------------------------------------------- --------------
UTILITIES--4.6%
---------------------------------------------------------------------------------
4,000,000 Alabama Power Co., 5.598%, 6/20/1997 3,969,222
---------------------------------------------------------------------------------
3,000,000 Southwestern Bell Telephone Co., 5.343%, 5/5/1997 2,998,233
--------------------------------------------------------------------------------- --------------
Total 6,967,455
--------------------------------------------------------------------------------- --------------
TOTAL COMMERCIAL PAPER 93,636,835
--------------------------------------------------------------------------------- --------------
CORPORATE BONDS--12.1%
- ------------------------------------------------------------------------------------------------
CONSUMER NON-DURABLES--0.7%
---------------------------------------------------------------------------------
1,050,000 Philip Morris Cos., Inc., 9.45%, 11/19/1997 1,068,257
--------------------------------------------------------------------------------- --------------
FINANCE--4.4%
---------------------------------------------------------------------------------
1,650,000 American General Finance Corp., 7.00%, 10/1/1997 1,659,575
---------------------------------------------------------------------------------
2,000,000 BankAmerica Corp., 6.00%, 7/15/1997 2,000,409
---------------------------------------------------------------------------------
3,000,000 NationsBank Corp., 5.20%-6.625%, 7/15/1997-1/15/1998 3,011,014
--------------------------------------------------------------------------------- --------------
Total 6,670,998
--------------------------------------------------------------------------------- --------------
FINANCE--AUTOMOTIVE--2.6%
---------------------------------------------------------------------------------
4,000,000 Ford Motor Credit Corp., 6.45%-9.50%, 8/26/1997-2/5/1998 4,038,110
--------------------------------------------------------------------------------- --------------
FINANCE--COMMERCIAL--1.0%
---------------------------------------------------------------------------------
1,500,000 Associates Corp. of North America, 6.625%, 11/15/1997 1,505,902
--------------------------------------------------------------------------------- --------------
LEASING--0.8%
---------------------------------------------------------------------------------
1,200,000 International Lease Finance Corp., 7.15%, 4/20/1998 1,212,040
--------------------------------------------------------------------------------- --------------
UTILITIES--2.6%
---------------------------------------------------------------------------------
4,000,000 Southern California Edison Co., 6.125%, 7/15/1997 4,003,742
--------------------------------------------------------------------------------- --------------
TOTAL CORPORATE BONDS 18,499,049
--------------------------------------------------------------------------------- --------------
</TABLE>
THE EXPEDITION MONEY MARKET FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
CORPORATE NOTES--7.1%
- ------------------------------------------------------------------------------------------------
FINANCE--0.9%
---------------------------------------------------------------------------------
$ 1,300,000 American General Finance Corp., 6.625%, 6/1/1997 $ 1,300,824
--------------------------------------------------------------------------------- --------------
FINANCE--COMMERCIAL--3.0%
---------------------------------------------------------------------------------
4,575,000 Associates Corp. of North America, 6.75%, 6/13/1997-7/15/1997 4,581,564
--------------------------------------------------------------------------------- --------------
FINANCIAL SERVICES--0.7%
---------------------------------------------------------------------------------
1,100,000 General Electric Capital Corp., 7.65%, 2/23/1998 1,117,373
--------------------------------------------------------------------------------- --------------
LEASING--2.5%
---------------------------------------------------------------------------------
3,770,000 International Lease Finance Corp., 5.42%-6.50%,
6/2/1997-7/15/1997 3,774,520
--------------------------------------------------------------------------------- --------------
TOTAL CORPORATE NOTES 10,774,281
--------------------------------------------------------------------------------- --------------
GOVERNMENT AGENCIES--5.2%
- ------------------------------------------------------------------------------------------------
(A) FEDERAL NATIONAL MORTGAGE ASSOCIATION--1.9%
---------------------------------------------------------------------------------
3,000,000 5.43%, 5/2/1997 2,999,549
--------------------------------------------------------------------------------- --------------
(B) STUDENT LOAN MARKETING ASSOCIATION--3.3%
---------------------------------------------------------------------------------
1,000,000 5.61%, 5/6/1997 1,000,000
---------------------------------------------------------------------------------
4,000,000 5.68%, 5/6/1997 4,002,970
--------------------------------------------------------------------------------- --------------
Total 5,002,970
--------------------------------------------------------------------------------- --------------
TOTAL GOVERNMENT AGENCIES 8,002,519
--------------------------------------------------------------------------------- --------------
(C) REPURCHASE AGREEMENT--7.5%
- ------------------------------------------------------------------------------------------------
11,453,000 Merrill Lynch, Pierce, Fenner and Smith, 5.40%, dated 4/30/1997,
due 5/1/1997 11,453,000
--------------------------------------------------------------------------------- --------------
TOTAL INVESTMENTS (AT AMORTIZED COST) (D) $ 152,365,709
--------------------------------------------------------------------------------- --------------
</TABLE>
(a) Each issue shows the rate of discount at the time of purchase.
(b) Denotes variable rate securities which show current rate and next demand
date.
(c) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio.
(d) Also represents cost for federal tax purposes.
THE EXPEDITION MONEY MARKET FUND
- --------------------------------------------------------------------------------
Note: The categories of investments are shown as a percentage of net assets
($152,475,677) at
April 30, 1997.
The following acronyms are used throughout this portfolio:
LP--Limited Partnership
PLC--Public Limited Company
(See Notes which are an integral part of the Financial Statements)
THE EXPEDITION MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $ 152,365,709
- -------------------------------------------------------------------------------------------------
Cash 974
- -------------------------------------------------------------------------------------------------
Income receivable 669,284
- ------------------------------------------------------------------------------------------------- --------------
Total assets 153,035,967
- -------------------------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------------
Income distribution payable $ 549,180
- -------------------------------------------------------------------------------------
Accrued expenses 11,110
- ------------------------------------------------------------------------------------- ----------
Total liabilities 560,290
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 152,475,677 shares outstanding $ 152,475,677
- ------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- -------------------------------------------------------------------------------------------------
TRUST SHARES:
- -------------------------------------------------------------------------------------------------
$123,740,724 / 123,740,724 shares outstanding $1.00
- ------------------------------------------------------------------------------------------------- --------------
INVESTMENT SHARES:
- -------------------------------------------------------------------------------------------------
$28,734,953 / 28,734,953 shares outstanding $1.00
- ------------------------------------------------------------------------------------------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
THE EXPEDITION MONEY MARKET FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------------------------
Interest $ 4,052,896
- ----------------------------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------------
Investment advisory fee $ 296,415
- ----------------------------------------------------------------------------------------
Administrative personnel and services fee 105,623
- ----------------------------------------------------------------------------------------
Custodian fees 24,075
- ----------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 48,224
- ----------------------------------------------------------------------------------------
Directors'/Trustees' fees 2,591
- ----------------------------------------------------------------------------------------
Auditing fees 10,821
- ----------------------------------------------------------------------------------------
Legal fees 1,182
- ----------------------------------------------------------------------------------------
Portfolio accounting fees 28,522
- ----------------------------------------------------------------------------------------
Distribution services fee--Investment Shares 36,442
- ----------------------------------------------------------------------------------------
Share registration costs 8,010
- ----------------------------------------------------------------------------------------
Printing and postage 10,443
- ----------------------------------------------------------------------------------------
Insurance premiums 373
- ----------------------------------------------------------------------------------------
Miscellaneous 1,629
- ---------------------------------------------------------------------------------------- ----------
Total expenses 574,350
- ----------------------------------------------------------------------------------------
Waiver--
- ----------------------------------------------------------------------------------------
Waiver of distribution services fee--Investment Shares (14,577)
- ---------------------------------------------------------------------------------------- ----------
Net expenses 559,773
- ---------------------------------------------------------------------------------------------------- ------------
Net investment income $ 3,493,123
- ---------------------------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
THE EXPEDITION MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
APRIL 30, 1997 OCTOBER 31, 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------------------------
Net investment income $ 3,493,123 $ 7,780,223
- ------------------------------------------------------------------------- ---------------- --------------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------------------------------------
Distributions from net investment income
- -------------------------------------------------------------------------
Trust Shares (2,819,777) (5,827,160)
- -------------------------------------------------------------------------
Investment Shares (673,346) (1,953,063)
- ------------------------------------------------------------------------- ---------------- --------------------
Change in net assets resulting from
distributions to shareholders (3,493,123) (7,780,223)
- ------------------------------------------------------------------------- ---------------- --------------------
SHARE TRANSACTIONS--
- -------------------------------------------------------------------------
Proceeds from sale of shares 430,861,850 672,443,575
- -------------------------------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 501,822 2,023,784
- -------------------------------------------------------------------------
Cost of shares redeemed (451,607,666) (698,096,099)
- ------------------------------------------------------------------------- ---------------- --------------------
Change in net assets resulting from share
transactions (20,243,994) (23,628,740)
- ------------------------------------------------------------------------- ---------------- --------------------
Change in net assets (20,243,994) (23,628,740)
- -------------------------------------------------------------------------
NET ASSETS:
- -------------------------------------------------------------------------
Beginning of period 172,719,671 196,348,411
- ------------------------------------------------------------------------- ---------------- --------------------
End of period $ 152,475,677 $ 172,719,671
- ------------------------------------------------------------------------- ---------------- --------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
THE EXPEDITION MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--TRUST SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1997 1996 1995 1994 1993 1992 1991 1990(A)
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------
Net investment income 0.02 0.04 0.05 0.03 0.03 0.04 0.06 0.06
- ------------------------------------
LESS DISTRIBUTIONS
- ------------------------------------
Distributions from net investment
income (0.02) (0.04) (0.05) (0.03) (0.03) (0.04) (0.06) (0.06)
- ------------------------------------ ------ --------- --------- --------- --------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------ ------ --------- --------- --------- --------- --------- --------- -----------
TOTAL RETURN (B) 2.38% 4.95% 5.51% 3.29% 2.84% 4.07% 6.44% 5.89%
- ------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------
Expenses 0.73%* 0.71% 0.56% 0.75% 0.70% 0.64% 0.62% 0.58%*
- ------------------------------------
Net investment income 4.74%* 4.85% 5.38% 3.26% 2.83% 4.01% 6.13% 7.80%*
- ------------------------------------
Expense waiver/reimbursement (c) -- -- 0.10% 0.04% -- 0.01% 0.05% 0.10%*
- ------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------
Net assets, end of period
(000 omitted) $123,741 $136,666 $141,434 $158,367 $131,508 $187,394 $212,997 $117,716
- ------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from February 5, 1990 (date of initial
public investment) to October 31, 1990.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
THE EXPEDITION MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--INVESTMENT SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
APRIL 30, YEAR ENDED OCTOBER 31,
<S> <C> <C> <C> <C> <C> <C> <C>
1997 1996 1995 1994 1993 1992 1991(A)
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------------------
Net investment income 0.02 0.04 0.05 0.03 0.03 0.04 0.03
- -----------------------------------------------
LESS DISTRIBUTIONS
- -----------------------------------------------
Distributions from net investment income (0.02) (0.04) (0.05) (0.03) (0.03) (0.04) (0.03)
- ----------------------------------------------- ------ --------- --------- --------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------- ------ --------- --------- --------- --------- --------- -----------
TOTAL RETURN (B) 2.31% 4.79% 5.35% 3.13% 2.69% 3.95% 2.90%
- -----------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------------------
Expenses 0.88%* 0.86% 0.71% 0.91% 0.86% 0.78% 0.61%*
- -----------------------------------------------
Net investment income 4.62%* 4.70% 5.22% 3.11% 2.66% 3.65% 5.51%*
- -----------------------------------------------
Expense waiver/reimbursement (c) 0.10%* 0.10% 0.20% 0.22% 0.20% 0.19% 0.05%*
- -----------------------------------------------
SUPPLEMENTAL DATA
- -----------------------------------------------
Net assets, end of period (000 omitted) $28,735 $36,054 $54,914 $39,722 $39,780 $36,432 $7,238
- -----------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from April 29, 1991 (date of initial
public investment) to October 31, 1991.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
THE EXPEDITION MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
The Expedition Funds (the "Trust") is registered under the Investment Company
Act of 1940, as amended (the "Act") as an open-end, management investment
company. As of April 30, 1997, the Trust consists of three portfolios. Effective
June 9, 1997, the Trust registered a fourth portfolio, the Expedition Equity
Fund. The financial statements included herein are only those of The Expedition
Money Market Fund (the "Fund"). The financial statements of the other portfolios
which were operational at April 30, 1997 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 investment objective of the Fund is to
provide current income consistent with stability of principal.
The Fund offers two classes of shares: Trust Shares and Investment Shares.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS--It is the policy of the Fund 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 Fund 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 Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's 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 Fund could
receive less than the repurchase price on the sale of collateral
securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
THE EXPEDITION MONEY MARKET FUND
- --------------------------------------------------------------------------------
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains 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.
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,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
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) for each
class of shares. At April 30, 1997, capital paid-in aggregated $152,475,677.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
TRUST SHARES APRIL 30, 1997 OCTOBER 31, 1996
<S> <C> <C>
Shares sold 290,015,886 333,904,465
- -------------------------------------------------------------------------
Shares redeemed (302,941,281) (338,672,882)
- ------------------------------------------------------------------------- ---------------- --------------------
Net change resulting from Trust Share transactions (12,925,395) (4,768,417)
- ------------------------------------------------------------------------- ---------------- --------------------
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
INVESTMENT SHARES APRIL 30, 1997 OCTOBER 31, 1996
<S> <C> <C>
Shares sold 140,845,964 338,539,110
- -------------------------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 501,822 2,023,784
- -------------------------------------------------------------------------
Shares redeemed (148,666,385) (359,423,217)
- ------------------------------------------------------------------------- ---------------- --------------------
Net change resulting from Investment Share
transactions (7,318,599) (18,860,323)
- ------------------------------------------------------------------------- ---------------- --------------------
Net change resulting from share transactions (20,243,994) (23,628,740)
- ------------------------------------------------------------------------- ---------------- --------------------
</TABLE>
THE EXPEDITION MONEY MARKET FUND
- --------------------------------------------------------------------------------
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Compass Bank, the Fund's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee
equal to 0.40% of the Fund's average daily net assets.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the
Fund with certain administrative personnel and services. The fee paid to
FAS is based on the level of average aggregate net assets of the Trust for
the period. Effective June 9, 1997, SEI Fund Resources (SFR) serves as
administrator to each Fund under an Administration Agreement. SFR is
entitled to receive an annual fee based upon each Fund's average net
assets, paid monthly for services performed under the Administration
Agreement.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan,
the Fund will compensated Federated Securities Corp. ("FSC"), the principal
distributor at that time, from the net assets of the Fund to finance
activities intended to result in the sale of the Fund's Investment Shares.
The Plan provides that the Fund may incur distribution expenses up to 0.25%
of the average daily net assets of the Investment Shares, annually, to
compensate the Distributor. The distributor may voluntarily choose to waive
any portion of its fee. The distributor can modify or terminate this
voluntary waiver at any time at its sole discretion. Effective June 9,
1997, SEI Investments Distribution Co. serves as the distributor to the
Fund.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ"), through its subsidiary, Federated Shareholder
Services Company ("FSSC"), served as transfer and dividend disbursing agent
for the Fund. The fee paid to FSSC was based on the size, type, and number
of accounts and transactions made by shareholders. Effective June 9, 1997
State Street Bank and Trust Company serves as the transfer agent and Boston
Financial Data Services, Inc. serves as dividend disbursing agent for the
Funds.
PORTFOLIO ACCOUNTING FEES--FServ maintained the Fund's accounting records
for which it received a fee. The fee was based on the level of the Fund's
average daily net assets for the period, plus out-of-pocket expenses.
CUSTODIAN FEES--Compass Bank is the Fund's custodian. The fee is based on
the level of the Fund's average daily net assets for the period, plus
out-of-pocket expenses.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
SHARES OF THE EXPEDITION MONEY MARKET FUND ARE NOT DEPOSITS OR OBLIGATIONS OF
COMPASS BANK, COMPASS BANCSHARES, INC. OR ANY OF ITS AFFILIATES, OR OF ANY BANK,
ARE NOT ENDORSED OR GUARANTEED BY COMPASS BANK, COMPASS BANCSHARES, INC. OR ANY
OF ITS AFFILIATES, OR BY ANY BANK, AND ARE NOT OBLIGATIONS OF, GUARANTEED BY OR
INSURED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN SHARES OF
THE EXPEDITION MONEY MARKET FUND INVOLVES INVESTMENT RISK, INCLUDING POSSIBLE
LOSS OF PRINCIPAL. ALTHOUGH THE EXPEDITION MONEY MARKET FUND SEEKS TO MAINTAIN A
STABLE NET ASSET VALUE OF $1.00 PER SHARE, THERE IS NO ASSURANCE THAT IT WILL BE
ABLE TO DO SO.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus, which contains facts
concerning its objective and policies, management fees, expenses and other
information.
