Expedition Funds GUIDING YOUR WAY
1998 Annual Report
[Graphic omitted]
<PAGE>
Table of Contents
Letter to Shareholders ............................... 1
Management's Discussion and Analysis ................. 3
Statement of Net Assets .............................. 9
Statement of Operations .............................. 29
Statement of Changes in Net Assets ................... 30
Financial Highlights ................................. 32
Notes to Financial Statements ........................ 34
Independent Auditors' Report ......................... 41
Shares of the Expedition Funds are not deposits of or obligations of, or
guaranteed or endorsed by Compass Bank, Compass Bancshares, Inc. or any of their
affiliates, or 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.
An investment in shares of the Funds involves investment risk, including the
possible loss of all or a portion of the principal invested, and the investment
return and value of shares of the Funds will fluctuate so that an investment,
when liquidated, may be worth more or less than the original cost.
Money market funds are not insured or guaranteed by the U.S. Government and
there can be no assurance that the Expedition Money Market Fund will be able to
maintain a stable net asset value of $1.00 per share.
Compass Bank serves as investment advisor and custodian to the Expedition Funds,
and Compass Bank and various of its affiliates may provide various services to
the Funds, for which investment advisory, custodian and other services Compass
Bank and/or such other affiliates are entitled to receive compensation.
<PAGE>
[logo omitted]
<PAGE>
Letter to Shareholders
Dear Shareholder:
Since the inception of the Expedition Funds family, we have encouraged our
shareholders to invest prudently, to avoid market timing, and to be patient
through temporary downturns in the market. Fiscal 1998 stands as proof that this
advice remains sound. And we are pleased to report that our shareholders appear
to have practiced these time-tested principles of investing during one of the
most challenging years in recent memory.
The fiscal year began with concerns over economic turmoil in Asia. During
the next several months, this turmoil deepened, eventually spreading to other
emerging economies around the world, particularly Russia and South America.
For a time, many feared that the wave of recessionary pressure would
eventually reach America's shores. And while there have been signs of weakness
due to the loss of key export markets, the American economy has proved
remarkably resilient throughout the global crisis.
The resiliency of the domestic economy is due in part to timely action by
the Federal Reserve Board, which reduced short-term interest rates twice during
the fiscal year to help ensure stability. But it must also be said that some of
the credit belongs to our nation's individual investors, who kept their
composure even in the face of exceptional volatility.
Those investors who held their positions throughout the worst of the year's
news were rewarded by a truly remarkable rebound in the U.S. equity markets,
which recouped all but a small percentage of their recent declines by fiscal
year-end. Moreover, those who had the presence of mind to add to their holdings
during times of weakness are now benefiting from significant gains.
In short, the fiscal year served as an accelerated course in how to invest
during turbulent times, and America's growing legion of individual investors
passed this difficult course with high marks.
October 31, 1998 1
<PAGE>
Letter to Shareholders (concluded)
GROWTH IN THE EXPEDITION FUND FAMILY
Despite ongoing turmoil in the markets, the past twelve months were a
period of solid growth and positive developments for the Expedition Funds
family.
Assets under management increased substantially during the year, rising
from $558 million at the end of fiscal 1997 to $710 million at October 31, 1998.
One contributor to our asset growth was the Expedition Tax-Free Money
Market Fund, which was introduced in April, 1998. The Fund met with immediate
demand, and has continued to attract new investment since its introduction. We
are gratified by these initial results, and are pleased to offer this new
portfolio to shareholders.
The overall performance of the Expedition Funds has also been gratifying,
with all four of the portfolios comparing favorably to their respective
benchmarks. The funds also performed well in relation to their peers.
As we enter fiscal 1999, we recognize that many uncertainties remain in the
financial markets. However, having guided investment portfolios through
countless market cycles and historical events, we remain committed to the
principles of disciplined, long-term investing. Our experience in the recent
past demonstrates that Expedition Funds investors share this commitment.
As always, we welcome your suggestions as to how Compass Bank can serve
Expedition Funds investors even better in the years ahead. Should you have any
questions or comments regarding the Expedition Funds, please do not hesitate to
call the Expedition Funds toll-free at 1-800-992-2085.
Thank you for your continued confidence in the Expedition Funds. We look
forward to helping you pursue your investment goals -- through all types of
markets -- in the years ahead.
Sincerely,
/s/signature omitted
Jan A. Koenig, CFA
CHIEF INVESTMENT OFFICER
COMPASS BANK ASSET MANAGEMENT GROUP
EXPEDITION FUNDS INVESTMENT ADVISOR
2 October 31, 1998
<PAGE>
Management's Discussion and Analysis
Expedition Equity Fund
For the twelve months ended October 31, 1998, the Expedition Equity Fund
Institutional Shares generated an annualized total return of 19.18%. This
compares to a 19.0% return for the S&P 1500 Composite Stock Index, a 22.0%
return for the S&P 500 Compsoite Stock Index and a 9.88% return for the Lipper
Growth & Income Mutual Fund Average. The Fund seeks to provide growth of
capital, with secondary objective of income, and pursues these objectives by
investing in a diversified portfolio of common stocks issued by mid and large
capitalization companies.
Fiscal 1998, like 1997, was a year of extremes for the stock market. The
first seven months of the fiscal year were characterized by a series of advances
to new highs. Then, beginning in July, the market began to experience tremendous
volatility, leading to a sharp decline that continued until late October.
Among the factors that precipitated the correction were currency
devaluations and recessionary conditions in developing countries, liquidity
problems and tighter credit conditions following losses within the banking
system, decelerating corporate profits, and political uncertainties in the U.S.
Despite all these events, we believed it was premature to prepare for a
prolonged bear market in the U.S. One reason is that most bear markets occur
during periods of high inflation, rising interest rates, and a subsequent
recession. By contrast, the current environment is characterized by low
inflation, declining interest rates, and continued economic growth in the United
States. Therefore, we remained fully committed to our investment strategy
throughout the period.
Looking ahead, we believe that corporate earnings growth may weaken
somewhat, but remain positive. This is due to declining demand from foreign
trading partners, slower domestic growth, fewer productivity gains, and narrower
profit margins in some industries. Offsetting the risk of lower corporate
earnings momentum is our forecast of continued low interest rates, as indicated
by the recent action of the Federal Reserve Board.
Regardless of economic conditions or the prevailing investment environment,
the managers of the Expedition Equity Fund will continue to utilize proven
investment disciplines that work well in most market cycles. We will seek
industries and companies with favorable long-term growth prospects whose stocks
are selling at reasonable valuations.
Sectors of the market which we are currently emphasizing include computer
technology, telecommunications equipment and services, health care, financial
services, and branded consumer products and services.
October 31, 1998 3
<PAGE>
Management's Discussion and Analysis
Expedition Equity Fund
- --------------------------------------------------------------------------------
EXPEDITION EQUITY FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
Annualized Annualized Annualized
1 Year 3 Year 5 Year Inception
Return Return Return to Date
- --------------------------------------------------------------------------------
Synthetic Investment Service Class 19.38% 22.89% 16.80% 17.39%+
- --------------------------------------------------------------------------------
Synthetic Investment Service
Class w/load 14.62% 21.21% 15.86% 12.40%+
- --------------------------------------------------------------------------------
Synthetic Institutional Class 19.18% 22.83% 16.76% 15.94%+
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE EXPEDITION
EQUITY FUND, SYNTHETIC INVESTMENT SERVICE CLASS OR SYNTHETIC INSTITUTIONAL
CLASS, VERSUS THE S&P 500 COMPOSITE INDEX, THE S&P 400 MID-CAP INDEX, AND THE
LIPPER GROWTH & INCOME FUNDS AVERAGE.
[GRAPH OMITTED]
PLOT POINTS ARE AS FOLLOWS:
Expedition Equity Fund Expedition Equity Fund S&P 500
Synthetic Investment Synthetic Institutional Composite
Service Class Class Index
10/31/93 $ 9,600 $10,000 $10,000
10/93 $ 9,600 $10,000 $10,000
10/94 $ 9,632 $10,033 $10,386
10/95 $11,243 $11,712 $13,129
10/96 $13,748 $14,321 $16,290
10/97 $17,481 $18,209 $21,520
10/98 $20,868 $21,701 $26,254
S&P 400 Lipper Growth &
Mid Cap Income Funds
Index Average
10/31/93 $10,000 $10,000
10/93 $10,000 $10,000
10/94 $10,236 $10,279
10/95 $12,407 $12,403
10/96 $14,560 $15,105
10/97 $19,313 $19,395
10/98 $20,607 $21,311
* FOR PERIODS PRIOR TO THE INCEPTION OF THE EXPEDITION EQUITY FUND ON JUNE 13,
1997, THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE OF THE EQUITY
MODEL COMMON TRUST FUND INTERNALLY MANAGED BY AN AFFILIATE OF THE EXPEDITION
EQUITY FUND'S INVESTMENT ADVISOR, ADJUSTED FOR THE MAXIMUM FEE AND EXPENSES OF
THE INSTITUTIONAL SHARES OF THE EXPEDITION EQUITY FUND APPLICABLE AT THE
INCEPTION OF THE EXPEDITION EQUITY FUND. THE EQUITY MODEL COMMON TRUST FUND
WAS NOT REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940 AND THEREFORE, WAS
NOT SUBJECT TO CERTAIN RESTRICTIONS WHICH MAY HAVE ADVERSELY AFFECTED
PERFORMANCE.
NOTE: PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE
OF FUTURE PERFORMANCE. ACTUAL RETURN AND PRINCIPAL VALUE WILL FLUCTUATE,
AND SHARES WHEN REDEEMED MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
[dagger] ACTUAL, NOT SYNTHETIC.
4 October 31, 1998
<PAGE>
Management's Discussion and Analysis
Expedition Bond Fund
For the twelve months ended October 31, 1998, the Expedition Bond Fund
Institutional Shares generated an annualized total return of 8.43%. This
compares to a 9.10% return for the Lehman Intermediate Gov't/Corp Bond Index,
and a 7.17% return for the Lipper Short-Intermediate Government Mutual Fund
Average. The Fund seeks to provide income with relative stability of principal.
Throughout the year, the Fund maintained its conservative strategy of
holding high-quality government and corporate bonds, with a strong preference
for those that cannot be called in prior to their maturity dates.
The portfolio's allocation favored government instruments, which made up
approximately 65% of assets compared with a 35% weighting in corporate issues.
In addition, the Fund continued to focus on securities in the short to
intermediate maturity range, in order to further reduce risk.
This proved to be an excellent strategy for the prevailing conditions of
the year.
As the economic crisis in Asia spread to other continents, demand for U.S.
Government bonds rose, pushing up prices. At the same time, fears of a domestic
recession led to lower demand for corporate bonds.
As a result, the Fund delivered an outstanding total return to investors,
with a level of capital appreciation that more than made up for the portfolio's
somewhat lower yield.
Looking ahead, we plan to maintain our strategy of overweighting the
portfolio in high-quality government bonds of moderate maturity levels. We
believe this approach will continue to provide our investors with a favorable
return -without undue risk -- in the months and years ahead.
October 31, 1998 5
<PAGE>
Management's Discussion and Analysis
Expedition Bond Fund
- --------------------------------------------------------------------------------
EXPEDITION BOND FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
Annualized Annualized Annualized
1 Year 3 Year 5 Year Inception
Return Return Return to Date
- --------------------------------------------------------------------------------
Investment Service Class 8.25% 6.36% 5.28% 6.29%
- --------------------------------------------------------------------------------
Investment Service Class w/load 3.93% 4.93% 4.43% 5.63%
- --------------------------------------------------------------------------------
Synthetic Institutional Class+ 8.43% 6.42% 5.31% 8.75%+
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE EXPEDITION
BOND FUND, INVESTMENT SERVICE CLASS OR SYNTHETIC INSTITUTIONAL CLASS, VERSUS
THE LEHMAN INTERMEDIATE GOVERNMENT/CORPORATE INDEX AND THE LIPPER SHORT-
INTERMEDIATE U.S. GOVERNMENT AVERAGE.
[GRAPH OMITTED]
PLOT POINTS ARE AS FOLLOWS:
Expedition Bond Fund Expedition Bond Fund Lehman Intermediate
Investment Synthetic Institutional Government
Service Class Class Corporate Index
4/30/92 $ 9,600 $10,000 $10,000
10/31/93 $10,215 $10,640 $10,620
10/93 $11,075 $11,536 $11,675
10/94 $10,729 $11,176 $11,449
10/95 $11,903 $12,399 $12,883
10/96 $12,431 $12,949 $13,632
10/97 $13,228 $13,780 $14,653
10/98 $14,320 $14,941 $15,987
NOTE: PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NOT
PREDICTIVE OF FUTURE PERFORMANCE. ACTUAL RETURN AND PRINCIPAL VALUE WILL
FLUCTUATE, AND SHARES WHEN REDEEMED MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST.
[dagger] ACTUAL, NOT SYNTHETIC.
6 October 31, 1998
<PAGE>
Management's Discussion and Analysis
Expedition Money Market Fund
For the twelve months ended October 31, 1998, the Expedition Money Market
Fund Investment Service Shares generated an annualized total return of 5.07%.
This compares to a 4.91% return for the Lipper Money Market Mutual Fund Average.
For much of the fiscal year, the world's economies were in turmoil, as
recessionary pressures spread from Asia, to Russia, to Latin America. This
created growing nervousness among equity investors, and an increasing "flight to
quality" among fixed income investors. With demand for high-quality U.S. bonds
rising, rates declined across the board.
The decline was especially dramatic in longer-term bonds, but was also felt
in shorter-term instruments. As one of the ultimate "safe havens," U.S. money
market investments became a popular alternative for both domestic and
international investors during uncertain times.
Then, in the final quarter of the fiscal year, the Federal Reserve Board
moved to calm the markets and stimulate growth by reducing short-term rates on
two occasions, each time by one quarter of one percent.
The effects of the Fed's policy change were more pronounced at the longer
end of the money market spectrum. For example, yields on one-year Treasury Bills
decreased by 1.02 percent, while yields on three-month Treasury Bills declined
by .79 percent.
The Expedition Money Market Fund's conservative position helped to shield
it from the worst of the rate declines. For most of the year, the majority of
the portfolio's assets were concentrated in commercial paper with 45-90 day
maturity levels, and in corporate notes ranging from six months to one year. The
balance of the Fund was invested in overnight repurchase agreements.
October 31, 1998 7
<PAGE>
Management's Discussion and Analysis
Expedition Tax-Free Money Market Fund
From its inception on May 20, 1998 through October 31, 1998, the Expedition
Tax-Free Money Market Fund Investment Service Shares generated an annualized
total return of 2.97%.
The Fund seeks to provide income, exempt from Federal income taxes,
consistent with stability of principal. The Fund pursues this investment
objective by investing in high-quality money market instruments maturing in 397
days or less.
During the second quarter of the calendar year, the U.S. economy continued
to show strong growth and low inflation. In May of 1998, the yields on six-month
and one-year notes were 3.70% and 3.75% respectively.
By August, world economic volatility led to fears that the U.S. marketplace
could join the current global crisis. This spurred investors to seek more secure
investment instruments, sending the yields on high-grade bonds, notes, and bills
to historically low levels.
Then, in September and October, the epic fall in prices of U.S. stocks and
lower-tier bonds pushed the Federal Reserve Board to move forcefully with two
quarter-percent rate cuts. These Fed actions proved effective in stabilizing the
American marketplace.
By October 1998, the yields on six-month and one-year notes were 2.90% and
2.95% respectively, a decline of 80 basis points since May. Further Fed
initiatives may be expected if the U.S. economy sputters during the coming year.
In this climate, the Fund maintained approximately 60% of its assets in
extremely liquid variable rate demand obligations. It has also maintained a
60-65 day average maturity in an attempt to lock in favorable rates at the
longer end of the spectrum. Our efforts to find regional issues also led to
enhanced performance.
Looking ahead, the upcoming year may present continued market challenges.
For example, any slowing of the U.S. economy could lead to further lowering of
short-term interest rates. Therefore, we will maintain our priority of liquidity
while staying attentive for strong note buying opportunities.
8 October 31, 1998
<PAGE>
Statement of Net Assets
Expedition Equity Fund
VALUE
DESCRIPTION SHARES (000)
- -------------------------------------------------------------------------------
COMMON STOCKS - 99.3%
AIRCRAFT - 4.4%
Lockheed Martin 55,970 $ 6,234
United Technologies 65,825 6,270
- -------------------------------------------------------------------------------
TOTAL AIRCRAFT 12,504
- -------------------------------------------------------------------------------
AUTOMOTIVE - 3.0%
Chrysler 79,690 3,835
Dana 113,220 4,734
- -------------------------------------------------------------------------------
TOTAL AUTOMOTIVE 8,569
- -------------------------------------------------------------------------------
BANKS - 4.0%
J.P. Morgan 37,545 3,539
Mellon Bank 132,885 7,990
- -------------------------------------------------------------------------------
TOTAL BANKS 11,529
- -------------------------------------------------------------------------------
BEAUTY PRODUCTS - 4.6%
Gillette 92,190 4,143
Procter & Gamble 101,640 9,033
- -------------------------------------------------------------------------------
TOTAL BEAUTY PRODUCTS 13,176
- -------------------------------------------------------------------------------
BROADCASTING, NEWSPAPERS & ADVERTISING - 2.1%
Omnicom Group 124,140 6,137
- -------------------------------------------------------------------------------
TOTAL BROADCASTING, NEWSPAPERS & ADVERTISING 6,137
- -------------------------------------------------------------------------------
CHEMICALS - 1.9%
E.I. duPont de Nemours 92,745 5,333
- -------------------------------------------------------------------------------
TOTAL CHEMICALS 5,333
- -------------------------------------------------------------------------------
COMPUTER COMMUNICATIONS EQUIPMENT - 4.9%
Cisco Systems* 147,538 9,295
EMC* 73,535 4,734
- -------------------------------------------------------------------------------
TOTAL COMPUTER COMMUNICATIONS EQUIPMENT 14,029
- -------------------------------------------------------------------------------
COMPUTERS & SERVICES - 6.1%
Compaq Computer 246,280 7,789
IBM 63,800 9,470
- -------------------------------------------------------------------------------
TOTAL COMPUTERS & SERVICES 17,259
- -------------------------------------------------------------------------------
DRUGS - 7.0%
Merck 54,200 7,330
Pfizer 62,400 6,696
Warner-Lambert 74,075 5,806
- -------------------------------------------------------------------------------
TOTAL DRUGS 19,832
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
October 31, 1998 9
<PAGE>
Statement of Net Assets
Expedition Equity Fund
VALUE
DESCRIPTION SHARES (000)
- -------------------------------------------------------------------------------
ENERGY SERVICES - 4.3%
Halliburton 158,950 $ 5,712
Schlumberger 123,042 6,460
- -------------------------------------------------------------------------------
TOTAL ENERGY SERVICES 12,172
- -------------------------------------------------------------------------------
ENTERTAINMENT - 3.6%
Carnival 193,770 6,273
Walt Disney 153,885 4,145
- -------------------------------------------------------------------------------
TOTAL ENTERTAINMENT 10,418
- -------------------------------------------------------------------------------
ENVIRONMENTAL SERVICES - 1.9%
Waste Management Inc. 118,920 5,366
- -------------------------------------------------------------------------------
TOTAL ENVIRONMENTAL SERVICES 5,366
- -------------------------------------------------------------------------------
FINANCIAL SERVICES - 4.5%
Fannie Mae 84,935 6,014
Franklin Resources 179,545 6,789
- -------------------------------------------------------------------------------
TOTAL FINANCIAL SERVICES 12,803
- -------------------------------------------------------------------------------
FOOD - 2.9%
H.J. Heinz 140,600 8,172
- -------------------------------------------------------------------------------
TOTAL FOOD 8,172
- -------------------------------------------------------------------------------
GAS/NATURAL GAS - 3.1%
Sempra Energy* 106,440 2,767
Williams Companies 218,285 5,989
- -------------------------------------------------------------------------------
TOTAL GAS/NATURAL GAS 8,756
- -------------------------------------------------------------------------------
INSURANCE - 6.4%
Allstate 124,000 5,340
Citigroup 155,177 7,303
Marsh & McLennan 101,385 5,627
- -------------------------------------------------------------------------------
TOTAL INSURANCE 18,270
- -------------------------------------------------------------------------------
INTERNET SOFTWARE - 1.9%
America Online* 42,000 5,337
- -------------------------------------------------------------------------------
TOTAL INTERNET SOFTWARE 5,337
- -------------------------------------------------------------------------------
MACHINERY - 3.3%
General Electric 106,385 9,309
- -------------------------------------------------------------------------------
TOTAL MACHINERY 9,309
- -------------------------------------------------------------------------------
MEDICAL PRODUCTS & SERVICES - 6.7%
Biomet* 182,901 6,207
McKesson 95,830 7,379
Tenet Healthcare* 197,195 5,509
- -------------------------------------------------------------------------------
TOTAL MEDICAL PRODUCTS & SERVICES 19,095
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
10 October 31, 1998
<PAGE>
Statement of Net Assets
Expedition Equity Fund
SHARES/FACE VALUE
DESCRIPTION AMT. (000) (000)
- -------------------------------------------------------------------------------
PAPER & PAPER PRODUCTS - 1.6%
Temple-Inland 93,730 $ 4,552
- -------------------------------------------------------------------------------
TOTAL PAPER & PAPER PRODUCTS 4,552
- -------------------------------------------------------------------------------
PETROLEUM REFINING - 3.0%
Exxon 122,230 8,709
- -------------------------------------------------------------------------------
TOTAL PETROLEUM REFINING 8,709
- -------------------------------------------------------------------------------
RETAIL - 6.0%
Dayton Hudson 186,710 7,912
Safeway* 195,950 9,369
- -------------------------------------------------------------------------------
TOTAL RETAIL 17,281
- -------------------------------------------------------------------------------
SPECIALTY CONSTRUCTION - 2.2%
Masco 223,050 6,287
- -------------------------------------------------------------------------------
TOTAL SPECIALTY CONSTRUCTION 6,287
- -------------------------------------------------------------------------------
TELEPHONES & TELECOMMUNICATION - 9.9%
Lucent Technologies 96,660 7,751
MCI WorldCom* 129,065 7,131
SBC Communications 148,625 6,883
Sprint 85,770 6,583
- -------------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATION 28,348
- -------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $243,290) 283,243
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 0.4%
Morgan Stanley
5.30%, dated 10/31/98, matures
11/02/98, repurchase price $1,004,292
(collateralized by U.S. Treasury
Bill, market value $1,029,300) $1,004 1,004
- -------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $1,004) 1,004
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS - 99.7%
(COST $244,294) 284,247
- -------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET - 0.3% 834
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
October 31, 1998 11
<PAGE>
Statement of Net Assets
Expedition Equity Fund
VALUE
DESCRIPTION (000)
- -------------------------------------------------------------------------------
NET ASSETS:
Portfolio Shares of Institutional Class
(unlimited authorization -- no par
value) based on 26,828,927 outstanding shares
of beneficial interest $227,677
Portfolio Shares of Investment Shares Class (unlimited
authorization -- no par value) based
on 180,726 outstanding shares of beneficial interest 1,766
Distributions in excess of net investment income (33)
Accumulated net realized gain on investments 15,718
Net unrealized appreciation on investments 39,953
===============================================================================
TOTAL NET ASSETS -- 100.0% $285,081
===============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INSTITUTIONAL CLASS $10.55
================================================================================
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- INVESTMENT SHARES CLASS $10.58
================================================================================
MAXIMUM OFFERING PRICE PER SHARE --
INVESTMENT SHARES CLASS(1) $11.02
================================================================================
* Non-income producing security
(1)The offer price is calculated by dividing the net asset value by 1 minus the
maximum sales charge of 4.00%.
The accompanying notes are an integral part of the financial statements.
12 October 31, 1998
<PAGE>
Statement of Net Assets
Expedition Bond Fund
FACE VALUE
DESCRIPTION AMT. (000) (000)
- -------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - 8.3%
AT&T Universal Card Master Trust,
Ser 1995-2, Cl A (A)
5.950%, 10/17/00 $2,500 $ 2,547
MBNA Master Credit Card Trust,
97-I, Cl A (A)
6.550%, 08/15/04 2,500 2,616
MBNA Master Trust,
Ser 1995-F, Cl A (A)
6.600%, 08/15/00 2,300 2,365
Proffitts Credit Card Master Trust,
Ser 1997-2, Cl A (A)
6.500%, 08/15/02 2,000 2,062
- -------------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(COST $9,321) 9,590
- -------------------------------------------------------------------------------
CORPORATE BONDS - 21.0%
CONSUMER NON-DURABLE - 3.9%
Archer Daniels Midland
6.250%, 05/15/03 1,500 1,575
Campbell Soup
5.625%, 09/15/03 1,875 1,889
Coca-Cola Enterprises
6.375%, 08/01/01 1,000 1,034
- -------------------------------------------------------------------------------
TOTAL CONSUMER NON-DURABLE 4,498
- -------------------------------------------------------------------------------
DIVERSIFIED FINANCE - 7.1%
American General Finance Senior Notes
7.250%, 04/15/00 1,500 1,538
Beneficial Finance
7.750%, 11/08/02 500 536
Caterpillar Finance Services
6.490%, 10/15/99 1,000 1,013
Ford Motor Credit
6.125%, 04/28/03 3,500 3,609
Lehman Brothers Holdings
6.500%, 10/01/02 1,000 980
Merrill Lynch
6.510%, 03/19/01 500 509
- -------------------------------------------------------------------------------
TOTAL DIVERSIFIED FINANCE 8,185
- -------------------------------------------------------------------------------
ELECTRICAL SERVICES - 1.8%
Georgia Power
6.000%, 03/01/00 2,000 2,028
- -------------------------------------------------------------------------------
TOTAL ELECTRICAL SERVICES 2,028
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
October 31, 1998 13
<PAGE>
Statement of Net Assets
Expedition Bond Fund
FACE VALUE
DESCRIPTION AMT.(000) (000)
- -------------------------------------------------------------------------------
LEASING & RENTING - 2.6%
International Lease Finance
6.250%, 10/15/00 $1,005 $ 1,021
5.750%, 01/15/03 2,000 2,015
- -------------------------------------------------------------------------------
TOTAL LEASING & RENTING 3,036
- -------------------------------------------------------------------------------
RETAIL - 5.6%
Dillard Department Stores
7.150%, 09/01/02 2,025 2,104
Wal-Mart Stores
6.500%, 06/01/03 1,520 1,613
7.500%, 05/15/04 2,500 2,781
- -------------------------------------------------------------------------------
TOTAL RETAIL 6,498
- -------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(COST $23,444) 24,245
- -------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 6.1%
FHLMC Note
6.800%, 03/19/07 1,000 1,103
FNMA Notes
6.220%, 03/13/06 1,000 1,059
6.620%, 06/25/07 1,000 1,093
6.000%, 05/15/08 3,500 3,711
- -------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $6,522) 6,966
- -------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS - 15.1%
FHLMC, Pool #E00543
6.000%, 04/01/13 2,424 2,437
FHLMC, Gold Pool #E00413
6.500%, 01/01/11 2,885 2,930
FHLMC, Gold Pool #E00475
7.500%, 02/01/12 1,397 1,434
FHLMC, Gold Pool #E00485
7.000%, 05/01/12 2,401 2,453
FHLMC, Gold Pool #E00532
6.500%, 02/01/13 1,881 1,911
FHLMC, Ser 1668, Cl B
6.500%, 11/15/10 686 691
FHLMC, Ser 1437, Cl H
7.000%, 12/15/02 1,004 1,038
FHLMC, Ser 1317, Cl H
7.000%, 01/15/07 1,000 1,019
FNMA, Pool #369212
6.500%, 11/01/08 956 971
The accompanying notes are an integral part of the financial statements.
14 October 31, 1998
<PAGE>
Statement of Net Assets
Expedition Bond Fund
FACE VALUE
DESCRIPTION AMT. (000) (000)
- -------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS (CONTINUED)
FNMA, Pool #190665
7.000%, 03/01/09 $1,927 $ 1,967
FNMA, Ser 1991-4, Cl E
8.250%, 09/25/05 209 211
FNMA, Ser 1991-31, Cl L
6.500%, 05/25/20 389 389
- -------------------------------------------------------------------------------
TOTAL TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS
(COST $17,204) 17,451
- -------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 47.0%
U.S. Treasury Notes
7.750%, 01/31/00 2,300 2,397
6.375%, 05/15/00 2,000 2,062
6.250%, 08/31/00 3,500 3,620
6.125%, 09/30/00 2,000 2,067
5.625%, 11/30/00 3,000 3,078
6.250%, 04/30/01 3,000 3,137
6.625%, 06/30/01 3,500 3,700
7.500%, 11/15/01 2,500 2,720
6.250%, 01/31/02 3,500 3,698
7.500%, 05/15/02 4,000 4,405
6.375%, 08/15/02 3,250 3,472
6.250%, 02/15/03 3,000 3,220
5.750%, 08/15/03 5,000 5,301
7.250%, 08/15/04 3,000 3,419
6.500%, 08/15/05 3,000 3,351
6.875%, 05/15/06 1,000 1,146
6.500%, 10/15/06 1,000 1,123
6.250%, 02/15/07 1,000 1,109
6.125%, 08/15/07 1,000 1,105
- -------------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATIONS
(COST $51,380) 54,130
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 1.5%
J.P. Morgan, Inc.
5.30%, dated 10/31/98, matures
11/02/98, repurchase price $1,775,515
(collateralized by U.S. Treasury
Note, market value $1,810,818) 1,775 1,775
- -------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $1,775) 1,775
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 99.0%
(COST $109,646) 114,157
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET - 1.0% 1,142
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
October 31, 1998 15
<PAGE>
Statement of Net Assets
Expedition Bond Fund
VALUE
DESCRIPTION (000)
- -------------------------------------------------------------------------------
NET ASSETS:
Portfolio Shares of Institutional Class (unlimited
authorization -- no par value) based on
10,336,727 outstanding shares of beneficial interest $100,083
Portfolio Shares of Investment Shares Class (unlimited
authorization -- no par value) based on 1,019,772
outstanding shares of beneficial interest 14,281
Distributions in excess of net investment income (8)
Accumulated net realized loss on investments (3,568)
Net unrealized appreciation on investments 4,511
===============================================================================
TOTAL NET ASSETS -- 100.0% $115,299
===============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INSTITUTIONAL CLASS $10.15
================================================================================
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- INVESTMENT SHARES CLASS $10.15
================================================================================
MAXIMUM OFFERING PRICE PER SHARE --
INVESTMENT SHARES CLASS(1) $10.57
================================================================================
(1) The offer price is calculated by dividing the net asset value
by 1 minus the maximum sales charge of 4.00%.
(A) Callable Security -- The call date is shown as the maturity date
on the Statement of Net Assets.
Cl -- Class
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
Ser -- Series
The accompanying notes are an integral part of the financial statements.
16 October 31, 1998
<PAGE>
Statement of Net Assets
Expedition Money Market Fund
FACE VALUE
DESCRIPTION AMT.(000) (000)
- -------------------------------------------------------------------------------
COMMERCIAL PAPER - 74.5%
BANKS - 5.7%
BankAmerica
5.230%, 11/23/98 $ 4,000 $ 3,987
5.160%, 01/13/99 5,000 4,948
Wachovia
5.000%, 11/24/98 5,000 4,984
- -------------------------------------------------------------------------------
TOTAL BANKS 13,919
- -------------------------------------------------------------------------------
BROKER/DEALERS - 15.7%
Bear Stearns
5.090%, 12/14/98 4,000 3,976
5.150%, 02/05/99 5,000 4,931
Goldman Sachs
5.300%, 11/17/98 4,000 3,991
5.100%, 01/22/99 6,000 5,930
Merrill Lynch
5.250%, 11/09/98 5,000 4,994
5.070%, 01/28/99 5,000 4,938
Morgan Stanley, Dean Witter, Discover
5.200%, 01/15/99 5,000 4,946
5.150%, 01/27/99 5,000 4,938
- -------------------------------------------------------------------------------
TOTAL BROKER/DEALERS 38,644
- -------------------------------------------------------------------------------
DIVERSIFIED FINANCE - 19.3%
American General Finance
5.070%, 12/11/98 8,000 7,955
6.875%, 07/01/99 1,400 1,410
Avco Financial Services
5.100%, 11/25/98 5,000 4,983
General Electric Capital
5.520%, 11/03/98 3,000 2,999
5.090%, 12/10/98 10,000 9,945
5.120%, 01/19/99 5,000 4,944
Norwest Corporation
5.020%, 01/20/99 5,000 4,944
6.250%, 04/15/99 3,000 3,017
6.000%, 08/01/99 1,000 1,002
6.680%, 09/15/99 1,150 1,160
Transamerica Finance
5.470%, 12/04/98 3,000 2,985
5.470%, 01/26/99 2,000 1,974
- -------------------------------------------------------------------------------
TOTAL DIVERSIFIED FINANCE 47,318
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
October 31, 1998 17
<PAGE>
Statement of Net Assets
Expedition Money Market Fund
FACE VALUE
DESCRIPTION AMT.(000) (000)
- -------------------------------------------------------------------------------
ELECTRICAL SERVICES - 2.5%
Georgia Power
5.020%, 11/05/98 $6,200 $ 6,196
- -------------------------------------------------------------------------------
TOTAL ELECTRICAL SERVICES 6,196
- -------------------------------------------------------------------------------
FUNDING CORPORATIONS-ASSET BACKED - 21.9%
Centric Capital
5.260%, 01/08/99 5,000 4,950
5.220%, 01/14/99 5,000 4,946
Falcon Asset Securitization
5.200%, 11/24/98 5,000 4,983
5.290%, 12/04/98 5,000 4,976
Madison Funding
5.300%, 11/19/98 5,000 4,987
Preferred Receivables
5.410%, 11/18/98 5,000 4,987
5.130%, 01/21/99 5,000 4,942
Receivables Capital
5.350%, 11/10/98 8,000 7,989
5.220%, 01/12/99 2,000 1,979
Riverwoods Funding
5.470%, 11/02/98 4,000 3,999
5.500%, 11/10/98 5,000 4,993
- -------------------------------------------------------------------------------
TOTAL FUNDING CORPORATIONS-ASSET BACKED 53,731
- -------------------------------------------------------------------------------
LEASING & RENTING - 1.2%
International Lease Finance
5.140%, 01/06/99 3,000 2,972
- -------------------------------------------------------------------------------
TOTAL LEASING & RENTING 2,972
- -------------------------------------------------------------------------------
PERSONAL CREDIT INSTITUTIONS - 6.6%
Toyota Motor Credit
5.530%, 11/05/98 1,300 1,299
5.100%, 01/08/99 3,000 2,971
5.170%, 01/29/99 2,000 1,974
Xerox Credit
5.170%, 12/01/98 4,000 3,983
5.030%, 12/21/98 2,000 1,986
5.070%, 01/29/99 4,000 3,950
- -------------------------------------------------------------------------------
TOTAL PERSONAL CREDIT INSTITUTIONS 16,163
- -------------------------------------------------------------------------------
PHARMACEUTICALS - 1.6%
Abbott Labs
5.200%, 11/05/98 4,000 3,998
- -------------------------------------------------------------------------------
TOTAL PHARMACEUTICALS 3,998
- -------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(COST $182,941) 182,941
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
18 October 31, 1998
<PAGE>
Statement of Net Assets
Expedition Money Market Fund
FACE VALUE
DESCRIPTION AMT.(000) (000)
- -------------------------------------------------------------------------------
CORPORATE BONDS - 13.3%
BANKS - 1.4%
NationsBank
8.500%, 03/01/99 $1,500 $1,513
Wachovia
6.000%, 03/15/99 2,000 2,003
- -------------------------------------------------------------------------------
TOTAL BANKS 3,516
- -------------------------------------------------------------------------------
BROKER/DEALER - 0.4%
Bear Stearns
7.625%, 09/15/99 1,002 1,018
- -------------------------------------------------------------------------------
TOTAL BROKER/DEALER 1,018
- -------------------------------------------------------------------------------
DIVERSIFIED FINANCE - 7.3%
Associates Corporation of North America
5.270%, 02/22/99 1,000 999
6.000%, 03/15/99 2,280 2,283
7.500%, 05/15/99 2,000 2,018
7.350%, 07/06/99 1,000 1,011
Ford Motor Credit
5.625%, 12/15/98 1,000 1,000
5.625%, 01/15/99 1,000 1,000
7.250%, 05/15/99 1,000 1,007
7.900%, 05/17/99 2,200 2,225
7.950%, 05/17/99 1,000 1,012
8.875%, 06/15/99 2,110 2,150
General Electric Capital
8.100%, 01/26/99 2,085 2,096
Transamerica Finance
6.800%, 03/15/99 1,035 1,039
- -------------------------------------------------------------------------------
TOTAL DIVERSIFIED FINANCE 17,840
- -------------------------------------------------------------------------------
ELECTRICAL SERVICES - 1.3%
Georgia Power
6.125%, 09/01/99 1,230 1,234
Southern California Edison
7.500%, 04/15/99 2,000 2,015
- -------------------------------------------------------------------------------
TOTAL ELECTRICAL SERVICES 3,249
- -------------------------------------------------------------------------------
LEASING & RENTING - 2.9%
International Lease Finance
5.980%, 11/16/98 1,000 1,000
5.750%, 01/15/99 2,000 2,000
6.270%, 02/10/99 1,000 1,001
The accompanying notes are an integral part of the financial statements.
October 31, 1998 19
<PAGE>
Statement of Net Assets
Expedition Money Market Fund
FACE VALUE
DESCRIPTION AMT. (000) (000)
- -------------------------------------------------------------------------------
LEASING & RENTING (CONTINUED)
7.500%, 03/01/99 $ 1,000 $ 1,006
6.625%, 04/01/99 1,000 1,004
6.750%, 07/15/99 1,000 1,009
- -------------------------------------------------------------------------------
TOTAL LEASING & RENTING 7,020
- -------------------------------------------------------------------------------
TOTAL CORPORATE BONDS
(COST $32,643) 32,643
- -------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 2.4%
Federal National Mortgage Association
5.540%, 04/02/99 2,000 1,999
Student Loan Marketing Association (A)
4.490%, 06/28/99 4,000 4,001
- -------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $6,000) 6,000
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 10.2%
J.P. Morgan, Inc.
5.300%, dated 10/31/98,
matures 11/02/98, repurchase price
$25,154,303 (collateralized by
U.S. Treasury Note, total market
value $25,650,331) 25,147 25,147
- -------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $25,147) 25,147
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.4%
(COST $246,731) 246,731
- -------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET - (0.4%) (1,122)
- -------------------------------------------------------------------------------
NET ASSETS:
Portfolio Shares of Institutional Class (unlimited
authorization -- no par value) based on
102,697,300 outstanding shares of beneficial interest 102,697
Portfolio Shares of Investment Service Shares Class (unlimited
authorization-- no par value) based on
142,910,006 outstanding shares of beneficial interest 142,910
Distributions in excess of net investment income (1)
Accumulated net realized gain on investments 3
===============================================================================
TOTAL NET ASSETS -- 100.0% 245,609
===============================================================================
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INSTITUTIONAL CLASS $1.00
===============================================================================
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- INVESTMENT SERVICE SHARES CLASS $1.00
===============================================================================
(A) Variable Rate Security -- The rate reported on the Statement of Net Assets
is the rate in effect as of October 31, 1998. The date shown is the next
scheduled reset date.
The accompanying notes are an integral part of the financial statements.
20 October 31, 1998
<PAGE>
Statement of Net Assets
Expedition Tax-Free Money Market Fund
FACE VALUE
DESCRIPTION AMT.(000) (000)
- -------------------------------------------------------------------------------
MUNICIPAL BONDS - 97.6%
ALABAMA - 8.1%
Alabama State, Multi-Family Housing RB, Rime
Village Hoover Project, Series A (A) (B) (C)
3.100%, 11/09/98 $1,200 $ 1,200
Albertville GO (C)
3.850%, 02/01/99 385 385
Birmingham, Special Care Facility Finance
Authority RB, Eye Foundation, Series A (A) (B)(C)
3.050%, 11/09/98 2,635 2,635
Mobile, Industrial Development Pollution Control RB,
M & T Chemicals Project (A) (B)(C)
3.225%, 11/09/98 1,000 1,000
- -------------------------------------------------------------------------------
TOTAL ALABAMA 5,220
- -------------------------------------------------------------------------------
ARKANSAS -- 0.2%
Greystone, Tax Exempt Certificate Trust Authority RB,
Senior Certificate of Beneficial Ownership
Project (A) (B)(C)
3.250%, 11/09/98 121 121
- -------------------------------------------------------------------------------
TOTAL ARKANSAS 121
- -------------------------------------------------------------------------------
CALIFORNIA - 2.3%
Kern, Community College District, COP (A) (B) (C)
4.050%, 11/09/98 1,500 1,500
- -------------------------------------------------------------------------------
TOTAL CALIFORNIA 1,500
- -------------------------------------------------------------------------------
COLORADO - 6.8%
Colorado State, Housing Finance Authority RB,
Greenwood Project, Series D (A) (B) (C)
3.150%, 11/09/98 100 100
Colorado State Multi-Family Housing RB,
Grants Plaza Project, Series A (A) (B)(C)
3.225%, 11/09/98 1,425 1,425
Eagle County, School District RB,
Garfield & Rout Counties (B) (C)(D)
6.950%, 12/01/98 1,500 1,504
Poudre Valley, Hospital District GO (B) (D)
6.750%, 11/15/98 750 758
Summit County, Colorado Recreational Facilities Authority RB,
Copper Mountain Project (A) (B) (C)
3.550%, 11/09/98 575 575
- -------------------------------------------------------------------------------
TOTAL COLORADO 4,362
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
October 31, 1998 21
<PAGE>
Statement of Net Assets
Expedition Tax-Free Money Market Fund
FACE VALUE
DESCRIPTION AMT.(000) (000)
- -------------------------------------------------------------------------------
FLORIDA - 10.7%
Alachua County, Industrial Development RB,
Florida Convention Centers Project (A) (B) (C)
3.450%, 11/09/98 $ 500 $ 500
Broward County, Multi-Family Housing RB,
Lake Park Association (A) (B) (C)
3.100%, 11/09/98 700 700
Greystone, Tax Exempt Certificate Trust Authority RB,
Senior Certificate of Beneficial Ownership
Project (A) (B)(C)
3.250%, 11/09/98 183 183
Jacksonville, Industrial Development Authority RB,
Trailer Marine Project (A) (B) (C)
3.400%, 11/09/98 1,400 1,400
Lee County, Industrial Development Authority RB,
Christian Mission-Shell Point Village Project
(A) (B) (C)
3.225%, 11/09/98 1,450 1,450
Orange County, Multi Family Housing
Authority RB, Oakwood Project (A) (B) (C)
3.550%, 10/01/99 1,000 1,000
Palm Beach City, Health Facility Authority
RB (B) (D)
8.875%, 12/01/98 1,625 1,664
- -------------------------------------------------------------------------------
TOTAL FLORIDA 6,897
- -------------------------------------------------------------------------------
GEORGIA - 4.1%
Greystone, Tax Exempt Certificate Trust
Authority RB, Senior Certificate of Beneficial
Ownership Project (A) (B) (C)
3.250%, 11/09/98 611 611
Marietta, Housing Finance Authority, Multi-Family
Housing RB, Falls At Bells Ferry Project (A) (B)(C)
3.950%, 01/15/99 1,000 1,001
Sumter County, School District GO
4.500%, 02/01/99 1,025 1,027
- -------------------------------------------------------------------------------
TOTAL GEORGIA 2,639
- -------------------------------------------------------------------------------
HAWAII - 1.4%
Hawaii State Department Budget Finance RB,
Special Purpose Mortgage (A) (B) (C)
3.500%, 10/01/99 880 880
- -------------------------------------------------------------------------------
TOTAL HAWAII 880
- -------------------------------------------------------------------------------
ILLINOIS - 2.6%
East Peoria, Multi-Family Housing RB (A) (B) (C)
3.350%, 11/09/98 665 665
Orland Park, Illinois Industrial Development
Authority RB (A) (B) (C)
3.800%, 11/09/98 1,040 1,040
- -------------------------------------------------------------------------------
TOTAL ILLINOIS 1,705
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
22 October 31, 1998
<PAGE>
Statement of Net Assets
Expedition Tax-Free Money Market Fund
FACE VALUE
DESCRIPTION AMT.(000) (000)
- -------------------------------------------------------------------------------
INDIANA - 6.8%
Fort Wayne, Industrial Economic Development
Authority RB, Avery International Project (A) (B)(C)
3.225%, 11/09/98 $1,000 $1,000
Huntington, Economic Development RB,
Indiana Allied Signal Income Project (A) (B)
3.250%, 11/09/98 1,000 1,000
Mishawaka, Waterworks RB, Series A, BAN (E)
4.200%, 08/12/99 545 545
Spencer-Owen, Facility Improvements RB, BAN
3.900%, 12/29/98 850 850
Indiana State, GO
4.000%, 01/20/99 1,000 1,000
- -------------------------------------------------------------------------------
TOTAL INDIANA 4,395
- -------------------------------------------------------------------------------
IOWA - 2.5%
Iowa State Higher Education Authority RB,
St. Ambrose University Project (A) (B) (C)
3.200%, 11/09/98 1,500 1,500
Salix, Pollution Control RB (A) (B)
3.150%, 11/09/98 100 100
- -------------------------------------------------------------------------------
TOTAL IOWA 1,600
- -------------------------------------------------------------------------------
KANSAS - 1.6%
Greystone, Tax Exempt Certificate Trust Authority RB,
Senior Certificate of Beneficial Ownership
Project (A) (B)(C)
3.250%, 11/09/98 90 90
Wyandotte County, Series UUU, TAN
3.200%, 11/01/99 930 930
- -------------------------------------------------------------------------------
TOTAL KANSAS 1,020
- -------------------------------------------------------------------------------
KENTUCKY - 6.9%
Georgetown, Educational Institution Improvement RB,
Georgetown College Project (A) (B) (C)
3.150%, 11/09/98 1,000 1,000
Jefferson County, Industrial Development Authority RB,
Bel Knap Project (A) (B)(C)
3.550%, 11/09/98 1,432 1,432
Kentucky State Economic Development Finance
Authority RB, Pooled Hospital Loan Project (A) (B) (C)
3.300%, 11/09/98 1,000 1,000
Kentucky State Jefferson County
Industrial Building RB (A) (B) (C)
3.300%, 11/09/98 1,000 1,000
- -------------------------------------------------------------------------------
TOTAL KENTUCKY 4,432
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
October 31, 1998 23
<PAGE>
Statement of Net Assets
Expedition Tax-Free Money Market Fund
FACE VALUE
DESCRIPTION AMT.(000) (000)
- -------------------------------------------------------------------------------
LOUISIANA - 1.5%
Lafayette, Louisiana Public Improvement
RB, Series B, (C)
10.000%, 05/01/99 $ 285 $ 294
Shreveport, GO
9.000%, 12/01/98 675 678
- -------------------------------------------------------------------------------
TOTAL LOUISIANA 972
- -------------------------------------------------------------------------------
MARYLAND - 1.5%
Howard County, Multi-Family Housing Authority RB,
Sherwood Crossing Project (A) (B) (C)
3.850%, 06/01/99 1,000 1,000
- -------------------------------------------------------------------------------
TOTAL MARYLAND 1,000
- -------------------------------------------------------------------------------
MASSACHUSETTS - 1.6%
Brockton, BAN
4.000%, 05/18/99 600 601
Massachusetts State Industrial Finance
Funding Agency RB, Morton
Hospital Medical Center (B) (D)
8.750%, 07/01/99 395 415
- -------------------------------------------------------------------------------
TOTAL MASSACHUSETTS 1,016
- -------------------------------------------------------------------------------
MICHIGAN - 2.4%
Michigan State Job Development Authority RB,
East Lansing Residential Project (A) (B)(C)
3.400%, 11/09/98 900 900
Parchment, SAN
4.250%, 08/26/99 665 666
- -------------------------------------------------------------------------------
TOTAL MICHIGAN 1,566
- -------------------------------------------------------------------------------
MINNESOTA - 4.9%
Cohasset, Power and Light Project, Series A, RB (A) (B)(C)
3.650%, 11/02/98 400 400
Minnesota State, Capital Realty Trust RB (A) (B)(C)
3.380%, 11/09/98 2,755 2,755
- -------------------------------------------------------------------------------
TOTAL MINNESOTA 3,155
- -------------------------------------------------------------------------------
MISSOURI - 4.1%
Kansas City, Industrial Development Authority RB,
Clover Sets Apartment Program (A) (B) (C)
3.650%, 11/09/98 1,630 1,630
Saint Louis, Grantor Trust RB,
Ser 1996-A, COP, LOC (A) (B)(C)
3.450%, 11/09/98 1,000 1,000
- -------------------------------------------------------------------------------
TOTAL MISSOURI 2,630
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
24 October 31, 1998
<PAGE>
Statement of Net Assets
Expedition Tax-Free Money Market Fund
FACE VALUE
DESCRIPTION AMT.(000) (000)
- -------------------------------------------------------------------------------
NEW YORK - 0.3%
New York City, Municipal Assistance
City for New York RB, Series 66
7.250%, 07/01/99 $ 200 $ 204
- -------------------------------------------------------------------------------
TOTAL NEW YORK 204
- -------------------------------------------------------------------------------
NORTH CAROLINA - 1.9%
Beaufort, Industrial Facility RB,
Pollution Control Revenue Project (A) (B)(C)
3.200%, 11/09/98 1,200 1,200
- -------------------------------------------------------------------------------
TOTAL NORTH CAROLINA 1,200
- -------------------------------------------------------------------------------
OHIO - 1.7%
East Muskingum, Water Authority GO Notes
4.320%, 06/24/99 500 501
Portage County, Sewer District
Improvement Notes, Series 2
4.000%, 07/07/99 609 610
- -------------------------------------------------------------------------------
TOTAL OHIO 1,111
- -------------------------------------------------------------------------------
OKLAHOMA - 0.5%
Tulsa, Public Facilities Authority RB, Series 1988-A
5.050%, 05/01/99 340 342
- -------------------------------------------------------------------------------
TOTAL OKLAHOMA 342
- -------------------------------------------------------------------------------
PENNSYLVANIA - 2.2%
Allegheny County, Industrial Development
Authority RB, Longwood At Oakmont
Project, Series A (A) (B)(C)
3.650%, 11/02/98 200 200
Montgomery County, Industrial Development
Authority RB, Ikea Property Project (A) (B)
3.150%, 11/09/98 900 900
York, General Authority Pooled Financing RB,
Series 1996, (A) (B) (C)
3.150%, 11/09/98 350 350
- -------------------------------------------------------------------------------
TOTAL PENNSYLVANIA 1,450
- -------------------------------------------------------------------------------
RHODE ISLAND - 0.8%
Cranston, BAN
4.500%, 06/28/99 545 547
- -------------------------------------------------------------------------------
TOTAL RHODE ISLAND 547
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
October 31, 1998 25
<PAGE>
Statement of Net Assets
Expedition Tax-Free Money Market Fund
FACE VALUE
DESCRIPTION AMT.(000) (000)
- -------------------------------------------------------------------------------
TENNESSEE - 2.6%
Greystone, Tax Exempt Certificate Trust Authority RB,
Senior Certificate of Beneficial Ownership
Project (A) (B)(C)
3.250%, 11/09/98 $ 683 $ 683
Nashville & Davidson County, Health & Education
Facilities Authority RB, Belmont
University Project, (A) (B) (C)
3.150%, 11/09/98 1,025 1,025
- -------------------------------------------------------------------------------
TOTAL TENNESSEE 1,708
- -------------------------------------------------------------------------------
TEXAS - 3.4%
Bryan, Independent School District
Public Facility RB, (C)
3.875%, 02/15/99 815 815
Longview, GO (C)
7.000%, 06/01/99 195 199
Paris, Texas Hospital Authority RB,
St. Josephs Hospital Project (B) (D)
10.250%, 08/01/99 105 110
Spring, Independent School District GO (C)
3.800%, 02/15/99 150 150
Texas State Health Facilities
Development RB, Series 1985-A, (A) (B) (C)
3.400%, 11/09/98 900 900
- -------------------------------------------------------------------------------
TOTAL TEXAS 2,174
- -------------------------------------------------------------------------------
UTAH - 0.4%
Utah State Housing Finance Agency RB,
Single Family Mortgage, (C)
4.800%, 07/01/99 255 256
- -------------------------------------------------------------------------------
TOTAL UTAH 256
- -------------------------------------------------------------------------------
VIRGINIA - 0.5%
Greystone, Tax Exempt Certificate Trust Authority RB,
Senior Certificate of Beneficial Ownership
Project (A) (B)(C)
3.250%, 11/09/98 322 322
- -------------------------------------------------------------------------------
TOTAL VIRGINIA 322
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
26 October 31, 1998
<PAGE>
Statement of Net Assets
Expedition Tax-Free Money Market Fund
FACE VALUE
DESCRIPTION AMT.(000) (000)
- -------------------------------------------------------------------------------
WASHINGTON - 6.8%
Washington State Housing Finance
Commission RB, Mill Plains Crossing (A) (B)(C)
3.300%, 11/09/98 $2,500 $ 2,500
Washington State Housing Finance Commission RB,
Multi-Family Housing, Pacific First Federal
Savings Bank Project (A) (B) (C)
3.100%, 11/09/98 1,375 1,375
Washington State Non-Profit Housing Finance
Authority RB, Emerald Heights Project, (A) (B) (C)
3.700%, 11/02/98 500 500
- -------------------------------------------------------------------------------
TOTAL WASHINGTON 4,375
- -------------------------------------------------------------------------------
WEST VIRGINIA - 1.9%
Putnam County, Industrial Development RB,
FMC Corporation Project (A) (B)(C)
3.600%, 11/09/98 1,200 1,200
- -------------------------------------------------------------------------------
TOTAL WEST VIRGINIA 1,200
- -------------------------------------------------------------------------------
WISCONSIN - 3.1%
Johnson Creek, School District TRANS
3.980%, 08/30/99 1,200 1,200
Wisconsin State School District Temporary
Borrowing Program, Series B2, COP
3.900%, 10/08/99 785 785
- -------------------------------------------------------------------------------
TOTAL WISCONSIN 1,985
- -------------------------------------------------------------------------------
WYOMING - 1.5%
Lincoln County, School District,
Afton Grant Anticipation Warrants
4.000%, 06/30/99 990 991
- -------------------------------------------------------------------------------
TOTAL WYOMING 991
- -------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(COST $62,975) 62,975
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 97.6%
(COST $62,975) 62,975
- -------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET - 2.4% 1,567
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
October 31, 1998 27
<PAGE>
Statement of Net Assets
Expedition Tax-Free Money Market Fund
VALUE
DESCRIPTION (000)
- -------------------------------------------------------------------------------
NET ASSETS:
Portfolio Shares of Investment Service Shares Class (unlimited
authorization -- no par value) based on 64,541,843
outstanding shares of beneficial interest $64,542
===============================================================================
TOTAL NET ASSETS -- 100.0% $64,542
===============================================================================
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- INVESTMENT SERVICE SHARES CLASS $1.00
===============================================================================
(A) Floating Rate Security -- the rate reported on the Statement of Net Assets
is the rate in effect on October 31, 1998.
(B) Put and Demand feature -- the date reported on the Statement of Net Assets
is the lesser of the maturity date or put date.
(C) Securities are held in conjunction with a letter of credit or other form of
credit enhancement from a major commercial bank or financial institution,
or government sponsored agency.
(D) Pre-Refunded Security -- the maturity date shown is the Pre-Refunded date.
(E) Restricted Security
BAN -- Bond Anticipation Note
COP -- Certificate of Participation
GO -- General Obligation
MBIA -- Municipal Bond Investors Assurance
RB -- Revenue Bond
SAN -- School Anticipation Note
TAN -- Tax Anticipation Note
TRAN -- Tax and Revenue Anticipation Note
The accompanying notes are an integral part of the financial statements.
28 October 31, 1998
<PAGE>
Statement of Operations (000)
For the year ended October 31, 1998
<TABLE>
EXPEDITION EXPEDITION EXPEDITION EXPEDITION
EQUITY BOND MONEY MARKET TAX-FREE MONEY
FUND FUND FUND MARKET FUND(1)
---------- --------- ------------ ---------------
INVESTMENT INCOME:
<S> <C> <C> <C> <C>
Dividends $ 3,887 $ -- $ -- $ --
Interest 153 7,057 10,310 960
------- ------ ------- ----
Total investment income 4,040 7,057 10,310 960
EXPENSES:
Investment Advisory fees 2,076 875 733 106
Waiver of Investment
Advisory fees -- (214) (413) (78)
Administrator fees 550 233 366 53
Waiver of Administrator fees -- -- (91) (13)
Transfer Agent fees 99 72 61 13
Custodian fees 55 23 36 7
Directors' fees 14 6 9 1
Registration fees 136 79 57 12
Professional fees 22 10 15 7
Printing fees 23 8 13 3
Shareholder Servicing fees --
Investment Service Shares -- -- 341 67
Distribution fees -- Investment shares 1 35 -- --
Distribution fees waiver -- Investment
shares -- (15) -- --
Amortization of organizational costs 5 -- -- 2
Other fees 6 6 2 1
------- ------ ------- ----
Total expenses 2,987 1,118 1,129 181
Reimbursement of expenses (87) -- -- --
------- ------ ------- ----
Net expenses 2,900 1,118 1,129 181
------- ------ ------- ----
Investment income--net 1,140 5,939 9,181 779
------- ------ ------- ----
Net realized gain on investments 16,144 544 7 --
Net change in unrealized
appreciation of investments 28,082 2,966 -- --
------- ------ ------- ----
NET GAIN ON INVESTMENTS 44,226 3,510 7 --
------- ------ ------- ----
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $45,366 $9,449 $ 9,188 $779
======= ====== ======= ====
</TABLE>
(1) Commenced operations on May 20, 1998.
The accompanying notes are an integral part of the financial statements.
October 31, 1998 29
<PAGE>
Statement of Changes in Net Assets (000)
EXPEDITION
EQUITY
FUND
-------------------------
Year Ended Period Ended
10/31/98 10/31/97(1)
-------- -----------
OPERATIONS:
Investment income--net $ 1,140 $ 485
Net realized gain (loss) on investments 16,144 31,123
Net change in unrealized appreciation
(depreciation) of investments 28,082 (24,519)
-------- --------
Net increase in net assets resulting
from operations 45,366 7,089
-------- --------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income--net:
Institutional Class (1,525) (361)
Investment Shares/Investment Service Shares Class -- --
Net realized gain on investments:
Institutional Class (12,889) (18,432)
Investment Shares/Investment Service Shares Class -- --
-------- --------
Total distributions (14,414) (18,793)
-------- --------
CAPITAL SHARE TRANSACTIONS:(3)
Institutional Class:
Proceeds from sales 72,889 21,421
Proceeds in connection with acquisition of
Common Trust Fund Assets -- 245,636
Reinvestment of distributions 246 18,432
Payments for redemptions (58,339) (36,218)
-------- --------
Increase (decrease) in net assets from Institutional
Class transactions 14,796 249,271
-------- --------
Investment Shares and Investment Service
Shares Class (respectively):
Proceeds from sales 1,846 --
Reinvestment of distributions 1 --
Payments for redemptions (81) --
-------- --------
Increase (decrease) in net assets from
Investment Shares and Investment Service Shares
Class (respectively) transactions 1,766 --
-------- --------
Increase (decrease) in net assets from
capital share transactions 16,562 249,271
-------- --------
Total increase (decrease) in net assets 47,514 237,567
-------- --------
NET ASSETS AT BEGINNING OF PERIOD 237,567 --
-------- --------
NET ASSETS AT END OF PERIOD $285,081 $237,567
======== ========
(3)Capital share transactions:
Institutional Class:
Shares issued 7,204 2,253
Shares issued in connection with acquisition of
Common Trust Fund Assets -- 24,854
Shares issued in lieu of cash distributions 23 2,032
Shares redeemed (5,701) (3,836)
-------- --------
Total Institutional Class transactions 1,526 25,303
-------- --------
Investment Shares and Investment Service
Shares Class (respectively):
Shares issued 189 --
Shares issued in lieu of cash distributions -- --
Shares redeemed (8) --
-------- --------
Total Investment Shares and Investment Service
Shares Class (respectively) transactions 181 --
-------- --------
NET INCREASE (DECREASE) FROM SHARE TRANSACTIONS 1,707 25,303
======== ========
(1) Commenced operations on June 13, 1997.
(2) Commenced operations on May 20, 1998.
30 October 31, 1998
Statement of Changes in Net Assets (000)
<TABLE>
EXPEDITION EXPEDITION EXPEDITION
BOND MONEY MARKET TAX-FREE MONEY
FUND FUND FUND
------------------------- ------------------------ ------------------------
Year Ended Period Ended Year Ended Year Ended Period Ended
10/31/98 10/31/97 10/31/98 10/31/97 10/31/98(2)
-------- ----------- -------- -------- ----------
OPERATIONS:
<S> <C> <C> <C> <C> <C>
Investment income--net $ 5,939 $ 3,825 $ 9,181 $ 7,999 $ 779
Net realized gain (loss) on investments 544 (739) 7 -- --
Net change in unrealized appreciation
(depreciation) of investments 2,966 2,551 -- -- --
-------- -------- -------- -------- --------
Net increase in net assets resulting
from operations 9,449 5,637 9,188 7,999 779
-------- -------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income--net:
Institutional Class (5,215) (1,889) (2,424) (910) --
Investment Shares/Investment Service Shares Class (729) (1,939) (6,758) (7,089) (779)
Net realized gain on investments:
Institutional Class -- -- -- -- --
Investment Shares/Investment Service Shares Class -- -- -- -- --
-------- -------- -------- -------- --------
Total distributions (5,944) (3,828) (9,182) (7,999) (779)
-------- -------- -------- -------- --------
CAPITAL SHARE TRANSACTIONS:(3)
Institutional Class:
Proceeds from sales 21,515 21,432 177,765 75,569 --
Proceeds in connection with acquisition of
Common Trust Fund Assets -- 95,844 -- -- --
Reinvestment of distributions 1,945 -- 75 -- --
Payments for redemptions (22,835) (17,787) (123,149) (27,564) --
-------- -------- -------- -------- --------
Increase (decrease) in net assets from Institutional
Class transactions 625 99,489 54,691 48,005 --
-------- -------- -------- -------- --------
Investment Shares and Investment Service
Shares Class (respectively):
Proceeds from sales 62 675 578,112 864,106 140,266
Reinvestment of distributions 389 874 1,618 1,085 1
Payments for redemptions (14,136) (22,545) 584,475) (890,259) (75,725)
-------- -------- -------- -------- --------
Increase (decrease) in net assets from
Investment Shares and Investment Service Shares
Class (respectively) transactions (13,685) (20,996) (4,745) (25,068) 64,542
-------- -------- -------- -------- --------
Increase (decrease) in net assets from
capital share transactions (13,060) 78,493 49,946 22,937 64,542
-------- -------- -------- -------- --------
Total increase (decrease) in net assets (9,555) 80,302 49,952 22,937 64,542
-------- -------- -------- -------- --------
NET ASSETS AT BEGINNING OF PERIOD 124,854 44,552 195,657 172,720 --
-------- -------- -------- -------- --------
NET ASSETS AT END OF PERIOD $115,299 $124,854 $245,609 $195,657 $ 64,542
======== ======== ======== ======== ========
(3)Capital share transactions:
Institutional Class:
Shares issued 2,164 2,200 177,765 75,569 --
Shares issued in connection with acquisition of
Common Trust Fund Assets -- 9,891 -- -- --
Shares issued in lieu of cash distributions 195 -- 75 -- --
Shares redeemed (2,297) (1,816) (123,149) (27,564) --
-------- -------- -------- -------- --------
Total Institutional Class transactions 62 10,275 54,691 48,005 --
-------- -------- -------- -------- --------
Investment Shares and Investment Service
Shares Class (respectively):
Shares issued 7 63 578,112 864,106 140,266
Shares issued in lieu of cash distributions 39 90 1,618 1,085 1
Shares redeemed (1,425) (2,312) (584,475) (890,259) (75,725)
-------- -------- -------- -------- --------
Total Investment Shares and Investment Service
Shares Class (respectively) transactions (1,379) (2,159) (4,745) (25,068) 64,542
-------- -------- -------- -------- --------
NET INCREASE (DECREASE) FROM SHARE TRANSACTIONS (1,317) 8,116 49,946 22,937 64,542
======== ======== ========= ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
October 31, 1998 31
<PAGE>
Financial Highlights
For the periods ended October 31,
For a Share Outstanding Throughout each Period.
<TABLE>
NET
NET REALIZED AND DISTRIBUTIONS ASSET
ASSET VALUE, NET UNREALIZED FROM NET DISTRIBUTIONS VALUE,
BEGINNING INVESTMENT GAINS OR (LOSSES) INVESTMENT FROM END OF
OF PERIOD INCOME ON INVESTMENTS INCOME CAPITAL GAINS PERIOD
------------ ---------- ----------------- ------------- ------------- ------
- -----------
EQUITY FUND
- -----------
<S> <C> <C> <C> <C> <C> <C>
Institutional Shares
1998 $ 9.39 0.06 1.67 (0.06) (0.51) $10.55
1997(1) 10.00 0.02 0.25 (0.02) (0.86) 9.39
Investment Shares
1998(6) $ 9.65 0.04 1.45 (0.05) (0.51) $10.58
- ---------
BOND FUND
- ---------
Institutional Shares
1998 $ 9.85 0.51 0.30 (0.51) -- $10.15
1997(1) 9.69 0.19 0.16 (0.19) -- 9.85
Investment Shares
1998 $ 9.85 0.49 0.30 (0.49) -- $10.15
1997 9.77 0.53 0.08 (0.53) -- 9.85
1996 9.92 0.58 (0.15) (0.58) -- 9.77
1995 9.54 0.63 0.38 (0.63) -- 9.92
1994 10.40 0.54 (0.86) (0.54) -- 9.54
1993 10.25 0.63 0.21 (0.63) (0.06) 10.40
1992(2) 10.00 0.36 0.25 (0.36) -- 10.25
- -----------------
MONEY MARKET FUND
- -----------------
Institutional Shares
1998 $ 1.00 0.05 -- (0.05) -- $ 1.00
1997(3) 1.00 0.02 -- (0.02) -- 1.00
Investment Service Shares(4)
1998 $ 1.00 0.05 -- (0.05) -- $ 1.00
1997 1.00 0.08 -- (0.08) -- 1.00
1996 1.00 0.04 -- (0.04) -- 1.00
1995 1.00 0.05 -- (0.05) -- 1.00
1994 1.00 0.03 -- (0.03) -- 1.00
1993 1.00 0.03 -- (0.03) -- 1.00
1992 1.00 0.04 -- (0.04) -- 1.00
1991 1.00 0.06 -- (0.06) -- 1.00
1990(5) 1.00 0.06 -- (0.06) -- 1.00
- --------------------------
TAX-FREE MONEY MARKET FUND
- --------------------------
Investment Service Shares(7)
1998 $ 1.00 0.01 -- (0.01) -- $ 1.00
</TABLE>
* Annualized
+ Returns are for the period indicated and have not been annualized.
(1) Commenced operations on June 13, 1997.
(2) Commenced operations on April 20, 1992.
(3) Commenced operations on June 9, 1997.
(4) During 1997, the Starburst Money Market Trust Shares were renamed the
Expedition Money Market Investment Service Shares.
32 October 31, 1998
<PAGE>
<TABLE>
RATIO OF NET
RATIO INVESTMENT
RATIO OF EXPENSES INCOME
OF NET TO AVERAGE TO AVERAGE
RATIO OF INVESTMENT NET ASSETS NET ASSETS
NET ASSETS EXPENSES INCOME (EXCLUDING (EXCLUDING
TOTAL END OF TO AVERAGE TO AVERAGE WAIVERS) AND WAIVERS) AND PORTFOLIO
RETURN[DAGGER] PERIOD (000) NET ASSETS NET ASSETS REIMBURSEMENTS REIMBURSEMENTS TURNOVER RATE
-------------- ------------ ---------- ---------- -------------- -------------- -------------
- -----------
EQUITY FUND
- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Institutional Shares
1998 19.18% $283,170 1.08% 0.38% 1.11% 0.35% 54.19%
1997(1) 2.96% 237,567 1.09%* 0.53%* 1.09%* 0.53%* 64.68%
Investment Shares
1998(6) 16.16%(8) $ 1,911 1.29%* (0.14%)* 1.37%* (0.22%)* 54.19%
- ---------
BOND FUND
- ---------
Institutional Shares
1998 8.43% $104,953 0.94% 5.11% 1.13% 4.92% 32.93%
1997(1) 3.49% 101,224 1.10%* 5.05%* 1.11%* 5.04%* 69.09%
Investment Shares
1998 8.25%(8) $ 10,346 1.10% 4.95% 1.25% 4.80% 32.93%
1997 6.41%(8) 23,630 1.13% 5.46% 1.56% 5.03% 69.09%
1996 4.44%(8) 44,552 1.08% 5.90% 1.58% 5.40% 77.00%
1995 10.94%(8) 63,521 1.04% 6.51% 1.51% 6.04% 79.00%
1994 (3.12%)(8) 58,827 1.20% 5.44% 1.50% 5.14% 91.00%
1993 8.42%(8) 97,246 1.11% 6.11% 1.40% 5.82% 69.00%
1992(2) 6.24%(8) 65,984 0.79%* 6.79%* 1.39%* 6.19%* 88.00%
- -----------------
MONEY MARKET FUND
- -----------------
Institutional Shares
1998 5.33% $102,699 0.43% 5.18% 0.66% 4.95% --
1997(3) 5.26% 48,006 0.43%* 5.22%* 0.70%* 4.95%* --
Investment Service Shares(4)
1998 5.07% $142,910 0.68% 4.95% 0.91% 4.73% --
1997 4.97% 147,651 0.73% 4.84% 0.85% 4.72% --
1996 4.95% 136,666 0.71% 4.85% 0.71% 4.85% --
1995 5.51% 141,434 0.56% 5.38% 0.66% 5.28% --
1994 3.29% 158,367 0.75% 3.26% 0.79% 3.22% --
1993 2.84% 131,508 0.70% 2.83% 0.70% 2.83% --
1992 4.07% 187,394 0.64% 4.01% 0.65% 4.00% --
1991 6.44% 212,997 0.62% 6.13% 0.67% 6.08% --
1990(5) 5.89% 117,716 0.58%* 7.80%* 0.68%* 7.70%* --
- --------------------------
TAX-FREE MONEY MARKET FUND
- --------------------------
Investment Service Shares(7)
1998 1.33% $ 64,542 0.68%* 2.95%* 0.78%* 2.85%* --
</TABLE>
(5) Commenced operations on February 5, 1990.
(6) Commenced operations on November 24, 1997.
(7) Commenced operations on May 20, 1998.
(8) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
October 31, 1998 33
<PAGE>
Notes to Financial Statements
(1) Organization
The Expedition Funds (the "Trust") is registered under the Investment Company
Act of 1940, as amended (the "1940 Act") as an open-end, management investment
company offering the following portfolios as of October 31, 1998: the Expedition
Equity Fund ("the Equity Fund"), the Expedition Bond Fund ("the Bond Fund"), the
Expedition Money Market Fund ("the Money Market Fund"), and the Expedition
Tax-Free Money Market Fund ("the Tax-Free Money Market Fund") (collectively,
"the Funds"). Each of the Expedition Funds portfolios is registered to offer two
classes of shares. The Bond and Equity Funds offer Institutional and Investment
shares and the Money Market Fund and the Tax Free Money Market Fund offer
Institutional and Investment Service shares. The assets of each portfolio are
segregated and a shareholder's interest is limited to the portfolio in which
shares are held. The investment objectives, policies, and strategies of the
Expedition Funds portfolios are described in their prospectuses.
(2) Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Funds which are in conformity with generally accepted accounting
principles.
SECURITY VALUATION -- Investment securities held by the Money Market Fund
and the Tax-Free Money Market Fund are stated at amortized cost, which
approximates market value. Under this valuation method, purchase discounts and
premiums are accreted and amortized ratably to maturity and are included in
interest income.
Investments in securities held in the Equity and Bond Funds are valued as
follows: Equity securities that are traded on a national securities exchange (or
reported on the NASDAQ national market system) are stated at the last quoted
sales price if readily available for such equity securities on each business
day; other equity securities traded in the over-the-counter market and listed
equity securities for which no sale was reported on that date are stated at the
last quoted bid price. Debt obligations exceeding sixty days to maturity for
which market quotations are readily available are valued at the mean of the most
recently quoted bid and asked price. Debt obligations with sixty days or less
remaining until maturity may be valued at their amortized cost. Restricted
34 October 31, 1998
<PAGE>
securities for which quotations are not readily available are valued at fair
value using methods determined in good faith under general supervision of the
Board of Trustees (the "Trustees").
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' advisor to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by 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.
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the date the security is purchased or sold (trade date). Costs
used in determining realized gains and losses on the sale of investment
securities are those of the specific securities sold, adjusted for the accretion
and amortization of purchase, discounts, and premiums during the respective
holding periods. Interest income is recorded on the accrual basis; dividend
income is recorded on the ex-dividend date.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Distributions from net investment
income for the Bond Fund, the Money Market Fund and the Tax-Free Money Market
Fund are declared daily and paid monthly. The Equity Fund declares and pays
dividends from net investment income monthly. Any net realized capital gains
will be distributed at least annually for all Funds. Dividends and distributions
are determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are primarily due to
differing treatments for deferral of wash sales losses and post-October losses.
October 31, 1998 35
<PAGE>
NOTES TO FINANCIAL STATEMENTS
FEDERAL TAXES -- It is each Funds' policy to comply with the provisions of the
Internal Revenue Code of 1986, as amended (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.
At October 31, 1998, the Bond Fund, for federal tax purposes, had a capital loss
carryforward of $3,566,948, which will reduce the Fund's taxable income arising
from future net realized gain on investments, if any, to the extent permitted by
the Code, and thus will reduce the amount of any distributions to shareholders
which would otherwise be necessary to relieve the Fund of any liability for
federal tax. Pursuant to the Code, such capital loss carryforward will expire as
follows:
EXPIRATION AMOUNT
-----------------------------
EXPIRATION BOND
YEAR FUND
---------- ------------
2002 $ 2,268,525
2003 558,610
2004 1,621
2005 738,192
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 upon settlement. 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.
36 October 31, 1998
<PAGE>
CLASSES -- Class specific expenses are borne by that class. Income, non-class
specific expenses, and realized/unrealized gains and losses are allocated to the
respective classes on the basis of the relative daily net assets.
(3) Investment Advisory, Administration, Distribution and Service Agreements
INVESTMENT ADVISORY FEE -- Compass Bank, the Trust's Investment Advisor (the
"Advisor"), receives for its services annual advisory fees equal to 0.75% each
of the Bond and Equity Funds' and 0.40% each of the Money Market and the
Tax-Free Money Market Funds' average daily net assets. The Advisor may
voluntarily choose to waive any portion of its fee. The Advisor can modify or
terminate these voluntary waivers at any time at its sole discretion.
INVESTMENT SUB-ADVISOR -- Weiss, Peck & Greer, L.L.C. ("WPG") serves as the
Tax-Free Money Market Fund's investment sub-advisor under a sub-advisory
agreement (the "Sub-Advisory Agreement") with the Advisor. Under the Sub-
Advisory Agreement, WPG invests the assets of the Fund on a daily basis, and
continuously administers the investment program of the Fund. WPG is entitled to
a fee which is paid by the Advisor and which is calculated daily and paid
monthly, at an annual rate of: .075% of the Fund's average daily net assets up
to $150 million; .05% of the next $350 million of the Fund's average daily net
assets, .04% of the next $500 million in average daily net assets; and .03% of
the Fund's average daily net assets over $1 billion.
ADMINISTRATIVE FEE -- The Trust and SEI Investments Mutual Funds Services
(the "Administrator"), a Delaware business trust, are parties to an
administration agreement (the "Agreement") dated June 9, 1997, under which
the Administrator provides the Trust with certain legal, accounting, and
shareholder services for an annual fee of .20% of the Funds' average daily
net assets. The Administrator may voluntarily waive its fee, subject to
termination at any time by the Administrator, to the extent necessary to
limit the total operating expenses of a Fund.
Prior to June 9, 1997 administrative and accounting services were provided to
the trust by Federated Administrative Services.
DISTRIBUTION PLAN -- The Trust and SEI Investments Distribution Co. (the
"Distributor") are parties to a Distribution Agreement dated June 9, 1997.
The Bond and Equity Funds have adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, each Fund
will compensate the Distributor from the net assets of each Fund to finance
activities
October 31, 1998 37
<PAGE>
Notes to Financial Statements
intended to result in the sale of the Fund's shares. The plan provides that each
Fund may incur distribution expenses up to 0.25% of the average daily net assets
of each Fund's Investment Shares, annually, to compensate the Distributor. The
Distributor may voluntarily choose to waive a portion of its fee.
Pursuant to the terms of a Shareholder Service Plan, the Money Market Fund and
the Tax-Free Money Market Fund will pay the Distributor an amount equal to 0.25%
of the average daily net assets of the Money Market Funds' Investment Service
Shares.
CUSTODIAN FEES -- Compass Bank serves as the Funds' custodian. Their fee
is based on a rate of 0.02% of each Fund's average daily net assets for the
period, plus out-of-pocket expenses.
(4) Investment Transactions
Purchases and sales of investments, excluding short-term securities, for the
period ended October 31, 1998, were as follows (000):
EQUITY BOND
FUND FUND
------ ----
Purchases
Government......................... -- $24,954
Other.............................. $150,942 $12,025
Sales
Government......................... -- $32,569
Other.............................. $146,972 $16,950
At October 31, 1998, the total cost of securities and the net realized gains or
losses on securities sold for Federal income tax purposes were not materially
different from amounts reported for financial reporting purposes. The aggregate
gross unrealized appreciation and depreciation for securities held by the Funds
at October 31, 1998, are as follows (000):
EQUITY BOND
FUND FUND
------ ----
Aggregate gross unrealized
appreciation........................ $51,421 $4,530
Aggregate gross unrealized
depreciation........................ (11,468) (19)
------- ------
Net unrealized appreciation........... $39,953 $4,511
======= ======
38 October 31, 1998
<PAGE>
(5) Organization Costs and Transactions with Affiliates
Organization costs have been capitalized by the Funds and are being amortized
over sixty months commencing with the reorganization. In the event any of the
initial shares of a Fund are redeemed by any holder thereof during the period
that such Fund is amortizing its organizational costs, the redemption proceeds
payable to the holder thereof by the Fund will be reduced by the unamortized
organizational costs in the same ratio as the number of initial shares being
redeemed bears to the number of initial shares outstanding at the time of
redemption.
Certain officers of the Trust are also officers of the Administrator
and the Distributor. Such officers are paid no fees by the Trust for serving as
officers of the Trust.
(6) Common Trust Fund Conversions
On June 13 and June 20, 1997, certain Common Trust Funds of Compass Bank and
certain of its affiliates were converted into the Expedition Funds.
The Funds involved in the conversion are as follows:
COMMON TRUST FUND EXPEDITION FUND
- ----------------- ---------------
River Oaks Equity Model Equity
Compass EB Growth Equity
Compass EB Value Stock Equity
Compass EB Contrarian Stock Equity
Compass Value Stock Equity
Compass Growth Stock Equity
Compass Contrarian Stock Equity
Compass EB Short Term High Quality Bond
Compass EB Intermediate Bond
Compass Short Term High Quality Bond
River Oaks Cap Trust Bond
River Oaks Cap Preserv Bond Bond
October 31, 1998 39
<PAGE>
Notes to Financial Statements
The assets, which consisted of securities, and related receivables less
liabilities were converted on a tax-free basis. The net assets of each fund
(including net unrealized gain/(loss) immediately before the conversion were as
follows (000):
COMMON UNREALIZED NET
TRUST FUND ASSETS GAIN/(LOSS) ASSETS
-------------- ------- ----------- ------
River Oaks Equity Model $23,029 $7,456 $30,485
Compass EB Growth 35,434 2,118 37,552
Compass EB Value Stock 48,976 2,663 51,639
Compass EB Contrarian Stock 42,068 2,123 44,191
Compass Value Stock 21,677 9,907 31,584
Compass Growth Stock 13,687 5,086 18,773
Compass Contrarian Stock 24,375 7,037 31,412
Compass EB Short Term High Quality 39,083 215 39,298
Compass EB Intermediate 6,603 51 6,654
Compass Short Term High Quality 42,538 (285) 42,253
River Oaks Cap Trust 6,609 41 6,650
River Oaks Cap Preserv Bond 980 9 989
The value and number of shares issued in exchange for each Common Trust Fund's
assets and shares outstanding in the tax-free conversions are included in the
capital share transactions of the Institutional Class in the Statement of
Changes in Net Assets for each respective fund.
As a result of transactions relating to the Common Trust Fund conversion,
$87,818 in commission credits was generated which have been used to offset
expenses for the Equity Fund.
40 October 31, 1998
<PAGE>
Independent Auditors' Report
The Board of Trustees and Shareholders of
Expedition Funds:
We have audited the accompanying statements of net assets of Expedition Funds
(the "Funds"), including the Equity Fund, Bond Fund, Money Market Fund, and
Tax-Free Money Market Fund, as of October 31, 1998, and the related statements
of operations, statements of changes in net assets and financial highlights for
the periods presented. These financial statements and the financial highlights
are the responsibility of the Funds' management. Our responsibility is to
express an opinion on these financial statements and the financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1998 by correspondence with the custodians and brokers, and where
replies were not received, we performed other auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of the Funds as of
October 31, 1998, the results of their operations, the changes in their net
assets, and the financial highlights for the respective stated periods, in
conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
December 3, 1998
October 31, 1998 41
<PAGE>
Notice to Shareholders
For shareholders that do not have a October 31, 1998 tax year end, this notice
is for informational purposes only. For shareholders with a October 31, 1998,
please consult your tax advisor as to the pertinence of this notice. For this
fiscal year ended October 31, 1998, each portfolio is designating the following
items with regard to distributions paid during the year.
<TABLE>
Long Term Mid Term
(20% Rate) (28% Rate) Ordinary
Capital Gain Capital Gain Income Tax-Exempt Total Qualifying
Fund Distribution Distribution Distributions Interest Distributions Dividends (1)
- ---- ------------ ------------ ------------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Expedition Funds-
MoneyMarket 0.00% 0.00% 100.0% 0.00% 100.0% 0.00%
Expedition Funds-
Tax-Free
MoneyMarket 0.00% 0.00% 0.16% 99.84% 0.00% 0.00%
Expedition Funds-
Bond Fund 0.00% 0.00% 100.0% 0.00% 100.0% 0.00%
Expedition
Equity Fund 39.72% 10.17% 50.11% 0.00% 100.0% 87.32%
</TABLE>
(1)Qualifying dividends represent dividends which qualify for the corporate
dividends received deduction and is reflected as a percentage of "Ordinary
Income Distributions."
42 October 31, 1998
<PAGE>
<PAGE>
[LOGO OMITTED]
INVESTMENT ADVISOR AND CUSTODIAN:
Compass Bank
15 South 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
117 Campus Drive
Princeton, New Jersey 08540
COUNSEL:
Morgan, Lewis & Bockius LLP
1800 M Street, N.W.
Washington, D.C. 20036
EXP-F-001-03
