<PAGE>
PARAGON PORTFOLIO
LETTER TO SHAREHOLDERS
DEAR SHAREHOLDERS:
The staff of Premier Investment Advisors, L.L.C. is pleased to report to you
on the results of operations of the Paragon Portfolio for the six months ended
May 31, 1995. In this letter, we will discuss the conditions that exist in the
economy and the stock and bond markets. Then we will explain how these condi-
tions have affected each of the Paragon mutual funds.
THE ECONOMY
Investors have been waiting for the "soft landing" in the U.S. economy and
it appears to be here. A good indication is the rate of employment growth,
which is settling in at 150,000-200,000 new jobs each month. This is consis-
tent with a 2% rate of Gross Domestic Product growth. This slower rate of
growth through the year should help keep a lid on inflation, which is running
around 3% based on consumer prices. Due to the economic environment, the Fed-
eral Reserve ("Fed") has lowered the Federal Funds Rate from 6% to 5.75%. This
was the first rate cut in three years and does not appear to be the last in
1995.
The slowing in economic activity was preordained by rising short-term and
long-term interest rates in 1994. Long-term rates approached 8.2% last Novem-
ber, creating a 5% real return over inflation, which investors eventually
viewed as a major buying opportunity. Yields have since dropped below 7%. Our
analysis suggests that every one percentage point drop in yields adds a full
percentage point in economic activity one year later. That means that 1996
should exhibit stronger economic activity aided by increased domestic and for-
eign demand for goods and services. With unemployment below 6% and the na-
tion's capacity utilization already at high levels, inflation pressure may en-
sue, forcing the Fed into another round of credit tightening late next year.
THE STOCK MARKET
So far this fiscal year, the Dow Jones Industrial Average has increased
21.1% while the broader S&P 500 Index has achieved a 19.2% return. The Russell
2000 Index, a proxy for small capitalization stocks, is up 11.7% for the same
period. International stocks, as measured by the EAFE Index, have risen 5.3%
during the last six months. Clearly, U.S. stocks have been stellar performers
so far this year. What kind of stocks have been rewarding investors? Believing
that the economy is slowing to a sustainable growth rate, investors are at-
tracted to stocks of well-known companies with consistent earnings patterns.
Investors also have been seeking large multinational companies with exposure
to the economic recovery in Europe. These investment characteristics help ex-
plain why large-company stocks have outperformed smaller stocks by a consider-
able margin this year.
Equities continue to be supported by a belief that the U.S. economy is exe-
cuting a soft landing. Furthermore, the end of the Fed's tightening and a drop
in bond yields below 7% are strong props under stock prices. A major negative
continues to be the low average dividend yield, but we believe this is an in-
dication that companies have found more productive uses for their cash. They
are expanding their businesses, buying other businesses or buying back their
own shares. These activities have helped boost share prices to record levels.
FIXED INCOME MARKET
So far this fiscal year, bonds have rallied strongly as short- and long-term
rates have plummeted. The Lehman Brothers Aggregate Bond Index has earned a
nonannualized total return of 11.4% during the last six months. This index
measures the performance of the bond market as a whole, both short- and long-
term maturities. Even the Lehman Brothers 1-3 year Government Index, a high-
quality short-term index, achieved impressive results of 6.2%, nonannualized.
Municipal bonds also rallied during the period, but to a lesser degree. Pro-
posals emanating from Washington concerning overhauling the nation's tax sys-
tem through a flat tax or a national sales tax spooked the muni market. Such
proposals, if enacted, would make municipal bonds much less attractive to in-
vestors. We will watch the progress of these tax reform proposals.
Our longer term view of the bond market remains positive.
SUMMARY
The rise in short-term rates since February 1994 has had its desired affect
of slowing economic activity. Stock valuations appear high with the S&P 500
price to earnings (based on 1995 earnings projections) ratio at nearly 16
times, but when compared with interest rates and inflation stocks appear
slightly undervalued. Demand for U.S. securities from domestic investors ap-
pears strong, yet sentiment does not seem alarmingly high. Demand from foreign
investors could rise once the dollar stabilizes. Though a 5%-10% technical
correction could occur, the trend in U.S. stock prices for 1995 appears to be
upward.
With this overview of the economy and financial markets, let us turn to the
events that shaped each Fund's results for the period.
<PAGE>
PARAGON PORTFOLIO
LETTER TO SHAREHOLDERS--(CONTINUED)
PARAGON SHORT-TERM GOVERNMENT FUND
For the six months ended May 31, 1995, the Class A shares of the Fund
achieved a total return of 5.6% based on net asset value ("NAV"). This com-
pares with the Lipper Short U.S. Government Fund average of 6.4% and the Leh-
man Brothers Mutual Fund Short (1-3) Government Index return of 6.2% for the
same period. Class B shares of the Fund recorded a total return of 5.2% based
on NAV for the six months ended May 31, 1995.
The Fund underperformed these benchmarks due to its large holdings in float-
ing rate securities. These securities served the Fund well in 1994, but pro-
duce a lower total return than comparable fixed rate securities when interest
rates decline. All the floating rate securities except those tied to the prime
rate were sold in May. We anticipate selling the prime-based floaters and mov-
ing into longer fixed rate securities soon. The amount of callable bonds in
the portfolio has also been reduced since these bonds tend to lag behind fixed
rate securities in total return as well.
The portfolio should benefit should the anticipated decline in interest
rates continue.
PARAGON INTERMEDIATE-TERM BOND FUND
For the six months ended May 31, 1995, the Class A shares of the Fund
achieved a total return of 11.6% based on NAV. This compares with the Lipper
Intermediate U.S. Government Fund average of 9.5% and the Lehman Brothers In-
termediate Government/Corporate Index return of 9.2% for the same time period.
Class B shares of the Fund recorded a total return of 11.3% based on NAV for
the six months ended May 31, 1995.
Several changes have been made in the portfolio to further enhance the total
return should interest rates continue to move downward. The first was to re-
place the majority of the callable issues with similar fixed rate securities
that will perform better in the current market environment. The other signifi-
cant change is in the mortgage-backed sector where CMO PAC securities are be-
ing replaced with conventional pass-through pools. This change is due to inef-
ficiency in the current CMO market and the ability of the pools to more
closely track the returns of their corresponding Treasury bonds along the
yield curve.
PARAGON LOUISIANA TAX-FREE FUND
For the six months ended May 31, 1995, the Class A shares of the Fund
achieved a total return of 8.6% based on NAV. This compares with the Lipper
Intermediate Municipal Debt Fund Average of 9.3% and the Lehman Brothers 7-
Year Municipal Bond Index return of 10.0% for the same time period. Class B
shares of the Fund recorded a total return of 8.4% based on NAV for the six
months ended May 31, 1995.
Lingering problems concerning state funding of Medicaid, as well as contin-
ued rising budget demands, dampened the performance of the returns in the Lou-
isiana market, compared with the returns in the national market. In an effort
to react to these pressures, we reduced the Fund's exposure to uninsured hos-
pital debt. The credits remaining are insured issues of the predominately
large hospitals located in Louisiana's larger population centers. We also re-
duced the holdings of uninsured Louisiana State general obligation debt and
replaced it with new insured state general obligation debt that was issued in
the first quarter of 1995.
As interest rates decline, refunding of municipal debt should increase, pro-
viding pockets of opportunities for purchasing portfolio securities in the
second half of the year. Current levels of duration and average maturity
should help reduce volatility of the Fund's NAV should concerns continue in
the Louisiana bond market.
PARAGON VALUE GROWTH FUND
During the six-month period ended May 31, 1995, the Paragon Value Growth
Fund Class A shares achieved a total return of 12.9% based on NAV, while the
S&P 500 Index ("S&P 500") earned a total return of 19.2%. The Lipper Growth &
Income Mutual Fund Index total return for the same period was 15.4%. Class B
shares of the Fund recorded a total return of 12.6% based on NAV for the six
months ended May 31, 1995.
We can cite several factors that contributed to the Fund's return trailing
that of the S&P 500. First of all, the Fund's median market capitalization as
of March 31, 1995 (the most recent data available) was $8.9 billion, compared
with the S&P 500 median market capitalization of $14.2 billion. As stated pre-
viously in this letter, market capitalization has been strongly correlated
with investment results in 1995. In addition, the Fund held underweighted po-
sitions in some market sectors that experienced strong price gains, causing
the Fund's return to lag behind the index. These include the capital equipment
and services sector, the consumer noncyclical sector and the financial sector.
We will discuss some of these sectors in more detail shortly.
The consumer cyclical sector, which was slightly overweighted in the Fund
versus the S&P 500, underperformed the index. In addition, the Fund's specific
holdings in this group did worse than the sector as a whole. Since this sector
made up over 16% of net assets, there was a noticeable effect on investment
results.
2
<PAGE>
PARAGON PORTFOLIO
LETTER TO SHAREHOLDERS--(CONTINUED)
Several decisions made during the period benefitted the Fund's performance.
Though we were incorrect in underweighting the capital equipment and services
sector, the stock selection in this group showed excellent results. The aver-
age return for the period was over 29% for these stocks, which included Gen-
eral Electric, W.W. Grainger, Johnson Controls and Allied Signal. Similarly,
in the financial sector, the Fund's holdings performed quite well. Top-per-
forming stocks included First American Corp. of Tennessee (up approximately
26%) and Federal National Mortgage Association (up approximately 31%).
In the technology sector, the top-performing group in the market during the
period, we correctly moved to an overweighted position with purchases of Xerox
Corp., General Instrument Corp. and, near the very end of the reporting peri-
od, Vishay Intertechnology, Inc. Including two convertible issues (Avnet, Inc.
and Corning Delaware LP) whose underlying common shares are technology-relat-
ed, the Fund's weighting in technology was near 19% on May 31, 1995. This is
well above the S&P 500 weighting of 11.5%. The stock selection proved success-
ful as well. Certainly, the shares of Intel Corp. and Texas Instruments, Inc.
contributed largely to this success.
The ten largest holdings as of May 31, 1995 are listed below.
<TABLE>
<CAPTION>
PRICE
PERCENT OF APPRECIATION
SECURITY NET ASSETS (DEPRECIATION)*
-------- ---------- ---------------
<S> <C> <C>
Intel Corp. 4.9% 77.8%
Texas Instruments, Inc. 3.9 53.1
Home Depot, Inc. 3.5 (10.0)
Amoco Corp. 3.5 12.3
Dow Chemical Co. 3.4 14.4
WorldCom, Inc. 3.3 29.2
AT & T Corp. 3.1 3.3
United Healthcare Corp. 2.9 (21.8)
Enron Corp. 2.8 35.2
Chrysler Corp. 2.7 (10.1)
</TABLE>
* For the period from the latter of December 1, 1994, or the purchase date, to
May 31, 1995.
The Fund's performance has been disappointing during the first half of this
fiscal year, due largely to its investment style being out of sync with the
stock market. When the leadership in the market broadens to include medium-
capitalization stocks that are used a great deal in the Paragon Value Growth
Fund, investment results should become more competitive.
PARAGON VALUE EQUITY INCOME FUND
For the six months ended May 31, 1995, the Class A shares of the Fund
achieved a total return of 17.2% based on NAV, compared with the S&P 500 re-
turn of 19.2% and the Lipper Equity Income Fund Index return of 14.4%. The
Class B shares recorded a total return of 16.7% based on NAV for the same six-
month period. We believe the Fund trailed the performance of the S&P 500 for
the following reasons: (1) Market capitalization was strongly correlated with
returns during the period. The Fund's average market capitalization is less
than the S&P 500. (2) The Fund maintained an underweighted position in the fi-
nancial sector, which outperformed the S&P 500 during the last six months. (3)
The Fund held a 6% weighting in convertible bonds, which performed positively,
but lagged behind the S&P 500 returns.
A number of changes were made in the Fund during the reporting period. Con-
sumer cyclical stocks were reduced from 14% to 9% of net assets due to the
sale of shares in Consolidated Stores Corp., a close-out retailing company, at
a gain of 59%. General Motors Corp. shares were sold at a 31% loss, while
Whirlpool Corp. common shares were sold at a 43% capital gain. We reduced the
Fund's exposure to discretionary consumer spending, which has been slowing in
1995. We remain underweighted in this sector, which makes up 15% of the
S&P 500.
The consumer noncyclical stocks were increased from 12% to 18% of net as-
sets. We moved closer to the S&P 500 weighting of 21% in this sector. As the
economy shows signs of slowing, these stocks should exhibit good relative per-
formance. Johnson & Johnson shares were sold at a 41% profit, and the proceeds
were used to purchase Baxter International, Inc., another hospital supply
stock. We added to the holdings of Bristol-Myers Squibb Co., a pharmaceutical
manufacturer, and also purchased shares of Columbia/HCA Healthcare Corp., the
nation's largest private acute-care hospital management company. Finally, we
added to our position in Premark International, Inc., bringing the Fund's
weighting in this security to approximately 3% of net assets. The consumer
noncyclical stocks in the Fund performed nearly as well as the S&P 500 during
the period, rising an average of 16%.
The technology sector experienced significant change during the period. The
Fund's weighting in this sector grew from 8% to 11% of net assets, with most
of this gain arising from price appreciation. Shares of IBM Corp. were pur-
chased during the period in an effort to increase exposure in this sector. We
are continually searching for stocks with valuation measures which suit the
Fund's investment criteria; however, these stocks are increasingly rare. IBM
Corp. is one security that now meets the Fund's criteria for purchase. The
Fund's holdings in technology achieved returns averaging 30% in the year's
first half. Shareholders
3
<PAGE>
PARAGON PORTFOLIO
LETTER TO SHAREHOLDERS--(CONTINUED)
benefitted from an overweighted position in this sector which has been the
market leader in the current rally.
The Fund's six-month performance was positively affected by healthy gains in
the Fund's top ten stock holdings. The following table lists the Fund's ten
largest positions as of May 31, 1995.
<TABLE>
<CAPTION>
PERCENT OF PRICE
SECURITY NET ASSETS APPRECIATION*
-------- ---------- -------------
<S> <C> <C>
Mobil Corp. 3.8% 16.7%
Lockheed Martin Corp. 3.5 33.8
Citicorp Convertible Preferred 3.2 30.0
Raytheon Co. 3.2 23.3
Dow Chemical Co. 3.1 14.4
Philip Morris Companies, Inc. 3.1 21.9
DuPont (E.I.) de Nemours & Co. 3.1 26.0
Premark International, Inc. 3.0 9.6
IBP, Inc. 3.0 11.5
Ford Motor Co. Preferred A 2.9 8.4
</TABLE>
* For the period from the latter of December 1, 1994 or the purchase date, to
May 31, 1995.
PARAGON GULF SOUTH GROWTH FUND
For the six months ended May 31, 1995, the Class A shares of the Fund
achieved a total return of 11.4% based on NAV, compared with the Russell 2000
Index return of 11.7%. The S&P 500 Index returned 19.2% for the same period.
An appropriate peer group index for this Fund is the Lipper Small Company
Growth Fund Index, which rose 11.2% during the six month period. Class B
shares of the Fund recorded a total return of 11.0% based on NAV for the six
months ended May 31, 1995.
We believe the reason for the Fund's lagging performance versus the S&P 500
Index is the unusually strong correlation between market capitalization and
investment results in 1995. The S&P 500, having a much larger average capital-
ization than the Fund, experienced greater returns. Note that the S&P 500 also
substantially outperformed the other small-capitalization indices listed
above.
The fact that the Fund achieved results similar to the Lipper Small Company
Growth Fund Index ("Lipper Small Company Index") for the six months ended May
31, 1995, hides the substantial volatility relative to this index that oc-
curred during this period. The Fund performed relatively well during the pe-
riod from November 30, 1994 through February 28, 1995. A performance advantage
over the Lipper Small Company Index of approximately 480 basis points was
achieved during these months. Then during March 1995, much of this lead was
given up as the Fund remained flat, while the Lipper Small Company Index rose
2.7%. The first two weeks of April were positive, as the Fund gained 2%, while
the Lipper Small Company Index gained 1.1%. Then on April 14, the Fund experi-
enced a setback when the value of its holdings in Health Maintenance Organiza-
tion ("HMO") stocks dropped precipitously due to some negative developments
that affected a north central U.S. HMO, but that worried investors in all HMO
stocks. The Gulf South Growth Fund's holdings in this industry include Coastal
Healthcare, Coventry Corporation and HealthWise of America, Inc. During the
last two weeks of April, the Fund declined over 3%, while the Lipper Small
Company Index rose slightly less than 1%. We are encouraged to see that since
then, the Fund has regained the ground lost in April with a return of 2.61% in
May, approximately 1% more than its comparative index. The gain has been
fairly broad-based, with numerous issues contributing.
Sectors that positively affected the Fund's results during the first six
months of the fiscal year include the energy sector, which made up about 7.9%
of net assets as of May 31, 1995. Within this group of stocks we sold two oil
service companies, American Oilfield Divers and Global Industries, while add-
ing a small exploration and production company, Benton Oil & Gas Co. The en-
ergy group exhibited an average return of 43%, due to a large gain in the
price of Input/Output, Inc., which is the largest holding in the group and the
Fund's fifth largest holding.
Financial stocks, which make up over 21% of net assets as of May 31, 1995,
also performed well, achieving an average return of 49%. Stocks appreciating
strongly include United Companies Financial Corp., Medaphis Corp. and Regional
Acceptance Corp. Some sales were made in this group to recognize substantial
profits. Coral Gables Fedcorp was sold following an announced buy-out of the
company. PMT Services, a payment services company, was bought and sold during
the period for a gain of 50.9%.
Holdings that negatively affected the period's results include some natural
resources/basic materials issues such as Georgia Gulf Corp., Nucor Corp. and
Image Industries, Inc. Industry conditions in which these companies operate
were responsible for these declines. We believe the outlook for these compa-
nies remains promising.
Consumer cyclical issues showed the worst performance of any group of stocks
held in the Fund. A combination of factors involving slowing consumer spending
on discretionary and big-ticket items seems to have weakened the demand for
these stocks. However, we doubt this situation will last long.
4
<PAGE>
PARAGON PORTFOLIO
LETTER TO SHAREHOLDERS--(CONTINUED)
The Fund's ten largest holdings are listed below.
<TABLE>
<CAPTION>
PRICE
PERCENT OF APPRECIATION
SECURITY NET ASSETS (DEPRECIATION)*
-------- ---------- ---------------
<S> <C> <C>
Medaphis Corp. 5.5% 53.5%
WorldCom, Inc. 5.3 29.2
First Financial Management Corp. 4.4 20.6
United Companies Financial Corp. 3.9 60.9
Input/Output, Inc. 3.8 75.5
Office Depot, Inc. 3.7 1.1
Atlantic Southeast Airlines, Inc. 3.3 58.2
Autozone, Inc. 3.2 (9.3)
Coventry Corp. 2.9 (17.5)
Stewart Enterprises, Inc. 2.9 26.3
</TABLE>
* For the period from the latter of December 1, 1994, or the purchase date, to
May 31, 1995.
We are generally pleased with the Fund's progress this year, though it is ob-
vious that we must await the return to favor of small-capitalization stocks be-
fore the Gulf South Growth Fund can truly shine.
In conclusion, we appreciate your support and look forward to helping you
meet your investment objectives.
/s/ Donald E. Allred
Donald E. Allred
President & Chief Investment Officer
Premier Investment Advisors, L.L.C.
July 7, 1995
5
<PAGE>
PARAGON PORTFOLIO
STATEMENT OF INVESTMENTS
PARAGON TREASURY MONEY MARKET FUND
MAY 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY AMORTIZED
AMOUNT RATE DATE COST
- ------------ -------- -------- ------------
<S> <C> <C> <C>
U.S. TREASURY OBLIGATIONS--7.9%
United States Treasury Bill
$ 25,000,000 5.61% 11/24/95 $ 24,314,333
------------
REPURCHASE AGREEMENTS--92.4%
C.S. First Boston Corp., dated 03/20/95,
repurchase price $35,535,257
(U.S. Treasury Note: $35,265,000,
6.75%, 05/31/99)
$ 35,000,000 6.05% 06/19/95 $ 35,000,000
Merrill Lynch Government Securities, Inc.,
dated 05/12/95, repurchase price
$15,188,417 (U.S. Treasury Notes:
$15,245,000, 4.25%, 05/15/96;
$310,000, 7.88%, 01/15/98)
15,000,000 5.95 07/27/95 15,000,000
Morgan Stanley & Company, Inc.,
dated 05/17/95, repurchase price
$10,150,403 (U.S. Treasury Note:
$10,580,000, 4.75%, 08/31/98)
10,000,000 5.95 08/16/95 10,000,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY AMORTIZED
AMOUNT RATE DATE COST
- ------------ -------- -------- ------------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS--CONTINUED
Swiss Bank Corp. Government Securities,
dated 05/05/95, repurchase price
$10,149,000 (U.S. Treasury Note:
$9,725,000, 7.50%, 12/31/96)
$ 10,000,000 5.96% 08/03/95 $ 10,000,000
Joint Repurchase Agreement Account
215,200,000 6.15 06/01/95 215,200,000
------------
Total Repurchase Agreements.................. $285,200,000
------------
Total Investments............................ $309,514,333(a)
============
- -------------------------------------------------------------------------------------------------
</TABLE>
(a) The cost stated also represents aggregate cost for federal income tax
purposes.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
PARAGON PORTFOLIO
STATEMENT OF INVESTMENTS
PARAGON SHORT-TERM GOVERNMENT FUND
MAY 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
- ----------- -------- -------- ------------
<S> <C> <C> <C>
U.S. TREASURY OBLIGATIONS--51.2%
United States Treasury Notes
$ 7,000,000 5.13% 11/15/95 $ 6,977,950
5,500,000 6.25 01/31/97 5,533,880
6,000,000 6.88 04/30/97 6,107,220
3,000,000 6.38 06/30/97 3,030,240
10,000,000 5.75 10/31/97 9,963,800
3,000,000 7.38 11/15/97 3,098,280
9,000,000 6.00 11/30/97 9,016,380
5,000,000 5.13 03/31/98 4,893,450
1,500,000 5.13 04/30/98 1,466,865
9,000,000 5.13 06/30/98 8,788,320
5,000,000 6.38 01/15/99 5,058,150
3,000,000 6.25 05/31/00 3,022,380
------------
Total U.S. Treasury Obligations
(cost $67,705,964)........................... $ 66,956,915
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS--42.4%
Federal Farm Credit Bank
$ 1,735,000 5.31% 05/26/98 $ 1,697,611
Federal Home Loan Bank
2,100,000 5.38 11/27/95 2,098,803
2,000,000 6.85 02/25/97 2,026,020
4,000,000 6.60 04/13/99 4,027,960
5,000,000 7.14 05/20/99 5,089,300
Federal National Mortgage Assn.
22,000,000 6.37(a) 01/26/96 22,014,300
5,000,000 8.45 10/21/96 5,164,400
1,500,000 7.05 03/10/97 1,500,000
3,000,000 7.00 04/10/97 3,000,000
3,000,000 5.35 10/10/97 2,943,300
2,000,000 5.30 03/11/98 1,948,560
4,000,000 5.35 04/01/98 3,902,400
------------
Total U.S. Government Agency Obligations
(cost $55,507,400)........................... $ 55,412,654
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
- ----------- -------- -------- ------------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS--6.2%
State Street Bank & Trust Company,
dated 05/31/95, repurchase price
$8,066,232 (U.S. Treasury Note:
$8,040,000, 6.63%, 03/31/97)
$ 8,065,000 5.50% 06/01/95 $ 8,065,000
------------
Total Repurchase Agreements
(cost $8,065,000)............................ $ 8,065,000
------------
Total Investments
(cost $131,278,364(b))....................... $130,434,569
============
- ---------------------------------------------------------------------------------------------------
Federal Income Tax Information:
Gross unrealized gain for investments in which
value exceeds cost............................... $ 504,216
Gross unrealized loss for investments in which
cost exceeds value............................... (1,348,011)
------------
Net unrealized loss............................... $ (843,795)
============
- ---------------------------------------------------------------------------------------------------
</TABLE>
(a) Variable rate security. Coupon rate disclosed is that which is in effect
at May 31, 1995.
(b) The cost stated also represents aggregate cost for federal income tax
purposes.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
PARAGON PORTFOLIO
STATEMENT OF INVESTMENTS
PARAGON INTERMEDIATE-TERM BOND FUND
MAY 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
- ----------- -------- -------- ------------
<S> <C> <C> <C>
U.S. TREASURY OBLIGATIONS--23.2%
United States Treasury Bonds
$ 6,000,000 8.38% 08/15/00 $ 6,039,300
8,000,000 8.25 05/15/05 8,639,200
10,000,000 8.38 08/15/08 11,224,100
United States Treasury Notes
500,000 9.25 01/15/96 510,055
4,000,000 8.88 02/15/96 4,081,560
5,000,000 6.00 12/31/97 5,009,100
10,000,000 9.00 05/15/98 10,815,000
1,000,000 8.88 11/15/98 1,088,150
3,400,000 8.88 02/15/99 3,717,594
4,000,000 9.13 05/15/99 4,431,200
2,600,000 6.38 07/15/99 2,631,382
3,000,000 5.50 04/15/00 2,934,060
12,000,000 6.25 02/15/03 11,983,680
------------
Total U.S. Treasury Obligations
(cost $71,254,335)...........................
$ 73,104,381
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS--32.3%
Federal Farm Credit Bank
$ 5,000,000 6.88% 05/01/00 $ 5,057,600
2,000,000 7.95 04/01/02 2,121,260
Federal Home Loan Bank
2,000,000 9.25 11/25/98 2,176,720
2,000,000 9.30 01/25/99 2,174,340
3,000,000 8.60 06/25/99 3,245,760
5,000,000 6.27 01/14/04 4,832,000
Federal Home Loan Mortgage Corp.
2,000,000 6.44 01/28/00 2,016,440
3,000,000 7.88 04/28/04 3,114,390
5,000,000 7.89 05/12/04 5,174,800
2,017,800 7.00 01/15/08 1,972,258
Federal National Mortgage Assn.
1,000,000 9.35 02/12/96 1,023,890
2,000,000 9.20 06/10/97 2,118,320
2,000,000 8.80 07/25/97 2,107,820
4,000,000 8.70 06/10/99 4,341,840
3,000,000 8.90 06/12/00 3,342,990
3,000,000 8.70 06/11/01 3,066,270
2,000,000 7.90 04/10/02 2,076,320
3,000,000 6.20 11/12/03 2,889,300
2,820,000 8.05 05/20/04 2,944,362
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
- ----------- -------- -------- ------------
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS--CONTINUED
Federal National Mortgage Assn.--Continued
$15,000,000 7.16% 05/11/05 $ 15,641,400
5,870,257 7.00 06/01/10 5,098,437
5,000,000 7.00 04/01/08 5,909,411
4,934,642 7.50 05/01/25 4,962,424
5,000,000 7.50 06/01/25 5,015,650
5,000,000 7.50 06/13/25 5,015,650
Student Loan Marketing Assn.
2,000,000 8.27 12/15/99 2,128,980
2,500,000 5.65 12/01/00 2,416,450
------------
Total U.S. Government Agency Obligations $101,985,082
(cost $100,359,158).......................... ------------
COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS)--15.9%
Federal National Mortgage Assn.
REMIC Trust 1992-135, Class L
$ 3,225,000 7.50% 09/25/07 $ 3,338,746
Federal National Mortgage Assn.
REMIC Trust 1992-205, Class K
5,584,000 6.50 05/25/21 5,372,087
Federal National Mortgage Assn.
REMIC Trust 1993-56, Class PT
6,901,000 6.60 02/25/21 6,705,840
Federal National Mortgage Assn.
REMIC Trust 1993-87, Class H
3,597,000 6.50 10/25/21 3,470,637
Federal National Mortgage Assn.
REMIC Trust 1993-110, Class H
5,000,000 6.50 05/25/23 4,823,800
Federal National Mortgage Assn.
REMIC Trust 1993-175, Class PG
7,875,000 6.50 09/25/08 7,564,253
Federal National Mortgage Assn.
REMIC Trust 1993-183, Class H
5,000,000 6.50 03/25/22 4,821,100
Federal National Mortgage Assn.
REMIC Trust 1993-225, Class VG
3,595,500 6.35 08/25/13 3,427,878
GS Trust 8 Series C, Class 6
10,000,000 8.50 02/20/21 10,617,800
------------
Total CMOs $ 50,142,141
(cost $50,976,876)........................... ------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
PARAGON PORTFOLIO
STATEMENT OF INVESTMENTS
PARAGON INTERMEDIATE-TERM BOND FUND--(CONTINUED)
MAY 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
---------- -------- -------- -----------
<S> <C> <C> <C>
CORPORATE OBLIGATIONS--22.8%
BASIC MATERIALS & NATURAL RESOURCES--0.9%
Monsanto Co.
$3,000,000 6.00% 07/01/00 $ 2,945,640
-----------
CONSUMER CYCLICAL--2.4%
Dayton Hudson Corp.
1,250,000 7.25 09/01/04 1,282,112
Dillard Department Stores, Inc.
2,000,000 8.75 06/15/98 2,123,300
Wal-Mart Stores, Inc.
4,000,000 7.50 05/15/04 4,213,320
-----------
7,618,732
-----------
CONSUMER NONCYCLICAL--2.3%
Baxter International Inc.
2,000,000 7.25 02/15/08 2,034,600
Coca Cola Enterprises, Inc.
2,000,000 7.00 11/15/99 2,030,600
Philip Morris Co., Inc.
1,000,000 9.00 01/01/01 1,102,830
2,000,000 7.13 08/15/02 2,012,000
-----------
7,180,030
-----------
FINANCIAL--15.6%
AmSouth Bancorporation
1,900,000 9.38 05/01/99 2,066,611
Aon Corp.
2,000,000 6.70 06/15/03 1,974,240
Banc One Corp.
1,000,000 8.74 09/15/03 1,111,170
Bear Stearns Companies, Inc.
5,000,000 8.25 02/01/02 5,306,350
Boatmen's Bancshares, Inc.
5,000,000 7.63 10/01/04 5,206,650
Capital Holding Corp.
2,000,000 8.90 10/20/99 2,161,760
1,000,000 8.98 09/23/03 1,101,770
2,850,000 7.82 06/23/04 2,952,942
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
---------- -------- -------- -----------
<S> <C> <C> <C>
CORPORATE OBLIGATIONS--CONTINUED
FINANCIAL--Continued
Comerica, Inc.
$2,990,000 7.25% 10/15/02 $ 3,086,069
Ford Motor Credit Corp.
2,000,000 9.38 12/15/97 2,140,580
General Electric Capital Corp.
2,000,000 8.65(a) 05/01/18 2,047,740
Harris Bancorp. Inc.
1,000,000 9.38 06/01/01 1,135,740
International Lease Finance Corp.
3,000,000 6.50 08/15/99 2,989,950
Merrill Lynch & Co., Inc.
3,000,000 8.00 02/01/02 3,160,800
1,000,000 8.23 04/30/02 1,069,120
Morgan Stanley Group, Inc.
2,000,000 9.38 06/15/01 2,232,380
NationsBank Corp.
3,000,000 9.50 06/01/04 3,494,010
Sovran Financial Corp.
1,500,000 9.25 06/15/06 1,759,455
SunTrust Banks, Inc.
2,000,000 8.88 02/01/98 2,129,360
Wachovia Corp.
2,000,000 6.38 04/15/03 1,960,940
-----------
49,087,637
-----------
TECHNOLOGY--0.6%
Motorola, Inc.
2,000,000 6.50 03/01/08 1,930,940
-----------
UTILITIES--1.0%
Alltel Corp.
3,000,000 7.25 04/01/04 3,056,580
-----------
Total Corporate
Obligations
(cost $69,205,053).......................... $71,819,559
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
PARAGON PORTFOLIO
STATEMENT OF INVESTMENTS
PARAGON INTERMEDIATE-TERM BOND FUND--(CONTINUED)
MAY 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
- ----------- -------- -------- ------------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS--9.9%
State Street Bank & Trust Company,
dated 05/31/95, repurchase price
$31,154,759 (U.S. Treasury Note:
$31,045,000, 6.63%, 03/31/97)
$31,150,000 5.50% 06/01/95 $ 31,150,000
------------
Total Repurchase Agreements
(cost $31,150,000)........................... $ 31,150,000
------------
Total Investments
(cost $322,945,422(b))....................... $328,201,163
============
</TABLE>
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
Federal Income Tax Information:
Gross unrealized gain for investments
in which value exceeds cost...................................... $ 8,612,855
Gross unrealized loss for investments
in which cost exceeds value...................................... (3,357,114)
-----------
Net unrealized gain............................................... $ 5,255,741
===========
- -------------------------------------------------------------------------------
</TABLE>
(a) Variable rate security. Coupon rate disclosed is that which is in effect
at May 31, 1995.
(b) The cost stated also represents aggregate cost for federal income tax
purposes.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
PARAGON PORTFOLIO
STATEMENT OF INVESTMENTS
PARAGON LOUISIANA TAX-FREE FUND
MAY 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
- ----------- -------- -------- ------------
<S> <C> <C> <C>
LOUISIANA MUNICIPAL BOND OBLIGATIONS--97.0%
GENERAL OBLIGATIONS--31.0%
Caddo Parish (MBIA)
$ 200,000 7.10% 02/01/00 $ 214,456
550,000 7.20 02/01/01 589,672
300,000 7.20 02/01/02 321,123
1,415,000 5.25 02/01/06 1,410,217
Caddo Parish School District (MBIA)
750,000 5.00 03/01/03 745,215
Calcasieu Parish School District (BIG)
500,000 7.10 02/01/01 532,705
De Soto Parish School District
120,000 8.00 08/01/05 133,928
1,070,000 5.30 10/01/05 1,040,404
1,245,000 5.60 10/01/06 1,208,796
Jefferson Parish (FGIC)
500,000 7.10 09/01/97 525,540
500,000 7.40 09/01/99 528,145
250,000 7.70 09/01/02 264,825
Jefferson Parish Construction Waterworks
District #2
400,000 7.25 01/15/00 401,032
LA State
6,160,000 7.00 08/01/02 6,543,090
675,000 7.00 08/01/03 714,555
LA State (FSA)
2,750,000 7.10 09/01/03 3,064,545
LA State (MBIA)
6,290,000 6.00 05/15/99 6,585,253
Lafayette Parish (FGIC)
1,000,000 7.80 03/01/01 1,089,140
Lafourche Parish Water District #3
650,000 5.63 01/01/01 668,369
Lincoln Parish School District (MBIA)
500,000 6.20 03/01/03 525,490
1,465,000 6.40 03/01/05 1,539,217
Monroe Parish School District (FGIC)
1,230,000 5.35 03/01/05 1,230,517
1,320,000 5.35 03/01/06 1,315,512
Monroe Parish School District (MBIA)
1,220,000 8.00 03/01/01 1,393,374
1,300,000 7.00 03/01/02 1,435,109
1,390,000 7.00 03/01/03 1,547,765
Ouachita Parish West School District
Refunding Series A (FSA)
2,000,000 6.50 03/01/03 2,154,140
1,000,000 6.60 03/01/04 1,079,380
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
- ------------ -------- -------- ------------
<S> <C> <C> <C>
LOUISIANA MUNICIPAL BOND OBLIGATIONS--CONTINUED
GENERAL OBLIGATIONS--Continued
Ouachita Parish West School District
Refunding Series A (FSA)--Continued
$ 2,695,000 6.65% 03/01/05 $ 2,901,599
1,655,000 6.70 03/01/06 1,777,387
Plaquemines Parish (AMBAC)
1,440,000 6.40 08/01/04 1,546,445
Rapides Parish (MBIA)
500,000 7.25 04/01/00 540,220
Rapides Parish School District #11 (FGIC)
670,000 6.90 02/01/01 718,776
1,475,000 6.95 02/01/02 1,582,247
Shreveport
880,000 4.25 12/01/03 825,009
930,000 4.25 12/01/04 862,017
480,000 5.90 02/01/07 493,934
Shreveport (AMBAC)
480,000 6.20 03/01/02 504,470
500,000 6.70 02/01/03 531,240
St. Charles School District #1 (AMBAC)
1,000,000 6.25 03/01/04 1,058,740
2,350,000 6.45 03/01/06 2,473,493
St. John Baptist Parish School District
605,000 4.90 03/01/06 566,649
500,000 5.10 03/01/08 478,980
St. John Baptist Parish School District #1
870,000 6.25 03/01/05 910,107
695,000 5.20 03/01/09 649,081
St. Landry Parish School District #1 (MBIA)
1,000,000 8.00 05/01/98 1,082,500
750,000 6.10 05/01/07 770,108
St. Tammany Parish (FGIC)
300,000 7.40 03/01/98 318,855
620,000 6.70 04/01/98 660,548
------------
60,053,919
Total General Obligations...................... ------------
HEALTH CARE REVENUE--14.3%
LA Public Facilities Authority Alton Ochsner
Medical Foundation 92-A (MBIA)
2,280,000 6.30 05/15/04 2,460,439
LA Public Facilities Authority General Health
(MBIA)
2,820,000 5.55 11/01/04 2,905,897
LA Public Facilities Authority Health and
Education
1,765,000 7.30(a) 12/01/15 1,848,873
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
PARAGON PORTFOLIO
STATEMENT OF INVESTMENTS
PARAGON LOUISIANA TAX-FREE FUND--(CONTINUED)
MAY 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
- ------------ -------- -------- ------------
<S> <C> <C> <C>
LOUISIANA MUNICIPAL BOND OBLIGATIONS--CONTINUED
HEALTH CARE REVENUE--Continued
LA Public Facilities Authority Health
and Education Series B
$ 3,825,000 7.30%(a) 12/01/15 $ 3,941,050
LA Public Facilities Authority Lafayette
Medical Center (FSA)
1,000,000 6.05 10/01/04 1,068,420
LA Public Facilities Authority Mary Bird
Perkins Cancer Center (FSA)
1,135,000 5.50 01/01/04 1,160,765
LA Public Facilities Authority Our Lady of
Lake Hospital (MBIA)
500,000 5.70 12/01/04 521,570
LA Public Facilities Authority St. Francis
Medical Center (FSA)
1,385,000 4.80 07/01/04 1,341,622
870,000 4.90 07/01/05 845,301
LA Public Facilities Authority Woman's Hospital
1,235,000 6.85 10/01/05 1,291,724
LA Public Facilities Authority Woman's
Hospital (FGIC)
500,000 7.20 10/01/97 531,035
730,000 5.40 10/01/05 742,906
1,715,000 5.50 10/01/06 1,747,482
Lafourche Parish Hospital District #3
525,000 5.50 10/01/04 504,452
Ouachita Parish Glenwood Hospital
2,525,000 7.50 07/01/06 2,809,239
St. Tammany Hospital District #1 (FGIC)
1,815,000 6.30 07/01/07 1,890,903
Terrebonne Parish Hospital Service #1 (BIG)
1,285,000 7.40 04/01/03 1,396,178
Vermilion Parish Hospital (MBIA)
555,000 6.35 05/01/00 595,193
------------
27,603,049
Total Health Care Revenue.................... ------------
HIGHER EDUCATION--5.3%
LA Public Facilities Authority Loyola
University
500,000 9.00 10/01/95 507,420
500,000 7.20 10/01/00 552,925
1,960,000 6.60 04/01/05 2,131,245
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
- ----------- -------- -------- ------------
<S> <C> <C> <C>
LOUISIANA MUNICIPAL BOND OBLIGATIONS--CONTINUED
HIGHER EDUCATION--Continued
LA Public Facilities Authority Tulane University
$ 300,000 7.50% 05/15/00 $ 327,594
2,940,000 6.25 07/15/06 3,112,549
1,000,000 6.40 11/15/07 1,070,640
LA Public Facilities Authority Tulane
University (FGIC)
450,000 5.80 02/15/04 471,929
LA Public Facilities Authority Tulane
University Series B
700,000 7.00 08/15/97 735,581
200,000 7.20 08/15/98 213,966
LA Public Facilities Authority Tulane
University Series C
750,000 7.00 08/15/97 788,123
300,000 7.20 08/15/98 320,949
------------
Total Higher Education........................ 10,232,921
------------
SALES TAX REVENUE--37.6%
Alexandria Public Improvements (MBIA)
300,000 7.35 08/01/97 318,573
Baton Rouge Public Improvements (AMBAC)
700,000 6.85 08/01/00 772,632
800,000 6.90 08/01/01 879,696
Baton Rouge Public Improvements (FSA)
2,000,000 6.00 08/01/04 2,109,000
1,000,000 6.00 08/01/06 1,043,720
765,000 6.38 08/01/09 796,136
Bossier City Public Improvements (AMBAC)
805,000 6.20 11/01/07 856,472
Bossier City Public Improvements (FGIC)
400,000 6.88 11/01/06 433,100
400,000 6.88 11/01/07 433,100
East Baton Rouge Parish (FGIC)
2,280,000 8.00 02/01/02 2,682,420
2,490,000 4.65 02/01/04 2,337,662
East Baton Rouge Parish (MBIA)
500,000 7.10 02/01/99 540,995
500,000 7.10 02/01/00 546,005
East Baton Rouge Parish Public Improvements
1,085,000 5.15 02/01/05 1,028,330
1,145,000 5.15 02/01/06 1,072,258
General Baton Parking Authority
1,390,000 6.38 07/01/03 1,392,821
</TABLE>
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
PARAGON PORTFOLIO
STATEMENT OF INVESTMENTS
PARAGON LOUISIANA TAX-FREE FUND--(CONTINUED)
MAY 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
- ------------ -------- -------- ------------
<S> <C> <C> <C>
LOUISIANA MUNICIPAL BOND OBLIGATIONS--CONTINUED
SALES TAX REVENUE--Continued
General Lafourche Port Fourchon Development
$ 1,220,000 5.00% 09/01/04 $ 1,151,302
Iberville Parish (MBIA)
300,000 6.20 09/01/98 305,715
Jefferson Parish (AMBAC)
1,650,000 6.50 11/01/06 1,755,946
Jefferson Parish District A (FGIC)
4,250,000 6.75 12/01/06 4,607,595
Jefferson Parish District B (FGIC)
1,910,000 6.75 12/01/06 2,070,707
Jefferson Parish School Board
1,000,000 4.45 02/01/00 983,420
Jefferson Parish School Board (MBIA)
2,500,000 6.05 02/01/02 2,649,425
1,270,000 6.15 02/01/03 1,355,217
4,280,000 6.25 02/01/08 4,489,848
Kenner (FGIC)
755,000 5.75 06/01/06 786,068
LA Public Facilities Authority Special Assessment
(Escrowed)
110,000 7.38 06/01/09 118,690
LA Public Facilities Authority Special Assessment
(FSA)
1,295,000 4.60 10/01/02 1,233,604
LA State Correctional Facilities Corporate Lease
(FSA)
650,000 5.60 12/15/03 674,596
LA State Energy Power Rodemacher
Unit No. 2
2,600,000 6.75 01/01/08 2,815,176
LA State Gas & Fuel
750,000 7.20 11/15/99 817,410
1,500,000 7.25 11/15/04 1,636,800
LA State Offshore Terminal Authority
1,500,000 5.85 09/01/00 1,553,010
400,000 6.00 09/01/01 421,160
500,000 6.10 09/01/02 525,225
LA State Recovery District Tax
1,910,000 5.70 07/01/98 1,966,078
Lafayette Parish Public Improvements
(FGIC)
505,000 4.90 03/01/03 496,354
580,000 5.00 03/01/05 563,975
1,120,000 4.75 05/01/06 1,050,347
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
- ------------ -------- -------- ------------
<S> <C> <C> <C>
LOUISIANA MUNICIPAL BOND OBLIGATIONS--CONTINUED
SALES TAX REVENUE--Continued
Lafayette Parish Public Power Authority
$ 1,730,000 6.80% 11/01/00 $ 1,828,160
4,000,000 7.13 11/01/07 4,226,360
Lafayette Parish Public Power
Authority (AMBAC)
1,000,000 5.10 11/01/07 959,600
Lafayette Parish Public Power
Authority (BIG)
500,000 7.25 11/01/12 532,305
Lafayette Parish School Board
500,000 7.20 04/01/99 519,970
1,500,000 7.35 04/01/01 1,560,465
1,075,000 4.88 04/01/04 1,043,331
1,130,000 4.88 04/01/05 1,085,670
Plaquemines Parish
420,000 6.70 12/01/08 440,731
410,000 6.70 12/01/09 430,918
Plaquemines Parish School Board
605,000 6.65 03/01/05 638,239
Rapides Parish Construction School District #62
700,000 7.65 03/01/96 715,043
St. Charles Parish Public Improvements
750,000 6.60 11/01/07 787,223
St. Charles Parish Public Improvements
(FGIC)
600,000 6.80 12/01/98 605,604
St. Tammany Parish (FGIC)
1,000,000 6.50 12/01/02 1,027,500
750,000 6.50 12/01/05 769,170
St. Tammany Parish District #3 Series A
(FGIC)
1,000,000 6.50 12/01/03 1,027,500
St. Tammany Parish School District #12
(FGIC)
550,000 6.50 03/01/01 588,973
400,000 6.50 03/01/04 424,248
Sulphur Public Improvements (MBIA)
150,000 6.00 03/01/00 152,081
615,000 6.00 03/01/01 623,530
Tangipahoa Parish School District #1
1,435,000 6.15 12/01/07 1,500,522
------------
Total Sales Tax Revenue........................ 72,757,731
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
PARAGON PORTFOLIO
STATEMENT OF INVESTMENTS
PARAGON LOUISIANA TAX-FREE FUND--(CONTINUED)
MAY 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
- ----------- -------- -------- ------------
<S> <C> <C> <C>
LOUISIANA MUNICIPAL BOND OBLIGATIONS--CONTINUED
UTILITY REVENUE--3.2%
Bossier City Public Improvements (FGIC)
$ 550,000 6.88% 11/01/08 $ 591,222
Houma (FGIC)
1,560,000 6.13 01/01/07 1,657,859
Shreveport Water & Sewer
500,000 6.25 12/01/03 542,870
Shreveport Water & Sewer (FGIC)
930,000 7.75 12/01/02 1,091,299
Terrebone Parish Waterworks (FGIC)
690,000 5.70 11/01/06 710,693
Ville Platte Parish
1,555,000 5.50 05/01/09 1,500,217
------------
Total Utility Revenue......................... 6,094,160
------------
MISCELLANEOUS LOUISIANA MUNICIPAL BONDS--5.6%
Bastrop Pollution Control Industrial
Development (International Paper)
2,500,000 6.90 03/01/07 2,688,925
Caddo Parish Industrial Development
Revenue (Wal-Mart Stores, Inc.)
470,000 5.95 11/01/07 478,192
De Soto Parish Pollution Control
1,000,000 5.05 12/01/02 989,480
East Baton Rouge Mortgage Finance Authority
770,000 4.90 10/01/05 722,175
East Baton Rouge Mortgage Finance
Authority (GNMA/FNMA collateralized)
1,390,000 5.45 10/01/03 1,411,503
Iberia Home Mortgage Loan Association
1,575,000 7.38 01/01/11 1,689,723
LA Housing Finance Agency
1,100,000 5.70 06/01/15 1,102,926
LA Public Facilities Authority
Multi-Housing Linlake Village
610,000 5.25(a) 06/01/07 615,813
LA Public Facilities Authority Shreveport
Single Family Mortgage
1,018,790 8.45 12/01/12 1,091,410
------------
Total Miscellaneous Louisiana Municipal 10,790,147
Bonds........................................ ------------
Total Louisiana Municipal Bond Obligations $187,531,927
(cost $184,261,635).......................... ------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
- ----------- -------- -------- ------------
<S> <C> <C> <C>
SHORT-TERM OBLIGATIONS--2.4%
Burke County Georgia Pollution
Control
$1,500,000 4.02%(a) 07/01/24 $ 1,500,000
LA State Recovery District Tax
2,000,000 4.55(a) 07/01/97 2,000,000
400,000 2.93(a) 07/01/98 400,000
North Alabama Environmental Pollution
Center
800,000 4.33(a) 12/01/00 800,000
------------
Total Short-Term Obligations
(cost $4,700,000).......................... $ 4,700,000
============
Total Investments
(cost $188,961,635(b))..................... $192,231,927
============
- -------------------------------------------------------------------------------
Federal Income Tax Information:
Gross unrealized gain for investments in which
value
exceeds cost................................... $ 4,648,835
Gross unrealized loss for investments in which
cost exceeds value............................. (1,378,543)
------------
Net unrealized gain............................. $ 3,270,292
============
</TABLE>
- -------------------------------------------------------------------------------
(a) Variable rate security. Coupon rate disclosed is that which is in effect
at May 31, 1995.
(b) The cost stated also represents aggregate cost for federal income tax
purposes.
AMBAC--Insured by American Municipal Bond Assurance Corporation.
BIG --Insured by Bond Investors Guaranty Insurance Company.
FGIC --Insured by Financial Guaranty Insurance Corporation.
FSA --Insured by Financial Security Assurance, Inc.
MBIA --Insured by Municipal Bond Investors Assurance Corporation.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
PARAGON PORTFOLIO
STATEMENT OF INVESTMENTS
PARAGON VALUE GROWTH FUND
MAY 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
------- ----------- ------------
<C> <S> <C>
COMMON STOCKS--84.5%
BASIC MATERIALS & NATURAL RESOURCES--8.0%
90,000 Dow Chemical Co. $ 6,603,750
75,000 Du Pont (E.I.) De Nemours & Co. 5,090,625
80,000 Nucor Corp. 3,820,000
------------
15,514,375
------------
CAPITAL EQUIPMENT & SERVICES--4.1%
100,000 Allied Signal, Inc. 4,037,500
70,000 Johnson Controls, Inc. 4,007,500
------------
8,045,000
------------
CONSUMER CYCLICAL--16.0%
200,000 Carnival Corp. 4,650,000
120,000 Chrysler Corp.(b) 5,235,000
200,000 Consolidated Stores Corp.(a) 3,750,000
150,000 Heilig Meyers Co. 3,581,250
165,000 Home Depot, Inc. 6,868,125
150,000 Office Depot, Inc.(a) 3,600,000
140,000 Wal-Mart Stores, Inc. 3,500,000
------------
31,184,375
------------
CONSUMER NONCYCLICAL--13.7%
125,000 Columbia/HCA Healthcare Corp. 5,109,375
65,000 Darden Restaurants, Inc.(a) 715,000
100,000 Duracell International, Inc. 4,325,000
135,000 Foundation Health Corp.(a) 3,796,875
65,000 General Mills, Inc. 3,371,875
120,000 Healthcare Compare Corp.(a) 3,750,000
150,000 United Healthcare Corp. 5,587,500
------------
26,655,625
------------
ENERGY--7.1%
100,000 Amoco Corp. 6,837,500
100,000 Murphy Oil Corp. 4,375,000
80,000 Sun Co., Inc. 2,520,000
------------
13,732,500
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
------- ----------- ------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
FINANCE--8.2%
81,000 CCB Financial Corp.(b) $ 3,341,250
50,000 Federal National Mortgage Association 4,650,000
120,000 First American Corp. of Tennessee 4,162,500
175,000 Southtrust Corp. 3,740,625
------------
15,894,375
------------
TECHNOLOGY--15.6%
130,000 Compaq Computer Corp.(a) 5,086,250
100,000 General Instrument Corp. 3,087,500
85,000 Intel Corp. 9,541,250
65,000 Texas Instruments, Inc. 7,515,625
10,000 Vishay Intertechnology, Inc.(a) 653,460
40,000 Xerox Corp. 4,535,000
------------
30,419,085
------------
TRANSPORTATION--1.2%
100,000 Atlantic Southeast Airlines, Inc. 2,412,500
------------
UTILITIES--10.6%
120,000 AT&T Corp. 6,090,000
41,500 BellSouth Corp. 2,547,063
150,000 Enron Corp. 5,475,000
250,000 WorldCom, Inc.(a) 6,500,000
------------
20,612,063
------------
Total Common Stocks
(cost $128,330,615)............................ $164,469,898
------------
PREFERRED STOCKS--5.8%
55,000 Ashland Oil Co., Convertible Preferred, 3.13% $ 3,245,000
75,000 Corning Delaware LP, Convertible Preferred, 6.00% 3,731,250
45,000 Ford Motor Co., Convertible Preferred, 4.20% 4,297,500
------------
Total Preferred Stocks
(cost $11,095,795)............................. $ 11,273,750
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
PARAGON PORTFOLIO
STATEMENT OF INVESTMENTS
PARAGON VALUE GROWTH FUND--(CONTINUED)
MAY 31,1995
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
- ----------- -------- -------- ------------
<S> <C> <C> <C>
CORPORATE OBLIGATIONS--2.9%
Avnet, Inc.
$ 2,800,000 6.00% 04/15/12 $ 3,097,500
Sports & Recreation, Inc.
3,250,000 4.25 11/01/00 2,474,063
------------
Total Corporate
Obligations
(cost $6,410,210) ........................... $ 5,571,563
------------
REPURCHASE AGREEMENTS--7.5%
State Street Bank & Trust Co., dated
05/31/95, repurchase price $14,592,229
(U.S. Treasury Note: $14,540,000,
6.63%, 03/31/97)
$14,590,000 5.50% 06/01/95 $ 14,590,000
------------
Total Repurchase
Agreements
(cost $14,590,000) .......................... $ 14,590,000
------------
Total Investments
(cost $160,426,620(c))....................... $195,905,211
============
</TABLE>
<TABLE>
- ----------------------------------------------------------------------
<S> <C>
Federal Income Tax Information:
Gross unrealized gain for investments
in which value exceeds cost............................ $ 39,485,811
Gross unrealized loss for investments
in which cost exceeds value............................ (4,007,220)
------------
Net unrealized gain..................................... $ 35,478,591
============
- ----------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
(b) There are common stock rights attached to these securities.
(c) The cost stated also represents aggregate cost for federal income tax
purposes.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
PARAGON PORTFOLIO
STATEMENT OF INVESTMENTS
PARAGON VALUE EQUITY INCOME FUND
MAY 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS--83.6%
BASIC MATERIALS & NATURAL RESOURCES--8.9%
60,000 Birmingham Steel Corp. $ 1,125,000
50,000 Dow Chemical Co. 3,668,750
53,000 Du Pont (E.I.) de Nemours & Co. 3,597,375
25,000 International Paper Co. 1,965,625
------------
10,356,750
------------
CAPITAL EQUIPMENT & SERVICES--12.2%
20,000 Deere & Co. 1,730,000
22,000 ITT Corp. 2,461,250
21,000 Johnson Controls, Inc. 1,202,250
68,600 Lockheed Martin Corp. 4,081,700
20,000 Paccar, Inc.(b) 962,500
48,600 Raytheon Co.(b) 3,766,500
------------
14,204,200
------------
CONSUMER CYCLICAL--9.3%
45,000 Chrysler Corp.(b) 1,963,125
70,000 Fleetwood Enterprises, Inc. 1,452,500
60,600 JC Penney, Inc. 2,855,775
46,000 Reebok International Ltd. 1,541,000
20,000 Sears Roebuck & Co. 1,127,500
35,000 VF Corp. 1,863,750
------------
10,803,650
------------
CONSUMER NONCYCLICAL--18.0%
85,000 Baxter International, Inc. 2,964,375
25,000 Bristol-Myers Squibb Co. 1,659,375
35,000 Columbia/HCA Healthcare Corp. 1,430,625
45,000 Conagra, Inc. 1,501,875
93,000 IBP Inc. 3,487,500
50,000 Philip Morris Companies, Inc. 3,643,750
70,000 Premark International, Inc. 3,491,250
36,000 Schering Plough Corp.(b) 2,835,000
------------
21,013,750
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
------ ----------- ------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
ENERGY--7.4%
24,000 Chevron Corp.(b) $ 1,179,000
15,000 Exxon Corp. 1,070,625
44,000 Mobil Corp.(b) 4,416,500
15,000 Royal Dutch Petroleum Co. ADR 1,901,250
------------
8,567,375
------------
FINANCE--7.3%
19,100 Federal National Mortgage Assn. 1,776,300
60,000 First Tennessee National Corp. 2,632,500
30,000 Merrill Lynch & Co., Inc. 1,410,000
71,000 Reliastar Financial Corp. 2,635,875
------------
8,454,675
------------
TECHNOLOGY--11.2%
50,000 Avnet, Inc. 2,275,000
23,000 Compaq Computer Corp.(a) 899,875
20,000 Intel Corp. 2,245,000
30,000 International Business Machines Corp. 2,797,500
50,000 Morgan Stanley Group, Inc. (Cisco Systems, Inc.--PERQS) 1,806,250
11,700 Texas Instruments, Inc. 1,352,812
15,000 Xerox Corp. 1,700,625
------------
13,077,062
------------
TRANSPORTATION--3.0%
40,000 Atlantic Southeast Airlines, Inc. 965,000
25,000 British Airways ADR 1,643,750
40,000 Consolidated Freightways, Inc. 950,000
------------
3,558,750
------------
UTILITIES--6.3%
37,000 BellSouth Corp. 2,270,875
45,000 Entergy Corp. 1,113,750
90,000 Peco Energy Co. 2,531,250
42,000 Sprint Corp. 1,407,000
------------
7,322,875
------------
Total Common Stocks
(cost $78,887,082)...................................... $ 97,359,087
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
PARAGON PORTFOLIO
STATEMENT OF INVESTMENTS
PARAGON VALUE EQUITY INCOME FUND--(CONTINUED)
MAY 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
------ ----------- ------------
<C> <S> <C>
PREFERRED STOCKS--8.9%
15,000 Burlington Northern, Inc., Convertible Preferred,
6.25% $ 1,001,250
26,000 Citicorp, Convertible Preferred, 5.38% 3,770,000
35,600 Ford Motor Co., Convertible Preferred, 4.20% 3,399,800
35,500 General Motors Corp., Convertible Preferred, 3.25% 2,201,000
------------
Total Preferred Stocks
(cost $9,055,436).................................. $ 10,372,050
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE
---------- -------- --------
<S> <C> <C> <C>
CORPORATE OBLIGATIONS--6.2%
Avnet, Inc.
$1,050,000 6.00% 04/15/12 $ 1,161,563
Healthsouth Rehabilitation
1,000,000 5.00 04/01/01 1,085,000
Hechinger Co.
2,500,000 5.50 04/01/12 1,612,500
Pennzoil Co.
2,250,000 6.50 01/15/03 2,655,000
Sports & Recreation, Inc.
980,000 4.25 11/01/00 746,025
-----------
Total Corporate
Obligations
(cost $7,619,941)....... $ 7,260,088
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
--------- -------- -------- ------------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS--1.1%
State Street Bank & Trust Company,
dated 05/31/95, repurchase price
$1,265,193 (U.S. Treasury Note:
$1,265,000, 6.63%, 03/31/97)
$1,265,000 5.50% 06/01/95 $ 1,265,000
------------
Total Repurchase
Agreements
(cost $1,265,000)..... $ 1,265,000
------------
Total Investments
(cost $96,827,459(c)). $116,256,225
============
</TABLE>
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Federal Income Tax Information:
Gross unrealized gain for investments
in which value exceeds cost..................................... $ 21,122,479
Gross unrealized loss for investments
in which cost exceeds value..................................... (1,693,713)
------------
Net unrealized gain.............................................. $ 19,428,766
============
- -------------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
(b) There are common stock rights attached to these securities.
(c) The cost stated also represents aggregate cost for federal income tax
purposes.
ADR--American Depository Receipt
PERQS--Performance Equity-Linked Quarterly-Pay Security
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
PARAGON PORTFOLIO
STATEMENT OF INVESTMENTS
PARAGON GULF SOUTH GROWTH FUND
MAY 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
------ ----------- -----------
<C> <S> <C>
COMMON STOCKS--89.8%
BASIC MATERIALS & NATURAL RESOURCES--7.9%
100,000 Albemarle Corp. $ 1,537,500
60,000 Georgia Gulf Corp. 1,822,500
65,000 Image Industries, Inc.(a) 682,500
50,000 Nucor Corp. 2,387,500
65,000 Shaw Group, Inc. 528,125
-----------
6,958,125
-----------
CAPITAL EQUIPMENT & SERVICES--1.9%
110,000 Union Switch & Signal, Inc.(a) 1,711,875
-----------
CONSUMER CYCLICAL--16.2%
120,000 Autozone, Inc.(a) 2,790,000
75,000 Cameron Ashley, Inc.(a) 843,750
40,000 Dollar General Corp. 1,135,000
100,000 Heilig Meyers Co. 2,387,500
50,000 Michaels Stores, Inc.(a) 1,131,250
135,000 Office Depot, Inc.(a) 3,240,000
114,000 River Oaks Furniture, Inc.(a) 1,425,000
120,000 Sports & Recreation, Inc.(a) 1,380,000
-----------
14,332,500
-----------
CONSUMER NONCYCLICAL--13.1%
100,000 Apple South, Inc. 1,737,500
25,000 Coastal Physician Group, Inc.(a) 390,625
125,000 Coventry Corp.(a) 2,578,125
75,000 Cracker Barrel Old Country Store 1,828,125
50,000 HeathWise of America, Inc.(a) 1,462,500
87,000 Inphynet Medical Management, Inc.(a) 1,413,750
800,000 Isolyser Company, Inc.(a) 2,120,000
-----------
11,530,625
-----------
ENERGY--7.9%
100,000 Benton Oil & Gas Co.(a) 1,312,500
100,000 Input/Output Inc.(a) 3,400,000
95,000 Landmark Graphics Corp.(a) 2,244,375
-----------
6,956,875
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
------ ----------- -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
FINANCE--21.9%
75,000 American Federal Bank, FSB $ 1,050,000
45,000 Bankers First Corp. 1,215,000
55,000 First Financial Management Corp. 3,905,000
20,000 Leader Financial Corp. 540,000
80,000 Medaphis Corp.(a) 4,820,000
120,000 Regional Acceptance Corp.(a) 1,890,000
85,000 Stewart Enterprises, Inc. 2,550,000
77,000 United Companies Financial Corp. 3,407,250
-----------
19,377,250
-----------
TECHNOLOGY--8.0%
60,000 Acxiom Corp.(a) 1,170,000
40,000 DSC Communications Corp.(a)(b) 1,480,000
55,000 Mobile Telecomunications Technology Corp.(a) 1,237,500
100,000 SCI Systems, Inc.(a) 2,075,000
60,000 Scientific-Atlanta, Inc. 1,117,500
-----------
7,080,000
-----------
TRANSPORTATION--4.8%
120,000 Atlantic Southeast Airlines, Inc. 2,895,000
75,000 Miller Industries, Inc.(a) 1,378,125
-----------
4,273,125
-----------
UTILITIES--8.1%
100,000 Communications Central, Inc.(a) 825,000
100,000 EqualNet Holding Corp.(a) 1,637,500
180,000 WorldCom, Inc.(a) 4,680,000
-----------
7,142,500
-----------
Total Common Stocks
(cost $61,044,615)........................ $79,362,875
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
PARAGON PORTFOLIO
STATEMENT OF INVESTMENTS
PARAGON GULF SOUTH GROWTH FUND--(CONTINUED)
MAY 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY
AMOUNT RATE DATE VALUE
---------- -------- -------- -----------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS--9.7%
State Street Bank & Trust Company,
dated 05/31/95, repurchase price
$8,531,303 (U.S. Treasury Note:
$8,505,000, 6.63%, 03/31/97)
$8,530,000 5.50% 06/01/95 $ 8,530,000
-----------
Total Repurchase Agreements
(cost $8,530,000)........................... $ 8,530,000
-----------
Total Investments
(cost $69,574,615(c))....................... $87,892,875
===========
</TABLE>
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
Federal Income Tax Information:
Gross unrealized gain for investments
in which value exceeds cost..................................... $23,435,921
Gross unrealized loss for investments
in which cost exceeds value..................................... (5,117,661)
-----------
Net unrealized gain.............................................. $18,318,260
===========
- -------------------------------------------------------------------------------
</TABLE>
(a) Non-income producing security.
(b) There are common stock rights attached to these securities.
(c) The cost stated also represents aggregate cost for federal income tax
purposes.
The percentage shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
The accompanying notes are an integral part of these financial statements.
20
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
21
<PAGE>
PARAGON PORTFOLIO
STATEMENTS OF ASSETS AND LIABILITIES
MAY 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
TREASURY SHORT-TERM
MONEY MARKET GOVERNMENT
FUND FUND
------------ ------------
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $309,514,333, $131,278,364, $322,945,422,
$188,961,635, $160,426,620, $96,827,459, and
$69,574,615, respectively)........................ $309,514,333 $130,434,569
Cash............................................... 36,851 4,478
Receivables:
Investment securities sold......................... -- --
Interest........................................... 585,249 1,100,523
Dividends.......................................... -- --
Fund shares sold................................... -- 7,952
Deferred organization expenses, net................ -- --
Other.............................................. 21,985 2,172
------------ ------------
Total assets...................................... 310,158,418 131,549,694
------------ ------------
LIABILITIES:
Payables:
Investment securities purchased.................... -- --
Fund shares redeemed............................... -- 11,444
Dividends and distributions........................ 1,491,077 550,655
Advisory fees...................................... 51,557 55,378
Administrative fees................................ 38,668 16,616
Transfer agent fees................................ 9,923 19,098
Accrued expenses and other liabilities............. 45,527 67,942
------------ ------------
Total liabilities................................. 1,636,752 721,133
------------ ------------
NET ASSETS:
Paid-in capital.................................... 308,460,838 132,802,292
Accumulated undistributed (distributions in excess
of) net investment income......................... -- --
Accumulated net realized gain (loss) on investment
transactions...................................... 60,828 (1,129,936)
Net unrealized gain (loss) on investments.......... -- (843,795)
------------ ------------
Net assets........................................ $308,521,666 $130,828,561
============ ============
Shares of beneficial interest outstanding ($0.01
par value),
unlimited number of shares authorized:
Class A Shares.................................... 308,460,838 12,903,084
============ ============
Class B Shares.................................... -- 16,206
============ ============
Class A Shares
Net asset value and redemption price per share
(net assets/shares outstanding)................... $ 1.00 $ 10.13
============ ============
Maximum public offering price per share (NAV per
share X 1.0471,
where applicable)................................. $ 1.00 $ 10.60
============ ============
Class B Shares
Net asset value and offering price per share (net
assets/shares outstanding)........................ -- $ 10.13
============ ============
Redemption price per share (NAV per share X 0.950,
where applicable)................................. -- $ 9.62
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
22
<PAGE>
<TABLE>
<CAPTION>
INTERMEDIATE- LOUISIANA VALUE VALUE EQUITY GULF SOUTH
TERM BOND TAX-FREE GROWTH INCOME GROWTH
FUND FUND FUND FUND FUND
------------- ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
$328,201,163 $192,231,927 $195,905,211 $116,256,225 $87,892,875
872 563,395 1,330 4,563 3,467
-- -- -- -- 803,403
4,301,502 3,251,444 35,206 98,214 1,303
-- -- 480,818 339,616 16,450
13,098 46,630 37,801 11,221 35,313
-- -- -- -- 6,091
-- 2,363 3,106 7,323 1,088
------------ ------------ ------------ ------------ -----------
332,516,635 196,095,759 196,463,472 116,717,162 88,759,990
------------ ------------ ------------ ------------ -----------
14,968,750 1,867,217 1,617,535 -- 256,250
26,534 58,164 16,189 15,331 9,716
1,592,539 648,737 31,787 43,222 --
132,227 67,295 106,859 59,840 48,273
39,668 16,821 24,668 18,321 11,140
-- 25,039 42,605 11,335 18,152
145,950 90,040 36,650 43,715 26,284
------------ ------------ ------------ ------------ -----------
16,905,668 2,773,313 1,876,293 191,764 369,815
------------ ------------ ------------ ------------ -----------
314,398,648 190,800,935 150,654,300 95,949,673 67,102,635
279,975 -- (2,478) (2,622) (104,878)
(4,323,397) (748,781) 8,456,766 1,149,581 3,074,158
5,255,741 3,270,292 35,478,591 19,428,766 18,318,260
------------ ------------ ------------ ------------ -----------
$315,610,967 $193,322,446 $194,587,179 $116,525,398 $88,390,175
============ ============ ============ ============ ===========
30,607,630 18,165,248 12,964,665 8,990,577 5,431,525
============ ============ ============ ============ ===========
66,573 87,823 97,623 18,784 64,285
============ ============ ============ ============ ===========
$ 10.29 $ 10.59 $ 14.90 $ 12.93 $ 16.08
============ ============ ============ ============ ===========
$ 10.77 $ 11.09 $ 15.60 $ 13.54 $ 16.84
============ ============ ============ ============ ===========
$ 10.32 $ 10.62 $ 14.88 $ 12.94 $ 15.99
============ ============ ============ ============ ===========
$ 9.80 $ 10.09 $ 14.14 $ 12.29 $ 15.19
============ ============ ============ ============ ===========
</TABLE>
23
<PAGE>
PARAGON PORTFOLIO
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED MAY 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
TREASURY SHORT-TERM
MONEY MARKET GOVERNMENT
FUND FUND
------------ ----------
<S> <C> <C>
INVESTMENT INCOME:
Interest............................................. $8,907,248 $4,276,629
Dividends (b)........................................ -- --
---------- ----------
Total income........................................ 8,907,248 4,276,629
---------- ----------
EXPENSES:
Advisory fees........................................ 299,143 338,205
Administration fees.................................. 224,357 101,462
Transfer agent fees.................................. 33,355 29,571
Custodian fees....................................... 32,117 30,278
Professional fees.................................... 15,780 12,997
Trustee fees......................................... 2,917 2,063
Registration fees.................................... -- 6,476
Amortization of deferred organization expenses....... 1,566 945
Other................................................ 6,955 6,851
---------- ----------
Total expenses...................................... 616,190 528,848
Class B Share distribution fees..................... -- 475
---------- ----------
Total expenses and Class B Share distribution fees. 616,190 529,323
---------- ----------
Net investment income (loss)....................... 8,291,058 3,747,306
---------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investment transactions.. 135,732 (181,534)
Net change in unrealized gain on investments......... -- 3,830,924
---------- ----------
Net realized and unrealized gain on investments.... 135,732 3,649,390
---------- ----------
Net increase in net assets resulting from
operations........................................ $8,426,790 $7,396,696
========== ==========
</TABLE>
- --------
(a) The Investment Advisor and Administrator waived fees of $97,494 and
$48,746, respectively, during the six months ended May 31, 1995.
(b) For the Value Equity Income Fund, amount is net of $12,258 in foreign
withholding taxes.
The accompanying notes are an integral part of these financial statements.
24
<PAGE>
<TABLE>
<CAPTION>
INTERMEDIATE- LOUISIANA VALUE VALUE EQUITY GULF SOUTH
TERM BOND TAX-FREE GROWTH INCOME GROWTH
FUND FUND(A) FUND FUND FUND
------------- ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C>
$11,542,797 $ 5,649,116 $ 403,995 $ 343,462 $ 206,684
-- -- 1,927,994 1,539,401 111,875
----------- ----------- ----------- ----------- ----------
11,542,797 5,649,116 2,331,989 1,882,863 318,559
----------- ----------- ----------- ----------- ----------
751,966 389,974 591,455 347,168 269,982
225,590 97,494 136,490 80,116 62,304
46,466 44,770 87,379 26,461 57,801
55,822 52,045 26,395 17,287 18,998
25,971 15,038 11,142 5,914 5,228
4,125 2,380 1,895 1,020 875
12,990 7,889 -- -- --
1,756 581 518 850 2,806
15,432 20,356 8,221 4,758 3,037
----------- ----------- ----------- ----------- ----------
1,140,118 630,527 863,495 483,574 421,031
1,779 1,923 3,338 381 2,406
----------- ----------- ----------- ----------- ----------
1,141,897 632,450 866,833 483,955 423,437
----------- ----------- ----------- ----------- ----------
10,400,900 5,016,666 1,465,156 1,398,908 (104,878)
----------- ----------- ----------- ----------- ----------
(24,237) (309,619) 8,456,111 1,149,288 3,073,993
23,043,658 11,433,036 12,366,611 14,686,596 5,926,408
----------- ----------- ----------- ----------- ----------
23,019,421 11,123,417 20,822,722 15,835,884 9,000,401
----------- ----------- ----------- ----------- ----------
$33,420,321 $16,140,083 $22,287,878 $17,234,792 $8,895,523
=========== =========== =========== =========== ==========
</TABLE>
25
<PAGE>
PARAGON PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED MAY 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
TREASURY SHORT-TERM
MONEY MARKET GOVERNMENT
FUND FUND
------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income (loss)..................... $ 8,291,058 $ 3,747,306
Net realized gain (loss) on investment
transactions.................................... 135,732 (181,534)
Net change in unrealized gain on investments..... -- 3,830,924
------------- ------------
Increase in net assets resulting from
operations..................................... 8,426,790 7,396,696
------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A Shares.................................. (8,291,378) (3,744,299)
Class B Shares.................................. -- (3,007)
In excess of net investment income
Class A Shares.................................. -- --
From net realized gains
Class A Shares.................................. (74,904) --
Class B Shares.................................. -- --
------------- ------------
Total distributions to shareholders............. (8,366,282) (3,747,306)
------------- ------------
TRUST SHARE TRANSACTIONS:
Net proceeds from the sale of shares............. 483,307,225 4,355,949
Reinvestment of dividends and distributions...... 313,399 211,868
Cost of shares redeemed.......................... (471,524,411) (20,387,164)
------------- ------------
Net increase (decrease) in net assets from Trust
share transactions............................. 12,096,213 (15,819,347)
------------- ------------
Total increase (decrease)....................... 12,156,721 (12,169,957)
------------- ------------
NET ASSETS:
Beginning of period.............................. 296,364,945 142,998,518
------------- ------------
End of period.................................... $ 308,521,666 $130,828,561
============= ============
ACCUMULATED UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS
OF)
NET INVESTMENT INCOME ........................... $ -- $ --
============= ============
SUMMARY OF SHARE TRANSACTIONS:
Class A Shares
Sold............................................. 483,307,225 424,097
Issued on reinvestment of dividends and
distributions................................... 313,399 20,963
Redeemed......................................... (471,524,411) (2,048,712)
------------- ------------
12,096,213 (1,603,652)
------------- ------------
Class B Shares
Sold............................................. -- 13,687
Issued on reinvestment of dividends and
distributions................................... -- 301
Redeemed......................................... -- (1,953)
------------- ------------
-- 12,035
------------- ------------
Net increase (decrease) in shares outstanding.... 12,096,213 (1,591,617)
============= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
26
<PAGE>
<TABLE>
<CAPTION>
INTERMEDIATE- LOUISIANA VALUE VALUE EQUITY GULF SOUTH
TERM BOND TAX-FREE GROWTH INCOME GROWTH
FUND FUND FUND FUND FUND
------------- ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
$ 10,400,900 $ 5,016,666 $ 1,465,156 $ 1,398,908 $ (104,878)
(24,237) (309,619) 8,456,111 1,149,288 3,073,993
23,043,658 11,433,036 12,366,611 14,686,596 5,926,408
------------ ------------ ------------ ------------ -----------
33,420,321 16,140,083 22,287,878 17,234,792 8,895,523
------------ ------------ ------------ ------------ -----------
(10,386,448) (5,005,481) (1,457,273) (1,408,716) --
(14,452) (11,185) (4,606) (1,173) --
-- -- (2,478) (2,662) --
-- -- (5,514,632) (3,322,240) (1,410,185)
-- -- (18,700) (1,060) (7,604)
------------ ------------ ------------ ------------ -----------
(10,400,900) (5,016,666) (6,997,689) (4,735,851) (1,417,789)
------------ ------------ ------------ ------------ -----------
12,578,767 8,557,329 13,519,297 7,104,259 7,412,585
720,749 988,736 1,305,180 243,985 327,635
(18,080,605) (24,370,886) (9,137,340) (6,716,865) (4,598,768)
------------ ------------ ------------ ------------ -----------
(4,781,089) (14,824,821) 5,687,137 631,379 3,141,452
------------ ------------ ------------ ------------ -----------
18,238,332 (3,701,404) 20,977,326 13,130,320 10,619,186
------------ ------------ ------------ ------------ -----------
297,372,635 197,023,850 173,609,853 103,395,078 77,770,989
------------ ------------ ------------ ------------ -----------
$315,610,967 $193,322,446 $194,587,179 $116,525,398 $88,390,175
============ ============ ============ ============ ===========
$ 279,975 $ -- $ (2,478) $ (2,622) $ (104,878)
============ ============ ============ ============ ===========
1,241,935 753,315 896,670 594,243 430,149
71,830 94,526 93,918 21,053 21,529
(1,850,228) (2,346,480) (645,232) (572,082) (295,343)
------------ ------------ ------------ ------------ -----------
(536,463) (1,498,639) 345,356 43,214 156,335
------------ ------------ ------------ ------------ -----------
42,186 72,536 68,824 15,925 50,257
1,275 816 1,717 200 523
(3,066) (5,907) (3,036) (2) (2,253)
------------ ------------ ------------ ------------ -----------
40,395 67,445 67,505 16,123 48,527
------------ ------------ ------------ ------------ -----------
(496,068) (1,431,194) 412,861 59,337 204,862
============ ============ ============ ============ ===========
</TABLE>
27
<PAGE>
PARAGON PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED NOVEMBER 30, 1994
<TABLE>
<CAPTION>
TREASURY SHORT-TERM
MONEY MARKET GOVERNMENT
FUND FUND
------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income (loss)..................... $ 10,164,395 $ 7,847,949
Net realized gain (loss) on investment
transactions.................................... 4,992 (442,989)
Net change in unrealized gain (loss) on invest-
ments........................................... -- (7,178,320)
------------- ------------
Increase (decrease) in net assets resulting from
operations..................................... 10,169,387 226,640
------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A Shares.................................. (10,162,326) (7,847,743)
Class B Shares.................................. -- (206)
In excess of net investment income
Class A Shares.................................. -- --
From net realized gains
Class A Shares.................................. (23,225) --
In excess of net realized gains
Class A Shares.................................. -- --
------------- ------------
Total distributions to shareholders............. (10,185,551) (7,847,949)
------------- ------------
TRUST SHARE TRANSACTIONS:
Net proceeds from the sale of shares............. 984,598,161 37,944,427
Reinvestment of dividends and distributions...... 180,411 392,469
Cost of shares redeemed.......................... (984,527,520) (57,707,000)
------------- ------------
Net increase (decrease) in net assets from Trust
share transactions............................. 251,052 (19,370,104)
------------- ------------
Total increase (decrease)....................... 234,888 (26,991,413)
------------- ------------
NET ASSETS:
Beginning of year................................ 296,130,057 169,989,931
------------- ------------
End of year...................................... $ 296,364,945 $142,998,518
============= ============
ACCUMULATED UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS
OF)
NET INVESTMENT INCOME ........................... $ 320 $ --
============= ============
SUMMARY OF SHARE TRANSACTIONS:
Class A Shares
Sold............................................. 984,598,161 3,731,929
Issued on reinvestment of dividends and
distributions................................... 180,411 38,942
Redeemed......................................... (984,527,520) (5,709,112)
------------- ------------
251,052 (1,938,241)
------------- ------------
Class B Shares
Sold............................................. -- 4,150
Issued on reinvestment of dividends and
distributions................................... -- 21
Redeemed......................................... -- --
------------- ------------
-- 4,171
------------- ------------
Net increase (decrease) in shares outstanding.... 251,052 (1,934,070)
============= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
28
<PAGE>
<TABLE>
<CAPTION>
INTERMEDIATE- LOUISIANA VALUE VALUE EQUITY GULF SOUTH
TERM BOND TAX-FREE GROWTH INCOME GROWTH
FUND FUND FUND FUND FUND
------------- ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
$ 21,188,128 $ 10,034,099 $ 2,380,116 $ 2,624,949 $ (304,341)
(4,254,181) (403,188) 5,533,531 3,338,407 1,417,789
(32,996,842) (15,995,358) (15,998,469) (7,781,546) (6,751,273)
------------ ------------ ------------ ------------ -----------
(16,062,895) (6,364,447) (8,084,822) (1,818,190) (5,637,825)
------------ ------------ ------------ ------------ -----------
(21,186,974) (10,032,553) (2,546,306) (2,973,890) --
(1,154) (1,546) (752) (78) --
-- -- (3,277) -- --
(4,432,431) (2,114,555) (8,389,918) (5,318,242) (649,788)
(44,979) (35,974) -- -- --
------------ ------------ ------------ ------------ -----------
(25,665,538) (12,184,628) (10,940,253) (8,292,210) (649,788)
------------ ------------ ------------ ------------ -----------
54,826,753 44,951,435 36,323,019 20,175,920 18,519,488
1,726,372 2,652,558 1,878,153 337,716 119,773
(58,987,271) (28,564,772) (16,706,771) (9,806,704) (9,562,871)
------------ ------------ ------------ ------------ -----------
(2,434,146) 19,039,221 21,494,401 10,706,932 9,076,390
------------ ------------ ------------ ------------ -----------
(44,162,579) 490,146 2,469,326 596,532 2,788,777
------------ ------------ ------------ ------------ -----------
341,535,214 196,533,704 171,140,527 102,798,546 74,982,212
------------ ------------ ------------ ------------ -----------
$297,372,635 $197,023,850 $173,609,853 $103,395,078 $77,770,989
============ ============ ============ ============ ===========
$ 279,975 $ -- $ (3,277) $ 11,021 $ --
============ ============ ============ ============ ===========
5,310,502 4,228,003 2,439,323 1,661,828 1,146,632
169,665 250,440 128,595 27,823 7,377
(5,844,772) (2,741,741) (1,142,802) (812,422) (600,948)
------------ ------------ ------------ ------------ -----------
(364,605) 1,736,702 1,425,116 877,229 553,061
------------ ------------ ------------ ------------ -----------
26,061 22,736 30,070 2,653 15,758
117 117 55 8 --
-- (2,475) (7) -- --
------------ ------------ ------------ ------------ -----------
26,178 20,378 30,118 2,661 15,758
------------ ------------ ------------ ------------ -----------
(338,427) 1,757,080 1,455,234 879,890 568,819
============ ============ ============ ============ ===========
</TABLE>
29
<PAGE>
PARAGON PORTFOLIO
TREASURY MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INCOME FROM INVESTMENT DISTRIBUTIONS TO
OPERATIONS SHAREHOLDERS FROM:
---------------------- ------------------------
NET ASSET TOTAL TOTAL
VALUE AT NET INCOME FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT INVESTMENT INVESTMENT TO SHARE-
OF PERIOD INCOME OPERATIONS INCOME HOLDERS
--------- ---------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED MAY 31,
- --------------------------------
1995 Class A Shares
(unaudited) $1.00 $0.03 $0.03 $(0.03) $(0.03)
FOR THE YEARS ENDED NOVEMBER 30,
- --------------------------------
1994 Class A Shares 1.00 0.04 0.04 (0.04) (0.04)
1993 Class A Shares 1.00 0.03 0.03 (0.03) (0.03)
1992 Class A Shares 1.00 0.04 0.04 (0.04) (0.04)
1991 Class A Shares 1.00 0.06 0.06 (0.06) (0.06)
FOR THE PERIOD DECEMBER 29, 1989 (COMMENCEMENT OF OPERATIONS) THROUGH NOVEMBER 30,
- ----------------------------------------------------------------------------------
1990 Class A Shares 1.00 0.07 0.07 (0.07) (0.07)
</TABLE>
<TABLE>
<CAPTION>
RATIO OF NET NET
NET ASSET RATIO OF NET INVESTMENT ASSETS AT
VALUE AT EXPENSES TO INCOME END
END TOTAL AVERAGE NET TO AVERAGE OF PERIOD
OF PERIOD RETURN(a) ASSETS NET ASSETS (000'S)
--------- --------- ------------ ------------ ---------
<S> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED MAY 31,
- --------------------------------
1995 Class A Shares
(unaudited) $1.00 5.73%(b) 0.41%(b) 5.54%(b) $308,522
FOR THE YEARS ENDED NOVEMBER 30,
- --------------------------------
1994 Class A Shares 1.00 3.68 0.43 3.60 296,365
1993 Class A Shares 1.00 2.84 0.45 2.76 296,130
1992 Class A Shares 1.00 3.71 0.46 3.43 334,003
1991 Class A Shares 1.00 6.00 0.50 5.67 300,539
FOR THE PERIOD DECEMBER 29, 1989 (COMMENCEMENT OF OPERATIONS) THROUGH NOVEMBER 30,
- ----------------------------------------------------------------------------------
1990 Class A Shares 1.00 7.91(b) 0.46(b) 7.73(b) 236,504
</TABLE>
- ----------
(a) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all dividends and distributions, a complete redemption of
the investment at the net asset value at the end of the period.
(b) Annualized.
The accompanying notes are an integral part of these financial statements.
30
<PAGE>
PARAGON PORTFOLIO
SHORT-TERM GOVERNMENT FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INCOME FROM INVESTMENT OPERATIONS
--------------------------------------------
NET REALIZED
NET ASSET AND UNREALIZED TOTAL
VALUE AT NET GAIN (LOSS) INCOME (LOSS) FROM
BEGINNING INVESTMENT ON INVESTMENT INVESTMENT
OF PERIOD INCOME TRANSACTIONS OPERATIONS
--------- ---------- -------------- ------------------
<S> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED MAY 31,
- --------------------------------
1995 Class A Shares
(unaudited) $ 9.85 $ 0.27 $ 0.28 $ 0.55
1995 Class B Shares
(unaudited) 9.85 0.24 0.28 0.52
FOR THE YEARS ENDED NOVEMBER 30,
- --------------------------------
1994 Class A Shares 10.34 0.50 (0.49) 0.01
1994 Class B Shares(c) 9.95 0.05 (0.10) (0.05)
1993 Class A Shares 10.30 0.56 0.04 0.60
1992 Class A Shares 10.35 0.67 (0.03) 0.64
1991 Class A Shares 10.04 0.74 0.31 1.05
FOR THE PERIOD DECEMBER 29, 1989 (COMMENCEMENT OF OPERATIONS) THROUGH NOVEMBER 30,
- ----------------------------------------------------------------------------------
1990 Class A Shares 10.00 0.69 0.04 0.73
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
------------------------------------
RATIO OF NET NET
NET TOTAL NET ASSET RATIO OF NET INVESTMENT ASSETS AT
NET REALIZED DISTRIBUTIONS VALUE AT EXPENSES TO INCOME PORTFOLIO END
INVESTMENT GAIN ON TO SHARE- END TOTAL AVERAGE NET TO AVERAGE TURNOVER OF PERIOD
INCOME INVESTMENTS HOLDERS OF PERIOD RETURN(a) ASSETS NET ASSETS RATE (000'S)
---------- ----------- ------------- --------- --------- ------------ ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED MAY 31,
- --------------------------------
1995 Class A Shares
(unaudited) $(0.27) $ - $(0.27) $10.13 5.62% 0.78%(b) 5.54%(b) 9% $130,665
1995 Class B Shares
(unaudited) (0.24) - (0.24) 10.13 5.24 1.53(b) 4.72(b) 9 164
FOR THE YEARS ENDED NOVEMBER 30,
- --------------------------------
1994 Class A Shares (0.50) - (0.50) 9.85 0.12 0.77 4.89 40 142,958
1994 Class B Shares(c) (0.05) - (0.05) 9.85 (0.39) 1.53(b) 4.92(b) 40 41
1993 Class A Shares (0.56) - (0.56) 10.34 5.91 0.78 5.35 44 169,990
1992 Class A Shares (0.67) - (0.69) 10.30 6.29 0.81 6.44 22 123,528
1991 Class A Shares (0.74) - (0.74) 10.35 10.90 0.84 7.34 15 76,921
FOR THE PERIOD DECEMBER 29, 1989 (COMMENCEMENT OF OPERATIONS) THROUGH NOVEMBER 30,
- ----------------------------------------------------------------------------------
1990 Class A Shares (0.69) - (0.69) 10.04 7.67 0.84(b) 7.60(b) 33 87,096
</TABLE>
- ----------
(a) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all dividends and distributions, a complete redemption of
the investment at the net asset value at the end of the period and no
sales charges. Total return would be reduced if a sales charge for Class A
Shares or a contingent deferred sales charge for Class B Shares were taken
into account.
(b) Annualized.
(c) Class B Share activity commenced on October 19, 1994.
The accompanying notes are an integral part of these financial statements.
31
<PAGE>
PARAGON PORTFOLIO
INTERMEDIATE-TERM BOND FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INCOME FROM INVESTMENT OPERATIONS
--------------------------------------------
NET REALIZED
NET ASSET AND UNREALIZED TOTAL
VALUE AT NET GAIN (LOSS) INCOME (LOSS) FROM
BEGINNING INVESTMENT ON INVESTMENT INVESTMENT
OF PERIOD INCOME TRANSACTIONS OPERATIONS
--------- ---------- -------------- ------------------
<S> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED MAY 31,
- --------------------------------
1995 Class A Shares
(unaudited) $ 9.54 $0.34 $0.75 $1.09
1995 Class B Shares
(unaudited) 9.56 0.30 0.76 1.06
FOR THE YEARS ENDED NOVEMBER 30,
- --------------------------------
1994 Class A Shares 10.84 0.66 (1.16) (0.50)
1994 Class B Shares(c) 9.74 0.10 (0.18) (0.08)
1993 Class A Shares 10.53 0.71 0.36 1.07
1992 Class A Shares 10.41 0.76 0.12 0.88
1991 Class A Shares 9.91 0.77 0.50 1.27
FOR THE PERIOD DECEMBER 29, 1989 (COMMENCEMENT OF OPERATIONS) THROUGH NOVEMBER 30,
- ----------------------------------------------------------------------------------
1990 Class A Shares 10.00 0.71 (0.09) 0.62
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTIONS TO SHAREHOLDERS FROM:
------------------------------------
RATIO OF NET NET
NET TOTAL NET ASSET RATIO OF NET INVESTMENT ASSETS AT
NET REALIZED DISTRIBUTIONS VALUE AT EXPENSES TO INCOME PORTFOLIO END
INVESTMENT GAIN ON TO SHARE- END TOTAL AVERAGE NET TO AVERAGE TURNOVER OF PERIOD
INCOME INVESTMENTS HOLDERS OF PERIOD RETURN(a) ASSETS NET ASSETS RATE (000'S)
---------- ----------- ------------- --------- --------- ------------ ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED MAY 31,
- --------------------------------
1995 Class A Shares
(unaudited) $(0.34) $ - $(0.34) $10.29 11.60% 0.76%(b) 6.91%(b) 18% $314,924
1995 Class B Shares
(unaudited) (0.30) - (0.30) 10.32 11.30 1.51(b) 6.13(b) 18 687
FOR THE YEARS ENDED NOVEMBER 30,
- --------------------------------
1994 Class A Shares (0.66) (0.14) (0.80) 9.54 (4.77) 0.76 6.56 38 297,123
1994 Class B Shares(c) (0.10) - (0.10) 9.56 (0.76) 1.52(b) 6.38(b) 38 250
1993 Class A Shares (0.70) (0.06) (0.76) 10.84 10.32 0.74 6.46 38 341,535
1992 Class A Shares (0.76) - (0.76) 10.53 8.71 0.78 7.17 24 285,684
1991 Class A Shares (0.77) - (0.77) 10.41 13.34 0.78 7.69 15 221,916
FOR THE PERIOD DECEMBER 29, 1989 (COMMENCEMENT OF OPERATIONS) THROUGH NOVEMBER 30,
- ----------------------------------------------------------------------------------
1990 Class A Shares (0.71) - (0.71) 9.91 6.59 0.80(b) 7.91(b) 14 165,464
</TABLE>
- ----------
(a) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all dividends and distributions, a complete redemption of
the investment at the net asset value at the end of the period and no
sales charges. Total return would be reduced if a sales charge for Class A
Shares or a contingent deferred sales charge for Class B shares were taken
into account.
(b) Annualized.
(c) Class B Share activity commenced on September 28, 1994.
The accompanying notes are an integral part of these financial statements.
32
<PAGE>
PARAGON PORTFOLIO
LOUISIANA TAX-FREE FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INCOME FROM INVESTMENT OPERATIONS DISTRIBUTIONS TO SHAREHOLDERS FROM:
----------------------------------------------- ------------------------------------
NET REALIZED
AND TOTAL
NET ASSET UNREALIZED INCOME NET TOTAL
VALUE AT NET GAIN (LOSS) ON (LOSS) FROM NET REALIZED DISTRIBUTIONS
BEGINNING INVESTMENT INVESTMENT INVESTMENT INVESTMENT GAIN ON TO SHARE-
OF PERIOD INCOME TRANSACTIONS OPERATIONS INCOME INVESTMENTS HOLDERS
--------- ---------- -------------- ----------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED MAY 31,
- --------------------------------
1995 Class A
Shares (unaudited) $10.01 $0.27 $0.58 $0.85 $(0.27) $ - $(0.27)
1995 Class B
Shares (unaudited) 10.01 0.23 0.61 0.84 (0.23) - (0.23)
FOR THE YEARS ENDED NOVEMBER 30,
- --------------------------------
1994 Class A Shares 10.96 0.52 (0.84) (0.32) (0.52) (0.11) (0.63)
1994 Class B Shares(c) 10.41 0.09 (0.40) (0.31) (0.09) - (0.09)
1993 Class A Shares 10.59 0.55 0.45 1.00 (0.55) (0.08) (0.63)
1992 Class A Shares 10.38 0.59 0.28 0.87 (0.59) (0.07) (0.66)
1991 Class A Shares 10.15 0.60 0.23 0.83 (0.60) - (0.60)
FOR THE PERIOD DECEMBER 29, 1989 (COMMENCEMENT OF OPERATIONS) THROUGH NOVEMBER 30,
- ----------------------------------------------------------------------------------
1990 Class A Shares 10.00 0.57 0.15 0.72 (0.57) - (0.57)
</TABLE>
<TABLE>
<CAPTION>
RATIOS ASSUMING NO
WAIVER OF FEES
----------------------
RATIO OF NET NET RATIO OF NET
NET ASSET RATIO OF NET INVESTMENT ASSETS AT RATIO OF INVESTMENT
VALUE AT EXPENSES TO INCOME PORTFOLIO END EXPENSES INCOME TO
END TOTAL AVERAGE NET TO AVERAGE TURNOVER OF PERIOD TO AVERAGE AVERAGE
OF PERIOD RETURN(a) ASSETS NET ASSETS RATE (000'S) NET ASSETS NET ASSETS
--------- --------- ------------ ------------ --------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED MAY 31,
- --------------------------------
1995 Class A
Shares (unaudited) $10.59 8.55% 0.65%(b) 5.15%(b) 11% $192,390 0.80%(b) 5.00%(b)
1995 Class B
Shares (unaudited) 10.62 8.39 1.40(b) 4.36(b) 11 932 1.55(b) 4.21(b)
FOR THE YEARS ENDED NOVEMBER 30,
- --------------------------------
1994 Class A Shares 10.01 (2.97) 0.65 4.97 24 196,820 0.80 4.82
1994 Class B Shares(c) 10.01 (2.94) 1.41(b) 4.45(b) 24 204 1.56(b) 4.30(b)
1993 Class A Shares 10.96 9.65 0.62 5.07 25 196,534 0.78 4.91
1992 Class A Shares 10.59 8.64 0.58 5.70 32 135,692 0.83 5.45
1991 Class A Shares 10.38 8.45 0.61 5.86 35 88,503 0.86 5.61
FOR THE PERIOD DECEMBER 29, 1989 (COMMENCEMENT OF OPERATIONS) THROUGH NOVEMBER 30,
- ----------------------------------------------------------------------------------
1990 Class A Shares 10.15 7.48 0.64(b) 6.20(b) 5 59,375 0.86(b) 5.98(b)
</TABLE>
- ----------
(a) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all dividends and distributions, a complete redemption of
the investment at the net asset value at the end of the period and no
sales charges. Total return would be reduced if a sales charge for Class A
Shares or a contingent deferred sales charge for Class B Shares were taken
into account.
(b) Annualized.
(c) Class B Share activity commenced on September 16, 1994.
The accompanying notes are an integral part of these financial statements.
33
<PAGE>
PARAGON PORTFOLIO
VALUE GROWTH FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
DISTRIBUTIONS TO SHAREHOLDERS
INCOME FROM INVESTMENT OPERATIONS FROM:
----------------------------------------- ------------------------------
NET REALIZED
NET ASSET AND UNREALIZED TOTAL NET TOTAL
VALUE AT NET GAIN (LOSS) INCOME (LOSS) NET REALIZED DISTRIBUTIONS
BEGINNING INVESTMENT ON INVESTMENT FROM INVESTMENT INVESTMENT GAIN ON TO SHARE-
OF PERIOD INCOME TRANSACTIONS OPERATIONS INCOME INVESTMENTS HOLDERS
--------- ---------- -------------- --------------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED MAY 31,
- --------------------------------
1995 Class A Shares
(unaudited) $13.73 $0.11 $1.61 $1.72 $(0.11) $(0.44) $(0.55)
1995 Class B Shares
(unaudited) 13.70 0.05 1.63 1.68 (0.06) (0.44) (0.50)
FOR THE YEARS ENDED NOVEMBER 30,
- --------------------------------
1994 Class A Shares 15.29 0.20 (0.86) (0.66) (0.21) (0.69) (0.90)
1994 Class B Shares(d) 14.98 0.03 (1.28) (1.25) (0.03) - (0.03)
1993 Class A Shares 14.38 0.17 1.25 1.42 (0.18) (0.33) (0.51)
1992 Class A Shares 11.90 0.17 2.68 2.85 (0.15) (0.22) (0.37)
1991 Class A Shares 9.75 0.19 2.19 2.38 (0.21) (0.02) (0.23)
FOR THE PERIOD DECEMBER 29, 1989 (COMMENCEMENT OF OPERATIONS) THROUGH NOVEMBER 30,
- ----------------------------------------------------------------------------------
1990 Class A Shares 10.00 0.24 (0.28) (0.04) (0.21) 0.00 (0.21)
</TABLE>
<TABLE>
<CAPTION>
RATIO OF NET NET
NET ASSET RATIO OF NET INVESTMENT ASSETS AT
VALUE AT EXPENSES TO INCOME PORTFOLIO END
END TOTAL AVERAGE NET TO AVERAGE TURNOVER OF PERIOD
OF PERIOD RETURN(a) ASSETS NET ASSETS RATE (000'S)
--------- --------- ------------ ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED MAY 31,
- --------------------------------
1995 Class A Shares
(unaudited) $14.90 12.93% 0.95%(b) 1.61%(b) 32% $193,134
1995 Class B Shares
(unaudited) 14.88 12.63 1.70(b) 0.88(b) 32 1,453
FOR THE YEARS ENDED NOVEMBER 30,
- --------------------------------
1994 Class A Shares 13.73 (4.32) 0.96 1.34 53 173,198
1994 Class B Shares(d) 13.70 (8.31) 1.71(b) 0.76(b) 53 412
1993 Class A Shares 15.29 10.13 0.96 1.21 66 171,141
1992 Class A Shares 14.38 24.27 0.97 1.25 43 133,614
1991 Class A Shares 11.90 24.97 0.95(c) 1.73(c) 54 93,400
FOR THE PERIOD DECEMBER 29, 1989 (COMMENCEMENT OF OPERATIONS) THROUGH NOVEMBER 30,
- ----------------------------------------------------------------------------------
1990 Class A Shares 9.75 (0.40) 1.03(b) 2.68(b) 53 45,937
</TABLE>
- ----------
(a) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all dividends and distributions, a complete redemption of
the investment at the net asset value at the end of the period and no
sales charges. Total return would be reduced if a sales charge for Class A
Shares or a contingent deferred sales charge for Class B Shares were taken
into account.
(b) Annualized.
(c) Had the Administrator not voluntarily waived a portion of the
administration fee, the expense ratio and the ratio of net investment
income to average net assets for the year ended November 30, 1991 would
have been 1.02% and 1.66% for Class A Shares.
(d) Class B Share activity commenced on September 9, 1994.
The accompanying notes are an integral part of these financial statements.
34
<PAGE>
PARAGON PORTFOLIO
VALUE EQUITY INCOME FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
DISTRIBUTIONS TO SHAREHOLDERS
INCOME FROM INVESTMENT OPERATIONS FROM:
----------------------------------------- ------------------------------------
NET REALIZED
NET ASSET AND UNREALIZED TOTAL NET TOTAL
VALUE AT NET GAIN (LOSS) INCOME (LOSS) NET REALIZED DISTRIBUTIONS
BEGINNING INVESTMENT ON INVESTMENT FROM INVESTMENT INVESTMENT GAIN ON TO SHARE-
OF PERIOD INCOME TRANSACTIONS OPERATIONS INCOME INVESTMENTS HOLDERS
--------- ---------- -------------- --------------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED MAY 31,
- --------------------------------
1995 Class A Shares
(unaudited) $11.55 $0.16 $1.75 $1.91 $(0.16) $(0.37) $(0.53)
1995 Class B Shares
(unaudited) 11.56 0.11 1.76 1.87 (0.12) (0.37) (0.49)
FOR THE YEARS ENDED NOVEMBER 30,
- --------------------------------
1994 Class A Shares 12.74 0.30 (0.54) (0.24) (0.34) (0.61) (0.95)
1994 Class B Shares(d) 12.01 0.04 (0.45) (0.41) (0.04) - (0.04)
1993 Class A Shares 12.20 0.28 0.93 1.21 (0.28) (0.39) (0.67)
1992 Class A Shares 10.42 0.27 1.76 2.03 (0.25) - (0.25)
1991 Class A Shares 9.00 0.29 1.45 1.74 (0.32) - (0.32)
FOR THE PERIOD DECEMBER 28, 1994 (COMMENCEMENT OF OPERATIONS) THROUGH NOVEMBER 30,
- ----------------------------------------------------------------------------------
1990 Class A Shares 10.00 0.31 (1.04) (0.73) (0.27) - (0.27)
</TABLE>
<TABLE>
<CAPTION>
RATIO OF NET NET
NET ASSET RATIO OF NET INVESTMENT ASSETS AT
VALUE AT EXPENSES TO INCOME PORTFOLIO END
END TOTAL AVERAGE NET TO AVERAGE TURNOVER OF PERIOD
OF PERIOD RETURN(a) ASSETS NET ASSETS RATE (000'S)
--------- --------- ------------ ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED MAY 31,
- --------------------------------
1995 Class A Shares
(unaudited) $12.93 17.16% 0.90%(b) 2.62%(b) 17% $116,282
1995 Class B Shares
(unaudited) 12.94 16.74 1.65(b) 1.81(b) 17 243
FOR THE YEARS ENDED NOVEMBER 30,
- --------------------------------
1994 Class A Shares 11.55 (1.69) 0.93 2.50 49 103,364
1994 Class B Shares(d) 11.56 (3.40) 1.67(b) 1.71(b) 49 31
1993 Class A Shares 12.74 10.24 0.93 2.30 51 102,799
1992 Class A Shares 12.20 19.65 0.98 2.38 36 83,136
1991 Class A Shares 10.42 20.03 0.95(c) 3.53(c) 50 59,854
FOR THE PERIOD DECEMBER 28, 1994 (COMMENCEMENT OF OPERATIONS) THROUGH NOVEMBER 30,
- ----------------------------------------------------------------------------------
1990 Class A Shares 9.00 (7.40) 0.99(b) 3.62(b) 56 72,783
</TABLE>
- ----------
(a) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all dividends and distributions, a complete redemption of
the investment at the net asset value at the end of the period and no
sales charges. Total return would be reduced if a sales charge for Class A
Shares or a contingent deferred sales charge for Class B Shares were taken
into account.
(b) Annualized.
(c) Had the Administrator not voluntarily waived a portion of the
administration fee, the expense ratio and the ratio of net investment
income to average net assets for the year ended November 30, 1991 would
have been 1.01% and 3.47% for Class A Shares.
(d) Class B Share activity commenced on October 3, 1994.
The accompanying notes are an integral part of these financial statements.
35
<PAGE>
PARAGON PORTFOLIO
GULF SOUTH GROWTH FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
DISTRIBUTIONS TO SHAREHOLDERS
INCOME FROM INVESTMENT OPERATIONS FROM:
----------------------------------------- ------------------------------------
NET REALIZED
NET ASSET NET AND UNREALIZED TOTAL NET TOTAL
VALUE AT INVESTMENT GAIN (LOSS) INCOME (LOSS) NET REALIZED DISTRIBUTIONS
BEGINNING INCOME ON INVESTMENT FROM INVESTMENT INVESTMENT GAIN ON TO SHARE-
OF PERIOD (LOSS) TRANSACTIONS OPERATIONS INCOME INVESTMENTS HOLDERS
--------- ---------- -------------- --------------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED MAY 31,
- --------------------------------
1995 Class A Shares
(unaudited) $14.70 $(0.02) $1.67 $1.65 $ - $(0.27) $(0.27)
1995 Class B Shares
(unaudited) 14.66 (0.05) 1.65 1.60 - (0.27) (0.27)
FOR THE YEARS ENDING NOVEMBER 30,
- ---------------------------------
1994 Class A Shares 15.88 (0.06) (0.99) (1.05) - (0.13) (0.13)
1994 Class B Shares(c) 16.10 (0.01) (1.43) (1.44) - - -
1993 Class A Shares 14.89 (0.03) 1.38 1.35 (0.01) (0.35) (0.36)
1992 Class A Shares 11.59 0.02 3.29 3.31 (0.01) - (0.01)
FOR THE PERIOD JULY 1, 1991 (COMMENCEMENT OF OPERATIONS) THROUGH NOVEMBER 30,
- -----------------------------------------------------------------------------
1991 Class A Shares 10.00 0.02 1.59 1.61 (0.02) - (0.02)
</TABLE>
<TABLE>
<CAPTION>
RATIO OF NET NET
NET ASSET RATIO OF NET INVESTMENT ASSETS AT
VALUE AT EXPENSES TO INCOME (LOSS) PORTFOLIO END
END TOTAL AVERAGE NET TO AVERAGE TURNOVER OF PERIOD
OF PERIOD RETURN(a) ASSETS NET ASSETS RATE (000'S)
--------- --------- ------------ ------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED MAY 31,
- --------------------------------
1995 Class A Shares
(unaudited) $16.08 11.38% 1.01%(b) (0.25)%(b) 26% $87,362
1995 Class B Shares
(unaudited) 15.99 11.04 1.76 (b) (1.01)(b) 26 1,028
FOR THE YEARS ENDING NOVEMBER 30,
- ---------------------------------
1994 Class A Shares 14.70 (6.66) 1.00 (0.38) 51 77,540
1994 Class B Shares(c) 14.66 (9.08) 1.75(b) (0.90)(b) 51 231
1993 Class A Shares 15.88 9.10 1.01 (0.21) 59 74,982
1992 Class A Shares 14.89 28.59 1.00 0.15 42 55,719
FOR THE PERIOD JULY 1, 1991 (COMMENCEMENT OF OPERATIONS) THROUGH NOVEMBER 30,
- -----------------------------------------------------------------------------
1991 Class A Shares 11.59 16.12 1.05(b) 0.31(b) 12 34,546
</TABLE>
- ----------
(a) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all dividends and distributions, a complete redemption of
the investment at the net asset value at the end of the period and no
sales charges. Total return would be reduced if a sales charge for Class A
Shares or a contingent deferred sales charge for Class B shares were taken
into account.
(b) Annualized.
(c) Class B Share activity commenced on September 12, 1994.
The accompanying notes are an integral part of these financial statements.
36
<PAGE>
PARAGON PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 (UNAUDITED)
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
Paragon Portfolio (the "Trust") is a Massachusetts business trust registered
under the Investment Company Act of 1940, as amended, as an open-end
management investment company. The Trust consists of eleven portfolios, seven
of which (the "Funds") are contained within: Paragon Short-Term Government
Fund, Paragon Intermediate-Term Bond Fund, Paragon Louisiana Tax-Free Fund,
Paragon Value Growth Fund, Paragon Value Equity Income Fund and Paragon Gulf
South Growth Fund (collectively, the "Non-Money Market Funds") and Paragon
Treasury Money Market Fund (the "Money Market Fund"). Each of the Funds offers
two classes of shares, Class A Shares and Class B Shares. Class B Shares of
the Money Market Fund will be issued only upon an exchange of Class B Shares
of any of the Non-Money Market Funds. Paragon Gulf South Growth Fund is a non-
diversified portfolio; all other portfolios are diversified. The following is
a summary of significant accounting policies followed by the Funds which are
in conformity with those generally accepted in the investment company
industry.
Investment Valuation. Portfolio securities of the Money Market Fund are
valued at amortized cost which approximates market value. Under this method,
all investments purchased at a discount or a premium are valued by amortizing
the difference between original purchase price and maturity value of the issue
over the period to maturity. For the Non-Money Market Funds, equity securities
traded on a national securities exchange or the National Association of
Securities Dealers NASDAQ System ("NASDAQ") are valued at their last sale
price on the principal exchange on which they are traded or NASDAQ (if NASDAQ
is the principal market for such securities) on the valuation day or, if no
sale occurs, at the mean between the closing bid and asked prices. Unlisted
equity securities for which market quotations are available are valued at the
mean between the most recent bid and asked prices. Fixed-income securities are
valued at prices supplied by an independent pricing service which reflect
broker/dealer-supplied valuations and electronic data processing techniques.
Short-term debt obligations maturing in sixty days or less are valued at
amortized cost. Other assets and assets whose market values, in the investment
adviser's opinion, do not reflect fair value are valued at fair value using
methods determined in good faith by the Board of Trustees.
Securities Transactions and Investment Income. Securities transactions are
recorded on the trade date. Realized gains and losses on sales of investments
are calculated on the identified cost basis. Dividend income is recorded on
the ex-dividend date and interest income is recorded on the accrual basis.
Premiums and Discounts on Debt Securities Owned. The Paragon Louisiana Tax-
Free Fund amortizes premiums on debt securities on the effective yield basis,
and does not accrete discounts on debt securities. The Paragon Intermediate-
Term Bond and Paragon Short-Term Government Funds accrete discounts on long-
term debt securities and do not amortize premiums. The Paragon Value Growth,
Paragon Value Equity Income, and Paragon Gulf South Growth Funds accrete
discounts and amortize premiums on long-term debt securities. Original issue
discounts on debt securities are amortized to interest income over the life of
the security with a corresponding increase in the cost basis of that security.
The Paragon Short-Term Government and the Paragon Intermediate-Term Bond Funds
may invest in mortgage-backed securities. Certain mortgage security paydown
gains and losses are taxable as ordinary income. Such paydown gains and losses
increase or decrease taxable ordinary income available for distributions and
are classified as interest income in the accompanying Statements of
Operations.
Federal Taxes. The Trust's policy is to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute each year substantially all of the investment company taxable and
tax-exempt income to the shareholders of each Fund. Accordingly, no federal
tax provisions are required.
At November 30, 1994, the Trust's last tax year-end, the following Funds had
approximately the following amounts of capital loss carryforward for U.S.
Federal tax purposes:
<TABLE>
<CAPTION>
FUND AMOUNT YEARS OF EXPIRATION
---- ----------- -------------------
<S> <C> <C>
Paragon Short-Term Government Fund....... $ 948,000 2000 to 2002
Paragon Intermediate-Term Bond Fund...... $ 4,254,000 2002
Paragon Louisiana Tax-Free Fund.......... $ 403,000 2002
</TABLE>
These amounts are available to be carried forward to offset future capital
gains of the corresponding funds to the extent permitted by applicable laws or
regulations.
Deferred Organization Costs. Organization-related costs are being amortized
on a straight-line basis over a period of five years.
37
<PAGE>
PARAGON PORTFOLIO
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
MAY 31, 1995 (UNAUDITED)
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
Expenses. Expenses incurred by the Trust which do not specifically relate to
an individual Fund are allocated to the Funds based on each Fund's relative
average net assets for the period. Shareholders of Class B Shares bear all
expenses which are directly attributable to such shares.
NOTE 2. AGREEMENTS
The Non-Money Market Funds have entered into Investment Advisory Agreements
with Premier Investment Advisors, L.L.C., ("Premier"), the successor to
Premier Investment Advisors, Inc. effective December 31, 1993 and a subsidiary
of Premier Bank N.A. The Money Market Fund has entered into an Investment
Advisory Agreement with Goldman Sachs Asset Management ("GSAM"), a separate
operating division of Goldman, Sachs & Co.("Goldman Sachs"), and into a
Subadvisory Agreement with Premier and GSAM. Pursuant to the terms of the
Investment Advisory Agreements, Premier and GSAM manage the investments and
make investment decisions for each Non-Money Market Fund and for the Money
Market Fund, respectively. For these services, each Fund pays its investment
adviser a monthly fee at the following annual rate of the corresponding Fund's
average daily net assets:
<TABLE>
<S> <C>
Paragon Treasury Money Market Fund.................................. .20%
Paragon Short-Term Government Fund.................................. .50%
Paragon Intermediate-Term Bond Fund................................. .50%
Paragon Louisiana Tax-Free Fund..................................... .50%
Paragon Value Growth Fund........................................... .65%
Paragon Value Equity Income Fund.................................... .65%
Paragon Gulf South Growth Fund...................................... .65%
</TABLE>
With respect to the Paragon Louisiana Tax-Free Fund, Premier has advised the
Trust that, as of January 1, 1993 and until further notice, it has voluntarily
agreed to reduce its advisory fee from .50% to .40% of the Fund's average
daily net assets. For the six months ended May 31, 1995, Premier waived
$97,494 of its advisory fee for the Paragon Louisiana Tax-Free Fund.
Pursuant to the Subadvisory Agreement among the Money Market Fund, GSAM and
Premier, Premier reviews on a quarterly basis the portfolio and investment
strategy of the Money Market Fund and consults with GSAM as needed concerning
that Fund's investments. As compensation, GSAM pays to Premier quarterly a
subadvisory fee equal to, on an annual basis, .10% of that Fund's average
daily net assets.
GSAM serves as the Trust's administrator pursuant to an Administration
Agreement. Under the Administration Agreement, GSAM administers the Trust's
business affairs. As compensation for services rendered under the
Administration Agreement, each Fund pays GSAM a fee, computed daily and
payable monthly, at the annual rate of .15% of the average daily net assets of
the corresponding Fund. With respect to the Paragon Louisiana Tax-Free Fund,
GSAM has advised the Trust that, as of February 5, 1990, and until further
notice, it has voluntarily agreed to reduce its administration fee from .15%
to .10% of the Fund's average daily net assets. For the six months ended May
31, 1995, GSAM waived $48,746 of its administration fee for the Paragon
Louisiana Tax-Free Fund.
Goldman Sachs serves as the Distributor of shares of the Funds pursuant to a
Distribution Agreement with the Trust. Goldman Sachs may receive a portion of
the sales load imposed on the sale of Class A Shares of the Non-Money Market
Funds and has advised the Trust that it retained approximately $19,100 during
the six months ended May 31, 1995.
The Trust, on behalf of each Fund, has adopted a Distribution Plan for Class
B Shares (the "Class B Plan") pursuant to Rule 12b-1. Under the Class B Plan,
each Fund pays Goldman Sachs a quarterly fee for distribution services with
respect to the Class B Shares equal to, on an annual basis, .75% of each
Fund's average daily net assets attributable to the Class B Shares of such
Fund.
The Distributor recovers distribution expenses with respect to the Class B
Shares also through the receipt of contingent deferred sales charges.
Goldman Sachs also serves as Transfer Agent of the Trust for a fee.
38
<PAGE>
PARAGON PORTFOLIO
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
MAY 31, 1995 (UNAUDITED)
NOTE 3. REPURCHASE AGREEMENTS
During the term of a repurchase agreement, the value of the underlying
securities, including accrued interest, is required to equal or exceed the
value of the repurchase agreement. The underlying securities for all
repurchase agreements are held in safekeeping in the customer-only account of
State Street Bank & Trust Co., the Funds' custodian, at the Federal Reserve
Bank of Boston, or at sub-custodians. The market values of the underlying
securities are monitored by pricing them daily.
In connection with transactions in repurchase agreements, if the seller
defaults and the value of the collateral declines, or if the seller enters an
insolvency proceeding, realization of the collateral by the Trust may be
delayed or limited.
NOTE 4. JOINT REPURCHASE AGREEMENT ACCOUNT
The Money Market Fund, together with other registered investment companies
having advisory agreements with GSAM, transfers uninvested cash balances into
a joint account, the daily aggregate balance of which is invested in one or
more repurchase agreements. The underlying securities for the repurchase
agreements are U.S. Treasury obligations. As of May 31, 1995, the Money Market
Fund had a 8.19% undivided interest in the repurchase agreements in this joint
account which equalled $215,200,000 in principal amount. At May 31, 1995, the
repurchase agreements in the joint account along with the corresponding
underlying securities (including the type of security, principal amount,
interest rate and maturity date) were as follows:
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY AMORTIZED
AMOUNT RATE DATE COST
------------ -------- -------- --------------
<S> <C> <C> <C> <C>
Bankers Trust Securities Corp.,
dated 05/31/95, repurchase
price $550,093,958 (U.S. Trea-
sury Note: $556,830,000, 6.13%,
05/15/98)...................... $550,000,000 6.15% 06/01/95 $ 550,000,000
Bear Stearns Companies, dated
05/31/95, repurchase price
$500,085,417 (U.S. Treasury
Strips: $621,616,000,
05/15/97-05/15/01)............. 500,000,000 6.15 06/01/95 500,000,000
Daiwa Securities, dated
05/31/95, repurchase price
$300,051,250 (U.S. Treasury
Note: $305,240,000,
6.13%, 05/31/97)............... 300,000,000 6.15 06/01/95 300,000,000
First Boston Corp., dated
05/31/95, repurchase price
$300,051,042 (U.S. Treasury
Bills: $312,018,000,
06/01/95-02/08/96)............. 300,000,000 6.13 06/01/95 300,000,000
Lehman Government Securities,
dated 05/31/95, repurchase
price $70,012,153 (U.S. Trea-
sury Principal-Only Strips:
$97,723,000, 05/15/00-
08/15/00)...................... 70,000,000 6.25 06/01/95 70,000,000
SBC Government Securities, Inc.,
dated 05/31/95, repurchase
price $500,085,556 (U.S. Trea-
sury Notes: $410,110,000, 4.63-
8.50%, 08/15/95-07/31/96) (U.S.
Treasury Bill: $92,800,000,
04/04/96)...................... 500,000,000 6.16 06/01/95 500,000,000
Smith Barney Shearson, Inc.,
dated 05/31/95, repurchase
price $407,269,790 (U.S. Trea-
sury Notes: $365,520,000,
4.25-9.00%, 05/15/96-02/15/01)
(U.S. Treasury Interest-Only
Strip: $52,185,000, 11/15/99).. 407,200,000 6.17 06/01/95 407,200,000
--------------
Total Joint Repurchase Agreement
Account........................ $2,627,200,000
==============
</TABLE>
39
<PAGE>
PARAGON PORTFOLIO
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
MAY 31, 1995 (UNAUDITED)
NOTE 5. INVESTMENT TRANSACTIONS
Purchases and proceeds of sales or maturities of long-term investments for
the six months ended May 31, 1995, were as follows:
PARAGON SHORT-TERM GOVERNMENT FUND
<TABLE>
<S> <C>
Purchases (excluding U.S. Government and agency obligations)....... $ --
Sales (excluding U.S. Government and agency obligations)........... --
Purchases of U.S. Government and agency obligations................ 11,011,875
Sales of U.S. Government and agency obligations.................... 30,328,047
PARAGON INTERMEDIATE-TERM BOND FUND
Purchases (excluding U.S. Government and agency obligations)....... $ --
Sales (excluding U.S. Government and agency obligations)........... 2,694,375
Purchases of U.S. Government and agency obligations................ 51,152,481
Sales of U.S. Government and agency obligations.................... 59,963,129
PARAGON LOUISIANA TAX-FREE FUND
Purchases (excluding U.S. Government and agency obligations)....... $ 20,217,869
Sales (excluding U.S. Government and agency obligations)........... 34,212,796
Purchases of U.S. Government and agency obligations................ --
Sales of U.S. Government and agency obligations.................... --
PARAGON VALUE GROWTH FUND
Purchases (excluding U.S. Government and agency obligations)....... $ 56,170,628
Sales (excluding U.S. Government and agency obligations)........... 66,303,388
Purchases of U.S. Government and agency obligations................ --
Sales of U.S. Government and agency obligations.................... --
PARAGON VALUE EQUITY INCOME FUND
Purchases (excluding U.S. Government and agency obligations)....... $ 23,011,530
Sales (excluding U.S. Government and agency obligations)........... 20,193,904
Purchases of U.S. Government and agency obligations................ --
Sales of U.S. Government and agency obligations.................... --
PARAGON GULF SOUTH GROWTH FUND
Purchases (excluding U.S. Government and agency obligations)....... $ 21,682,747
Sales (excluding U.S. Government and agency obligations)........... 20,259,273
Purchases of U.S. Government and agency obligations................ --
Sales of U.S. Government and agency obligations.................... --
</TABLE>
The Money Market Fund invests only in short-term investments.
NOTE 6. CAPITAL SHARES AND DISTRIBUTIONS
As of May 31, 1995, Premier Bank, N.A. Trustee, in its capacity as trustee
or fiduciary of trusts and employee benefit plans, is the beneficial owner of
approximately the following percentages of the outstanding shares of
beneficial interest of each of the Funds:
<TABLE>
<S> <C>
Paragon Treasury Money Market Fund.................................... 95%
Paragon Short-Term Government Fund.................................... 92%
Paragon Intermediate-Term Bond Fund................................... 90%
Paragon Louisiana Tax-Free Fund....................................... 69%
Paragon Value Growth Fund............................................. 81%
Paragon Value Equity Income Fund...................................... 94%
Paragon Gulf South Growth Fund........................................ 76%
</TABLE>
40
<PAGE>
PARAGON PORTFOLIO
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
MAY 31, 1995 (UNAUDITED)
NOTE 7. CONCENTRATION OF CREDIT RISK
The Paragon Louisiana Tax-Free Fund invests substantially all of its assets
in debt obligations of issuers located in the State of Louisiana. The issuers'
abilities to meet their obligations may be affected by Louisiana economic or
political developments.
41
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PARAGON PORTFOLIO
------------------------
TRUSTEES
Paul C. Nagel, Jr.,
Chairman
Bruce C. Gottwald, Jr.
Ernest E. Howard III
OFFICERS
Paul W. Klug
President
Marcia L. Beck
Vice President
John W. Mosior
Vice President
Nancy L. Mucker
Vice President
Pauline Taylor
Vice President
Scott M. Gilman
Treasurer
Michael J. Richman
Secretary
Howard B. Surloff
Assistant Secretary
This Semiannual Report is authorized for distribution to prospective
investors only when preceded or accompanied by a Paragon Portfolio Prospectus
which contains facts concerning Paragon Portfolio's objectives and policies,
management, expenses and other information.
<PAGE>
PARAGON PORTFOLIO
4900 Sears Tower
Chicago, Illinois 60606
INVESTMENT ADVISOR
Premier Investment Advisors, L.L.C.
451 Florida Street
Baton Rouge, Louisiana 70801
INVESTMENT ADVISOR AND ADMINISTRATOR
Goldman Sachs Asset Management
One New York Plaza
New York, New York 10004
DISTRIBUTOR
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
CUSTODIAN
State Street Bank & Trust Company
225 Franklin Street
Boston, Massachusetts 02110
TRANSFER AGENT
Goldman, Sachs & Co.
4900 Sears Tower
Chicago, Illinois 60606
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036
LEGAL COUNSEL
Hale and Dorr
60 State Street
Boston, Massachusetts 02109
PA-SEM95
PARAGON PORTFOLIO
---------------------------------------------
Paragon Treasury Money Market Fund
Paragon Short-Term Government Fund
Paragon Intermediate-Term Bond Fund
Paragon Louisiana Tax-Free Fund
Paragon Value Growth Fund
Paragon Value Equity Income Fund
Paragon Gulf South Growth Fund
Semiannual Report
-------------------------------
May 31, 1995
LOGO PARAGON
PORTFOLIO
