<PAGE> 1
REPORT FROM THE INVESTMENT ADVISER
- --------------------------------------------------------------------------------
MARK SILVERSTEIN, PORTFOLIO MANAGER OF THE BEA SHORT DURATION PORTFOLIO, ANSWERS
SOME OF THE MOST COMMONLY ASKED QUESTIONS ABOUT THE PORTFOLIO.
Q. HOW WOULD YOU ASSESS THE PORTFOLIO'S PERFORMANCE DURING 1995?
A. For the year ended December 31, 1995, the Portfolio's total return was
between 7.67% and 8.30%, depending on the class of shares, which have different
fee structures. In comparison, the Portfolio's unmanaged benchmark, the Merrill
Lynch 1-3 Year Government/Treasury Bond Index, produced a total return of
10.99%. The Portfolio's performance benefited from sharply falling interest
rates on one- to three-year securities, which boosted prices of these
securities. Although the federal funds rate changed little in 1995, interest
rates on one-year U.S. Treasury securities fell two full percentage points, from
7.16% to 5.13%. The two-year bond yield fell 2.5 percentage points, from 7.69%
to 5.15%. (The federal funds rate, the overnight rate banks charge each other,
is a bellwether for very short-term interest rates.)
The Portfolio was able to take advantage of favorable market conditions across a
spectrum of maturities. Although the Portfolio's average duration remains at
about one year, the Portfolio contains a combination of bonds maturing in one
year, as well as a significant number of securities with two- to three-year
maturities.
Q. WHAT IS YOUR PRESENT STRATEGY?
A. Our current strategy remains unchanged, namely, to remain diversified across
the maturity spectrum. By doing so, the Portfolio can benefit from capital
appreciation on longer-term securities when interest rates fall. At the same
time, having short-term instruments provides stability during periods of
interest-rate volatility, since short-term securities are less sensitive to
changes in rates. In addition, the Portfolio is diversified from a sector
perspective, with holdings in asset-backed securities, high-grade corporate
bonds, European bank debt and mortgage-backed securities.
Q. HOW HAS YOUR PORTFOLIO COMPOSITION CHANGED?
A. Rather than seek higher yields by lowering credit standards, we have ventured
into additional sectors of the short-term bond market. In addition, the
Portfolio's increased position in European bank debt reflects our belief that
European banks are about to have some very good years, just as the U.S. banking
industry has strengthened recently. Another area of opportunity, we believe, is
the commercial mortgage-backed securities market. These are newly originated
loans on commercial properties such as shopping malls, office buildings and
apartments. While providing a high yield, the underwriting criteria on these
properties is very conservative. A AAA-rated commercial mortgage-backed security
offers an additional 0.3% yield compared to other asset-backed securities.
Overall, the credit quality of the securities in the Portfolio remains extremely
high, at AA+.
Q. WHAT IS YOUR OUTLOOK?
A. The Federal Reserve Board is clearly on a path to lower interest rates, but
in small incremental steps. We expect rates on short- to intermediate-term
securities to stay even or drift downward, creating additional capital
appreciation opportunities in the Portfolio. With inflation running at 1.5% to
2.5% and the Fed Funds rate at 5.5%, real interest rates are very high by
historical standards. In a normal market environment, short-term rates are one
to two percentage points above inflation, not three to four percentage points as
they are now. In 1996, Federal Reserve policy will be affected by the budget
negotiations as well as the outlook for the economy.
1
<PAGE> 2
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- --------------------------------------------------------------------------------
INVESTMENT GOAL
The BEA Short Duration Portfolio is an open-end mutual fund that seeks to
provide investors with as high a level of current income as is consistent with
the preservation of capital. The Portfolio is normally managed to maintain an
average duration of one year, with a maximum of 1.5 years. A one-year duration
implies that if interest rates move one percentage point down or up, then the
value of the Portfolio should rise or fall by one percentage point. The
Portfolio must maintain an average dollar-weighted credit rating of at least
single A-, and only investment-grade securities may be included in the
Portfolio.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1995
<TABLE>
<CAPTION>
CLIENT SERVICE INVESTOR
SHARES SHARES SHARES
---------- --------- --------
<S> <C> <C> <C>
Inception Date 12/10/92** 12/29/92* 11/4/93*
1 Year 8.30% 7.67% 8.21%
Since Inception 5.49% 4.93% 5.39%
30-Day SEC Yield 5.82% 6.36% 5.72%
</TABLE>
- ---------------
* Currently, certain fees are being waived/reimbursed with respect to the BEA
Service and Investor shares. If such fees had not been waived/reimbursed, the
30-day SEC yields would have been -10.91% and 5.57% for the BEA Service
Shares and BEA Investor Shares, respectively, and total returns would have
been lower. This voluntary waiver/reimbursement may be modified or terminated
at any time, which would reduce the Portfolio's performance.
** The Portfolio operated as a money market fund from August 28, 1990, through
December 9, 1992. This performance is not reflected.
Past performance is no guarantee of future results. Investment return and
principal values will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
Concord Financial Group, Inc. is the distributor of the Portfolio.
A LOOK AT PERFORMANCE
- --------------------------------------------------------------------------------
AN ALL-SEASON PORTFOLIO
The BEA Short Duration Portfolio performed favorably in both 1994 and 1995,
years that experienced dramatically different market environments. 1994 was
notable for soaring interest rates, while 1995 was the opposite--a year in which
rates fell almost as much as they had risen the year before. The following
graphs represent a hypothetical $10,000 investment made at the inception of each
class of shares, compared to a hypothetical $10,000 investment in the Merrill
Lynch 1-3 Year Government/Treasury Bond Index, an unmanaged index of U.S.
Government/Treasury securities with maturities of 1 to 3 years. The Portfolio is
now using this index as its benchmark, since it is more appropriate for
comparison than the former benchmark, the Merrill Lynch 1-3 Year
Government/Agency Index. The indices do not include investment expenses, which
an investor would normally incur when making any type of investment. Past
performance is not indicative of future results. The investment return and net
asset value will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
2
<PAGE> 3
<TABLE>
<CAPTION>
Merrill Lynch 1-3 Merrill Lynch 1-3
Year Year
Measurement Period Client Shares -- Government/Treasury B Government/Agency
(Fiscal Year Covered) Inception: 12/10/92 ond Index Bond Index
<S> <C> <C> <C>
12/10/92 10000 10000 10000
12/31/92 10033 10056 10055
12/31/93 10583 10600 10629
12/31/94 10874 10660 10657
12/31/95 11776 11833 11833
</TABLE>
<TABLE>
<CAPTION>
Merrill Lynch 1-3 Merrill Lynch 1-3
Year Year
Measurement Period Service Shares -- Government/Treasury Government/Agency
(Fiscal Year Covered) Inception: 12/29/92 Bond Index Bond Index
<S> <C> <C> <C>
12/29/92 10000 10000 10000
12/31/92 9993 10008 10012
12/31/93 10497 10549 10584
12/31/94 10733 10609 10612
12/31/95 11556 11776 11777
</TABLE>
3
<PAGE> 4
<TABLE>
<CAPTION>
Merrill Lynch 1-3 Merrill Lynch 1-3
Year Year
Measurement Period Investor Shares -- Government/Treasury Government/Agency
(Fiscal Year Covered) Inception: 11/04/93 Bond Index Bond Index
<S> <C> <C> <C>
11/04/93 10000 10000 10000
12/31/93 10059 10059 10066
12/31/94 10349 10116 10093
12/31/95 11198 11229 11228
</TABLE>
4
<PAGE> 5
THE INFINITY MUTUAL FUNDS, INC.
BEA SHORT DURATION PORTFOLIO
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL
RATINGS MATURITY AMOUNT
(UNAUDITED) RATE DATE (000) VALUE
---------- ---- -------- --------- ------------
<S> <C> <C> <C> <C> <C>
LONG-TERM INVESTMENTS -- 71.7%
CORPORATE OBLIGATIONS -- 50.4%
ASSET BACKED SECURITIES -- 45.2%
AFC Home Equity Loan Trust, Ser. 94-1, Class
1A........................................... AAA/Aaa 6.40% 3/25/25 $ 1,705 $ 1,715,364
American Express Master Trust, Ser. 94-1, Class
A............................................ AAA/Aaa 7.15 8/15/99 3,000 3,116,397
Choice Credit Card Master Trust, Ser. 92-2,
Class A...................................... AAA/Aaa 6.18 4/15/99 2,000 2,000,558
Dan Mall Financial, Class A-1, 144A**(b)....... AA/Aaa 6.36 10/20/04 2,130 2,131,331
Discover Card Trust, Ser. 91-D, Class A........ AAA/Aaa 8.00 10/16/00 4,500 4,755,820
First USA Credit Card Master Trust, Ser. 94-3,
Class A**.................................... AAA/Aaa 6.22 12/15/99 5,000 5,010,845
Fleetwood Credit Corp., Grantor Trust, Ser.
92-A......................................... AAA/Aaa 7.10 2/15/07 694 701,905
Fleetwood Credit Corp., Grantor Trust, Ser.
94-B......................................... AAA/Aaa 6.75 3/15/10 1,517 1,549,523
Ford Credit Grantor Trust, Ser. 94-B, Class
A............................................ AAA/Aaa 7.30 10/15/99 3,184 3,250,474
General Electric Equipment Trust 93-A,
144A(b)...................................... AAA/Aaa 4.15 11/10/98 552 549,071
General Motors Acceptance Corp., Ser. 1992-D,
Grantor Trust................................ AAA/Aaa 5.55 5/15/97 185 184,416
Green Tree Financial, Grantor Trust, Ser.
94-A......................................... NR/Baa3 6.90 2/15/04 2,171 2,179,915
Green Tree Financial, Grantor Trust, Ser. 93-1,
Class A2..................................... AAA/Aa2 6.10 4/15/18 2,300 2,322,308
Green Tree Financial, Grantor Trust, Ser.
93-1......................................... NR/Aa2 4.90 4/15/18 1,178 1,175,155
Green Tree Financial, Grantor Trust, Ser. 94-8,
Class A1..................................... NR/Aaa 7.75 4/15/25 2,311 2,327,933
Green Tree Financial, Grantor Trust, Ser. 95-6,
Class A3..................................... AAA/Aaa 6.65 11/15/25 2,250 2,320,243
John Deere Owner Trust, Ser. 94-A, Class A**... AAA/Aaa 6.11 10/15/01 1,835 1,833,397
Kearny St. Real Estate Co.**................... AAA/Aa1 6.15 10/15/02 632 632,338
Lehman Brothers Mortgage Trust, Ser. 92-M1**... AA+/Aa2 6.59 11/25/01 18 18,323
Nacional Financiera Trust Division, 144A**
***(b)....................................... NR/NR 8.39 3/31/99 687 611,104
Nomura Assets Securities Corp., Ser. 1994
MDII**....................................... NR/NR 7.24 7/7/03 1,225 1,261,707
SAAB Trust, Ser. 1994-A, 144A(b)............... AAA/Aaa 6.15 4/11/00 762 761,655
Sears Credit Acct. Trust, Ser. 1992-A.......... AAA/Aaa 5.90 11/15/98 1,925 1,931,812
</TABLE>
Continued
5
<PAGE> 6
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL
RATINGS MATURITY AMOUNT
(UNAUDITED) RATE DATE (000) VALUE
---------- ---- -------- --------- ------------
<S> <C> <C> <C> <C> <C>
Security Pacific Acceptance Corp., Ser. 92-2,
Class A2..................................... AAA/Aaa 7.10% 6/15/12 $ 2,005 $ 2,044,583
Security Pacific Home Equity Loan, Ser. 91-2,
Class A**.................................... AAA/Aaa 8.10 6/15/20 121 126,009
Volvo Auto Receivable Grantor Trust, Ser.
1992A........................................ AAA/Aaa 4.65 6/15/98 541 538,912
Vornado Finance Corp., 144A**(b)............... AAA/Aaa 6.43 12/1/00 4,550 4,545,905
------------
49,597,003
------------
MEDIUM TERM NOTES -- DOMESTIC -- 3.4%
General Motors Acceptance Corp................. BBB+/Baa1 8.25% 8/29/96 2,000 2,033,424
General Motors Acceptance Corp................. BBB+/Baa1 7.75% 12/10/96 1,650 1,683,172
------------
3,716,596
------------
CORPORATE NOTE -- 1.8%
Time Warner.................................... BBB-/Ba1 6.84 8/15/00 2,000 2,008,820
------------
Total Corporate Obligations (cost $54,590,140)... 55,322,419
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 19.5%
Federal Home Loan Mortgage Corp., Pool
#M16724...................................... AAA/Aaa* 6.00 12/1/97 19 19,268
Federal Home Loan Mortgage Corp., Pool
#L70346...................................... AAA/Aaa* 6.00 9/1/98 16 16,211
Federal Home Loan Mortgage Corp., Pool
#L71120...................................... AAA/Aaa* 6.00 11/1/98 137 138,055
Federal Home Loan Mortgage Corp., Pool
#L71539...................................... AAA/Aaa* 6.00 1/1/99 671 674,448
Federal Home Loan Mortgage Corp., Pool
#L71700...................................... AAA/Aaa* 6.00 1/1/99 472 474,220
Federal Home Loan Mortgage Corp., Pool
#L71935...................................... AAA/Aaa* 6.00 3/1/99 28 28,253
Federal Home Loan Mortgage Corp., Pool
#L71984...................................... AAA/Aaa* 6.00 3/1/99 132 132,786
Federal Home Loan Mortgage Corp., Pool
#L72002...................................... AAA/Aaa* 6.00 3/1/99 464 466,393
Federal Home Loan Mortgage Corp., Pool
#L72033...................................... AAA/Aaa* 6.00 3/1/99 91 91,666
Federal Home Loan Mortgage Corp., Pool
#G50147...................................... AAA/Aaa* 6.00 4/1/99 140 140,411
Federal Home Loan Mortgage Corp., Pool
#L72140...................................... AAA/Aaa* 6.00 4/1/99 99 99,783
Federal Home Loan Mortgage Corp., Pool
#L72151...................................... AAA/Aaa* 6.00 4/1/99 491 493,164
Federal Home Loan Mortgage Corp., Pool
#L72170...................................... AAA/Aaa* 6.00 4/1/99 662 665,402
Federal Home Loan Mortgage Corp., Pool
#L72207...................................... AAA/Aaa* 6.00 4/1/99 551 553,720
</TABLE>
Continued
6
<PAGE> 7
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL
RATINGS MATURITY AMOUNT
(UNAUDITED) RATE DATE (000) VALUE
---------- ---- -------- --------- ------------
<S> <C> <C> <C> <C> <C>
Federal Home Loan Mortgage Corp., Pool
#M90328...................................... AAA/Aaa* 6.00% 4/1/99 $ 753 $ 756,382
Federal Home Loan Mortgage Corp., Pool
#L72378...................................... AAA/Aaa* 6.00 5/1/99 31 30,658
Federal Home Loan Mortgage Corp., Pool
#L72529...................................... AAA/Aaa* 6.00 6/1/99 292 293,126
Federal Home Loan Mortgage Corp., Pool
#L72556...................................... AAA/Aaa* 6.00 6/1/99 34 33,862
Federal Home Loan Mortgage Corp., Pool
#L72746...................................... AAA/Aaa* 6.00 6/1/99 253 254,435
Federal Home Loan Mortgage Corp., Pool
#L90109...................................... AAA/Aaa* 6.00 6/1/99 696 699,089
Federal Home Loan Mortgage Corp., Pool
#G50180...................................... AAA/Aaa* 6.00 7/1/99 190 190,735
Federal Home Loan Mortgage Corp., Pool
#L72657...................................... AAA/Aaa* 6.00 7/1/99 710 713,845
Federal National Mortgage Assn., Pool
#190856...................................... AAA/Aaa* 7.50 2/1/00 6,821 6,980,946
Federal Mortgage National Assn., 91-59......... AAA/Aaa* 8.50 2/25/15 789 790,542
Federal Home Loan Mortgage Corp., Ser. 1184,
Class F...................................... AAA/Aaa* 8.00 12/15/18 2,450 2,496,719
Federal Home Loan Mortgage Corp., Ser.
1990-108, Class E............................ AAA/Aaa* 8.50 6/25/19 1,807 1,843,598
Government National Mortgage Assn., Pool
#008765...................................... AAA/Aaa* 5.50 12/20/25 2,380 2,383,687
------------
U.S. Government Agency Obligations
(cost $20,946,532)............................. 21,461,404
------------
TAXABLE MUNICIPAL BOND -- 1.8%
Industrial Dev. Board of Selma, Alabama (FRN)
(cost $2,000,000)............................ A1+/NR 6.28 4/1/99 2,000 2,000,000
------------
Total Long-Term Investments (cost $77,536,672)... 78,783,823
------------
SHORT-TERM INVESTMENTS -- 24.8%
TIME DEPOSITS -- 4.9%
Fifth Third Bancorp (cost $5,400,000).......... 5.81 1/2/96 5,400 5,400,000
------------
</TABLE>
Continued
7
<PAGE> 8
<TABLE>
<CAPTION>
MOODY'S/S&P PRINCIPAL
RATINGS MATURITY AMOUNT
(UNAUDITED) RATE DATE (000) VALUE
---------- ---- -------- --------- ------------
<S> <C> <C> <C> <C> <C>
BANK NOTES -- 10.0%
Capital One Bank............................... NR/Baa3 7.52% 2/15/96 $ 2,500 $ 2,504,914
Den Norske Bank**.............................. BBB+/Baa1 6.13 11/30/39 1,850 1,460,297
Hong Kong & Shanghai Bank**.................... BBB+/Baa1 6.13 7/30/49 3,000 2,327,550
Lloyds Bank, PLC**............................. AA/Aa2 6.06 11/30/49 2,000 1,664,600
Okobank, 144A**(b)............................. NR/A3 7.33 10/14/49 3,000 2,994,000
------------
Total Bank Notes (cost $10,867,312).............. 10,951,361
------------
U.S GOVERNMENT GUARANTEED NOTES -- 5.5%
Agency for International Development -- Bolivia
(FRN)***..................................... A1+/P1* 6.09 6/1/10 3,590 3,599,304
Agency for International Development -- Panama
(FRN)***..................................... A1+/P1* 7.07 1/1/07 2,441 2,465,885
------------
Total U.S. Government Guaranteed Notes (cost
$6,187,630).................................... 6,065,189
------------
CORPORATE OBLIGATION -- 4.4%
MEDIUM TERM NOTE -- DOMESTIC -- 4.4%
General Electric Capital Corp. (cost
$4,800,000).................................. AAA/Aaa 5.76% 6/3/96 4,800 4,803,182
------------
Total Short-Term Investments (cost
$27,254,942)................................... 27,219,732
------------
INTEREST RATE CAP BUYOUTS+ -- 0.1%
Interest rate cap buyout on Agency for
International Development -- Bolivia (FRN),
due 6/1/10................................... 29,500
Interest rate cap buyout on Agency for
International Development -- Panama (FRN),
due 1/1/07................................... 32,717
------------
Total Interest Rate Cap Buyouts (cost
$135,979)...................................... 62,217
------------
</TABLE>
Continued
8
<PAGE> 9
<TABLE>
<CAPTION>
VALUE
------------
<S> <C>
TOTAL INVESTMENTS (COST
$104,927,593)(a) -- 96.6%...................... $106,065,772
OTHER ASSETS IN EXCESS OF LIABILITIES -- 3.4%.... 3,767,963
------------
NET ASSETS -- 100.0%............................. $109,833,735
===========
</TABLE>
- ---------------
Percentages indicated are based on net assets of $109,833,735.
* Implied long-term rating.
** Variable rate security. The maturity date reflects the final maturity. The
rate resets daily, weekly, monthly or quarterly.
*** Illiquid securities.
FRN Floating Rate Note.
+ Interest rate cap buyouts give the holder the right to continue to receive
interest payments on a floating rate debt obligation at a current interest
rate which exceeds its stated interest rate cap.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation........ $1,424,911
Unrealized depreciation........ (286,732)
----------
Net unrealized appreciation.... $1,138,179
==========
</TABLE>
(b) 144a security which is restricted as to resale to institutional investors.
NR Not rated.
See Notes to Financial Statements.
9
<PAGE> 10
THE INFINITY MUTUAL FUNDS, INC.
BEA SHORT DURATION PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments at value (cost $104,927,593).................................................... $106,065,772
Cash........................................................................................ 57,137
Receivable from brokers for investment securities sold...................................... 5,115,308
Interest receivable......................................................................... 888,078
Receivable from administrator............................................................... 5,282
Deferred organization costs................................................................. 38,079
Prepaid expenses............................................................................ 21,807
------------
Total assets.................................................................................. 112,191,463
------------
LIABILITIES
Payable to brokers for investment securities purchased...................................... 1,706,776
Payable for Portfolio shares redeemed....................................................... 575,598
Accrued expenses and other payables:
Advisory fees............................................................................. 12,824
Distribution fees (BEA Service Shares).................................................... 363
Special investors services fees (BEA Investor Shares)..................................... 412
Other..................................................................................... 61,755
------------
Total liabilities............................................................................. 2,357,728
------------
NET ASSETS.................................................................................... $109,833,735
============
Net Asset Value and Redemption Price Per Share:
BEA Client Shares:
($76,354,064/15,303,343 shares of common stock issued and outstanding)...................... $4.99
====
BEA Service Shares:
($1,006/202 shares of common stock issued and outstanding).................................. $4.99
====
BEA Investor Shares:
($33,478,665/6,714,212 shares of common stock issued and outstanding)....................... $4.99
====
COMPOSITION OF NET ASSETS:
Shares of common stock, at par ($0.001 per share)........................................... $ 22,029
Additional paid-in-capital.................................................................. 109,971,156
Net unrealized appreciation from investments................................................ 1,138,179
Accumulated net realized losses from securities transactions................................ (1,297,629)
------------
Net Assets, December 31, 1995................................................................. $109,833,735
============
</TABLE>
- ---------------
See Notes to Financial Statements.
10
<PAGE> 11
THE INFINITY MUTUAL FUNDS, INC.
BEA SHORT DURATION PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Interest.............................................................................. $7,700,360
Expenses
Advisory fees....................................................................... $177,405
Administration fees................................................................. 141,924
Distribution fees (BEA Service Shares).............................................. 6,047
Special investors services fees (BEA Service Shares)................................ 3,629
Special investors services fees (BEA Investor Shares)............................... 48,379
Custodian fees and expenses......................................................... 80,797
Audit fees.......................................................................... 26,718
Legal fees.......................................................................... 9,192
Insurance expense................................................................... 8,256
Directors' fees..................................................................... 5,001
Registration fees................................................................... 82,680
Amortization of organization expenses............................................... 35,361
Transfer agent fees and expenses.................................................... 101,855
Reports to shareholders............................................................. 16,979
Other expenses...................................................................... 4,460
--------
Total expenses before waivers/reimbursements...................................... 748,683
Waivers/reimbursements............................................................ (69,183)
--------
Total expenses.................................................................... 679,500
----------
Net Investment Income................................................................. 7,020,860
----------
REALIZED AND UNREALIZED GAINS FROM SECURITIES TRANSACTIONS
Net realized gains from securities transactions..................................... 77,225
Net change in unrealized appreciation from investments.............................. 2,319,671
----------
Net Realized and Unrealized Gains from Investments.................................... 2,396,896
----------
Net Increase in Net Assets Resulting from Operations.................................. $9,417,756
=========
</TABLE>
- ---------------
See Notes to Financial Statements.
11
<PAGE> 12
THE INFINITY MUTUAL FUNDS, INC.
BEA SHORT DURATION PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
-----------------------------
DECEMBER 31, DECEMBER 31,
1995 1994
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income.......................................................................... $ 7,020,860 $ 7,812,150
Net realized gains (losses) from securities transactions....................................... 77,225 (1,979,182)
Net realized losses from written options....................................................... -- (152,764)
Net change in unrealized appreciation (depreciation) from investments.......................... 2,319,671 (1,488,480)
------------
Net increase in net assets resulting from operations......................................... 9,417,756 4,191,724
------------
Dividends to shareholders from net investment income:
BEA Client Shares.............................................................................. (4,611,592) (5,767,040)
BEA Service Shares............................................................................. (124,208) (467,510)
BEA Investor Shares............................................................................ (1,754,109) (1,577,600)
------------
Total dividends to shareholders from net investment income...................................... (6,489,909) (7,812,150)
------------
Dividends to shareholders in excess of net investment income:
BEA Client Shares.............................................................................. (75,299) --
BEA Service Shares............................................................................. (2,028) --
BEA Investor Shares............................................................................ (28,642) --
------------
Total dividends to shareholders in excess of net investment income.............................. (105,969) --
------------
Return of capital distributions:
BEA Client Shares.............................................................................. (301,983) --
BEA Service Shares............................................................................. (8,134) --
BEA Investor Shares............................................................................ (114,865) --
------------
Total return of capital distributions........................................................... (424,982) --
------------
Total dividends and distributions to shareholders............................................... (7,020,860) (7,812,150)
------------
Portfolio Share Transactions
Net proceeds from shares subscribed............................................................ 5,826,109 25,650,871
Net asset value of shares issued to shareholders in reinvestment of dividends and
distributions................................................................................ 6,920,991 7,807,109
Cost of shares redeemed........................................................................ (48,396,100) (68,274,864)
------------
Net decrease in net assets from Portfolio share transactions................................. (35,649,000) (34,816,884)
------------
Total Decrease.................................................................................. (33,252,104) (38,437,310)
NET ASSETS
Beginning of period............................................................................ 143,085,839 181,523,149
------------
End of period.................................................................................. $109,833,735 $143,085,839
============
SHARE TRANSACTIONS:
Issued......................................................................................... 1,174,247 5,137,806
Reinvested..................................................................................... 1,398,285 1,579,413
Redeemed....................................................................................... (9,814,580) (13,713,349)
------------
Change in shares............................................................................... (7,242,048) (6,996,130)
============
</TABLE>
- ---------------
See Notes to Financial Statements.
12
<PAGE> 13
THE INFINITY MUTUAL FUNDS, INC.
BEA SHORT DURATION PORTFOLIO
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
NOTE 1 -- GENERAL
The Infinity Mutual Funds, Inc., (the "Fund") was organized as a Maryland
corporation on March 6, 1990 and is registered under the Investment Company Act
of 1940, as amended (the "Act"), as an open-end, management investment company.
The Fund operates as a series company currently comprising twelve portfolios.
The accompanying financial statements and notes relate only to the BEA Short
Duration Portfolio (the "Portfolio"). The Portfolio seeks to provide investors
with as high a level of current income as is consistent with the preservation of
capital.
The Portfolio issues three classes of shares as follows: BEA Client Shares,
BEA Service Shares and BEA Investor Shares. BEA Client Shares, BEA Service
Shares and BEA Investor Shares are substantially the same, except as follows:
(a) BEA Service Shares bear fees payable to the Distributor under a plan adopted
by the Fund's Board of Directors pursuant to Rule 12b-1 under the Act (the
"Distribution Plan") and (b) BEA Service Shares and BEA Investor Shares bear
fees payable to certain service organizations under the Special Investors
Services Plan (the "Services Plan"). In addition to the fees paid pursuant to
the Distribution Plan and the Services Plan by the relevant class, each class
also bears the expenses associated with the printing of their shareholder
reports, transfer agent fees and expenses and registration fees.
At December 31, 1995, there were one billion shares of the Portfolio's
$0.001 par value capital stock authorized, of which 500 million shares were
classified as BEA Client Shares, 250 million shares were classified as BEA
Service Shares and 250 million shares were classified as BEA Investor Shares.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Portfolio in the preparation of its financial statements.
A) Securities Valuation
Portfolio securities are valued through the use of an independent pricing
service (the "Service") approved by the Board of Directors. The Service values
portfolio securities at the mean between the most recent bid and asked prices
based upon its evaluation of the market for such securities. Portfolio
securities which cannot be valued as set forth above are valued by independent
broker dealer quotes. Investment securities denominated in foreign currencies
are valued in U.S. dollars using market quotes as provided by the Service. Debt
securities with remaining maturities of 60 days of less are normally valued at
amortized cost, which approximates market value. The amortized cost method
involves valuing a security at its cost on the date of purchase or, in the case
of securities purchased with more than 60 days to maturity, at their market
value each day until the 61st day prior to maturity, and thereafter assuming a
constant amortization to maturity of the difference between the principal amount
due at maturity and such valuation.
B) Securities Transactions and Investment Income
Securities transactions are recorded on the trade date. Realized gains and
losses on the sales of investments are calculated on the identified cost basis.
Interest income, including accretion of discount and amortization of premium on
investments, is accrued daily. The investment income of
13
<PAGE> 14
the Portfolio is allocated to the separate classes of shares based upon the
relative net asset value of each class.
C) Expenses
Organization costs were deferred and are being amortized by the Portfolio
on a straight-line basis for five years. Direct expenses of the Portfolio are
borne solely by the Portfolio and general Fund expenses are allocated among the
Fund's respective investment portfolios.
All other expenses (other than transfer agent fees and expenses, reports to
shareholders expenses, registration and filing fees, and Securities and Exchange
Commission filing fees) are allocated to their separate classes of shares based
upon the relative net asset value of each class.
D) Federal Income Taxes
It is the policy of the Portfolio to meet the requirements of the Internal
Revenue Code (the "Code") applicable to regulated investment companies and to
distribute substantially all of its income to shareholders. Therefore, no
federal income tax provision is required.
At December 31, 1995, the Portfolio has a capital loss carryover of
approximately $1,297,629 which is available to offset future net realized gains
on securities transactions to the extent provided for in the Code. Such capital
loss carryover will expire December 31, 2002.
E) Dividends and Distributions
Dividends are declared daily to shareholders of record at the close of
business on the day of declaration and are paid monthly. Distributions of net
realized gains, if any, will be paid at least annually. Dividends and
distributions are recorded on the ex-dividend date. Distributions from net
investment income and from net realized gains are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. Timing differences relating to shareholder distributions have been
reclassified to paid-in-capital. These differences are primarily due to
deferrals of certain losses and expiring capital loss carryovers.
Effective January 1, 1995, the Fund adopted Statement of Position 93-2:
Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distribution by Investment Companies. As a
result of this statement, the Fund changed the classification of distributions
to shareholders to better disclose the differences between financial statement
amounts and distributions determined in accordance with income tax regulations.
Accordingly, amounts as of December 31, 1995 have been restated to reflect a
decrease in paid-in-capital of $964,751, an increase in undistributed net
investment income of $551,191 and a decrease in accumulated net realized losses
on investments of $413,560. In addition, the Fund reclassified $551,191 from
accumulated net realized gains (losses) on investments to undistributed net
investment income (loss) resulting from losses on paydowns on asset-backed
securities held by the Fund.
F) Use of Estimates
Estimates and assumptions are required to be made regarding assets,
liabilities, and changes in
14
<PAGE> 15
net assets resulting from operations when financial statements are prepared.
Changes in the economic environment, financial markets and any other parameters
used in determining these estimates could cause actual results to differ from
these amounts.
NOTE 3 -- AGREEMENTS AND OTHER TRANSACTIONS
WITH AFFILIATES
BEA Associates ("BEA") serves as the Portfolio's investment adviser.
Concord Holding Corporation ("Concord") serves as the Portfolio's administrator
and Concord Financial Group, Inc. (the "Distributor") serves as the distributor
of the Portfolio's shares. Concord and the Distributor are each a subsidiary of
The BISYS Group, Inc.
As investment adviser, BEA supervises and assists in the overall operations
of the Portfolio. Pursuant to the terms of the Investment Advisory Agreement,
BEA is entitled to a fee from the Portfolio at an annual rate of 0.15% of the
Portfolio's average daily net assets.
As administrator, Concord assists in supervising the operations of the
Portfolio. Pursuant to the terms of the Administration Agreement, Concord is
entitled to a fee from the Portfolio at an annual rate of 0.12% of the
Portfolio's average daily net assets.
Concord and BEA have voluntarily agreed to limit the aggregate expenses of
the Portfolio (generally including fees payable to Concord and BEA but excluding
brokerage commissions, extraordinary expenses and fees payable under the
Distribution Plan and the Services Plan) to 0.55%, 0.70% and 0.95% of the
Portfolio's average daily net assets of the BEA Client Class, BEA Investor Class
and BEA Service Class, respectively. If such expenses exceed this limitation,
Concord and BEA will reimburse the Portfolio for any such excess expenses. For
the year ended December 31, 1995, Concord and BEA reimbursed or agreed to
reimburse expenses in the amount of $26,550 and $12,785 for BEA Service Shares
and BEA Investor Shares, respectively, in order to comply with this voluntary
expense limitation.
Pursuant to the Distribution Plan, the Portfolio pays the Distributor for
advertising, marketing and distributing BEA Service Shares at an annual rate of
0.25% of the average daily net assets of BEA Service Shares. For the year ended
December 31, 1995, BEA Service Shares incurred $6,047 pursuant to the Plan.
Pursuant to the Special Investors Services Plan, the Portfolio has agreed
to pay one or more service organizations, including BEA Associates, a fee at an
annual rate of up to 0.15% of the average daily net assets of the outstanding
BEA Service Shares and BEA Investor Shares for shareholder services provided to
holders of the BEA Service Shares and BEA Investor Shares. For the year ended
December 31, 1995, BEA Service Shares and BEA Investor Shares incurred $3,629
and $48,379, respectively, pursuant to the Special Investors Services Plan. For
the year ended December 31, 1995, fees in the amount of $29,848 were waived with
respect to the BEA Investor Shares.
Certain officers and Directors of the Fund are affiliated persons (as
defined in the Act) of Concord. Each nonaffiliated Director receives an annual
fee of $5,000 and a meeting fee of $1,250 per meeting for services relating to
all of the portfolios constituting the Fund.
15
<PAGE> 16
NOTE 4 -- CONCENTRATION OF CREDIT RISK
The Portfolio invests a portion of its assets in a diversified portfolio of
U.S. dollar denominated fixed income securities as disclosed in the portfolio of
investments by security type. The issuer's abilities to meet their obligations
may be affected by domestic economic, regional and political developments.
The Portfolio had the following concentrations of securities at December
31, 1995 (as a percentage of total investments):
<TABLE>
<S> <C>
Asset Backed Securities............. 46.8%
U.S. Government
Obligations/Agencies.............. 26.0%
Bank Notes.......................... 10.3%
Corporate & Medium Term Notes....... 9.9%
Other............................... 5.1%
Taxable Municipal Bonds............. 1.9%
-------
100.0%
========
</TABLE>
NOTE 5 -- SECURITIES TRANSACTIONS
For the year ended December 31, 1995, the cost of purchases and the
proceeds from sales of the Portfolio's securities (excluding short-term
investments) amounted to $48,241,653 and $59,844,889, respectively.
NOTE 6 -- CAPITAL SHARE TRANSACTIONS
Transactions in capital shares for the Portfolio are summarized below:
<TABLE>
<CAPTION>
YEAR ENDED
----------------------------
DECEMBER 31, DECEMBER 31,
1995 1994
------------ ------------
<S> <C> <C>
BEA CLIENT SHARES:
Shares sold......... 703,605 2,638,306
Shares issued in
reinvestment of
dividends and
distributions..... 988,897 1,166,616
Shares redeemed..... (8,196,200) (5,933,028)
------------ ------------
Net decrease in BEA
Client Shares..... (6,503,698) (2,128,106)
------------ ------------
BEA SERVICE SHARES:
Shares sold......... 192,373 503,490
Shares issued in
reinvestment of
dividends and
distributions..... 26,033 92,536
Shares redeemed..... (1,357,212) (6,812,195)
------------ ------------
Net decrease in BEA
Service Shares.... (1,138,806) (6,216,169)
------------ ------------
BEA INVESTOR SHARES:
Shares sold......... 278,269 1,996,010
Shares issued in
reinvestment of
dividends and
distributions..... 383,355 320,261
Shares redeemed..... (261,168) (968,126)
------------ ------------
Net increase in BEA
Investor Shares... 400,456 1,348,145
------------ ------------
Net decrease in
Portfolio
Shares............ (7,242,048) (6,996,130)
============ ============
</TABLE>
16
<PAGE> 17
THE INFINITY MUTUAL FUNDS, INC.
BEA SHORT DURATION PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
----------------------------------------------------------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1995 1994 1993 1992** 1991**
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
BEA CLIENT SHARES:
NET ASSET VALUE, BEGINNING OF
PERIOD............................ $ 4.89 $ 5.01 $ 5.00 $ 5.00 $ 5.00
------------ ------------ ------------ ------------ ------------
Income from investment operations:
Net investment income............. 0.30 0.25 0.22 0.20 0.32
Net realized and unrealized
gains/(losses) on securities
transactions.................... 0.10 (0.12) 0.05 0.01 --
------------ ------------ ------------ ------------ ------------
Total from investment operations.... 0.40 0.13 0.27 0.21 0.32
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment
income.......................... (0.28) (0.25) (0.22) (0.20) (0.32)
Return of capital distributions... (0.02) -- -- -- --
Distributions from net realized
gains on securities
transactions.................... -- -- (0.04) (0.01) --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions... (0.30) (0.25) (0.26) (0.21) (0.32)
------------ ------------ ------------ ------------ ------------
Net change in net asset value....... 0.10 (0.12) 0.01 -- --
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD...... $ 4.99 $ 4.89 $ 5.01 $ 5.00 $ 5.00
============ ============ ============ ============ ============
Total Return........................ 8.30% 2.75% 5.06% 4.28% 6.55%
Ratios/Supplemental Data:
Net assets, end of period (000)... $ 76,354 $106,659 $119,854 $126,619 $205,302
Ratio of expenses to average net
assets.......................... 0.54% 0.48% 0.50% 0.16% 0.15%
Ratio of net investment income to
average net assets.............. 5.98% 5.12% 4.44% 4.09% 6.34%
Ratio of expenses to average net
assets*......................... 0.54% 0.48% 0.51% 0.27% 0.26%
Ratio of net investment income to
average net assets*............. 5.98% 5.12% 4.43% 3.98% 6.23%
Portfolio Turnover................ 69% 263% 407% 70% --
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced and/or certain
expenses were reimbursed. If such voluntary fee reductions and/or
reimbursements had not occurred, the ratios would have been as indicated.
** Immediately after the close of business on December 9, 1992 the Portfolio
underwent a reverse 5 for 1 stock split. Subsequently, the Portfolio changed
its investment objective from that of a money market with a stable net asset
value of $1.00 per share, to a non-money market fund with a fluctuating net
asset value.
See Notes to Financial Statements.
17
<PAGE> 18
THE INFINITY MUTUAL FUNDS, INC.
BEA SHORT DURATION PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
-------------------------------------------- PERIOD ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1995 1994 1993 1992*
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
BEA SERVICE SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD............ $ 4.89 $ 5.01 $ 5.00 $ 5.01
----- ------ ------------ ------
Income from investment operations:
Dividends from net investment income.......... 0.27 0.23 0.20 --
Net realized and unrealized gains/(losses) on
securities transactions..................... 0.10 (0.12) 0.05 --
----- ------ ------------ ------
Total from investment operations................ 0.37 0.11 0.25 --
----- ------ ------------ ------
Less dividends and distributions:
Dividends from net investment income.......... (0.25) (0.23) (0.20) --
Return of capital distributions............... (0.02) -- -- --
Distributions from net realized gains on
securities transactions..................... -- -- (0.04) (0.01)
----- ------ ------------ ------
Total Distributions............................. (0.27) (0.23) (0.24) (0.01)
----- ------ ------------ ------
Net change in net asset value................... 0.10 (0.12) 0.01 (0.01)
----- ------ ------------ ------
NET ASSET VALUE, END OF PERIOD.................. $ 4.99 $ 4.89 $ 5.01 $ 5.00
============ ============ ============ ============
Total Return.................................... 7.67% 2.25% 4.62% 0.33%(a)
Ratios/Supplemental Data:
Net assets, end of period (000)............... $ 1 $5,566 $ 36,821 $1,085
Ratio of expenses to average net
assets...................................... 0.95% 0.95% 0.93% 0.79%(b)
Ratio of net investment income to average net
assets...................................... 5.58% 4.46% 4.01% 4.77%(b)
Ratio of expenses to average net assets**..... 2.06% 1.29% 0.98% 0.79%(b)
Ratio of net investment income to average net
assets**.................................... 4.48% 4.12% 3.96% 4.77%(b)
Portfolio Turnover............................ 69% 263% 407% 70%
</TABLE>
- ---------------
* Period from December 29, 1992 (initial offering of Service Shares) through
December 31, 1992.
** During the period, certain fees were voluntarily reduced and/or certain
expenses were reimbursed. If such voluntary fee reductions and/or
reimbursements had not occurred, the ratios would have been as indicated.
(a) Total return is not annualized, as it may not be representative of the total
return for the year.
(b) Annualized.
See Notes to Financial Statements.
18
<PAGE> 19
THE INFINITY MUTUAL FUNDS, INC.
BEA SHORT DURATION PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
---------------------------- PERIOD ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1995 1994 1993*
------------ ------------ ------------
<S> <C> <C> <C>
BEA INVESTOR SHARES:
NET ASSET VALUE, BEGINNING OF PERIOD.......................... $ 4.89 $ 5.00 $ 5.04
------------ ------------ ------------
Income from investment operations:
Dividends from net investment income........................ 0.29 0.25 0.03
Net realized and unrealized gains/(losses) on securities
transactions.............................................. 0.10 (0.11) --
------------ ------------ ------------
Total from investment operations.............................. 0.39 0.14 0.03
------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income........................ (0.27) (0.25) (0.03)
Return of capital distributions............................. (0.02) -- --
Distributions from net realized gains on securities
transactions.............................................. -- -- (0.04)
------------ ------------ ------------
Total Distributions........................................... (0.29) (0.25) (0.07)
------------ ------------ ------------
Net change in net asset value................................. 0.10 (0.11) (0.04)
------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD................................ $ 4.99 $ 4.89 $ 5.00
============ ============ ============
Total Return.................................................. 8.21% 2.88% 0.59%(a)
Ratios/Supplemental Data:
Net assets, end of period (000)............................. $ 33,479 $ 30,861 $ 24,847
Ratio of expenses to average net assets..................... 0.63% 0.55% 0.55%(b)
Ratio of net investment income to average net assets........ 5.90% 5.03% 4.48%(b)
Ratio of expenses to average net assets**................... 0.76% 0.71% 0.70%(b)
Ratio of net investment income to average net assets**...... 5.77% 4.87% 4.33%(b)
Portfolio Turnover.......................................... 69% 263% 407%
</TABLE>
- ---------------
* Period from November 4, 1993 (initial offering of Investor Shares) through
December 31, 1993.
** During the period, certain fees were voluntarily reduced and/or certain
expenses were reimbursed. If such voluntary fee reductions and/or
reimbursements had not occurred, the ratios would have been as indicated.
(a) Total return is not annualized, as it may not be representative of the total
return for the year.
(b) Annualized.
See Notes to Financial Statements.
19
<PAGE> 20
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
To the Shareholders and
Board of Directors
The Infinity Mutual Funds, Inc.:
We have audited the accompanying statement of assets and liabilities of the
BEA Short Duration Portfolio (formerly Pegasus Prime Portfolio) (one of the
portfolios constituting The Infinity Mutual Funds, Inc.), including the
portfolio of investments as of December 31, 1995, the related statement of
operations for the year then ended, the related statement of changes in net
assets for each of the years in the two-year period then ended, and the
financial highlights for each of the years in the five-year period then ended.
These financial statements and financial highlights are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based upon our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995, by correspondence with the custodian. As to securities
purchased but not received, we performed other appropriate auditing procedures.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
BEA Short Duration Portfolio as of December 31, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the years in the two-year period then ended, and the financial highlights for
each of the years in the five-year period then ended, in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
New York, New York
February 9, 1996
Federal Income Tax Status of Dividends (Unaudited)
- --------------------------------------------------------------------------------
The Infinity Mutual Funds, Inc. -- BEA Short Duration Portfolio has determined
that 100% of the dividends paid during the year ended December 31, 1995 were
paid from net investment income and net realized gains and are subject to
federal income tax. Of these dividends, 11.58% was derived from U.S. Government
Obligations.
20
<PAGE> 21
[INFINITY MUTUAL FUNDS LOGO]
------------------------------------------------
THE INFINITY MUTUAL FUNDS, INC.
3435 Stelzer Road
Columbus, OH 43219
1-800-852-9730
------------------------------------------------
INVESTMENT ADVISER
BEA ASSOCIATES
One Citicorp Center
153 East 53rd Street
New York, NY 10019
------------------------------------------------
ADMINISTRATOR
CONCORD HOLDING CORPORATION
3435 Stelzer Road
Columbus, OH 43219
------------------------------------------------
DISTRIBUTOR
CONCORD FINANCIAL GROUP, INC.
3435 Stelzer Road
Columbus, OH 43219
------------------------------------------------
CUSTODIAN
THE BANK OF NEW YORK
90 Washington Street
New York, NY 10286
------------------------------------------------
TRANSFER AGENT
& DIVIDEND DISBURSING AGENT
BISYS FUND SERVICES
3435 Stelzer Road
Columbus, OH 43219
This report is not authorized for distribution
to prospective investors unless preceded or accompanied
by a current prospectus.
COIBEAD95A
--------------------------------------------
--------------------------------------------
THE INFINITY MUTUAL FUNDS, INC.
-------------------------------------------
BEA
SHORT DURATION
PORTFOLIO
ANNUAL REPORT
December 31, 1995
--------------------------------------------
--------------------------------------------
B E A
