<PAGE>
MESSAGE FROM THE CHAIRMAN & THE INVESTMENT ADVISER THE RIVERFRONT FUNDS
- -------------------------------------------------------------------------------
Dear Shareholders:
The financial markets were volatile during the six months ended June 30, 1996.
Stocks continued to climb to new records, fueled by rising corporate profits
and large flows of cash into mutual funds. By contrast, bonds suffered
significant losses as investors fretted that stronger-than-expected economic
growth could rekindle inflation.
INCOME EQUITY FUND RECOGNIZED FOR STRONG PERFORMANCE
We are pleased to report that the Riverfront Income Equity Fund received a
four-star rating from Morningstar for its one and three-year returns for the
period ended June 30, 1996.* The Fund was rated among 2,882 and 1,583 equity
funds for its one- and three-year performance, respectively. The Fund's one-
year return was 23.17%, and its average annual returns for the past three
years and since inception on October 8, 1992, were 16.86% and 17.21%,
respectively. (Returns are for Investor A Shares.)**
Our Funds benefited from their investments in some especially strong sectors
of the stock market. For example, many financial companies reported strong
earnings growth. In addition, we owned some medical companies that were either
takeover candidates or were involved in consolidations, both of which resulted
in significant gains.
At the same time, we believe that investors have overlooked some sectors that
offer excellent values. Our portfolio managers will continue to seek out such
values, always keeping long-term performance in mind.
INFLATION FEARS DEFLATE BONDS
The bond market's poor performance was due to fears that a surprisingly strong
economy would generate higher inflation. Economic reports during the period
raised the specter of a tight labor market that could boost wage demands and
might lead the Federal Reserve Board to raise rates.
We believe that U.S. fiscal policy will become more restrictive during the
coming months in order to head off the potential for higher inflation, and we
expect the Federal Reserve to increase short-term interest rates at some point
in the next six months. With this in mind, our fixed-income managers have
positioned their portfolios defensively, shortening the average maturity and
duration of their holdings. Shorter-term securities tend to be more stable
when interest rates are changing, although they also tend to have lower
returns than longer-term issues.
MAINTAINING A LONG-TERM PERSPECTIVE
This is a good time to remind ourselves that we have been in a bull market for
nearly six years. Investors should expect some volatility in the near future.
But regardless of short-term market fluctuations, it's important that
investors continue to focus on their long-term financial goals.
We see little point in trying to outguess the markets' short-term moves.
Instead, we will take advantage of short-term market setbacks to purchase
stocks or bonds that we believe offer good value.
Sincerely,
/s/ Stephen G. Mintos
Stephen G. Mintos
Chairman
The Riverfront Funds, Inc.
/s/ Drew T. Kagan
Drew T. Kagan
The Provident Bank
Investment Adviser
July 22, 1996
- ------
* Morningstar proprietary ratings reflect risk-adjusted performance through
June 30, 1996. The ratings are subject to change every month. Past
performance is no guarantee of future results. Morningstar ratings are
calculated from the Fund's three-year return (with fee adjustments) in excess
of 90-day Treasury bill returns and a risk factor that reflects Fund
performance below 90-day T-bill returns. The one-year rating is calculated
using the same methodology, but is not a component of the overall rating. Ten
percent of the funds in a rating category received five stars, and 22.5%
received four stars.
The returns and rankings may reflect a waiver of a portion of the Funds'
advisory or administrative fees. In such instances, and without waiver of
fees, the returns and the rankings would have been lower.
** With the 4.50% sales charge, returns for the Fund's A Shares were 17.64% for
the one-year period. Its average annualized returns for the three years ended
June 30, 1996, and since inception were 15.09% and 15.78%, respectively. Past
performance is no guarantee of future results.
THE RIVERFRONT FUNDS ARE NOT FDIC INSURED AND ARE NOT OBLIGATIONS OR DEPOSITS
OF, OR ENDORSED OR GUARANTEED BY, THE PROVIDENT BANK OR ITS AFFILIATES.
INVESTMENT PRODUCTS INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
<PAGE>
PERFORMANCE REVIEWS THE RIVERFRONT FUNDS
- --------------------------------------------------------------------------------
THE RIVERFRONT INCOME EQUITY FUND
The Riverfront Income Equity Fund continued to invest in shares of companies
that meet three criteria: attractive yields, good value and a catalyst that
will get the stock moving again. Despite the stock market's bias toward growth
stocks, that value-oriented strategy paid off during the six months ended June
30, 1996. For the period, the Fund had a total return of 9.43% (Investor A
Shares),+ compared to a return of 10.20% for its benchmark, the Standard &
Poor's 500 Stock Index.
FINANCIALS BOOST PERFORMANCE
The period also saw several changes in market leadership and shifting sentiment
toward various market sectors, which created opportunities and profits for the
Fund. For example, the Fund's holdings in the financial industry during the
period performed well. Smaller regional banks such as Summit Bank Corporation,
Central Fidelity Banks and Crestar posted gains even as interest rates rose.
Our insurance stocks performed well, too, as they benefited from better pricing
and expanding margins. Our holdings included American General Corporation and
ITT Hartford.
Since we expect a rebound in stocks of paper companies, we also increased our
investment in that industry, which suffered from inventory corrections last
year. The Fund also holds significant positions in energy, utility and consumer
staples stocks. We believe, for example, that holdings such as CPC
International, a food company, offer attractive values and growth opportunities
overseas.
DIVERSIFICATION AIDS PRICE PROTECTION
U.S. corporate earnings growth is likely to slow, and the potential for
creeping inflation could add pressure to the financial markets. Thus, we are
being particularly careful in our stock selection. We have exposure to cyclical
stocks and basic industries, such as specialty chemicals, that could offer
strong returns as the economy grows. But we are also invested in more defensive
stocks in the drug and consumer staples sectors. Such firms generally can
deliver profits even when the economy sputters. This diversified approach,
combined with our focus on value, should offer some cushion against even the
most severe losses that can occur in a market correction.
As of June 30, 1996, the Fund's top five holdings were CPC International
(2.20%), Philips NV (2.10%), Pharmacia-Upjohn (2.10%), ITT Industries (2.08%)
and Reynolds Metals (2.04%)./1/
- ----------
+ The return with the maximum sales charge of 4.50% was 4.52% for the six-
month period.
/1/ The Fund's composition is subject to change.
<TABLE>
<CAPTION>
======================================================
Average Annual Total Return
- ------------------------------------------------------
Since Inception
1 Year (10/8/92)
- ------------------------------------------------------
<S> <C> <C>
Investor A Shares* 17.64% 15.78%
Investor B Shares** 18.04% 16.00%
======================================================
</TABLE>
*Reflects 4.50% sales charge
**Reflects applicable contingent deferred sales charge
<TABLE>
<CAPTION>
Value of $10,000 Investment
---------------------------------------------------------------
INCOME EQUITY 10/08/92 12/31/92 12/31/93 12/31/94 12/31/95 06/30/96
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investor A Shares* 9,551* 10,387* 11,645* 12,004* 15,779* 17,268*
- ----------------------------------------------------------------------------------------
Investor B Shares** 10,000** 10,475** 11,792** 12,168** 15,947** 17,389**
- ----------------------------------------------------------------------------------------
<CAPTION>
INCOME EQUITY
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
S&P 500 Index 10,000 10,503 11,545 11,713 16,137 17,672
- ----------------------------------------------------------------------------------------
</TABLE>
Past performance is not predictive of future performance. Investment return and
principal value of The Riverfront Funds will fluctuate so that the shares, when
redeemed, may be worth more or less than their original cost. Performance for
Investor B Shares for periods prior to initial offering, January 1995,
represents performance for Investor A Shares and is restated to reflect
applicable contingent deferred sales charges. Investor B Shares are subject to
distribution and service fees, which would have reduced performance.
The Standard & Poor's 500 Index is an unmanaged index considered to be
representative of the stock market as a whole. It does not reflect the
deduction of expenses associated with a mutual fund, such as investment
management and fund accounting fees. The performance of The Riverfront Income
Equity Fund reflects the deduction of fees for these value-added services.
-2-
<PAGE>
PERFORMANCE REVIEWS THE RIVERFRONT FUNDS
- --------------------------------------------------------------------------------
THE RIVERFRONT FLEXIBLE GROWTH FUND
The Fund allocates its holdings among stocks, bonds and money market
instruments in an effort to deliver an optimal mix of growth and current
income. This diversified approach helps protect shareholders from potential
losses when one market sector suffers temporary losses.
The Fund had a total return of -0.83% (Investor A Shares)+ for the six months
ended June 30, 1996. That compared to a return of 10.20% for the Standard &
Poor's 500 Stock Index and -0.21% for the Lehman Brothers Intermediate
Government/Corporate Bond Index, the fund's two primary benchmarks.
DEFENSIVE IN EQUITIES
During the six-month period ended June 30, 1996, the Fund invested between 45%
and 50% of its assets in stocks, well below its more typical equity allocation
of 60% to 70%. We underweighted equities because we believed the stock market
could be due for a significant correction. Valuations were high throughout the
period, and dividend yields on most stocks were relatively low.
Consumer companies, including those in the beverage, drug and tobacco
industries, comprised 22% of our equity holdings. These stocks included
Anheuser-Busch, Bristol-Myers Squibb and Philip Morris. We also favored shares
of gold mining companies, such as Barrick Gold and Homestake Mining, since
mining stocks could potentially provide a good defense for investors if the
market enters a correction.
Selected technology stocks, such as Eastman Kodak and Compaq Computer, offered
attractive values and comprised another 5.03% of our equity holdings. In
addition, the Fund invested 6% of its equity holdings in emerging markets such
as New Zealand and Argentina, which we believe offer excellent long-term
opportunities for profit.
In the fixed-income portion of the portfolio, bond prices fell due to concerns
about inflation. Our primary holdings were Treasury securities in the two-to-
ten-year range. A mix of other short- and long-term securities included some
government agency issues that offered attractive yields without significant
added risk. The portfolio maintained an average maturity of around six to seven
years for its bond investments during the period.
OPPORTUNITIES IN LARGE COMPANIES AND FOREIGN MARKETS
We recently began shifting out of our small-company holdings and focusing
instead on shares of larger growth companies, which are likely to hold up
better in a market decline. We also may reduce the Fund's exposure to stocks by
another 5% or so. It seems likely that interest rates will stabilize at around
7.25% and then move lower. If that occurs, we expect to invest in longer-term
bonds, which benefit more from falling rates, since interest-rate declines
typically result in higher bond prices.
In addition, we will continue to search for opportunities in other markets such
as Latin America. International investments could help cushion the portfolio if
U.S. stocks fall, while still offering the opportunity for long-term gains.
Finally, we will be on the lookout for a temporary correction in stock prices.
We would take advantage of such an opportunity to seek bargains with the
potential to boost the Fund's long-term returns.
The Fund's top five equity holdings as of June 30, 1996, were Philip Morris
(2.07%), Healthcare Property Investments (2.03%), Ameritech Corp. (1.78%), Case
Corp. (1.78%) and Bristol-Myers Squibb (1.66%)/1/.
- ----------
+ The return with the maximum sales charge of 4.50% was -5.33% for the six-
month period.
/1/ The Fund's composition is subject to change.
<TABLE>
<CAPTION>
======================================================
Average Annual Total Return
- ------------------------------------------------------
Since Inception
1 Year (9/1/94)
- ------------------------------------------------------
<S> <C> <C>
Investor A Shares* 2.74% 7.17%
Investor B Shares** 3.62% 7.64%
======================================================
</TABLE>
*Reflects 4.50% sales charge
**Reflects applicable contingent deferred sales charge
<TABLE>
<CAPTION>
Value of $10,000 Investment
-----------------------------------------
FLEXIBLE GROWTH 09/01/94 12/31/94 12/31/95 06/30/96
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investor A Shares* 9,551* 9,473* 11,446* 11,350*
- ------------------------------------------------------------------------------------
Investor B Shares** 10,000** 9,526** 11,554** 11,423**
- ------------------------------------------------------------------------------------
<CAPTION>
FLEXIBLE GROWTH
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
S&P 500 Index 10,000 9,800 13,475 15,140
- ------------------------------------------------------------------------------------
Lehman Int. Government/Corp. Bond Index 10,000 9,896 11,413 11,494
- ------------------------------------------------------------------------------------
U.S. Treasury Bills 10,000 10,157 10,731 10,956
- ------------------------------------------------------------------------------------
</TABLE>
Past performance is not predictive of future performance. Investment return and
principal value of The Riverfront Funds will fluctuate so that the shares, when
redeemed, may be worth more or less than their original cost. Performance for
Investor B Shares for periods prior to initial offering, January 1995,
represents performance for Investor A Shares and is restated to reflect
applicable contingent deferred sales charges. Investor B Shares are subject to
distribution and service fees, which would have reduced performance.
The Standard & Poor's 500 Stock Index, the Lehman Brothers Intermediate
Government/Corporate Bond Index and the U.S. Treasury Bills Index are
considered to be representative of the stock, bond and T-bill markets,
respectively. They are unmanaged and do not reflect the deduction of expenses
associated with a mutual fund, such as investment management and fund
accounting fees. The performance of The Riverfront Flexible Growth Fund
reflects the deduction of fees for these value-added services.
-3-
<PAGE>
PERFORMANCE REVIEWS THE RIVERFRONT FUNDS
- --------------------------------------------------------------------------------
THE RIVERFRONT STOCK APPRECIATION FUND
The Fund continued its policy of investing in stocks of companies that seem
likely to deliver superior earnings growth, with an emphasis on small and mid-
sized companies. For the six-month period ended June 30, 1996, it posted a
total return of 6.11% (Investor A Shares),+ compared to 12.12% and 12.00% for
its benchmarks, the Standard & Poor's 500 Stock Index and the NASDAQ Composite
Index, respectively.
SHIFTING SENTIMENT FAVORS DIFFERENT SECTORS
Although stocks in general performed well during the recent period, some
sectors suffered losses at different times. The technology sector was strong
early, then faltered near the end of the period. Financial service stocks
gained some momentum from earlier in the year, and the retail sector has
rebounded and performed well since February.
In some cases, these shifts caused the Fund to give up gains it had made early
in the period. For example, June saw share prices of small companies in
technology and other industries weaken, as investors sold to lock in profits.
We held a number of positions in companies that we continue to believe are the
strongest stocks in sectors poised to reward investors. During the period, we
focused our attention on retail, energy and selected technology issues. We feel
these selected shares offer the potential for the strongest performance and
earnings generation over the next few months. For example, shares that
performed well during the period included those of Men's Wearhouse, a discount
men's clothing chain; Aspect Telecom, a telecommunications firm; and Global
Marine, an energy services company.
LOOKING AHEAD
The next six months likely will be more challenging than the recent period.
Going forward, we believe the sell-off in technology stocks in June will lead
to a rebound in the third quarter. Financial stocks appeared to come on strong
in May and June, and we may add to our holdings in this sector. We expect to
continue to experience significant rotation in various sectors, and we will
position the Fund to take advantage of both the strongest sectors and the
strongest stocks in those sectors.
As of June 30, 1996, the Fund's top five holdings were Cisco Systems (2.95%),
Checkpoint Systems (2.24%), Microsoft (2.19%), Cognos (2.16%) and Jones Medical
Industries (2.08%)/1/.
- ----------
+ The return with the maximum sales charge of 4.50% was 1.31% for the six-
month period.
/1/ The Fund's composition is subject to change.
<TABLE>
<CAPTION>
===============================================================
Average Annual Total Return
- ---------------------------------------------------------------
Since Inception
1 Year 5 Years (7/23/87)
- ---------------------------------------------------------------
<S> <C> <C> <C>
Investor A Shares* 13.37% 12.81% 9.57%
Investor B Shares** 14.34% 13.68% 10.10%
===============================================================
</TABLE>
*Reflects 4.50% sales charge
**Reflects applicable contingent deferred sales charge
<TABLE>
<CAPTION>
Value of $10,000 Investment
---------------------------------------------------------------
STOCK APPRECIATION 07/23/87 12/31/87 12/31/88 12/31/89 12/31/90 12/31/91
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investor A Shares* 9,548* 7,530* 7,369* 8,572* 9,015* 14,967*
- ----------------------------------------------------------------------------------------
Investor B Shares** 10,000** 7,572** 7,413** 8,630** 9,168** 16,510**
- ----------------------------------------------------------------------------------------
<CAPTION>
----------------------------------------------------
12/31/92 12/31/93 12/31/94 12/31/95 06/30/96
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investor A Shares* 16,683* 18,642* 16,697* 21,354* 22,658*
- -----------------------------------------------------------------------------
Investor B Shares** 17,582** 19,525** 17,487** 22,436** 23,658**
- -----------------------------------------------------------------------------
<CAPTION>
---------------------------------------------------------------
STOCK APPRECIATION 07/23/87 12/31/87 12/31/88 12/31/89 12/31/90 12/31/91
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
S&P 500 Index 10,000 8,027 9,339 12,255 11,871 15,433
- ----------------------------------------------------------------------------------------
NASDAQ Composite Index 10,000 7,728 8,919 10,636 8,742 13,712
- ----------------------------------------------------------------------------------------
<CAPTION>
----------------------------------------------------
12/31/92 12/31/93 12/31/94 12/31/95 06/30/96
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
continued: 16,580 18,228 18,462 25,315 27,734
- -----------------------------------------------------------------------------
continued: 15,830 18,166 17,584 24,604 27,252
- -----------------------------------------------------------------------------
</TABLE>
Past performance is not predictive of future performance. Investment return and
principal value of The Riverfront Funds will fluctuate so that the shares, when
redeemed, may be worth more or less than their original cost. Performance for
Investor B Shares for periods prior to initial offering, January 1995,
represents performance for Investor A Shares and is restated to reflect
applicable contingent deferred sales charges. Investor B Shares are subject to
distribution and service fees, which would have reduced performance. The return
includes the performance history of the MIM Stock Appreciation Fund and
excludes that of the MIM Stock Growth Fund prior to acquisition.
The Standard & Poor's 500 Stock Index is an unmanaged index considered to be
representative of the stock market as a whole, and the NASDAQ Composite Index
is considered to be representative of stocks of small-capitalization companies.
The indices do not reflect the deduction of expenses associated with a mutual
fund, such as investment management and fund accounting fees. The performance
of The Riverfront Stock Appreciation Fund reflects the deduction of fees for
these value-added services.
-4-
<PAGE>
PERFORMANCE REVIEWS THE RIVERFRONT FUNDS
- --------------------------------------------------------------------------------
THE RIVERFRONT U.S. GOVERNMENT INCOME FUND
During a difficult period for virtually all bond investors, the Fund returned -
1.19% (Investor A Shares)+ for the six months ended June 30, 1996. Its
performance compared to a -0.21% loss for the Lehman Brothers Intermediate
Government/Corporate Bond Index and 0.35% for the Lehman Brothers
Government/Mortgage Bond Index, the Fund's benchmarks.
Bond prices declined as interest rates rose due to surprisingly strong economic
growth during the period. Our response was to shorten the average maturity of
the Fund, since shorter-term securities typically maintain greater price
stability than long-term issues when interest rates rise. The portfolio's
average maturity fell from 5.5 years at the end of December to 5.0 years at the
end of the period.
A DIVERSIFIED APPROACH
The Fund maintained a broadly diversified portfolio, with exposure to various
sectors of the high-quality fixed-income market. The Fund's investments were
divided among government agency issues (67%); corporate bonds (22%); Treasuries
(7%) and cash equivalents (4%). These investments carried an average credit
rating of AA./1/
For now, we will maintain a relatively neutral average maturity, which means we
will keep it in line with broad industry averages. But we will watch for signs
that the economy is slowing--which could occur by the end of this year. If and
when that happens, the Fund's average maturity will likely move higher to
capture higher yields and the potential for capital gains.
- ----------
+ The return with the maximum sales charge of 4.50% was -5.66% for the six-
month period.
/1/ The Fund's composition is subject to change.
<TABLE>
<CAPTION>
======================================================
Average Annual Total Return
- ------------------------------------------------------
Since Inception
1 Year (10/1/92)
- ------------------------------------------------------
<S> <C> <C>
Investor A Shares* -0.77% 2.55%
Investor B Shares** -0.92% 2.86%
======================================================
</TABLE>
*Reflects 4.50% sales charge
**Reflects applicable contingent deferred sales charge
<TABLE>
<CAPTION>
Value of $10,000 Investment
---------------------------------------------------------------
U.S. GOVERNMENT INCOME 10/01/92 12/31/92 12/31/93 12/31/94 12/31/95 06/30/96
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investor A Shares* 9,551* 9,426* 10,122* 9,653* 11,121* 10,989*
- ----------------------------------------------------------------------------------------
Investor B Shares** 10,000** 9,479** 10,201** 9,749** 11,217** 11,031**
- ----------------------------------------------------------------------------------------
<CAPTION>
U.S. GOVERNMENT INCOME 10/01/92 12/31/92 12/31/93 12/31/94 12/31/95 06/30/96
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Lehman Government/Mortgage Index 10,000 10,028 10,958 10,656 12,554 12,519
- --------------------------------------------------------------------------------------------------------
Lehman Int. Government/Corp. Bond Index 10,000 9,964 10,840 10,631 12,261 12,384
- --------------------------------------------------------------------------------------------------------
</TABLE>
Past performance is not predictive of future performance. Investment return and
principal value of The Riverfront Funds will fluctuate so that the shares, when
redeemed, may be worth more or less than their original cost. Performance for
Investor B Shares for periods prior to initial offering, January 1995,
represents performance for Investor A Shares and is restated to reflect
applicable contingent deferred sales charges. Investor B Shares are subject to
distribution and service fees, which would have reduced performance.
The Fund's performance is measured against two indices considered to be
representative of mortgage-backed government bonds and intermediate-term bonds:
the Lehman Brothers Government/Mortgage Bond Index and the Lehman Brothers
Intermediate Government/Corporate Bond Index, respectively. The indices do not
reflect the deduction of expenses associated with a mutual fund, such as
investment management and fund accounting fees. The performance of The
Riverfront U.S. Government Income Fund reflects the deduction of fees for these
value-added services.
-5-
<PAGE>
PERFORMANCE REVIEWS THE RIVERFRONT FUNDS
- --------------------------------------------------------------------------------
THE RIVERFRONT OHIO TAX-FREE BOND FUND/1/
During the six months ended June 30, 1996, the Fund maintained a laddered
portfolio of securities with staggered maturities ranging from two to
approximately 20 years. That approach provides higher yields than a portfolio
of short-term securities, but carries less risk than a portfolio comprised
solely of long-term issues.
Given the market's volatility, we lowered the Fund's average maturity during
the period, from around 10 years to 7.09 years. That move reflected our
concerns that higher rates would trim prices of longer-term bonds.
We believe that two factors will continue to support the Ohio municipal bond
market. First, the supply of municipal bonds across the country remains tight,
with this year's total issuance expected to be around $160 billion. Second, the
yields on Ohio municipal bonds should remain attractive to investors in the
higher tax brackets.
The Fund's total return during the period was -0.85% (Investor A Shares).+ That
compared to 0.35% for the Lehman Brothers Intermediate Municipal Bond Index,
the Fund's benchmark. It's important to bear in mind that the index includes
bonds from around the country that may carry lower credit ratings than those we
purchase for the Fund. On average, the Fund's investments were rated AA.
LOOKING AHEAD
The Fund will continue to maintain a laddered portfolio of high-quality issues
in the diversified Ohio economy. Eventually, we will increase the Fund's
average maturity to capture higher yields and potential profits if interest
rates decline. But we expect such changes to be modest, and our portfolio
strategy will continue to reflect the Fund's primary aim: to capture a
combination of yield and potential capital gains, while minimizing credit and
other types of risk.
- ----------
/1/ The Fund's income may be subject to certain state and local taxes and,
depending on your tax status, the federal alternative minimum tax.
+ The return with the maximum sales charge of 4.50% was -5.35% for the six-
month period.
<TABLE>
<CAPTION>
======================================================
Average Annual Total Return
- ------------------------------------------------------
Since Inception
1 Year (8/1/94)
- ------------------------------------------------------
<S> <C> <C>
Investor A Shares* -0.63% 2.37%
Investor B Shares** -0.71% 2.23%
======================================================
</TABLE>
*Reflects 4.50% sales charge
**Reflects applicable contingent deferred sales charge
<TABLE>
<CAPTION>
Value of $10,000 Investment
-----------------------------------------
OHIO TAX-FREE BOND 08/01/94 12/31/94 12/31/95 06/30/96
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investor A Shares* 9,551* 9,506* 10,548* 10,459*
- ------------------------------------------------------------------------------------
Investor B Shares** 10,000** 9,560** 10,558** 10,432**
- ------------------------------------------------------------------------------------
<CAPTION>
OHIO TAX-FREE BOND FUND
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lehman Municipal Bond Index 10,000 9,727 11,424 11,396
- ------------------------------------------------------------------------------------
</TABLE>
Past performance is not predictive of future performance. Investment return and
principal value of The Riverfront Funds will fluctuate so that the shares, when
redeemed, may be worth more or less than their original cost. Performance for
Investor B Shares for periods prior to initial offering, January 1995,
represents performance for Investor A Shares and is restated to reflect
applicable contingent deferred sales charges. Investor B Shares are subject to
distribution and service fees, which would have reduced performance.
The Lehman Brothers Intermediate Municipal Bond Index is an unmanaged index
considered to be representative of intermediate-term securities in the
municipal bond market. The index does not reflect the deduction of expenses
associated with a mutual fund, such as investment management and fund
accounting fees. The performance of The Riverfront Ohio Tax-Free Bond Fund
reflects the deduction of fees for these value-added services.
-6-
<PAGE>
PERFORMANCE REVIEWS THE RIVERFRONT FUNDS
- --------------------------------------------------------------------------------
THE RIVERFRONT U.S. GOVERNMENT SECURITIES MONEY MARKET FUND*
The Fund's average maturity was shortened from 29 days at the beginning of the
six-month period to around 27 days as of June 30, 1996. That move was designed
to protect shareholders from the risk that the Federal Reserve might increase
short-term rates--a risk that increased as signs of rapid economic growth
rekindled fears of inflation. The portfolio included securities with a series
of different maturity dates, a diversified approach that offered a further
cushion against sudden shifts in interest rates.
The Fund continued to invest in repurchase agreements, agency discount notes
and U.S. Treasury bills. However, we also invested 29% of the Fund's assets in
high-quality commercial paper--its first foray into that sector. We believe the
move increased the Fund's yield without adding undue credit risk.
We will maintain the Fund's laddered approach during the coming months to
reduce shareholders' exposure to changes in interest rates. There will not be
any dramatic changes or shifts in this portfolio, whose overriding purpose
remains capital preservation.
- --------------------------------------------------------------------------------
The Riverfront Funds, Inc., is a family of mutual funds distributed by BISYS
Fund Services, which is independent of The Provident Bank and its affiliates.
SHARES IN THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, THE PROVIDENT BANK OR ITS AFFILIATES, NOR ARE THEY FEDERALLY
INSURED BY THE FDIC OR ANY OTHER AGENCY. AN INVESTMENT IN MUTUAL FUND SHARES
INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF THE AMOUNT INVESTED.
This material is authorized for distribution only when accompanied or preceded
by a prospectus.
- ----------
*An investment in the Fund is
neither insured nor guaranteed by
the U.S. Government. There can be no
assurance that the Fund will be able
to maintain a stable net asset value
of $1 per share.
-7-
<PAGE>
TABLE OF CONTENTS
Statements of Assets and Liabilities
Page 9
Statements of Operations
Page 11
Statements of Changes in Net Assets
Page 13
Schedules of Portfolio Investments
Page 16
Notes to Financial Statements
Page 32
Financial Highlights
Page 41
-8-
<PAGE>
THE RIVERFRONT FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
U.S. GOVERNMENT
SECURITIES MONEY U.S. GOVERNMENT INCOME
MARKET FUND INCOME FUND EQUITY FUND
---------------- --------------- -----------
<S> <C> <C> <C>
ASSETS:
Investments, at value (Cost
$118,594,200; $35,104,732; and
$70,486,237, respectively)...... $118,594,200 $35,112,277 $72,913,779
Repurchase agreements (Cost
$55,150,000; $0; and $0,
respectively).................... 55,150,000 -- --
------------ ----------- -----------
Total Investments............. 173,744,200 35,112,277 72,913,779
Interest and dividends
receivable....................... 24,473 419,215 193,334
Receivable for capital shares
issued........................... -- -- 37,337
Receivable for investments sold.. -- -- 481,918
Receivable from investment
adviser.......................... -- 36,688 44,526
Prepaid expenses and other
assets........................... 9,442 5,517 19,323
------------ ----------- -----------
Total Assets.................. 173,778,115 35,573,697 73,690,217
------------ ----------- -----------
LIABILITIES:
Dividends payable................ 663,920 148,404 75,143
Payable for capital shares
redeemed......................... -- 47,990 27,684
Payable for investments
purchased........................ -- -- 974,951
Accrued expenses and other
payables:
Investment advisory fees........ 25,335 11,507 53,169
Administration fees............. 30,233 5,754 11,247
12b-1 fees (Investor A)......... -- 4,190 10,933
12b-1 fees (Investor B)......... -- 978 3,893
Audit and legal fees............ 37,123 10,039 7,980
Other........................... 37,676 10,173 13,075
------------ ----------- -----------
Total Liabilities............. 794,287 239,035 1,178,075
------------ ----------- -----------
NET ASSETS:
Capital.......................... 172,986,118 37,227,426 61,564,894
Undistributed (distributions in
excess of) net investment income. -- 18,462 (6,186)
Net unrealized appreciation on
investments...................... -- 7,545 4,222,994
Accumulated undistributed net
realized gains (losses) on
investment transactions......... (2,290) (1,918,771) 6,730,440
------------ ----------- -----------
Net Assets.................... $172,983,828 $35,334,662 $72,512,142
============ =========== ===========
Net Assets
Investor A Shares............... $172,983,828 $34,144,538 $67,611,962
Investor B Shares............... NA 1,190,124 4,900,180
------------ ----------- -----------
Total......................... $172,983,828 $35,334,662 $72,512,142
============ =========== ===========
Shares of capital stock
Investor A Shares............... 172,986,121 3,655,928 5,325,955
Investor B Shares............... NA 112,972 381,416
------------ ----------- -----------
Total......................... 172,986,121 3,768,900 5,707,371
============ =========== ===========
Net asset value
Investor A Shares--redemption
price per share................. $ 1.00 $ 9.34 $ 12.70
Investor B Shares--offering
price per share*................ NA $ 10.53 $ 12.85
============ =========== ===========
Maximum Sales Charge (Investor
A)............................... 4.50% 4.50%
=========== ===========
Maximum Offering Price
(100%/(100%--Maximum Sales
Charge)
of net asset value adjusted to
nearest cent) per share
(Investor A).................... $ 1.00(a) $ 9.78 $ 13.30
============ =========== ===========
</TABLE>
- ------
(a)Offering price and redemption price are the same for the U.S. Government
Securities Money Market Fund.
*Redemption price of Investor B shares varies based on length of time shares
are held.
NANot applicable.
See notes to financial statements.
-9-
<PAGE>
THE RIVERFRONT FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
OHIO TAX-FREE FLEXIBLE GROWTH STOCK APPRECIATION
BOND FUND FUND FUND
------------- --------------- ------------------
<S> <C> <C> <C>
ASSETS:
Investments, at value (Cost
$10,940,541; $20,633,173; and
$41,721,425, respectively)... $11,191,246 $21,627,078 $38,363,504
Interest and dividends
receivable.................... 65,735 139,297 6,874
Receivable for capital shares
issued........................ -- 89,354 1,909
Receivable from investment
adviser....................... -- 39,694 --
Unamortized organization
costs......................... 911 229 28,691
Prepaid expenses and other
assets........................ 4,972 13,566 28,787
----------- ----------- -----------
Total Assets............... 11,262,864 21,909,218 38,429,765
----------- ----------- -----------
LIABILITIES:
Dividends payable............. 32,810 37,118 --
Payable for capital shares
redeemed...................... -- 3,220 156
Accrued expenses and other
payables:
Investment advisory fees..... 3,653 13,825 25,678
Administration fees.......... 1,826 3,456 6,420
12b-1 fees (Investor A)...... 2,290 1,425 7,904
12b-1 fees (Investor B)...... 591 6,910 481
Audit and legal fees......... 4,030 3,708 5,155
Custodian fees............... 1,278 2,592 4,815
Other........................ 1,529 5,723 858
----------- ----------- -----------
Total Liabilities.......... 48,007 77,977 51,467
----------- ----------- -----------
NET ASSETS:
Capital....................... 10,962,591 21,075,251 29,011,041
Undistributed (distributions
in excess of) net investment
income........................ 4,291 6,052 (233,107)
Net unrealized appreciation on
investments................... 250,705 993,905 5,830,755
Accumulated undistributed net
realized gains (losses) on
investment transactions...... (2,730) (243,967) 3,769,609
----------- ----------- -----------
Net Assets................. $11,214,857 $21,831,241 $38,378,298
=========== =========== ===========
Net Assets
Investor A Shares............ $10,538,311 $13,121,118 $37,759,161
Investor B Shares............ 676,546 8,710,123 619,137
----------- ----------- -----------
Total...................... $11,214,857 $21,831,241 $38,378,298
=========== =========== ===========
Shares of capital stock.......
Investor A Shares............ 1,030,877 1,181,864 3,746,931
Investor B Shares............ 64,747 761,462 59,260
----------- ----------- -----------
Total...................... 1,095,624 1,943,326 3,806,191
=========== =========== ===========
Net asset value...............
Investor A Shares--
redemption price per share... $ 10.22 $ 11.10 $ 10.08
Investor B Shares--offering
price per share*............. $ 10.45 $ 11.44 $ 10.45
=========== =========== ===========
Maximum Sales Charge (Investor
A)............................ 4.50% 4.50% 4.50%
=========== =========== ===========
Maximum Offering Price
(100%/(100%--Maximum Sales
Charge) of net asset value
adjusted to nearest cent) per
share (Investor A)........... $ 10.70 $ 11.62 $ 10.55
=========== =========== ===========
</TABLE>
- ------
* Redemption price of Investor B shares varies based on length of time shares
are held.
See notes to financial statements.
-10-
<PAGE>
THE RIVERFRONT FUNDS, INC.
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
U.S. GOVERNMENT
SECURITIES MONEY U.S. GOVERNMENT INCOME EQUITY
MARKET FUND INCOME FUND FUND
---------------- --------------- -------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income................. $4,577,860 $ 1,190,822 $ 70,966
Dividend income................. -- -- 1,075,742
---------- ----------- -----------
Total Income................ 4,577,860 1,190,822 1,146,708
---------- ----------- -----------
EXPENSES:
Investment advisory fees........ 128,251 72,518 325,427
Administration fees............. 170,993 36,259 68,463
12b-1 fees (Investor A)......... 213,848 43,784 80,717
12b-1 fees (Investor B)......... -- 6,092 19,629
Custodian and accounting fees... 42,748 18,129 51,348
Audit and legal fees............ 64,642 14,682 28,822
Trustees' fees and expenses..... 7,114 1,680 2,990
Transfer agent fees............. 34,381 18,236 24,538
Registration and filing fees.... 38,777 7,635 25,082
Printing costs.................. 18,740 4,400 8,548
Other........................... 5,456 1,823 2,169
---------- ----------- -----------
Expenses before fee waivers and
expense reimbursements..... 724,950 225,238 637,733
Less: Fee waivers and expense
reimbursements................. (213,848) (13,694) (33,109)
---------- ----------- -----------
Net Expenses................ 511,102 211,544 604,624
---------- ----------- -----------
Net Investment Income........... 4,066,758 979,278 542,084
---------- ----------- -----------
REALIZED/UNREALIZED GAINS
(LOSSES) FROM INVESTMENTS
Net realized gains (losses) from
investment transactions........ -- (11,433) 6,703,449
Net change in unrealized
depreciation from investments.. -- (1,429,289) (1,159,002)
---------- ----------- -----------
Net realized/unrealized gains
(losses) from investments...... -- (1,440,722) 5,544,447
---------- ----------- -----------
Change in net assets resulting
from operations................ $4,066,758 $ (461,444) $ 6,086,531
========== =========== ===========
</TABLE>
See notes to financial statements.
-11-
<PAGE>
THE RIVERFRONT FUNDS, INC.
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
FLEXIBLE STOCK
OHIO TAX-FREE GROWTH APPRECIATION
BOND FUND FUND FUND
------------- --------- ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income.......................... $ 301,982 $ 302,638 $ 73,771
Dividend income.......................... -- 114,153 56,152
--------- --------- -----------
Total Income......................... 301,982 416,791 129,923
--------- --------- -----------
EXPENSES:
Investment advisory fees................. 28,245 82,480 155,525
Administration fees...................... 11,301 18,287 38,881
12b-1 fees (Investor A).................. 13,308 14,044 48,137
12b-1 fees (Investor B).................. 3,273 35,370 1,860
Custodian and accounting fees............ 7,911 13,716 29,161
Audit and legal fees..................... 4,882 5,878 17,724
Organization costs....................... 4,914 1,820 19,540
Trustees' fees and expenses.............. 558 898 1,919
Transfer agent fees...................... 12,462 12,755 18,115
Registration and filing fees............. 1,998 3,396 17,577
Printing costs........................... 1,281 5,961 12,867
Other.................................... 910 539 1,435
--------- --------- -----------
Expenses before fee waivers and expense
reimbursements.......................... 91,043 195,144 362,741
Less: Fee waivers and expense
reimbursements...................... (5,643) (24,242) --
--------- --------- -----------
Net Expenses......................... 85,400 170,902 362,741
--------- --------- -----------
Net Investment Income (Loss)............. 216,582 245,889 (232,818)
--------- --------- -----------
REALIZED/UNREALIZED GAINS (LOSSES) FROM
INVESTMENTS
Net realized gains (losses) from
investment transactions................. (2,920) (243,967) 3,769,609
Net change in unrealized depreciation
from investments........................ (307,674) (206,105) (1,287,068)
--------- --------- -----------
Net realized/unrealized gains (losses)
from investments........................ (310,594) (450,072) 2,482,541
--------- --------- -----------
Change in net assets resulting from
operations.............................. $ (94,012) $(204,183) $ 2,249,723
========= ========= ===========
</TABLE>
See notes to financial statements.
-12-
<PAGE>
THE RIVERFRONT FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
U.S. GOVERNMENT SECURITIES U.S. GOVERNMENT INCOME EQUITY
MONEY MARKET FUND INCOME FUND FUND
---------------------------- ------------------------- -------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31,
1996 1995 1996 1995 1996 1995
------------- ------------- ----------- ------------ ----------- ------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income.. $ 4,066,758 $ 7,906,286 $ 979,278 $ 2,067,824 $ 542,084 $ 1,082,073
Net realized gains
(losses) from
investment
transactions.......... -- (1,415) (11,433) (517,451) 6,703,449 6,655,045
Net change in
unrealized
appreciation
(depreciation) from
investments........... -- -- (1,429,289) 3,520,908 (1,159,002) 5,311,784
------------- ------------- ----------- ----------- ----------- -----------
Change in net assets
resulting from
operations............. 4,066,758 7,904,871 (461,444) 5,071,281 6,086,531 13,048,902
------------- ------------- ----------- ----------- ----------- -----------
DISTRIBUTIONS TO
INVESTOR A
SHAREHOLDERS:
From net investment
income................ (4,066,758) (7,906,286) (940,840) (2,032,120) (531,555) (1,065,510)
In excess of net
investment income..... -- -- -- -- -- (6,742)
From net realized gains
from investments...... -- -- -- -- -- (6,293,075)
DISTRIBUTIONS TO
INVESTOR B
SHAREHOLDERS:
From net investment
income................ -- -- (27,782) (22,977) (16,715) (16,563)
In excess of net
investment income..... -- -- -- -- -- (105)
From net realized gains
from investments...... -- -- -- -- -- (222,170)
------------- ------------- ----------- ----------- ----------- -----------
Change in net assets
from shareholder
distributions.......... (4,066,758) (7,906,286) (968,622) (2,055,097) (548,270) (7,604,165)
------------- ------------- ----------- ----------- ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued................ 187,416,065 331,872,719 1,359,606 5,670,500 6,943,511 12,155,416
Proceeds from shares
issued in connection
with acquisition...... -- 4,865,634 -- -- -- 9,727,219
Dividends reinvested... 1,076,488 1,518,099 216,290 578,837 707,286 8,648,647
Cost of shares
redeemed.............. (173,004,224) (330,133,820) (2,612,343) (4,185,229) (4,355,305) (7,262,834)
------------- ------------- ----------- ----------- ----------- -----------
Change in net assets
from capital
transactions........... 15,488,329 8,122,632 (1,036,447) 2,064,108 3,295,492 23,268,448
------------- ------------- ----------- ----------- ----------- -----------
Change in net assets.... 15,488,329 8,121,217 (2,466,513) 5,080,292 8,833,753 28,713,185
NET ASSETS:
Beginning of period.... 157,495,499 149,374,282 37,801,175 32,720,883 63,678,389 34,965,204
------------- ------------- ----------- ----------- ----------- -----------
End of period.......... $ 172,983,828 $ 157,495,499 $35,334,662 $37,801,175 $72,512,142 $63,678,389
============= ============= =========== =========== =========== ===========
SHARE TRANSACTIONS:
Issued................. 187,416,065 331,872,719 140,407 592,903 562,689 1,069,857
Issued in connection
with acquisition...... -- 4,865,634 -- -- -- 793,942
Reinvested............. 1,076,488 1,518,099 22,547 61,636 58,270 764,131
Redeemed............... (173,004,224) (330,133,820) (272,085) (444,444) (352,570) (634,159)
------------- ------------- ----------- ----------- ----------- -----------
Change in shares........ 15,488,329 8,122,632 (109,131) 210,095 268,389 1,993,771
============= ============= =========== =========== =========== ===========
</TABLE>
See notes to financial statements.
-13-
<PAGE>
THE RIVERFRONT FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
OHIO TAX-FREE BOND FUND FLEXIBLE GROWTH FUND
------------------------- -------------------------
SIX SIX
MONTHS YEAR MONTHS YEAR
ENDED ENDED ENDED ENDED
JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31,
1996 1995 1996 1995
----------- ------------ ----------- ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income..... $ 216,582 $ 419,775 $ 245,889 $ 275,589
Net realized gains
(losses) from investment
transactions............ (2,920) 8,848 (243,967) 131,879
Net change in unrealized
appreciation
(depreciation) from
investments............. (307,674) 713,315 (206,105) 1,230,202
----------- ----------- ----------- -----------
Change in net assets
resulting from
operations............... (94,012) 1,141,938 (204,183) 1,637,670
----------- ----------- ----------- -----------
DISTRIBUTIONS TO INVESTOR A
SHAREHOLDERS:
From net investment
income................... (207,865) (401,164) (170,197) (202,502)
From net realized gains
from investments......... -- -- -- (85,787)
DISTRIBUTIONS TO INVESTOR B
SHAREHOLDERS:
From net investment
income................... (9,885) (13,152) (78,806) (63,921)
From net realized gains
from investments......... -- -- -- (43,216)
----------- ----------- ----------- -----------
Change in net assets from
shareholder distributions. (217,750) (414,316) (249,003) (395,426)
----------- ----------- ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued................... 252,290 895,943 8,894,629 11,076,750
Dividends reinvested...... 11,379 18,208 252,100 334,888
Cost of shares redeemed... (454,091) (114,312) (1,319,196) (906,216)
----------- ----------- ----------- -----------
Change in net assets from
capital transactions..... (190,422) 799,839 7,827,533 10,505,422
----------- ----------- ----------- -----------
Change in net assets....... (502,184) 1,527,461 7,374,347 11,747,666
NET ASSETS:
Beginning of period....... 11,717,041 10,189,580 14,456,894 2,709,228
----------- ----------- ----------- -----------
End of period............. $11,214,857 $11,717,041 $21,831,241 $14,456,894
=========== =========== =========== ===========
SHARE TRANSACTIONS:
Issued.................... 23,706 87,181 778,082 1,035,102
Reinvested................ 1,080 1,760 22,095 30,561
Redeemed.................. (43,042) (11,223) (116,822) (82,394)
----------- ----------- ----------- -----------
Change in shares........... (18,256) 77,718 683,355 983,269
=========== =========== =========== ===========
</TABLE>
See notes to financial statements.
-14-
<PAGE>
THE RIVERFRONT FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
STOCK APPRECIATION FUND
----------------------------------------------------------
PERIOD PERIOD
SIX MONTHS FROM OCTOBER 1, FROM OCTOBER 1, 1994
ENDED 1995 THROUGH THROUGH
JUNE 30, 1996 DECEMBER 31, 1995 (A) SEPTEMBER 30, 1995 (B)
------------- --------------------- ----------------------
(UNAUDITED)
<S> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment loss.... $ (232,818) $ (51,131) $ (292,270)
Net realized gains from
investment
transactions......... 3,769,609 1,556,383 3,024,858
Net change in
unrealized
appreciation
(depreciation) from
investments.......... (1,287,068) (2,070,853) 5,538,265
----------- ----------- -----------
Change in net assets
resulting from
operations............ 2,249,723 (565,601) 8,270,853
----------- ----------- -----------
DISTRIBUTIONS TO
INVESTOR A
SHAREHOLDERS:
From net investment
income................ (289) -- (1,166,721)
From net realized gains
from investments...... -- (1,556,383) --
Tax return of capital.. -- (6,824) --
----------- ----------- -----------
Change in net assets
from shareholder
distributions.......... (289) (1,563,207) (1,166,721)
----------- ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued................ 2,261,501 810,508 --
Dividends reinvested... 554 1,542,781 --
Cost of shares
redeemed.............. (7,200,363) (3,611,887) --
----------- ----------- -----------
Change in net assets
from capital
transactions.......... (4,938,308) (1,258,598) (10,529,141)
----------- ----------- -----------
Change in net assets.... (2,688,874) (3,387,406) (3,425,009)
NET ASSETS:
Beginning of period.... 41,067,172 44,454,578 47,879,587
----------- ----------- -----------
End of period.......... $38,378,298 $41,067,172 $44,454,578
=========== =========== ===========
SHARE TRANSACTIONS:
Issued................. 228,156 83,381
Reinvested............. 59 164,279
Redeemed............... (744,934) (370,208)
----------- -----------
Change in shares........ (516,719) (122,548)
=========== ===========
</TABLE>
- ------
(a)Period from date acquired by Riverfront Stock Appreciation Fund.
(b)Represents statements of changes in net assets for the MIM Stock
Appreciation Fund. Audited by other auditors.
See notes to financial statements.
-15-
<PAGE>
THE RIVERFRONT FUNDS, INC.
U.S. GOVERNMENT SECURITIES MONEY MARKET FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
---------- ---------------------------------------------------- ------------
<C> <S> <C>
U.S. GOVERNMENT AGENCIES (39.9%):
Federal Farm Credit Bank:
$1,535,000 Discount Note, 7/12/96.............................. $ 1,532,552
5,000,000 Discount Note, 7/31/96.............................. 4,978,208
2,910,000 Discount Note, 10/21/96............................. 2,863,013
Federal Home Loan Mortgage Corp.:
3,000,000 Discount Note, 7/1/96............................... 3,000,000
3,000,000 Discount Note, 7/3/96............................... 2,999,153
3,852,000 Discount Note, 8/1/96............................... 3,834,752
5,000,000 Discount Note, 8/12/96.............................. 4,969,083
3,025,000 Discount Note, 8/14/96.............................. 3,005,737
4,000,000 Discount Note, 8/19/96.............................. 3,971,689
2,000,000 Discount Note, 8/22/96.............................. 1,984,689
4,000,000 Discount Note, 9/12/96.............................. 3,956,849
4,000,000 Discount Note, 9/18/96.............................. 3,953,390
Federal National Mortgage Assoc.:
3,000,000 Discount Note, 7/5/96............................... 2,998,373
5,000,000 Discount Note, 7/10/96.............................. 4,993,563
3,200,000 Discount Note, 7/24/96.............................. 3,189,369
3,000,000 Discount Note, 8/6/96............................... 2,984,250
4,000,000 Discount Note, 8/23/96.............................. 3,971,616
3,000,000 Discount Note, 9/6/96............................... 2,970,911
3,000,000 Discount Note, 9/9/96............................... 2,968,908
4,000,000 Discount Note, 10/10/96............................. 3,940,859
------------
Total U.S. Government Agencies 69,066,964
------------
COMMERCIAL PAPER (28.6%):
Automobiles (1.7%):
3,000,000 Daimler-Benz North America Corp., Discount Note,
7/22/96............................................ 2,991,250
------------
Banking (1.7%):
3,000,000 Banc One Funding, Discount Note, 8/1/96............. 2,986,179
------------
Beverages (2.9%):
5,000,000 PepsiCo, Discount Note, 8/19/96..................... 4,963,658
------------
Computers (1.7%):
3,000,000 Epson American, Series B, Discount Note, 8/5/96..... 2,985,271
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
---------- ---------------------------------------------------- ------------
<C> <S> <C>
COMMERCIAL PAPER, CONTINUED:
Financial (12.6%):
$3,000,000 Bank of Tokyo Financial, Discount Note, 7/2/96...... $ 2,999,543
4,000,000 Cargill Financial, Discount Note, 7/26/96........... 3,986,056
4,000,000 Merrill Lynch, Discount Note, 8/12/96............... 3,975,360
4,000,000 Merrill Lynch, Discount Note, 8/26/96............... 3,967,022
3,000,000 Sunbelt Dixie, Discount Note, 7/16/96............... 2,993,337
4,000,000 Sunbelt Dixie, Discount Note, 7/30/96............... 3,982,826
------------
21,904,144
------------
Holding Companies (1.7%):
3,000,000 Japan Leasing U.S. Funding Corp., Discount Note,
7/18/96............................................ 2,992,378
------------
Manufacturing (2.6%):
3,000,000 Hanson PLC, Discount Note, 7/11/96.................. 2,995,500
1,500,000 Hanson PLC, Discount Note, 7/29/96.................. 1,493,700
------------
4,489,200
------------
Transportation (1.9%):
3,229,000 Holland Limited Securitization, Inc., Discount Note,
7/29/96............................................ 3,215,564
------------
Telecommunications (1.8%):
3,000,000 AT&T, Discount Note, 7/2/96......................... 2,999,592
------------
Total Commercial Paper 49,527,236
------------
Total Investments, at amortized cost 118,594,200
------------
</TABLE>
Continued
-16-
<PAGE>
THE RIVERFRONT FUNDS, INC.
U.S. GOVERNMENT SECURITIES MONEY MARKET FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
----------- ---------------------------------------------------- ------------
<C> <S> <C>
REPURCHASE AGREEMENTS (31.9%):
$25,150,000 Dean Witter, 5.20%, 7/1/96 (Collateralized by
various U.S. Treasury and U.S. Government Agency
Securities, 0.00%-11.90%, 7/10/96-2/15/15, market
value--$25,654,047)................................. $ 25,150,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
---------- ---------------------------------------------------- ------------
<C> <S> <C>
30,000,000 Prudential, 5.43%, 7/1/96 (Collateralized by various
U.S. Government Agency Securities, 6.00%-7.74%,
11/1/22--4/1/26, market value--$30,600,001)......... $ 30,000,000
------------
Total Repurchase Agreements 55,150,000
------------
Total (Amortized cost--$173,744,200)(a) $173,744,200
============
</TABLE>
- --------
Percentages indicated are based on net assets of $172,983,828.
(a) Cost and value for federal income tax and financial reporting purposes are
the same.
See notes to financial statements.
-17-
<PAGE>
THE RIVERFRONT FUNDS, INC.
U.S. GOVERNMENT INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ------------------------------------------------------ ----------
<C> <S> <C>
CORPORATE BONDS (21.2%):
Automotive (1.3%):
$ 500,000 Ford Motor Credit Corp., 6.25%, 12/8/05............... $ 463,750
----------
Financial (14.2%):
1,000,000 Chase Manhattan Corp., 8.50%, 2/15/02................. 1,068,750
1,000,000 First Chicago Master Trust, Series-L, Class A 1994
7.15%, 4/15/01....................................... 1,017,740
500,000 Grand Metropolitan Investment Co., 7.45%, 4/15/35..... 508,125
500,000 Lehman Brothers Holdings, 8.50%, 5/1/07............... 527,500
1,000,000 MBNA Master Credit Card Trust, 6.05%, 11/15/02........ 981,730
1,000,000 Midland Bank PLC, (HSBC), 6.95%, 3/15/11.............. 941,250
----------
5,045,095
----------
Telecommunications (2.8%):
1,000,000 U.S. West Capital Corp., 6.31%, 11/1/05............... 982,500
----------
Tobacco (2.9%):
1,000,000 Philip Morris Companies, Inc., 7.50%, 3/15/97......... 1,010,000
----------
Total Corporate Bonds 7,501,345
----------
U.S. GOVERNMENT AGENCIES (66.4%):
Federal Farm Credit:
1,000,000 Discount Note, 7/15/96................................ 997,480
Federal Home Loan Bank:
1,000,000 5.60%, 7/24/97........................................ 996,490
500,000 8.07%, 2/27/02........................................ 507,920
875,000 6.38%, 4/29/03........................................ 837,428
Federal Home Loan Mortgage Corp.:
1,500,000 Discount Note, 7/22/96................................ 1,494,720
1,000,000 6.55%, 1/4/00......................................... 996,890
1,000,000 6.78%, 3/28/01........................................ 987,860
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- -------------------------------------------------- -----------
<C> <S> <C>
U.S. GOVERNMENT AGENCIES, CONTINUED:
Federal Home Loan Mortgage Corp., continued:
$1,000,000 7.35%, 5/16/05.................................... $ 994,120
500,000 7.50%, 3/15/15.................................... 503,665
1,000,000 7.00%, 10/15/17................................... 989,720
1,000,000 6.00%, 1/15/18.................................... 981,790
1,000,000 7.20%, 6/15/18.................................... 996,780
Federal National Mortgage Assoc.:
1,000,000 5.33%, 6/26/98.................................... 980,490
500,000 9.05%, 4/10/00.................................... 539,045
1,000,000 6.40%, 5/2/01..................................... 989,650
1,317,649 6.00%, 2/1/03..................................... 1,272,032
1,000,000 6.71%, 5/21/03.................................... 995,380
625,000 6.38%, 6/25/03.................................... 598,100
625,000 6.05%, 6/30/03.................................... 599,456
578,254 6.75%, 8/25/04, Series 1992-152, Class H.......... 578,775
1,050,000 8.50%, 2/1/05..................................... 1,092,000
1,000,000 7.00%, 9/25/05, Series 1992-1110, Class G......... 998,760
849,946 7.00%, 9/25/19.................................... 845,535
Government National Mortgage Assoc.
737,574 8.00%, 5/15/03, Pool #35172....................... 743,717
Private Export Funding Corp.:
1,000,000 6.24%, 5/15/02.................................... 975,000
Student Loan Marketing Assoc.:
1,000,000 6.05%, 9/14/00.................................... 978,710
-----------
Total U.S. Government Agencies 23,471,513
-----------
U.S. TREASURY NOTES (7.1%):
1,000,000 6.00%, 11/30/97................................... 1,000,590
1,000,000 5.88%, 3/31/99.................................... 990,280
500,000 7.25%, 5/15/04.................................... 518,090
-----------
Total U.S. Treasury Notes 2,508,960
-----------
YANKEE DOLLAR BONDS (1.1%):
365,000 Montreal Urban Community, 9.13%, 3/15/01.......... 393,744
-----------
Total Yankee Dollar Bonds 393,744
-----------
</TABLE>
Continued
-18-
<PAGE>
THE RIVERFRONT FUNDS, INC.
U.S. GOVERNMENT INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
INVESTMENT COMPANIES (3.5%):
1,236,715 Dreyfus Treasury Prime Fund............................ $ 1,236,715
-----------
Total Investment Companies 1,236,715
-----------
Total (Cost--$35,104,732)(a) $35,112,277
===========
</TABLE>
- --------
Percentages indicated are based on net assets of $35,334,662.
(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............ $357,092
Unrealized depreciation............ (349,547)
--------
Net unrealized appreciation........ $ 7,545
========
</TABLE>
See notes to financial statements.
-19-
<PAGE>
THE RIVERFRONT FUNDS, INC.
INCOME EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS (94.2%):
Apparel (0.3%):
3,100 V.F. Corp.............................................. $ 184,838
-----------
Auto Parts (1.0%):
18,800 Echlin, Inc............................................ 712,050
-----------
Banks (7.7%):
5,100 BayBanks, Inc.......................................... 549,525
44,700 Central Fidelity Banks, Inc............................ 1,016,925
17,800 Crestar Financial Corp................................. 950,075
14,000 First American Corp.................................... 589,750
28,300 Jefferson Bankshares, Inc.............................. 626,138
12,800 Magna Group, Inc....................................... 307,200
11,800 Signet Banking Corp.................................... 274,350
35,250 Summit Bancorp......................................... 1,238,156
-----------
5,552,119
-----------
Broadcast/Radio, TV (0.0%):
1,500 U.S. West Media Group, Inc. (b)........................ 27,375
-----------
Building Materials (1.9%):
46,000 Masco Corp............................................. 1,391,500
-----------
Chemicals (7.4%):
14,000 Akzo Nobel N.V. ADR.................................... 836,500
3,500 E.I. du Pont deNemours & Co............................ 276,938
94,500 Ethyl Corp............................................. 909,563
26,500 Lawter International, Inc.............................. 331,250
3,000 PPG Industries, Inc.................................... 146,250
16,600 RPM, Inc............................................... 259,375
20,900 Rohm & Haas Co......................................... 1,311,475
37,200 Witco Corp............................................. 1,278,750
-----------
5,350,101
-----------
Commercial Services (0.8%):
32,000 Ogden Corp............................................. 580,000
-----------
Consumer Products (2.9%):
10,000 B.A.T. Industries, PLC-ADR............................. 158,125
6,972 Corning, Inc........................................... 267,550
22,300 CPC International...................................... 1,605,600
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- -------------------------------------------------------- ----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Consumer Products, continued:
800 Genuine Parts Co........................................ $ 36,600
----------
2,067,875
----------
Cosmetics (1.6%):
24,500 International Flavors................................... 1,166,813
----------
Department Stores (3.0%):
22,500 May Department Stores Co................................ 984,375
19,800 J.C. Penney Co.......................................... 1,039,500
3,000 Sears Roebuck & Co...................................... 145,875
----------
2,169,750
----------
Electrical (3.5%):
34,100 AMP Inc................................................. 1,368,262
31,000 Thomas & Betts Corp..................................... 1,162,500
----------
2,530,762
----------
Electronics (4.2%):
4,000 General Electric Co..................................... 346,000
28,900 General Signal Corp..................................... 1,094,588
1,500 National Service Industries, Inc........................ 58,688
47,000 Phillips NV (b)......................................... 1,533,375
----------
3,032,651
----------
Energy & Oil (0.1%):
1,000 British Petroleum, PLC-ADR.............................. 106,875
----------
Financial Services (4.5%):
39,200 H & R Block, Inc........................................ 1,278,900
60,400 ITT Industries, Inc..................................... 1,517,550
5,500 J.P. Morgan & Co........................................ 465,437
----------
3,261,887
----------
Food Processing (2.1%):
53,600 Grand Metropolitan, PLC-ADR (b)......................... 1,433,800
9,500 Tasty Baking Co......................................... 109,250
----------
1,543,050
----------
</TABLE>
Continued
-20-
<PAGE>
THE RIVERFRONT FUNDS, INC.
INCOME EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Forest Products (2.6%):
38,600 International Paper Co................................. $ 1,423,375
13,000 Rayonier, Inc.......................................... 494,000
-----------
1,917,375
-----------
Holding Company (1.9%):
9,600 Unilever N.V........................................... 1,393,200
-----------
Household Products/Wares (0.2%):
1,500 Colgate-Palmolive Co................................... 127,125
-----------
Industrial Machinary (0.7%):
11,600 Cooper Industries, Inc................................. 481,400
-----------
Insurance (4.9%):
29,900 American General Corp.................................. 1,087,613
1,500 American International Group........................... 147,937
21,500 ITT Hartford Group, Inc................................ 1,144,875
13,100 Lincoln National Corp.................................. 605,875
13,700 Torchmark Corp......................................... 599,375
-----------
3,585,675
-----------
Manufacturing (0.3%):
3,500 Minnesota Mining & Manufacturing Co.................... 241,500
-----------
Medical Services & Supplies (0.2%):
1,500 Becton Dickinson & Co.................................. 120,375
-----------
Metals (2.1%):
28,600 Reynolds Metals Co..................................... 1,490,775
-----------
Office Equipment & Supplies (1.0%):
12,900 Xerox Corp............................................. 690,150
-----------
Oil & Gas Production (8.9%):
18,900 Amoco Corp............................................. 1,367,887
10,800 Atlantic Richfield Co.................................. 1,279,800
11,400 Mobil Corp............................................. 1,278,224
15,500 Texaco, Inc............................................ 1,300,062
37,400 Unocal Corp............................................ 1,262,250
-----------
6,488,223
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- -------------------------------- -----------
<S> <C> <C>
COMMON STOCKS, CONTINUED:
Oil--International (0.5%):
5,000 Chevron Corp.................... $ 295,000
1,000 Exxon Corp...................... 86,875
-----------
381,875
-----------
Packaged Food (1.0%):
38,000 Lance, Inc...................... 627,000
2,500 Sara Lee Corp................... 80,937
-----------
707,937
-----------
Paper (3.4%):
13,000 Consolidated Papers, Inc........ 676,000
15,700 Kimberly-Clark Corp............. 1,212,825
20,500 Westvaco Corp................... 612,437
-----------
2,501,262
-----------
Pharmaceuticals (6.3%):
33,300 Abbott Laboratories............. 1,448,550
1,600 Bristol Myers Squibb Co......... 144,000
34,500 Pharmacia & Upjohn, Inc......... 1,530,938
26,000 Warner-Lambert Co............... 1,430,000
-----------
4,553,488
-----------
Photography (0.4%):
3,500 Eastman Kodak Co................ 272,125
-----------
Pipelines (1.9%):
26,400 Tenneco, Inc.................... 1,349,700
-----------
Printing & Publishing (1.6%):
12,800 American Greetings, Class A..... 350,400
19,800 Dow Jones & Co.................. 826,650
-----------
1,177,050
-----------
Real Estate Investment Trusts (0.2%):
3,000 Federal Realty Investment Trust. 68,250
3,200 New Plan Realty Trust........... 67,600
-----------
135,850
-----------
</TABLE>
Continued
-21-
<PAGE>
THE RIVERFRONT FUNDS, INC.
INCOME EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- ----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Retail (0.2%):
5,000 Winn Dixie Stores, Inc................................. $ 176,875
----------
Savings & Loans (0.8%):
31,900 Roosevelt Financial Group, Inc......................... 614,075
----------
Steel (0.6%):
22,700 Allegheny Ludlum Corp.................................. 428,462
----------
Tires & Rubber (0.1%):
1,600 B.F. Goodrich Co....................................... 59,800
----------
Tobacco (1.0%):
5,000 American Brands, Inc................................... 226,875
5,000 Philip Morris Cos., Inc................................ 520,000
----------
746,875
----------
Tools (0.6%):
9,800 Snap-On, Inc........................................... 464,275
----------
Transportation (1.8%):
13,700 Conrail, Inc........................................... 909,337
2,500 Norfolk Southern Corp.................................. 211,875
7,200 Ryder System, Inc...................................... 202,500
----------
1,323,712
----------
Utilities--Electric (3.5%):
33,900 Central & Southwest Corp............................... 983,100
12,300 Chilgener S.A., ADR (b)................................ 295,200
1,000 KU Energy Corp......................................... 29,875
14,700 Pacificorp............................................. 327,075
32,500 Public Services Enterprise Group....................... 889,688
----------
2,524,938
----------
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- --------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Utilities--Gas (0.1%):
1,500 Consolidated Natural Gas Co........................ $ 78,375
-----------
Utilities--Telecommunications (6.4%):
32,200 Frontier Corp...................................... 986,125
17,500 GTE Corp........................................... 783,125
46,000 Peco Energy Co..................................... 1,196,000
22,700 Southern New England Telecommunications Corp....... 953,400
15,500 Sprint Corp........................................ 651,000
1,500 US West, Inc....................................... 47,813
-----------
4,617,463
-----------
Total Common Stocks 68,327,581
===========
CORPORATE BONDS (1.2%):
$50,000 Chubb Capital Corp., 6.00%, 5/15/98................ 59,125
50,000 Cincinnati Financial Corp., 5.50%, 5/1/02.......... 66,313
85,000 Cooker Restaurant, 6.75%,
10/1/02........................................... 76,925
100,000 Hasbro, Inc., 6.00%, 11/15/98...................... 125,625
150,000 INA Republic of Italy, 5.00%, 6/28/01.............. 153,000
50,000 Liebert Corp., 8.00%, 11/15/10..................... 166,500
100,000 Pennzoil Co., 6.50%, 1/15/03....................... 141,250
50,000 South Carolina National Corp., 6.50%, 5/15/01...... 115,500
-----------
Total Corporate Bonds 904,238
-----------
</TABLE>
Continued
-22-
<PAGE>
THE RIVERFRONT FUNDS, INC.
INCOME EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
INVESTMENT COMPANIES (5.1%):
2,851,960 Dreyfus Treasury Prime Fund............................ $ 2,851,960
830,000 Federated Short Term Government Fund................... 830,000
-----------
Total Investment Companies 3,681,960
-----------
Total (Cost--$70,486,237)(a) $72,913,779
===========
</TABLE>
- --------
Percentages indicated are based on net assets of $72,512,142.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting in excess of federal income tax reporting of
$76,532. Cost for federal income tax purposes differs from value by net
unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.......... $5,443,701
Unrealized depreciation.......... (3,092,691)
----------
Net unrealized appreciation...... $2,351,010
==========
</TABLE>
(b)Non-income producing security.
ADR--American Depository Receipt
NV--Naamloze Vennootschap (Dutch Corporation)
PLC--Public Limited Company (British)
See notes to financial statements.
-23-
<PAGE>
THE RIVERFRONT FUNDS, INC.
OHIO TAX-FREE BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
OHIO MUNICIPAL BONDS (92.8%):
$100,000 Aurora City School District, GO, 5.40%, 12/1/06........ $ 101,625
200,000 Beavercreek Local School District, GO, 5.30%, 12/1/08.. 199,250
100,000 Bowling Green City School District, GO, 5.70%, 12/1/11. 99,000
230,000 Butler County Hospital Facilities, 6.00%, 11/15/10,
Callable 5/15/04 @101................................. 236,612
200,000 Butler County Sewer System Revenue, 5.40%, 12/1/09..... 197,750
250,000 Butler County Sewer System Revenue, Series B, 6.20%,
12/1/09............................................... 257,500
250,000 Canton Waterworks System, GO, 5.75%, 12/1/10........... 253,437
100,000 Chillicothe Water System Revenue, 5.10%, 12/1/05....... 98,875
250,000 Cincinnati, GO, 5.25%, 12/1/01......................... 256,875
250,000 Clermont County Waterworks Revenue, 6.63%, 12/1/16..... 276,562
250,000 Columbus, GO, 5.50%, 5/15/08, Callable 5/15/06 @102.... 252,812
200,000 Columbus, GO, 5.65%, 6/15/11........................... 200,000
250,000 Columbus Sewer Revenue, 6.13%, 6/1/03.................. 267,812
100,000 Delaware County, GO, 5.60%, 12/1/10.................... 99,000
100,000 Dover Municipal Electric System Revenue, 5.35%,
12/1/06............................................... 100,375
250,000 Franklin County Hospital Revenue, 5.25%, 6/1/08........ 243,125
250,000 Franklin County Hospital Revenue Refunding, Riverside
United Methodist, Series A, 5.30%, 5/15/02............ 253,437
250,000 Fremont, GO, 5.45%, 12/15/07........................... 251,875
250,000 Gahanna, GO, 5.85%, 6/1/08............................. 258,437
80,000 Hamilton County Sewer Systems, Series A, 6.40%,
12/1/04............................................... 87,000
170,000 Hamilton County Sewer System Unrefunded, Series A,
6.40%, 12/1/04........................................ 183,600
250,000 Hamilton County, Building Improvement & Refunding,
Museum Center, GO, 5.75%, 12/1/00..................... 260,312
250,000 Hilliard School District, GO, 5.35%, 12/1/04........... 252,813
250,000 Kings Local School District, GO, 5.75%, 12/1/10........ 253,125
100,000 Lake County Human Services Building, GO, 5.70%,
12/1/15............................................... 98,875
250,000 Lakota Local School District, GO, 6.00%, 12/1/07,
Callable 12/1/02 @101................................. 257,500
250,000 Mahoning County, GO, 5.60%, 12/1/02.................... 259,375
250,000 Mahoning County, GO, 5.70%, 12/1/08.................... 257,188
100,000 Marysville Exempt Village School District, GO, 5.30%,
12/1/09............................................... 97,750
200,000 Mason City School District, GO, 5.20%, 12/1/08......... 195,250
250,000 Middletown Capital Facilities Improvement, 5.60%,
12/1/05............................................... 251,875
100,000 Montgomery County, GO, 5.40%, 9/1/09................... 98,250
250,000 Olentangy Local School District, GO, Series A, 5.70%,
12/1/05............................................... 260,312
</TABLE>
Continued
-24-
<PAGE>
THE RIVERFRONT FUNDS, INC.
OHIO TAX-FREE BOND FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------ -----------
<C> <S> <C>
OHIO MUNICIPAL BONDS, CONTINUED:
$100,000 Solon, GO, 5.25% 12/1/07.............................. $ 98,250
100,000 State, GO, 5.60%, 8/1/02.............................. 104,625
250,000 State Building Authority, 5.70%, 9/1/01............... 261,250
250,000 State Building Authority, 6.00%, 10/1/07.............. 262,812
245,000 State Building Authority, 6.13%, 10/1/09.............. 256,944
95,000 State Building Authority, 6.25%, 6/1/11............... 97,138
250,000 State Elementary & Secondary Capital Facilities,
5.45%, 6/1/99........................................ 256,875
250,000 State Public Facilities Commission, Higher Education
Capital Facilities, Series II-B, 5.70%, 11/1/03...... 261,563
250,000 State Public Facilities Commission, Parks &
Recreations, Series II-A, 5.25%, 6/1/06.............. 250,000
200,000 State Public Facilities Commission, Higher Education
Capital Facilities, Series II-A, 5.20%, 5/1/05....... 201,000
250,000 State Water Development Authority Revenue, 5.75%,
6/1/03............................................... 261,563
250,000 State Water Development Authority Revenue, 5.75%,
12/1/05, Callable
12/1/02 @102......................................... 261,563
150,000 State Water Development Authority Revenue, 5.70%,
12/1/11.............................................. 150,375
100,000 Summit County, 5.45%, 12/1/10......................... 99,504
250,000 University of Cincinnati, Series R3, 5.80%, 6/1/04.... 259,063
250,000 Warren County Waterworks, 5.75%, 12/1/09.............. 250,313
100,000 West Clermont Local School District, GO, 5.55%,
12/1/06.............................................. 101,875
250,000 Woodridge Local School District, GO, 5.75%, 12/1/07,
Callable 12/1/04 @102................................ 257,188
-----------
Total Ohio Municipal Bonds...................................... 10,409,485
-----------
INVESTMENT COMPANIES (7.0%):
325,000 Dreyfus Municipal Money Market Fund................... 325,000
456,761 Goldman Tax Free Fund................................. 456,761
-----------
Total Investment Companies...................................... 781,761
-----------
Total (Cost--$10,940,541)(a).................................... $11,191,246
===========
</TABLE>
- --------
Percentages indicated are based on net assets of $11,214,857.
(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............. $267,576
Unrealized depreciation............. (16,871)
--------
Net unrealized appreciation......... $250,705
========
</TABLE>
GO--General Obligation
See notes to financial statements.
-25-
<PAGE>
THE RIVERFRONT FUNDS, INC.
FLEXIBLE GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS (46.9%):
Aerospace (0.9%):
2,200 Lockheed Martin Corp................................... $ 184,800
-----------
Agricultural Machinery (1.8%):
8,000 Case Corp.............................................. 384,000
-----------
Apparel (0.9%):
4,000 Jones Apparel Group (b)................................ 196,500
-----------
Beverages (0.7%):
2,000 Anheuser-Busch Cos., Inc............................... 150,000
-----------
Building Materials (1.3%):
4,000 Texas Industries, Inc.................................. 274,500
-----------
Chemicals (0.9%):
2,500 E. I. du Pont de Nemours & Co.......................... 197,813
-----------
Computers & Software (1.9%):
4,800 Seagate Technology, Inc. (b)........................... 216,000
4,000 Compaq Computer Corp. (b).............................. 197,000
-----------
413,000
-----------
Department Stores (0.8%):
3,000 Mercantile Stores Co., Inc............................. 175,875
-----------
Drugs (2.4%):
3,000 Amgen, Inc. (b)........................................ 162,000
4,000 Bristol-Myers Squibb Co................................ 360,000
-----------
522,000
-----------
Food Processing (2.3%):
8,000 IBP, Inc............................................... 221,000
8,500 H. J. Heinz Co......................................... 258,187
-----------
479,187
-----------
Forest Products (0.3%):
2,000 International Paper Co................................. 73,750
-----------
Grocery (1.1%):
6,000 Kroger Co. (b)......................................... 237,000
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------ -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Household Products/Wares (1.1%):
2,700 Clorox Co............................................. $ 239,287
-----------
Industrial Machinery (1.1%):
3,400 Caterpillar, Inc...................................... 230,350
-----------
Leisure Time (0.5%):
5,000 Brunswick Corp. 100,000............................... 100,000
-----------
Manufacturing (0.6%):
4,000 TRINOVA Corp.......................................... 133,500
-----------
Metals (1.2%):
11,000 Placer Dome, Inc...................................... 262,625
-----------
Mining (2.6%):
10,000 Barrick Gold Corp..................................... 271,250
4,000 Homestake Mining Co................................... 68,500
14,000 Santa Fe Pacific Gold Corp............................ 197,750
-----------
537,500
-----------
Oil & Gas Producers (6.5%):
2,500 British Petroleum PLC, ADR............................ 267,188
2,300 Exxon Corp............................................ 199,813
1,200 Mobil Corp............................................ 134,550
8,000 Panenergy Corp........................................ 263,000
2,000 Texaco, Inc........................................... 167,750
16,000 YPF Sociedad Anonima-Sponsored ADR.................... 360,000
-----------
1,392,301
-----------
Photography (1.4%):
4,000 Eastman Kodak Co...................................... 311,000
-----------
Real Estate (3.6%):
13,000 Healthcare Properties Investment, Inc................. 438,750
12,000 Health & Retirement Properties Trust.................. 207,000
7,000 Public Storage Inc.................................... 144,375
-----------
790,125
-----------
</TABLE>
Continued
-26-
<PAGE>
THE RIVERFRONT FUNDS, INC.
FLEXIBLE GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Restaurants (0.8%):
5,000 Outback Steakhouse, Inc. (b)........................... $ 172,422
-----------
Retail (1.5%):
3,000 Albertson's, Inc....................................... 124,125
6,000 Walgreen Co............................................ 201,000
-----------
325,125
-----------
Transportation--Rail (0.7%):
3,000 CSX Corp. 144,750...................................... 144,750
-----------
Tobacco (2.0%):
4,300 Philip Morris Cos., Inc................................ 447,200
-----------
Utilities--Electric (2.0%):
7,000 Consolidated Edison of
New York.............................................. 204,750
4,500 Duke Power Co.......................................... 230,625
-----------
435,375
-----------
Utilities--Telecommunications (6.0%):
6,500 Ameritech Corp......................................... 385,937
4,000 Atmel Corp. (b)........................................ 120,500
2,000 CIA Telecomunicacion Chile, ADR........................ 196,250
4,000 Telecom of New Zealand, ADR............................ 267,000
11,000 Telefonica De Argentina,
ADR (b)............................................... 325,875
-----------
1,295,562
-----------
Total Common Stocks 10,105,547
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------ -----------
<C> <S> <C>
U.S. GOVERNMENT AGENCIES (5.8%):
FEDERAL HOME LOAN BANK:
$ 100,000 5.97%, 12/14/98....................................... $ 98,723
400,000 5.78%, 1/8/99......................................... 391,540
200,000 6.11%, 1/18/01........................................ 194,344
300,000 6.04%, 2/14/01........................................ 289,647
300,000 7.00%, 3/28/01........................................ 296,844
-----------
Total U.S. Government Agencies 1,271,098
-----------
U.S. TREASURY NOTES (39.3%):
500,000 Discount Note, 9/19/96................................ 494,085
300,000 Discount Note, 12/19/96............................... 292,371
1,300,000 6.50%, 5/15/97........................................ 1,308,151
500,000 6.00%, 12/31/97....................................... 500,280
2,950,000 7.25%, 5/15/04........................................ 3,056,731
2,500,000 6.88%, 5/16/06........................................ 2,525,750
400,000 7.25%, 5/15/16 ....................................... 409,908
-----------
Total U.S. Treasury Notes 8,587,276
-----------
U.S. TREASURY BILLS (4.3%):
950,000 6.25%, 5/31/00........................................ 944,091
-----------
Total U.S. Treasury Bills 944,091
-----------
U.S. TREASURY BONDS (1.5%):
300,000 8.13%, 8/15/19........................................ 336,672
-----------
Total U.S. Treasury Bonds 336,672
-----------
</TABLE>
Continued
-27-
<PAGE>
THE RIVERFRONT FUNDS, INC.
FLEXIBLE GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JUNE 30, 1996
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------ -----------
<C> <S> <C>
INVESTMENT COMPANIES (1.8%):
$248,394 Dreyfus Treasury Prime Fund........................... $ 248,394
8,000 Southern Africa Fund, Inc............................. 134,000
-----------
Total Investment Companies 382,394
-----------
Total (Cost--$20,633,173)(a) $21,627,078
===========
</TABLE>
- ------
The percentages indicated are based on net assets of $21,831,241.
(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........... $1,293,514
Unrealized depreciation........... (299,609)
----------
Net unrealized appreciation....... $ 993,905
==========
</TABLE>
(b) Non-income producing security.
ADR--American Depository Receipt
See notes to financial statements.
-28-
<PAGE>
THE RIVERFRONT FUNDS, INC.
STOCK APPRECIATION FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS (95.7%):
Apparel (8.7%):
15,000 Jones Apparel Group (b)................................ $ 736,875
7,000 Nike, Inc., Class B.................................... 719,250
14,000 The GAP, Inc........................................... 449,750
24,000 The Men's Wearhouse, Inc. (b).......................... 774,000
12,000 TJX Companies, Inc..................................... 405,000
15,000 Vans, Inc. (b)......................................... 255,000
-----------
3,339,875
-----------
Brokerage (1.1%):
8,000 Alex Brown, Inc........................................ 452,000
-----------
Business Services (0.7%):
9,750 PMT Services, Inc. (b)................................. 279,094
-----------
Building Materials (0.4%):
5,000 NCI Building Systems, Inc. (b)......................... 168,750
-----------
Commercial Services (4.8%):
10,000 Employee Solutions, Inc. (b)........................... 315,000
8,000 Greenwich Air Services, Inc., Class A (b).............. 196,000
8,000 Greenwich Air Services, Inc., Class B (b).............. 156,000
10,500 Paychex, Inc........................................... 505,312
20,000 Prepaid Legal Services, Inc. (b)....................... 370,000
8,600 Wackenhut Corrections
Corp. (b)............................................. 287,025
-----------
1,829,337
-----------
Computer, Software & Services (16.1%):
7,500 Aspen Technologies, Inc. (b)........................... 412,500
20,000 Auspex Systems, Inc. (b)............................... 300,000
11,250 Cadence Design Systems, Inc. (b)....................... 379,688
20,000 Cisco Systems, Inc. (b)................................ 1,132,500
36,000 Cognos, Inc. (b)....................................... 828,000
12,500 Comverse Technology, Inc. (b).......................... 381,250
10,000 Dialogic Corp. (b)..................................... 596,250
12,300 In Focus Systems, Inc. (b)............................. 298,275
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Computer, Software & Services, continued:
7,000 Microsoft Corp. (b).................................... $ 840,875
6,000 Peoplesoft, Inc. (b)................................... 427,500
8,000 Sun Microsystems, Inc. (b)............................. 471,000
15,000 Unisys Corp. (b)....................................... 106,875
-----------
6,174,713
-----------
Cosmetics (0.7%):
10,000 Nature's Sunshine
Products, Inc......................................... 255,000
-----------
Department Stores (2.2%):
15,000 Dollar Tree Stores, Inc. (b)........................... 476,250
10,000 Kohl's Corp. (b)....................................... 366,250
-----------
842,500
-----------
Drugs (2.8%):
11,000 Gilead Sciences, Inc. (b).............................. 277,750
24,000 Jones Medical Industries, Inc.......................... 798,000
-----------
1,075,750
-----------
Electronics (7.6%):
30,000 Alliance Semiconductor
Corp. (b)............................................. 251,250
12,500 Analog Devices, Inc. (b)............................... 318,750
11,000 Applied Materials, Inc. (b)............................ 335,500
25,000 Checkpoint Systems, Inc. (b)........................... 859,375
10,000 Kent Electronics Corp. (b)............................. 312,500
7,500 Lam Research Corp. (b)................................. 195,000
15,000 Micron Technology, Inc................................. 388,125
10,000 Vitesse Semiconductor
Corp. (b)............................................. 240,000
-----------
2,900,500
-----------
Entertainment (2.2%):
7,500 Circus Circus Enterprises,
Inc. (b).............................................. 307,500
10,000 Mirage Resorts, Inc. (b)............................... 540,000
-----------
847,500
-----------
</TABLE>
Continued
-29-
<PAGE>
THE RIVERFRONT FUNDS, INC.
STOCK APPRECIATION FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- -------------------------------------------------------- ----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Environmental Control (1.4%):
15,000 Allied Waste Industries, Inc. (b)....................... $ 133,125
12,000 United Waste Systems, Inc. (b).......................... 387,000
----------
520,125
----------
Financial Services (3.8%):
15,000 Aames Financial Corp.................................... 538,125
10,000 Green Tree Financial Corp. (b).......................... 312,500
27,500 The Money Store, Inc.................................... 608,438
10 Transport Holdings, Inc.,
Class A (b)............................................ 460
----------
1,459,523
----------
Food Service (1.9%):
15,000 Longhorn Steaks, Inc. (b)............................... 375,000
10,000 Outback Steakhouse, Inc. (b)............................ 344,844
----------
719,844
----------
Homebuilders (1.8%):
15,000 Cavalier Homes, Inc..................................... 346,875
16,000 Oakwood Homes Corp...................................... 330,000
----------
676,875
----------
Home Improvememt (1.6%):
40,000 Eagle Hardware And Garden, Inc. (b)..................... 610,000
----------
Hospital Management & Services (1.7%):
20,000 Prime Medical Services, Inc. (b)........................ 347,500
12,000 Universal Health Services, Inc., Class B (b)............ 313,500
----------
661,000
----------
Industrial Machinery (1.0%):
5,000 JLG Industries, Inc..................................... 371,250
----------
Insurance (0.0%):
200 Highlands Insurance Group (b)........................... 3,750
----------
Lodging (1.3%):
7,000 HFS, Inc. (b)........................................... 490,000
----------
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Medical Supplies (1.0%):
15,000 Mentor Corp............................................ $ 382,500
-----------
Metals (0.9%):
15,000 Placer Dome, Inc....................................... 358,125
-----------
Mining (2.8%):
15,000 Barrick Gold Corp...................................... 406,875
7,500 Newmont Gold Co........................................ 377,812
25,000 Pegasus Gold, Inc. (b)................................. 306,250
-----------
1,090,937
-----------
Oil Equipment, Wells & Services (7.7%):
12,000 Ensco International, Inc. (b).......................... 390,000
30,000 Global Marine, Inc. (b)................................ 416,250
11,000 Pogo Producing Co...................................... 419,375
20,000 Reading & Bates Corp. (b).............................. 442,500
25,000 Rowan Companies, Inc. (b).............................. 368,750
5,000 Sonat Offshore Drilling Co............................. 252,500
15,000 Tidewater, Inc......................................... 658,125
-----------
2,947,500
-----------
Printing & Publishing (1.0%):
10,000 Gartner Group, Inc.,
Class A (b)........................................... 366,250
-----------
Recreational Equipment (1.3%):
15,000 Callaway Golf Co....................................... 498,750
-----------
Retail (9.3%):
15,000 Bed Bath & Beyond, Inc. (b)............................ 401,250
10,000 Boise Cascade Office Products Corp. (b)................ 346,250
10,000 Consolidated Stores Corp. (b).......................... 367,500
15,000 Corporate Express, Inc. (b)............................ 600,000
11,000 PetsMart, Inc. (b)..................................... 525,250
13,500 Regis Corp............................................. 421,875
9,000 Ross Stores, Inc. ..................................... 312,750
</TABLE>
Continued
-30-
<PAGE>
THE RIVERFRONT FUNDS, INC.
STOCK APPRECIATION FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JUNE 30, 1996
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Retail, continued:
10,000 Tech Data Corp. (b).................................... $ 217,500
5,000 Tiffany & Co........................................... 365,000
-----------
3,557,375
-----------
Steel (1.0%)
10,000 AK Steel Holding Corp.................................. 391,250
-----------
Telecommunications (5.2%)
8,000 Aspect Telecommunications Corp. (b).................... 396,000
15,000 ECI Telecommunications Limited Designs................. 348,750
5,000 Glenayre Technologies, Inc. (b)........................ 250,000
10,000 LCI International, Inc. (b)............................ 313,750
12,500 Worldcom, Inc. (b)..................................... 692,187
-----------
2,000,687
-----------
Textiles (2.0%):
6,500 Tommy Hilfiger Corp. (b)............................... 348,563
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Textiles, continued:
15,000 G & K Services, Inc., Class A.......................... $ 427,500
-----------
776,063
-----------
Transportation (1.7)%
7,500 Coachmen Industries, Inc............................... 262,500
15,000 Conair Holdings, Inc................................... 405,000
-----------
667,500
-----------
Total Common Stocks 36,714,323
-----------
U.S. GOVERNMENT AGENCIES (2.6%)
Federal National Mortgage Assoc.:
1,000,000 Discount Notes, 7/3/96................................. 999,260
-----------
Total U.S. Government Agencies 999,260
-----------
INVESTMENT COMPANIES (1.7%):
649,921 Dreyfus Treasury Prime Fund............................ 649,921
-----------
Total Investment Companies 649,921
-----------
Total (Cost--$41,721,425)(a) $38,363,504
===========
</TABLE>
- ------
The percentages indicated are based on net asets of $38,378,298.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation........ $ 7,467,921
Unrealized depreciation........ (10,825,842)
------------
Net unrealized depreciation.... $ (3,357,921)
============
</TABLE>
(b) Non-income producing security.
See notes to financial statements.
-31-
<PAGE>
THE RIVERFRONT FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
(UNAUDITED)
1.ORGANIZATION:
The Riverfront Funds, Inc. (the "Fund"), was organized as a Maryland
corporation on March 27, 1990, and is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a diversified, open-
end management investment company. The Fund is authorized to issue six
series of shares of capital stock, representing interests in different
portfolios of securities as follows: The Riverfront U.S. Government
Securities Money Market Fund, The Riverfront U.S. Government Income Fund,
The Riverfront Income Equity Fund, The Riverfront Ohio Tax-Free Bond Fund,
The Riverfront Flexible Growth Fund and The Riverfront Stock Appreciation
Fund (each, a "Portfolio"; and collectively, the "Portfolios").
The investment objective of the U.S. Government Securities Money Market
Fund is to seek current income from U.S. Government short-term securities
while preserving capital and maintaining liquidity. The investment
objective of the U.S. Government Income Fund is to seek a high level of
current income by investing primarily in securities issued or guaranteed by
the U.S. Government, its agencies and instrumentalities. The investment
objective of the Income Equity Fund is to seek a high level of investment
income through investment primarily in income-producing equity securities
of U.S. issuers. The investment objective of the Ohio Tax-Free Bond Fund is
to seek income exempt from federal and state income taxes and preservation
of capital through bonds or notes issued by the State of Ohio. The
investment objective of the Flexible Growth Fund is to seek long-term
growth of capital with some current income as a secondary objective. The
investment objective of the Stock Appreciation Fund is to seek capital
growth by investing primarily in common stocks.
The Fund is authorized to issue 3,000,000,000 shares with a par value of
$.001. Sales of shares of the Portfolios may be made to customers of The
Provident Bank ("Provident") and its affiliates, to all accounts of
correspondent banks of Provident and to the general public.
The U.S. Government Income Fund, the Income Equity Fund, the Ohio Tax-Free
Bond Fund, the Flexible Growth Fund and the Stock Appreciation Fund
(collectively, "the variable net asset value funds") each offers two share
classes: Investor A Shares and Investor B Shares. The U.S. Government
Securities Money Market Fund (the "money market fund") offers only the
Investor A Shares. Investor A Shares of the variable net asset value funds
are subject to initial sales charges imposed at the time of purchase, in
accordance with the Portfolios' prospectuses. Certain redemptions of the
Investor B Shares of the variable net asset value funds made within six
years of purchase are subject to varying contingent deferred sales charges
in accordance with the Portfolios' prospectuses. Each share class has
identical rights and privileges, except with respect to distribution and
services (12b-1) fees paid by each share class, voting rights on matters
affecting a single share class, and the exchange privileges of each share
class.
2.SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies followed by
the Fund in preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles. The preparation
of financial statements requires management to make estimates and
assumptions that affect the
Continued
-32-
<PAGE>
THE RIVERFRONT FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JUNE 30, 1996
(UNAUDITED)
reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses for the period.
Actual results could differ from those estimates.
SECURITIES VALUATION:
Investments of the money market fund are valued at either amortized cost,
which approximates market value, or at original cost which, combined with
accrued interest, approximates market value. Under the amortized cost
method, discount or premium is amortized on a constant basis to the
maturity of the security. In addition, the money market fund may not (a)
purchase any instrument with a remaining maturity greater than 397 days
unless such investment is subject to a demand feature, or (b) maintain a
dollar-weighted-average portfolio maturity which exceeds 90 days.
Investments in common and preferred stocks, corporate bonds, municipal
bonds, commercial paper and U.S. Government securities of the variable net
asset value funds are valued at their market values determined on the basis
of the mean of the latest available bid and asked quotations on the
principal exchange (closing sales prices if the over-the-counter National
Market System) in which such securities are normally traded. Short-term
investments maturing in 60 days or less are valued at amortized cost which,
combined with accrued interest, approximates market value. Investments in
investment companies are valued at their net asset values as reported by
such investment companies. Other securities for which quotations are not
readily available are valued at their fair value by the investment adviser
under the supervision of the Fund's Board of Directors. The differences
between the cost and market values of investments held by the variable net
asset value funds are reflected as either unrealized appreciation or
depreciation.
SECURITY TRANSACTIONS AND RELATED INCOME:
Security transactions are accounted for on the date the security is
purchased or sold (trade date). Interest income is recognized on the
accrual basis and includes, where applicable, the pro rata amortization of
premium or discount. Dividend income is recorded on the ex-dividend date.
Realized gains or losses from sales of securities are determined by
comparing the identified cost of the security lot sold with the net sales
proceeds.
REPURCHASE AGREEMENTS:
The Portfolios may acquire repurchase agreements from financial
institutions such as banks and broker dealers which Provident, as
investment adviser or the Portfolio's sub-investment adviser deems
creditworthy under guidelines approved by the Board of Directors, subject
to the seller's agreement to repurchase such securities at a mutually
agreed-upon date and price. The repurchase price generally equals the price
paid by each Portfolio plus interest negotiated on the basis of current
short-term rates, which may be more or less than the rate on the underlying
portfolio securities. The seller, under a repurchase agreement, is required
to maintain the value of collateral held pursuant to the agreement at not
less than the repurchase price (including accrued interest). Securities
subject to repurchase agreements are held by each Portfolio's custodian or
another qualified custodian or in the Federal Reserve/Treasury book-entry
system. Repurchase agreements are considered to be loans by the Portfolios
under the 1940 Act.
Continued
-33-
<PAGE>
THE RIVERFRONT FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JUNE 30, 1996
(UNAUDITED)
DIVIDENDS TO SHAREHOLDERS:
Dividends from net investment income are declared daily and paid monthly
for the money market fund. Dividends from net investment income are
declared and paid monthly for the variable net asset value funds.
Distributable net realized capital gains, if any, are declared and
distributed at least annually. Any taxable distributions declared in
December and paid in the following fiscal year will be taxable to
shareholders in the year declared.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. Timing differences relating to shareholder
distributions are reflected in the components of net assets and permanent
book and tax basis differences relating to shareholder distributions have
been reclassified to additional paid-in capital. These differences are due
primarily to differing treatments for dollar roll transactions, the
deferral of certain losses and expiring capital loss carryforwards.
FEDERAL INCOME TAXES:
It is the policy of each Portfolio to qualify or continue to qualify as a
regulated investment company by complying with the provisions available to
certain investment companies, as defined in applicable sections of the
Internal Revenue Code, and to make distributions of net investment income
and net realized capital gains sufficient to relieve it from all, or
substantially all, federal income taxes.
OTHER:
Expenses that are directly related to one of the Portfolios are charged
directly to that Portfolio. Other operating expenses of the Fund are
prorated to the portfolios, generally on the basis of relative net assets.
3.PURCHASES AND SALES OF SECURITIES:
Purchases and sales of securities (excluding short-term securities) for the
six months ended June 30, 1996 are as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
----------- -----------
<S> <C> <C>
U.S. Government Income Fund......................... $10,036,208 $13,633,145
Income Equity Fund.................................. $53,911,172 $53,175,699
Ohio Tax-Free Bond Fund............................. $ 499,504 $ 716,491
Flexible Growth Fund................................ $15,044,234 $ 8,647,209
Stock Appreciation Fund............................. $31,930,644 $35,070,302
</TABLE>
Continued
-34-
<PAGE>
THE RIVERFRONT FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JUNE 30, 1996
(UNAUDITED)
4.CAPITAL SHARE TRANSACTIONS:
Transactions in capital shares for the Fund were as follows:
<TABLE>
<CAPTION>
U.S. GOVERNMENT SECURITIES
MONEY MARKET FUND U.S. GOVERNMENT INCOME FUND
---------------------------- -----------------------------
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED DECEMBER 31, ENDED DECEMBER 31,
JUNE 30, 1996 1995 JUNE 30, 1996 1995
------------- ------------- -------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
INVESTOR A SHARES:
Proceeds from shares
issued.............. $ 187,416,065 $ 331,872,719 $ 1,130,930 $ 4,352,572
Proceeds from shares
issued in connection
with acquisition.... -- 4,865,634 -- --
Dividends reinvested. 1,076,488 1,518,099 195,234 569,125
Shares redeemed...... (173,004,224) (330,133,820) (2,338,203) (4,089,227)
------------- ------------- ------------- -------------
Change in net assets
from Investor A
share transactions.. $ 15,488,329 $ 8,122,632 $ (1,012,039) $ 832,470
============= ============= ============= =============
INVESTOR B SHARES:
Proceeds from shares
issued.............. -- -- $ 228,676 $ 1,317,928
Dividends reinvested. -- -- 21,056 9,712
Shares redeemed...... (274,140) (96,002)
------------- ------------- ------------- -------------
Change in net assets
from Investor B
share transactions.. -- -- $ (24,408) $ 1,231,638
============= ============= ============= =============
SHARE TRANSACTIONS:
INVESTOR A SHARES:
Issued............... 187,416,065 331,872,719 119,163 469,561
Issued in connection
with acquisition.... -- 4,865,634 -- --
Reinvested........... 1,076,488 1,518,099 20,586 60,733
Redeemed............. (173,004,224) (330,133,820) (246,569) (435,482)
------------- ------------- ------------- -------------
Change in Investor A
Shares.............. 15,488,329 8,122,632 (106,820) 94,812
============= ============= ============= =============
INVESTOR B SHARES:
Issued............... -- -- 21,244 123,342
Reinvested........... -- -- 1,961 903
Redeemed............. -- -- (25,516) (8,962)
------------- ------------- ------------- -------------
Change in Investor B
Shares.............. -- -- (2,311) 115,283
============= ============= ============= =============
</TABLE>
Continued
-35-
<PAGE>
THE RIVERFRONT FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
INCOME EQUITY FUND OHIO TAX-FREE FUND
-------------------------- --------------------------
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED DECEMBER 31, ENDED DECEMBER 31,
JUNE 30, 1996 1995 JUNE 30, 1996 1995
------------- ------------ ------------- ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
INVESTOR A SHARES:
Proceeds from shares
issued............... $ 5,267,395 $ 9,389,602 $ 39,306 $ 297,450
Proceeds from shares
issued in connection
with acquisition..... -- 9,727,219 -- --
Dividends reinvested.. 480,302 8,635,353 2,841 8,453
Shares redeemed....... (4,221,291) (7,219,484) (301,788) (109,278)
----------- ----------- --------- ---------
Change in net assets
from Investor A share
transactions......... $ 1,526,406 $20,532,690 $(259,641) $ 196,625
=========== =========== ========= =========
INVESTOR B SHARES:
Proceeds from shares
issued............... $ 1,676,116 $ 2,765,814 $ 212,984 $ 598,493
Dividends reinvested.. 226,984 13,294 8,538 9,755
Shares redeemed....... (134,014) (43,350) (152,303) (5,034)
----------- ----------- --------- ---------
Change in net assets
from Investor B share
transactions......... $ 1,769,086 $ 2,735,758 $ 69,219 $ 603,214
=========== =========== ========= =========
SHARE TRANSACTIONS:
INVESTOR A SHARES:
Issued................ 428,872 828,287 3,723 29,259
Issued in connection
with acquisition..... -- 793,942 -- --
Reinvested............ 39,085 763,006 274 833
Redeemed.............. (341,894) (630,554) (28,642) (10,732)
----------- ----------- --------- ---------
Change in Investor A
Shares............... 126,063 1,754,681 (24,645) 19,360
=========== =========== ========= =========
INVESTOR B SHARES:
Issued................ 133,817 241,570 19,983 57,922
Reinvested............ 19,185 1,125 806 927
Redeemed.............. (10,676) (3,605) (14,400) (491)
----------- ----------- --------- ---------
Change in Investor B
Shares............... 142,326 239,090 6,389 58,358
=========== =========== ========= =========
</TABLE>
Continued
-36-
<PAGE>
THE RIVERFRONT FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
FLEXIBLE GROWTH FUND STOCK APPRECIATION FUND
-------------------------- --------------------------
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED DECEMBER 31, ENDED DECEMBER 31,
JUNE 30, 1996 1995 JUNE 30, 1996 1995(A)
------------- ------------ ------------- ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
INVESTOR A SHARES:
Proceeds from shares
issued............... $4,796,993 $6,257,968 $ 1,721,983 $ 738,522
Dividends reinvested.. 138,211 282,271 554 1,542,781
Shares redeemed....... (967,355) (717,635) (7,182,625) (3,611,887)
---------- ---------- ----------- -----------
Change in net assets
from Investor A share
transactions......... $3,967,849 $5,822,604 $(5,460,088) $(1,330,584)
========== ========== =========== ===========
INVESTOR B SHARES:
Proceeds from shares
issued............... $4,097,636 $4,818,782 $ 539,518 $ 71,986
Dividends reinvested.. 113,889 52,617 -- --
Shares redeemed....... (351,841) (188,581) (17,738) --
---------- ---------- ----------- -----------
Change in net assets
from Investor B share
transactions......... $3,859,684 $4,682,818 $ 521,780 $ 71,986
========== ========== =========== ===========
SHARE TRANSACTIONS:
INVESTOR A SHARES:
Issued................ 426,109 593,056 174,475 76,082
Reinvested............ 12,288 25,863 59 164,279
Redeemed.............. (86,427) (65,727) (743,214) (370,208)
---------- ---------- ----------- -----------
Change in Investor A
Shares............... 351,970 553,192 (568,680) (129,847)
========== ========== =========== ===========
INVESTOR B SHARES:
Issued................ 351,973 442,046 53,681 7,299
Reinvested............ 9,807 4,698 -- --
Redeemed.............. (30,395) (16,667) (1,720) --
---------- ---------- ----------- -----------
Change in Investor B
Shares............... 331,385 430,077 51,961 7,299
========== ========== =========== ===========
</TABLE>
- --------
(a) Period from date acquired by Riverfront Stock Appreciation Fund.
Continued
-37-
<PAGE>
THE RIVERFRONT FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JUNE 30,1996
(UNAUDITED)
5.RELATED PARTY TRANSACTIONS
Provident has entered into an Investment Advisory Agreement with the Fund
whereby Provident supervises and manages the investment and reinvestment of
the assets of the U.S. Government Securities Money Market Fund, the U.S.
Government Income Fund, the Ohio Tax-Free Bond Fund and the Stock
Appreciation Fund. Under the terms of the Investment Advisory Agreement,
Provident is entitled to receive fees based on a percentage of the average
net assets of each Portfolio.
Pursuant to the terms of the Investment Advisory Agreement with the Fund,
Provident has entered into Sub-Investment Advisory Agreements with
DePrince, Race & Zollo, Inc. ("DRZ"), for the Income Equity Fund and with
James Investment Research ("JIR") for the Flexible Growth Fund. DRZ and JIR
provide investment advice to and supervise the investment program of the
Income Equity Fund and the Flexible Growth Fund, respectively. Under the
terms of the Sub-Investment Advisory Agreements, JIR receives from
Provident fees calculated at 0.50% of the average daily net assets of the
Flexible Growth Fund, and DRZ receives from Provident fees calculated at
0.50% of average daily net assets up to $55 million of the Income Equity
Fund and 0.55% of average daily net assets above $55 million for this Fund.
In addition to serving as Investment Adviser, Provident serves as custodian
and fund accountant to the Portfolios. Under the terms of the Custodian,
Fund Accounting and Recordkeeping Agreement, Provident is entitled to
receive fees based on a percentage of the average daily net assets of each
Portfolio.
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services ("BISYS")
is an Ohio limited partnership. BISYS Fund Services Ohio, Inc. ("BISYS
Ohio"), and BISYS are subsidiaries of the BISYS Group, Inc.
BISYS, with whom certain officers and a director of the Fund are
affiliated, serves the Fund as administrator, principal underwriter and
distributor. Such officers and director are paid no fees directly by the
Portfolios for serving as officers and as director of the Fund. Under the
terms of the Administration Agreement, BISYS' fees are computed at 0.20% of
the average daily net assets of each Portfolio.
Provident also serves as transfer agent and shareholder servicing agent to
the Fund and BISYS Ohio serves as sub-transfer agent for the Investor B
Shares. Under the terms of the Master Transfer and Record-keeping
Agreement, Provident is entitled to receive fees based on the number of
shareholders of each Portfolio and certain out-of-pocket expenses. Under
the terms of the Shareholder Servicing Agreement, Provident may receive a
fee computed daily at an annual rate of up to 0.25% of the average daily
net assets of certain shares of each Portfolio. This fee may be used to
reimburse BISYS or other providers of record keeping and/or administrative
support services. As of June 30, 1996, there were no shareholder servicing
agreements entered into on behalf of any of the Portfolios.
The Fund has adopted an Investor A Distribution Plan ("Investor A Plan")
and an Investor B Distribution and Services Plan ("Investor B Plan"), each
in accordance with Rule 12b-1 under the Investment Company Act of 1940.
Pursuant to the Investor A Plan, each Portfolio is authorized to pay or
reimburse BISYS, as distributor of Investor A Shares, a periodic amount,
calculated at an annual rate not to exceed 0.25% of the
Continued
-38-
<PAGE>
THE RIVERFRONT FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JUNE 30, 1996
(UNAUDITED)
average daily net asset value of Investor A Shares of each Portfolio.
Pursuant to the Investor B Plan, each variable net asset value fund is
authorized to pay or reimburse BISYS, as distributor of Investor B Shares,
(a) a distribution fee in an amount not to exceed, on an annual basis,
0.75% of the average daily net asset value of Investor B Shares of that
Portfolio and (b) a service fee in an amount not to exceed 0.25% of the
average daily net asset value of Investor B Shares of that Portfolio. These
fees may be used by BISYS to pay banks, broker dealers and other
institutions, including Provident, DRZ and JIR, or to reimburse BISYS or
its affiliates, to finance any activity which is principally intended to
result in the sale of shares or to compensate for providing shareholder
services. For the six months ended June 30, 1996, BISYS received $163,841
from commissions on sales of capital shares, of which $10,697 was reallowed
to the affiliated brokers.
Provident and certain of its affiliates own shares of Portfolios of the
Fund. As of June 30, 1996, the aggregate value of capital shares owned by
Provident and its affiliates were as follows (amounts in thousands):
<TABLE>
<S> <C>
U.S. Government Income Fund..................................... $23,490,656
Ohio Tax-Free Bond Fund......................................... $10,220,000
</TABLE>
Fees may be voluntarily reduced or reimbursed to assist the Portfolios in
maintaining competitive expense ratios.
Information regarding these transactions is as follows for the six months
ended June 30, 1996:
<TABLE>
<CAPTION>
U.S. GOVERNMENT INCOME
SECURITIES MONEY U.S. GOVERNMENT EQUITY
MARKET FUND INCOME FUND FUND
---------------- --------------- -------
<S> <C> <C> <C>
INVESTMENT ADVISOR FEES:
Annual fee before voluntary fee
reductions
(percentage of average daily net
assets)........................... 0.15% 0.40% 0.95%
Voluntary fee reductions........... -- -- $17,346
ADMINISTRATION FEES:
Annual fee (percentage of average
net assets)....................... 0.20% 0.20% 0.20%
12B-1 FEES (INVESTOR A):
Annual fee before voluntary fee
reductions
(percentage of average net
assets)........................... 0.25% 0.25% 0.25%
Voluntary fee reductions........... $213,848 $13,694 $12,400
12B-1 FEES (INVESTOR B):
Annual fee (percentage of average
net assets)....................... NA 1.00% 1.00%
CUSTODIAN AND ACCOUNTING FEES:..... $ 42,748 $18,129 $51,348
TRANSFER AGENT FEES:............... $ 34,381 $18,236 $24,538
REIMBURSED FEES:................... -- -- $ 3,363
</TABLE>
Continued
-39-
<PAGE>
THE RIVERFRONT FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
STOCK
OHIO TAX-FREE FLEXIBLE APPRECIATION
BOND FUND GROWTH FUND FUND
------------- ----------- ------------
<S> <C> <C> <C>
INVESTMENT ADVISOR FEES:
Annual fee before voluntary fee
reductions
(percentage of average daily net
assets).............................. 0.50% 0.90% 0.80%
Voluntary fee reductions.............. $ 5,643 $17,547 --
ADMINISTRATION FEES:
Annual fee (percentage of average net
assets).............................. 0.20% 0.20% 0.20%
12B-1 FEES (INVESTOR A):
Annual fee before voluntary fee
reductions (percentage of average net
assets).............................. 0.25% 0.25% 0.25%
Voluntary fee reductions.............. -- $ 4,985 --
12B-1 FEES (INVESTOR B):
Annual fee (percentage of average net
assets).............................. 1.00% 1.00% 1.00%
CUSTODIAN AND ACCOUNTING FEES:........ $ 7,911 $13,716 $29,161
TRANSFER AGENT FEES:.................. $12,462 $12,755 $18,115
REIMBURSED FEES:...................... -- $ 1,710 --
</TABLE>
--------
NA--Not applicable
-40-
<PAGE>
THE RIVERFRONT FUNDS, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
U.S. GOVERNMENT SECURITIES MONEY MARKET FUND
---------------------------------------------------------
YEARS ENDED DECEMBER 31,
----------------------------
SIX MONTHS OCTOBER 1,
ENDED 1992 TO
JUNE, 30 DECEMBER 31,
1996 1995 1994(D) 1993(D) 1992(A)(D)
----------- -------- -------- -------- ------------
(UNAUDITED)
-----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------
INVESTMENT ACTIVITIES
Net investment income.. 0.02 0.05 0.04 0.03 0.01
-------- -------- -------- -------- -------
DISTRIBUTIONS
Net investment income.. (0.02) (0.05) (0.04) (0.03) (0.01)
-------- -------- -------- -------- -------
NET ASSET VALUE, END OF
PERIOD................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== =======
Total Return............ 2.39%(b) 5.52% 3.78% 2.90% 0.80%(b)
RATIOS/SUPPLEMENTARY
DATA:
Net Assets at end of
period (000)........... $172,984 $157,495 $149,374 $133,207 $37,083
Ratio of expenses to
average net assets..... 0.60%(c) 0.58% 0.51% 0.32% 0.01%(c)
Ratio of net investment
income to average net
assets................. 4.75%(c) 5.34% 3.70% 2.85% 3.09%(c)
Ratio of expenses to
average net assets*.... 0.85%(c) 0.83% 0.80% 0.42% 0.68%(c)
Ratio of net investment
income to average net
assets*................ 4.50%(c) 5.09% 3.41% 2.75% 2.42%(c)
</TABLE>
- ------
* During the period, certain fees were voluntarily reduced and/or reduced
reimbursed. If such voluntary fee reductions and/or expense reimbursements
had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Audited by other auditors.
See notes to financial statements.
-41-
<PAGE>
THE RIVERFRONT FUNDS, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
U.S. GOVERNMENT INCOME FUND
-------------------------------------------------------------------------------------
SIX MONTHS JANUARY 17,
ENDED YEAR ENDED 1995 TO YEARS ENDED DECEMBER 31,
JUNE 30, DECEMBER 31, DECEMBER 31, ----------------------------
1996 1995 1995(A) 1994(F) 1993(F) 1992(B)(F)
------------------------- ------------ ------------ ------- ------- ----------
INVESTOR A INVESTOR B INVESTOR A INVESTOR B
----------- ----------- ------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 9.71 $10.95 $ 8.92 $10.00 $ 9.91 $ 9.76 $ 10.00
------- ------ ------- ------ ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income.. 0.26 0.24 0.54 0.43 0.54 0.51 0.10
Net realized and
unrealized gains
(losses) from
investments........... (0.37) (0.42) 0.79 0.94 (0.99) 0.20 (0.23)
------- ------ ------- ------ ------- ------- -------
Total from Investment
Activities.......... (0.11) (0.18) 1.33 1.37 (0.45) 0.71 (0.13)
------- ------ ------- ------ ------- ------- -------
DISTRIBUTIONS
Net investment income.. (0.26) (0.24) (0.54) (0.42) (0.54) (0.50) (0.10)
In excess of net
investment income.... -- -- -- -- -- (0.06) (0.01)
------- ------ ------- ------ ------- ------- -------
Total Distributions... (0.26) (0.24) (0.54) (0.42) (0.54) (0.56) (0.11)
------- ------ ------- ------ ------- ------- -------
NET ASSET VALUE, END OF
PERIOD................. $ 9.34 $10.53 $ 9.71 $10.95 $ 8.92 $ 9.91 $ 9.76
======= ====== ======= ====== ======= ======= =======
Total Return (excludes
sales/redemption
charge)................ (1.19)%(g) (1.61)%(g) 15.22% 13.96%(e) (4.64)% 7.38% (1.31)%
RATIOS/SUPPLEMENTARY
DATA:
Net Assets at end of
period (000)........... $34,145 $1,190 $36,538 $1,263 $32,721 $30,078 $24,588
Ratio of expenses to
average net assets..... 1.14%(c) 1.93%(c) 1.09% 1.90%(c) 0.86% 0.65% 0.66%
Ratio of net investment
income to average net
assets................. 5.43%(c) 4.65%(c) 5.74% 4.80%(c) 5.78% 5.05% 4.00%
Ratio of expenses to
average net assets*.... 1.22%(c) 1.93%(c) 1.18% 1.90%(c) 1.14% 1.08% 1.06%
Ratio of net investment
income to average net
assets*................ 5.35%(c) 4.65%(c) 5.65% 4.80%(c) 5.49% 4.62% 3.60%
Portfolio Turnover...... 30%(d) 30%(d) 75%(d) 75%(d) 83% 220% 117%
</TABLE>
- ------
* During the period, certain fees were voluntarily reduced and/or
reimbursued. If such voluntary fee reductions and/or expense
reimbursements had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Investment operations and sales of shares to the public began on October
1, 1992.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
(e) Represents total return for the Investor A Shares from January 1, 1995 to
January 16, 1995 plus the total return for the Investor B Shares from
January 17, 1995 to December 31, 1995.
(f) Audited by other auditors.
(g) Not annualized
See notes to financial statements.
-42-
<PAGE>
THE RIVERFRONT FUNDS, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INCOME EQUITY FUND
-------------------------------------------------------------------------
SIX MONTHS JANUARY 17,
ENDED YEAR ENDED 1995 TO YEARS ENDED DECEMBER 31,
JUNE 30, DECEMBER 31, DECEMBER 31, ----------------------------
1996 1995 1995(A) 1994(F) 1993(F) 1992(B)(F)
------------------------- ------------ ------------ ------- ------- ----------
INVESTOR A INVESTOR B INVESTOR A INVESTOR B
----------- ----------- ------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 11.70 $ 11.85 $ 10.15 $10.00 $ 10.63 $ 10.78 $ 10.00
------- ------- ------- ------ ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income.. 0.10 0.05 0.27 0.13 0.32 0.28 0.08
Net realized and
unrealized gains from
investments........... 1.00 1.00 2.89 2.78 -- 1.01 0.80
------- ------- ------- ------ ------- ------- -------
Total from Investment
Activities............. 1.10 1.05 3.16 2.91 0.32 1.29 0.88
------- ------- ------- ------ ------- ------- -------
DISTRIBUTIONS
Net investment income.. (0.10) (0.05) (0.27) (0.13) (0.31) (0.27) (0.08)
In excess of net
investment income...... -- -- -- -- -- (0.03) (0.01)
Net realized gains..... -- -- (1.34) (0.93) (0.49) (1.14) --
In excess of net
realized gains......... -- -- -- -- -- -- (0.01)
------- ------- ------- ------ ------- ------- -------
Total Distributions... (0.10) (0.05) (1.61) (1.06) (0.80) (1.44) (0.10)
------- ------- ------- ------ ------- ------- -------
NET ASSET VALUE, END OF
PERIOD................. $ 12.70 $ 12.85 $ 11.70 $11.85 $ 10.15 $ 10.63 $ 10.78
======= ======= ======= ====== ======= ======= =======
Total Return (excludes
sales/redemption
charge)................ 9.43%(g) 8.88%(g) 31.45% 29.28%(e) 3.08% 12.11% 8.74%
RATIOS/SUPPLEMENTARY
DATA:
Net Assets at end of
period (000)........... $67,612 $ 4,900 $60,845 $2,833 $34,965 $24,387 $12,262
Ratio of expenses to
average net assets..... 1.72%(c) 2.47%(c) 1.49% 2.46%(c) 1.30% 1.47% 1.48%
Ratio of net investment
income to average net
assets................. 1.63%(c) 0.85%(c) 2.27% 1.12%(c) 2.93% 2.55% 3.16%
Ratio of expenses to
average net assets*.... 1.82%(c) 2.52%(c) 1.74% 2.51%(c) 1.58% 1.64% 2.02%
Ratio of net investment
income to average net
assets*................ 1.53%(c) 0.80%(c) 2.02% 1.07%(c) 2.65% 2.38% 2.62%
Portfolio Turnover...... 81%(d) 81%(d) 180%(d) 180%(d) 119% 145% 12%
Average commission rate
paid (h)............... $0.0405 $0.0405 -- -- -- -- --
</TABLE>
- ------
* During the period, certain fees were voluntarily reduced and/or
reimbursed. If such voluntary fee reductions and/or expense reimbursements
had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Investment operations and sales of shares to the public began on October
1, 1992.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
(e) Represents total return for the Investor A Shares from January 1, 1995 to
January 16, 1995 plus the total return for the Investor B Shares from
January 17, 1995 to December 31, 1995.
(f) Audited by other auditors.
(g) Not annualized.
(h) Represents the dollar amount of commissions paid on Portfolio transactions
divided by the total number of shares purchased and sold for which
commissions were charged and is calculated on the basis of the Portfolio
as a whole without distinguishing between the classes of shares issued.
See notes to financial statements.
-43-
<PAGE>
THE RIVERFRONT FUNDS, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
OHIO TAX-FREE BOND FUND
-------------------------------------------------------------------------
SIX MONTHS YEAR JANUARY 17 FROM AUGUST 1,
ENDED ENDED 1995 TO 1994 THROUGH
JUNE 30, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1995(A) 1994(A)(E)
-------------------------- ------------ ------------ --------------
INVESTOR A INVESTOR B INVESTOR A INVESTOR B
----------- ----------- ------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 10.51 $10.73 $ 9.83 $10.00 $ 10.00
------- ------ ------- ------ -------
INVESTMENT ACTIVITIES
Net investment income.. 0.20 0.16 0.39 0.27 0.12
Net realized and
unrealized gains
(losses) from
investments........... (0.29) (0.28) 0.67 0.73 (0.17)
------- ------ ------- ------ -------
Total from Investment
Activities.......... (0.09) (0.12) 1.06 1.00 (0.05)
------- ------ ------- ------ -------
DISTRIBUTIONS
Net investment income.. (0.20) (0.16) (0.38) (0.27) (0.12)
------- ------ ------- ------ -------
NET ASSET VALUE, END OF
PERIOD................. $ 10.22 $10.45 $ 10.51 $10.73 $ 9.83
======= ====== ======= ====== =======
Total Return (excludes
sales/redemption
charge)................ (0.85)%(d) (1.16)%(d) 10.96% 10.10%(d) (0.47)%(d)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of
period (000)........... $10,538 $ 677 $11,091 $ 626 $10,190
Ratio of expenses to
average net assets..... 1.46%(c) 2.17%(c) 1.49% 2.27%(c) 1.08%(c)
Ratio of net investment
income to average net
assets................. 3.88%(c) 3.17%(c) 3.77% 3.01%(c) 2.92%(c)
Ratio of expenses to
average net assets*.... 1.56%)(c) 2.27%(c) 1.64% 2.41%(c) 1.44%(c)
Ratio of net investment
income to average net
assets*................ 3.78%(c) 3.08%(c) 3.62% 2.87%(c) 2.56%(c)
Portfolio Turnover...... 5%(b) 5%(b) 34%(b) 34%(b) 29%
</TABLE>
- ------
* During the period, certain fees were voluntarily reduced and/or
reimbursed. If such voluntary fee reductions and/or expense reimbursements
had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
(c) Annualized.
(d) Not annualized.
(e) Audited by other auditors.
See notes to financial statements.
-44-
<PAGE>
THE RIVERFRONT FUNDS, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FLEXIBLE GROWTH FUND
---------------------------------------------------------------------------
SIX MONTHS JANUARY 17, FROM SEPTEMBER 1,
ENDED YEAR ENDED 1995 TO 1994 THROUGH
JUNE 30, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1995(A) 1994(A)(F)
-------------------------- ------------ ------------ -----------------
INVESTOR A INVESTOR B INVESTOR A INVESTOR B
----------- ----------- ------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 11.36 $ 11.70 $ 9.79 $10.00 $10.00
------- ------- ------ ------ ------
INVESTMENT ACTIVITIES
Net investment income.. 0.17 0.12 0.35 0.25 0.10
Net realized and
unrealized gains
(losses) from
investments........... (0.26) (0.26) 1.66 1.79 (0.18)
------- ------- ------ ------ ------
Total from Investment
Activities.......... (0.09) (0.14) 2.01 2.04 (0.08)
------- ------- ------ ------ ------
DISTRIBUTIONS
Net investment income.. (0.17) (0.12) (0.34) (0.24) (0.13)
Net realized gains..... -- -- (0.10) (0.10) --
------- ------- ------ ------ ------
Total Distributions... (0.17) (0.12) (0.44) (0.34) (0.13)
------- ------- ------ ------ ------
NET ASSET VALUE, END OF
PERIOD................. $ 11.10 $ 11.44 $11.36 $11.70 $ 9.79
======= ======= ====== ====== ======
Total Return (excludes
sales redemption
charge)................ (0.83)%(e) (1.09)%(e) 20.83% 20.53%(c) (0.82)%(e)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of
period (000)........... $13,121 $ 8,710 $9,427 $5,030 $2,709
Ratio of expenses to
average net assets..... 1.55%(d) 2.36%(d) 1.28% 2.04%(d) 1.48%(d)
Ratio of net investment
income to average net
assets................. 2.99%(d) 2.19%(d) 3.48% 2.69%(d) 4.01%(d)
Ratio of expenses to
average net assets*.... 1.86%(d) 2.56%(d) 1.67% 2.84%(d) 4.61%(d)
Ratio of net investment
income to average net
assets*................ 2.68%(d) 1.99%(d) 3.09% 1.89%(d) 0.88%(d)
Portfolio Turnover...... 52%(b) 52%(b) 13%(b) 13%(b) 1%
Average commission rate
paid (h)............... $0.0043 $0.0043 -- -- --
</TABLE>
- ------
* During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or expense reimbursements had not
occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
(c) Represents total return for the Investor A Shares from January 1, 1995 to
January 16, 1995 plus the total return for the Investor B Shares from
January 17, 1995 to December 31, 1995.
(d) Annualized.
(e) Not annualized.
(f) Audited by other auditors.
(h) Represents the dollar amount of commissions paid on Portfolio transactions
divided by the total number of shares purchased and sold for which
commissions were charged and is calculated on the basis of the Portfolio
as a whole without distinguishing between the classes of shares issued.
See notes to financial statements.
-45-
<PAGE>
THE RIVERFRONT FUNDS, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
STOCK APPRECIATION FUND
--------------------------------------------------------------------------------------------------------
SIX MONTHS FROM OCTOBER 1, FROM OCTOBER 1,
ENDED 1995 THROUGH 1995 THROUGH YEARS ENDED SEPTEMBER 30,
JUNE 30, DECEMBER 31, DECEMBER 31, ------------------------------------------
1996 1995(B) 1995(A)(B) 1995(F) 1994(F) 1993(F) 1992(F)
-------------------------- --------------- --------------- ------- ------- ---------- -------
INVESTOR B INVESTOR A INVESTOR B INVESTOR A
----------- ----------- --------------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 9.50 $ 9.91 $ 10.00 $10.00 $ 8.25 $ 10.18 $ 7.98 $ 7.70
------- ------- ------- ------ ------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment loss.... (0.06) (0.06) (0.01) (0.01) (0.07) (0.12) (0.17) (0.08)
Net realized and
unrealized gains
(losses) from
investments........... 0.64 0.60 (0.12) (0.08) 2.14 (1.26) 2.57 1.41
------- ------- ------- ------ ------- ------- ------- -------
Total from Investment
Activities.......... 0.58 0.54 (0.13) (0.09) 2.07 (1.38) 2.40 1.33
------- ------- ------- ------ ------- ------- ------- -------
DISTRIBUTIONS
Net realized gains..... -- -- (0.37) -- (0.32) (0.55) (0.20) (1.05)
------- ------- ------- ------ ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD................. $ 10.08 $ 10.45 $ 9.50 $ 9.91 $ 10.00 $ 8.25 $ 10.18 $ 7.98
======= ======= ======= ====== ======= ======= ======= =======
Total Return (excludes
sales/redemption
charge)................ 6.11%(c) 5.45%(c) (1.20)%(c) (0.90)%(c) 25.12% (13.91)% 30.61% 16.69%
RATIOS/SUPPLEMENTARY
DATA:
Net Assets at end of
period (000)........... $37,759 $ 619 $40,995 $ 72 $44,500 $47,880 $59,330 $28,750
Ratio of expenses to
average net assets..... 1.86%(d) 2.55%(d) 1.76%(d) 2.30%(d) 2.61% 2.44% 2.47% 2.70%
Ratio of net investment
loss to average net
assets................. (1.19)%(d) (1.94)%(d) (0.49)%(d) (1.69)%(d) (0.73)% (1.35)% (1.85)% (1.00)%
Ratio of expenses to
average net assets*.... 1.86%(d) 2.55%(d) 1.77%(d) 2.39%(d) (g) (g) (g) (g)
Ratio of net investment
loss to average net
assets*................ (1.19)%(d) (1.94)%(d) (0.50)%(d) (1.78)%(d) (g) (g) (g) (g)
Portfolio Turnover...... 87%(e) 87%(e) 46%(e) 46%(e) 197% 254% 216% 288%
Average commission rate
paid (h)............... $0.0019 $0.0019 -- -- -- -- -- --
</TABLE>
- ------
* During the period, certain fees were voluntarily reduced and/or
reimbursed. If such voluntary fee reductions and/or expense reimbursements
had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) As of September 30, 1995, the Stock Appreciation Fund acquired all of the
assets of the MIM Stock Appreciation Fund and the MIM Stock Growth Fund.
Financial highlights for periods prior to September 30, 1995 represent the
performance of the MIM Stock Appreciation Fund. The per share data for the
periods prior to September 30, 1995 have been restated to reflect the
impact of the change of the net asset value of the Stock Appreciation Fund
on September 30, 1995 from $17.34 to $10.00.
(c) Not annualized.
(d) Annualized.
(e) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
(f) Audited by other auditors.
(g) There were no waivers or reimbursements during the period.
(h) Represents the dollar amount of commissions paid on Portfolio transactions
divided by the total number of shares purchased and sold for which
commissions were charged and is calculated on the basis of the Portfolio
as a whole without distinguishing between the classes of shares issued.
See notes to financial statements.
-46-
<PAGE>
- --------------------------------------------------------------------------------
THE RIVERFRONT THE RIVERFRONT THE RIVERFRONT
U.S. GOVERNMENT U.S. GOVERNMENT INCOME EQUITY
SECURITIES MONEY INCOME FUND FUND
MARKET FUND
THE RIVERFRONT THE RIVERFRONT THE RIVERFRONT
OHIO TAX-FREE FLEXIBLE GROWTH STOCK APPRECIATION
BOND FUND FUND FUND
[LOGO OF RIVERFRONT FUNDS]
THE RIVERFRONT FUNDS, INC.
Investment Adviser
The Provident Bank
One East Fourth Street
Cincinnati, Ohio 45202
Distributor
BISYS Fund Services
3435 Stelzer Road
Columbus, OH 43219
For additional information call
The Provident Bank
Mutual Fund Services
1-800-424-2295
SEMI-ANNUAL REPORT
JUNE 30, 1996
