Annual
Report
December 31, 1998
The Riverfront U.S. Government Securities Money Market Fund
The Riverfront U.S. Government Income Fund
The Riverfront Income Equity Fund
The Riverfront Balanced Fund
The Riverfront Small Company Select Fund
(formerly, The Riverfront Stock Appreciation Fund)
The Riverfront Large Company Select Fund
[LOGO OF RIVERFRONT FUNDS]
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Table of Contents The Riverfront Funds
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Message From The President.................................................. 2
Message From The Investment Adviser......................................... 3
Performance Reviews......................................................... 4
Report of Independent Auditors.............................................. 19
Statements of Assets and Liabilities........................................ 20
Statements of Operations.................................................... 22
Statements of Changes in Net Assets......................................... 24
Schedules of Portfolio Investments.......................................... 26
Notes to Financial Statements............................................... 39
Financial Highlights........................................................ 50
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Message From The President The Riverfront Funds
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Dear Shareholders:
I am pleased to present the Combined Annual Report to Shareholders for The
Riverfront Funds. This Report covers the 12-month reporting period from January
1, 1998 through December 31, 1998, and includes commentary by portfolio
management, a complete list of fund holdings and the financial statements.
The Financial Markets in Review
Overall, it was a positive yet highly volatile year for stocks, with blue-chips
leading the way. While small-company stocks suffered from a continued lack of
investor confidence, this sector appears quite undervalued vs. large-company
stocks, and remains very attractive for long-term investors. It was also a
generally positive year for bonds, particularly U.S. Treasury securities. A
"flight to quality" in the wake of overseas economic turmoil saw increased
demand for U.S. Treasuries, which caused yields to decline--and prices to
rise--on both short-term and long-term securities.
New Administrator and Distributor Appointed
I'm also pleased to report that Federated has been awarded a three-year contract
to serve as administrator of The Riverfront Funds. As Vice Chairman of Federated
Investors, Inc. and the new President of The Riverfront Funds, I'll be
communicating with you in future annual and semi-annual reports. We're proud to
have earned the confidence of The Riverfront Funds' Board of Trustees in our
ability to provide expert guidance and growth opportunities to your fund family
in the years ahead.
Thank you for joining other shareholders who have entrusted nearly $500 million
to this growing mutual fund family. We hope you are pleased with your progress.
You have our commitment to keep you up-to-date on the details of your investment
on a regular basis, through the highest level of service possible.
Sincerely,
/s/ Edward C. Gonzales
Edward C. Gonzales
President
February 15, 1999
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Message From The Investment Adviser The Riverfront Funds
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The Standard & Poor's 500 Composite Stock Price Index (the "S&P 500 Index")*
ended the year of 1998 with a total return of 28.6%, which represents the fourth
consecutive calendar year that the S&P 500 Index has appreciated by more than
20%. These unprecedented returns have occurred during the longest peacetime
economic expansion (94 months) in the United States.
The domestic economy performed very well in 1998. In fact, gross domestic
product (GDP) grew 3.9% for 1998, matching 1997's results. Consumer spending was
the driver of last year's growth, up 4.8% (largest annual gain in 14 years), as
a strong labor market, rising wages and very low inflation boosted consumer
confidence.
While this past year was rewarding for many investors, there were some pitfalls.
1998 was a year of extreme performance divergence by market capitalization.
Large company stocks greatly outperformed small company stocks. By year-end,
over 70% of the stocks that make up the S&P 500 Index under- performed the index
by 15% or more. Actually just 50 stocks generated 87% of the entire move in the
S&P 500 Index. A broader view of all U.S. equities shows us that two-thirds of
stocks lost value for the year. While relatively few stocks performed well
during the year, there was a consistent trend. Technology stocks, along with
Pharmaceuticals and Retailers, captured the attention of Wall Street investors
as convictions towards earnings growth improved. Contrarians and value-oriented
investors were, on average, sadly disappointed with their results.
Investors in small company stocks were left generally frustrated while
shareholders in commodity based businesses often lost value. The Asian currency
crisis created volatility in most financial markets throughout the year ending
with a Baby Bear market in the U.S. from July, 1998 to October, 1998. The
rebound in the market averages (up 28.1%), and more importantly the market
leaders, from October 8, 1998 through year-end was simply remarkable. Investors'
appetite for stocks overwhelmed the caution resulting from the global economic
events.
Outlook
The current economic and financial environment is exceeding almost every
expectation. Most forecasters have, in recent times, been too pessimistic in
their view towards economic growth, inflation and market returns. At this time
we do not foresee any significant change in the opportunity for our economy to
continue to thrive. Consumer spending, accounting for two-thirds of economic
activity in the U.S., should dictate the degree of success of the 1999 economy.
We believe this consumer-friendly environment of full employment, low inflation
and stable taxes will extend throughout 1999.
We believe that the financial markets should continue to reward winners and
punish losers in 1999. Therefore we forecast another year where macro-economic
circumstances carry significant weight. While commodities and industrials may
not suffer from another year of sizable price declines, we see few signs for
improvement. While the stocks they represent may bounce later in the year in an
attempt to identify the bottom, growth-oriented strategies should continue to
dominate the style categories.
Following another year of lower interest rates in 1998, we look for a fairly
stable interest rate scene. The Federal Reserve Board (the "Federal Reserve")
will continue to act responsibly in its efforts to balance the troubled global
situation with the robust American consumer.
Sincerely,
/s/ C. Edwin Riley, Jr.
C. Edwin Riley, Jr.
Senior Vice President
Managing Director
Provident Investment Advisors
*The S&P 500 Index is an unmanaged index of common stocks in industry,
transportation, and financial and public utility companies. Investments cannot
be made in an index.
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Performance Reviews The Riverfront Funds
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The Riverfront U.S. Government Securities Money Market Fund
Short-term interest rates, which were steady through the first half of 1998,
dropped 0.75% when the Federal Reserve became concerned about credit conditions
and credit spreads in the 3rd and 4th quarters of 1998. This change in rates
moved the money market yield curve from slightly positive to negative at the end
of 1998. This was a result of expectations that the Federal Reserve would
continue to drop rates in 1999.
As rates started coming down in the second half of 1998, we extended the
maturity of the Fund to around 80 days to capture the higher yields. As 1998
came to a close, and the yield curve became inverted, we came back to a more
neutral stance with the average maturity of around 60 days.
It is our expectation that the economy will decelerate in 1999 to a level of
1.5% to 2.0%, down from 3.5% to 4.0% in 1998. With that thought in mind, we
anticipate further lowering of short-term rates in the latter half of 1999. The
portfolio was widely diversified, and a laddered maturity structure was
maintained throughout the reporting period. Given the Fund's overriding goal,
preservation of capital, we expect to maintain our laddered approach to the
markets in the months ahead. If the economy does slow in the latter half of
1999, we would anticipate extending the maturity range to lock in the higher
yields.
[GRAPHIC REPRESENTATION OMITTED. SEE APPENDIX A1.]
Performance quoted represents past performance and is not indicative of future
results.
An investment in the Fund is neither insured nor guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the Fund
seeks to preserve the value of your investment at $1.00 per share, it is
possible to lose money by investing in the Fund.
The returns set forth for the Fund reflect the waiver of certain advisory or
administrative fees. Without the waiver of fees, total returns would have been
lower and the 7-day net yield would have been 4.35%. Yield will vary. Yields
quoted for money market funds most closely reflect the Fund's current earnings.
The U.S. 30-Day Treasury Bill Index is considered to be representative of the
U.S. 30-Day Treasury bill market. The index is unmanaged and does not reflect
the deduction of expenses associated with a mutual fund, such as investment-
management and fund-accounting fees. Investments cannot be made in such index.
The performance of the Fund reflects the deduction of fees for these value-added
services.
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Performance Reviews, continued The Riverfront Funds
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The Riverfront U.S. Government Income Fund
The fixed income market, similar to the stock market, experienced high
volatility in 1998; but the trend was consistently downward for interest rates.
The Federal Reserve was sufficiently concerned about the economy. They dropped
short-term rates three times in 1998 with the expectation for further declines
in 1999. Commodity prices, as measured by the Commodity Research Bureau (CRB)
Index, hit decade-long lows in 1998. The Consumer Price Index (CPI) remained low
at around 1.6% for the last 12 months. The yield curve, while flat to negative
for most of 1998, has returned to a slightly positive bias in the last part of
1998. This indicates neutral to rising expectations for interest rates in 1999.
The Fund provided a competitive market return of 6.95% (Investor A Shares)/1/,
based on net asset value, for 1998 versus 7.68% on the Lipper Intermediate U.S.
Government Index.
It is our expectation that the economy will decelerate in 1999 to a level of
1.5% to 2.0%, down from 3.5% to 4.0% in 1998. With that thought in mind, we
anticipate further lowering of short term rates in the latter half of 1999.
Longer-term rates will probably trade in a range with an upward bias. We
estimate that range to be 5.0% to 5.75% in 1999, which would result in a slight
steepening of the yield curve from the present structure.
With current spread levels versus U.S. Treasuries at the wide end of the
spectrum, we would favor an under-allocation in U.S. Treasuries and an over-
allocation in agency product, specifically callable agencies, as well as
medium grade corporates. We would also favor a high allocation in mortgage
product, and we would favor premium coupons, due to their high yield and our
anticipation of lower refinancing activity in 1999.
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1 The return, with the maximum sales charge of 4.50%; was 2.10%, 4.23% and 4.35%
for the one-year, five-year and since inception (10/1/92) periods,
respectively.
[GRAPHIC REPRESENTATION OMITTED. SEE APPENDIX A2.]
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Performance Reviews, continued The Riverfront Funds
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[GRAPHIC REPRESENTATION OMITTED. SEE APPENDIX A3.]
[GRAPHIC REPRESENTATION OMITTED. SEE APPENDIX A4.]
Past performance is not predictive of future results. Investment return and
principal value of the Riverfront variable net asset funds will fluctuate, so
that the shares, when redeemed, may be worth more or less than their original
cost. The returns set forth for the Fund reflect the waiver of certain advisory
or administrative fees. Without the waiver of fees, total return may have been
lower.
We have formally changed benchmarks from the Lehman Brothers Government/Mortgage
Bond Index, the Lehman Brothers Intermediate Government/Corporate Bond Index and
the Lipper Intermediate Government Average to the Lipper Intermediate U.S.
Government Index and the Lehman Brothers Intermediate Government Index as of
12/31/98. We believe these indices are more appropriate benchmarks because they
more closely mirror the investment style and average duration of the Fund.
The Fund's performance has been measured against 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 Fund is also
measured against the Lipper Intermediate U.S. Government Index and the Lehman
Brothers Intermediate Government Index, both representative of the intermediate
term government bond market. These indices do not reflect the deduction of
expenses associated with a mutual fund, such as investment management fees. The
indices are unmanaged, and investments cannot be made in such indices.
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Performance Reviews, continued The Riverfront Funds
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The Riverfront Income Equity Fund
For the year, the Income Equity Fund account returned 3.37% (Investor A
Shares)/1/, based on net asset value, versus the S&P 500 Index, an unmanaged
index, which returned 28.56%.
The S&P 500 Index's gains this year were concentrated in just a handful of
stocks, dominated by technology. Microsoft, Cisco, Intel, Lucent and Dell
contributed approximately one-quarter of this year's gains. While the S&P 500
Index gained more than 28% for the year, nearly three-fourths of U.S. stocks
failed to gain even 8%, and 40% posted losses for the year. In the past 25 years
the market has never been so narrow.
It was a large capitalization market, as the largest companies generated about
70% of the total return. Large cap growth stocks were viewed as a relatively
safe haven during 1998's profits recession. Also, with market instability
overseas, we saw an enormous amount of cash flow into the U.S. stock market,
most of it being directed at stocks of very large companies. High-priced
technology favorites and drug stocks were the market drivers. For value-
oriented managers, whose investment disciplines kept them out of these richly
priced growth stocks, it was the most challenging year since the 1990 recession.
The average stock fell more than 20% from its 12-month high, and behaved as if
we have been in a full-blown recession. Many value stocks are selling at
relative valuations below the levels experienced in the recessions of 1990, 1982
and 1980. We have experienced only two periods of dramatic under- performance
since the inception of our equity income investment discipline 13 years ago.
Prior to 1998, the last period of significant under-performance occurred in
1989, which was an environment plagued by down profits. For the four years
following the 1990 recession, our discipline outperformed the S&P 500 Index by
an average of 10% per year. Therefore, as history has demonstrated, the
environment should begin to improve for value stocks as the profit cycle troughs
and begins to accelerate.
Heading into the new year, through our bottom-up stock selection, there are two
areas of particular interest in the Fund's portfolio. We believe Basic Industry,
particularly paper stocks, and Financials, particularly banks, offer tremendous
upside at current valuations. The paper industry has experienced the lowest
capacity increases since 1970, which supports a bottoming of the pricing cycle.
Also, ongoing consolidation in the papers, should drive stocks higher. The
portfolio's first over-weighted position in banks in more than two years should
prove rewarding, with our group of names with attractive franchises, strong
fundamentals, and little or no exposure to South East Asia or Eastern Europe.
While value investing has been out of style, the evidence for its long-term
success is convincing. The frenzied speculation occurring in Internet and other
technology stocks has created enormous opportunities in other areas of the
market for value investors. Multiple easings by the Federal Reserve indicate
that the worst of the profit recession should be over. Historically, this
represents a time when value stocks begin to come into favor. The portfolio's 13
premium takeovers in 1998 confirm our valuation work and give us great
confidence going forward. Low valuations have begun to spawn the interest of
strategic buyers in many industries where we have significant exposure. We
believe that the consistent execution of our equity income investment discipline
will ultimately prevail as investors begin to recognize the tremendous value in
our universe. As always, we appreciate your continued support.
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/1/The return, with the maximum sales charge of 4.50%, was -1.28%, 15.50%, and
15.89% for the one-year, five-year and since inception (10/8/92) periods,
respectively.
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Performance Reviews, continued The Riverfront Funds
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[GRAPHIC REPRESENTATION OMITTED. SEE APPENDIX A5.]
[GRAPHIC REPRESENTATION OMITTED. SEE APPENDIX A6.]
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Performance Reviews, continued The Riverfront Funds
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[GRAPHIC REPRESENTATION OMITTED. SEE APPENDIX A7.]
Past performance is not predictive of future results. Investment return and
principal value of the Riverfront variable net asset funds will fluctuate, so
that the shares, when redeemed, may be worth more or less than their original
cost. The returns set forth for the Fund reflect the waiver of certain advisory
or administrative fees. Without the waiver of fees, total return may have been
lower.
The S&P 500 Index is an unmanaged index considered to be representative of the
stock market as a whole. This 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 Fund reflects the deduction of fees for these
value-added services. Investments cannot be made in such index. The Lipper
Equity Income Average is representative of an average of all funds in the Lipper
category of equity income.
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Performance Reviews, continued The Riverfront Funds
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The Riverfront Balanced Fund
The Balanced Fund provides shareholders with a combination of strategies within
one product. The application of the Adviser's strategic asset allocation
approach, combined with a large company growth-oriented equity process and a
sector rotation fixed income discipline, helps to provide our clients with
above-average return potential.
This Fund generated excellent results throughout 1998, as the 25.29% (Investor A
Shares)/1/ total return, based on net asset value, outpaced over 90% of all
other "Balanced Funds" according to Lipper Analytical Services, Inc. ("Lipper").
For the one-year period ended December 31, 1998, the Fund (Investor A Shares)
was ranked 21 out of 410 funds in the "Balanced Fund" category by Lipper./2/ For
the twelve months ended December 31, 1998, the Fund's total return, based on net
asset value, of 25.29% (Investor A Shares)/1/ ranked in the 6th percentile./2/
The Fund's focus on owning successful growth stocks and taking advantage of the
continuing decline in interest rates are, in our view, the keys to the success
of our results.
The largest equity holdings in the Fund as of December 31, 1998 included Cisco
Systems (4.06% of net assets), Microsoft (3.03% of net assets), Pfizer (2.99% of
net assets), Staples (2.78% of net assets), Time Warner (2.72% of net assets),
General Electric (2.44% of net assets), Home Depot (2.43% of net assets),
Wal-Mart Stores (2.43% of net assets), Walgreen (2.33% of net assets), and
Schering Plough (2.20% of net assets).
The asset allocation of the Fund as of December 31, 1998, was Stocks--60%,
Bonds--33% and Cash--7%.
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/1/The return, with the maximum sales charge of 4.50%; was 19.65% and 14.11% for
the one-year and since inception (9/1/94) periods, respectively.
/2/Lipper rankings are based on total return and do not take sales charges into
account. During the ranking period, certain Fund expenses were waived,
otherwise, total return would have been lower.
[GRAPHIC REPRESENTATION OMITTED. SEE APPENDIX A8.]
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Performance Reviews, continued The Riverfront Funds
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[GRAPHIC REPRESENTATION OMITTED. SEE APPENDIX A9.]
[GRAPHIC REPRESENTATION OMITTED. SEE APPENDIX A10.]
Past performance is not predictive of future results. Investment return and
principal value of the Riverfront variable net asset funds will fluctuate, so
that the shares, when redeemed, may be worth more or less than their original
cost. The returns set forth for the Fund reflect the waiver of certain advisory
or administrative fees. Without the waiver of fees, total return may have been
lower.
The S&P 500 Index and the Lehman Brothers Intermediate Government/Corporate Bond
Index are considered to be representative of the stock and bond markets,
respectively. They do not reflect the deduction of expenses associated with a
mutual fund, such as investment management and fund accounting fees. The
performance of the Fund reflects the deduction of fees for these value-added
services. The Lipper Balanced Average is a composite of 522 funds in the Lipper
Balanced category.
The Fund is also being measured against a benchmark of blended indices which
represent 50% of the S&P 500 Index and 50% of the Lehman Brothers Intermediate
Government/Corporate Bond Index. Indices are unmanaged. Investments cannot be
made in such indices.
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Performance Reviews, continued The Riverfront Funds
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The Riverfront Small Company Select Fund
(formerly, The Riverfront Stock Appreciation Fund)
1998 was a year of transition for the Fund. During the year, we repositioned the
Fund from an eclectic mix of more than 100 companies, to a smaller, more select
group of approximately 40 companies. We believe this allows us to provide more
focus on the companies in the Fund's portfolio, thereby offering better
potential for strong investment returns./2/
Small company stocks had a difficult year overall. The Fund's total return based
on net asset value, was -2.26% (Investor A Shares)/1/, which was in line with
its benchmarks. The Russell 2000 Index, an unmanaged index, closed the year at
- -2.24%; and the S&P 600 Small Cap Index, an unmanaged index, was at -1.32%.
We continued our search for companies with solid management, and growing
revenues and earnings. Unfortunately, even these companies could not gain enough
attention in the marketplace to show price gains similar to those experienced by
larger companies. During the year, the valuation discrepancy between large and
small companies continued to grow to unprecedented levels. We believe this
presents an opportunity, as eventually the difference in valuations will narrow
and small companies will outperform. We are not market timers, and will not
predict when this will occur. However, we will continue to invest, focusing on
strength of management, and revenue and earnings growth, so that when the
discrepancy narrows, our companies should be among the leaders.
Key holdings of the Fund at year-end included: Jacor Communications (3.9% of
net assets), a leading operator of radio stations; Complete Business Solutions
(4.0% of net assets), an information technology company; Steris (3.0% of net
assets), a leading manufacturer of equipment for sterilizing instruments used
in operating rooms; Gentex (2.7% of net assets), a leading automobile supplier
of mirrors; Vitesse Semiconductor (3.1% of net assets), a technology
manufacturer; AmSouth (3.3% of net assets), a major regional bank located in
the southeast; Sanmina (3.5% of net assets), an electronic equipment
manufacturer; Bed Bath & Beyond (3.6% of net assets), a retailer of household
products; SEI Investments (3.3% of net assets), a leader in investment
consulting; and Legg Mason (3.4% of net assets), a major regional brokerage
firm.
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/1/The return, with the maximum sales charge of 4.50%; was -6.63%, 6.95% and
13.49% for the one-year, five-year and ten-year periods, respectively.
/2/Small cap stocks have historically experienced greater volatility than
average.
[GRAPHIC REPRESENTATION OMITTED. SEE APPENDIX A11.]
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Performance Reviews, continued The Riverfront Funds
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[GRAPHIC REPRESENTATION OMITTED. SEE APPENDIX A12.]
[GRAPHIC REPRESENTATION OMITTED. SEE APPENDIX A13.]
Past performance is not predictive of future results. Investment return and
principal value of the Riverfront variable net asset funds will fluctuate, so
that the shares, when redeemed, may be worth more or less than their original
cost. The return of Investor A Shares includes the performance history of the
MIM Stock Appreciation Fund and excludes that of the MIM Stock Growth Fund prior
to acquisition. The returns set forth for the Fund reflect the waiver of certain
advisory or administrative fees. Without the waiver of fees, total return may
have been lower.
We have formally changed benchmarks from just the Russell 2000 Index to the
Russell 2000 Index and the S&P 600 Small Cap Index as of 12/31/98. We believe
the combination of these indices allow the shareholder more appropriate
benchmarks to compare to the Fund.
The Russell 2000 Index is an unmanaged index considered to be representative of
the small- to mid-sized stock market. The S&P 600 Small Cap Index is an
unmanaged index representative of the top 600 small capitalization companies in
the United States. Investments cannot be made in these indices. These 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 Fund
reflects the deduction of fees for these value-added services. The Lipper Small
Cap Fund Average is representative of the average of the Lipper "Small Cap"
category of funds.
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Performance Reviews, continued The Riverfront Funds
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The Riverfront Large Company Select Fund
1998 was an exceptional period for large growth-oriented stocks. The Large
Company Select Fund performed extremely well in 1998, with a total return, based
on net asset value, of 39.03% (Investor A Shares)/1/. This result was well ahead
of the Fund's benchmarks. The S&P 500 Index, an unmanaged benchmark, posted a
total return of 28.56%, while the Lipper Growth and Income Fund Average rose to
15.61%. Our results place the Fund in the top 1% of all "Growth and Income
Funds" tracked by Lipper./2/ For the one-year period ended December 31, 1998,
the Fund (Investor A Shares) ranked 7th out of 769 funds in the Lipper "Growth
and Income Fund" category./2/
The Fund has also been very successful over the last five- and ten-year periods
with total returns, based on net asset value, of 24.69% and 17.89%, respectively
(Investor A Shares)./1/
The Fund's success was due to several factors. First, the Fund was
well-positioned in the strongest sectors of the U.S. economy; with large
holdings in Technology, Health Care and Consumer Cyclical stocks. The companies
in these sectors continue to be the drivers of the U.S. economy, the stock
market, and the performance of the Fund.
Second, the Fund was well-positioned in owning a large number of strong
companies. These companies are well represented in the Fund's top ten holdings.
The ten largest holdings in the Fund as of December 31, 1998, are General
Electric (4.6% of net assets), Wal-Mart (4.5% of net assets), America Online
(4.1% of net assets), Cisco Systems (4.4% of net assets), Microsoft (3.9% of net
assets), Walgreen (3.3% of net assets), Home Depot (3.3% of net assets), Dell
Computer (3.0% of net assets), Pfizer (3.0% of net assets), and Lucent
Technologies (2.9% of net assets).
Third, the Fund's "buy and hold" strategy paid-off in a very volatile year for
the U.S. equity markets. Market timing is not a part of the Fund's investment
strategy, and in a volatile market, the rewards often go to those who don't make
hasty decisions. For those who market time, the task is difficult, as they must
be "right" twice. They must not only sell out of the market at the "right" time,
but they must also make purchases at the "right" time. In managing the Fund, we
are solely focused on buying the most attractive investments, not on market
timing. This strategy is borne out in the Fund's investment results.
Our outlook for large company stocks for 1999 is favorable. It will still be
very important to invest in areas of strength. The U.S. consumer continues to be
strong and we are focusing on those companies that will benefit from that
strength. Stocks such as Wal-Mart, The Gap, Home Depot, and Staples lead the
way. The technology sector is also strong. Companies like Microsoft, America
Online, Dell Computer, Intel, and EMC Corp. will likely perform well as
consumers get on-line in record numbers, and as businesses continue to make
large investments in technology.
There are several companies in other sectors that are also attractive,
including: General Electric, Walgreen, Tyco International, MCI Worldcom, and
Time Warner. Companies, such as these, that can continue to grow revenues and
earnings at above-average rates should continue to be rewarded with higher
share prices in the marketplace.
We continue to significantly under-emphasize the industrial and manufacturing
sectors of the economy given the deflationary pricing pressures in commodity-
related markets and weak foreign economies.
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/1/The return, with the maximum sales charge of 4.50%; was 32.82%, 23.54% and
17.35% for the one-year, five-year and ten-year periods, respectively.
/2/Lipper rankings are based on total return and do not take sales charges into
account. The Fund does not have a five- and ten-year Lipper ranking because the
inception date of the Fund was 1/2/97.
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Performance Reviews, continued The Riverfront Funds
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[GRAPHIC REPRESENTATION OMITTED. SEE APPENDIX A14.]
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Performance Reviews, continued The Riverfront Funds
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[GRAPHIC REPRESENTATION OMITTED. SEE APPENDIX A15.]
[GRAPHIC REPRESENTATION OMITTED. SEE APPENDIX A16.]
The quoted performance of Investor A Shares of this Fund includes performance of
certain collective trust funds accounts ("Commingled Accounts") advised by The
Provident Bank, for periods dating back to 8/30/86 and prior to the Fund's
commencement of operations on 1/2/97, as adjusted to reflect the expenses
associated with the Fund. The Commingled Accounts were not registered with the
Securities and Exchange Commission and, therefore, were not subject to the
investment restrictions imposed by law on registered mutual funds. If the
accounts had been registered, the account's performance may have been adversely
affected.
Past performance is not predictive of future results. Investment return and
principal value of the Riverfront variable net asset funds will fluctuate, so
that the shares, when redeemed, may be worth more or less than their original
cost.
We have formally changed benchmarks from the Lipper Growth & Income Average to
the S&P 500 Index as of 12/31/98. We believe this index is a more appropriate
benchmark with an average market capitalization closer to the way the Fund is
investing and similar average market capitalization to the Fund. The S&P 500
Index is an unmanaged index considered to be representative of the stock market
as a whole. This index does not reflect the deduction of expenses associated
with a mutual fund, such as investment management and fund accounting fees.
Investments cannot be made in such index. The performance of the Fund reflects
the deduction of fees for value-added services associated with a mutual fund,
such as investment management and fund accounting fees. The Lipper Growth &
Income Average is representative of the average of the Lipper "Growth & Income"
category of funds.
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Report of Independent Auditors
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The Riverfront Funds December 31, 1998
To the Shareholders and Trustees
The Riverfront Funds
We have audited the accompanying statements of assets and liabilities, including
the schedules of portfolio investments, of The Riverfront Funds (comprised of
U.S. Government Securities Money Market Fund, U.S. Government Income Fund,
Income Equity Fund, Balanced Fund, Small Company Select Fund, and Large Company
Select Fund (collectively, the "Funds")) as of December 31, 1998, and the
related statements of operations for the year then ended and statements of
changes in net assets and financial highlights for each of the periods indicated
therein. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of December 31, 1998 by correspondence with the custodian
and others. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the Funds as of December 31, 1998, the results of their operations for the
year then ended and the changes in their net assets and their financial
highlights for each of the periods indicated therein, in conformity with
generally accepted accounting principles.
Ernst & Young LLP
Cincinnati, Ohio
January 29, 1999
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
<TABLE>
<CAPTION>
U.S. Government U.S. Government Income
Securities Money Income Equity
Market Fund Fund Fund
---------------- --------------- -----------
<S> <C> <C> <C>
Assets:
Investments, at value (Cost
$148,784,060, $43,310,576, and
$95,841,160, respectively)......... $148,784,060 $44,185,356 $93,789,517
Repurchase agreements (Cost
$40,671,000, $--, and $--,
respectively)...................... 40,671,000 -- --
------------ ----------- -----------
Total investments.................. 189,455,060 44,185,356 93,789,517
Cash............................... 424 1 1
Interest and dividends receivable.. 198,072 571,405 244,446
Receivable for capital shares
issued............................. -- 475 2,552
Prepaid expenses and other assets.. 5,755 1,742 6,066
------------ ----------- -----------
Total Assets....................... 189,659,311 44,758,979 94,042,582
------------ ----------- -----------
Liabilities:
Dividends payable.................. 689,901 -- --
Payable for capital shares
redeemed........................... -- -- 55,059
Payable for investments purchased.. -- -- 127,770
Accrued expenses and other
payables:
Investment advisory fees.......... 22,672 15,457 75,079
Administration fees............... 4,071 978 1,973
Custodian and accounting fees..... 7,731 5,038 12,441
12b-1 fees (Investor A)........... 15,115 7,227 12,893
12b-1 fees (Investor B)........... -- 1,110 14,048
Transfer agent fees............... 3,397 3,769 7,442
Audit and legal fees.............. 39,639 11,327 19,018
Other............................. 29,971 8,816 10,211
------------ ----------- -----------
Total Liabilities.................. 812,497 53,722 335,934
------------ ----------- -----------
Net Assets:
Capital............................ 188,853,233 44,356,965 97,753,903
Accumulated undistributed net
investment income.................. -- 25,526 693
Net unrealized
appreciation/depreciation on
investments........................ -- 874,780 (2,051,643)
Accumulated undistributed
(distributions in excess) net
realized gains (losses)
on investment transactions........ (6,419) (552,014) (1,996,305)
------------ ----------- -----------
Net Assets........................ $188,846,814 $44,705,257 $93,706,648
============ =========== ===========
Net assets
Investor A Shares................. $188,846,814 $43,410,903 $77,144,017
Investor B Shares................. N/A 1,294,354 16,562,631
------------ ----------- -----------
Total........................... $188,846,814 $44,705,257 $93,706,648
============ =========== ===========
Shares of capital stock
Investor A Shares................. 188,853,233 4,500,031 7,365,239
Investor B Shares................. N/A 118,452 1,538,862
------------ ----------- -----------
Total........................... 188,853,233 4,618,483 8,904,101
============ =========== ===========
Net asset value
Investor A Shares--redemption
price per share................... $ 1.00 $ 9.65 $ 10.47
Investor B Shares--offering price
per share*........................ N/A 10.93 10.76
============ =========== ===========
Maximum sales charge (Investor A).. N/A 4.50% 4.50%
============ =========== ===========
Maximum offering price per share
(100%/(100%--maximum sales charge)
of net asset value adjusted to
nearest cent) (Investor A) (a).... $ 1.00 $ 10.10 $ 10.96
============ =========== ===========
</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.
N/A Not applicable
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
<TABLE>
<CAPTION>
Balanced Small Company Large Company
Fund Select Fund Select Fund
----------- ------------- -------------
<S> <C> <C> <C>
Assets:
Investments, at value (Cost
$20,712,787, $16,890,216, and
$34,860,335, respectively)............. $24,915,001 $20,763,794 $58,689,733
Interest and dividends receivable...... 175,697 11,152 32,037
Receivable for capital shares issued... 104,901 8,413 99,422
Receivable for investments sold........ -- -- 1,477,822
Unamortized organization costs......... -- -- 3,343
Prepaid expenses and other assets...... 1,055 4,269 2,155
----------- ----------- -----------
Total Assets........................... 25,196,654 20,787,628 60,304,512
----------- ----------- -----------
Liabilities:
Payable for capital shares redeemed.... 8,837 1,167 1,167
Accrued expenses and other payables:
Investment advisory fees.............. 16,380 13,276 38,135
Administration fees................... 531 436 1,279
Custodian and accounting fees......... 3,681 3,079 7,646
12b-1 fees (Investor A)............... 1,631 4,035 9,126
12b-1 fees (Investor B)............... 11,250 1,148 7,354
Transfer agent fees................... 4,046 8,060 3,697
Audit and legal fees.................. 5,483 5,202 11,266
Other................................. 2,495 10,067 8,366
----------- ----------- -----------
Total Liabilities...................... 54,334 46,470 88,036
----------- ----------- -----------
Net Assets:
Capital................................ 20,766,337 16,968,402 35,625,070
Accumulated undistributed net
investment income (loss)............... 4,004 -- --
Net unrealized
appreciation/depreciation on
investments............................ 4,202,214 3,873,578 23,829,398
Accumulated undistributed
(distributions in excess) net realized
gains (losses) on investment
transactions.......................... 169,765 (100,822) 762,008
----------- ----------- -----------
Net Assets............................ $25,142,320 $20,741,158 $60,216,476
=========== =========== ===========
Net assets
Investor A Shares..................... $11,247,136 $19,285,841 $50,800,748
Investor B Shares..................... 13,895,184 1,455,317 9,415,728
----------- ----------- -----------
Total............................... $25,142,320 $20,741,158 $60,216,476
=========== =========== ===========
Shares of capital stock
Investor A Shares..................... 862,216 2,444,030 3,656,736
Investor B Shares..................... 1,025,084 178,872 687,927
----------- ----------- -----------
Total............................... 1,887,300 2,622,902 4,344,663
=========== =========== ===========
Net asset value
Investor A Shares--redemption price
per share............................. $ 13.04 $ 7.89 $ 13.89
Investor B Shares--offering price per
share*................................ 13.56 8.14 13.69
=========== =========== ===========
Maximum sales charge (Investor A)...... 4.50% 4.50% 4.50%
=========== =========== ===========
Maximum offering price per share
(100%/(100%--maximum sales charge)
of net asset value adjusted to nearest
cent) (Investor A).................... $ 13.65 $ 8.26 $ 14.54
=========== =========== ===========
</TABLE>
- -------
*Redemption price of Investor B shares varies based on length of time shares are
held.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Statements of Operations
- --------------------------------------------------------------------------------
The Riverfront Funds For the Year Ended December 31, 1998
<TABLE>
<CAPTION>
U.S. Government
Securities Money U.S. Government Income
Market Fund Income Fund Equity Fund
---------------- --------------- -----------
<S> <C> <C> <C>
Investment Income:
Interest income.................... $8,724,530 $2,808,466 $ 43,957
Dividend income.................... -- 71,228 2,759,583
---------- ---------- ----------
Total Income....................... 8,724,530 2,879,694 2,803,540
---------- ---------- ----------
Expenses:
Investment advisory fees........... 239,063 191,380 953,736
Administration fees................ 318,753 95,691 200,788
12b-1 fees (Investor A)............ 398,436 116,384 205,430
12b-1 fees (Investor B)............ -- 12,916 182,213
Custodian and accounting fees...... 81,312 53,978 154,411
Audit and legal fees............... 64,509 19,960 47,411
Trustees' fees and expenses........ 22,648 5,754 12,414
Transfer agent fees................ 40,339 43,615 87,612
Registration and filing fees....... 11,491 4,001 13,245
Printing costs..................... 99,188 26,720 72,389
Other.............................. 10,907 3,817 7,900
---------- ---------- ----------
Gross Expenses..................... 1,286,646 574,216 1,937,549
Less: Fee waivers................ (239,063) (27,932) (24,937)
---------- ---------- ----------
Net Expenses................... 1,047,583 546,284 1,912,612
---------- ---------- ----------
Net Investment Income.............. 7,676,947 2,333,410 890,928
---------- ---------- ----------
Realized/Unrealized Gains (Losses)
from Investments
Net realized gains (losses) from
investment transactions............ (2,666) 541,953 8,762,126
Net change in unrealized
appreciation/depreciation from
investments........................ -- 286,081 (6,788,439)
---------- ---------- ----------
Net realized/unrealized gains
(losses) from investments.......... (2,666) 828,034 1,973,687
---------- ---------- ----------
Change in net assets resulting from
operations......................... $7,674,281 $3,161,444 $2,864,615
========== ========== ==========
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Statements of Operations
- --------------------------------------------------------------------------------
The Riverfront Funds For the Year Ended December 31, 1998
<TABLE>
<CAPTION>
Balanced Small Company Large Company
Fund Select Fund Select Fund
---------- ------------- -------------
<S> <C> <C> <C>
Investment Income:
Interest income......................... $ 539,416 $ 20,126 $ 2,824
Dividend income......................... 205,040 182,045 524,782
---------- --------- -----------
Total Income............................ 744,456 202,171 527,606
---------- --------- -----------
Expenses:
Investment advisory fees................ 200,306 181,783 360,018
Administration fees..................... 44,513 45,446 90,005
12b-1 fees (Investor A)................. 25,093 53,306 99,047
12b-1 fees (Investor B)................. 122,192 14,006 53,834
Custodian and accounting fees........... 36,837 36,415 69,214
Audit and legal fees.................... 6,181 9,611 21,360
Organization costs...................... -- -- 1,601
Trustees' fees and expenses............. 2,511 2,712 4,834
Transfer agent fees..................... 43,924 91,945 46,311
Registration and filing fees............ 3,298 6,506 9,213
Printing costs.......................... 17,109 14,968 30,600
Other................................... 1,543 2,028 2,621
---------- --------- -----------
Gross Expenses.......................... 503,507 458,726 788,658
Less: Fee waivers..................... (28,354) -- --
---------- --------- -----------
Net Expenses........................ 475,153 458,726 788,658
---------- --------- -----------
Net Investment Income (Loss)............ 269,303 (256,555) (261,052)
---------- --------- -----------
Realized/Unrealized Gains (Losses) from
Investments
Net realized gains (losses) from
investment transactions................. 3,474,428 (101,284) 8,153,519
Net change in unrealized
appreciation/depreciation from
investments............................. 1,277,732 (164,771) 7,822,437
---------- --------- -----------
Net realized/unrealized gains (losses)
from investments........................ 4,752,160 (266,055) 15,975,956
---------- --------- -----------
Change in net assets resulting from
operations.............................. $5,021,463 $(522,610) $15,714,904
========== ========= ===========
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
The Riverfront Funds
<TABLE>
<CAPTION>
U.S. Government
Securities Money U.S. Government Income Equity
Market Fund Income Fund Fund
---------------------------- -------------------------- --------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31, December 31, December 31,
1998 1997 1998 1997 1998 1997
------------- ------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
From Investment
Activities:
Operations:
Net investment income... $ 7,676,947 $ 7,931,905 $ 2,333,410 $ 2,698,288 $ 890,928 $ 1,039,879
Net realized gains
(losses) from
investment transactions. (2,666) (1,463) 541,953 781,702 8,762,126 21,576,605
Net change in unrealized
appreciation/
depreciation from
investments............ -- -- 286,081 (56,510) (6,788,439) 752,438
------------- ------------- ----------- ----------- ------------ ------------
Change in net assets
resulting from
operations............... 7,674,281 7,930,442 3,161,444 3,423,480 2,864,615 23,368,922
------------- ------------- ----------- ----------- ------------ ------------
Distributions to Investor
A Shareholders:
From net investment
income.................. (7,676,947) (7,931,905) (2,287,710) (2,663,877) (832,004) (981,986)
In excess of net
investment income....... -- -- -- (412,137) -- --
From net realized gains
from investments........ -- -- -- -- (7,878,594) (19,246,795)
In excess of net
realized gains.......... -- -- -- -- (1,694,145) --
Distributions to Investor
B Shareholders:
From net investment
income.................. -- -- (45,525) (64,440) (58,765) (57,359)
In excess of net
investment income....... -- -- -- (11,526) -- --
From net realized gains
from investments........ -- -- -- -- (1,734,789) (3,879,842)
In excess of net
realized gains.......... -- -- -- -- (294,053) --
------------- ------------- ----------- ----------- ------------ ------------
Change in net assets from
shareholder
distributions............ (7,676,947) (7,931,905) (2,333,235) (3,151,980) (12,492,350) (24,165,982)
------------- ------------- ----------- ----------- ------------ ------------
Capital Transactions:
Proceeds from shares
issued.................. 364,869,432 374,303,813 1,989,526 4,236,017 8,159,129 15,853,924
Proceeds from shares
issued in connection
with common trust fund
acquisition............ -- -- -- 16,606,766 -- --
Dividends reinvested.... 2,082,417 2,327,411 283,938 506,586 12,341,290 23,523,261
Cost of shares redeemed. (320,671,126) (415,078,263) (8,722,844) (6,285,274) (18,569,826) (18,176,359)
------------- ------------- ----------- ----------- ------------ ------------
Change in net assets from
capital transactions..... 46,280,723 (38,447,039) (6,449,380) 15,064,095 1,930,593 21,200,826
------------- ------------- ----------- ----------- ------------ ------------
Change in net assets..... 46,278,057 (38,448,502) (5,621,171) 15,335,595 (7,697,142) 20,403,766
Net Assets:
Beginning of period..... 142,568,757 181,017,259 50,326,428 34,990,833 101,403,790 81,000,024
------------- ------------- ----------- ----------- ------------ ------------
End of period........... $ 188,846,814 $ 142,568,757 $44,705,257 $50,326,428 $ 93,706,648 $101,403,790
============= ============= =========== =========== ============ ============
Share Transactions:
Issued.................. 364,869,432 374,303,813 205,307 448,161 658,371 1,186,068
Issued in connection
with common trust
fund acquisition....... -- -- -- 1,761,057 -- --
Reinvested.............. 2,082,417 2,327,411 29,262 53,203 1,170,115 1,989,492
Redeemed................ (320,671,126) (415,078,263) (907,353) (664,598) (1,565,735) (1,316,119)
------------- ------------- ----------- ----------- ------------ ------------
Change in shares......... 46,280,723 (38,447,039) (672,784) 1,597,823 262,751 1,859,441
============= ============= =========== =========== ============ ============
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
The Riverfront Funds
<TABLE>
<CAPTION>
Balanced Small Company Large Company
Fund Select Fund Select Fund
-------------------------- -------------------------- --------------------------
For the
Year Ended Year Ended Year Ended Year Ended Year Ended Period Ended
December 31, December 31, December 31, December 31, December 31, December 31,
1998 1997 1998 1997 1998 1997*
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
From Investment
Activities:
Operations:
Net investment income
(loss).................. $ 269,303 $ 277,959 $ (256,555) $ (123,137) $ (261,052) $ (7,932)
Net realized gains
(losses) from
investment transactions. 3,474,428 1,983,851 (101,284) 5,867,571 8,153,519 4,033,588
Net change in unrealized
appreciation/
depreciation from
investments............ 1,277,732 870,883 (164,771) (1,404,729) 7,822,437 3,414,575
----------- ----------- ----------- ------------ ----------- -----------
Change in net assets
resulting from
operations............... 5,021,463 3,132,693 (522,610) 4,339,705 15,714,904 7,440,231
----------- ----------- ----------- ------------ ----------- -----------
Distributions to Investor
A Shareholders:
From net investment
income.................. (169,385) (180,288) -- -- -- --
From net realized gains
from investments........ (1,567,457) (786,461) (2,744,106) (4,562,955) (6,012,066) (3,675,987)
In excess of net
realized gains.......... -- -- (35,043) -- -- --
Tax return of capital -- -- -- -- -- (76,753)
Distributions to Investor
B Shareholders:
From net investment
income.................. (99,893) (99,558) -- -- -- --
From net realized gains
from investments........ (1,864,419) (913,202) (127,743) (216,879) (1,129,216) (270,025)
In excess of net
realized gains.......... -- -- (67,542) -- -- --
----------- ----------- ----------- ------------ ----------- -----------
Change in net assets from
shareholder
distributions............ (3,701,154) (1,979,509) (2,974,434) (4,779,834) (7,141,282) (4,022,765)
----------- ----------- ----------- ------------ ----------- -----------
Capital Transactions:
Proceeds from shares
issued.................. 3,341,172 2,623,393 1,954,127 3,536,148 13,309,662 4,882,547
Proceeds from shares
issued in connection
with common trust fund
acquisition............ -- -- -- -- -- 27,813,338
Dividends reinvested.... 3,609,340 1,948,716 2,842,226 4,580,891 7,080,161 3,939,671
Cost of shares redeemed. (4,174,349) (5,473,923) (6,135,730) (14,013,668) (4,824,558) (3,975,433)
----------- ----------- ----------- ------------ ----------- -----------
Change in net assets from
capital transactions..... 2,776,163 (901,814) (1,339,377) (5,896,629) 15,565,265 32,660,123
----------- ----------- ----------- ------------ ----------- -----------
Change in net assets..... 4,096,472 251,370 (4,836,421) (6,336,758) 24,138,887 36,077,589
Net Assets:
Beginning of period..... 21,045,848 20,794,478 25,577,579 31,914,337 36,077,589 --
----------- ----------- ----------- ------------ ----------- -----------
End of period........... $25,142,320 $21,045,848 $20,741,158 $ 25,577,579 $60,216,476 $36,077,589
=========== =========== =========== ============ =========== ===========
Share Transactions:
Issued.................. 244,765 207,417 223,267 359,468 1,025,833 403,509
Issued in connection
with common
trust fund acquisition. -- -- -- -- -- 2,781,335
Reinvested.............. 271,327 156,705 327,046 490,460 511,275 353,440
Redeemed................ (309,204) (437,775) (711,763) (1,448,614) (375,134) (355,595)
----------- ----------- ----------- ------------ ----------- -----------
Change in shares......... 206,888 (73,653) (161,450) (598,686) 1,161,974 3,182,689
=========== =========== =========== ============ =========== ===========
</TABLE>
- -------
*For the period January 2, 1997 (commencement of operations) through December
31, 1997.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
U.S. Government Securities Money Market Fund
<TABLE>
<CAPTION>
Principal Security
Amount Description Value
----------- --------------------------------------------------- ------------
<C> <S> <C>
Commercial Paper (31.8%)
Agriculture (4.7%)
$ 5,000,000 Cargill, Inc., Discount Note, 2/8/99............... $ 4,972,662
2,000,000 Monsanto Co., Discount Note, 4/5/99................ 1,973,993
2,000,000 Monsanto Co., Discount Note, 4/8/99................ 1,973,163
------------
8,919,818
------------
Banks (4.2%)
3,000,000 Banc One Corp., 4.72%*, 1/5/99, MTN................ 2,999,105
5,000,000 Bank of New York Co., Inc., Discount Note, 1/5/99.. 4,997,050
------------
7,996,155
------------
Beverages (0.8%)
1,500,000 PepsiCo, Inc., Discount Note, 1/12/99.............. 1,497,695
------------
Brokerage Services (6.6%)
2,000,000 Merrill Lynch & Co., Inc., Discount Note, 1/8/99... 1,998,024
2,500,000 Merrill Lynch & Co., Inc., Discount Note, 1/26/99.. 2,490,972
2,000,000 Merrill Lynch & Co., Inc., Discount Note, 2/26/99.. 1,984,164
2,000,000 Morgan Stanley Dean Witter & Co., Discount Note,
2/12/99........................................... 1,987,633
4,000,000 Morgan Stanley Dean Witter & Co., Discount Note,
3/19/99........................................... 3,955,683
------------
12,416,476
------------
Financial Services (8.4%)
2,000,000 Ford Motor Credit Co., Discount Note, 1/4/99....... 1,999,165
2,000,000 Ford Motor Credit Co., Discount Note, 1/19/99...... 1,995,000
3,000,000 Ford Motor Credit Co., Discount Note, 2/5/99....... 2,985,154
2,000,000 General Electric Capital Corp., Discount Note,
1/19/99........................................... 1,994,710
2,000,000 General Electric Capital Corp., Discount Note,
3/12/99........................................... 1,979,778
4,000,000 General Electric Capital Corp., Discount Note,
3/18/99........................................... 3,956,933
1,000,000 General Motors Acceptance Corp., Discount Note,
5/17/99........................................... 980,733
------------
15,891,473
------------
Food Distributors, Supermarkets & Wholesalers (3.4%)
2,000,000 Winn-Dixie Stores, Inc., Discount Note, 1/5/99..... 1,998,873
</TABLE>
<TABLE>
<CAPTION>
Principal Security
Amount Description Value
----------- ---------------------------------------------------- ------------
<C> <S> <C>
Commercial Paper, continued:
Food Distributors, Supermarkets & Wholesalers, continued
$ 1,500,000 Winn-Dixie Stores, Inc., Discount Note, 1/26/99..... $ 1,494,500
3,000,000 Winn-Dixie Stores, Inc., Discount Note, 2/4/99...... 2,985,125
------------
6,478,498
------------
Insurance (1.1%)
2,000,000 General Re Corp., Discount Note, 2/5/99............. 1,990,025
------------
Manufacturing-Consumer Goods (2.6%)
1,000,000 Eaton Corp., Discount Note, 1/28/99................. 995,973
2,000,000 Eaton Corp., Discount Note, 4/26/99................. 1,967,608
2,000,000 Eaton Corp., Discount Note, 7/19/99................. 1,945,828
------------
4,909,409
------------
Total Commercial Paper
(Amortized Cost $60,099,549) 60,099,549
------------
U.S. Government Agencies (47.0%)
Federal Farm Credit Bank (1.6%)
3,000,000 5.50%, 4/1/99, MTN.................................. 2,999,346
------------
Federal Home Loan Bank (8.4%)
3,000,000 Discount Note, 1/8/99............................... 2,997,247
3,000,000 Discount Note, 2/3/99............................... 2,985,343
3,000,000 Discount Note, 2/24/99.............................. 2,977,770
4,000,000 Discount Note, 5/26/99.............................. 3,923,471
3,000,000 5.13%, 11/17/99, Series LZ99........................ 3,000,000
------------
15,883,831
------------
Federal Home Loan Mortgage Corp. (20.8%)
3,000,000 Discount Note, 1/14/99.............................. 2,994,876
3,000,000 Discount Note, 1/15/99.............................. 2,993,898
5,000,000 Discount Note, 1/22/99.............................. 4,985,196
3,000,000 Discount Note, 2/9/99............................... 2,983,880
3,000,000 Discount Note, 2/10/99.............................. 2,983,333
5,000,000 Discount Note, 2/12/99.............................. 4,970,635
2,000,000 Discount Note, 2/19/99.............................. 1,985,926
2,000,000 Discount Note, 2/26/99.............................. 1,984,600
2,000,000 Discount Note, 3/8/99............................... 1,982,693
6,520,000 Discount Note, 3/12/99.............................. 6,455,344
3,000,000 Discount Note, 4/9/99............................... 2,960,392
2,000,000 Discount Note, 4/14/99.............................. 1,972,648
------------
39,253,421
------------
Federal National Mortgage Assoc. (16.2%)
1,000,000 5.10%*, 1/5/99, MTN................................. 995,710
2,000,000 Discount Note, 1/26/99.............................. 1,992,875
</TABLE>
Continued
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
U.S. Government Securities Money Market Fund
<TABLE>
<CAPTION>
Principal Security
Amount Description Value
----------- ---------------------------------------------------- ------------
<C> <S> <C>
U.S. Government Agencies, continued:
Federal National Mortgage Assoc., continued
$ 3,000,000 Discount Note, 2/1/99............................... $ 2,987,135
2,000,000 Discount Note, 2/5/99............................... 1,990,356
2,000,000 Discount Note, 2/25/99.............................. 1,984,997
3,000,000 Discount Note, 3/15/99.............................. 2,967,698
5,000,000 Discount Note, 3/18/99.............................. 4,946,208
2,000,000 6.61%, 3/24/99...................................... 2,004,074
1,000,000 Discount Note, 4/1/99............................... 988,000
2,000,000 Discount Note, 5/3/99............................... 1,967,534
1,800,000 6.01%, 8/16/99, MTN................................. 1,815,596
3,000,000 Discount Note, 9/1/99............................... 2,906,040
3,000,000 5.08%, 9/24/99, MTN................................. 3,001,690
------------
30,547,913
------------
Total U.S. Government Agencies
(Amortized Cost $88,684,511) 88,684,511
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Security
Amount Description Value
----------- ------------------------------------------------ ------------
<C> <S> <C>
Repurchase Agreement (21.5%)
$40,671,000 Morgan Stanley Dean Witter & Co., 4.90%, 1/4/99,
(Collateralized by $66,540,777 various U.S.
Government Agency Securities, 7.27%-8.50%,
10/1/23-8/1/37, market value--$41,484,421)..... $ 40,671,000
------------
Total Repurchase Agreement (Amortized Cost $40,671,000) 40,671,000
------------
Total Investments (Amortized Cost $189,455,060) (a)--100.3% 189,455,060
Liabilities in excess of other assets--(0.3)% (608,246)
------------
Total Net Assets--100.0% $188,846,814
============
</TABLE>
- -------
(a)Cost and value for federal income tax and financial reporting purposes are
the same.
* Variable rate investments. The rate presented on the Schedule of Portfolio
Investments is the rate in effect at December 31, 1998. The date presented
reflects the next rate change date.
MTN--Medium Term Note
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
U.S. Government Income Fund
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ----------------------------------------------------- -----------
<C> <S> <C>
Corporate Bonds (27.9%)
Banks (5.0%)
$ 600,000 Chase Capital I, Series A, 7.67%, 12/1/26, Callable
12/1/06 @ 103.84, Guaranteed by Chase Manhattan
Corp................................................ $ 645,000
500,000 Mellon Capital I, Series A, 7.72%, 12/1/26, Callable
12/1/06 @ 103.86, Guaranteed by Mellon Bank Corp.... 543,750
1,000,000 Midland Bank PLC (HSBC), 6.95%, 3/15/11.............. 1,065,000
-----------
2,253,750
-----------
Consumer Goods & Services (4.6%)
2,000,000 Hasbro, Inc., 6.15%, 7/15/08......................... 2,052,500
-----------
Financial Services (15.3%)
1,000,000 American Express Master Trust, Series 1998-1, Class
A, 5.90%, 4/15/04, ABS.............................. 1,040,330
200,000 Associates Corp., N.A., 5.25%, 3/30/00............... 199,750
684,721 Boatmen's Auto Trust, Series 1996-A, Class A3, 6.75%,
1/15/03, ABS........................................ 705,578
1,924,920 Countrywide Home Loans, Inc., Series 1998-11, Class
A10, 6.25%, 8/25/28, CMO............................ 1,936,951
1,000,000 Countrywide Home Loans, Inc., Series 1998-1, Class
AF2, 6.27%, 4/25/28, ABS............................ 1,005,640
998,652 Green Tree Home Improvement Loan Trust, Series 1997-
D, Class HEA4, 6.54%, 9/15/28....................... 1,032,196
634,126 Security Pacific Acceptance Corp., Series 1995-1,
Class A2, 6.70%, 4/10/20, ABS....................... 637,665
250,000 Toyota Motor Credit Corp., 7.13%, 9/26/06, Callable
9/26/99 @ 100, MTN.................................. 271,875
-----------
6,829,985
-----------
Food Processing & Packaging (1.2%)
500,000 McCormick & Co., Inc., 8.95%, 7/1/01................. 544,375
-----------
Oil & Gas Transmission (0.8%)
356,000 Trans-Canada Pipelines Ltd., 6.77%, 4/30/01, MTN..... 365,345
-----------
Steel (0.5%)
200,000 Worthington Industries, Inc., 7.13%, 5/15/06......... 211,000
-----------
Utilities-Electric & Gas (0.5%)
200,000 Oklahoma Gas & Electric Co., 6.25%, 10/15/00......... 204,000
-----------
Total Corporate Bonds (Cost $12,100,688) 12,460,955
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ---------------------------------------------------- ------------
<C> <S> <C>
U.S. Government Agencies (62.7%)
Federal Farm Credit Bank (3.5%)
$1,500,000 5.90%, 2/5/08, MTN.................................. $ 1,558,665
------------
Federal Home Loan Bank (6.4%)
2,000,000 5.63%, 3/19/01, Series 87........................... 2,032,760
690,000 9.50%, 2/25/04...................................... 823,308
------------
2,856,068
------------
Federal Home Loan Mortgage Corp. (2.3%)
780,592 6.00%, 12/1/99, Gold Pool #M80147................... 785,377
225,000 6.20%, 4/15/03...................................... 234,563
------------
1,019,940
------------
Federal National Mortgage Assoc. (40.8%)
3,400,000 6.38%, 1/16/02...................................... 3,528,995
1,000,000 6.71%, 3/13/02, Callable 3/13/00 @ 100, MTN......... 1,020,490
739,354 6.00%, 2/1/03, Pool #335463......................... 743,738
1,500,000 5.75%, 4/15/03...................................... 1,542,735
816,745 6.00%, 5/1/03, Pool #347156......................... 821,613
371,515 7.00%, 9/25/05, Series 1992-110, Class G, CMO....... 370,820
1,000,000 7.55%, 3/27/07, Series 07-B, Callable 3/27/00 @ 100. 1,028,500
1,000,000 6.50%, 12/25/07, Series 1993-43, Class H, CMO....... 1,016,550
2,994,572 5.89%, 10/1/08, Pool #380755........................ 3,002,058
101,897 7.50%, 3/17/14, Series 1997-39, Class A, CMO........ 101,834
103,152 7.00%, 9/25/19, Series 1991-155, Class PE, CMO...... 102,929
2,000,000 6.50%, 8/18/20, Series 1997-57, Class PM, CMO....... 2,000,620
3,000,000 6.50%, 10/25/28, Series 1998-58, Class PC, CMO...... 2,970,000
------------
18,250,882
------------
Government National Mortgage Assoc. (0.9%)
394,709 8.00%, 5/15/23, Pool #351752........................ 408,903
------------
Private Export Funding Corp. (2.3%)
1,000,000 6.24%, 5/15/02, Series VV, Guaranteed by Export-
Import Bank of The United States................... 1,038,750
------------
Student Loan Marketing Assoc. (3.6%)
587,856 5.13%*, 1/6/99, Series 1996-3, Class A1, ABS........ 587,327
1,000,000 6.05%, 9/14/00...................................... 1,018,550
------------
1,605,877
------------
</TABLE>
Continued
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
U.S. Government Income Fund
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ------------------------------------------------------ -----------
<C> <S> <C>
U.S. Government Agencies, continued
Tennessee Valley Authority (2.9%)
$1,250,000 6.24%, 7/15/45, Series B, Callable 7/15/20
@ 100, Putable 7/15/01 @ 100......................... $ 1,312,500
-----------
Total U.S. Government Agencies (Cost $27,653,417) 28,051,585
-----------
U.S. Treasury Notes (4.3%)
500,000 5.50%, 5/31/03........................................ 516,005
950,000 7.00%, 7/15/06........................................ 1,084,017
300,000 5.63%, 5/15/08........................................ 320,145
-----------
Total U.S. Treasury Notes (Cost $1,803,822) 1,920,167
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- ------------------------------------------------------- -----------
<C> <S> <C>
Investment Companies (3.9%)
1,060,424 Dreyfus Treasury Prime Fund............................ $ 1,060,424
692,225 Federated U.S. Treasury Services Fund.................. 692,225
-----------
Total Investment Companies (Cost $1,752,649) 1,752,649
-----------
Total Investments (Cost $43,310,576) (a)--98.8% 44,185,356
Other assets in excess of liabilities--1.2% 519,901
-----------
Total Net Assets--100.0% $44,705,257
===========
</TABLE>
- -------
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 988,910
Unrealized depreciation..................................... (114,130)
---------
Net unrealized appreciation................................. $ 874,780
=========
</TABLE>
* Variable rate investments. The rate presented on the Schedule of Portfolio
Investments is the rate in effect at December 31, 1998. The date presented
reflects the next rate change date.
ABS--Asset Backed Security
CMO--Collateralized Mortgage Obligation
MTN--Medium Term Note
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
Income Equity Fund
<TABLE>
<CAPTION>
Market
Shares Value
------- --------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks (99.7%)
Aerospace/Defense (1.7%)
21,400 Northop Grumman Corp..................................... $ 1,564,875
-----------
Aluminum (1.5%)
25,800 Reynolds Metals Co....................................... 1,359,338
-----------
Automotive (0.1%)
2,000 Ford Motor Co............................................ 117,375
-----------
Automotive Parts (4.7%)
49,600 Genuine Parts Co......................................... 1,658,500
30,200 Lucasvarity PLC, ADR..................................... 1,011,700
31,000 TRW, Inc................................................. 1,741,813
-----------
4,412,013
-----------
Banks (10.1%)
34,746 Banc One Corp............................................ 1,774,218
33,106 BankAmerica Corp......................................... 1,990,497
2,300 Citigroup, Inc........................................... 113,850
10,200 First American Corp...................................... 452,625
950 First Union Corp......................................... 57,772
19,900 First Virginia Banks, Inc................................ 935,300
10,200 Hibernia Corp., Class A.................................. 177,225
7,200 Huntington Bancshares, Inc............................... 216,450
875 Mellon Bank Corp......................................... 60,156
33,300 PNC Bank Corp............................................ 1,802,363
825 State Street Corp........................................ 57,389
41,500 Summit Bancorp........................................... 1,813,031
-----------
9,450,876
-----------
Building Materials (1.5%)
22,900 Armstrong World Industries, Inc.......................... 1,381,156
-----------
Chemicals-General (5.1%)
39,425 Air Products & Chemicals, Inc............................ 1,577,000
59,300 Hercules, Inc............................................ 1,623,337
4,450 PPG Industries, Inc...................................... 259,213
42,600 Rohm & Haas Co........................................... 1,283,325
-----------
4,742,875
-----------
Chemicals-Specialty (3.2%)
45,700 Millenium Chemicals...................................... 908,288
57,000 Morton International, Inc................................ 1,396,500
44,500 RPM, Inc................................................. 712,000
-----------
3,016,788
-----------
Commercial Services (0.1%)
2,150 Ecolab, Inc.............................................. 77,803
-----------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Value
------- --------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks, continued:
Computers & Peripherals (0.3%)
1,125 Cisco Systems, Inc. (b).................................. $ 104,414
3,215 Compaq Computer Corp..................................... 134,829
1,200 Hewlett-Packard Co....................................... 81,975
-----------
321,218
-----------
Consumer Goods & Services (1.8%)
47,575 Fortune Brands, Inc...................................... 1,504,559
1,600 Procter & Gamble Co...................................... 146,100
-----------
1,650,659
-----------
Containers & Packaging (1.5%)
46,500 Crown Cork & Seal Co., Inc............................... 1,432,781
-----------
Cosmetics & Toiletries (0.1%)
2,750 Gillette Co.............................................. 132,859
-----------
Diversified (3.0%)
1,800 General Electric Co...................................... 183,713
26,500 National Service Industries, Inc......................... 1,007,000
41,700 Tenneco, Inc............................................. 1,420,406
2,050 Tyco International Ltd................................... 154,647
-----------
2,765,766
-----------
Electrical Equipment (4.1%)
34,000 Emerson Electric Co...................................... 2,127,125
45,500 Hubbell, Inc., Class B................................... 1,729,000
-----------
3,856,125
-----------
Electronic & Electrical-General (6.3%)
47,700 Harris Corp.............................................. 1,747,013
17,800 Parker-Hannifin Corp..................................... 582,950
41,600 Rockwell International Corp.............................. 2,020,199
36,000 Thomas & Betts Corp...................................... 1,559,250
-----------
5,909,412
-----------
Financial Services (2.0%)
1,725 T. Rowe Price Associates................................. 59,081
15,600 TransAmerica Corp........................................ 1,801,800
-----------
1,860,881
-----------
Food Distributors, Supermarkets & Wholesalers (0.2%)
5,000 Winn-Dixie Stores, Inc................................... 224,375
-----------
Food Processing & Packaging (5.9%)
10,700 Bestfoods................................................ 569,775
64,700 ConAgra, Inc............................................. 2,038,050
44,400 Dean Foods Co............................................ 1,812,075
45,400 Flowers Industries, Inc.................................. 1,086,763
-----------
5,506,663
-----------
</TABLE>
Continued
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
Income Equity Fund
<TABLE>
<CAPTION>
Market
Shares Value
------- --------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks, continued:
Forest Products-Lumber & Paper (9.3%)
61,700 Boise Cascade Corp....................................... $ 1,912,699
24,100 Bowater, Inc............................................. 998,644
26,100 Georgia-Pacific Timber Group............................. 621,506
34,900 Kimberly-Clark Corp...................................... 1,902,050
14,900 Rayonier, Inc............................................ 684,469
27,100 Temple-Inland, Inc....................................... 1,607,369
28,200 Willamette Industries, Inc............................... 944,700
-----------
8,671,437
-----------
Leisure-Recreation, Gaming (0.5%)
19,600 Brunswick Corp........................................... 485,100
-----------
Manufacturing-Capital Goods (1.8%)
35,800 Cooper Industries, Inc................................... 1,707,213
-----------
Manufacturing-Miscellaneous (0.6%)
20,100 Olin Corp................................................ 569,081
-----------
Medical Supplies (4.1%)
29,500 Bausch & Lomb, Inc....................................... 1,770,000
28,900 Baxter International, Inc................................ 1,858,632
2,950 Johnson & Johnson........................................ 247,431
-----------
3,876,063
-----------
Office Equipment & Supplies (Non-Computer Related) (0.1%)
2,075 Pitney-Bowes, Inc........................................ 137,080
-----------
Oil & Gas Exploration, Production & Services (7.5%)
1,950 Enron Corp............................................... 111,272
42,600 Kerr-McGee Corp.......................................... 1,629,449
23,700 MCN Energy Group, Inc.................................... 451,781
37,400 Mitchell Energy & Development, Class A................... 427,763
36,900 Mitchell Energy & Development, Class B................... 428,963
24,300 Murphy Oil Corp.......................................... 1,002,374
13,000 National Fuel Gas Co..................................... 587,438
38,600 PennzEnergy Co........................................... 629,663
29,600 Sonat, Inc............................................... 801,050
37,600 Ultramar Diamond Shamrock Corp........................... 911,799
-----------
6,981,552
-----------
Oil-Integrated Companies (4.3%)
25,600 Atlantic Richfield Co.................................... 1,670,400
1,544 British Petroleum PLC, ADR (c)........................... 138,381
1,550 Chevron Corp............................................. 128,553
1,200 Exxon Corp............................................... 87,750
38,600 Pennzoil-Quaker State Co. (b)............................ 569,350
1,525 Royal Dutch Petroleum Co. - New York Shares.............. 73,009
25,625 Texaco, Inc.............................................. 1,354,922
-----------
4,022,365
-----------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Value
------ ---------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks, continued:
Pharmaceuticals (1.4%)
625 Bristol-Myers Squibb Co................................... $ 83,633
1,200 Eli Lilly & Co............................................ 106,650
1,200 Merck & Co., Inc.......................................... 177,225
17,300 Pharmacia & Upjohn, Inc................................... 979,612
-----------
1,347,120
-----------
Precision Instruments & Related (0.8%)
43,700 Flowserve Corp............................................ 723,781
-----------
Publishing (0.2%)
2,000 McGraw-Hill Cos., Inc..................................... 203,750
-----------
Real Estate Investment Trusts (1.5%)
22,900 Developers Diversified Realty Corp........................ 406,475
5,250 Duke Realty Investments, Inc.............................. 122,063
15,575 Equity Residential Properties Trust....................... 629,814
11,200 FelCor Lodging Trust, Inc................................. 258,300
-----------
1,416,652
-----------
Retail (0.1%)
2,375 Dayton Hudson Corp........................................ 128,844
-----------
Retail-Department Stores (3.4%)
33,300 J.C. Penney Co., Inc...................................... 1,560,938
27,400 May Department Stores Co.................................. 1,654,275
-----------
3,215,213
-----------
Retail-Drug Stores (0.2%)
5,700 Longs Drug Stores Corp.................................... 213,750
-----------
Rubber & Rubber Products (1.2%)
54,400 Cooper Tire & Rubber Co................................... 1,111,800
-----------
Semiconductors (0.1%)
600 Intel Corp................................................ 71,138
-----------
Steel (1.4%)
63,321 Allegheny Teledyne, Inc................................... 1,294,123
-----------
Tax Return Preparation (2.1%)
43,200 H&R Block, Inc............................................ 1,944,000
-----------
Utilities-Electric (0.7%)
19,300 CINergy Corp.............................................. 663,438
-----------
Utilities-Electric & Gas (1.1%)
36,000 OGE Energy Corp........................................... 1,041,750
-----------
Utilities-Natural Gas (1.3%)
9,100 NICOR, Inc................................................ 384,475
18,000 People's Energy Corp...................................... 717,750
3,225 Williams Companies, Inc................................... 100,580
-----------
1,202,805
-----------
</TABLE>
Continued
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
Income Equity Fund
<TABLE>
<CAPTION>
Market
Shares Value
------- --------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks, continued:
Utilities-Telecommunications (2.8%)
900 Ameritech Corp........................................... $ 57,038
925 Bell Atlantic Corp....................................... 52,552
33,900 Frontier Corp............................................ 1,152,600
19,900 GTE Corp................................................. 1,342,005
-----------
2,604,195
-----------
Total Common Stocks (Cost $95,467,731) 93,416,088
-----------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Value
------- -------------------------------------------------------- -----------
<C> <S> <C>
Investment Companies (0.4%)
233,031 Dreyfus Treasury Prime Fund............................. $ 233,031
140,398 Federated U.S. Treasury Services Fund................... 140,398
-----------
Total Investment Companies (Cost $373,429) 373,429
-----------
Total Investments (Cost $95,841,160) (a)--100.1% 93,789,517
Liabilities in excess of other assets--(0.1)% (82,869)
-----------
Total Net Assets--100.0% $93,706,648
===========
</TABLE>
- -------
(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 purposes in excess of federal income tax reporting of
approximately $1,415,227. Cost for federal income tax purposes differs from
value by net unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation................................... $ 6,055,411
Unrealized depreciation................................... (9,522,281)
-----------
Net unrealized depreciation............................... $(3,466,870)
===========
</TABLE>
(b) Represents non-income producing securities. (c) Name change to BP Amoco PLC,
ADR effective 1/4/99.
ADR--American Depository Receipt
PLC--Public Liability Co.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
Balanced Fund
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- ------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks (59.7%)
Banks (6.3%)
5,658 BankAmerica Corp....................................... $ 340,186
2,200 BankBoston Corp........................................ 85,663
3,000 Chase Manhattan Corp................................... 204,188
4,000 Citigroup, Inc......................................... 198,000
1,650 J.P. Morgan & Co....................................... 173,353
3,000 Mellon Bank Corp....................................... 206,250
4,000 State Street Corp...................................... 278,250
700 SunTrust Banks, Inc.................................... 53,550
500 Wachovia Corp.......................................... 43,719
-----------
1,583,159
-----------
Beverages (0.5%)
2,000 Coca-Cola Co........................................... 133,750
-----------
Brokerage Services (0.8%)
3,000 Merrill Lynch & Co., Inc............................... 200,250
-----------
Computers & Peripherals (8.0%)
11,000 Cisco Systems, Inc. (b)................................ 1,020,937
5,000 Dell Computer Corp. (b)................................ 365,938
1,300 EMC Corp. (b).......................................... 110,500
2,000 Hewlett-Packard Co..................................... 136,625
2,000 International Business Machines Corp................... 369,500
-----------
2,003,500
-----------
Diversified (4.1%)
6,000 General Electric Co.................................... 612,375
5,500 Tyco International Ltd................................. 414,906
-----------
1,027,281
-----------
Entertainment (0.5%)
4,200 The Walt Disney Co..................................... 126,000
-----------
Financial Services (0.9%)
1,500 Fannie Mae............................................. 111,000
3,000 T. Rowe Price Associates............................... 102,750
-----------
213,750
-----------
Insurance (0.6%)
1,500 American International Group, Inc...................... 144,938
-----------
Linen Supply & Related Items (0.6%)
2,000 Cintas Corp............................................ 140,875
-----------
Media (2.7%)
11,000 Time Warner, Inc....................................... 682,688
-----------
Medical Supplies (0.4%)
1,200 Johnson & Johnson...................................... 100,650
-----------
Oil & Gas Exploration, Production & Services (0.6%)
3,500 Schlumberger, Ltd...................................... 161,438
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ----------------------------------------------------- -----------
<C> <S> <C>
Common Stocks, continued
Oil-Integrated Companies (1.9%)
3,000 Exxon Corp........................................... $ 219,375
5,000 Texaco, Inc.......................................... 264,375
-----------
483,750
-----------
Pharmaceuticals (11.3%)
2,000 Bristol-Myers Squibb Co.............................. 267,625
4,500 Cardinal Health, Inc................................. 341,438
4,000 Eli Lilly & Co....................................... 355,500
1,000 Merck & Co., Inc..................................... 147,688
6,000 Pfizer, Inc.......................................... 752,624
10,000 Schering-Plough Corp................................. 552,499
6,000 Warner-Lambert Co.................................... 451,125
-----------
2,868,499
-----------
Radio (0.3%)
1,000 Jacor Communications, Inc. (b)....................... 64,375
-----------
Retail (10.0%)
10,000 Home Depot, Inc...................................... 611,875
16,000 Staples, Inc. (b).................................... 698,999
7,500 Wal-Mart Stores, Inc................................. 610,781
10,000 Walgreen Co.......................................... 585,625
-----------
2,507,280
-----------
Retail-Department Stores (0.7%)
3,000 Kohl's Corp. (b)..................................... 184,313
-----------
Semiconductors (0.9%)
2,000 Intel Corp........................................... 237,125
-----------
Software & Computer Services (4.2%)
2,000 America Online, Inc. (b)............................. 289,500
5,500 Microsoft Corp. (b).................................. 762,781
-----------
1,052,281
-----------
Telecommunications-Equipment (1.7%)
3,850 Lucent Technologies, Inc............................. 423,500
-----------
Utilities-Telecommunications (2.7%)
11,000 Cincinnati Bell, Inc................................. 415,938
3,700 MCI Worldcom, Inc. (b)............................... 265,475
-----------
681,413
-----------
Total Common Stocks (Cost $11,008,933) 15,020,815
-----------
Corporate Bonds (3.4%)
Banks (1.8%)
$ 400,000 Chase Capital I, Series A, 7.67%, 12/1/26, Callable
12/1/06 @ 103.84, Guaranteed by Chase Manhattan
Corp................................................ 430,000
-----------
</TABLE>
Continued
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
Balanced Fund
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ----------------------------------------------------- -----------
<C> <S> <C>
Corporate Bonds, continued
Financial Services (1.6%)
$ 400,000 Ford Motor Credit Co., 6.25%, 12/8/05................ $ 413,500
-----------
Total Corporate Bonds (Cost $801,209) 843,500
-----------
U.S. Government Agencies (23.4%)
Federal Home Loan Bank (6.9%)
1,000,000 5.53%, 1/15/03, Series KL03.......................... 1,016,190
700,000 5.42%, 1/22/03, Series LF03.......................... 708,589
-----------
1,724,779
-----------
Federal Home Loan Mortgage Corp. (4.0%)
1,000,000 6.59%, 7/23/08, Callable 7/23/99 @ 100............... 1,003,810
-----------
Federal National Mortgage Assoc. (12.5%)
1,450,000 6.67%, 8/1/01, MTN................................... 1,511,669
500,000 6.01%, 1/14/03, Callable 1/14/00 @ 100, MTN.......... 503,495
300,000 5.75%, 4/15/03....................................... 308,547
500,000 6.89%, 7/12/04, Callable 7/12/00 @ 100, MTN.......... 512,800
300,000 6.95%, 11/13/06, Series 06-B, Callable 11/13/01 @
100................................................. 313,995
-----------
3,150,506
-----------
Total U.S. Government Agencies (Cost $5,771,655) 5,879,095
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ------------------------------------------------------ -----------
<C> <S> <C>
U.S. Treasury Notes (5.5%)
$1,300,000 5.63%, 5/15/08........................................ $ 1,387,295
-----------
Total U.S. Treasury Notes (Cost $1,346,694) 1,387,295
-----------
Investment Companies (7.1%)
964,406 Dreyfus Treasury Prime Fund........................... 964,406
819,890 Federated U.S. Treasury Services Fund................. 819,890
-----------
Total Investment Companies (Cost $1,784,296) 1,784,296
-----------
Total Investments (Cost $20,712,787) (a)--99.1% 24,915,001
-----------
Other assets in excess of liabilities--0.9% 227,319
-----------
Total Net Assets--100.0% $25,142,320
===========
</TABLE>
- -------
(a) Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.................................... $4,438,194
Unrealized depreciation.................................... (235,980)
----------
Net unrealized appreciation................................ $4,202,214
==========
</TABLE>
(b) Represents non-income producing securities.
MTN--Medium Term Note
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
Small Company Select Fund
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------- --------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks (95.8%)
Aerospace/Defense (3.2%)
18,500 BE Aerospace, Inc. (b)................................... $ 388,500
6,400 Orbital Sciences Corp. (b)............................... 283,200
-----------
671,700
-----------
Airlines (1.6%)
10,000 COMAIR Holdings, Inc..................................... 337,500
-----------
Apparel/Footwear (5.4%)
19,200 Jones Apparel Group, Inc. (b)............................ 423,600
19,500 Tropical Sportswear International Corp. (b).............. 699,563
-----------
1,123,163
-----------
Automotive Parts (3.1%)
32,000 Gentex Corp. (b)......................................... 640,000
-----------
Banks (4.5%)
15,000 AmSouth Bancorp.......................................... 684,375
13,000 National Commerce Bancorp................................ 244,563
-----------
928,938
-----------
Brokerage Services (3.4%)
22,500 Legg Mason, Inc.......................................... 710,156
-----------
Business Services (1.5%)
7,800 American Management Systems (b).......................... 312,000
-----------
Commercial Services (2.1%)
8,000 Quintiles Transnational Corp. (b)........................ 427,000
-----------
Computers & Peripherals (1.2%)
3,500 Comverse Technology, Inc. (b)............................ 248,500
-----------
Educational Institutions (1.4%)
9,600 DeVry, Inc. (b).......................................... 294,000
-----------
Electrical Equipment (4.5%)
6,000 Benchmark Electronics, Inc. (b).......................... 219,750
11,500 Sanmina Corp. (b)........................................ 718,750
-----------
938,500
-----------
Electronic & Electrical-General (3.3%)
14,000 American Power Conversion Corp. (b)...................... 678,125
-----------
Environmental Control (2.2%)
25,000 Catalytica, Inc. (b)..................................... 450,000
-----------
Financial Services (8.0%)
6,500 Astoria Financial Corp................................... 297,375
20,000 Eaton Vance Corp......................................... 417,500
8,800 Fidelity National Financial, Inc......................... 268,400
6,800 SEI Investments Co....................................... 675,749
-----------
1,659,024
-----------
Food Processing & Packaging (2.5%)
20,000 American Italian Pasta Co., Class A (b).................. 527,500
-----------
</TABLE>
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------- --------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks, continued:
Heavy Machinery (1.5%)
20,000 JLG Industries, Inc...................................... $ 312,500
-----------
Medical Supplies (3.0%)
22,000 STERIS Corp. (b)......................................... 625,625
-----------
Pharmaceuticals (7.1%)
7,000 Genetech, Inc. (b)....................................... 557,813
30,800 Kendle International, Inc. (b)........................... 719,950
2,000 MedImmune, Inc. (b)...................................... 198,875
-----------
1,476,638
-----------
Printing & Publishing (4.2%)
10,000 Consolidated Graphics, Inc. (b).......................... 675,625
5,000 Multi-Color Corp. (b).................................... 33,125
5,000 World Color Press, Inc. (b).............................. 152,188
-----------
860,938
-----------
Radio (3.9%)
12,500 Jacor Communications, Inc. (b)........................... 804,688
-----------
Restaurants (3.0%)
14,000 Papa John's International, Inc. (b)...................... 617,750
-----------
Retail-Specialty Stores (7.2%)
22,000 Bed Bath & Beyond, Inc. (b).............................. 750,749
7,000 O'Reilly Automotive, Inc. (b)............................ 330,750
10,000 Williams-Sonoma, Inc. (b)................................ 403,125
-----------
1,484,624
-----------
Semiconductors (5.6%)
15,000 Plexus Corp. (b)......................................... 508,125
14,200 Vitesse Semiconductor Corp. (b).......................... 647,875
-----------
1,156,000
-----------
Software & Computer Services (6.6%)
24,755 Complete Business Solutions, Inc. (b).................... 838,577
10,000 Genesys Telecomm Labs, Inc. (b).......................... 222,500
10,000 i2 Technologies, Inc. (b)................................ 303,750
-----------
1,364,827
-----------
Textile Products (3.2%)
16,000 Mohawk Industries, Inc. (b).............................. 673,000
-----------
Wholesale Distribution (2.6%)
10,000 Brightpoint, Inc. (b).................................... 137,500
10,000 Tech Data Corp. (b)...................................... 402,500
-----------
540,000
-----------
Total Common Stocks (Cost $15,989,118) 19,862,696
-----------
</TABLE>
Continued
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
Small Company Select Fund
<TABLE>
<CAPTION>
Security Market
Shares Description Value
------- -------------------------------------------------------- -----------
<C> <S> <C>
Investment Companies (4.3%)
883,400 Dreyfus Treasury Prime Fund............................. $ 883,400
17,698 Federated U.S. Treasury Services Fund................... 17,698
-----------
Total Investment Companies (Cost $901,098) 901,098
-----------
Total Investments (Cost $16,890,216) (a)--100.1% 20,763,794
Liabilities in excess of other assets--(0.1)% (22,636)
-----------
Total Net Assets--100.0% $20,741,158
===========
</TABLE>
- -------
(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 purposes in excess of federal income tax reporting of
approximately $10,793. Cost for federal income tax purposes differs from
value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.................................... $4,320,589
Unrealized depreciation.................................... (457,804)
----------
Net unrealized appreciation................................ $3,862,785
==========
</TABLE>
(b) Represents non-income producing securities.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
Large Company Select Fund
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- ------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks (92.1%)
Apparel/Footwear (2.7%)
22,500 Gap, Inc............................................... $ 1,265,625
15,000 Jones Apparel Group, Inc. (b).......................... 330,938
-----------
1,596,563
-----------
Automotive (1.0%)
10,000 Ford Motor Co.......................................... 586,875
-----------
Banks (5.6%)
14,710 BankAmerica Corp....................................... 884,439
20,000 Citigroup, Inc......................................... 989,999
4,000 Fifth Third Bancorp.................................... 285,250
7,400 First Union Corp....................................... 450,013
6,300 Mellon Bank Corp....................................... 433,125
4,600 State Street Corp...................................... 319,988
-----------
3,362,814
-----------
Beverages (1.4%)
13,000 Coca-Cola Co........................................... 869,375
-----------
Brokerage Services (0.8%)
7,500 Merrill Lynch & Co., Inc............................... 500,625
-----------
Computers & Peripherals (10.4%)
28,650 Cisco Systems, Inc. (b)................................ 2,659,077
21,000 Compaq Computer Corp................................... 880,688
25,000 Dell Computer Corp. (b)................................ 1,829,687
4,600 EMC Corp. (b).......................................... 391,000
2,700 International Business Machines Corp................... 498,825
-----------
6,259,277
-----------
Consumer Goods & Services (1.1%)
7,000 Procter & Gamble Co.................................... 639,188
-----------
Cosmetics & Toiletries (0.6%)
7,000 Gillette Co............................................ 338,188
-----------
Diversified (7.3%)
27,100 General Electric Co.................................... 2,765,894
22,000 Tyco International Ltd................................. 1,659,625
-----------
4,425,519
-----------
Financial Services (3.9%)
8,000 American Express Co.................................... 818,000
16,600 Fannie Mae............................................. 1,228,400
8,500 T. Rowe Price Associates............................... 291,125
-----------
2,337,525
-----------
Insurance (3.9%)
10,500 American International Group, Inc...................... 1,014,563
16,500 SunAmerica, Inc........................................ 1,338,562
-----------
2,353,125
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- ------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks, continued
Linen Supply & Related Items (1.3%)
11,000 Cintas Corp............................................ $ 774,813
-----------
Media (2.8%)
26,800 Time Warner, Inc....................................... 1,663,275
-----------
Medical Supplies (0.6%)
4,000 Johnson & Johnson...................................... 335,500
-----------
Office Equipment & Supplies (Non-Computer Related) (1.0%)
9,000 Pitney-Bowes, Inc...................................... 594,563
-----------
Oil-Integrated Companies (2.5%)
12,150 Exxon Corp............................................. 888,469
7,200 Mobil Corp............................................. 627,300
-----------
1,515,769
-----------
Pharmaceuticals (14.9%)
9,800 Bristol-Myers Squibb Co................................ 1,311,363
4,500 Cardinal Health, Inc................................... 341,438
15,000 Eli Lilly & Co......................................... 1,333,125
9,700 Merck & Co., Inc....................................... 1,432,568
14,500 Pfizer, Inc............................................ 1,818,843
21,000 Schering-Plough Corp................................... 1,160,250
21,000 Warner-Lambert Co...................................... 1,578,937
-----------
8,976,524
-----------
Retail (13.4%)
32,000 Home Depot, Inc........................................ 1,958,000
33,000 Staples, Inc. (b)...................................... 1,441,688
33,000 Wal-Mart Stores, Inc................................... 2,687,437
34,000 Walgreen Co............................................ 1,991,124
-----------
8,078,249
-----------
Retail-Specialty Stores (0.6%)
12,000 TJX Cos, Inc........................................... 348,000
-----------
Semiconductors (2.1%)
10,800 Intel Corp............................................. 1,280,475
-----------
Software & Computer Services (8.0%)
17,200 America Online, Inc. (b)............................... 2,489,699
17,000 Microsoft Corp. (b).................................... 2,357,688
-----------
4,847,387
-----------
Telecommunications-Equipment (2.9%)
16,000 Lucent Technologies, Inc............................... 1,760,000
-----------
Utilities-Telecommunications (3.3%)
15,000 Cincinnati Bell, Inc................................... 567,188
20,000 MCI Worldcom, Inc. (b)................................. 1,435,000
-----------
2,002,188
-----------
Total Common Stocks (Cost $31,617,040) 55,445,817
-----------
</TABLE>
Continued
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
Large Company Select Fund
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ------------------------------------------------------ -----------
<C> <S> <C>
U.S. Government Agencies (2.3%)
Federal Home Loan Mortgage Corp. (2.3%)
$1,400,000 Discount Note, 1/6/99................................. $ 1,399,622
-----------
Total U.S. Government Agencies (Cost $1,399,001) 1,399,622
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
--------- ------------------------------------------------------- -----------
<C> <S> <C>
Investment Companies (3.1%)
433,735 Dreyfus Treasury Prime Fund............................ $ 433,735
1,410,559 Federated U.S. Treasury Services Fund.................. 1,410,559
-----------
Total Investment Companies (Cost $1,844,294) 1,844,294
-----------
Total Investments (Cost $34,860,335) (a)--97.5% 58,689,733
Other assets in excess of liabilities--2.5% 1,526,743
-----------
Total Net Assets--100.0% $60,216,476
===========
</TABLE>
- -------
(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 purposes in excess of federal income tax reporting of
approximately $14,180. Cost for federal income tax purposes differs from
value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation................................... $24,212,730
Unrealized depreciation................................... (397,512)
-----------
Net unrealized appreciation............................... $23,815,218
===========
</TABLE>
(b) Represents non-income producing securities.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
1. Organization:
The Riverfront Funds, Inc. was organized on March 27, 1990, and is registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end management investment company. Effective December 29, 1998, The
Riverfront Funds, Inc., a Maryland corporation, changed its form of
organization from that of a Maryland corporation to an Ohio business trust by
completing a reorganization with The Riverfront Funds, an Ohio business trust
(the "Trust"), created for such purpose. The Trust is authorized to issue six
series of shares of beneficial interest, without par value, 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 Balanced Fund, The
Riverfront Small Company Select Fund (formerly The Riverfront Stock
Appreciation Fund) and The Riverfront Large Company Select Fund (each, a
"Fund"; and collectively, the "Funds").
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,
consistent with preservation of capital, by investing primarily in securities
issued or guaranteed by the U.S. government, its agencies and instrumentalities
and in high quality fixed rate and adjustable rate mortgage-backed securities
and other asset-backed securities. The investment objective of the Income
Equity Fund is to seek a high level of investment income, with capital
appreciation as a secondary objective, through investment primarily in
income-producing equity securities of U.S. issuers. The investment objective of
the Balanced Fund is to seek long-term growth of capital with some current
income as a secondary objective. The investment objective of the Small Company
Select Fund is to seek capital growth. The investment objective of the Large
Company Select Fund is to seek long term growth of capital with some current
income as a secondary objective.
The Trust is authorized to issue an unlimited number of shares of beneficial
interest, without par value. Sales of shares of the Funds 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 Balanced Fund, the
Small Company Select Fund and the Large Company Select Fund (collectively, "the
variable net asset value funds") each offer 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 Funds' prospectus.
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 Funds' prospectus. Investor B
Shares, other than those purchased through reinvestment of dividends, convert
automatically to Investor A Shares eight years after the date of their
issuance. A portion of the Investor B Shares purchased through dividend
reinvestment also converts automatically to Investor A Shares at such time.
Each share class has identical rights and privileges, except with respect to
(i) distribution and shareholder services (12b-1) fees paid by each share
class, (ii) voting rights on matters specifically affecting a single share
class, and (iii) the exchange privileges.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the
Funds in preparation of their 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 reported amounts of assets and
Continued
- --------------------------------------------------------------------------------
Notes to Financial Statements, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
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 amortized cost, which
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 an
appropriate demand feature, or (b) maintain a dollar-weighted-average fund
maturity which exceeds 90 days, in each case calculated in accordance with Rule
2a-7 under the 1940 Act.
Investments in common and preferred stocks, corporate 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 as of the close of trading on the New York
Stock Exchange (generally 4:00 p.m. Eastern time), or closing sale prices on
the principal exchange (closing sales prices on the over-the-counter National
Market System) in which such securities are normally traded. Municipal bonds
are valued by using market quotations or independent services that use prices
provided by market makers or estimates of market values obtained from yield
data relating to instruments or securities with similar characteristics.
Short-term investments maturing in 60 days or less are valued at amortized
cost, which 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 as determined in good faith by Provident, as the investment
adviser, or by the sub-investment advisor, as the case may be, under the
supervision of the Trust's Board of Trustees. 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). Realized gains or losses from sales of securities are
determined on an identified cost basis. 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.
Repurchase Agreements:
The Funds may enter into repurchase agreements with financial institutions such
as banks and broker/dealers which Provident, as investment adviser or the
Funds' sub-investment adviser, as applicable, deems creditworthy under
guidelines approved by the Trust's Board of Trustees, 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 Fund plus
interest negotiated on the basis of current short-term rates, which may be more
or less than the rate on the underlying fund 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
Fund's custodian or another qualified custodian or in the Federal
Reserve/Treasury book-entry system. Repurchase agreements are considered to be
loans by the Funds under the 1940 Act.
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
generally paid monthly for each variable net asset value fund with the
Continued
- --------------------------------------------------------------------------------
Notes to Financial Statements, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
exception of the Small Company Select Fund which declares and pays any
dividends semiannually. Net investment losses incurred by a Fund are offset
against Capital to the extent that short-term gains are not available in a
given year in the accompanying Statements of Assets and Liabilities.
Distributable net realized capital gains, if any, are declared and distributed
at least annually for each of the Funds. Any taxable distributions declared in
December and paid in the following fiscal year will be taxable to shareholders
in the year declared.
The amounts of dividends from net investment income and of distributions from
net realized gains are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the composition of net assets based on their federal
tax-basis treatment; temporary differences do not require reclassification.
Dividends and distributions to shareholders which exceed net investment income
and net realized capital gains for financial reporting purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized gains. To the extent they exceed net investment income and net
realized gains for tax purposes, they are reported as distributions of capital.
As of December 31, 1998, the following reclassifications have been made to
increase (decrease) such accounts with offsetting adjustments made to
paid-in-capital:
<TABLE>
<CAPTION>
Accumulated Accumulated Net
Undistributed Net Realized Gain/(Loss)
Investment Income on Investments
----------------- --------------------
<S> <C> <C>
U.S. Government Income Fund............. $ 25,351 $ (25,351)
Income Equity Fund...................... -- (8,107)
Small Company Select Fund............... 258,749 1,763
Large Company Select Fund............... 261,052 (261,052)
</TABLE>
Federal Income Taxes:
It is the policy of the Funds to comply with all requirements of the Internal
Revenue Code of 1986, as amended (the "Code") applicable to regulated
investment companies and to distribute substantially all of their taxable
income to their shareholders; therefore, no federal tax provision was required.
Other:
Expenses that are directly related to one of the Funds are charged directly to
that Fund. Other operating expenses of the Trust are prorated to the Funds,
generally on the basis of relative net assets. Fees paid under a Fund's
shareholder servicing or distribution plans are borne by the specific class of
shares to which they apply.
All expenses in connection with the organization of the Large Company Select
Fund and the registration of its shares under the Securities Act of 1933, as
amended, were paid by the Fund. Such expenses are being amortized over a period
of five years commencing with the inception date of the Fund.
Continued
- --------------------------------------------------------------------------------
Notes to Financial Statements, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
3. Purchases and Sales of Securities:
Purchases and sales of securities (excluding short-term securities) for the
year ended December 31, 1998 are as follows:
<TABLE>
<CAPTION>
Purchases Sales
------------ ------------
<S> <C> <C>
U.S. Government Income Fund.......................... $ 48,499,239 $ 59,122,711
Income Equity Fund................................... $127,726,032 $136,956,638
Balanced Fund........................................ $ 24,803,816 $ 26,376,481
Small Company Select Fund............................ $ 25,176,810 $ 26,830,264
Large Company Select Fund............................ $ 34,674,356 $ 29,117,008
</TABLE>
4. Capital Share Transactions:
Transactions in capital shares for the Funds were as follows:
<TABLE>
<CAPTION>
U.S. Government Income Fund Income Equity Fund
----------------------------- --------------------------
Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31,
1998 1997 1998 1997
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Investor A Shares:
Proceeds from shares
issued............... $ 1,870,036 $ 3,965,162 $ 4,928,919 $ 7,333,378
Proceeds from shares
issued in connection
with common trust
fund acquisition..... -- 16,606,766 -- --
Dividends reinvested.. 247,700 447,813 10,320,240 19,742,254
Shares redeemed....... (8,523,069) (5,969,304) (14,154,051) (16,662,273)
------------- ------------- ------------ ------------
Change in net assets
from Investor A share
transactions......... $(6,405,333) $15,050,437 $ 1,095,108 $ 10,413,359
============= ============= ============ ============
Investor B Shares:
Proceeds from shares
issued............... $ 119,490 $ 270,855 $ 3,230,210 $ 8,520,546
Dividends reinvested.. 36,238 58,773 2,021,050 3,781,007
Shares redeemed....... (199,775) (315,970) (4,415,775) (1,514,086)
------------- ------------- ------------ ------------
Change in net assets
from Investor B share
transactions......... $ (44,047) $ 13,658 $ 835,485 $ 10,787,467
============= ============= ============ ============
SHARE TRANSACTIONS:
Investor A Shares:
Issued................ 194,328 423,205 405,411 552,976
Issued in connection
with common trust
fund acquisition..... -- 1,761,057 -- --
Reinvested............ 25,909 47,635 981,947 1,674,497
Redeemed.............. (888,903) (634,837) (1,197,255) (1,206,389)
------------- ------------- ------------ ------------
Change in Investor A
Shares............... (668,666) 1,597,060 190,103 1,021,084
============= ============= ============ ============
Investor B Shares:
Issued................ 10,979 24,956 252,960 633,092
Reinvested............ 3,353 5,568 188,168 314,995
Redeemed.............. (18,450) (29,761) (368,480) (109,730)
------------- ------------- ------------ ------------
Change in Investor B
Shares............... (4,118) 763 72,648 838,357
============= ============= ============ ============
</TABLE>
Continued
- --------------------------------------------------------------------------------
Notes to Financial Statements, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
4. Capital Share Transactions, continued:
<TABLE>
<CAPTION>
Balanced Fund Small Company Select Fund
-------------------------- --------------------------
Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31,
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Investor A Shares:
Proceeds from shares
issued................. $ 1,816,435 $ 1,140,421 $ 1,355,158 $ 3,009,538
Dividends reinvested.... 1,709,409 969,400 2,647,256 4,366,182
Shares redeemed......... (2,408,823) (3,919,227) (5,805,686) (13,898,332)
----------- ----------- ----------- ------------
Change in net assets
from Investor A shares
transactions........... $ 1,117,021 $(1,809,406) $(1,803,272) $ (6,522,612)
=========== =========== =========== ============
Investor B Shares:
Proceeds from shares
issued................. $ 1,524,737 $ 1,482,972 $ 598,969 $ 526,610
Dividends reinvested.... 1,899,931 979,316 194,970 214,709
Shares redeemed......... (1,765,526) (1,554,696) (330,044) (115,336)
----------- ----------- ----------- ------------
Change in net assets
from Investor B share
transactions........... $ 1,659,142 $ 907,592 $ 463,895 $ 625,983
=========== =========== =========== ============
SHARE TRANSACTIONS:
Investor A Shares:
Issued.................. 135,447 91,585 157,466 307,000
Reinvested.............. 131,021 79,188 305,335 468,165
Redeemed................ (181,427) (316,498) (669,783) (1,436,813)
----------- ----------- ----------- ------------
Change in Investor A
Shares................. 85,041 (145,725) (206,982) (661,648)
=========== =========== =========== ============
Investor B Shares:
Issued.................. 109,318 115,832 65,801 52,468
Reinvested.............. 140,306 77,517 21,711 22,295
Redeemed................ (127,777) (121,277) (41,980) (11,801)
----------- ----------- ----------- ------------
Change in Investor B
Shares................. 121,847 72,072 45,532 62,962
=========== =========== =========== ============
</TABLE>
Continued
- --------------------------------------------------------------------------------
Notes to Financial Statements, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
4. Capital Share Transactions, continued:
<TABLE>
<CAPTION>
Large Company Select Fund
--------------------------
Year Ended Year Ended
December 31, December 31,
1998 1997*
------------ ------------
<S> <C> <C>
CAPITAL TRANSACTIONS:
Investor A Shares:
Proceeds from shares issued........................ $ 7,462,897 $ 2,486,334
Proceeds from shares issued in connection with
common trust fund acquisition..................... -- 27,813,338
Dividends reinvested............................... 6,003,616 3,676,075
Shares redeemed.................................... (3,998,246) (3,937,879)
----------- -----------
Change in net assets from Investor A share
transactions...................................... $ 9,468,267 $30,037,868
=========== ===========
Investor B Shares:
Proceeds from shares issued........................ $ 5,846,765 $ 2,396,213
Dividends reinvested............................... 1,076,545 263,596
Shares redeemed.................................... (826,312) (37,554)
----------- -----------
Change in net assets from Investor B share
transactions...................................... $ 6,096,998 $ 2,622,255
=========== ===========
SHARE TRANSACTIONS:
Investor A Shares:
Issued............................................. 569,741 205,316
Issued in connection with common trust fund
acquisition....................................... -- 2,781,335
Reinvested......................................... 432,540 329,693
Redeemed........................................... (309,699) (352,190)
----------- -----------
Change in Investor A Shares........................ 692,582 2,964,154
=========== ===========
Investor B Shares:
Issued............................................. 456,092 198,193
Reinvested......................................... 78,735 23,747
Redeemed........................................... (65,435) (3,405)
----------- -----------
Change in Investor B Shares........................ 469,392 218,535
=========== ===========
</TABLE>
- -------
* For the period January 2, 1997 (commencement of operations) through December
31, 1997.
5. Related Party Transactions:
Provident has entered into an Investment Advisory Agreement with the Trust
whereby Provident supervises and manages the investment and reinvestment of the
assets of the Funds. 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 Fund.
Pursuant to the terms of the Investment Advisory Agreement with the Trust,
Provident has entered into a Sub-Investment Advisory Agreement with DePrince,
Race & Zollo, Inc. ("DRZ") for the Income Equity Fund. DRZ provides investment
advice to and supervises the investment program of that portion of the assets
of the Income Equity Fund allocated to DRZ by the Trust's Board of Trustees.
Under the terms of the Sub-Investment Advisory
Continued
- --------------------------------------------------------------------------------
Notes to Financial Statements, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
5. Related Party Transactions, continued:
Agreement, DRZ receives from Provident (and not the Fund), fees calculated at
0.50% of average daily net assets up to $55 million of the Income Equity Fund
managed by DRZ and 0.55% of average daily net assets above $55 million for this
Fund managed by DRZ.
In addition to serving as Investment Adviser, Provident serves as custodian and
fund accountant to the Funds. 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 Fund.
During the year ended December 31, 1998, Provident Securities & Investment
Company ("PSI"), an affiliate of Provident which is a registered broker dealer,
executed transactions to purchase and sell Fund investments on an agency basis
on behalf of the Trust. The Trust paid PSI approximately $54,872 that has been
included in investments at cost, as commissions for such transactions.
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 trustee of the Trust are affiliated,
serves the Trust as administrator, principal underwriter and distributor. Such
officers and trustee are paid no fees directly by the Funds for serving as
officers and as trustee of the Trust. Under the terms of the Administration
Agreement, BISYS' fees are computed at 0.20% of the average daily net assets of
each Fund.
Provident also serves as transfer agent and shareholder servicing agent to the
Trust. 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 Fund and certain out-of-pocket expenses. Under the terms of the
Shareholder Services Plan, each Fund is authorized to pay compensation to banks
and other financial institutions, including Provident and BISYS or other
providers for record keeping and/or administrative support services. As of
December 31, 1998, there were no shareholder servicing agreements entered into
on behalf of any of the Funds.
The Trust has adopted an Investor A Distribution and Shareholder Service Plan
("Investor A Plan") and an Investor B Distribution and Shareholder Services
Plan ("Investor B Plan"), each in accordance with Rule 12b-1 under the 1940
Act. Pursuant to the Investor A Plan, each Fund 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 average daily net asset
value of Investor A Shares of each Fund. 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 Fund 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 Fund.
These fees may be used by BISYS to pay banks, broker dealers and other
institutions, including Provident, 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 year ended December 31, 1998, BISYS received $516,971 from commissions
on sales of shares of the Funds. BISYS, as dealer/underwriter, retained
$515,505 and reallowed $1,466 to brokers affiliated with Provident.
As of December 31, 1998, Provident and certain of its affiliates owned shares
in the Riverfront U.S. Government Income Fund totaling $24,270,325, or 54% of
the Fund.
Continued
- --------------------------------------------------------------------------------
Notes to Financial Statements, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
5. Related Party Transactions, continued:
Fees may be voluntarily reduced or reimbursed to assist the Funds in
maintaining competitive expense ratios. Information regarding these
transactions is as follows for the year ended December 31, 1998:
<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 (percentage of
average net assets)............ 0.15% 0.40% 0.95%
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........ $239,063 $27,932 $ 24,937
12b-1 Fees (Investor B):
Annual fee (percentage of
average net assets)............ N/A 1.00% 1.00%
Custodian and Accounting Fees:.. $ 81,312 $53,978 $154,411
Transfer Agent Fees:............ $ 40,339 $43,615 $ 87,612
<CAPTION>
Balanced Small Company Large Company
Fund Select Fund Select Fund
---------------- --------------- -------------
<S> <C> <C> <C>
Investment Advisor Fees:
Annual fee before voluntary fee
reductions
(percentage of average net
assets)........................ 0.90% 0.80% 0.80%
Voluntary fee reductions........ $ 22,256 N/A N/A
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........ $ 6,098 N/A N/A
12b-1 Fees (Investor B):
Annual fee (percentage of
average net assets)............. 1.00% 1.00% 1.00%
Custodian and Accounting Fees:.. $ 36,837 $36,415 $ 69,214
Transfer Agent Fees:............ $ 43,924 $91,945 $ 46,311
</TABLE>
N/A--Not applicable
Continued
- --------------------------------------------------------------------------------
Notes to Financial Statements, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
6. Acquisition of Common Trust Funds A, C and G:
On January 2, 1997, the Large Company Select Fund issued Investor A shares in a
tax free conversion to acquire the assets and liabilities, including
distributions payable of $26,562, of the Common Trust A and Common Trust G of
The Provident Bank. The following is a summary of Investor A shares issued, net
assets acquired, net asset value per share and unrealized appreciation as of
the date acquired:
<TABLE>
<S> <C>
Investor A Shares (000)'s............................................. 2,781
Net assets acquired (000)'s........................................... $27,813
Net asset value....................................................... $ 10.00
Unrealized appreciation (000)'s....................................... $12,592
Net assets of the mutual fund before acquisition...................... $ --
</TABLE>
On January 23, 1997, the U.S. Government Income Fund issued Investor A shares
in a tax free conversion to acquire the assets and liabilities, including
distributions payable of $26,148, of the Common Trust Fund C and Common Trust
Fund F-1 of The Provident Bank. The following is a summary of Investor A shares
issued, net assets acquired, net asset value per share and unrealized
appreciation as of the date acquired.
<TABLE>
<S> <C>
Investor A Shares (000)'s............................................. 1,761
Net assets acquired (000)'s........................................... $16,607
Net asset value....................................................... $ 9.43
Unrealized appreciation (000)'s....................................... $ 392
Net assets of the mutual fund before acquisition (000)'s.............. $34,983
</TABLE>
7. Special Meetings of Shareholders (unaudited):
A special meeting of Shareholders of the Trust was held on January 30, 1998. At
the meeting, shareholders voted on the Agreement and Plan of Reorganization and
Liquidation (the "Plan of Conversion") providing for the conversion of each of
the Funds from a separate series of a Maryland corporation to a separate series
of an Ohio business trust. Included in the Plan of Conversion was a provision
to change the name of The Riverfront Stock Appreciation Fund to The Riverfront
Small Company Select Fund. The Plan of Conversion was approved by six of the
seven Funds, as follows, and as a result was not approved.
<TABLE>
<CAPTION>
Fund For Against Abstain
---- ---------- ------- ---------
<S> <C> <C> <C>
U.S. Government Securities Money Market Fund..... 97,741,441 224,373 1,499,951
U.S. Government Income Fund...................... 2,751,914 0 0
Ohio Tax-Free Bond Fund.......................... 733,691 0 2,987
Income Equity Fund............................... 4,655,627 10,779 74,455
Balanced Fund.................................... 853,760 36,855 41,055
Stock Appreciation Fund (Small Company Select
Fund)............................................ 1,040,220 55,119 112,536
Large Company Select Fund........................ 2,591,906 266 0
</TABLE>
Continued
- --------------------------------------------------------------------------------
Notes to Financial Statements, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
7. Special Meetings of Shareholders, continued:
A second special meeting of Shareholders of the Trust was held on August 7,
1998 for the same purpose. The results of the August 7, 1998 special meeting
are as follows:
<TABLE>
<CAPTION>
Fund For Against Abstain
---- ----------- ------- -------
<S> <C> <C> <C>
U.S. Government Securities Money Market Fund...... 102,870,596 539,345 405,934
U.S. Government Income Fund....................... 4,807,475 2,104 1,312
Income Equity Fund................................ 5,853,357 34,055 88,938
Balanced Fund..................................... 899,042 3,389 40,742
Stock Appreciation Fund (Small Company Select
Fund)............................................. 1,342,041 43,899 57,079
Large Company Select Fund......................... 3,095,349 1,117 4,658
</TABLE>
As a result, the Plan of Conversion was approved by all the Funds and became
effective December 29, 1998.
A Special Meeting of Shareholders of The Riverfront Ohio Tax-Free Fund was held
on April 27, 1998. At the meeting, shareholders of the Fund voted on the Plan
of Dissolution, Liquidation and Termination of the Fund. The results of the
Special Meeting are as follows:
<TABLE>
<CAPTION>
For Abstain Against
------- ------- -------
<S> <C> <C>
295,862 -- 1,285
</TABLE>
As a result, The Riverfront Ohio Tax-Free Fund was terminated on April 30,
1998.
8. Eligible Distributions (Unaudited):
The Trust designates the following percentage of distributions eligible for the
dividends received deductions for the following funds:
<TABLE>
<CAPTION>
Qualified
Dividend Income
---------------
<S> <C>
Income Equity Fund............................................. 32.04%
Balanced Fund.................................................. 22.73%
</TABLE>
9. Federal Income Tax Information (Unaudited):
The accompanying table details distributions from long-term capital gains for
the following Funds for the year ended December 31, 1998:
<TABLE>
<CAPTION>
Distributions
--------------
<S> <C> <C>
Income Equity Fund............................................ $4,739,170
Balanced Fund................................................. $2,960,089
Small Company Select Fund..................................... $2,774,127
Large Company Select Fund..................................... $7,141,282
</TABLE>
- --------------------------------------------------------------------------------
Notes to Financial Statements, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1998
9. Federal Income Tax Information, continued:
At December 31, 1998, the following Funds have capital loss carryforwards for
tax purposes which are available to offset future capital gains, if any:
<TABLE>
<CAPTION>
Capital Loss
Carryforward Expires
------------ -------
<S> <C> <C>
U.S. Government Securities Money Market Fund.............. $ 875 2002
U.S. Government Securities Money Market Fund.............. $ 1,415 2003
U.S. Government Securities Money Market Fund.............. $ 28 2005
U.S. Government Securities Money Market Fund.............. $ 3,779 2006
U.S. Government Income Fund............................... $ 4,366 2002
U.S. Government Income Fund............................... $516,479 2003
Small Company Select Fund................................. $ 90,491 2006
</TABLE>
Under current tax law, capital losses realized subsequent to October 31 of the
current fiscal year may be deferred and treated as occurring on the first day
of the following fiscal year. The following deferred losses will be treated as
arising on the first day of the fiscal year ended December 31, 1999:
<TABLE>
<CAPTION>
Post-October
Capital Losses
--------------
<S> <C>
U.S. Government Securities Money Market Fund.................... $ 318
U.S. Government Income Fund..................................... $ 31,168
Income Equity Fund.............................................. $590,485
</TABLE>
Continued
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
The Riverfront Funds
<TABLE>
<CAPTION>
U.S. Government Securities Money Market Fund
------------------------------------------------
Years Ended December 31,
------------------------------------------------
1998 1997 1996 1995 1994 (a)
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period........ $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- --------
Investment Activities
Net investment income...... 0.048 0.049 0.046 0.050 0.040
-------- -------- -------- -------- --------
Total from Investment
Activities................. 0.048 0.049 0.046 0.050 0.040
-------- -------- -------- -------- --------
Distributions
Net investment income...... (0.048) (0.049) (0.046) (0.050) (0.040)
-------- -------- -------- -------- --------
Total Distributions........ (0.048) (0.049) (0.046) (0.050) (0.040)
-------- -------- -------- -------- --------
Net Asset Value,
End of Period.............. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ========
Total Return................ 4.93% 5.02% 4.89% 5.52% 3.78%
Ratios/Supplementary Data:
Net Assets at end of period
(000)....................... $188,847 $142,569 $181,017 $157,495 $149,374
Ratio of expenses to average
net assets.................. 0.66% 0.64% 0.59% 0.58% 0.51%
Ratio of net investment
income to average net
assets...................... 4.82% 4.90% 4.78% 5.34% 3.70%
Ratio of expenses to average
net assets*................. 0.81% 0.79% 0.84% 0.83% 0.80%
Ratio of net investment
income to average net
assets*..................... 4.67% 4.75% 4.53% 5.09% 3.41%
</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) Audited by other auditors.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
The Riverfront Funds
<TABLE>
<CAPTION>
U.S. Government Income Fund
---------------------------------------------------------------------------------------------------------
January 17,
Years Ended December 31, Year Ended 1995 to Year Ended
----------------------------------------------------------------- December 31, December 31, December 31,
1998 1997 1996 1995 1995 (a) 1994 (e)
--------------------- --------------------- --------------------- ------------ ------------ ------------
Investor A Investor B Investor A Investor B Investor A
Investor B Investor A Investor B
---------- ---------- ---------- ---------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Period.......... $ 9.48 $10.68 $ 9.43 $10.64 $ 9.71 $10.95 $ 8.92 $10.00 $ 9.91
------- ------ ------- ------ ------- ------ ------- ------ -------
Investment
Activities
Net investment
income......... 0.47 0.44 0.49 0.48 0.52 0.49 0.54 0.43 0.54
Net realized and
unrealized
gains (losses)
from
investments.... 0.17 0.19 0.14 0.14 (0.29) (0.31) 0.79 0.94 (0.99)
------- ------ ------- ------ ------- ------ ------- ------ -------
Total from
Investment
Activities..... 0.64 0.63 0.63 0.62 0.23 0.18 1.33 1.37 (0.45)
------- ------ ------- ------ ------- ------ ------- ------ -------
Distributions
Net investment
income......... (0.47) (0.38) (0.50) (0.49) (0.51) (0.49) (0.54) (0.42) (0.54)
In excess of net
investment
income......... -- -- (0.08) (0.09) -- -- -- -- --
------- ------ ------- ------ ------- ------ ------- ------ -------
Total
Distributions.. (0.47) (0.38) (0.58) (0.58) (0.51) (0.49) (0.54) (0.42) (0.54)
------- ------ ------- ------ ------- ------ ------- ------ -------
Net Asset Value,
End of Period... $ 9.65 $10.93 $ 9.48 $10.68 $ 9.43 $10.64 $ 9.71 $10.95 $ 8.92
======= ====== ======= ====== ======= ====== ======= ====== =======
Total Return
(excludes
sales/redemption
charge)......... 6.95% 6.03% 6.94% 6.07% 2.51% 1.72% 15.22% 13.96%(d) (4.64)%
Ratios/Supplementary Data:
Net Assets at end
of period (000). $43,411 $1,294 $49,017 $1,309 $33,694 $1,296 $36,538 $1,263 $32,721
Ratio of expenses
to average net
assets.......... 1.12% 1.93% 1.14% 1.95% 1.11% 1.96% 1.09% 1.90%(b) 0.86%
Ratio of net
investment
income to
average net
assets.......... 4.90% 4.09% 5.40% 4.56% 5.45% 4.59% 5.74% 4.80%(b) 5.78%
Ratio of expenses
to average net
assets*......... 1.18% 1.93% 1.20% 1.95% 1.20% 1.96% 1.18% 1.90%(b) 1.14%
Ratio of net
investment
income to
average net
assets*......... 4.84% 4.09% 5.34% 4.56% 5.36% 4.59% 5.65% 4.80%(b) 5.49%
Portfolio
Turnover (c).... 109% 109% 71% 71% 53% 53% 75% 75% 83%
</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) Annualized.
(c) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
(d) 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.
(e) Audited by other auditors.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
The Riverfront Funds
<TABLE>
<CAPTION>
Income Equity Fund
---------------------------------------------------------------------------------------------------------
January 17,
Years Ended December 31, Year Ended 1995 to Year Ended
----------------------------------------------------------------- December 31, December 31, December 31,
1998 1997 1996 1995 1995 (a) 1994 (e)
--------------------- --------------------- --------------------- ------------ ------------ ------------
Investor A Investor B Investor A Investor B Investor A
Investor B Investor A Investor B
---------- ---------- ---------- ---------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Period.......... $ 11.68 $ 11.98 $ 11.92 $ 12.16 $ 11.70 $11.85 $ 10.15 $10.00 $ 10.63
------- ------- ------- ------- ------- ------ ------- ------ -------
Investment
Activities
Net investment
income......... 0.12 0.03 0.16 0.06 0.21 0.12 0.27 0.13 0.32
Net realized and
unrealized
gains from
investments.... 0.25 0.25 3.11 3.17 2.12 2.21 2.89 2.78 --
------- ------- ------- ------- ------- ------ ------- ------ -------
Total from
Investment
Activities..... 0.37 0.28 3.27 3.23 2.33 2.33 3.16 2.91 0.32
------- ------- ------- ------- ------- ------ ------- ------ -------
Distributions
Net investment
income......... (0.12) (0.04) (0.16) (0.06) (0.21) (0.12) (0.27) (0.13) (0.31)
Net realized
gains.......... (1.46) (1.46) (3.35) (3.35) (1.90) (1.90) (1.34) (0.93) (0.49)
------- ------- ------- ------- ------- ------ ------- ------ -------
Total
Distributions.. (1.58) (1.50) (3.51) (3.41) (2.11) (2.02) (1.61) (1.06) (0.80)
------- ------- ------- ------- ------- ------ ------- ------ -------
Net Asset Value,
End of Period... $ 10.47 $ 10.76 $ 11.68 $ 11.98 $ 11.92 $12.16 $ 11.70 $11.85 $ 10.15
======= ======= ======= ======= ======= ====== ======= ====== =======
Total Return
(excludes
sales/redemption
charge)......... 3.37% 2.51% 28.20% 27.19% 19.88% 19.67% 31.45% 29.28%(d) 3.08%
Ratios/Supplementary Data:
Net Assets at end
of period (000). $77,144 $16,563 $83,841 $17,563 $73,368 $7,632 $60,845 $2,833 $34,965
Ratio of expenses
to average net
assets.......... 1.76% 2.54% 1.75% 2.55% 1.76% 2.48% 1.49% 2.46%(b) 1.30%
Ratio of net
investment
income to
average net
assets.......... 1.03% 0.25% 1.21% 0.40% 1.62% 0.88% 2.27% 1.12%(b) 2.93%
Ratio of expenses
to average net
assets*......... 1.79% 2.54% 1.80% 2.55% 1.85% 2.54% 1.74% 2.51%(b) 1.58%
Ratio of net
investment
income to
average net
assets*......... 1.00% 0.25% 1.16% 0.40% 1.53% 0.82% 2.02% 1.07%(b) 2.65%
Portfolio
Turnover (c)..... 129% 129% 157% 157% 166% 166% 180% 180% 119%
</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) Annualized.
(c) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
(d) 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.
(e) Audited by other auditors.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
The Riverfront Funds
<TABLE>
<CAPTION>
Balanced Fund
--------------------------------------------------------------------------------------------------------------
January 17, From September 1,
Years Ended December 31, Year Ended 1995 to 1994 through
----------------------------------------------------------------- December 31, December 31, December 31,
1998 1997 1996 1995 1995 (a) 1994 (a)(f)
--------------------- --------------------- --------------------- ------------ ------------ -----------------
Investor A Investor B Investor A Investor B Investor A
Investor B Investor A Investor B
---------- ---------- ---------- ---------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Period.......... $ 12.30 $ 12.71 $11.69 $ 12.04 $11.36 $ 11.70 $ 9.79 $10.00 $10.00
------- ------- ------ ------- ------- ------- ------ ------ ------
Investment
Activities
Net investment
income......... 0.23 0.11 0.23 0.12 0.31 0.26 0.35 0.25 0.10
Net realized and
unrealized
gains (losses)
from
investments.... 2.84 2.95 1.71 1.77 0.33 0.34 1.66 1.79 (0.18)
------- ------- ------ ------- ------- ------- ------ ------ ------
Total from
Investment
Activities..... 3.07 3.06 1.94 1.89 0.64 0.60 2.01 2.04 (0.08)
------- ------- ------ ------- ------- ------- ------ ------ ------
Distributions
Net investment
income......... (0.23) (0.11) (0.23) (0.12) (0.31) (0.26) (0.34) (0.24) (0.13)
Net realized
gains.......... (2.10) (2.10) (1.10) (1.10) -- -- (0.10) (0.10) --
------- ------- ------ ------- ------- ------- ------ ------ ------
Total
Distributions.. (2.33) (2.21) (1.33) (1.22) (0.31) (0.26) (0.44) (0.34) (0.13)
------- ------- ------ ------- ------- ------- ------ ------ ------
Net Asset Value,
End of Period... $ 13.04 $ 13.56 $12.30 $ 12.71 $ 11.69 $ 12.04 $11.36 $11.70 $ 9.79
======= ======= ====== ======= ======= ======= ====== ====== ======
Total Return
(excludes
sales/redemption
charge)......... 25.29% 24.34% 16.77% 15.82% 5.76% 5.27% 20.83% 20.53%(b) (0.82)%(c)
Ratios/Supplementary Data:
Net Assets at end
of period (000). $11,247 $13,895 $9,563 $11,483 $10,786 $10,008 $9,427 $5,030 $2,709
Ratio of expenses
to average net
assets.......... 1.69% 2.50% 1.86% 2.72% 1.70% 2.54% 1.28% 2.04%(d) 1.48%
Ratio of net
investment
income to
average net
assets.......... 1.65% 0.84% 1.80% 0.93% 2.87% 2.03% 3.48% 2.69%(d) 4.01%
Ratio of expenses
to average net
assets*......... 1.85% 2.60% 2.07% 2.82% 1.94% 2.68% 1.67% 2.84%(d) 4.61%
Ratio of net
investment
income to
average net
assets*......... 1.49% 0.74% 1.59% 0.83% 2.63% 1.89% 3.09% 1.89%(d) 0.88%
Portfolio
Turnover (e).... 118% 118% 102% 102% 98% 98% 13% 13% 1%
</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) 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.
(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.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
The Riverfront Funds
<TABLE>
<CAPTION>
Small Company Select Fund
-----------------------------------------------------------------------------------------------------
From October 1, From October 1,
Years Ended December 31, 1995 through 1995 through
-------------------------------------------------------------------- December 31 December 31
1998 1997 1996 1995 (b) 1995 (a)(b)
---------------------- ---------------------- ---------------------- --------------- ---------------
Investor A Investor B Investor A Investor B Investor A
Investor B Investor A Investor B
---------- ---------- ---------- ---------- ---------- ---------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Period.......... $ 9.17 $ 9.49 $ 9.43 $ 9.77 $ 9.50 $ 9.91 $ 10.00 $10.00
------- ------ ------- ------ ------- ------ ------- ------
Investment
Activities
Net investment
loss........... (0.09) (0.15) (0.04) (0.08) (0.14) (0.15) (0.01) (0.01)
Net realized and
unrealized
gains (losses)
from
investments.... (0.01) (0.02) 1.75 1.77 1.10 1.04 (0.12) (0.08)
------- ------ ------- ------ ------- ------ ------- ------
Total from
Investment
Activities..... (0.10) (0.17) 1.71 1.69 0.96 0.89 (0.13) (0.09)
------- ------ ------- ------ ------- ------ ------- ------
Distributions
Net realized
gains.......... (1.18) (1.18) (1.97) (1.97) (1.03) (1.03) (0.37) --
------- ------ ------- ------ ------- ------ ------- ------
Total
Distributions.. (1.18) (1.18) (1.97) (1.97) (1.03) (1.03) (0.37) --
------- ------ ------- ------ ------- ------ ------- ------
Net Asset Value,
End of Period... $ 7.89 $ 8.14 $ 9.17 $ 9.49 $ 9.43 $ 9.77 $ 9.50 $ 9.91
======= ====== ======= ====== ======= ====== ======= ======
Total Return
(excludes
sales/redemption
charge)......... (2.26)% (2.96)% 18.79% 17.86% 10.17% 9.05% (1.20)%(c) (0.90)%(c)
Ratios/Supplementary Data:
Net Assets at end
of period (000). $19,286 $1,455 $24,312 $1,265 $31,227 $ 687 $40,995 $ 72
Ratio of expenses
to average net
assets.......... 1.97% 2.72% 2.11% 2.86% 1.91% 2.64% 1.76%(d) 2.30%(d)
Ratio of net
investment loss
to average net
assets.......... (1.08)% (1.88)% (0.43)% (1.20)% (1.25)% (2.01)% (0.49)%(d) (1.69)%(d)
Ratio of expenses
to average net
assets*......... 1.97% 2.72% 2.11% 2.86% 1.91% 2.64% 1.77%(d) 2.39%(d)
Ratio of net
investment loss
to average net
assets*......... (1.08)% (1.88)% (0.43)% (1.20)% (1.25)% (2.01)% (0.50)%(d) (1.78)%(d)
Portfolio
Turnover (e).... 114% 114% 67% 67% 162% 162% 46% 46%
<CAPTION>
Years Ended
September 30,
---------------------
1995 (f) 1994 (f)
---------- ----------
<S> <C> <C>
Net Asset Value,
Beginning of
Period.......... $ 8.25 $ 10.18
---------- ----------
Investment
Activities
Net investment
loss........... (0.07) (0.12)
Net realized and
unrealized
gains (losses)
from
investments.... 2.14 (1.26)
---------- ----------
Total from
Investment
Activities..... 2.07 (1.38)
---------- ----------
Distributions
Net realized
gains.......... (0.32) (0.55)
---------- ----------
Total
Distributions.. (0.32) (0.55)
---------- ----------
Net Asset Value,
End of Period... $ 10.00 $ 8.25
========== ==========
Total Return
(excludes
sales/redemption
charge)......... 25.12% (13.91)%
Ratios/Supplementary Data:
Net Assets at end
of period (000). $44,500 $47,880
Ratio of expenses
to average net
assets.......... 2.61% 2.44%
Ratio of net
investment loss
to average net
assets.......... (0.73)% (1.35)%
Ratio of expenses
to average net
assets*......... 2.61% 2.44%
Ratio of net
investment loss
to average net
assets*......... (0.73)% (1.35)%
Portfolio
Turnover (e).... 197% 254%
</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 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.
See Notes to Financial Statements.
Financial Highlights
- --------------------------------------------------------------------------------
The Riverfront Funds
<TABLE>
<CAPTION>
Large Company Select Fund
-----------------------------------------------
From January 2,
Year Ended 1997 through
December 31, 1998 December 31, 1997 (a)
---------------------- ------------------------
Investor A Investor B Investor A Investor B
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period....................... $ 11.34 $11.28 $ 10.00 $10.00
------- ------ ------- ------
Investment Activities
Net investment loss.......... (0.05) (0.10) -- (0.04)
Net realized and unrealized
gains (losses) from
investments................. 4.47 4.38 2.77 2.72
------- ------ ------- ------
Total from Investment
Activities.................. 4.42 4.28 2.77 2.68
------- ------ ------- ------
Distributions
Net realized gains........... (1.87) (1.87) (1.40) (1.40)
Tax return of capital........ -- -- (0.03) --
------- ------ ------- ------
Total Distributions.......... (1.87) (1.87) (1.43) (1.40)
------- ------ ------- ------
Net Asset Value, End of
Period....................... $ 13.89 $13.69 $ 11.34 $11.28
======= ====== ======= ======
Total Return (excludes
sales/redemption charge)..... 39.03% 38.00% 27.93%(b) 26.97%(b)
Ratios/Supplementary Data:
Net Assets at end of period
(000)........................ $50,801 $9,416 $33,614 $2,464
Ratio of expenses to average
net assets................... 1.66% 2.41% 1.69%(c) 2.47%(c)
Ratio of net investment loss
to average net assets........ (0.48)% (1.28)% 0.00%(c) (1.10)%(c)
Portfolio Turnover (d)........ 69% 69% 39% 39%
</TABLE>
- -------
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
See Notes to Financial Statements.
55
The Riverfront Funds, Inc.
INVESTMENT ADVISER
The Provident Bank
One East Fourth Street
Cincinnati, Ohio 45202
DISTRIBUTOR
Edgewood Services, Inc.
5800 Corporate Drive
Pittsburgh, PA 15237-5829
FOR ADDITIONAL INFORMATION CALL:
The Provident Bank
Mutual Fund Services
1-800-424-2295
Cusip 768709602 Cusip 768709701 Cusip 768709404 Cusip 768709800 Cusip 768709842
Cusip 768709834 Cusip 768709107 Cusip 768709867 Cusip 768709859 Cusip 768709305
Cusip 768709875 G02568-01 (2/99)
APPENDIX
A1. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed in the right quadrants of
the graphic presentation. The shares of The Riverfront U.S. Government
Securities Money Market Fund (the "Fund") are represented by a dashed line. The
U.S. 30-Day Treasury Bill Index is represented by a solid line. The line graph
is a visual representation of a comparison of change in value of a $10,000
hypothetical investment in the shares of the Fund and the U.S. 30-Day Treasury
Bill Index. The "x" axis reflects computation periods from 10/1/1992 to
12/31/1998. The "y" axis reflects the cost of the investment. The right margin
reflects the ending value of the hypothetical investment in the Fund's shares as
compared to the U.S. 30-Day Treasury Bill Index. The ending values were $13,130
and $13,535, respectively. The legend in the bottom quadrant of the graphic
presentation indicates the Fund's shares Average Annual Total Return for the
one-year, five-year, and start of performance (10/8/1992) periods ended to
December 31, 1998, and the 7-day net yield. The total returns were 4.93%, 4.83%,
and 4.45%, respectively, and the net yield was 4.50%.
A2. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed in the right quadrants of
the graphic presentation. The Investor A Shares (No Load) of The Riverfront U.S.
Government Income Fund (the "Fund") are represented by a solid line. The Lehman
Brothers Government/Mortgage Bond Index (the "LBG/MBI") is represented by a
dashed line. The Lehman Brothers Intermediate Government/Corporate Bond Index
(the "LBIG/CBI") is represented by a dotted line. The Lipper Intermediate
Government Average (the "LIGA") is represented by a dash-dotted line. The Lehman
Brothers Intermediate Government Index (the "LBIGI") is represented by a
dash-dash-dotted line. The Lipper Intermediate U.S. Government Index (the
"LIUSGI") is represented by a dot-dot-dashed line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the Investor A Shares (No Load) of the Fund, the LBG/MBI, the
LBIG/CBI, the LIGA, the LBIGI, and the LIUSGI. The "x" axis reflects computation
periods from October 1, 1992 to December 31, 1998. The "y" axis reflects the
cost of the investment. The right margin reflects the ending value of the
hypothetical investment in the Fund's Investor A Shares (No Load) as compared to
the LBG/MBI, the LBIG/CBI, the LIGA, the LBIGI, and the LIUSGI. The ending
values were $13,652, $15,321, $14,900, $15,660, $14,618, and $14,576,
respectively. The legend in the bottom quadrant of the graphic presentation
indicates the Fund's Investor A Shares (No Load) Average Annual Total Returns
for the one-year, five-year and start of performance (October 1, 1992) periods
ended December 31, 1998. The total returns were 6.95%, 5.20%, and 5.12%,
respectively.
A3. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed in the right quadrants of
the graphic presentation. The Investor A Shares of The Riverfront U.S.
Government Income Fund (the "Fund"), based on a 4.50% sales charge, are
represented by a solid line. The Lehman Brothers Government/Mortgage Bond Index
(the "LBG/MBI") is represented by a dashed line. The Lehman Brothers
Intermediate Government/Corporate Bond Index (the "LBIG/CBI") is represented by
a dotted line. The Lipper Intermediate Government Average (the "LIGA") is
represented by a dash-dotted line. The Lehman Brothers Intermediate Government
Index (the "LBIGI") is represented by a dash-dash-dotted line. The Lipper
Intermediate U.S. Government Index (the "LIUSGI") is represented by a
dot-dot-dashed line. The line graph is a visual representation of a comparison
of change in value of a $10,000 hypothetical investment in the Investor A Shares
of the Fund (based on a 4.50% sales charge), the LBG/MBI, the LBIG/CBI, the
LIGA, the LBIGI, and the LIUSGI. The "x" axis reflects computation periods from
October 1, 1992 to December 31, 1998. The "y" axis reflects the cost of the
investment. The right margin reflects the ending value of the hypothetical
investment in the Fund's Investor A Shares, based on a 4.50% sales charge, as
compared to the LBG/MBI, the LBIG/CBI, the LIGA, the LBIGI, and the LIUSGI. The
ending values were $13,040, $15,321, $14,900, $15,660, $14,618, and $14,576,
respectively. The legend in the bottom quadrant of the graphic presentation
indicates the Fund's Investor A Shares Average Annual Total Returns, based on a
4.50% sales charge, for the one-year, five-year and start of performance
(October 1, 1992) periods ended December 31, 1998. The total returns were 2.10%,
4.23%, and 4.35%, respectively.
A4. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed in the right quadrants of
the graphic presentation. The Investor B Shares of The Riverfront U.S.
Government Income Fund (the "Fund"), reflecting the applicable contingent
deferred sales charge, are represented by a solid line. The Lehman Brothers
Government/Mortgage Bond Index (the "LBG/MBI") is represented by a dashed line.
The Lehman Brothers Intermediate Government/Corporate Bond Index (the
"LBIG/CBI") is represented by a dash-dotted line. The Lipper Intermediate
Government Average (the "LIGA") is represented by a dotted line. The Lehman
Brothers Intermediate Government Index (the "LBIGI") is represented by a
dash-dash-dotted line. The Lipper Intermediate U.S. Government Index (the
"LIUSGI") is represented by a dot-dot-dashed line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the Investor B Shares of the Fund (reflecting the applicable
contingent deferred sales charge), the LBG/MBI, the LBIG/CBI, the LIGA, the
LBIGI, and the LIUSGI. The "x" axis reflects computation periods from January
17, 1995 to December 31, 1998. The "y" axis reflects the cost of the investment.
The right margin reflects the ending value of the hypothetical investment in the
Fund's Investor B Shares, reflecting the applicable contingent deferred sales
charge, as compared to the LBG/MBI, the LBIG/CBI, the LIGA, the LBIGI, and the
LIUSGI. The ending values were $12,736, $14,380, $14,641, $13,843, $14,015, and
$13,977, respectively. The legend in the bottom quadrant of the graphic
presentation indicates the Fund's Investor B Shares Average Annual Total
Returns, reflecting the applicable contingent deferred sales charge, for the
one-year and start of performance (January 17, 1995) periods ended December 31,
1998. The total returns were 2.03% and 6.31%, respectively.
A5. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed in the right quadrants of
the graphic presentation. The Investor A Shares (No Load) of The Riverfront
Income Equity Fund (the "Fund") are represented by a solid line. The S&P 500
Index (the "S&P 500") is represented by a dashed line. The Lipper Equity Income
Average (the "LEIA") is represented by a dotted line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the Investor A Shares (No Load) of the Fund, the S&P 500, and the
LEIA. The "x" axis reflects computation periods from October 8, 1992 to December
31, 1998. The "y" axis reflects the cost of the investment. The right margin
reflects the ending value of the hypothetical investment in the Fund's Investor
A Shares (No Load) as compared to the S&P 500 and the LEIA. The ending values
were $26,237, $32,695, and $25,672, respectively. The legend in the bottom
quadrant of the graphic presentation indicates the Fund's Investor A Shares (No
Load) Average Annual Total Returns for the one-year, five-year and start of
performance (October 8, 1992) periods ended December 31, 1998. The total returns
were 3.37%, 16.56%, and 16.75%, respectively.
A6. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed in the right quadrants of
the graphic presentation. The Investor A Shares of The Riverfront Income Equity
Fund (the "Fund"), based on a 4.50% sales charge, are represented by a solid
line. The S&P 500 Index (the "S&P 500") is represented by a dashed line. The
Lipper Equity Income Average (the "LEIA") is represented by a dotted line. The
line graph is a visual representation of a comparison of change in value of a
$10,000 hypothetical investment in the Investor A Shares of the Fund (based on a
4.50% sales charge), the S&P 500, and the LEIA. The "x" axis reflects
computation periods from October 8, 1992 to December 31, 1998. The "y" axis
reflects the cost of the investment. The right margin reflects the ending value
of the hypothetical investment in the Fund's Investor A Shares, based on a 4.50%
sales charge, as compared to the S&P 500 and the LEIA. The ending values were
$25,060, $32,695, and $25,672, respectively. The legend in the bottom quadrant
of the graphic presentation indicates the Fund's Investor A Shares Average
Annual Total Returns, based on a 4.50% sales charge, for the one-year, five-year
and start of performance (October 8, 1992) periods ended December 31, 1998. The
total returns were -1.28%, 15.50%, and 15.89%, respectively.
<PAGE>
A7. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed in the right quadrants of
the graphic presentation. The Investor B Shares of The Riverfront Income Equity
Fund (the "Fund"), reflecting the applicable contingent deferred sales charge,
are represented by a solid line. The S&P 500 Index (the "S&P 500") is
represented by a dashed line. The Lipper Equity Income Average (the "LEIA") is
represented by a dotted line. The line graph is a visual representation of a
comparison of change in value of a $10,000 hypothetical investment in the
Investor B Shares of the Fund (reflecting the applicable contingent deferred
sales charge), the S&P 500, and the LEIA. The "x" axis reflects computation
periods from January 17, 1995 to December 31, 1998. The "y" axis reflects the
cost of the investment. The right margin reflects the ending value of the
hypothetical investment in the Fund's Investor B Shares, reflecting the
applicable contingent deferred sales charge, as compared to the S&P 500 and the
LEIA. The ending values were $19,877, $29,015, and $21,923, respectively. The
legend in the bottom quadrant of the graphic presentation indicates the Fund's
Investor B Shares Average Annual Total Returns, reflecting the applicable
contingent deferred sales charge, for the one-year and start of performance
(January 17, 1995) periods ended December 31, 1998. The total returns were
- -1.08% and 18.98%, respectively.
A8. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed in the right quadrants of
the graphic presentation. The Investor A Shares (No Load) of The Riverfront
Balanced Fund (the "Fund") are represented by a solid line. The S&P 500 Index
(the "S&P 500") is represented by a dashed line. The Lehman Brothers
Intermediate Government/Corporate Bond Index (the "LBIG/CBI") is represented by
a dotted line. The Lipper Balanced Average (the "LBA") is represented by a
dot-dash-dash-dashed line. The Blended 50% S&P and 50% Lehman Brothers
Intermediate Government/Corporate Bond Index (the "Blended 50/50") is
represented by a dot-dash-dashed line. The line graph is a visual representation
of a comparison of change in value of a $10,000 hypothetical investment in the
Investor A Shares (No Load) of the Fund, the S&P 500, the LBIG/CBI, the LBA, and
the Blended 50/50. The "x" axis reflects computation periods from September 1,
1994 to December 31, 1998. The "y" axis reflects the cost of the investment. The
right margin reflects the ending value of the hypothetical investment in the
Fund's Investor A Shares (No Load) as compared to the S&P 500, the LBIG/CBI, the
LBA, and the Blended 50/50. The ending values were $18,543, $28,298, $13,889,
$18,560, and $20,381, respectively. The legend in the bottom quadrant of the
graphic presentation indicates the Fund's Investor A Shares (No Load) Average
Annual Total Returns for the one-year and start of performance (September 1,
1994) periods ended December 31, 1998. The total returns were 25.29% and 15.32%,
respectively.
A9. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed in the right quadrants of
the graphic presentation. The Investor A Shares of The Riverfront Balanced Fund
(the "Fund"), based on a 4.50% sales charge, are represented by a solid line.
The S&P 500 Index (the "S&P 500") is represented by a dashed line. The Lehman
Brothers Intermediate Government/Corporate Bond Index (the "LBIG/CBI") is
represented by a dotted line. The Lipper Balanced Average (the "LBA") is
represented by a dot-dash-dash-dashed line. The Blended 50% S&P and 50% Lehman
Brothers Intermediate Government/Corporate Bond Index (the "Blended 50/50") is
represented by a dot-dash-dashed line. The line graph is a visual representation
of a comparison of change in value of a $10,000 hypothetical investment in the
Investor A Shares of the Fund (based on a 4.50% sales charge), the S&P 500, the
LBIG/CBI, the LBA, and the Blended 50/50. The "x" axis reflects computation
periods from September 1, 1994 to December 31, 1998. The "y" axis reflects the
cost of the investment. The right margin reflects the ending value of the
hypothetical investment in the Fund's Investor A Shares, based on a 4.50% sales
charge, as compared to the S&P 500, the LBIG/CBI, the LBA, and the Blended
50/50. The ending values were $17,710, $28,298, $13,889, $18,560, and $20,381,
respectively. The legend in the bottom quadrant of the graphic presentation
indicates the Fund's Investor A Shares Average Annual Total Returns, based on a
4.50% sales charge, for the one-year and start of performance (September 1,
1994) periods ended December 31, 1998. The total returns were 19.65% and 14.11%,
respectively.
<PAGE>
A10. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed in the right quadrants of
the graphic presentation. The Investor B Shares of The Riverfront Balanced Fund
(the "Fund"), reflecting the applicable contingent deferred sales charge, are
represented by a solid line. The S&P 500 Index (the "S&P 500") is represented by
a dashed line. The Lehman Brothers Intermediate Government/Corporate Bond Index
(the "LBIG/CBI") is represented by a dot-dot-dash-dot-dashed line. The Lipper
Balanced Average (the "LBA") is represented by a dotted line. The Blended 50%
S&P and 50% Lehman Brothers Intermediate Government/Corporate Bond Index (the
"Blended 50/50") is represented by a dot-dash-dashed line. The line graph is a
visual representation of a comparison of change in value of a $10,000
hypothetical investment in the Investor B Shares of the Fund (reflecting the
applicable contingent deferred sales charge), the S&P 500, the LBIG/CBI, the
LBA, and the Blended 50/50. The "x" axis reflects computation periods from
September 1, 1994 to December 31, 1998. The "y" axis reflects the cost of the
investment. The right margin reflects the ending value of the hypothetical
investment in the Fund's Investor B Shares, reflecting the applicable contingent
deferred sales charge, as compared to the S&P 500, the LBIG/CBI, the LBA, and
the Blended 50/50. The ending values were $17,971, $29,015, 14,925, $19,058, and
$20,933, respectively. The legend in the bottom quadrant of the graphic
presentation indicates the Fund's Investor B Shares Average Annual Total
Returns, reflecting the applicable contingent deferred sales charge, for the
one-year and start of performance (January 17, 1995) periods ended December 31,
1998. The total returns were 20.34% and 15.98%, respectively.
A11. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed in the right quadrants of
the graphic presentation. The Investor A Shares (No Load) of The Riverfront
Small Company Select Fund (the "Fund") are represented by a solid line. The
Russell 2000 Index (the "R2000") is represented by a dash-dot-dash-dot-dotted
line. The S&P 600 Small Cap Index (the "S&P 600") is represented by a dashed
line. The Lipper Small Cap Average (the "LSCA") is represented by a dotted line.
The line graph is a visual representation of a comparison of change in value of
a $10,000 hypothetical investment in the Investor A Shares (No Load) of the
Fund, the R2000, the S&P 600, and the LSCA. The "x" axis reflects computation
periods from July 23, 1987 to December 31, 1998. The "y" axis reflects the cost
of the investment. The right margin reflects the ending value of the
hypothetical investment in the Fund's Investor A Shares (No Load) as compared to
the R2000, the S&P 600, and the LSCA. The ending values were $28,637, $31,115,
$29,652, and $40,510, respectively. The legend in the bottom quadrant of the
graphic presentation indicates the Fund's Investor A Shares (No Load) Average
Annual Total Returns for the one-year, five-year, ten-year, and start of
performance (July 23, 1987) periods ended December 31, 1998. The total returns
were -2.26%, 7.94%, 14.02%, and 9.63%, respectively.
A12. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed in the right quadrants of
the graphic presentation. The Investor A Shares of The Riverfront Small Company
Select Fund (the "Fund"), based on a 4.50% sales charge, are represented by a
solid line. The Russell 2000 Index (the "R2000") is represented by a
dash-dot-dash-dot-dotted line. The S&P 600 Small Cap Index (the "S&P 600") is
represented by a dashed line. The Lipper Small Cap Average (the "LSCA") is
represented by a dotted line. The line graph is a visual representation of a
comparison of change in value of a $10,000 hypothetical investment in the
Investor A Shares of the Fund (based on a 4.50% sales charge), the R2000, the
S&P 600, and the LSCA. The "x" axis reflects computation periods from July 23,
1987 to December 31, 1998. The "y" axis reflects the cost of the investment. The
right margin reflects the ending value of the hypothetical investment in the
Fund's Investor A Shares, based on a 4.50% sales charge, as compared to the
R2000, the S&P 600, and the LSCA. The ending values were $27,357, $31,115,
$29,652, and $40,510, respectively.
The legend in the bottom quadrant of the graphic presentation indicates the
Fund's Investor A Shares Average Annual Total Returns, based on a 4.50% sales
charge, for the one-year, five-year, ten-year, and start of performance (July
23, 1987) periods ended December 31, 1998. The total returns were -6.63%, 6.95%,
13.49%, and 9.19%, respectively.
<PAGE>
A13. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed in the right quadrants of
the graphic presentation. The Investor B Shares of The Riverfront Small Company
Select Fund (the "Fund"), reflecting the applicable contingent deferred sales
charge, are represented by a solid line. The Russell 2000 Index (the "R2000") is
represented by a dash-dot-dash-dot-dotted line. The S&P 600 Small Cap Index (the
"S&P 600") is represented by a dashed line. The Lipper Small Cap Average (the
"LSCA") is represented by a dotted line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the Investor B Shares of the Fund, reflecting the applicable
contingent deferred sales charge, the R2000, the S&P 600, and the LSCA. The "x"
axis reflects computation periods from October 1, 1995 to December 31, 1998. The
"y" axis reflects the cost of the investment. The right margin reflects the
ending value of the hypothetical investment in the Fund's Investor B Shares
(reflecting the applicable contingent sales charge), as compared to the R2000,
the S&P 600, and the LSCA. The ending values were $12,115, $14,193, $15,104, and
$14,782, respectively. The legend in the bottom quadrant of the graphic
presentation indicates the Fund's Investor B Shares Average Annual Total
Returns, reflecting the applicable contingent deferred sales charge, for the
one-year and start of performance (October 1, 1995) periods ended December 31,
1998. The total returns were -6.39% and 6.08%, respectively.
A14. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed in the right quadrants of
the graphic presentation. The Investor A Shares (No Load) of The Riverfront
Large Company Select Fund (the "Fund") are represented by a solid line. The
Lipper Growth & Income Average (the "LGIA") is represented by a dashed line. The
S&P 500 Index (the "S&P 500") is represented by a dash-dot-dash-dot-dotted line.
The line graph is a visual representation of a comparison of change in value of
a $10,000 hypothetical investment in the Investor A Shares (No Load) of the
Fund, the LGIA, and the S&P 500. The "x" axis reflects computation periods from
August 30, 1986 to December 31, 1998. The "y" axis reflects the cost of the
investment. The right margin reflects the ending value of the hypothetical
investment in the Fund's Investor A Shares (No Load) as compared to the LGIA,
and the S&P 500. The ending values were $57,374, $48,679, and $73,790,
respectively. The legend in the bottom quadrant of the graphic presentation
indicates the Fund's Investor A Shares (No Load) Average Annual Total Returns
for the one-year, five-year, ten-year, and start of performance (August 30,
1986) periods ended December 31, 1998. The total returns were 39.03%, 24.69%,
17.89%, and 15.21%, respectively.
A15. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed in the right quadrants of
the graphic presentation. The Investor A Shares of The Riverfront Large Company
Select Fund (the "Fund"), based on a 4.50% sales charge, are represented by a
solid line. The Lipper Growth & Income Average (the "LGIA") is represented by a
dotted line. The S&P 500 Index (the "S&P 500") is represented by a dashed line.
The line graph is a visual representation of a comparison of change in value of
a $10,000 hypothetical investment in the Investor A Shares of the Fund (based on
a 4.50% sales charge), the LGIA, and the S&P 500. The "x" axis reflects
computation periods from August 30, 1986 to December 31, 1998. The "y" axis
reflects the cost of the investment. The right margin reflects the ending value
of the hypothetical investment in the Fund's Investor A Shares, based on a 4.50%
sales charge, as compared to the LGIA, and the S&P 500. The ending values were
$54,726, $48,679, and $73,790, respectively. The legend in the bottom quadrant
of the graphic presentation indicates the Fund's Investor A Shares Average
Annual Total Returns, based on a 4.50% sales charge, for the one-year,
five-year, ten-year, and start of performance (August 30, 1986) periods ended
December 31, 1998. The total returns were 32.82%, 23.54%, 17.35%, and 14.77%,
respectively.
<PAGE>
A16. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed in the right quadrants of
the graphic presentation. The Investor B Shares of The Riverfront Large Company
Select Fund (the "Fund"), reflecting the applicable contingent deferred sales
charge, are represented by a solid line. The Lipper Growth & Income Average (the
"LGIA") is represented by a dotted line. The S&P 500 Index (the "S&P 500") is
represented by a dashed line. The line graph is a visual representation of a
comparison of change in value of a $10,000 hypothetical investment in the
Investor B Shares of the Fund (reflecting the applicable contingent deferred
sales charge), the LGIA, and the S&P 500. The "x" axis reflects computation
periods from January 2, 1997 to December 31, 1998. The "y" axis reflects the
cost of the investment. The right margin reflects the ending value of the
hypothetical investment in the Fund's Investor B Shares, reflecting the
applicable contingent deferred sales charge, as compared to the LGIA, and the
S&P 500. The ending values were $17,283, $14,696, and $17,151, respectively. The
legend in the bottom quadrant of the graphic presentation indicates the Fund's
Investor B Shares Average Annual Total Returns, reflecting the applicable
contingent deferred sales charge, for the one-year, and start of performance
(January 2, 1997) periods ended December 31, 1998. The total returns were
34.00%, and 31.56%, respectively.
