Annual
Report
December 31, 1999
The Riverfront Large Company Select Fund
The Riverfront Balanced Fund
The Riverfront Small Company Select Fund
The Riverfront Income Equity Fund
The Riverfront U.S. Government Income Fund
The Riverfront U.S. Government Securities Money Market Fund
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NOT FDIC NO BANK MAY LOSE
INSURED GUARANTEE VALUE
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[LOGO]
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Table of Contents The Riverfront Funds
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<TABLE>
<S> <C>
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............................................... 37
Financial Highlights........................................................ 44
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Message From The President The Riverfront Funds
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Dear Shareholder:
I am pleased to present the Combined Annual Report to Shareholders for The
Riverfront Funds. This Report covers the fiscal year period from January 1, 1999
through December 31, 1999, and includes commentary by the Funds' investment
adviser and the audited financial statements, including the portfolio of
investments.
The Financial Markets In Review
Overall, it was a positive, volatile year for stocks. However, performance
concentrated among a relatively narrow group of stocks--particularly within the
technology sector--while small-company stocks experienced a much welcomed
rebound. It continued to be a difficult period for bond investors from a total
return perspective, as a rising interest rate environment caused bond prices to
decline across the board.
A fund-by fund performance summary is as follows:
Riverfront Large Company Select Fund
At the end of the reporting period, the fund's portfolio of large-company
stocks included such household names as AT&T Corp., Bank of America Corp.,
Bristol-Myers Squibb, Coca-Cola Co., Dell Computer Corp., Ebay Inc., Ford Motor
Co., Gap Inc., Merck & Co., Inc. Procter & Gamble Co., Time-Warner Inc., Wal-
Mart Stores, Inc. and Yahoo Inc. Investor A Shares produced a total return of
33.57%, or 27.60% adjusted for the fund's sales charge, through a $3.70
increase in net asset value and $0.96 per share in capital gains. Investor B
Shares produced a total return of 32.52%, or 28.52% adjusted for the fund's
contingent deferred sales charge, through a $3.49 increase in net asset value
and $0.96 per share in capital gains. Total fund assets totaled $107 million at
the end of the period.
Riverfront Balanced Fund
This fund invests in a classic combination of two key financial markets: stocks
and bonds. At the end of the reporting period, 58% of the fund's portfolio was
invested in stocks, with the remainder invested in bonds and money market
securities. Investor A Shares produced a total return of 13.15%, or 8.09%
adjusted for the fund's sales charge. Contributing to the total return were
$0.36 increase in net asset value, $0.18 per share in dividends and $1.15 per
share in capital gains. Investor B Shares produced a total return of 12.10%, or
8.10% adjusted for the fund's contingent deferred sales charge. Contributing to
the total return were a $0.41 increase in net asset value, $0.07 per share in
dividends and $1.15 per share in capital gains. The fund's total assets reached
$30.1 million at the end of the reporting period.
Riverfront Small Company Select Fund
The fund's relatively aggressive portfolio of stocks issued by smaller companies
recorded extremely strong returns.* The fund's Investor A Shares produced a
total return of 47.08%, or 40.49% adjusted for the fund's sales charge, through
a $3.55 increase in net asset value and $0.16 per share in capital gains.
Investor B Shares produced a total return of 46.01%, or 42.00% adjusted for the
fund's contingent deferred sales charge, through a $3.58 increase in net asset
value and $0.16 per share in capital gains. Total fund assets total $25.6
million at the end of the reporting period.
Riverfront Income Equity Fund
This fund pursues income and capital appreciation through high-quality
dividend-paying stocks that, at the end of the reporting period, included
companies like Bank of America Corp., Clorox Co., The Walt Disney Co., Exxon
Mobil Corporation, IBM Corp., Intel Corp., MCI Worldcom, Inc., Microsoft Corp.,
Monsanto Co., Pfizer, Inc. and Time Warner, Inc. During the reporting period,
Investor A Shares produced a total return of 7.44% or 2.64% adjusted for the
fund's sales charge. Contributing to the total return were a $0.75 increase in
net asset value and $0.03 per share in dividends. Investor B Shares produced a
total return of 6.65%, or 2.65% adjusted for the fund's contingent deferred
sales charge. Contributing to the total return were a $0.71 increase in net
asset value and $0.01 per share in dividends. Fund assets totaled $37.8 million
at the end of the reporting period.
Riverfront U.S. Government Income Fund
The fund pursues income through a portfolio that, at the end of the reporting
period, invested primarily in U.S. government agency securities (60.8%),
corporate bonds (20.7%), and U.S. Treasury securities (16.5%). Investor A Shares
provided shareholders with dividends totaling $0.49 per share. As interest rates
rose during the period, the net asset value of the fund declined from $9.65 to
$9.02. Through income and the decline in net asset value, the fund's Investor A
Shares produced a total return of (1.43)%, or (5.82)% adjusted for the fund's
sales charge. Investor B Shares provided shareholders with dividends totaling
$0.41 per share. As interest rates rose during the period, the net asset value
of the fund declined from $10.93 to $10.28. Through income and the decline in
net asset value, the fund's Investor B Shares produced a total return of
(2.25)%, or (6.01)% adjusted for the fund's contingent deferred sales charge.
Total fund assets reached $38 million at the end of the reporting period.
Riverfront U.S. Government Securities Money Market Fund
Designed to provide you with a convenient way to earn daily income on your ready
cash, the fund's portfolio of U.S. government money market securities paid
dividends totaling $0.045 per share, while maintaining a stable share value of
$1.00.** More than $194.5 million was at work in the fund at the end of the
reporting period.
Thank you for pursuing your goals through The Riverfront Funds. We look forward
to keeping you up-to-date on the details of your investment on a regular basis,
and providing you with the highest level of service possible.
Sincerely,
/s/ Edward C. Gonzales
Edward C. Gonzales
President
February 15, 2000
* In return for higher growth potential, small company stocks can be more
volatile than large company stocks.
** An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
Although money market funds seek to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in them.
Performance quoted represents past performance and is no guarantee of future
results. Investment return and principal value will fluctuate, so that an
investor's shares, when redeemed, may be worth more or less than the original
cost.
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Message From The Investment Adviser The Riverfront Funds
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[Logo of Provident Investment Advisors]
February 1, 2000
Dear Shareholders:
As we enter the new year, we have good reason to celebrate--the longest period
of uninterrupted economic growth in our country's history. While we will witness
certain politicians taking credit, the true reasons are continued low inflation,
enhanced worker productivity and solid corporate earnings growth. The U. S.
economy grew at 4.1% in 1999, exceeding nearly every forecast. Consumer
spending, up 5.5%, was the lead driver once again. Capital spending was strong
as well, up 7.0%. Importantly, growth was stronger in the second half of 1999
with the Gross Domestic Product ("GDP") up 5.7% and 5.8% in the third and fourth
quarters respectively. The Federal Reserve Board (the "Fed") raised short-term
interest rates in the past year and, in our opinion, will continue to do so
until consumer spending slows. While inflation remains subdued, the potential
for higher prices resulting from a tight labor market and sizable consumer
demand is the focus of the Fed. As a result, short-term interest rates will
likely rise throughout 2000 creating a more difficult environment for most
financial assets.
Interest rates rose steadily throughout last year. Short-term three-month U. S.
Treasury Bills increased from 4.47% to 5.42% in yield, while long-term 30 year
Treasuries increased from 5.15% to 6.53% in yield. These increases in yield
resulted in negative price returns from bonds and most bond funds.
Returns from stocks were again robust, especially growth stocks. In another
volatile year, the Standard & Poor's 500 Composite Price Index (the "S&P 500
Index"*) returned 21.4% as the technology components of the index moved up 75%,
34.5% in the fourth quarter alone. While 1999 was another 20% plus year for the
S & P 500 it was also a year of above average volatility. According to Crandall
Pierce, 58% of all trading days within the NASDAQ saw a 1% or more change in
price. Style differences had a meaningful impact on performance again in 1999.
Growth funds outpaced value funds once again last year.
Unlike prior years where only large-cap growth funds shined, small-cap growth
funds generated sizable gains. Value funds, regardless of market cap, under
performed.
Operating earnings for the S & P 500 in 1999 are estimated to have grown by
nearly 14%, higher than most estimates. We forecast a solid 12% gain for 2000.
The economic environment is nearly perfect. Even if higher interest rates slow
the pace of growth this year, it will be from a higher base than was generally
thought, just a few months ago.
The winds of volatility are blowing through the stock markets, scattering
companies and investors in their path. Fears of rising interest rates appear to
be the main culprit. In times like these, especially after such a strong year
for technology stocks, it might be easy to lose sight of the real changes
occurring in the business world. We attempt to stay focused on the fundamental
reasons for the companies we invest in and prefer to let others get distracted
by the day-to-day noisy market activities. We believe that there are some very
powerful long-term trends in place that have the potential to produce some very
good returns for investors who are positioned for it.
Successful investors must understand technology. Not only has technology become
such a large part of the market (now about 30% of the S & P 500 Index), but
technology is affecting all businesses. Investors must develop new mental models
in which to understand this new investment environment. This task is made all
the more challenging by the short-term volatility we experience day- to-day in
the marketplace, but we believe that investors will be rewarded for making this
effort.
On behalf of my associates, we thank you for your confidence in us and wish you
all the best in the new year.
Sincerely,
/s/ C. Edwin Riley, Jr.
C. Edwin Riley
President
Chief Investment Officer
* 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 Large Company Select Fund
The Riverfront Large Company Select Fund delivered a total return of 33.57%
(Investor A Shares) in 1999(/1/). It was the second year in a row that the Fund
outperformed the S&P 500 Index by more than 10%. In 1999 the S&P 500 Index, an
unmanaged benchmark, rose 21.04%. The Fund also performed well versus a peer
universe of other funds with similar investment objectives.
The Fund's longer-term results are also extremely strong. Over the last three
and five periods the Fund has posted average annual returns of better than 30%.
Over the last three years, ended December 31, 1999, the Fund's total return
averaged 33.43% per year, and over the last five years, the Fund's total return
averaged 31.95% per year(/1/). These results compare favorably to the three and
five year returns for S&P 500 Index of 27.57% and 28.55%, respectively.
1999 was another challenging year for all investors. Most of the market's gains
came in the fourth quarter as concerns about possible Year 2000 computer
problems dissipated and as investors become increasingly confident about
prospects for technology companies. In the fourth quarter, the S&P 500 Index
rose 14.9%, while the S&P Technology Sector rose 34.5% to finish the year with a
75.0% gain.
Investments in computing technology, the growth of telecommunications, and the
Internet are driving our economic growth. New industries are developing and
companies around the world are investing in new technologies to re-tool their
existing operations to become more competitive. New technologies are changing
the way we communicate, the way we buy products and services, and the way that
business is conducted. We believe that these changes are just beginning and the
technological trends will last for a long while. The Fund's success in 1999 can,
in part, be attributed to the Fund's positioning to benefit from major trends in
technology.* Each of the major holdings in the Fund are either using new
technologies to their advantage, or providing those new technologies to other
companies.
The ten largest holdings in the Fund as of December 31, 1999 are EMC Corporation
(5.10% of net assets), Cisco Systems (5.00% of net assets), Microsoft (4.69% of
net assets), America Online (4.53% of net assets), Wal-Mart Stores (4.39% of net
assets), General Electric (4.19% of net assets), Tyco International (3.28% of
net assets), Dell Computer (3.26% of net assets), MCI Worldcom (3.16% of net
assets), and Home Depot (2.89% of net assets).
When making investments in the Fund, we look for companies with the following
attributes. We seek to invest in companies that are more profitable, as measured
by return on equity, than the average company in the S&P 500 Index. We seek
companies that are able to grow their revenues and earnings at consistently high
rates. For example, last year the average company in the S&P 500 Index did not
grow its revenues, whereas the average company in the Fund grew its revenues by
45% in 1999. Similarly, in 1999 the earnings growth for the average company in
the S&P 500 Index was 9%, whereas the average earnings growth for the companies
in the Fund was 28%. We believe that over time stock price performance will
track the growth in companies' earnings. Other factors that are important to us
when making investments include earnings stability, debt levels, cash flow
growth, market opportunity, competitive position, management strength and depth,
and valuation.
Along with the fundamental changes in the global economy come changes in the way
many investors view investments. For many investors, growth is now more
important than dividends, as tax rates on capital gains are often lower than tax
on ordinary income. In the past, many investors used to examine a company's book
value per share and compare it to the stock price. With increasing numbers of
mergers, higher investments in research and development, and greater investments
in intangible assets, companies' book values are no longer relevant. These
changes are also impacting reported earnings and are challenging the relevancy
of price-to-earnings ratios as a measure of valuation. Many investors also seem
to be focused on short-term events, and stock price volatility often seems
extreme.
(1) Total returns quoted are for Class A Shares at net asset value.
* Concentration in the technology sector may involve a higher degree of market
risk.
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Performance Reviews, continued The Riverfront Funds
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We remain committed to long-term investors. Market timing is not part of the
Fund's investment strategy. For those who engage in market timing, 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
long-term investments, not on market timing. This strategy is borne out in the
Fund's investment results.
Under normal business conditions it is often difficult for companies to produce
good returns for shareholders, much less under the more difficult conditions
that many companies find themselves facing in the Year 2000. We are avoiding
companies and industries that find themselves under "siege" by new competition
armed with new technologies and almost limitless venture capital. We are also
under-emphasizing interest rate sensitive and commodity price sensitive
companies.
Our outlook for the Fund's performance is favorable. We remain fully invested
in leading growth companies. We believe that the trends in technology are long-
term in nature and will impact every single company. We are investing in areas
of strength and in those companies that are the "attackers." We feel that
attractive investments for 2000 are America Online Inc./Time Warner Inc., Amgen
Inc., Citigroup Inc., EMC Corp-Mass, Exodus Communications Inc., Home Depot
Inc., JDS Uniphase Corp., Nokia Corp. ADR, Microsoft Corp., MCI Worldcom Inc.,
Texas Instruments Inc., and Wal-Mart Stores, Inc., to name just a few. The Fund
contains many other companies that we believe should produce good results for
shareholders over the long-run.
[Graphic representation omitted. See Appendix A1]
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Performance Reviews, continued The Riverfront Funds
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[Graphic representation omitted. See Appendix A2]
[Graphic representation omitted. See Appendix A3]
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 no guarantee of future results. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed, may
be worth more or less than their original cost.
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 an 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
Large-Cap Core Average is representative of an average of all funds in the
Lipper Large-Cap Core category of funds.
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Performance Reviews, continued The Riverfront Funds
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The Riverfront Balanced Fund
The Riverfront Balanced Fund delivered a total return of 13.15% (investor A
shares at net asset value) in 1999, outperforming the average Balanced Fund
return of 8.69% tracked by Lipper Analytical Services. Over the last three years
the Fund's 18.30% average annual return is ranked by Lipper in the 14%
percentile, outperforming 86% of all balanced funds(/1/).
The Riverfront Balanced Fund is a diversified hybrid fund of stocks, bonds and
cash equivalents. Over the past several years the performance was attributable
to excellent returns from the common stocks owned in the Fund. The ten largest
equity holdings in the Fund as of December 31, 1999 are:
<TABLE>
<CAPTION>
<C> <S> <C>
1. Microsoft............................................................. 3.9%
2. Cisco Systems........................................................ 3.6%
3. Home Depot........................................................... 3.6%
4. Wal-Mart Stores...................................................... 3.2%
5. EMC.................................................................. 2.9%
6. Time Warner Inc...................................................... 2.7%
7. General Electric..................................................... 2.6%
8. Dell Computer........................................................ 2.6%
9. Walgreen Co.......................................................... 2.0%
10. Tyco International................................................... 2.0%
</TABLE>
When making equity investments in the Fund, we look for companies with the
following attributes. We seek to invest in companies that are more profitable,
as measured by return on equity, than the average company in the S&P 500 Index.
We seek companies that are able to grow their revenues and earnings at
consistently high rates. For example, last year the average company in the S&P
500 Index did not grow it's revenues, whereas the average company in the Fund
grew its revenues 45% in 1999. Similarly, in 1999 the earnings growth for the
average company in the S&P 500 Index was 9% whereas the average earnings growth
for the companies in the Fund was 28%. We believe that over time stock price
performance will track the growth in company's earnings. Other factors that are
important to us when making investments include earnings stability, debt levels,
cash flow growth, market opportunity, competitive position, management strength
and depth, and valuation.
[Graphic representation omitted. See Appendix A4]
(1) 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. For the one-, three-, and
five-year periods, the Fund Lipper ranking within the balanced funds
category were as follows: 109/450; 46/335; and 101/223, 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]
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate, so that an investor's 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 representative of an average of all
funds in the Lipper Balanced category.
The Fund is also being measured against a benchmark of blended indices which
represents 50% of the S&P 500 Index and 50% of the Lehman Brothers Intermediate
Government/Corporate Bond Index. Indexes are unmanaged and investments cannot be
made in an index.
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Performance Reviews, continued The Riverfront Funds
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The Riverfront Small Company Select Fund
The Small Company Select Fund finished 1999 with a total return of 47.08%*. The
S&P Small Cap 600, its primary benchmark, closed the year up 12.41%. The Fund's
three year average annual return of 19.53%* also compares favorably with the S&P
Small Cap 600 average of 11.61%.
During 1999 the differentiation between Small and Large Companies became
increasingly clouded. Many small companies, especially those projected to have
rapid growth, were bid up to relatively high prices and in some cases to large
market capitalization prices. Most of these stocks are technology related, and
in some way, tied to the Internet. With this rapid growth came volatility and
the risk that many of these stocks could decline as rapidly as they rose.
Our challenge was and continues to be to find those small capitalization
companies that have the necessary business model to continue to compete in this
changing environment. Much of the recent press has focused on which Internet
stocks may or may not survive. We believe one also needs to examine which
traditional old line companies lack the vision to see the change occurring and,
therefore, may not survive. The risk is both with the new and the old.
We believe that we have put together a portfolio of high quality small companies
that will continue to grow and prosper. The majority of the top ten holdings are
technology related. The focus is on companies that supply the infrastructure of
the Internet and wireless communication rather than on specific Internet
properties. In the top ten we also hold one biotech company and one radio
station operator.
The top ten companies and there respective weights in the portfolio are: i2
Technologies (7.37%); MedImmune (6.27%); Comverse Technology (5.39); Vitesse
Semiconductor (5.32%); Sanmina (4.46%); NetSilicon (3.86%); Cox Radio (3.61%);
Digex (3.31%); Tuts Systems Inc. (3.30%); and Exodus (3.30%). These stocks
comprise 45.39% of the Fund and continue to lead the returns.
As we look at 2000 and beyond we see a continuation of rapid technological
change. We believe that those small companies with the vision to embrace this
change will continue to grow and prosper. Those that do not, regardless of
sector or industry will suffer. We will continue to strive to find the
visionaries and to avoid the rest. We believe this will provide the basis for
continued solid return potential from the fund.
Small Company Select Fund
[Graphic representation omitted. See Appendix A7]
* Total return quoted for Class A shares at net asset value
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Performance Reviews, continued The Riverfront Funds
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[Graphic representation omitted. See Appendix A8]
[Graphic representation omitted. See Appendix A9]
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate, so that an investor's 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 returns may have been lower.
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 Core Average is representative of an average of all funds in the
Lipper Small-Cap Core category of funds.
Small company stocks may be less liquid and subject to greater price volatility
than large company stocks. Funds that concentrate in the technology sector may
be subject to a higher degree of market risk.
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Performance Reviews, continued The Riverfront Funds
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The Riverfront Income Equity Fund
1999 was a volatile, but ultimately strong year for equity indices. While the
S&P 500 advanced a very respectable 21.04%, many of the more technology oriented
indices were up considerably more, such as the NASDAQ's* 85.6% gain. The
impressive gains of various indices masked the narrowness of the market. 1999
was one of the most narrow markets in the past fifteen years with less than
one-third of the stocks on the S&P 500 outperforming the average. Meanwhile,
about 70% of the stocks within the technology sector outperformed the S&P 500.
Such an environment made it challenging for value style, income oriented funds
to perform as well as an overall broader index such as the S&P 500. However, we
are pleased to report that the Riverfront Income Equity Fund posted a solid 7.4%
(Investor A shares at net asset value) total return in 1999 compared to 4.6% for
the Lipper Equity Income average.
We are especially pleased that our increased focus on stock selection and the
addition to our weightings in technology and communications services were
rewarded with very strong results in the fourth quarter. In that period, our
total return was 10.0% (Investor A shares at net asset value) vs. 4.1% for
Lipper Equity Income Index.
We are optimistic about the outlook for 2000 and believe your Fund is well
positioned for what we believe is likely to be another volatile but rewarding
year. It remains our opinion that the best values are in those companies which
can actually grow their revenues and earnings. We believe our careful bottom-up
stock selection process can continue to do well in such an environment.
Technology and communication services, where we are well represented, in our
opinion, will likely continue to be the engines of growth.
We thank you for your continued support.
* NASDAQ is a national computer network through which securities dealers
execute and post transactions as well as record prices. The NASDAQ is the
major method of over-the-counter trading.
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Performance Reviews, continued The Riverfront Funds
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[Graphic representation omitted. See Appendix A10]
[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]
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate, so that an investor's 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. Indexes are unmanaged and investments cannot be made in an
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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[This Page Intentionally Left Blank]
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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 experienced one of its worst years on record in 1999
and, as measured by the 30 year Treasury bond, it was the worst recorded year
since 1977. The Federal Reserve Board (the "Fed") was sufficiently concerned
about the strong economy that they raised short-term rates three times in 1999.
The market anticipates additional increases throughout the new year. The
Consumer Price Index ("CPI") remained modest at 2.6% during the past year. The
yield curve, while positively sloped for most of 1999, flattened during the
fourth quarter as short term interest rates spiked in response to continued
strong economic data. We expect the Fed will continue to raise short-term
interest rates until consumer spending shows signs of slowing, thereby relieving
some of their fears given the tight labor markets.
We correctly anticipated the rise in bond yields in the first half of 1999 and
kept a short duration portfolio during that period. We adjusted to a neutral
duration at midyear and a long duration portfolio in the latter half of 1999.
The first two actions benefited Fund performance versus the benchmark while the
last proved to be premature and diluted performance as bond prices continued to
decline. The Fund performance results were (1.43)% total return for 1999
(Investor A Shares at net asset value), but were better than the Lipper
Intermediate US Government Index (2.76)%.
We anticipate a deceleration in economic growth in 2000 to a Gross Domestic
Product level of 3% to 3.5% from the 4.3% growth in 1999. With this forecast and
real yields at historically high levels, we anticipate maintaining the long
duration portfolio. We anticipate that the yield curve may become inverted
(higher short term and lower long term rates) should the Federal Reserve become
aggressive in raising short-term rates to slow the economy. Long-term rates may
reach 7.00% in early 2000 before the evidence of slower growth arrives.
Given the budget surplus, we anticipate that the issuance of Government debt
will decline this year and the Treasury Department may institute a buyback
program. This leads us to favor Treasuries in lieu of corporates, which are in
ample supply. We would also favor a high allocation in callable agency product
to take advantage of the wide spreads available with a reduction in mortgage
product.
[Graphic representation omitted. See Appendix A13]
[Graphic representation omitted. See Appendix A14]
[Graphic representation omitted. See Appendix A15]
- --------------------------------------------------------------------------------
Performance Reviews, continued The Riverfront Funds
- --------------------------------------------------------------------------------
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate, so that an investor's 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 Lehman Brothers U.S. Government Index is considered to be representative of
mortgage-backed government bonds and intermediate-term bonds. The Fund is also
measured against the Lipper Intermediate U.S. Government Index which measures
the performance of the 30 largest mutual funds in the intermediate term
government bond category. 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 an index.
- --------------------------------------------------------------------------------
Performance Reviews, continued The Riverfront Funds
- --------------------------------------------------------------------------------
The Riverfront U.S. Government Securities Money Market Fund
Short-term interest rates rose in 1999 as the Federal Reserve ( the "Fed")
reversed the 75 basis point drop they implemented in 1998 to offset the concerns
about credit conditions and credit spreads. The increase in rates occurred as
the economy accelerated beyond the so-called "speed limit" as consumer spending
soared. Market expectations are that the Fed will continue to raise rates in the
first half of 2000. We believe that a 50 basis point rise from current levels is
the most likely outcome of Federal Open Market Committee ("FOMC") meetings in
the first half of 2000. From there, the Fed will consider the economic data of
the first half and move accordingly. We sense the preferred level of Gross
Domestic Product (the "GDP") is close to 3%.
The average maturity of the Fund varied throughout the year. From 60 days at the
beginning of the year to slightly longer during mid-year to 51 days at year-end.
The 30-day yield on the fund at December 31, 1999 was 5.23%.
We expect economic activity to decelerate in 2000 to a level of 3% to 3.5%,
slower than the 4.3% growth in 1999. As of early 2000 about 75 basis points of
tightening has been built into the yield curve. Therefore we expect to maintain
a short duration target as rates rise in the first half of the year. The
portfolio reflected a barbell maturity structure in late 1999 to compensate for
any Y2K effects at year-end. Now that Y2K issues have passed without incident,
we plan to implement a laddered maturity structure. Should the economy show
signs of slowing later in the period, we anticipate extending the maturities to
attempt to lock in the higher yields.
[Graphic representation omitted. See Appendix A16]
Past performance is no guarantee of future results. Yield will vary. Yields
quoted for money market funds most closely reflect the fund's current earnings.
An investment in the Fund is neither insured nor guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although money
market funds seek 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 4.91. 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 an index. The
performance of the Fund reflects the deduction of fees for these value- added
services.
- --------------------------------------------------------------------------------
Report of Independent Auditors
- --------------------------------------------------------------------------------
The Riverfront Funds
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
Large Company Select Fund, Balanced Fund, Small Company Select Fund, Income
Equity Fund, U.S. Government Income Fund, and U.S. Government Securities Money
Market Fund (collectively, the "Funds")) as of December 31, 1999, the related
statements of operations for the year then ended, the statements of changes in
net assets for each of the two years for the period then ended and the 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 auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of December 31, 1999, by correspondence with the custodian and brokers.
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, 1999, the results of its operations for the year
then ended, the changes in its net assets for each of the two years for the
period then ended and the financial highlights for each of the periods indicated
therein, in conformity with accounting principles generally accepted in the
United States.
Ernst & Young LLP
Cincinnati, Ohio
February 11, 2000
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1999
<TABLE>
<CAPTION>
Large Company Balanced Small Company
Select Fund Fund Select Fund
------------- ----------- -------------
<S> <C> <C> <C>
Assets:
Investments, at value (Cost $64,357,369,
$24,845,235, and
$15,050,627 respectively).............. $106,749,274 $29,967,352 $25,601,734
Interest and dividends receivable...... 59,338 217,658 9,443
Receivable for investments sold........ 382,337 -- --
Receivable for capital shares issued... 140,464 37,938 600
Unamortized organization costs......... 306 -- --
Prepaid expenses and other assets...... 5,406 -- 7,757
------------ ----------- -----------
Total Assets........................... 107,337,125 30,222,948 25,619,534
------------ ----------- -----------
Liabilities:
Payable for capital shares redeemed.... 85,342 30,731 1,166
Accrued expenses and other payables:
Investment advisory fees.............. 69,668 20,126 16,074
Administration fees................... 14,924 4,304 3,414
Custodian and accounting fees......... 13,458 4,520 3,453
Distribution fees..................... 36,615 16,302 5,115
Transfer agent fees................... -- 3,563 18,436
Audit and legal fees.................. 4,215 8,253 3,257
Other................................. 1,951 6,371 4,212
------------ ----------- -----------
Total Liabilities...................... 226,173 94,170 55,127
------------ ----------- -----------
Net Assets:
Capital................................ 62,955,914 24,972,571 13,938,178
Net unrealized
appreciation/depreciation on
investments............................ 42,391,905 5,122,117 10,551,107
Accumulated net realized gains on
investment transactions............... 1,763,133 34,090 1,075,122
------------ ----------- -----------
Net Assets............................ $107,110,952 $30,128,778 $25,564,407
============ =========== ===========
Net assets
Investor A Shares..................... $ 81,317,823 $12,961,868 $23,633,330
Investor B Shares..................... 25,793,129 17,166,910 1,931,077
------------ ----------- -----------
Total............................... $107,110,952 $30,128,778 $25,564,407
============ =========== ===========
Shares of capital stock
Investor A Shares..................... 4,623,358 967,625 2,065,434
Investor B Shares..................... 1,501,733 1,228,613 164,752
------------ ----------- -----------
Total............................... 6,125,091 2,196,238 2,230,186
============ =========== ===========
Net asset value
Investor A Shares--redemption price
per share............................ $ 17.59 $ 13.40 $ 11.44
Investor B Shares--offering price per
share*............................... 17.18 13.97 11.72
============ =========== ===========
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).................... $ 18.42 $ 14.03 $ 11.98
============ =========== ===========
</TABLE>
- -------
*Redemption price of Investor B shares varies based on length of time shares are
held.
See Notes which are an integral part of the Financial Statements
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1999
<TABLE>
<CAPTION>
Income U.S. Government U.S. Government
Equity Income Securities Money
Fund Fund Market Fund
----------- --------------- ----------------
<S> <C> <C> <C>
Assets:
Investments, at value (Cost
$34,112,696, $39,826,293, and
$149,542,370 respectively)........ $37,697,107 $37,827,744 $149,542,370
Repurchase agreements (Cost $0,
$0, and $45,318,000
respectively)..................... -- -- 45,318,000
----------- ----------- ------------
Total investments................. 37,697,107 37,827,744 194,860,370
Cash.............................. -- -- 136
Interest and dividends
receivable........................ 52,830 491,526 575,039
Receivable for capital shares
issued............................ 550 1,122 --
----------- ----------- ------------
Total Assets...................... 37,750,487 38,320,392 195,435,545
----------- ----------- ------------
Liabilities:
Dividends payable................. -- -- 798,526
Payable for capital shares
redeemed.......................... 9,597 200 --
Accrued expenses and other
payables:
Investment advisory fees......... 30,387 13,113 22,549
Administration fees.............. 5,336 5,533 25,220
Custodian and accounting fees.... 5,970 3,742 7,864
Distribution fees................ 13,188 7,363 14,931
Transfer agent fees.............. 10,574 4,237 4,333
Audit and legal fees............. 9,371 4,581 18,248
Other............................ 16,421 7,599 16,372
----------- ----------- ------------
Total Liabilities................. 100,844 46,368 908,043
----------- ----------- ------------
Net Assets:
Capital........................... 40,327,971 40,583,126 194,529,732
Accumulated undistributed net
investment income................. -- -- --
Net unrealized
appreciation/depreciation on
investments....................... 3,584,411 (1,998,549) --
Accumulated net realized (losses)
and distributions in excess of
realized gains................... (6,262,739) (310,553) (2,230)
----------- ----------- ------------
Net Assets....................... $37,649,643 $38,274,024 $194,527,502
=========== =========== ============
Net assets
Investor A Shares................ $26,075,308 $36,720,307 $194,527,502
Investor B Shares................ 11,574,335 1,553,717 --
----------- ----------- ------------
Total.......................... $37,649,643 $38,274,024 $194,527,502
=========== =========== ============
Shares of capital stock
Investor A Shares................ 2,324,463 4,071,843 194,529,732
Investor B Shares................ 1,009,384 151,118 --
----------- ----------- ------------
Total.......................... 3,333,847 4,222,961 194,529,732
=========== =========== ============
Net asset value
Investor A Shares--redemption
price per share................. $ 11.22 $ 9.02 $ 1.00
Investor B Shares--offering
price per share*................ 11.47 10.28 N/A
=========== =========== ============
Maximum sales charge (Investor
A)................................ 4.50% 4.50% N/A
=========== =========== ============
Maximum offering price per share (100%/(100%--maximum sales charge) of net asset
value adjusted to nearest cent)
(Investor A) (a)................. $ 11.75 $ 9.45 $ 1.00
=========== =========== ============
</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
See Notes which are an integral part of the Financial Statements
- --------------------------------------------------------------------------------
Statements of Operations
- --------------------------------------------------------------------------------
The Riverfront Funds For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Large Company Balanced Small Company
Select Fund Fund Select Fund
------------- ---------- -------------
<S> <C> <C> <C>
Investment Income:
Interest income....................... $ 2,436 $ 626,389 $ 12,701
Dividend income....................... 615,743 216,587 53,085
----------- ---------- ----------
Total Income.......................... 618,179 842,976 65,786
----------- ---------- ----------
Expenses:
Investment advisory fees.............. 648,700 259,010 156,209
Administration fees................... 139,440 49,503 33,720
Distribution services fee (Investor A
Shares)............................... 158,863 31,838 45,272
Distribution services and shareholder
service fees (Investor B Shares)...... 175,423 160,060 14,174
Custodian and accounting fees......... 123,244 46,151 30,649
Audit and legal fees.................. 17,604 14,185 8,154
Organization costs.................... 3,037 -- --
Trustees' fees and expenses........... 5,873 5,236 2,470
Transfer agent fees................... 56,663 45,749 82,553
Registration and filing fees.......... 13,724 9,543 13,286
Printing costs........................ 14,465 7,591 5,799
Other................................. 1,258 667 584
----------- ---------- ----------
Gross Expenses........................ 1,358,294 629,533 392,870
Less: Fee waivers
Investment advisory fees............ -- (29,118) --
Distribution services fee (Investor
A Shares).......................... -- (7,650) --
----------- ---------- ----------
Net Expenses...................... 1,358,294 592,765 392,870
----------- ---------- ----------
Net Investment Income (Loss).......... (740,115) 250,211 (327,084)
----------- ---------- ----------
Realized/Unrealized Gains from
Investments:
Net realized gains from investment
transactions.......................... 7,307,164 2,205,251 1,862,302
Net change in unrealized appreciation
from investments...................... 18,562,507 919,903 6,677,529
----------- ---------- ----------
Net realized/unrealized gains from
investments........................... 25,869,671 3,125,154 8,539,831
----------- ---------- ----------
Change in net assets resulting from
operations............................ $25,129,556 $3,375,365 $8,212,747
=========== ========== ==========
</TABLE>
See Notes which are an integral part of the Financial Statements
- --------------------------------------------------------------------------------
Statements of Operations
- --------------------------------------------------------------------------------
The Riverfront Funds For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
U.S. Government
Income U.S. Government Securities Money
Equity Fund Income Fund Market Fund
----------- --------------- ----------------
<S> <C> <C> <C>
Investment Income:
Interest income.................... $ 35,204 $ 2,411,593 $8,760,526
Dividend income.................... 948,607 82,654 --
----------- ----------- ----------
Total Income....................... 983,811 2,494,247 8,760,526
----------- ----------- ----------
Expenses:
Investment advisory fees........... 450,118 159,434 257,456
Administration fees................ 82,918 68,866 296,371
Distribution services fee (Investor
A)................................. 84,622 96,058 429,122
Distribution services and
shareholder service fees (Investor
B)................................. 133,922 14,172 --
Custodian and accounting fees...... 74,446 44,887 87,231
Audit and legal fees............... 27,038 12,528 52,551
Trustees' fees and expenses........ 10,975 5,326 17,835
Transfer agent fees................ 74,887 43,030 34,888
Registration and filing fees....... 20,002 7,076 23,666
Printing costs..................... 24,974 11,809 44,304
Other.............................. 1,682 994 3,064
----------- ----------- ----------
Gross Expenses..................... 985,584 464,180 1,246,488
Less: Distribution services fee
(Investor A) waiver............. (9,847) (23,019) (257,487)
----------- ----------- ----------
Net Expenses................... 975,737 441,161 989,001
----------- ----------- ----------
Net Investment Income.............. 8,074 2,053,086 7,771,525
----------- ----------- ----------
Realized/Unrealized Gains (Losses)
from Investments:
Net realized gains (losses) from
investment transactions............ (4,266,434) 241,461 4,189
Net change in unrealized
appreciation/(depreciation) from
investments........................ 5,636,054 (2,873,329) --
----------- ----------- ----------
Net realized/unrealized gains
(losses) from investments.......... 1,369,620 (2,631,868) 4,189
----------- ----------- ----------
Change in net assets resulting from
operations......................... $ 1,377,694 $ (578,782) $7,775,714
=========== =========== ==========
</TABLE>
See Notes which are an integral part of the Financial Statements
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
The Riverfront Funds
See Notes which are an integral part of the Financial Statements
<TABLE>
<CAPTION>
Large Company
Balanced Small Company
Select Fund
Fund Select 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,
1999 1998 1999
1998 1999 1998
------------ ------------ ------------ ------------
- ------------ ------------
<S> <C> <C> <C> <C>
<C> <C>
Increase (Decrease) in Net
Assets:
Operations:
Net investment income
(loss)................... $ (740,115) $ (261,052) $ 250,211 $ 269,303
$ (327,084) $ (256,555)
Net realized gains
(losses) from
investment transactions.. 7,307,164 8,153,519 2,205,251 3,474,428
1,862,302 (101,284)
Net change in unrealized
appreciation
(depreciation) from
investments............. 18,562,507 7,822,437 919,903 1,277,732
6,677,529 (164,771)
------------ ----------- ----------- -----------
- ----------- -----------
Change in net assets
resulting from
operations................ 25,129,556 15,714,904 3,375,365 5,021,463
8,212,747 (522,610)
------------ ----------- ----------- -----------
- ----------- -----------
Distributions to
Shareholders:
Distributions to Investor
A Shareholders:
From net investment
income................... -- -- (171,291)
(169,385) -- --
From net realized gains
from investments......... (4,204,804) (6,012,066) (1,027,715)
(1,567,457) (333,579) (2,744,106)
In excess of net realized
gains.................... -- -- --
- -- -- (35,043)
Distributions to Investor
B Shareholders:
From net investment
income................... -- -- (81,190)
(99,893) -- --
From net realized gains
from investments......... (1,361,120) (1,129,216) (1,314,945)
(1,864,419) (25,695) (127,743)
In excess of net realized
gains.................... -- -- --
- -- -- (67,542)
------------ ----------- ----------- -----------
- ----------- -----------
Change in net assets from
shareholder
distributions............. (5,565,924) (7,141,282) (2,595,141)
(3,701,154) (359,274) (2,974,434)
------------ ----------- ----------- -----------
- ----------- -----------
Capital Transactions:
Proceeds from shares
issued................... 36,567,464 13,309,662 10,666,264 3,341,172
2,822,590 1,954,127
Dividends reinvested..... 823,101 7,080,161 243,906
3,609,340 355,663 2,842,226
Cost of shares redeemed.. (10,059,721) (4,824,558) (6,703,936) (4,174,349)
(6,208,477) (6,135,730)
------------ ----------- ----------- -----------
- ----------- -----------
Change in net assets from
capital transactions...... 27,330,844 15,565,265 4,206,234 2,776,163
(3,030,224) (1,339,377)
------------ ----------- ----------- -----------
- ----------- -----------
Change in net assets...... 46,894,476 24,138,887 4,986,458 4,096,472
4,823,249 (4,836,421)
Net Assets:
Beginning of year........ 60,216,476 36,077,589 25,142,320 21,045,848
20,741,158 25,577,579
------------ ----------- ----------- -----------
- ----------- -----------
End of year.............. $107,110,952 $60,216,476 $30,128,778 $25,142,320
$25,564,407 $20,741,158
============ =========== =========== ===========
=========== ===========
Share Transactions:
Issued................... 2,388,070 1,025,833 779,375
244,765 344,221 223,267
Reinvested............... 44,711 511,275 17,917
271,327 30,555 327,046
Redeemed................. (652,353) (375,134) (488,354)
(309,204) (767,492) (711,763)
------------ ----------- ----------- -----------
- ----------- -----------
Change in shares.......... 1,780,428 1,161,974 308,938
206,888 (392,716) (161,450)
============ =========== =========== ===========
=========== ===========
</TABLE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
The Riverfront Funds
<TABLE>
<CAPTION>
U.S. Government
Income Equity U.S.
Government Securities Money
Fund Income
Fund Market 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,
1999 1998 1999
1998 1999 1998
------------ ------------ ------------ ------------
- ------------- -------------
<S> <C> <C> <C> <C>
<C> <C>
Increase (Decrease) in Net
Assets:
Operations:
Net investment income.... $ 8,074 $ 890,928 $ 2,053,086 $ 2,333,410
$ 7,771,525 $ 7,676,947
Net realized gains
(losses) from
investment transactions.. (4,266,434) 8,762,126 241,461
541,953 4,189 (2,666)
Net change in unrealized
appreciation
(depreciation) from
investments............. 5,636,054 (6,788,439) (2,873,329)
286,081 -- --
------------ ------------ ----------- -----------
- ------------- -------------
Change in net assets
resulting from
operations................ 1,377,694 2,864,615 (578,782)
3,161,444 7,775,714 7,674,281
------------ ------------ ----------- -----------
- ------------- -------------
Distributions to
Shareholders:
Distributions to Investor
A Shareholders:
From net investment
income................... (8,767) (832,004) (2,023,573)
(2,287,710) (7,771,525) (7,676,947)
From net realized gains
from investments......... -- (7,878,594) --
- -- -- --
In excess of net realized
gains.................... -- (1,694,145) --
- -- -- --
From paid-in capital..... (72,012) -- --
- -- -- --
Distributions to Investor
B Shareholders:
From net investment
income................... -- (58,765) (55,502)
(45,525) -- --
From net realized gains
from investments......... -- (1,734,789) --
- -- -- --
In excess of net realized
gains.................... -- (294,053) --
- -- -- --
From paid-in capital..... (7,104) -- --
- -- -- --
------------ ------------ ----------- -----------
- ------------- -------------
Change in net assets from
shareholder
distributions............. (87,883) (12,492,350) (2,079,075)
(2,333,235) (7,771,525) (7,676,947)
------------ ------------ ----------- -----------
- ------------- -------------
Capital Transactions:
Proceeds from shares
issued................... 3,359,456 8,159,129 3,037,080 1,989,526
377,728,269 364,869,432
Dividends reinvested..... 86,495 12,341,290 292,567
283,938 2,128,195 2,082,417
Cost of shares redeemed.. (60,792,767) (18,569,826) (7,103,023) (8,722,844)
(374,179,965) (320,671,126)
------------ ------------ ----------- -----------
- ------------- -------------
Change in net assets from
capital transactions...... (57,346,816) 1,930,593 (3,773,376)
(6,449,380) 5,676,499 46,280,723
------------ ------------ ----------- -----------
- ------------- -------------
Change in net assets...... (56,057,005) (7,697,142) (6,431,233)
(5,621,171) 5,680,688 46,278,057
Net Assets:
Beginning of year........ 93,706,648 101,403,790 44,705,257 50,326,428
188,846,814 142,568,757
------------ ------------ ----------- -----------
- ------------- -------------
End of year.............. $ 37,649,643 $ 93,706,648 $38,274,024 $44,705,257 $
194,527,502 $ 188,846,814
============ ============ =========== ===========
============= =============
Share Transactions:
Issued................... 315,914 658,371 319,518 205,307
377,728,269 364,869,432
Reinvested............... 8,522 1,170,115 30,935
29,262 2,128,195 2,082,417
Redeemed................. (5,894,690) (1,565,735) (745,975) (907,353)
(374,179,965) (320,671,126)
------------ ------------ ----------- -----------
- ------------- -------------
Change in shares.......... (5,570,254) 262,751 (395,522)
(672,784) 5,676,499 46,280,723
============ ============ =========== ===========
============= =============
</TABLE>
See Notes which are an integral part of the Financial Statements
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1999
Large Company Select Fund
Continued
<TABLE>
<CAPTION>
Market
Shares Value
------ --------------------------------------------------------- ------------
<C> <S> <C>
Common Stocks (94.3%)
Apparel (1.8%)
33,825 Gap, Inc................................................. $ 1,555,950
9,450 Intimate Brands, Inc..................................... 407,531
------------
1,963,481
------------
Automotive (0.6%)
12,000 Ford Motor Co............................................ 641,250
------------
Banks (2.4%)
11,000 Bank Of America Corp..................................... 552,063
6,000 Chase Manhattan Corp..................................... 466,125
17,940 Citigroup Inc............................................ 996,791
7,000 Fifth Third Bancorp...................................... 513,625
------------
2,528,604
------------
Beverages (1.0%)
17,500 Coca-Cola Co............................................. 1,019,375
------------
Biopharmaceuticals (0.2%)
1,000 MedImmune, Inc. (b)...................................... 165,875
------------
Business & Public Services (3.5%)
9,000 Ariba, Inc.(b)........................................... 1,596,375
2,500 CMG Information Services, Inc. (b)....................... 692,188
2,250 Commerce One Inc. (b).................................... 442,125
4,000 Internet Capital Group, Inc. (b)......................... 680,000
5,000 United Parcel Service Class B............................ 345,000
------------
3,755,688
------------
Commercial Services (0.4%)
800 Freemarkets, Inc. (b).................................... 273,050
8,000 Harris Interactive, Inc. (b)............................. 104,500
------------
377,550
------------
Computers & Peripherals (15.2%)
50,000 Cisco Systems, Inc. (b).................................. 5,356,250
68,570 Dell Computer Corp.(b)................................... 3,497,070
50,000 EMC Corp-Mass(b)......................................... 5,462,500
4,000 Hewlett-Packard Co....................................... 455,750
10,000 IBM Corp................................................. 1,080,000
400 Juniper Networks, Inc. (b)............................... 136,000
4,000 Sun Microsystems, Inc. (b)............................... 309,750
------------
16,297,320
------------
Consumer Goods & Services (2.0%)
6,700 Ebay Inc. (b)............................................ 838,756
3,000 Priceline.com, Inc. (b).................................. 142,125
8,000 Procter & Gamble Co...................................... 876,500
1,000 Sony Corp. ADR........................................... 284,750
------------
2,142,131
------------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Value
------ --------------------------------------------------------- ------------
<C> <S> <C>
Common Stocks, continued
Diversified (7.9%)
9 Berkshire Hathaway, Inc. Class A (b)..................... $ 504,900
29,000 General Electric Co...................................... 4,487,750
90,000 Tyco International Ltd................................... 3,498,750
------------
8,491,400
------------
Electronic Technology (0.7%)
8,000 Solectron Corp. (b)...................................... 761,000
------------
Financial Services (2.3%)
40,000 Charles Schwab Corp...................................... 1,535,000
8,600 Fannie Mae............................................... 536,963
21,000 Firstar Corp............................................. 443,625
------------
2,515,588
------------
Insurance (1.3%)
12,500 American International Group............................. 1,351,563
------------
Media (4.1%)
13,000 Clear Channel Communications, Inc. (b)................... 1,160,250
6,000 Qwest Communications, Intl. (b).......................... 258,000
20,000 SBC Communications, Inc.................................. 975,000
28,040 Time Warner, Inc......................................... 2,031,148
------------
4,424,398
------------
Medical Supplies (1.2%)
14,000 Johnson & Johnson........................................ 1,303,750
------------
Oil-Integrated Companies (0.9%)
12,190 Exxon Mobil Corporation.................................. 982,057
------------
Pharmaceuticals (7.1%)
12,000 Amgen Inc. (b)........................................... 720,750
14,000 Bristol-Myers Squibb..................................... 898,625
15,040 Eli Lilly & Co........................................... 1,000,160
19,000 Merck & Co., Inc......................................... 1,274,187
50,000 Pfizer, Inc.............................................. 1,621,875
11,060 Schering-Plough.......................................... 466,594
20,000 Warner-Lambert Co........................................ 1,638,750
------------
7,620,941
------------
Retail (10.8%)
10,000 Amazon.com Inc. (b)...................................... 761,250
45,000 Home Depot, Inc.......................................... 3,085,313
73,000 Staples, Inc. (b)........................................ 1,514,750
50,000 Walgreen Co.............................................. 1,462,500
68,060 Wal-Mart Stores, Inc..................................... 4,704,647
------------
11,528,460
------------
Semiconductors (4.3%)
2,000 Broadcom Corp. Class A (b)............................... 544,750
25,800 Intel Corp............................................... 2,123,662
5,000 Maker Communications, Inc. (b)........................... 213,750
30,000 NETsilicon, Inc. (b)..................................... 607,500
</TABLE>
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1999
Large Company Select Fund
<TABLE>
<CAPTION>
Market
Shares Value
------ --------------------------------------------------------- ------------
<C> <S> <C>
Common Stocks, continued
Semiconductors, continued
2,500 Silicon Image, Inc. (b).................................. $ 175,156
10,000 Texas Instruments, Inc................................... 968,750
------------
4,633,568
------------
Software & Computer Services (14.0%)
1,200 Alteon Websystems, Inc. (b).............................. 105,300
64,000 America Online Inc. (b).................................. 4,828,000
2,700 At Home Corp. Series A (b)............................... 115,763
1,400 Clarent Corp. (b)........................................ 108,850
4,000 Digex Inc. (b)........................................... 275,000
18,000 Exodus Communications, Inc. (b).......................... 1,598,625
5,650 Gric Communications, Inc. (b)............................ 143,369
1,000 i2 Technologies, Inc. (b)................................ 195,000
10,000 Jacada Ltd. (b).......................................... 278,750
43,000 Microsoft Corp. (b)...................................... 5,020,250
2,000 Oracle Corp. (b)......................................... 224,125
1,500 RealNetworks, Inc. (b)................................... 180,469
6,000 Rhythms NetConnections (b)............................... 186,000
1,900 Vitria Technology, Inc. (b).............................. 444,600
3,000 Yahoo Inc. (b)........................................... 1,298,062
------------
15,002,163
------------
Telecommunications-Equipment (5.7%)
10,000 AltiGen Communications, Inc. (b)......................... 103,125
4,000 JDS Uniphase Corp. (b)................................... 645,250
28,000 Lucent Technologies, Inc................................. 2,094,750
2,000 Metromedia Fiber Network, Inc. Class A (b)............... 95,875
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Value
--------- ------------------------------------------------------ ------------
<C> <S> <C>
Common Stocks, continued
Telecommunications-Equipment, continued
4,500 MRV Communications, Inc. (b).......................... $ 282,937
5,000 Network Solution Inc. (b)............................. 1,087,812
5,000 Nokia Corp. ADR....................................... 950,000
1,600 Qualcomm Inc.(b)...................................... 282,000
4,000 Vodafone Air Touch PLC ADR............................ 198,000
14,000 Williams Communications Group, Inc. (b)............... 405,125
------------
6,144,874
------------
Utilities -Telecommunications (6.9%)
50,000 A T & T Corp.......................................... 2,537,500
12,000 Global Crossing Ltd. (b).............................. 600,000
20,000 Broadwing, Inc. (b)................................... 737,500
63,750 MCI Worldcom Inc. (b)................................. 3,382,734
16,500 PNV.net, Inc. (b)..................................... 135,094
500 Z-Tel Technologies, Inc. (b).......................... 20,187
------------
7,413,015
------------
Total Common Stocks (Identified Cost $58,672,146) 101,064,051
------------
Investment Companies (5.3%)
694,936 Dreyfus Treasury Prime Fund........................... 694,936
3,762,044 Fidelity Institutional Treasury Money Market Fund..... 3,762,044
1,228,243 Merrill Lynch Government Money Market Fund............ 1,228,243
------------
Total Investment Companies (Identified Cost $5,685,223) 5,685,223
------------
Total Investments (Identified Cost $64,357,369) (a) $106,749,274
============
</TABLE>
- -------
(a) The cost of investments for Federal tax purposes amounts to $64,513,897.
The net unrealized appreciation of investments on a Federal tax basis
amounts to $42,235,377 which is comprised of $44,396,336 appreciation and
$2,160,959 depreciation at December 31, 1999.
(b) Represents non-income producing securities.
Note: The categories of investments are shown as a percentage of net assets
($107,110,952) at December 31, 1999.
See Notes which are an integral part of the Financial Statements
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1999
Balanced Fund
Continued
<TABLE>
<CAPTION>
Market
Shares Value
--------- ------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks (58.0%)
Banks (1.4%)
6,000 Mellon Bank Corp....................................... $ 204,375
3,000 State Street Corp...................................... 219,187
-----------
423,562
-----------
Brokerage Services (0.5%)
4,000 Charles Schwab Corp.................................... 153,500
-----------
Computers & Peripherals (11.8%)
10,000 Cisco Systems, Inc. (b)................................ 1,071,250
15,000 Dell Computer Corp. (b)................................ 765,000
8,000 EMC Corp-Mass (b)...................................... 874,000
3,500 IBM Corp............................................... 378,000
6,000 Sun Microsystems, Inc. (b)............................. 464,625
-----------
3,552,875
-----------
Consumer Products (0.5%)
1,050 Intimate Brands, Inc................................... 45,281
1,000 Procter & Gamble Co.................................... 109,563
-----------
154,844
-----------
Diversified (4.5%)
5,000 General Electric Co.................................... 773,750
15,000 Tyco International Ltd................................. 583,125
-----------
1,356,875
-----------
Financial Services (1.8%)
7,500 Citigroup Inc.......................................... 416,719
2,000 Fannie Mae............................................. 124,875
-----------
541,594
-----------
Insurance (0.9%)
2,500 American International Group........................... 270,313
-----------
Medical Supplies (0.8%)
2,500 Johnson & Johnson...................................... 232,813
-----------
Media (3.2%)
2,000 Clear Channel Communications, Inc. (b)................. 178,500
11,000 Time Warner, Inc....................................... 796,812
-----------
975,312
-----------
Office Equipment & Supplies (Non-Computer Related) (0.5%)
3,000 Pitney-Bowes, Inc...................................... 144,938
-----------
Oil-Integrated Companies (1.1%)
6,000 Texaco, Inc............................................ 325,875
-----------
Oil & Gas Exploration, Production & Services (0.7%)
3,500 Schlumberger, Ltd...................................... 196,875
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ----------------------------------------------------- -----------
<C> <S> <C>
Common Stocks, continued
Pharmaceuticals (7.6%)
8,000 Amgen Inc. (b)....................................... $ 480,500
4,000 Bristol-Myers Squibb................................. 256,750
6,500 Cardinal Health Inc.................................. 311,188
2,000 Merck & Co., Inc..................................... 134,125
15,000 Pfizer, Inc.......................................... 486,563
5,000 Schering-Plough...................................... 210,937
5,000 Warner-Lambert Co.................................... 409,687
-----------
2,289,750
-----------
Retail (10.4%)
15,750 Home Depot, Inc...................................... 1,079,859
25,000 Staples, Inc. (b).................................... 518,750
20,000 Walgreen Co.......................................... 585,000
14,000 Wal-Mart Stores, Inc................................. 967,750
-----------
3,151,359
-----------
Semiconductors (1.9%)
1,000 Broadcom Corp. Class A (b)........................... 272,375
3,000 Texas Instruments, Inc............................... 290,625
-----------
563,000
-----------
Software & Computer Services (5.9%)
6,000 America Online Inc. (b).............................. 452,625
2,000 Exodus Communications, Inc. (b)...................... 177,625
10,000 Microsoft Corp. (b).................................. 1,167,500
-----------
1,797,750
-----------
Telecommunications-Equipment (1.5%)
6,000 Lucent Technologies, Inc............................. 448,875
-----------
Utilities-Telecommunications (3.0%)
7,000 A T & T Corp......................................... 355,250
10,500 MCI Worldcom Inc. (b)................................ 557,156
-----------
912,406
-----------
Total Common Stocks (Identified Cost $11,897,794) 17,492,516
-----------
Corporate Bonds (2.5%)
Banks (1.2%)
$ 400,000 Chase Capital I, Series A, 7.67%, 12/1/26, Callable
12/1/06 @ 103.84, Guaranteed by Chase Manhattan
Corp................................................ 363,500
-----------
Financial Services (1.3%)
400,000 Ford Motor Credit Co., 6.25%, 12/8/05................ 378,500
-----------
Total Corporate Bonds (Identified Cost $801,686) 742,000
-----------
</TABLE>
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1999
Balanced Fund
<TABLE>
<CAPTION>
Principal Market
Amount Value
---------- ------------------------------------------------------ -----------
<C> <S> <C>
U.S. Government Agencies (19.2%)
Federal Home Loan Mortgage Corp. (3.2%)
$1,000,000 6.59%, 7/23/08, Callable 1/3/00 @ 100................. $ 951,690
-----------
Federal National Mortgage Assoc.(16.0%)
300,000 5.75%, 4/15/03........................................ 291,516
500,000 6.01%, 1/14/03........................................ 488,265
2,000,000 6.09%, 1/12/09........................................ 1,818,620
1,450,000 6.67%, 8/1/01......................................... 1,453,306
500,000 6.89%, 7/12/04........................................ 486,130
300,000 6.95%, 11/13/06....................................... 290,148
-----------
4,827,985
-----------
Total U.S. Government Agencies (Identified Cost $6,074,433) 5,779,675
-----------
U.S. Treasury Obligations (10.3%)
U.S. Treasury Bonds (7.0%)
1,000,000 7.25%, 5/15/16........................................ 1,045,290
1,000,000 7.50%, 11/15/16....................................... 1,069,900
-----------
2,115,190
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ------------------------------------------------------ -----------
<C> <S> <C>
U.S. Treasury Obligations, continued
U.S. Treasury Notes (3.3%)
$1,000,000 4.875%, 3/31/01....................................... $ 984,430
-----------
Total U.S. Treasury Obligations (Identified Cost $3,217,781) 3,099,620
-----------
Investment Companies (9.5%)
942,849 Dreyfus Treasury Prime Fund........................... 942,849
1,048,560 Fidelity Institutional Treasury Money Market Fund..... 1,048,560
862,132 Merrill Lynch Government Money Market Fund............ 862,132
-----------
Total Investment Companies (Identified Cost $2,853,541) 2,853,541
-----------
Total Investments (Identified Cost $24,845,235)(a) $29,967,352
===========
</TABLE>
- -------
(a) The cost of investments for Federal tax purposes amounts to $24,940,075.
The net unrealized appreciation of investments on a Federal tax basis
amounts to $5,027,277 which is comprised of $5,921,555 appreciation and
$894,278 depreciation at December 31, 1999.
(b) Represents non-income producing securities.
Note: The categories of investments are shown as a percentage of net assets
($30,128,778) at December 31, 1999.
See Notes which are an integral part of the Financial Statements
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1999
Small Company Select Fund
Continued
<TABLE>
<CAPTION>
Market
Shares Value
------ ---------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks (89.5%)
Apparel (1.9%)
7,500 Abercrombie & Fitch Class A (b)........................... $ 200,156
4,000 American Eagle Outfitters (b)............................. 180,000
5,000 Tommy Hilfiger Corp. (b).................................. 116,563
-----------
496,719
-----------
Automotive Parts (3.3%)
20,000 Gentex Corp. (b).......................................... 555,000
14,000 O'Reilly Automotive, Inc. (b)............................. 301,000
-----------
856,000
-----------
Banks (1.5%)
16,500 National Commerce Bancorp................................. 374,344
-----------
Biopharmaceuticals (6.7%)
10,300 MedImmune, Inc. (b)....................................... 1,708,512
-----------
Brokerage Services (1.4%)
10,000 Legg Mason Inc............................................ 362,500
-----------
Computer & Peripherals (5.1%)
8,950 Comverse Technology, Inc. (b)............................. 1,295,512
-----------
Educational Institutions (0.7%)
9,600 DeVry Incorporated (b).................................... 178,800
-----------
Electrical Equipment (6.7%)
11,500 Sanmina Corp. (b)......................................... 1,148,563
21,000 American Power Conversion Corporation (b)................. 553,875
-----------
1,702,438
-----------
Environmental Control (2.9%)
54,000 Catalytica Inc. (b)....................................... 732,375
-----------
Financial Services (4.0%)
10,000 Eaton Vance Corp.......................................... 380,000
5,300 SEI Corp.................................................. 630,783
-----------
1,010,783
-----------
Food Processing (2.4%)
20,000 American Italian Pasta-Class A (b)........................ 615,000
-----------
Medical Laser Systems (0.2%)
10,000 LCA-Vision Inc. (b)....................................... 46,875
-----------
Pharmaceuticals (0.6%)
2,400 Express Scripts, Inc. (b)................................. 153,600
-----------
Printing & Publishing (0.1%)
5,000 Multi Color Corp. (b)..................................... 26,875
-----------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Value
------ ---------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks, continued
Radio (3.9%)
10,000 Cox Radio Inc. Class A (b)................................ $ 997,500
-----------
Retail-Specialty Stores (0.7%)
5,500 Bed Bath & Beyond, Inc. (b)............................... 191,125
-----------
Textiles (0.8%)
8,000 Mohawk Industries, Inc. (b)............................... 211,000
-----------
Semiconductors (14.8%)
50,000 NETsilicon, Inc. (b)...................................... 1,012,500
4,000 Novellus Systems, Inc. (b)................................ 490,125
15,000 Plexus Corp. (b).......................................... 660,000
5,000 Silicon Image, Inc. (b)................................... 350,313
24,200 Vitesse Semiconductor (b)................................. 1,268,987
-----------
3,781,925
-----------
Software & Computer Services (24.1%)
4,000 Ariba, Inc. (b)........................................... 709,500
2,400 BEA Systems, Inc. (b)..................................... 167,850
13,000 Digex Inc. (b)............................................ 893,750
8,800 Exodus Communications, Inc. (b)........................... 781,550
9,000 i2 Technologies, Inc. (b)................................. 1,755,000
8,000 Lernout & Hauspie Speech (b).............................. 370,000
2,000 Macromedia Inc. (b)....................................... 146,250
7,500 MapQuest.com, Inc. (b).................................... 169,219
250 MP3.com, Inc. (b)......................................... 7,922
3,700 RealNetworks, Inc. (b).................................... 445,156
8,000 Sportsline.com, Inc. (b).................................. 401,000
6,000 Whittman Hart, Inc. (b)................................... 321,750
-----------
6,168,947
-----------
Telecommunications-Equipment (5.5%)
4,500 MRV Communications, Inc. (b).............................. 282,937
1,500 Network Solution Inc. (b)................................. 326,344
15,000 Tuts Systems, Inc. (b).................................... 804,375
-----------
1,413,656
-----------
Utilities-Telecommunications (1.2%)
2,500 NTL Incorporated (b)...................................... 311,875
-----------
Wholesale Distribution (1.0%)
6,000 Expeditors International of Washington, Inc............... 262,875
-----------
Total Common Stocks (Identified Cost $12,348,129) 22,899,236
-----------
</TABLE>
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1999
Small Company Select Fund
<TABLE>
<CAPTION>
Market
Shares Value
--------- ------------------------------------------------------- -----------
<C> <S> <C>
Investment Companies (10.5%)
902,704 Dreyfus Treasury Prime Fund............................ $ 902,704
787,510 Fidelity Institutional Treasury Money Market Fund...... 787,510
1,012,284 Merrill Lynch Government Money Market Fund............. 1,012,284
-----------
Total Investment Companies (Identified Cost $2,702,498) 2,702,498
-----------
Total Investments (Identified Cost $15,050,627)(a) $25,601,734
===========
</TABLE>
- -------
(a) The cost of investments for Federal tax purposes amounts to $15,127,809. The
net unrealized appreciation of investments on a Federal tax basis amounts to
$10,473,925 which is comprised of $11,021,268 appreciation and $547,343
depreciation at December 31, 1999.
(b) Represents non-income producing securities.
Note: The categories of investments are shown as a percentage of net assets
($25,564,407) at December 31, 1999.
See Notes which are an integral part of the Financial Statements
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1999
Income Equity Fund
Continued
<TABLE>
<CAPTION>
Market
Shares Value
------ ---------------------------------------------------------- -----------
<C> <S> <C>
Preferred Stock (0.7%)
Agricultural Biotechnology (0.7%)
8,100 Monsanto Co. 6.5%, ACES 11/30/03.......................... $ 268,312
-----------
Total Preferred Stock (Identified Cost $288,522) 268,312
-----------
Common Stocks (98.7%)
Agricultural Biotechnology (1.0%)
11,000 Monsanto Co............................................... 391,875
-----------
Apparel (1.5%)
12,600 Gap, Inc.................................................. 579,600
-----------
Automotive Parts (2.5%)
10,150 Ford Motor Co............................................. 542,391
5,250 General Motors Corp....................................... 381,609
-----------
924,000
-----------
Banks (15.1%)
11,000 Bank Of America Corp...................................... 552,062
19,696 Bank One Corporation...................................... 631,503
25,000 Citigroup Inc............................................. 1,389,063
11,000 Chase Manhattan Corp...................................... 854,563
26,000 First Union Corp.......................................... 853,125
20,000 Firstar Corp.............................................. 422,500
6,500 State Street Corp......................................... 474,906
16,000 Summit Bancorp............................................ 490,000
-----------
5,667,722
-----------
Brokerage Services (2.4%)
11,000 Merrill Lynch & Co........................................ 918,500
-----------
Computers & Peripherals (8.5%)
5,700 Cisco Systems, Inc. (b)................................... 610,612
8,050 Dell Computer Corp. (b)................................... 410,550
6,000 EMC Corp-Mass (b)......................................... 655,500
7,975 Hewlett-Packard Co........................................ 908,652
5,600 IBM Corp.................................................. 604,800
-----------
3,190,114
-----------
Consumer Goods & Services (1.2%)
9,200 Clorox Co................................................. 463,450
-----------
Diversified (8.2%)
9,800 Fannie Mae Common......................................... 611,888
11,500 General Electric Co....................................... 1,779,625
7,125 Minnesota Mining & Mfg. Co................................ 697,359
-----------
3,088,872
-----------
Entertainment (2.1%)
26,550 The Walt Disney Co........................................ 776,588
-----------
Food Products (1.0%)
9,700 H. J. Heinz Co............................................ 386,181
-----------
Forest Products-Lumber & Paper (1.2%)
3,500 Temple-Inland Inc......................................... 230,781
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Value
------ ---------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks, continued
Forest Products-Lumber & Paper, continued
5,000 Willamette Industries, Inc................................ $ 232,188
-----------
462,969
-----------
Independent Power Producer (2.1%)
12,100 Calpine Corporation (b)................................... 774,400
-----------
Insurance (2.1%)
7,250 American International Group.............................. 783,906
-----------
Media (2.2%)
11,475 Time Warner, Inc.......................................... 831,220
-----------
Medical Supplies (1.1%)
4,575 Johnson & Johnson......................................... 426,047
-----------
Office Equipment & Supplies (Non-Computer Related) (3.1%)
26,700 Staples, Inc. (b)......................................... 554,025
27,800 Xerox Corp................................................ 630,713
-----------
1,184,738
-----------
Oil & Gas Exploration, Production, & Services (0.8%)
5,225 Schlumberger, Ltd......................................... 293,906
-----------
Oil-Integrated Companies (6.6%)
4,700 Chevron Corp.............................................. 407,138
13,200 Exxon Mobil Corporation................................... 1,063,425
8,000 Royal Dutch Petroleum Co.-NY Shares....................... 483,500
9,425 Texaco, Inc............................................... 511,895
-----------
2,465,958
-----------
Pharmaceuticals (6.2%)
14,800 Amgen Inc. (b)............................................ 888,925
5,300 Bristol-Myers Squibb...................................... 340,194
18,100 Pfizer, Inc............................................... 587,119
6,250 Warner-Lambert Co......................................... 512,109
-----------
2,328,347
-----------
Retail (1.7%)
9,000 Wal-Mart Stores, Inc...................................... 622,125
-----------
Semiconductors (4.5%)
9,050 Intel Corp................................................ 744,928
9,800 Texas Instruments, Inc.................................... 949,375
-----------
1,694,303
-----------
Software & Computer Services (3.6%)
11,700 Microsoft Corp. (b)....................................... 1,365,975
-----------
Telecommunications-Equipment (5.7%)
11,900 Lucent Technologies, Inc.................................. 890,269
12,500 Nortel Networks Corporation............................... 1,262,500
-----------
2,152,769
-----------
Utilities-Natural Gas (1.3%)
16,000 Piedmont Natural Gas Co................................... 484,000
-----------
</TABLE>
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1999
Income Equity Fund
<TABLE>
<CAPTION>
Market
Shares Value
------ ---------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks, continued
Utilities-Telecommunications (13.0%)
23,300 A T & T Corp.............................................. $ 1,182,475
31,200 Broadwing, Inc. (b)....................................... 1,150,500
14,300 GTE Corp.................................................. 1,009,044
29,400 MCI Worldcom, Inc. (b).................................... 1,560,037
-----------
4,902,056
-----------
Total Common Stocks (Identified Cost $33,555,000) 37,159,621
-----------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Value
------- --------------------------------------------------------- -----------
<C> <S> <C>
Investment Companies (0.7%)
269,174 Fidelity Institutional Treasury Money Market Fund........ $ 269,174
-----------
Total Investment Companies (Identified Cost $269,174) 269,174
-----------
Total Investments (Identified Cost $34,112,696)(a) $37,697,107
===========
</TABLE>
- -------
(a) The cost of investments for Federal tax purposes amounts to $34,233,817.
The net unrealized appreciation of investments on a Federal tax basis
amounts to $3,463,290 which is comprised of $5,893,341 appreciation and
$2,430,051 depreciation at December 31, 1999.
(b) Represents non-income producing securities.
ACES--Adjustable Conversion-Rate Equity Securities
Note: The categories of investments are shown as a percentage of net assets
($37,649,643) at December 31, 1999.
See Notes which are an integral part of the Financial Statements
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1999
U.S. Government Income Fund
Continued
<TABLE>
<CAPTION>
Principal Market
Amount Value
---------- ----------------------------------------------------- -----------
<C> <S> <C>
Corporate Bonds (20.7%)
Banks (5.1%)
$ 600,000 Chase Capital I, Series A, 7.67%, 12/1/26, Callable
12/1/06 @ 103.84, Guaranteed by Chase Manhattan
Corp................................................ $ 545,250
500,000 Mellon Capital I, Series A, 7.72%, 12/1/26, Callable
12/1/06 @ 103.86, Guaranteed by Mellon Bank Corp.... 458,750
1,000,000 Midland Bank PLC (HSBC) 6.95%, 3/15/11............... 932,500
-----------
1,936,500
-----------
Financial Services (12.8%)
1,000,000 American Express Master Trust, Series 1998-1, Class
A, 5.90%, 4/15/04, ABS.............................. 970,490
130,521 Boatmen's Auto Trust, Series 1996-A, Class A3, 6.75%,
1/15/03, ABS........................................ 130,486
1,621,848 Countrywide Home Loans, Inc., Series 1998-11, Class
A10, 6.25%, 8/25/28, CMO............................ 1,599,061
1,000,000 Countrywide Home Loans, Inc., Series 1998-1, Class
AF2, 6.27%, 4/25/28, ABS............................ 989,480
760,434 Green Tree Home Improvement Loan Trust, Series 1997-
D, Class HEA4, 6.54%, 9/15/28....................... 757,400
225,625 Security Pacific Acceptance Corp., Series 1995-1,
Class A2, 6.70%, 4/10/20, ABS....................... 225,382
250,000 Toyota Motor Credit Corp., 7.13%, 9/26/06, Callable
3/26/00 @ 100, MTN.................................. 241,563
-----------
4,913,862
-----------
Food Processing & Packaging (1.4%)
500,000 McCormick & Co., Inc., 8.95%, 7/1/01................. 515,625
-----------
Oil & Gas Transmission (0.9%)
356,000 Trans-Canada Pipelines Ltd., 6.77%, 4/30/01, MTN..... 354,665
-----------
Utilities-Electric & Gas (0.5%)
200,000 Oklahoma Gas & Electric Co., 6.25%, 10/15/00......... 199,000
-----------
Total Corporate Bonds (Identified Cost $8,185,237) 7,919,652
-----------
U.S. Government Agencies (60.8%)
Federal Agricultural Mortgage Corp. (2.4%)
1,000,000 5.90%, 3/3/09........................................ 916,305
-----------
Federal Home Loan Bank (6.9%)
2,000,000 6.375%, 8/15/06...................................... 1,934,480
725,000 6.85%, 12/27/04...................................... 717,065
-----------
2,651,545
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal Market
Amount Value
---------- ------------------------------------------------------ ----------
<C> <S> <C>
U.S. Government Agencies, continued
Federal Home Loan Mortgage Corp. (6.9%)
$ 225,000 6.20%, 4/15/03........................................ $ 221,450
1,095,000 6.22%, 3/18/08........................................ 1,012,601
1,500,000 6.60%, 7/20/10........................................ 1,390,365
----------
2,624,416
----------
Federal National Mortgage Association (31.9%)
1,000,000 5.25%, 1/15/09........................................ 881,800
1,896,750 5.50%, 4/1/24 Pool #280553............................ 1,712,708
628,091 6.00%, 2/01/03........................................ 613,161
625,822 6.00%, 5/1/03 Pool #347156............................ 611,065
1,000,000 6.00%, 5/15/08........................................ 936,170
1,000,000 6.03%, 2/2/09......................................... 914,810
1,000,000 6.40%, 5/14/09........................................ 936,250
1,000,000 6.50%, 12/25/07, Series 1993-43, Class H, CMO......... 984,230
3,000,000 6.50%, 10/25/28, Series 1998-58, Class PC, CMO........ 2,646,870
1,000,000 6.71%, 3/13/02........................................ 995,250
1,000,000 7.55%, 3/27/07, Series 07-B, Callable 3/27/00 @ 100... 993,250
----------
12,225,564
----------
Government National Mortgage Association (6.9%)
420,641 7.00%, 11/15/08 Pool #363175.......................... 418,164
478,922 7.00%, 1/15/09 Pool #363194........................... 475,991
1,443,074 7.00%, 2/15/09 Pool #383488........................... 1,434,603
314,343 8.00%, 5/15/23, Pool #351752.......................... 317,241
----------
2,645,999
----------
Private Export Funding Corp. (2.6%)
1,000,000 6.24%, 5/15/02, Series VV, Guaranteed by Export-Import
Bank of The United States............................ 988,750
----------
Tennessee Valley Authority (3.2%)
1,250,000 6.235%, 7/15/45, Series B, Callable 7/15/20 @ 100,
Putable 7/15/01 @ 100................................ 1,240,625
----------
Total U.S. Government Agencies (Identified Cost $24,650,958) 23,293,204
----------
U.S. Treasury Bonds (16.5%)
2,000,000 7.50%, 11/15/16....................................... 2,139,800
4,000,000 7.25%, 5/15/16........................................ 4,181,160
----------
Total U.S. Treasury Bonds
(Identified Cost $6,696,170) 6,320,960
----------
</TABLE>
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1999
U.S. Government Income Fund
See Notes which are an integral part of the Financial Statements
<TABLE>
<CAPTION>
Market
Shares Value
--------- ------------------------------------------------------- -----------
<C> <S> <C>
Investment Companies (0.8%)
88,974 Dreyfus Treasury Prime Fund............................ $ 88,974
204,954 Fidelity Institutional Treasury Money Market Fund...... 204,954
-----------
Total Investment Companies (Identified Cost $293,928) 293,928
-----------
Total Investments (Identified Cost $39,826,293) (a) $37,827,744
===========
</TABLE>
- -------
(a) The cost of investments for Federal tax purposes amounts to $39,847,902.
The net unrealized depreciation of investments on a Federal tax basis
amounts to $2,020,158 which is comprised of $13,848 appreciation and
$2,034,006 depreciation at December 31, 1999.
ABS--Asset Backed Security
CMO--Collateralized Mortgage Obligation
MTN--Medium Term Note
Note: The categories of investments are shown as a percentage of net assets
($38,274,024) at December 31, 1999.
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1999
U.S. Government Securities Money Market Fund
See Notes which are an integral part of the Financial Statements
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
---------- ----------------------------------------------- ------------
<C> <S> <C>
Commercial Paper (22.0%)
Agricultural Biotechnology(1.5%)
$3,000,000 Monsanto Co., Discount Note, 1/21/00 $ 2,990,250
------------
Beverages (1.5%)
3,000,000 Coca-Cola, Discount Note, 3/1/00 2,971,100
------------
Brokerage Services (3.1%)
3,000,000 Merrill Lynch & Co., Discount Note, 2/1/00 2,986,463
3,000,000 Merril Lynch & Co., Discount Note, 2/22/00 2,974,217
------------
5,960,680
------------
Financial Services (11.2%)
5,000,000 Associates Corp., Discount Note, 1/10/00 4,993,500
3,000,000 Ford Motor Credit Co., Discount Note, 1/14/00 2,993,576
3,000,000 General Electric Capital Corp., Discount Note,
3/03/00 2,969,982
3,000,000 General Electric Capital Corp., Discount Note,
3/20/00 2,961,817
5,000,000 General Motors Acceptance Corp., Discount Note,
2/15/00 4,961,937
3,000,000 General Motors Acceptance Corp., Discount Note
2/11/00 2,980,525
------------
21,861,337
------------
Multi-line Insurance (1.5%)
3,000,000 Allstate Corp., Discount Note, 2/4/00 2,983,368
------------
Pharmaceuticals (1.5%)
3,000,000 Glaxo Wellcome PLC, Discount Note, 2/18/00 2,976,320
------------
Telecommunications (1.6%)
3,000,000 BellSouth, Discount Note, 1/18/00 2,991,642
------------
Total Commercial Paper 42,734,697
------------
U.S. Government Agencies (54.9%)
Federal Agricultural Mortgage Corp.(4.6%)
3,000,000 Discount Note, 11/13/00 2,853,916
3,000,000 Discount Note, 1/12/00 2,994,958
3,000,000 Discount Note, 1/13/00 2,994,450
------------
8,843,324
------------
Federal Farm Credit Bank (6.1%)
7,000,000 5.6%, 3/1/00 6,995,281
5,000,000 Discount Note, 3/31/00 4,928,375
------------
11,923,656
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Security Market
Amount Description Value
---------- ---------------------------------------------------- ------------
<C> <S> <C>
U.S. Government Agencies, continued:
Federal Home Loan Bank (15.6%)
$1,500,000 4.89%, 12/22/00 $ 1,481,928
2,000,000 4.95%, 2/17/00 1,999,532
2,000,000 4.98%, 3/29/00 1,999,310
4,000,000 5.01%, 2/3/00 4,000,000
3,000,000 5.035%, 2/25/00 2,999,801
3,000,000 5.04%, 3/29/00 3,000,193
4,000,000 5.16%, 3/8/2000 4,001,079
4,000,000 5.59%, 1/28/00 3,983,230
3,000,000 Discount Note, 2/1/00 2,985,533
4,000,000 Discount Note, 4/24/00 3,929,700
------------
30,380,306
------------
Federal Home Loan Mortgage Corp. (13.3%)
2,000,000 5.99%, 12/6/00 MTN 1,998,380
4,000,000 Discount Note, 1/10/00 3,994,420
3,000,000 Discount Note, 1/19/00 2,991,630
3,000,000 Discount Note, 1/26/00 2,988,604
3,000,000 Discount Note, 2/4/00 2,984,275
3,000,000 Discount Note, 2/29/00 2,972,860
3,000,000 Discount Note, 3/21/00 2,961,667
5,000,000 Discount Note, 3/30/00 4,932,657
------------
25,824,493
------------
Federal National Mortgage Association (15.3%)
3,000,000 Discount Note, 1/18/00 2,992,322
3,000,000 Discount Note, 1/20/00 2,991,213
5,000,000 Discount Note, 1/21/00 4,984,944
3,000,000 Discount Note, 3/9/00 2,967,700
3,000,000 Discount Note, 3/16/00 2,964,000
3,000,000 Discount Note, 5/18/00 2,936,635
3,000,000 4.97%, 4/12/00 MTN 2,999,590
4,000,000 4.98%, 4/20/00 MTN 3,999,490
3,000,000 5.04%, 2/23/00 MTN 3,000,000
------------
29,835,894
------------
Total U.S. Government Agencies 106,807,673
------------
Repurchase Agreement (23.3%)
45,318,000 Morgan Stanley Dean Witter & Co., 3.5%, dated
12/31/99, due 1/3/00 (Collateralized by $69,838,688
U.S. Government Agency Securities, 6.59%-7.00%,
12/21/28-8/1/37, market value-$46,224,360) 45,318,000
------------
Total Investments (at amortized cost)(a) $194,860,370
============
</TABLE>
- -------
(a) Also represents cost for Federal tax purposes.
MTN--Medium Term Note
Note: The categories of investments are shown as a percentage of net assets
($194,527,502) at December 31, 1999.
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1999
Continued
1. Organization:
The Riverfront Funds, Inc. was organized on March 27, 1990, and 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
Large Company Select Fund, The Riverfront Balanced Fund, The Riverfront Small
Company Select Fund, The Riverfront Income Equity Fund, The Riverfront U.S.
Government Income Fund and The Riverfront U.S. Government Securities Money
Market Fund (each, a "Fund"; and collectively, the "Funds").
The investment objective of the Large Company Select Fund is to seek long term
growth of capital with current income as a secondary objective. 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
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
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 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 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 Large Company Select Fund, the Balanced Fund, the Small Company Select
Fund, the Income Equity Fund and the U.S. Government Income 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 liabilities at the date of the
financial statements and the reported amounts of income and expenses for the
reporting 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 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, 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
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 in the accompanying Statements of Assets and Liabilities to the
extent that short-term gains are not available in a given year.
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 January of the following fiscal year will be taxable to
shareholders in the year declared.
Income and capital gain distributions 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, 1999, the following reclassifications were made to the
financial statements.
<TABLE>
<CAPTION>
Increase (Decrease)
-----------------------------------------
Undistributed
Paid- Net Investment Accumulated Net
In Capital Income Realized Gains
---------- -------------- ---------------
<S> <C> <C> <C>
Large Company Select Fund........... $ -- $740,115 $(740,115)
Balanced Fund....................... -- (1,734) 1,734
Small Company Select Fund........... -- 327,084 (327,084)
Income Equity Fund.................. (79,116) 79,116 --
U.S. Government Income Fund......... (463) 463 --
</TABLE>
Net investment income, net realized gains/losses, and net assets were not
affected by these reclassifications.
Federal Taxes:
It is the Funds' policy 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 is required.
As of December 31, 1999, the following Funds had capital loss carryforwards for
tax purposes which are available to offset future capital gains, if any:
<TABLE>
<S> <C> <C>
Income Equity Fund................................ $6,151,025 Expires 2007
U.S. Government Income Fund....................... 256,740 Expires 2003
U.S. Government Securities Money Market Fund...... 2,230 Expires 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, 2000:
<TABLE>
<S> <C> <C>
U.S. Government Income Fund................................ $32,204
</TABLE>
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.
- --------------------------------------------------------------------------------
Notes to Financial Statements, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1999
Continued
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.
3. Purchases and Sales of Securities:
Purchases and sales of securities (excluding short-term securities) for the
year ended December 31, 1999 are as follows:
<TABLE>
<CAPTION>
Purchases Sales
----------- -----------
<S> <C> <C>
Large Company Select Fund.............................. $47,234,316 $27,486,374
Balanced Fund.......................................... 13,854,590 12,979,362
Small Company Select Fund.............................. 12,411,086 17,914,376
Income Equity Fund..................................... 58,996,543 116,354,319
U.S. Government Income Fund............................ 27,399,787 29,026,559
</TABLE>
4. Capital Share Transactions:
Transactions in capital shares for the Funds were as follows:
<TABLE>
<CAPTION>
Large Company Select Fund
-----------------------------------
Year Ended Year Ended
December 31, 1999 December 31, 1998
----------------- -----------------
<S> <C> <C>
CAPITAL TRANSACTIONS:
Investor A Shares:
Proceeds from shares issued.............. $22,368,396 $ 7,462,897
Dividends reinvested..................... 627,456 6,003,616
Shares redeemed.......................... (7,850,245) (3,998,246)
----------- -----------
Change in net assets from Investor A
share transactions...................... $15,145,607 $ 9,468,267
=========== ===========
Investor B Shares:
Proceeds from shares issued.............. $14,199,068 $ 5,846,765
Dividends reinvested..................... 195,645 1,076,545
Shares redeemed.......................... (2,209,476) (826,312)
----------- -----------
Change in net assets from Investor B
share transactions...................... $12,185,237 $ 6,096,998
=========== ===========
SHARE TRANSACTIONS:
Investor A Shares:
Issued................................... 1,439,010 569,741
Reinvested............................... 33,898 432,540
Redeemed................................. (506,286) (309,699)
----------- -----------
Change in Investor A Shares.............. 966,622 692,582
=========== ===========
Investor B Shares:
Issued................................... 949,060 456,092
Reinvested............................... 10,813 78,735
Redeemed................................. (146,067) (65,435)
----------- -----------
Change in Investor B Shares.............. 813,806 469,392
=========== ===========
</TABLE>
- --------------------------------------------------------------------------------
Notes to Financial Statements, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1999
Continued
4. Capital Share Transactions, continued:
<TABLE>
<CAPTION>
Balanced Fund Small Company
Select Fund
-----------------------------------
- -----------------------------------
Year Ended Year Ended Year Ended
Year Ended
December 31, 1999 December 31, 1998 December 31, 1999
December 31, 1998
----------------- ----------------- -----------------
- -----------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Investor A Shares:
Proceeds from shares
issued............... $ 5,215,058 $ 1,816,435 $ 2,453,810 $
1,355,158
Dividends reinvested.. 167,289 1,709,409 330,134
2,647,256
Shares redeemed....... (3,994,745) (2,408,823) (5,721,071)
(5,805,686)
----------- ----------- -----------
- -----------
Change in net assets
from Investor A
shares transactions.. $1,387,602 $1,117,021 $(2,937,127)
$(1,803,272)
=========== =========== ===========
===========
Investor B Shares:
Proceeds from shares
issued............... $5,451,206 $1,524,737 $368,780
$598,969
Dividends reinvested.. 76,617 1,899,931 25,529
194,970
Shares redeemed....... (2,709,191) (1,765,526) (487,406)
(330,044)
----------- ----------- -----------
- -----------
Change in net assets
from Investor B
share transactions... $ 2,818,632 $ 1,659,142 $ (93,097) $
463,895
=========== =========== ===========
===========
SHARE TRANSACTIONS:
Investor A Shares:
Issued................ 388,753 135,447 301,620
157,466
Reinvested............ 12,432 131,021 28,410
305,335
Redeemed.............. (295,776) (181,427) (708,626)
(669,783)
----------- ----------- -----------
- -----------
Change in Investor A
Shares............... 105,409 85,041 (378,596)
(206,982)
=========== =========== ===========
===========
Investor B Shares:
Issued................ 390,622 109,318
42,601 65,801
Reinvested............ 5,485 140,306
2,145 21,711
Redeemed.............. (192,578) (127,777) (58,866)
(41,980)
----------- ----------- -----------
- -----------
Change in Investor B
Shares............... 203,529 121,847
(14,120) 45,532
=========== =========== ===========
===========
</TABLE>
- --------------------------------------------------------------------------------
Notes to Financial Statements, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1999
Continued
4. Capital Share Transactions, continued:
<TABLE>
<CAPTION>
Income Equity Fund U.S. Government
Income Fund
-----------------------------------
- -----------------------------------
Year Ended Year Ended Year Ended
Year Ended
December 31, 1999 December 31, 1998 December 31, 1999
December 31, 1998
----------------- ----------------- -----------------
- -----------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Investor A Shares:
Proceeds from shares
issued............... $ 3,002,649 $ 4,928,919 $ 2,428,766 $
1,870,036
Dividends reinvested.. 79,709 10,320,240 247,100
247,700
Shares redeemed....... (54,722,808) (14,154,051) (6,794,552)
(8,523,069)
------------ ------------ -----------
- -----------
Change in net assets
from Investor A share
transactions......... $(51,640,450) $ 1,095,108 $(4,118,686)
$(6,405,333)
============ ============ ===========
===========
Investor B Shares:
Proceeds from shares
issued............... $ 356,807 $ 3,230,210 $ 608,314 $
119,490
Dividends reinvested.. 6,786 2,021,050
45,467 36,238
Shares redeemed....... (6,069,959) (4,415,775) (308,471)
(199,775)
------------ ------------ -----------
- -----------
Change in net assets
from Investor B share
transactions......... $ (5,706,366) $ 835,485 $ 345,310 $
(44,047)
============ ============ ===========
===========
SHARE TRANSACTIONS:
Investor A Shares:
Issued................ 282,756 405,411 261,961
194,328
Reinvested............ 7,866 981,947
26,621 25,909
Redeemed.............. (5,331,398) (1,197,255) (716,770)
(888,903)
------------ ------------ -----------
- -----------
Change in Investor A
Shares............... (5,040,776) 190,103 (428,188)
(668,666)
============ ============ ===========
===========
Investor B Shares:
Issued................ 33,158 252,960
57,557 10,979
Reinvested............ 656 188,168
4,314 3,353
Redeemed.............. (563,292) (368,480) (29,205)
(18,450)
------------ ------------ -----------
- -----------
Change in Investor B
Shares............... (529,478) 72,648
32,666 (4,118)
============ ============ ===========
===========
</TABLE>
5. Investment Advisory Fee and Other Transactions with Affiliates:
Investment Advisory Fee--Provident Investment Advisors, Inc., the Fund's
investment adviser (the "Adviser"), has entered into an Investment Advisory
Agreement with the Trust whereby the Adviser supervises and manages the
investment and reinvestment of the assets of the Funds. Under the terms of the
Investment Advisory Agreement, the Adviser is entitled to receive fees based on
a percentage of the average daily net assets of each Fund as listed below. The
Adviser may voluntarily choose to waive any portion of its fee. The Adviser can
modify or terminate this voluntary waiver at any time at its sole discretion.
- --------------------------------------------------------------------------------
Notes to Financial Statements, continued
- --------------------------------------------------------------------------------
The Riverfront Funds December 31, 1999
Continued
5. Investment Advisory Fee and Other Transactions with Affiliates, continued:
<TABLE>
<CAPTION>
Fund Annual Rate
---- -----------
<S> <C>
Large Company Select Fund.......................................... 0.80%
Balanced Fund...................................................... 0.90%
Small Company Select Fund.......................................... 0.80%
Income Equity Fund................................................. 0.95%
Income Fund........................................................ 0.40%
Money Market Fund.................................................. 0.15%
</TABLE>
Administration--Federated Services Company ("FServ"), under an Agreement for
Administrative Services with the Trust, provides the Funds with certain
administrative personnel and services. The fee paid to FServ is equal to 0.17%
of the average daily net assets of each Fund.
Distribution Services Fee--Edgewood Services, Inc., ("Distributor") is the
principal underwriter and distributor of the Trust. The Trust has adopted
Distribution Plans (the "Plans") pursuant to Rule 12b-1 under the 1940 Act.
Under the terms of the Plans, the Funds will compensate the Distributor from
the net assets of the fund to finance activities intended to result in the sale
of the Fund's Investor A Shares and Investor B Shares. The Plans provide that
the Funds may incur annual distribution expenses up to 0.25% of the average
daily net assets of each Fund's Investor A and B Shares and up to 0.75% of the
average daily net assets of each Fund's Investor B Shares to compensate the
Distributor. The Distributor does not retain these amounts generally, but uses
the fee to compensate investment professionals such as banks, broker/dealers,
trust departments of banks, and registered investment advisers, for marketing
activities (such as advertising, printing and distributing prospectuses, and
providing incentives to investment professionals), to promote sales of Shares
so that overall Fund assets are maintained or increased.
Shareholder Service Fee--Under the terms of a Shareholder Services Plan, the
Funds may pay compensation, in an amount not to exceed 0.25% of the average
daily net assets of each Fund's Investor A and B Shares, to banks and other
financial institutions including Provident and its affiliates and the
Distributor for providing shareholder services and maintaining shareholder
accounts. As of December 31, 1999, there were no shareholder servicing
agreements entered into on behalf of the Investor A or B Shares of any of the
Funds.
Custodian, Fund Accounting and Recordkeeping Fees--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.
Transfer and Dividend Disbursing Agent Fees and Expenses--Provident serves as
transfer agent and dividend disbursing agent to the Trust. Under the terms of
the Master Transfer and Recordkeeping Agreement, Provident is entitled to
receive fees based on the number of shareholders of each Fund and to be
reimbursed for certain out-of-pocket expenses.
6. 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>
Balanced Fund........................................ 11.88%
Income Equity Fund................................... 96.42%
</TABLE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
The Riverfront Funds
See Notes which are an integral part of the Financial Statements
<TABLE>
<CAPTION>
Large Company Select Fund
- -----------------------------------------------------------------------
Year Ended December 31, From
January 2,
---------------------------------------------- 1997
through
1999 1998 December 31,
1997 (a)
---------------------- ----------------------
- ------------------------
Investor A Investor B Investor A Investor B Investor
A Investor B
---------- ---------- ---------- ----------
- ---------- ----------
<S> <C> <C> <C> <C>
<C> <C>
Net Asset Value,
Beginning of Period.... $ 13.89 $ 13.69 $ 11.34 $11.28 $
10.00 $10.00
------- ------- ------- ------
- ------- ------
Income from Investment
Operations
Net investment income.. (0.10) (0.18) (0.05) (0.10)
(0.00) (0.04)
Net realized and
unrealized gains
(losses) on
investments........... 4.76 4.63 4.47 4.38
2.77 2.72
------- ------- ------- ------
- ------- ------
Total from Investment
Operations............ 4.66 4.45 4.42 4.28
2.77 2.68
------- ------- ------- ------
- ------- ------
Less Distributions
Net realized gains..... (0.96) (0.96) (1.87) (1.87)
(1.40) (1.40)
Tax return of capital.. -- -- -- --
(0.03) --
------- ------- ------- ------
- ------- ------
Total Distributions.... (0.96) (0.96) (1.87) (1.87)
(1.43) (1.40)
------- ------- ------- ------
- ------- ------
Net Asset Value, End of
Period................. $ 17.59 $ 17.18 $ 13.89 $13.69 $
11.34 $11.28
======= ======= ======= ======
======= ======
Total Return (excludes
sales/redemption
charge)................ 33.57% 32.52% 39.03% 38.00%
27.93%(b) 26.97%(b)
Ratios to Average Net
Assets:
Expenses................ 1.51% 2.26% 1.66% 2.41%
1.69%(c) 2.47%(c)
Net investment loss..... (0.75)% (1.50)% (0.48)% (1.28)%
0.00%(c) (1.10)%(c)
Supplementary Data:
Net Assets, end of
period (000 omitted)... $81,318 $25,793 $50,801 $9,416
$33,614 $2,464
Portfolio Turnover (d).. 35% 35% 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.
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
The Riverfront Funds
See Notes which are an integral part of the Financial Statements
<TABLE>
<CAPTION>
Balanced Fund
- --------------------------------------------------------------------------------------------------
Years Ended December 31,
- --------------------------------------------------------------------------------------------------
1999 1998
1997 1996 1995
--------------------- --------------------- ---------------------
- --------------------- ----------
Investor A Investor B Investor A Investor B Investor A
Investor B Investor A Investor B Investor A
---------- ---------- ---------- ---------- ---------- ----------
- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
<C> <C> <C>
Net Asset Value,
Beginning of
Period.......... $ 13.04 $ 13.56 $ 12.30 $ 12.71 $11.69 $ 12.04
$ 11.36 $ 11.70 $ 9.79
------- ------- ------- ------- ------ -------
- ------- ------- ------
Income from
Investment
Operations:
Net investment
income......... 0.18 0.07 0.23 0.11 0.23
0.12 0.31 0.26 0.35
Net realized and
unrealized
gains on
investments.... 1.51 1.56 2.84 2.95 1.71
1.77 0.33 0.34 1.66
------- ------- ------- ------- ------ -------
- ------- ------- ------
Total from
investment
operations..... 1.69 1.63 3.07 3.06 1.94
1.89 0.64 0.60 2.01
------- ------- ------- ------- ------ -------
- ------- ------- ------
Less
Distributions:
Net investment
income......... (0.18) (0.07) (0.23) (0.11) (0.23)
(0.12) (0.31) (0.26) (0.34)
In excess of net
investment
income......... -- -- (2.10) (2.10) (1.10)
(1.10) -- -- (0.10)
Net realized
gains.......... (1.15) (1.15) -- -- --
- -- -- -- --
------- ------- ------- ------- ------ -------
- ------- ------- ------
Total
distributions.. (1.33) (1.22) (2.33) (2.21) (1.33)
(1.22) (0.31) (0.26) (0.44)
------- ------- ------- ------- ------ -------
- ------- ------- ------
Net Asset Value,
End of Period... $ 13.40 $ 13.97 $ 13.04 $ 13.56 $12.30 $ 12.71
$ 11.69 $ 12.04 $11.36
======= ======= ======= ======= ====== =======
======= ======= ======
Total Return
(excludes
sales/redemption
charge)......... 13.15% 12.10% 25.29% 24.34% 16.77%
15.82% 5.76% 5.27% 20.83%
Ratios to Average
Net Assets:
Expenses......... 1.61% 2.42% 1.69% 2.50% 1.86%
2.72% 1.70% 2.54% 1.28%
Net investment
income........... 1.32% 0.52% 1.65% 0.84% 1.80%
0.93% 2.87% 2.03% 3.48%
Expenses (before
waivers)*....... 1.77% 2.52% 1.85% 2.60% 2.07%
2.82% 1.94% 2.68% 1.67%
Net investment
income (before
waivers)*....... 1.15% 0.42% 1.49% 0.74% 1.59%
0.83% 2.63% 1.89% 3.09%
Supplemental
Data:
Net Assets, end
of period (000
omitted)........ $12,962 $17,167 $11,247 $13,895 $9,563 $11,483
$10,786 $10,008 $9,427
Portfolio
Turnover (d)..... 51% 51% 118% 118% 102%
102% 98% 98% 13%
<CAPTION>
January 17,
1995 to
December 31,
1995 (a)
-------------
Investor B
-------------
<S> <C>
Net Asset Value,
Beginning of
Period.......... $10.00
-------------
Income from
Investment
Operations:
Net investment
income......... 0.25
Net realized and
unrealized
gains on
investments.... 1.79
-------------
Total from
investment
operations..... 2.04
-------------
Less
Distributions:
Net investment
income......... (0.24)
In excess of net
investment
income......... (0.10)
Net realized
gains.......... --
-------------
Total
distributions.. (0.34)
-------------
Net Asset Value,
End of Period... $11.70
=============
Total Return
(excludes
sales/redemption
charge)......... 20.53%(b)
Ratios to Average
Net Assets:
Expenses......... 2.04%(c)
Net investment
income........... 2.69%(c)
Expenses (before
waivers)*....... 2.84%(c)
Net investment
income (before
waivers)*....... 1.89%(c)
Supplemental
Data:
Net Assets, end
of period (000
omitted)........ $5,030
Portfolio
Turnover (d)..... 13%
</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) Annualized.
(d) Portfolio turnover is calculated on the basis of the Portfolio as a whole
without distinguishing between the classes of shares issued.
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
The Riverfront Funds
See Notes which are an integral part of the Financial Statements
<TABLE>
<CAPTION>
Small Company Select Fund
- -------------------------------------------------------------------------------------------
Years Ended December 31,
- -------------------------------------------------------------------------------------------
1999 1998
1997 1996
---------------------- ----------------------
- ---------------------- ----------------------
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........... $ 7.89 $ 8.14 $ 9.17 $ 9.49 $ 9.43 $
9.77 $ 9.50 $9.91
------- ------ ------- ------ -------
- ------ ------- -----
Income from
Investment
Operations:
Net investment
(loss).......... (0.14) (0.20) (0.09) (0.15) (0.04)
(0.08) (0.14) (0.15)
Net realized and
unrealized gains
(losses) on
investment...... 3.85 3.94 (0.01) (0.02) 1.75
1.77 1.10 1.04
------- ------ ------- ------ -------
- ------ ------- -----
Total from
investment
operations...... 3.71 3.74 (0.10) (0.17) 1.71
1.69 0.96 0.89
------- ------ ------- ------ -------
- ------ ------- -----
Less Distributions
Net realized
gains........... (0.16) (0.16) -- -- --
- -- -- --
In excess of net
investment
income.......... -- -- (1.18) (1.18) (1.97)
(1.97) (1.03) (1.03)
------- ------ ------- ------ -------
- ------ ------- -----
Total
distributions.. (0.16) (0.16) (1.18) (1.18) (1.97)
(1.97) (1.03) (1.03)
------- ------ ------- ------ -------
- ------ ------- -----
Net Asset Value,
End of Period.... $ 11.44 $11.72 $ 7.89 $ 8.14 $ 9.17 $
9.49 $ 9.43 $9.77
======= ====== ======= ====== =======
====== ======= =====
Total Return
(excludes
sales/redemption
charge).......... 47.08% 46.01% (2.26)% (2.96)% 18.79%
17.86% 10.17% 9.05%
Ratios to Average
Net Assets:
Expenses.......... 1.96% 2.71% 1.97% 2.72% 2.11%
2.86% 1.91% 2.64%
Net investment
(loss)........... (1.62)% (2.37)% (1.08)% (1.88)% (0.43)%
(1.20)% (1.25)% (2.01)%
Expenses (before
waivers)*........ 1.96% 2.71% 1.97% 2.72% 2.11%
2.86% 1.91% 2.64%
Net investment
income (loss)
(before
waivers)*........ (1.62)% (2.37)% (1.08)% (1.88)% (0.43)%
(1.20)% (1.25)% (2.01)%
Supplemental Data:
Net Assets, end of
period (000
omitted)......... $23,633 $1,931 $19,826 $1,455 $24,312
$1,265 $31,227 $ 687
Portfolio Turnover
(e)............... 65% 65% 114% 114% 67%
67% 162% 162%
<CAPTION>
October 1, 1995 to Year Ended
December 31, September 30,
1995 (b) 1995 (f)
------------------------------ -------------
Investor A Investor B (a)
-------------- ---------------
<S> <C> <C> <C>
Net Asset Value,
Beginning of
Period........... $ 10.00 $10.00 $ 8.25
-------------- --------------- -------------
Income from
Investment
Operations:
Net investment
(loss).......... (0.01) (0.01) (0.07)
Net realized and
unrealized gains
(losses) on
investment...... (0.12) (0.08) 2.14
-------------- --------------- -------------
Total from
investment
operations...... (0.13) (0.09) 2.07
-------------- --------------- -------------
Less Distributions
Net realized
gains........... -- -- --
In excess of net
investment
income.......... (0.37) -- (0.32)
-------------- --------------- -------------
Total
distributions.. (0.37) -- (0.32)
-------------- --------------- -------------
Net Asset Value,
End of Period.... $ 9.50 $ 9.91 $ 10.00
============== =============== =============
Total Return
(excludes
sales/redemption
charge).......... (1.20)%(c) (.90)%(c) 25.12%
Ratios to Average
Net Assets:
Expenses.......... 1.76%(d) 2.30%(d) 2.61%
Net investment
(loss)........... (0.49)%(d) (1.69)%(d) (0.73)%
Expenses (before
waivers)*........ 1.77%(d) 2.39%(d) 2.61%
Net investment
income (loss)
(before
waivers)*........ (0.50)%(d) (1.78)%(d) (0.73)%
Supplemental Data:
Net Assets, end of
period (000
omitted)......... $40,995 $ 72 $44,500
Portfolio Turnover
(e)............... 46% 46% 197%
</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 Small Company Select 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 Small Company Select 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.
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
The Riverfront Funds
See Notes which are an integral part of the Financial Statements
<TABLE>
<CAPTION>
Income Equity Fund
- ------------------------------------------------------------------------------------------------------
Years ended December 31,
- ------------------------------------------------------------------------------------------------------
1999 1998
1997 1996 1995
------------------------ ---------------------
- --------------------- --------------------- ----------
Investor A Investor B Investor A Investor B Investor A
Investor B Investor A Investor B Investor A
---------- ---------- ---------- ---------- ----------
- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
<C> <C> <C> <C>
Net Asset Value,
Beginning of
Period.......... $ 10.47 $ 10.76 $ 11.68 $ 11.98 $ 11.92 $
12.16 $ 11.70 $11.85 $ 10.15
------- ------- ------- ------- -------
- ------- ------- ------ -------
Income from
Investment
Operations:
Net investment
income......... 0.03 (0.07) 0.12 0.03 0.16
0.06 0.21 0.12 0.27
Net realized and
unrealized
gains (losses)
on
investments.... 0.75 0.79 0.25 0.25 3.11
3.17 2.12 2.21 2.89
------- ------- ------- ------- -------
- ------- ------- ------ -------
Total from
Investment
Operations..... 0.78 0.72 0.37 0.28 3.27
3.23 2.33 2.33 3.16
------- ------- ------- ------- -------
- ------- ------- ------ -------
Less
Distributions:
Net investment
income......... (0.00)(e) -- (0.12) (0.04) (0.16)
(0.06) (0.21) (0.12) (0.27)
In excess of net
investment
income......... -- -- (1.46) (1.46) (3.35)
(3.35) (1.90) (1.90) (1.34)
Tax return of
capital........ (0.03) (0.01) -- -- --
- -- -- -- --
------- ------- ------- ------- -------
- ------- ------- ------ -------
Total
distributions.. (0.03) (0.01) (1.58) (1.50) (3.51)
(3.41) (2.11) (2.02) (1.61)
------- ------- ------- ------- -------
- ------- ------- ------ -------
Net Asset Value,
End of Period... $ 11.22 $ 11.47 $ 10.47 $ 10.76 $ 11.68 $
11.98 $ 11.92 $12.16 $ 11.70
======= ======= ======= ======= =======
======= ======= ====== =======
Total return
(excludes
sales/redemption
charge)......... 7.44% 6.65% 3.37% 2.51% 28.20%
27.19% 19.88% 19.67% 31.45%
Ratios to Average
Net Assets:
Expenses......... 1.84% 2.63% 1.76% 2.54% 1.75%
2.55% 1.76% 2.48% 1.49%
Net investment
income.......... 0.22% (0.50)% 1.03% 0.25% 1.21%
0.40% 1.62% 0.88% 2.27%
Expenses (before
waivers)*....... 1.87% 2.63% 1.79% 2.54% 1.80%
2.55% 1.85% 2.54% 1.74%
Net investment
income (before
waivers)*....... 0.19% (0.50)% 1.00% 0.25% 1.16%
0.40% 1.53% 0.82% 2.02%
Supplementary
Data:
Net Assets, at
end of period
(000)........... $26,075 $11,574 $77,144 $16,563 $83,841
$17,563 $73,368 $7,632 $60,845
Portfolio
Turnover (c)..... 128% 128% 129% 129% 157%
157% 166% 166% 180%
<CAPTION>
January 17,
1995 to
December 31,
1995 (a)
-------------
Investor B
-------------
<S> <C>
Net Asset Value,
Beginning of
Period.......... $10.00
-------------
Income from
Investment
Operations:
Net investment
income......... 0.13
Net realized and
unrealized
gains (losses)
on
investments.... 2.78
-------------
Total from
Investment
Operations..... 2.91
-------------
Less
Distributions:
Net investment
income......... (0.13)
In excess of net
investment
income......... (0.93)
Tax return of
capital........ --
-------------
Total
distributions.. (1.06)
-------------
Net Asset Value,
End of Period... $11.85
=============
Total return
(excludes
sales/redemption
charge)......... 29.28%(d)
Ratios to Average
Net Assets:
Expenses......... 2.46%(b)
Net investment
income.......... 1.12%(b)
Expenses (before
waivers)*....... 2.51%(b)
Net investment
income (before
waivers)*....... 1.07%
Supplementary
Data:
Net Assets, at
end of period
(000)........... $2,833
Portfolio
Turnover (c)..... 180%
</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) Actual Amount $(0.0038).
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
The Riverfront Funds
<TABLE>
<CAPTION>
U.S. Government Income Fund
- ---------------------------------------------------------------------------------------------------
Years ended December 31,
- ---------------------------------------------------------------------------------------------------
1999 1998
1997 1996 1995
---------------------- --------------------- ---------------------
- --------------------- ----------
Investor A Investor B Investor A Investor B Investor A
Investor B Investor A Investor B Investor A
---------- ---------- ---------- ---------- ---------- ----------
- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
<C> <C> <C>
Net Asset Value,
Beginning of
Period.......... $ 9.65 $10.93 $ 9.48 $10.68 $ 9.43
$10.64 $ 9.71 $10.95 $ 8.92
Income from
Investment
Operations:
Net investment
income......... 0.48 0.45 0.47 0.44 0.49
0.48 0.52 0.49 0.54
Net realized and
unrealized
gains (losses)
on
investments.... (0.62) (0.69) 0.17 0.19 0.14
0.14 (0.29) (0.31) 0.79
------- ------ ------- ------ -------
- ------ ------- ------ -------
Total from
investment
operations..... (0.14) (0.24) 0.64 0.63 0.63
0.62 0.23 0.18 1.33
------- ------ ------- ------ -------
- ------ ------- ------ -------
Less
Distributions:
Net investment
income......... (0.49) (0.41) (0.47) (0.38) (0.50)
(0.49) (0.51) (0.49) (0.54)
In excess of net
investment
income......... -- -- -- -- (0.08)
(0.09) -- -- --
------- ------ ------- ------ -------
- ------ ------- ------ -------
Total
Distributions.. (0.49) (0.41) (0.47) (0.38) (0.58)
(0.58) (0.51) (0.49) (0.54)
------- ------ ------- ------ -------
- ------ ------- ------ -------
Net Asset Value,
End of Period... $ 9.02 $10.28 $ 9.65 $10.93 $ 9.48
$10.68 $ 9.43 $10.64 $ 9.71
======= ====== ======= ====== =======
====== ======= ====== =======
Total Return
(excludes
sales/redemption
charge)......... (1.43)% (2.25)% 6.95% 6.03% 6.94%
6.07% 2.51% 1.72% 15.22%
Ratios to Average
Net Assets:
Expenses......... 1.08% 1.89% 1.12% 1.93% 1.14%
1.95% 1.11% 1.96% 1.09%
Net investment
income........... 5.18% 4.40% 4.90% 4.09% 5.40%
4.56% 5.45% 4.59% 5.74%
Expenses (before
waivers)*....... 1.14% 1.89% 1.18% 1.93% 1.20%
1.95% 1.20% 1.96% 1.18%
Net investment
income (before
waivers)*....... 5.12% 4.40% 4.84% 4.09% 5.34%
4.56% 5.36% 4.59% 5.65%
Supplemental
Data:
Net Assets, end
of period (000
omitted)........ $36,720 $1,554 $43,411 $1,294 $49,017
$1,309 $33,694 $1,296 $36,538
Portfolio
Turnover (c)..... 74% 74% 109% 109% 71%
71% 53% 53% 75%
<CAPTION>
January 17,
1995 to
December 31,
1995 (a)
-------------
Investor B
-------------
<S> <C>
Net Asset Value,
Beginning of
Period.......... $10.00
Income from
Investment
Operations:
Net investment
income......... 0.43
Net realized and
unrealized
gains (losses)
on
investments.... 0.94
-------------
Total from
investment
operations..... 1.37
-------------
Less
Distributions:
Net investment
income......... (0.42)
In excess of net
investment
income......... --
-------------
Total
Distributions.. (0.42)
-------------
Net Asset Value,
End of Period... $10.95
=============
Total Return
(excludes
sales/redemption
charge)......... 13.96%(d)
Ratios to Average
Net Assets:
Expenses......... 1.90%(b)
Net investment
income........... 4.80%(b)
Expenses (before
waivers)*....... 1.90%(b)
Net investment
income (before
waivers)*....... 4.80%(b)
Supplemental
Data:
Net Assets, end
of period (000
omitted)........ $1,263
Portfolio
Turnover (c)..... 75%
</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.
See Notes which are an integral part of the Financial Statements
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
The Riverfront Funds
<TABLE>
<CAPTION>
U.S. Government Securities Money Market Fund
------------------------------------------------
Years Ended December 31,
------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year.......... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- --------
Income from Investment
Operations:
Net investment income...... 0.045 0.048 0.049 0.046 0.050
-------- -------- -------- -------- --------
Less Distributions:
Net investment income...... (0.045) (0.048) (0.049) (0.046) (0.050)
-------- -------- -------- -------- --------
Net Asset Value,
End of Year................ $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ========
Total Return............... 4.61% 4.93% 5.02% 4.89% 5.52%
Ratios to Average Net
assets:
Expenses.................... 0.58% 0.66% 0.64% 0.59% 0.58%
Net investment income....... 4.53% 4.82% 4.90% 4.78% 5.34%
Expenses (before waivers)*.. 0.73% 0.81% 0.79% 0.84% 0.83%
Net investment income
(before waivers)*........... 4.38% 4.67% 4.75% 4.53% 5.09%
Supplemental Data:
Net Assets, end of year (000
omitted).................... $194,528 $188,847 $142,569 $181,017 $157,495
</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.
See Notes which are an integral part of the Financial Statements
The Riverfront Funds, Inc.
INVESTMENT ADVISER
Provident Investment Advisors, Inc.
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
This report must be preceded or accompanied by the Funds' prospectus which
contains facts concerning its objectives and policies, management fees, expenses
and other information.
Cusip 768709602 Cusip 768709701 Cusip 768709404 Cusip 768709800 Cusip 768709842
Cusip 768709834 Cusip 768709107 Cusip 768709867 Cusip 768709859 Cusip 768709305
Cusip 768709875 G02568-01 (2/00)
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 Investor A Shares (No Load) of
The Riverfront Large Company Select Fund (the "Fund") are represented by a
solid line. The Lipper Large-Cap Core Average (the "LCCA") 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 LCCA, and the S&P 500. The "x"
axis reflects computation periods from August 30, 1986 to December 31,
1999. 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 LCCA, and the S&P 500. The
ending values were $69,273, $59,977, and $70,063, 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, 1999. The total returns were 33.57%, 31.95%, 18.34%, and
16.49%, respectively.
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 of The
Riverfront Large Company Select Fund (the "Fund"), based on a 4.50% sales
charge, are represented by a solid line. The Lipper Large-Cap Core Average
(the "LCCA") 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 LCCA, and the S&P 500. The "x" axis reflects computation
periods from August 30, 1986 to December 31, 1999. 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 LCCA, and the S&P 500. The ending
values were $62,888, $59,977, and $70,063, 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, 1999. The total returns were 27.60%, 30.74%,
17.79%, and 16.08%, 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 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 Large-Cap Core Average (the "LCCA") 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
LCCA, and the S&P 500. The "x" axis reflects computation periods from
January 2, 1997 to December 31, 1999. 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 LCCA, and the S&P 500.
The ending values were $23,033, $19,547, and $20,762, 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, 1999. The total returns were
28.52%, and 31.10%, 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 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,
1999. 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 $20,981, $34,255,
$13,943, $20,180, and $22,390, 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 (September 1, 1994) periods ended December 31, 1999.
The total returns were 13.15%,%16.17 and 14.91%, 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 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,
1999. 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
$19,140, $34,255, $13,943, $20,180, and $22,390, 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 (September 1,
1994) periods ended December 31, 1999. The total returns were 8.09%, 15.10%
and 13.92%, 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 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, 1999. 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
$17,771, $35,122, 16,182, $20,722, and $22,996, 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, 1999. The total returns were
8.10% and 15.34%, respectively.
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 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, 1999. 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 $54,524, $40,875, $38,817, and
$45,923, 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, 1999. The total
returns were 47.08%, 19.20%, 16.75%, and 12.25%, 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 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, 1999.
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 $49,752, $31,115, $38,817, and
$45,923, 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, 1999. The total returns were 40.49%, 18.09%, 16.20%, and 11.84%,
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 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, 1999. 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 $17,210, $17,209,
$16,980, and $19,047, 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, 1999. The total returns were 42.00% and 14.59%,
respectively.
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 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, 1999. 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
$28,197, $39,577, and $26,529, 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, 1999. The
total returns were 7.44%, 17.53%, and 15.41%, 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 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, 1999. 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 $25,726,
$39,577, and $26,529, 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, 1999. The total returns were 2.64%, 16.45%, and 14.68%, 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 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, 1999. 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 $21,318, $35,122, and $22,655, 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, 1999. The total
returns were2.65% and 16.50%, respectively.
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 A Shares (No Load) of
The Riverfront U.S. Government Income Fund (the "Fund") are represented by
a solid line. The Lehman Brothers U.S. Government Index (the "LBUSGI") is
represented by a dashed line. The Lipper Intermediate U.S. Government Index
(the "LIUSGI") 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 LBUSGI, and
the LIUSGI. The "x" axis reflects computation periods from October 1, 1992
to December 31, 1999. 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 LBUSGI and the
LIUSGI. The ending values were $13,457, $15,311, and $14,373, 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, 1999. The total returns were -1.43%, 5.89%, and 4.19%,
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 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 U.S.
Government Index (the "LBUSGI") is represented by a dashed line. The Lipper
Intermediate U.S. Government Index (the "LIUSGI") 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 LBUSGI, and the
LIUSGI. The "x" axis reflects computation periods from October 1, 1992 to
December 31, 1999. 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 LBUSGI, and the LIUSGI. The ending values were $12,281, $15,311, and
$14,373, 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, 1999. The
total returns were -5.82%, 4.92%, and 3.53 %, 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 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 U.S. Government Index (the "LBUSGI") is
represented by a dashed line. The Lipper Intermediate U.S. Government Index
(the "LIUSGI") 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 LBUSGI, and the LIUSGI. The "x" axis
reflects computation periods from January 17, 1995 to December 31, 1999.
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 LBUSGI, and the LIUSGI. The ending values were $12,543,
$14,314, and $13,783, 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, 1999. The total returns were -6.01% and 4.68%,
respectively.
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 shares of The Riverfront U.S.
Government Securities Money Market Fund (the "Fund") are represented by a
solid line. The U.S. 30-Day Treasury Bill Index 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 shares of the Fund and
the U.S. 30-Day Treasury Bill Index. The "x" axis reflects computation
periods from 10/1/1992 to December 31, 1999. 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 $13,736 and $14,200,
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, 1999, and the 7-day net yield. The total returns were 4.61%, 4.99%, and
4.53%, respectively, and the net yield was 5.06%.
