[LOGO]
THE VIRTUS FUNDS
Combined
Semi-Annual Report
. . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 1997
. The U.S. Government Securities Fund
. The Style Manager: Large Cap Fund
. The Style Manager Fund
. The Virginia Municipal Bond Fund
. The Maryland Municipal Bond Fund
. The Treasury Money Market Fund
. The Money Market Fund
. The Tax-Free Money Market Fund
Funds Managed by
[LOGO OF VIRTUS CAPITAL MANAGEMENT, INC.]
VIRTUS(sm)
CAPITAL MANAGEMENT, INC.
The Investment Adviser to The Virtus Funds is Virtus Capital Management, Inc.,
a subsidiary of Signet Banking Corporation. The Virtus Funds are administered
by subsidiaries of Federated Investors, independent of Signet.
Investment products offered through Signet Financial Services, Inc. are not
deposits, obligations of, or guaranteed by Signet Bank, and are not insured by
FDIC or any Federal agency. In addition, they involve risk, including possible
loss of principal invested. Member NASD.
Virtus Capital Management, Inc. is the investment adviser for The Virtus Funds.
Federated Securities Corp. is the distributor of The Funds.
Federated Securities Corp., Distributor, is independent of Signet Bank.
MESSAGE TO SHAREHOLDERS
- -------------------------------------------------------------------------------
Dear Investor:
I am pleased to present your Semi-Annual Report for The Virtus Funds, which
covers the six-month period from October 1, 1996 through March 31, 1997.
As always, this report contains complete financial information--including a
commentary by the portfolio manager and a list of holdings--for every fund in
the Virtus family.
I encourage you to take a few minutes to review the following highlights for
each fund over the six-month period. During the six-month reporting period,
the stock market continued to climb, although it experienced significant
volatility late in the period. Bond market performance has been impacted by
market uncertainty about the economy and a rate increase by the Federal
Reserve Board (the "Fed") in late March. The fund-by-fund performance
highlights are as follows:
. THE U.S. GOVERNMENT SECURITIES FUND paid dividends of $0.31 per share for
Investment Shares ($0.32 for Trust Shares). The fund produced a total return
of 1.87% for Investment Shares, based on net asset value (2% for Trust
Shares).* The fund's net asset value decreased by 1% from the first day of
the period to the last day of the period. At the end of the reporting
period, net assets stood at more than $173 million.
. THE STYLE MANAGER: LARGE CAP FUND delivered a competitive total return of
11.28% for Investment Shares, based on net asset value, (11.35% for Trust
Shares).* The fund paid dividends of $0.09 per share and capital gains of
$1.83 per share for Investment Shares (and dividends of $0.11 per share and
capital gains of $1.83 per share for Trust Shares). The fund's net asset
value decreased by 2% from the first day of the period to the last day of
the period. At the end of the reporting period, net assets stood at more
than $92 million.
. THE STYLE MANAGER FUND produced a strong total return, based on net asset
value, of 11.02% through dividends totaling $0.18 per share, capital gains
of $0.63 per share, and a 3% increase in net asset value.* Net assets stood
at more than $62 million on the last day of the period.
. THE VIRGINIA MUNICIPAL BOND FUND paid double-tax-free dividends** of $0.21
per share for Investment Shares ($0.22 for Trust Shares). The fund produced
a total return of 1.66% for Investment Shares, based on net asset value
(1.79% for Trust Shares).* The fund's net asset value decreased slightly by
.2% from the first day of the period to the last day of the period.* Net
assets totaled more than $86 million on the last day of the reporting
period.
. THE MARYLAND MUNICIPAL BOND FUND paid double-tax-free dividends** of $0.19
per share for Investment Shares ($0.20 in dividends for Trust Shares). The
fund produced a total return of 1.40% for Investment Shares, based on net
asset value (1.53% for Trust Shares).* The fund's net asset value decreased
slightly by .4% from the first day of the period to the last day of the
period. At the end of the reporting period, net assets stood at more than
$35 million.
. THE TREASURY MONEY MARKET FUND, a portfolio of U.S. Treasury money market
securities, paid dividends totaling $0.02 per share for Trust Shares and
$0.02 per share for Investment Shares. At the end of the period, fund net
assets reached $390 million.+
. THE MONEY MARKET FUND paid dividends totaling $0.02 per share for both Trust
Shares and Investment Shares through its portfolio of high-quality money
market securities. The fund ended the reporting period with more than $252
million in net assets.+
. THE TAX-FREE MONEY MARKET FUND, a portfolio of municipal money market
securities, paid tax-free dividends totaling $0.01 per share.++ At the end
of the reporting period, net assets stood at more than $55 million.+
Thank you for pursuing your financial goals through The Virtus Funds. We look
forward to keeping you informed about the progress of your investment.
Sincerely,
/s/ Gary M. Allen
Garry M. Allen Chief Investment Officer Virtus Capital Management Investment
Adviser to The Virtus Funds
May 15, 1997
- --------
* Performance quoted reflects past performance. 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. Adjusted for the Funds'
contingent deferred sales charge, the total returns of The Virtus Funds
were as follows: The U.S. Government Securities Fund (Investment Shares):
(0.20%); The Style Manager: Large Cap Fund (Investment Shares) 9.02%; The
Style Manager Fund: 8.87%: The Virginia Municipal Bond Fund (Investment
Shares): (0.34%); and The Maryland Municipal Bond Fund (Investment Shares):
(0.61%).
** Income may be subject to the federal alternative minimum tax.
+ Although money market funds seek to maintain a stable net asset value of
$1.00 a share, there is no guarantee that they will be able to do so. An
investment in the fund is not insured or guaranteed by the U.S. government.
++ Income may be subject to the federal alternative minimum tax and state and
local taxes.
INVESTMENT REVIEW
The U.S. Government Securities Fund
- -------------------------------------------------------------------------------
Interest rates remained stable for the six month period ended March 31, 1997,
rising 20 to 30 basis points in yield. Overall, 30-year Treasury rates traded
in a range of 6.35% to 7.15%, very similar to the range seen in the last six-
month period. We again commend the Fed for engineering a stable interest rate
environment by effectively controlling economic growth and inflation
expectations. Total returns (coupon income plus changes in share price) for
the period were modest at 2.00% (Trust shares). As interest rates rose during
the period, the price of each share fell slightly reducing your total return
to below your income yield.
We maintained our longer than average maturity posture from June of 1996
through mid-November 1996. Believing that interest rates had fallen about as
far as they should, we shortened our average maturities to be in line with the
Lehman Brothers Intermediate Government Index (the "LBIGI")* in mid-November.
Shortly thereafter, interest rates rose. As an example, for the five-year
Treasury Note, interest rates dropped from 6.45% to 5.96% (on November 15,
1996) before climbing back up to 6.75% at March 31, 1997. We were generally
under-invested in mortgage-backed securities for the period, which provided a
healthy return from both their higher coupon income and price appreciation.
Overall, your total return, based on net asset value, of 2.00% for Trust
Shares, compares favorably to a return of 2.28% observed by the LBIGI.
While we believe the Fed has done an outstanding job in controlling economic
growth, more and more signs emerge that the economy may be growing at a faster
rate than is desired. While most signs of inflation are currently benign, a
healthy economic environment tends to drive up prices and increase inflation,
which has a negative impact on the bond market. Given this environment, the
Fed increased short-term interest rates in late March and we expect them to
increase short-term interest rates by 25 or 50 basis points in the next few
months. Given this outlook, we expect to see short-term interest rates
increase and to see a modest increase in the long-term interest rates before
the effects of higher short-term interest rates slow down economic growth.
Under this scenario, we will maintain our average maturity at slightly below
the LBIGI. Since mortgage-backed securities offer the lowest yield advantage
over Treasuries seen in several years, we intend to continue to add mortgages
to the portfolio.
- --------
* Lehman Brothers Intermediate Government Index is an unmanaged index
comprised of all publicly issued, non-convertible domestic debt of the U.S.
government or any agency thereof or any quasi-federal corporation and of
corporate debt guaranteed by the U.S. government. Investments cannot be made
in an index.
INVESTMENT REVIEW
The Style Manager: Large Cap Fund
- -------------------------------------------------------------------------------
For the six month period from October 1, 1996 through March 31, 1997, The
Style Manager: Large Cap Fund participated fully in the strong upward movement
in large cap stocks. The fund's Trust Shares and Investment Shares reported a
total return of 11.35% and 11.28%, respectively, based on net asset value,
while the Standard & Poor's Composite 500 Stock Index ("S&P 500")* returned
11.30%. The 1996 year ended strongly, and large cap returns were less than 200
basis points apart for large cap value stocks and large cap growth stocks for
the year.
The S&P 500 return of 2.6% for the first quarter 1997 outdistanced the Russell
2000 Index** which generated a negative return of (5.17%) for the same period.
In large cap, growth outpaced value; whereas in small cap, value significantly
outperformed growth.
In the first quarter of 1997, the major style opportunity existed in the small
cap end of the equity market. Large cap growth style leadership was again
narrow in the number of stocks beating the S&P 500. Value outperformed growth
in small cap, medium cap and the Russell Top 200 Index*** large cap stocks.
Only in the S&P 500 did growth outperform value. This points to the narrowness
of large cap stock leadership overall. Our current large cap positioning
should benefit from this overall movement toward value stocks.
We continue a strategy of capital preservation and value stock positioning in
our style driven accounts. The stock market is now highly sensitive to
economic events as we are over seven years without a recession.
- --------
*The S&P 500 is an unmanaged index comprised of common stocks in industry,
transportation, and financial and public utility companies. Investments
cannot be made in an index.
**The Russell 2000 is an unmanaged capitalization weighted index comprised of
2,000 small capitalization common stocks. Investments cannot be made in an
index.
*** Russell Top 200TM is an unmanaged index that measures the performance of
the 200 largest companies in the Russell 1000 Index, which represents
approximately 65% of the total market capitalization of the Russell 1000
Index. Investments cannot be made in an index.
INVESTMENT REVIEW
The Style Manager Fund
- -------------------------------------------------------------------------------
The S&P 500 return of 2.6% for the first quarter 1997 outdistanced the Russell
2000 Index which generated a negative return of (5.17%) for the same period.
In large cap, growth outpaced value; whereas in small cap, value significantly
outperformed growth.
The first quarter 1997 was one of the top five in the history of the Russell
2000 Index for return spreads between small value and small growth stocks.
Small value outperformed small growth by over 1,000 basis points in the first
quarter 1997. We were positioned correctly for this outperformance. Also, the
back-to-back quarters of the fourth quarter 1996 and the first quarter 1997
were the worst two quarters for the Russell 2000 small growth stocks since the
benchmark began in 1979. Again, we were positioned correctly in small value.
The Russell 2000 returned (0.24%) for the six months ended March 31, 1997. The
Style Manager Fund returned 11.02% for the same six-month period due to our
correct positioning on the capital preservation value side of small stocks.
In the first quarter 1997, the major style opportunity existed in the small
cap end of the equity market. Large cap growth style leadership was again
narrow in the number of stocks beating the S&P 500. Value outperformed growth
in small cap, medium cap and the Russell Top 200 Index large cap stocks. Only
in the S&P 500 did large growth outperform large value. This points to the
narrowness of large cap stock leadership overall.
We continue a strategy of capital preservation and value stock positioning in
our style driven accounts. The stock market is now highly sensitive to
economic events as we are over seven years without a recession.
INVESTMENT REVIEW
The Virginia Municipal Bond Fund
- -------------------------------------------------------------------------------
The fixed income markets began 1997 with a negative tone due to a rise in
interest rates. Interest rates across the yield curve have risen because of
stronger economic growth and fears of future inflation. We believe the Fed
will raise short-term rates again in the near future to prevent any inflation
pressures. This would cause the yield curve to flatten, with short-term rates
rising considerably more than long-term rates. The rise in rates may lead to
an economic slowdown towards the later half of 1997. As the economy slows,
this should, in turn, cause interest rates to fall once again.
Municipal bonds outperformed Treasuries as yields rose by preserving more of
their value. This caused municipals to be slightly expensive versus Treasuries
on a historical basis.
We are maintaining a neutral average maturity and duration in The Virginia
Municipal Bond Fund.
INVESTMENT REVIEW
The Maryland Municipal Bond Fund
- -------------------------------------------------------------------------------
The fixed income markets began 1997 with a negative tone due to a rise in
interest rates. Interest rates across the yield curve have risen because of
stronger economic growth and fears of future inflation. We believe the Fed
would raise short-term rates again in the near future to prevent any inflation
pressures. This will cause the yield curve to flatten, with short-term rates
rising considerably more than long-term rates. The rise in rates may lead to
an economic slowdown towards the later half of 1997. As the economy slows,
this should, in turn, cause interest rates to fall once again.
Municipal bonds outperformed Treasuries as yields rose by preserving more of
their value. This caused municipals to be slightly expensive versus Treasuries
on a historical basis.
We are maintaining a neutral average maturity and duration in The Maryland
Municipal Bond Fund.
SHAREHOLDER MEETING RESULTS
- -------------------------------------------------------------------------------
A Special Meeting of the Shareholders of The Style Manager Fund and The Style
Manager: Large Cap Fund was held on October 21, 1996. On August 22, 1996, the
record date for shareholders voting at the meeting, there were 5,576,689
shares of The Style Manager Fund and 7,040,786 shares of The Style Manager:
Large Cap Fund outstanding and entitled to vote. Totals of 5,015,597 shares of
The Style Manager Fund and 5,052,067 shares of The Style Manager: Large Cap
Fund were present in person at the meeting or represented by proxy. The
following items were considered by shareholders and the results of their
voting were as follows:
AGENDA ITEM: To approve the Sub-Advisory Agreement between Virtus Capital
Management, Inc. and Trend Capital Management, Inc. on behalf of The Style
Manager Fund and The Style Manager: Large Cap Fund.
Shareholders of The Style Manager Fund voted as follows:
<TABLE>
<CAPTION>
SHARES VOTED FOR SHARES VOTED AGAINST SHARES ABSTAINED
<S> <C> <C> <C> <C>
4,953,944 30,650 31,003
</TABLE>
Shareholders of The Style Manager: Large Cap Fund voted as follows:
<TABLE>
<CAPTION>
SHARES VOTED FOR SHARES VOTED AGAINST SHARES ABSTAINED
<S> <C> <C> <C> <C>
4,893,598 80,766 77,703
</TABLE>
AGENDA ITEM: To approve an Amendment to the Investment Advisory Contract
between Virtus Capital Management, Inc. and The Virtus Funds, increasing the
advisory fee payable by The Style Manager Fund.
Shareholders of The Style Manager Fund voted as follows:
<TABLE>
<CAPTION>
SHARES VOTED FOR SHARES VOTED AGAINST SHARES ABSTAINED
<S> <C> <C> <C> <C>
4,839,503 55,829 27,063
</TABLE>
THE U.S. GOVERNMENT SECURITIES FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997 (UNAUDITED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- --------------------------------------------------- ------------
<C> <S> <C>
LONG-TERM INVESTMENTS--96.3%
---------------------------------------------------------------
U.S. TREASURY NOTES--61.0%
---------------------------------------------------
$23,000,000 6.875%, 5/15/2006 $ 22,871,890
---------------------------------------------------
6,000,000 7.125%, 2/29/2000 6,083,940
---------------------------------------------------
2,000,000 7.50%, 11/15/2001 2,058,200
---------------------------------------------------
13,000,000 7.50%, 5/15/2002 13,408,980
---------------------------------------------------
5,000,000 7.875%, 4/15/1998 5,089,550
---------------------------------------------------
6,000,000 8.25%, 7/15/1998 6,150,360
---------------------------------------------------
15,000,000 8.875%, 11/15/1998 15,580,200
---------------------------------------------------
33,000,000 8.875%, 2/15/1999 34,426,920
--------------------------------------------------- ------------
Total U.S. Treasury Notes 105,670,040
--------------------------------------------------- ------------
GOVERNMENT OBLIGATIONS--35.3%
---------------------------------------------------
Federal Agricultural Mortgage Corp., 7.37%, 1,000,835
993,000 8/1/2006
---------------------------------------------------
8,330,928 Federal Home Loan Bank, 6.50%, 11/1/2009 8,077,584
---------------------------------------------------
12,256,760 Federal Home Loan Bank, 6.50%, 9/1/2008 11,921,647
---------------------------------------------------
82,041 Federal Home Loan Bank, 7.638%, 8/1/2019 86,059
---------------------------------------------------
32,893 Federal Home Loan Bank, 8.444%, 12/1/2020 33,799
---------------------------------------------------
5,000,000 Federal Home Loan Mortgage Corp., 7.974%, 4/20/2005 5,018,200
---------------------------------------------------
Federal Home Loan Mortgage Corp., PC, REMIC, 7.80%, 1,174,098
1,168,001 5/15/2012
---------------------------------------------------
Federal National Mortgage Association, 7.00%, 4,944,480
4,958,960 12/1/1999
---------------------------------------------------
Federal National Mortgage Association, 7.00%, 4,021,634
4,043,103 8/1/2001
---------------------------------------------------
Federal National Mortgage Association, 7.50%, 23,933,602
24,375,282 8/1/2026
---------------------------------------------------
Federal National Mortgage Association, 8.50%, 426,302
413,761 12/1/2001
---------------------------------------------------
Federal National Mortgage Association, 8.778%, 75,315
72,249 6/1/2019
---------------------------------------------------
Government National Mortgage Association, 8.00%, 173,136
169,377 3/15/2017
---------------------------------------------------
Government National Mortgage Association, 9.00%,
328,674 9/15/2021 347,369
--------------------------------------------------- ------------
Total Government Obligations 61,234,060
--------------------------------------------------- ------------
TOTAL LONG-TERM INVESTMENTS (IDENTIFIED COST
$170,608,618) 166,904,100
--------------------------------------------------- ------------
(A) REPURCHASE AGREEMENT--2.7%
---------------------------------------------------------------
4,753,872 Nikko Securities Co. International, Inc., 6.50%,
dated 3/31/1997,
due 4/1/1997 (AT AMORTIZED COST) 4,753,872
--------------------------------------------------- ------------
TOTAL INVESTMENTS (IDENTIFIED COST
$175,362,490)(B) $171,657,972
--------------------------------------------------- ------------
</TABLE>
(a) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio.
(b) The cost of investments for federal tax purposes amounts to $175,362,490.
The net unrealized depreciation of investments on a federal tax basis
amounts to $3,704,518 which is comprised of $134,392 appreciation and
$3,838,910 depreciation at March 31, 1997.
Note: The categories of investments are shown as a percentage of net assets
($173,326,454) at March 31, 1997.
The following acronyms are used throughout this portfolio:
PC--Participation Certificate
REMIC--Real Estate Mortgage Investment Conduit
(See Notes which are an integral part of the Financial Statements)
THE STYLE MANAGER: LARGE CAP FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- ---------------------------- -----------
<C> <S> <C>
COMMON STOCKS--97.2%
---------------------------------------
AEROSPACE & DEFENSE--2.6%
----------------------------
12,400 Boeing Co. $ 1,222,950
----------------------------
7,900 Lockheed Martin Corp. 663,600
----------------------------
8,600 McDonnell-Douglas Corp. 524,600
---------------------------- -----------
Total 2,411,150
---------------------------- -----------
AIRLINES--1.2%
----------------------------
7,800 (a)AMR Corp. 643,500
----------------------------
6,000 Delta Air Lines, Inc. 504,750
---------------------------- -----------
Total 1,148,250
---------------------------- -----------
ALUMINUM--0.6%
----------------------------
17,200 Alcan Aluminum, Ltd. 582,650
---------------------------- -----------
AUTO PARTS & EQUIPMENT--1.3%
----------------------------
12,200 Goodyear Tire & Rubber Co. 637,450
----------------------------
10,000 TRW, Inc. 517,500
---------------------------- -----------
Total 1,154,950
---------------------------- -----------
AUTOMOBILES--2.6%
----------------------------
29,900 Chrysler Corp. 897,000
----------------------------
49,000 Ford Motor Co. 1,537,375
---------------------------- -----------
Total 2,434,375
---------------------------- -----------
BANKS MAJOR REGIONAL--9.2%
----------------------------
18,600 Banc One Corp. 739,350
----------------------------
18,100 Bank of New York Co., Inc. 665,175
----------------------------
10,400 Barnett Banks, Inc. 483,600
----------------------------
7,400 Comerica, Inc. 417,175
----------------------------
9,900 First Union Corp. 803,137
----------------------------
8,700 Fleet Financial Group, Inc. 498,075
----------------------------
9,900 KeyCorp 482,625
----------------------------
5,300 Mellon Bank Corp. 385,575
----------------------------
9,800 National City Corp. 456,925
----------------------------
25,600 NationsBank Corp. 1,417,600
----------------------------
10,900 Norwest Corp. 504,125
----------------------------
16,800 PNC Financial Corp. 672,000
----------------------------
3,300 Republic New York Corp. 290,813
----------------------------
5,200 SunTrust Banks, Inc. 241,150
----------------------------
8,100 Wachovia Corp. 441,450
---------------------------- -----------
Total 8,498,775
---------------------------- -----------
BANKS-MONEY CENTER--4.5%
----------------------------
11,600 BankAmerica Corp. 1,168,700
----------------------------
</TABLE>
THE STYLE MANAGER: LARGE CAP FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
------------------------------------------------
15,200 Citicorp $ 1,645,400
-------------------------------------
15,400 First Chicago NBD Corp. 833,525
-------------------------------------
5,000 J.P. Morgan & Co., Inc. 491,250
------------------------------------- -----------
Total 4,138,875
------------------------------------- -----------
BEVERAGE-ALCOHOLIC--0.6%
-------------------------------------
15,000 Seagram Co. Ltd. 573,750
------------------------------------- -----------
BROADCAST MEDIA--0.9%
-------------------------------------
27,900 (a)Tele-Communications, Inc., Class A 334,800
-------------------------------------
28,900 (a)U.S. West Media Group 538,263
------------------------------------- -----------
Total 873,063
------------------------------------- -----------
BUILDING MATERIALS--0.7%
-------------------------------------
4,400 Armstrong World Industries, Inc. 284,900
-------------------------------------
9,500 Masco Corp. 339,625
------------------------------------- -----------
Total 624,525
------------------------------------- -----------
BUILDING SUPPLIES--0.3%
-------------------------------------
10,800 Sherwin-Williams Co. 291,600
------------------------------------- -----------
CHEMICALS--2.0%
-------------------------------------
7,200 Air Products & Chemicals, Inc. 488,700
-------------------------------------
12,300 Dow Chemical Co. 984,000
-------------------------------------
8,700 Union Carbide Corp. 384,975
------------------------------------- -----------
Total 1,857,675
------------------------------------- -----------
CHEMICALS-DIVERSE--0.4%
-------------------------------------
8,600 Morton International, Inc. 363,350
------------------------------------- -----------
CHEMICALS-SPECIALTY--0.7%
-------------------------------------
6,100 (a)Grace (W.R.) & Co. 288,987
-------------------------------------
7,500 Great Lakes Chemical Corp. 345,000
------------------------------------- -----------
Total 633,987
------------------------------------- -----------
COMMUNICATION EQUIPMENT--0.4%
-------------------------------------
4,900 Harris Corp. 376,687
------------------------------------- -----------
COMPUTER HARDWARE--3.3%
-------------------------------------
10,300 (a)Digital Equipment Corp. 281,962
-------------------------------------
18,500 International Business Machines Corp. 2,541,438
-------------------------------------
11,300 (a)Silicon Graphics, Inc. 220,350
------------------------------------- -----------
Total 3,043,750
------------------------------------- -----------
CONTAINERS & PACKAGING--0.3%
-------------------------------------
6,400 Union Camp Corp. 301,600
------------------------------------- -----------
ELECTRIC COMPANIES--4.1%
-------------------------------------
6,800 Carolina Power & Light Co. 246,500
-------------------------------------
10,800 Consolidated Edison Co. 324,000
-------------------------------------
5,800 Duke Power Co. 255,925
-------------------------------------
</TABLE>
THE STYLE MANAGER: LARGE CAP FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------------------------------------ -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
-----------------------------------------------------
29,700 Edison International $ 668,250
------------------------------------------
13,600 Entergy Corp. 333,200
------------------------------------------
28,400 P G & E Corp. 667,400
------------------------------------------
12,400 P P & L Resources, Inc. 251,100
------------------------------------------
15,500 PECO Energy Co. 315,813
------------------------------------------
24,200 Southern Co. 511,225
------------------------------------------
6,500 Texas Utilities Co. 222,625
------------------------------------------ -----------
Total 3,796,038
------------------------------------------ -----------
ELECTRICAL EQUIPMENT--0.5%
------------------------------------------
13,100 AMP, Inc. 450,312
------------------------------------------ -----------
ELECTRONICS-DEFENSE--0.6%
------------------------------------------
12,200 Raytheon Co. 550,525
------------------------------------------ -----------
ELECTRONICS-DISTRIBUTORS--0.3%
------------------------------------------
4,100 Grainger (W.W.), Inc. 303,400
------------------------------------------ -----------
ELECTRONICS-INSTRUMENTS--0.1%
------------------------------------------
1,100 Tektronix, Inc. 55,550
------------------------------------------ -----------
ELECTRONICS-SEMICONDUCTORS--1.3%
------------------------------------------
10,200 (a)LSI Logic Corp. 354,450
------------------------------------------
10,900 Texas Instruments, Inc. 816,138
------------------------------------------ -----------
Total 1,170,588
------------------------------------------ -----------
ENTERTAINMENT--0.7%
------------------------------------------
18,800 (a) Viacom, Inc., Class B 622,750
------------------------------------------ -----------
FINANCIAL--3.6%
------------------------------------------
17,900 American Express Co. 1,071,762
------------------------------------------
13,100 American General Corp. 533,825
------------------------------------------
16,800 Dean Witter, Discover & Co. 585,900
------------------------------------------
30,400 Federal Home Loan Mortgage Corp. 828,400
------------------------------------------
2,900 MBIA Insurance Corporation 278,038
------------------------------------------ -----------
Total 3,297,925
------------------------------------------ -----------
GOLD & PRECIOUS METAL MINES--0.4%
------------------------------------------
15,100 Barrick Gold Corp. 358,625
------------------------------------------ -----------
HEALTHCARE-DRUGS MAJOR--0.8%
------------------------------------------
19,500 Pharmacia & Upjohn, Inc. 714,188
------------------------------------------ -----------
HEALTHCARE-HOSPITAL MANAGEMENT--1.1%
------------------------------------------
28,950 Columbia/HCA Healthcare Corp. 973,443
------------------------------------------ -----------
HEALTHCARE-MEDICAL PRODUCTS & SUPPLY--0.7%
------------------------------------------
14,400 Baxter International, Inc. 621,000
------------------------------------------ -----------
HOUSEHOLD FURNITURE & APPLIANCES--0.3%
------------------------------------------
6,300 Whirlpool Corp. 300,038
------------------------------------------ -----------
</TABLE>
THE STYLE MANAGER: LARGE CAP FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------------------------- -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
------------------------------------------
INSURANCE-BROKERS--0.4%
-------------------------------
6,200 AON Corp. $ 379,750
------------------------------- -----------
INSURANCE-LIFE/HEALTH--1.9%
-------------------------------
9,100 Aetna Services, Inc. 781,462
-------------------------------
8,200 Conseco, Inc. 292,125
-------------------------------
4,500 Jefferson-Pilot Corp. 244,687
-------------------------------
5,100 Transamerica Corp. 456,450
------------------------------- -----------
Total 1,774,724
------------------------------- -----------
INSURANCE-MULTILINE--2.2%
-------------------------------
600 CIGNA Corp. 87,675
-------------------------------
6,700 Lincoln National Corp. 358,450
-------------------------------
5,200 Loews Corp. 462,150
-------------------------------
24,400 Travelers Group, Inc. 1,168,150
------------------------------- -----------
Total 2,076,425
------------------------------- -----------
INSURANCE-PROPERTY--1.3%
-------------------------------
8,000 Chubb Corp. 431,000
-------------------------------
11,300 SAFECO Corp. 452,000
-------------------------------
5,400 St. Paul Cos., Inc. 350,325
------------------------------- -----------
Total 1,233,325
------------------------------- -----------
INVESTMENT BANK-BROKERAGE--1.6%
-------------------------------
7,700 Merrill Lynch & Co., Inc. 661,238
-------------------------------
8,400 Morgan Stanley Group, Inc. 493,500
-------------------------------
5,700 Salomon, Inc. 284,288
------------------------------- -----------
Total 1,439,026
------------------------------- -----------
IRON & STEEL--0.3%
-------------------------------
9,200 USX-U.S. Steel Group, Inc. 244,950
------------------------------- -----------
LODGING-HOTELS--0.6%
-------------------------------
8,800 (a)ITT Corp. 518,100
------------------------------- -----------
MACHINERY--0.8%
-------------------------------
9,800 Cooper Industries, Inc. 425,075
-------------------------------
7,800 Ingersoll-Rand Co. 340,275
------------------------------- -----------
Total 765,350
------------------------------- -----------
MANUFACTURER-SPECIAL--0.3%
-------------------------------
6,400 Parker-Hannifin Corp. 273,600
------------------------------- -----------
MANUFACTURING-DIVERSE--1.5%
-------------------------------
3,900 Allied-Signal, Inc. 277,875
-------------------------------
8,500 Tenneco, Inc. 331,500
-------------------------------
4,000 Textron, Inc. 420,000
-------------------------------
4,600 United Technologies Corp. 346,150
------------------------------- -----------
Total 1,375,525
------------------------------- -----------
</TABLE>
THE STYLE MANAGER: LARGE CAP FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- --------------------------------- -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
--------------------------------------------
METALS & MINING--0.4%
---------------------------------
11,900 Inco Ltd. $ 388,238
--------------------------------- -----------
NATURAL GAS--1.1%
---------------------------------
5,300 Coastal Corp. 254,400
---------------------------------
11,000 Panenergy Corp. 474,375
---------------------------------
6,900 Williams Cos., Inc. (The) 307,050
--------------------------------- -----------
Total 1,035,825
--------------------------------- -----------
OIL-EXPLORATION & PRODUCTS--0.4%
---------------------------------
8,500 Burlington Resources, Inc. 363,375
--------------------------------- -----------
OIL-DOMESTIC--1.5%
---------------------------------
6,900 Amerada-Hess Corp. 365,700
---------------------------------
11,100 Phillips Petroleum Co. 453,713
---------------------------------
19,200 USX Marathon Corp. 535,200
--------------------------------- -----------
Total 1,354,613
--------------------------------- -----------
OIL-INTERNATIONAL--13.6%
---------------------------------
17,700 Amoco Corp. 1,533,262
---------------------------------
24,700 Chevron Corp. 1,719,737
---------------------------------
42,400 Exxon Corp. 4,568,600
---------------------------------
9,800 Mobil Corp. 1,280,125
---------------------------------
13,700 Royal Dutch Petroleum Co., ADR 2,397,500
---------------------------------
10,100 Texaco, Inc. 1,105,950
--------------------------------- -----------
Total 12,605,174
--------------------------------- -----------
OIL & GAS-DRILL & EQUIPMENT--0.4%
---------------------------------
8,800 Baker Hughes, Inc. 337,700
--------------------------------- -----------
PAPER & FOREST PRODUCTS--2.0%
---------------------------------
7,700 Champion International Corp. 350,350
---------------------------------
18,400 International Paper Co. 715,300
---------------------------------
13,000 Weyerhaeuser Co. 580,125
---------------------------------
3,400 Willamette Industries, Inc. 212,500
--------------------------------- -----------
Total 1,858,275
--------------------------------- -----------
PHOTOGRAPH/IMAGING--0.8%
---------------------------------
12,900 Xerox Corp. 733,688
--------------------------------- -----------
RAILROADS--2.6%
---------------------------------
6,800 Burlington Northern Santa Fe 503,200
---------------------------------
9,400 CSX Corp. 437,100
---------------------------------
3,800 Consolidated Rail Corp. 428,450
---------------------------------
5,800 Norfolk Southern Corp. 494,450
---------------------------------
9,800 Union Pacific Corp. 556,150
--------------------------------- -----------
Total 2,419,350
--------------------------------- -----------
</TABLE>
THE STYLE MANAGER: LARGE CAP FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
----------- ---------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
----------------------------------------------------
RETAIL-DEPARTMENT STORES--2.0%
----------------------------------------
13,600 (a)Federated Department Stores, Inc. $ 447,100
----------------------------------------
12,000 J.C. Penney Co., Inc. 571,500
----------------------------------------
11,200 May Department Stores Co. 509,600
----------------------------------------
7,700 Nordstrom, Inc. 291,638
---------------------------------------- -----------
Total 1,819,838
---------------------------------------- -----------
RETAIL-DRUG STORES--0.5%
----------------------------------------
9,500 CVS Corp. 438,187
---------------------------------------- -----------
RETAIL GENERAL MERCHANDISE--1.3%
----------------------------------------
10,100 (a)Costco Cos., Inc. 279,012
----------------------------------------
18,700 Sears, Roebuck & Co. 939,675
---------------------------------------- -----------
Total 1,218,687
---------------------------------------- -----------
RETAIL-SPECIALITY--0.5%
----------------------------------------
15,100 (a)Toys R Us, Inc. 422,800
---------------------------------------- -----------
SAVINGS & LOAN--0.6%
----------------------------------------
14,200 Great Western Financial Corp. 573,325
---------------------------------------- -----------
SERVICES-COMMERCIAL & CONSOLIDATED--0.4%
----------------------------------------
12,800 Service Corp. International 380,800
---------------------------------------- -----------
SERVICES-DATA PROCESSING--0.3%
----------------------------------------
8,120 First Data Corp. 275,065
---------------------------------------- -----------
SPECIALTY PRINTING--0.4%
----------------------------------------
10,900 Donnelley (R.R.) & Sons Co. 380,137
---------------------------------------- -----------
TELECOMMUNICATIONS-CELLULAR--0.5%
----------------------------------------
20,900 Airtouch Communications, Inc. 480,700
---------------------------------------- -----------
TELECOMMUNICATIONS-LONG DISTANCE--4.2%
----------------------------------------
60,300 AT&T Corp. 2,095,425
----------------------------------------
28,200 MCI Communications Corp. 1,004,625
----------------------------------------
17,100 Sprint Corp. 778,050
---------------------------------------- -----------
Total 3,878,100
---------------------------------------- -----------
TELEPHONE--4.7%
----------------------------------------
14,600 Bell Atlantic Corp. 888,775
----------------------------------------
39,600 BellSouth Corp. 1,673,100
----------------------------------------
19,500 NYNEX Corp. 889,688
----------------------------------------
27,300 U.S. West, Inc. 928,200
---------------------------------------- -----------
Total 4,379,763
---------------------------------------- -----------
TEXTILES-APPAREL--0.4%
----------------------------------------
5,100 V.F. Corp. 341,063
---------------------------------------- -----------
TOBACCO--0.5%
----------------------------------------
9,200 American Brands, Inc. 465,750
---------------------------------------- -----------
</TABLE>
THE STYLE MANAGER: LARGE CAP FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
---------- --------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
--------------------------------------------------------------
TRUCKS & PARTS--0.3%
---------------------------------------------------
5,300 Cummins Engine Co., Inc. $ 271,625
--------------------------------------------------- -----------
WASTE MANAGEMENT--0.8%
---------------------------------------------------
26,100 Browning-Ferris Industries, Inc. 753,637
--------------------------------------------------- -----------
TOTAL COMMON STOCKS (IDENTIFIED COST $79,374,323) 89,779,884
--------------------------------------------------- -----------
(B) REPURCHASE AGREEMENT--2.2%
--------------------------------------------------------------
$2,071,749 Nikko Securities Co. International, Inc., 6.50%,
dated 3/31/1997,
due 4/1/1997 (AT AMORTIZED COST) 2,071,749
--------------------------------------------------- ===========
TOTAL INVESTMENTS (IDENTIFIED COST $81,446,072)(C) $91,851,633
--------------------------------------------------- -----------
</TABLE>
(a) Non-income producing security.
(b) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio.
(c) The cost of investments for federal tax purposes amounts to $81,446,072.
The net unrealized appreciation of investments on a federal tax basis
amounts to $10,405,561 which is comprised of $12,410,771 appreciation and
$2,005,210 depreciation at March 31, 1997.
Note: The categories of investments are shown as a percentage of net assets
($92,413,826) at March 31, 1997.
The following acronym is used throughout this portfolio:
ADR--American Depositary Receipt
(See Notes which are an integral part of the Financial Statements)
THE STYLE MANAGER FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- -------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS--96.5%
-------------------------------------------------
AEROSPACE/DEFENSE--0.7%
--------------------------------------
2,500 Curtiss Wright Corp. $ 133,750
--------------------------------------
5,600 Thiokol Corp. 309,400
-------------------------------------- -----------
Total 443,150
-------------------------------------- -----------
AUTO PARTS & EQUIPMENT--0.1%
--------------------------------------
7,900 Simpson Industries, Inc. 78,013
-------------------------------------- -----------
BANKING-MAJOR REGIONAL--24.2%
--------------------------------------
7,920 Associated Banc Corp. 291,060
--------------------------------------
12,200 Bancorpsouth, Inc. 333,975
--------------------------------------
4,800 CCB Financial Corp. 308,400
--------------------------------------
41,093 Central Fidelity Banks, Inc. 1,140,331
--------------------------------------
14,300 Centura Banks, Inc. 557,700
--------------------------------------
4,625 Chittenden Corp. 124,875
--------------------------------------
9,812 Commerce Bancorp, Inc. 269,830
--------------------------------------
28,041 Compass Bancshares, Inc. 1,247,824
--------------------------------------
16,032 Crestar Financial Corp. 555,108
--------------------------------------
10,600 Cullen Frost Bankers, Inc. 377,625
--------------------------------------
33,600 Deposit Guaranty Corp. 1,008,000
--------------------------------------
7,300 F & M National Corp. 149,650
--------------------------------------
28,085 First Commerce Corp. 1,137,442
--------------------------------------
16,240 First Michigan Bank Corp. 491,260
--------------------------------------
6,200 Firstbank Illinois Co. 223,200
--------------------------------------
6,700 Fort Wayne National Corp. 286,425
--------------------------------------
18,810 Fulton Financial Corp. 463,196
--------------------------------------
9,700 Jefferson Bankshares, Inc. 266,750
--------------------------------------
22,650 Keystone Financial, Inc. 571,912
--------------------------------------
8,000 Mark Twain Bancshares, Inc. 404,000
--------------------------------------
31,371 Mercantile Bankshares Corp. 1,058,771
--------------------------------------
13,310 Mid Am, Inc. 222,943
--------------------------------------
11,375 One Valley Bancorp West Virginia, Inc. 408,078
--------------------------------------
22,500 Provident Bancorp, Inc. 793,125
--------------------------------------
8,767 Republic Bancorp, Inc. 113,971
--------------------------------------
3,100 S & T Bancorp, Inc. 94,550
--------------------------------------
7,400 Susquehanna Bankshares, Inc. 243,275
--------------------------------------
7,600 United Bankshares, Inc. 261,250
--------------------------------------
17,700 United Carolina Bancshares 758,888
--------------------------------------
5,700 Whitney Holding Corp. 221,944
--------------------------------------
</TABLE>
THE STYLE MANAGER FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
------------------------------------------------
7,200 Zions Bancorp $ 855,000
------------------------------------- -----------
Total 15,240,358
------------------------------------- -----------
BEVERAGES-ALCOHOLIC--0.8%
-------------------------------------
22,500 Coors Adolph Co., Class B 478,125
------------------------------------- -----------
CHEMICALS-DIVERSE--0.2%
-------------------------------------
6,400 Stepen Chemical Co. 118,400
------------------------------------- -----------
CHEMICALS-SPECIALTY--1.1%
-------------------------------------
4,900 Cuno, Inc. 75,337
-------------------------------------
15,600 Dexter Corp. 469,950
-------------------------------------
5,600 Learonal 126,000
------------------------------------- -----------
Total 671,287
------------------------------------- -----------
COMPUTERS-PERIPHERAL--0.7%
-------------------------------------
14,800 Komag, Inc. 449,550
------------------------------------- -----------
CONSUMER--0.4%
-------------------------------------
10,400 Stanhome, Inc. 258,700
------------------------------------- -----------
DISTRIBUTORS-FOOD & HEALTH--0.2%
-------------------------------------
6,900 Nash Finch Co. 131,963
------------------------------------- -----------
ELECTRIC COMPANIES--17.3%
-------------------------------------
46,028 American Water Works Co., Inc. 966,588
-------------------------------------
33,500 Atlantic Energy, Inc. NJ 561,125
-------------------------------------
9,200 Black Hills Corp. 241,500
-------------------------------------
4,000 California Water Service Corp. 156,000
-------------------------------------
11,100 Central Hudson Gas & Electric Service 364,912
-------------------------------------
7,400 Central VT Public Service Corp. 78,625
-------------------------------------
8,400 Cilcorp, Inc. 319,200
-------------------------------------
2,700 ETOWN 82,012
-------------------------------------
13,000 Eastern Utilities Association 234,000
-------------------------------------
5,000 Empire Distribution Electric Co. 88,750
-------------------------------------
21,114 Hawaiian Electric Industries, Inc. 715,237
-------------------------------------
18,800 IES Industries, Inc. 542,850
-------------------------------------
22,600 Idaho Power Co. 672,350
-------------------------------------
3,300 Interstate Power Co. 96,112
-------------------------------------
18,200 MDU Resources Group, Inc. 395,850
-------------------------------------
10,200 Madison Gas & Electric Co. 206,550
-------------------------------------
37,179 MidAmerican Energy Holdings Co. 636,690
-------------------------------------
19,900 Minnesota Power And Light Co. 554,713
-------------------------------------
29,700 Nevada Power Co. 590,288
-------------------------------------
5,600 Northwestern Public Service Co. 212,800
-------------------------------------
8,700 Orange & Rockland Utilities, Inc. 307,763
-------------------------------------
11,250 Philadelphia Suburban Corp. 175,781
-------------------------------------
</TABLE>
THE STYLE MANAGER FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------------------------------------ -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
-----------------------------------------------------
14,112 Portland General Corp. $ 492,156
------------------------------------------
24,500 Rochester Gas & Electric Corp 465,500
------------------------------------------
13,950 SIG Corp., Inc. 326,081
------------------------------------------
9,000 United Illuminating Co. 235,125
------------------------------------------
20,500 United Water Resources, Inc. 351,063
------------------------------------------
17,900 WPL Holdings, Inc. 492,250
------------------------------------------
12,200 WPS Resources Corp. 317,200
------------------------------------------ -----------
Total 10,879,071
------------------------------------------ -----------
EQUIPMENT-SEMICONDUCTOR--0.6%
------------------------------------------
11,000 Tencor Instruments 397,375
------------------------------------------ -----------
FOODS--3.6%
------------------------------------------
33,400 Chiquita Brands International 521,875
------------------------------------------
19,103 Dean Foods Co. 661,441
------------------------------------------
36,750 Flowers Industries, Inc. 840,656
------------------------------------------
11,200 International Multifoods Corp. 229,600
------------------------------------------ -----------
Total 2,253,572
------------------------------------------ -----------
FOREST PRODUCTS & PAPER--1.1%
------------------------------------------
18,900 Rayonier, Inc. 704,025
------------------------------------------ -----------
HEALTHCARE-MEDICAL PRODUCTS & SUPPLY--1.6%
------------------------------------------
8,100 ADAC Laboratories 169,087
------------------------------------------
13,381 Block Drug, Inc., Class A 588,764
------------------------------------------
6,200 Chemed Corp. 223,975
------------------------------------------ -----------
Total 981,826
------------------------------------------ -----------
HOMEBUILDING--1.1%
------------------------------------------
15,093 Fleetwood Enterprises, Inc. 377,325
------------------------------------------
12,200 Kaufman & Broad Homes Corp. 161,650
------------------------------------------
5,800 Skyline Corp. 126,875
------------------------------------------ -----------
Total 665,850
------------------------------------------ -----------
HEALTHCARE-HOSPITAL MANAGEMENT--0.7%
------------------------------------------
13,300 Universal Health Services, Inc., Class B 437,238
------------------------------------------ -----------
HOUSEHOLD FURNITURE & APPLIANCES--2.5%
------------------------------------------
8,500 Bassett Furniture Industries, Inc. 204,000
------------------------------------------
10,800 Ethan Allen Interiors, Inc. 469,800
------------------------------------------
13,400 Kimball International, Inc., Class B 509,200
------------------------------------------
10,800 La-Z Boy Chair Co. 369,900
------------------------------------------ -----------
Total 1,552,900
------------------------------------------ -----------
HOUSEWARES--0.4%
------------------------------------------
4,700 National Presto Industries, Inc. 168,613
------------------------------------------
4,300 Oneida Ltd. 84,925
------------------------------------------ -----------
Total 253,538
------------------------------------------ -----------
</TABLE>
THE STYLE MANAGER FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------------------------- -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
------------------------------------------
INSURANCE-LIFE/HEALTH--2.5%
-------------------------------
11,100 Home Beneficial Corp., Class B $ 423,187
-------------------------------
25,200 USLIFE Corp. 1,178,100
------------------------------- -----------
Total 1,601,287
------------------------------- -----------
INSURANCE-MULTILINE--1.1%
-------------------------------
12,900 Alfa Corp. 159,637
-------------------------------
53,200 Reliance Group Holdings, Inc. 558,600
------------------------------- -----------
Total 718,237
------------------------------- -----------
INSURANCE-PROPERTY--4.0%
-------------------------------
6,500 Foremost Corp. 377,000
-------------------------------
8,100 Fremont General Corp. 227,812
-------------------------------
24,547 Ohio Casualty Corp. 1,009,495
-------------------------------
5,500 PXRE Corp. 140,938
-------------------------------
9,100 Selective Insurance Group, Inc. 377,650
-------------------------------
2,100 Trenwick Group, Inc. 103,950
-------------------------------
11,300 Zenith National Insurance Corp. 303,688
------------------------------- -----------
Total 2,540,533
------------------------------- -----------
IRON & STEEL--1.0%
-------------------------------
5,100 Cleveland Cliffs, Inc. 215,475
-------------------------------
8,600 Lukens, Inc. 145,125
-------------------------------
4,200 Quanex Corp. 105,525
-------------------------------
19,800 UNR Industries, Inc. 148,500
------------------------------- -----------
Total 614,625
------------------------------- -----------
LEISURE TIME--1.0%
-------------------------------
8,400 K2, Inc. 208,950
-------------------------------
17,200 Sturm Ruger & Co., Inc. 273,050
-------------------------------
16,200 Winnebago Industries, Inc. 111,375
------------------------------- -----------
Total 593,375
------------------------------- -----------
MACHINERY--0.7%
-------------------------------
7,600 Cascade Corp. 116,850
-------------------------------
4,900 Commercial Intertech Corp. 55,125
-------------------------------
7,350 Manitowoc, Inc. 265,519
------------------------------- -----------
Total 437,494
------------------------------- -----------
MANUFACTURING-SPECIAL--0.1%
-------------------------------
5,000 Zero Corp. 93,750
------------------------------- -----------
MANUFACTURING-DIVERSE--0.5%
-------------------------------
9,800 Kaman Corp., Class A 132,300
-------------------------------
2,500 Starrett (L.S.) Co., Class A 71,563
-------------------------------
3,700 Thomas Industries, Inc. 86,950
------------------------------- -----------
Total 290,813
------------------------------- -----------
</TABLE>
THE STYLE MANAGER FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- --------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
--------------------------------------------------
NATURAL GAS--8.1%
---------------------------------------
5,600 Connecticut Energy Corp. $ 125,300
---------------------------------------
6,300 Connecticut Natural Gas Corp. 138,600
---------------------------------------
9,800 Eastern Enterprises 302,575
---------------------------------------
13,577 El Paso Natural Gas 768,798
---------------------------------------
6,900 Energen Corp. 206,137
---------------------------------------
11,100 Laclede Gas Co. 231,712
---------------------------------------
7,500 New Jersey Resources Corp. 213,750
---------------------------------------
14,100 Northwest Natural Gas Co. 345,450
---------------------------------------
17,200 Oneok, Inc. 447,200
---------------------------------------
2,800 Pennsylvania Enterprises 125,650
---------------------------------------
22,000 Peoples Energy Corp. 728,750
---------------------------------------
18,300 Piedmont Natural Gas, Inc. 420,900
---------------------------------------
11,900 Public Service Co. North Carolina, Inc. 212,713
---------------------------------------
6,300 South Jersey Industries, Inc. 134,663
---------------------------------------
3,900 United Cities Gas Co. 89,700
---------------------------------------
27,300 Washington Gas Light Co. 614,250
--------------------------------------- -----------
Total 5,106,148
--------------------------------------- -----------
OFFICE EQUIPMENT & SUPPLIES--3.5%
---------------------------------------
9,000 American Business Products, Inc. 216,000
---------------------------------------
15,200 Herman Miller, Inc. 1,037,400
---------------------------------------
5,000 Hunt Manufacturers Co. 88,750
---------------------------------------
18,300 Standard Register 599,325
---------------------------------------
7,818 Wallace Computer, Inc. 258,971
--------------------------------------- -----------
Total 2,200,446
--------------------------------------- -----------
OIL & GAS--0.6%
---------------------------------------
9,000 Camco International, Inc. 396,000
--------------------------------------- -----------
PAPER & FOREST PRODUCTS--1.0%
---------------------------------------
700 Chesapeake Corp. 19,250
---------------------------------------
33,100 Longview Fibre Co. 496,500
---------------------------------------
8,500 Pope & Talbot, Inc. 116,875
--------------------------------------- -----------
Total 632,625
--------------------------------------- -----------
RAILROADS--1.0%
---------------------------------------
12,800 GATX Corp. 625,600
--------------------------------------- -----------
REITS--0.8%
---------------------------------------
6,700 National Golf Properties, Inc. 206,863
---------------------------------------
9,400 Omega Healthcare Investors 293,750
--------------------------------------- -----------
Total 500,613
--------------------------------------- -----------
RESTAURANTS--0.8%
---------------------------------------
9,000 Luby's Cafeterias, Inc. 167,625
---------------------------------------
</TABLE>
THE STYLE MANAGER FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- -------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
-------------------------------------------------------------
12,900 Sbarro, Inc. $ 364,425
-------------------------------------------------- -----------
Total 532,050
-------------------------------------------------- -----------
RETAIL-DEPARTMENT STORES--1.8%
--------------------------------------------------
36,200 Family Dollar Stores, Inc. 846,175
--------------------------------------------------
20,400 Shopko Stores, Inc. 306,000
-------------------------------------------------- -----------
Total 1,152,175
-------------------------------------------------- -----------
RETAIL-DRUG STORES--0.8%
--------------------------------------------------
22,600 Longs Drug Stores Corp. 531,100
-------------------------------------------------- -----------
RETAIL-GENERAL MERCHANDISE--0.1%
--------------------------------------------------
4,000 Blair Corp. 63,500
-------------------------------------------------- -----------
RETAIL-FOOD CHAINS--1.0%
--------------------------------------------------
13,200 Ingles Markets, Inc., Class A 193,050
--------------------------------------------------
26,400 Ruddick Corp. 409,200
-------------------------------------------------- -----------
Total 602,250
-------------------------------------------------- -----------
SAVINGS & LOAN--1.9%
--------------------------------------------------
8,200 Bankers Corp. 203,975
--------------------------------------------------
19,500 First Financial Corp. Wisconsin 509,437
--------------------------------------------------
6,700 JSB Financial, Inc. 284,750
--------------------------------------------------
5,850 New York Bancorp, Inc. 169,650
-------------------------------------------------- -----------
Total 1,167,812
-------------------------------------------------- -----------
SERVICES-COMMERCIAL & CONSOLIDATED--2.5%
--------------------------------------------------
8,100 CPI Corp. 136,687
--------------------------------------------------
14,247 Ogden Corp. 300,968
--------------------------------------------------
24,500 PHH Corp. 1,130,063
-------------------------------------------------- -----------
Total 1,567,718
-------------------------------------------------- -----------
SERVICES-FACILITIES/ENVIRONMENTAL--1.2%
--------------------------------------------------
11,800 ABM Industries, Inc. 221,250
--------------------------------------------------
37,000 Safety-Kleen Corp. 545,750
-------------------------------------------------- -----------
Total 767,000
-------------------------------------------------- -----------
TEXTILES-HOME FURNISHINGS--1.3%
--------------------------------------------------
9,000 Guilford Mills, Inc. 271,125
--------------------------------------------------
5,500 Oxford Industries, Inc. 146,438
--------------------------------------------------
8,300 Springs Industries, Inc., Class A 371,425
-------------------------------------------------- -----------
Total 788,988
-------------------------------------------------- -----------
TOBACCO--1.0%
--------------------------------------------------
22,300 Universal Corp. 643,913
-------------------------------------------------- -----------
TRUCKERS--0.9%
--------------------------------------------------
22,900 Alexander and Baldwin, Inc. 592,537
-------------------------------------------------- -----------
TOTAL COMMON STOCKS (IDENTIFIED COST $51,038,370) 60,755,530
-------------------------------------------------- -----------
</TABLE>
THE STYLE MANAGER FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- --------------------------------------------------- -----------
<C> <S> <C>
(A) REPURCHASE AGREEMENT--3.8%
--------------------------------------------------------------
$2,405,602 Nikko Securities Co. Ltd., 6.50%, dated 3/31/1997,
due 4/1/1997 (AT AMORTIZED COST) $ 2,405,601
--------------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST $53,443,971)(B) $63,161,131
--------------------------------------------------- -----------
</TABLE>
(a) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio.
(b) The cost of investments for federal tax purposes amounts to $53,443,971.
The net unrealized appreciation of investments on a federal tax basis
amounts to $9,717,160 which is comprised of $11,012,167 appreciation and
$1,295,007 depreciation at March 31, 1997.
Note: The categories of investments are shown as a percentage of net assets
($62,943,934) at March 31, 1997.
(See Notes which are an integral part of the Financial Statements)
THE VIRGINIA MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
---------- --------------------------------------------- ------- -----------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--97.3%
--------------------------------------------------------
VIRGINIA--97.3%
---------------------------------------------
$1,000,000 Albemarle County, VA IDA, Hospital Revenue
Refunding Bonds, 5.75% (Martha Jefferson
Hospital), 10/1/2008 A $ 1,016,120
---------------------------------------------
1,000,000 Arlington County, VA, GO UT Bonds, 5.30% AAA 992,550
(Original Issue Yield: 5.40%), 6/1/2011
---------------------------------------------
3,675,000 Big Stone Gap, VA Redevelopment & Housing
Authority, Correctional Facility Lease
Revenue Bonds, 6.00% (Wallens Ridge
Development Project), 9/1/2007 AA 3,901,380
---------------------------------------------
3,000,000 Chesapeake Bay Bridge & Tunnel District, VA,
Revenue Bonds, 5.50% (FGIC INS)/(Original
Issue Yield: 5.65%), 7/1/2006 AAA 3,079,560
---------------------------------------------
2,890,000 Chesapeake Bay Bridge & Tunnel District, VA,
Revenue Bonds, 5.875% (FGIC INS)/(Original
Issue Yield: 5.95%), 7/1/2010 AAA 2,985,197
---------------------------------------------
3,500,000 Chesapeake, VA, GO UT Bonds, 5.375%
(Commonwealth of Virginia GTD)/(Original
Issue Yield: 5.45%), 5/1/2010 AA 3,493,315
---------------------------------------------
2,980,000 Chesterfield County, VA, GO UT Bonds, 5.25%,
3/1/2010 AA+ 2,961,911
---------------------------------------------
5,860,000 Commonwealth of Virginia, GO UT Bonds,
5.375%, 6/1/2009 AAA 5,922,936
---------------------------------------------
4,000,000 Commonwealth of Virginia, GO UT Public
Facilities Bonds (Series A), 5.70% (Original
Issue Yield: 5.75%), 6/1/2008 AAA 4,153,240
---------------------------------------------
2,545,000 Danville, VA IDA, Hospital Refunding Revenue
Bonds, 6.20% (Danville Regional Medical
Center)/(FGIC INS)/(Original Issue Yield:
6.30%), 10/1/2009 AAA 2,688,691
---------------------------------------------
2,605,000 Fairfax County, VA Sewer Revenue, Revenue
Bonds, 5.625%, 7/15/2011 AA 2,622,063
---------------------------------------------
1,140,000 Fairfax County, VA Sewer Revenue, Sewer
Refunding Revenue Bonds, 5.30% (AMBAC INS),
11/15/2006 AAA 1,152,905
---------------------------------------------
1,505,000 Fairfax County, VA Sewer Revenue, Sewer
Refunding Revenue Bonds, 5.40% (AMBAC INS),
11/15/2007 AAA 1,527,169
---------------------------------------------
2,000,000 Fairfax County, VA Water Authority, Refunding
Revenue Bonds, 6.00% (Original Issue Yield:
6.281%), 4/1/2022 AA- 2,026,480
---------------------------------------------
4,000,000 Fairfax County, VA, (Series A), 5.25% (State
Aid Withholding LOC)/(Original Issue Yield:
5.35%), 6/1/2009 AAA 3,990,800
---------------------------------------------
2,000,000 Henrico County, VA IDA, Refunding Revenue
Bonds, 5.60% (Bon Secours Health
System)/(MBIA INS)/(Original Issue Yield:
5.65%), 8/15/2010 AAA 1,993,520
---------------------------------------------
1,000,000 Henrico County, VA, GO UT Refunding Bonds,
5.20% (Original Issue Yield: 5.35%),
1/15/2008 AAA 1,003,790
---------------------------------------------
600,000 Loudoun County, VA IDA, Lease Revenue Bonds,
5.50% (Northern Virginia Criminal
Justice)/(Original Issue Yield: 5.829%),
6/1/2008 AA- 604,854
---------------------------------------------
1,000,000 Loudoun County, VA, GO UT Refunding Bonds
(Series A), 5.50% (Commonwealth of Virginia
GTD)/(Original Issue Yield: 5.649%),
10/1/2007 AA- 1,022,810
---------------------------------------------
</TABLE>
THE VIRGINIA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT CREDIT
OR SHARES RATING* VALUE
---------- ------------------------------------------ ------- -----------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--CONTINUED
----------------------------------------------------- -----------
$1,850,000 Lynchburg, VA, GO UT Refunding Bonds,
5.25% (Original Issue Yield: 5.45%),
4/1/2007 AA $ 1,858,991
------------------------------------------
4,440,000 Newport News, VA, GO UT, 5.75%, 1/15/2017 AA- 4,426,547
------------------------------------------
3,000,000 Norfolk, VA, GO UT BONDS, 5.25%
(Commonwealth of Virginia GTD)/(Original
Issue Yield: 5.55%), 6/1/2011 AA 2,939,610
------------------------------------------
2,000,000 Norfolk, VA, GO UT Bonds, 5.70% (MBIA
INS), 6/1/2008 AAA 2,069,800
------------------------------------------
2,535,000 Portsmouth, VA, GO UT Bonds, 5.00% (FGIC
INS), 8/1/2011 AAA 2,411,444
------------------------------------------
3,375,000 Riverside, VA Regional Jail Authority,
Jail Facility Revenue Bonds, 5.625% (MBIA
INS)/(Original Issue Yield: 5.75%),
7/1/2007 AAA 3,491,640
------------------------------------------
1,185,000 Roanoke, VA IDA, Hospital Revenue
Refunding Bonds
(Series B), 6.00% (Roanoke Memorial
Hospital)/(Original
Issue Yield: 6.10%), 7/1/2007 A+ 1,217,066
------------------------------------------
4,010,000 Virginia College Building Authority,
Revenue Bonds, 5.40% (21ST Century College
Program), 8/1/2015 AA 3,871,735
------------------------------------------
8,255,000 Virginia State Public Building Authority,
Revenue Bonds, 5.20% (Original Issue
Yield: 5.40%), 8/1/2010 AA 8,042,268
------------------------------------------
2,030,000 Virginia State Transportation Board,
Revenue Bonds, 6.00% (Northern Virginia
Transportation District )/(Original Issue
Yield: 6.10%), 5/15/2008 AA 2,132,779
------------------------------------------
1,500,000 Virginia State Transportation Board,
Transportation Contract Revenue Bonds
(Series C), 5.10% (Northern Virginia
Transportation District ), 5/15/2007 AA 1,489,965
------------------------------------------
1,000,000 Virginia State Transportation Board,
Transportation Contract Revenue Refunding
Bonds, 5.375% (U.S. Route 58 Corridor
PG-A), 5/15/2007 AA 1,012,400
------------------------------------------
2,325,000 Virginia State University-Virginia
Commonwealth, Revenue Bonds, 5.75%
(Original Issue Yield: 5.827%), 5/1/2021 AA- 2,278,872
------------------------------------------ -----------
TOTAL LONG-TERM MUNICIPAL SECURITIES
(IDENTIFIED COST $84,123,057) 84,382,408
------------------------------------------ -----------
<CAPTION>
MUTUAL FUNDS ISSUES--1.6%
------------------------------------------------------
<C> <S> <C> <C>
795,372 Goldman Sachs & Co. 795,372
------------------------------------------
586,775 Municipal Fund for Temporary Investment 586,775
------------------------------------------ -----------
TOTAL MUTUAL FUND ISSUES (AT NET ASSET
VALUE) 1,382,147
------------------------------------------ -----------
TOTAL INVESTMENTS (IDENTIFIED COST
$85,505,204)(A) $85,764,555
------------------------------------------ -----------
</TABLE>
(a) The cost of investments for federal tax purposes amounts to $85,505,204.
The net unrealized appreciation of investments on a federal tax basis
amounts to $259,351 which is comprised of $884,866 appreciation and
$625,515 depreciation at March 31, 1997.
* Please refer to the Appendix of the Statement of Additional Information
for an explanation of the credit ratings. Current credit ratings are
unaudited.
Note: The categories of investments are shown as a percentage of net assets
($86,679,126) at March 31, 1997.
THE VIRGINIA MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
The following acronyms are used throughout this portfolio:
AMBAC--American Municipal Bond Assurance Corporation
FGIC--Financial Guaranty Insurance Company
GO--General Obligation
GTD--Guaranty
IDA--Industrial Development Authority
INS--Insured
LOC--Letter of Credit
MBIA--Municipal Bond Investors Assurance
UT--Unlimited Tax
(See Notes which are an integral part of the Financial Statements)
THE MARYLAND MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
---------- ------------------------------------------ ------- -----------
<C> <S> <C> <C>
LONG-TERM MUNICIPAL SECURITIES--97.2%
-----------------------------------------------------
MARYLAND--97.2%
------------------------------------------
$1,000,000 Baltimore County, MD Revenue Authority,
Revenue Refunding Bonds, 5.25% (Original
Issue Yield: 5.40%), 7/1/2008 A $ 1,006,900
------------------------------------------
1,000,000 Baltimore County, MD, UT GO Refunding
Bonds, 5.50% (Pension Funding), 8/1/2005 AAA 1,038,150
------------------------------------------
1,000,000 Baltimore, MD, UT GO Bonds (Series A),
5.375% (AMBAC INS), 10/15/2008 AAA 1,004,900
------------------------------------------
1,500,000 Calvert County, MD, Pollution Control
Revenue Bonds, 5.55% (Baltimore Gas &
Electric Co.)/(Original Issue Yield:
5.601%), 7/15/2014 A 1,465,650
------------------------------------------
2,150,000 Carroll County, MD, UT GO, 5.35%,
12/1/2016 AA 2,065,204
------------------------------------------
1,930,000 Howard County, MD, GO Refunding Bonds
(Series A), 5.25% (Original Issue Yield:
5.60%), 8/15/2011 AA+ 1,902,131
------------------------------------------
1,000,000 Maryland Health & Higher Educational
Facilities Authority, Refunding Revenue
Bonds, 5.30% (Francis Scott Key Medical
Center)/(FGIC INS)/(Original Issue Yield:
5.40%), 7/1/2008 AAA 1,002,100
------------------------------------------
1,500,000 Maryland Health & Higher Educational
Facilities Authority, Revenue Bonds, 5.20%
(Frederick Memorial Hospital)/(FGIC
INS)/(Original Issue Yield: 5.30%),
7/1/2008 AAA 1,496,205
------------------------------------------
2,000,000 Maryland National Capital Park & Planning
Commission, Park Acquisition & Development
Refunding UT GO Bonds Series S-2, 5.125%
(Original Issue Yield: 5.20%), 7/1/2009 AA 1,965,940
------------------------------------------
1,740,000 Maryland National Capital Park & Planning
Commission, UT GO Bonds, 5.125% (Park
Acquisition & Development S-2)/ (Original
Issue Yield: 5.25%), 7/1/2010 AA 1,691,297
------------------------------------------
1,720,000 Maryland State Community Development
Administration, Revenue Bonds (Single
Family Program-Fifth Series), 5.40%,
4/1/2008 Aa 1,721,703
------------------------------------------
1,800,000 Maryland State Stadium Authority, Revenue
Bonds, 5.875% (AMBAC INS), 12/15/2011 AAA 1,848,708
------------------------------------------
500,000 Maryland State Transportation Authority,
Refunding Revenue Bonds, 5.70% (Original
Issue Yield: 5.80%), 7/1/2005 A+ 521,835
------------------------------------------
850,000 Maryland State Transportation Authority,
Refunding Revenue Bonds, 5.80% (Original
Issue Yield: 5.90%), 7/1/2006 A+ 891,769
------------------------------------------
2,500,000 Maryland State, UT GO Bonds, 5.70%
(Original Issue Yield: 5.75%), 3/15/2010 AAA 2,580,725
------------------------------------------
1,000,000 Maryland State, UT GO Bonds, 5.25%,
6/15/2007 AAA 1,013,400
------------------------------------------
820,000 Montgomery County, MD, UT GO Refunding
Bonds (Series A), 5.75% (Original Issue
Yield: 5.85%), 7/1/2006 AAA 864,100
------------------------------------------
1,000,000 Ocean City, MD, GO UT Refunding Bonds,
5.50% (MBIA INS), 3/15/2009 AAA 1,008,760
------------------------------------------
500,000 Prince Georges County, MD, UT GO Bonds,
5.50% (Stormwater Management)/(Original
Issue Yield: 5.55%), 3/15/2008 AA 507,220
------------------------------------------
</TABLE>
THE MARYLAND MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT CREDIT
OR SHARES RATING* VALUE
---------- ------------------------------------------ ------- -----------
<C> <S> <C> <C>
LONG-TERM MUNICIPAL SECURITIES--CONTINUED
-----------------------------------------------------
$1,435,000 Prince Georges County, MD IDA, Lease
Revenue Bonds, 6.00% (Hyattsville District
Court Facility)/(Original Issue Yield:
6.10%), 7/1/2009 AA $ 1,540,659
------------------------------------------
1,425,000 Rockville, MD, UT GO Revenue Refunding
Bonds, 4.90% (Original Issue Yield:
5.00%), 4/15/2007 AA+ 1,398,296
------------------------------------------
1,500,000 University of Maryland, System Auxiliary
Facilities & Tuition Revenue Bonds (Series
A), 5.40% (Original Issue Yield: 5.45%),
4/1/2009 AA+ 1,512,345
------------------------------------------
2,600,000 Washington Suburban Sanitation District,
MD, UT GO Bonds, 5.375%, 6/1/2011 AA 2,566,850
------------------------------------------
1,700,000 Washington Suburban Sanitation District,
MD, UT GO Bonds, 5.50%, 6/1/2010 AA 1,705,321
------------------------------------------ -----------
TOTAL LONG-TERM MUNICIPAL SECURITIES
(IDENTIFIED COST $34,296,725) 34,320,168
------------------------------------------ -----------
MUTUAL FUND SHARES--1.6%
-----------------------------------------------------
456,774 Goldman Sachs Institutional Tax Exempt 456,774
------------------------------------------
92,277 Municipal Fund for Temporary Investment 92,277
------------------------------------------ -----------
TOTAL MUTUAL FUND SHARES (AT NET ASSET
VALUE) 549,051
------------------------------------------ -----------
TOTAL INVESTMENTS (IDENTIFIED COST
$34,845,776)(A) $34,869,219
------------------------------------------ -----------
</TABLE>
(a) The cost of investments for federal tax purposes amounts to $34,845,776.
The net unrealized appreciation of investments on a federal tax basis
amounts to $23,443 which is comprised of $274,039 appreciation and
$250,596 depreciation at March 31, 1997.
* Please refer to the Appendix of the Statement of Additional Information
for an explanation of the credit ratings. Current credit ratings are
unaudited.
Note: The categories of investments are shown as a percentage of net assets
($35,295,755) at March 31, 1997.
The following acronym(s) are used throughout this portfolio:
AMBAC--American Municipal Bond Assurance Corporation
FGIC--Financial Guaranty Insurance Company
GO--General Obligation
IDA--Industrial Development Authority
INS--Insured
MBIA--Municipal Bond Investors Assurance
UT--Unlimited Tax
(See Notes which are an integral part of the Financial Statements)
THE TREASURY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997 (UNAUDITED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- --------------------------------------------------- ------------
<C> <S> <C>
U.S. TREASURY OBLIGATIONS--52.8%
---------------------------------------------------------------
U.S. TREASURY BILL--19.2%
---------------------------------------------------
$75,000,000 4/17/1997 $ 74,828,644
--------------------------------------------------- ------------
U.S. TREASURY NOTES--33.6%
---------------------------------------------------
16,000,000 5.625%-5.750%, 10/31/1997 16,016,579
---------------------------------------------------
9,000,000 5.875%, 7/31/1997 9,011,268
---------------------------------------------------
4,000,000 6.500%-6.875%, 4/30/1997 4,002,953
---------------------------------------------------
23,000,000 6.500%-8.500%, 5/15/1997 23,059,491
---------------------------------------------------
10,000,000 6.500%, 8/15/1997 10,023,509
---------------------------------------------------
27,000,000 7.875%, 1/15/1998 27,465,043
---------------------------------------------------
6,000,000 8.500%, 4/15/1997 6,006,441
---------------------------------------------------
21,000,000 8.500%, 7/15/1997 21,166,039
---------------------------------------------------
14,000,000 8.750%, 10/15/1997 14,230,100
--------------------------------------------------- ------------
Total 130,981,423
--------------------------------------------------- ------------
TOTAL U.S. TREASURY OBLIGATIONS 205,810,067
--------------------------------------------------- ------------
(A) REPURCHASE AGREEMENTS--46.9%
---------------------------------------------------------------
CS First Boston, Inc., 6.450%, dated 3/31/1997, due
75,000,000 4/1/1997 75,000,000
---------------------------------------------------
Merrill Lynch, Pierce, Fenner and Smith, 6.400%,
dated 3/31/1997,
20,000,000 due 4/1/1997 20,000,000
---------------------------------------------------
Nikko Securities Co. International, Ltd., 6.500%,
dated 3/31/1997,
30,000,000 due 4/1/1997 30,000,000
---------------------------------------------------
Prudential Securities, Inc., 6.350%, dated
37,878,678 3/31/1997, due 4/1/1997 37,878,678
---------------------------------------------------
Smith Barney, Inc., 6.250%, dated 3/31/1997, due
20,000,000 4/1/1997 20,000,000
--------------------------------------------------- ------------
TOTAL REPURCHASE AGREEMENTS 182,878,678
--------------------------------------------------- ------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(B) $388,688,745
--------------------------------------------------- ------------
</TABLE>
(a) The repurchase agreements are fully collateralized by U.S. Treasury and/or
agency obligations based on market prices at the date of the portfolio.
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($389,824,752) at March 31, 1997.
(See Notes which are an integral part of the Financial Statements)
THE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- -------------------------------------------------- ------------
<C> <S> <C>
(A) COMMERCIAL PAPER--58.2%
--------------------------------------------------------------
BANKING-FINANCE--19.0%
--------------------------------------------------
Banc One Funding Corp., 5.321%-5.350%, 4/18/1997- $ 7,976,946
$ 8,000,000 4/25/1997
--------------------------------------------------
Bear Stearns Cos., Inc., 5.448%-5.465%, 4/29/1997- 7,947,069
8,000,000 6/13/1997
--------------------------------------------------
Credit Suisse First Boston, 5.350%-5.620%, 9,846,151
10,000,000 5/14/1997-9/9/1997
--------------------------------------------------
2,365,000 Delaware Funding Corp., 5.413%, 5/27/1997 2,345,318
--------------------------------------------------
Greenwich Funding Corp., 5.346%-5.408%, 4/11/1997- 9,971,131
10,000,000 4/30/1997
--------------------------------------------------
NationsBank Corp., 5.320%-5.456%, 5/13/1997- 9,931,546
10,000,000 5/22/1997
-------------------------------------------------- ------------
Total 48,018,161
-------------------------------------------------- ------------
CONSUMER NON-DURABLES--3.1%
--------------------------------------------------
Campbell Soup Co., 5.476%-5.614%, 9/29/1997- 7,750,697
8,000,000 11/18/1997
-------------------------------------------------- ------------
CONSUMER SERVICES--2.7%
--------------------------------------------------
Disney (Walt) Co., 5.507%-5.515%, 6/19/1997- 6,909,753
7,000,000 7/1/1997
-------------------------------------------------- ------------
FINANCE-RETAIL--2.7%
--------------------------------------------------
7,000,000 Xerox Credit Corp., 5.493%-5.495%, 11/5/1997 6,776,187
-------------------------------------------------- ------------
FINANCE-LEASING--3.1%
--------------------------------------------------
8,000,000 Pitney Bowes Credit Corp., 5.541%, 7/2/1997 7,891,031
-------------------------------------------------- ------------
FINANCIAL SERVICES--23.1%
--------------------------------------------------
Ascot Capital Corp., 5.367%-5.466%, 4/21/1997- 11,925,875
12,000,000 5/28/1997
--------------------------------------------------
3,000,000 Credit Suisse, Zurich, 5.536%, 9/16/1997 2,924,820
--------------------------------------------------
General Electric Capital Corp., 5.441%-5.486%, 6,827,648
6,939,000 6/2/1997-8/6/1997
--------------------------------------------------
Marsh & McLennan Cos., Inc., 5.473%-5.594%, 6,463,645
6,500,000 4/22/1997-7/3/1997
--------------------------------------------------
5,000,000 McGraw-Hill Cos., Inc., 5.425%, 6/16/1997 4,944,267
--------------------------------------------------
5,000,000 Merrill Lynch & Co., Inc., 5.484%, 5/29/1997 4,956,661
--------------------------------------------------
5,000,000 Receivables Capital Corp., 5.329%, 4/4/1997 4,997,796
--------------------------------------------------
12,400,000 Sigma Finance, 5.415%-5.562%, 4/25/1997-8/27/1997 12,297,020
--------------------------------------------------
3,000,000 Smith Barney, Inc., 5.333%, 4/7/1997 2,997,355
-------------------------------------------------- ------------
Total 58,335,087
-------------------------------------------------- ------------
PHARMACEUTICALS--1.9%
--------------------------------------------------
5,000,000 Lilly (Eli) & Co., 5.469%, 7/15/1997 4,922,271
-------------------------------------------------- ------------
UTILITIES--2.6%
--------------------------------------------------
1,575,000 Southern California Edison Co., 5.425%, 4/4/1997 1,574,304
--------------------------------------------------
5,000,000 Virginia Electric Power Co., 5.352%, 4/21/1997 4,985,222
-------------------------------------------------- ------------
Total 6,559,526
-------------------------------------------------- ------------
TOTAL COMMERCIAL PAPER 147,162,713
-------------------------------------------------- ------------
CORPORATE BONDS--7.8%
--------------------------------------------------------------
BANKING-FINANCE--1.8%
--------------------------------------------------
Associates Corp. of North America, 8.675%, 2,502,662
2,490,000 6/15/1997
--------------------------------------------------
</TABLE>
THE MONEY MARKET FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- --------------------------------------------------- ------------
<C> <S> <C>
CORPORATE BONDS--CONTINUED
---------------------------------------------------------------
$ 1,000,000 Norwest Corp., 9.250%, 5/1/1997 $ 1,002,595
---------------------------------------------------
Wachovia Bank of NC, NA, Winston-Salem, 6.050%, 1,000,127
1,000,000 4/14/1997
--------------------------------------------------- ------------
Total 4,505,384
--------------------------------------------------- ------------
FINANCE-AUTOMOTIVE--0.3%
---------------------------------------------------
850,000 Ford Motor Co., 5.300%, 7/1/1997 849,290
--------------------------------------------------- ------------
FINANCE-LEASING--1.2%
---------------------------------------------------
1,250,000 International Lease Finance Corp., 5.500%, 4/1/1997 1,250,000
---------------------------------------------------
International Lease Finance Corp., 8.125%, 1,688,581
1,660,000 1/15/1998
--------------------------------------------------- ------------
Total 2,938,581
--------------------------------------------------- ------------
FINANCIAL SERVICES--1.7%
---------------------------------------------------
2,000,000 American General Finance Corp., 5.800%, 4/1/1997 2,000,000
---------------------------------------------------
2,400,000 J.P. Morgan & Co., Inc., 6.500%, 6/30/1997 2,403,905
--------------------------------------------------- ------------
Total 4,403,905
--------------------------------------------------- ------------
OIL/GAS--0.2%
---------------------------------------------------
500,000 Texaco Capital, Inc., 9.000%, 11/15/1997 509,555
--------------------------------------------------- ------------
RESTAURANT/FOOD SERVICE--2.6%
---------------------------------------------------
3,238,000 PepsiCo, Inc., 6.125%, 1/15/1998 3,247,409
---------------------------------------------------
1,250,000 Philip Morris Cos., Inc., 8.750%, 6/15/1997 1,257,913
---------------------------------------------------
2,000,000 Philip Morris Cos., Inc., 9.750%, 5/1/1997 2,005,783
--------------------------------------------------- ------------
Total 6,511,105
--------------------------------------------------- ------------
TOTAL CORPORATE BONDS 19,717,820
--------------------------------------------------- ------------
CORPORATE NOTES--3.4%
---------------------------------------------------------------
BANKING-FINANCE--0.4%
---------------------------------------------------
1,000,000 CIT Group Holdings, Inc., 8.750%, 7/1/1997 1,007,582
--------------------------------------------------- ------------
FINANCE-LEASING--0.8%
---------------------------------------------------
International Lease Finance Corp., 6.500%, 2,004,771
2,000,000 7/15/1997
--------------------------------------------------- ------------
FINANCIAL SERVICES--2.2%
---------------------------------------------------
1,000,000 American General Finance Corp., 6.625%, 6/1/1997 1,000,926
---------------------------------------------------
1,978,000 Deere (John) Capital Corp., 7.200%, 5/15/1997 1,980,564
---------------------------------------------------
2,461,000 Ford Capital BV, 9.750%, 6/5/1997 2,476,622
--------------------------------------------------- ------------
Total 5,458,112
--------------------------------------------------- ------------
TOTAL CORPORATE NOTES 8,470,465
--------------------------------------------------- ------------
GOVERNMENT AGENCIES--22.6%
---------------------------------------------------------------
(b)Federal National Mortgage Association, 5.420%, 2,000,542
2,000,000 6/14/1997
---------------------------------------------------
(b)Student Loan Marketing Association, 5.390%- 55,271,453
55,250,000 5.760%, 4/8/1997
--------------------------------------------------- ------------
TOTAL GOVERNMENT AGENCIES 57,271,995
--------------------------------------------------- ------------
(C) REPURCHASE AGREEMENT--7.9%
---------------------------------------------------------------
Prudential Securities, Inc., 6.350%, dated 20,073,578
20,073,578 3/31/1997, due 4/1/1997
--------------------------------------------------- ------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(D) $252,696,571
--------------------------------------------------- ------------
</TABLE>
THE MONEY MARKET FUND
- -------------------------------------------------------------------------------
(a) Each issue shows the rate of discount at the time of purchase for discount
issues, or the coupon for interest bearing issues.
(b) Current rate and next reset date shown.
(c) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio.
(d)Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($252,883,474) at March 31, 1997.
(See Notes which are an integral part of the Financial Statements)
THE TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
---------- --------------------------------------------- ------- -----------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--99.4%
--------------------------------------------------------
ALABAMA--3.6%
---------------------------------------------
$2,000,000 Columbia, AL, IDB , PCR (Series C) Daily
VRDNs (Alabama Power Co.) A $ 2,000,000
--------------------------------------------- -----------
ALASKA--7.1%
---------------------------------------------
4,000,000 Alaska State Housing Finance Corp., Revenue
Bonds (Series 1991C) Weekly VRDNs (Swiss Bank
Capital Markets LOC) A+ 4,000,000
--------------------------------------------- -----------
ARIZONA--7.2%
---------------------------------------------
2,000,000 Arizona Health Facilities Authority, Pooled
Loan Program Revenue Bonds (Series 1985B)
Weekly VRDNs (FGIC INS)/(Chase Manhattan Bank
N.A., New York LIQ) AAA 2,000,000
---------------------------------------------
2,000,000 Phoenix, AZ, Revenue Bonds, 7.375% Bonds
(United States Treasury PRF), 7/1/1997 (@102) AAA 2,057,130
--------------------------------------------- -----------
Total 4,057,130
--------------------------------------------- -----------
FLORIDA--5.7%
---------------------------------------------
3,200,000 Putnam County, FL, Development Authority, PCR
Bonds (Series 1984H) Weekly VRDNs (Seminole
Electric Cooperative, Inc. (FL))/(National
Rural Utilities Cooperative Finance Corp.
LOC) AA- 3,200,000
--------------------------------------------- -----------
GEORGIA--13.8%
---------------------------------------------
1,500,000 Burke County, GA, Development Authority, PCR
Bonds, Daily VRDNs (Georgia Power Company
Plant Vogtle) A+ 1,500,000
---------------------------------------------
2,700,000 Gwinnett County, GA, School District, GO UT
Refunding Bonds, 4.40%, 2/1/1998 AA 2,718,632
---------------------------------------------
2,500,000 Monroe County, GA, Development Authority
IDRB, PCR Refunding Bonds (Series 2) Daily
VRDNs (Gulf Power Co.) A+ 2,500,000
---------------------------------------------
1,000,000 Monroe County, GA, Development Authority
IDRB, Second Series, Daily VRDNs (Georgia
Power Co.) A+ 1,000,000
--------------------------------------------- -----------
Total 7,718,632
--------------------------------------------- -----------
MARYLAND--3.6%
---------------------------------------------
2,000,000 Maryland Health & Higher Educational
Facilities Authority, Revenue Bonds, Weekly
VRDNs (Greater Baltimore Medical
Center)/(First National Bank of Maryland,
Baltimore LOC) A1 2,000,000
--------------------------------------------- -----------
MINNESOTA--0.7%
---------------------------------------------
400,000 Beltrami County, MN, Environmental Control
Authority Daily VRDNs (Northwood Panelboard
Co.)/(Union Bank of Switzerland, Zurich LOC) AA+ 400,000
--------------------------------------------- -----------
NEW YORK--19.9%
---------------------------------------------
3,000,000 New York City Municipal Water Finance
Authority, Water and Sewer System Revenue
Bonds (Series 1995 A) Daily VRDNs (FGIC
INS)/(FGIC Securities Purchase, Inc. LIQ) AAA 3,000,000
---------------------------------------------
1,100,000 New York City, NY, Daily VRDNs (FGIC
INS)/(FGIC Securities Purchase, Inc. LIQ) AAA 1,100,000
---------------------------------------------
1,000,000 New York City, NY, Daily VRDNs AAA 1,000,000
---------------------------------------------
</TABLE>
THE TAX-FREE MONEY MARKET FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT CREDIT
OR SHARES RATING* VALUE
---------- --------------------------------------------- ------- -----------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
--------------------------------------------------------
$1,600,000 New York City, NY, GO Bonds (Series-B), Daily
VRDNs (FGIC INS)/(FGIC Securities Purchase,
Inc. LIQ) AAA $ 1,600,000
---------------------------------------------
1,500,000 New York City, NY, GO UT (Sub-Series B-4)
Daily VRDNs AAA 1,500,000
---------------------------------------------
1,500,000 New York City, NY, (Series C) Daily VRDNs
(Morgan Guaranty Trust Co., New York LOC) AAA 1,500,000
---------------------------------------------
1,400,000 New York City, NY, (Subseries B-3), Weekly
VRDNs (Morgan Guaranty Trust Co., New York
LOC) AAA 1,400,000
--------------------------------------------- -----------
Total 11,100,000
--------------------------------------------- -----------
OHIO--7.2%
---------------------------------------------
2,000,000 Clermont County, OH , Revenue Bonds, (Series
B) Weekly VRDNs (Mercy Health Systems) A+ 2,000,000
---------------------------------------------
2,000,000 Ohio State Air Quality Development Authority,
Revenue Bonds, (Series B) Daily VRDNs
(Cincinnati Gas and Electric Co.)/(J.P.
Morgan Delaware, Wilmington LOC) AAA 2,000,000
--------------------------------------------- -----------
Total 4,000,000
--------------------------------------------- -----------
TEXAS--10.4%
---------------------------------------------
1,500,000 Lower Neches Valley, TX, Refunding Revenue
Bonds, 3.50% TOBs (Chevron U.S.A., Inc.),
Optional Tender 8/15/1997 AA 1,500,000
---------------------------------------------
2,300,000 Sabine River Authority, TX , PCR, (Series B)
Daily VRDNs (Texas Utilities Electric
Co.)/(Union Bank of Switzerland, Zurich LOC) AAA 2,300,000
---------------------------------------------
2,000,000 Texas State, 4.75% TRANs, 8/29/1997 SP-1+ 2,006,322
--------------------------------------------- -----------
Total 5,806,322
--------------------------------------------- -----------
UTAH--3.6%
---------------------------------------------
2,000,000 Intermountain Power Agency, UT, (Series B),
5.00% Bonds, 7/1/1997 AA- 2,006,051
--------------------------------------------- -----------
VIRGINIA--14.8%
---------------------------------------------
2,200,000 Fairfax County, VA, IDA, Refunding Revenue
Bonds, (Series A) Weekly VRDNs (Fairfax
Hospital System) AA- 2,200,000
---------------------------------------------
965,000 Richmond, VA, Public Utility, (Series A),
8.00% Bonds (United States Treasury PRF),
1/15/1998 (@102) AAA 1,016,754
---------------------------------------------
1,400,000 Virginia College Building Authority, Weekly
VRDNs (University of Richmond)/(Crestar Bank
of Virginia, Richmond SA) Aa 1,400,000
---------------------------------------------
1,500,000 Virginia State Public School Authority,
(Series A), 6.00% Bonds, 1/1/1998 AA 1,526,967
---------------------------------------------
2,000,000 Virginia State Transportation Board, 7.70%
Bonds (Route 28 Project)/(United States
Treasury PRF), 3/1/1998 (@102) AAA 2,112,105
--------------------------------------------- -----------
Total 8,255,826
--------------------------------------------- -----------
WYOMING--1.8%
---------------------------------------------
1,000,000 Lincoln County, WY, Revenue Bonds, Daily
VRDNs (Exxon Corp.) AAA 1,000,000
--------------------------------------------- -----------
TOTAL SHORT-TERM MUNICIPAL SECURITIES 55,543,961
--------------------------------------------- -----------
MUTUAL FUND SHARES--0.2%
--------------------------------------------------------
97,396 Goldman Sachs Institutional Tax Exempt Fund
(AT NET ASSET VALUE) 97,396
--------------------------------------------- -----------
TOTAL INVESTMENTS (AT AMORTIZED COST AND NET
ASSET VALUE)(A) $55,641,357
--------------------------------------------- -----------
</TABLE>
THE TAX-FREE MONEY MARKET FUND
- -------------------------------------------------------------------------------
(a) Also represents cost for federal tax purposes.
* Please refer to the Appendix of the Statement of Additional Information
for an explanation of the credit ratings.
Note: The categories of investments are shown as a percentage of net assets
($55,881,044) at March 31, 1997.
The following acronyms are used throughout this portfolio:
FGIC--Financial Guaranty Insurance Company
GO--General Obligation
IDA--Industrial Development Authority
IDB--Industrial Development Bond
IDRB--Industrial Development Revenue Bond
INS--Insured
LIQ--Liquidity Agreement
LOC--Letter of Credit
PCR--Pollution Control Revenue
PRF--Prerefunded
SA--Support Agreement
TOBs--Tender Option Bonds
TRANs--Tax and Revenue Anticipation Notes
UT--Unlimited Tax
VRDNs--Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
THE VIRTUS FUNDS
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THE U.S. THE STYLE THE
GOVERNMENT MANAGER: THE STYLE THE VIRGINIA MARYLAND
SECURITIES LARGE CAP MANAGER MUNICIPAL MUNICIPAL
FUND FUND FUND BOND FUND BOND FUND
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in
repurchase agreements,
at
amortized cost $ 4,753,872 $ 2,071,749 $ 2,405,601 $ -- $ --
Investments in
securities, at value 166,904,100 89,779,884 60,755,530 85,764,555 34,869,219
- ---------------------------------------------------------------------------------------
Total investments in
securities, at value 171,657,972 91,851,633 63,161,131 85,764,555 34,869,219
- ---------------------------------------------------------------------------------------
Cash -- 61,826 25,343 -- --
Income receivable 2,739,025 139,109 195,660 1,381,491 518,550
Receivable for
investments sold -- 495,918 -- -- --
Receivable for shares
sold 96,962 20,177 161,431 1,289 57,863
Deferred expenses -- -- 9,103 -- --
- ---------------------------------------------------------------------------------------
Total assets 174,493,959 92,568,663 63,552,668 87,147,335 35,445,632
- ---------------------------------------------------------------------------------------
LIABILITIES:
Payable for investments
purchased -- -- 525,983 -- --
Payable for shares
redeemed 83,672 29,865 18,756 44,745 850
Income distribution
payable 928,934 71,178 4,153 302,817 109,705
Accrued expenses 154,899 53,794 59,842 120,647 39,322
- ---------------------------------------------------------------------------------------
Total liabilities 1,167,505 154,837 608,734 468,209 149,877
- ---------------------------------------------------------------------------------------
TOTAL NET ASSETS $173,326,454 $92,413,826 $62,943,934 $86,679,126 $35,295,755
- ---------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Paid in capital 193,143,401 76,092,212 52,228,505 86,982,421 35,689,278
Net unrealized
appreciation
(depreciation) of
investments (3,704,518) 10,405,561 9,717,160 259,351 23,443
Accumulated net realized
gain (loss) on
investments (13,260,891) 5,835,567 946,225 (562,646) (417,992)
Accumulated
distributions in excess
of net realized gain on
investments (2,897,104) -- -- -- --
Accumulated
undistributed net
investment income 45,566 80,486 52,044 -- 1,026
- ---------------------------------------------------------------------------------------
TOTAL NET ASSETS $173,326,454 $92,413,826 $62,943,934 $86,679,126 $35,295,755
- ---------------------------------------------------------------------------------------
NET ASSETS:
Trust Shares $ 63,088,400 $26,974,126 $ -- $24,089,345 $ 6,771,187
Investment Shares 110,238,054 65,439,700 62,943,934 62,589,781 28,524,568
- ---------------------------------------------------------------------------------------
Total $173,326,454 $92,413,826 $62,943,934 $86,679,126 $35,295,755
- ---------------------------------------------------------------------------------------
NET ASSET VALUE AND
OFFERING PRICE PER
SHARE
Trust Shares $9.77 $13.28 -- $10.65 $10.52
Investment Shares $9.77 $13.29 $11.90 $10.65 $10.52
- ---------------------------------------------------------------------------------------
REDEMPTION PROCEEDS PER
SHARE*
Trust Shares $9.77 -- -- $10.65 $10.52
Investment Shares** $9.57 $13.02 $11.66 $10.44 $10.31
- ---------------------------------------------------------------------------------------
SHARES OUTSTANDING:
Trust Shares 6,455,401 2,031,502 -- 2,261,383 643,494
Investment Shares 11,279,933 4,925,787 5,289,202 5,875,627 2,710,794
- ---------------------------------------------------------------------------------------
Total Shares
Outstanding 17,735,334 6,957,289 5,289,202 8,137,010 3,354,288
- ---------------------------------------------------------------------------------------
Investments, at
identified cost $175,362,490 $81,446,072 $53,443,971 $85,505,204 $34,845,776
- ---------------------------------------------------------------------------------------
Investments, at tax cost $175,362,490 $81,446,072 $53,443,971 $85,505,204 $34,845,776
- ---------------------------------------------------------------------------------------
</TABLE>
*See "Redeeming Shares" in the Prospectus.
**Computation of redemption proceeds per share: 98/100 of net asset value.
(See Notes which are an integral part of the Financial Statements)
THE VIRTUS FUNDS
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THE TAX-
THE TREASURY FREE
MONEY THE MONEY MONEY
MARKET FUND MARKET FUND MARKET FUND
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investments in repurchase agreements
at amortized cost $182,878,678 $ 20,073,578 $ --
Investments in securities at value 205,810,067 232,622,993 55,641,357
- -----------------------------------------------------------------------------
Total investments in securities, at
value 388,688,745 252,696,571 55,641,357
- -----------------------------------------------------------------------------
Income receivable 3,334,161 1,301,987 334,498
Deferred expenses -- -- 32,365
- -----------------------------------------------------------------------------
Total assets 392,022,906 253,998,558 56,008,220
- -----------------------------------------------------------------------------
LIABILITIES:
Income distribution payable 1,598,581 928,223 127,176
Payable to bank 337,500 66,207 --
Accrued expenses 262,073 120,654 --
- -----------------------------------------------------------------------------
Total liabilities 2,198,154 1,115,084 127,176
- -----------------------------------------------------------------------------
TOTAL NET ASSETS $389,824,752 $252,883,474 $55,881,044
- -----------------------------------------------------------------------------
NET ASSETS:
Trust Shares 256,918,011 167,945,731 --
Investment Shares 132,906,741 84,937,743 55,881,044
- -----------------------------------------------------------------------------
TOTAL NET ASSETS $389,824,752 $252,883,474 $55,881,044
- -----------------------------------------------------------------------------
NET ASSET VALUE AND REDEMPTION
PROCEEDS PER SHARE
Trust Shares $1.00 $1.00 --
Investment Shares $1.00 $1.00 $1.00
- -----------------------------------------------------------------------------
SHARES OUTSTANDING:
Trust Shares 256,918,011 167,945,731 --
Investment Shares 133,073,673 84,937,743 55,881,044
- -----------------------------------------------------------------------------
Total Shares Outstanding 389,991,684 252,883,474 55,881,044
- -----------------------------------------------------------------------------
Investments, at amortized cost and net
asset value $388,688,745 $252,696,571 $55,641,357
- -----------------------------------------------------------------------------
Investments, at tax cost $388,688,745 $252,696,571 $55,641,357
- -----------------------------------------------------------------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
THE VIRTUS FUNDS
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THE U.S. THE STYLE THE
GOVERNMENT MANAGER: THE STYLE THE VIRGINIA MARYLAND
SECURITIES LARGE CAP MANAGER MUNICIPAL MUNICIPAL
FUND FUND FUND BOND FUND BOND FUND
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ -- $ 1,173,417 $1,184,368 $ -- $ --
Interest 6,922,364 57,346 54,074 2,382,252 991,672
- ----------------------------------------------------------------------------------------
Total income 6,922,364 1,230,763 1,238,442 2,382,252 991,672
- ----------------------------------------------------------------------------------------
EXPENSES:
Investment advisory fee 702,927 368,775 392,156 340,769 144,618
Administrative personnel
and services fee 90,796 47,637 37,397 44,017 37,397
Custodian fees 25,000 30,626 13,977 16,294 4,269
Transfer and dividend
disbursing agent fees
and expenses 66,231 67,099 24,090 46,183 24,391
Directors'/Trustees'
fees 1,743 866 743 1,363 1,098
Auditing fees 8,497 8,908 6,404 6,618 6,999
Legal fees 1,529 2,860 1,339 1,226 795
Portfolio accounting
fees 30,000 31,145 29,680 30,903 24,774
Distribution services
fee--
Investment Shares 144,225 81,791 -- 81,135 38,208
Share registration costs 8,812 12,869 5,909 7,047 3,677
Printing and postage 5,542 9,970 13,593 2,647 5,023
Insurance premiums 2,402 3,452 2,133 1,321 1,366
Miscellaneous 3,132 3,353 3,756 7,165 1,262
- ----------------------------------------------------------------------------------------
Total expenses 1,090,836 669,351 531,177 586,688 293,877
- ----------------------------------------------------------------------------------------
Waivers
Waiver of investment
advisory fee (37,709) -- (151,439) -- --
- ----------------------------------------------------------------------------------------
Net expenses 1,053,127 669,351 379,738 586,688 293,877
- ----------------------------------------------------------------------------------------
Net investment income 5,869,237 561,412 858,704 1,795,564 697,795
- ----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss)
on investments (1,833,975) 5,903,277 1,141,942 194,257 97,176
Change in unrealized
appreciation
(depreciation) of
investments (188,804) 4,264,484 4,683,204 (335,467) (183,265)
- ----------------------------------------------------------------------------------------
Net realized and
unrealized gain (loss)
on investments (2,022,779) 10,167,761 5,825,146 (141,210) (86,089)
- ----------------------------------------------------------------------------------------
Change in net assets
resulting from
operations $ 3,846,458 $10,729,173 $6,683,850 $1,654,354 $ 611,706
- ----------------------------------------------------------------------------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
THE VIRTUS FUNDS
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THE TAX-
THE TREASURY FREE
MONEY THE MONEY MONEY
MARKET FUND MARKET FUND MARKET FUND
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $10,281,286 $6,982,857 $899,647
- ---------------------------------------------------------------------------------
Total income 10,281,286 6,982,857 899,647
- ---------------------------------------------------------------------------------
EXPENSES:
Investment advisory fee 950,988 637,208 131,600
Administrative personnel and services fee 184,262 123,452 37,397
Custodian fees 59,097 32,712 8,550
Transfer and dividend disbursing agent
fees and expenses 114,634 64,214 9,709
Directors'/Trustees' fees 2,550 1,956 883
Auditing fees 8,494 4,459 4,202
Legal fees 2,713 2,466 1,226
Portfolio accounting fees 45,971 37,428 11,466
Distribution services fee--Investment
Shares 171,996 105,680 --
Share registration costs 9,254 7,586 6,374
Printing and postage 6,905 8,631 3,650
Insurance premiums 2,489 3,649 1,962
Miscellaneous 3,994 4,292 3,746
- ---------------------------------------------------------------------------------
Total expenses 1,563,347 1,033,733 220,765
Waivers--
Waiver of investment advisory fee (46,840) (57,472) (31,791)
- ---------------------------------------------------------------------------------
Net expenses 1,516,507 976,261 188,974
- ---------------------------------------------------------------------------------
Net investment income 8,764,779 6,006,596 710,673
- ---------------------------------------------------------------------------------
Change in net assets resulting from
operations $ 8,764,779 $6,006,596 $710,673
- ---------------------------------------------------------------------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
THE VIRTUS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THE U.S. GOVERNMENT THE STYLE MANAGER:
SECURITIES FUND LARGE CAP FUND
---------------------------- ----------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
MARCH 31, 1997 SEPTEMBER 30, MARCH 31, 1997 SEPTEMBER 30,
(UNAUDITED) 1996 (UNAUDITED) 1996
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 5,869,237 $ 13,381,466 $ 561,412 $ 1,995,250
Net realized gain (loss)
on investments (1,833,975) (3,219,621) 5,903,277 12,982,465
Net change in unrealized
appreciation
(depreciation) of
investments (188,804) (2,011,452) 4,264,484 (2,926,184)
- ------------------------------------------------------------------------------------
Change in net assets
resulting from
operations 3,846,458 8,150,393 10,729,173 12,051,531
- ------------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS--
Distributions from net
investment income:
Trust Shares (2,308,723) (6,107,288) (231,970) (926,390)
Investment Shares (3,560,514) (7,274,178) (399,297) (1,026,148)
Distributions from net
realized gains:
Trust Shares -- -- (4,272,531) (3,898,915)
Investment Shares -- -- (7,970,549) (3,989,082)
- ------------------------------------------------------------------------------------
Change in net assets
resulting from
distributions to
shareholders (5,869,237) (13,381,466) (12,874,347) (9,840,535)
- ------------------------------------------------------------------------------------
SHARE TRANSACTIONS--
Proceeds from sale of
shares 11,606,981 46,455,480 9,982,525 18,263,662
Shares issued in
connection with
acquisition -- -- -- 9,245,450
Net asset value of
shares issued to
shareholders in payment
of distributions
declared 2,351,857 6,142,681 9,068,813 5,478,249
Cost of shares redeemed (34,025,851) (68,163,717) (18,066,337) (31,477,651)
- ------------------------------------------------------------------------------------
Change in net assets
resulting from share
transactions (20,067,013) (15,565,556) 985,001 1,509,710
- ------------------------------------------------------------------------------------
Change in net assets (22,089,792) (20,796,629) (1,160,173) 3,720,706
NET ASSETS:
Beginning of period 195,416,246 216,212,875 93,573,999 89,853,293
- ------------------------------------------------------------------------------------
End of period $173,326,454 $195,416,246 $ 92,413,826 $ 93,573,999
- ------------------------------------------------------------------------------------
Undistributed net
investment income
included in net assets
at end of period $ 45,566 $ 45,566 $ 80,486 $ 150,341
- ------------------------------------------------------------------------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
THE VIRTUS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THE VIRGINIA MUNICIPAL
THE STYLE MANAGER FUND BOND FUND
---------------------------- ----------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
MARCH 31, 1997 SEPTEMBER 30, MARCH 31, 1997 SEPTEMBER 30,
(UNAUDITED) 1996 (UNAUDITED) 1996
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS:
OPERATIONS--
Net investment income $ 858,704 $ 1,728,218 $ 1,795,564 $ 3,919,914
Net realized gain (loss)
on investments 1,141,942 4,542,510 194,257 780,289
Net change in unrealized
appreciation
(depreciation) of
investments 4,683,204 (119,759) (335,467) (2,101,082)
- ------------------------------------------------------------------------------------
Change in net assets
resulting from
operations 6,683,850 6,150,969 1,654,354 2,599,121
- ------------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS--
Distributions from net
investment income:
Trust Shares -- (535,843) (1,287,834)
Investment Shares (920,120) (1,638,472) (1,259,721) (2,632,080)
Distributions from net
realized gains:
Trust Shares -- -- -- --
Investment Shares (3,328,990) (8,143,290) -- --
- ------------------------------------------------------------------------------------
Change in net assets
resulting from
distributions to
shareholders (4,249,110) (9,781,762) (1,795,564) (3,919,914)
- ------------------------------------------------------------------------------------
SHARE TRANSACTIONS--
Proceeds from sale of
shares 26,496,243 16,506,045 3,974,917 16,125,700
Shares issued in
connection with
acquisition -- -- -- --
Net asset value of
shares issued to
shareholders in payment
of distributions
declared 4,193,950 9,243,789 800,732 1,997,026
Cost of shares redeemed (32,963,578) (37,724,499) (11,765,238) (27,234,673)
- ------------------------------------------------------------------------------------
Change in net assets
resulting from share
transactions (2,273,385) (11,974,665) (6,989,589) (9,111,947)
- ------------------------------------------------------------------------------------
Change in net assets 161,355 (15,605,458) (7,130,799) (10,432,740)
NET ASSETS:
Beginning of period 62,782,579 78,388,037 93,809,925 104,242,665
- ------------------------------------------------------------------------------------
End of period $ 62,943,934 $ 62,782,579 $ 86,679,126 $ 93,809,925
- ------------------------------------------------------------------------------------
Undistributed net
investment income
included in net assets
at end of period $ 52,044 $ 113,460 $ -- $ --
- ------------------------------------------------------------------------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
THE VIRTUS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THE MARYLAND MUNICIPAL THE TREASURY
BOND FUND MONEY MARKET FUND
---------------------------- -----------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
MARCH 31, 1997 SEPTEMBER 30, MARCH 31, 1997 SEPTEMBER 30,
(UNAUDITED) 1996 (UNAUDITED) 1996
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS:
OPERATIONS--
Net investment income $ 697,795 $ 1,527,863 $ 8,764,779 $ 16,209,478
Net realized gain (loss)
on investments 97,176 186,173 -- --
Net change in unrealized
appreciation
(depreciation) of
investments (183,265) (739,639) -- --
- -------------------------------------------------------------------------------------
Change in net assets
resulting from
operations 611,706 974,397 8,764,779 16,209,478
- -------------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS--
Distributions from net
investment income:
Trust Shares (152,488) (352,284) (5,704,387) (11,356,506)
Investment Shares (545,307) (1,175,552) (3,060,392) (4,852,972)
- -------------------------------------------------------------------------------------
Change in net assets
resulting from
distributions to
shareholders (697,795) (1,527,836) (8,764,779) (16,209,478)
- -------------------------------------------------------------------------------------
SHARE TRANSACTIONS--
Proceeds from sale of
shares 986,278 8,364,014 424,846,391 659,743,838
Shares issued in
connection with
acquisition -- -- -- 122,108,127
Net asset value of
shares issued to
shareholders in payment
of distributions
declared 350,300 989,879 2,408,422 4,898,441
Cost of shares redeemed (6,127,553) (10,247,633) (410,569,106) (661,630,604)
- -------------------------------------------------------------------------------------
Change in net assets
resulting from share
transactions (4,790,975) (893,740) 16,685,707 125,119,802
- -------------------------------------------------------------------------------------
Change in net assets (4,877,064) (1,447,179) 16,685,707 125,119,802
NET ASSETS:
Beginning of period 40,172,819 41,619,998 373,139,045 248,019,243
- -------------------------------------------------------------------------------------
End of period $35,295,755 $40,172,819 $ 389,824,752 $ 373,139,045
- -------------------------------------------------------------------------------------
Undistributed net
investment income
included in net assets
at end of period $ 1,026 $ 1,026 $ -- $ --
- -------------------------------------------------------------------------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
THE VIRTUS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THE TAX-FREE MONEY
THE MONEY MARKET FUND MARKET FUND
---------------------------- -----------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
MARCH 31, 1997 SEPTEMBER 30, MARCH 31, 1997 SEPTEMBER 30,
(UNAUDITED) 1996 (UNAUDITED) 1996
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS:
OPERATIONS--
Net investment income $ 6,006,596 $ 12,191,680 $ 710,673 $ 2,734,120
- -------------------------------------------------------------------------------------
Change in net assets
resulting from
operations 6,006,596 12,191,680 710,673 2,734,120
- -------------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS--
Distributions from net
investment income:
Trust Shares (4,080,262) (8,395,610) -- --
Investment Shares (1,926,334) (3,796,070) (710,673) (2,734,120)
- -------------------------------------------------------------------------------------
Change in net assets
resulting from
distributions to
shareholders (6,006,596) (12,191,680) (710,673) (2,734,120)
- -------------------------------------------------------------------------------------
SHARE TRANSACTIONS--
Proceeds from sale of
shares 389,989,431 576,928,235 135,039,798 389,800,080
Net asset value of
shares issued to
shareholders in payment
of distributions
declared 1,533,379 3,626,658 175,091 459,305
Cost of shares redeemed (382,839,169) (551,929,373) (131,832,752) (419,737,938)
- -------------------------------------------------------------------------------------
Change in net assets
resulting from share
transactions 8,683,641 28,625,520 3,382,137 (29,478,553)
- -------------------------------------------------------------------------------------
Change in net assets 8,683,641 28,625,520 3,382,137 (29,478,553)
NET ASSETS:
Beginning of period 244,199,833 215,574,313 52,498,907 81,977,460
- -------------------------------------------------------------------------------------
End of period $252,883,474 $ 244,199,833 $ 55,881,044 $ 52,498,907
- -------------------------------------------------------------------------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
THE U.S. GOVERNMENT SECURITIES FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
MARCH 31, YEAR ENDED SEPTEMBER 30,
----------- ------------------------------------------------------------
INVESTMENT SHARES 1997 1996 1995 1994 1993 1992 1991(A)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $9.89 $10.13 $ 9.83 $10.90 $10.95 $10.54 $10.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income 0.31 0.62 0.64 0.61 0.66 0.75 0.78
Net realized and
unrealized gain (loss)
on investments (0.12) (0.24) 0.30 (0.94) 0.03 0.50 0.54
- ---------------------------------------------------------------------------------------------------------
Total from investment
operations 0.19 0.38 0.94 (0.33) 0.69 1.25 1.32
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Distributions from net
investment income (0.31) (0.62) (0.64) (0.61) (0.66)(b) (0.75) (0.78)
Distributions from net
realized gain on
investments -- -- -- -- (0.08) (0.09) --
Distributions in excess
of net realized gain on
investments (b) -- -- -- (0.13) -- -- --
- ---------------------------------------------------------------------------------------------------------
Total distributions (0.31) (0.62) (0.64) (0.74) (0.74) (0.84) (0.78)
- ---------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD $ 9.77 $ 9.89 $10.13 $ 9.83 $10.90 $10.95 $10.54
- ---------------------------------------------------------------------------------------------------------
TOTAL RETURN (D) 1.87% 3.79% 9.84% (3.36)% 6.82% 12.42% 14.00%
- ---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET
ASSETS
Expenses 1.22%(c) 1.14% 1.01% 0.99% 0.77% 0.52% 0.64%(c)
Net investment income 6.17%(c) 6.11% 6.41% 5.94% 5.91% 7.01% 8.03%(c)
Expense
waiver/reimbursement
(e) 0.04%(c) 0.13% 0.28% 0.32% 0.43% 0.65% 0.93%(c)
- ---------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of
period (000 omitted) $110,238 $116,418 $114,803 $112,439 $119,187 $40,274 $ 10
Portfolio turnover 48% 118% 82% 227% 154% 201% 101%
- ---------------------------------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
MARCH 31, YEAR ENDED SEPTEMBER 30,
----------- ------------------------------------------------------------
TRUST SHARES 1997 1996 1995 1994 1993 1992 1991(A)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $9.89 $10.13 $ 9.83 $10.90 $10.95 $10.54 $10.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income 0.32 0.64 0.66 0.63 0.67 0.75 0.78
Net realized and
unrealized gain (loss)
on investments (0.12) (0.24) 0.30 (0.94) 0.03 0.50 0.54
- ---------------------------------------------------------------------------------------------------------
Total from investment
operations 0.20 0.40 0.96 (0.31) 0.70 1.25 1.32
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Distributions from net
investment income (0.32) (0.64) (0.66) (0.63) (0.67)(b) (0.75) (0.78)
Distributions from net
realized gain on
investments -- -- -- -- (0.08) (0.09) --
Distributions in excess
of net realized gain on
investments (b) -- -- -- (0.13) -- -- --
- ---------------------------------------------------------------------------------------------------------
Total distributions (0.32) (0.64) (0.66) (0.76) (0.75) (0.84) (0.78)
- ---------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD $ 9.77 $ 9.89 $10.13 $ 9.83 $10.90 $10.95 $10.54
- ---------------------------------------------------------------------------------------------------------
TOTAL RETURN (D) 2.00% 4.05% 10.11% (3.12)% 6.94% 12.42% 14.00%
- ---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET
ASSETS
Expenses 0.97%(c) 0.89% 0.76% 0.74% 0.63% 0.52% 0.64%(c)
Net investment income 6.41%(c) 6.36% 6.66% 6.19% 6.17% 7.01% 8.03%(c)
Expense
waiver/reimbursement
(e) 0.04%(c) 0.13% 0.28% 0.32% 0.43% 0.65% 0.93%(c)
- ---------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of
period (000 omitted) $ 63,088 $ 78,998 $101,410 $107,103 $112,334 $95,610 $27,565
Portfolio turnover 48% 118% 82% 227% 154% 201% 101%
- ---------------------------------------------------------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from October 16, 1990 (date of initial
public investment) to September 30, 1991.
(b) Distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles. These
distributions do not represent a return of capital for federal tax
purposes.
(c) Computed on an annualized basis.
(d) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(e) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
THE STYLE MANAGER: LARGE CAP FUND
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
MARCH 31, YEAR ENDED SEPTEMBER 30,
----------- -----------------------------------------------------
INVESTMENT SHARES 1997 1996 1995(E) 1994 1993 1992 1991(A)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $13.68 $13.70 $11.80 $12.39 $12.02 $11.86 $10.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income 0.08 0.27 0.09 0.17 0.24 0.26 0.32
Net realized and
unrealized gain (loss)
on investments 1.45 1.18 2.20 (0.39) 0.54 0.46 1.85
- -------------------------------------------------------------------------------------------------
Total from investment
operations 1.53 1.45 2.29 (0.22) 0.78 0.72 2.17
- -------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Distributions from net
investment income (0.09) (0.27) (0.09) (0.17) (0.25) (0.25) (0.31)
Distributions from net
realized gain on
investments (1.83) (1.20) (0.30) (0.20) (0.16) (0.31) --
- -------------------------------------------------------------------------------------------------
Total distributions (1.92) (1.47) (0.39) (0.37) (0.41) (0.56) (0.31)
- -------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD $13.29 $13.68 $13.70 $11.80 $12.39 $12.02 $11.86
- -------------------------------------------------------------------------------------------------
TOTAL RETURN (B) 11.28% 11.28% 20.02% (1.72%) 6.31% 6.31% 22.68%
- -------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET
ASSETS
Expenses 1.45%(c) 1.36% 1.21% 1.20% 0.87% 0.95% 0.80%(c)
Net investment income 1.05%(c) 2.01% 0.67% 1.40% 1.81% 2.25% 3.05%(c)
Expense
waiver/reimbursement
(d) -- -- 0.21% 0.23% 0.55% 0.34% 0.38%(c)
- -------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of
period (000 omitted) $65,440 $59,891 $44,509 $26,739 $18,691 $2,290 $488
Average commission rate
paid (f) $0.0764 $0.0616 -- -- -- -- --
Portfolio turnover 21% 151% 208% 205% 67% 38% 84%
- -------------------------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
MARCH 31, YEAR ENDED SEPTEMBER 30,
----------- -----------------------------------------------------
TRUST SHARES 1997 1996 1995(E) 1994 1993 1992 1991(A)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $13.68 $13.70 $11.80 $12.39 $12.02 $11.86 $10.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income 0.12 0.33 0.12 0.20 0.28 0.26 0.32
Net realized and
unrealized gain (loss)
on investments 1.42 1.15 2.20 (0.40) 0.51 0.46 1.85
- -------------------------------------------------------------------------------------------------
Total from investment
operations 1.54 1.48 2.32 (0.20) 0.79 0.72 2.17
- -------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Distributions from net
investment income (0.11) (0.30) (0.12) (0.19) (0.26) (0.25) (0.31)
Distributions from net
realized gain on
investments (1.83) (1.20) (0.30) (0.20) (0.16) (0.31) --
- -------------------------------------------------------------------------------------------------
Total distributions (1.94) (1.50) (0.42) (0.39) (0.42) (0.56) (0.31)
- -------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD $13.28 $13.68 $13.70 $11.80 $12.39 $12.02 $11.86
- -------------------------------------------------------------------------------------------------
TOTAL RETURN (B) 11.35% 11.55% 20.33% (1.50%) 6.42% 6.31% 22.68%
- -------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET
ASSETS
Expenses 1.19%(c) 1.11% 0.96% 0.95% 0.66% 0.95% 0.80%(c)
Net investment income 1.33%(c) 2.26% 0.92% 1.68% 2.09% 2.25% 3.05%(c)
Expense
waiver/reimbursement
(d) -- -- 0.21% 0.23% 0.55% 0.34% 0.38%(c)
- -------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of
period (000 omitted) $26,974 $33,683 $45,345 $70,374 $65,841 $49,581 $37,032
Average commission rate
paid (f) $0.0764 $0.0616 -- -- -- -- --
Portfolio turnover 21% 151% 208% 205% 67% 38% 84%
- -------------------------------------------------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from October 16, 1990 (date of initial
public investment) to September 30, 1991.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(e) Per share information presented is based upon monthly average number of
shares outstanding due to large fluctuations in the number of shares
outstanding during the period.
(f) Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged. This
disclosure is required for fiscal years beginning on or after September 1,
1995.
(See Notes which are an integral part of the Financial Statements)
THE STYLE MANAGER FUND
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
MARCH 31, SEPTEMBER 30,
----------- ----------------
1997 1996 1995(A)
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.47 $12.03 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.17 0.31 0.03
Net realized and unrealized gain (loss) on
investments 1.07 0.77 2.03
- ------------------------------------------------------------------------------
Total from investment operations 1.24 1.08 2.06
- ------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Distributions from net investment income (0.18) (0.29) (0.03)
Distributions from net realized gain on
investments (0.63) (1.35) --
- ------------------------------------------------------------------------------
Total distributions (0.81) (1.64) (0.03)
- ------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $11.90 $11.47 $12.03
- ------------------------------------------------------------------------------
TOTAL RETURN (B) 11.02% 10.19% 20.59%
- ------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
Expenses 1.18%(c) 0.99% 0.44%(c)
Net investment income 2.68%(c) 2.63% 0.46%(c)
Expense waiver/reimbursement (d) 0.47%(c) 0.44% 1.03%(c)
- ------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $62,944 $62,783 $78,388
Average commission rate paid $0.0606 $0.0514 --
Portfolio turnover 7% 112% 92%
- ------------------------------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from March 7, 1995 (date of initial
public investment) to September 30, 1995.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
THE VIRGINIA MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
MARCH 31, YEAR ENDED SEPTEMBER 30,
----------- -------------------------------------------------------
INVESTMENT SHARES 1997 1996 1995 1994 1993 1992 1991(A)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $10.68 $10.81 $10.26 $11.26 $10.46 $10.18 $10.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income 0.21 0.41 0.45 0.45 0.51 0.54 0.57
Net realized and
unrealized gain
(loss) on investments (0.03) (0.13) 0.55 (0.92) 0.89 0.29 0.18
- --------------------------------------------------------------------------------------------------
Total from investment
operations 0.18 0.28 1.00 (0.47) 1.40 0.83 0.75
- --------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Distributions from net
investment income (0.21) (0.41) (0.45) (0.45)(g) (0.51) (0.54) (0.57)
Distributions from net
realized gain on
investments -- -- -- (0.06) (0.09) (0.01) --
Distributions in excess
of net realized
gain on investments (b) -- -- -- (0.02) -- -- --
- --------------------------------------------------------------------------------------------------
Total distributions (0.21) (0.41) (0.45) (0.53) (0.60) (0.55) (0.57)
- --------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD $10.65 $10.68 $10.81 $10.26 $11.26 $10.46 $10.18
- --------------------------------------------------------------------------------------------------
TOTAL RETURN (D) 1.66% 2.60% 10.00% (4.25)% 13.49% 8.51% 7.64%
- --------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET
ASSETS
Expenses 1.36%(c) 1.32% 1.17% 1.15% 0.90% 0.83% 0.47%(c)
Net investment income 3.88%(c) 3.78% 4.32% 4.22% 4.68% 5.14% 6.08%(c)
Expense
waiver/reimbursement
(e) -- 0.02% 0.22% 0.27% 0.50% 0.86% 1.70%(c)
- --------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of
period (000 omitted) $62,590 $65,700 $70,572 $74,706 $63,492 $20,883 $6,031
Portfolio turnover 15% 129% 26% 29% 17% 51% 27%
- --------------------------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
MARCH 31, YEAR ENDED SEPTEMBER 30,
----------- -------------------------------------------------------
TRUST SHARES 1997 1996 1995 1994 1993 1992 1991(A)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $10.68 $10.81 $10.26 $11.26 $10.46 $10.18 $10.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income 0.22 0.44 0.48 0.48 0.53 0.54 0.57
Net realized and
unrealized gain
(loss) on investments (0.03) (0.13) 0.55 (0.92) 0.89 0.29 0.18
- --------------------------------------------------------------------------------------------------
Total from investment
operations 0.19 0.31 1.03 (0.44) 1.42 0.83 0.75
- --------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Distributions from net
investment income (0.22) (0.44) (0.48) (0.48)(f) (0.53) (0.54) (0.57)
Distributions from net
realized gain on
investments -- -- -- (0.06) (0.09) (0.01) --
Distributions in excess
of net realized
gain on investments (b) -- -- -- (0.02) -- -- --
- --------------------------------------------------------------------------------------------------
Total distributions (0.22) (0.44) (0.48) (0.56) (0.62) (0.55) (0.57)
- --------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD $10.65 $10.68 $10.81 $10.26 $11.26 $10.46 $10.18
- --------------------------------------------------------------------------------------------------
TOTAL RETURN (D) 1.79% 2.86% 10.27% (4.01%) 13.62% 8.51% 7.64%
- --------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET
ASSETS
Expenses 1.11%(c) 1.06% 0.92% 0.90% 0.75% 0.83% 0.47%(c)
Net investment income 4.13%(c) 4.03% 4.57% 4.47% 4.85% 5.14% 6.08%(c)
Expense
waiver/reimbursement
(e) -- 0.02% 0.22% 0.27% 0.50% 0.86% 1.70%(c)
- --------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of
period (000 omitted) $24,089 $28,110 $33,670 $34,165 $41,204 $20,852 $8,546
Portfolio turnover 15% 129% 26% 29% 17% 51% 27%
- --------------------------------------------------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from October 16, 1990 (date of initial
public investment) to September 30, 1991.
(b) Distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles. These
distributions do not represent a return of capital for federal income tax
purposes.
(c) Computed on an annualized basis.
(d) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(e) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(f) Amount includes distributions to shareholders in excess of net investment
income of $0.0002 per share.
(g) Amount includes distributions to shareholders in excess of net investment
income of $0.0001 per share.
(See Notes which are an integral part of the Financial Statements)
THE MARYLAND MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
MARCH 31, YEAR ENDED SEPTEMBER 30,
----------- ----------------------------------------------------
INVESTMENT SHARES 1997 1996 1995 1994 1993 1992 1991(A)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $10.56 $10.69 $10.17 $11.24 $10.39 $10.10 $10.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income 0.19 0.38 0.40 0.45 0.49 0.54 0.53
Net realized and
unrealized gain (loss)
on investments (0.04) (0.13) 0.54 (0.97) 0.85 0.29 0.10
- ----------------------------------------------------------------------------------------------
Total from investment
operations 0.15 0.25 0.94 (0.52) 1.34 0.83 0.63
- ----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Distributions from net
investment income (0.19) (0.38) (0.40) (0.45) (0.49) (0.54) (0.53)
Distributions from net
realized gain on
investments -- -- (0.02) (0.10) -- -- --
- ----------------------------------------------------------------------------------------------
Total distributions (0.19) (0.38) (0.42) (0.55) (0.49) (0.54) (0.53)
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD $10.52 $10.56 $10.69 $10.17 $11.24 $10.39 $10.10
- ----------------------------------------------------------------------------------------------
TOTAL RETURN (B) 1.40% 2.36% 9.81% (4.74%) 13.24% 8.31% 6.64%
- ----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET
ASSETS
Expenses 1.57%(c) 1.43% 1.24% 1.17% 1.00% 0.59% 0.60%(c)
Net investment income 3.57%(c) 3.57% 4.24% 4.22% 4.50% 5.11% 5.66%(c)
Expense
waiver/reimbursement
(d) -- 0.25% 0.44% 0.51% 0.77% 1.91% 1.05%(c)
- ----------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of
period (000 omitted) $28,525 $31,284 $32,172 $34,580 $33,907 $4,053 $2,940
Portfolio turnover 10% 138% 21% 27% 23% 34% 35%
- ----------------------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
MARCH 31, YEAR ENDED SEPTEMBER 30,
----------- ----------------------------------------------------
TRUST SHARES 1997 1996 1995 1994 1993 1992 1991(A)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $10.56 $10.69 $10.17 $11.24 $10.39 $10.10 $10.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income 0.20 0.41 0.42 0.48 0.50 0.54 0.53
Net realized and
unrealized
gain (loss) on
investments (0.04) (0.13) 0.54 (0.97) 0.85 0.29 0.10
- ----------------------------------------------------------------------------------------------
Total from investment
operations 0.16 0.28 0.96 (0.49) 1.35 0.83 0.63
- ----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Distributions from net
investment income (0.20) (0.41) (0.42) (0.48) (0.50) (0.54) (0.53)
Distributions from net
realized
gain on investments -- -- (0.02) (0.10) -- -- --
- ----------------------------------------------------------------------------------------------
Total distributions (0.20) (0.41) (0.44) (0.58) (0.50) (0.54) (0.53)
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD $10.52 $10.56 $10.69 $10.17 $11.24 $10.39 $10.10
- ----------------------------------------------------------------------------------------------
TOTAL RETURN (B) 1.53% 2.61% 10.09% (4.50%) 13.37% 8.31% 6.64%
- ----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET
ASSETS
Expenses 1.32%(c) 1.18% 0.99% 0.92% 0.86% 0.59% 0.60%(c)
Net investment income 3.82%(c) 3.83% 4.49% 4.46% 4.64% 5.11% 5.66%(c)
Expense
waiver/reimbursement
(d) -- 0.25% 0.44% 0.51% 0.77% 1.91% 1.05%(c)
- ----------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of
period (000 omitted) $6,771 $8,889 $9,447 $11,301 $12,014 $6,004 $556
Portfolio turnover 10% 138% 21% 27% 23% 34% 35%
- ----------------------------------------------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from October 16, 1990 (date of initial
public investment) to September 31, 1991.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
THE TREASURY MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
MARCH 31, YEAR ENDED SEPTEMBER 30,
----------- ----------------------------------------------------------
INVESTMENT SHARES 1997 1996 1995 1994 1993 1992 1991(A)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income 0.02 0.05 0.05 0.03 0.02 0.04 0.06
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Distributions from net
investment income (0.02) (0.05) (0.05) (0.03) (0.02) (0.04) (0.06)
- ------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN (B) 2.24% 4.67% 4.98% 2.90% 2.52% 3.61% 5.90%
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET
ASSETS
Expenses 0.96%(c) 0.90% 0.85% 0.84% 0.70% 0.70% 0.51%(c)
Net investment income 4.45%(c) 4.49% 4.92% 3.05% 2.47% 3.49% 5.65%(c)
Expense
waiver/reimbursement
(d) 0.02%(c) 0.09% 0.10% 0.18% 0.20% 0.11% 0.27%(c)
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of
period (000 omitted) $132,907 $146,161 $39,363 $21,883 $20,382 $12,960 $548
- ------------------------------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
MARCH 31, YEAR ENDED SEPTEMBER 30,
----------- ----------------------------------------------------------
TRUST SHARES 1997 1996 1995 1994 1993 1992 1991(A)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income 0.02 0.05 0.05 0.03 0.03 0.04 0.06
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Distributions from net
investment income (0.02) (0.05) (0.05) (0.03) (0.03) (0.04) (0.06)
- ------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN (B) 2.36% 4.89% 5.24% 3.16% 2.64% 3.61% 5.90%
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET
ASSETS
Expenses 0.71%(c) 0.65% 0.60% 0.59% 0.58% 0.70% 0.51%(c)
Net investment income 4.70%(c) 4.81% 5.17% 3.30% 2.60% 3.49% 5.65%(c)
Expense
waiver/reimbursement
(d) 0.02%(c) 0.06% 0.10% 0.18% 0.20% 0.11% 0.27%(c)
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of
period (000 omitted) $256,918 $226,978 $208,656 $304,285 $152,921 $163,451 $129,959
- ------------------------------------------------------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from October 16, 1990 (date of initial
public investment) to September 30, 1991.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
THE MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
MARCH 31, YEAR ENDED SEPTEMBER 30,
----------- ---------------------------------------------------------
INVESTMENT SHARES 1997 1996 1995 1994 1993 1992 1991(A)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income 0.02 0.05 0.05 0.03 0.03 0.04 0.06
- -----------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Distributions from net
investment income (0.02) (0.05) (0.05) (0.03) (0.03) (0.04) (0.06)
- -----------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------------------
TOTAL RETURN (B) 2.29% 4.91% 5.11% 3.10% 2.77% 3.79% 5.92%
- -----------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET
ASSETS
Expenses 0.93%(c) 0.73% 0.80% 0.80% 0.64% 0.64% 0.51%(c)
Net investment income 4.56%(c) 4.77% 5.04% 3.07% 2.68% 3.64% 5.99%(c)
Expense
waiver/reimbursement
(d) 0.05%(c) 0.23% 0.21% 0.25% 0.30% 0.29% 0.36%(c)
- -----------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of
period (000 omitted) $84,938 $83,525 $41,813 $15,236 $9,905 $5,803 $1
- -----------------------------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
MARCH 31, YEAR ENDED SEPTEMBER 30,
----------- ---------------------------------------------------------
TRUST SHARES 1997 1996 1995 1994 1993 1992 1991(A)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment income 0.02 0.05 0.05 0.03 0.03 0.04 0.06
- -----------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Distributions from net
investment income (0.02) (0.05) (0.05) (0.03) (0.03) (0.04) (0.06)
- -----------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------------------------------------------------------------
TOTAL RETURN (B) 2.42% 5.04% 5.36% 3.35% 2.89% 3.79% 5.92%
- -----------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET
ASSETS
Expenses 0.68%(c) 0.60% 0.57% 0.55% 0.50% 0.64% 0.51%(c)
Net investment income 4.79%(c) 4.93% 5.27% 3.25% 2.83% 3.64% 5.99%(c)
Expense
waiver/reimbursement
(d) 0.05%(c) 0.12% 0.19% 0.25% 0.30% 0.29% 0.36%(c)
- -----------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of
period (000 omitted) $167,946 $160,675 $173,761 $132,445 $134,397 $136,616 $57,432
- -----------------------------------------------------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from October 16, 1990 (date of initial
public investment) to September 30, 1991.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
THE TAX-FREE MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED SEPTEMBER
MARCH 31, 30,
----------- -------------------------
1997 1996 1995 1994(A)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.01 0.03 0.03 0.01
- -------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Distributions from net investment
income (0.01) (0.03) (0.03) (0.01)
- -------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------------------------------------
TOTAL RETURN (B) 1.36% 3.01% 3.53% 0.45%
- -------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
Expenses 0.72%(c) 0.56% 0.39% 0.36%(c)
Net investment income 2.70%(c) 2.95% 3.55% 2.65%(c)
Expense waiver/reimbursement (d) 0.12%(c) 0.20% 0.56% 0.70%(c)
- -------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (000
omitted) $55,881 $52,499 $81,977 $21,967
- -------------------------------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from July 27, 1994 (date of initial
public investment) to September 30, 1994.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
THE VIRTUS FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997 (UNAUDITED)
- -------------------------------------------------------------------------------
(1) ORGANIZATION
The Virtus Funds (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "Act"), as an open-end management investment company.
The Trust consists of eight portfolios (individually referred to as the
"Fund", or collectively as the "Funds"). All Funds, except The Style Manager
Fund and The Tax-Free Money Market Fund are offered in two classes of shares:
Trust Shares and Investment Shares. The Style Manager Fund and The Tax-Free
Money Market Fund are presented as Investment Shares for financial statement
purposes. The following portfolios comprise the Trust:
<TABLE>
<CAPTION>
PORTFOLIO NAME INVESTMENT OBJECTIVE
- ---------------------------------------------------------------------------------------
<C> <S>
The U.S. Government Securities Fund Current income
("Government Securities Fund") (d)
- ---------------------------------------------------------------------------------------
The Style Manager: Large Cap Fund Growth of capital and income
("Large Cap Fund") (d)
- ---------------------------------------------------------------------------------------
The Style Manager Fund Growth of capital
("Style Manager Fund") (d)
- ---------------------------------------------------------------------------------------
The Virginia Municipal Bond Fund Current income exempt from federal regular
("Virginia Municipal Bond Fund") (n) income tax and the personal income tax imposed
by the Commonwealth of Virginia
- ---------------------------------------------------------------------------------------
The Maryland Municipal Bond Fund Current income exempt from federal regular
("Maryland Municipal Bond Fund") (n) income tax and the personal income tax imposed
by the State of Maryland
- ---------------------------------------------------------------------------------------
The Treasury Money Market Fund Current income consistent with stability of
("Treasury Money Market Fund") (d) principal
- ---------------------------------------------------------------------------------------
The Money Market Fund Current income consistent with stability of
("Money Market Fund") (d) principal
- ---------------------------------------------------------------------------------------
The Tax-Free Money Market Fund Current income exempt from federal regular
("Tax-Free Money Market Fund") (d) income tax consistent with stability of
principal and liquidity
</TABLE>
(d)Diversified
(n)Non-diversified
The assets of each portfolio are segregated and a shareholder's interest is
limited to the portfolio in which shares are held.
On September 30, 1995, Treasury Money Market Fund acquired all the net assets
of the Blanchard 100% Treasury Money Market Fund pursuant to a plan of
reorganization approved by Blanchard 100% Treasury Money Market Fund's
shareholders. This was accomplished by a tax-free exchange of shares of
Treasury Money Market Fund for shares of the Blanchard 100% Treasury Money
Market Fund.
On June 24, 1996, Large Cap Fund acquired all the net assets of the Blanchard
American Equity Fund pursuant to a plan of reorganization approved by
Blanchard American Equity Fund's shareholders. The acquisition was
accomplished by a tax-free exchange of shares of Large Cap Fund for shares of
the Blanchard American Equity Fund.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
THE VIRTUS FUNDS
- -------------------------------------------------------------------------------
INVESTMENT VALUATIONS--Municipal bonds are valued by an independent pricing
service, taking into consideration yield, liquidity, risk, credit quality,
coupon, maturity, type of issue, and any other factors or market data the
pricing service deems relevant. U.S. government securities, listed
corporate bonds, other fixed income and asset-backed securities, and
unlisted securities and private placement securities are generally valued
at the mean of the latest bid and asked price as furnished by an
independent pricing service. Listed equity securities are valued at the
last sale price reported on a national securities exchange. The Trusts'
money market funds' use of the amortized cost method to value portfolio
securities is in accordance with Rule 2a-7 under the Act. For the remaining
Funds within the Trust, short-term securities are valued at the prices
provided by an independent pricing service. However, short-term securities
purchased with remaining maturities of sixty days or less may be valued at
amortized cost, which approximates fair market value. Investments in other
open-end investment companies are valued at net asset value.
REPURCHASE AGREEMENTS--It is the policy of the Funds to require a custodian
bank to take possession, to have legally segregated in the Federal Reserve
Book Entry System, or to have segregated within the custodian bank's vault,
all securities held as collateral under repurchase agreement transactions.
Additionally, procedures have been established by the Funds to monitor, on
a daily basis, the market value of each repurchase agreement's collateral
to ensure that the value of collateral at least equals the repurchase price
to be paid under the repurchase agreement transaction.
The Funds will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Funds' adviser to be creditworthy pursuant to guidelines and/or
standards reviewed or established by the Board of Trustees (the
"Trustees"). Risks may arise from the potential inability of counterparties
to honor the terms of the repurchase agreement. Accordingly, the Funds
could receive less than the repurchase price on the sale of collateral
securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Dividend income and
distributions to shareholders are recorded on the ex-dividend date.
Interest income and expenses are accrued daily. Bond premium and discount,
if applicable, are amortized as required by the Internal Revenue Code, as
amended (the "Code").
FEDERAL TAXES--It is the Funds' policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of their income. Accordingly, no
provisions for federal tax are necessary.
At September 30, 1996, Government Securities Fund, Virginia Municipal Bond
Fund, Maryland Municipal Bond Fund and Money Market Fund, for federal tax
purposes, each had a capital loss carryforward, as noted below. These
capital loss carryforwards will reduce the Fund's taxable income arising
from future net realized gain on investments, if any, to the extent
permitted by the Code, and thus will reduce the amount of the distributions
to shareholders which would otherwise be necessary to relieve the Funds of
any liability for federal tax.
<TABLE>
<CAPTION>
FUNDS TOTAL TAX LOSS CARRYFORWARD
---------------------------- ---------------------------
<S> <C>
Government Securities Fund $11,120,666
Virginia Municipal Bond Fund $ 756,721
Maryland Municipal Bond Fund $ 515,234
Money Market Fund $ 76,711
</TABLE>
THE VIRTUS FUNDS
- -------------------------------------------------------------------------------
Pursuant to the Code, such capital loss carryforwards will expire as
follows:
<TABLE>
<CAPTION>
GOVERNMENT SECURITIES FUND VIRGINIA MUNICIPAL BOND FUND
------------------------------------- ------------------------------------
EXPIRATION YEAR EXPIRATION AMOUNT EXPIRATION YEAR EXPIRATION AMOUNT
--------------- ----------------- --------------- -----------------
<S> <C> <C> <C>
2003 $9,742,636 2003 $219,533
2004 $1,378,030 2004 $537,188
<CAPTION>
MARYLAND MUNICIPAL BOND FUND MONEY MARKET FUND
------------------------------------- ------------------------------------
EXPIRATION YEAR EXPIRATION AMOUNT EXPIRATION YEAR EXPIRATION AMOUNT
--------------- ----------------- --------------- -----------------
<S> <C> <C> <C>
2004 $515,234 2002 $34,522
2003 $42,189
</TABLE>
Additionally, net capital losses, as noted below, attributable to security
transactions incurred after September 30, 1995, were treated as arising on
October 1, 1996 the first day of the Funds' taxable year.
<TABLE>
<CAPTION>
FUND TOTAL TAX LOSS PUSHFORWARD
---------------------------- --------------------------
<S> <C>
Government Securities Fund $3,215,438
Virginia Municipal Bond Fund $1,317,477
</TABLE>
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Funds may engage in
when-issued or delayed delivery transactions. The Funds record when-issued
securities on the trade date and maintain security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
DEFERRED EXPENSES--The costs incurred by each Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized over a period not to exceed five years from each Fund's
commencement date.
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value). At
March 31, 1997, Treasury Money Market Fund, Money Market Fund, and Tax-Free
Money Market Fund, capital paid-in aggregated $389,824,752, $252,883,474, and
$55,881,044, respectively. Transactions in shares were as follows:
THE VIRTUS FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
GOVERNMENT
SECURITIES FUND LARGE CAP FUND
------------------------ ------------------------
FOR THE SIX MONTHS ENDED
MARCH 31, 1997: SHARES DOLLARS SHARES DOLLARS
- -------------------------- ---------- ------------ ---------- ------------
INVESTMENT SHARES:
- --------------------------
Shares sold 649,296 $ 6,462,487 417,991 $ 5,878,785
- --------------------------
Shares issued to
shareholders in payment of
distributions declared 235,749 2,351,857 624,758 8,243,068
- --------------------------
Shares redeemed (1,372,764) (13,647,667) (493,373) (6,924,892)
- -------------------------- ---------- ------------ ---------- ------------
Net change resulting from
Investment Share
transactions (487,719) $ (4,833,323) 549,376 $ 7,196,961
- -------------------------- ---------- ------------ ---------- ------------
TRUST SHARES:
- --------------------------
Shares sold 516,956 $ 5,144,494 299,709 $ 4,103,740
- --------------------------
Shares issued to
shareholders in payment of
distributions declared -- -- 62,609 825,745
- --------------------------
Shares redeemed (2,046,738) (20,378,184) (793,354) (11,141,445)
- -------------------------- ---------- ------------ ---------- ------------
Net change resulting from
Trust Share transactions (1,529,782) $(15,233,690) (431,036) $ (6,211,960)
- -------------------------- ---------- ------------ ---------- ------------
Net change resulting
from fund share
transactions (2,017,501) $(20,067,013) 118,340 $ 985,001
- -------------------------- ---------- ------------ ---------- ------------
GOVERNMENT
SECURITIES FUND LARGE CAP FUND
------------------------ ------------------------
FOR THE YEAR ENDED
SEPTEMBER 30, 1996: SHARES DOLLARS SHARES DOLLARS
- -------------------------- ---------- ------------ ---------- ------------
INVESTMENT SHARES:
- --------------------------
Shares sold 2,763,200 $ 27,838,858 965,024 $ 12,986,255
- --------------------------
Shares issued in
connection with the
acquisition -- -- 695,147 9,245,450
- --------------------------
Shares issued to
shareholders in payment of
distributions declared 611,870 6,142,678 379,876 4,969,161
- --------------------------
Shares redeemed (2,935,461) (29,411,819) (913,112) (13,464,743)
- -------------------------- ---------- ------------ ---------- ------------
Net change resulting from
Investment Share
transactions 439,609 $ 4,569,717 1,126,935 $ 13,736,123
- -------------------------- ---------- ------------ ---------- ------------
TRUST SHARES:
- --------------------------
Shares sold 1,853,668 $ 18,616,622 395,754 $ 5,277,407
- --------------------------
Shares issued to
shareholders in payment of
distributions declared 1 3 38,987 509,088
- --------------------------
Shares redeemed (3,875,084) (38,751,898) (1,282,606) (18,012,908)
- -------------------------- ---------- ------------ ---------- ------------
Net change resulting from
Trust Share transactions (2,021,415) $(20,135,273) (847,865) $(12,226,413)
- -------------------------- ---------- ------------ ---------- ------------
Net change resulting
from fund share
transactions (1,581,806) $(15,565,556) 279,070 $ 1,509,710
- -------------------------- ---------- ------------ ---------- ------------
</TABLE>
THE VIRTUS FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STYLE MANAGER FUND
------------------------
FOR THE SIX MONTHS ENDED MARCH 31, 1997: SHARES DOLLARS
- --------------------------------------------------- ---------- ------------
<S> <C> <C>
Shares sold 2,243,193 $ 26,496,243
- ---------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 361,262 4,193,950
- ---------------------------------------------------
Shares redeemed (2,789,651) (32,963,578)
- --------------------------------------------------- ---------- ------------
Net change resulting from fund share transactions (185,196) $ (2,273,385)
- --------------------------------------------------- ---------- ------------
<CAPTION>
STYLE MANAGER FUND
------------------------
FOR THE YEAR ENDED SEPTEMBER 30, 1996: SHARES DOLLARS
- --------------------------------------------------- ---------- ------------
<S> <C> <C>
Shares sold 1,489,971 $ 16,506,045
- ---------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 863,431 9,243,789
- ---------------------------------------------------
Shares redeemed (3,397,734) (37,724,499)
- --------------------------------------------------- ---------- ------------
Net change resulting from fund share transactions (1,044,332) $(11,974,665)
- --------------------------------------------------- ---------- ------------
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
VIRGINIA MUNICIPAL MARYLAND MUNICIPAL
BOND FUND BOND FUND
--------------------- ---------------------
FOR THE SIX MONTHS ENDED MARCH SHARES DOLLARS SHARES DOLLARS
31, 1997: -------- ----------- -------- -----------
- --------------------------------
INVESTMENT SHARES:
- --------------------------------
Shares sold 292,874 $ 3,173,993 85,065 $ 907,825
- --------------------------------
Shares issued to shareholders in
payment of distributions
declared 73,864 800,732 32,715 350,300
- --------------------------------
Shares redeemed (643,437) (6,952,394) (369,220) (3,937,944)
- -------------------------------- -------- ----------- -------- -----------
Net change resulting from
Investment Share transactions (276,699) $(2,977,669) (251,440) $(2,679,819)
- -------------------------------- -------- ----------- -------- -----------
TRUST SHARES:
- --------------------------------
Shares sold 74,008 $ 800,942 7,306 $ 78,453
- --------------------------------
Shares issued to shareholders in
payment of distributions
declared -- -- -- --
- --------------------------------
Shares redeemed (444,879) (4,812,844) (205,516) (2,189,609)
- -------------------------------- -------- ----------- -------- -----------
Net change resulting from Trust
Share transactions (370,871) $(4,011,902) (198,210) $(2,111,156)
- -------------------------------- -------- ----------- -------- -----------
Net change resulting from fund
share transactions (647,570) $(6,989,571) (449,650) $(4,790,975)
- -------------------------------- -------- ----------- -------- -----------
</TABLE>
THE VIRTUS FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
VIRGINIA MUNICIPAL MARYLAND MUNICIPAL
BOND FUND BOND FUND
------------------------ ---------------------
FOR THE YEAR ENDED SEPTEMBER SHARES DOLLARS SHARES DOLLARS
30, 1996: ---------- ------------ -------- -----------
- -----------------------------
INVESTMENT SHARES:
- -----------------------------
Shares sold 1,022,563 $ 11,073,171 574,103 $ 6,142,806
- -----------------------------
Shares issued to shareholders
in payment of distributions
declared 184,796 1,997,026 92,527 989,879
- -----------------------------
Shares redeemed (1,580,634) (17,022,733) (712,478) (7,557,624)
- ----------------------------- ---------- ------------ -------- -----------
Net change resulting from
Investment Share transactions (373,275) $ (3,952,536) (45,848) $ (424,939)
- ----------------------------- ---------- ------------ -------- -----------
TRUST SHARES:
- -----------------------------
Shares sold 468,285 $ 5,052,529 209,103 $ 2,221,208
- -----------------------------
Shares issued to shareholders
in payment of distributions
declared -- -- -- --
- -----------------------------
Shares redeemed (950,703) (10,211,940) (252,990) (2,690,009)
- ----------------------------- ---------- ------------ -------- -----------
Net change resulting from
Trust Share transactions (482,418) $ (5,159,411) (43,887) $ (468,801)
- ----------------------------- ---------- ------------ -------- -----------
Net change resulting from
fund share transactions (855,693) $ (9,111,947) (89,735) $ (893,740)
- ----------------------------- ---------- ------------ -------- -----------
</TABLE>
<TABLE>
<CAPTION>
TREASURY MONEY MARKET FUND MONEY MARKET FUND
--------------------------- ---------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
MARCH 31, SEPTEMBER 30, MARCH 31, SEPTEMBER 30,
1997 1996 1997 1996
------------ ------------- ------------ -------------
<S> <C> <C> <C> <C>
INVESTMENT SHARES
- -----------------------
Shares sold 39,364,218 92,237,108 47,420,512 144,072,045
- -----------------------
Shares issued in
connection with the
Acquisition -- 122,108,127 -- --
- -----------------------
Shares issued to
shareholders in payment
of distributions
declared 2,408,420 4,898,438 1,533,379 3,626,655
- -----------------------
Shares redeemed (55,026,957) (112,278,779) (47,540,807) (105,987,535)
- ----------------------- ------------ ------------ ------------ ------------
Net change resulting
from Investment Share
transactions (13,254,319) 106,964,894 1,413,084 41,711,165
- ----------------------- ------------ ------------ ------------ ------------
TRUST SHARES
- -----------------------
Shares sold 385,482,173 567,506,731 342,568,919 432,856,190
- -----------------------
Shares issued to
shareholders in payment
of distributions
declared 2 3 -- 3
- -----------------------
Shares redeemed (355,542,149) (549,184,891) (335,298,362) (445,941,838)
- ----------------------- ------------ ------------ ------------ ------------
Net change resulting
from Trust Share
transactions 29,940,026 18,321,843 7,270,557 (13,085,645)
- ----------------------- ------------ ------------ ------------ ------------
Net change resulting
from fund share
transactions 16,685,707 125,286,737 8,683,641 28,625,520
- ----------------------- ------------ ------------ ------------ ------------
</TABLE>
THE VIRTUS FUNDS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TAX-FREE MONEY MARKET FUND
----------------------------
SIX MONTHS YEAR ENDED
ENDED SEPTEMBER 30,
MARCH 31, 1997 1996
-------------- -------------
<S> <C> <C>
Shares sold 135,039,798 389,800,080
- -------------------------------------------
Shares issued to shareholders in payment of
distributions declared 175,091 459,305
- -------------------------------------------
Shares redeemed (131,832,752) (419,737,938)
- ------------------------------------------- ------------ ------------
Net change resulting from fund share
transactions 3,382,137 (29,478,553)
- ------------------------------------------- ------------ ------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Virtus Capital Management, Inc., the Trust's
investment adviser (the "Adviser"), receives for its services an annual
investment advisory fee based on a percentage of each Fund's average daily net
assets (see below).
<TABLE>
<CAPTION>
FUND ANNUAL RATE
---------------------------- -----------
<C> <S>
Government Securities Fund 0.75%
Large Cap Fund 0.75%
Style Manager Fund 1.25%
Virginia Municipal Bond Fund 0.75%
Maryland Municipal Bond Fund 0.75%
Treasury Money Market Fund 0.50%
Money Market Fund 0.50%
Tax-Free Money Market Fund 0.50%
</TABLE>
The Adviser may voluntarily choose to waive a portion of its fee. The Adviser
can modify or terminate this voluntary waiver at any time at its sole
discretion.
Effective October 22, 1996, the Adviser increased its annual fee to 1.25% on
the Style Manager Fund.
Effective October 22, 1996, the Adviser entered into a sub-advisory agreement
with Trend Capital Management ("Trend") on behalf of Style Manager Fund and
Large Cap Fund. Under the terms of a sub-advisory agreement between the
Adviser and Trend, with respect to Style Manager Fund, the Adviser will pay
Trend an annual fee as follows: (a) an amount equal to 0.10% of the first $60
million of the Fund's average daily net assets; and (b) with respect to
average daily net assets of the Fund in excess of $60 million, an amount equal
to (i) one-third of the Adviser's advisory fee to the extent that such
advisory fee is less than or equals 1% of the Fund's average daily net assets
(but not to exceed 0.25% of the Fund's average daily net assets); plus (ii) to
the extent that the annual advisory fee exceeds 1% of the Fund's average daily
net assets, an additional amount equal to two-thirds of such excess. With
respect to the Large Cap Fund, the Adviser will pay Trend an amount equal to
0.15% of the first $100 million of the Fund's average daily net assets; and
0.33 1/3% the Fund's average daily net assets in excess of $100 million. Trend
may voluntarily choose to reduce its compensation. Trend can modify or
terminate this voluntary reduction at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Funds with administrative
personnel and services. The fee paid to FAS is based on the level of average
aggregate daily net assets of the Trust, the Blanchard Precious Metals Fund,
Inc., and the Blanchard Funds, all of which are advised by the Adviser. The
administrative fee received during any fiscal year shall be at least $75,000
per Fund. FAS may voluntarily choose to waive a portion of its fee. FAS can
modify or terminate this voluntary waiver at any time at its sole discretion.
DISTRIBUTION SERVICES FEE--The Trust has adopted a Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan,
each Fund will reimburse Federated Securities Corp. ("FSC"), the principal
distributor, from the net assets of the Fund to finance activities intended to
result in the sale of the Fund's Investment Shares. The Plan provides that the
Funds may incur distribution expenses up to 0.25% of the average daily net
assets of the Investment Shares, annually, to reimburse FSC. Tax-Free Money
Market Fund and Style Manager Fund will not accrue or pay any
distribution expenses pursuant to the Plan until a second class of shares has
been created for certain institutional investors.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated Services
Company ("FServ"), through its subsidiary, Federated Shareholder Services
Company ("FSSC") serves as transfer and dividend disbursing agent for the
Funds. The fee paid to FSSC is based on the size, type, and number of accounts
and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Funds' accounting records
for which it receives a fee. The fee is based on the level of each Fund's
average net assets for the period, plus out-of-pocket expenses.
CUSTODIAN FEES--Signet Trust Company is the Funds' custodian for which it
receives a fee. The fee is based on the level of each Fund's average net
assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses were borne initially by FAS.
The Funds have agreed to reimburse FAS for the organizational expenses during
the five year period following each Fund's effective date. For the six months
ended March 31, 1997, the following amounts were paid pursuant to this
agreement:
<TABLE>
<CAPTION>
AMOUNT REIMBURSED
EXPENSES OF TO FAS FOR THE
ORGANIZING SIX MONTHS ENDED
FUND THE FUND MARCH 31, 1997
-------------------------- ----------- -----------------
<S> <C> <C>
Style Manager Fund $28,773 $1,743
Tax-Free Money Market Fund $17,883 $1,161
</TABLE>
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
six months ended March 31, 1997, were as follows:
<TABLE>
<CAPTION>
FUND PURCHASES SALES
----------------------------- ----------- ------------
<S> <C> <C>
Government Securities Fund $86,837,678 $109,477,380
Large Cap Fund $19,876,406 $ 32,479,047
Style Manager Fund $ 4,413,907 $ 7,892,290
Virginia Municipal Bond Fund $12,930,079 $ 18,739,267
Maryland Municipal Bond Fund $ 3,642,776 $ 7,583,206
</TABLE>
(6) CONCENTRATION OF CREDIT RISK
Since Virginia Municipal Bond Fund and Maryland Municipal Bond Fund invest a
substantial portion of their assets in issuers located in one state, they will
be more susceptible to factors adversely affecting issuers of those states
than would be a comparable general tax-exempt mutual fund. In order to reduce
the credit risk associated with such factors, at March 31, 1997, 38.3% of the
securities in Virginia Municipal Bond Fund's portfolio of investments were
backed by letters of credit or bond insurance of various financial
institutions and financial guaranty assurance agencies. The value of
investments insured by or supported (backed) by a letter of credit from any
one institution or agency did not exceed 13.0% of total investments. At March
31, 1997, 18.2% of the securities in Maryland Municipal Bond Fund's portfolio
of investments were backed by letters of credit or bond insurance of various
financial institutions and financial guaranty assurance agencies. The value of
investments insured by or supported (backed) by a letter of credit from any
one institution or agency did not exceed 8.2% of total investments.
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
John F. Donahue Thomas G. Bigley John T. Conroy, Jr. William J. Copeland James
E. Dowd Lawrence D. Ellis, M.D. Edward L. Flaherty, Jr. Edward C. Gonzales
Peter E. Madden Gregor F. Meyer John E. Murray, Jr. Wesley W. Posvar Marjorie
P. Smuts
John F. Donahue
Chairman
Edward C. Gonzales
President and Treasurer
J. Christopher Donahue
Executive Vice President
John W. McGonigle
Executive Vice President and
Secretary
Joseph S. Machi
Vice President and Assistant
Treasurer
Richard B. Fisher
Vice President
C. Grant Anderson
Assistant Secretary
Timothy S. Johnson
Assistant Secretary
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Funds' prospectuses which contains facts
concerning their objective and policies, management fees, expenses and other
information.
Federated Securities Corp. is the distributor of the Funds.
Cusip 927913608 Cusip 927913855 Cusip 927913400
Cusip 927913707 Cusip 927913848 Cusip 927913301
Cusip 927913863 Cusip 927913830 Cusip 927913889
Cusip 927913871 Cusip 927913509 Cusip 927913103
Cusip 927913806 Cusip 927913202
008531 (5/97)
